UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21539
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First Trust/Four Corners Senior Floating Rate Income Fund II
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(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios, L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(Name and address of agent for service)
Registrant's telephone number, including area code: 630-765-8000
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Date of fiscal year end: May 31
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Date of reporting period: February 28, 2010
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Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549. The OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - 137.3%
AEROSPACE & DEFENSE - 6.3%
$ 398,512 BE Aerospace, Inc., Term Loan, Tranche B Ba1 BBB- 5.75% 07/28/14 $ 400,647
1,582,109 DAE Aviation Holdings, Inc., Term Loan B1 B3 B 4.00% 07/31/14 1,466,088
1,543,841 DAE Aviation Holdings, Inc., Term Loan B2 B3 B 3.99%-4.00% 07/31/14 1,430,627
1,464,118 GenCorp, Inc., Synthetic Letter of Credit Ba3 B+ 2.48% 04/30/13 1,390,912
603,508 GenCorp, Inc., Term Loan Ba3 B+ 2.51% 04/30/13 573,332
817,662 ILC Industries, Inc., Term Loan, First Lien NR (f) NR (f) 2.23% 02/24/12 787,000
1,915,375 L-1 Identity Solutions Operating Co.,
Term Loan B-2 Ba3 BB 7.25% 08/05/13 1,915,375
2,986,248 Robertson Fuel Systems, LLC, Term Loan NR (f) NR (f) 2.98%-5.00% 04/19/13 2,807,073
977,444 Safenet, Inc., Term Loan, First Lien B1 B+ 2.73% 04/12/14 918,797
4,278,945 Spirit Aerosystems, Inc., Term Loan B Ba2 BBB- 2.00% 09/30/13 4,196,931
437,500 TASC, Inc., Term Loan A Ba2 BB 5.50% 12/18/14 439,323
1,812,500 TASC, Inc., Term Loan B Ba2 BB 5.75% 12/18/15 1,824,584
2,066,667 Vought Aircraft Industries, Inc., Synthetic
Letter of Credit, Tranche B Ba2 BB- 7.50% 12/22/10 2,071,833
1,083,074 Vought Aircraft Industries, Inc., Term Loan B Ba2 BB- 7.50% 12/22/11 1,083,976
984,409 Wesco Aircraft Hardware Corp., Term Loan,
First Lien Ba3 BB- 2.48% 09/29/13 950,570
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22,257,068
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AGRICULTURAL PRODUCTS - 2.4%
504,242 Dole Food Co., Inc., Prefunded Letter of Credit Ba2 BB- 8.00% 08/30/10 504,242
876,905 Dole Food Co., Inc., Term Loan B Ba2 BB- 8.00% 04/12/13 876,905
2,845,142 Dole Food Co., Inc., Term Loan C Ba2 BB- 8.00% 04/12/13 2,845,142
1,243,026 Dole Food Co., Inc., Term Loan B1 Ba2 BB- 5.50% 03/02/17 1,243,648
2,983,263 Dole Food Co., Inc., Term Loan C1 Ba2 BB- 5.50% 03/02/17 2,984,754
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8,454,691
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AIRLINES - 0.1%
490,000 Delta Air Lines, Inc., Synthetic Revolving
Credit Facility Ba2 BB- 2.25%-2.28% 04/30/12 457,742
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ALUMINUM - 1.7%
4,380,060 Novelis Corp., Term Loan Ba3 BB- 2.23%-2.26% 07/06/14 4,231,449
1,990,859 Novelis, Inc., Canadian Term Loan Ba3 BB- 2.23% 07/06/14 1,923,311
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6,154,760
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APPAREL RETAIL - 0.7%
2,500,000 Hanesbrands, Inc., New Term Loan Ba1 BB+ 5.25% 12/10/15 2,518,750
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APPLICATION SOFTWARE - 0.8%
2,793,838 Verint Systems, Inc., Term Loan, First Lien NR B+ 3.48% 05/25/14 2,640,177
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ASSET MANAGEMENT & CUSTODY BANKS - 2.1%
1,318,164 Grosvenor Capital Management Holdings, LLP,
Term Loan NR (f) NR (f) 2.25% 12/05/13 1,186,347
3,843,934 LPL Holdings, Inc., Term Loan D Ba3 B+ 2.00% 06/28/13 3,664,549
2,704,791 Nuveen Investments, Inc., Term Loan B3 B 3.25%-3.32% 11/13/14 2,353,168
138,486 Oxford US Acquisition, LLC, Term Loan, Tranche B-2 NR (f) NR (f) 2.25% 05/12/14 129,485
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7,333,549
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AUTO PARTS & EQUIPMENT - 0.4%
1,500,000 TRW Automotive, Inc., Term Loan, Tranche B-3 Ba3 BB- 5.00% 05/30/16 1,502,501
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AUTOMOBILE MANUFACTURERS - 0.7%
2,838,417 Ford Motor Co., Term Loan, Tranche B-1 Ba3 B- 3.24%-3.26% 12/15/13 2,651,555
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AUTOMOTIVE RETAIL - 0.6%
2,308,825 KAR Holdings, Inc., Term Loan B Ba3 B+ 2.98% 10/20/13 2,226,573
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BROADCASTING - 3.4%
