<SEC-DOCUMENT>0000928816-12-002033.txt : 20121228
<SEC-HEADER>0000928816-12-002033.hdr.sgml : 20121228
<ACCEPTANCE-DATETIME>20121228112623
ACCESSION NUMBER:		0000928816-12-002033
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20121031
FILED AS OF DATE:		20121228
DATE AS OF CHANGE:		20121228
EFFECTIVENESS DATE:		20121228

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			JOHN HANCOCK INCOME SECURITIES TRUST
		CENTRAL INDEX KEY:			0000759866
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04186
		FILM NUMBER:		121289373

	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

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HANCOCK JOHN INCOME SECURITIES TRUST /MA
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>a_incomesecurities.htm
<DESCRIPTION>JOHN HANCOCK INCOME SECURITIES TRUST
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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>UNITED STATES</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>SECURITIES AND EXCHANGE COMMISSION</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>Washington, D.C. 20549</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><B><FONT face=serif size=3>FORM N-CSR</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><B><FONT face=serif size=3>CERTIFIED SHAREHOLDER REPORT OF REGISTERED</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><B><FONT face=serif size=3>MANAGEMENT INVESTMENT COMPANIES</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>Investment Company Act file number </FONT><U><FONT face=serif size=3>811-4186</FONT></U>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>&nbsp; </FONT></TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><U><FONT face=serif size=3>John Hancock Income Securities Trust</FONT></U>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>(Exact name of registrant as specified in charter)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><U><FONT face=serif size=3>601 Congress Street, Boston, Massachusetts 02210</FONT></U>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>(Address of principal executive offices) (Zip code)</FONT>&nbsp;</TD></TR>

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   <TD align=center width="100%" colSpan=2><FONT face=serif size=3>Salvatore Schiavone</FONT></TD></TR>

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   <TD align=center width="100%" colSpan=2><FONT face=serif size=3>Treasurer</FONT></TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>601 Congress Street</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>&nbsp; </FONT></TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><U><FONT face=serif size=3>Boston, Massachusetts 02210</FONT></U>&nbsp;</TD></TR>

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   <TD noWrap align=center width="100%" colSpan=2><FONT face=serif size=3>(Name and address of agent for service)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=2><FONT face=serif size=3>Registrant's telephone number, including area code: </FONT><U><FONT face=serif size=3>617-663-4497</FONT></U>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Date of fiscal year end:</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%"><FONT face=serif size=3>October 31</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Date of reporting period:</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%"><FONT face=serif size=3>October 31, 2012</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=serif size=3>ITEM 1. SCHEDULE OF INVESTMENTS</FONT></P></DIV>









































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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Management&#8217;s discussion of<BR>
</FONT></B><FONT face=serif size=7>Fund performance</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>By John Hancock Asset Management a division of Manulife Asset Management (US) LLC</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>U.S. bonds </FONT></B><FONT face=serif size=2>posted positive returns overall for the 12 months ended October 31, 2012. In the first half of the reporting period, the U.S. economy showed marked signs of improvement and European authorities took steps to ease the Continent&#8217;s persistent sovereign debt crisis. In this environment, corporate bonds and commercial mortgage-backed securities led a broad bond market rally. Over the last half of the reporting period, weaker economic data and worsening debt problems in Europe led to a flight to quality in the bond market, sending U.S. Treasury yields down to historically low levels. However, corporate bonds and other credit-related securities also continued to rally as investors sought out higher-yielding investments in a low interest-rate environment. For the full 12-month period, corporate bonds (especially high yield) performed best, while U.S. Treasury securities lagged.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=serif size=2>For the year ended October 31, 2012, John Hancock Income Securities Trust produced a total return of 16.57% at net asset value (NAV) and 19.95% at market value. The Fund&#8217;s NAV return and its market performance differ because the market share price is subject to the dynamics of secondary market trading, which could cause it to trade at a discount or premium to the Fund&#8217;s NAV price at any time. By comparison, the average leveraged closed-end investment-grade bond fund tracked by UBS Securities LLC returned 14.72% at NAV and 18.51% at market value. The Fund&#8217;s benchmark, the Barclays Capital U.S. Government/Credit Bond Index, returned 5.90%. This index is unleveraged and does not include below investment-grade bonds.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund&#8217;s outperformance of its benchmark index was driven by sector allocation, particularly overweight positions in commercial mortgage-backed securities and corporate bonds, which were the top performing segments of the bond market during the reporting period. A meaningful position in high-yield corporate bonds, as well as an emphasis on investment-grade corporate bonds issued by financial companies, also added value versus the benchmark, as did an underweight position in U.S. Treasury bonds. We modestly reduced the Fund&#8217;s exposure to corporate bonds and residential mortgage-backed securities over the past year. These assets were redeployed into higher-yielding securities, including commercial mortgage-backed securities, non-agency residential mortgage-backed bonds&nbsp;and collateralized mortgage obligations. The latter group included interest-only mortgage-backed securities, many of which performed well during the period.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>This commentary reflects the views of the portfolio managers through the end of the period discussed in this report. The managers&#8217; statements reflect their own opinions. As such, they are in no way guarantees of future events, and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Past performance is no guarantee of future results.</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>The major factors in this Fund&#8217;s performance are interest-rate and credit risk. When interest rates rise, bond prices usually fall. Higher-yielding bonds are riskier than lower-yielding bond, and their value may fluctuate more in response to market conditions.</FONT></P>
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     <TD noWrap align=left colSpan=2><FONT face=sans-serif size=2>6</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT face=serif size=7>Portfolio summary</FONT></P>
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     <TD style="TEXT-INDENT: 0pt" noWrap align=left width="24%"><B><FONT face=sans-serif size=1>Portfolio Composition</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Corporate Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>52.3%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>U.S. Government</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.6%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>U.S. Government Agency</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>21.5%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Preferred Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.6%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Collateralized Mortgage Obligations</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>12.7%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Capital Preferred Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.5%</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 0.008pt" noWrap align=left width="24%"><FONT face=sans-serif size=1>Asset Backed Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>5.6%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Other Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.3%</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 0.008pt" noWrap align=left width="24%"><FONT face=sans-serif size=1>Common Stocks</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.9%</FONT>&nbsp;</TD>
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     <TD style="TEXT-INDENT: 0pt" noWrap align=left width="24%"><B><FONT face=sans-serif size=1>Quality Distribution</FONT></B><SUP><FONT face=sans-serif size=1>1,2</FONT></SUP>&nbsp;</TD>
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     <TD noWrap align=left width="3%"></TD>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>U.S. Government</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.6%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>9.1%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>U.S. Government Agency</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>21.5%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>CCC &amp; Below</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>7.0%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>4.9%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Not Rated</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>0.7%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>3.1%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Preferred Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.6%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>8.0%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Equity</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>1.9%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>30.5%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"><FONT face=sans-serif size=1></FONT></TD>
     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>Short-Term Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>0.4%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="24%"><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right width="24%"><FONT face=sans-serif size=1>9.7%</FONT>&nbsp;</TD>
     <TD noWrap align=left width="3%"></TD>
     <TD noWrap align=left width="24%">&nbsp;</TD>
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<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>As a percentage of the Fund&#8217;s total investments on 10-31-12.</FONT></P>
<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Ratings are from Moody&#8217;s Investors Service, Inc. If not available, we have used Standard &amp; Poor&#8217;s ratings. In the absence of ratings from these agencies, we have used Fitch, Inc. ratings. &#8220;Not Rated&#8221; securities are those with no ratings available from these agencies. All ratings are as of 10-31-12 and do not reflect subsequent downgrades or upgrades, if any.</FONT></P>
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     <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>7</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT face=serif size=7>Fund&#8217;s investments</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=4>As of 10-31-12</FONT></P>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Corporate Bonds 77.1% (52.3% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$143,160,685</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $130,481,308)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Discretionary 10.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>19,892,762</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Auto Components 0.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Allison Transmission, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$380,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>404,225</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American Axle &amp; Manufacturing, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>55,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>54,381</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Exide Technologies (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>380,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>308,275</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hyva Global BV (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-24-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>317,050</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Visteon Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>220,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>226,325</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Automobiles 1.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ford Motor Credit Company LLC</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-20-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>207,047</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ford Motor Credit Company LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,070,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,179,741</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ford Motor Credit Company LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>330,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>399,511</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hyundai Capital Services, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-27-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>336,034</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hyundai Capital Services, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-05-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>430,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>474,320</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Kia Motors Corp. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-14-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>315,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>331,896</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nissan Motor Acceptance Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-12-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>490,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>497,192</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Diversified Financial Services 0.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Rivers Pittsburgh Borrower LP (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>155,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>167,400</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Food Products 0.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Simmons Foods, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>250,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>213,125</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Hotels, Restaurants &amp; Leisure 2.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CCM Merger, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>380,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>379,050</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Downstream Development Authority of the</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Quapaw Tribe of Oklahoma (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>297,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Greektown Superholdings, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>13.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,713,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,839,334</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Landry&#8217;s, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>250,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>263,438</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Little Traverse Bay Bands of Odawa Indians (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-31-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>319,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>296,670</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Marina District Finance Company, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>320,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>323,600</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>MGM Resorts International (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>272,938</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>MGM Resorts International (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>367,625</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Seminole Indian Tribe of Florida (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.535</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>650,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>699,615</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Seminole Indian Tribe of Florida (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>325,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>354,250</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Waterford Gaming LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-14</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>184,062</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>100,222</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Household Durables 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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<TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American Standard Americas (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>165,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>154,275</FONT>&nbsp;</TD></TR>

<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Corporacion GEO SAB de CV (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-27-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>410,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>433,575</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

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   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>8&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<TR>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

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   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Internet &amp; Catalog Retail 0.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Expedia, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$530,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$584,748</FONT>&nbsp;</TD></TR>

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   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>QVC, Inc. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-02-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>90,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>94,613</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Media 3.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>AMC Entertainment, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>140,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>154,700</FONT>&nbsp;</TD></TR>

<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CBS Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-30-30</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>595,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>833,788</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Cinemark USA, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>195,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>214,988</FONT>&nbsp;</TD></TR>

<TR>

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   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Grupo Televisa SAB (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>415,591</FONT>&nbsp;</TD></TR>

<TR>

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   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>News America, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.150</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-01-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>165,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>206,639</FONT>&nbsp;</TD></TR>

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   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>News America, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.150</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>55,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>70,993</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>News America, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.400</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>150,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>191,901</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>News America, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-11-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,170,211</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>News America, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-20-24</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,020,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,304,211</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nexstar Broadcasting, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9,032</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nexstar Broadcasting, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>255,998</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>256,894</FONT>&nbsp;</TD></TR>

<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Regal Entertainment Group (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>100,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>111,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Time Warner Cable, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>605,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>765,553</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Multiline Retail 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Macy&#8217;s Retail Holdings, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>444,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>475,354</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Specialty Retail 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Dufry Finance SCA (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>218,763</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hillman Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>305,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>330,925</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Petco Holdings Inc., PIK (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>120,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>120,450</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Toys R Us, Inc. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>180,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>184,050</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Textiles, Apparel &amp; Luxury Goods 0.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Burlington Coat Factory Warehouse Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>665,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>733,994</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Levi Strauss &amp; Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>500,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>546,250</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Staples 2.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>4,398,413</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Food &amp; Staples Retailing 0.9%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Rite Aid Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>720,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>736,200</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Safeway, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>575,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>616,638</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Safeway, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-31</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>225,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>250,509</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp; </FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Food Products 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bunge, Ltd. Finance Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>389,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>501,609</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Corporacion Pesquera Inca SAC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-10-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,500</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Household Products 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Reynolds Group Issuer, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>420,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>425,250</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Reynolds Group Issuer, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>382,338</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>YCC Holdings LLC, PIK</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>85,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>87,869</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Tobacco 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Alliance One International, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,032,500</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Energy 8.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>16,079,317</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Energy Equipment &amp; Services 0.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Astoria Depositor Corp., Series B (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.144</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>940,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Offshore Group Investments, Ltd.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>187,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>205,466</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Trinidad Drilling, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>265,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>284,213</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Weatherford International, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.800</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>130,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>150,653</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>9</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Gas Utilities 0.3%</FONT></B>&nbsp;</TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>DCP Midstream LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$405,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$529,352</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Oil, Gas &amp; Consumable Fuels 7.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Afren PLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-08-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>274,800</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Afren PLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>400,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>456,000</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Alpha Natural Resources, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>125,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>109,688</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Alpha Natural Resources, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>270,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>234,900</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Arch Coal, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>165,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>146,438</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Arch Coal, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>322,113</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>BreitBurn Energy Partners LP (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>222,525</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>DTEK Finance BV (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-28-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>202,120</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Energy Transfer Partners LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>135,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>154,832</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Energy Transfer Partners LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.700</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>425,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>571,820</FONT>&nbsp;</TD></TR>

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<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Enterprise Products Operating LLC (7.000% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>6-1-17, then 3 month LIBOR + 2.777%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>695,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>754,075</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>EP Energy LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>195,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>201,825</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>EV Energy Partners LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>400,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>421,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Halcon Resources Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>80,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>81,100</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Kerr-McGee Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-01-24</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>600,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>788,713</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Kinder Morgan Energy Partners LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-32</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>195,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>271,224</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Newfield Exploration Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-30-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>280,800</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>NuStar Logistics LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.900</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>845,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>959,043</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Peabody Energy Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>325,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>335,563</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Petro-Canada (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,452,911</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Petrohawk Energy Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>595,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>667,451</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Petroleos Mexicanos</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-24-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>308,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Regency Energy Partners LP</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-23</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>265,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,600</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Spectra Energy Capital LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,217,121</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Targa Resources Partners LP (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>245,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>261,538</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>TransCanada Pipelines, Ltd. (6.350% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>5-15-17, then 3 month LIBOR + 2.210%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.350</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>710,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>762,718</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>W&amp;T Offshore, Inc. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>100,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>105,250</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Williams Partners LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,463,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,798,765</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>WPX Energy, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>331,700</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

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<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Financials 28.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>52,786,856</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Capital Markets 3.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Jefferies Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>905,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>988,713</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Jefferies Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>165,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>193,050</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Macquarie Bank, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-07-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>286,166</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Macquarie Group, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-14-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>370,645</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>150,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>151,497</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.550</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-27-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,300,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,444,603</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>290,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>324,209</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-24-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>405,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>464,265</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.300</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-13-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>485,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>583,236</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>The Goldman Sachs Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-27-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>300,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>334,918</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>The Goldman Sachs Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-24-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>318,961</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>The Goldman Sachs Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.150</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>760,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>889,615</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

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   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>10&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

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<TR>

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<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Commercial Banks 5.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Abbey National Treasury Services PLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-27-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$630,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$660,778</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Banco de Credito del Peru (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-16-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>175,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>186,813</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Barclays Bank PLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.050</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-04-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,225,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,429,144</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Barclays Bank PLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.179</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-12-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>344,835</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>BPCE SA (12.500% to 9-30-19, then</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>3 month LIBOR + 12.980%) (Q)(S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-30-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>330,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>377,249</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>First Horizon National Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>355,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>389,120</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>ICICI Bank, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-16-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>475,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>516,373</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nordea Bank AB (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-20-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>680,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>716,048</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Regions Financial Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-10-14</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,102,500</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Royal Bank of Scotland Group PLC</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.550</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-18-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>335,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>343,384</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Santander Holdings USA, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-19-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>115,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>120,186</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Sberbank of Russia (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-07-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>223,806</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Svenska Handelsbanken AB (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-04-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>530,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>559,789</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Swedbank AB (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-29-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>460,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>464,301</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Synovus Financial Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>225,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>VTB Bank OJSC (9.500% to 12-6-22, then</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>10 Year U.S. Treasury + 8.067%) (Q)(S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-06-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>235,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>236,551</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Wachovia Bank NA (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.850</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>390,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>501,138</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Wachovia Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>405,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>484,118</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Finance 2.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Capital One Financial Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.150</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>730,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>835,876</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Capital One Financial Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,230,220</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Discover Bank (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>270,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>330,700</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Discover Financial Services (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-27-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>585,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>660,195</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nationstar Mortgage LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>175,100</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nelnet, Inc. (P)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.735</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-29-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>715,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>563,063</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Diversified Financial Services 5.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bank of America Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>305,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>354,627</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bank of America NA (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.300</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>150,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>168,342</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bank of America NA (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>390,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>476,374</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bank of Ceylon (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-03-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>250,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>268,125</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Citigroup, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.850</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-11-34</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>107,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>127,391</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>General Electric Capital Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-16-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>408,101</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>General Electric Capital Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-14-38</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>160,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>196,490</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>General Electric Capital Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-07-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>335,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>410,063</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>General Electric Capital Corp. (7.125% until</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>6-15-22, then 3 month LIBOR + 5.296%) (Q)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>600,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>686,454</FONT>&nbsp;</TD></TR>

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   <TD align=left width="99%" colSpan=6>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>International Lease Finance Corp. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>290,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,750</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>iPayment, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>295,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>259,600</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>JPMorgan Chase &amp; Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>775,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>921,970</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>JPMorgan Chase &amp; Company (7.900% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>4-30-18, then 3 month LIBOR + 3.470%) (Q)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.900</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-30-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>655,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>754,383</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Merrill Lynch &amp; Company, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-25-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,206,875</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Merrill Lynch &amp; Company, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-14-38</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>407,553</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Rabobank Nederland NV (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-19-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>295,655</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>SPL Logistics Escrow LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>228,438</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>The Bear Stearns Companies LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,243,841</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>UBS AG (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-17-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>445,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>479,491</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>USB Realty Corp. (P)(Q)(S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.487</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>800,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>676,760</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>11</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Insurance 6.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Aflac, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$385,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$522,832</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American International Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>3.800</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-22-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>235,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>253,432</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American International Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>8.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>230,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>298,652</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Aon Corp. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>8.205</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-01-27</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>345,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>431,883</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>AXA SA (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>8.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-30</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>175,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>217,393</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CNA Financial Corp. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>720,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>830,933</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CNA Financial Corp. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-15-23</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>540,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>670,212</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CNO Financial Group, Inc. (S)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>145,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>150,075</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Glen Meadow Pass-Through Trust (6.505% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>2-15-17, then 3 month LIBOR + 2.125%) (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.613pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.505</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-12-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>835,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>759,850</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hartford Financial Services Group, Inc.</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-30-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>190,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>219,978</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hartford Financial Services Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>193,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>226,715</FONT>&nbsp;</TD></TR>

<TR>

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   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hartford Financial Services Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-30-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>225,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>289,184</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Liberty Mutual Group, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>163,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>177,843</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Liberty Mutual Group, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>230,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>261,458</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Liberty Mutual Group, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.800</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>705,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>791,363</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Lincoln National Corp. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>535,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>707,989</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Lincoln National Corp. (6.050% until 4-20-17,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 2.040%) (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.050</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-20-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>395,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>395,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nippon Life Insurance Company (S)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-18-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>319,516</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Prudential Financial, Inc. (5.875% to 9-15-22,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 4.175%) (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>445,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>468,363</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Teachers Insurance &amp; Annuity Association of</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>America (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.850</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-16-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>475,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>656,109</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>The Chubb Corp. (6.375% until 4-15-17, then</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>3 month LIBOR + 2.250%) (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-29-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>585,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>634,725</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>The Hanover Insurance Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>150,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,483</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Unum Group (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-30-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>395,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>465,191</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>UnumProvident Finance Company PLC (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.850</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>605,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>678,776</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>W.R. Berkley Corp. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>397,768</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>White Mountains Re Group, Ltd. (7.506% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>6-30-17, then 3 month LIBOR + 3.200%) (Q)(S)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.688pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.506</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-30-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>415,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>431,144</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Willis Group Holdings PLC (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>350,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>397,191</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Willis North America, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-29-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>495,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>598,782</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp; </FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Real Estate Investment Trusts 4.9%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Boston Properties LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>3.700</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>195,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>212,373</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Brandywine Operating Partnership LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>345,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>389,871</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CubeSmart LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.800</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>280,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>307,916</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>DDR Corp. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>880,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,061,463</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Goodman Funding Pty, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>645,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>726,847</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Health Care REIT, Inc.</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>190,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>210,498</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Health Care REIT, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>700,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>823,102</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Health Care REIT, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>505,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>579,193</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Healthcare Realty Trust, Inc. (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-17-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>540,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>618,069</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>MPT Operating Partnership LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>320,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>333,600</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>MPT Operating Partnership LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>230,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>248,400</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Prologis International Funding II (S)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>180,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>178,671</FONT>&nbsp;</TD></TR>

<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>ProLogis LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>55,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>59,990</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>ProLogis LP (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>475,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>540,060</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>12&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

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   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Real Estate Investment Trusts (continued)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ventas Realty LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-30-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$330,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$356,091</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ventas Realty LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>670,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>745,463</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Vornado Realty LP (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>405,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>430,391</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>WEA Finance LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-02-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>290,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>358,709</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Weyerhaeuser Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-32</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>690,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>876,461</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

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   <TD noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Real Estate Management &amp; Development 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>General Shopping Investments, Ltd.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>(12.000% to 3-20-17, then 5 Year USGG +</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>11.052%) (Q)(S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-20-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>228,800</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Realogy Corp. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>231,125</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Thrifts &amp; Mortgage Finance 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nationstar Mortgage LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>295,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>325,600</FONT>&nbsp;</TD></TR>

<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nationstar Mortgage LLC</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>540,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>583,875</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Health Care 1.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>3,266,288</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

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<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Health Care Equipment &amp; Supplies 0.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Alere, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>185,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>194,250</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Health Care Providers &amp; Services 0.9%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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<TR>

   <TD align=left width="99%" colSpan=6>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>BioScrip, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>285,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>304,950</FONT>&nbsp;</TD></TR>

<TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Community Health Systems, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>140,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>148,050</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>HCA, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>380,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>424,650</FONT>&nbsp;</TD></TR>

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   <TD align=left width="99%" colSpan=6>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Medco Health Solutions, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>545,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>691,899</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Pharmaceuticals 0.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Catalent Pharma Solutions, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>421,756</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>432,827</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hospira, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.050</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-30-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>485,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>569,078</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Valeant Pharmaceuticals International (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>315,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>335,869</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Watson Pharmaceuticals, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>160,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>164,715</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Industrials 8.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>16,327,309</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Aerospace &amp; Defense 1.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bombardier, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>280,500</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ducommun, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>70,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>74,025</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Embraer Overseas, Ltd. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>380,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>439,850</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Huntington Ingalls Industries, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>360,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>387,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Kratos Defense &amp; Security Solutions, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>350,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>378,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Textron Financial Corp. (6.000% to 2-15-17,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 1.735%) (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>750,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>645,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Textron, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>505,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>555,755</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Textron, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>270,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>326,135</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Airlines 3.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>America West Airlines 2000-1 Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.057</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-02-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>173,084</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>185,633</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American Airlines 2011-1 Class B Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-31-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>557,427</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>569,272</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 1997-4 Class A Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.900</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-02-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>308,732</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>334,974</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 1998-1 Class A Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.648</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>169,168</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>181,010</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 1999-1 Class A Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.545</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-02-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>195,216</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>214,738</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>13</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD align=left width="31%"></TD>

