SEC Form N-CSRS filed by MFS Intermediate High Income Fund
$CIF
Trusts Except Educational Religious and Charitable
Finance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05440
MFS INTERMEDIATE INCOME TRUST
(Exact name of registrant as specified in charter)
111 Huntington Avenue, Boston, Massachusetts 02199 (Address of principal executive offices) (Zip code)
Christopher R. Bohane
Massachusetts Financial Services Company
111Huntington Avenue Boston, Massachusetts 02199
(Name and address of agents for service)
Registrant’s telephone number, including area code: (617) 954-5000
Date of fiscal year end: October 31
Date of reporting period: April 30, 2026
ITEM 1. REPORTS TO STOCKHOLDERS.
Item 1(a):
MANAGED DISTRIBUTION POLICY DISCLOSURE
The MFS Intermediate Income Trust’s (the fund) Board of Trustees adopted a managed distribution policy. The fund seeks to pay monthly distributions based on an annual
rate of 8.50% of the fund’s average monthly net asset value. The primary purpose of the managed distribution policy is to provide shareholders with a constant, but not guaranteed, fixed rate of distribution each month. You should not draw any conclusions about the fund’s investment performance from the amount of the current distribution or from the terms of the fund’s managed distribution policy. The Board may amend or terminate the managed distribution policy at any time without prior notice
to fund shareholders. The amendment or termination of the managed distribution policy
could have an adverse effect on the market price of the fund’s shares.
With each distribution, the fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to shareholders are only
estimates and are not being provided for tax reporting purposes. The actual amounts
and sources of the amounts for tax reporting purposes will depend upon the fund’s investment experience during the remainder of its fiscal year and may be subject to
changes based on tax regulations. The fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income
tax purposes. Please refer to “Tax Matters and Distributions” under Note 2 of the Notes to Financial Statements for information regarding the tax character of the fund’s distributions.
Under a managed distribution policy the fund may at times distribute more than its
net investment income and net realized capital gains; therefore, a portion of your distribution may result in a return of capital. A return of capital may occur, for
example, when some or all of the money that you invested in the fund is paid back to you. Any
such returns of capital will decrease the fund’s total assets and, therefore, could have the effect of increasing the fund’s expense ratio. In addition, in order to make the level of distributions called for under its managed distribution policy, the fund may have
to sell portfolio securities at a less than opportune time. A return of capital does
not necessarily reflect the fund’s investment performance and should not be confused with ‘yield’ or ‘income’. The fund’s total return in relation to changes in net asset value is presented in the Financial Highlights.
MFS® Intermediate
Income Trust
Income Trust
New York Stock Exchange Symbol: MIN
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back cover
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NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Portfolio Composition
Portfolio structure at value (v)
Portfolio structure reflecting equivalent exposure of derivative positions (i)
Fixed income sectors (i)
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U.S. Treasury Securities
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60.1%
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Investment Grade Corporates
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49.7%
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Mortgage-Backed Securities
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7.9%
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Municipal Bonds
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3.9%
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Residential Mortgage-Backed Securities
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2.9%
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Asset-Backed Securities
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2.6%
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Collateralized Loan Obligations
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2.3%
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Commercial Mortgage-Backed Securities
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2.2%
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Emerging Markets Bonds
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1.2%
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High Yield Corporates
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1.0%
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Non-U.S. Government Bonds
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0.4%
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Composition including fixed income credit quality (a)(i)
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AAA
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8.2%
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AA
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5.3%
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A
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15.6%
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BBB
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35.2%
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BB
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1.0%
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CC
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0.9%
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U.S. Government
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22.0%
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Federal Agencies
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7.9%
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Not Rated
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38.1%
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Cash & Cash Equivalents
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3.9%
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Other (q)
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(38.1)%
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Portfolio facts
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Average Duration (d)
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3.6
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Average Effective Maturity (m)
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3.3 yrs.
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1
Portfolio Composition - continued
(a)
For all securities other than those specifically described below, ratings are assigned
to
underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating
agencies and applying the following hierarchy: If all three agencies provide a rating,
the middle rating (after dropping the highest and lowest ratings) is assigned; if two
of the three agencies rate a security, the lower of the two is assigned. If none of the 3 rating
agencies above assign a rating, but the security is rated by DBRS Morningstar, then the DBRS
Morningstar rating is assigned. If none of the 4 rating agencies listed above rate
the security, but the security is rated by the Kroll Bond Rating Agency (KBRA), then the KBRA rating
is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated
BBB or
higher are considered investment grade. All ratings are subject to change. U.S. Government includes securities issued by the U.S. Department of the Treasury. Federal Agencies
includes rated and unrated U.S. Agency fixed-income securities, U.S. Agency mortgage-backed
securities, and collateralized mortgage obligations of U.S. Agency mortgage-backed
securities. Not Rated includes fixed income securities and fixed income derivatives that have
not been
rated by any rating agency. The fund may or may not have held all of these instruments on this date. The fund is not rated by these agencies.
(d)
Duration is a measure of how much a bond’s price is likely to fluctuate with general changes
in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely
to lose about
5.00% of its value due to the interest rate move. The Average Duration calculation
reflects the
impact of the equivalent exposure of derivative positions, if any.
(i)
For purposes of this presentation, the components include the value of securities,
and reflect
the impact of the equivalent exposure of derivative positions, if any. These amounts
may be
negative from time to time. Equivalent exposure is a calculated amount that translates
the
derivative position into a reasonable approximation of the amount of the underlying
asset that
the portfolio would have to hold at a given point in time to have the same price sensitivity
that results from the portfolio’s ownership of the derivative contract. When dealing with
derivatives, equivalent exposure is a more representative measure of the potential
impact of a
position on portfolio performance than value. The bond component will include any
accrued
interest amounts.
(m)
In determining each instrument’s effective maturity for purposes of calculating the fund’s
dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening
feature (such as a put, pre-refunding or prepayment) will cause the instrument to
be repaid.
Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(q)
For purposes of this presentation, Other includes equivalent exposure from currency
derivatives and/or any offsets to derivative positions and may be negative.
(v)
For purposes of this presentation, market value of fixed income and/or equity derivatives,
if
any, is included in Cash & Cash Equivalents.
Where the fund holds convertible bonds, they are treated as part of the equity portion
of the portfolio.
Cash & Cash Equivalents includes any cash, investments in money market funds, short-term
securities, and other assets less liabilities. Please see the Statement of Assets
and Liabilities for additional information related to the fund’s cash position and other assets and liabilities.
Percentages are based on net assets as of April 30, 2026.
The portfolio is actively managed and current holdings may be different.
2
Portfolio Managers' Profiles
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Portfolio Manager
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Primary Role
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Since
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Title and Five Year History
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Alexander Mackey
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Investment Grade
Debt Instruments
Portfolio Manager
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2017
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Co-Chief Investment Officer-Global
Fixed Income of MFS; employed in
the investment management area of
MFS since 2001.
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Jake Stone
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U.S. Government
Securities Portfolio
Manager
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2023
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Investment Officer of MFS; employed
in the investment management area
of MFS since 2018.
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Other Notes
The fund’s shares may trade at a discount or premium to net asset value. When fund shares trade at a premium, buyers pay more than the net asset value of the underlying
fund shares, and shares purchased at a premium would receive less than the amount
paid for them in the event of the fund’s concurrent liquidation.
The fund's target annual distribution rate is calculated based on an annual rate of
8.50% of the fund's average monthly net asset value, not a fixed share price, and
the fund's distribution amount will fluctuate with changes in the fund's average monthly
net assets.
In accordance with Section 23(c) of the Investment Company Act of 1940, the fund hereby gives notice that it may from time to time repurchase shares of the fund in
the open market at the option of the Board of Trustees and on such terms as the Trustees
shall determine.
3
Portfolio of Investments
4/30/26 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund.
It is categorized by broad-based asset classes.
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Issuer
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Shares/Par
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Value ($)
