MFS CHARTER INCOME TRUST N-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05822

MFS CHARTER INCOME TRUST

(Exact name of registrant as specified in charter)

500 Boylston Street, Boston, Massachusetts 02116

(Address of principal executive offices) (Zip code)

Susan S. Newton

Massachusetts Financial Services Company

500 Boylston Street

Boston, Massachusetts 02116

(Name and address of agents for service)

Registrant’s telephone number, including area code: (617) 954-5000

Date of fiscal year end: November 30

Date of reporting period: February 28, 2011


ITEM 1. SCHEDULE OF INVESTMENTS.


LOGO


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11

 

Issuer

   Shares/Par      Value ($)  

Bonds – 113.9%

     

Aerospace – 0.9%

     

Alliant Techsystems, Inc., 6.875%, 2020

   $ 475,000       $ 491,031   

BE Aerospace, Inc., 8.5%, 2018

     1,225,000         1,353,625   

Bombardier, Inc., 7.5%, 2018 (n)

     885,000         951,375   

Bombardier, Inc., 7.45%, 2034 (n)

     625,000         600,000   

Hawker Beechcraft Acquisition Co. LLC, 8.5%, 2015

     1,534,000         1,231,035   

Oshkosh Corp., 8.25%, 2017

     435,000         482,850   
           
      $ 5,109,916   
           

Airlines – 0.0%

     

Continental Airlines, Inc., 7.25%, 2021

   $ 213,922       $ 236,384   
           

Apparel Manufacturers – 0.4%

     

Hanesbrands, Inc., 8%, 2016

   $ 965,000       $ 1,044,612   

Hanesbrands, Inc., 6.375%, 2020

     475,000         458,137   

Phillips-Van Heusen Corp., 7.375%, 2020

     700,000         745,500   
           
      $ 2,248,249   
           

Asset-Backed & Securitized – 7.3%

     

Anthracite Ltd., “A”, CDO, FRN, 0.622%, 2019 (z)

   $ 1,353,738       $ 1,231,902   

Anthracite Ltd., “BFL”, CDO, FRN, 1.26%, 2037 (z)

     3,000,000         2,790,000   

Banc of America Commercial Mortgage, Inc., FRN, 5.742%, 2051

     1,500,000         1,635,616   

Bayview Financial Acquisition Trust, FRN, 5.483%, 2041

     296,055         297,448   

Bayview Financial Revolving Mortgage Loan Trust, FRN, 1.861%, 2040 (z)

     856,573         549,156   

Citigroup/Deutsche Bank Commercial Mortgage Trust, FRN, 5.366%, 2049

     1,605,000         1,599,307   

Commercial Mortgage Pass-Through Certificates, FRN, 5.789%, 2046

     230,000         244,575   

Countrywide Asset-Backed Certificates, FRN, 5.147%, 2035

     1,286,362         1,285,657   

Credit Suisse Mortgage Capital Certificate, FRN, 5.715%, 2039

     1,400,000         1,455,167   

Crest Ltd., CDO, 7%, 2040

     2,106,848         105,342   

First Union-Lehman Brothers Bank of America, FRN, 0.452%, 2035 (i)

     17,432,669         293,814   

First Union-Lehman Brothers Commercial Mortgage Trust, 7%, 2029 (n)

     452,074         469,402   

JPMorgan Chase Commercial Mortgage Securities Corp., 5.42%, 2049

     1,255,000         1,333,861   

JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.817%, 2049

     1,000,000         1,053,068   

JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.817%, 2049

     5,000,000         5,385,449   

JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.988%, 2051

     6,000,000         6,341,731   

JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 6.06%, 2051

     185,000         141,736   

Merrill Lynch Mortgage Trust, “B”, FRN, 5.826%, 2050

     185,000         113,887   

Merrill Lynch Mortgage Trust, FRN, 5.826%, 2050

     1,350,000         1,465,711   

Multi Security Asset Trust, “A3”, 5%, 2035 (z)

     1,461,810         1,476,428   

PNC Mortgage Acceptance Corp., 7.1%, 2032 (z)

     1,030,276         1,030,516   

Spirit Master Funding LLC, 5.05%, 2023 (z)

     1,447,661         1,260,319   

Structured Asset Securities Corp., FRN, 4.67%, 2035

     150,746         150,742   

Wachovia Bank Commercial Mortgage Trust, FRN, 5.686%, 2047

     1,503,155         774,788   

Wachovia Bank Commercial Mortgage Trust, FRN, 5.899%, 2051

     7,250,000         7,831,351   
           
      $ 40,316,973   
           

Automotive – 2.0%

     

Accuride Corp., 9.5%, 2018

   $ 775,000       $ 864,125   

Allison Transmission, Inc., 11%, 2015 (n)

     1,455,000         1,582,312   

Ford Motor Credit Co. LLC, 8%, 2014

     485,000         542,432   

Ford Motor Credit Co. LLC, 12%, 2015

     4,965,000         6,270,159   

General Motors Corp., 7.125%, 2013 (d)

     1,169,000         371,157   

Goodyear Tire & Rubber Co., 10.5%, 2016

     1,200,000         1,368,000   

UCI International, Inc., 8.625%, 2019 (z)

     230,000         244,950   
           
      $ 11,243,135   
           

Basic Industry – 0.2%

     

Trimas Corp., 9.75%, 2017

   $ 795,000       $ 882,450   
           

 

1


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Broadcasting – 2.9%

     

Allbritton Communications Co., 8%, 2018

   $ 1,320,000       $ 1,382,700   

Citadel Broadcasting Corp., 7.75%, 2018 (z)

     180,000         193,050   

Entravision Communications Corp., 8.75%, 2017

     240,000         259,200   

Gray Television, Inc., 10.5%, 2015

     155,000         164,687   

Inmarsat Finance PLC, 7.375%, 2017 (n)

     1,145,000         1,230,875   

Intelsat Bermuda Ltd., 11.25%, 2017

     635,000         702,469   

Intelsat Jackson Holdings Ltd., 9.5%, 2016

     4,100,000         4,335,750   

Lamar Media Corp., 6.625%, 2015

     740,000         758,500   

Lamar Media Corp., “C”, 6.625%, 2015

     135,000         138,037   

Local TV Finance LLC, 9.25%, 2015 (p)(z)

     1,220,374         1,183,763   

Newport Television LLC, 13%, 2017 (n)(p)

     58,939         55,746   

News America, Inc., 6.2%, 2034

     325,000         335,147   

News America, Inc., 6.9%, 2039

     205,000         229,414   

Nexstar Broadcasting, Inc., 0.5% to 2011, 7% to 2014 (p)

     511,998         496,638   

Nexstar Broadcasting, Inc., 7%, 2014

     168,000         163,800   

Salem Communications Corp., 9.625%, 2016

     137,000         150,358   

Sinclair Broadcast Group, Inc., 9.25%, 2017 (n)

     1,425,000         1,610,250   

Sinclair Broadcast Group, Inc., 8.375%, 2018 (n)

     185,000         195,638   

SIRIUS XM Radio, Inc., 13%, 2013 (z)

     195,000         232,538   

SIRIUS XM Radio, Inc., 8.75%, 2015 (n)

     725,000         803,844   

SIRIUS XM Radio, Inc., 7.625%, 2018 (n)

     485,000         514,100   

Univision Communications, Inc., 12%, 2014 (n)

     335,000         365,150   

Univision Communications, Inc., 7.875%, 2020 (n)

     350,000         375,375   
           
      $ 15,877,029   
           

Brokerage & Asset Managers – 0.7%

     

E*TRADE Financial Corp., 7.875%, 2015

   $ 785,000       $ 788,925   

E*TRADE Financial Corp., 12.5%, 2017

     990,000         1,173,150   

Janus Capital Group, Inc., 6.95%, 2017

     1,900,000         2,081,836   
           
      $ 4,043,911   
           

Building – 1.8%

     

Building Materials Holding Corp., 6.875%, 2018 (n)

   $ 680,000       $ 697,000   

Building Materials Holding Corp., 7%, 2020 (n)

     600,000         632,250   

CEMEX Finance LLC, 9.5%, 2016 (n)

     1,275,000         1,368,075   

CEMEX S.A., 9.25%, 2020

     1,695,000         1,745,850   

CEMEX S.A.B. de C.V., 9%, 2018 (n)

     188,000         194,580   

Nortek, Inc., 11%, 2013

     1,611,711         1,716,472   

Nortek, Inc., 10%, 2018 (n)

     435,000         464,362   

Owens Corning, 9%, 2019

     1,725,000         2,041,325   

Ply Gem Industries, Inc., 13.125%, 2014

     670,000         735,325   

Ply Gem Industries, Inc., 8.25%, 2018 (z)

     360,000         368,550   
           
      $ 9,963,789   
           

Business Services – 1.3%

     

First Data Corp., 9.875%, 2015

   $ 1,040,000       $ 1,050,400   

Interactive Data Corp., 10.25%, 2018 (n)

     1,425,000         1,596,000   

Iron Mountain, Inc., 6.625%, 2016

     775,000         778,875   

Iron Mountain, Inc., 8.375%, 2021

     460,000         508,875   

SunGard Data Systems, Inc., 10.25%, 2015

     1,955,000         2,060,081   

SunGard Data Systems, Inc., 7.375%, 2018 (n)

     1,065,000         1,099,613   

SunGard Data Systems, Inc., 7.625%, 2020 (n)

     265,000         273,613   
           
      $ 7,367,457   
           

Cable TV – 3.8%

     

Bresnan Broadband Holdings LLC, 8%, 2018 (z)

   $ 270,000       $ 283,500   
           

 

2


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Cable TV – continued

     

Cablevision Systems Corp., 8.625%, 2017

   $ 475,000       $ 532,000   

CCH II LLC, 13.5%, 2016

     1,350,000         1,635,187   

CCO Holdings LLC, 7.875%, 2018

     735,000         784,612   

CCO Holdings LLC, 8.125%, 2020

     470,000         507,012   

Cequel Communications Holdings, 8.625%, 2017 (z)

