UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22043
Van Kampen Dynamic Credit Opportunities Fund
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(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York 10036
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(Address of principal executive offices) (Zip code)
Ronald Robison
522 Fifth Avenue, New York, New York 10036
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 7/31
Date of reporting period: 1/31/08
Item 1. Reports to Shareholders.
The Fund's semi-annual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Dynamic Credit Opportunities Fund performed during the semiannual period.
The portfolio management team will provide an overview of the market
conditions and discuss some of the factors that affected investment
performance during the reporting period. In addition, this report
includes the fund's financial statements and a list of fund investments
as of January 31, 2008.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND
THAT THE VALUE OF THE FUND SHARES MAY THEREFORE BE LESS THAN WHAT YOU
PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
PLEASE SEE THE PROSPECTUS FOR MORE COMPLETE INFORMATION ON INVESTMENT
RISKS.
AN INVESTMENT IN SENIOR LOANS IS SUBJECT TO CERTAIN RISKS SUCH AS LOAN
DEFAULTS AND ILLIQUIDITY DUE TO INSUFFICIENT COLLATERAL BACKING.
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NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
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NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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PERFORMANCE SUMMARY as of 1/31/08
DYNAMIC CREDIT OPPORTUNITIES FUND
SYMBOL: VTA
------------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (6/26/07) -12.35% -26.38%
6-month -5.37 -15.73
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PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
The NAV per share is determined by dividing the value of the fund's portfolio
securities, cash and other assets, less all liabilities, by the total number of
common shares outstanding. The common share market price is the price the market
is willing to pay for shares of the fund at a given time. Common share market
price is influenced by a range of factors, including supply and demand and
market conditions. Total return assumes an investment at the beginning of the
period, reinvestment of all distributions for the period in accordance with the
fund's dividend reinvestment plan, and sale of all shares at the end of the
period.
1
Fund Report
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2008
MARKET CONDITIONS
U.S. economic growth, as measured by gross domestic product (GDP), rose 4.9
percent in the third quarter of 2007, well above the 3.8 percent posted during
the second quarter. However, advance estimates at the end of the reporting
period show GDP expanded just 0.6 percent in the fourth quarter. The economic
slowdown translated into slower earnings growth for many corporate borrowers
within the senior loan market.
The six-month period under review was challenging for the senior loan market, as
it was for virtually all non-government bond sectors. The turmoil and
uncertainty that began in early summer persisted throughout the period as
dislocations stemming from the problems in the subprime mortgage arena permeated
the fixed income markets, leading to a significant contraction in credit and
liquidity. In an effort to spur the economy and ease the liquidity crunch, the
Federal Open Market Committee (the "Fed") lowered the target federal funds rate
a total of 2.25 percentage points during the reporting period, bringing the rate
to 3.00 percent as of the end of January. Although the Fed's moves did bring
some stability to the markets, it was relatively short-lived and riskier assets
continued to struggle as investors fled to high-quality securities.
The broad reassessment of risk pricing in the credit markets, coupled with the
significant decline in market liquidity, put considerable pressure on senior
loan prices. Although the market experienced a brief respite in September and
October, when loan values rose, a subsequent significant decline in demand and
rise in supply pushed loan values lower again. Demand for collateralized loan
obligations (CLOs) in particular, which had until recently accounted for up to
60 percent of purchases in the senior loan market, evaporated almost entirely in
the latter half of the year. At the same time, following the run up of prices in
October, a significant amount of new deals were launched. This technical
demand/supply imbalance in the market, coupled with the tightening of lending
standards, have in our view been the primary drivers of the volatility in the
senior loan market over the past several months. Increased selling by retail and
relative value investors has also pressured loan prices. Nonetheless, default
rates remain well below the historical average, though they have trended upward
slightly in recent weeks, and the overall fundamentals of the senior loan
market, in our opinion, remain intact.
2
PERFORMANCE ANALYSIS
The Fund's return can be calculated based upon either the market price or the
net asset value (NAV) of its shares. NAV per share is determined by dividing the
value of the Fund's portfolio securities, cash and other assets, less all
liabilities by the total number of common shares outstanding, while market price
reflects the supply and demand for the shares. As a result, the two returns can
differ, as they did during the reporting period. For the six months ended
January 31, 2008, the Fund returned -15.73% percent on a market price basis and
-5.37% percent on an NAV basis.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2008
---------------------------------------
BASED ON BASED ON
NAV MARKET PRICE
-5.37% -15.73%
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Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. Investment return, net asset value and common share market price will
fluctuate and Fund shares, when sold, may be worth more or less than their
original cost. See Performance Summary for additional performance information.
Although the past several months have certainly been challenging for investors,
we have not seen a meaningful decline in the credit quality of the portfolio and
we continue to see relatively strong earnings from the companies in which we
have invested. From a portfolio construction standpoint, the launch of the Fund
came at an opportune time. We had put together a model portfolio that we
believed would reach the yield we were seeking, and given the environment at the
time of the launch, we were able to buy assets at prices that we expected would
meet that yield hurdle. We have positioned the portfolio defensively, generally
avoiding sectors or industries that we believe are vulnerable to cyclical
economic downturns. For example, we remain cautious about auto and airline
industries because of their susceptibility to high fuel prices. Given the
decline in the residential housing market, we have also generally avoided
investments in the building and real estate sectors. We have been very selective
regarding investments in the health care industry, particularly those assets
with inherent reimbursement and regulatory risks, but have found pockets of
attractive opportunities in sub-sectors that are not exposed to these risks.
As of the end of the reporting period, approximately one-third of the Fund's
assets were invested internationally, primarily in Europe, and 100 percent of
this exposure to non-dollar assets was hedged into U.S. dollars, which
effectively eliminated currency risk in the portfolio. The international
allocation is managed by the fund's subadvisor, Avenue Europe International
Management, L.P., and may change over time depending upon where we find the most
attractive opportunities. Avenue Capital generally invests its portion of the
Fund's assets in obligations with total yields at the time of purchase below an
3
applicable benchmark plus a credit spread set from time to time by Avenue
Capital (the "Avenue-Credit Thresholds"). The Avenue-Credit Thresholds shall be
determined periodically by Avenue Capital, in its sole discretion, as the
markets change. As of the date of this Semiannual Report, the Avenue-Credit
Thresholds for floating rate obligations based on LIBOR are those obligations
with total yields below LIBOR plus 500 basis points.
The Fund was fully invested at period end, and we have begun to
opportunistically deploy leverage in an effort to enhance the Fund's yield.
Leverage involves borrowing at a floating short-term rate and reinvesting the
proceeds at a higher rate. Unlike other fixed-income asset classes, using
leverage in conjunction with senior loans does not involve the same degree of
risk from rising short-term interest rates since the income from senior loans
adjusts to changes in interest rates, as do the rates which determine the Fund's
borrowing costs. (Similarly, should short-term rates fall, borrowing costs would
also decline. Of course, the Fund's portfolio, though, also will generate less
income when interest rates decline.) We might reduce leverage in periods of
weaker credit quality conditions to prevent magnifying erosion of the Fund's net
asset value.
Given that default rates remain low and credit quality is still generally
strong, there have been few opportunities to buy distressed debt where the
return potential sufficiently compensated us for the risk involved. As a result,
the Fund's portfolio had very limited exposure to distressed securities.
However, if the economic cycle changes and defaults rise, as we expect they may,
we can reposition the Fund to take advantage of opportunities in distressed
securities by increasing exposure there.
Although it has been a very difficult period, it has created certain
opportunities. Loans coming to market today are offering better spreads and
stronger credit structures than we have seen in the past few years. These more
investor-friendly terms may lead to attractive risk/reward characteristics for
investors going forward. In addition, merger and acquisition activity continues,
which has historically meant greater opportunities for senior secured lenders.
The emergence of a large number of non-public funds seeking to acquire portions
of loans currently held by banks is encouraging as well, as it may serve to
reduce the supply overhang and therefore relieve some of the downward pressure
on prices in the market. Overall, we believe the value in the senior loan market
remains compelling.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the Fund in
the future.
4
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 1/31/08
Printing & Publishing 10.6%
Beverage, Food & Tobacco 5.2
Buildings & Real Estate 5.1
Finance 5.1
Non-Durable Consumer Products 4.7
Chemicals, Plastics & Rubber 4.5
Hotels, Motels, Inns & Gaming 4.3
Healthcare 4.1
Electronics 4.0
Telecommunications--Wireless 4.0
Entertainment & Leisure 3.9
Telecommunications--Equipment & Services 3.9
Broadcasting--Cable 3.5
Containers, Packaging & Glass 3.4
Retail--Stores 2.8
Mining, Steel, Iron & Non-Precious Metals 2.5
Business Equipment & Services 2.4
Broadcasting--Television 2.0
Automotive 2.0
Utilities 1.8
Insurance 1.6
Transportation--Cargo 1.5
Medical Products & Services 1.4
Construction Material 1.2
Natural Resources 1.1
Home & Office Furnishings, Housewares & Durable Consumer
Products 1.0
Health & Beauty 1.0
Telecommunications--Local Exchange Carriers 1.0
Broadcasting--Radio 0.9
Education & Child Care 0.8
Retail--Specialty 0.8
Restaurants & Food Service 0.7
Aerospace/Defense 0.7
Paper & Forest Products 0.7
Broadcasting--Diversified 0.6
Ecological 0.5
Diversified Manufacturing 0.4
Textiles & Leather 0.4
Retail--Oil & Gas 0.4
Transportation--Personal 0.4
Farming & Agriculture 0.4
Pharmaceuticals 0.3
Machinery 0.2
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Total Long-Term Investments 97.8
Short-Term Investments 2.2
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Total Investments 100.0%
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the sectors shown above. Summary of investments by industry
classification percentages are as a percentage of total investments. Securities
are classified by sectors that represent broad groupings of related industries.
Van Kampen is a wholly owned subsidiary of a global securities firm which is
engaged in a wide range of financial services including, for example, securities
trading and brokerage activities, investment banking, research and analysis,
financing and financial advisory services.
5
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to shareholders, and
makes these reports available on its public Web site, www.vankampen.com.
In addition to the semiannual and annual reports that Van Kampen delivers
to shareholders and makes available through the Van Kampen public Web
site, each fund files a complete schedule of portfolio holdings with the
SEC for the Fund's first and third fiscal quarters on Form N-Q. Van
Kampen does not deliver the reports for the first and third fiscal
quarters to shareholders, nor are the reports posted to the Van Kampen
public Web site. You may, however, obtain the Form N-Q filings (as well
as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site,
http://www.sec.gov. You may also review and copy them at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the
SEC's Public Reference Room may be obtained by calling the SEC at (800)
SEC-0330. You can also request copies of these materials, upon payment of
a duplicating fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference section of the
SEC, Washington, DC 20549-0102.