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Bonds – 95.3%
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||||
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Aerospace & Defense – 0.3%
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||||
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Howmet Aerospace, Inc., 4.55%, 11/15/2032
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$
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831,000
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$817,209
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Asset-Backed & Securitized – 9.9%
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||||
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3650R Commercial Mortgage Trust, 2021-PF1, “XA”,
1.101%, 11/15/2054 (i)
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$
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10,182,238
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$331,778
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ACREC 2021-FL1 Ltd., “AS”, FLR, 5.282% ((SOFR - 1mo. +
0.11448%) + 1.5%), 10/16/2036 (n)
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276,370
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276,245
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AmeriCredit Automobile Receivables Trust, 2026-1, “A”,
4.16%, 7/12/2029 (n)
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1,180,622
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1,180,299
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Angel Oak Mortgage Trust, 2024-10, “A1”, 5.348%, 10/25/2069 (n)
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1,109,163
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1,111,746
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AREIT 2022-CRE6 Trust, “AS”, FLR, 5.29% (SOFR - 30 day +
1.65%), 1/20/2037 (n)
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1,522,500
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1,520,454
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ARI Fleet Lease Trust, 2023-B, “A2”, 6.05%, 7/15/2032 (n)
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51,425
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51,672
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ARI Fleet Lease Trust, 2025-A, “A2”, 4.38%, 1/17/2034 (n)
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231,116
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231,433
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Babson CLO Ltd., 2021-3A, “B1R”, FLR, 5.305% (SOFR - 3mo. +
1.63%), 1/18/2035 (n)
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600,000
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600,242
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BDS 2024-FL13 Ltd., “A”, FLR, 5.237% (SOFR - 1mo. +
1.5762%), 9/19/2039 (n)
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305,500
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305,647
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BDS 2025-FL16 Ltd., “B”, FLR, 5.511% (SOFR - 1mo. +
1.85%), 6/19/2043 (n)
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429,727
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430,492
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Brazos Securitization LLC, 5.014%, 9/01/2031 (n)
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528,927
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532,444
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Bridgecrest Lending Auto Securitization Trust, 2025-4, “A2”,
4.35%, 6/15/2028
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530,629
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531,004
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Business Jet Securities LLC, 2024-1A, “A”, 6.197%, 5/15/2039 (n)
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258,780
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262,629
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BXMT 2021-FL4 Ltd., “AS”, FLR, 5.332% ((SOFR - 1mo. +
0.11448%) + 1.3%), 5/15/2038 (n)
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2,000,000
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1,994,550
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Commercial Mortgage Pass-Through Certificates, 2024-CBM, “A2”,
5.867%, 12/10/2041 (n)
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214,765
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214,949
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Commercial Mortgage Trust, 2017-COR2, “A3”, 3.51%, 9/10/2050
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1,676,352
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1,656,968
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Duke Energy Progress NC Storm Funding II LLC, 4.226%, 7/01/2035
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1,750,000
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1,714,496
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EQT Trust, 2024-EXTR, “B”, 5.654%, 7/05/2041 (n)
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236,027
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238,609
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Exeter Automobile Receivables Trust, 2026-2A, “A2”,
4.31%, 11/15/2028
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821,000
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821,525
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GLS Auto Select Receivables Trust, 2025-2A, “A2”,
6.37%, 6/15/2028 (n)
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10,213
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10,223
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GLS Auto Select Receivables Trust, 2026-2A, “A2”,
4.04%, 11/15/2028 (n)
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499,000
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498,630
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GreatAmerica Leasing Receivables Funding LLC, 2025-1, “A2”,
4.52%, 10/15/2027 (n)
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375,312
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376,114
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LAD Auto Receivables Trust, 2025-1A, “A2”, 4.6%, 12/15/2027 (n)
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3,814
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3,815
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4
Portfolio of Investments (unaudited) – continued
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Issuer
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Shares/Par
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Value ($)
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Bonds – continued
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||||
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Asset-Backed & Securitized – continued
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||||
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LoanCore 2021-CRE6 Ltd., “AS”, FLR, 5.419% ((SOFR - 1mo. +
0.11448%) + 1.65%), 11/15/2038 (n)
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$
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1,500,000
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$1,500,947
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Morgan Stanley Residential Mortgage Loan Trust, 2024-NQM3,
“A1”, 5.044%, 7/25/2069 (n)
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335,435
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335,389
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Morgan Stanley Residential Mortgage Loan Trust, 2025-NQM3,
“A1”, 5.53%, 5/25/2070 (n)
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386,476
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388,106
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Morgan Stanley Residential Mortgage Loan Trust, 2026-INV1, “A9”,
FLR, 4.795% (SOFR - 1mo. + 1.15%), 2/25/2061 (n)
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402,969
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403,275
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Neuberger Berman CLO Ltd., 2023-53A, “BR”, FLR, 5.367% (SOFR -
3mo. + 1.7%), 10/24/2037 (n)
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758,092
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759,026
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New Residential Mortgage Loan Trust, 2026-NQM2, “A1”,
4.743%, 12/25/2065 (n)
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758,545
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751,611
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New Residential Mortgage Loan Trust, 2026-NQM3, “A1”,
4.833%, 2/25/2066 (n)
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1,516,493
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1,505,374
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OBX Trust, 2024-NQM1, “A1”, 5.928%, 11/25/2063 (n)
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176,709
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177,343
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OBX Trust, 2024-NQM1, “A2”, 6.253%, 11/25/2063 (n)
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53,494
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53,732
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OBX Trust, 2024-NQM12, “A1”, 5.475%, 7/25/2064 (n)
|
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246,539
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247,507
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OBX Trust, 2024-NQM2, “A1”, 5.878%, 12/25/2063 (n)
|
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790,552
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793,760
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Palmer Square Loan Funding 2025-1A Ltd., “A2”, FLR, 4.853%
(SOFR - 3mo. + 1.2%), 2/15/2033 (n)
|
|
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900,000
|
899,982
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Palmer Square Loan Funding 2025-2A Ltd., “A2”, FLR, 5.073%
(SOFR - 3mo. + 1.4%), 7/15/2033 (n)
|
|
|
1,100,000
|
1,098,265
|
|
Palmer Square Loan Funding, 2025-1A Ltd., “A1”, FLR, 4.452%
(SOFR - 3mo. + 0.8%), 2/15/2033 (n)
|
|
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468,334
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468,046
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PFP III 2024-11 Ltd., “11A”, FLR, 5.493% (SOFR - 1mo. +
1.83239%), 9/17/2039 (n)
|
|
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403,322
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403,631
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PFS Financing Corp., 2025-A, “A”, FLR, 4.289% (SOFR - 1mo. +
0.65%), 1/15/2029 (n)
|
|
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721,000
|
721,766
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PMT Loan Trust, 2025-INV10, “A36”, FLR, 4.995% (SOFR - 1mo. +
1.35%), 10/01/2056 (n)
|
|
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484,902
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487,046
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PMT Loan Trust, 2026-INV2, “A35”, FLR, 4.795% (SOFR - 1mo. +
1.15%), 1/25/2057 (n)
|
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1,513,390
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1,518,269
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Provident Funding Mortgage Trust, 2024-1, “A3”,
5.5%, 12/25/2054 (n)
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327,982
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328,005
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RCKT Trust, 2025-1A, “A”, 4.9%, 7/25/2034 (n)
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99,114
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99,315
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Santander Drive Auto Receivables Trust, 2026-1, “A2”,
4.04%, 3/15/2029
|
|
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509,000
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508,783
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Shackleton 2019-14A CLO Ltd., “BRR”, FLR, 5.225% (SOFR - 3mo. +
1.55%), 7/20/2034 (n)
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880,478
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880,698
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Verus Securitization Trust, 2024-1, “A1”, 5.712%, 1/25/2069 (n)
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414,743
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415,959
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Verus Securitization Trust, 2024-1, “A2”, 5.915%, 1/25/2069 (n)
|
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115,971