     620,000         655,650   

Charter Communications Operating LLC, 10.875%, 2014 (n)

     650,000         730,437   

CSC Holdings LLC, 8.5%, 2014

     770,000         862,400   

CSC Holdings LLC, 8.5%, 2015

     2,315,000         2,534,925   

DIRECTV Holdings LLC, 5.2%, 2020

     1,240,000         1,280,209   

Insight Communications Co., Inc., 9.375%, 2018 (n)

     820,000         904,050   

Mediacom LLC, 9.125%, 2019

     1,395,000         1,482,187   

Myriad International Holdings B.V., 6.375%, 2017 (n)

     857,000         888,066   

ONO Finance ll PLC, 10.875%, 2019 (z)

     300,000         322,500   

TCI Communications, Inc., 9.8%, 2012

     701,000         756,830   

Time Warner Cable, Inc., 5%, 2020

     1,150,000         1,166,968   

UPCB Finance III Ltd., 6.625%, 2020 (z)

     784,000         781,060   

Videotron LTEE, 6.875%, 2014

     2,110,000         2,139,013   

Virgin Media Finance PLC, 9.125%, 2016

     2,185,000         2,332,487   

Virgin Media Finance PLC, 9.5%, 2016

     395,000         455,731   
           
      $ 21,034,824   
           

Chemicals – 3.1%

     

Ashland, Inc., 9.125%, 2017

   $ 1,845,000       $ 2,145,966   

Braskem S.A., 7%, 2020 (n)

     1,312,000         1,354,640   

Celanese U.S. Holdings LLC, 6.625%, 2018 (n)

     540,000         564,300   

Hexion U.S. Finance Corp/Hexion Nova Scotia Finance, 8.875%, 2018

     1,030,000         1,105,962   

Hexion U.S. Finance Corp/Hexion Nova Scotia Finance, 9%, 2020 (n)

     270,000         287,212   

Huntsman International LLC, 8.625%, 2021 (n)

     1,120,000         1,243,200   

Lyondell Chemical Co., 8%, 2017 (n)

     463,000         521,164   

Lyondell Chemical Co., 11%, 2018

     2,718,207         3,119,143   

Momentive Performance Materials, Inc., 12.5%, 2014

     1,706,000         1,904,322   

Momentive Performance Materials, Inc., 11.5%, 2016

     1,103,000         1,196,755   

Momentive Performance Materials, Inc., 9%, 2021 (n)

     540,000         574,425   

Mosaic Co., 7.625%, 2016 (n)

     1,525,000         1,650,812   

Polypore International, Inc., 7.5%, 2017 (z)

     180,000         186,300   

Sociedad Quimica y Minera de Chile S.A., 5.5%, 2020 (n)

     414,000         412,092   

Solutia, Inc., 7.875%, 2020

     805,000         885,500   
           
      $ 17,151,793   
           

Computer Software – 0.4%

     

Seagate Technology HDD Holdings, 6.375%, 2011

   $ 1,950,000       $ 1,993,875   

Syniverse Holdings, Inc., 9.125%, 2019 (z)

     455,000         491,400   
           
      $ 2,485,275   
           

Computer Software - Systems – 0.5%

     

DuPont Fabros Technology, Inc., REIT, 8.5%, 2017

   $ 1,380,000       $ 1,521,450   

International Business Machines Corp., 8%, 2038

     1,000,000         1,370,850   
           
      $ 2,892,300   
           

Conglomerates – 0.7%

     

Actuant Corp., 6.875%, 2017

   $ 1,005,000       $ 1,040,175   

Amsted Industries, Inc., 8.125%, 2018 (n)

     1,125,000         1,209,375   

Kennametal, Inc., 7.2%, 2012

     684,000         716,004   

Pinafore LLC, 9%, 2018 (n)

     770,000         856,625   
           
      $ 3,822,179   
           

 

3


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Construction – 0.1%

     

Corporacion GEO S.A.B. de C.V., 9.25%, 2020 (n)

   $ 249,000       $ 280,747   
           

Consumer Products – 0.9%

     

ACCO Brands Corp., 10.625%, 2015

   $ 105,000       $ 118,650   

ACCO Brands Corp., 7.625%, 2015

     255,000         259,781   

Central Garden & Pet Co., 8.25%, 2018

     455,000         478,319   

Easton-Bell Sports, Inc., 9.75%, 2016

     560,000         630,000   

Elizabeth Arden, Inc., 7.375%, 2021 (z)

     470,000         493,500   

Jarden Corp., 7.5%, 2017

     1,095,000         1,164,806   

Libbey Glass, Inc., 10%, 2015

     666,000         727,605   

NBTY, Inc., 9%, 2018 (n)

     135,000         146,475   

Visant Corp., 10%, 2017

     925,000         1,001,313   
           
      $ 5,020,449   
           

Consumer Services – 1.2%

     

KAR Holdings, Inc., 10%, 2015

   $ 405,000       $ 429,300   

KAR Holdings, Inc., FRN, 4.304%, 2014

     380,000         375,250   

Realogy Corp., 10.5%, 2014

     255,000         265,200   

Service Corp. International, 6.75%, 2015

     265,000         280,238   

Service Corp. International, 7%, 2017

     4,030,000         4,291,950   

Ticketmaster Entertainment, Inc., 10.75%, 2016

     1,020,000         1,119,450   
           
      $ 6,761,388   
           

Containers – 1.5%

     

Graham Packaging Co. LP/GPC Capital Corp., 9.875%, 2014

   $ 1,800,000       $ 1,863,000   

Graham Packaging Co. LP/GPC Capital Corp., 8.25%, 2018

     185,000         199,337   

Greif, Inc., 6.75%, 2017

     855,000         906,300   

Greif, Inc., 7.75%, 2019

     1,000,000         1,102,500   

Owens-Illinois, Inc., 7.375%, 2016

     1,000,000         1,090,000   

Packaging Dynamics Corp., 8.75%, 2016 (z)

     255,000         261,056   

Reynolds Group, 7.75%, 2016 (n)

     1,050,000         1,118,250   

Reynolds Group, 7.125%, 2019 (n)

     565,000         579,125   

Reynolds Group, 9%, 2019 (z)

     530,000         552,525   

Reynolds Group, 8.25%, 2021 (z)

     480,000         481,200   
           
      $ 8,153,293   
           

Defense Electronics – 0.2%

     

BAE Systems Holdings, Inc., 5.2%, 2015 (n)

   $ 450,000       $ 481,454   

ManTech International Corp., 7.25%, 2018

     260,000         271,700   

MOOG, Inc., 7.25%, 2018

     335,000         352,598   
           
      $ 1,105,752   
           

Electronics – 0.6%

     

CPI International Acquisition, Inc., 8%, 2018 (z)

   $ 310,000       $ 312,325   

Freescale Semiconductor, Inc., 10.125%, 2018 (n)

     385,000         440,825   

Freescale Semiconductor, Inc., 9.25%, 2018 (n)

     545,000         607,675   

Jabil Circuit, Inc., 7.75%, 2016

     1,140,000         1,291,050   

NXP B.V., 7.875%, 2014

     520,000         542,750   

NXP B.V., 9.75%, 2018 (n)

     103,000         117,677   
           
      $ 3,312,302   
           

Emerging Market Quasi-Sovereign – 3.6%

     

Banco del Estado de Chile, 4.125%, 2020 (n)

   $ 234,000       $ 218,808   

BNDES Participacoes S.A., 5.5%, 2020 (n)

     138,000         139,035   

Development Bank of Kazakhstan, 5.5%, 2015 (n)

     1,762,000         1,806,050   

Ecopetrol S.A., 7.625%, 2019

     594,000         687,555   

Empresa Nacional del Petroleo, 5.25%, 2020 (n)

     206,000         202,181   

Gaz Capital S.A., 5.092%, 2015 (n)

     380,000         388,550   

 

4


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Emerging Market Quasi-Sovereign – continued

     

Gaz Capital S.A., 9.25%, 2019

   $ 583,000       $ 715,271   

KazMunaiGaz Finance B.V., 11.75%, 2015 (n)

     2,051,000         2,563,750   

KazMunaiGaz Finance B.V., 9.125%, 2018 (n)

     733,000         886,930   

KazMunaiGaz Finance B.V., 6.375%, 2021 (n)

     245,000         250,831   

Majapahit Holding B.V., 7.25%, 2017 (n)

     591,000         650,100   

Majapahit Holding B.V., 8%, 2019 (n)

     380,000         432,250   

Novatek Finance Ltd., 5.326%, 2016 (n)

     336,000         342,922   

Novatek Finance Ltd., 6.604%, 2021 (n)

     257,000         265,352   

Pemex Project Funding Master Trust, 5.75%, 2018

     642,000         676,160   

Petrobras International Finance Co., 7.875%, 2019

     1,361,000         1,604,019   

Petrobras International Finance Co., 6.75%, 2041

     481,000         492,229   

Petroleos de Venezuela S.A., 5.25%, 2017

     950,000         551,000   

Petroleos Mexicanos, 8%, 2019

     1,101,000         1,307,438   

Petroleos Mexicanos, 6%, 2020

     167,000         174,515   

Ras Laffan Liquefied Natural Gas Co. Ltd., 8.294%, 2014 (n)

     1,045,800         1,132,079   

Ras Laffan Liquefied Natural Gas Co. Ltd., 6.75%, 2019 (n)

     721,000         807,868   

SCF Capital Ltd., 5.375%, 2017 (n)

     726,000         706,979   

Transnet Ltd., 4.5%, 2016 (z)

     203,000         206,264   

VEB Finance Ltd., 6.902%, 2020 (n)

     1,140,000         1,192,782   

VTB Capital S.A., 6.465%, 2015 (n)