You may obtain copies of a fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 341-2929.
6
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the Fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 341-2929 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the Fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge by visiting our Web site at www.vankampen.com.
This information is also available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
7
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED)
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
VARIABLE RATE** SENIOR LOAN INTERESTS 113.1%
AEROSPACE/DEFENSE 1.0%
$ 4,455 DeCrane Aircraft Holdings,
Inc., Term Loan........... 7.40% 02/21/13 $ 4,299,511
2,432 IAP Worldwide Services,
Inc., Term Loan........... 11.13 12/30/12 2,160,038
3,667 Sequa Corp., Term Loan.... 8.08 12/03/14 3,504,721
3,000 Wesco Aircraft Hardware
Corp., Term Loan.......... 10.58 03/28/14 2,932,500
--------------
12,896,770
--------------
AUTOMOTIVE 2.8%
24,874 Ford Motor Co., Term
Loan...................... 8.00 12/15/13 21,844,226
5,601 Metokote Corp., Term
Loan...................... 6.25 to 7.84 11/27/11 5,096,468
1,333 Navistar International
Corp., Revolving Credit
Agreement................. 6.50 to 8.32 01/19/12 1,211,111
3,667 Navistar International
Corp., Term Loan.......... 6.50 01/19/12 3,330,554
1,332 Precision Partners, Inc.,
Term Loan................. 8.33 10/27/13 1,212,466
1,938 Textron Fastening Systems,
Term Loan................. 8.33 08/11/13 1,860,181
--------------
34,555,006
--------------
BEVERAGE, FOOD & TOBACCO 7.2%
10,466 Birds Eye Foods
Investments, Inc., Term
Loan (b).................. 9.70 07/11/12 9,576,622
5,271 Coleman Natural Foods,
LLC, Term Loan............ 9.50 08/22/12 4,730,398
7,972 Culligan International
Co., Term Loan............ 5.56 to 7.08 11/24/12 7,291,449
9,952 Dole Food Co., Inc., Term
Loan...................... 6.00 to 7.13 04/12/13 11,369,421
10,000 DSW Holdings, Inc., Term
Loan...................... 8.60 03/07/12 9,400,000
15,000 Farley's & Sathers Candy
Co., Inc., Term Loan...... 12.57 to 12.91 03/24/11 14,925,000
kr27,307 Findus Ab, Term Loan
(Sweden).................. 7.18 to 7.68 11/15/15 4,068,738
E 3,185 Foodvest Ltd., Term Loan
(Sweden).................. 7.03 to 7.53 03/17/14 4,474,521
$ 5,000 FSB Holdings, Inc., Term
Loan...................... 10.94 03/29/14 4,700,000
8 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
BEVERAGE, FOOD & TOBACCO (CONTINUED)
$ 16,930 Pinnacle Foods Finance,
LLC, Term Loan............ 7.48 to 7.59% 04/02/14 $ 15,321,650
3,404 Southern Wine & Spirits of
America, Inc., Term
Loan...................... 6.34 05/31/12 3,378,222
--------------
89,236,021
--------------
BROADCASTING--CABLE 4.8%
25,725 Charter Communications
Operating, LLC, Term
Loan...................... 5.26 to 7.34 03/06/14 to 09/06/14 22,002,679
19,087 CSC Holdings, Inc., Term
Loan...................... 6.40 02/24/12 17,710,940
1,496 CW Media Holdings, Inc.,
Term Loan (Canada)........ 8.08 02/15/15 1,451,363
E 12,000 Kabel Baden-Wuerttemburg,
Term Loan (Germany)....... 7.38 to 7.88 09/27/14 to 09/27/15 16,251,481
$ 2,992 Knology, Inc., Term
Loan...................... 6.95 06/30/12 2,738,120
--------------
60,154,583
--------------
BROADCASTING--DIVERSIFIED 0.8%
8,100 Alpha Topco, Ltd., Term
Loan (United Kingdom)..... 7.09 to 8.22 12/31/13 to 06/30/14 7,506,563
2,591 NEP II, Inc., Term Loan... 7.11 02/16/14 2,450,823
--------------
9,957,386
--------------
BROADCASTING--RADIO 1.3%
1,995 CMP Susquehanna Corp.,
Term Loan................. 5.30 to 6.44 05/05/13 1,762,857
7,995 Emmis Operating Co., Term
Loan...................... 6.84 11/01/13 7,280,447
3,500 NextMedia Operating, Inc.,
Term Loan................. 7.77 11/15/13 4,117,500
2,992 Spanish Broadcasting
System, Inc., Term Loan... 6.58 06/11/12 2,723,000
--------------
15,883,804
--------------
BROADCASTING--TELEVISION 2.8%
11,663 New Vision Television,
Term Loan................. 8.13 to 11.63 11/01/13 to 11/01/14 10,975,094
28,993 Univision Communications,
Inc., Term Loan........... 5.49 to 5.52 09/29/14 23,922,478
--------------
34,897,572
--------------
BUILDINGS & REAL ESTATE 4.2%
2,000 El Ad IDB Las Vegas LLC,
Term Loan................. 8.41 08/10/08 1,820,000
2,000 Forestar Real Estate
Group, Inc., Term Loan.... 8.32 12/01/10 1,980,000
2,984 Ginn LA CS Borrower, LLC,
Term Loan................. 8.23 to 8.33 06/08/11 2,424,900
See Notes to Financial Statements 9
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
BUILDINGS & REAL ESTATE (CONTINUED)
$ 4,500 Ginn LA CS Borrower, LLC,
Term Loan (b)............. 12.33% 06/08/12 $ 2,714,999
3,000 Kuilima Resort Co., Term
Loan (c).................. 11.50 09/30/11 870,000
5,000 Kyle Acquisition Group,
LLC, Term Loan............ 6.81 07/20/08 to 07/20/10 3,637,500
3,000 Lake At Las Vegas Joint
Venture, LLC, Term Loan... 11.00 01/24/08 3,000,000
13,645 Lake at Las Vegas Joint
Venture, LLC, Term Loan
(b)....................... 15.10 to 15.30 06/20/12 6,390,488
1,806 Lake Las Vegas Resort,
Revolving Credit Agreement
(b)....................... 15.10 06/20/12 845,601
2,691 Landsource Communities
Development, LLC, Term
Loan...................... 9.75 to 9.77 02/27/13 2,101,278
3,000 Metroflag BP, LLC, Term
Loan...................... 13.02 07/06/09 2,700,000
2,000 North Las Vegas, Term
Loan...................... 11.52 05/30/12 700,000
2,994 Pivotal Promontory, Term
Loan...................... 9.75 08/31/10 2,394,988
2,000 Pivotal Promontory, Term
Loan (c).................. 11.50 08/31/11 550,000
2,985 Realogy Corp., Term
Loan...................... 7.45 to 7.51 10/10/13 2,516,728
4,000 Re/Max International,
Inc., Term Loan........... 6.79 12/17/12 3,600,000
4,735 Rhodes Ranch General
Partnership, Term Loan.... 8.33 to 12.58 11/21/10 to 11/21/11 2,997,647
2,977 Shea Capital I, LLC, Term
Loan...................... 6.83 10/27/11 2,740,064
2,338 Shea Mountain House, LLC,
Term Loan................. 5.27 05/11/11 1,894,081
2,000 Standard Pacific Corp.,
Term Loan................. 6.66 05/05/13 1,445,000
2,496 Tamarack Resort, LLC, Term
Loan...................... 8.18 to 10.25 05/19/11 2,184,194
1,489 TOUSA, Inc., Term Loan (d)... 8.27 07/31/12 1,410,600
1,688 WCI Communities, Inc.,
Term Loan................. 9.66 12/23/10 1,494,141
--------------
52,412,209
--------------
10 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES 3.3%
$ 10,977 Edwards (Cayman Islands
II) Ltd., Term Loan....... 7.08 to 10.83% 05/31/14 to 11/30/14 $ 8,641,197
2,000 HydroChem Industrial
Services, Inc., Term
Loan...................... 10.62 07/12/14 1,970,000
3,985 NCO Financial Systems,
Term Loan................. 7.83 to 8.00 05/15/13 3,769,073
4,975 RGIS Services, LLC, Term
Loan...................... 5.74 to 5.77 04/30/14 4,353,125
3,985 SMG Holdings, Inc., Term
Loan...................... 7.73 to 8.31 07/27/14 3,865,438
19,899 VNU, Inc., Term Loan...... 6.66 to 7.15 08/09/13 18,445,540
--------------
41,044,373
--------------
CHEMICALS, PLASTICS & RUBBER 6.2%
5,985 Arizona Chemical Co., Term
Loan...................... 7.08 to 10.57 02/28/13 to 02/28/14 5,017,068
E 10,757 Borsodchem, Term Loan
(Hungary)................. 6.98 to 7.48 09/19/14 to 09/09/15 15,560,353
$ 5,000 Brenntag Holdings, GMBH &
Co. KG, Term Loan
(Germany)................. 7.79 07/17/15 4,675,000
4,952 Fibervisions Delaware
Corp., Term Loan.......... 9.08 03/31/13 4,184,307
10,000 Foamex L.P., Term Loan.... 9.01 02/12/14 8,150,000
5,482 Hexion Specialty
Chemicals, Inc., Term
Loan...................... 7.00 to 7.19 05/05/13 5,641,329
E 2,970 Ineos Group Holdings,
Plc., Term Loan (United
Kingdom).................. 7.24 to 7.74 12/01/13 4,004,147
E 12,753 Momentive Performance,
Term Loan................. 6.69 12/14/13 16,945,484
$ 5,000 Univar, Term Loan......... 7.89 10/11/14 4,862,500
14,000 Wellman, Inc., Term
Loan...................... 8.91 to 11.66 02/10/09 to 02/10/10 7,653,336
--------------
76,693,524
--------------
CONSTRUCTION MATERIAL 1.6%
1,990 Axia, Inc., Term Loan..... 10.00 12/21/12 3,586,283
2,461 Beacon Sales Acquisition,
Inc., Term Loan........... 6.73 to 7.08 09/30/13 2,239,743
8,968 Building Materials Corp.