   <TD align=right width="15%"></TD>

   <TD align=left width="15%"></TD>

   <TD align=left width="8%"></TD>

   <TD align=right width="15%"></TD>

   <TD align=right width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Airlines (continued)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 2000-2 Class B Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.307</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-02-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$117,370</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$124,412</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 2007-1 Class A Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.983</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-19-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>505,444</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>563,570</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 2010-1 Class A Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-12-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>147,923</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>158,648</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Continental Airlines 2012-1 Class B Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-11-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>253,200</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Delta Air Lines 2002-1 Class G-1 Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.718</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-02-23</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>671,474</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>738,621</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Delta Air Lines 2007-1 Class A Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.821</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-10-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>663,565</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>745,648</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Delta Air Lines 2010-1 Class A Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-02-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>191,712</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>212,800</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Delta Air Lines 2011-1 Class A Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.300</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>324,466</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>355,291</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Northwest Airlines 2002-1 Class G-2 Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.264</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-20-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>131,632</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>139,043</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Northwest Airlines 2007-1 Class A Pass</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.027</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>400,353</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>442,390</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>UAL 2009-1 Pass Through Trust</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.400</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>141,968</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>163,093</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>UAL 2009-2A Pass Through Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>362,786</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>419,925</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>United Airlines 2007-1 Class C Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.984</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-02-14</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>583,794</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>566,280</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>US Airways 2012-1 Class A Pass Through</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Trust (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.900</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-24</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>175,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>190,750</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Building Products 1.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Masco Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>285,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>330,294</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Owens Corning</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>395,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>398,858</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ply Gem Industries, Inc. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>75,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>78,750</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Voto-Votorantim Overseas Trading Operations</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>NV (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-25-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>450,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>528,750</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Voto-Votorantim, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-05-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>490,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>584,325</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Commercial Services &amp; Supplies 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Casella Waste Systems, Inc. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>357,700</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Garda World Security Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>100,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>105,625</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Steelcase, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>500,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>534,827</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Construction &amp; Engineering 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Tutor Perini Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>335,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>342,538</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Electrical Equipment 0.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Coleman Cable, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>205,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>218,325</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Industrial Conglomerates 0.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>General Electric Company</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-09-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>210,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>219,362</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Odebrecht Finance, Ltd. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-05-23</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>350,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>405,125</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Odebrecht Finance, Ltd. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-26-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>425,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>491,938</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Odebrecht Finance, Ltd. (Q)(S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-14-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>214,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Marine 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Navios South American Logistics, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>315,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>298,463</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>14</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD align=left width="31%"></TD>

   <TD align=right width="15%"></TD>

   <TD align=left width="15%"></TD>

   <TD align=left width="8%"></TD>

   <TD align=right width="15%"></TD>

   <TD align=right width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Road &amp; Rail 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Avis Budget Car Rental LLC</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$125,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$136,406</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Penske Truck Leasing Company LP (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-11-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>460,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>469,510</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Trading Companies &amp; Distributors 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Air Lease Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>95,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>95,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Air Lease Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>110,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>112,750</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Aircastle, Ltd. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>160,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>171,200</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Aircastle, Ltd. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>160,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>176,800</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>H&amp;E Equipment Services, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>205,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>213,200</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>HD Supply, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>180,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>198,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Information Technology 0.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,491,854</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Computers &amp; Peripherals 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Hewlett-Packard Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>306,109</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>IT Services 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Brightstar Corp. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>560,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>599,200</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Computer Sciences Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.450</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>225,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>226,995</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Lender Processing Services, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-23</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>359,550</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Materials 6.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>11,110,110</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Chemicals 1.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American Pacific Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>152,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>154,090</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Braskem Finance, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-07-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>515,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>606,413</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CF Industries, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>208,669</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CF Industries, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>430,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>544,614</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Incitec Pivot Finance LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-10-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>345,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>390,713</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Polymer Group, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>95,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>101,650</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Construction Materials 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American Gilsonite Company (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>290,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>301,600</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Magnesita Finance, Ltd. (Q)(S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-05-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>420,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>443,050</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Severstal Columbus LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>100,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>103,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Vulcan Materials Company</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>130,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>146,900</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Containers &amp; Packaging 0.9%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>ARD Finance SA, PIK (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>267,800</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Consolidated Container Company LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>320,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Pretium Packaging LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>165,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>169,125</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Temple-Inland, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>750,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>906,950</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Metals &amp; Mining 2.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Allegheny Technologies, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>140,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>156,643</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Allegheny Technologies, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>280,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>357,857</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>ArcelorMittal (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.100</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>370,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>434,717</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Commercial Metals Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.350</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>333,250</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Edgen Murray Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>310,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>307,675</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>FMG Resources August 2006 Pty, Ltd. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,000</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Inmet Mining Corp. (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>250,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>259,375</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>JMC Steel Group (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>185,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>187,775</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Metinvest BV (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-14-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>435,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>417,491</FONT>&nbsp;</TD></TR>

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   <TD align=left width="99%" colSpan=6>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Rain CII Carbon LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>346,800</FONT>&nbsp;</TD></TR>

<TR>

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   <HR noShade SIZE=1>

</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>SunCoke Energy, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>259,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>264,828</FONT>&nbsp;</TD></TR>

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</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Teck Resources, Ltd.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>119,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>143,293</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>15</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

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   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Metals &amp; Mining (continued)</FONT></B>&nbsp;</TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Thompson Creek Metals Company, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$395,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$312,050</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Vale Overseas, Ltd. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-10-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>320,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>397,208</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Paper &amp; Forest Products 1.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Georgia-Pacific LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.400</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>485,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>575,164</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Georgia-Pacific LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-28</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>165,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>213,186</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>International Paper Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>385,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>529,573</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Westvaco Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.950</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-31</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>770,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,018,651</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Telecommunication Services 3.9%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>7,218,578</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

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   <TD noWrap align=left width="8%"></TD>

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   <TD noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Diversified Telecommunication Services 3.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

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<TR>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>American Tower Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.700</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>400,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>441,445</FONT>&nbsp;</TD></TR>

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   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>BellSouth Telecommunications, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.300</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>455,769</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>483,102</FONT>&nbsp;</TD></TR>

<TR>

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   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CenturyLink, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.800</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>480,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>504,803</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CenturyLink, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.450</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>305,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>334,099</FONT>&nbsp;</TD></TR>

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   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CenturyLink, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>305,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>311,959</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Crown Castle Towers LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.883</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>760,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>867,785</FONT>&nbsp;</TD></TR>

<TR>

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   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>GTP Acquisition Partners I LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.347</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>650,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>684,107</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>GTP Acquisition Partners I LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.628</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>650,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>674,807</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>GTP Towers Issuer LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.112</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>885,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>924,949</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PAETEC Holding Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>369,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>421,583</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Telecom Italia Capital SA (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.200</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-18-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>365,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>370,475</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Wireless Telecommunication Services 0.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Clearwire Communications LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>315,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>335,475</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Nextel Communications, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.375</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,269</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>SBA Tower Trust (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.933</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>395,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>405,088</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Verizon New York Inc</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-33</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>235,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>243,632</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Utilities 5.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>10,589,198</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Electric Utilities 3.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Beaver Valley II Funding</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>244,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>249,924</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>BVPS II Funding Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.890</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>441,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>485,642</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Commonwealth Edison Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.800</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>525,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>647,748</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>DPL, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>570,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>642,675</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Exelon Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.900</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>985,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,082,868</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>FPL Energy National Wind LLC (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.608</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-10-24</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>206,536</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>194,303</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Oncor Electric Delivery Company LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-30-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>820,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>935,395</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PNM Resources, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>705,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>805,463</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PNPP II Funding Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9.120</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-30-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>220,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>228,281</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PPL Capital Funding, Inc. (6.700% to 3-30-17,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 2.665%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.700</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-30-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>525,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>553,219</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Southern California Edison Company</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>(6.250% to 2-1-22, then 3 month LIBOR +</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>4.199%) (Q)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>302,297</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>TXU Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.460</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-01-15</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>86,182</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>84,414</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>W3A Funding Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.090</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-02-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>337,407</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>344,709</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Independent Power Producers &amp; Energy Traders 1.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Allegheny Energy Supply Company LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-15-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>460,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>508,438</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Exelon Generation Company LLC (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>223,366</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Exelon Generation Company LLC (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>175,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>211,531</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>16&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<TR>

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   <TD align=right width="15%"></TD>

   <TD align=left width="15%"></TD>

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<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

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   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Independent Power Producers &amp; Energy Traders (continued)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>NRG Energy, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$385,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$420,613</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>NRG Energy, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-20</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>355,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>391,388</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Multi-Utilities 1.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>GDF Suez (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.875</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-10-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>325,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>326,016</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Integrys Energy Group, Inc. (6.110% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>12-1-16, then 3 month LIBOR + 2.120%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.110</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-66</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>650,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>682,500</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>MidAmerican Energy Holdings Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.480</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-15-28</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>550,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>828,683</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Wisconsin Energy Corp. (6.250% to 5-15-17,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 2.113%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-67</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>410,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>439,725</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Convertible Bonds 0.2% (0.2% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$409,200</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $267,530)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Discretionary 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>409,200</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Media 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>XM Satellite Radio, Inc. (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-14</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>248,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>409,200</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Municipal Bonds 0.4% (0.2% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$668,337</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $553,211)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>California 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>316,134</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>State of California</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>General Obligation Bond (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.600</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>225,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>316,134</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Illinois 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>352,203</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>State of Illinois</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>General Obligation Bond</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.100</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-33</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>355,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>352,203</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6></TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Term Loans (M) 0.5% (0.4% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$973,749</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $971,416)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Discretionary 0.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>854,049</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Hotels, Restaurants &amp; Leisure 0.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>CCM Merger, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-01-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>180,089</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>181,102</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Kalispel Tribal Economic Authority</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-25-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>553,509</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>542,438</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Landry&#8217;s, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-24-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>129,350</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>130,509</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Financials 0.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>119,700</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Real Estate Investment Trusts 0.1%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>iStar Financial Inc. (T)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-28-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>120,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>119,700</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6></TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="84%" colSpan=5><B><FONT face=sans-serif size=1>Capital Preferred Securities (a) 2.3% (1.5% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$4,225,264</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $4,090,104)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Financials 2.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>4,225,264</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Capital Markets 0.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>State Street Capital Trust IV (P)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.389</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-15-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>935,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>717,023</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Commercial Banks 1.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Fifth Third Capital Trust IV (6.500% to 4-15-17,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 1.368%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>825,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>827,063</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PNC Financial Services Group, Inc. (6.750% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>8-1-21, then 3 month LIBOR + 3.678%) (Q)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.613pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>215,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>247,936</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>17</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="31%"></TD>

   <TD align=right width="15%"></TD>

   <TD align=left width="15%"></TD>

   <TD align=left width="8%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Commercial Banks (continued)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PNC Preferred Funding Trust III (8.700% to</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>3-15-13, then 3 month LIBOR + 5.226%)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>(Q)(S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.613pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>8.700</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-13</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$835,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$845,354</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Regions Financing Trust II (6.625% to 5-15-27,</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 1.290%) (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-47</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>259,038</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Sovereign Capital Trust VI</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>7.908</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-13-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>480,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>504,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Insurance 0.4%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>MetLife Capital Trust X (9.250% to 4-8-38 then</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>3 month LIBOR + 5.540%) (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>9.250</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-08-68</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>315,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>437,850</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>ZFS Finance USA Trust II (6.450% to 6-15-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>then 3 month LIBOR + 2.000%) (S)(Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.450</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-65</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>360,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>387,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>U.S. Government &amp; Agency Obligations 34.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="31%"><B><FONT face=sans-serif size=1>(23.1% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$63,179,335</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $61,092,466)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>U.S. Government 2.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>4,251,049</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>U.S. Treasury Bonds</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Bond (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>3.125</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,325,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,456,144</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>U.S. Treasury Notes</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Note</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>1.625</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>265,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>263,261</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Note (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>1.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-15-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>900,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>907,945</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>U.S. Treasury Strips, PO (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>2.907</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-15-30</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,020,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>623,699</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>U.S. Government Agency 31.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>58,928,286</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Federal Home Loan Mortgage Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>1.750</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-30-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,440,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,487,485</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>3.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,097,628</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,149,686</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,577,622</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6,289,620</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>29,959</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>33,597</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-01-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>153,094</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>171,493</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-01-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>69,666</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>78,038</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,498,256</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,676,438</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Federal National Mortgage Association</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>3.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-29-27</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>705,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>706,141</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>3.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,974,612</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,222,400</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>662,477</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>727,399</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,639,129</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,914,253</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,496,744</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,888,232</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,973,427</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,320,935</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,844,635</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6,393,653</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,634,140</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,888,068</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,017,969</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,334,978</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,751,573</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,018,767</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-01-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>839,012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>949,589</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-01-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,495,489</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,644,869</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-01-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,875,804</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,148,231</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-01-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>334,484</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>367,216</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-01-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,436,352</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,597,770</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-01-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>528,348</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>595,950</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-01-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,568,971</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,896,866</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru (Z)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-01-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>168,739</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>190,382</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>30 Yr Pass Thru</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 8.539pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-01-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>209,434</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>236,230</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>18&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



<!--$$/page=--><A name="page_15"></A><BR>

<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="31%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD>

   <TD width="8%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.028pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="84%" colSpan=5><B><FONT face=sans-serif size=1>Foreign Government Obligations 0.2% (0.1% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$401,908</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $368,694)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><B><FONT face=sans-serif size=1>South Korea 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>401,908</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Korea Development Bank (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>09-09-16</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$370,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>401,908</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Collateralized Mortgage Obligations 18.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>(12.7% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$34,686,771</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $32,745,098)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Commercial &amp; Residential 14.9%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>27,607,467</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>American Home Mortgage Assets LLC</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-6, Class XP IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.149</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>12-25-46</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6,972,357</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>644,943</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>American Tower Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-1A, Class D (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.957</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>865,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>890,652</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Americold 2010 LLC Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2010-ARTA, Class D (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7.443</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>01-14-29</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>605,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>729,907</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Banc of America Commercial Mortgage Trust, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-2, Class AM (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.762</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>05-10-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>595,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>662,381</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-4, Class AM</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.675</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>07-10-46</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>845,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>951,143</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-3, Class A4 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.889</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>07-10-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>785,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>898,783</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Bear Stearns Adjustable Rate Mortgage Trust, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-1, Class B2 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.342</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>761,838</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>56,600</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Bear Stearns Alt-A Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-12, Class 1A1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.561</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>641,405</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>606,679</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Citigroup/Deutsche Bank Commercial</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Mortgage Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-CD1, Class C (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.219</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>295,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>275,723</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Commercial Mortgage Pass Through Certificates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-LC4, Class B (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.934</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>12-10-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>360,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>404,482</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-LC4, Class C (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.649</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>12-10-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>285,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>322,707</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Countrywide Alternative Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-OA12, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.660</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>09-20-46</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9,043,864</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>570,878</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Extended Stay America Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2010-ESHA, Class B (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.221</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-05-27</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>530,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>532,010</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Fontainebleau Miami Beach Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-FBLU, Class C (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.270</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>05-05-27</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>315,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>329,550</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-FBLU, Class D (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.007</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-05-27</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>465,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>491,890</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>GMAC Mortgage Corp. Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-AR2, Class 3A (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.563</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-19-34</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>753,567</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>712,518</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Greenwich Capital Commercial Funding Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-GG7, Class AM (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.867</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-10-38</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>670,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>745,978</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>GSR Mortgage Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-4F, Class 6A1</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,457,709</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,846,939</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-9, Class B1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.276</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-25-34</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>785,951</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>337,792</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Harborview Mortgage Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-11, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.060</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-19-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,156,364</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>316,087</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-11, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.025</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-19-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,664,493</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>112,708</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-2, Class IX IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.229</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-19-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10,263,085</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>698,817</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-8, Class 1X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.184</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-19-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,077,389</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>263,706</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-3, Class ES IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.010</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-19-47</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10,757,531</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>76,378</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-4, Class ES IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.350</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-19-47</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12,666,890</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>89,935</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-6, Class ES IO (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.342</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>08-19-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9,005,527</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>63,939</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>IndyMac Index Mortgage Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AR18, Class 1X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.025</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>9,056,121</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>655,663</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AR18, Class 2X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.676</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8,518,448</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>445,770</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp; <FONT face=sans-serif size=2>19</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="31%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD>

   <TD width="8%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>JPMorgan Chase Commercial Mortgage Securities Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-LDP5, Class AM (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.242</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-15-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$1,155,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$1,278,367</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-LDP7, Class AM (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.868</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-15-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>735,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>829,278</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-HSBC Class XA IO (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.431</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>07-05-32</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,620,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>406,819</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>LB&#8211;UBS Commercial Mortgage Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-C1, Class AM</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.455</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>850,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>944,694</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Merrill Lynch Mortgage Investors Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-3, Class 2A1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.693</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>635,114</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>634,762</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-3, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.455</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>09-25-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>243,807</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>132,431</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-3, Class M2 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.455</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>09-25-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>92,626</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>14,633</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-3, Class M3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.455</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>09-25-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>59,764</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,121</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley Capital I</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-HQ10, Class AM</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.360</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-12-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>660,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>728,182</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-HQ8, Class AM (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.466</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>03-12-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,020,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,118,610</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Springleaf Mortgage Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-2A, Class A (P)(S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.220</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-57</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>482,813</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>485,378</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-3A, Class M1 (P)(S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.660</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>12-25-59</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>265,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>264,891</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Thornburg Mortgage Securities Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-1, Class II2A (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.908</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>748,144</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>734,102</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>UBS Commercial Mortgage Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-C1, Class B</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.822</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>05-10-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>405,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>442,829</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-C1, Class C (P) (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.536</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.015pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>05-10-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>270,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>297,693</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>UBS-Barclays Commercial Mortgage Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-C2, Class XA IO (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.832</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>05-10-63</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,998,247</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>534,512</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>WaMu Mortgage Pass Through Certificates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-AR13, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-34</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>10,637,472</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>487,343</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AR1, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>15,779,353</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>797,435</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AR2, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12,043,355</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>694,968</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AR6, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>04-25-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>7,276,096</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>436,842</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AR8, Class X IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>07-25-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>13,034,594</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>847,852</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>WF-RBS Commercial Mortgage Trust (P)(S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2.451</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-15-45</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,230,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>759,167</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>U.S. Government Agency 3.8%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>7,079,304</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Federal Home Loan Mortgage Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 3747, Class HI IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,667,182</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>599,633</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 3794, Class PI IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-15-38</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>881,099</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>86,591</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 3830, Class NI IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-15-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4,018,776</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>484,084</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 4077, Class IK IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-15-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,077,017</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>307,147</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K017, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.457</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-25-21</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,821,014</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>285,441</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K018, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.467</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,770,569</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>384,617</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K021, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.516</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-25-22</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>816,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>92,044</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K707, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.559</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-25-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,465,498</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>200,023</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K708, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.512</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,808,920</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>468,855</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K709, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.547</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,398,848</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>282,458</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series K710, Class X1 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.785</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-25-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,577,739</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>251,817</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Federal National Mortgage Association</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2009-47, Class EI IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>08-25-19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>631,408</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>57,727</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2010-68, Class CI IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-38</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,139,615</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>160,818</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-118, Class IB IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,525,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>397,453</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-98, Class JP</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,207,843</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,290,638</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 398, Class C3 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>769,130</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>108,042</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 401, Class C2 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>504,826</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>44,795</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 402, Class 3 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>799,329</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>104,221</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 402, Class 4 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,330,458</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>162,737</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 402, Class 7 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,163,200</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>161,115</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 402, Class 8 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,249,938</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>141,528</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class 15 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,153,997</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,623</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class 16 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>239,466</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>25,135</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>20</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



<!--$$/page=--><A name="page_17"></A><BR>

<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="31%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD>

   <TD width="8%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Federal National Mortgage Association</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class 17 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$228,747</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$31,793</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class 21 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>853,011</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>71,422</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class 7 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>412,571</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>72,711</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class 8 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-41</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>414,716</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>70,278</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 407, Class C6 IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,828,858</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>294,037</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.77pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Government National Mortgage Association</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2010-78, Class AI IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>04-20-39</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,145,847</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>68,988</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-114, Class IO</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.024</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-16-53</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,101,929</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>202,533</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Asset Backed Securities 8.3% (5.6% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$15,424,161</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $14,627,598)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Asset Backed Securities 8.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>15,424,161</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ace Securities Corp.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-ASP5, Class A2B (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.341</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>361,587</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>163,755</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-ASP5, Class A2C (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.391</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>317,143</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>144,560</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-ASP5, Class A2D (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.471</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>605,884</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>279,022</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Aegis Asset Backed Securities Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-4, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.661</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>750,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>542,709</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ameriquest Mortgage Securities, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-R1, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.661</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>455,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>447,966</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Argent Securities, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-M2, Class A2C (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.361</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>09-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,657,278</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>589,262</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Asset Backed Funding Certificates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-AQ1, Class A4</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.010</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>323,468</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>327,771</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Asset Backed Securities Corp. Home Equity</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-HE1, Class A3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.411</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>613,592</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>547,813</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Bravo Mortgage Asset Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-1A, Class A2 (P) (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.451</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>07-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>822,112</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>719,873</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Carrington Mortgage Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-OPT2, Class M2 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.661</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>05-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>404,674</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>385,935</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Citicorp Residential Mortgage Securities, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-2, Class A6</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6.265</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>06-25-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>355,435</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>352,488</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Citigroup Mortgage Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-WFH3, Class A3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.361</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>479,481</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>470,507</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Contimortgage Home Equity Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 1995-2, Class A5</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.100</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>08-15-25</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>34,872</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>34,609</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Countrywide Asset-Backed Certificates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-10, Class AF5B</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.110</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>02-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>558,888</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>556,333</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Dominos Pizza Master Issuer LLC</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-1A, Class A2 (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.216</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-42</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,102,456</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,228,186</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Encore Credit Receivables Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-2, Class M2</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.671</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>600,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>513,738</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Home Equity Asset Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2003-1, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.711</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>06-25-33</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,088,447</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>924,594</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-5, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.691</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>450,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>431,175</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Leaf II Receivables Funding LLC</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2011-1, Class A (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.700</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>12-20-18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>119,725</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>118,540</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Mastr Asset Backed Securities Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-HE4, Class A2 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.321</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>11-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,823,857</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>733,393</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2007-HE2, Class A2 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.911</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>08-25-37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>529,805</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>498,935</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Merrill Lynch Mortgage Investors, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-WMC1, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.961</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="8%"><FONT face=sans-serif size=1>09-25-35</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>256,559</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>226,226</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=2>21</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



<!--$$/page=--><A name="page_18"></A><BR>

<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="31%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD>