     329,000         348,345   

VTB Capital S.A., 6.551%, 2020 (n)

     974,000         970,981   
           
      $ 19,720,244   
           

Emerging Market Sovereign – 2.6%

     

Dominican Republic, 7.5%, 2021 (n)

   $ 239,000       $ 246,170   

Government of Ukraine, 6.875%, 2015 (n)

     353,000         358,118   

Government of Ukraine, 7.75%, 2020 (n)

     245,000         245,612   

Republic of Argentina, 2.5%, to 2019, 3.75% to 2029, 5.25% to 2038

     1,848,000         776,160   

Republic of Argentina, FRN, 0.467%, 2012

     973,575         930,398   

Republic of Colombia, 7.375%, 2019

     465,000         555,675   

Republic of Colombia, 8.125%, 2024

     664,000         837,304   

Republic of Indonesia, 6.875%, 2018

     204,000         231,540   

Republic of Indonesia, 11.625%, 2019 (n)

     1,423,000         2,054,456   

Republic of Indonesia, 7.75%, 2038 (n)

     593,000         711,600   

Republic of Panama, 9.375%, 2029

     1,062,000         1,486,800   

Republic of Peru, 7.35%, 2025

     355,000         428,663   

Republic of Philippines, 6.375%, 2034

     1,377,000         1,456,178   

Republic of South Africa, 5.5%, 2020

     751,000         790,428   

Republic of Sri Lanka, 6.25%, 2020 (n)

     144,000         141,840   

Republic of Turkey, 5.625%, 2021

     362,000         360,190   

Republic of Ukraine, 7.95%, 2021 (z)

     1,195,000         1,196,996   

Ukraine Government International, 6.58%, 2016

     1,389,000         1,362,956   

United Mexican States, 5.95%, 2019

     134,000         148,539   

United Mexican States, 5.75%, 2110

     206,000         184,370   
           
      $ 14,503,993   
           

Energy - Independent – 3.8%

     

Anadarko Petroleum Corp., 6.45%, 2036

   $ 160,000       $ 161,196   

Anadarko Petroleum Corp., 6.2%, 2040

     580,000         567,761   

Atlas Energy Operating Co. LLC, 12.125%, 2017

     270,000         352,021   

Carrizo Oil & Gas, Inc., 8.625%, 2018 (n)

     685,000         727,812   

Chesapeake Energy Corp., 6.875%, 2020

     510,000         543,150   

Comstock Resources, Inc., 7.75%, 2019

     445,000         445,000   

Concho Resources, Inc., 8.625%, 2017

     165,000         181,912   

Denbury Resources, Inc., 8.25%, 2020

     655,000         728,687   

 

5


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Energy - Independent – continued

     

Energy XXI Gulf Coast, Inc., 9.25%, 2017 (n)

   $ 620,000       $ 666,500   

EXCO Resources, Inc., 7.5%, 2018

     400,000         397,000   

Harvest Operations Corp., 6.875%, 2017 (n)

     790,000         821,600   

Hilcorp Energy I LP, 9%, 2016 (n)

     1,080,000         1,134,000   

Linn Energy LLC, 8.625%, 2020 (n)

     470,000         524,050   

Linn Energy LLC, 7.75%, 2021 (n)

     648,000         688,500   

Newfield Exploration Co., 6.625%, 2014

     650,000         664,625   

Newfield Exploration Co., 6.625%, 2016

     560,000         578,200   

OPTI Canada, Inc., 9.75%, 2013 (n)

     505,000         497,425   

OPTI Canada, Inc., 8.25%, 2014

     1,505,000         820,225   

Penn Virginia Corp., 10.375%, 2016

     1,075,000         1,206,687   

Pioneer Natural Resources Co., 6.875%, 2018

     1,175,000         1,275,675   

Pioneer Natural Resources Co., 7.5%, 2020

     1,015,000         1,139,636   

Plains Exploration & Production Co., 7%, 2017

     1,705,000         1,777,463   

QEP Resources, Inc., 6.875%, 2021

     910,000         953,225   

Quicksilver Resources, Inc., 8.25%, 2015

     780,000         805,350   

Quicksilver Resources, Inc., 9.125%, 2019

     695,000         736,700   

Range Resources Corp., 8%, 2019

     1,045,000         1,150,806   

SandRidge Energy, Inc., 8%, 2018 (n)

     1,015,000         1,063,213   

Talisman Energy, Inc., 7.75%, 2019

     280,000         343,288   
           
      $ 20,951,707   
           

Energy - Integrated – 0.7%

     

CCL Finance Ltd., 9.5%, 2014 (n)

   $ 1,244,000       $ 1,430,600   

CCL Finance Ltd., 9.5%, 2014

     457,000         525,550   

Hess Corp., 8.125%, 2019

     100,000         125,596   

Husky Energy, Inc., 5.9%, 2014

     306,000         339,270   

Husky Energy, Inc., 7.25%, 2019

     324,000         385,074   

Pacific Rubiales Energy Corp., 8.75%, 2016 (n)

     1,005,000         1,138,162   
           
      $ 3,944,252   
           

Entertainment – 0.8%

     

AMC Entertainment, Inc., 8.75%, 2019

   $ 1,360,000       $ 1,460,300   

AMC Entertainment, Inc., 9.75%, 2020 (z)

     720,000         772,200   

Cinemark USA, Inc., 8.625%, 2019

     1,460,000         1,591,400   

NAI Entertainment Holdings LLC, 8.25%, 2017 (z)

     370,000         397,750   
           
      $ 4,221,650   
           

Financial Institutions – 2.7%

     

American General Finance Corp., 5.375%, 2012

   $ 325,000       $ 319,719   

American General Finance Corp., 6.9%, 2017

     1,030,000         924,425   

CIT Group, Inc., 7%, 2014

     725,000         739,047   

CIT Group, Inc., 7%, 2016

     1,245,000         1,255,894   

CIT Group, Inc., 7%, 2017

     4,330,000         4,362,475   

Credit Acceptance Corp., 9.125%, 2017

     500,000         538,750   

Credit Acceptance Corp., 9.125%, 2017 (z)

     145,000         153,700   

General Electric Capital Corp., 6.375% to 2017, FRN to 2067

     410,000         419,737   

GMAC, Inc., 6.875%, 2011

     293,000         299,592   

GMAC, Inc., 8%, 2031

     890,000         1,019,050   

International Lease Finance Corp., 8.75%, 2017 (n)

     1,035,000         1,182,487   

International Lease Finance Corp., 7.125%, 2018 (n)

     455,000         496,519   

International Lease Finance Corp., 8.25%, 2020

     885,000         984,562   

Nationstar Mortgage LLC, 10.875%, 2015 (z)

     960,000         988,800   

SLM Corp., 8%, 2020

     1,255,000         1,331,869   
           
      $ 15,016,626   
           

 

6


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Food & Beverages – 2.0%

     

Anheuser-Busch InBev, 6.875%, 2019 (n)

   $ 1,300,000       $ 1,545,917   

ARAMARK Corp., 8.5%, 2015

     1,154,000         1,205,930   

B&G Foods, Inc., 7.625%, 2018

     470,000         501,725   

CEDC Finance Corp. International, Inc., 9.125%, 2016 (n)

     893,000         966,672   

Constellation Brands, Inc., 7.25%, 2016

     1,020,000         1,096,500   

Del Monte Foods Co., 6.75%, 2015

     1,170,000         1,187,550   

Del Monte Foods Co., 7.5%, 2019

     1,000,000         1,215,000   

Pinnacle Foods Finance LLC, 9.25%, 2015

     990,000         1,032,075   

Pinnacle Foods Finance LLC, 10.625%, 2017

     205,000         219,863   

TreeHouse Foods, Inc., 7.75%, 2018

     1,045,000         1,131,213   

Tyson Foods, Inc., 7.35%, 2016

     912,000         1,024,860   
           
      $ 11,127,305   
           

Forest & Paper Products – 2.0%

     

Boise, Inc., 8%, 2020

   $ 820,000       $ 904,050   

Cascades, Inc., 7.75%, 2017

     1,535,000         1,605,994   

Fibria Overseas Finance, 6.75%, 2021 (z)

     278,000         275,517   

Georgia-Pacific Corp., 7.125%, 2017 (n)

     3,585,000         3,809,062   

Georgia-Pacific Corp., 8%, 2024

     260,000         298,025   

Georgia-Pacific Corp., 7.25%, 2028

     205,000         216,275   

Graphic Packaging Holding Co., 7.875%, 2018

     510,000         548,250   

Inversiones CMPC S.A., 4.75%, 2018 (n)

     1,608,000         1,547,089   

JSG Funding PLC, 7.75%, 2015

     40,000         41,000   

Sappi Papier Holding GmbH, 6.75%, 2012 (n)

     335,000         349,238   

Smurfit Kappa Group PLC, 7.75%, 2019 (n)

   EUR 560,000         826,866   

Votorantim Participacoes S.A., 6.75%, 2021 (n)

   $ 650,000         682,500   
           
      $ 11,103,866   
           

Gaming & Lodging – 3.2%

     

Ameristar Casinos, Inc., 9.25%, 2014

   $ 510,000       $ 548,250   

Firekeepers Development Authority, 13.875%, 2015 (n)

     460,000         547,976   

Fontainebleau Las Vegas Holdings LLC, 10.25%, 2015 (d)(n)

     460,000         2,300   

Gaylord Entertainment Co., 6.75%, 2014

     1,020,000         1,035,300   

GWR Operating Partnership LLP, 10.875%, 2017

     765,000         824,287   

Harrah’s Operating Co., Inc., 11.25%, 2017

     1,285,000         1,458,475   

Harrah’s Operating Co., Inc., 10%, 2018

     735,000         690,900   

Harrah’s Operating Co., Inc., 10%, 2018

     1,624,000         1,526,560   

Host Hotels & Resorts, Inc., 6.75%, 2016

     930,000         964,875   

Host Hotels & Resorts, Inc., 9%, 2017

     1,525,000         1,711,812   

MGM Mirage, 10.375%, 2014

     145,000         162,400   

MGM Mirage, 11.125%, 2017

     1,015,000         1,169,787   

MGM Mirage, 9%, 2020 (n)