of America, Term Loan..... 6.69 to 9.56 03/15/14 to 09/15/14 6,652,755
2,985 Building Materials
Holdings, Corp., Term
Loan...................... 8.83 11/10/13 2,484,918
2,000 Custom Building Products,
Inc., Term Loan........... 9.72 04/29/12 1,800,000
See Notes to Financial Statements 11
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
CONSTRUCTION MATERIAL (CONTINUED)
$ 1,990 Masonite International
Corp., Term Loan
(Canada).................. 5.33 to 6.83% 04/06/13 $ 1,722,733
969 United Subcontractors,
Inc., Term Loan........... 7.57 to 7.68 12/27/12 811,837
--------------
19,298,269
--------------
CONTAINERS, PACKAGING & GLASS 2.3%
5,200 Altivity Packaging LLC,
Term Loan................. 8.40 12/30/13 5,180,500
7,988 Berlin Packaging, LLC,
Term Loan................. 8.00 to 11.85 08/14/14 to 08/17/15 7,822,687
4,172 Berry Plastics Group,
Inc., Term Loan (b)....... 11.65 06/05/14 3,170,442
3,980 Berry Plastics Group,
Inc., Term Loan........... 7.16 04/03/15 3,450,370
5,992 Consolidated Container
Co., LLC, Term Loan....... 5.50 to 10.58 03/28/14 to 09/28/14 4,236,301
2,539 Solo Cup, Co., Term
Loan...................... 8.13 to 8.54 02/27/11 2,464,117
2,985 Unifrax Corp., Term
Loan...................... 5.56 05/02/13 2,843,032
--------------
29,167,449
--------------
DIVERSIFIED MANUFACTURING 0.6%
5,710 Euramax International,
Inc., Term Loan........... 7.81 to 12.65 06/29/12 to 06/29/13 5,692,666
1,995 X-Rite, Inc., Term Loan... 8.38 to 8.69 10/24/12 1,997,494
--------------
7,690,160
--------------
ECOLOGICAL 0.7%
10,250 Synagro Technologies,
Inc., Term Loan........... 9.64 10/02/14 8,763,750
--------------
EDUCATION & CHILD CARE 1.2%
9,975 Cengage Learning Holdings
II, L.P., Term Loan....... 6.03 to 7.58 07/05/14 9,005,211
500 Educate, Inc., Term
Loan...................... 10.08 06/14/14 465,000
5,000 Nelson Education Ltd.,
Term Loan (Canada)........ 10.83 07/05/15 4,850,000
--------------
14,320,211
--------------
ELECTRONICS 3.3%
2,993 Ax Acquisition Corp, Term
Loan...................... 8.62 08/15/14 2,775,544
6,000 Dealer Computer Services,
Inc., Term Loan........... 10.34 10/26/13 5,760,000
2,992 Infor Enterprise Solutions
Holdings, Inc., Term
Loan...................... 8.58 07/28/12 2,723,106
5,000 Kronos, Inc., Term Loan... 10.58 06/11/15 4 ,312,500
7,960 Open Solutions, Inc., Term
Loan...................... 5.85 01/23/14 7,352,964
12 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
ELECTRONICS (CONTINUED)
$ 4,955 Stratus Technologies,
Inc., Term Loan........... 8.58% 03/29/11 $ 4,492,307
5,000 Sungard Data Systems,
Inc., Term Loan........... 6.90 02/28/14 4,646,355
9,854 Verint Systems, Inc., Term
Loan...................... 7.38 05/25/14 8,819,192
--------------
40,881,968
--------------
ENTERTAINMENT & LEISURE 5.5%
4,988 Bushnell, Inc., Term
Loan...................... 8.58 08/24/13 4,812,937
4,385 Fender Musical Instruments
Corp., Term Loan.......... 6.97 to 7.16 06/09/14 3,990,653
47,382 Metro-Goldwyn-Mayer,
Studios, Inc., Term
Loan...................... 8.11 04/08/12 42,342,207
4,975 Panavision, Inc., Term
Loan...................... 6.74 to 8.44 03/30/11 4,402,653
E 7,796 Travelport, Term Loan..... 7.02 08/23/13 10,401,869
$ 2,500 True Temper Sports, Inc.,
Term Loan................. 8.10 to 8.73 03/15/11 2,312,500
--------------
68,262,819
--------------
FARMING & AGRICULTURE 0.5%
7,000 Wm. Bolthouse Farms, Inc.,
Term Loan................. 10.33 12/16/13 6,475,000
--------------
FINANCE 6.8%
4,762 C.G. JCF Corp., Term
Loan...................... 7.83 08/01/14 4,690,226
3,990 Daimler Chrysler Financial
Services, Term Loan....... 9.00 08/03/12 3,591,000
2,802 DCS Business Services,
Inc., Term Loan........... 9.02 02/04/11 2,494,132
E 33,915 First Data Corp., Term
Loan...................... 7.52 to 7.63 09/24/14 38,359,454
$ 6,417 National Processing
Company Group, Term
Loan...................... 7.69 to 11.19 09/29/12 to 09/29/14 5,814,602
3,333 Nuveen Investments, Inc.,
Term Loan................. 7.83 11/13/14 3,235,677
9,848 Outsourcing Solutions,
Inc., Term Loan........... 9.50 to 10.70 06/17/10 to 09/30/10 9,749,572
3,789 Oxford Acq. III, Ltd.,
Term Loan (United
Kingdom).................. 5.64 05/11/14 3,404,196
See Notes to Financial Statements 13
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
$ 9,988 RJO Holdings, Corp., Term
Loan...................... 6.28 to 10.03% 07/12/14 to 07/12/15 $ 8,027,531
5,485 Transfirst Holdings, Inc.,
Term Loan................. 7.58 to 10.83 06/15/14 to 06/15/15 4,836,500
--------------
84,202,890
--------------
HEALTH & BEAUTY 1.4%
7,500 American Safety Razor Co.,
Term Loan................. 11.69 01/30/14 7,425,000
6,802 Marietta Intermediate
Holdings, Term Loan (b)... 9.03 to 14.65 12/17/10 to 12/17/11 5,358,078
4,975 Philosophy, Inc., Term
Loan...................... 5.26 to 5.29 03/16/14 4,328,250
--------------
17,111,328
--------------
HEALTHCARE 5.7%
5,000 Capella Healthcare, Inc.,
Term Loan................. 7.34 11/30/12 4,925,000
333 Community Health Systems,
Inc., Revolving Credit
Agreement................. 6.49 07/25/13 313,333
2,768 Community Health Systems,
Inc., Term Loan........... 7.33 07/25/14 2,561,448
4,990 Concentra, Inc., Term
Loan...................... 7.08 to 10.33 06/25/14 to 06/25/15 4,560,650
2,000 FHC Health Systems, Term
Loan...................... 11.25 12/13/13 1,995,000
16,927 HCA, Inc., Term Loan...... 7.08 11/17/13 15,682,691
5,977 Health Management
Associates, Inc., Term
Loan...................... 5.02 to 6.58 02/28/14 5,274,330
1,978 HealthCare Partners, LLC,
Term Loan................. 6.58 10/31/13 1,830,077
8,490 Inverness Medical
Innovations, Inc., Term
Loan...................... 6.84 to 9.09 06/26/14 to 06/26/15 8,854,875
15,000 Manor Care, Inc., Term
Loan...................... 6.04 11/09/14 14,025,000
1,987 Matria Healthcare, Inc.,
Term Loan................. 6.83 to 7.00 01/19/12 1,937,756
700 Surgical Care Affiliates,
LLC, Revolving Credit
Agreement................. 7.08 06/29/13 637,000
14 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
$ 3,786 United Surgical Partners
International, Inc., Term
Loan...................... 5.49 to 7.43% 04/19/14 $ 3,450,081
4,980 Viant Holdings, Inc., Term
Loan...................... 7.08 06/25/14 4,513,114
--------------
70,560,355
--------------
HOME & OFFICE FURNISHINGS, HOUSEWARES &
DURABLE CONSUMER PRODUCTS 1.4%
8,870 Hunter Fan Co., Term
Loan...................... 7.38 to 11.63 04/16/14 to 10/16/14 7,288,734
993 Lenox, Inc., Term Loan.... 7.75 to 7.78 04/20/13 828,738
4,975 Mattress Holdings, Corp.,
Inc., Term Loan........... 5.50 01/18/14 3,980,000
4,000 National Bedding Co., LLC,
Term Loan................. 8.26 08/31/12 3,300,000
2,813 Quality Home Brands
Holdings, LLC, Term
Loan...................... 7.64 12/20/12 2,411,984
--------------
17,809,456
--------------
HOTELS, MOTELS, INNS & GAMING 5.4%
3,992 Cannery Casino Resorts,
LLC, Term Loan............ 2.25 to 7.40 05/18/13 2,574,602
L 2,610 Gala Group Ltd., Term Loan
(United Kingdom).......... 8.80 12/01/12 4,679,979
$ 2,000 Golden Nugget, Inc., Term
Loan...................... 7.21 12/31/14 1,750,000
843 Greektown Casino, LLC,
Term Loan................. 8.00 12/03/12 788,563
3,000 Harrah's Entertainment,
Inc., Term Loan........... 6.24 01/28/15 2,762,499
8,977 Herbst Gaming, Inc., Term
Loan...................... 9.22 to 9.64 12/02/11 8,259,164
8,700 Magnolia Hill, LLC, Term
Loan...................... 6.53 to 14.00 10/30/13 to 04/24/14 8,453,000
10,000 New World Gaming Partners
Ltd., Term Loan........... 10.23 03/31/15 8,500,000
E 6,500 Regency Entertainment,
Term Loan (Greece)........ 6.69 to 7.06 12/07/14 9,172,318
$ 7,490 Wembley, Inc., Term
Loan...................... 5.78 to 9.72 08/23/11 to 07/18/12 6,428,383
4,851 Wimar OPCO LLC, Term
Loan...................... 9.25 01/03/12 4,809,337
9,655 Yonkers Racing Corp., Term
Loan...................... 9.25 08/12/11 9,316,784
--------------
67,494,629
--------------
See Notes to Financial Statements 15
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
INSURANCE 2.2%
$ 5,653 Alliant Holdings I, Inc.,
Term Loan................. 7.83% 11/01/14 $ 5,341,613
7,463 AmWins Group, Inc., Term
Loan...................... 7.59 to 8.07 06/08/13 5,970,000
6,485 HMSC Holdings, Corp., Term
Loan...................... 6.25 to 9.50 04/03/14 to 10/03/14 5,539,492
5,860 Mitchell International,
Inc., Term Loan........... 10.13 03/28/15 5,215,400
6,000 Vertafore, Inc., Term
Loan...................... 10.77 to 11.02 01/31/13 5,610,000
--------------
27,676,505
--------------
MACHINERY 0.3%
3,990 Mold-Masters Luxembourg
Holdings SA, Term Loan.... 8.13 10/11/14 3,820,425
--------------
MEDICAL PRODUCTS & SERVICES 1.9%
2,000 AGA Medical Corp., Term
Loan...................... 7.17 04/28/13 1,845,000
19,950 Biomet, Inc., Term Loan... 7.86 03/25/15 19,408,178
3,000 VWR Funding, Inc., Term
Loan...................... 7.33 06/29/14 2,763,750
--------------
24,016,928
--------------
MINING, STEEL, IRON & NON-PRECIOUS METALS 0.5%
7,453 John Maneely Co., Term
Loan...................... 7.69 to 8.13 12/08/13 6,404,346
--------------
NATURAL RESOURCES 1.5%
8,000 CDX Funding, LLC, Term