798,706 Cumulus Media, Inc., Term Loan, First Lien Caa1 B- 4.23% 06/11/14 683,892
2,297,471 Gray Television, Inc., Term Loan B Caa1 CCC 3.75% 12/31/14 2,064,278
4,331,250 LBI Media, Inc., Term Loan B B1 B- 1.73% 03/31/12 3,779,016
3,500,000 Raycom Media, Inc., Term Loan, Tranche B NR NR 1.81% 06/25/14 3,080,000
2,443,750 Sirius Satellite Radio, Inc., Term Loan, First Lien B1 BB- 2.50% 12/20/12 2,336,836
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11,944,022
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BUILDING PRODUCTS - 0.1%
1,000,000 South Edge, LLC, Term Loan C (l) NR NR 5.50% 10/31/09 375,000
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See Notes to Quarterly Portfolio of Investments Page 1
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - (Continued)
CABLE AND SATELLITE - 4.2%
$ 5,288,803 Charter Communications Operating, LLC, Term Loan Ba2 BB+ 2.23% 03/06/14 $ 4,933,248
5,676,851 CSC Holdings, Inc., Incremental Term Loan Baa3 BBB- 2.00%-2.05% 03/29/13 5,516,304
1,946,576 UPC Broadband Holding B.V., Term Loan N Ba3 B+ 2.18% 12/31/14 1,843,569
2,703,424 UPC Broadband Holding B.V., Term Loan T Ba3 B+ 3.93% 12/31/16 2,627,728
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14,920,849
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CASINOS & GAMING - 4.8%
3,006,245 CCM Merger, Inc., Term Loan B B3 BB- 8.50% 07/13/12 2,962,405
551,600 Las Vegas Sands, LLC, Delayed Draw Term Loan 1 B3 B- 2.01% 05/23/14 479,662
3,287,186 Penn National Gaming, Inc., Term Loan B Ba2 BB+ 1.98%-2.00% 10/03/12 3,218,977
805,992 Seminole Tribe of Florida, Delayed Draw
Term Loan B1 Baa3 BBB 1.75% 03/05/14 773,416
2,904,575 Seminole Tribe of Florida, Delayed Draw
Term Loan B2 Baa3 BBB 1.75% 03/05/14 2,787,181
2,210,526 Seminole Tribe of Florida, Delayed
Draw Term Loan B3 Baa3 BBB 1.75% 03/05/14 2,121,183
5,005,965 VML US Finance, LLC, Term Loan B B3 B- 4.76% 05/25/13 4,763,491
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17,106,315
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COMMODITY CHEMICALS - 2.4%
1,421,521 Ineos Group Limited, Term Loan B2 Caa1 B- 9.50% 12/14/13 1,318,461
1,421,521 Ineos Group Limited, Term Loan C2 Caa1 B- 10.00% 12/14/14 1,318,461
6,200,000 Univar, Inc., Term Loan B-Opco B2 B+ 3.23% 10/11/14 5,824,125
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8,461,047
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COMPUTER HARDWARE - 1.4%
5,178,427 Activant Solutions, Inc., Term Loan B1 B 2.25%-2.31% 05/02/13 4,925,979
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DATA PROCESSING & OUTSOURCED SERVICES - 1.7%
6,825,000 Harland Clarke Holdings Corp., Term Loan B B1 B+ 2.73%-2.75% 06/30/14 5,968,463
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DIVERSIFIED CHEMICALS - 5.1%
1,055,448 Brenntag Holding GmbH & Co. KG, Acquisition
Term Loan B1 BB- 2.00%-2.14% 01/17/14 1,026,423
3,000,000 Brenntag Holding GmbH & Co. KG, Term Loan,
Second Lien Caa1 CCC+ 4.25% 06/18/15 2,861,250
4,322,712 Brenntag Holding GmbH & Co. KG, Term Loan B2 B1 BB- 1.98%-2.00% 01/17/14 4,203,837
4,179,454 Huntsman International, LLC, Term Loan B Ba2 B+ 1.99%-2.00% 04/19/14 3,949,555
1,250,000 Huntsman International, LLC, Term Loan C Ba2 B+ 2.48%-2.49% 06/30/16 1,185,156
12,091 LyondellBasell Industries AF S.C.A., Dutch
Revolving Credit Facility (j) WR NR 3.73% 12/20/13 8,524
27,369 LyondellBasell Industries AF S.C.A., Dutch Term
Loan A (j) WR NR 3.73% 12/20/13 19,295
34,713 LyondellBasell Industries AF S.C.A., German Term
Loan B1 (j) WR NR 3.98% 12/20/14 24,473
34,713 LyondellBasell Industries AF S.C.A., German Term
Loan B2 (j) WR NR 3.98% 12/20/14 24,473
34,713 LyondellBasell Industries AF S.C.A., German Term
Loan B3 (j) WR NR 3.98% 12/20/14 24,473
268,821 LyondellBasell Industries AF S.C.A., Initial New
Money Loan (DIP) (g)(j) NR BB- 1.50%(i)-13.00% 06/03/10 279,776
150,630 LyondellBasell Industries AF S.C.A.,
Term Loan B1 (j) WR NR 7.00% 12/20/14 105,818
150,630 LyondellBasell Industries AF S.C.A.,
Term Loan B2 (j) WR NR 7.00% 12/20/14 105,818
150,630 LyondellBasell Industries AF S.C.A.,
Term Loan B3 (j) WR NR 7.00% 12/20/14 105,818
45,343 LyondellBasell Industries AF S.C.A., U.S. Primary
Revolving Credit Facility (j) WR NR 3.73% 12/20/13 31,967
86,391 LyondellBasell Industries AF S.C.A., U.S. Term
Loan A (j) WR NR 3.73% 12/20/13 60,905
3,934,485 Rockwood Specialties Group, Inc., Term Loan H Ba2 BB- 6.00% 05/15/14 3,946,288
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17,963,849
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DIVERSIFIED SUPPORT SERVICES - 0.2%