     655,000         715,587   

MGM Resorts International, 11.375%, 2018

     1,215,000         1,379,025   

Penn National Gaming, Inc., 8.75%, 2019

     1,065,000         1,187,475   

Starwood Hotels & Resorts Worldwide, Inc., 6.75%, 2018

     1,485,000         1,607,513   

Station Casinos, Inc., 6.5%, 2014 (d)

     25,000         3   

Station Casinos, Inc., 6.875%, 2016 (d)

     980,000         98   

Wyndham Worldwide Corp., 6%, 2016

     985,000         1,048,850   

Wyndham Worldwide Corp., 7.375%, 2020

     660,000         730,592   

Wynn Las Vegas LLC, 7.75%, 2020

     595,000         629,213   
           
      $ 17,941,278   
           

Industrial – 0.5%

     

Altra Holdings, Inc., 8.125%, 2016

   $ 350,000       $ 373,625   

Diversey, Inc., 8.25%, 2019

     680,000         740,350   

Hillman Group, Inc., 10.875%, 2018

     495,000         544,500   

 

7


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Industrial – continued

     

Mueller Water Products, Inc., 7.375%, 2017

   $ 580,000       $ 565,500   

Mueller Water Products, Inc., 8.75%, 2020

     295,000         326,712   
           
      $ 2,550,687   
           

Insurance – 1.4%

     

American International Group, Inc., 8.175% to 2038, FRN to 2068

   $ 1,385,000       $ 1,520,037   

ING Groep N.V., 5.775% to 2015, FRN to 2049

     3,248,000         2,890,720   

MetLife, Inc., 9.25% to 2038, FRN to 2038 (n)

     1,100,000         1,331,000   

Metropolitan Life Global Funding, 5.125%, 2014 (n)

     860,000         933,781   

Unum Group, 7.125%, 2016

     1,171,000         1,326,818   
           
      $ 8,002,356   
           

Insurance - Property & Casualty – 1.8%

     

Allstate Corp., 7.45%, 2019

   $ 850,000       $ 1,022,266   

AXIS Capital Holdings Ltd., 5.75%, 2014

     1,013,000         1,092,869   

Liberty Mutual Group, Inc., 10.75% to 2038, FRN to 2088 (n)

     1,635,000         2,129,587   

USI Holdings Corp., 9.75%, 2015 (z)

     615,000         633,450   

USI Holdings Corp., FRN, 4.188%, 2014 (n)

     2,005,000         1,934,825   

XL Group PLC, 6.5% to 2017, FRN to 2049

     1,315,000         1,216,375   

ZFS Finance USA Trust II, 6.45% to 2016, FRN to 2065 (n)

     1,190,000         1,213,800   

ZFS Finance USA Trust V, 6.5% to 2017, FRN to 2067 (n)

     627,000         625,433   
           
      $ 9,868,605   
           

International Market Quasi-Sovereign – 1.6%

     

Bank of Ireland, 2.75%, 2012 (n)

   $ 1,480,000       $ 1,396,288   

Canada Housing Trust, 4.6%, 2011 (n)

   CAD 392,000         410,778   

Commonwealth Bank of Australia, 2.9%, 2014 (n)

   $ 1,780,000         1,842,862   

ING Bank N.V., 3.9%, 2014 (n)

     1,390,000         1,478,553   

Irish Life & Permanent PLC, 3.6%, 2013 (e)(n)

     1,500,000         1,361,836   

KFW International Finance, Inc., 4.875%, 2019

     1,000,000         1,103,893   

Societe Financement de l’ Economie Francaise, 3.375%, 2014 (n)

     1,000,000         1,051,372   
           
      $ 8,645,582   
           

International Market Sovereign – 11.3%

     

Commonwealth of Australia, 5.75%, 2021

   AUD 384,000       $ 398,339   

Federal Republic of Germany, 3.75%, 2015

   EUR 2,176,000         3,186,781   

Federal Republic of Germany, 4.25%, 2018

   EUR 1,329,000         1,998,092   

Federal Republic of Germany, 6.25%, 2030

   EUR 847,000         1,575,250   

Government of Canada, 4.5%, 2015

   CAD 747,000         831,215   

Government of Canada, 4.25%, 2018

   CAD 447,000         496,211   

Government of Canada, 5.75%, 2033

   CAD 136,000         182,511   

Government of Japan, 1.5%, 2012

   JPY 549,000,000         6,824,311   

Government of Japan, 1.3%, 2014

   JPY 225,600,000         2,843,186   

Government of Japan, 1.7%, 2017

   JPY 644,600,000         8,339,913   

Government of Japan, 2.2%, 2027

   JPY 619,000,000         7,971,378   

Kingdom of Belgium, 5.5%, 2017

   EUR 378,000         570,862   

Kingdom of Spain, 4.6%, 2019

   EUR 656,000         875,508   

Kingdom of Sweden, 4.5%, 2015

   SEK 2,635,000         441,372   

Kingdom of the Netherlands, 3.75%, 2014

   EUR 1,333,000         1,940,644   

Kingdom of the Netherlands, 5.5%, 2028

   EUR 454,000         764,822   

Republic of Austria, 4.65%, 2018

   EUR 1,345,000         2,023,261   

Republic of Finland, 3.875%, 2017

   EUR 921,000         1,340,327   

Republic of France, 4.75%, 2012

   EUR 703,000         1,020,065   

Republic of France, 4.75%, 2035

   EUR 1,370,000         2,096,599   

Republic of Ireland, 5.4%, 2025

   EUR 525,000         509,450   

Republic of Italy, 4.75%, 2013

   EUR 5,607,000         8,020,567   

 

8


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

International Market Sovereign – continued

     

Republic of Italy, 5.25%, 2017

   EUR 2,516,000       $ 3,674,924   

United Kingdom Treasury, 8%, 2015

   GBP 755,000         1,531,003   

United Kingdom Treasury, 8%, 2021

   GBP 953,000         2,113,447   

United Kingdom Treasury, 4.25%, 2036

   GBP 739,000         1,177,027   
           
      $ 62,747,065   
           

Machinery & Tools – 0.8%

     

Case Corp., 7.25%, 2016

   $ 710,000       $ 775,675   

Case New Holland, Inc., 7.875%, 2017 (n)

     2,235,000         2,497,612   

Rental Service Corp., 9.5%, 2014

     572,000         600,600   

RSC Equipment Rental, Inc., 8.25%, 2021 (z)

     660,000         697,950   
           
      $ 4,571,837   
           

Major Banks – 2.8%

     

Bank of America Corp., 7.375%, 2014

   $ 1,000,000       $ 1,138,540   

Bank of America Corp., 7.625%, 2019

     370,000         432,595   

Bank of America Corp., 8% to 2018, FRN to 2049

     2,515,000         2,655,060   

BNP Paribas, 5.186% to 2015, FRN to 2049 (n)

     1,667,000         1,550,310   

Credit Suisse New York, 5.5%, 2014

     1,000,000         1,099,506   

HSBC USA, Inc., 4.875%, 2020

     460,000         450,794   

JPMorgan Chase & Co., 6.3%, 2019

     1,000,000         1,124,369   

JPMorgan Chase & Co., 7.9% to 2018, FRN to 2049

     835,000         908,906   

Morgan Stanley, 5.75%, 2016

     397,000         427,881   

Morgan Stanley, 6.625%, 2018

     391,000         432,227   

Morgan Stanley, 7.3%, 2019

     830,000         945,829   

Morgan Stanley, 5.625%, 2019

     1,500,000         1,540,882   

Royal Bank of Scotland Group PLC, 7.648% to 2031, FRN to 2049

     2,245,000         2,054,175   

Royal Bank of Scotland Group PLC, 6.99% to 2017, FRN to 2049 (d)(n)

     350,000         301,000   

UniCredito Luxembourg Finance S.A., 6%, 2017 (n)

     498,000         468,370   
           
      $ 15,530,444   
           

Medical & Health Technology & Services – 5.0%

     

Biomet, Inc., 10%, 2017

   $ 545,000       $ 606,994   

Biomet, Inc., 10.375%, 2017 (p)

     320,000         358,000   

Biomet, Inc., 11.625%, 2017

     2,680,000         3,021,700   

Community Health Systems, Inc., 8.875%, 2015

     3,510,000         3,720,600   

Davita, Inc., 6.375%, 2018

     790,000         800,862   

Davita, Inc., 6.625%, 2020

     465,000         471,394   

Fresenius Medical Care AG & Co. KGaA, 9%, 2015 (n)

     665,000         762,256   

HCA, Inc., 9.25%, 2016

     6,130,000         6,620,400   

HCA, Inc., 8.5%, 2019

     605,000         677,600   

HealthSouth Corp., 8.125%, 2020

     1,605,000         1,741,425   

Hospira, Inc., 6.05%, 2017

     655,000         731,651   

McKesson Corp., 7.5%, 2019

     110,000         132,491   

Owens & Minor, Inc., 6.35%, 2016

     970,000         996,550   

Tenet Healthcare Corp., 9.25%, 2015

     1,445,000         1,587,694   

Tenet Healthcare Corp., 8%, 2020

     375,000         386,250   

United Surgical Partners International, Inc., 8.875%, 2017

     365,000         385,075   

United Surgical Partners International, Inc., 9.25%, 2017 (p)

     385,000         407,138   

Universal Hospital Services, Inc., 8.5%, 2015 (p)

     1,795,000         1,875,775   

Vanguard Health Systems, Inc., 8%, 2018

     935,000         960,713   

VWR Funding, Inc., 10.25%, 2015 (p)