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116,157
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$29,757,956
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5
Portfolio of Investments (unaudited) – continued
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Issuer
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Shares/Par
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Value ($)
|
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Bonds – continued
|
||||
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Auto & Auto Components – 1.3%
|
||||
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Ford Motor Credit Co. LLC, 5.8%, 3/05/2027
|
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$
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958,000
|
$964,732
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Hyundai Capital America, 1.65%, 9/17/2026 (n)
|
|
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1,000,000
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989,814
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LKQ Corp., 5.75%, 6/15/2028
|
|
|
862,000
|
875,611
|
|
Stellantis Finance US, Inc., 1.711%, 1/29/2027 (n)
|
|
|
762,000
|
745,329
|
|
Stellantis Finance US, Inc., 2.691%, 9/15/2031 (n)
|
|
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532,000
|
455,168
|
|
|
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|
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$4,030,654
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Brokerage & Asset Managers – 2.9%
|
||||
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Brookfield Finance, Inc., 2.724%, 4/15/2031
|
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$
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2,844,000
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$2,584,681
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Charles Schwab Corp., 5.875%, 8/24/2026
|
|
|
425,000
|
426,838
|
|
Charles Schwab Corp., 5.643% to 5/19/2028, FLR (SOFR - 1 day +
2.210%) to 5/19/2029
|
|
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1,535,000
|
1,574,846
|
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Low Income Investment Fund, 3.386%, 7/01/2026
|
|
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705,000
|
702,748
|
|
Low Income Investment Fund, 3.711%, 7/01/2029
|
|
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1,905,000
|
1,852,023
|
|
LPL Holdings, Inc., 6.75%, 11/17/2028
|
|
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1,437,000
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1,503,748
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|
|
|
|
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$8,644,884
|
|
Building – 0.6%
|
||||
|
Allegion US Holding Co., Inc., 5.6%, 5/29/2034
|
|
$
|
1,713,000
|
$1,754,407
|
|
Business Services – 1.6%
|
||||
|
Paychex, Inc., 5.6%, 4/15/2035
|
|
$
|
1,890,000
|
$1,893,011
|
|
Tencent Holdings Ltd., 2.88%, 4/22/2031 (n)
|
|
|
1,499,000
|
1,406,859
|
|
Verisk Analytics, Inc., 4.125%, 3/15/2029
|
|
|
716,000
|
709,670
|
|
Verisk Analytics, Inc., 5.75%, 4/01/2033
|
|
|
850,000
|
882,746
|
|
|
|
|
|
$4,892,286
|
|
Cable TV – 0.5%
|
||||
|
Cox Communications, Inc., 5.45%, 9/15/2028 (n)
|
|
$
|
1,559,000
|
$1,586,949
|
|
Conglomerates – 1.5%
|
||||
|
nVent Finance S.à r.l., 5.65%, 5/15/2033
|
|
$
|
1,216,000
|
$1,246,928
|
|
Regal Rexnord Corp., 6.05%, 4/15/2028
|
|
|
1,533,000
|
1,571,445
|
|
Westinghouse Air Brake Technologies Corp., 4.7%, 9/15/2028
|
|
|
1,760,000
|
1,765,506
|
|
|
|
|
|
$4,583,879
|
|
Consumer Products – 0.3%
|
||||
|
Haleon US Capital LLC, 3.375%, 3/24/2029
|
|
$
|
860,000
|
$836,153
|
|
Consumer Services – 2.1%
|
||||
|
Booking Holdings, Inc., 3.55%, 3/15/2028
|
|
$
|
2,737,000
|
$2,699,276
|
|
CBRE Services, Inc., 5.5%, 6/15/2035
|
|
|
1,500,000
|
1,521,033
|
|
Conservation Fund, 3.474%, 12/15/2029
|
|
|
563,000
|
537,226
|
|
Rentokil Terminix Funding LLC, 5.625%, 4/28/2035 (n)
|
|
|
1,668,000
|
1,695,548
|
|
|
|
|
|
$6,453,083
|
6
Portfolio of Investments (unaudited) – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Containers – 0.6%
|
||||
|
Berry Global, Inc., 1.65%, 1/15/2027
|
|
$
|
1,542,000
|
$1,512,492
|
|
Berry Global, Inc., 5.5%, 4/15/2028
|
|
|
325,000
|
330,933
|
|
|
|
|
|
$1,843,425
|
|
Diversified Financial Services – 1.4%
|
||||
|
AerCap Ireland Capital DAC/AerCap Global Aviation Trust,
3.3%, 1/30/2032
|
|
$
|
332,000
|
$303,460
|
|
Avolon Holdings Funding Ltd., 3.25%, 2/15/2027 (n)
|
|
|
583,000
|
576,280
|
|
Avolon Holdings Funding Ltd., 2.528%, 11/18/2027 (n)
|
|
|
382,000
|
370,129
|
|
Avolon Holdings Funding Ltd., 2.75%, 2/21/2028 (n)
|
|
|
2,336,000
|
2,256,000
|
|
SMBC Aviation Capital Finance DAC, 5.3%, 4/03/2029 (n)
|
|
|
789,000
|
800,229
|
|
|
|
|
|
$4,306,098
|
|
Electrical Equipment – 0.8%
|
||||
|
Arrow Electronics, Inc., 3.875%, 1/12/2028
|
|
$
|
1,049,000
|
$1,036,560
|
|
Molex Electronic Technologies LLC, 5.25%, 4/30/2032 (n)
|
|
|
1,392,000
|
1,417,497
|
|
|
|
|
|
$2,454,057
|
|
Emerging Market Quasi-Sovereign – 0.5%
|
||||
|
Qatar Petroleum, 2.25%, 7/12/2031 (n)
|
|
$
|
1,635,000
|
$1,461,723
|
|
Energy - Independent – 0.7%
|
||||
|
Occidental Petroleum Corp., 5.55%, 10/01/2034
|
|
$
|
375,000
|
$381,554
|
|
Pioneer Natural Resources Co., 1.9%, 8/15/2030
|
|
|
1,750,000
|
1,580,836
|
|
|
|
|
|
$1,962,390
|
|
Energy - Integrated – 0.4%
|
||||
|
Eni S.p.A., 4.25%, 5/09/2029 (n)
|
|
$
|
1,252,000
|
$1,244,517
|
|
Food & Beverages – 2.1%
|
||||
|
Bacardi-Martini B.V., 5.25%, 1/15/2029 (n)
|
|
$
|
1,356,000
|
$1,369,745
|
|
JBS N.V./JBS USA Foods Group Holdings, Inc./JBS USA Food Co.,
3%, 2/02/2029
|
|
|
1,451,000
|
1,393,571
|
|
JDE Peet's N.V., 1.375%, 1/15/2027 (n)
|
|
|
1,931,000
|
1,888,522
|
|
Mars, Inc., 5.2%, 3/01/2035 (n)
|
|
|
1,666,000
|
1,680,866
|
|
|
|
|
|
$6,332,704
|
|
Global Systemically Important Banks – 5.5%
|
||||
|
Bank of America Corp., 1.734% to 7/22/2026, FLR (SOFR - 1 day +
0.96%) to 7/22/2027
|
|
$
|
2,224,000
|
$2,210,805
|
|
Bank of America Corp., 2.572% to 10/20/2031, FLR (SOFR - 1 day +
1.21%) to 10/20/2032
|
|
|
1,823,000
|
1,624,084
|
|
Barclays PLC, 2.279% to 11/24/2026, FLR (CMT - 1yr. + 1.05%)
to 11/24/2027
|
|
|
1,435,000
|
1,417,087
|
7
Portfolio of Investments (unaudited) – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Global Systemically Important Banks – continued
|
||||
|
BNP Paribas S.A., 2.591% to 1/20/2027, FLR (SOFR - 1 day +
1.228%) to 1/20/2028 (n)
|
|
$
|
1,723,000
|
$1,699,943
|
|
Deutsche Bank AG, 2.311% to 11/16/2026, FLR (SOFR - 1 day +
1.219%) to 11/16/2027
|
|
|
457,000
|
451,572
|
|
Deutsche Bank AG, 6.72% to 1/18/2028, FLR (SOFR - 1 day +
3.18%) to 1/18/2029
|
|
|
150,000
|
155,032
|
|
JPMorgan Chase & Co., 5.04% to 1/23/2027, FLR (SOFR - 1 day +
1.19%) to 1/23/2028
|
|
|
357,000
|
358,656
|
|
JPMorgan Chase & Co., 2.58% to 4/22/2031, FLR (SOFR - 1 day +
1.25%) to 4/22/2032
|
|
|
2,250,000
|
2,035,808
|
|
Mizuho Financial Group, Inc., 5.754%, 5/27/2034
|
|
|
2,000,000
|
2,078,142
|
|
Morgan Stanley, 3.625%, 1/20/2027
|
|
|
824,000
|
821,173
|
|
Morgan Stanley, 3.95%, 4/23/2027
|
|
|
290,000
|
289,266
|
|
Morgan Stanley, 1.512% to 7/20/2026, FLR (SOFR - 1 day +
0.858%) to 7/20/2027
|
|
|
977,000
|
971,061
|
|
UBS Group Funding (Switzerland) AG, 4.253%, 3/23/2028 (n)
|
|
|
2,449,000
|
2,443,057
|
|
|
|
|
|
$16,555,686
|
|
Industrial – 0.4%
|
||||
|
Howard University, Washington D.C., AGM, 2.757%, 10/01/2027
|
|
$
|
1,250,000
|
$1,222,800
|
|
Insurance – 1.6%
|
||||
|
AIA Group Ltd., 3.375%, 4/07/2030 (n)
|
|
$
|
563,000
|
$545,492
|
|
Corebridge Financial, Inc., 3.85%, 4/05/2029
|
|
|
2,500,000
|
2,447,252
|
|
Sammons Financial Group, Inc., 4.75%, 4/08/2032 (n)
|
|
|
2,000,000
|
1,916,386
|
|
|
|
|
|
$4,909,130
|
|
Insurance - Health – 1.2%
|
||||
|
Elevance Health, Inc., 4.95%, 11/01/2031
|
|
$
|
1,905,000
|
$1,922,049
|
|
Humana, Inc., 3.7%, 3/23/2029
|
|
|
867,000
|
844,404
|
|
Humana, Inc., 5.875%, 3/01/2033
|
|
|
882,000
|
904,718
|
|
|
|
|
|
$3,671,171
|
|
Insurance - Property & Casualty – 0.6%
|
||||
|
Arthur J. Gallagher & Co., 6.5%, 2/15/2034
|
|
$
|
1,626,000
|
$1,753,535
|
|
International Market Quasi-Sovereign – 0.4%
|
||||
|
NBN Co. Ltd. (Commonwealth of Australia), 5.75%, 10/06/2028 (n)
|
|
$
|
1,181,000
|
$1,217,031
|
|
Machinery & Tools – 1.2%
|
||||
|
AGCO Corp., 5.8%, 3/21/2034
|
|
$
|
529,000
|
$544,183
|
|
CNH Industrial N.V., 3.85%, 11/15/2027
|
|
|
3,066,000
|
3,040,021
|
|
|
|
|
|
$3,584,204
|
8
Portfolio of Investments (unaudited) – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Medical & Health Technology & Services – 0.7%
|
||||
|
IQVIA, Inc., 5.7%, 5/15/2028
|
|
$
|
472,000
|
$480,543
|
|
IQVIA, Inc., 6.25%, 2/01/2029
|
|
|
353,000
|
366,162
|
|
ProMedica Toledo Hospital, “B”, AGM, 5.75%, 11/15/2038
|
|
|
1,250,000
|
1,243,641
|
|
|
|
|
|
$2,090,346
|
|
Metals & Mining – 1.3%
|
||||
|
Anglo American Capital PLC, 4.75%, 4/10/2027 (n)
|
|
$
|
1,120,000
|
$1,124,056
|
|
Anglo American Capital PLC, 2.875%, 3/17/2031 (n)
|
|
|
870,000
|
795,736
|
|
Glencore Funding LLC, 3.875%, 10/27/2027 (n)
|
|
|
1,887,000
|
1,871,958
|
|
|
|
|
|
$3,791,750
|
|
Midstream – 2.2%
|
||||
|
Columbia Pipelines Holdings Co. LLC, 4.999%, 11/17/2032 (n)
|
|
$
|
1,500,000
|
$1,489,658
|
|
Enbridge, Inc., 3.125%, 11/15/2029
|
|
|
1,506,000
|
1,436,973
|
|
MPLX LP, 4%, 3/15/2028
|
|
|
1,395,000
|
1,383,852
|
|
Plains All American Pipeline LP, 3.8%, 9/15/2030
|
|
|
1,510,000
|
1,454,743
|
|
Targa Resources Corp., 4.2%, 2/01/2033
|
|
|
357,000
|
339,137
|
|
Targa Resources Corp., 6.125%, 3/15/2033
|
|
|
577,000
|
610,354
|
|
|
|
|
|
$6,714,717
|
|
Mortgage-Backed – 7.9%
|
|
|||
|
Fannie Mae, 6.5%, 11/01/2031
|
|
$
|
147,584
|
$153,013
|
|
Fannie Mae, 2.5%, 2/25/2051 (i)
|
|
|
276,381
|
38,530
|
|
Fannie Mae, 4.995%, 11/25/2054
|
|
|
1,474,590
|
1,491,745
|
|
Fannie Mae, 5.045%, 12/25/2054
|
|
|
332,064
|
336,192
|
|
Fannie Mae, 4.945%, 1/25/2055
|
|
|
1,238,562
|
1,252,165
|
|
Freddie Mac, 2.57%, 7/25/2026
|
|
|
2,216,841
|
2,206,734
|
|
Freddie Mac, 0.601%, 5/25/2029 (i)
|
|
|
6,509,082
|
79,029
|
|
Freddie Mac, 1.004%, 7/25/2029 (i)
|
|
|
4,920,901
|
121,537
|
|
Freddie Mac, 0.733%, 1/25/2030 (i)
|
|
|
1,498,806
|
29,407
|
|
Freddie Mac, 0.548%, 2/25/2031 (i)
|
|
|
6,786,456
|
129,376
|
|
Freddie Mac, 0.431%, 5/25/2033 (i)
|
|
|
6,200,000
|
122,448
|
|
Freddie Mac, 0.363%, 10/25/2033 (i)
|
|
|
11,614,030
|
179,695
|
|
Freddie Mac, 6%, 8/01/2034
|
|
|
1,555
|
1,589
|
|
Freddie Mac, 1.092%, 9/25/2034 (i)
|
|
|
1,558,346
|
104,833
|
|
Freddie Mac, 0.427%, 1/25/2035 (i)
|
|
|
7,378,905
|
161,507
|
|
Freddie Mac, 0.278%, 7/25/2035 (i)
|
|
|
23,608,032
|
305,313
|
|
Freddie Mac, 2.5%, 3/25/2051 (i)
|
|
|
855,725
|
138,073
|
|
Freddie Mac, 5.875%, 12/25/2053
|
|
|
446,905
|
447,952
|
|
Freddie Mac, 5.145%, 12/25/2054
|
|
|
1,755,235
|
1,778,956
|
|
Freddie Mac, 4.595%, 2/25/2055
|
|
|
1,175,495
|
1,184,020
|
|
Ginnie Mae, 6%, 6/15/2033 - 10/15/2036
|
|
|
84,985
|
87,743
|
|
Ginnie Mae, 4.89%, 8/20/2053
|
|
|
1,436,718
|
1,450,583
|
|
Ginnie Mae, 5.04%, 9/20/2053
|
|
|
1,363,368
|
1,380,673
|
9
Portfolio of Investments (unaudited) – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Mortgage-Backed – continued
|
|
|||
|
Ginnie Mae, 4.94%, 10/20/2053
|
|
$
|
1,362,008
|
$1,376,810
|
|
Ginnie Mae, 4.99%, 10/20/2053
|
|
|
1,463,541
|
1,480,926
|
|
Ginnie Mae, 4.84%, 12/20/2053
|
|
|
1,424,949
|
1,436,634
|
|
Ginnie Mae, 4.69%, 2/20/2054
|
|
|
1,432,940
|
1,441,729
|
|
Ginnie Mae, 6.114%, 6/20/2055
|
|
|
490,635
|
497,073
|
|
Ginnie Mae, 6.189%, 6/20/2055
|
|
|
314,620
|
304,737
|
|
Ginnie Mae, 1.709%, 7/20/2055 (i)
|
|
|
533,524
|
22,737
|
|
Ginnie Mae, 4.158%, 8/20/2067
|
|
|
1,290,694
|
1,288,318
|
|
Ginnie Mae, 4.298%, 4/20/2068
|
|
|
884,826
|
887,809
|
|
Ginnie Mae, 4.278%, 11/20/2068 - 8/20/2069
|
|
|
458,993
|
459,213
|
|
Ginnie Mae, 4.04%, 12/20/2071
|
|
|
314,363
|
313,514
|
|
Ginnie Mae, 4.29%, 8/20/2074
|
|
|
646,631
|
648,085
|
|
Ginnie Mae, 3.64%, 11/20/2074
|
|
|
330,775
|
328,135
|
|
|
|
|
|
$23,666,833
|
|
Municipals – 3.8%
|
||||
|
Gainesville, TX, Hospital District, Taxable, “A”, 5.711%, 8/15/2033
|
|
$
|
2,330,000
|
$2,353,403
|
|
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement
Rev., Taxable, “B”, 3%, 6/01/2046
|
|
|
475,000
|
436,210
|
|
Massachusetts Educational Financing Authority, Education Loan
Rev., Taxable, “N”, 6.069%, 7/01/2033
|
|
|
1,750,000
|
1,811,111
|
|
Michigan Finance Authority, Hospital Refunding Rev., Taxable (Trinity
Health Credit Group), “T”, 3.084%, 12/01/2034
|
|
|
2,500,000
|
2,269,285
|
|
Syracuse, NY, Industrial Development Agency PILOT Rev., Taxable
(Carousel Center Project), “B”, 5%, 1/01/2036 (z)
|
|
|
3,635,000
|
2,755,460
|
|
University of California, General Rev., Taxable, “BG”,
1.614%, 5/15/2030