Loan...................... 11.39 03/31/13 7,360,000
3,000 Dresser, Inc., Term
Loan...................... 11.13 05/04/15 2,715,000
8,480 Kinder Morgan, Inc., Term
Loan...................... 4.78 05/30/14 8,404,139
--------------
18,479,139
--------------
NON-DURABLE CONSUMER PRODUCTS 6.2%
11,393 Aearo Technologies, Inc.,
Term Loan................. 7.08 to 10.33 09/24/13 to 06/01/14 11,342,777
6,754 Amscan Holdings, Inc.,
Term Loan................. 5.63 to 7.35 05/25/13 6,179,887
5,985 Huish Detergents, Inc.,
Term Loan................. 6.83 to 9.08 04/26/14 to 10/26/14 4,540,830
9,394 KIK Custom Products, Inc.,
Term Loan................. 7.11 to 9.84 05/31/14 to 11/30/14 5,217,170
1,985 Mega Brands, Inc., Term
Loan (Canada)............. 5.50 07/26/12 1,751,515
995 Nice Pak Products, Term
Loan...................... 8.46 06/18/14 935,300
16 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
NON-DURABLE CONSUMER PRODUCTS (CONTINUED)
E 20,000 Ontex, Term Loan
(Belgium)................. 8.40 to 8.90% 07/05/12 to 07/05/13 $ 28,395,956
$ 695 Spectrum Brands, Inc.,
Revolving Credit
Agreement................. 4.48 03/30/13 646,919
13,681 Spectrum Brands, Inc.,
Term Loan................. 8.44 to 8.90 03/30/13 12,730,635
5,000 Targus Group
International, Inc., Term
Loan...................... 13.35 05/22/13 4,312,500
1,995 Wilton Products, Inc.,
Term Loan................. 7.21 to 8.24 08/01/14 1,855,350
--------------
77,908,839
--------------
PAPER & FOREST PRODUCTS 1.0%
4,000 Ainsworth Lumber Co.,
Ltd., Term Loan........... 6.29 06/26/14 3,720,000
7,500 New Page, Term Loan....... 8.69 12/21/14 7,304,168
1,990 White Birch Paper Co.,
Term Loan (Canada)........ 7.58 05/08/14 1,480,560
--------------
12,504,728
--------------
PHARMACEUTICALS 0.4%
2,000 Generics International
Inc., Term Loan........... 12.33 04/30/15 1,993,750
3,600 Mylan Laboratories, Inc.,
Term Loan................. 6.63 to 8.13 10/02/14 3,528,000
--------------
5,521,750
--------------
PRINTING & PUBLISHING 12.1%
1,995 Advanstar Communications,
Inc., Term Loan........... 7.09 05/31/14 1,645,865
10,000 American Media Operations,
Inc., Term Loan........... 8.16 to 8.34 01/31/13 9,400,000
2,051 Ascend Media Holdings,
LLC, Term Loan............ 9.45 01/31/12 877,001
1,199 Canon Communications, LLC,
Term Loan................. 6.27 05/31/11 1,181,243
998 DRI Holdings, Inc., Term
Loan...................... 6.27 to 7.83 07/03/14 953,434
4,000 Endurance Business Media,
Inc., Term Loan........... 10.53 01/26/14 3,380,000
4,975 FSC Acquisition, LLC, Term
Loan...................... 6.31 to 6.98 03/08/14 3,936,469
5,000 Gatehouse Media, Inc.,
Term Loan................. 6.45 to 7.07 08/28/14 4,000,000
7,749 Haights Cross Operating
Co., Term Loan............ 8.37 to 9.37 08/20/08 7,660,272
10,000 Idearc, Inc., Term Loan... 6.33 11/17/13 9,196,566
See Notes to Financial Statements 17
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
PRINTING & PUBLISHING (CONTINUED)
$ 1,995 Intermedia Outdoor, Inc.,
Term Loan................. 7.83% 01/31/13 $ 2,870,969
9,745 MediaNews Group, Inc.,
Term Loan................. 6.64 to 7.08 12/30/10 to 08/02/13 8,354,336
11,750 Merrill Communications,
LLC, Term Loan............ 9.77 11/15/13 10,457,500
5,976 Penton Media, Inc., Term
Loan...................... 5.54 to 8.27 02/01/13 to 02/01/14 5,241,889
E 15,000 Primacom, Term Loan
(Germany)................. 7.44 to 8.69 09/25/10 22,300,489
$ 4,500 Primedia, Inc., Term
Loan...................... 5.21 to 7.08 08/01/14 4,342,873
E 5,000 Prosiebensat.1 Media AG,
Term Loan (Germany)....... 6.55 05/09/15 6,188,553
$ 3,427 R.H. Donnelley, Inc., Term
Loan...................... 6.25 to 6.70 12/31/09 to 06/30/11 3,215,564
4,552 Thomas Nelson, Inc., Term
Loan...................... 5.52 to 7.54 06/12/12 4,313,481
3,990 Thomson Medical,
Education, Term Loan...... 8.13 to 11.88 04/26/14 to 04/26/15 3,815,450
49,750 Tribune Co., Term Loan.... 7.91 05/19/14 37,517,719
--------------
150,849,673
--------------
RESTAURANTS & FOOD SERVICE 1.0 %
1,380 Advantage Sales &
Marketing, Inc., Term
Loan...................... 5.28 to 6.83 03/29/13 1,283,153
1,592 Center Cut Hospitality,
Inc., Term Loan........... 6.46 07/06/14 1,536,280
142 OSI Restaurant Partners,
LLC, Revolving Credit
Agreement................. 7.49 06/14/13 120,285
1,791 OSI Restaurant Partners,
LLC, Term Loan............ 5.56 06/14/13 1,515,595
997 Sagittarius Restaurants,
LLC, Term Loan............ 7.08 03/29/13 897,716
3,000 Van Houtte Inc., Term Loan
(Canada).................. 10.33 01/19/15 2,790,000
4,938 Volume Services America,
Inc., Term Loan........... 7.18 to 7.25 10/01/10 4,814,851
--------------
12,957,880
--------------
RETAIL--OIL & GAS 0.5%
7,361 Pantry, Inc. (The), Term
Loan...................... 5.03 05/15/14 6,735,307
--------------
18 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
RETAIL--SPECIALTY 1.1%
E 9,500 Zapf, Term Loan
(Germany)................. 8.31% 11/30/12 $ 14,123,643
--------------
RETAIL--STORES 3.8%
$ 15,000 Dollar General Corp, Term
Loan...................... 5.99 to 7.71 07/06/14 13,146,880
6,957 General Nutrition Centers,
Inc., Term Loan........... 6.98 to 7.08 09/16/13 5,952,120
19,000 Guitar Center, Inc., Term
Loan...................... 7.28 10/09/14 16,530,000
9,925 Michaels Stores, Inc.,
Term Loan................. 6.00 to 7.63 10/31/13 8,521,638
2,000 Neiman Marcus Group, Inc.,
Term Loan................. 6.29 to 6.90 04/06/13 1,843,334
1,990 Sally Holdings, Inc., Term
Loan...................... 7.52 11/16/13 1,884,387
--------------
47,878,359
--------------
TELECOMMUNICATIONS--EQUIPMENT & SERVICES 2.1%
E 10,000 Fibernet, Term Loan
(Bulgaria)................ 6.94 to 7.44 12/20/14 to 12/20/15 14,495,318
E 7,960 Orion, Term Loan
(Germany)................. 7.02 to 7.98 02/02/14 11,264,720
--------------
25,760,038
--------------
TELECOMMUNICATIONS--LOCAL EXCHANGE CARRIERS 1.3%
$ 1,985 CavTel Holdings, LLC, Term
Loan...................... 9.58 12/31/12 1,657,444
8,384 Global Tel*Link Corp.,
Term Loan................. 8.33 02/14/13 8,132,445
3,156 Hawaiian Telcom
Communications, Inc., Term
Loan...................... 7.08 06/01/14 2,801,115
2,786 NuVox Transition
Subsidiary, LLC, Term
Loan...................... 8.24 05/31/14 2,664,112
1,527 Sorenson Communications,
Inc., Term Loan........... 7.38 04/27/14 1,469,557
--------------
16,724,673
--------------
TELECOMMUNICATIONS--WIRELESS 2.6%
5,985 Alltel Holdings, Term
Loan...................... 6.77 05/16/15 5,466,298
11,466 Asurion Corp., Term
Loan...................... 7.88 07/03/14 10,463,155
16,862 MetroPCS Wireless, Inc.,
Term Loan................. 7.13 to 7.19 11/03/13 15,786,987
--------------
31,716,440
--------------
See Notes to Financial Statements 19
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
TEXTILES & LEATHER 0.6%
$ 3,496 Gold Toe Investment Corp.,
Term Loan................. 6.02 to 9.26% 10/30/13 to 04/30/14 $ 3,186,524
5,000 Levi Strauss & Co., Term
Loan...................... 7.57 03/27/14 4,037,500
--------------
7,224,024
--------------
TRANSPORTATION--CARGO 0.5%
9,000 JHCI Acquisitions, Inc.,
Term Loan................. 9.46 12/19/14 6,615,000
--------------
TRANSPORTATION--PERSONAL 0.5%
10,810 Coach America Holdings,
Inc., Term Loan........... 7.48 to 11.36 04/20/14 to 10/20/14 6,585,829
--------------
UTILITIES 2.2%
5,000 Bicent Power LLC, Term
Loan...................... 8.83 12/31/14 4,656,250
2,900 First Light Power
Resources, Inc., Term
Loan...................... 9.44 05/01/14 2,675,250
5,572 NRG Energy, Inc., Term
Loan...................... 6.48 to 6.58 02/01/13 5,132,924
11,320 Texas Competitive Electric
Holdings, Co., LLC, Term
Loan...................... 8.40 10/10/14 10,438,840
5,000 TPF Generation Holdings,
LLC, Term Loan............ 9.08 12/15/14 4,475,000
--------------
27,378,264
--------------
TOTAL VARIABLE RATE** SENIOR LOAN INTERESTS 113.1%................ 1,410,651,322
--------------
NOTES 22.5%
BUILDINGS & REAL ESTATE 2.8%
E 16,865 Eco-bat Finance Plc
(United Kingdom) (e)...... 10.13 01/31/13 26,076,110
E 7,000 Grohe Holding GmbH
(Germany)................. 7.45 01/15/14 9,132,050
--------------
35,208,160
--------------
CHEMICALS, PLASTICS & RUBBER 0.3%
$ 5,000 Cognis GmbH (Germany)
(e)....................... 6.99 09/15/13 4,225,000
--------------
CONSTRUCTION MATERIAL 0.1%
2,000 Compression Polymers
Corp. .................... 11.47 07/01/12 1,790,000
--------------
20 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
CONTAINERS, PACKAGING & GLASS 2.4%
E 10,000 Ardagh Glass Finance BV
(Ireland) (e)............. 8.88% 07/01/13 $ 13,231,623
E 10,850 Pregis Corp. ............. 9.57 04/15/13 16,376,841
--------------
29,608,464
--------------
ELECTRONICS 2.3%
E 11,050 Invensys Plc (United
Kingdom) (e).............. 9.88 03/15/11 17,311,033
$ 10,597 Invensys Plc (United
Kingdom) (e).............. 9.88 03/15/11 11,200,414
--------------
28,511,447
--------------
FINANCE 0.3%
E 2,700 Ford Credit Europe (United
Kingdom).................. 7.13 01/15/13 3,247,518
--------------
HOTELS, MOTELS, INNS & GAMING 0.6%
$ 2,000 Codere Fin Luxembourg SA
(Luxembourg) (e).......... 8.25 06/15/15 2,653,758
E 4,000 Peermont Global Ltd.
