n-qwrapincomeadvantagefund.htm
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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- 21269

Evergreen Income Advantage Fund
_____________________________________________________________
(Exact name of registrant as specified in charter)

      200 Berkeley Street
Boston, Massachusetts 02116
_____________________________________________________________
(Address of principal executive offices) (Zip code)

      Michael H. Koonce, Esq.
200 Berkeley Street Boston,
Massachusetts 02116
____________________________________________________________
(Name and address of agent for service)

Registrant's telephone number, including area code:    (617) 210-3200

Date of fiscal year end: Registrant is making a quarterly filing for one of its series, Evergreen Income Advantage Fund , for the quarter ended January 31, 2008. This one series has an April 30 fiscal year end .

Date of reporting period: January 31, 2008

 


Item 1 – Schedule of Investments

EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS

January 31, 2008 (unaudited)

Principal
Amount

Value

CORPORATE BONDS     140.3%

CONSUMER DISCRETIONARY     36.4%

Auto Components     3.7%

Cooper Tire & Rubber Co.:

7.00%, 12/15/2012

$

535,000

$

465,450

7.625%, 03/15/2027

6,935,000

5,964,100

Goodyear Tire & Rubber Co.:

9.00%, 07/01/2015 ρ

7,880,000

8,274,000

11.25%, 03/01/2011

4,900,000

5,194,000

Metaldyne Corp.:

10.00%, 11/01/2013

12,246,000

8,878,350

11.00%, 06/15/2012

6,377,000

3,124,730

31,900,630

Automobiles      2.2%

Ford Motor Co.:

5.80%, 01/12/2009

350,000

340,508

7.45%, 07/16/2031 ρ

2,340,000

1,737,450

7.70%, 05/15/2097

6,075,000

4,161,375

General Motors Corp.:

7.20%, 01/15/2011 ρ

10,310,000

9,459,425

8.25%, 07/15/2023 ρ

3,860,000

3,107,300

18,806,058

Diversified Consumer Services     0.8%

Carriage Services, Inc., 7.875%, 01/15/2015

2,290,000

2,244,200

Education Management, LLC:

8.75%, 06/01/2014

1,780,000

1,722,150

10.25%, 06/01/2016

2,035,000

1,948,513

Service Corporation International, 6.75%, 04/01/2015

900,000

895,500

6,810,363

Hotels, Restaurants & Leisure     9.6%

Caesars Entertainment, Inc.:

7.875%, 03/15/2010 ρ

4,169,000

3,944,916

8.125%, 05/15/2011 ρ

1,350,000

1,182,938

Fontainebleau Las Vegas Holdings, LLC, 10.25%, 06/15/2015 144A ρ

13,618,000

10,281,590

Inn of the Mountain Gods Resort & Casino, 12.00%, 11/15/2010

10,670,000

10,670,000

Isle of Capri Casinos, Inc., 7.00%, 03/01/2014 ρ

19,378,000

15,017,950

Outback Steakhouse, Inc., 10.00%, 06/15/2015 144A ρ

1,600,000

1,016,000

Pokagon Gaming Authority, 10.375%, 06/15/2014 144A ρ

6,230,000

6,471,412

Seneca Gaming Corp., 7.25%, 05/01/2012

2,320,000

2,262,000

Shingle Springs Tribal Gaming Authority, 9.375%, 06/15/2015 144A ρ

6,470,000

5,855,350

Six Flags, Inc.:

8.875%, 02/01/2010

1,670,000

1,231,625

9.625%, 06/01/2014 ρ

3,385,000

2,276,413

Trump Entertainment Resorts, Inc., 8.50%, 06/01/2015 ρ

13,170,000

9,548,250

Universal City Development Partners, Ltd., 11.75%, 04/01/2010

11,315,000

11,682,737

81,441,181

Household Durables     3.8%

Centex Corp., 4.875%, 08/15/2008

3,080,000

3,011,079

D.R. Horton, Inc., 5.00%, 01/15/2009

4,595,000

4,445,663

Hovnanian Enterprises, Inc.:

6.00%, 01/15/2010

1,670,000

943,550

6.50%, 01/15/2014

1,105,000

762,450

KB Home:

7.75%, 02/01/2010

2,435,000

2,361,950

8.625%, 12/15/2008 ρ

1,345,000

1,345,000

Libbey, Inc., FRN, 11.91%, 06/01/2011

4,960,000

5,034,400

 

 

 

1

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

January 31, 2008 (unaudited)

Principal
Amount

Value

CORPORATE BONDS     continued

CONSUMER DISCRETIONARY     continued

Household Durables     continued

Meritage Homes Corp.:

6.25%, 03/15/2015

$

1,725,000

$

1,216,125

7.00%, 05/01/2014

3,895,000

2,862,825

Pulte Homes, Inc.:

4.875%, 07/15/2009

6,795,000

6,472,237

7.875%, 08/01/2011

470,000

457,075

Standard Pacific Corp., 5.125%, 04/01/2009

720,000

576,000

Toll Brothers, Inc., 8.25%, 02/01/2011

2,655,000

2,565,394

32,053,748

Media      10.4%

Cablevision Systems Corp., Ser. B, 8.00%, 04/15/2012

7,210,000

6,939,625

CCH I, LLC, 11.00%, 10/01/2015

7,450,000

5,356,125

CSC Holdings, Inc., 7.625%, 04/01/2011

4,125,000

4,104,375

Dex Media West, LLC, 8.50%, 08/15/2010 ρ

4,470,000

4,542,638

Idearc, Inc., 8.00%, 11/15/2016 ρ

4,400,000

3,960,000

Lamar Media Corp.:

6.625%, 08/15/2015

1,905,000

1,814,513

Ser. B, 6.625%, 08/15/2015

7,825,000

7,453,312

Mediacom Broadband, LLC, 8.50%, 10/15/2015

900,000

742,500

Mediacom Communications Corp.:

7.875%, 02/15/2011

680,000

610,300

9.50%, 01/15/2013

5,405,000

4,850,987

Paxson Communications Corp., FRN, 11.49%, 01/15/2013 144A ρ

9,720,000

8,432,100

R.H. Donnelley Corp., Ser. A-4, 8.875%, 10/15/2017 144A ρ

11,550,000

9,846,375

Sinclair Broadcast Group, Inc., 8.00%, 03/15/2012 ρ

5,525,000

5,607,875

Sirius Satellite Radio, Inc., 9.625%, 08/01/2013 ρ

5,160,000

4,437,600

Visant Corp., 7.625%, 10/01/2012 ρ

7,465,000

7,409,012

XM Satellite Radio Holdings, Inc., 9.75%, 05/01/2014 ρ

5,065,000

4,621,813

Young Broadcasting, Inc., 8.75%, 01/15/2014

11,239,000

7,698,715

88,427,865

Multi-line Retail     0.6%

Neiman Marcus Group, Inc., 9.00%, 10/15/2015

5,565,000

5,592,825

Specialty Retail     2.0%

American Achievement Corp., 8.25%, 04/01/2012

6,155,000

5,662,600

Home Depot, Inc., 5.875%, 12/16/2036

1,635,000

1,368,712

Michaels Stores, Inc., 10.00%, 11/01/2014 ρ

3,005,000

2,689,475

Payless ShoeSource, Inc., 8.25%, 08/01/2013

7,950,000

7,353,750

17,074,537

Textiles, Apparel & Luxury Goods    3.3%

AAC Group Holdings Corp., Sr. Disc. Note, Step Bond, 0.00%, 10/01/2012

1,055,000

880,925

Norcross Safety Products, LLC, Ser. B, 9.875%, 08/15/2011

3,780,000

3,902,850

Oxford Industries, Inc., 8.875%, 06/01/2011

12,000,000

11,790,000

Unifi, Inc., 11.50%, 05/15/2014

2,207,000

1,616,627

Warnaco Group, Inc., 8.875%, 06/15/2013

9,450,000

9,662,625

27,853,027

CONSUMER STAPLES     4.2%

Beverages    0.3%

Constellation Brands, Inc., 8.375%, 12/15/2014 ρ

2,410,000

2,494,350

Food & Staples Retailing     0.7%

Ingles Markets, Inc., 8.875%, 12/01/2011

5,495,000

5,591,163

Rite Aid Corp., 8.125%, 05/01/2010

535,000

518,281

6,109,444

 

 

2

 

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

January 31, 2008 (unaudited)

Principal
Amount

Value

CORPORATE BONDS     continued

CONSUMER STAPLES     continued

Food Products     1.9%

Dean Foods Co., 6.625%, 05/15/2009

$

480,000

$

476,400

Del Monte Foods Co.:

6.75%, 02/15/2015 ρ

490,000

458,150

8.625%, 12/15/2012 ρ

10,870,000

11,033,050

Pilgrims Pride Corp., 8.375%, 05/01/2017 ρ

4,230,000

3,711,825

Smithfield Foods, Inc., 7.75%, 07/01/2017

160,000

152,000

15,831,425

Household Products     0.5%

Church & Dwight Co., 6.00%, 12/15/2012 ρ

4,330,000

4,243,400

Personal Products     0.8%

Central Garden & Pet Co., 9.125%, 02/01/2013

8,560,000

6,848,000

ENERGY      20.4%

Electric Utilities     2.4%

Energy Future Holdings Corp., 10.875%, 11/01/2017 144A ρ

14,100,000

14,029,500

Texas Competitive Electric Holdings Co., LLC:

10.25%, 11/01/2015 144A

6,400,000

6,320,000

10.50%, 11/01/2016 144A ρ

275,000

268,125

20,617,625

Energy Equipment & Services     3.9%

Bristow Group, Inc.:

6.125%, 06/15/2013

380,000

367,650

7.50%, 09/15/2017 144A

2,500,000

2,537,500

Dresser-Rand Group, Inc., 7.375%, 11/01/2014

4,756,000

4,684,660

GulfMark Offshore, Inc., 7.75%, 07/15/2014 ρ

4,100,000

4,182,000

Helix Energy Solutions, Inc., 9.50%, 01/15/2016 144A ρ

1,015,000

1,035,300

Hornbeck Offshore Services, Inc., Ser. B, 6.125%, 12/01/2014

10,495,000

9,812,825

Parker Drilling Co., 9.625%, 10/01/2013

5,215,000

5,527,900

PHI, Inc., 7.125%, 04/15/2013

5,627,000

5,380,819

33,528,654

Oil, Gas & Consumable Fuels     14.1%

Chesapeake Energy Corp.:

7.50%, 09/15/2013 ρ

6,250,000

6,421,875

7.75%, 01/15/2015 ρ

5,500,000

5,665,000

Clayton Williams Energy, Inc., 7.75%, 08/01/2013

2,275,000

1,967,875

Delta Petroleum Corp., 7.00%, 04/01/2015

4,280,000

3,680,800

El Paso Corp., 7.00%, 06/15/2017

2,580,000

2,630,398

Encore Acquisition Co.:

6.00%, 07/15/2015

4,745,000

4,306,088

6.25%, 04/15/2014 ρ

1,710,000

1,598,850

Energy Partners, Ltd., 9.75%, 04/15/2014 ρ

2,452,000

2,120,980

Exco Resources, Inc., 7.25%, 01/15/2011

6,205,000

5,956,800

Forest Oil Corp.:

7.25%, 06/15/2019 144A ρ

2,765,000

2,778,825

7.75%, 05/01/2014

200,000

204,000

Frontier Oil Corp., 6.625%, 10/01/2011

1,515,000

1,499,850

Griffin Coal Mining Co., Ltd.:

9.50%, 12/01/2016

1,985,000

1,553,263

9.50%, 12/01/2016 144A

12,805,000

10,596,137

Mariner Energy, Inc., 8.00%, 05/15/2017

1,343,000

1,289,280

Overseas Shipholding Group, Inc., 8.25%, 03/15/2013

10,960,000

11,234,000

Peabody Energy Corp.:

5.875%, 04/15/2016

9,555,000

8,981,700

6.875%, 03/15/2013

1,655,000

1,650,863

 

 

 

3

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

January 31, 2008 (unaudited)

Principal
Amount

Value

CORPORATE BONDS     continued

ENERGY    continued

Oil, Gas & Consumable Fuels      continued

Plains Exploration & Production Co., 7.75%, 06/15/2015 ρ

$

2,225,000

$

2,238,906

Regency Energy Partners, LP, 8.375%, 12/15/2013

1,658,000

1,691,160

Sabine Pass LNG, LP:

7.25%, 11/30/2013

1,025,000

973,750

7.50%, 11/30/2016

9,995,000

9,420,287

Southwestern Energy Co., 7.50%, 02/01/2018 144A

2,910,000

3,004,575

Targa Resources, Inc., 8.50%, 11/01/2013 ρ

5,540,000

5,249,150

Tesoro Corp.:

6.50%, 06/01/2017

5,250,000

5,145,000

6.625%, 11/01/2015 ρ

1,840,000

1,798,600

Williams Cos.:

7.50%, 01/15/2031

5,520,000

5,906,400

8.125%, 03/15/2012

9,285,000

10,190,287

119,754,699

FINANCIALS      19.6%

Consumer Finance     12.7%

CCH II Capital Corp., 10.25%, 09/15/2010 ρ

22,000,000

20,944,525

Ford Motor Credit Co., LLC:

5.70%, 01/15/2010

10,000

9,153

7.375%, 10/28/2009

14,980,000

14,431,642

9.75%, 09/15/2010 ρ

21,332,000

20,615,757

General Motors Acceptance Corp., LLC:

5.625%, 05/15/2009 ρ

2,415,000

2,338,420

6.875%, 09/15/2011

24,895,000

21,781,756

6.875%, 08/28/2012

1,930,000

1,640,191

7.25%, 03/02/2011

675,000

610,246

7.75%, 01/19/2010

4,020,000

3,847,317

8.00%, 11/01/2031

9,525,000

7,912,541

FRN:

6.03%, 09/23/2008

2,980,000

2,898,721

6.12%, 05/15/2009

6,105,000

5,701,624

Qwest Capital Funding, Inc., 6.50%, 11/15/2018

1,885,000

1,592,825

Sprint Capital Corp., 6.875%, 11/15/2028

3,805,000

3,200,420

107,525,138

Diversified Financial Services     1.3%

Leucadia National Corp.:

7.125%, 03/15/2017

545,000

516,387

8.125%, 09/15/2015

10,635,000

10,635,000

11,151,387

Real Estate Investment Trusts     2.8%

Host Marriott Corp.:

7.125%, 11/01/2013 ρ

5,580,000

5,552,100

Ser. O, 6.375%, 03/15/2015

340,000

326,400

Ser. Q, 6.75%, 06/01/2016

7,550,000

7,304,625

Omega Healthcare Investors, Inc.:

7.00%, 04/01/2014

4,010,000

3,989,950

7.00%, 01/15/2016

3,520,000

3,484,800

Thornburg Mortgage, Inc., 8.00%, 05/15/2013 ρ

1,375,000

1,165,312

Ventas, Inc., 7.125%, 06/01/2015

2,070,000

2,152,800

23,975,987

Real Estate Management & Development     0.0%

Realogy Corp., 10.50%, 04/15/2014 144A ρ

175,000

126,000

 

 

4

 

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

January 31, 2008 (unaudited)

Principal
Amount

Value

CORPORATE BONDS     continued

FINANCIALS      continued

Thrifts & Mortgage Finance     2.8%

Residential Capital, LLC:

7.625%, 11/21/2008

$

6,125,000

$

4,746,875

7.875%, 06/30/2010

27,900,000

18,274,500

FRN, 5.65%, 06/09/2008

920,000

791,200

23,812,575

HEALTH CARE     6.1%

Health Care Equipment & Supplies     0.0%

Universal Hospital Services, Inc., 8.50%, 06/01/2015 ρ

294,000

298,410

Health Care Providers & Services     6.1%

HCA, Inc.:

6.375%, 01/15/2015

6,325,000

5,423,687

6.50%, 02/15/2016

1,805,000

1,541,019

8.75%, 09/01/2010

6,860,000

6,911,450

9.25%, 11/15/2016

20,535,000

21,587,419

Omnicare, Inc.:

6.125%, 06/01/2013

8,540,000

7,728,700

6.875%, 12/15/2015

9,335,000

8,448,175

51,640,450

INDUSTRIALS      11.8%

Aerospace & Defense      6.7%

Alliant Techsystems, Inc., 6.75%, 04/01/2016

1,475,000

1,430,750

DRS Technologies, Inc.:

6.625%, 02/01/2016

2,625,000

2,579,063

7.625%, 02/01/2018 ρ

1,055,000

1,047,088

Hexcel Corp., 6.75%, 02/01/2015

4,200,000

4,074,000

L-3 Communications Holdings, Inc.:

5.875%, 01/15/2015

27,665,000

27,042,537

6.125%, 01/15/2014 ρ

3,520,000

3,484,800

6.375%, 10/15/2015

13,351,000

13,317,622

Vought Aircraft Industries, Inc., 8.00%, 07/15/2011

4,370,000

4,053,175

57,029,035

Commercial Services & Supplies     1.7%

Browning-Ferris Industries, Inc.:

7.40%, 09/15/2035

7,620,000

7,048,500

9.25%, 05/01/2021

3,715,000

3,919,325

Corrections Corporation of America, 6.25%, 03/15/2013

455,000

455,000

Geo Group, Inc., 8.25%, 07/15/2013

1,310,000

1,326,375

Mobile Mini, Inc., 6.875%, 05/01/2015

2,130,000

1,863,750

14,612,950

Machinery      1.2%

Commercial Vehicle Group, Inc., 8.00%, 07/01/2013

12,341,000

10,505,276

Road & Rail     1.8%

Avis Budget Car Rental, LLC:

7.625%, 05/15/2014 ρ

790,000

730,750

7.75%, 05/15/2016

5,475,000

4,900,125

Hertz Global Holdings, Inc.:

8.875%, 01/01/2014

3,220,000

3,123,400

10.50%, 01/01/2016 ρ

95,000

91,794

Kansas City Southern:

7.50%, 06/15/2009

2,730,000

2,760,713

9.50%, 10/01/2008

3,590,000

3,675,262

15,282,044

 

 

 

5

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

January 31, 2008 (unaudited)

Principal
Amount

Value

CORPORATE BONDS     continued

INDUSTRIALS      continued

Trading Companies & Distributors     0.4%

Neff Corp., 10.00%, 06/01/2015 ρ

$

525,000

$

252,000

United Rentals, Inc., 6.50%, 02/15/2012 ρ

3,275,000

3,029,375

3,281,375

INFORMATION TECHNOLOGY      5.8%

Electronic Equipment & Instruments     2.4%

Da-Lite Screen Co., Inc., 9.50%, 05/15/2011

7,000,000

6,527,500

Jabil Circuit, Inc., 8.25%, 03/15/2018 144A ρ

9,660,000

9,390,486

Sanmina-SCI Corp.:

6.75%, 03/01/2013 ρ

1,105,000

961,350

8.125%, 03/01/2016 ρ

1,760,000

1,544,400

FRN, 7.74%, 06/15/2010 144A

1,481,000

1,481,000

19,904,736

IT Services     2.3%

First Data Corp., 9.875%, 09/24/2015 144A ρ

8,860,000

7,852,175

ipayment, Inc., 9.75%, 05/15/2014

4,770,000

4,436,100

SunGard Data Systems, Inc.:

4.875%, 01/15/2014 ρ

6,345,000

5,504,288

10.25%, 08/15/2015 ρ

270,000

271,350

Unisys Corp., 6.875%, 03/15/2010

1,848,000

1,746,360

19,810,273

Semiconductors & Semiconductor Equipment     0.9%

Freescale Semiconductor, Inc.:

8.875%, 12/15/2014

4,775,000

3,903,562

9.125%, 12/15/2014

1,920,000

1,432,800

Spansion, Inc.:

11.25%, 01/15/2016 144A ρ

2,180,000

1,536,900

FRN, 6.20%, 06/01/2013 144A

955,000

732,963

7,606,225

Software      0.2%

Activant Solutions, Inc., 9.50%, 05/01/2016

2,175,000

1,846,031

MATERIALS      16.5%

Chemicals      6.5%

ARCO Chemical Co.:

9.80%, 02/01/2020

2,490,000

2,278,350

10.25%, 11/01/2010

460,000

476,100

Huntsman, LLC, 11.625%, 10/15/2010

7,000,000

7,367,500

Koppers Holdings, Inc.:

9.875%, 10/15/2013

575,000

615,250

Sr. Disc. Note, Step Bond, 0.00%, 11/15/2014

5,519,000

4,691,150

MacDermid, Inc., 9.50%, 04/15/2017 144A ρ

9,116,000

7,885,340

Millenium America, Inc., 7.625%, 11/15/2026

5,515,000

3,943,225

Momentive Performance Materials, Inc., 9.75%, 12/01/2014

9,085,000

8,267,350

Mosaic Co.:

7.30%, 01/15/2028

3,385,000

3,401,925

7.875%, 12/01/2016 144A ρ

4,665,000

5,061,525

Tronox Worldwide, LLC, 9.50%, 12/01/2012

12,150,000

11,481,750

55,469,465

Construction Materials     1.0%

CPG International, Inc., 10.50%, 07/01/2013

8,910,000

7,974,450

Dayton Superior Corp., 13.00%, 06/15/2009

530,000

446,525

8,420,975

 

 

6

 

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

 

 

 

 

 

 

 

January 31, 2008 (unaudited)

 

 

 

 

 

 

 

 

 

 

Principal
Amount

 

 

Value

 