|
|
|
2,010,000
|
1,823,035
|
|
|
|
|
|
$11,448,504
|
|
Non-Global Systemically Important Banks – 2.3%
|
||||
|
AIB Group PLC, 6.608% to 9/13/2028, FLR (SOFR - 1 day + 2.33%)
to 9/13/2029 (n)
|
|
$
|
352,000
|
$367,787
|
|
CaixaBank S.A., 5.673% to 3/15/2029, FLR (SOFR - 1 day + 1.78%)
to 3/15/2030 (n)
|
|
|
1,201,000
|
1,231,764
|
|
Capital One Financial Corp., 7.624% to 10/30/2030, FLR (SOFR - 1
day + 3.07%) to 10/30/2031
|
|
|
1,677,000
|
1,851,445
|
|
First Citizens Bancshare, Inc., 5.231% to 3/12/2030, FLR (SOFR - 1
day + 1.41%) to 3/12/2031
|
|
|
633,000
|
629,830
|
|
Huntington Bancshares, Inc., 6.208% to 8/21/2028, FLR (SOFR - 1
day + 2.02%) to 8/21/2029
|
|
|
1,142,000
|
1,181,758
|
|
Macquarie Group Ltd., 6.255% to 12/07/2033, FLR (SOFR - 1 day +
2.303%) to 12/07/2034 (n)
|
|
|
819,000
|
874,686
|
10
Portfolio of Investments (unaudited) – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Non-Global Systemically Important Banks – continued
|
||||
|
Truist Financial Corp., 5.435% to 1/24/2029, FLR (SOFR - 1 day +
1.62%) to 1/24/2030
|
|
$
|
789,000
|
$807,345
|
|
|
|
|
|
$6,944,615
|
|
Real Estate - Retail – 2.9%
|
||||
|
Brixmor Operating Partnership LP, REIT, 4.05%, 7/01/2030
|
|
$
|
2,349,000
|
$2,289,952
|
|
NNN REIT, Inc., 5.6%, 10/15/2033
|
|
|
675,000
|
692,239
|
|
Realty Income Corp., REIT, 3.4%, 1/15/2028
|
|
|
2,875,000
|
2,827,463
|
|
Regency Centers Corp., 3.7%, 6/15/2030
|
|
|
3,000,000
|
2,909,482
|
|
|
|
|
|
$8,719,136
|
|
Retail & E-commerce – 1.6%
|
||||
|
DICK'S Sporting Goods, 3.15%, 1/15/2032
|
|
$
|
2,631,000
|
$2,397,668
|
|
Ross Stores, Inc., 4.8%, 4/15/2030
|
|
|
2,358,000
|
2,378,730
|
|
|
|
|
|
$4,776,398
|
|
Semiconductor & Electronic Components – 0.6%
|
||||
|
Broadcom, Inc., 4.55%, 2/15/2032
|
|
$
|
1,671,000
|
$1,660,633
|
|
Telecommunications - Wireless – 2.0%
|
||||
|
Crown Castle, Inc., REIT, 3.65%, 9/01/2027
|
|
$
|
947,000
|
$936,330
|
|
Crown Castle, Inc., REIT, 2.25%, 1/15/2031
|
|
|
1,000,000
|
886,574
|
|
Rogers Communications, Inc., 3.2%, 3/15/2027
|
|
|
1,739,000
|
1,721,336
|
|
T-Mobile USA, Inc., 3.875%, 4/15/2030
|
|
|
2,500,000
|
2,434,201
|
|
|
|
|
|
$5,978,441
|
|
Tobacco – 1.3%
|
||||
|
B.A.T. Capital Corp., 5.35%, 8/15/2032
|
|
$
|
2,000,000
|
$2,056,024
|
|
Philip Morris International, Inc., 5.75%, 11/17/2032
|
|
|
1,773,000
|
1,866,092
|
|
|
|
|
|
$3,922,116
|
|
Transportation & Logistics – 2.4%
|
||||
|
Element Fleet Management Corp., 5.643%, 3/13/2027 (n)
|
|
$
|
653,000
|
$659,422
|
|
Element Fleet Management Corp., 5.037%, 3/25/2030 (n)
|
|
|
1,260,000
|
1,273,379
|
|
GXO Logistics, Inc., 6.25%, 5/06/2029
|
|
|
625,000
|
648,755
|
|
Penske Truck Leasing Co. LP, 5.35%, 1/12/2027 (n)
|
|
|
648,000
|
652,054
|
|
Penske Truck Leasing Co. LP, 5.35%, 3/30/2029 (n)
|
|
|
911,000
|
926,717
|
|
Toll Road Investors Partnership II LP, Capital Appreciation, NPFG,
0%, 2/15/2027 (n)
|
|
|
1,525,000
|
1,445,441
|
|
Toll Road Investors Partnership II LP, Capital Appreciation, NPFG,
0%, 2/15/2029 (n)
|
|
|
1,392,000
|
1,153,857
|
|
Toll Road Investors Partnership II LP, Capital Appreciation, NPFG,
0%, 2/15/2031 (n)
|
|
|
480,000
|
345,445
|
|
|
|
|
|
$7,105,070
|
11
Portfolio of Investments (unaudited) – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Travel, Gaming, & Lodging – 2.1%
|
||||
|
Flutter Treasury DAC, 5.875%, 6/04/2031 (n)
|
|
$
|
1,083,000
|
$1,078,950
|
|
GLP Capital LP/GLP Financing II, Inc., 4%, 1/15/2031
|
|
|
3,055,000
|
2,895,638
|
|
Marriott International, Inc., 2.85%, 4/15/2031
|
|
|
802,000
|
735,175
|
|
Marriott International, Inc., 2.75%, 10/15/2033
|
|
|
1,750,000
|
1,518,207
|
|
|
|
|
|
$6,227,970
|
|
U.S. Treasury Obligations – 21.9%
|
||||
|
U.S. Treasury Notes, 1.625%, 11/30/2026
|
|
$
|
7,750,000
|
$7,657,242
|
|
U.S. Treasury Notes, 1.875%, 2/28/2027
|
|
|
7,566,500
|
7,450,461
|
|
U.S. Treasury Notes, 2.375%, 5/15/2027
|
|
|
4,075,000
|
4,016,263
|
|
U.S. Treasury Notes, 0.5%, 6/30/2027
|
|
|
6,500,000
|
6,256,504
|
|
U.S. Treasury Notes, 3.75%, 8/15/2027 (f)
|
|
|
11,885,000
|
11,868,287
|
|
U.S. Treasury Notes, 0.375%, 9/30/2027
|
|
|
5,672,000
|
5,403,023
|
|
U.S. Treasury Notes, 3.375%, 12/31/2027
|
|
|
9,301,000
|
9,225,065
|
|
U.S. Treasury Notes, 4.375%, 12/31/2029
|
|
|
4,100,000
|
4,157,496
|
|
U.S. Treasury Notes, 1.5%, 2/15/2030
|
|
|
5,043,500
|
4,611,059
|
|
U.S. Treasury Notes, 4.625%, 4/30/2031
|
|
|
1,626,000
|
1,668,682
|
|
U.S. Treasury Notes, 4.125%, 11/15/2032
|
|
|
3,400,000
|
3,388,977
|
|
|
|
|
|
$65,703,059
|
|
Utilities – 3.9%
|
||||
|
Algonquin Power & Utilities Corp., 5.365%, 6/15/2026
|
|
$
|
364,000
|
$363,991
|
|
Enel Americas S.A., 4%, 10/25/2026
|
|
|
252,000
|
251,191
|
|
FirstEnergy Corp., 3.9%, 7/15/2027
|
|
|
2,827,000
|
2,807,408
|
|
ITC Holdings Corp., 2.95%, 5/14/2030 (n)
|
|
|
3,000,000
|
2,808,939
|
|
Liberty Utilities Finance Co., 2.05%, 9/15/2030 (n)
|
|
|
3,000,000
|
2,695,698
|
|
Pacific Gas & Electric Co., 5.45%, 6/15/2027
|
|
|
401,000
|
404,645
|
|
Pacific Gas & Electric Co., 2.1%, 8/01/2027
|
|
|
952,000
|
924,297
|
|
Pacific Gas & Electric Co., 6.1%, 1/15/2029
|
|
|
326,000
|
336,892
|
|
PSEG Power LLC, 5.2%, 5/15/2030 (n)
|
|
|
314,000
|
318,912
|
|
Southern California Edison Co., 6.65%, 4/01/2029
|
|
|
816,000
|
852,388
|
|
|
|
|
|
$11,764,361
|
|
Total Bonds (Identified Cost, $290,950,026)
|
|
$286,389,880
|
||
|
Mutual Funds (h) – 4.4%
|
||||
|
Money Market Funds – 4.4%
|
|
|||
|
MFS Institutional Money Market Portfolio, 3.7% (v) (Identified Cost,
$13,205,163)
|
|
|
13,204,413
|
$13,205,733
|
|
|
||||
|
|
||||
|
Other Assets, Less Liabilities – 0.3%
|
|
869,466
|
||
|
Net Assets – 100.0%
|
$300,465,079
|
|||
12
Portfolio of Investments (unaudited) – continued
|
(f)
|
All or a portion of the security has been segregated as collateral for open futures
contracts and
cleared swap agreements.
|
|
(h)
|
An affiliated issuer, which 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. At period
end, the
aggregate values of the fund's investments in affiliated issuers and in unaffiliated
issuers were
$13,205,733 and $286,389,880, respectively.
|
|
(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 $73,074,945, representing 24.3% of net assets.
|
|
(v)
|
Affiliated issuer that is available only to investment companies managed by MFS. The
rate quoted
for the MFS Institutional Money Market Portfolio 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:
|
|
Restricted Securities
|
Acquisition
Date
|
Cost
|
Value
|
|
Syracuse, NY, Industrial Development Agency PILOT Rev.,
Taxable (Carousel Center Project), “B”, 5%, 1/01/2036
|
4/23/19-9/26/19
|
$3,527,606
|
$2,755,460
|
|
% of Net assets
|
|
|
0.9%
|
|
The following abbreviations are used in this report and are defined:
|
|
|
AGM
|
Assured Guaranty Municipal
|
|
CLO
|
Collateralized Loan Obligation
|
|
CMT
|
Constant Maturity Treasury
|
|
FLR
|
Floating Rate. Interest rate resets periodically based on the parenthetically disclosed
reference rate plus a spread (if any). The period-end rate reported may not be the
current rate. All reference rates are USD unless otherwise noted.
|
|
NPFG
|
National Public Finance Guarantee Corp.
|
|
REIT
|
Real Estate Investment Trust
|
|
SOFR
|
Secured Overnight Financing Rate
|
Derivative Contracts at 4/30/26
|
Futures Contracts
|
||||||
|
Description
|
Long/
Short
|
Currency
|
Contracts
|
Notional
Amount
|
Expiration
Date
|
Value/Unrealized
Appreciation
(Depreciation)
|
|
Liability Derivatives
|
||||||
|
Interest Rate Futures
|
|
|
||||
|
U.S. Treasury Note 10 yr
|
Long
|
USD
|
62
|
$6,856,813
|
June – 2026
|
$(124,459
)
|
|
U.S. Treasury Note 2 yr
|
Long
|
USD
|
301
|
62,344,625
|
June – 2026
|
(443,434
)
|
|
U.S. Treasury Note 5 yr
|
Long
|
USD
|
560
|
60,388,125
|
June – 2026
|
(793,758
)
|
|
|
|
|
|
|
|
$(1,361,651
)
|
13
Portfolio of Investments (unaudited) – continued
|
Cleared Swap Agreements
|
||||||||
|
Maturity
Date
|
Notional
Amount
|
Counterparty
|
Cash
Flows
to
Receive/
Frequency
|
Cash
Flows
to Pay/
Frequency
|
Unrealized
Appreciation
(Depreciation)
|
Net
Unamortized
Upfront
Payments
(Receipts)
|
Value
|
|
|
Asset Derivatives
|
|
|
|
|||||
|
Interest Rate Swaps
|
|
|
|
|||||
|
4/30/29
|
USD
|
15,180,000
|
centrally
cleared
|
1-day SOFR
/ Annually
|
3.637% /
Annually
|
$23,668
|
$—
|
$23,668
|
At April 30, 2026, the fund had liquid securities collateral with an aggregate value
of $1,541,822 to cover any collateral or margin obligations for certain derivative contracts.
See Notes to Financial Statements
14
Financial Statements
Statement of Assets and Liabilities
At 4/30/26 (unaudited)
This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.
|
Assets
|
|
|
Investments in unaffiliated issuers, at value (identified cost, $290,950,026)
|
$286,389,880
|
|
Investments in affiliated issuers, at value (identified cost, $13,205,163)
|
13,205,733
|
|
Cash
|
4,473
|
|
Receivables for
|
|
|
Net daily variation margin on open cleared swap agreements
|
23,668
|
|
Net daily variation margin on open futures contracts
|
162,556
|
|
Interest and dividends
|
2,270,069
|
|
Other assets
|
75,068
|
|
Total assets
|
$302,131,447
|
|
Liabilities
|
|
|
Payables for
|
|
|
Distributions
|
$81,586
|
|
Investments purchased
|
1,453,369
|
|
Payable to affiliates
|
|
|
Investment adviser
|
8,640
|
|
Administrative services fee
|
281
|
|
Transfer agent and dividend disbursing costs
|
1,908
|
|
Payable for independent Trustees' compensation
|
1,154
|
|
Accrued expenses and other liabilities
|
119,430
|
|
Total liabilities
|
$1,666,368
|
|
Net assets
|
$300,465,079
|
|
Net assets consist of
|
|
|
Paid-in capital
|
$328,492,539
|
|
Total distributable earnings (loss)
|
(28,027,460
)
|
|
Net assets
|
$300,465,079
|
|
Shares of beneficial interest outstanding (unlimited number of shares authorized)
|
113,798,238
|
|
Net asset value per share (net assets of $300,465,079 / 113,798,238 shares of
beneficial interest outstanding)
|
$2.64
|
See Notes to Financial Statements
15
Financial Statements
Statement of Operations
Six months ended 4/30/26 (unaudited)
This statement describes how much your fund earned in investment income and accrued
in expenses. It also describes any gains and/or losses generated by fund operations.
|
Net investment income (loss)
|
|
|
Income
|
|
|
Interest
|
$5,557,498
|
|
Dividends from affiliated issuers
|
401,881
|
|
Other
|
53
|
|
Total investment income
|
$5,959,432
|
|
Expenses
|
|
|
Management fee
|
$832,650
|
|
Transfer agent and dividend disbursing costs
|
41,721
|
|
Administrative services fee
|
25,363
|
|
Independent Trustees' compensation
|
6,193
|
|
Stock exchange fee
|
54,994
|
|
Custodian fee
|
15,316
|
|
Shareholder communications
|
62,859
|
|
Audit and tax fees
|
51,354
|
|
Legal fees
|
4,330
|
|
Miscellaneous
|
22,643
|
|
Total expenses
|
$1,117,423
|
|
Net investment income (loss)
|
$4,842,009
|
|
Realized and unrealized gain (loss)
|
|
|
Realized gain (loss) (identified cost basis)
|
|
|
Unaffiliated issuers
|
$184,219
|
|
Affiliated issuers
|
(171
)
|
|
Futures contracts
|
(157,288
)
|
|
Net realized gain (loss)
|
$26,760
|
|
Change in unrealized appreciation or depreciation
|
|
|
Unaffiliated issuers
|
$(1,072,717
)
|
|
Affiliated issuers
|
(1,107
)
|
|
Futures contracts
|
(1,290,934
)
|
|
Swap agreements
|
23,668
|
|
Net unrealized gain (loss)
|
$(2,341,090
)
|
|
Net realized and unrealized gain (loss)
|
$(2,314,330
)
|
|
Change in net assets from operations
|
$2,527,679
|
See Notes to Financial Statements
16
Financial Statements
Statements of Changes in Net Assets
These statements describe the increases and/or decreases in net assets resulting from
operations, any distributions, and any shareholder transactions.
|
|
Six months ended
|
Year ended
|
|
|
4/30/26 (unaudited)
|
10/31/25 |
|
Change in net assets
|
|
|
|
From operations
|
|
|
|
Net investment income (loss)
|
$4,842,009
|
$10,014,331
|
|
Net realized gain (loss)
|
26,760
|
(1,749,228
)
|
|
Net unrealized gain (loss)
|
(2,341,090
)
|
9,975,622
|
|
Change in net assets from operations
|
$2,527,679
|
$18,240,725
|
|
Distributions to shareholders
|
$(5,020,230
)
|
$(10,341,044
)
|
|
Tax return of capital distributions to shareholders
|
$—
|
$(16,461,858
)
|
|
Distributions from other sources
|
$(8,098,431
)(a)
|
$—
|
|
Total change in net assets
|
$(10,590,982
)
|
$(8,562,177
)
|
|
Net assets
|
|
|
|
At beginning of period
|
311,056,061
|
319,618,238
|
|
At end of period
|
$300,465,079
|
$311,056,061
|
|
(a)
|
Estimated tax return of capital. All or a portion of this amount may be redesignated
as
ordinary income and/or capital gains at fiscal year end when the tax character of
distributions
is determined. Please refer to “Tax Matters and Distributions” under Note 2 of the Notes to
Financial Statements for additional information regarding the tax character of the fund’s
distributions.