(South Africa) (e)........ 7.75 04/30/14 4,802,039
--------------
7,455,797
--------------
MINING, STEEL, IRON & NON-PRECIOUS METALS 3.0%
E 6,000 FMG Finance Pty Ltd
(Australia) (e)........... 9.75 09/01/13 9,202,671
$ 24,500 FMG Finance Pty Ltd
(Australia) (e)........... 10.63 09/01/16 27,930,000
--------------
37,132,671
--------------
PRINTING & PUBLISHING 2.7%
E 18,500 Kabel Deutschland
(Germany) (e)............. 10.75 07/01/14 27,916,495
$ 5,000 Kabel Deutschland
(Germany)................. 10.63 07/01/14 5,087,500
--------------
33,003,995
--------------
TELECOMMUNICATIONS--EQUIPMENT & SERVICES 3.3%
E 15,825 Magyar Telecom (Invtel)
(Netherlands) (e)......... 10.75 08/15/12 24,556,323
E 12,000 Versatel Ag (Germany)
(e)....................... 7.70 06/15/14 16,323,958
--------------
40,880,281
--------------
TELECOMMUNICATIONS--WIRELESS 2.9%
E 13,000 Wind Acquisition Fin SA
(Luxembourg) (e).......... 9.75 12/01/15 19,641,155
$ 16,000 Wind Acquisition Fin SA
(Luxembourg) (e).......... 10.75 12/01/15 17,040,000
--------------
36,681,155
--------------
See Notes to Financial Statements 21
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
TRANSPORTATION--CARGO 1.5%
E 12,450 Cb Bus Ab (Sweden)........ 9.13% 08/01/09 $ 18,509,406
--------------
UTILITIES 0.3%
L 2,000 InterGen NV (Netherlands)
(e)....................... 9.50 06/30/17 3,818,016
--------------
TOTAL NOTES 22.5%................................................. 280,071,910
--------------
TOTAL LONG-TERM INVESTMENTS 135.6%
(Cost $1,825,391,005).............................................. 1,690,723,232
--------------
SHORT-TERM INVESTMENTS 3.0%
REPURCHASE AGREEMENTS 2.8%
State Street Bank & Trust Co. ($34,800,000 par collateralized by U.S. Government
obligations in a pooled cash account, interest rate of 2.48%, dated 01/31/08,
to be sold on 2/01/08 at $34,802,397) (a)..................................... 34,800,000
TIME DEPOSIT 0.2%
State Street Bank & Trust Corp. ($3,096,269 par, 0.30% coupon, dated 1/31/08, to
be sold on 02/01/08 at $3,096,295)............................................ 3,096,269
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $37,896,269)............................................................ 37,896,269
--------------
TOTAL INVESTMENTS 138.6%
(Cost $1,863,287,274)......................................................... 1,728,619,501
FOREIGN CURRENCY 0.2%
(Cost $3,002,892)............................................................. 3,043,191
LIABILITIES IN EXCESS OF OTHER ASSETS (38.8%).................................. (484,229,523)
--------------
NET ASSETS 100.0%.............................................................. $1,247,433,169
==============
Par Amounts are denominated in US currency unless otherwise noted.
Percentages are calculated as a percentage of net assets.
(a) All or a portion of this security is designated in connection with unfunded
loan commitments.
(b) Payment-in-kind security.
(c) This Senior Loan interest is non-income producing.
(d) This borrower has filed for protection in federal bankruptcy court.
22 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
(e) 144A-Private Placement security which is exempt from registration under Rule
144A of the Securities Act of 1933, as amended. This security may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
* Senior Loans in the Fund's portfolio generally are subject to mandatory
and/or optional prepayment. Because of these mandatory prepayment conditions
and because there may be significant economic incentives for a Borrower to
prepay, prepayments of Senior Loans in the Fund's portfolio may occur. As a
result, the actual remaining maturity of Senior Loans held in the Fund's
portfolio may be substantially less than the stated maturities shown.
Although the Fund is unable to accurately estimate the actual remaining
maturity of individual Senior Loans, the Fund estimates that the actual
average maturity of the Senior Loans held in its portfolio will be
approximately 18-24 months.
** Senior Loans in which the Fund invests generally pay interest at rates which
are periodically redetermined by reference to a base lending rate plus a
premium. These base lending rates are generally (i) the lending rate offered
by one or more major European banks, such as the London Inter-Bank Offered
Rate ("LIBOR"), (ii) the prime rate offered by one or more major United
States banks or (iii) the certificate of deposit rate. Senior Loans are
generally considered to be restricted in that the Fund ordinarily is
contractually obligated to receive approval from the Agent Bank and/or
Borrower prior to the disposition of a Senior Loan.
E--Euro
L--Great Britain Pound
Kr--Swedish Krona
SWAP AGREEMENTS OUTSTANDING AS OF JANUARY 31, 2008:
CREDIT DEFAULT SWAPS
PAY/
RECEIVE NOTIONAL
REFERENCE BUY/SELL FIXED EXPIRATION AMOUNT UPFRONT
COUNTERPARTY ENTITY PROTECTION RATE DATE (000) PAYMENTS VALUE
Goldman Sachs Credit
Partners, L.P. .......... Peermont Global
Limited Sell 3.50% 09/20/12 $ 7,433 $ 0 $ (321,322)
Goldman Sachs Credit
Partners, L.P. .......... UPC Holding B.V. Sell 3.45 09/20/12 7,433 0 (461,934)
Credit Suisse
International............ Codere Finance
(Luxembourg) S.A. Sell 3.42 09/20/12 7,433 0 (486,025)
Bank of America N.A. ..... Seat Pagine
Gialle S.P.A. Sell 3.35 09/20/12 7,433 0 (155,198)
Goldman Sachs Credit
Partners, L.P. .......... M-Real OYJ Sell 3.45 09/20/09 7,433 0 (603,225)
UBS AG.................... M-Real OYJ Sell 3.05 09/20/08 7,433 424 (272,674)
Goldman Sachs Credit
Partners, L.P. .......... M-Real OYJ Sell 3.10 09/20/08 7,433 0 (269,702)
Goldman Sachs Credit
Partners, L.P. .......... British Energy
Holdings PLC Sell 3.50 12/20/12 22,300 0 (208,313)
See Notes to Financial Statements 23
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PAY/
RECEIVE NOTIONAL
REFERENCE BUY/SELL FIXED EXPIRATION AMOUNT UPFRONT
COUNTERPARTY ENTITY PROTECTION RATE DATE (000) PAYMENTS VALUE
Goldman Sachs Credit
Partners, L.P. .......... Gala Group
Finance Ltd. Sell 3.45% 12/20/12 $ 7,433 $ 0 $ (75,631)
Citigroup Global Markets
Limited.................. M-Real OYJ Sell 4.25 12/20/09 7,433 0 196,888
Bank of America N.A. ..... Smurfit Kappa Sell 4.25 12/20/12 7,433 0 (306,586)
Bank of America N.A. ..... Cognis GMBH Sell 3.90 12/20/09 7,433 0 (207,199)
Citigroup Global Markets
Limited.................. Basell AF S.C.A. Sell 4.05 12/20/09 7,433 0 (426,404)
UBS AG.................... Rank Group PLC Sell 4.25 12/20/12 14,866 0 (91,929)
Bank of America N.A....... Seat Pagine
Gialle S.P.A. Sell 3.65 12/20/12 7,433 0 (71,489)
Goldman Sachs Credit
Partners, L.P. .......... Grohe Holding
GMBH Sell 4.25 12/20/09 14,866 0 (440,875)
Deutsche Bank............. M-Real OYJ Sell 4.15 12/20/09 7,433 0 (574,900)
Goldman Sachs Credit
Partners, L.P. .......... Gala Group
Finance Ltd. Sell 4.15 03/20/13 7,433 0 60,110
Goldman Sachs Credit
Partners, L.P. .......... Standard Pacific
Corporation Sell 4.77 09/20/12 5,000 0 (1,545,082)
Goldman Sachs Credit
Partners, L.P. .......... K. Hovnanian
Enterprises, Inc. Sell 4.69 09/20/12 5,000 0 (1,335,129)
Goldman Sachs Credit
Partners, L.P. .......... LCDX.NA.9 Sell 1.20 06/20/12 40,000 (130,000) (2,800,804)
Goldman Sachs Credit
Partners, L.P. .......... CDX.NA.HY.9 Sell 3.75 12/20/12 70,000 (1,126,562) (5,621,410)
UBS AG.................... CDX.NA.HY.9 Sell 3.75 12/20/12 50,000 (804,688) (4,015,292)
Goldman Sachs Credit
Partners, L.P. .......... Citgo Petroleum
Corporation Sell 3.00 12/20/10 5,000 0 112,757
----------- -------------
TOTAL CREDIT DEFAULT SWAPS................................................................. $(2,060,826) $(19,921,368)
=========== =============
24 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AS OF JANUARY 31, 2008:
UNREALIZED
APPRECIATION/
IN EXCHANGE FOR CURRENT VALUE DEPRECIATION
LONG CONTRACTS:
Euro
268,512 expiring 4/16/08................... US $ $ 398,241 $ 11,718
2,025,215 expiring 4/16/08................. US $ 3,003,682 94,663
1,097,901 expiring 4/16/08................. US $ 1,628,343 10,311
1,236,286 expiring 4/16/08................. US $ 1,833,588 8,731
3,000,000 expiring 4/16/08................. US $ 4,449,426 70,926
1,972,618 expiring 4/16/08................. US $ 2,925,673 16,061
2,700,000 expiring 4/16/08................. US $ 4,004,483 23,064
-------------
235,474
-------------
Pound Sterling
2,904,445 expiring 4/16/08................. US $ 5,747,890 85,093
-------------
Total Long Contracts..................... $ 320,567
=============
SHORT CONTRACTS:
Euro
252,257,948 expiring 4/16/08............... US $ $374,134,381 $ (9,495,517)
17,790,000 expiring 4/16/08................ US $ 26,385,098 (731,384)
2,105,000 expiring 4/16/08................. US $ 3,122,014 (23,665)
4,971,583 expiring 4/16/08................. US $ 7,373,564 (70,309)
1,880,000 expiring 4/16/08................. US $ 2,788,307 (23,015)
1,360,000 expiring 4/16/08................. US $ 2,017,073 (22,987)
2,177,500 expiring 4/16/08................. US $ 3,229,542 8,183
1,567,437 expiring 4/16/08................. US $ 2,324,732 (24,361)
1,830,000 expiring 4/16/08................. US $ 2,714,150 (75,290)
112,406 expiring 4/16/08................... US $ 166,714 (173)
-------------
(10,458,518)
-------------
Pound Sterling
4,567,577 expiring 4/16/08................. US $ 9,039,224 166,270
1,867,028 expiring 4/16/08................. US $ 3,694,844 (7,463)
950,000 expiring 4/16/08................... US $ 1,800,048 (28,023)
-------------
130,784
-------------
Swedish Krona
26,150,731 expiring 4/16/08................ US $ 4,099,038 (86,836)
-------------
Total Short Contracts.................... (10,414,570)
=============
TOTAL FORWARD FOREIGN CURRENCY CONTRACTS..... $(10,094,003)
=============
See Notes to Financial Statements 25
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
SUMMARY OF LONG-TERM INVESTMENTS BY COUNTRY CLASSIFICATION
PERCENTAGE OF
LONG-TERM
COUNTRY VALUE INVESTMENTS
United States.............................................. $1,235,564,822 73.1%
Germany.................................................... 137,488,889 8.1
United Kingdom............................................. 77,429,960 4.6
Luxembourg................................................. 39,334,913 2.3
Australia.................................................. 37,132,671 2.2
Belgium.................................................... 28,395,956 1.7
Netherlands................................................ 28,374,338 1.7
Sweden..................................................... 27,052,665 1.6
Hungary.................................................... 15,560,353 0.9
Bulgaria................................................... 14,495,318 0.9
Canada..................................................... 14,046,171 0.8
Ireland.................................................... 13,231,623 0.8
Greece..................................................... 9,172,318 0.5
Cayman Islands............................................. 8,641,197 0.5
South Africa............................................... 4,802,038 0.3
-------------- -----
$1,690,723,232 100.0%
-------------- -----
RATINGS ALLOCATION AS OF 1/31/08
BBB/Baa..................................................... 0.5%
BB/Ba....................................................... 29.5
B/B......................................................... 40.6
CCC/Caa..................................................... 6.8
Non-Rated................................................... 22.6
RATINGS ALLOCATIONS ARE AS A PERCENTAGE OF LONG-TERM DEBT OBLIGATIONS. RATINGS