     1,204,125         1,276,373   
           
      $ 27,520,941   
           

Metals & Mining – 3.1%

     

ArcelorMittal, 9.85%, 2019

   $ 1,710,000       $ 2,198,282   

 

9


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Metals & Mining – continued

     

ArcelorMittal USA, Inc., 6.5%, 2014

   $ 1,300,000       $ 1,432,198   

Arch Coal, Inc., 7.25%, 2020

     470,000         499,375   

Arch Western Finance LLC, 6.75%, 2013

     637,000         643,370   

Bumi Investment Pte Ltd., 10.75%, 2017 (n)

     249,000         274,211   

Cloud Peak Energy, Inc., 8.25%, 2017

     1,320,000         1,435,500   

Cloud Peak Energy, Inc., 8.5%, 2019

     760,000         837,900   

Consol Energy, Inc., 8%, 2017

     1,425,000         1,546,125   

Consol Energy, Inc., 8.25%, 2020

     480,000         529,200   

Freeport-McMoRan Copper & Gold, Inc., 8.375%, 2017

     1,045,000         1,159,950   

Gold Fields Orogen Holdings Ltd., 4.875%, 2020 (n)

     2,260,000         2,158,259   

Metinvest B.V., 8.75%, 2018 (z)

     200,000         204,000   

Novelis, Inc., 8.375%, 2017 (n)

     470,000         518,175   

Novelis, Inc., 8.75%, 2020 (n)

     270,000         297,675   

Peabody Energy Corp., 5.875%, 2016

     425,000         432,437   

Peabody Energy Corp., 7.375%, 2016

     1,070,000         1,209,100   

Rearden G Holdings Eins GmbH, 7.875%, 2020 (n)

     115,000         121,325   

Southern Copper Corp., 5.375%, 2020

     161,000         165,321   

Southern Copper Corp., 6.75%, 2040

     553,000         574,691   

Teck Resources Ltd., 9.75%, 2014

     167,000         204,267   

Vale Overseas Ltd., 4.625%, 2020

     490,000         481,142   

Vale Overseas Ltd., 6.875%, 2039

     341,000         367,831   
           
      $ 17,290,334   
           

Mortgage-Backed – 4.9%

     

Fannie Mae, 3.81%, 2013

   $ 301,859       $ 313,664   

Fannie Mae, 4.1%, 2013

     494,546         516,022   

Fannie Mae, 4.19%, 2013

     407,145         426,971   

Fannie Mae, 4.845%, 2013

     137,812         145,716   

Fannie Mae, 4.562%, 2014

     257,760         273,889   

Fannie Mae, 4.6%, 2014

     419,490         444,987   

Fannie Mae, 4.609%, 2014

     479,240         513,274   

Fannie Mae, 4.77%, 2014

     326,226         348,838   

Fannie Mae, 4.56%, 2015

     176,324         188,016   

Fannie Mae, 4.665%, 2015

     143,011         152,967   

Fannie Mae, 4.7%, 2015

     136,520         146,171   

Fannie Mae, 4.74%, 2015

     338,442         362,808   

Fannie Mae, 4.78%, 2015

     394,418         423,311   

Fannie Mae, 4.815%, 2015

     356,716         383,104   

Fannie Mae, 4.87%, 2015

     288,800         310,976   

Fannie Mae, 4.89%, 2015

     96,430         103,828   

Fannie Mae, 4.922%, 2015

     964,341         1,041,291   

Fannie Mae, 6%, 2016 - 2037

     2,982,952         3,260,893   

Fannie Mae, 5.5%, 2019 - 2035

     6,400,332         6,899,874   

Fannie Mae, 4.88%, 2020

     252,780         265,380   

Fannie Mae, 4%, 2025

     2,500,000         2,583,998   

Fannie Mae, 6.5%, 2032 - 2033

     725,136         821,411   

Fannie Mae, 5%, 2035

     2,175,152         2,295,417   

Freddie Mac, 6%, 2034

     454,517         501,064   

Ginnie Mae, 5.5%, 2039

     2,000,000         2,163,443   

Ginnie Mae, 4.5%, 2041

     2,000,000         2,069,310   
           
      $ 26,956,623   
           

Natural Gas - Distribution – 0.5%

     

AmeriGas Partners LP, 7.125%, 2016

   $ 1,980,000       $ 2,059,200   

 

10


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Natural Gas - Distribution – continued

     

Ferrellgas Partners LP, 8.625%, 2020

   $ 685,000       $ 744,937   
           
      $ 2,804,137   
           

Natural Gas - Pipeline – 1.6%

     

Atlas Pipeline Partners LP, 8.125%, 2015

   $ 915,000       $ 955,031   

Atlas Pipeline Partners LP, 8.75%, 2018

     185,000         197,950   

Crosstex Energy, Inc., 8.875%, 2018

     1,205,000         1,328,512   

El Paso Corp., 7%, 2017

     1,395,000         1,558,521   

El Paso Corp., 7.75%, 2032

     546,000         578,103   

Energy Transfer Equity LP, 7.5%, 2020

     1,780,000         1,929,075   

Enterprise Products Partners LP, 8.375% to 2016, FRN to 2066

     991,000         1,069,041   

Enterprise Products Partners LP, 7.034% to 2018, FRN to 2068

     256,000         266,880   

MarkWest Energy Partners LP, 8.75%, 2018

     165,000         180,675   

Spectra Energy Capital LLC, 8%, 2019

     810,000         979,700   
           
      $ 9,043,488   
           

Network & Telecom – 2.5%

     

AT&T, Inc., 6.55%, 2039

   $ 170,000       $ 181,147   

AT&T, Inc., 5.35%, 2040 (n)

     1,108,000         1,016,086   

CenturyLink, Inc., 7.6%, 2039

     265,000         279,755   

Cincinnati Bell, Inc., 8.25%, 2017

     1,020,000         1,030,200   

Cincinnati Bell, Inc., 8.75%, 2018

     1,250,000         1,198,437   

Citizens Communications Co., 9%, 2031

     680,000         715,700   

Frontier Communications Corp., 8.25%, 2017

     375,000         414,375   

Frontier Communications Corp., 8.5%, 2020

     1,535,000         1,703,850   

Qwest Communications International, Inc., 8%, 2015

     365,000         398,306   

Qwest Communications International, Inc., 7.125%, 2018 (n)

     1,075,000         1,152,938   

Qwest Corp., 7.875%, 2011

     700,000         721,875   

Telefonica Emisiones S.A.U., 2.582%, 2013

     995,000         1,002,122   

TELUS Corp., 8%, 2011

     300,000         305,546   

Windstream Corp., 8.625%, 2016

     2,575,000         2,723,063   

Windstream Corp., 8.125%, 2018

     380,000         406,600   

Windstream Corp., 7.75%, 2020

     560,000         580,300   
           
      $ 13,830,300   
           

Oil Services – 0.8%

     

Afren PLC, 11.5%, 2016 (n)

   $ 200,000       $ 208,000   

Edgen Murray Corp., 12.25%, 2015

     320,000         305,600   

Expro Finance Luxembourg, 8.5%, 2016 (n)

     1,425,000         1,464,187   

McJunkin Red Man Holding Corp., 9.5%, 2016 (n)

     995,000         985,050   

Pioneer Drilling Co., 9.875%, 2018

     845,000         921,050   

Trinidad Drilling Ltd., 7.875%, 2019 (n)

     410,000         428,963   
           
      $ 4,312,850   
           

Oils – 0.5%

     

LUKOIL International Finance B.V., 6.125%, 2020 (n)

   $ 1,922,000       $ 1,943,719   

Petroplus Holdings AG, 9.375%, 2019 (n)

     795,000         826,800   
           
      $ 2,770,519   
           

Other Banks & Diversified Financials – 3.4%

     

Alfa Bank, 7.875%, 2017 (n)

   $ 1,151,000       $ 1,188,407   

Banco Cruzeiro do Sul S.A., 8.25%, 2016 (n)

     701,000         686,980   

Banco PanAmericano S.A., 8.5%, 2020 (n)

     416,000         425,360   

Banco Santander U.S. Debt S.A.U., 3.781%, 2015 (n)

     1,400,000         1,338,082   

Banco Votorantim S.A., 5.25%, 2016 (z)

     657,000         664,884   

Bank of China (Hong Kong) Ltd., 5.55%, 2020 (n)

     1,570,000         1,615,159   

Bosphorus Financial Services Ltd., FRN, 2.113%, 2012 (z)

     375,000         370,354   

 

11


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Other Banks & Diversified Financials – continued

     

Capital One Financial Corp., 8.8%, 2019

   $ 320,000       $ 404,160   

Capital One Financial Corp., 10.25%, 2039

     1,000,000         1,086,250   

Citigroup Capital XXI, 8.3% to 2037, FRN to 2077

     2,535,000         2,611,050   

Groupe BPCE S.A., 12.5% to 2019, FRN to 2049 (n)

     1,974,000         2,221,836   

ICICI Bank Ltd., 5.75%, 2020 (n)

     248,000         238,983   

Isbank GmbH, 5.1%, 2016 (n)

     1,727,000         1,705,774   

LBG Capital No.1 PLC, 7.875%, 2020 (n)

     1,325,000         1,278,625   

Santander UK PLC, 8.963% to 2030, FRN to 2049

     1,323,000         1,455,300   

Woori Bank, 6.125% to 2011, FRN to 2016 (n)

     1,490,000         1,497,416   
           
      $ 18,788,620   
           

Pharmaceuticals – 0.3%

     

Roche Holdings, Inc., 6%, 2019 (n)

   $ 1,000,000       $ 1,142,307   

Valeant Pharmaceuticals International, Inc., 6.75%, 2017 (n)

     770,000         796,950   
           
      $ 1,939,257   
           

Pollution Control – 0.2%

     