|
See Notes to Financial Statements
17
Financial Statements
Financial Highlights
The financial highlights table is intended to help you understand the fund's financial
performance for the semiannual period and the past 5 fiscal years. Certain information
reflects financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment in the fund
share class (assuming reinvestment of all distributions) held for the entire period.
|
|
Six months
ended
|
Year ended
|
||||
|
|
4/30/26
(unaudited)
|
10/31/25
|
10/31/24
|
10/31/23
|
10/31/22
|
10/31/21
|
|
Net asset value, beginning of period
|
$2.73
|
$2.81
|
$2.81
|
$2.98
|
$3.64
|
$3.95
|
|
Income (loss) from investment operations
|
||||||
|
Net investment income (loss) (d)
|
$0.04
|
$0.09
|
$0.09
|
$0.08
|
$0.07
|
$0.08
|
|
Net realized and unrealized gain (loss)
|
(0.01
)
|
0.07
|
0.15
|
0.00
(w)
|
(0.44
)
|
(0.06
)
|
|
Total from investment operations
|
$0.03
|
$0.16
|
$0.24
|
$0.08
|
$(0.37
)
|
$0.02
|
|
Less distributions declared to shareholders
|
||||||
|
From net investment income
|
$(0.05
)
|
$(0.09
)
|
$(0.09
)
|
$(0.08
)
|
$(0.08
)
|
$(0.10
)
|
|
From net realized gain
|
—
|
—
|
—
|
—
|
—
|
(0.03
)
|
|
From tax return of capital
|
—
|
(0.15
)
|
(0.15
)
|
(0.17
)
|
(0.21
)
|
(0.20
)
|
|
From other sources
|
(0.07
)(b)
|
—
|
—
|
—
|
—
|
—
|
|
Total distributions declared
to shareholders
|
$(0.12
)
|
$(0.24
)
|
$(0.24
)
|
$(0.25
)
|
$(0.29
)
|
$(0.33
)
|
|
Net increase from repurchase of
capital shares
|
$—
|
$—
|
$0.00
(w)
|
$0.00
(w)
|
$0.00
(w)
|
$—
|
|
Net asset value, end of period (x)
|
$2.64
|
$2.73
|
$2.81
|
$2.81
|
$2.98
|
$3.64
|
|
Market value, end of period
|
$2.51
|
$2.61
|
$2.73
|
$2.58
|
$2.75
|
$3.63
|
|
Total return at market value (%)
|
0.55
(n)
|
4.33
|
15.71
|
2.73
|
(16.98
)
|
6.18
|
|
Total return at net asset value (%) (j)(s)(x)
|
1.11
(n)
|
6.02
|
9.35
|
3.26
|
(10.29
)
|
0.54
|
|
Ratios (%) (to average net assets)
and Supplemental data:
|
||||||
|
Expenses
|
0.73
(a)
|
0.73
|
0.72
|
0.69
|
0.65
|
0.62
|
|
Net investment income (loss)
|
3.18
(a)
|
3.18
|
3.15
|
2.72
|
2.16
|
2.08
|
|
Portfolio turnover rate
|
12
(n)
|
20
|
20
|
15
|
16
|
20
|
|
Net assets at end of period (000 omitted)
|
$300,465
|
$311,056
|
$319,618
|
$320,505
|
$342,280
|
$422,382
|
See Notes to Financial Statements
18
Financial Highlights – continued
|
(a)
|
Annualized.
|
|
(b)
|
Estimated tax return of capital. All or a portion of this amount may be redesignated
as
ordinary income and/or capital gains at fiscal year end when the tax character of
distributions
is determined. Please refer to “Tax Matters and Distributions” under Note 2 of the Notes to
Financial Statements for additional information regarding the tax character of the fund’s
distributions.
|
|
(d)
|
Per share data is based on average shares outstanding.
|
|
(j)
|
Total return at net asset value is calculated using the net asset value of the fund,
not the
publicly traded price and therefore may be different than the total return at market
value.
|
|
(n)
|
Not annualized.
|
|
(s)
|
From time to time the fund may receive proceeds from litigation settlements, without
which
performance would be lower.
|
|
(w)
|
Per share amount was less than $0.01.
|
|
(x)
|
The net asset values and total returns at net asset value have been calculated on
net assets
which include adjustments made in accordance with U.S. generally accepted accounting
principles required at period end for financial reporting purposes.
|
See Notes to Financial Statements
19
Notes to Financial Statements
(unaudited)
(1) Business and Organization
MFS Intermediate Income Trust (the fund) is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended, as a
diversified closed-end management investment company.
The fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB)
Accounting Standards Codification Topic 946 Financial Services - Investment Companies.
(2) Significant Accounting Policies
General — The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates. In the preparation of these
financial statements, management has evaluated subsequent events occurring after the
date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. The fund invests in foreign securities. Investments in foreign securities are vulnerable to the effects of changes in the relative values
of the local currency and the U.S. dollar and to the effects of changes in each country’s market, economic, industrial, political, regulatory, geopolitical, environmental,
public health, and other conditions.
Segment Reporting — An operating segment is defined in FASB Accounting Standards Codification Topic 280, Segment Reporting as a component of a public entity that engages in business activities from which it may recognize revenues and
incur expenses, has operating results that are regularly reviewed by the entity’s chief operating decision maker (CODM) in making resource allocation decisions and assessing segment performance, and for which discrete financial information is available. The fund represents a single operating segment and the Chairman’s Committee of the fund's adviser acts as the segment’s CODM. The fund’s total returns, expense ratios, and changes in net assets which are used by the CODM to assess segment performance and to make resource allocation decisions to the segment are consistent with that presented within the fund’s financial statements.
Balance Sheet Offsetting — The fund's accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination
of the agreement, the International Swaps and Derivatives Association (ISDA) Master
Agreement, or similar agreement, does not result in an offset of reported amounts
of financial assets and financial liabilities in the Statement of Assets and Liabilities
across transactions between the fund and the applicable counterparty. The fund's right to
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the
particular jurisdiction to which a specific master netting agreement counterparty
is subject. Balance sheet offsetting disclosures, to the extent applicable to the fund,
have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.
20
Notes to Financial Statements (unaudited) - continued
Investment Valuations — Subject to its oversight, the fund's Board of Trustees has delegated primary responsibility for determining or causing to be determined the value
of the fund’s investments to MFS as the fund's adviser, pursuant to the fund’s valuation policy and procedures which have been adopted by the adviser and approved by the Board. In accordance with Rule 2a-5 under the Investment Company Act of 1940, the
Board of Trustees designated the adviser as the “valuation designee” of the fund. If the adviser, as valuation designee, determines that reliable market quotations are not
readily available for an investment, the investment is valued at fair value as determined
in good faith by the adviser in accordance with the adviser’s fair valuation policy and procedures.
Under the fund's valuation policy and procedures, debt instruments and floating rate
loans, including restricted debt instruments, are generally valued at an evaluated
or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price on their primary exchange as provided by a third-party pricing service.
Futures contracts for which there were no trades that day for a particular position
are generally valued at the closing bid quotation on their primary exchange as provided
by a third-party pricing service. Swap agreements are generally valued using valuations provided by a third-party pricing service, which for cleared swaps includes an evaluation
of any trading activity at the clearinghouses. Open-end investment companies are generally valued at net asset value per share. 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.
Under the fund’s valuation policy and procedures, market quotations are not considered to be readily available for debt instruments, floating rate loans, and
many types of derivatives. These investments are generally valued at fair value based on
information from third-party pricing services or otherwise determined by the adviser
in accordance with the adviser’s fair valuation policy and procedures. 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. In determining values, third-party
pricing services can utilize both transaction data and market information such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics, spreads and
other market data. Pricing services generally value debt instruments assuming orderly transactions of institutional round lot sizes, but a fund may hold or transact in
such securities in smaller, odd lot sizes. In instances where a fund holds an odd lot size
position in a debt instrument, such position will typically be valued using the pricing
agent’s institutional round lot price for the debt instrument. Odd lots may trade at lower prices than institutional round lots, and the fund may receive different prices
when it sells odd lot positions than it would receive for sales of institutional round
lot positions. An investment may also be valued at fair value if the adviser determines
that the investment’s value has been materially affected 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 halt 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
21
Notes to Financial Statements (unaudited) - continued
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 significant
unobservable inputs, which may include the adviser's own assumptions in determining
the fair value of investments. Other financial instruments are derivative instruments,
such as futures contracts and swap agreements. The following is a summary of the levels used as of April 30, 2026 in valuing the fund's assets and liabilities:
|
Financial Instruments
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
U.S. Treasury Bonds &
U.S. Government Agencies &
Equivalents
|
$—
|
$65,703,059
|
$—
|
$65,703,059
|
|
Non - U.S. Sovereign Debt
|
—
|
2,678,754
|
—
|
2,678,754
|
|
Municipal Bonds
|
—
|
11,448,504
|
—
|
11,448,504
|
|
U.S. Corporate Bonds
|
—
|
115,189,846
|
—
|
115,189,846
|
|
Residential Mortgage-Backed
Securities
|
—
|
32,300,112
|
—
|
32,300,112
|
|
Commercial Mortgage-Backed
Securities
|
—
|
6,666,586
|
—
|
6,666,586
|
|
Asset-Backed Securities (including
CDOs)
|
—
|
14,458,091
|
—
|
14,458,091
|
|
Foreign Bonds
|
—
|
37,944,928
|
—
|
37,944,928
|
|
Investment Companies
|
13,205,733
|
—
|
—
|
13,205,733
|
|
Total
|
$13,205,733
|
$286,389,880
|
$—
|
$299,595,613
|
|
Other Financial Instruments
|
|
|
|
|
|
Futures Contracts – Liabilities
|
$(1,361,651
)
|
$—
|
$—
|
$(1,361,651
)
|
|
Swap Agreements – Assets
|
—
|
23,668
|
—
|
23,668
|
For further information regarding security characteristics, see the Portfolio of Investments.
Derivatives — The fund uses derivatives primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease
interest rate or currency exposure, or as alternatives to direct investments. Derivatives
22
Notes to Financial Statements (unaudited) - continued
are used for hedging or non-hedging purposes. While hedging can reduce or eliminate
losses, it can also reduce or eliminate gains. When the fund uses derivatives as an
investment to increase market exposure, or for hedging purposes, gains and losses
from derivative instruments may be substantially greater than the derivative’s original cost.
The derivative instruments used by the fund during the period were futures contracts and swap agreements. Depending on the type of derivative, a fund may exit
a derivative position by entering into an offsetting transaction with a counterparty
or exchange, negotiating an agreement with the derivative counterparty, or novating the
position to a third party. The fund may be unable to promptly close out a futures
position in instances where the daily fluctuation in the price for that type of future
exceeds the daily limit set by the exchange. The fund's period end derivatives, as
presented in the Portfolio of Investments and the associated Derivative Contract tables,
generally are indicative of the volume of its derivative activity during the period.
The following table presents, by major type of derivative contract, the fair value,
on a gross basis, of the asset and liability components of derivatives held by the fund
at April 30, 2026 as reported in the Statement of Assets and Liabilities:
|
|
|
Fair Value (a)
|
|
|
Risk
|
Derivative Contracts
|
Asset Derivatives
|
Liability Derivatives
|
|
Interest Rate
|
Futures Contracts
|
$—
|
$(1,361,651
)
|
|
Interest Rate
|
Cleared Swap Agreements
|
23,668
|
—
|
|
Total
|
|
$23,668
|
$(1,361,651
)
|
(a)
Values presented in this table for futures contracts and cleared swap agreements correspond
to the values reported in the Portfolio of Investments. Only the current day net variation
margin for futures contracts and cleared swap agreements is reported separately within
the
Statement of Assets and Liabilities.
The following table presents, by major type of derivative contract, the realized gain
(loss) on derivatives held by the fund for the six months ended April 30, 2026 as
reported in the Statement of Operations:
|
Risk
|
Futures
Contracts
|
|
Interest Rate
|
$(157,288
)
|
The following table presents, by major type of derivative contract, the change in
unrealized appreciation or depreciation on derivatives held by the fund for the six
months ended April 30, 2026 as reported in the Statement of Operations:
|
Risk
|
Futures
Contracts
|
Swap
Agreements
|
|
Interest Rate
|
$(1,290,934
)
|
$23,668
|
Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain, but not all, uncleared
derivatives, the fund attempts to reduce its exposure to counterparty credit risk
whenever possible by entering into an ISDA Master Agreement on a bilateral basis.