750,000 JohnsonDiversey, Inc., Term Loan Ba2 BB- 5.50% 11/24/15 754,688
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EDUCATION SERVICES - 0.9%
2,391,818 Education Management, LLC, Term Loan C B1 BB- 2.06% 06/01/13 2,268,865
1,034,200 ProQuest-CSA, LLC, Term Loan, First Lien Ba3 BB- 2.76% 02/09/14 956,635
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3,225,500
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ELECTRIC UTILITIES - 8.9%
4,350,206 Astoria Generating Co. Acquisitions, LLC,
Term Loan B B1 BB- 2.00%-2.01% 02/23/12 4,215,349
6,343,147 Calpine Corporation, First Priority Term Loan B2 B+ 3.14% 03/29/14 5,953,011
2,305,929 Covanta Energy Corporation, Synthetic Letter
of Credit Ba1 BB 1.75% 02/09/14 2,196,397
See Notes to Quarterly Portfolio of Investments Page 2
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - (Continued)
ELECTRIC UTILITIES - (Continued)
$ 4,555,110 Covanta Energy Corporation, Term Loan Ba1 BB 1.75% 02/09/14 $ 4,338,742
4,308,372 Mirant North America, LLC, Term Loan Ba2 BB 1.98% 01/03/13 4,119,110
7,950,729 NRG Energy, Inc., Synthetic Letter of Credit Baa3 BB+ 2.00% 02/01/13 7,669,742
593,470 NRG Energy, Inc., Term Loan Baa3 BB+ 1.97%-2.00% 02/01/13 572,496
1,712,790 Riverside Energy Center, LLC, Term Loan Ba3 BB- 4.50% 06/24/11 1,699,944
169,917 Rocky Mountain Energy Center, LLC, Synthetic
Letter of Credit Ba3 BB- 4.60% 06/24/11 168,642
666,578 Rocky Mountain Energy Center, LLC, Term Loan Ba3 BB- 4.50% 06/24/11 661,578
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31,595,011
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ENVIRONMENTAL & FACILITIES SERVICES - 1.3%
220,126 EnergySolutions, LLC, Synthetic Letter of Credit Ba2 NR (f) 3.98% 06/07/13 215,723
1,481,947 EnergySolutions, LLC, Term Loan (Duratek) Ba2 NR (f) 4.01% 06/07/13 1,452,308
3,088,837 EnergySolutions, LLC, Term Loan (EnergySolutions) Ba2 NR (f) 4.01% 06/07/13 3,027,060
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4,695,091
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FOOD DISTRIBUTORS - 2.1%
847,826 B&G Foods, Inc., Term Loan C Ba1 BB 2.26% 02/23/13 834,402
3,914,620 Dean Foods Co., Term Loan B B1 BB 1.62%-1.64% 04/02/14 3,753,632
1,178,571 Wm. Wrigley Jr. Company, Term Loan B1 NR (f) NR (f) 3.06% 12/16/12 1,181,334
1,571,429 Wm. Wrigley Jr. Company, Term Loan B2 NR (f) NR (f) 3.31% 10/06/14 1,576,085
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7,345,453
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FOOD RETAIL - 1.8%
6,617,587 SUPERVALU, Inc., Term Loan B Ba3 BB+ 1.48% 06/02/12 6,416,048
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FOREST PRODUCTS - 2.0%
2,800,095 Georgia-Pacific Corporation, Term Loan B1 Ba2 BBB 2.25%-2.26% 12/20/12 2,734,643
1,431,788 Georgia-Pacific Corporation, Term Loan B2 Ba2 BBB 2.24%-2.25% 12/20/12 1,398,320
2,836,299 Georgia-Pacific Corporation, Term Loan C Ba2 BBB 3.50%-3.51% 12/23/14 2,829,917
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6,962,880
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GAS UTILITIES - 0.2%
602,173 Atlas Pipeline Partners, L.P., Term Loan B1 B 6.75% 07/27/14 598,410
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HEALTH CARE EQUIPMENT - 1.3%
4,725,827 Biomet, Inc., Dollar Term Loan B1 BB- 3.23%-3.25% 03/25/15 4,571,165
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HEALTH CARE FACILITIES - 6.1%
755,461 HCA, Inc., Term Loan A Ba3 BB 1.75% 11/19/12 713,478
5,500,000 HCA, Inc., Term Loan B Ba3 BB 2.50% 11/18/13 5,219,373
3,479,196 Health Management Associates, Inc., Term Loan B B1 BB- 2.00% 02/28/14 3,278,659
5,651,633 Lifepoint Hospitals, Inc., Term Loan B Ba1 BB 1.89% 04/15/12 5,548,694
3,615,416 Select Medical Corporation, Term Loan B-1 Ba2 BB- 4.00% 08/22/14 3,540,096
271,667 Sun Healthcare Group, Inc., Synthetic Letter
of Credit Ba2 B+ 2.25% 04/19/14 255,367
2,401,161 Sun Healthcare Group, Inc., Term Loan, First Lien Ba2 B+ 2.23%-2.50% 04/19/14 2,257,091
154,089 United Surgical Partners International, Inc.,
Delayed Draw Term Loan Ba3 B 2.23% 04/19/14 143,945
815,645 United Surgical Partners International, Inc.,
Term Loan B Ba3 B 2.23%-2.25% 04/19/14 761,949
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21,718,652
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HEALTH CARE SERVICES - 6.2%
340,009 CHS/Community Health Systems, Inc., Delayed Draw
Term Loan Ba3 BB 2.50% 07/25/14 317,696
6,647,211 CHS/Community Health Systems, Inc., Term Loan Ba3 BB 2.48%-2.50% 07/25/14 6,210,988