CORPORATE BONDS     continued

 

 

 

 

 

 

 

MATERIALS      continued

 

 

 

 

 

 

 

Containers & Packaging     4.3%

 

 

 

 

 

 

 

BPC Holding Corp., 8.875%, 09/15/2014 ρ

 

$

3,086,000

 

$

2,754,255

 

Exopack Holding Corp., 11.25%, 02/01/2014

 

 

8,275,000

 

 

7,799,187

 

Graham Packaging Co.:

 

 

 

 

 

 

 

8.50%, 10/15/2012

 

 

4,355,000

 

 

3,854,175

 

9.875%, 10/15/2014 ρ

 

 

4,875,000

 

 

4,143,750

 

Graphic Packaging International, Inc.:

 

 

 

 

 

 

 

8.50%, 08/15/2011 ρ

 

 

4,685,000

 

 

4,567,875

 

9.50%, 08/15/2013 ρ

 

 

5,760,000

 

 

5,457,600

 

Smurfit-Stone Container Corp., 8.375%, 07/01/2012

 

 

8,680,000

 

 

8,441,300

 

 

 

 

 

 

 

37,018,142

 

Metals & Mining     1.6%

 

 

 

 

 

 

 

Freeport-McMoRan Copper & Gold, Inc.:

 

 

 

 

 

 

 

6.875%, 02/01/2014 ρ

 

 

2,300,000

 

 

2,346,000

 

8.375%, 04/01/2017

 

 

6,530,000

 

 

6,954,450

 

Indalex Holdings Corp., 11.50%, 02/01/2014

 

 

4,735,000

 

 

4,202,313

 

 

 

 

 

 

 

13,502,763

 

Paper & Forest Products     3.1%

 

 

 

 

 

 

 

Bowater, Inc., 9.375%, 12/15/2021

 

 

1,895,000

 

 

1,373,875

 

Georgia Pacific Corp.:

 

 

 

 

 

 

 

8.125%, 05/15/2011

 

 

5,000,000

 

 

5,025,000

 

8.875%, 05/15/2031

 

 

5,875,000

 

 

5,551,875

 

Glatfelter, 7.125%, 05/01/2016

 

 

4,105,000

 

 

4,074,212

 

Newpage Corp., 10.00%, 05/01/2012 144A ρ

 

 

4,180,000

 

 

4,180,000

 

Verso Paper Holdings, LLC, 11.375%, 08/01/2016

 

 

6,535,000

 

 

6,273,600

 

 

 

 

 

 

 

26,478,562

 

TELECOMMUNICATION SERVICES     9.4%

 

 

 

 

 

 

 

Diversified Telecommunication Services     3.9%

 

 

 

 

 

 

 

Citizens Communications Co.:

 

 

 

 

 

 

 

7.875%, 01/15/2027

 

 

1,120,000

 

 

1,030,400

 

9.25%, 05/15/2011

 

 

6,680,000

 

 

7,147,600

 

Consolidated Communications, Inc., 9.75%, 04/01/2012

 

 

7,800,000

 

 

7,956,000

 

Qwest Corp., 8.875%, 03/15/2012

 

 

11,660,000

 

 

12,374,175

 

West Corp., 11.00%, 10/15/2016

 

 

4,705,000

 

 

4,305,075

 

 

 

 

 

 

 

32,813,250

 

Wireless Telecommunication Services     5.5%

 

 

 

 

 

 

 

Centennial Communications Corp.:

 

 

 

 

 

 

 

8.125%, 02/01/2014

 

 

6,755,000

 

 

6,383,475

 

10.125%, 06/15/2013

 

 

5,215,000

 

 

5,358,413

 

Cricket Communications, Inc.:

 

 

 

 

 

 

 

9.375%, 11/01/2014 ρ

 

 

3,060,000

 

 

2,799,900

 

9.375%, 11/01/2014 144A

 

 

3,580,000

 

 

3,275,700

 

MetroPCS Communications, Inc., 9.25%, 11/01/2014

 

 

9,070,000

 

 

8,389,750

 

Rural Cellular Corp., 8.25%, 03/15/2012

 

 

13,350,000

 

 

13,817,250

 

Sprint Nextel Corp.:

 

 

 

 

 

 

 

Ser. D, 7.375%, 08/01/2015

 

 

5,245,000

 

 

4,801,614

 

Ser. F, 5.95%, 03/15/2014

 

 

2,465,000

 

 

2,177,275

 

 

 

 

 

 

 

47,003,377

 

 

 

 

7

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

 

 

 

 

 

 

 

January 31, 2008 (unaudited)

 

 

 

 

 

 

 

 

 

 

Principal
Amount

 

 

Value

 

CORPORATE BONDS     continued

 

 

 

 

 

 

 

UTILITIES      10.1%

 

 

 

 

 

 

 

Electric Utilities     9.6%

 

 

 

 

 

 

 

Allegheny Energy Supply Co., 8.25%, 04/15/2012 144A

 

$

9,780,000

 

$

10,513,500

 

Aquila, Inc., 14.625%, 07/01/2012

 

 

14,026,000

 

 

17,567,565

 

CMS Energy Corp.:

 

 

 

 

 

 

 

6.55%, 07/17/2017 ρ

 

 

755,000

 

 

743,886

 

8.50%, 04/15/2011 ρ

 

 

1,355,000

 

 

1,464,549

 

Edison Mission Energy:

 

 

 

 

 

 

 

7.00%, 05/15/2017

 

 

1,350,000

 

 

1,319,625

 