ALLOCATIONS BASED UPON RATINGS AS ISSUED BY STANDARD AND POOR'S AND MOODY'S,
RESPECTIVELY. BANK LOANS RATED BELOW BBB BY STANDARD AND POOR'S OR BAA BY
MOODY'S ARE CONSIDERED TO BE BELOW INVESTMENT GRADE.
26 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
January 31, 2008 (Unaudited)
ASSETS:
Total Investments (Cost $1,863,287,274)..................... $1,728,619,501
Foreign Currency (Cost $3,002,892).......................... 3,043,191
Restricted Cash............................................. 31,928,276
Receivables:
Interest.................................................. 20,631,973
Investments Sold.......................................... 7,046,762
Forward Foreign Currency Contracts.......................... 495,020
Swap Contracts.............................................. 369,755
Other....................................................... 29,519
--------------
Total Assets............................................ 1,792,163,997
--------------
LIABILITIES:
Payables:
Borrowings................................................ 440,000,000
Investments Purchased..................................... 66,043,311
Investment Advisory Fee................................... 1,796,266
Income Distributions...................................... 1,461,203
Other Affiliates.......................................... 173,633
Swap Contracts.............................................. 20,291,123
Forward Foreign Currency Contracts.......................... 10,589,023
Unfunded Commitments........................................ 2,248,801
Accrued Interest Expense.................................... 1,626,094
Trustees' Deferred Compensation and Retirement Plans........ 13,572
Accrued Expenses............................................ 487,802
--------------
Total Liabilities....................................... 544,730,828
--------------
NET ASSETS.................................................. $1,247,433,169
==============
NET ASSET VALUE PER COMMON SHARE ($1,247,433,169 divided by
74,005,236 shares outstanding)............................ $ 16.86
==============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 74,005,236 shares issued and
outstanding).............................................. $ 740,052
Paid in Surplus............................................. 1,411,909,415
Accumulated Undistributed Net Investment Income............. 4,229,807
Accumulated Net Realized Loss............................... (4,629,149)
Net Unrealized Depreciation................................. (164,816,956)
--------------
NET ASSETS.................................................. $1,247,433,169
==============
See Notes to Financial Statements 27
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended January 31, 2008 (Unaudited)
INVESTMENT INCOME:
Interest.................................................... $ 67,629,876
Other....................................................... 2,140,220
-------------
Total Income.............................................. 69,770,096
-------------
EXPENSES:
Investment Advisory Fee..................................... 9,638,962
Professional Fees........................................... 523,102
Custody..................................................... 299,221
Credit Line................................................. 294,231
Accounting & Administrative Expenses........................ 109,797
Reports to Shareholders..................................... 75,195
Trustees' Fees and Related Expenses......................... 24,133
Registration Fees........................................... 22,349
Transfer Agent.............................................. 8,301
Other....................................................... 40,141
-------------
Total Operating Expense................................. 11,035,432
Interest Expense........................................ 4,630,800
-------------
Total Expenses............................................ 15,666,232
-------------
NET INVESTMENT INCOME....................................... $ 54,103,864
=============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 4,294,938
Swap Contracts............................................ 3,644,923
Foreign Currency Transactions............................. (1,804,483)
Forward Foreign Currency Contracts........................ (10,420,201)
-------------
Net Realized Loss........................................... (4,284,823)
-------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... (38,968,462)
-------------
End of the Period:
Foreign Currency Translation............................ 54,163
Unfunded Commitments.................................... (2,248,801)
Forward Foreign Currency Contracts...................... (10,094,003)
Swap Contracts.......................................... (17,860,542)
Investments............................................. (134,667,773)
-------------
(164,816,956)
-------------
Net Unrealized Depreciation During the Period............... (125,848,494)
-------------
NET REALIZED AND UNREALIZED LOSS............................ $(130,133,317)
=============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $ (76,029,453)
=============
28 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
FOR THE PERIOD
JUNE 26, 2007
FOR THE (COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS)
JANUARY 31, 2008 TO JULY 31, 2007
------------------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income....................... $ 54,103,864 $ 5,972,539
Net Realized Loss........................... (4,284,823) (57,951)
Net Unrealized Depreciation During the
Period.................................... (125,848,494) (38,968,462)
-------------- --------------
Change in Net Assets from Operations........ (76,029,453) (33,053,874)
Distributions from Net Investment Income.... (56,132,971) -0-
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................ (132,162,424) (33,053,874)
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold................... -0- 1,412,900,000
Additional Cost from the 2007 Initial Public
Offering.................................. (250,533) -0-
-------------- --------------
TOTAL INCREASE/DECREASE IN NET ASSETS FROM
INVESTMENT ACTIVITIES..................... (132,412,957) 1,379,846,126
NET ASSETS:
Beginning of the Period..................... 1,379,846,126 -0-
-------------- --------------
End of the Period (Including accumulated
undistributed net investment income of
$4,229,807 and $6,258,914,
respectively)............................. $1,247,433,169 $1,379,846,126
============== ==============
See Notes to Financial Statements 29
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Six Months Ended January 31, 2008 (Unaudited)
CHANGE IN NET ASSETS FROM OPERATIONS........................ $ (76,029,453)
---------------
Adjustments to Reconcile the Change in Net Assets from
Operations to
Net Cash Provided by Operating Activities:
Purchases of Investments.................................. (1,226,804,968)
Principal Repayments/Sales of Investments................. 302,747,898
Net Sales of Short-Term Investments....................... 720,825,582
Purchases of Foreign Currency............................. (1,454,248,337)
Sales of Foreign Currency................................. 1,442,059,052
Amortization of Loan Fees................................. 1,100,892
Net Loan Fees Received.................................... 1,181,668
Accretion of Discount..................................... (2,101,822)
Net Realized Gain on Investments.......................... (4,294,938)
Net Realized Loss on Foreign Currency Transactions........ 1,804,483
Net Realized Loss on Forward Foreign Currency
Transactions............................................ 10,420,201
Net Change in Unrealized Depreciation on Investments...... 104,768,480
Net Change in Unrealized Appreciation on Foreign
Currency................................................ (66,608)
Net Change in Unrealized Depreciation on Forward Foreign
Currency Contracts...................................... 10,177,063
Increase in Restricted Cash............................... (12,778,276)
Increase in Interest Receivables and Other Assets......... (17,213,441)
Decrease in Receivable for Investments Sold............... 32,953,238
Increase in Accrued Expenses and Other Payables........... 1,923,452
Decrease in Investments Purchased Payable................. (222,015,016)
Net Change in Unrealized Depreciation in Swap Contracts... 8,851,959
Net Change in Upfront Payments on Swap Contracts.......... (720,424)
Net Change in Unfunded Commitments........................ 2,131,809
---------------
Total Adjustments....................................... (299,298,053)
---------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... (375,327,506)
---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Additional Cost from the 2007 Initial Public Offering..... (250,533)
Cash Distributions Paid................................... (54,671,768)
Proceeds from and Repayments of Borrowings................ 440,000,000
Change in Custodian Bank Payable.......................... (9,750,193)
---------------
Net Cash Provided by Financing Activities................. 375,327,506
---------------
NET DECREASE IN CASH........................................ 0
Cash at the Beginning of the Period......................... --
---------------
CASH AT THE END OF THE PERIOD............................... 0
===============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the Year for Interest...................... $ 3,004,706
===============
30 See Notes to Financial Statements
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
JUNE 26, 2007
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) TO
JANUARY 31, 2008 JULY 31, 2007
-----------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD................. $ 18.65 $ 19.10
-------- --------
Net Investment Income (a).............................. 0.73 0.08
Net Realized and Unrealized Loss....................... (1.76) (0.53)
-------- --------
Total from Investment Operations....................... (1.03) (0.45)
Less Distributions from Net Investment Income.......... (0.76) -0-
-------- --------
NET ASSET VALUE, END OF THE PERIOD....................... $ 16.86 $ 18.65
======== ========
Common Share Market Price at End of the Period........... $ 15.90 $ 19.75
Total Return (b)......................................... -15.73%* -1.25%*
Net Assets at End of the Period (In millions)............ $1,247.4 $1,379.8
Ratio to Average Net Assets excluding Borrowings:
Operating Expense...................................... 1.61% 1.54%
Interest Expense....................................... 0.68% N/A
Gross Expense.......................................... 2.29% 1.54%
Net Investment Income.................................. 7.91% 4.58%
Portfolio Turnover (c)................................... 22%* 0%*
SUPPLEMENTAL RATIOS:
Ratio to Average Net Assets including Borrowings:
Operating Expense...................................... 1.35% N/A
Interest Expense....................................... 0.57% N/A
Gross Expense.......................................... 1.92% N/A
Net Investment Income.................................. 6.61% N/A
SENIOR INDEBTEDNESS:
Total Borrowing Outstanding (In thousands)............... $440,000 -0-
Asset Coverage per $1,000 Unit of Senior Indebtedness
(d).................................................... $ 3,835 N/A
* Non-Annualized
(a) Based on average shares outstanding.