5,611,970 DaVita, Inc., Term Loan B-1 Ba1 BB+ 1.73%-1.76% 10/05/12 5,480,790
7,022,332 Fresenius Medical Care AG, Term Loan B Baa3 BBB- 1.62%-1.63% 03/31/13 6,836,535
1,940,000 Healthways, Inc., Term Loan B Ba2 BB 1.75% 12/01/13 1,833,300
1,440,125 Quintiles Transnational Corp., Term Loan B,
First Lien Ba2 BB 2.25% 03/31/13 1,391,160
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22,070,469
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HOMEBUILDING - 0.3%
969,773 Mattamy Funding Partnership, Term Loan NR (f) NR (f) 2.56% 04/11/13 887,343
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See Notes to Quarterly Portfolio of Investments Page 3
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - (Continued)
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 2.3%
$ 5,424,265 Dynegy Holdings, Inc., Synthetic Letter of Credit Ba2 BB- 3.98% 04/02/13 $ 5,293,502
3,406,439 Texas Competitive Electric Holdings Co., LLC,
Initial Term Loan B-3 B1 B+ 3.73%-3.75% 10/10/14 2,725,152
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8,018,654
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INDUSTRIAL CONGLOMERATES - 0.5%
1,380,000 Bucyrus International, Inc., Term Loan C Ba2 BB 4.50% 01/27/16 1,387,314
233,003 Mueller Water Products, Inc., Term Loan B Ba3 BB- 5.24%-5.25% 05/24/14 231,489
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1,618,803
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INSURANCE BROKERS - 0.2%
784,179 HealthCare Partners, LLC, Term Loan Ba2 BBB- 2.00% 10/31/13 750,851
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INTEGRATED TELECOMMUNICATION SERVICES - 3.7%
2,259,831 Intelsat Corp., Term Loan B-2-A B1 BB- 2.73% 01/03/14 2,148,251
2,259,139 Intelsat Corp., Term Loan B-2-B B1 BB- 2.73% 01/03/14 2,147,594
2,259,139 Intelsat Corp., Term Loan B-2-C B1 BB- 2.73% 01/03/14 2,147,594
1,496,250 NTELOS, Inc., Term Loan Ba3 BB- 5.75% 08/07/15 1,500,926
5,015,278 Telesat Canada, U.S. Term Loan I B1 BB- 3.24% 10/31/14 4,880,939
430,765 Telesat Canada, U.S. Term Loan II B1 BB- 3.24% 10/31/14 419,226
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13,244,530
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INTERNET RETAIL - 0.6%
2,429,519 Sabre Holdings Corp., Term Loan B1 B 2.48%-2.50% 09/30/14 2,127,450
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IT CONSULTING & OTHER SERVICES - 2.6%
2,032,002 Alion Science and Technology Corp., Term Loan B3 B+ 10.50% 02/06/13 2,020,572
449,213 Apptis (DE), Inc., Term Loan B1 B+ 3.48%-3.51% 12/20/12 436,860
1,226,076 CACI International, Inc., Term Loan B Baa3 NR 1.74%-1.75% 05/03/11 1,214,581
5,818,257 West Corporation, Term Loan B-2 B1 BB- 2.60%-2.63% 10/24/13 5,613,711
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9,285,724
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LEISURE FACILITIES - 3.0%
2,917,361 Cedar Fair, L.P., U.S. Term Loan Ba3 BB- 2.23% 08/30/12 2,890,375
715,813 London Arena and Waterfront Finance, LLC,
Term Loan A NR (f) NR (f) 2.73% 03/08/12 651,390
2,250,000 Six Flags, Inc., Exit Term Loan Caa1 D TBA 06/30/16 2,229,187
972,500 Town Sports International, LLC, Term Loan Ba2 BB- 2.06% 02/27/14 884,975
4,000,000 Universal City Development Partners, Ltd.,
Term Loan Ba2 BB- 6.50% 11/06/14 4,022,500
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10,678,427
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LEISURE PRODUCTS - 0.4%
1,594,437 LodgeNet Entertainment Corp., Term Loan B3 B- 2.26% 04/04/14 1,473,259
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LIFE & HEALTH INSURANCE - 3.0%
630,950 Conseco, Inc., Term Loan Caa1 B- 7.50% 10/10/13 597,628
3,615,050 MultiPlan Merger Corporation, Term Loan B1 B+ 2.75% 04/12/13 3,517,896
375,416 MultiPlan Merger Corporation, Term Loan C B1 B+ 2.75% 04/12/13 365,327
6,174,134 Viant Holdings, Inc., Term Loan, Tranche B Ba3 B+ 2.51% 06/25/14 5,988,910
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10,469,761
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MANAGED HEALTH CARE - 3.0%
1,176,134 IASIS Healthcare Corporation, Delayed Draw
Term Loan Ba2 B+ 2.23% 03/15/14 1,119,777
318,412 IASIS Healthcare Corporation, Synthetic Letter
of Credit Ba2 B+ 2.23% 03/15/14 303,155
3,398,471 IASIS Healthcare Corporation, Term Loan Ba2 B+ 2.23% 03/15/14 3,235,626
6,000,000 Vanguard Health Systems, Inc., Term Loan B Ba2 B+ 5.00% 01/29/16 6,007,500
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10,666,058
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METAL & GLASS CONTAINERS - 1.4%