Allied Waste North America, Inc., 7.125%, 2016

   $ 75,000       $ 78,187   

Allied Waste North America, Inc., 6.875%, 2017

     870,000         946,125   
           
      $ 1,024,312   
           

Precious Metals & Minerals – 0.1%

     

ALROSA Finance S.A., 7.75%, 2020 (n)

   $ 300,000       $ 318,000   
           

Printing & Publishing – 0.2%

     

American Media, Inc., 13.5%, 2018 (z)

   $ 11,911       $ 12,164   

McClatchy Co., 11.5%, 2017

     345,000         391,575   

Nielsen Finance LLC, 11.5%, 2016

     354,000         416,835   

Nielsen Finance LLC, 7.75%, 2018 (n)

     465,000         502,781   
           
      $ 1,323,355   
           

Railroad & Shipping – 0.4%

     

Kansas City Southern Railway, 8%, 2015

   $ 1,895,000       $ 2,056,075   
           

Real Estate – 0.8%

     

CB Richard Ellis Group, Inc., 11.625%, 2017

   $ 400,000       $ 471,500   

Country Garden Holding Co., 11.125%, 2018 (z)

     200,000         199,600   

Entertainment Properties Trust, REIT, 7.75%, 2020 (n)

     665,000         699,912   

HRPT Properties Trust, REIT, 6.25%, 2016

     1,053,000         1,133,937   

Simon Property Group, Inc., REIT, 5.875%, 2017

     756,000         845,337   

Simon Property Group, Inc., REIT, 10.35%, 2019

     660,000         906,587   
           
      $ 4,256,873   
           

Restaurants – 0.0%

     

Dunkin Finance Corp., 9.625%, 2018 (n)

   $ 232,000       $ 234,900   
           

Retailers – 1.8%

     

Burlington Coat Factory Warehouse Corp., 10%, 2019 (z)

   $ 190,000       $ 191,900   

Express LLC/Express Finance Corp., 8.75%, 2018

     525,000         565,031   

General Nutrition Centers, Inc., FRN, 5.75%, 2014 (p)

     740,000         738,612   

Home Depot, Inc., 5.875%, 2036

     509,000         516,074   

Limited Brands, Inc., 6.9%, 2017

     480,000         514,800   

Limited Brands, Inc., 6.95%, 2033

     670,000         623,100   

Neiman Marcus Group, Inc., 10.375%, 2015

     1,015,000         1,074,631   

QVC, Inc., 7.375%, 2020 (n)

     925,000         980,500   

Sally Beauty Holdings, Inc., 10.5%, 2016

     1,270,000         1,397,000   

Toys “R” Us Property Co. II LLC, 8.5%, 2017

     1,725,000         1,875,938   

Toys “R” Us, Inc., 10.75%, 2017

     1,040,000         1,188,200   

 

12


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Retailers – continued

     

YCC Holdings LLC, 10.25%, 2016 (p)(z)

   $ 360,000       $ 370,800   
           
      $ 10,036,586   
           

Specialty Stores – 0.5%

     

Giraffe Acquisition Corp., 9.125%, 2018 (n)

   $ 220,000       $ 224,400   

GSC Holdings Corp., 8%, 2012

     130,000         133,087   

Michaels Stores, Inc., 11.375%, 2016

     635,000         693,737   

Michaels Stores, Inc., 7.75%, 2018 (n)

     1,660,000         1,713,950   

Payless ShoeSource, Inc., 8.25%, 2013

     151,000         153,548   
           
      $ 2,918,722   
           

Supermarkets – 0.1%

     

Delhaize Group, 5.7%, 2040 (n)

   $ 834,000       $ 786,344   
           

Supranational – 0.6%

     

Central American Bank, 4.875%, 2012 (n)

   $ 570,000       $ 585,681   

European Investment Bank, 5.125%, 2017

     2,593,000         2,912,875   
           
      $ 3,498,556   
           

Telecommunications - Wireless – 3.7%

     

Cingular Wireless LLC, 6.5%, 2011

   $ 1,020,000       $ 1,067,544   

Clearwire Corp., 12%, 2015 (n)

     2,430,000         2,648,700   

Cricket Communications, Inc., 7.75%, 2016

     560,000         592,200   

Crown Castle International Corp., 9%, 2015

     1,475,000         1,659,375   

Crown Castle International Corp., 7.75%, 2017 (n)

     430,000         474,612   

Crown Castle International Corp., 7.125%, 2019

     450,000         478,687   

Digicel Group Ltd., 12%, 2014 (n)

     100,000         117,250   

Digicel Group Ltd., 8.25%, 2017 (n)

     821,000         857,945   

Digicel Group Ltd., 10.5%, 2018 (n)

     350,000         399,000   

Globo Comunicacoes e Participacoes S.A., 6.25% to 2015, 9.375% to 2049 (n)

     165,000         172,425   

MetroPCS Wireless, Inc., 7.875%, 2018

     900,000         950,625   

Net Servicos de Comunicacao S.A., 7.5%, 2020

     758,000         879,280   

Nextel Communications, Inc., 7.375%, 2015

     650,000         651,625   

NII Holdings, Inc., 10%, 2016

     1,615,000         1,828,987   

NII Holdings, Inc., 8.875%, 2019

     710,000         784,550   

SBA Communications Corp., 8%, 2016

     260,000         283,400   

SBA Communications Corp., 8.25%, 2019

     445,000         490,613   

Sprint Capital Corp., 6.875%, 2028

     1,315,000         1,185,144   

Sprint Nextel Corp., 8.375%, 2017

     2,905,000         3,220,919   

VimpelCom Ltd., 7.748%, 2021 (z)

     336,000         347,357   

Wind Acquisition Finance S.A., 11.75%, 2017 (n)

     435,000         499,163   

Wind Acquisition Finance S.A., 7.25%, 2018 (n)

     1,170,000         1,208,025   
           
      $ 20,797,426   
           

Telephone Services – 0.5%

     

Cogent Communications Group, Inc., 8.375%, 2018 (z)

   $ 445,000       $ 461,687   

Frontier Communications Corp., 8.125%, 2018

     1,835,000         2,039,144   
           
      $ 2,500,831   
           

Tobacco – 0.2%

     

Reynolds American, Inc., 6.75%, 2017

   $ 1,040,000       $ 1,170,802   
           

Transportation – 0.2%

     

BRT Escrow Corp. S.p.A., 8%, 2018 (z)

   $ 1,373,000       $ 1,390,525   
           

Transportation - Services – 1.6%

     

ACL I Corp., 10.625%, 2016 (p)(z)

   $ 750,000       $ 749,484   

Aguila American Resources Ltd., 7.875%, 2018 (z)

     570,000         591,375   

American Petroleum Tankers LLC, 10.25%, 2015 (n)

     515,000         538,819   

 

13


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Bonds – continued

     

Transportation - Services – continued

     

Commercial Barge Line Co., 12.5%, 2017

   $ 1,320,000       $ 1,531,200   

Erac USA Finance Co., 6.375%, 2017 (n)

     1,000,000         1,123,011   

Hertz Corp., 8.875%, 2014

     829,000         850,761   

Hertz Corp., 7.5%, 2018 (n)

     665,000         704,069   

Hertz Corp., 7.375%, 2021 (n)

     650,000         679,250   

Navios Maritime Acquisition Corp., 8.625%, 2017 (n)

     460,000         479,550   

Navios Maritime Holdings, Inc., 8.875%, 2017

     340,000         367,200   

Swift Services Holdings, Inc., 10%, 2018 (z)

     820,000         897,900   

Westinghouse Air Brake Technologies Corp., 6.875%, 2013

     370,000         388,500   
           
      $ 8,901,119   
           

U.S. Government Agencies and Equivalents – 0.6%

     

Freddie Mac, 5.5%, 2017

   $ 3,060,000       $ 3,519,202   
           

U.S. Treasury Obligations – 4.1%

     

U.S. Treasury Bonds, 8.5%, 2020

   $ 4,050,000       $ 5,746,253   

U.S. Treasury Bonds, 6.25%, 2023 (f)

     1,800,000         2,246,344   

U.S. Treasury Bonds, 5.375%, 2031

     286,200         328,951   

U.S. Treasury Bonds, 4.5%, 2036

     95,000         96,262   

U.S. Treasury Bonds, 4.75%, 2037

     2,986,200         3,138,311   

U.S. Treasury Notes, TIPS, 1.25%, 2020

     10,735,517         11,053,385   
           
      $ 22,609,506   
           

Utilities - Electric Power – 3.6%

     

AES Corp., 8%, 2017

   $ 2,840,000       $ 3,081,400   

Allegheny Energy Supply Co. LLC, 8.25%, 2012 (n)

     370,000         395,193   

Bruce Mansfield Unit, 6.85%, 2034

     1,530,526         1,611,436   

Calpine Corp., 8%, 2016 (n)

     1,800,000         1,953,000   

Calpine Corp., 7.875%, 2020 (n)

     560,000         592,200   

CenterPoint Energy, Inc., 6.5%, 2018

     400,000         450,724   

Colbun S.A., 6%, 2020 (n)

     748,000         751,825   

Covanta Holding Corp., 7.25%, 2020

     665,000         698,424   

Dynegy Holdings, Inc., 7.75%, 2019

     1,895,000         1,369,137   

Edison Mission Energy, 7%, 2017

     1,760,000         1,430,000   

EDP Finance B.V., 6%, 2018 (n)

     798,000         784,083   

Energy Future Holdings Corp., 10.25%, 2020 (n)

     1,125,000         1,171,521   

Energy Future Holdings Corp., 10%, 2020

     2,275,000         2,374,763   

Genon Escrow Corp., 9.875%, 2020 (n)

     1,455,000         1,531,387   

System Energy Resources, Inc., 5.129%, 2014 (z)

     765,319         786,366   

Texas Competitive Electric Holdings LLC, 10.25%, 2015

     1,290,000         725,625   
           
      $ 19,707,084   
           

Total Bonds

      $ 632,064,379   
           

Floating Rate Loans (g)(r) – 0.2%

     