(b) Total return based on common share market price assumes an investment at the
common share market price at the beginning of the period indicated,
reinvestment of all distributions for the period in accordance with the
Fund's dividend reinvestment plan, and sale of all shares at the closing
common share market price at the end of the periods indicated.
(c) Calculation includes the proceeds from principal repayments and sales of
variable rate senior loan interests.
(d) Calculated by subtracting the Fund's total liabilities (not including the
Borrowings) from the Fund's total assets and dividing by the total number of
senior indebtedness units, where one unit equals $1,000 of senior
indebtedness.
N/A=Not Applicable
See Notes to Financial Statements 31
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Dynamic Credit Opportunities Fund (the "Fund") is a statutory trust
organized under the laws of the State of Delaware pursuant to an Agreement and
Declaration of Trust dated March 15, 2007. The Fund is registered as a
diversified, closed-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"), as amended. The Fund's investment
objective is to seek a high level of current income, with a secondary objective
of capital appreciation. The Fund seeks to achieve its investment objectives by
opportunistically investing primarily in credit securities of issuers which
operate in a variety of industries and geographic regions located throughout the
world. The Fund will invest in a combination of (i) senior secured floating rate
and fixed rate loans; (ii) second lien or other subordinated or unsecured
floating rate loans or debt; (iii) other debt obligations, including high yield,
high risk obligations; and (iv) structured products including collateralized
debt and loan obligations. The Fund intends to borrow money for investment
purposes which will create the opportunity for enhanced return, but also should
be considered a speculative technique and may increase the Fund's volatility.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION The Fund's loans and debt obligations are valued by the
Fund following valuation guidelines established and periodically reviewed by the
Fund's Board of Trustees. Under the valuation guidelines, loans and debt
obligations for which reliable market quotes are readily available are valued at
the mean of such bid and ask quotes. Where reliable market quotes are not
readily available, loans and debt obligations are valued, where possible, using
independent market indicators provided by independent pricing sources approved
by the Board of Trustees. Other loans and debt obligations are valued by
independent pricing sources approved by the Board of Trustees based upon pricing
models developed, maintained and operated by those pricing sources or valued by
the Van Kampen Asset Management (the "Adviser") by considering a number of
factors including consideration of market indicators, transactions in
instruments which the Adviser believes may be comparable (including comparable
credit quality, interest rate, interest rate redetermination period and
maturity), the credit worthiness of the borrower, the current interest rate, the
period until next interest rate redetermination and the maturity of such loan.
Consideration of comparable instruments may include commercial paper, negotiable
certificates of deposit and short-term variable rate securities which have
adjustment periods comparable to the loans in the Fund's portfolio. The fair
value of loans are reviewed and approved by the Fund's Valuation Committee and
the Board of Trustees. Forward foreign currency contracts are valued using
quoted foreign exchange rates. Credit default swaps are valued using market
quotations obtained from brokers.
Short-term securities with remaining maturities of 60 days or less are
valued at amortized cost, which approximates market value. Short-term loan
participations are valued at cost in the absence of any indication of
impairment. The Fund may invest in repurchase
32
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
agreements, which are short-term investments in which the Fund acquires
ownership of a debt security and the seller agrees to repurchase the security at
a future time and specified price. Repurchase agreements are fully
collateralized by the underlying debt security. The Fund will make payment for
such securities only upon physical delivery or evidence of book entry transfer
to the account of the custodian bank. The seller is required to maintain the
value of the underlying security at not less than the repurchase proceeds due
the Fund.
B. SECURITY TRANSACTIONS Investment transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
Legal expenditures that are expected to result in the restructuring of or a plan
of reorganization for an investment are recorded as realized losses. The Fund
may purchase and sell securities on a "when-issued" or "delayed delivery" basis,
with settlement to occur at a later date. The value of the security so purchased
is subject to market fluctuations during this period. The Fund will segregate
assets with the custodian having an aggregate value at least equal to the amount
of the when-issued or delayed delivery purchase commitments until payment is
made. At January 31, 2008, the Fund had no when-issued or delayed delivery
purchase commitments.
C. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Facility fees received are
treated as market discounts. Market premiums are amortized and discounts are
accreted over the stated life of each applicable loan or other debt obligation.
Other income is comprised primarily of amendment fees which are recorded when
received. Amendment fees are earned as compensation for agreeing to changes in
loan agreements.
D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required. The
Fund may be subject to taxes imposed by countries in which it invests. Such
taxes are generally based on income earned or gains realized or repatriated.
Taxes are accrued and applied to net investment income, net realized capital
gains and net unrealized appreciation, as applicable as the income is earned or
capital gains are recorded. The Fund adopted the provisions of the Financial
Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48") Accounting
for Uncertainty in Income Taxes on January 31, 2008. FIN 48 sets forth a minimum
threshold for financial statement recognition of the benefit of a tax position
taken or expected to be taken in a tax return. The implementation of FIN 48 did
not result in any unrecognized tax benefits in the accompanying financial
statements. If applicable, the Fund recognizes interest accrued related to
unrecognized tax benefits in "Interest Expense" and penalties in "Other"
expenses on the Statement of Operations. The Fund files tax returns with the
U.S. Internal Revenue Service and various states.
33
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
At January 31, 2008, the cost and related gross unrealized appreciation and
depreciation are as follows:
Cost of investments for tax purposes........................ $1,862,320,496
==============
Gross tax unrealized appreciation........................... $ 126,325,918
Gross tax unrealized depreciation........................... (281,463,119)
--------------
Net tax unrealized depreciation on investments.............. $ (155,137,201)
==============
E. DISTRIBUTION OF INCOME AND GAINS The Fund intends to declare and pay monthly
dividends from net investment income. Net realized gains, if any, are
distributed at least annually to its shareholders. Distributions from net
realized gains for book purposes may include short term capital gains, which are
included as ordinary income for tax purposes. For the period from June 26, 2007
(Commencement of Operations) to July 31, 2007, there were no distributions of
income or gains paid.
As of July 31, 2007, the components of distributable earnings on a tax basis
were as follows:
Undistributed ordinary income............................... $6,420,930
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of gains or losses recognized on securities for
tax purposes but not for book purposes.
F. FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS The Fund may enter into
forward foreign currency exchange contracts to attempt to protect securities and
related receivables and payables against changes in future foreign currency
exchange rates. A currency exchange contract is an agreement between two parties
to buy or sell currency at a set price on a future date. The market value of the
contract will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily and the change in market value is recorded by the Fund as
unrealized appreciation/depreciation on foreign currency translation.
Assets and liabilities denominated in foreign currencies and commitments
under forward foreign currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rate
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates prevailing when accrued. Realized and
unrealized gains and losses on securities resulting from changes in exchange
rates are not segregated for financial reporting purposes from amounts arising
from changes in the market prices of securities. Realized gains and losses on
foreign currency transactions include the net realized amount from the sale of
foreign currency and the amount realized between trade date and settlement date
on security and income transactions. Risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts. Risks may also arise from the unanticipated movements in the
value of a foreign currency relative to the U.S. dollar.
34
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide certain day-to-day investment management services to the Fund for an
annual fee of 1.25% of the average daily managed assets. Average daily managed
assets are defined as the average daily total asset value of the Fund minus the
sum of accrued liabilities other than the aggregate amount of borrowings for
investment purposes. The Adviser has entered into a subadvisory agreement with
Avenue Europe International Management, L.P. (the "Subadviser"). Under the
subadvisory agreement, the Adviser retains the Subadviser to manage that portion
of the Fund's assets that are allocated to the Subadviser. The Adviser will pay
the Subadviser an annual fee, payable monthly, in an amount equal to 1.25% of
the portion of the managed assets of the Fund managed by the Subadviser.
For the six months ended January 31, 2008, the Fund recognized expenses of
approximately $253,900 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Fund.