7.20%, 05/15/2019

 

 

2,925,000

 

 

2,866,500

 

Mirant Americas Generation, LLC, 8.50%, 10/01/2021 ρ

 

 

1,220,000

 

 

1,082,750

 

Mirant Mid-Atlantic, LLC, Ser. C, 10.06%, 12/30/2028

 

 

1,190,000

 

 

1,380,400

 

Mirant North America, LLC, 7.375%, 12/31/2013 ρ

 

 

12,720,000

 

 

12,783,600

 

NRG Energy, Inc., 7.375%, 02/01/2016 ρ

 

 

10,420,000

 

 

10,094,375

 

Orion Power Holdings, Inc., 12.00%, 05/01/2010

 

 

7,880,000

 

 

8,608,900

 

Reliant Energy, Inc.:

 

 

 

 

 

 

 

6.75%, 12/15/2014

 

 

13,358,000

 

 

13,541,673

 

7.875%, 06/15/2017 ρ

 

 

230,000

 

 

225,400

 

 

 

 

 

 

 

82,192,723

 

Independent Power Producers & Energy Traders     0.5%

 

 

 

 

 

 

 

AES Corp., 8.00%, 10/15/2017

 

 

275,000

 

 

281,875

 

Dynegy Holdings, Inc., 7.50%, 06/01/2015 ρ

 

 

4,310,000

 

 

4,040,625

 

 

 

 

 

 

 

4,322,500

 

Total Corporate Bonds     (cost $1,265,444,299)

 

 

 

 

 

1,195,017,480

 

YANKEE OBLIGATIONS CORPORATE     6.5%

 

 

 

 

 

 

 

ENERGY      0.6%

 

 

 

 

 

 

 

Oil, Gas & Consumable Fuels     0.6%

 

 

 

 

 

 

 

Connacher Oil & Gas, Ltd., 10.25%, 12/15/2015 144A

 

 

3,145,000

 

 

3,129,275

 

OPTI Canada, Inc., 8.25%, 12/15/2014 144A ρ

 

 

2,500,000

 

 

2,462,500

 

 

 

 

 

 

 

5,591,775

 

FINANCIALS      1.2%

 

 

 

 

 

 

 

Consumer Finance     0.4%

 

 

 

 

 

 

 

Virgin Media Finance plc, 9.125%, 08/15/2016 ρ

 

 

3,363,000

 

 

3,060,330

 

Diversified Financial Services     0.8%

 

 

 

 

 

 

 

Preferred Term Securities XII, Ltd., FRN, 10.00%, 12/24/2033

 

 

1,540,000

 

 

1,061,984

 

Ship Finance International, Ltd., 8.50%, 12/15/2013 ρ

 

 

5,880,000

 

 

5,924,100

 

 

 

 

 

 

 

6,986,084

 

INDUSTRIALS      0.4%

 

 

 

 

 

 

 

Road & Rail     0.4%

 

 

 

 

 

 

 

Kansas City Southern de Mexico:

 

 

 

 

 

 

 

7.375%, 06/01/2014 144A

 

 

1,796,000

 

 

1,710,690

 

9.375%, 05/01/2012

 

 

1,495,000

 

 

1,547,325

 

 

 

 

 

 

 

3,258,015

 

INFORMATION TECHNOLOGY     1.0%

 

 

 

 

 

 

 

Communications Equipment     0.8%

 

 

 

 

 

 

 

Nortel Networks Corp., 10.125%, 07/15/2013 144A ρ

 

 

6,890,000

 

 

6,907,225

 

Semiconductors & Semiconductor Equipment     0.2%

 

 

 

 

 

 

 

Sensata Technologies, Inc., 8.00%, 05/01/2014

 

 

1,645,000

 

 

1,488,725

 

MATERIALS      2.5%

 

 

 

 

 

 

 

Metals & Mining     2.1%

 

 

 

 

 

 

 

Novelis, Inc., 7.25%, 02/15/2015

 

 

19,220,000

 

 

17,826,550

 

 

 

8

 

 


 

EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

 

 

 

 

 

 

 

January 31, 2008 (unaudited)

 

 

 

 

 

 

 

 

 

 

Principal
Amount

 

 

Value

 

YANKEE OBLIGATIONS CORPORATE     continued

 

 

 

 

 

 

 

MATERIALS      continued

 

 

 

 

 

 

 

Paper & Forest Products     0.4%

 

 

 

 

 

 

 

Corporacion Durango SAB de CV, 10.50%, 10/05/2017 144A

 

$

4,435,000

 

$

3,647,787

 

TELECOMMUNICATION SERVICES     0.8%

 

 

 

 

 

 

 

Wireless Telecommunication Services     0.8%

 

 

 

 

 

 

 

Intelsat, Ltd.:

 

 

 

 

 

 

 

9.25%, 06/15/2016

 

 

2,385,000

 

 

2,390,963

 

11.25%, 06/15/2016 ρ

 

 

4,170,000

 

 

4,190,850

 

 

 

 

 

 

 

6,581,813

 

Total Yankee Obligations Corporate     (cost $58,642,548)

 

 

 

 

 

55,348,304

 


               

 

 

 

Shares

 

 

Value

 

COMMON STOCKS     0.2%

 

 

 

 

 

 

 

INDUSTRIALS      0.1%

 

 

 

 

 

 

 

Airlines      0.1%

 

 

 

 

 

 

 

Delta Air Lines, Inc. *

 

 

37,496

 

 

631,058

 

MATERIALS      0.0%

 

 

 

 

 

 

 

Chemicals      0.0%

 

 

 

 

 

 

 

Tronox, Inc., Class A ρ

 

 

76,300

 

 

556,990

 

TELECOMMUNICATION SERVICES     0.1%

 

 

 

 

 

 

 

Wireless Telecommunication Services     0.1%

 

 

 

 

 

 

 

Sprint Nextel Corp.