5,127,138 Owens-Illinois Group, Inc., Term Loan B Baa3 BBB 1.73% 06/14/13 5,023,313
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MOVIES & ENTERTAINMENT - 3.8%
4,704,000 AMC Entertainment, Inc., Term Loan Ba2 BB- 1.98% 01/26/13 4,550,141
55,118 Deluxe Entertainment Services Group, Inc., Credit
Linked Term Loan A Ba3 B- 6.25% 05/11/13 50,709
905,935 Deluxe Entertainment Services Group, Inc.,
Term Loan, Tranche B Ba3 B- 6.25% 05/11/13 833,461
95,049 Deluxe Entertainment Services Group, Inc.,
Term Loan, Tranche C Ba3 B- 6.25% 05/11/13 87,445
2,379,305 Discovery Communications Holding, LLC, Term Loan B Baa3 NR (f) 2.25% 05/14/14 2,363,585
2,233,125 Discovery Communications Holding, LLC, Term Loan C Baa3 NR (f) 5.25% 05/14/14 2,247,082
See Notes to Quarterly Portfolio of Investments Page 4
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - (Continued)
MOVIES & ENTERTAINMENT - (Continued)
$ 2,000,000 National CineMedia, LLC, Term Loan B Ba3 B+ 2.01% 02/13/15 $ 1,924,166
1,513,279 Regal Cinemas Corporation, Term Loan Ba2 BB- 3.75% 10/27/13 1,513,805
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13,570,394
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MULTI-UTILITIES - 1.3%
2,510,637 KGEN, LLC, Synthetic Letter of Credit B1 BB 2.06% 02/08/14 2,347,446
2,442,197 KGEN, LLC, Term Loan B1 BB 2.00% 02/08/14 2,283,454
-----------
4,630,900
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OFFICE SERVICES & SUPPLIEs - 1.4%
2,727,219 Emdeon Business Services, LLC, Term Loan,
First Lien Ba3 BB 2.26% 11/16/13 2,663,301
1,193,791 Pike Electric, Inc., Term Loan B NR (f) NR (f) 1.75% 07/01/12 1,122,163
1,349,428 Pike Electric, Inc., Term Loan C NR (f) NR (f) 1.75% 12/10/12 1,268,463
-----------
5,053,927
-----------
OIL & GAS EQUIPMENT & SERVICES - 1.4%
2,500,000 Dresser, Inc., Term Loan B B2 B+ 2.48%-2.50% 05/04/14 2,385,417
1,078,395 Hercules Offshore, Inc., Term Loan B2 B 6.00% 07/11/13 1,020,207
1,500,000 Targa Resources, Inc., Term Loan Ba3 BB- 6.00% 07/05/16 1,503,750
-----------
4,909,374
-----------
OIL & GAS EXPLORATION & PRODUCTION - 2.3%
2,193,864 ATP Oil & Gas Corporation, Term Loan, Tranche B1 NR NR 11.25% 07/15/14 2,195,921
309,732 ATP Oil & Gas Corporation, Term Loan, Tranche B2 NR NR 12.25% 01/15/11 310,023
1,989,624 Helix Energy Solutions Group, Inc., Term Loan Ba2 BB 2.48% 07/01/13 1,910,869
3,325,000 SemCrude, L.P., Prefunded Synthetic Letter
of Credit NR NR 8.41% 11/30/12 3,293,137
175,000 SemCrude, L.P., Prefunded Synthetic Letter
of Credit NR NR 8.50% 11/30/12 173,323
156,008 SemCrude, L.P., Term Loan, Second Lien NR NR 9.00%(o) 11/30/16 153,571
-----------
8,036,844
-----------
OIL & GAS REFINING & MARKETING - 0.5%
107,222 Alon USA, Inc., Term Loan (Edgington Facility) B1 BB- 2.48% 06/22/13 89,262
857,778 Alon USA, Inc., Term Loan (Paramount Facility) B1 BB- 2.48%-2.50% 06/22/13 714,100
114,943 Calumet Lubricants Co., L.P., Synthetic
Letter of Credit B1 B 4.10% 01/03/15 103,161
853,414 Calumet Lubricants Co., L.P., Term Loan B1 B 4.23%-4.25% 01/03/15 765,939
-----------
1,672,462
-----------
OIL & GAS STORAGE & TRANSPORTATION - 1.9%
3,000,000 Energy Transfer Equity, L.P., Term Loan Ba2 NR 1.98% 11/01/12 2,958,729
3,920,000 Enterprise GP Holdings, L.P., Term Loan B Ba2 BB- 2.48%-2.50% 11/08/14 3,867,735
-------------
6,826,464
-------------
OTHER DIVERSIFIED FINANCIAL SERVICES - 1.7%
6,249,081 Royalty Pharma Finance Trust, Term Loan Baa2 BBB- 2.50% 04/16/13 6,157,220
-------------
PACKAGED FOODS & MEATS - 0.4%
1,461,139 Weight Watchers International, Inc., Term Loan B Ba1 BB+ 1.81% 01/26/14 1,435,048
-------------
PAPER PACKAGING - 5.6%
5,727,583 Graham Packaging Holdings Co., Term Loan B,
First Lien B1 B+ 2.50% 10/07/11 5,649,590
2,500,000 Graphic Packaging International, Inc., Term Loan Ba3 BB 3.00% 05/16/14 2,451,735
3,376,872 Graphic Packaging International, Inc.,
Term Loan B Ba3 BB 2.25% 05/16/14 3,273,878
2,500,000 Reynolds Consumer Products Holdings, Inc.,
Term Loan Ba2 BB- 6.25% 11/05/15 2,515,625
852,751 Smurfit-Stone Container Enterprises, Inc.,
Canadian Revolving Credit Facility (j) WR D 2.50%-5.00% 11/01/09 848,487
516,062 Smurfit-Stone Container Enterprises, Inc.,
Synthetic Letter of Credit (j) WR D 4.50% 11/01/10 510,041
587,292 Smurfit-Stone Container Enterprises, Inc.,
Term Loan B (j) WR D 2.50% 11/01/11 580,440
1,106,950 Smurfit-Stone Container Enterprises, Inc.,
Term Loan C (j) WR D 2.50% 11/01/11 1,093,805
334,679 Smurfit-Stone Container Enterprises, Inc.,
Term Loan C1 (j) WR D 2.50% 11/01/11 330,705
2,569,206 Smurfit-Stone Container Enterprises, Inc., U.S.