   <TD width="8%"></TD>

   <TD align=right width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Morgan Stanley ABS Capital I</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-HE4, Class A3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.361</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>06-25-36</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$565,981</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$356,018</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>New Century Home Equity Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-3, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.691</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>07-25-35</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>305,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>298,995</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Novastar Home Equity Loan</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-4, Class M3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.291</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-35</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>645,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>620,905</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Park Place Securities, Inc.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2004-WHQ2, Class M2 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.841</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>02-25-35</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>915,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>886,377</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>People&#8217;s Choice Home Loan Securities Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-1, Class M3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1.081</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-25-35</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>480,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>469,239</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>RAMP Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005-RS3, Class M1 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.631</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-25-35</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>320,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>284,968</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Sonic Capital LLC</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2011-1A, Class A2 (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5.438</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-20-41</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>593,650</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>662,229</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Soundview Home Equity Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2006-OPT2, Class A3 (P)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.391</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>05-25-36</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>296,163</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>249,209</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Soundview Home Loan Trust</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2005 &#8212; OPT 2</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>0.471</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>12-25-35</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>695,887</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>668,051</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Westgate Resorts LLC</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>Series 2012-2A, Class A (S)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>01-20-25</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.17pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>689,058</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>690,780</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 4.78pt" noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Shares</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Common Stocks 2.8% (1.9% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$5,248,877</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $5,169,483)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=left width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Discretionary 0.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>43,162</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Hotels, Restaurants &amp; Leisure 0.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Greektown Superholdings, Inc. (I)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>768</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>43,162</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Staples 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>885,600</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Tobacco 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Philip Morris International, Inc. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.337pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>10,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>885,600</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Energy 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>547,840</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Oil, Gas &amp; Consumable Fuels 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Royal Dutch Shell PLC, ADR</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>547,840</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Health Care 0.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,411,542</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Pharmaceuticals 0.7%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Eli Lilly &amp; Company (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.337pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>17,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>826,710</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Johnson &amp; Johnson (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8,258</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>584,832</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Information Technology 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>562,250</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Semiconductors &amp; Semiconductor Equipment 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Intel Corp. (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.345pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>26,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>562,250</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Materials 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>907,702</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Containers &amp; Packaging 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Rock-Tenn Company, Class A (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.337pt" noWrap align=right width="15%"><FONT face=sans-serif size=1>12,402</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>907,702</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>22</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<TR>

   <TD width="31%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD>

   <TD width="8%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Shares</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Telecommunication Services 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$890,781</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><B><FONT face=sans-serif size=1>Diversified Telecommunication Services 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Oi SA, ADR (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>123,276</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>493,104</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Oi SA, Series C, ADR</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12,025</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>56,037</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Telefonica SA, ADR (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>26,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>341,640</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Preferred Securities (b) 2.4% (1.6% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$4,470,407</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $4,530,776)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Discretionary 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,177,393</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Hotels, Restaurants &amp; Leisure 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Greektown Superholdings, Inc., Series A (I)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>14,991</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,177,393</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Staples 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,144,531</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Food &amp; Staples Retailing 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ocean Spray Cranberries, Inc., Series A</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>6.250% (S)(Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>12,500</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,144,531</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Financials 1.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,816,438</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Commercial Banks 0.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>PNC Financial Services Group, Inc. (6.135% to</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>5-1-22, then 3 month LIBOR + 4.067%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>19,375</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>542,500</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>U.S. Bancorp (6.000% to 4-15-17, then</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>3 month LIBOR + 4.861%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>15,475</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>444,133</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Consumer Finance 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Ally Financial, Inc. 7.300% (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11,815</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>293,957</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Diversified Financial Services 0.3%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>Citigroup Capital XIII (7.875% to 10-30-15, then 3 month</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>LIBOR + 6.370%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,900</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>108,459</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="46%" colSpan=2><FONT face=sans-serif size=1>GMAC Capital Trust I (8.125% to 2-15-16, then 3 month</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="31%"><FONT face=sans-serif size=1>LIBOR + 5.785%) (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>16,350</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>427,389</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Industrials 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>332,045</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Aerospace &amp; Defense 0.2%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>United Technologies Corp. 7.500% (Z)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>6,106</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>332,045</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Rate (%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD style="TEXT-INDENT: 1.013pt" noWrap align=left width="8%"><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="69%" colSpan=4><B><FONT face=sans-serif size=1>Escrow Certificates 0.0% (0.0% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$5,513</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=6>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>(Cost $0)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%"></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><B><FONT face=sans-serif size=1>Materials 0.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="8%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>5,513</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="31%"><FONT face=sans-serif size=1>Smurfit-Stone Container Corp. (I)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="8%"><FONT face=sans-serif size=1>03-15-17</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$245,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>5,513</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>23</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<HR align=center width="100%" noShade SIZE=2>



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<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Value</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Short-Term Investments 0.6% (0.4% of Total Investments)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$1,100,000</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>(Cost $1,100,000)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Repurchase Agreement 0.6%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,100,000</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>Repurchase Agreement with State Street Corp. dated 10-31-12 at</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>0.010% to be repurchased at $1,100,000 on 11-1-12, collateralized</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>by $1,125,000 Federal National Mortgage Association Discount</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Notes 0.010% due 1-23-13 (valued at $1,124,438)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$1,100,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,100,000</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Total investments (Cost $255,997,684)</FONT></B><FONT face=sans-serif size=1>&#8224; </FONT><B><FONT face=sans-serif size=1>147.5%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$273,954,207</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Other assets and liabilities, net (47.5%)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>($88,162,788)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Total net assets 100.0%</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$185,791,419</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=3>

   <HR noShade SIZE=1>

</TD></TR></TABLE></DIV>

<P style="TEXT-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 of the Fund.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>ADR American Depositary Receipts</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>IO Interest-Only Security &#8212; (Interest Tranche of Stripped Mortgage Pool). Rate shown is the annualized yield at the end of the period.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>LIBOR London Interbank Offered Rate</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>PIK Paid In Kind</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>PO Principal-Only Security &#8212; (Principal Tranche of Stripped Security). Rate shown is the annualized yield on date of purchase.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>REIT Real Estate Investment Trust</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>USGG U.S. Generic Government Yield Index</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(a) Includes hybrid securities with characteristics of both equity and debt that trade with, and pay, interest income.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(b) Includes preferred stocks and hybrid securities with characteristics of both equity and debt that pay dividends on a periodic basis.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(I) Non-income producing security.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(M) Term loans are variable rate obligations. The coupon rate shown represents the rate at period end.</FONT></P>

<P style="TEXT-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 style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(Q) Perpetual bonds have no stated maturity date. Date shown is next call date.</FONT></P>

<P style="TEXT-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 $54,151,839 or 29.15% of the Fund&#8217;s net assets as of 10-31-12.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(T) This position represents an unsettled loan commitment at period end where the coupon rate will be determined at time of settlement.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(Z) All or a portion of this security is segregated as collateral pursuant to the Credit Facility Agreement. Total collateral value at 10-31-12 was $186,435,639.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>&#8224; At 10-31-12, the aggregate cost of investment securities for federal income tax purposes was $256,886,556. Net unrealized appreciation aggregated $17,067,651, of which $22,543,719 related to appreciated investment securities and $5,476,068 related to depreciated investment securities.</FONT></P>

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<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>24&nbsp; </FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>F </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>C </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>L&nbsp;&nbsp;&nbsp;</FONT><FONT face=sans-serif size=2>S </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>M </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>S</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=7>Financial statements</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=4>Statement of assets and liabilities </FONT><FONT face=sans-serif size=2>10-31-12</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>This Statement of assets and liabilities is the Fund&#8217;s balance sheet. It shows the value of what the Fund owns, is due and owes. You&#8217;ll also find the net asset value for each common share.</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="50%"></TD>

   <TD width="50%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Assets</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Investments, at value (Cost $255,997,684)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>$273,954,207</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Cash</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>68,852</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Cash segregated at custodian for swap&nbsp;contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>820,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Receivable for investments&nbsp;sold</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>2,790</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Dividends and interest&nbsp;receivable</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>2,908,584</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Other receivables and prepaid&nbsp;expenses</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>20,140</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Total&nbsp;assets</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="50%"><B><FONT face=sans-serif size=1>277,774,573</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Liabilities</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Credit facility agreement&nbsp;payable</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>90,300,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Payable for investments&nbsp;purchased</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>198,198</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Payable for delayed delivery securities&nbsp;purchased</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>91,926</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Swap contracts, at&nbsp;value</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>1,209,063</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Interest&nbsp;payable</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>57,549</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Payable to&nbsp;affiliates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="50%"><FONT face=sans-serif size=1>Accounting and legal services&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>5,702</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="50%"><FONT face=sans-serif size=1>Trustees&#8217;&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>15,381</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Other liabilities and accrued&nbsp;expenses</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>105,335</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Total&nbsp;liabilities</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="50%"><B><FONT face=sans-serif size=1>91,983,154</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Net&nbsp;assets</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Paid-in&nbsp;capital</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>$184,947,219</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Undistributed net investment&nbsp;income</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>1,466,762</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Accumulated net realized gain (loss) on investments, futures contracts and</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="50%"><FONT face=sans-serif size=1>swap&nbsp;agreements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>(17,370,022)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Net unrealized appreciation (depreciation) on investments and</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="50%"><FONT face=sans-serif size=1>swap&nbsp;agreements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>16,747,460</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Net&nbsp;assets</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="50%"><B><FONT face=sans-serif size=1>$185,791,419</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="50%"><B><FONT face=sans-serif size=1>Net asset value per&nbsp;share</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR>

   <TD colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="50%"><FONT face=sans-serif size=1>Based on 11,699,015 shares of beneficial interest outstanding &#8212; unlimited</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="50%"><FONT face=sans-serif size=1>number of shares authorized with no par&nbsp;value</FONT>&nbsp;</TD>

   <TD noWrap align=right width="50%"><FONT face=sans-serif size=1>$15.88</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

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<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right width="66%" colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=2>25</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>C </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>L&nbsp;&nbsp;&nbsp;</FONT><FONT face=sans-serif size=2>S </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>M </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>S</FONT></FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=Arial size=2><BR></FONT><FONT face=sans-serif size=4>Statement of operations </FONT><FONT face=sans-serif size=2>For the year ended 10-31-12</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>This Statement of operations summarizes the Fund&#8217;s investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) for the period stated.</FONT></B></P>

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<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="85%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Investment&nbsp;income</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Interest</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$14,109,137</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Dividends</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>620,562</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Less foreign taxes&nbsp;withheld</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(12,997)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Total investment&nbsp;income</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>14,716,702</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Expenses</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Investment management&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,381,829</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Accounting and legal services&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>34,766</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Transfer agent&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>112,386</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Trustees&#8217;&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>42,104</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Printing and&nbsp;postage</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>78,328</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Professional&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>103,494</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Custodian&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>28,868</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Interest&nbsp;expense</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>829,957</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Stock exchange listing&nbsp;fees</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>24,290</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Other</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>35,723</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Total&nbsp;expenses</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>2,671,745</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Net investment&nbsp;income</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>12,044,957</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Realized and unrealized gain&nbsp;(loss)</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD colSpan=2>

   <HR noShade SIZE=1>

</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Net realized gain (loss)&nbsp;on</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Investments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>50,604</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Futures&nbsp;contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(22,590)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Swap&nbsp;contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(196,225)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>(168,211)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Change in net unrealized appreciation (depreciation)&nbsp;of</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Investments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>16,424,418</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Futures&nbsp;contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(120,001)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Swap&nbsp;contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(935,105)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>15,369,312</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Net realized and unrealized&nbsp;gain</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>15,201,101</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Increase in net assets from&nbsp;operations</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$27,246,058</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

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<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>26&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>C </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>L&nbsp;&nbsp;&nbsp;</FONT><FONT face=sans-serif size=2>S </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>M </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>S</FONT></FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=4><BR>Statements of changes in net assets</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>These Statements of changes in net assets show how the value of the Fund&#8217;s net assets has changed during the last two 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>

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<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Year</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Year</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>ended</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>ended</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>10-31-12</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>10-31-11</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Increase (decrease) in net&nbsp;assets</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>

   <HR noShade SIZE=1>

&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>From&nbsp;operations</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Net investment&nbsp;income</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$12,044,957</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$12,557,511</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Net realized gain&nbsp;(loss)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(168,211)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,145,523</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Change in net unrealized appreciation&nbsp;(depreciation)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>15,369,312</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(4,581,560)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Increase in net assets resulting from&nbsp;operations</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>27,246,058</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>11,121,474</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Distributions to&nbsp;shareholders</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>From net investment&nbsp;income</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(12,769,589)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(13,136,659)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>From Fund share&nbsp;transactions</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Issued pursuant to Dividend Reinvestment&nbsp;Plan</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,017,966</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,037,011</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Total increase&nbsp;(decrease)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>15,494,435</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>(978,174)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Net&nbsp;assets</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Beginning of&nbsp;year</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>170,296,984</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>171,275,158</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>End of&nbsp;year</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$185,791,419</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$170,296,984</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Undistributed net investment&nbsp;income</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$1,466,762</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$1,261,578</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Share activity</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Shares&nbsp;outstanding</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Beginning of&nbsp;year</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11,631,473</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>11,559,635</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.001pt" noWrap align=left width="70%"><FONT face=sans-serif size=1>Issued pursuant to Dividend Reinvestment&nbsp;Plan</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>67,542</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>71,838</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>End of&nbsp;year</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>11,699,015</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>11,631,473</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp;&nbsp; <FONT face=sans-serif size=2>27</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>C </FONT><FONT face=sans-serif size=2>I </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>L&nbsp;&nbsp;&nbsp;</FONT><FONT face=sans-serif size=2>S </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>A </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>M </FONT><FONT face=sans-serif size=2>E </FONT><FONT face=sans-serif size=2>N </FONT><FONT face=sans-serif size=2>T </FONT><FONT face=sans-serif size=2>S</FONT></FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=Arial size=2><BR></FONT><FONT face=sans-serif size=4>Statement of cash flows</FONT></P>

<P style="TEXT-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>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="85%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>For the</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>year ended</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>10-31-12</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Cash flows from operating activities</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Net increase in net assets from operations</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$27,246,058</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Adjustments to reconcile net increase in net assets from operations to net</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>cash provided by operating activities:</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Long-term investments purchased</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(136,233,916)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Long-term investments sold</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>129,106,474</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Increase in short-term investments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(103,000)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Net amortization of premium (discount)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>3,813,620</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in dividends and interest receivable</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>65,655</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in payable for investments purchased</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(769,366)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Increase in payable for delayed delivery securities purchased</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>91,926</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in receivable for investments sold</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,555,290</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Increase in cash segregated at custodian for swap contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(820,000)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in cash held at broker for futures contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>62,288</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in other receivables and prepaid expenses</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>1,861</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Increase in unrealized depreciation of swap contracts</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>935,105</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in payable for futures variation margin</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(3,016)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Increase in payable to affiliates</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2,713</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Increase in interest payable</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>48,208</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Decrease in other liabilities and accrued expenses</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(4,996)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Net change in unrealized (appreciation) depreciation on investments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(16,424,418)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Net realized gain on investments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(50,604)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Net cash provided by operating activities</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$8,519,882</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Cash flows from financing activities</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Borrowings from credit facility agreement payable</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>$3,300,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><FONT face=sans-serif size=1>Distributions to common shareholders net of reinvestments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>(11,751,623)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Net cash used in financing activities</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>($8,451,623)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Net increase in cash</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$68,259</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Cash at beginning of period</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$593</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Cash at end of period</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$68,852</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Supplemental disclosure of cash flow information</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD colSpan=3>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Cash paid for interest</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>$781,749</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Noncash financing activities not included herein consist of</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>1,017,966</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>reinvestment of distributions</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="33%"></TD>

   <TD width="33%"></TD>

   <TD width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>28</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

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<DIV style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%">

<P style="TEXT-ALIGN: left"><FONT face=serif size=7>Financial highlights</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>The Financial highlights show how the Fund&#8217;s net asset value for a share has changed during the period.</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="14%"></TD>

   <TD width="14%"></TD>

   <TD width="14%"></TD>

   <TD width="14%"></TD>

   <TD width="14%"></TD>

   <TD width="14%"></TD>

   <TD width="14%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>COMMON SHARES </FONT></B><B><FONT face=sans-serif size=1>Period&nbsp;ended</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>10-31-12</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>10-31-11</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>10-31-10</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>10-31-09</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>10-31-08</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>12-31-07</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="98%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Per share operating&nbsp;performance</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR>

   <TD width="98%" colSpan=7>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.022pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Net asset value, beginning of&nbsp;period</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.64</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.82</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$13.42</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$10.67</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.53</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$15.22</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Net investment&nbsp;income</FONT><SUP><FONT face=sans-serif size=1>2</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.03</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.08</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.19</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.18</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.05</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.34</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.014pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>on&nbsp;investments</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.31</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(0.13)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.37</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>2.70</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(3.92)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(0.69)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.006pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Distributions to Auction Preferred</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.006pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Shares&nbsp;(APS)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(0.15)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(0.42)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Total from investment&nbsp;operations</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>2.34</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>0.95</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>2.56</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>3.88</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>(3.02)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>0.23</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Less distributions to</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.016pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>common&nbsp;shareholders</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>From net investment&nbsp;income</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(1.10)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(1.13)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(1.16)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(1.13)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(0.84)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(0.92)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Net asset value, end of&nbsp;period</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$15.88</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.64</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.82</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$13.42</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$10.67</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.53</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Per share market value, end of&nbsp;period</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$16.53</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.81</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$14.76</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$12.94</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$9.67</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$12.85</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Total return at net asset value (%)</FONT></B><SUP><FONT face=sans-serif size=1>3</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>16.57</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>6.78</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>19.90</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>39.06</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>(21.36)</FONT></B><SUP><FONT face=sans-serif size=1>4</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>1.97</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.023pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Total return at market value (%)</FONT></B><SUP><FONT face=sans-serif size=1>3</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>19.95</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>8.46</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>23.85</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>47.95</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>(19.41)</FONT></B><SUP><FONT face=sans-serif size=1>4</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>(6.94)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="98%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Ratios and supplemental&nbsp;data</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR>

   <TD width="98%" colSpan=7>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Net assets applicable to common shares,</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>end of period (in&nbsp;millions)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$186</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$170</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$171</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$154</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$121</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$165</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Ratios (as a percentage of average</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.016pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>net assets):</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.016pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Expenses</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.53</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.56</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.78</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>2.25</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>2.17</FONT><SUP><FONT face=sans-serif size=1>5</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1.16</FONT><SUP><FONT face=sans-serif size=1>6</FONT></SUP>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Net investment&nbsp;income</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>6.88</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>7.34</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>8.44</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>10.56</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>9.37</FONT><SUP><FONT face=sans-serif size=1>5</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>8.87</FONT><SUP><FONT face=sans-serif size=1>7</FONT></SUP>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Portfolio turnover (%)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>50</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>71</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>79</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>94</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>40</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>54</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="98%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Senior&nbsp;securities</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR>

   <TD width="98%" colSpan=7>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Total value of APS outstanding</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.024pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>(in&nbsp;millions)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Involuntary liquidation preference per</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.016pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>unit (in&nbsp;thousands)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>25</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Average market value per unit</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.007pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>(in&nbsp;thousands)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>25</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Asset coverage per&nbsp;unit</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$71,228</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.021pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Total debt outstanding end of period</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.021pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>(in millions)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$87</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$84</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$58</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$58</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.013pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Asset coverage per $1,000 of&nbsp;APS</FONT><SUP><FONT face=sans-serif size=1>10</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$2,851</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Asset coverage per $1,000 of&nbsp;debt</FONT><SUP><FONT face=sans-serif size=1>11</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$3,057</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$2,957</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$3,051</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$3,656</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$3,094</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD>

   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>29</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

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<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>For the ten-month period ended 10-31-08. The Fund changed its fiscal year end from December 31 to October&nbsp;31.</FONT><BR><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Based on the average daily shares&nbsp;outstanding.</FONT><BR><SUP><FONT face=sans-serif size=1>3 </FONT></SUP><FONT face=sans-serif size=1>Total return based on net asset value reflects changes in the Fund&#8217;s net asset value during each period. Total</FONT><BR><FONT face=sans-serif size=1>return based on market value reflects changes in market value. Each figure assumes that dividend and capital gain</FONT><BR><FONT face=sans-serif size=1>distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or</FONT><BR><FONT face=sans-serif size=1>premium to net asset value at which the Fund&#8217;s shares traded during the&nbsp;period.</FONT><BR><SUP><FONT face=sans-serif size=1>4 </FONT></SUP><FONT face=sans-serif size=1>Not&nbsp;annualized.</FONT><BR><SUP><FONT face=sans-serif size=1>5 </FONT></SUP><FONT face=sans-serif size=1>Annualized.</FONT><BR><SUP><FONT face=sans-serif size=1>6 </FONT></SUP><FONT face=sans-serif size=1>Ratios calculated on the basis of expenses relative to the average net assets of common shares. Without the exclusion</FONT><BR><FONT face=sans-serif size=1>of preferred shares, the annualized ratio of expenses would have been 0.76% for the year ended 12-31-07.</FONT><BR><SUP><FONT face=sans-serif size=1>7 </FONT></SUP><FONT face=sans-serif size=1>Ratios calculated on the basis of net investment income relative to the average net assets of common shares.</FONT><BR><FONT face=sans-serif size=1>Without the exclusion of preferred shares, the annualized ratio of net investment income would have been 5.82%</FONT><BR><FONT face=sans-serif size=1>for the year ended 12-31-07.</FONT><BR><SUP><FONT face=sans-serif size=1>8 </FONT></SUP><FONT face=sans-serif size=1>Calculated by subtracting the Fund&#8217;s total liabilities from the Fund&#8217;s total assets and dividing that amount by the</FONT><BR><FONT face=sans-serif size=1>number of APS outstanding, as of the applicable 1940 Act Evaluation Date, which may differ from the financial</FONT><BR><FONT face=sans-serif size=1>reporting&nbsp;date.</FONT><BR><SUP><FONT face=sans-serif size=1>9 </FONT></SUP><FONT face=sans-serif size=1>In May 2008, the Fund entered into a Committed Facility Agreement with a third-party commercial bank in order to</FONT><BR><FONT face=sans-serif size=1>redeem the APS. The redemption of all APS was completed on 6-12-08.</FONT><BR><SUP><FONT face=sans-serif size=1>10 </FONT></SUP><FONT face=sans-serif size=1>Asset coverage equals the total net assets plus APS divided by the APS of the Fund outstanding at period&nbsp;end.</FONT><BR><SUP><FONT face=sans-serif size=1>11 </FONT></SUP><FONT face=sans-serif size=1>Asset coverage equals the total net assets plus borrowings divided by the borrowings of the Fund outstanding at</FONT><BR><FONT face=sans-serif size=1>period end (Note 7). As debt outstanding changes, level of invested assets may change accordingly. Asset coverage</FONT><BR><FONT face=sans-serif size=1>ratio provides a consistent measure of&nbsp;leverage.</FONT></P>

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   <TD noWrap align=left width="66%" colSpan=2><FONT face=sans-serif size=2>30&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="33%"><FONT face=sans-serif size=1>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=7>Notes to financial statements</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 1 &#8212; Organization</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>John Hancock Income Securities Trust (the Fund) is a closed-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act).</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 2 &#8212; Significant accounting policies</FONT></B></P>

