UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-5769

Van Kampen High Income Trust II

 

(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip code)

Edward C. Wood III
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)

Registrant’s telephone number, including area code: 212-762-4000

Date of fiscal year end: 12/31

Date of reporting period: 3/31/10

 

 

Item 1. Schedule of Investments.

The Trust’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited)

Par
Amount
(000)				Description		Coupon				Maturity				Value
				Corporate Bonds 139.4%
				Aerospace & Defense 2.1%
$	780			Bombardier, Inc. (Canada) (a)			6.300	%			05/01/14			$	813,150
	395			Hexcel Corp.			6.750				02/01/15				393,025
															1,206,175
				Cable 5.2%
	785			Charter Communications Operating LLC (a)			10.875				09/15/14				882,144
	1,510			CSC Holdings, Inc. (a)			8.625				02/15/19				1,661,000
	340			Echostar DBS Corp.			6.625				10/01/14				343,400
	30			NTL Cable PLC (United Kingdom)			8.750				04/15/14				30,862
	100			NTL Cable PLC (United Kingdom)			9.125				08/15/16				106,750
															3,024,156
				Chemicals 4.9%
	605			Airgas, Inc. (a)			7.125				10/01/18				667,012
	600			Hexion Finance Escrow LLC (a)			8.875				02/01/18				594,000
	740			Innophos, Inc.			8.875				08/15/14				765,900
	834			Westlake Chemical Corp.			6.625				01/15/16				817,320
															2,844,232
				Consumer Products 3.6%
	770			Goodyear Tire & Rubber Co.			10.500				05/15/16				835,450
	540			Great Atlantic & Pacific Tea Co. (a)			11.375				08/01/15				533,250
	740			Steinway Musical Instruments, Inc. (a)			7.000				03/01/14				717,800
															2,086,500
				Energy 17.7%
	905			Atlas Energy Operating Co., LLC			10.750				02/01/18				1,000,025
	1,500			Chesapeake Energy Corp.			9.500				02/15/15				1,638,750
	230			Cimarex Energy Co.			7.125				05/01/17				235,750

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Par
Amount
(000)				Description		Coupon				Maturity				Value
				Energy (continued)
$	565			Compagnie Generale de Geophysique, SA (France)			7.500	%			05/15/15			$	569,237
	60			Forest Oil Corp.			7.250				06/15/19				60,600
	625			Hilcorp Energy/Finance Corp. (a)			7.750				11/01/15				620,312
	430			Key Energy Services, Inc.			8.375				12/01/14				436,988
	1,055			Massey Energy Co.			6.875				12/15/13				1,074,781
	400			Mirant North America LLC			7.375				12/31/13				401,000
	730			Newfield Exploration Co.			6.625				09/01/14				753,725
	195			Newfield Exploration Co.			7.125				05/15/18				198,900
	620			OPTI Canada, Inc. (Canada)			8.250				12/15/14				585,900
	540			Orion Power Holdings, Inc.			12.000				05/01/10				544,725
	210			Plains Exploration & Production Co.			7.625				06/01/18				213,150
	770			Plains Exploration & Production Co.			7.750				06/15/15				784,438
	1,355			Western Refining, Inc. (a)			11.250				06/15/17				1,226,275
															10,344,556
				Financial 11.2%
	765			CB Richard Ellis Services, Inc.			11.625				06/15/17				860,625
	1,090			FireKeepers Development Authority (a)			13.875				05/01/15				1,267,125
	1,355			GMAC LLC (a)			6.875				09/15/11				1,383,794
	830			International Lease Finance Corp. (a)			8.750				03/15/17				851,192
	1,050			JBS USA LLC/JBS USA Finance, Inc. (a)			11.625				05/01/14				1,202,250
	945			LPL Holdings, Inc. (a)			10.750				12/15/15				986,344
															6,551,330
				Food & Drug 3.3%
	355			Axcan Intermediate Holdings, Inc.			12.750				03/01/16				392,275
	285			M-Foods Holdings, Inc. (a)			9.750				10/01/13				296,044