Aerospace – 0.0%

     

Hawker Beechcraft Acquisition Co. LLC, Term Loan, 10.5%, 2014

   $ 207,018       $ 209,865   
           

Automotive – 0.1%

     

Allison Transmission, Inc., Term Loan B, 3.02%, 2014

   $ 234,382       $ 233,503   
           

Broadcasting – 0.0%

     

Gray Television, Inc., Term Loan B, 3.77%, 2014

   $ 52,929       $ 52,693   

Local TV Finance LLC, Term Loan B, 2.31%, 2013

     48,016         46,815   
           
      $ 99,508   
           

Building – 0.0%

     

Goodman Global Holdings, Inc., 2nd Lien Term Loan, 9%, 2017

   $ 29,726       $ 30,637   

 

14


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

Issuer

   Shares/Par      Value ($)  

Floating Rate Loans (g)(r) – continued

     

Consumer Services – 0.0%

     

Realogy Corp., Letter of Credit, 3.113%, 2016

   $ 29,719       $ 28,509   

Realogy Corp., Term Loan, 5.25%, 2016

     175,221         168,087   
           
      $ 196,596   
           

Financial Institutions – 0.0%

     

American General Financial Corp., Term Loan B, 7.25%, 2015

   $ 86,679       $ 87,451   
           

Gaming & Lodging – 0.1%

     

MGM Mirage, Term Loan, 7%, 2014 (o)

   $ 464,788       $ 457,756   
           

Total Floating Rate Loans

      $ 1,315,316   
           

Common Stocks – 0.1%

     

Automotive – 0.1%

     

Accuride Corp. (a)

     12,648       $ 176,946   
           

Printing & Publishing – 0.0%

     

American Media Operations, Inc. (a)

     3,053       $ 43,566   

Golden Books Family Entertainment, Inc. (a)

     3,683         0   
           
      $ 43,566   
           

Total Common Stocks

      $ 220,512   
           

Preferred Stocks – 0.1%

     

Automotive – 0.1%

     

General Motors Co., 4.75%

     13,160       $ 669,581   
           

Money Market Funds (v) – 2.3%

     

MFS Institutional Money Market Portfolio, 0.2%, at Net Asset Value

     12,519,675       $ 12,519,675   
           

Total Investments

      $ 646,789,463   
           

Other Assets, Less Liabilities (16.6)%

        (91,854,720
           

Net Assets – 100.0%

      $ 554,934,743   
           

 

(a) Non-income producing security.
(d) Non-income producing security - in default.
(e) Guaranteed by Minister for Finance of Ireland.
(f) All or a portion of the security has been segregated as collateral for open futures contracts.
(g) The rate shown represents a weighted average coupon rate on settled positions at period end, unless otherwise indicated.
(i) Interest only security for which the fund receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security.
(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $138,424,276, representing 24.9% of net assets.
(o) All or a portion of this position has not settled. Upon settlement date, interest rates for unsettled amounts will be determined. The rate shown represents the weighted average coupon rate for settled amounts.
(p) Payment-in-kind security.
(r) Remaining maturities of floating rate loans may be less than stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. These loans may be subject to restrictions on resale. Floating rate loans generally have rates of interest which are determined periodically by reference to a base lending rate plus a premium.
(v) Underlying affiliated fund that is available only to investment companies managed by MFS. The rate quoted is the annualized seven-day yield of the fund at period end.
(z) Restricted securities are not registered under the Securities Act of 1933 and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time-consuming negotiations and prompt sale at an acceptable price may be difficult. The fund holds the following restricted securities:

 

     Acquisition              

Restricted Securities

   Date    Cost      Value  

ACL I Corp., 10.625%, 2016

   2/10/11    $ 736,954       $ 749,484   

AMC Entertainment, Inc., 9.75%, 2020

   12/01/10 -2/04/11      741,782         772,200   

Aguila American Resources Ltd., 7.875%, 2018

   1/24/11 - 1/25/11      580,397         591,375   

 

15


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

     Acquisition              

Restricted Securities

   Date    Cost      Value  

American Media, Inc., 13.5%, 2018

   12/22/10    $ 12,099       $ 12,164   

Anthracite Ltd., “A”, CDO, FRN, 0.622%, 2019

   1/15/10      973,623         1,231,902   

Anthracite Ltd., “BFL”, CDO, FRN, 1.26%, 2037

   12/09/10      2,730,000         2,790,000   

BRT Escrow Corp. S.p.A., 8%, 2018

   2/14/11      1,373,000         1,390,525   

Banco Votorantim S.A., 5.25%, 2016

   2/07/11      649,407         664,884   

Bayview Financial Revolving Mortgage Loan Trust, FRN, 1.861%, 2040

   3/01/06      856,573         549,156   

Bosphorus Financial Services Ltd., FRN, 2.113%, 2012

   3/08/05      375,000         370,354   

Bresnan Broadband Holdings LLC, 8%, 2018

   12/01/10      270,000         283,500   

Burlington Coat Factory Warehouse Corp., 10%, 2019

   2/17/11      190,000         191,900   

CPI International Acquisition, Inc., 8%, 2018

   2/03/11      310,000         312,325   

Cequel Communications Holdings, 8.625%, 2017

   1/13/11 -1/21/11      641,873         655,650   

Citadel Broadcasting Corp., 7.75%, 2018

   12/06/10      180,000         193,050   

Cogent Communications Group, Inc., 8.375%, 2018

   1/11/11      445,000         461,687   

Country Garden Holding Co., 11.125%, 2018

   2/16/11      198,812         199,600   

Credit Acceptance Corp., 9.125%, 2017

   2/28/11      153,700         153,700   

Elizabeth Arden, Inc., 7.375%, 2021

   1/13/11 -1/21/11      477,565         493,500   

Fibria Overseas Finance, 6.75%, 2021

   2/28/11      275,517         275,517   

Local TV Finance LLC, 9.25%, 2015

   11/09/07 -2/16/11      1,152,675         1,183,763   

Metinvest B.V., 8.75%, 2018

   2/07/11      197,455         204,000   

Multi Security Asset Trust, “A3”, 5%, 2035

   10/12/10      1,429,288         1,476,428   

NAI Entertainment Holdings LLC, 8.25%, 2017

   12/02/10 -12/20/10      380,179         397,750   

Nationstar Mortgage LLC, 10.875%, 2015

   3/23/10 - 2/17/11      919,855         988,800   

ONO Finance ll PLC, 10.875%, 2019

   1/21/11      300,000         322,500   

PNC Mortgage Acceptance Corp., 7.1%, 2032

   3/25/08      1,030,276         1,030,516   

Packaging Dynamics Corp., 8.75%, 2016

   1/25/11 - 2/01/11      257,935         261,056   

Ply Gem Industries, Inc., 8.25%, 2018

   2/09/11      360,000         368,550   

Polypore International, Inc., 7.5%, 2017

   11/10/10      180,000         186,300   

RSC Equipment Rental, Inc., 8.25%, 2021

   1/13/11 - 2/01/11      672,663         697,950   

Republic of Ukraine, 7.95%, 2021

   2/16/11      1,195,000         1,196,996   

Reynolds Group, 9%, 2019

   1/24/11      559,574         552,525   

Reynolds Group, 8.25%, 2021

   1/27/11      480,000         481,200   

SIRIUS XM Radio, Inc., 13%, 2013

   12/15/10      229,291         232,538   

Spirit Master Funding LLC, 5.05%, 2023

   7/15/05      1,447,351         1,260,319   

Swift Services Holdings, Inc., 10%, 2018

   12/15/10 - 1/04/11      836,738         897,900   

Syniverse Holdings, Inc., 9.125%, 2019

   12/16/10      462,478         491,400   

System Energy Resources, Inc., 5.129%, 2014

   4/16/04      765,319         786,366   

Transnet Ltd., 4.5%, 2016

   2/03/11      201,880         206,264   

UCI International, Inc., 8.625%, 2019

   1/11/11      230,000         244,950   

UPCB Finance III Ltd., 6.625%, 2020

   2/07/11      784,000         781,060   

USI Holdings Corp., 9.75%, 2015

   4/07/10      593,139         633,450   

VimpelCom Ltd., 7.748%, 2021

   1/26/11      336,000         347,357   

YCC Holdings LLC, 10.25%, 2016

   2/04/11 - 2/10/11      361,510         370,800   
              

Total Restricted Securities

         $ 27,943,211   
              

% of Net Assets

           5.0

The following abbreviations are used in this report and are defined:

 

CDO

   Collateralized Debt Obligation

FRN

   Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end.

PLC

   Public Limited Company

REIT

   Real Estate Investment Trust

TIPS

   Treasury Inflation Protected Security

Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below:

 

AUD

   Australian Dollar

CAD

   Canadian Dollar

CHF

   Swiss Franc

CNY

   Chinese Yuan Renminbi

EUR

   Euro

 

16


MFS Charter Income Trust

PORTFOLIO OF INVESTMENTS (unaudited) 2/28/11 - continued

 

GBP

   British Pound

IDR

   Indonesian Rupiah

JPY

   Japanese Yen

MXN

   Mexican Peso

NOK

   Norwegian Krone

NZD

   New Zealand Dollar

PHP

   Philippine Peso

SEK

   Swedish Krona

SGD

   Singapore Dollar

See attached supplemental information. For more information see notes to financial statements as disclosed in the most recent semiannual or annual report.

 

17


MFS Charter Income Trust

Supplemental Information (Unaudited) 2/28/11

(1) Investment Valuations

Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price as provided by a third-party pricing service on the market or exchange on which they are primarily traded. Equity securities, for which there were no sales reported that day, are generally valued at the last quoted daily bid quotation as provided by a third-party pricing service on the market or exchange on which such securities are primarily traded. Equity securities held short, for which there were no sales reported for that day, are generally valued at the last quoted daily ask quotation as provided by a third-party pricing service on the market or exchange on which such securities are primarily traded. Short-term instruments with a maturity at issuance of 60 days or less generally are valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Forward foreign currency contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates provided by a third-party pricing service for proximate time periods. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates provided by a third-party pricing service.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially effected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Various inputs are used in determining the value of the fund’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures and forwards.