<P style="TEXT-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. Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Security valuation. </FONT></B><FONT face=serif size=2>Investments are stated at value as of the close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 </FONT><FONT face=serif size=1>P.</FONT><FONT face=serif size=1>M</FONT><FONT face=serif size=1>.</FONT><FONT face=serif size=2></FONT><FONT face=serif size=2>, Eastern Time. In order to value the securities, the Fund uses the following valuation techniques: Equity securities held by the Fund are valued at the last sale price or official closing price on the principal securities exchange on which they trade. In the event there were no sales during the day or closing prices are not available, then the securities are valued using the last quoted bid or evaluated price. 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, taking 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. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. Swaps are marked-to-market daily based upon values from third party vendors, which may include a registered commodities exchange, or broker quotations. Certain securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Certain short-term securities are valued at amortized cost. Other portfolio securities and assets, where reliable market quotations are not available, are valued at fair value as determined in good faith by the Fund&#8217;s Pricing Committee following procedures established by the Board of Trustees, which include price verification procedures. The frequency with which these fair valuation procedures are used cannot be predicted.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the Fund&#8217;s own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.</FONT></P>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>31</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The following is a summary of the values by input classification of the Fund&#8217;s investments as of October 31, 2012, by major security category or type:</FONT></P>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>LEVEL 3</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>LEVEL 2</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>SIGNIFICANT</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>TOTAL MARKET</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>LEVEL 1</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>SIGNIFICANT</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>UNOBSERVABLE</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>VALUE AT 10-31-12</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>QUOTED PRICE</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>OBSERVABLE INPUTS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>INPUTS</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Corporate Bonds</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>$143,160,685</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>$142,534,993</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>$625,692</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Convertible Bonds</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>409,200</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>409,200</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Municipal Bonds</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>668,337</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>668,337</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Term Loans</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>973,749</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>973,749</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Capital Preferred Securities</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>4,225,264</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>4,225,264</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>U.S. Government &amp;</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 4.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Agency Obligations</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>63,179,335</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>63,179,335</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Foreign Government</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 4.016pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Obligations</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>401,908</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>401,908</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Collateralized Mortgage</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 4.016pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Obligations</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>34,686,771</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>33,697,352</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>989,419</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Asset Backed Securities</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>15,424,161</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>15,424,161</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Common Stocks</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>5,248,877</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>$5,205,715</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>43,162</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Preferred Securities</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>4,470,407</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>2,148,483</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>1,144,531</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>1,177,393</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Escrow Certificates</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>5,513</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>5,513</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Short-Term Investments</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>1,100,000</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>1,100,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="20%">&nbsp;</TD>

   <TD width="80%" colSpan=4>

   <HR noShade SIZE=1>

</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Total investments in</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 4.031pt" noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Securities</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>$273,954,207</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>$7,354,198</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>$263,764,343</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>$2,835,666</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.039pt" noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Other Financial Instruments</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.039pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Interest Rate Swaps</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($1,209,063)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($1,209,063)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-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. Transfers into or out of Level 3 represent the beginning value of any security or instrument where a change in the level has occurred from the beginning to the end of the period.</FONT></P>

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   <TD width="14%"></TD>

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   <TD width="14%"></TD>

   <TD width="14%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>COLLATERALIZED</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>CORPORATE</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>MORTGAGE</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>ASSET BACKED</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>PREFERRED</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>BONDS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>OBLIGATIONS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>SECURITIES </FONT></TD>

   <TD noWrap align=right width="14%">&nbsp;<FONT face=sans-serif size=1>COMMON STOCKS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>SECURITIES</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>TOTAL</FONT>&nbsp;</TD></TR>

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   <TD width="98%" colSpan=7>

   <HR noShade SIZE=1>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Balance as of 10-31-11</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$344,203</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$125,276</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$214,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$56,075</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$1,094,555</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$1,834,109</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Realized gain (loss)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>355</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$355</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Change in unrealized</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>appreciation (depreciation)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>58,978</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>45,706</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(12,913)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>82,838</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$174,609</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Purchases</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>260,000</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>901,190</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>1,552,517</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$2,713,707</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Sales</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(37,844)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(189,378)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(1,766,517)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>($1,993,739)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Transfers into Level 3</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>150,173</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$150,173</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><FONT face=sans-serif size=1>Transfers out of Level 3</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>(43,548)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>($43,548)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="14%"><B><FONT face=sans-serif size=1>Balance as of 10-31-12</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$625,692</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$989,419</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>&#8212;</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$43,162</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$1,177,393</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="14%"><B><FONT face=sans-serif size=1>$2,835,666</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>Change in unrealized at</FONT>&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD>

   <TD noWrap align=left width="14%">&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="14%"><FONT face=sans-serif size=1>period end*</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$58,978</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$45,706</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>($12,913)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$82,838</FONT>&nbsp;</TD>

   <TD noWrap align=right width="14%"><FONT face=sans-serif size=1>$174,609</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>*Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at the period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statement of operations.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Repurchase agreements. </FONT></B><FONT face=serif size=2>The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement, it receives collateral which is held in a segregated account by the Fund&#8217;s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline.</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Security transactions and related investment income. </FONT></B><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. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income is recorded on the ex-date, except for dividends of foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the Fund becomes aware of the dividends. Foreign taxes are provided for based on the Fund&#8217;s understanding of the tax rules and rates that exist in the foreign markets in which it invests. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Foreign taxes. </FONT></B><FONT face=serif size=2>The Fund may be subject to withholding tax on income or capital gains or repatriation taxes as imposed by certain countries in which it invests. Taxes are accrued based upon net investment income, net realized gains or net unrealized appreciation.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Stripped securities. </FONT></B><FONT face=serif size=2>Stripped securities are financial instruments structured to separate principal and interest cash flows so that one class receives only principal payments from the underlying assets (PO or principal only), while the other class receives the interest cash flows (IO or interest only). Both PO and IO investments represent an interest in the cash flows of an underlying stripped security. If the underlying assets experience greater than anticipated prepayments of principal, the Fund may fail to fully recover its initial investment in an IO security. The market value of these securities can be extremely volatile in response to changes in interest rates. In addition, these securities present additional credit risk such that the Fund may not receive all or part of its principal or interest payments because the borrower or issuer has defaulted on its obligation.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Overdrafts. </FONT></B><FONT face=serif size=2>Pursuant to the custodian agreement, the Fund&#8217;s 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, including any costs or expenses associated with the overdraft. The custodian may have a lien, security interest or security entitlement in any Fund property that is not otherwise segregated or pledged, to the maximum extent permitted by law, to the extent of any overdraft.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Expenses. </FONT></B><FONT face=serif size=2>Within the John Hancock Funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund&#8217;s relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Federal income taxes. </FONT></B><FONT face=serif size=2>The Fund intends to continue to qualify 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 style="TEXT-ALIGN: left"><FONT face=serif size=2>Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.</FONT></P>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>33</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>For federal income tax purposes, the Fund has a capital loss carryforward of $16,617,020 available to offset future net realized capital gains as of October 31, 2012. The following table details the capital loss carryforward available as of October 31, 2012:</FONT></P>

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   <TD noWrap align=left width="48%" colSpan=4><FONT face=sans-serif size=1>CAPITAL LOSS CARRYFORWARD EXPIRING AT OCTOBER 31</FONT>&nbsp;</TD>

   <TD noWrap align=left width="12%">&nbsp;</TD>

   <TD noWrap align=left width="12%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.972pt" noWrap align=center width="24%" colSpan=2><FONT face=sans-serif size=1>NO EXPIRATION DATE</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 13.266pt" noWrap align=center width="12%"><FONT face=sans-serif size=1>2013</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>2014</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>2015</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>2016</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>2017</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>2018</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>Short Term</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>Long Term</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.281pt" noWrap align=center width="12%"><FONT face=sans-serif size=1>$2,205,183</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>$3,342,775</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>$1,351,797</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>$1,367,076</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>$6,785,450</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>$436,296</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 9.763pt" noWrap align=center width="12%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=center width="12%"><FONT face=sans-serif size=1>$1,128,443</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>As of October 31, 2012, the Fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The Fund&#8217;s federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Distribution of income and gains. </FONT></B><FONT face=serif size=2>Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The Fund generally declares and pays dividends quarterly and capital gain distributions, if any, annually. The tax character of distributions for the years ended October 31, 2012 and October 31, 2011 was as follows:</FONT></P>

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   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>OCTOBER 31, 2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>OCTOBER 31, 2011</FONT>&nbsp;</TD>

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   <TD noWrap align=left width="25%"><FONT face=sans-serif size=1>Ordinary Income</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>$12,769,589</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>$13,136,659</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1></FONT></TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>As of October 31, 2012, the components of distributable earnings on a tax basis consisted of $1,477,375 of undistributed ordinary income.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Such distributions and distributable earnings, 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. Material distributions in excess of tax basis earnings and profits, if any, are reported in the Fund&#8217;s financial statements as a return of capital.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to derivative transactions and amortization and accretion on debt securities.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Statement of cash flows. </FONT></B><FONT face=serif size=2>Information on financial transactions that have been settled through the receipt and disbursement of cash is presented in the Statement of cash flows. The cash amount shown in the Statement of cash flows is the amount included in the Fund&#8217;s Statement of assets and liabilities and represents the cash on hand at its custodian and does not include any short-term investments or cash segregated at custodian for swap contracts.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>New accounting pronouncement. </FONT></B><FONT face=serif size=2>In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update No. 2011-11 (ASU 2011-11), </FONT><I><FONT face=serif size=2>Disclosures about Offsetting Assets and Liabilities</FONT></I><FONT face=serif size=2>. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of assets and liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. ASU 2011-11 may result in additional disclosure relating to the presentation of derivatives and certain other financial instruments.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 3 &#8212; Derivative instruments</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund may invest in derivatives in order to meet its investment objective. The use of derivatives may involve risks different from, or potentially greater than, the risks associated with investing directly in securities. Specifically, the Fund is exposed 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 honor its obligations. OTC derivatives transactions typically can only be</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>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 the Fund will succeed in enforcing them.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund has entered into collateral agreements with certain counterparties to mitigate counterparty risk on over-the-counter derivatives. Subject to established minimum levels, collateral is generally determined based on the net aggregate unrealized gain or loss on contracts with a particular counterparty. Collateral pledged to the Fund is held by the custodian bank for the benefit of the Fund and can be in the form of cash or debt securities issued by the U.S. government or related agencies; collateral posted by the Fund is held in a segregated account at the Fund&#8217;s custodian and is noted in the accompanying portfolio of investments, or if cash is posted, on the Statement of assets and liabilities. As of October 31, 2012, $820,000 was posted by the Fund for the benefit of counterparties.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Futures. </FONT></B><FONT face=serif size=2>A futures contract is a contractual agreement to buy or sell a particular currency or financial instrument at a pre-determined price in the future. Risks related to the use of futures contracts include possible illiquidity of the futures markets, contract prices that can be highly volatile and imperfectly correlated to movements in hedged security values and/or interest rates and potential losses in excess of the amounts recognized on the Statement of assets and liabilities.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Upon entering into a futures contract, the Fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is generally based on a percentage of the contract value; this amount is the initial margin for the trade. The margin deposit must then be maintained at the established level over the life of the contract. Futures collateral receivable/ payable is included on the Statement of assets and liabilities. Futures contracts are marked-to-market daily and an appropriate payable or receivable for the change in value (variation margin) and unrealized gain or loss is recorded by the Fund. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>During the year ended October 31, 2012, the Fund used futures contracts to manage duration of the portfolio. During the year ended October 31, 2012, the Fund held futures contracts with aggregate settlement values ranging up to 13.4 million, as measured at each quarter end. There were no open futures contracts as of October 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Interest rate swaps. </FONT></B><FONT face=serif size=2>Interest rate swaps represent an agreement between a Fund and counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. 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 interest receivable or payable under the swap contracts at specified, future intervals. A termination payment by the counterparty or the Fund is recorded as realized gain or loss, as well as the net periodic payments received or paid by the Fund.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Entering into swap agreements involves, to varying degrees, elements of credit, market and documentation risk that may amount to values that are in excess of the amounts recognized on the Statement of assets and liabilities. Such risks involve the possibility that there will be no liquid market for the swap, or that a counterparty may default on its obligation or delay payment under the swap terms. The counterparty may disagree or contest the terms of the swap. Market risks may also accompany the swap, including interest rate risk. The Fund may also suffer losses if it is unable to terminate or assign outstanding swaps or reduce its exposure through offsetting transactions.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>During the year ended October 31, 2012, the Fund used interest rate swaps in anticipation of rising interest rates. During the year ended October 31, 2012, the Fund held interest rate swaps with total USD notional amounts ranging from $22.0 million to $44.0 million, as measured at each quarter end. The following table summarizes the interest rate swap contracts held as of October 31, 2012.</FONT></P>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>35</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>PAYMENTS</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>PAYMENTS</FONT>&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

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   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>USD NOTIONAL</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>MADE BY</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>RECEIVED BY</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.01pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>MATURITY</FONT>&nbsp;</TD>

   <TD noWrap align=right width="16%"><FONT face=sans-serif size=1>MARKET</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>COUNTERPARTY</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>AMOUNT</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>FUND</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>FUND</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.01pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>DATE</FONT>&nbsp;</TD>

   <TD noWrap align=right width="16%"><FONT face=sans-serif size=1>VALUE</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>Morgan Stanley</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.013pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>$22,000,000</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>Fixed 1.442500%</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.006pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>3 Month LIBOR (a)</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.006pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>Aug 2016</FONT>&nbsp;</TD>

   <TD noWrap align=right width="16%"><FONT face=sans-serif size=1>($756,753)</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.014pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>Capital Services</FONT>&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="16%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="16%"></TD>

   <TD noWrap align=left width="16%"></TD>

   <TD noWrap align=left width="16%"></TD>

   <TD noWrap align=left width="16%"></TD>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>Morgan Stanley</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.507pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>22,000,000</FONT>&nbsp;</TD>

   <TD noWrap align=left width="16%"><FONT face=sans-serif size=1>Fixed 1.093750%</FONT>&nbsp;</TD>

   <TD noWrap align=left width="16%"><FONT face=sans-serif size=1>3 Month LIBOR (a)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="16%"><FONT face=sans-serif size=1>May 2017</FONT>&nbsp;</TD>

   <TD noWrap align=right width="16%"><FONT face=sans-serif size=1>(452,310)</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="16%"><FONT face=sans-serif size=1>Capital Services</FONT>&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="16%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="16%"></TD>

   <TD noWrap align=left width="16%"></TD>

   <TD noWrap align=left width="16%"></TD>

   <TD noWrap align=left width="16%"></TD>

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   <TD noWrap align=left width="16%"><B><FONT face=sans-serif size=1>Total</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="16%"><B><FONT face=sans-serif size=1>$44,000,000</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=left width="16%">&nbsp;</TD>

   <TD noWrap align=right width="16%"><B><FONT face=sans-serif size=1>($1,209,063)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>(a) At 10-31-12, the 3-month LIBOR rate was 0.31275%.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Fair value of derivative instruments by risk category</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The table below summarizes the fair value of derivatives held by the Fund at October 31, 2012 by risk category:</FONT></P>

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   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>FINANCIAL</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>ASSET</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>LIABILITY</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>STATEMENT OF ASSETS</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>INSTRUMENTS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>DERIVATIVES FAIR</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>DERIVATIVES</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>RISK</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>AND LIABILITIES LOCATION</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>LOCATION</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>VALUE</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>FAIR VALUE</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Interest rate</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Swap contracts</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Interest</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>&#8212;</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($1,209,063)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>contracts</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>at value</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Rate Swaps</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Total</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>&#8212;</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($1,209,063)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Effect of derivative instruments on the Statement of operations</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The table below summarizes the net realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended October 31, 2012:</FONT></P>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>STATEMENT OF</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>FUTURES</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>SWAP</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>RISK</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>OPERATIONS LOCATION</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>CONTRACTS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>CONTRACTS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>TOTAL</FONT>&nbsp;</TD></TR>

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</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Interest rate</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Net realized gain</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($22,590)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($196,225)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($218,815)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>contracts</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>(loss)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>&nbsp;</FONT></TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="20%"></TD>

   <TD noWrap align=left width="20%"></TD>

   <TD noWrap align=left width="20%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Total</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($22,590)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($196,225)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($218,815)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The table below summarizes the net change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended October 31, 2012:</FONT></P>

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<TR vAlign=bottom>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>STATEMENT OF</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>FUTURES</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>SWAP</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>RISK</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>OPERATIONS LOCATION</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>CONTRACTS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>CONTRACTS</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>TOTAL</FONT>&nbsp;</TD></TR>

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   <TD width="100%" colSpan=5>

   <HR noShade SIZE=1>

</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Interest rate</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>Change in</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($120,001)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($935,105)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>($1,055,106)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>contracts</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>unrealized</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>appreciation</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1>(depreciation)</FONT>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=left width="20%"><FONT face=sans-serif size=1></FONT></TD>

   <TD noWrap align=left width="20%"></TD>

   <TD noWrap align=left width="20%"></TD>

   <TD noWrap align=left width="20%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Total</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="20%">&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($120,001)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($935,105)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>($1,055,106)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 4 &#8212; Guarantees and indemnifications</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Under the Fund&#8217;s organizational documents, its Officers and Trustees are indemnified against certain liabilities 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&#8217;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. The risk of material loss from such claims is considered remote.</FONT></P>

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   <TD noWrap align=left colSpan=2><FONT face=sans-serif size=2>36</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 5 &#8212; Fees and transactions with affiliates</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>John Hancock Advisers, LLC (the Adviser) serves as investment adviser for the Fund. The Adviser is an indirect, wholly owned subsidiary of Manulife Financial Corporation (MFC).</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Management fee. </FONT></B><FONT face=serif size=2>The Fund has an investment advisory agreement with the Adviser under which the Fund pays a daily 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&#8217;s average daily net assets and the value attributable to the Credit Facility Agreement (see Note 7) (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&#8217;s average daily managed assets in excess of $300,000,000. The Adviser has a subadvisory agreement with John Hancock Asset Management a division of Manulife Asset Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser. The Fund is not responsible for payment of the subadvisory fees.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The investment management fees incurred for the year ended October 31, 2012, were equivalent to a net annual effective rate of 0.53% of the Fund&#8217;s average daily managed assets.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Accounting and legal services. </FONT></B><FONT face=serif size=2>Pursuant to a service agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services to the Fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred for the year ended October 31, 2012 amounted to an annual rate of 0.01% of the Fund&#8217;s average daily managed assets.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Trustee expenses. </FONT></B><FONT face=serif size=2>The Fund compensates each Trustee who is not an employee of the Adviser or its affiliates. The John Hancock Group of Funds Deferred Compensation Plan (the Plan) was in effect on October 31, 2012 but since then has been terminated. Under the Plan, deferred amounts were invested in various John Hancock funds. The investment of deferred amounts and the offsetting liability are included within Other receivables and prepaid expenses and Payable to affiliates &#8212; Trustees&#8217; fees, respectively, in the accompanying Statement of assets and liabilities.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 6 &#8212; Leverage risk</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund utilizes a Credit Facility Agreement (CFA) to increase its assets available for investment. When the Fund leverages its assets, common shareholders bear the fees associated with the CFA and have the potential to benefit or be disadvantaged from the use of leverage. The Adviser&#8217;s fee is also increased in dollar terms from the use of leverage. Consequently, the Fund and the Adviser may have differing interests in determining whether to leverage the Fund&#8217;s assets. Leverage creates risks that may adversely affect the return for the holders of common shares, including:</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; the likelihood of greater volatility of net asset value and market price of common shares</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; fluctuations in the interest rate paid for the use of the credit facility</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; increased operating costs, which may reduce the Fund&#8217;s total return</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; the potential for a decline in the value of an investment acquired through leverage, while the </FONT><FONT face=serif size=2>Fund&#8217;s obligations under such leverage remains fixed</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; the Fund is more likely to have to sell securities in a volatile market in order to meet asset </FONT><FONT face=serif size=2>coverage or other debt compliance requirements</FONT></P>

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<P style="TEXT-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&#8217;s return will be greater than if leverage had not been used, conversely, returns would be lower if the cost of the leverage exceeds the income or capital appreciation derived.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>In addition to the risks created by the Fund&#8217;s use of leverage, the Fund is subject to the risk that it would be unable to timely, or at all, obtain replacement financing if the CFA is terminated. Were this to happen, the Fund would be required to de-leverage, selling securities at a potentially inopportune time and incurring tax consequences. Further, the Fund&#8217;s ability to generate income from the use of leverage would be adversely affected.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 7 &#8212; Credit Facility Agreement</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Effective August 15, 2012, the Fund has entered into a CFA with Credit Suisse Securities (USA) LLC (CSSU), pursuant to which the Fund borrows money to increase its assets available for investment. In accordance with the 1940 Act, the Fund&#8217;s borrowings under the CFA will not exceed 33 1/3% of the Fund&#8217;s managed assets (net assets plus borrowings) at the time of any borrowing.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund pledges a portion of its assets as collateral to secure borrowings under the CFA. Such pledged assets are held in a special custody account with the Fund&#8217;s custodian. The amount of assets required to be pledged by the Fund is determined in accordance with the CFA. The Fund retains the benefits of ownership of assets pledged to secure borrowings under the CFA. Interest charged is at the rate of three month LIBOR plus 0.41% and is payable monthly. As of October 31, 2012, the Fund had borrowings of $90,300,000 at an interest rate of 0.72%, which are reflected in the Credit facility agreement payable on the Statement of assets and liabilities. During the period from August 15, 2012 to October 31, 2012, the average borrowings under the CFA and the effective average interest rate were $89,801,282 and 0.80%, respectively.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund may terminate the CFA with CSSU at any time. If certain asset coverage and collateral requirements or other covenants are not met, the CFA could be deemed in default and result in termination. Absent a default or termination event, CSSU is generally required to provide the Fund with 270 calendar days&#8217; notice before terminating or amending the facility.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Prior to August 15, 2012, the Fund borrowed money pursuant to a CFA with a subsidiary of BNP Paribas (BNP). Interest charged was at the rate of one month LIBOR plus 0.70% payable monthly. The Fund also paid a commitment fee of 0.60% per annum on the unused portion of the facility. The commitment fee for the period ended August 14, 2012 amounted to $14,400 and is included in the interest expense in the Statement of operations. During the period ended August 14, 2012, the average borrowings under the CFA with BNP and the effective average interest rate were $87,000,000 and 0.99%, respectively.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Note 8 &#8212; Purchase and sale of securities</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Purchases and sales of securities, other than short-term securities and U.S. Treasury obligations, aggregated $112,499,167 and $102,948,549, respectively, for the year ended October 31, 2012. Purchases and sales of U.S. Treasury obligations aggregated $23,734,749 and $26,157,925, respectively, for the year ended October 31, 2012.</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=4>Auditor&#8217;s report</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Report of Independent Registered Public Accounting Firm</FONT></B></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>To the Board of Trustees and Shareholders of John Hancock Income Securities Trust:</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations, of changes in net assets and of cash flows and the financial highlights present fairly, in all material respects, the financial position of John Hancock Income Securities Trust (the &#8220;Fund&#8221;) at October 31, 2012, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as &#8220;financial statements&#8221;) are the responsibility of the Fund&#8217;s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2012 by correspondence with the custodian, agent banks and brokers, and the application of alternative auditing procedures where securities purchased confirmations had not been received, provide a reasonable basis for our opinion.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>PricewaterhouseCoopers LLP</FONT><BR><FONT face=serif size=2>Boston, Massachusetts</FONT><BR><FONT face=serif size=2>December 21, 2012</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=4>Tax information</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Unaudited</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended October 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund reports the maximum amount allowable of its net taxable income as eligible for the corporate dividends-received deduction.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund reports the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Eligible shareholders will be mailed a 2012 Form 1099-DIV in early 2013. This will reflect the tax character of all distributions paid in calendar year 2012.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>In prior years, certain dividends paid by the Fund were generally taxed to individuals at a rate of 15%. For tax years beginning after December 31, 2012, such favorable treatment of dividend income is scheduled to expire as are certain other favorable tax provisions. As a result, absent congressional action, the maximum tax rate on dividend income will increase from 15% to 39.6%. Congress is considering various tax law changes that could alter these changes in tax rates or that could otherwise affect the Fund or its shareholders.</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=4>Additional information</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Unaudited</FONT></B></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Investment objective and policy</FONT></B></P>