Revolving Credit Facility (j) WR D 2.50%-4.50% 11/01/09 2,556,359
-----------
19,810,665
-----------
See Notes to Quarterly Portfolio of Investments Page 5
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - (Continued)
PAPER PRODUCTS - 0.3%
$ 885,000 Domtar Corporation, Term Loan B Baa3 BBB- 1.60% 03/07/14 $ 869,446
-----------
PHARMACEUTICALS - 5.5%
4,879,900 Catalent Pharma Solutions, Inc., Dollar Term Loan Ba3 BB- 2.48% 04/10/14 4,437,659
3,292,633 Graceway Pharmaceuticals, LLC, Term Loan,
First Lien B2 BB- 2.98% 05/03/12 2,329,538
3,958,763 Mylan, Inc., Term Loan B Ba3 BB+ 3.50%-3.56% 10/02/14 3,908,728
2,796,610 Warner Chilcott Corporation, Term Loan A B1 BB+ 5.50% 10/30/14 2,795,911
1,350,000 Warner Chilcott Corporation, Term Loan B B1 BB+ 5.75% 04/30/15 1,350,367
1,398,305 Warner Chilcott Corporation, Term Loan B1 B1 BB+ 5.75% 04/30/15 1,397,346
3,076,271 Warner Chilcott Corporation, Term Loan B2 B1 BB+ 5.75% 04/30/15 3,074,161
-----------
19,293,710
-----------
PUBLISHING - 0.8%
84,278 Cenveo Corporation, Delayed Draw Term Loan Ba2 BB 4.75% 06/21/13 84,199
2,254,214 Cenveo Corporation, Term Loan C Ba2 BB 4.75% 06/21/13 2,252,102
845,147 Yell Group, PLC, Term Loan B1 B2 B 3.98% 07/31/14 635,068
-----------
2,971,369
-----------
RESIDENTIAL REITs - 0.0%
11,250 Apartment Investment Management Co., Term Loan Ba1 BB+ 1.73% 03/22/11 11,025
-----------
RETAIL REITs - 1.5%
5,801,047 Capital Automotive, L.P., Term Loan C Ba3 B 5.73% 12/14/12 5,293,456
-----------
SEMICONDUCTORS - 0.8%
3,194,944 Freescale Semiconductors, Inc., Term Loan,
First Lien B2 B- 1.98% 12/01/13 2,940,348
-----------
SPECIALIZED CONSUMER SERVICES - 5.0%
965,000 Acosta, Inc., Term Loan NR (f) NR (f) 2.48% 07/28/13 920,369
3,346,029 Acxiom Corporation, Extended Term Loan Ba2 BBB- 3.25% 03/15/15 3,312,569
903,116 Advantage Sales & Marketing, Inc., Term Loan NR (f) NR (f) 2.25%-2.26% 03/29/13 859,465
4,685,639 Affinion Group, Inc., Term Loan B Ba2 BB 2.73% 10/17/12 4,547,413
256,221 ARAMARK Corporation, Prefunded Synthetic Letter
of Credit Ba3 BB 2.11% 01/26/14 244,414
3,897,364 ARAMARK Corporation, Term Loan Ba3 BB 2.13% 01/26/14 3,717,774
997,500 Asurion Corp., Term Loan, First Lien NR (f) NR (f) 3.23%-3.25% 07/03/14 965,609
914,286 N.E.W. Holdings I, LLC, Term Loan NR (f) NR (f) 2.73% 05/22/14 871,314
1,681,607 Nielsen Finance, LLC, Dollar Term Loan Ba3 B+ 2.23% 08/09/13 1,583,714
598,500 Protection One, Inc., Term Loan B2 Ba3 BB 6.25% 03/31/14 572,565
-----------
17,595,206
-----------
SPECIALTY CHEMICALS - 1.7%
2,000,000 Celanese Holdings, LLC, Synthetic Letter of Credit Ba2 BB+ 1.98% 04/02/14 1,920,000
4,383,599 Celanese Holdings, LLC, Term Loan Ba2 BB+ 2.00% 04/02/14 4,201,758
-----------
6,121,758
-----------
SPECIALTY STORES - 2.6%
1,179,063 Dollarama Group, L.P., Replacement Term Loan B Ba1 BB- 2.00% 11/18/11 1,161,377
5,500,000 Harbor Freight Tools USA, Inc., Term Loan C NR (f) NR (f) 5.00% 02/12/16 5,509,168
2,504,519 The Yankee Candle Co., Inc., Term Loan Ba3 BB- 2.23% 02/06/14 2,399,470
-----------
9,070,015
-----------
SYSTEMS SOFTWARE - 4.4%
4,351,177 Dealer Computer Services, Inc., Term Loan,
First Lien Ba2 BB 2.25% 10/26/12 4,111,862
3,884,107 Intergraph Corporation, Term Loan, First Lien B1 BB- 2.25% 05/29/14 3,760,204
1,034,316 Open Solutions, Inc., Term Loan, First Lien B1 BB- 2.38% 01/23/14 905,888
4,657,124 SunGard Data Systems, Inc., Term Loan A Ba3 BB 1.98% 02/28/14 4,462,107
2,493,573 SunGard Data Systems, Inc., Term Loan B Ba3 BB 3.86%-3.87% 02/28/16 2,429,454
-----------
15,669,515
-----------
TECHNOLOGY DISTRIBUTORS - 1.2%
1,078,000 H3C Holdings, Ltd., Term Loan B Ba2 BB+ 3.64% 09/28/12 1,037,575
3,451,788 Sensata Technologies Finance Co., LLC, Term Loan,
First Lien B1 B+ 1.99%-2.00% 04/27/13 3,238,208
-----------
4,275,783
-----------
See Notes to Quarterly Portfolio of Investments Page 6
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
Principal Ratings (c) Stated
Value Description Moody's S&P Rate Maturity (d) Value
------------ ------------------------------------------------- ------------------ ------------- ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS (e) - (Continued)
TRUCKING - 2.3%
$ 2,518,324 OshKosh Corporation, Term Loan B Ba3 BB- 6.25%-6.26% 12/06/13 $ 2,516,226
789,497 The Hertz Corporation, Prefunded Synthetic
Letter of Credit Ba1 BB- 2.00% 12/21/12 770,323
5,009,102 The Hertz Corporation, Term Loan B Ba1 BB- 1.98%-1.99% 12/21/12 4,887,450
-----------
8,173,999
-----------
Total Senior Floating-Rate Loan Interests 486,449,358
(Cost $501,150,909) -----------
SENIOR FLOATING-RATE NOTES - 0.2%
Leisure Facilities - 0.0%
1,225,000 HRP Myrtle Beach (h)(j)(k)(m) WR NR 8.00% 04/01/12 0
-----------
Semiconductors - 0.2%
650,000 NXP B.V. C CC 3.00% 10/15/13 553,313
-----------
Total Senior Floating-Rate Notes 553,313
(Cost $1,875,000) -----------
NOTES - 0.0%
Homebuilding - 0.0%
727,273 TOUSA, Inc. (Payment-In-Kind Election Note) (h)(j)(m)(n) 14.75% 07/01/15 0
-----------
Total Notes 0
(Cost $436,364) -----------
Shares Description Value
--------- ------------------------------------------------------------------------------------------------- -----------
PREFERRED STOCKS - 0.0%
HOMEBUILDING - 0.0%
4,273 TOUSA, Inc. (8.0%, Series A Convertible Payment-In-Kind
Preferred Stock) (h)(j)(k)(m) 0
-----------
Total Preferred Stocks 0
(Cost $2,563,636) ------------
COMMON STOCKS - 0.1%
OIL & GAS EXPLORATION & PRODUCTION - 0.1%
19,828 SemCrude, L.P. 459,762
-----------
Total Common Stocks 459,762
(Cost $495,700) ------------
WARRANTS - 0.0%
BROADCASTING - 0.0%
1,449 Cumulus Media, Inc. (m) 2,232
-----------
Total Warrants 2,232
(Cost $0) -----------
TOTAL INVESTMENTS - 137.6% 487,464,665
(Cost $506,521,609) (p)
Outstanding Loan - (39.0)% (138,300,000)
NET OTHER ASSETS AND LIABILITIES - 1.4% 5,034,792
------------
NET ASSETS (APPLICABLE TO COMMON SHARES) - 100.0% $354,199,457
============
See Notes to Quarterly Portfolio of Investments Page 7
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS (a) (b) (Continued)
FEBRUARY 28, 2010 (Unaudited)
(a) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common Shares.