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Par
Amount
(000)				Description		Coupon				Maturity				Value
				Food & Drug (continued)
$	1,030			Rite Aid Corp.			8.625	%			03/01/15			$	885,800
	365			SUPERVALU, Inc.			7.500				11/15/14				372,300
															1,946,419
				Food & Tobacco 0.8%
	465			Constellation Brands, Inc.			7.250				05/15/17				478,950
				Forest Products 8.4%
	400			Appleton Papers, Inc. (a)			10.500				06/15/15				400,000
	508			Crown Americas LLC			7.625				11/15/13				525,780
	850			Georgia-Pacific Corp. (a)			7.125				01/15/17				888,250
	500			Graphic Packaging International, Inc.			9.500				08/15/13				515,000
	1,140			NewPage Corp.			11.375				12/31/14				1,140,000
	320			P.H. Glatfelter Co.			7.125				05/01/16				316,000
	1,045			Verso Paper Holdings LLC, Inc. (a)			11.500				07/01/14				1,133,825
															4,918,855
				Gaming & Leisure 9.2%
	620			Ameristar Casinos, Inc.			9.250				06/01/14				652,550
	1,690			Harrah’s Operating Co., Inc.			11.250				06/01/17				1,829,425
	860			Las Vegas Sands Corp.			6.375				02/15/15				819,150
	1,310			MGM Mirage, Inc. (a)			10.375				05/15/14				1,450,825
	245			MGM Mirage, Inc.			13.000				11/15/13				286,650
	350			Scientific Games International, Inc.			9.250				06/15/19				371,875
															5,410,475
				Health Care 13.1%
	625			Apria Healthcare Group, Inc. (a)			11.250				11/01/14				682,813
	500			Apria Healthcare Group, Inc. (a)			12.375				11/01/14				550,000
	745			Biomet, Inc.			10.000				10/15/17				825,087
	960			Community Health Systems, Inc.			8.875				07/15/15				996,000

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Par
Amount
(000)				Description		Coupon				Maturity				Value
				Health Care (continued)
$	665			FMC Finance III SA (Luxembourg)			6.875	%			07/15/17			$	694,925
	1,345			HCA, Inc. (a)			7.875				02/15/20				1,411,409
	455			Healthsouth Corp.			10.750				06/15/16				494,244
	165			Invacare Corp.			9.750				02/15/15				178,200
	710			Omnicare, Inc.			6.875				12/15/15				700,238
	750			Res-Care, Inc.			7.750				10/15/13				757,500
	350			Tenet Healthcare Corp. (a)			10.000				05/01/18				393,750
															7,684,166
				Housing 2.9%
	888			Interface, Inc., Ser B			9.500				02/01/14				919,080
	750			K. Hovnanian Enterprises, Inc.			10.625				10/15/16				802,500
															1,721,580
				Information Technology 6.0%
	435			Expedia, Inc.			8.500				07/01/16				485,025
	1,075			First Data Corp.			9.875				09/24/15				932,562
	1,015			Unisys Corp. (a)			14.250				09/15/15				1,215,463
	955			Vangent, Inc.			9.625				02/15/15				892,925
															3,525,975
				Manufacturing 6.1%
	330			Baldor Electric Co.			8.625				02/15/17				350,625
	1,350			Berry Plastics Escrow LLC			8.250				11/15/15				1,365,188
	1,200			Case New Holland, Inc.			7.125				03/01/14				1,221,000
	605			RBS Global, Inc. & Rexnord Corp.			9.500				08/01/14				632,225
															3,569,038
				Metals 4.9%
	245			Foundation PA Coal Co.			7.250				08/01/14				250,512
	130			Freeport-McMoRan Cooper & Gold, Inc.			8.375				04/01/17				144,819
	1,070			Novelis, Inc. (Canada)			7.250				02/15/15				1,037,900

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Par
Amount
(000)				Description		Coupon				Maturity				Value
				Metals (continued)
$	1,225			Teck Resources Ltd. (Canada)			10.250	%			05/15/16			$	1,463,875
															2,897,106
				Pipelines 2.0%
	1,000			El Paso Corp.			12.000				12/12/13				1,175,000
				Retail 4.9%
	1,045			Brown Shoe Co., Inc.			8.750				05/01/12				1,071,125
	850			Oxford Industries, Inc.			11.375				07/15/15				952,000
	790			Sally Holdings LLC/Sally Capital, Inc.			9.250				11/15/14				841,350
															2,864,475
				Services 4.3%
	750			Affinion Group, Inc.			11.500				10/15/15				772,500
	215			ARAMARK Corp.			8.500				02/01/15				220,912
	1,350			Ticketmaster Entertainment, Inc.			10.750				08/01/16				1,512,000
															2,505,412
				Telecommunications 8.9%
	870			DISH DBS Corp.			7.000				10/01/13				909,150
	750			Intelsat Corp.			9.250				06/15/16				789,375
	1,000			Nielsen Finance LLC / Nielsen Finance Co.			11.625				02/01/14				1,135,000
	750			Sprint Capital Corp.			6.900				05/01/19				690,000
	815			Wind Acquisition Finance, SA (Luxembourg) (a)			12.000				12/01/15				884,275
	435			Windstream Corp.			7.875				11/01/17				430,650
	345			Windstream Corp.			8.125				08/01/13				363,113
															5,201,563
				Transportation 3.5%
	645			Commercial Barge Line Co.			12.500				07/15/17				681,281
	1,340			Ford Motor Credit Co.			7.000				10/01/13				1,387,612
															2,068,893