<P style="TEXT-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&#8217;s investment objective is to generate a high level of current income consistent with prudent investment risk. There can be no assurance that the Fund will achieve its investment objective.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Under normal circumstances, the Fund invests at least 80% of net assets in income securities, consisting of the following: (i) marketable corporate debt securities, (ii) governmental obligations and (iii) cash and commercial paper. &#8220;Net assets&#8221; 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. The Fund may invest up to 20% of its total assets in income-producing preferred securities and common stocks. At least 75% of the Fund&#8217;s total assets will be represented by debt securities which are rated, at the time of acquisition, investment grade by Moody&#8217;s Investors Service, Inc. or Standard &amp; Poor&#8217;s Rating Corporation or in unrated securities determined by the Adviser to be of comparable quality.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Dividends and distributions</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>During the year ended October 31, 2012, dividends from net investment income totaling $1.0954 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=left width="25%"><FONT face=sans-serif size=1>December 30, 2011</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>$0.3049</FONT>&nbsp;</TD>

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   <TD noWrap align=left width="25%"><FONT face=sans-serif size=1>March 30, 2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>0.2639</FONT>&nbsp;</TD>

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   <TD noWrap align=left width="25%"><FONT face=sans-serif size=1>June 29, 2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>0.2728</FONT>&nbsp;</TD>

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   <TD noWrap align=left width="25%"><FONT face=sans-serif size=1>September 28, 2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="25%"><FONT face=sans-serif size=1>0.2538</FONT>&nbsp;</TD>

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   <TD noWrap align=right width="25%"><B><FONT face=sans-serif size=1>$1.0954</FONT></B>&nbsp;</TD>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Dividend reinvestment plan</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund&#8217;s Dividend Reinvestment Plan (the Plan) provides that distributions of dividends and capital gains are automatically reinvested in common shares of the Fund by Computershare Trust Company, N.A. (formerly known as The Bank of New York Mellon) (the Plan Agent). Every shareholder holding at least one full share of the Fund is entitled to participate in the Plan. In addition, every shareholder who became a shareholder of the Fund after June 30, 2011 and holds at least one full share of the Fund will be automatically enrolled in the Plan. Shareholders may withdraw from the Plan at any time and shareholders who do not participate in the Plan will receive all distributions in cash.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>If the Fund declares a dividend or distribution payable either in cash or in common shares of the Fund and the market price of shares on the payment date for the distribution or dividend equals or exceeds the Fund&#8217;s net asset value per share (NAV), the Fund will issue common shares to participants at a value equal to the higher of NAV or 95% of the market price. The number of additional shares to be credited to each participant&#8217;s account will be determined by dividing the dollar amount of the distribution or dividend by the higher of NAV or 95% of the market price. If the market price is lower than NAV, or if dividends or distributions are payable only in cash, then participants will receive shares purchased by the Plan Agent on participants&#8217; behalf on the New York Stock Exchange (the NYSE) or otherwise on the open market. If the market price exceeds</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>NAV before the Plan Agent has completed its purchases, the average per share purchase price may exceed NAV, resulting in fewer shares being acquired than if the Fund had issued new shares.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>There are no brokerage charges with respect to common shares issued directly by the Fund. However, whenever shares are purchased or sold on the NYSE or otherwise on the open market, each participant will pay a pro rata portion of brokerage trading fees, currently $0.05 per share purchased or sold. Brokerage trading fees will be deducted from amounts to be invested.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The reinvestment of dividends and net capital gains distributions does not relieve participants of any income tax that may be payable on such dividends or distributions.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Shareholders participating in the Plan may buy additional shares of the Fund through the Plan at any time in amounts of at least $50 per investment, up to a maximum of $10,000, with a total calendar year limit of $100,000. Shareholders will be charged a $5 transaction fee plus $0.05 per share brokerage trading fee for each order. Purchases of additional shares of the Fund will be made on the open market. Shareholders who elect to utilize monthly electronic fund transfers to buy additional shares of the Fund will be charged a $2 transaction fee plus $0.05 per share brokerage trading fee for each automatic purchase. Shareholders can also sell Fund shares held in the Plan account at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent&#8217;s Web site at www.computershare.com and clicking on EquityAccess &amp; More. The Plan Agent will mail a check to you (less applicable brokerage trading fees) on settlement date, which is three business days after your shares have been sold. If you choose to sell your shares through your stockbroker, you will need to request that the Plan Agent electronically transfer your shares to your stockbroker through the Direct Registration System.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Shareholders participating in the Plan may withdraw from the Plan at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent&#8217;s </FONT><FONT face=serif size=2>Web site at www.computershare.com and clicking on EquityAccess &amp; More. Such termination will be effective immediately if the notice is received by the Plan Agent prior to any dividend or distribution record date; otherwise, such termination will be effective on the first trading day after the payment date for such dividend or distribution, with respect to any subsequent dividend or distribution. If you withdraw, your shares will be credited to your account; or, if you wish, the Plan Agent will sell your full and fractional shares and send you the proceeds, less a transaction fee of $5.00 and less brokerage trading fees of $0.05 per share. </FONT><FONT face=serif size=2>If a shareholder does not maintain at least one whole share of common stock in the Plan account, the Plan Agent may terminate such shareholder&#8217;s participation in the Plan after written notice. Upon termination, shareholders will be sent a check for the cash value of any fractional share in the Plan account, less any applicable broker commissions and taxes.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Shareholders who hold at least one full share of the Fund may join the Plan by notifying the&nbsp;Plan Agent by telephone, in writing or by visiting the Plan Agent&#8217;s Web site at www.computershare.com and clicking on EquityAccess &amp; More. If received in proper form by the Plan Agent before the record date of a dividend, the election will be effective with respect to all dividends paid after such record date. If you wish to participate in the Plan and your shares are held in the name of a brokerage firm, bank or other nominee, please contact your nominee to see if it will participate in the Plan for you. If you wish to participate in the Plan, but your brokerage firm, bank or other nominee is unable to participate on your behalf, you will need to request that your shares be re-registered in your own name, or you will not be able to participate. The Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by you as representing the total amount registered in your name and held for your account by your nominee.</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund and the Plan Agent reserve the right to amend or terminate the Plan. Participants generally will receive written notice at least 90 days before the effective date of any amendment.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>In the case of termination, participants will receive written notice at least 90 days before the record date for the payment of any dividend or distribution by the Fund.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>All correspondence or additional information about the Plan should be directed to Computershare Trust Company, N.A., at the address stated below or by calling 1-800-852-0218, 1-201-680-6578 (For International Telephone Inquiries) and 1-201-680-6610 (For the Hearing Impaired (TDD)).</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Shareholder communication and assistance</FONT></B></P>

<P style="TEXT-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 style="TEXT-ALIGN: left"><STRONG><FONT face=sans-serif size=1>Computershare Trust Company, N.A.</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&#8211;1900</FONT><BR><FONT face=sans-serif size=1>Telephone: 1-800-852-0218</FONT></STRONG></P>

<P style="TEXT-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 </FONT><FONT face=serif size=2>assistance.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Shareholder meeting</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Fund held its Annual Meeting of Shareholders on November 9, 2012. The following proposal was considered by the shareholders:</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=serif size=2>Proposal: </FONT></B><FONT face=serif size=2>Election of thirteen (13) Nominees to serve until their respective successors have been duly elected and qualified. Each nominee was elected by the Fund&#8217;s shareholders and the votes cast with respect to each Trustee are set forth below.</FONT></P>

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   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>TOTAL VOTES</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>TOTAL VOTES WITHHELD</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>FOR THE NOMINEE</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.005pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>FROM THE NOMINEE</FONT>&nbsp;</TD></TR>

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   <TD width="99%" colSpan=3>

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   <TD noWrap align=left width="33%"><B><FONT face=serif size=2>Independent Trustees</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Charles L. Bardelis</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,039,726</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>240,552</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Peter S. Burgess</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,062,578</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>217,700</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>William H. Cunningham</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,100,143</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>180,135</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Grace K. Fey</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,036,621</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>243,657</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Theron S. Hoffman</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,063,622</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>216,656</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Deborah C. Jackson</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,098,733</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>181,545</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Hassell H. McClellan</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,044,508</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>235,770</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>James M. Oates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,040,289</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>239,989</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Steven R. Pruchansky</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,094,643</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>185,635</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Gregory A. Russo</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,112,320</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>167,958</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><B><FONT face=serif size=2>Non-Independent Trustees</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>James R. Boyle</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,068,469</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>211,809</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Craig Bromley</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>9,034,479</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>245,799</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=serif size=2>Warren A. Thomson</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="33%"><FONT face=serif size=2>9,062,938</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.009pt" noWrap align=left width="33%"><FONT face=serif size=2>217,340</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>43</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Board Consideration of and Continuation of Investment Advisory Agreement and Subadvisory Agreement</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board of Trustees (the Board, the members of which are referred to as Trustees) of </FONT><FONT face=serif size=2>John Hancock Income Securities Trust (the Fund) met in-person on May 6&#8211;8 and June 3&#8211;5, 2012 to consider the approval of the Fund&#8217;s investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser), the Fund&#8217;s investment adviser. The Board also considered the approval of the investment subadvisory agreement (the Subadvisory Agreement) among the Adviser, Manulife Asset Management (US) LLC (the Subadviser) and the Fund. The Advisory Agreement and the Subadvisory Agreement are referred to as the Agreements.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Activities and composition of the Board</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>On June 3&#8211;5, 2012, the Board consisted of nine individuals, seven of whom were Independent Trustees. Independent Trustees are generally those individuals who are not employed by or have any significant business or professional relationship with the Adviser or the Subadviser. The Trustees are responsible for the oversight of operations of the Fund and perform various duties required of directors of investment companies by the Investment Company Act of 1940, as amended (the 1940 Act). The Independent Trustees have independent legal counsel to assist them in connection with their duties. The Board has appointed an Independent Trustee as Chairman. On June 3&#8211;5, 2012, the Board had four standing committees that were composed entirely of Independent Trustees: the Audit Committee; the Compliance Committee; the Nominating, Governance and Administration Committee; and the Contracts &amp; Operations Committee. Additionally, on June 3&#8211;5, 2012, Investment Performance Committee A was a standing committee of the Board composed of Independent Trustees and one Trustee who is affiliated with the Adviser. Investment Performance Committee A was responsible for overseeing and monitoring matters relating to the investment performance of the Fund. The Board also designated an Independent Trustee as Vice Chairman to serve in the absence of the Chairman. The Board also designates working groups or ad hoc committees as it deems appropriate.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>The approval process</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Under the 1940 Act, the Board is required to consider the continuation of the Agreements each year. Throughout the year, the Board, acting directly and through its committees, regularly reviews and assesses the quality of the services that the Fund receives under these Agreements. The Board reviews reports of the Adviser at least quarterly, which include Fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year. The Board considers at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by the Adviser and Subadviser to the Fund and its shareholders.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Prior to the May 6&#8211;8, 2012 meeting, the Board requested and received materials specifically relating to the Agreements. The materials provided in connection with the May meeting included information compiled and prepared by Lipper, a Thomson Reuters company (Lipper), on Fund fees and expenses, the investment performance of the Fund and other matters including the prices at which Fund shares have traded. This Fund information is assembled in a format that permits comparison with similar information from a Category and a subset of the Category referred to as the Expense Group, each as determined by Lipper, and with the Fund&#8217;s benchmark index. </FONT><FONT face=serif size=2>The Category includes all funds that invest similarly to the way the Fund invests. The Expense Group represents funds of similar size, excluding passively managed funds and funds-of-funds. The Fund&#8217;s benchmark index is an unmanaged index of securities that is provided as a basis for comparison with the Fund&#8217;s performance. Other material provided for the Fund review included (a) information on the profitability of the Agreements to the Adviser and a discussion of any additional benefits to the Adviser or Subadviser or their affiliates that result from being the Adviser or Subadviser to the Fund; (b) a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees charged to other clients, such as institutional clients and</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>other investment companies, having similar investment mandates, as well as the performance of those other clients and a comparison of the services provided to those other clients and the services provided to the Fund; (c) the impact of economies of scale; and (d) a summary of aggregate amounts paid by the Fund to the Adviser.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>At an in-person meeting held on May 6&#8211;8, 2012, the Board reviewed materials relevant to its consideration of the Agreements. As a result of the discussions that occurred during the May 6&#8211;8, 2012 meeting, the Board asked the Adviser for additional information on certain matters. The Adviser provided the additional information and the Board also considered this information as part of its consideration of the Agreements.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>At an in-person meeting held on June 3&#8211;5, 2012, the Board, including the Independent Trustees, formally considered the continuation of the Advisory Agreement and the Subadvisory Agreement, each for an additional one-year term. The Board considered what it believed were key relevant factors that are described under separate headings presented below.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board also considered other matters important to the approval process, such as services related to the valuation and pricing of Fund portfolio holdings. Other important matters considered by the Board were the direct and indirect benefits to the Adviser, the Subadviser and their affiliates from their relationship with the Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Board&#8217;s review.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Nature, extent and quality of services</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board reviewed the nature, extent and quality of services provided by the Adviser and the Subadviser, including the investment advisory services and the resulting performance of the Fund.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. It considered the background and experience of senior management and investment professionals responsible for managing the Fund. The Board considered the investment philosophy, research and investment decision-making processes of the Subadviser responsible for the daily investment activities of the Fund, including, among other things, portfolio trading capabilities, use of technology, commitment to compliance and approach to training and retaining portfolio managers and other research, advisory and management personnel.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board considered the Subadviser&#8217;s history and experience providing investment services to the Fund. The Board considered the Adviser&#8217;s investment manager analytical capabilities, market and economic knowledge and execution of its Subadviser oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs, record of compliance with applicable laws and regulations, with the Fund&#8217;s investment policies and restrictions and with the applicable Code of Ethics, and the responsibilities of the Adviser&#8217;s and Subadviser&#8217;s compliance departments.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>In addition to advisory services, the Board considered the quality of the administrative services provided to the Fund by the Adviser under a separate agreement. The Board noted that the Adviser and its affiliates provide the Fund with certain administrative services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. The Board reviewed the structure and duties of the Adviser&#8217;s administration, accounting, legal and compliance departments and considered the Adviser&#8217;s and its affiliate&#8217;s policies and procedures for assuring compliance with applicable laws and regulations.</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board also received information about the nature, extent and quality of services provided by and fee rates charged by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board reviewed a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees charged to other clients having similar investment mandates, the services provided to those other clients as compared to the services provided to the Fund, the performance of those other clients as compared to the performance by the Fund and other factors relating to those other clients. The Board considered the significant differences between the Adviser&#8217;s and Subadviser&#8217;s services to the Fund and the services they provide to other clients. For other clients that are not closed-end funds, the differences in services relate to the more burdensome regulatory and legal obligations of closed-end funds, the enhanced management and oversight arising from the public trading of Fund shares on an exchange and the potentially higher turnover of closed-end fund portfolio holdings. When compared to all clients including mutual funds, the Adviser has greater oversight and supervisory responsibility for the Fund and undertakes greater entrepreneurial risk as the sponsor of the Fund.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Fund performance</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board was provided with reports, independently prepared by Lipper, which included a comprehensive analysis of the Fund&#8217;s performance. The Board also examined materials discussing Fund performance and the Fund&#8217;s investment objective, strategies and outlook. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by the Adviser, which analyzed various factors that may affect the Lipper rankings. The Board reviewed information regarding the investment performance of the Fund as compared to its Lipper Category as well as its benchmark index (see chart below). The Board was provided with a description of the methodology used by Lipper to select the funds in the Category. The Board also considered updated performance information provided by the Adviser at its May and June 2012 meetings. The Board regularly reviews the performance of the Fund throughout the year and attaches more importance to performance over relatively longer periods of time, typically three to five years.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>Set forth below is the performance of the Fund (based on net asset value (NAV) and market value (Market)) over certain time periods ended December 31, 2011 and that of its Category average and benchmark index over the same periods:</FONT></P>

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   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>1 YEAR</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>3 YEAR</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>5 YEAR</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>10 YEAR</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="20%"><B><FONT face=sans-serif size=1>Income Securities Trust (NAV)</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>6.47%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>22.61%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>7.21%</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="20%"><B><FONT face=sans-serif size=1>6.43%</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Corporate Debt BBB-Rated Category</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>6.76%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>19.64%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>4.34%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>8.00%</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Average (NAV)</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Barclay US Gvt/Cr TR Index</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>8.74%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>6.60%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>6.55%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>5.85%</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.024pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Income Securities Trust (Market)</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>4.59%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>24.59%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>8.29%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>7.61%</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Corporate Debt BBB-Rated Category</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>8.36%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>20.03%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>4.11%</FONT>&nbsp;</TD>

   <TD noWrap align=right width="20%"><FONT face=sans-serif size=1>8.02%</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.031pt" noWrap align=left width="20%"><FONT face=sans-serif size=1>Average (Market)</FONT>&nbsp;</TD>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board noted that the Fund&#8217;s NAV performance compared favorably to the Category&#8217;s average NAV performance and the benchmark index&#8217;s performance over all periods shown, except for the one-year period over which the Fund underperformed its Category&#8217;s average performance and benchmark index&#8217;s performance, and the ten-year period over which it underperformed its Category&#8217;s average performance. The Board was advised that the Fund&#8217;s recent underperformance versus the benchmark index related to the differing amounts of U.S. Treasury securities between the two.</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Expenses and fees</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board, including the Independent Trustees, reviewed the Fund&#8217;s contractual advisory fee rate payable by the Fund to the Adviser as compared with the other funds in its Expense Group. The Board also received information about the investment subadvisory fee rate payable by the Adviser to the Subadviser for investment subadvisory services. The Board considered the services provided and the fees charged by the Adviser and the Subadviser to other clients with similar investment mandates, including other registered investment companies, institutional investors and separate accounts.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>In addition, the Board considered the cost of the services provided to the Fund by the Adviser. The Board received and considered expense information regarding the Fund&#8217;s various components, including advisory fees and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, administration fees and other miscellaneous fees (</FONT><I><FONT face=serif size=2>e.g.</FONT></I><FONT face=serif size=2>, fees for accounting and legal services). The Board considered comparisons of these expenses to the Expense Group median. The Board also considered expense information regarding the Fund&#8217;s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking any fee limitation arrangement by the Adviser into account (Net Expense Ratio). The Gross Expense Ratio and Net Expense Ratio are based on common and leveraged assets and include interest expense relating to leverage. The Board considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Expense Group median.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board noted that the Fund&#8217;s advisory fee ratio was one basis point below the Expense Group median advisory fee ratio. The Board noted the following information about the Fund&#8217;s Gross and Net Expense Ratios derived from the Fund&#8217;s 2011 financial statements in relation with the Fund&#8217;s Expense Group median provided by Lipper in April 2012:</FONT></P>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>Advisory Fee Ratio</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>0.53%</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>0.54%</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.007pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>Gross Expense Ratio</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.012pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>1.04%</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.015pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>0.99%</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.016pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>Net Expense Ratio</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.02pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>1.04%</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.023pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>0.99%</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board was aware that the Expense Group includes funds with varying amounts of leverage and funds that use borrowing and preferred stocks as leverage; that the Expense Group comparison shows advisory fees and expense ratios as percentages of assets attributable to total managed assets; and that the Fund&#8217;s fees and expenses may be higher than funds in the Expense Group with lower levels of leverage or funds that leverage with preferred stocks. The Board also reviewed comparative information which illustrated the expenses of the Fund and the Expense Group for the cost of leverage or interest expense and the Fund compared favorably to peers in this analysis.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board received and reviewed statements relating to the Adviser&#8217;s financial condition and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by the Adviser for services under the Advisory Agreement, as well as from other relationships between the Fund and the Adviser and its affiliates. The Board reviewed the Adviser&#8217;s profitability with respect to the Fund and other funds the Board currently oversees for the year ended December 31, 2011 compared to available aggregate profitability data provided for the year ended December 31, 2010. The Board reviewed the Adviser&#8217;s profitability with respect to other fund complexes managed by the Adviser and/or its affiliates. The Board reviewed the Adviser&#8217;s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products.</FONT></P>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust&nbsp; </FONT>&nbsp;<FONT face=sans-serif size=2>47</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board also considered a comparison of the Adviser&#8217;s profitability to that of a limited number of other investment advisers whose profitability information is publicly available. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Adviser, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is limited.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board considered limited profitability information with respect to the Subadviser, which is affiliated with the Adviser. In addition, as noted above, the Board considered basic assumptions and methodology for allocating expenses in the Subadviser&#8217;s profitability information.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Economies of scale</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board, including the Independent Trustees, considered the extent to which economies of scale might be realized as the assets of the Fund increase but recognized that there is limited ability to grow assets for a closed-end fund. Possible changes in the advisory fee rate or structure in order to enable the Fund to participate in these economies of scale (</FONT><I><FONT face=serif size=2>e.g.</FONT></I><FONT face=serif size=2>, through the use of breakpoints in the advisory fee at higher asset levels) are periodically discussed. The Board also considered the Adviser&#8217;s overall operations and its ongoing investment in its business in order to expand the scale of, and improve the quality of, its operations that benefit the Fund.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board&#8217;s understanding that most of the Adviser&#8217;s costs are not specific to individual funds, but rather are incurred across a variety of products and services. To ensure that any economies are reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the contractual advisory fee rate.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Other benefits to the Adviser and the Subadviser</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board understands that the Adviser, the Subadviser or their affiliates may derive other ancillary benefits from their relationship with the Fund, both tangible and intangible, such as their ability to leverage investment professionals who manage other portfolios, an increase in their profile in the investment advisory community and the engagement of their affiliates and/or significant shareholders as service providers to the Fund, including for administrative and distribution services. The Board believes that certain of these benefits are difficult to quantify. The Board also was informed that the Subadviser may use third-party research obtained by soft dollars generated by certain mutual fund transactions to assist itself in managing all or a number of its other client accounts.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Board determination</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>The Board unanimously approved the continuation of the Advisory Agreement and the Subadvisory Agreement each for an additional one-year term. Based upon its evaluation of relevant factors in their totality, the Board was satisfied that the terms of the Agreements, including the advisory and subadvisory fee rates, were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreements, the Board did not identify any single factor or any group of factors as all-important or controlling, but considered all factors together. Different Trustees may have attributed different weights to the various factors considered. The Independent Trustees were also assisted by independent legal counsel in making this determination. The Trustees&#8217; conclusions may be based in part on their consideration of these arrangements in prior years and on their ongoing regular review of Fund performance and operations throughout the year.</FONT></P>

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   <TD noWrap align=left colSpan=2><FONT face=sans-serif size=2>48&nbsp; </FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=7>Trustees and Officers</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>This chart provides information about the Trustees and Officers who oversee your John Hancock fund as of December 1, 2012. Officers elected by the Trustees manage the day-to-day operations of the Portfolio and execute policies formulated by the Trustees.</FONT></B></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Independent Trustees</FONT></B></P>