 

18


MFS Charter Income Trust

Supplemental Information (Unaudited) 2/28/11 - continued

 

The following is a summary of the levels used as of February 28, 2011 in valuing the fund’s assets or liabilities:

 

Investments at Value

   Level 1     Level 2     Level 3      Total  

Equity Securities

   $ 846,527      $ 43,566      $ —         $ 890,093   

U.S. Treasury Bonds & U.S. Government Agency & Equivalents

     —          26,128,708        —           26,128,708   

Non-U.S. Sovereign Debt

     —          109,115,440        —           109,115,440   

Corporate Bonds

     —          345,727,631        —           345,727,631   

Residential Mortgage-Backed Securities

     —          28,690,470        —           28,690,470   

Commercial Mortgage-Backed Securities

     —          32,430,298        —           32,430,298   

Asset-Backed Securities (including CDOs)

     —          6,152,828        —           6,152,828   

Foreign Bonds

     —          83,819,004        —           83,819,004   

Floating Rate Loans

     —          1,315,316        —           1,315,316   

Mutual Funds

     12,519,675        —          —           12,519,675   
                                 

Total Investments

   $ 13,366,202      $ 633,423,261      $ —         $ 646,789,463   
                                 

Other Financial Instruments

                         

Futures

   $ (96,846   $ —        $ —         $ (96,846

Forward Currency Contracts

   $ —        $ (1,774,206   $ —         $ (1,774,206

For further information regarding security characteristics, see the Portfolio of Investments.

(2) Portfolio Securities

The cost and unrealized appreciation and depreciation in the value of the investments owned by the fund, as computed on a federal income tax basis, are as follows:

 

Aggregate cost

   $  613,347,025   
        

Gross unrealized appreciation

   $ 42,048,986   

Gross unrealized depreciation

     (8,606,548
        

Net unrealized appreciation (depreciation)

   $ 33,442,438   
        

The aggregate cost above includes prior fiscal year end tax adjustments, if applicable.

 

19


MFS Charter Income Trust

Supplemental Information (Unaudited) 2/28/11 - continued

 

(3) Derivative Contracts at 2/28/11

Forward Foreign Currency Exchange Contracts at 2/28/11

 

Type

  

Currency

  

Counterparty

   Contracts to
Deliver/Receive
     Settlement Date
Range
     In Exchange
For
     Contracts at
Value
     Net
Unrealized
Appreciation
(Depreciation)
 

Asset Derivatives

              

BUY

   AUD    Westpac Banking Corp      1,938,000         4/12/11       $ 1,946,246       $ 1,963,218         16,972   

BUY

   CAD    Barclays Bank PLC      1,421,000         4/12/11         1,457,224         1,461,321         4,097   

BUY

   CHF    Deutsche Bank AG      5,241,000         4/12/11         5,569,429         5,642,938         73,509   

BUY

   CNY    Deutsche Bank AG      5,910,000         4/18/11         893,019         900,177         7,158   

BUY

   CNY    HSBC Bank      11,785,000         4/18/11         1,779,674         1,795,023         15,349   

BUY

   EUR    Barclays Bank PLC      2,020,000         4/12/11         2,757,752         2,786,087         28,335   

BUY

   EUR    Citibank N.A.      2,079,000         4/12/11         2,821,538         2,867,464         45,926   

BUY

   EUR    Deutsche Bank AG      2,849,881         4/12/11         3,734,516         3,930,702         196,186   

BUY

   EUR    HSBC Bank      2,068,000         4/12/11         2,718,965         2,852,292         133,327   

BUY

   EUR    Royal Bank of Scotland Group PLC      2,013,000         3/15/11         2,762,210         2,777,387         15,177   

BUY

   EUR    UBS AG      908,304         3/15/11         1,194,078         1,253,210         59,132   

BUY

   GBP    Barclays Bank PLC      230,000         4/12/11         367,772         373,769         5,997   

BUY

   IDR    HSBC Bank      24,684,286,000         5/11/11         2,739,654         2,765,659         26,005   

BUY

   JPY    UBS AG      115,399,000         4/12/11         1,400,086         1,411,026         10,940   

BUY

   MXN    Royal Bank of Scotland Group PLC      17,049,000         4/11/11         1,384,522         1,403,643         19,121   

SELL

   MXN    Royal Bank of Scotland Group PLC      17,050,000         4/11/11         1,406,224         1,403,725         2,499   

BUY

   NOK    Barclays Bank PLC      7,581,000         4/12/11         1,288,979         1,350,794         61,815   

BUY

   NOK    Deutsche Bank AG      8,618,000         4/12/11         1,464,600         1,535,567         70,967   

SELL

   NZD    Barclays Bank PLC      3,000         4/12/11         2,268         2,251         17   

SELL

   NZD    Westpac Banking Corp      2,502,000         4/12/11         1,939,926         1,877,013         62,913   

BUY

   PHP    JPMorgan Chase Bank N.A.      120,509,110         3/07/11 - 3/25/11         2,738,413         2,763,592         25,179   

BUY

   SEK    Credit Suisse Group      17,574,542         4/12/11         2,574,760         2,769,313         194,553   

BUY

   SGD    Deutsche Bank AG      5,466,000         4/12/11         4,224,993         4,298,853         73,860   
                          
                     $ 1,149,034   
                          

Liability Derivatives

              

SELL

   AUD    Westpac Banking Corp      393,609         4/12/11       $ 384,607       $ 398,731       $ (14,124

SELL

   CAD    Goldman Sachs International      1,952,873         4/12/11         1,963,752         2,008,285         (44,533

SELL

   CHF    Citibank N.A.      2,630,519         4/12/11         2,747,000         2,832,257         (85,257

SELL

   CHF    HSBC Bank      2,609,000         4/12/11         2,703,235         2,809,088         (105,853

BUY

   EUR    Citibank N.A.      514,925         4/12/11         710,968         710,212         (756

SELL

   EUR    Credit Suisse Group      4,455,946         4/12/11         6,034,915         6,145,869         (110,954

SELL

   EUR    HSBC Bank      6,108,000         4/12/11         8,230,129         8,424,467         (194,338

SELL

   EUR    UBS AG      28,425,786         3/15/11         37,545,915         39,219,775         (1,673,860

SELL

   GBP    Barclays Bank PLC      1,607,488         4/12/11         2,488,279         2,612,303         (124,024

SELL

   GBP    Deutsche Bank AG      1,607,488         4/12/11         2,487,765         2,612,303         (124,538

SELL

   JPY    Barclays Bank PLC      112,804,000         4/12/11         1,357,598         1,379,296         (21,698

SELL

   JPY    Credit Suisse Group      13,897,053         4/12/11         167,185         169,925         (2,740

SELL

   JPY    Merrill Lynch International Bank      2,128,397,766         4/12/11         25,605,401         26,024,702         (419,301

SELL

   NOK    Deutsche Bank AG      113,000         4/12/11         18,870         20,134         (1,264
                          
                     $ (2,923,240
                          

Futures Contracts Outstanding at 2/28/11

 

Description

   Currency      Contracts      Value      Expiration
Date
     Unrealized
Appreciation
(Depreciation)
 

Asset Derivatives

              

Interest Rate Futures

              

U.S. Treasury Note 30 yr (Long)

     USD         23         2,767,906         June-2011         8,724   

Liability Derivatives

              

Interest Rate Futures

              

U.S. Treasury Note 10 yr (Short)

     USD         404         48,094,938         June-2011         (105,570

At February 28, 2011, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

 

20


MFS Charter Income Trust

Supplemental Information (Unaudited) 2/28/11 - continued

 

(4) Transactions in Underlying Affiliated Funds-Affiliated Issuers

An affiliated issuer may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the fund assumes the following to be affiliated issuers:

 

Underlying Affiliated Funds

   Beginning
Shares/Par
Amount
     Acquisitions
Shares/Par
Amount
     Dispositions
Shares/Par
Amount
    Ending
Shares/Par
Amount
 

MFS Institutional Money Market Portfolio

     29,055,511         50,463,988         (66,999,824     12,519,675   

 

Underlying Affiliated Funds

   Realized
Gain
(Loss)
     Capital Gain
Distributions
     Dividend
Income
     Ending
Value
 

MFS Institutional Money Market Portfolio

   $ —         $ —         $ 11,710       $ 12,519,675   

(5) Issuer Country Weightings

Issuer country weighting percentages of portfolio holdings based on net assets, as of February 28, 2011, are as follows:

 

United States

     64.7

Japan

     4.7

United Kingdom

     3.1

Italy

     2.5

Canada

     2.2

Brazil

     1.9

Netherlands

     1.7

Russia

     1.6

France

     1.5

Other Countries

     16.1

The issuer country weighting percentages include both accrued interest amounts and the equivalent exposure from any derivative holdings, if applicable.

 

21


ITEM 2. CONTROLS AND PROCEDURES.

 

(a) Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this Form N-Q, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

 

(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.


Notice

A copy of the Amended and Restated Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.


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: MFS CHARTER INCOME TRUST

 

By (Signature and Title)*    MARIA F. DIORIODWYER
  Maria F. DiOrioDwyer, President

Date: April 15, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*    MARIA F. DIORIODWYER
  Maria F. DiOrioDwyer, President (Principal Executive Officer)

Date: April 15, 2011

 

By (Signature and Title)*    JOHN M. CORCORAN
  John M. Corcoran, Treasurer (Principal Financial Officer and Accounting Officer)

Date: April 15, 2011

 

* Print name and title of each signing officer under his or her signature.