The ISDA Master Agreement gives each party to the agreement the right to terminate all
transactions traded under such agreement if there is a specified deterioration in
the credit quality of the other party. Upon an event of default or a termination of the
ISDA
23
Notes to Financial Statements (unaudited) - continued
Master Agreement, the non-defaulting party has the right to close out all transactions
traded under such agreement and to net amounts owed under each agreement to one net amount payable by one party to the other. This right to close out and net payments
across all transactions traded under the ISDA Master Agreement could result in a reduction of the fund's credit risk to such counterparty equal to any amounts payable
by the fund under the applicable transactions, if any.
Collateral and margin requirements differ by type of derivative. For exchange-traded
and cleared derivatives (e.g., futures contracts, cleared swaps, and exchange-traded
options), margin requirements are set by the exchange or clearing broker and the clearing house and collateral, in the form of cash or securities, is posted by the
fund directly with the exchange or clearing broker. Collateral terms are counterparty agreement specific for uncleared derivatives (e.g., forward foreign currency exchange
contracts, uncleared swap agreements, and uncleared options). Collateral, in the form
of cash and securities, is held in segregated accounts with the fund's custodian in
connection with these agreements. For derivatives traded under an ISDA Master Agreement, which contains a credit support annex, the collateral requirements are
netted across all transactions traded under such counterparty-specific agreement and
an amount is posted from one party to the other to collateralize such obligations.
Cash that has been segregated or delivered to brokers to cover the fund's collateral or
margin obligations under derivative contracts, if any, will be reported separately
in the Statement of Assets and Liabilities as cash collateral posted for uncleared derivatives
and/or cash pledged for exchange-traded or cleared derivatives. Securities pledged
as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments. The fund may be required to make payments of interest on uncovered collateral or margin obligations with the broker. Any such payments are included in
“Miscellaneous” expense in the Statement of Operations.
Futures Contracts — The fund entered into futures contracts which may be used to hedge against or obtain broad market exposure, interest rate exposure, currency exposure, or to manage duration. A futures contract represents a commitment for the
future purchase or sale of an asset at a specified price on a specified date.
Upon entering into a futures contract, the fund is required to deposit with the broker,
either in cash or securities, an initial margin in an amount equal to a specified
percentage of the notional amount of the contract. Subsequent payments (variation
margin) are made or received by the fund each day, depending on the daily fluctuations
in the value of the contract, and are recorded for financial statement purposes as
unrealized gain or loss by the fund until the contract is closed or expires at which
point the gain or loss on futures contracts is realized.
The fund bears the risk of interest rates, exchange rates or securities prices moving
unexpectedly, in which case, the fund may not achieve the anticipated benefits of
the futures contracts and may realize a loss. While futures contracts may present less
counterparty risk to the fund since the contracts are exchange traded and the exchange’s clearinghouse guarantees payments to the broker, there is still counterparty credit risk due to the insolvency of the broker. The fund’s maximum risk of loss due to counterparty credit risk is equal to the margin posted by the fund to the broker plus
any gains or minus any losses on the outstanding futures contracts.
24
Notes to Financial Statements (unaudited) - continued
Swap Agreements — The fund entered into swap agreements which generally involve a periodic exchange of cash payments on a net basis, at specified intervals
or upon the occurrence of specified events, between the fund and a counterparty. Certain
swap agreements may be entered into as a bilateral contract (“uncleared swaps”) while others are required to be centrally cleared (“cleared swaps”).
Both cleared and uncleared swap agreements are marked to market daily. The value
of uncleared swap agreements is reported in the Statement of Assets and Liabilities as
“Uncleared swaps, at value” which includes any related interest accruals to be paid or received by the fund. For cleared swaps, payments (variation margin) are made or
received by the fund each day, depending on the daily fluctuations in the value of
the cleared swap, such that only the current day net receivable or payable for variation
margin is reported in the Statement of Assets and Liabilities.
For both cleared and uncleared swaps, premiums paid or received at the inception of
the agreements are amortized over the term of the agreement as realized gain or loss
on swap agreements in the Statement of Operations. The periodic exchange of net cash payments, as well as any liquidation payment received or made upon early termination, are recorded as a realized gain or loss on swap agreements in the Statement of Operations. The change in unrealized appreciation or depreciation on
swap agreements in the Statement of Operations reflects the aggregate change over
the reporting period in the value of swaps net of any unamortized premiums paid or
received.
Risks related to swap agreements include the possible lack of a liquid market, unfavorable market and interest rate movements of the underlying instrument and the
failure of the counterparty to perform under the terms of the agreements. The fund's
maximum risk of loss from counterparty credit risk is the discounted net value of
the cash flows to be received from/paid to the counterparty over the contract's remaining
life, to the extent that the amount is positive. To address counterparty risk, uncleared
swap agreements are limited to only highly-rated counterparties. Risk is further
reduced by having an ISDA Master Agreement (“ISDA”) between the fund and the counterparty and, where applicable, by the posting of collateral by the counterparty
to the fund to cover the fund’s exposure to the counterparty under such ISDA. The fund's counterparty risk due to cleared swaps is mitigated by the fact that the clearinghouse
is the counterparty to the transaction and the regulatory requirement safeguards in the
event of a clearing broker bankruptcy.
The fund entered into interest rate swap agreements in order to manage its exposure
to interest rate fluctuations. Interest rate swap agreements involve the periodic
exchange of cash flows, between the fund and a counterparty, based on the difference
between two interest rates applied to a notional principal amount. The two interest
rates exchanged may either be a fixed rate and a floating rate or two floating rates
based on different indices.
Mortgage-Backed/Asset-Backed Securities — The fund invests a significant portion of its assets in asset-backed and/or mortgage-backed securities. For these securities,
the value of the debt instrument also depends on the credit quality and adequacy of
the underlying assets or collateral as well as whether there is a security interest
in the underlying assets or collateral. Enforcing rights, if any, against the underlying
assets or collateral may be difficult. U.S. Government securities not supported as to the payment
25
Notes to Financial Statements (unaudited) - continued
of principal or interest by the U.S. Treasury, such as those issued by Fannie Mae,
Freddie Mac, and the Federal Home Loan Banks, are subject to greater credit risk than are
U.S. Government securities supported by the U.S. Treasury, such as those issued by
Ginnie Mae.
Indemnifications — Under the fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of
the performance of their duties to the fund. Additionally, in the normal course of business,
the fund enters into agreements with service providers that may contain indemnification clauses. The fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that
have not yet occurred.
Investment Transactions and Income — Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Interest payments received in additional securities are recorded on the ex-interest date in
an amount equal to the value of the security on such date.
The fund may receive proceeds from litigation settlements. Any proceeds received from
litigation involving portfolio holdings are reflected in the Statement of Operations
in realized gain/loss if the security has been disposed of by the fund or in unrealized
gain/loss if the security is still held by the fund. Any other proceeds from litigation
not related to portfolio holdings are reflected as other income in the Statement of Operations.
Investment transactions are recorded on the trade date. In determining the net gain
or loss on securities sold, the cost of securities is determined on the identified cost
basis.
The fund may purchase or sell mortgage-backed securities on a To Be Announced (“TBA”) basis. A TBA transaction is subject to extended settlement and typically does not designate the actual security to be delivered, but instead includes an approximate
principal amount. The price of the TBA security and the date that it will be settled
are fixed at the time the transaction is negotiated. The value of the security varies
with market fluctuations and no interest accrues to the fund until settlement takes place.
TBA purchase and sale commitments are held at carrying amount, which approximates
fair value and are categorized as level 2 within the fair value hierarchy and included
in TBA purchase and TBA sale commitments in the Statement of Assets and Liabilities,
as applicable. Losses may arise as a result of changes in the value of the TBA investment
prior to settlement date or due to counterparty non-performance.
The fund may also enter into mortgage dollar rolls, typically TBA dollar rolls, in
which the fund sells TBA mortgage-backed securities to financial institutions and simultaneously agrees to repurchase similar (same issuer, type and coupon) securities
at a later date at an agreed-upon price. During the period between the sale and repurchase, the fund will not be entitled to receive interest and principal payments
on the securities sold. The fund accounts for dollar roll transactions as purchases and
sales and realizes gains and losses on these transactions. Dollar roll transactions involve
the risk that the market value of the securities that the fund is required to purchase
may decline below the agreed upon repurchase price of those securities.
To mitigate the counterparty credit risk on To Be Announced (“TBA”) transactions, mortgage dollar rolls, and other types of forward settling mortgage-backed and asset-backed security transactions, the fund whenever possible enters into a Master
26
Notes to Financial Statements (unaudited) - continued
Securities Forward Transaction Agreement (“MSFTA”) on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions.
The MSFTA gives each party to the agreement the right to terminate all transactions traded
under such agreement if there is a specified deterioration in the credit quality of
the other party. Upon an event of default or a termination of the MSFTA, the non-defaulting party has the right to close out all transactions traded under such
agreement and to net amounts owed under each transaction to one net amount payable by one party to the other. This right to close out and net payments across
all transactions traded under the MSFTA could result in a reduction of the fund's credit
risk to such counterparty equal to any amounts payable by the fund under the applicable
transactions, if any.
For mortgage-backed and asset-backed securities traded under a MSFTA, the collateral
and margining requirements are contract specific. Collateral amounts across all transactions traded under such agreement are netted and an amount is posted from one party to the other to collateralize such obligations. Cash posted to cover the
fund's collateral or margin obligations under a MSFTA, if any, will be reported separately
on the Statement of Assets and Liabilities as cash collateral posted. Securities pledged
as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments.
Tax Matters and Distributions — The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As
a result, no provision for federal income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for generally a
three year period. Management has analyzed the fund’s tax positions taken on federal and state tax returns for all open tax years and does not believe that there are any
uncertain tax positions that require recognition of a tax liability. Foreign taxes,
if any, have been accrued by the fund in the accompanying financial statements in accordance
with the applicable foreign tax law. Foreign income taxes may be withheld by certain
countries in which the fund invests. Additionally, capital gains realized by the fund
on securities issued in or by certain foreign countries may be subject to capital gains
tax imposed by those countries.
Distributions to shareholders are recorded on the ex-dividend date. The fund employs
a managed distribution policy whereby the fund seeks to pay monthly distributions based
on an annual rate of 8.50% of the fund’s average monthly net asset value. As a result, distributions may exceed actual earnings which may result in a tax return of capital.
Distributions in any year may include a substantial return of capital component. For
the six months ended April 30, 2026, the amount of distributions estimated to be a tax
return of capital was approximately $8,098,431 which is reported as distributions
from other sources in the Statements of Changes in Net Assets. All or a portion of this
amount may be redesignated as ordinary income and/or capital gains at fiscal year
end. Please refer to the Financial Highlights for distributions of tax returns of capital
made during the prior five years. Income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from U.S. generally accepted
accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character.
27
Notes to Financial Statements (unaudited) - continued
These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense,
gain or loss in different periods for financial statement and tax purposes will reverse
at some time in the future.
Book/tax differences primarily relate to amortization of premium and accretion of
discount of debt securities.
The tax character of distributions made during the six months ended April 30, 2026 will
be determined at fiscal year end. The tax character of distributions declared to shareholders for the last fiscal year is as follows:
|
|
Year ended
10/31/25
|
|
Ordinary income (including any
short-term capital gains)
|
$10,341,044
|
|
Tax return of capital (b)
|
16,461,858
|
|
Total distributions
|
$26,802,902
|
|
(b)
|
Distributions in excess of tax basis earnings and profits are reported in the financial
statements
as a tax return of capital.
|
The federal tax cost and the tax basis components of distributable earnings were as
follows:
|
As of 4/30/26
|
|
|
Cost of investments
|
$305,505,077
|
|
Gross appreciation
|
1,958,299
|
|
Gross depreciation
|
(7,867,763)
|
|
Net unrealized appreciation (depreciation)
|
$(5,909,464)
|
|
As of 10/31/25
|
|
|
Capital loss carryforwards
|
(12,583,159)
|
|
Other temporary differences
|
(80,851)
|
|
Net unrealized appreciation (depreciation)
|
(4,772,468)
|
The aggregate cost above includes prior fiscal year end tax adjustments, if applicable.