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   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Name, Year of Birth</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>Trustee</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Number of</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><I><FONT face=sans-serif size=1>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>of the</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>John&nbsp;Hancock</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Principal occupation(s) and other</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>Trust</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>funds overseen</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>directorships during past 5 years</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>since</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>by Trustee</FONT></B>&nbsp;</TD></TR>

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   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>James M. Oates,</FONT></B><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Born: 1946</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Managing Director, Wydown Group (financial consulting firm) (since 1994); Chairman and Director,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Emerson Investment Management, Inc. (since 2000); Independent Chairman, Hudson Castle Group, Inc.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>(formerly IBEX Capital Markets, Inc.) (financial services company) (1997&#8211;2011); Director, Stifel Financial</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>(since 1996); Director, Investor Financial Services Corporation (1995&#8211;2007); Director, Connecticut River</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Bancorp (since 1998); Director, Virtus Funds (formerly Phoenix Mutual Funds) (since 1988). Trustee</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>and Chairman of the Board, John Hancock retail funds (since 2012); Trustee, John Hancock Funds III</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>(2005&#8211;2006); Trustee (since 2004) and Chairman of the Board (since 2005), John Hancock Variable</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="85%" colSpan=2><FONT face=sans-serif size=1>Insurance Trust; Trustee and Chairman of the Board (since 2005), John Hancock Funds II.</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

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   <TD width="100%" colSpan=3></TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Charles L. Bardelis,</FONT></B><SUP><FONT face=sans-serif size=1>2,3 </FONT></SUP><FONT face=sans-serif size=1>Born: 1941</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.005pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Director, Island Commuter Corp. (marine transport). Trustee, John Hancock retail funds (since 2012);</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, John Hancock Funds III (2005&#8211;2006); Trustee, John Hancock Variable Insurance Trust (since</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>1988); Trustee, John Hancock Funds II (since 2005).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp; </TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Peter S. Burgess,</FONT></B><SUP><FONT face=sans-serif size=1>2,3 </FONT></SUP><FONT face=sans-serif size=1>Born: 1942</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.005pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Consultant (financial, accounting and auditing matters) (since 1999); Certified Public Accountant;</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Partner, Arthur Andersen (independent public accounting firm) (prior to 1999); Director, Lincoln</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Educational Services Corporation (since 2004); Director, Symetra Financial Corporation (since 2010);</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>former Director, PMA Capital Corporation (2004&#8211;2010). Trustee, John Hancock retail funds (since 2012);</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, John Hancock Funds III (2005&#8211;2006); Trustee, John Hancock Variable Insurance Trust and</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>John Hancock Funds II (since 2005).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>William H. Cunningham, </FONT></B><FONT face=sans-serif size=1>Born: 1944</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2005</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>System and former President of the University of Texas, Austin, Texas; Director, LIN Television (since</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>2009); Chairman (since 2009) and Director (since 2006), Lincoln National Corporation (insurance);</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Director, Resolute Energy Corporation (since 2009); Director, Southwest Airlines (since 2000);</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>former Director, Introgen (manufacturer of biopharmaceuticals) (until 2008); former Director, Hicks</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Acquisition Company&nbsp;I, Inc. (until 2007); former Advisory Director, JP Morgan Chase Bank (formerly</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Texas Commerce Bank&#8211;Austin) (until 2009). Trustee, John Hancock retail funds (since 1986); Trustee,</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>John Hancock Variable Insurance Trust (since 2012); Trustee, John Hancock Funds II (since 2012</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>and 2005&#8211;2006).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Grace K. Fey,</FONT></B><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Born: 1946</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President,</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Frontier Capital Management Company (1988&#8211;2007); Director, Fiduciary Trust (since 2009).</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, John Hancock retail funds (since 2012); Trustee, John Hancock Variable Insurance Trust and</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>John Hancock Funds II (since 2008).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>49</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Independent Trustees </FONT></B><FONT face=sans-serif size=1>(continued)</FONT></P>

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<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Name, Year of Birth</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>Trustee</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Number of</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><I><FONT face=sans-serif size=1>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>of the</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>John&nbsp;Hancock</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Principal occupation(s) and other</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>Trust</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>funds overseen</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>directorships during past 5 years</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>since</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>by Trustee</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Theron S. Hoffman,</FONT></B><SUP><FONT face=sans-serif size=1>2,3 </FONT></SUP><FONT face=sans-serif size=1>Born: 1947</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.006pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Chief Executive Officer, T. Hoffman Associates, LLC (consulting firm) (since 2003); Director, The Todd</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Organization (consulting firm) (2003&#8211;2010); President, Westport Resources Management (investment</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>management consulting firm) (2006&#8211;2008); Senior Managing Director, Partner and Operating Head,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Putnam Investments (2000&#8211;2003); Executive Vice President, The Thomson Corp. (financial and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>legal information publishing) (1997&#8211;2000). Trustee, John Hancock retail funds (since 2012); Trustee,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%" colSpan=2><FONT face=sans-serif size=1>John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Deborah C. Jackson, </FONT></B><FONT face=sans-serif size=1>Born: 1952</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2008</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>President, Cambridge College, Cambridge, Massachusetts (since 2011); Chief Executive Officer,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>American Red Cross of Massachusetts Bay (2002&#8211;2011); Board of Directors of Eastern Bank Corporation</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>(since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>of American Student Assistance Corporation (1996&#8211;2009); Board of Directors of Boston Stock Exchange</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>(2002&#8211;2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007&#8211;2011).</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, John Hancock retail funds (since 2008); Trustee of John Hancock Variable Insurance Trust and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>John Hancock Funds II (since 2012).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Hassell H. McClellan,</FONT></B><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Born: 1945</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Associate Professor, The Wallace E. Carroll School of Management, Boston College (since 1984);</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, Virtus Variable Insurance Trust (formerly Phoenix Edge Series Funds) (since 2008); Director,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>The Barnes Group (since 2010). Trustee, John Hancock retail funds (since 2012); Trustee, John Hancock</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Funds III (2005&#8211;2006); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>(since 2005).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Steven R. Pruchansky, </FONT></B><FONT face=sans-serif size=1>Born: 1944</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2005</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Director,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>First Signature Bank &amp; Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Maxwell Building Corp. (until 1991). Trustee (since 1992) and Chairman of the Board (2011&#8211;2012),</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>John Hancock retail funds; Trustee, John Hancock Variable Insurance Trust and John Hancock Funds&nbsp;II</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>(since 2012).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Gregory A. Russo, </FONT></B><FONT face=sans-serif size=1>Born: 1949</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2009</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Director and Audit Committee Chairman (since 2012) and Member, Audit Committee and Finance</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Committee (since 2011), NCH Healthcare System, Inc. (holding company for multi-entity healthcare</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>system); Director and Member of Finance Committee, The Moorings, Inc. (nonprofit continuing care</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>community) (since 2012); Vice Chairman, Risk &amp; Regulatory Matters, KPMG LLP (KPMG) (2002&#8211;2006);</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Vice Chairman, Industrial Markets, KPMG (1998&#8211;2002); Chairman and Treasurer, Westchester</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>County, New York, Chamber of Commerce (1986&#8211;1992); Director, Treasurer and Chairman of</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Audit and Finance Committees, Putnam Hospital Center (1989&#8211;1995); Director and Chairman of</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990&#8211;1995).</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, John Hancock retail funds (since 2008); Trustee, John Hancock Variable Insurance Trust and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>John Hancock Funds&nbsp;II (since 2012).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="13%"></TD>

   <TD width="86%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left colSpan=2><FONT face=sans-serif size=2>50&nbsp;&nbsp;</FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

<HR align=center width="100%" noShade SIZE=2>



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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Non-Independent Trustees</FONT></B><SUP><FONT face=sans-serif size=1>4</FONT></SUP></P>

<DIV align=left>

<TABLE style="WIDTH: 80%" cellSpacing=0 border=0>



<TR>

   <TD width="70%"></TD>

   <TD width="15%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Name, Year of Birth</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>Trustee</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Number of</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><I><FONT face=sans-serif size=1>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>of the</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>John&nbsp;Hancock</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Principal occupation(s) and other</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>Trust</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>funds overseen</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>directorships during past 5 years</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.308pt" noWrap align=left width="15%"><B><FONT face=sans-serif size=1>since</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>by Trustee</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>James R. Boyle,</FONT></B><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Born: 1959</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Senior Executive Vice President, John Hancock Financial Services (since 1999, including prior positions);</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Chairman and Director, John Hancock Advisers, LLC, John Hancock Funds, LLC and John Hancock</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Investment Management Services, LLC (2005&#8211;2010). Trustee, John Hancock retail funds (since 2012 and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>2005&#8211;2010), Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005).</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Craig Bromley,</FONT></B><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Born: 1966</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>President, John Hancock Financial Services (since 2012); Senior Executive Vice President and General</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Manager, U.S. Division, John Hancock Financial Services (since 2012); President and Chief Executive</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Officer, Manulife Insurance Company (Manulife (Japan) (2005&#8211;2010), including prior positions).</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Trustee, John Hancock retail funds (since 2012); Trustee, John Hancock Variable Insurance Trust and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>John Hancock Funds II (since 2012).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Warren A. Thomson,</FONT></B><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Born: 1955</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Senior Executive Vice President and Chief Investment Officer, Manulife Financial Corporation (since</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>2001, including prior positions); Director, Manulife Trust Company and Manulife Bank of Canada (since</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>2001, including prior positions); Director and Chairman, Manulife Asset Management (since 2001,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>including prior positions). Trustee, John Hancock retail funds, John Hancock Variable Insurance Trust and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>John Hancock Funds&nbsp;II (since 2012).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Principal officers who are not Trustees</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>&nbsp;</FONT></B></TD>

   <TD noWrap align=left width="15%"></TD>

   <TD noWrap align=left width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Name, Year of Birth</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Officer</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><I><FONT face=sans-serif size=1>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>of the</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Principal occupation(s) and other</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Trust</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><B><FONT face=sans-serif size=1>directorships during past 5 years</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>since</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Hugh McHaffie, </FONT></B><FONT face=sans-serif size=1>Born: 1959</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2012</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><I><FONT face=sans-serif size=1>President</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Executive Vice President, John Hancock Financial Services (since 2006, including prior positions);</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Chairman and Director, John Hancock Advisers, LLC, John Hancock Investment Management Services,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>LLC and John Hancock Funds, LLC (since 2010); President, John Hancock Advisers, LLC (since 2012);</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>President, John Hancock Investment Management Services, LLC (since 2010). President (since 2012) and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>former Trustee (2010&#8211;2012), John Hancock retail funds; President, John Hancock Variable Insurance</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>Trust and John Hancock Funds II (since 2009).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Andrew G. Arnott, </FONT></B><FONT face=sans-serif size=1>Born: 1971</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2009</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left width="100%" colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><I><FONT face=sans-serif size=1>Executive Vice President</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Senior Vice President, John Hancock Financial Services (since 2009); Executive Vice President,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>John Hancock Advisers, LLC (since 2005); Executive Vice President, John Hancock Investment</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Management Services, LLC (since 2006); President, John Hancock Funds, LLC (since 2004, including</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>prior positions); Executive Vice President, John Hancock retail funds (since 2007, including prior</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>positions); Executive Vice President, John Hancock Variable Insurance Trust and John Hancock Funds II</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="70%"><FONT face=sans-serif size=1>(since 2007, including prior positions).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="70%"><B><FONT face=sans-serif size=1>Thomas M. Kinzler, </FONT></B><FONT face=sans-serif size=1>Born: 1955</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2006</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="70%"><I><FONT face=sans-serif size=1>Secretary and Chief Legal Officer</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>Vice President, John Hancock Financial Services (since 2006); Secretary and Chief Legal Counsel,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=3><FONT face=sans-serif size=1>John Hancock Funds, LLC (since 2007); Secretary and Chief Legal Officer, John Hancock retail funds,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%" colSpan=2><FONT face=sans-serif size=1>John Hancock Variable Insurance Trust and John Hancock Funds II (since 2006).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>51</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>Principal officers who are not Trustees </FONT></B><FONT face=sans-serif size=1>(continued)</FONT></P>

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   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Name, Year of Birth</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Officer</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><I><FONT face=sans-serif size=1>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>of the</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Principal occupation(s) and other</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>Trust</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><B><FONT face=sans-serif size=1>directorships during past 5 years</FONT></B>&nbsp;</TD>

   <TD noWrap align=right width="15%"><B><FONT face=sans-serif size=1>since</FONT></B>&nbsp;</TD></TR>

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   <TD width="100%" colSpan=2>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Francis V. Knox, Jr., </FONT></B><FONT face=sans-serif size=1>Born: 1947</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2005</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

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</FONT></B></TD></TR>

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   <TD noWrap align=left width="85%"><I><FONT face=sans-serif size=1>Chief Compliance Officer</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, John Hancock</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>retail funds, John Hancock Variable Insurance Trust, John Hancock Funds II, John Hancock Advisers,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>LLC and John Hancock Investment Management Services, LLC (since 2005); Vice President and Chief</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>Compliance Officer, John Hancock Asset Management a division of Manulife Asset Management (US)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>LLC (2005&#8211;2008).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Charles A. Rizzo, </FONT></B><FONT face=sans-serif size=1>Born: 1957</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2007</FONT>&nbsp;</TD></TR>

<TR>

   <TD noWrap align=left colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="85%"><I><FONT face=sans-serif size=1>Chief Financial Officer</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>Advisers, LLC and John Hancock Investment Management Services, LLC (since 2008); Chief Financial</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>Officer, John Hancock retail funds, John Hancock Variable Insurance Trust and John Hancock</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>Funds&nbsp;II (since 2007).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=2>&nbsp;&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" noWrap align=left width="85%"><B><FONT face=sans-serif size=1>Salvatore Schiavone, </FONT></B><FONT face=sans-serif size=1>Born: 1965</FONT>&nbsp;</TD>

   <TD noWrap align=right width="15%"><FONT face=sans-serif size=1>2009</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left colSpan=3><B><FONT face=sans-serif color=#000000 size=1>

   <HR noShade SIZE=1>

</FONT></B></TD></TR>

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   <TD noWrap align=left width="85%"><I><FONT face=sans-serif size=1>Treasurer</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

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   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>Advisers, LLC and John Hancock Investment Management Services, LLC (since 2007); Treasurer,</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>John Hancock retail funds (since 2007, including prior positions); Treasurer, John Hancock Variable</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="100%" colSpan=2><FONT face=sans-serif size=1>Insurance Trust (since 2010 and 2007&#8211;2009, including prior positions); Treasurer, John Hancock Fund II</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="85%"><FONT face=sans-serif size=1>(since 2010, including prior positions).</FONT>&nbsp;</TD>

   <TD noWrap align=left width="15%">&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>John Hancock retail funds is comprised of John Hancock Funds III and 33 other John Hancock funds consisting of 23&nbsp;series of other John Hancock trusts and 10 closed-end funds.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210&#8211;2805.</FONT></P>

<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>Each Trustee holds office until his or her successor is elected and qualified, or until the Trustee&#8217;s death, retirement, resignation or removal.</FONT></P>

<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Became a Trustee of the Fund, effective December 1, 2012.</FONT></P>

<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>3 </FONT></SUP><FONT face=sans-serif size=1>Member of Audit Committee.</FONT></P>

<P style="TEXT-ALIGN: left"><SUP><FONT face=sans-serif size=1>4 </FONT></SUP><FONT face=sans-serif size=1>Because Messrs. Bromley and Thomson are senior executives or directors and Mr. Boyle held prior positions as a senior executive or director with the Adviser and/or its affiliates, each of them is considered an &#8220;interested person,&#8221; as defined in the Investment Company Act of 1940, of the Fund.</FONT></P>

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   <TD noWrap align=left colSpan=2><FONT face=sans-serif size=2>52&nbsp; </FONT>&nbsp;<FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=7>More information</FONT></P>

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   <TD width="33%"></TD>

   <TD width="33%"></TD>

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   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Trustees</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Officers</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Investment adviser</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>James M. Oates</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Hugh McHaffie</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>John Hancock Advisers, LLC</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.003pt" noWrap align=left width="33%"><I><FONT face=serif size=2>Chairman</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="33%"><I><FONT face=serif size=2>President</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Subadviser</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Charles L. Bardelis</FONT><FONT face=sans-serif size=1>*</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Andrew G. Arnott</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>John Hancock Asset Management</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>James R. Boyle</FONT><FONT face=sans-serif size=1>&#8224;</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><I><FONT face=serif size=2>Executive Vice President</FONT></I>&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.003pt" noWrap align=left width="33%"><FONT face=serif size=2>a division of Manulife Asset</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Craig Bromley</FONT><FONT face=sans-serif size=1>&#8224;</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Management (US) LLC</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Peter S. Burgess</FONT><FONT face=sans-serif size=1>*</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Thomas M. Kinzler</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>William H. Cunningham</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><EM><FONT face=serif size=2>Secretary and Chief Legal Officer</FONT></EM>&nbsp;&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Custodian</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Grace K. Fey</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>State Street Bank and</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Theron S. Hoffman</FONT><FONT face=sans-serif size=1>*</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Francis V. Knox, Jr.</FONT>&nbsp;&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Trust Company</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Deborah C. Jackson</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><EM><FONT face=serif size=2>Chief Compliance Officer</FONT></EM>&nbsp;&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Hassell H. McClellan</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Transfer agent</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Steven R. Pruchansky</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Charles A. Rizzo</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Computershare Shareowner</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6pt" noWrap align=left width="33%"><I><FONT face=serif size=2>Vice Chairman</FONT></I>&nbsp;</TD>

   <TD noWrap align=left width="33%"><EM><FONT face=serif size=2>Chief Financial Officer</FONT></EM>&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Services, LLC</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Gregory A. Russo</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Warren A. Thomson</FONT><FONT face=sans-serif size=1>&#8224;</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Salvatore Schiavone</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><STRONG><FONT face=Arial size=1>Legal counsel</FONT></STRONG>&nbsp;</TD></TR>

<TR>

   <TD width="33%">&nbsp; </TD>

   <TD width="33%"><EM><FONT face=serif size=2>Treasurer</FONT></EM>&nbsp;&nbsp;&nbsp;&nbsp;</TD>

   <TD width="33%"><FONT face=serif size=2>K&amp;L Gates LLP</FONT>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>*Member of the</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 4.447pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>Audit&nbsp;Committee</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><STRONG><FONT face=sans-serif size=1>Independent registered</FONT></STRONG>&nbsp;&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>&#8224;Non-Independent Trustee</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>public accounting firm</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>PricewaterhouseCoopers LLP</FONT>&nbsp;</TD></TR>

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   <TD width="33%">&nbsp;</TD>

   <TD width="33%">&nbsp;</TD>

   <TD width="33%">&nbsp; </TD></TR>

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   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Stock symbol</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=serif size=2>Listed New York Stock</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.003pt" noWrap align=left width="33%"><FONT face=serif size=2>Exchange: JHS</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=1>For shareholder assistance refer to page 43</FONT></B></P>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1>You can also contact us:</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 64pt" noWrap align=left width="33%"><B><FONT face=sans-serif size=1>1-800-852-0218</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1>Regular mail:</FONT></B>&nbsp;</TD>

   <TD noWrap align=left width="33%"><B><FONT face=sans-serif size=1></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 64pt" noWrap align=left width="33%"><B><FONT face=sans-serif size=1>jhfunds.com</FONT></B>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.002pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>Computershare Shareowner Services, LLC</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1></FONT></TD></TR>

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   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.002pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>Newport Office Center VII</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1></FONT></TD></TR>

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   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.002pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>480 Washington Boulevard</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1></FONT></TD></TR>

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   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.002pt" noWrap align=left width="33%"><FONT face=sans-serif size=1>Jersey City, NJ 07310-1900</FONT>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=1></FONT></TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>The Fund&#8217;s proxy voting policies and procedures, as well as the Fund&#8217;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) Web site at www.sec.gov or on our Web site.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=1>The Fund&#8217;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&#8217;s Form N-Q is available on our Web site and the SEC&#8217;s Web site, www.sec.gov, and can be reviewed and copied (for a fee) at the SEC&#8217;s Public Reference Room in Washington, DC. Call 1-202-551-8090 to&nbsp;receive information on the operation of the SEC&#8217;s Public Reference Room.</FONT></P>

<P style="TEXT-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 Web site at www.jhfunds.com or by calling 1-800-852-0218.</FONT></P>

<P style="TEXT-ALIGN: left"><I><FONT face=serif size=2>The report is certified under the Sarbanes-Oxley Act, which requires closed-end funds and other public companies to affirm that, to the best of their knowledge, the information in their financial reports is fairly and accurately stated in all material respects.</FONT></I></P>

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   <TD noWrap align=right colSpan=2><B><FONT face=sans-serif size=1>Annual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;&nbsp; <FONT face=sans-serif size=2>53</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-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><FONT face=sans-serif size=1></FONT></P>

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   <TD noWrap align=right><FONT face=sans-serif size=1>P600A 10/12</FONT>&nbsp;</TD></TR>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 2. CODE OF ETHICS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>As of the end of the year, October 31, 2012, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the &#8220;Senior Financial Officers&#8221;). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Peter S. Burgess is the audit committee financial expert and is &#8220;independent&#8221;, pursuant to general instructions on Form N-CSR Item 3.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(a) Audit Fees</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>The aggregate fees billed for professional services rendered by the principal accountant(s) for the audit of the registrant&#8217;s annual financial statements or services that are normally provided by the accountant(s) in connection with statutory and regulatory filings or engagements amounted to $48,638 for the fiscal year ended October 31, 2012 and $43,714 for the fiscal year ended October 31, 2011. These fees were billed to the registrant and were approved by the registrant&#8217;s audit committee.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(b) Audit-Related Services</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Audit-related fees amounted to $0 for the fiscal year ended October 31, 2012 and $0 for the fiscal year ended October 31, 2011 billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant ("control affiliates").</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(c) Tax Fees</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>The aggregate fees billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning (&#8220;tax fees&#8221;) amounted to $3,200 for the fiscal year ended October 31, 2012 and $3,107 for the fiscal year ended October 31, 2011. The nature of the services comprising the tax fees was the review of the registrant&#8217;s tax returns and tax distribution requirements. These fees were billed to the registrant and were approved by the registrant&#8217;s audit committee.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(d) All Other Fees</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>The all other fees billed to the registrant for products and services provided by the principal accountant were $419 for the fiscal year ended October 31, 2012 and $73 for the fiscal year ended October 31, 2011 billed to control affiliates for products and services provided by the principal accountant. These fees were approved by the registrant&#8217;s audit committee.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(e)(1) Audit Committee Pre-Approval Policies and Procedures:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>The trust&#8217;s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the &#8220;Auditor&#8221;) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>The trust&#8217;s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee&#8217;s consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor. </FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Audit-Related Fees, Tax Fees and All Other Fees:</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(f) According to the registrant&#8217;s principal accountant, for the fiscal year ended October 31, 2012, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $3,659,553 for the fiscal year ended October 31, 2012 and $1,674,958 for the fiscal year ended October 31, 2011.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(h) The audit committee of the registrant has considered the non-audit services provided by the registrant&#8217;s principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Peter S. Burgess - Chairman</FONT><BR><FONT face=sans-serif size=2>Charles L. Bardelis</FONT><BR><FONT face=sans-serif size=2>Theron S. Hoffman</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 6. SCHEDULE OF INVESTMENTS.</FONT></P>

