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 811-5822
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MFS CHARTER INCOME TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
James F. DesMarais
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: November 30
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Date of reporting period: February 28, 2005
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ITEM 1. SCHEDULE OF INVESTMENTS.
MFS(R) Mutual Funds
QUARTERLY PORTFOLIO HOLDINGS 02/28/05
MFS(R) CHARTER INCOME TRUST
[graphic omitted]
[logo] M F S(R)
INVESTMENT MANAGEMENT
THE TRUST IS A CLOSED-END INVESTMENT PRODUCT. SHARES OF THE TRUST ARE ONLY
AVAILABLE FOR PURCHASE/SALE ON THE NYSE AT THE CURRENT MARKET PRICE. SHARES MAY
TRADE AT A PREMIUM OR DISCOUNT TO NAV.
Visit MFS.COM for the latest information about your investment.
o Annual and semiannual reports contain information regarding the specific
securities held in the fund and how the fund has performed over the
period.
o Week in Review provides a look at key events influencing U.S. and global
financial markets for the week.
o MFS Global Perspective is a commentary and analysis of markets around the
globe.
o Chief Investment Strategist Corner is a commentary by James Swanson, MFS'
Chief Investment Strategist.
A fact sheet, annual, and semiannual report for the fund can be accessed by
clicking "Closed End Funds" on the home page. Week in Review, MFS Global
Perspective, and Chief Investment Strategist Corner are located under "Updates
and Announcements."
The portfolio is actively managed, and current holdings may be different.
MFS Charter Income Trust
PORTFOLIO OF INVESTMENTS (Unaudited) 02/28/2005
ISSUER PAR AMOUNT $ VALUE
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BONDS - 95.8%
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ADVERTISING & BROADCASTING - 1.7%
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Allbritton Communications Co., 7.75%, 2012 $ 555,000 $ 578,587
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DIRECTV Holdings LLC, 8.375%, 2013 1,710,000 1,932,300
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Echostar DBS Corp., 6.375%, 2011 2,195,000 2,260,850
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Intelsat Ltd., 7.7938%, 2012## 150,000 154,125
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Intelsat Ltd., 8.625%, 2015## 340,000 362,950
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Lamar Media Corp., 7.25%, 2013 1,390,000 1,487,300
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News America Holdings, 7.7%, 2025 1,140,000 1,370,118
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News America, Inc., 6.2%, 2034## 542,000 559,022
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Paxson Communications Corp., 0% to 2006, 12.25% to 2008 580,000 566,950
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Young Broadcasting, Inc., 8.5%, 2008 355,000 379,850
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$ 9,652,052
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AGENCY - OTHER - 1.0%
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Financing Corp., 10.35%, 2018 $ 3,600,000 $ 5,499,688
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AIRLINES - 0.2%
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Continental Airlines, Inc., 7.566%, 2020 $ 1,073,054 $ 883,444
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ASSET BACKED & SECURITIZED - 5.3%
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Airplane Pass-Through Trust, 10.875%, 2019* $ 222,233 $ 667
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Amresco Commercial Mortgage Funding I, 7%, 2029 3,000,000 3,112,950
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Asset Securitization Corp., 8.2901%, 2026 2,000,000 2,069,608
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Asset Securitization Corp., 7.525%, 2029 1,586,134 1,426,529
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Commercial Mortgage Acceptance Corp., 5.44%, 2030## 3,535,000 3,560,285
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Credit Suisse First Boston Mortgage Securities Corp., 6.75%, 2030## 2,000,000 1,895,861
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Crest Ltd., 7%, 2040## 2,000,000 1,896,250
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DLJ Commercial Mortgage Corp., 6.04%, 2031 2,000,000 1,979,040
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First Union-Lehman Brothers Bank of America, 0.5602%, 2028^^ 77,285,383 1,678,739
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First Union-Lehman Brothers Commercial Mortgage Trust, 7%, 2029## 850,000 947,834
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First Union-Lehman Brothers Commercial Mortgage Trust, 7.5%, 2029 3,000,000 3,453,511
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Mortgage Capital Funding, Inc., 0.8612%, 2031^^ 22,865,174 504,003
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Residential Asset Mortgage Products, Inc., 3.878%, 2035 1,340,523 1,323,766
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Structured Asset Securities Corp., 4.67%, 2035 2,484,152 2,473,669
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TIAA Retail Estate CDO Ltd., 7.17%, 2032## 3,163,091 3,322,767