(b) All or a portion of the investments are available to serve as collateral on
the outstanding loan.
(c) Ratings below Baa3 by Moody's Investors Service, Inc. or BBB- by Standard &
Poor's Ratings Group are considered to be below investment grade.
(d) Senior Loans generally are subject to mandatory and/or optional prepayment.
As a result, the actual remaining maturity of Senior Loans may be
substantially less than the stated maturities shown.
(e) Senior Loans in which the Fund invests generally pay interest at rates which
are periodically predetermined by reference to a base lending rate plus a
premium. These base lending rates are generally (i) the lending rate offered
by one or more major European banks, such as the London Interbank Offered
Rate ("LIBOR"), (ii) the prime rate offered by one or more United States
banks or (iii) the certificate of deposit rate.
(f) This Senior Loan Interest was privately rated upon issuance. The rating
agency does not provide ongoing surveillance on the rating.
(g) This DIP facility is partially drawn per Debtor-In-Possession Credit
Agreement dated March 3, 2009.
(h) This investment is fair valued in accordance with valuation procedures
adopted by the Fund's Board of Trustees.
(i) Represents commitment fee rate on unfunded loan commitment.
(j) This borrower has filed for protection in federal bankruptcy court.
(k) Non-income producing investment.
(l) This issuer is in default and interest is not being accrued by the Fund nor
paid by the issuer.
(m) This investment is restricted and cannot be offered for public sale without
first being registered under the Securities Act of 1933, as amended. Prior
to registration, restricted investments may only be resold in transactions
exempt from registration (see Note D - Restricted Investments in the Notes
to Quarterly Portfolio of Investments).
(n) This investment is a Senior Subordinated Payment-in-Kind Election Note
whereby 1.00% of interest per annum is to be paid in cash and 13.75% of
interest per annum is to be paid by the issuer, at its option (i) entirely
in cash, (ii) entirely in Payment-in-Kind interest or (iii) in a combination
of (i) and (ii). Interest is to be paid semi-annually; however, the issuer
is in default and income is not being accrued.
(o) Interest for the period commencing on November 30, 2009 ending on December
31, 2011, shall be payable, at the Borrowers' option, (i) in cash at a rate
per annum equal to 9% ("Cash Interest") or (ii) in Payment-in-Kind interest
at a rate per annum equal to 11%, and, commencing January 1, 2012, shall be
payable as Cash Interest.
(p) Aggregate cost for financial reporting purposes, which approximates the
aggregate cost for federal income tax purposes. As of February 28, 2010, the
aggregate gross unrealized appreciation for all investments in which there
was an excess of value over tax cost was $1,631,823 and the aggregate gross
unrealized depreciation for all investments in which there was an excess of
tax cost over value was $20,688,767.
NR Not rated.
WR Withdrawn rating.
TBA To be announced.
---------------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of February 28,
2010 is as follows (see Note A - Portfolio Valuation in the Notes to Quarterly
Portfolio of Investments):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE QUOTED OBSERVABLE UNOBSERVABLE
VALUATION INPUTS AT 02/28/10 PRICES INPUTS INPUTS
------------------------------------- ---------------- ---------------- --------------- ----------------
Senior Floating-Rate Loan Interests* $ 486,449,358 $ - $ 486,449,358 $ -
Senior Floating-Rate Notes* 553,313 - 553,313 -
Common Stocks* 459,762 - 459,762 -
Warrants* 2,232 - 2,232 -
-------------- ----------- -------------- ---------
Total Investments $ 487,464,665 $ - $ 487,464,665 $ -
============== =========== ============== =========
* See Portfolio of Investments for industry breakout.
See Notes to Quarterly Portfolio of Investments Page 8
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
FEBRUARY 28, 2010 (Unaudited)
VALUATION AND INVESTMENT PRACTICES
A. Portfolio Valuation:
The net asset value ("NAV") of the Common Shares of First Trust/Four Corners
Senior Floating Rate Income Fund II ("the Fund") is determined daily as of the
close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00
p.m. Eastern time, on each day the NYSE is open for trading. Domestic debt
securities and foreign securities are priced using data reflecting the earlier
closing of the principal markets for those securities. The NAV per Common Share
is calculated by dividing the value of all assets of the Fund (including accrued
interest), less all liabilities (including accrued expenses, dividends declared
but unpaid and any borrowings of the Fund), by the total number of Common Shares
outstanding.
The Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio investments, at fair value according
to valuation procedures adopted by the Fund's Board of Trustees. A majority of
the Fund's assets are valued using market information supplied by third parties.
In the event that market quotations are not readily available, the pricing
service does not provide a valuation for a particular asset, or the valuations
are deemed unreliable, the Fund's Board of Trustees has designated First Trust
Advisors L.P. ("First Trust") to use a fair value method to value the Fund's
investments. Additionally, if events occur after the close of the principal
market for particular securities (e.g., domestic debt and foreign securities),
but before the Fund values its assets, that could materially affect NAV, First
Trust may use a fair value method to value the Fund's investments. The use of
fair value pricing by the Fund is governed by valuation procedures adopted by
the Fund's Board of Trustees, and in accordance with the provisions of the
Investment Company Act of 1940, as amended ("1940 Act").