<P style="TEXT-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 style="TEXT-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 style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>See attached exhibit &#8220;Proxy Voting Policies and Procedures&#8221;.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=sans-serif size=2>Information about the portfolio managers</FONT></B></P>

<P style="TEXT-ALIGN: left"><B><FONT face=serif size=3>Management Biographies</FONT></B></P></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=3>Below is a list of the portfolio managers who share joint responsibility for the day-to-day investment management of the Fund. It provides a brief summary of their business careers over the past five years. Information is provided as of November 1, 2012.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=serif size=3>Barry H. Evans, CFA</FONT></B><BR><FONT face=serif size=3>President, Chief Fixed Income Officer and Chief Operating Officer, John Hancock</FONT><BR><FONT face=serif size=3>Management since 2005</FONT><BR><FONT face=serif size=3>Began business career in 1986</FONT><BR><FONT face=serif size=3>Joined fund team in 2002</FONT><BR><BR><B><FONT face=serif size=3>Jeffrey N. Given, CFA</FONT></B><BR><FONT face=serif size=3>Vice President, John Hancock Asset Management since 2005</FONT><BR><FONT face=serif size=3>Began business career in 1993</FONT><BR><FONT face=serif size=3>Joined fund team in 1999</FONT><BR><BR><B><FONT face=serif size=3>Howard C. Greene, CFA</FONT></B><BR><FONT face=serif size=3>Senior Vice President, John Hancock Asset Management since 2005</FONT><BR><FONT face=serif size=3>Began business career in 1979</FONT><BR><FONT face=serif size=3>Joined fund team in 2005</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=serif size=3>Other Accounts the Portfolio Managers are Managing</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=3>The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2012. For purposes of the table, &#8220;Other Pooled Investment Vehicles&#8221; may include investment partnerships and group trusts, and &#8220;Other Accounts&#8221; may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.</FONT></P>

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   <TD noWrap align=left width="50%"><B><FONT face=serif size=3>P</FONT></B><B><FONT face=serif size=2>ORTFOLIO </FONT></B><B><FONT face=serif size=3>M</FONT></B><B><FONT face=serif size=2>ANAGER</FONT></B>&nbsp;</TD>

   <TD noWrap align=center width="50%"><B><FONT face=serif size=3>O</FONT></B><B><FONT face=serif size=2>THER </FONT></B><B><FONT face=serif size=3>A</FONT></B><B><FONT face=serif size=2>CCOUNTS </FONT></B><B><FONT face=serif size=3>M</FONT></B><B><FONT face=serif size=2>ANAGED BY THE </FONT></B><B><FONT face=serif size=3>P</FONT></B><B><FONT face=serif size=2>ORTFOLIO</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><B><FONT face=serif size=3>N</FONT></B><B><FONT face=serif size=2>AME</FONT></B>&nbsp;</TD>

   <TD noWrap align=center width="50%"><B><FONT face=serif size=3>M</FONT></B><B><FONT face=serif size=2>ANAGER</FONT></B>&nbsp;</TD></TR>

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&nbsp;</FONT></B><B><FONT face=serif color=#ffffff size=3></FONT></B></TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Barry H. Evans, CFA</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Investment Companies: Nine (9) funds with</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>assets of approximately $15.4 billion.</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Pooled Investment Vehicles: Twenty-two (22)</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>accounts with assets of approximately $362.1 million</FONT>&nbsp;</TD></TR>

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   <TD align=left width="50%"><FONT face=serif size=3>Other Accounts: None</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Jeffrey N. Given, CFA</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Investment Companies: Sixteen (16) funds with</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>assets of approximately $19.7 billion.</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Pooled Investment Vehicles: Three (3) accounts</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>with assets of approximately $241.5 million.</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Accounts: Eleven (11) accounts with assets of</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>approximately $2.9 billion.</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD noWrap align=left width="50%"><B><FONT face=serif size=3>P</FONT></B><B><FONT face=serif size=2>ORTFOLIO </FONT></B><B><FONT face=serif size=3>M</FONT></B><B><FONT face=serif size=2>ANAGER</FONT></B>&nbsp;</TD>

   <TD noWrap align=center width="50%"><B><FONT face=serif size=3>O</FONT></B><B><FONT face=serif size=2>THER </FONT></B><B><FONT face=serif size=3>A</FONT></B><B><FONT face=serif size=2>CCOUNTS </FONT></B><B><FONT face=serif size=3>M</FONT></B><B><FONT face=serif size=2>ANAGED BY THE </FONT></B><B><FONT face=serif size=3>P</FONT></B><B><FONT face=serif size=2>ORTFOLIO</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><B><FONT face=serif size=3>N</FONT></B><B><FONT face=serif size=2>AME</FONT></B>&nbsp;</TD>

   <TD noWrap align=center width="50%"><B><FONT face=serif size=3>M</FONT></B><B><FONT face=serif size=2>ANAGER</FONT></B>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Howard C. Greene, CFA</FONT>&nbsp;</TD>

   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Investment Companies: Twelve (12) funds with</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>assets of approximately $13.0 billion.</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Pooled Investment Vehicles: Two (2) accounts</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>with assets of approximately $183.0 million.</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Other Accounts: Ten (10) accounts with assets of $2.8</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>billion</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=3>With respect to accounts managed by Messrs. Given, the Subadviser receives a performance-based fee with respect to one Other Account with total assets of approximately $58 million.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT face=serif size=3>Conflicts of Interest</FONT></B><FONT face=serif size=3>. </FONT><FONT face=serif size=3>When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio manager&#8217;s responsibility for the management of the Fund as well as one or more other accounts. The Subadviser has adopted procedures that are intended to monitor compliance with the policies referred to in the following paragraphs. Generally, the risks of such conflicts of interests are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. The Subadviser has structured its compensation arrangements in a manner that is intended to limit such potential for conflicts of interests. See &#8220;Compensation of Portfolio Managers&#8221; below.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; </FONT><FONT face=serif size=3>A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings (&#8220;IPOs&#8221;) and private placements. If, for example, an IPO that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation on the IPO. The Subadviser has policies that require a portfolio manager to allocate such investment opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; </FONT><FONT face=serif size=3>A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a</FONT></P></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=3>portfolio manager intends to trade the same security for more than one account, the policies of the Subadviser generally require that such trades be &#8220;bunched,&#8221; which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances also may arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, the Subadviser will place the order in a manner intended to result in as favorable a price as possible for such client.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; </FONT><FONT face=serif size=3>A portfolio manager could favor an account if the portfolio manager&#8217;s compensation is tied to the performance of that account rather than all accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager&#8217;s bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if the Subadviser receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager&#8217;s compensation. The investment performance on specific accounts is not a factor in determining the portfolio manager&#8217;s compensation. See &#8220;Compensation of Portfolio Managers&#8221; below. The Subadviser receives a performance-based fee with respect to certain of the other accounts managed by the portfolio managers of the Fund described above.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; </FONT><FONT face=serif size=3>A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. The Subadviser imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=serif size=2>&#8226; </FONT><FONT face=serif size=3>If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest may arise. For example, if a portfolio manager purchases a security for one account and sells the same security short for another account, such trading pattern could disadvantage either the account that is long or short. In making portfolio manager assignments, the Subadviser seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. While these accounts have many similarities, the investment</FONT></P></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=serif size=3>performance of each account will be different due to differences in fees, expenses and cash flows.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT face=serif size=3>Compensation of Portfolio Managers</FONT></B><FONT face=serif size=3>. The Subadviser has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied systematically among investment professionals. At the Subadviser, investment professionals are compensated with a combination of base salary and performance bonuses (e.g., cash and deferral awards). The following describes each component of the compensation package for the individuals identified as a portfolio manager for the Fund.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=serif size=3>&#8226; </FONT><B><FONT face=serif size=3>Base salaries. </FONT></B><FONT face=serif size=3>Base salaries are market-based and fixed. Salary ranges are reviewed and adjusted annually. Individual salary adjustments are based on individual performance against mutually-agreed-upon objectives and development of technical and experiential skills.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=serif size=3>&#8226; </FONT><B><FONT face=serif size=3>Performance Bonuses. </FONT></B><FONT face=serif size=3>Performance bonuses take the form of cash and deferred incentives.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=3>&#9642; </FONT><B><FONT face=serif size=3>Short-Term Cash Incentives. </FONT></B><FONT face=serif size=3>Short-term incentives take the form of annual cash awards. Individual targets are market-based and actual awards are tied to performance against various objective measures and on overall personal performance ratings. These include:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=3>&#8212; </FONT><B><I><FONT face=serif size=3>Investment Performance. </FONT></I></B><FONT face=serif size=3>The majority of the bonus considered under the plan is based on investment performance of accounts managed by the investment professional over one, three and five year periods (to the extent applicable). The pre-tax performance of each account is measured relative to an appropriate benchmark or universe as identified in the table below.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=3>&#8212; </FONT><B><I><FONT face=serif size=3>Financial Performance of the Subadviser. </FONT></I></B><FONT face=serif size=3>The financial performance of the Subadviser and its parent corporation are also considered in determining bonus awards.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=3>&#8212; </FONT><B><I><FONT face=serif size=3>Non-Investment Performance. </FONT></I></B><FONT face=serif size=3>The more intangible contributions of an investment professional to the Subadviser&#8217;s business, including new strategy idea generation, professional growth and development, and management, where applicable, are evaluated in determining the amount of any bonus award.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=3>&#9642; </FONT><B><FONT face=serif size=3>Long-Term Incentives. </FONT></B><FONT face=serif size=3>All investment professionals are eligible for participation in a deferred incentive plan. 100% of the eligible awards are invested in the strategies that the team manages as well as other strategies managed by other teams at the Subadviser. The Subadviser believes that owning units in the same strategies a team manages aligns the performance goals of both client and manager giving the team added incentive to act in the best interest of the Company&#8217;s clients.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT face=serif size=3>As an added incentive, certain investment professionals (considered officers of Manulife Financial) would receive a portion of their award in Manulife Restricted Share Units (&#8220;RSUs&#8221;) or stock options. This plan is based on the value of the underlying common shares of Manulife Financial.</FONT></P>
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   <TD noWrap align=left width="50%"><FONT face=serif size=2>Morningstar US OE Intermediate-Term Bond</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT face=serif size=3>Share Ownership by Portfolio Managers</FONT></B><FONT face=serif size=3>. The following table indicates as of October 31, 2012 the value, within the indicated range, of shares beneficially owned by the portfolio managers in the Fund.</FONT></P>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Barry H. Evans, CFA</FONT>&nbsp;</TD>

   <TD noWrap align=center width="50%"><FONT face=serif size=3>$10,001-$50,000</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Jeffrey N. Given, CFA</FONT>&nbsp;</TD>

   <TD noWrap align=center width="50%"><FONT face=serif size=3>$1-$10,000</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="50%"><FONT face=serif size=3>Howard C. Greene, CFA</FONT>&nbsp;</TD>

   <TD noWrap align=center width="50%"><FONT face=serif size=3>$1-$10,000</FONT>&nbsp;</TD></TR>

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<P style="TEXT-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 style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Not applicable.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>There were no material changes to previously disclosed John Hancock Funds &#8211; Governance Committee Charter.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 11. CONTROLS AND PROCEDURES.</FONT></P>

<P style="TEXT-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 style="TEXT-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>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>ITEM 12. EXHIBITS.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(a)(1) Code of Ethics for Senior Financial Officers is attached.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(b)(1) 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</FONT></P></DIV>

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<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>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 style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(c)(1) Proxy Voting Policies and Procedures are attached.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(c)(2) Submission of Matters to a Vote of Security Holders is attached. See attached &#8220;John Hancock Funds &#8211; Governance Committee Charter&#8221;.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(c)(3) Contact person at the registrant.</FONT></P></DIV>

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<P style="TEXT-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 style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>John Hancock Income Securities Trust</FONT></P>
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     <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>By:</FONT>&nbsp;</TD>
     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>/s/ Hugh McHaffie</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>------------------------------</FONT>&nbsp;</TD></TR>
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     <TD align=left width="97%"><FONT face=sans-serif size=2>Hugh McHaffie</FONT>&nbsp;</TD></TR>
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<P style="TEXT-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>
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     <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>By:</FONT>&nbsp;</TD>
     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>/s/ Hugh McHaffie</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>-------------------------------</FONT>&nbsp;</TD></TR>
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     <TD align=left width="97%"><FONT face=sans-serif size=2>Hugh McHaffie</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>December 20, 2012</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>/s/ Charles A. Rizzo</FONT>&nbsp;</TD></TR>
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     <TD align=left width="97%"><FONT face=sans-serif size=2>Charles A. Rizzo</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>December 20, 2012</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><B><U><FONT face=sans-serif size=2>CERTIFICATION</FONT></U></B></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>I, Hugh McHaffie, certify that:</FONT></P>

<P style="TEXT-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 &#8220;registrant&#8221;);</FONT></P>

<P style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(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>

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   <TD noWrap align=left width="33%"><U><FONT face=sans-serif size=2>/s/ Hugh McHaffie</FONT>&nbsp;</U></TD></TR>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2>Hugh McHaffie</FONT>&nbsp;</TD></TR>

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<P style="TEXT-ALIGN: left"><B><U><FONT face=sans-serif size=2>CERTIFICATION</FONT></U></B></P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>I, Charles A. Rizzo, certify that:</FONT></P>

<P style="TEXT-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 &#8220;registrant&#8221;);</FONT></P>

<P style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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 style="TEXT-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>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>(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>

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   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2>Date: </FONT><U><FONT face=sans-serif size=2>December 20, 2012</FONT></U>&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="33%"><U><FONT face=sans-serif size=2>/s/ Charles A. Rizzo</FONT>&nbsp;</U></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2>Charles A. Rizzo</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="33%">&nbsp;</TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="33%"><FONT face=sans-serif size=2>Chief Financial Officer</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

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

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   <TD noWrap 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</FONT></B>&nbsp;</TD></TR>

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   <TD align=center><B><FONT face=sans-serif size=2>the Sarbanes-Oxley Act of 2002</FONT></B></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>In connection with the attached Report of John Hancock Income Securities Trust (the &#8220;registrant&#8221;) 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 style="TEXT-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 style="TEXT-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>

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   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>/s/ Hugh McHaffie</FONT>&nbsp;</TD></TR>

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   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>--------------------------------</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>Hugh McHaffie</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>President</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Dated: December 20, 2012</FONT></P>

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   <P>&nbsp;</P></TD>

   <TD width="97%"></TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>/s/ Charles A. Rizzo</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>-------------------------------</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>Charles A. Rizzo</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD noWrap align=left width="3%"><FONT face=sans-serif size=2></FONT></TD>

   <TD noWrap align=left width="97%"><FONT face=sans-serif size=2>Chief Financial Officer</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: left"><FONT face=sans-serif size=2>Dated: December 20, 2012</FONT></P>