Under separate Legal Services, Accounting Services and Chief Compliance
Officer (CCO) Employment agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Fund. The costs of
these services are allocated to each fund. For the six months ended January 31,
2008, the Fund recognized expenses of approximately $86,900 representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Fund as well as the salary,
benefits and related costs of the CCO and related support staff paid by Van
Kampen. Services provided pursuant to the Legal Services agreement are reported
as part of "Professional Fees" on the Statement of Operations. Services provided
pursuant to the Accounting and CCO Employment agreements are reported as part of
"Accounting and Administrative Expenses" on the Statement of Operations.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund provides deferred compensation and retirement plans for its
Trustees who are not officers of Van Kampen. Under the deferred compensation
plan, Trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each Trustee's years of service to the Fund. The maximum
annual benefit per Trustee under the plan is $2,500.
At January 31, 2008, Van Kampen Investments Inc., an affiliate of the
Adviser, owned 5,236 shares of common stock at an aggregate purchase price of
$100,000.
3. CAPITAL TRANSACTIONS
For the six months ended January 31, 2008 and the period ended July 31, 2007,
transactions were as follows:
SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, JULY 31,
2008 2007
Beginning Shares.......................................... 74,005,236 -0-
Sales..................................................... -0- 74,005,236
---------- ----------
Ending Shares............................................. 74,005,236 74,005,236
========== ==========
35
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
The Fund is authorized to issue an unlimited number of common shares of
beneficial interest, par value $0.01 per share. The Fund had no operations until
June 26, 2007, other than matters relating to its organization and registration
and sale and issuance to Van Kampen Investments Inc., an affiliate of the
Adviser, of 5,236 shares of common stock at an aggregate purchase price of
$100,000. The Adviser, on behalf of the Fund, will incur all of the Fund's
organizational cost, estimated at $10,000. The Adviser also has agreed to pay
the amount by which the offering costs of the Fund (other than the sales load)
exceed $0.04 per share of the Fund's common shares. On June 26, 2007, the Fund
sold 71,000,000 common shares in an initial public offering. Proceeds to the
Fund were $1,355,500,000 after deducting underwriting commissions and estimated
$600,000 of offering expenses. On July 23, 2007 the Fund sold 3,000,000 common
shares, pursuant to an over allotment agreement with the underwriters for net
proceeds of $57,300,000 after deducting underwriting commissions. For the six
months ended January 31, 2008, the Fund incurred additional costs of $250,533
from the 2007 initial public offering.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from investments sold and
repaid, excluding short-term investments, were $1,226,804,968 and $302,747,898,
respectively.
5. COMMITMENTS
Pursuant to the terms of certain loan agreements, the Fund had unfunded loan
commitments of approximately $29,199,108 as of January 31, 2008. The Fund
intends to reserve against such contingent obligations by designating cash,
liquid securities and liquid loans as a reserve. The unrealized depreciation on
these commitments of $2,248,801 as of January 31, 2008 is reported as "Unfunded
Commitments" on the Statement of Assets and Liabilities.
6. BORROWINGS
The Fund has entered into a $750 million revolving credit and security
agreement. This revolving credit agreement is secured by the assets of the Fund.
In connection with this agreement, for the six months ended January 31, 2008,
the Fund incurred fees of approximately $294,200. For the six months ended
January 31, 2008, the average daily balance of borrowings under the revolving
credit and security agreement was $267,764,228 with a weighted average interest
rate of 5.14%.
7. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund may use derivative instruments for a variety of reasons, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio or to generate potential gain. All of the Fund's portfolio holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in unrealized appreciation/depreciation. Risks may arise as a
result of the potential inability of the counterparties to meet the terms of
their contracts.
Summarized below are specific types of derivative financial instruments used
by the Fund.
36
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
A. FORWARD FOREIGN CURRENCY CONTRACTS Forward foreign currency contracts are
commitments to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original value of the contract and the closing value of such contract is
included as a component of realized gain/loss on forward foreign currency
contracts.
B. CREDIT DEFAULT SWAPS The Fund may enter into credit default swap contracts
for hedging purposes or to gain exposure to a credit in which the Fund may
otherwise invest. A credit default swap is an agreement between two parties to
exchange the credit risk of an issuer. A buyer of a credit default swap is said
to buy protection by paying periodic fees in return for a contingent payment
from the seller if the issuer has a credit event such as bankruptcy, a failure
to pay outstanding obligations or deteriorating credit while the swap is
outstanding. A seller of a credit default swap is said to sell protection and
thus collects the periodic fees and profits if the credit of the issuer remains
stable or improves while the swap is outstanding but the seller in a credit
default swap contract would be required to pay an agreed-upon amount, which
approximates the notional amount of the swap as disclosed in the table following
the Portfolio of Investments, to the buyer in the event of an adverse credit
event of the issuer. The Fund accrues for the periodic fees on credit default
swaps on a daily basis with the net amount accrued recorded within unrealized
appreciation/depreciation of swap contracts. Upon cash settlement of the
periodic fees, the net amount is recorded as realized gain/loss on swap
contracts on the Statements of Operations. Net unrealized gains are recorded as
an asset or net unrealized losses are reported as a liability on the Statement
of Assets and Liabilities. The change in value of the swap contracts is reported
as unrealized gains or losses on the Statement of Operations. Payments received
or made upon entering into a credit default swap contract, if any, are recorded
as realized gain or loss on the Statement of Operations upon termination or
maturity of the swap. Credit default swaps may involve greater risks than if a
Fund had invested in the issuer directly. Credit default swaps are subject to
general market risk, counterparty risk and credit risk.
If there is a default by the counterparty to a swap agreement, the Fund will
have contractual remedies pursuant to the agreements related to the transaction.
Counterparties are required to pledge collateral daily (based on the valuation
of each swap) on behalf of the Fund with a value approximately equal to the
amount of any unrealized gain. Reciprocally, when the Fund has an unrealized
loss on a swap contract, the Fund has instructed the custodian to pledge cash or
liquid securities as collateral with a value approximately equal to the amount
of the unrealized loss. Collateral pledges are monitored and subsequently
adjusted if and when the swap valuations fluctuate. Restricted cash, if any, for
segregating purposes is shown on the Statement of Assets and Liabilities.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. ACCOUNTING PRONOUNCEMENT
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157), was issued and is effective for fiscal years
beginning after
37
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
November 15, 2007. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements. As
of January 31, 2008, the Adviser does not believe the adoption of SFAS 157 will
impact the amounts reported in the financial statements, however, additional
disclosures will be required about the inputs used to develop the measurements
of fair value and the effect of certain measurements reported on the Statement
of Operations for a fiscal period.
38
VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND
BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
CHRISTINA JAMIESON
Vice President
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
SUBADVISER
AVENUE-EUROPE INTERNATIONAL MANAGEMENT, L.P.
535 Madison Avenue, 15th Floor
New York, New York 10022
CUSTODIAN
STATE STREET BANK
AND FUND COMPANY
One Lincoln Street
Boston, Massachusetts 02111
TRANSFER AGENT
COMPUTERSHARE FUND COMPANY, N.A.
c/o Computershare Investor Services
P.O. Box 43078
Providence, Rhode Island 02940-3078
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
111 South Wacker Drive
Chicago, Illinois 60606-4301
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, a amended.
39
Van Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our U.S. Privacy Policy
We are required by federal law to provide you with a copy of our Privacy
Policy annually.
The following Policy applies to current and former individual clients of Van
Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors
Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van
Kampen Exchange Corp., as well as current and former individual investors in
Van Kampen mutual funds, unit investment trusts, and related companies.
This Policy is not applicable to partnerships, corporations, trusts or other
non-individual clients or account holders, nor is this Policy applicable to
individuals who are either beneficiaries of a trust for which we serve as
trustee or participants in an employee benefit plan administered or advised
by us. This Policy is, however, applicable to individuals who select us to
be a custodian of securities or assets in individual retirement accounts,
401(k) accounts, 529 Educational Savings Accounts, accounts subject to the
Uniform Gifts to Minors Act, or similar accounts.
Please note that we may amend this Policy at any time, and will inform you
of any changes to this Policy as required by law.
WE RESPECT YOUR PRIVACY
We appreciate that you have provided us with your personal financial
information. We strive to maintain the privacy of such information while we
help you achieve your financial objectives. This Policy describes what
non-public personal information we collect about you, why we collect it, and
when we may share it with others.
We hope this Policy will help you understand how we collect and share
non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies
you or your accounts as "personal information."
1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU?
To serve you better and manage our business, it is important that we collect
and maintain accurate information about you. We may obtain this information
from applications and other forms you submit to us, from your dealings with
us, from consumer reporting agencies, from our Web sites and from third
parties and other sources.
(continued on next page)
Van Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
For example:
-- We may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
-- We may obtain information about account balances, your use of
account(s) and the types of products and services you prefer to receive
from us through your dealings and transactions with us and other
sources.
-- We may obtain information about your creditworthiness and credit
history from consumer reporting agencies.
-- We may collect background information from and through third-party
vendors to verify representations you have made and to comply with
various regulatory requirements.
-- If you interact with us through our public and private Web sites, we
may collect information that you provide directly through online
communications (such as an e-mail address). We may also collect
information about your Internet service provider, your domain name,
your computer's operating system and Web browser, your use of our Web
sites and your product and service preferences, through the use of
"cookies." "Cookies" recognize your computer each time you return to
one of our sites, and help to improve our sites' content and
personalize your experience on our sites by, for example, suggesting
offerings that may interest you. Please consult the Terms of Use of
these sites for more details on our use of cookies.
2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?
To provide you with the products and services you request, to serve you
better and to manage our business, we may disclose personal information we
collect about you to our affiliated companies and to non-affiliated third
parties as required or permitted by law.
A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose
personal information that we collect about you to our affiliated companies
except to enable them to provide services on our behalf or as otherwise
required or permitted by law.
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except
to enable them to provide services on our behalf, to perform joint marketing
agreements with
(continued on back)
Van Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
other financial institutions, or as otherwise required or permitted by law.
For example, some instances where we may disclose information about you to
non-affiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against
fraud, for institutional risk control, to respond to judicial process or to
perform services on our behalf. When we share personal information with
these companies, they are required to limit their use of personal
information to the particular purpose for which it was shared and they are
not allowed to share personal information with others except to fulfill that
limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL
INFORMATION WE COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza - Suite 100
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
VTASAN 3/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-01368P-Y01/08
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
Please refer to Item #1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures
(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSRS
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(1) Code of Ethics -- Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(2)(b) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen Dynamic Credit Opportunities Fund
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: March 20, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: March 20, 2008
By: /s/ Stuart N. Schuldt
----------------------
Name: Stuart N. Schuldt
Title: Principal Financial Officer
Date: March 20, 2008