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$ 29,645,479
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AUTOMOTIVE - 1.1%
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Affinia Group, Inc., 9%, 2014## $ 75,000 $ 75,937
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DaimlerChrysler N.A. Holdings Corp., 8.5%, 2031 400,000 509,734
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Ford Motor Credit Co., 5.7%, 2010 1,400,000 1,373,030
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General Motors Acceptance Corp., 8%, 2031 500,000 501,563
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General Motors Corp., 7.2%, 2011 1,200,000 1,191,516
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General Motors Corp., 8.375%, 2033 500,000 491,156
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Navistar International Corp., 7.5%, 2011 730,000 777,450
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TRW Automotive, Inc., 9.375%, 2013 781,000 882,530
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TRW Automotive, Inc., 11%, 2013 84,000 98,700
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Tenneco Automotive, Inc., 10.25%, 2013 270,000 317,250
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Tenneco Automotive, Inc., 8.625%, 2014## 105,000 111,825
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$ 6,330,691
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BANKS & CREDIT COMPANIES - 3.0%
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Abbey National Capital Trust I, 8.963% to 2030, 5.745% to 2049 $ 1,500,000 $ 2,147,137
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Banco Mercantil del Norte S.A., 5.875%, 2014## 2,408,000 2,462,180
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Chuo Mitsui Trust & Banking Co., 5.506%, 2049## 1,676,000 1,643,767
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HBOS Capital Funding LP, 6.071% to 2014, 4.82% to 2049## 1,330,000 1,426,925
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J.P. Morgan Chase & Co., 5.125%, 2014 2,100,000 2,113,339
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Kazkommerts International B.V., 10.125%, 2007 128,000 139,200
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Kazkommerts International B.V., 10.125%, 2007## 367,000 399,113
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Mizuho Financial Group, Inc., 5.79%, 2014## 1,898,000 1,981,163
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RBS Capital Trust II, 6.425% to 2034, 4.863% to 2049 829,000 894,091
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Turanalem Finance B.V., 8%, 2014## 1,940,000 1,944,850
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UFJ Finance Aruba AEC, 6.75%, 2013 1,300,000 1,441,705
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$ 16,593,470
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BROADCAST & CABLE TV - 1.6%
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CSC Holdings, Inc., 8.125%, 2009 $ 1,050,000 $ 1,168,125
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Charter Communications, Inc., 8.625%, 2009 580,000 474,150
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Continental Cablevision, Inc., 9.5%, 2013 2,390,000 2,560,048
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Lenfest Communications, Inc., 10.5%, 2006 1,900,000 2,043,370
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Mediacom Broadband LLC, 9.5%, 2013 280,000 291,900
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Rogers Cable, Inc., 5.5%, 2014 1,025,000 981,438
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TCI Communications, Inc., 9.8%, 2012 1,169,000 1,491,819
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$ 9,010,850
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BROKERAGE & ASSET MANAGERS - 1.0%
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Goldman Sachs Group, Inc., 5.7%, 2012 $ 2,680,000 $ 2,817,302
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Morgan Stanley Dean Witter, Inc., 6.6%, 2012 2,537,000 2,805,072
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$ 5,622,374
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BUILDING - 0.2%
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Building Materials Corp. of America, 7.75%, 2014## $ 660,000 $ 666,600
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Jacuzzi Brands, Inc., 9.625%, 2010 260,000 290,550
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$ 957,150
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BUSINESS SERVICES - 0.2%
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Iron Mountain, Inc., 7.75%, 2015 $ 265,000 $ 269,638
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Xerox Corp., 7.625%, 2013 920,000 997,050
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$ 1,266,688
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CHEMICALS - 1.2%
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BCP Caylux Holdings Luxembourg S.A., 9.625%, 2014## $ 365,000 $ 414,070
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Hercules, Inc., 6.75%, 2029 1,095,000 1,127,850
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Huntsman International LLC, 10.125%, 2009 331,000 347,964