<P style="TEXT-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></DIV>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>4
<FILENAME>d_jhiicoodeofethics.htm
<DESCRIPTION>CODE OF ETHICS
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>John
Hancock Variable Insurance Trust</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>John
Hancock Funds </B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>John
Hancock Funds II</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>John
Hancock Funds III</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B><U>Sarbanes-Oxley
Code of Ethics </U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B><U>for
</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B><U>Principal
Executive, Principal Financial Officers &amp; Treasurer</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">I.</TD><TD STYLE="text-align: left">Covered Officers/Purpose of the Code</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">This code of ethics (this &ldquo;Code&rdquo;) for John Hancock Variable
Insurance Trust, John Hancock Funds<A HREF="#note_ftn1" NAME="note_ftnref1" STYLE="font-size: 65%; vertical-align: 35%">1</A>,
John Hancock Funds II and John Hancock Funds III, each a registered management investment company under the Investment Company
Act of 1940, as amended (&ldquo;1940 Act&rdquo;), which may issue shares in separate and distinct series (each investment company
and series thereunder to be hereinafter referred to as a &ldquo;Fund&rdquo;), applies to each Fund&rsquo;s Principal Executive
Officer (&ldquo;President&rdquo;), Principal Financial Officer (&ldquo;Chief Financial Officer&rdquo;) and Treasurer (&ldquo;Treasurer&rdquo;)
(the &ldquo;Covered Officers&rdquo; as set forth in <U>Exhibit A</U>) for the purpose of promoting:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and
professional relationships;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with, or submits to,
the Securities and Exchange Commission (&ldquo;SEC&rdquo;) and in other public communications made by the Fund;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>compliance with applicable laws and governmental rules and regulations;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>accountability for adherence to the Code.</TD></TR></TABLE>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">Each of the Covered Officers should adhere to
a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts
of interest.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>II.</B></TD><TD><B>Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest</B></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>Overview</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">A &ldquo;conflict of interest&rdquo; occurs when a Covered Officer&rsquo;s
private interest interferes with the interests of, or his service to, the Fund. For example, a conflict of interest would arise
if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund.
Certain conflicts of interest arise out of the relationships between the Covered Officers and the Fund and already are subject
to conflict of interest provisions in the Investment Company Act of 1940, as amended (the &ldquo;Investment Company Act&rdquo;)
and the Investment Advisers Act of 1940, as amended (the &ldquo;Investment Advisers Act&rdquo;). For example, Covered Officers
may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund
because of their status as &ldquo;affiliated persons&rdquo; of the Fund. Each of the Covered Officers is an officer or employee
of the investment adviser or a service provider (&ldquo;Service Provider&rdquo;) to the Fund. The Fund&rsquo;s, the investment
adviser&rsquo;s and the Service Provider&rsquo;s compliance programs and procedures are designed to prevent, or identify and correct,
violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and
such conflicts fall outside of the parameters of this Code.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual relationship between the Fund and the investment adviser and
the Service Provider of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered
Officers will, in the normal course of their duties (whether formally for the Fund, for the investment adviser or for the Service
Provider), be involved in establishing policies and implementing decisions which will have different effects on the investment
adviser, the Service Provider and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual
relationship between the Fund and the investment adviser and the Service Provider and is consistent with the performance by the
Covered Officers of their duties as officers of the Fund. Thus, if such participation is performed in conformity with the provisions
of the Investment Company Act and the Investment Advisers Act, it will be deemed to have been handled ethically. In addition, it
is recognized by the Fund&rsquo;s Board of Trustees/Directors (the &ldquo;Board&rdquo;) that the Covered Officers may also be officers
or employees of one or more other investment companies covered by other Codes.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following
list provides examples of conflicts of interest under the Code, but the Covered Officers should keep in mind that these examples
are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly
before the interest of the Fund.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">*&#9;*&#9;*</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Each Covered Officer must:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>not use his/her personal influence or personal relationships improperly to influence investment decisions or financial reporting
by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather
than for the benefit of the Fund; and</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause
others to trade personally in contemplation of the market effect of such transactions.</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Additionally, conflicts of interest may arise in other situations,
the propriety of which may be discussed, if material, with the Fund&rsquo;s Chief Compliance Officer (&ldquo;CCO&rdquo;). Examples
of these include:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>service as a director/trustee on the board of any public or private company;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>the receipt of any non-nominal gifts;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>the receipt of any entertainment from any company with which the Fund has current or prospective business dealings unless such
entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question
of impropriety (or other formulation as the Fund already uses in another code of conduct);</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>any ownership interest in, or any consulting or employment relationship with, any of the Fund&rsquo;s service providers, other
than its investment adviser, any sub-adviser, principal underwriter, administrator or any affiliated person thereof; and</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio
transactions or for selling or redeeming shares other than an interest arising from the Covered Officer&rsquo;s employment, such
as compensation or equity ownership.</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>III.</B></TD><TD><B>Disclosure &amp; Compliance</B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Fund;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether
within or outside the Fund, including to the Fund&rsquo;s directors and auditors, and to governmental regulators and self-regulatory
organizations;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Each Covered Officer should, to the extent appropriate within his/her area of responsibility, consult with other officers and
employees of the Fund and the Fund&rsquo;s adviser or any sub-adviser with the goal of promoting full, fair, accurate, timely and
understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications
made by the Fund; and</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable
laws, rules and regulations.</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>IV.</B></TD><TD><B>Reporting &amp; Accountability</B></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Each Covered Officer must:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>upon adoption of the Code (or thereafter as applicable, upon becoming an Covered Officer), affirm in writing to the Fund&rsquo;s
CCO that he/she has received, read, and understands the Code;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>annually thereafter affirm to the Fund&rsquo;s CCO that he/she has complied with the requirements of the Code;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>not retaliate against any employee or Covered Officer or their affiliated persons for reports of potential violations that
are made in good faith;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>notify the Fund&rsquo;s CCO promptly if he/she knows of any violation of this Code (Note: failure to do so is itself a violation
of this Code); and</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>report at least annually any change in his/her affiliations from the prior year.</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">The Fund&rsquo;s CCO is responsible for applying
this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any
particular situation. However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Fund&rsquo;s
Board or the Compliance Committee thereof (the &ldquo;Committee&rdquo;).</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">The Fund will follow these procedures in investigating
and enforcing this Code:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>the Fund&rsquo;s CCO will take all appropriate action to investigate any potential violations reported to him/her;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>if, after such investigation, the CCO believes that no violation has occurred, the CCO is not required to take any further
action;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>any matter that the CCO believes is a violation will be reported to the Board or, if applicable, Compliance Committee;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>if the Board or, if applicable, Compliance Committee concurs that a violation has occurred, the Board, either upon its determination
of a violation or upon recommendation of the Compliance Committee, if applicable, will consider appropriate action, which may include
review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Service
Provider or the investment adviser or its board; or a recommendation to dismiss the Registrant&rsquo;s Executive Officer;</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>the Board, or if applicable the Compliance Committee, will be responsible for granting waivers, as appropriate; and</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>V.</B></TD><TD><B>Other Policies &amp; Procedures</B></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">This Code shall be the sole code of ethics adopted by the Fund for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies
thereunder. Insofar as other policies or procedures of the Fund, the Fund&rsquo;s adviser, any sub-adviser, principal underwriter
or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this
Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Fund&rsquo;s
and its investment adviser&rsquo;s codes of ethics under Rule 204A-1 under the Investment Advisers Act and Rule 17j-1 under the
Investment Company Act, respectively, are separate requirements applying to the Covered Officers and others, and are not part of
this Code.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>VI.</B></TD><TD><B>Amendments</B></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Any amendments to this Code, other than amendments to Exhibit A,
must be approved or ratified by a majority vote of the Fund&rsquo;s Board, including a majority of independent directors.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>VII.</B></TD><TD><B>Confidentiality</B></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">All reports and records prepared or maintained pursuant to this
Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or
this Code, such matters shall not be disclosed to anyone other than the Fund&rsquo;s Board and its counsel, the investment adviser
and the relevant Service Providers.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>VIII.</B></TD><TD><B>Internal Use</B></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">The Code is intended solely for the internal use by the Fund and
does not constitute an admission, by or on behalf of the Fund, as to any fact, circumstance, or legal conclusion.</P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>Exhibit A</U></B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Persons Covered by this Code of Ethics</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(As of October 2012)</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>John Hancock Variable Insurance Trust </B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Executive Officer and President &ndash; Hugh McHaffie</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Financial Officer and Chief Financial Officer &ndash; Charles Rizzo</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Treasurer &ndash; Salvatore Schiavone</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>John Hancock Funds</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Executive Officer and President &ndash; Hugh McHaffie</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Financial Officer and Chief Financial Officer &ndash; Charles Rizzo</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Treasurer &ndash; Salvatore Schiavone</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>John Hancock Funds II</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Executive Officer and President &ndash; Hugh McHaffie</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Financial Officer and Chief Financial Officer &ndash; Charles Rizzo</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Treasurer &ndash; Salvatore Schiavone</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B>John Hancock Funds III</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Executive Officer and President &ndash; Hugh McHaffie</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Principal Financial Officer and Chief Financial Officer &ndash; Charles Rizzo</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Oslash;</FONT></TD><TD>Treasurer &ndash; Salvatore Schiavone</TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<HR ALIGN="LEFT" SIZE="1" STYLE="width: 33%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><A HREF="#note_ftnref1" NAME="note_ftn1" STYLE="font-size: 65%; vertical-align: 35%">1</A>
John Hancock Funds includes the following trusts: John Hancock Bank and Thrift Opportunity Fund; John Hancock Bond Trust; John
Hancock California Tax-Free Income Fund; John Hancock Capital Series; John Hancock Current Interest; John Hancock Income Securities
Trust; John Hancock Investment Trust; John Hancock Investment Trust II; John Hancock Investment Trust III; John Hancock Investors
Trust; John Hancock Municipal Securities Trust; John Hancock Premium Dividend Fund ; Trust; John Hancock Preferred Income Fund;
John Hancock Preferred Income Fund II; John Hancock Preferred Income Fund III; John Hancock Series Trust; John Hancock Sovereign
Bond Fund; John Hancock Strategic Series; John Hancock Tax-Exempt Series Fund; John Hancock Tax-Advantaged Dividend Income Fund;
John Hancock Tax-Advantaged Global Shareholder Yield Fund and John Hancock Hedged Equity and Income Fund.</P>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>e_proxyvoting122812.htm
<DESCRIPTION>PROXY VOTING POLICIES
<TEXT>
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     <TITLE>e_proxyvoting122812.htm</TITLE>
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    <TD STYLE="width: 100%; border: windowtext 1.5pt double; font: bold 16pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">General Compliance Policies for Trust &amp; Adviser</TD></TR>
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<P STYLE="font: 16pt Arial, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: bold 14pt Arial, Helvetica, Sans-Serif">Section 7:</TD>
    <TD STYLE="width: 81%; padding-right: 5.4pt; padding-left: 5.4pt; font: bold 14pt Arial, Helvetica, Sans-Serif">Disclosures, Filings, and Reporting</TD></TR>
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<P STYLE="font: 14pt Arial, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 9%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 12pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; color: white">7Ha.</TD>
    <TD STYLE="width: 91%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: bold 12pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; color: white">John Hancock Funds Proxy Voting Procedures</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-family: Arial, Helvetica, Sans-Serif">&nbsp; Version Effective Date 1 01-01-2012 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Versions prior to 01-01-2012 available from the CCO&rsquo;s Office upon request.</TD></TR>
</TABLE>
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    <TD STYLE="width: 100%; border: windowtext 1pt solid; font: bold 11pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; color: white">General</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board of Trustees (the &ldquo;Board&rdquo;)
        of each registered investment company in the John Hancock family of funds listed on Schedule A (collectively, the &ldquo;Trust&rdquo;),
        including a majority of the Trustees who are not &ldquo;interested persons&rdquo; (as defined in the Investment Company Act of
        1940, as amended (the &ldquo;1940 Act&rdquo;)) of the Trust (the &ldquo;Independent Trustees&rdquo;), adopts these proxy voting
        policies and procedures.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Each fund of the Trust or any other registered
        investment company (or series thereof) (each, a &ldquo;fund&rdquo;) is required to disclose its proxy voting policies and procedures
        in its registration statement and, pursuant to Rule 30b1-4 under the 1940 Act, file annually with the Securities and Exchange Commission
        and make available to shareholders its actual proxy voting record. In this regard, the Trust Policy is set forth below.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Delegation of Proxy Voting Responsibilities</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">It is the policy of the Trust to delegate the
        responsibility for voting proxies relating to portfolio securities held by a fund to the fund&rsquo;s investment adviser (&ldquo;adviser&rdquo;)
        or, if the fund&rsquo;s adviser has delegated portfolio management responsibilities to one or more investment sub-adviser(s), to
        the fund&rsquo;s sub-adviser(s), subject to the Board&rsquo;s continued oversight. The sub-adviser for each fund shall vote all
        proxies relating to securities held by each fund and in that connection, and subject to any further policies and procedures contained
        herein, shall use proxy voting policies and procedures adopted by each sub-adviser in conformance with Rule 206(4)-6 under the
        Investment Advisers Act of 1940, as amended (the &ldquo;Advisers Act&rdquo;).</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Except as noted below under Material Conflicts
        of Interest, the Trust Policy with respect to a fund shall incorporate that adopted by the fund&rsquo;s sub-adviser with respect
        to voting proxies held by its clients (the &ldquo;Sub-adviser Policy&rdquo;). Each Sub-adviser Policy, as it may be amended from
        time to time, is hereby incorporated by reference into the Trust Policy. Each sub-adviser to a fund is directed to comply with
        these policies and procedures in voting proxies relating to portfolio securities held by a fund, subject to oversight by the fund&rsquo;s
        adviser and by the Board. Each adviser to a fund retains the responsibility, and is directed, to oversee each sub-adviser&rsquo;s
        compliance with these policies and procedures, and to adopt and implement such additional policies and procedures as it deems necessary
        or appropriate to discharge its oversight responsibility. Additionally, the Trust&rsquo;s Chief Compliance Officer (&ldquo;CCO&rdquo;)
        shall conduct such monitoring and supervisory activities as the CCO or the Board deems necessary or appropriate in order to appropriately
        discharge the CCO&rsquo;s role in overseeing the sub-advisers&rsquo; compliance with these policies and procedures.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The delegation by the Board of the authority
        to vote proxies relating to portfolio securities of the funds is entirely voluntary and may be revoked by the Board, in whole or
        in part, at any time.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Voting Proxies of Underlying Funds of a
        Fund of Funds</B></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify; text-indent: -0.2in"><FONT STYLE="font-size: 11pt">A.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;
        </FONT><FONT STYLE="font-size: 11pt"><U>Where the Fund of Funds is not the Sole Shareholder of the Underlying Fund</U></FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">With respect to voting proxies relating
        to the shares of an underlying fund (an &ldquo;Underlying Fund&rdquo;) held by a fund of the Trust operating as a fund of funds
        (a &ldquo;Fund of Funds&rdquo;) in reliance on Section 12(d)(1)(G) of the 1940 Act where the Underlying Fund has shareholders other
        than the Fund of Funds which are not other Fund of Funds, the Fund of Funds will vote proxies relating to shares of the Underlying
        Fund in the same proportion as the vote of all other holders of such Underlying Fund shares.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify; text-indent: -0.2in"><FONT STYLE="font-size: 11pt">B.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;
        </FONT><FONT STYLE="font-size: 11pt"><U>Where the Fund of Funds is the Sole Shareholder of the Underlying Fund</U></FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.2in; text-align: justify">In the event that one or more Funds
        of Funds are the sole shareholders of an Underlying Fund, the adviser to the Fund of Funds or the Trust will vote proxies relating
        to the shares of the Underlying Fund as set forth below unless the Board elects to have the Fund of Funds seek voting instructions
        from the shareholders of the Funds of Funds in which case the Fund of Funds will vote proxies relating to shares of the Underlying
        Fund in the same proportion as the instructions timely received from such shareholders.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.45in; text-align: justify; text-indent: -0.2in"><FONT STYLE="font-size: 11pt">1.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;
        </FONT><FONT STYLE="font-size: 11pt"><U>Where Both the Underlying Fund and the Fund of Funds are Voting on Substantially Identical
        Proposals</U></FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the event that the Underlying Fund and the
        Fund of Funds are voting on substantially identical proposals (the &ldquo;Substantially Identical Proposal&rdquo;), then the adviser
        or the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of the shareholders
        of the Fund of Funds on the Substantially Identical Proposal.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.45in; text-align: justify; text-indent: -0.2in"><FONT STYLE="font-size: 11pt">2.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;
        </FONT><FONT STYLE="font-size: 11pt"><U>Where the Underlying Fund is Voting on a Proposal that is Not Being Voted on By the Fund
        of Funds</U></FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-size: 11pt">(a)</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;
        </FONT><FONT STYLE="font-size: 11pt"><U>Where there is No Material Conflict of Interest Between the Interests of the Shareholders
        of the Underlying Fund and the Adviser Relating to the Proposal</U></FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">In the event that the Fund of Funds
        is voting on a proposal of the Underlying Fund and the Fund of Funds is not also voting on a substantially identical proposal and
        there is no material conflict of interest between the interests of the shareholders of the Underlying Fund and the adviser relating
        to the Proposal, then the adviser will vote proxies relating to the shares of the Underlying Fund pursuant to its Proxy Voting
        Procedures.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-size: 11pt">(b)</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;
        </FONT><FONT STYLE="font-size: 11pt"><U>Where there is a Material Conflict of Interest Between the Interests of the Shareholders
        of the Underlying Fund and the Adviser Relating to the Proposal </U></FONT></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">In the event that the Fund of Funds
        is voting on a proposal of the Underlying Fund and the Fund of Funds is not also voting on a substantially identical proposal and
        there is a material conflict of interest between the interests of the shareholders of the Underlying Fund and the adviser relating
        to the Proposal, then the Fund of Funds will seek voting instructions from the shareholders of the Fund of Funds on the proposal
        and will vote proxies relating to shares of the Underlying Fund in the same proportion as the instructions timely received from
        such shareholders. A material conflict is generally defined as a proposal involving a matter in which the adviser or one of its
        affiliates has a material economic interest.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Material Conflicts of Interest </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If: (1) a sub-adviser to a fund becomes aware
        that a vote presents a material conflict between the interests of: (a) shareholders of the fund; and (b) the fund&rsquo;s adviser,
        sub-adviser, principal underwriter, or any of their affiliated persons, and (2) the sub-adviser does not propose to vote on the
        particular issue in the manner prescribed by its Sub-adviser Policy or the material conflict of interest procedures set forth in
        its Sub-adviser Policy are otherwise triggered, then the sub-adviser will follow the material conflict of interest procedures set
        forth in its Sub-adviser Policy when voting such proxies.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If a Sub-adviser Policy provides that in the
        case of a material conflict of interest between fund shareholders and another party, the sub-adviser will ask the Board to provide
        voting instructions, the sub-adviser shall vote the proxies, in its discretion, as recommended by an independent third party, in
        the manner prescribed by its Sub-adviser Policy or abstain from voting the proxies.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Securities Lending Program</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain of the funds participate in a securities
        lending program with the Trust through an agent lender. When a fund&rsquo;s securities are out on loan, they are transferred into
        the borrower&rsquo;s name and are voted by the borrower, in its discretion. Where a sub-adviser determines, however, that a proxy
        vote (or other shareholder action) is materially important to the client&rsquo;s account, the sub-adviser should request that the
        agent recall the security prior to the record date to allow the sub-adviser to vote the securities.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Disclosure of Proxy Voting Policies and
        Procedures in the Trust&rsquo;s Statement of Additional Information (&ldquo;SAI&rdquo;)</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Trust shall include in its SAI a summary
        of the Trust Policy and of the Sub-adviser Policy included therein. (In lieu of including a summary of these policies and procedures,
        the Trust may include each full Trust Policy and Sub-adviser Policy in the SAI.)</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Disclosure of Proxy Voting Policies and
        Procedures in</B> <B>Annual and Semi-Annual Shareholder Reports </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Trust shall disclose in its annual and
        semi-annual shareholder reports that a description of the Trust Policy, including the Sub-adviser Policy, and the Trust&rsquo;s
        proxy voting record for the most recent 12 months ended June 30 are available on the Securities and Exchange Commission&rsquo;s
        (&ldquo;SEC&rdquo;) website, and without charge, upon request, by calling a specified toll-free telephone number. The Trust will
        send these documents within three business days of receipt of a request, by first-class mail or other means designed to ensure
        equally prompt delivery.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Filing of Proxy Voting Record on Form N-PX
        </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Trust will annually file its complete proxy
        voting record with the SEC on Form N-PX. The Form N-PX shall be filed for the twelve months ended June 30 no later than August
        31 of that year.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: gray">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: bold 11pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; color: white">Procedure</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Review of Sub-advisers&rsquo; Proxy Voting</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Trust has delegated proxy voting authority
        with respect to fund portfolio securities in accordance with the Trust Policy, as set forth above.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Consistent with this delegation, each sub-adviser
        is responsible for the following:</P>
<OL START="1" TYPE="1" STYLE="margin-top: 0in">

        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">Implementing written policies and procedures, in compliance with Rule
        206(4)-6 under the Advisers Act, reasonably designed to ensure that the sub-adviser votes portfolio securities in the best interest
        of shareholders of the Trust.</LI>
        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">Providing the adviser with a copy and description of the Sub-adviser
        Policy prior to being approved by the Board as a sub-adviser, accompanied by a certification that represents that the Sub-adviser
        Policy has been adopted in conformance with Rule 206(4)-6 under the Advisers Act. Thereafter, providing the adviser with notice
        of any amendment or revision to that Sub-adviser Policy or with a description thereof. The adviser is required to report all material
        changes to a Sub-adviser Policy quarterly to the Board. The CCO&rsquo;s annual written compliance report to the Board will contain
        a summary of the material changes to each Sub-adviser Policy during the period covered by the report.</LI>
        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">Providing the adviser with a quarterly certification indicating that
        the sub-adviser did vote proxies of the funds and that the proxy votes were executed in a manner consistent with the Sub-adviser
        Policy. If the sub-adviser voted any proxies in a manner inconsistent with the Sub-adviser Policy, the sub-adviser will provide
        the adviser with a report detailing the exceptions.</LI>
</OL>

        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Adviser Responsibilities </B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Trust has retained a proxy voting service
        to coordinate, collect, and maintain all proxy-related information, and to prepare and file the Trust&rsquo;s reports on Form N-PX
        with the SEC.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The adviser, in accordance with its general
        oversight responsibilities, will periodically review the voting records maintained by the proxy voting service in accordance with
        the following procedures:</P>
<OL START="1" TYPE="1" STYLE="margin-top: 0in">

        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">Receive a file with the proxy voting information directly from each
        sub-adviser on a quarterly basis.</LI>
        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">Select a sample of proxy votes from the files submitted by the sub-advisers
        and compare them against the proxy voting service files for accuracy of the votes.</LI>
        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">Deliver instructions to shareholders on how to access proxy voting
        information via the Trust&rsquo;s semi-annual and annual shareholder reports.</LI>
</OL>

        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Proxy Voting Service Responsibilities</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Aggregation of Votes:</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The proxy voting service&rsquo;s proxy disclosure
        system will collect fund-specific and/or account-level voting records, including votes cast by multiple sub-advisers or third party
        voting services.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Reporting:</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The proxy voting service&rsquo;s proxy disclosure
        system will provide the following reporting features:</P>
<OL START="1" TYPE="1" STYLE="margin-top: 0in">

        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">multiple report export options;</LI>
        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">report customization by fund-account, portfolio manager, security,
        etc.; and</LI>
        <LI STYLE="text-align: justify; margin: 0; font-size: 11pt">account details available for vote auditing.</LI>
</OL>

        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Form N-PX Preparation and Filing:</B></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The adviser will be responsible for oversight
        and completion of the filing of the Trust&rsquo;s reports on Form N-PX with the SEC. The proxy voting service will prepare the
        EDGAR version of Form N-PX and will submit it to the adviser for review and approval prior to filing with the SEC. The proxy voting
        service will file Form N-PX for each twelve-month period ending on June 30. The filing must be submitted to the SEC on or before
        August 31 of each year.</P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>Adoption Schedule</U></B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: #B3B3B3">
    <TD STYLE="width: 82%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">Name of Trust</TD>
    <TD STYLE="width: 18%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">Adopted</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Variable Insurance Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/28/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Funds II</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/28/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Funds III</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Bond Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock California Tax-Free Income Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Capital Series</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Current Interest</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Equity Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Investment Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Investment Trust II</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Investment Trust III</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Municipal Securities Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Series Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Sovereign Bond Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Strategic Series</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Tax-Exempt Series</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock World Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Preferred Income Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Preferred Income Fund II</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Preferred Income Fund III</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Patriot Premium Dividend Fund II</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Bank &amp; Thrift Opportunity Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Income Securities Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Investors Trust</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Tax-Advantaged Dividend Income Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">John Hancock Tax-Advantaged Global Shareholder Yield Fund</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">09/11/2007</TD></TR>
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<TYPE>EX-99
<SEQUENCE>6
<FILENAME>f_jhgovcommcharter142012.htm
<DESCRIPTION>GOVERNANCE CHARTER
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   <TD align=center><B><FONT size=3 face=serif>JOHN HANCOCK FUNDS</FONT></B></TD></TR>

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   <TD noWrap align=center><B><U><FONT size=3 face=serif>NOMINATING, GOVERNANCE AND ADMINISTRATION COMMITTEE CHARTER</FONT></U></B>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>A. </FONT><U><FONT size=3 face=serif>Composition</FONT></U><FONT size=3 face=serif>. The Nominating, Governance and Administration Committee (the &#8220;Committee&#8221;) shall be composed entirely of Trustees who are &#8220;independent&#8221; as defined in the rules of the New York Stock Exchange (&#8220;NYSE&#8221;) and are not &#8220;interested persons&#8221; (as defined in the Investment Company Act of 1940) of any of the Funds, or of any Fund&#8217;s investment adviser, subadviser or principal underwriter (the &#8220;Independent Trustees&#8221;) 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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>B. </FONT><U><FONT size=3 face=serif>Overview</FONT></U><FONT size=3 face=serif>. The purpose of the Committee is (1) to make determinations and recommendations to the Board on issues related to (a) the composition and operation of the Board, (b) corporate governance matters applicable to the Independent Trustees, and (c) issues related to complex-wide matters and practices designed to facilitate uniformity and administration of the Board's oversight of the Funds, and (2) to discharge such additional duties, responsibilities and functions as are delegated to it from time to time.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>C. </FONT><U><FONT size=3 face=serif>Specific Responsibilities</FONT></U><FONT size=3 face=serif>. The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall determine:</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>1. To identify individuals qualified to serve as Independent Trustees of the Funds, and to consider and determine nominations of individuals to serve as Trustees.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>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 provided by them, subject to ratification of any such special compensation by the Committee at the next regular meeting of the Committee.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>4. To consider and determine the duties and compensation of the Chairman of the Board.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>5. To consider and recommend changes to the Board regarding the size, structure, and composition of the Board.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>6. To evaluate, from time to time, and determine changes to the retirement policies for the Independent Trustees, as appropriate.</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>7. 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: directors and officers liability insurance and fidelity bond coverage and costs; association dues, including Investment Company Institute and Mutual Fund Directors Forum 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; publication expenses; expenses of computers and related service charges; and fees of counsel to the Independent Trustees.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>8. 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 &#8220;interested persons&#8221; as defined in the Investment Company Act of 1940 of any of the Funds or any Fund&#8217;s investment adviser, subadviser or principal underwriter, or by the Committee, from time to time, other than as may be engaged directly by another Committee.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>9. To make a recommendation to the Board of Trustees concerning the annual consideration of the agreements relating to legal services.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>10. To periodically review the Board&#8217;s committee structure and, in collaboration with the Chairs of the various Committees, the charters of the Board&#8217;s committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>11. To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of Funds in the Fund complex and the effectiveness of its committee structure.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>12. To retain and terminate any firm(s) to be used to identify or evaluate or assist in identifying or evaluating potential Independent Board nominees, subject to the Board&#8217;s sole authority to approve the firm&#8217;s fees and other retention terms.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>13. 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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>D. </FONT><U><FONT size=3 face=serif>Additional Responsibilities</FONT></U><FONT size=3 face=serif>. 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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>E. </FONT><U><FONT size=3 face=serif>Governance</FONT></U><FONT size=3 face=serif>. 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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>F. </FONT><U><FONT size=3 face=serif>Miscellaneous</FONT></U><FONT size=3 face=serif>. 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&#8217; 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 style="TEXT-ALIGN: left"><FONT size=3 face=serif>G. </FONT><U><FONT size=3 face=serif>Evaluation</FONT></U><FONT size=3 face=serif>. At least annually, the Committee shall evaluate its performance consistent with the requirements of this charter and report the results to the Board of Trustees.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>H. </FONT><U><FONT size=3 face=serif>Review</FONT></U><FONT size=3 face=serif>. The Committee shall review this charter periodically and shall recommend changes to the Board of Trustees, as it deems desirable.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>Last revised: June 7, 2011</FONT></P>

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   <TD noWrap align=center><U><FONT size=3 face=serif>ANNEX A</FONT></U>&nbsp;</TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face=serif>General Criteria</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>1. Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>2. Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the Funds and should be willing and able to contribute positively to the decision-making process of the Funds.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>3. Nominees should have a commitment to understand the Funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its committees.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>4. Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the Funds, including shareholders and the management company, and to act in the interests of all shareholders.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>5. Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a director/trustee.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT size=3 face=serif>Application of Criteria to Current Trustees</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>The renomination of current Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above based on, among other things, the current Trustee&#8217;s contribution to the Board and any committee.</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT size=3 face=serif>Review of Nominations</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>1. The Committee believes that it is in the best interests of the Fund and its shareholders to obtain highly-qualified candidates to serve as members of the Board.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>2. In nominating candidates who would be Independent Trustees, the Committee believes that no particular qualities or skills nor any specific minimum qualifications or disqualifications are controlling or paramount. The Committee shall take into consideration any such factors as it deems appropriate. These factors may include (but are not limited to) the person&#8217;s character, integrity, judgment, skill, diversity and experience with investment companies and other organizations of comparable purpose, complexity and size and subject to similar legal restrictions and oversight; the interplay of the candidate&#8217;s experience with the experience of other Board members; and the extent to which the candidate would be desirable addition to the Board and any Committees thereof. Other factors that the Committee may take into consideration include a person&#8217;s</FONT></P>

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<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>availability and commitment to attend meetings and perform his or her responsibilities; an whether or not the person had any relationships that might impair or appear to impair his or her independence, such as any business, financial or family relationships with Fund management, the investment adviser and/or subadviser of the Fund, as applicable, Fund service providers, or their affiliates or with Fund shareholders.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>3. While the Committee is solely responsible for the selection and recommendation to the Board of Independent Board candidates, the Committee may consider nominees recommended by any source, including Fund shareholders, management and Committee members, as it deems appropriate. Any such recommendations from shareholders shall be directed to the Secretary of the relevant Fund at such address as is set forth in the Fund&#8217;s disclosure documents. Recommendations from management may be submitted to the Committee Chairperson. All recommendations shall include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Board members and as specified in the relevant Fund&#8217;s By-Laws, and must be accompanied by a written consent of the proposed candidate to stand for election if nominated for the Board and to serve if elected by shareholders.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>4. The Committee may from time to time establish specific requirements and/or additional factors to be considered for Independent Board candidates as it deems necessary or appropriate.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>5. After its consideration of relevant factors, the Committee shall present its recommendation(s) to the full Board for its consideration.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=serif>As long as a current Independent Trustee continues, in the opinion of the Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of a current 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.</FONT></P>

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