The Senior Floating-Rate Loans ("Senior Loans") in which the Fund invests are
not listed on any securities exchange or board of trade. Senior Loans are
typically bought and sold by institutional investors in individually negotiated
private transactions that function in many respects like an over-the-counter
secondary market, although typically no formal market-makers exist. This market,
while having grown substantially in the past several years, generally has fewer
trades and less liquidity than the secondary market for other types of
securities. Some Senior Loans have few or no trades, or trade infrequently, and
information regarding a specific Senior Loan may not be widely available or may
be incomplete. Accordingly, determinations of the market value of Senior Loans
may be based on infrequent and dated information. Because there is less
reliable, objective data available, elements of judgment may play a greater role
in valuation of Senior Loans than for other types of securities. Typically,
Senior Loans are valued using information provided by a third party pricing
service. If the pricing service cannot or does not provide a valuation for a
particular Senior Loan or such valuation is deemed unreliable, First Trust may
value such Senior Loan at a fair value according to valuation procedures adopted
by the Fund's Board of Trustees, and in accordance with the provisions of the
1940 Act.
Portfolio investments listed on any exchange other than the NASDAQ National
Market ("NASDAQ") are valued at the last sale price on the business day as of
which such value is being determined. If there has been no sale on such day, the
investments are valued at the mean of the most recent bid and asked prices on
such day. Investments traded on the NASDAQ are valued at the NASDAQ Official
Closing Price as determined by NASDAQ. Portfolio investments traded on more than
one securities exchange are valued at the last sale price on the business day as
of which such value is being determined at the close of the exchange
representing the principal market for such investments. Portfolio investments
traded in the over-the-counter market, but excluding investments traded on the
NASDAQ, are valued at the closing bid prices. Short-term investments that mature
in less than 60 days when purchased are valued at amortized cost.
The Fund is subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical securities. An active market is a market in which
transactions for the security occur with sufficient frequency
and volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly
or indirectly, and include the following:
o Quoted prices for similar securities in active markets.
o Quoted prices for identical or similar securities in markets that
are non-active. A non-active market is a market where there are
few transactions for the security, the prices are not current, or
price quotations vary substantially either over time or among
market makers, or in which little information is released publicly.
Page 9
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (Continued)
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
FEBRUARY 28, 2010 (Unaudited)
o Inputs other than quoted prices that are observable for the
security (for example, interest rates and yield curves observable
at commonly quoted intervals, volatilities, prepayment speeds,
loss severities, credit risks, and default rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
security.
The inputs or methodology used for valuing investments are not necessarily an
indication of the risks associated with investing in those investments. A
summary of the inputs used to value the Fund's investments as of February 28,
2010 is included with the Fund's Portfolio of Investments.
B. Investment Transactions:
Investment transactions are recorded as of the trade date. Realized gains and
losses from investment transactions are recorded on the identified cost basis.
Investments purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income on such
investments is not accrued until settlement date. The Fund maintains liquid
assets with a current value at least equal to the amount of its when-issued or
delayed-delivery purchase commitments. As of February 28, 2010, the Fund had no
when-issued or delayed-delivery purchase commitments.
C. Unfunded Loan Commitments:
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. The Fund had unfunded delayed draw loan commitments of
approximately $89,580 as of February 28, 2010. The Fund is obligated to fund
these loan commitments at the borrower's discretion. Net unrealized appreciation
from the commitments is $3,655 at February 28, 2010.
D. Restricted Investments:
The Fund invests in restricted investments, which are investments that cannot be
offered for public sale without first being registered under the Securities Act
of 1933, as amended. Prior to registration, restricted investments may only be
resold in transactions exempt from registration. The Fund held restricted
investments at February 28, 2010 as shown in the following table. The Fund does
not have the right to demand that such investments be registered. These
investments are valued according to the valuation procedures as stated in the
Portfolio Valuation footnote (Note A) and are not expressed as a discount to the
carrying value of a comparable unrestricted investment. There are no
unrestricted investments with the same maturity dates and yields for these
issuers.
% of
Net Assets
Applicable
Acquisition Principal Value Current to Common
Security Date Value/Shares Per Share Carrying Cost Value Shares
--------------------------------------------- ----------- ------------ ----------- -------------- --------- -----------
Cumulus Media, Inc. - Warrants 6/29/09 1,449 $ 1.54 $ - $ 2,232 0.00%
HRP Myrtle Beach - Senior Floating Rate Notes 3/23/06 $1,225,000 - 1,225,000 - 0.00
TOUSA, Inc. - Notes 7/31/07(1) $727,273 - 436,364 - 0.00
TOUSA, Inc. - Preferred Stocks 7/31/07(1) 4,273 - 2,563,636 - 0.00
-------------- --------- -----------
$ 4,225,000 $ 2,232 0.00%
============== ========= ===========
(1) Security was acquired through a restructuring that was effective on
July 31, 2007.
Page 10
ITEM 2. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
quarter that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 are attached hereto.
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) First Trust/Four Corners Senior Floating Rate Income Fund II
---------------------------------------------------------------
By (Signature and Title)* /s/ James A. Bowen
--------------------------------------------------
James A. Bowen, Chairman of the Board, President
and Chief Executive Officer
(principal executive officer)
Date April 21, 2010
-----------------------------
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/ James A. Bowen
--------------------------------------------------
James A. Bowen, Chairman of the Board, President
and Chief Executive Officer
(principal executive officer)
Date April 21, 2010
-----------------------------
By (Signature and Title)* /s/ Mark R. Bradley
--------------------------------------------------
Mark R. Bradley, Treasurer, Controller, Chief
Financial Officer and Chief Accounting Officer
(principal financial officer)
Date April 21, 2010
-----------------------------
* Print the name and title of each signing officer under his or her
signature.