As of October 31, 2025, the fund had capital loss carryforwards available to offset
future realized gains. These net capital losses may be carried forward indefinitely
and their character is retained as short-term and/or long-term losses. Such losses are
characterized as follows:
|
Short-Term
|
$(1,263,102
)
|
|
Long-Term
|
(11,320,057
)
|
|
Total
|
$(12,583,159
)
|
(3) Transactions with Affiliates
Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.32% of the fund’s average daily net assets and 5.65% of gross income. Gross income is calculated based on tax elections that generally include the
accretion of discount and exclude the amortization of premium, which may differ from
28
Notes to Financial Statements (unaudited) - continued
investment income reported in the Statement of Operations. MFS has agreed to reduce
its management fee to the lesser of the contractual management fee as set forth above
or 0.85% of the fund's average daily net assets. This written agreement will continue
until modified by the fund's Board of Trustees, but such agreement will continue at
least until October 31, 2026. For the six months ended April 30, 2026, the fund’s average daily net assets and gross income fees did not meet the threshold required
to waive the management fee under this agreement. The management fee, from net assets and gross income, incurred for the six months ended April 30, 2026 was equivalent to an annual effective rate of 0.55% of the fund’s average daily net assets.
Transfer Agent — The fund engages Computershare Trust Company, N.A. (“Computershare”) as the sole transfer agent for the fund. MFS Service Center, Inc. (MFSC) monitors and supervises the activities of Computershare for an agreed upon
fee approved by the Board of Trustees. For the six months ended April 30, 2026, fees paid
to MFSC amounted to $15,926.
Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative
services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on
average daily net assets. The administrative services fee is computed daily and paid
monthly. The administrative services fee incurred for the six months ended April 30,
2026 was equivalent to an annual effective rate of 0.0167% of the fund's average daily net assets.
Trustees’ and Officers’ Compensation — The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. Independent Trustees’ compensation is accrued daily and paid subsequent to each Trustee Board meeting. The
fund does not pay compensation directly to Trustees or officers of the fund who are
also officers of the investment adviser, all of whom receive remuneration from MFS
for their services to the fund. Certain officers and Trustees of the fund are officers
or directors of MFS and MFSC.
Other — The fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and
liquidity. This money market fund does not pay a management fee to MFS but does incur investment and operating costs.
(4) Portfolio Securities
For the six months ended April 30, 2026, purchases and sales of investments, other
than short-term obligations, were as follows:
|
|
Purchases
|
Sales
|
|
U.S. Government securities
|
$25,131,975
|
$13,454,805
|
|
Non-U.S. Government securities
|
10,261,438
|
24,285,347
|
(5) Shares of Beneficial Interest
The fund's Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest. The Trustees have authorized the
repurchase by the fund of up to 10% annually of its own shares of beneficial interest. During the six months ended April 30, 2026 and the year ended October 31, 2025, there were no transactions in fund shares.
29
Notes to Financial Statements (unaudited) - continued
(6) Line of Credit
The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the
fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of
banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal
to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate), 2) the Federal
Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon
spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of
credit expires on March 11, 2027 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged
to each fund, based on its borrowings, at rates equal to customary reference rates plus
an agreed upon spread. For the six months ended April 30, 2026, the fund’s commitment fee and interest expense were $710 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.
(7) Investments in 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. The following were affiliated issuers for the six months ended April 30, 2026:
|
Affiliated Issuers
|
Beginning
Value
|
Purchases
|
Sales
Proceeds
|
Realized
Gain
(Loss)
|
Change in
Unrealized
Appreciation or
Depreciation
|
Ending
Value
|
|
MFS Institutional Money
Market Portfolio
|
$18,454,334
|
$44,139,476
|
$49,386,799
|
$(171
)
|
$(1,107
)
|
$13,205,733
|
|
Affiliated Issuers
|
Dividend
Income
|
Capital Gain
Distributions
|
|
MFS Institutional Money Market Portfolio
|
$401,881
|
$—
|
(8) Subsequent Event
On April 29, 2026, the Board of Trustees (the “Board”) of the fund approved a proposal to appoint abrdn Inc. (“Aberdeen”) as the fund’s new investment adviser and nominated five new trustees as a new board for the fund, as discussed further below
(collectively, the “Aberdeen Proposals”). Shareholders of the fund as of May 1, 2026, will be asked to approve the Aberdeen Proposals at a special meeting of shareholders,
scheduled for June 18, 2026, or such other date as the Board may approve. If approved by shareholders of the fund, it is expected that the Aberdeen Proposals will
take effect in early 3rd quarter of 2026, subject to the satisfaction or waiver of
certain conditions agreed to between MFS and Aberdeen relating to the Aberdeen Proposals.
Previously, on December 10, 2025, the Board approved a reorganization of the fund
with and into the MFS Multimarket Income Trust (the “Reorganization”), subject to approval by the fund’s shareholders. As sufficient shareholder votes were not received and MFS believes that continued solicitation of the fund’s shareholders was unlikely to
30
Notes to Financial Statements (unaudited) - continued
result in approval of the Reorganization, MFS recommended the Aberdeen Proposals to
the Board and the Board has recommended the Aberdeen Proposals for approval by the fund’s shareholders as an alternative to the Reorganization.
31
Report of Independent Registered Public
Accounting Firm
To the Board of Trustees and Shareholders of MFS Intermediate Income Trust:
Results of Review of Interim Financial Information
We have reviewed the accompanying statement of assets and liabilities of MFS Intermediate Income Trust (the “Trust”), including the portfolio of investments, as of April 30, 2026, and the related statements of operations and changes in net
assets and the financial highlights for the six-month period ended April 30, 2026,
and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made
to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (PCAOB), the statement of assets and liabilities, including the portfolio of investments, as of October 31, 2025 (not presented
herein), the related statement of operations for the year ended October 31, 2025 (not
presented herein), the statements of changes in net assets for the years ended October 31, 2025, and October 31, 2024 (2024 not presented herein) and the financial
highlights for each of the five years in the period ended October 31, 2025; and in
our report dated December 15, 2025, we expressed an unqualified opinion on those financial statements.
Basis for Review Results
These interim financial information are the responsibility of the Trust's management.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our review in accordance with the standards of the PCAOB. A review of
interim financial information consists principally of applying analytical procedures
and making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the standards
of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
June 12, 2026
June 12, 2026
We have served as the auditor of one or more of the MFS investment companies since
1924.
32
Board Review of Investment
Advisory Agreement
MFS Intermediate Income Trust
The Board of Trustees of the Fund (the “Board”) has considered and approved an arrangement pursuant to which abrdn Inc. (“Aberdeen”) will serve as the new investment adviser to the Fund (the “Investment Advisory Agreement”), subject to the approval of the Fund’s shareholders at a meeting to be held on June 18, 2026, or any adjournment thereof.
At a meeting on December 10, 2025 (the “December Meeting”), MFS and abrdn Inc. (“Aberdeen”) and, for the purposes specified therein, Aberdeen Group plc, entered into a purchase agreement (the “Purchase Agreement”) pursuant to which Aberdeen would acquire certain assets and liabilities related to MFS’ business of providing investment management services with respect to the assets of the Fund and certain
other registered investment companies (the “Business”) if certain closed-end fund reorganizations were approved, and upon satisfaction or waiver of certain other conditions. Under the Purchase Agreement, MFS agreed to transfer to Aberdeen, in exchange for a cash payment at the closing of the Transaction, and subject to certain
conditions and exceptions, (i) all right, title and interest of MFS in and to the
books and records relating to the Business of the Trusts; (ii); the historical investment performance
records of the funds being reorganized; and (iii) the goodwill of the Business (the
“Transaction”).
In connection with the Transaction, at the December Board Meeting, the Trustees approved, subject to shareholder approval, the reorganization of the Fund and certain
other MFS closed-end funds with and into MFS Multimarket Income Trust (the “Reorganization”). A meeting of the Fund’s shareholders to vote on the Reorganization was called for March 11, 2026 and adjourned to enable further solicitation. However,
the required favorable vote of shareholders of the Fund was not reached and MFS adjourned the meeting without a formal vote on the proposed Reorganization. The Reorganization with respect to certain other closed-end funds was approved.
On April 29, 2026 (the “April Board Meeting”, together with the December Board Meeting, the “Board Meetings” and each a “Board Meeting”) the Trustees, including all of the non-interested (“independent”) Trustees, met to consider various factors relating to the Transaction, including whether to recommend to shareholders of the
Fund the approval of the Investment Advisory Agreement. In addition, independent Trustees met on several occasions together and separately with senior executives and
other representatives of MFS and Aberdeen to discuss various aspects of the Transaction. The Trustees were assisted in their evaluation of the Investment Advisory
Agreement by independent legal counsel, from whom they received assistance and advice, including a review of the legal standards applicable to the consideration
of advisory arrangements, and with whom they met separately from MFS and Aberdeen management. MFS had recommended that the Board approve the Investment Advisory Agreement in connection with its consideration of the broader Transaction.
In connection with their deliberations regarding the Investment Advisory Agreement,
the Trustees, including the independent Trustees, considered such information and
factors as they believed, in light of the legal advice furnished to them and their
own business judgment, to be relevant. As described below, among other factors, the Trustees considered the nature, quality, and extent of the various investment advisory,
33
Board Review of Investment Advisory Agreement - continued
administrative, and shareholder services to be performed by Aberdeen under the Investment Advisory Agreement, and other proposed arrangements between Aberdeen and the Fund, as appropriate. The Board also considered certain other alternatives
to the approval of the Investment Advisory Agreement but ultimately concluded approval
of the Investment Advisory Agreement) presented an attractive alternative to the Fund’s participation in the Reorganization and serves the best interests of the Fund’s shareholders, under the then current circumstances.
At the request of the independent Trustees, Aberdeen and MFS provided detailed information to the Board relevant to the Board’s consideration of the Investment Advisory Agreement, including information about the broader Transaction and any impacts on shareholders, as well as information about Aberdeen and MFS. MFS and Aberdeen responded to questions and supplemental information requests from the Board in advance of and at each Board Meeting. In connection with their Board Meeting, the Trustees received and relied upon materials that included, among other
items: (i) general and financial information regarding Aberdeen and its affiliates;
(ii) information about the Transaction; (iii) information regarding Aberdeen personnel
and services to be provided to the Fund; (iv) information relating to Aberdeen’s investment advisory services and performance generally including performance of comparable accounts managed by Aberdeen and peer groups; (v) Aberdeen’s brokerage practices and allocation of portfolio transactions (vi) information regarding
the Fund’s fees and expenses, including the fees and expenses proposed under the Investment Advisory Agreement; (vii) Aberdeen’s expected profitability with respect to their management of the Fund and other benefits; (viii) Aberdeen’s governance, oversight and compliance policies and procedures as proposed for the Fund; (ix) information relating to Aberdeen’s cybersecurity, artificial intelligence risk and business continuity; (x) information relating to Aberdeen’s affiliates and management of any potential conflicts of interest; (xi) and proposed services arrangements for the
Fund. The independent Trustees considered that the terms of the Investment Advisory
Agreement were similar to those of the proposed management agreement between MFS Multimarket Income Trust and Aberdeen, and that certain information received in
connection with its December Board Meeting remained relevant to the Board’s consideration of the Investment Advisory Agreement. In connection with requests submitted in advance of the April Board Meeting, the independent Trustees requested
that Aberdeen and MFS provide updated information in response to requests submitted
in advance of the December Board Meeting. In addition to the information received
in connection with the December Board Meeting, the Board also considered information
it had previously received regarding Aberdeen and the proposed Transaction at meetings held earlier with MFS management and Aberdeen. In addition, prior to the
December Board Meeting, independent Trustees met with each trustee nominated by Aberdeen to serve on the Fund’s board if the Investment Advisory Agreement was approved by shareholders. The independent Trustees approved the nominees and recommended that shareholders of the Fund elect the nominees.
The Trustees’ conclusion to approve, and to recommend that shareholders approve, the Investment Advisory Agreement was based on a comprehensive consideration of all information provided to the Board and not the result of any single factor. Some of
the factors that figured particularly in the Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently
34
Board Review of Investment Advisory Agreement - continued
from one another, giving different weights to various factors. In reaching the decision
to approve, and to recommend that shareholders approve, the Investment Advisory Agreement, the Board considered a number of factors, including, among others and in
no order of priority:
Nature, extent, and quality of services
The Trustees received and considered various information regarding the nature, extent,
and quality of the advisory services to be provided by Aberdeen to the Fund under
the Investment Advisory Agreement. Aberdeen’s most recent investment adviser registration forms were provided to the Trustees, as were responses to detailed requests
submitted by the independent Trustees’ independent legal counsel on their behalf, as described above. The Trustees also had previously met with senior personnel across
various departments of Aberdeen. The Trustees considered the information provided
with respect to the proposed experienced portfolio management teams and other resources that would be dedicated to the Fund, as well as the investment philosophies
and processes that would be followed by those individuals in managing the Fund. Further, the Trustees noted that Aberdeen has advised the Trustees that in transitioning
the management of the Fund, Aberdeen would be focused on minimizing any disruption to the Fund and its shareholders and that it expects any repositioning
of the Fund’s investment portfolio to be undertaken by Aberdeen in connection with the Transaction would be done in a manner that minimizes transaction costs and mitigates
adverse tax consequences. The Trustees noted that Aberdeen has substantial experience in assimilating unaffiliated closed-end funds into its family of funds.