 

 

55,370

 

 

583,046

 

Total Common Stocks     (cost $1,962,235)

 

 

 

 

 

1,771,094

 

PREFERRED STOCKS     1.5%

 

 

 

 

 

 

 

FINANCIALS      1.5%

 

 

 

 

 

 

 

Thrifts & Mortgage Finance     1.5%

 

 

 

 

 

 

 

Fannie Mae, Ser. S, 8.25%

 

 

398,865

 

 

10,538,013

 

Freddie Mac, Ser. Z, 8.375%

 

 

75,135

 

 

2,017,375

 

Total Preferred Stocks     (cost $11,870,143)

 

 

 

 

 

12,555,388

 

               

 

 

 

Principal
Amount

 

 

Value

 

LOANS      4.5%

 

 

 

 

 

 

 

CONSUMER DISCRETIONARY     0.3%

 

 

 

 

 

 

 

Claires Stores, Inc., 6.75%, 05/29/2014

 

$

498,747

 

 

398,873

 

Metaldyne Corp., FRN:

 

 

 

 

 

 

 

7.06%, 01/11/2012

 

 

310,000

 

 

264,548

 

7.06%, 01/11/2014

 

 

1,860,000

 

 

1,584,032

 

 

 

 

 

 

 

2,247,453

 

ENERGY      1.9%

 

 

 

 

 

 

 

Blue Grass Energy Corp., FRN, 9.82%, 12/30/2013 <

 

 

15,300,000

 

 

14,822,487

 

Saint Acquisition Corp., FRN, 8.81%, 06/05/2014

 

 

1,600,000

 

 

1,236,880

 

 

 

 

 

 

 

16,059,367

 

INDUSTRIALS      1.3%

 

 

 

 

 

 

 

Clarke American Corp., FRN, 7.58%, 02/28/2014 <

 

 

8,570,000

 

 

6,817,178

 

Neff Corp., FRN:

 

 

 

 

 

 

 

7.43%, 11/30/2014 <

 

 

3,855,000

 

 

2,849,693

 

9.20%, 11/30/2014 <

 

 

490,000

 

 

362,218

 

10.25%, 06/01/2008 <

 

 

1,720,000

 

 

1,271,458

 

 

 

 

 

 

 

11,300,547

 



 

 

 

9

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

 

 

 

 

 

 

 

January 31, 2008 (unaudited)

 

 

 

 

 

 

 

 

 

 

Principal
Amount

 

 

Value

 

LOANS      continued

 

 

 

 

 

 

 

MATERIALS      1.0%

 

 

 

 

 

 

 

Wimar Co., 5.74%, 01/03/2012

 

$

8,455,000

 

$

8,341,449

 

Total Loans     (cost $39,451,300)

 

 

 

 

 

37,948,816

 

SHORT-TERM INVESTMENTS     27.0%

 

 

 

 

 

 

 

CORPORATE BONDS     1.6%

 

 

 

 

 

 

 

Commercial Banks     0.7%

 

 

 

 

 

 

 

First Tennessee Bank, FRN, 4.04%, 08/15/2008 ρρ

 

 

6,000,000

 

 

5,967,987

 

Insurance      0.9%

 

 

 

 

 

 

 

Metropolitan Life Global Funding, FRN, 3.92%, 08/21/2008 ρρ

 

 

8,000,000

 

 

7,995,062

 

               

 

 

 

Shares

 

 

Value

 

MUTUAL FUND SHARES     25.4%

 

 

 

 

 

 

 

Evergreen Institutional Money Market Fund, Class I, 4.31% q ρρ

 

 

216,415,965

 

 

216,415,965

 

Total Short-Term Investments     (cost $230,415,967)

 

 

 

 

 

230,379,014

 

Total Investments    (cost $1,607,786,492)      180.0%

 

 

 

 

 

1,533,020,096

 

Other Assets and Liabilities and Preferred Shares     (80.0%)

 

 

 

 

 

(681,233,009

)

Net Assets Applicable to Common Shareholders     100.0%

 

 

 

 

$

851,787,087

 

ρ

All or a portion of this security is on loan.

144A

Security that may be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees, unless otherwise noted.

Security initially issued in zero coupon form which converts to coupon form at a specified rate and date. An effective interest rate is applied to recognize interest income daily for the bond. This rate is based on total expected interest to be earned over the life of the bond which consists of the aggregate coupon-interest payments and discount at acquisition. The rate shown is the stated rate at the current period end.

*

Non-income producing security

<

All or a portion of the position represents an unfunded loan commitment.

ρρ

All or a portion of this security represents investment of cash collateral received from securities on loan.

q

Rate shown is the 7-day annualized yield at period end.

Evergreen Investment Management Company, LLC is the investment advisor to both the Fund and the money market fund.

Summary of Abbreviations

FRN

Floating Rate Note

At January 31, 2008, the Fund had the following open interest rate swap agreements:

 

Expiration

 

Notional
Amount

 

Counterparty

 

Cash Flows Paid
by the Fund

 

Cash Flows Received
by the Fund

 

Unrealized
Gain (Loss)

7/02/2008

 

$100,000,000

 

JPMorgan Chase & Co.