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Par
Amount
(000)				Description		Coupon				Maturity				Value
				Utility 10.6%
$	1,275			AES Corp.			7.750	%			03/01/14			$	1,310,062
	615			CMS Energy Corp.			6.300				02/01/12				645,104
	795			Dynegy Holdings, Inc.			7.750				06/01/19				604,200
	425			Edison Mission Energy			7.750				06/15/16				312,375
	800			Intergen NV (Netherlands) (a)			9.000				06/30/17				828,000
	405			IPALCO Enterprises, Inc.			8.625				11/14/11				433,350
	765			NRG Energy, Inc.			7.375				01/15/17				759,262
	735			RRI Energy, Inc.			7.875				06/15/17				663,338
	950			Texas Competitive Electric Holdings Co., LLC, Ser A			10.250				11/01/15				665,000
															6,220,691
				Wireless Communications 4.5%
	1,775			Nextel Communications, Inc., Ser E			6.875				10/31/13				1,739,500
	820			XM Satellite Radio, Inc. (a)			11.250				06/15/13				891,750
															2,631,250
				Wireline 1.3%
	815			Citizens Communications Co.			7.125				03/15/19				778,325
Total Corporate Bonds 139.4%															81,655,122
Equities 0.4%
DecisionOne Corp. (5,483 Common Shares) (b)(c)(d)															0
Hosiery Corp. of America, Inc., Class A (1,000 Common Shares) (b)(c)(d)															0
GMAC, Inc. (287 Preferred Shares) (a)															218,784
VS Holdings, Inc. (20,207 Common Shares) (b)(c)(d)															0
Total Equities 0.4%															218,784
Total Long-Term Investments 139.8% (Cost $78,545,526)															81,873,906

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Description		Value
Repurchase Agreements 3.1%
Banc of America Securities ($312,298 par collateralized by U.S. Government obligations in a pooled cash account, interest rate of 0.01%, dated 03/31/10, to be sold on 04/01/10 at $312,298)		$	312,298
JPMorgan Chase & Co. ($1,496,636 par collateralized by U.S. Government obligations in a pooled cash account, interest rate of 0.01%, dated 03/31/10, to be sold on 04/01/10 at $1,496,637)			1,496,636
State Street Bank & Trust Co. ($66 par collateralized by U.S. Government obligations in a pooled cash account, interest rate of 0.00%, dated 03/31/10, to be sold on 04/01/10 at $66)			66
Total Repurchase Agreements 3.1% (Cost $1,809,000)			1,809,000
Total Investments 142.9% (Cost $80,354,526)			83,682,906
Borrowings (44.4%)			(26,000,000	)
Other Assets in Excess of Liabilities 1.5%			893,663
Net Assets 100.0%		$	58,576,569

Van Kampen High Income Trust II
Portfolio of Investments § March 31, 2010 (Unaudited) continued

Security Valuation Investments are valued by an independent pricing service using the mean of the last reported bid and asked prices. For those securities where quotations or prices are not readily available, valuations are obtained from yield data relating to instruments or securities with similar characteristics in accordance with procedures established in good faith by the Board of Trustees. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances. Futures contracts are valued at the settlement price established each day on the exchange on which they are traded. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates fair value.

Fair Value Measurements Financial Accounting Standards Board Accounting Standards Codification (ASC 820), Fair Value Measurements and Disclosures (ASC 820) (formerly known as FAS 157), defines fair value as the price that the Trust would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Trust’s investments. The inputs are summarized in the three broad levels listed below.

Level 1—		Prices are based on quoted prices in active markets for identical investments
Level 2—		Prices are based on other significant observable inputs which may include quoted prices (for similar investments, interest rates, prepayment speeds, credit risk, etc.)
Level 3—		Prices are based on significant unobservable inputs including the Trust’s own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of March 31, 2010 in valuing the Trust’s investments carried at value.

		Level 1				Level 2				Level 3
										Significant
						Other Significant				Unobservable
Investments		Quoted Prices				Observable Inputs				Inputs (a)				Total
Investments in an Asset Position
Corporate Bonds		$	—			$	81,655,122			$	—			$	81,655,122
Common and Preferred Stocks
Apparel, Accessories & Luxury Goods			—				—				—				—
Highways & Railtracks			—				—				—				—
IT Consulting & Other Services			—				—				—				—
Other Diversified Financial Services			—				218,784				—				218,784
Repurchase Agreements			—				1,809,000				—				1,809,000
Total Investments in an Asset Position		$	—			$	83,682,906			$	—			$	83,682,906

Transfers between investment levels may occur as the markets fluctuate and/or as the availability of data used in an investment’s valuation changes. The Trust recognizes the transfer of investments into or out of a valuation level at month end. As of the three-month period ended March 31, 2010, the Trust did not have any investments transfer between valuation levels.

Item 2. Controls and Procedures.

(a) The Trust’s principal executive officer and principal financial officer have concluded that the Trust’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the Trust’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Item 3. Exhibits.

(a) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.cert.

(b) A certification for the Principal Financial Officer of the registrant is attached hereto as part of EX-99.cert.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Van Kampen High Income Trust II

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