The Trustees considered that Aberdeen and its affiliates managed 15 U.S. closed-end
funds and 13 non-U.S. closed-end funds, totaling $28.7 billion in assets as of February 28, 2026. The Trustees additionally considered Aberdeen’s commitment to its asset management business, in particular its larger closed-end fund platform, its
knowledge of the closed-end fund marketplace, and dedicated closed-end fund investor services professionals.
The Trustees noted Aberdeen’s and MFS’ representations that, if Aberdeen were approved as the Fund’s investment adviser, there would be no expected diminution in the nature, quality and extent of services provided to the Fund and its respective
shareholders, including administrative, regulatory and compliance services. The Trustees
further considered the valuation policies of Aberdeen and MFS are substantially similar.
Based on the foregoing and other relevant information reviewed, the Trustees concluded that they were satisfied with assurances from Aberdeen and MFS as to the
expected nature, extent and quality of the services to be provided to the Fund under
the Investment Advisory Agreement.
Investment performance
The Trustees considered the investment performance of Aberdeen advised closed-end
funds, generally as well as the investment performance of other Aberdeen advised products, as the Trustees deemed relevant. The Trustees specifically considered the
performance of those Aberdeen advised products with investment objectives and/or strategies that are comparable with the strategy of the Fund. The Trustees considered
performance results for various periods ended September 30, 2025 and evaluated performance in comparison to each relevant Aberdeen advised products’ relevant
35
Board Review of Investment Advisory Agreement - continued
benchmark index, as applicable, as well as against the performance of the Fund. The
Trustees were generally satisfied with Aberdeen’s performance as an investment adviser with respect to those products with strategies and/or objectives comparable to those
of the Fund.
Fees, Expenses and Economies of Scale
The Trustees considered that the Investment Advisory Agreement will have a different
fee structure and different fee rates than the MFS Management Agreement. The Trustees considered that the investment advisory fee rate under the Investment Advisory Agreement will be computed with reference to the Fund’s average daily total Managed Assets[1] and that currently, under the MFS Management Agreement, the investment advisory fee rate is computed with reference to the Fund’s average daily total net assets plus a percentage of the Fund’s gross income (i.e., income other than gains from the sale of securities, short-term gains from options and futures transactions
and premium income from options written). The Trustees therefore considered the fees
and expenses of the Fund, as compared to the proposed fees and expenses for the Fund on the basis of both net and Managed Assets.
The Trustees considered that the Fund’s estimated total annual expenses, after application of Aberdeen’s proposed expense limitation, would be lower on a Managed Asset basis and on a net asset basis as compared to the current total annual fund
operating expenses of the Fund. The Trustees also took into account that the expense
limitation arrangement could not be amended or terminated during the two-year period without the approval of a majority of the Fund’s independent Trustees. The Trustees also considered that it is expected that the Fund’s total annual expenses will be higher on a Managed Assets and net assets basis excluding the Aberdeen Expense Limitation as compared to the Fund’s total annual expenses for a period of at least two years from the date on which Aberdeen begins managing the Fund.
Additionally, the Trustees considered the estimated fees and expenses of the Fund
under the Investment Advisory Agreement in the context of Broadridge Financial Solutions, Inc. expense peer groups last reviewed by the Trustees in connection with
the Fund’s most recent contract renewal. The Trustees also evaluated the fees and expenses of other comparable funds that MFS and Aberdeen had deemed relevant in the context of the broader Transaction and as provided in response to the Trustees’ information request in advance of the December Board Meeting and again in advance
of the April Board Meeting.
The Trustees also noted that while the Fund, as a closed-end fund, would not present
the opportunity for economies of scale on its own, Aberdeen’s large platform presented opportunities for the Fund to receive the benefits of economies of scale
through Aberdeen’s relationships with service providers and other operational efficiencies. The Trustees noted that Aberdeen’s proposed advisory fee for the Fund includes multiple breakpoints in the advisory fee rate for the Fund and considered
Aberdeen’s representation that Aberdeen regularly assesses the potential of the closed-end funds it manages to raise additional assets through new offerings (for
example, at the market offerings and rights offerings) taking into account a fund’s discount or premium and prevailing market conditions. The Trustees also noted Aberdeen’s representation that it would attempt to achieve economies of scale through relationships with brokers, administrative systems and other efficiencies. The Trustees
considered the ways in which Aberdeen may be able to achieve economies of scale for
36
Board Review of Investment Advisory Agreement - continued
the Fund, but noted that there can be no assurances that economies of scale will be
achieved by Aberdeen. Under the circumstances, the Board concluded that the proposed advisory fee for the Fund is not excessive and that the advisory fee structure
is appropriate.
Profitability
The Trustees also considered information prepared by Aberdeen relating to Aberdeen’s estimated costs and profits with respect to the Fund as well as Aberdeen’s methodologies used to determine and allocate its internal costs to the Fund (for purposes of such estimates). The Trustees further noted the pro forma nature of the
profitability information presented and that it was not possible to predict with certainty
what Aberdeen’s profitability with respect to the Fund would be or how Aberdeen’s overall profitability actually would be affected by becoming the investment adviser
to the Fund. They concluded, however, that they had been satisfied, based on their review
of the projected profitability of Aberdeen, that the profitability from its relationship
with the Fund would not be excessive.
Other Benefits to Aberdeen
The Trustees considered so-called “fall-out benefits” to Aberdeen such as reputational value derived from serving as investment manager to the Fund; the benefits from allocation of Fund brokerage to improve trading efficiencies; and the fees that it
and/or various affiliates would receive for providing administration and investor relations
services and to the Fund, subject to approval by the Fund’s board of trustees. The Trustees considered that Aberdeen does not currently engage in commission sharing
arrangements or “soft dollars” and would not do so with respect to their management of the Fund.
The Board concluded that, to the extent Aberdeen or its affiliates derive other benefits
from its relationship with the Fund, those benefits are not so significant as to render
Aberdeen’s fees excessive.
The Trustees also considered that MFS has a financial interest under the Purchase
Agreement in having the Board and shareholders approve the Investment Advisory Agreement.
Conclusion
Based on their evaluation of factors that they deemed to be material, including those
factors described above, the Board of Trustees, including the independent Trustees,
concluded to approve the Investment Advisory Agreement and recommend to shareholders the approval of the Investment Advisory Agreement.
[1] “Managed Assets” means the total assets of the Combined Fund, including assets attributable to any form of leverage, minus liabilities (other than debt representing
leverage and any preferred stock that may be outstanding).
37
Proxy Voting Policies and Information
MFS votes proxies on behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to portfolio securities
during the most recent twelve-month period ended June 30 is available by August 31 of each
year without charge by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Quarterly Portfolio Disclosure
The fund files a complete schedule of portfolio holdings with the SEC for the first
and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The
fund’s Form N-PORT reports are available on the SEC’s Web site at http://www.sec.gov. A shareholder can obtain the portfolio holdings report for the first and third quarters of the fund's fiscal year at mfs.com/closedendfunds by choosing the fund's name and then scrolling to the “Resources” section and clicking on the “Reports and Other Documents” tab.
Further Information
From time to time, MFS may post important information about the fund or the MFS Funds on the MFS Web site (mfs.com). This information is available at https://www.mfs.com/announcements or at mfs.com/closedendfunds by choosing the fund's name and then scrolling to the “Resources” section and clicking on the “Announcements” tab, if any.
Additional information about the fund (e.g., performance, dividends and the fund’s price history) is also available at mfs.com/closedendfunds by choosing the fund's name, if any.
INFORMATION ABOUT FUND CONTRACTS AND LEGAL CLAIMS
The fund has entered into contractual arrangements with an investment adviser, administrator, transfer agent, and custodian who each provide services to the fund.
Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements
are not intended to create any shareholder right to enforce them against the service
providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.
Under the Trust’s By-Laws and Declaration of Trust, any claims asserted against or on behalf of the MFS Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.
38
CONTACT US
COMPUTERSHARE TRUST COMPANY, N.A.
TRANSFER AGENT, REGISTRAR, AND
DIVIDEND DISBURSING AGENT
TRANSFER AGENT, REGISTRAR, AND
DIVIDEND DISBURSING AGENT
CALL
1-800-637-2304
9 a.m. to 5 p.m. Eastern time
WRITE
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
New York Stock Exchange Symbol: MIN
Item 1(b):
A copy of the notice transmitted to the Registrant’s shareholders in reliance on Rule 30e-3 of the Investment Company Act of 1940, as amended that contains disclosure specified by paragraph (c)(3) of Rule 30e-3 is attached hereto as EX-99.30e-3Notice.
ITEM 2. CODE OF ETHICS.
During the period covered by this report, the Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definition enumerated in paragraph (b) of Item 2 of this Form N-CSR. During the period covered by this report, the Registrant did not grant a waiver, including an implicit waiver, from any provision of the Code.
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. INVESTMENTS
A schedule of investments of the Registrant is included as part of the report to shareholders of the Registrant under Item 1(a) of this Form N-CSR.
ITEM 7. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 10. RENUMERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT.
This information is disclosed as part of the financial statements included in Item 1 above.
ITEM 12. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable for semi-annual reports.
ITEM 13. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There were no changes during the period.
ITEM 14. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
MFS Intermediate Income Trust
|
|
|
|
|
(c) Total |
(d) Maximum |
|
|
|
|
|
Number of |
Number (or |
|
|
|
(a) Total number |
(b) |
Shares |
Approximate |
|
|
Period |
of Shares |
Average |
Purchased as |
Dollar Value) of |
|
|
|
Purchased |
Price Paid |
Part of Publicly |
Shares that May |
|
|
|
|
per Share |
Announced |
Yet Be Purchased |
|
|
|
|
|
Plans or |
under the Plans |
|
|
|
|
|
Programs |
or Programs |
|
|
|
|
|
|
|
|
|
11/01/25-11/30/25 |
0 |
N/A |
0 |
11,379,823 |
|
|
12/01/25-12/31/25 |
0 |
N/A |
0 |
11,379,823 |
|
|
01/01/26-01/31/26 |
0 |
N/A |
0 |
11,379,823 |
|
|
02/01/26-02/28/26 |
0 |
N/A |
0 |
11,379,823 |
|
|
03/01/26-03/31/26 |
0 |
N/A |
0 |
11,379,823 |
|
|
04/01/26-04/30/26 |
0 |
N/A |
0 |
11,379,823 |
|
|
Total |
0 |
|
0 |
|
|
|
|
|
|
|
|
Note: The Board approved procedures to repurchase shares and reviews the results periodically. The notification to shareholders of the program is part of the semi-annual and annual reports sent to shareholders. These annual programs begin on October 1st of each year. The programs conform to the conditions of Rule 10b-18 of the Securities Exchange Act of 1934 and limit the aggregate number of shares that may be purchased in each annual period (October 1 through the following September 30) to 10% of the Registrant’s outstanding shares as of the first day of the plan year (October 1). The aggregate number of shares available for purchase for the October 1, 2025 plan year is 11,379,823.
86121
ITEM 15. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.
ITEM 16. 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 report on Form N-CSR, 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 period covered by the report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 17. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable for semi-annual reports.
ITEM 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
Not applicable.
ITEM 19. EXHIBITS.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable.
(2)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 as EX-99.302CERT.
(3)Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(4)Change in the registrant’s independent public accountant. Not applicable.
(b)If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Attached hereto as EX-99.906CERT.
(c)Registrant’s Rule 30e-3 Notice pursuant to Item 1(b) of Form N-CSR. Attached hereto as EX-99.30e-3Notice.
(d)Notices to Trust’s common shareholders in accordance with Investment Company Act Section 19(a) and Rule 19a-1. Attached hereto as Ex-99.19a-1.
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 INTERMEDIATE INCOME TRUST
By (Signature and Title)*
/S/ DAVID L. DILORENZO
David L. DiLorenzo, President
Date: June 12, 2026
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)*
/S/ DAVID L. DILORENZO
David L. DiLorenzo, President (Principal Executive Officer)
Date: June 12, 2026
By (Signature and Title)*
/S/ KASEY L. PHILLIPS
Kasey L. Phillips, Treasurer (Principal Financial Officer and Accounting Officer) Date: June 12, 2026
* Print name and title of each signing officer under his or her signature.