 

Fixed 2.737%

 

Floating 4.60%1

 

$314,810

11/26/2008

 

65,000,000

 

Merrill Lynch & Co., Inc.

 

Fixed 3.585%

 

Floating 3.29%2

 

(481,836)

1

This rate represents the 1 month USD London InterBank Offered Rate (LIBOR) effective for the period of January 2, 2008 through February 4, 2008.

2

This rate represents the 1 month USD London InterBank Offered Rate (LIBOR) effective for the period of January 28, 2008 through February 26, 2008.

At January 31, 2008, the Fund had the following open credit default swap contracts outstanding:

 

Expiration

 

Counterparty

 

Reference Index

 

Notional
Amount

 

Fixed
Payments
Made by
the Fund

 

Frequency
of Payments
Made

 

Unrealized
Loss

12/12/2012

 

Goldman Sachs

 

Dow Jones CDX,

 

$9,210,000

 

3.75%

 

Quarterly

 

$780,530

 

 

Group, Inc.

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

Investment Grade Index

 

 

 

 

 

 

 

 

12/13/2049

 

Goldman Sachs

 

Dow Jones CDX,

 

2,450,000

 

0.27%

 

Quarterly

 

585,305

 

 

Group, Inc.

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

Investment Grade Index

 

 

 

 

 

 

 

 

 

 

10

 

 


EVERGREEN INCOME ADVANTAGE FUND
SCHEDULE OF INVESTMENTS continued

 

 

 

 

 

 

 

January 31, 2008 (unaudited)

 

 

 

 

 

 

 

On January 31, 2008, the aggregate cost of securities for federal income tax purposes was $1,609,163,831. The gross unrealized appreciation and depreciation on securities based on tax cost was $3,858,841 and $80,002,576, respectively, with a net unrealized depreciation of $76,143,735.

As of January 31, 2008, the Fund had unfunded loan commitments of $21,198,538.

Valuation of investments

Portfolio debt securities acquired with more than 60 days to maturity are fair valued using matrix pricing methods determined by an independent pricing service which takes into consideration such factors as similar security prices, yields, maturities, liquidity and ratings. Securities for which valuations are not readily available from an independent pricing service may be valued by brokers which use prices provided by market makers or estimates of market value obtained from yield data relating to investments or securities with similar characteristics.

Listed equity securities are usually valued at the last sales price or official closing price on the national securities exchange where the securities are principally traded.

Short-term securities with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost, which approximates market value.

Investments in open-end mutual funds are valued at net asset value. Securities for which market quotations are not readily available or not reflective of current market value are valued at fair value as determined by the investment advisor in good faith, according to procedures approved by the Board of Trustees.

When-issued and delayed delivery transactions

The Fund records when-issued or delayed delivery securities as of trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Loans

The Fund may purchase loans through an agent, by assignment from another holder of the loan or as a participation interest in another holders portion of the loan. Loans are purchased on a when-issued or delayed delivery basis. Interest income is accrued based on the terms of the securities. Fees earned on loan purchasing activities are recorded as income when earned. Loans involve interest rate risk, liquidity risk and credit risk, including the potential default or insolvency of the borrower.

Securities lending

The Fund may lend its securities to certain qualified brokers in order to earn additional income. The Fund receives compensation in the form of fees or interest earned on the investment of any cash collateral received. The Fund also continues to receive interest and dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a market value at least equal to the market value of the securities on loan, including accrued interest. In the event of default or bankruptcy by the borrower, the Fund could experience delays and costs in recovering the loaned securities or in gaining access to the collateral. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

Interest rate swaps

The Fund may enter into interest rate swap agreements to manage the Funds exposure to interest rates. A swap agreement is an exchange of cash payments between the Fund and another party based on a notional principal amount. Cash payments or receipts are recorded as realized gains or losses. The value of the swap agreements is marked-to-market daily based upon quotations from market makers and any change in value is recorded as an unrealized gain or loss. The Fund could be exposed to risks if the counterparty defaults on its obligation to perform or if there are unfavorable changes in the fluctuation of interest rates.

Credit default swaps

The Fund may enter into credit default swaps. Credit default swaps involve an exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of default or bankruptcy. Under the terms of the swap, one party acts as a guarantor and receives a periodic stream of payments that is a fixed percentage applied to a notional principal amount over the term of the swap. In return, the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. Periodic payments are recorded as realized gains or losses. Any premiums paid or received on the transactions are recorded as an asset or liability on the Statement of Assets and Liabilities and amortized. The Fund may enter into credit default swaps as either the guarantor or the counterparty.

Swaps are marked-to-market daily based on quotations from market makers and any change in value is recorded as an unrealized gain or loss. Payments received or made as a result of a credit event or termination of the contract are recognized as realized gains or losses. The Fund could be exposed to risks if the counterparty defaults on its obligation to perform, or if there are unfavorable changes in the fluctuation of interest rates or in the price of the underlying security.

 

 

 

11

 


Item 2 - Controls and Procedures

(a)     

The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-Q was recorded, processed, summarized, and reported timely.

 
(b)     

There has been no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3 - Exhibits

File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.

(a) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached as 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.

Evergreen Income Advantage Fund

By:   _____________________________
          Dennis H. Ferro, 
          Principal Executive Officer 
Date:   March 30, 2008 

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:    _____________________________
          Dennis H. Ferro, 
          Principal Executive Officer 
Date:    March 30, 2008 
       
By:    _____________________________
         Kasey Phillips 
          Principal Financial Officer 
Date:    March 30, 2008