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Kronos International, Inc., 8.875%, 2009 EUR 100,000 143,779
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Lyondell Chemical Co., 11.125%, 2012 $ 750,000 885,000
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Nalco Co., 7.75%, 2011 395,000 422,650
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Nova Chemicals Corp., 6.5%, 2012 830,000 879,800
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Rhodia S.A., 8.875%, 2011 325,000 337,188
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Rockwood Specialties Group, Inc., 7.5%, 2014## 60,000 63,300
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Sovereign Specialty Chemicals, Inc., 11.875%, 2010 135,000 142,931
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Yara International A.S.A., 5.25%, 2014## 2,000,000 2,006,058
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$ 6,770,590
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CONGLOMERATES - 0.6%
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Kennametal, Inc., 7.2%, 2012 $ 2,775,000 $ 3,118,539
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CONSTRUCTION - 0.2%
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D.R. Horton, Inc., 8%, 2009 $ 935,000 $ 1,035,461
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CONSUMER GOODS & SERVICES - 0.2%
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Church & Dwight Co., Inc., 6%, 2012## $ 460,000 $ 468,050
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K2, Inc., 7.375%, 2014 560,000 606,200
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$ 1,074,250
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CONTAINERS - 0.4%
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Crown European Holdings S.A., 9.5%, 2011 $ 530,000 $ 596,250
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Owens-Brockway Glass Container, Inc., 8.875%, 2009 660,000 712,800
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Owens-Brockway Glass Container, Inc., 8.25%, 2013 500,000 550,000
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Pliant Corp., 13%, 2010 190,000 185,725
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$ 2,044,775
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DEFENSE ELECTRONICS - 0.1%
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L-3 Communications Holdings, Inc., 5.875%, 2015## $ 830,000 $ 842,450
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ELECTRONICS - 0.2%
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Flextronics International Ltd., 6.5%, 2013 $ 1,145,000 $ 1,190,800
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EMERGING MARKET QUASI-SOVEREIGN - 1.8%
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Gazprom OAO, 9.625%, 2013 $ 420,000 $ 500,850
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Gazprom OAO, 9.625%, 2013## 1,510,000 1,793,125
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Pemex Master Trust, 9.5%, 2027## 2,005,000 2,611,513
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Pemex Project Funding Master Trust, 8.625%, 2022 2,576,000 3,091,200
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Petroliam Nasional Berhad, 7.75%, 2015 1,363,000 1,651,813
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Petronas Capital Ltd., 7.875%, 2022## 464,000 579,157
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$ 10,227,658
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EMERGING MARKET SOVEREIGN - 5.7%
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Federal Republic of Brazil, 8%, 2014 $ 11,290,593 $ 11,495,235
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Republic of Colombia, 11.75%, 2020 1,289,000 1,624,140
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Republic of Panama, 9.375%, 2023 - 2029 2,262,000 2,725,830
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Republic of Panama, 8.875%, 2027 1,001,000 1,131,130
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Republic of Peru, 9.875%, 2015 1,311,000 1,583,033
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Republic of Peru, 8.75%, 2033 851,000 919,080
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Republic of South Africa, 9.125%, 2009 469,000 546,971
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Republic of South Africa, 8.5%, 2017 1,974,000 2,472,435
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Russian Federation, 3%, 2008 - 2011 4,495,000 4,077,118
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Russian Federation, 11%, 2018 1,071,000 1,542,668
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State of Qatar, 9.75%, 2030 2,645,000 3,934,438
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$ 32,052,078
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ENERGY - INDEPENDENT - 1.0%
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Chesapeake Energy Corp., 7.5%, 2014 $ 335,000 $ 375,200
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Chesapeake Energy Corp., 6.375%, 2015## 140,000 148,050
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Chesapeake Energy Corp., 6.875%, 2016 925,000 994,375
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Forest Oil Corp., 7.75%, 2014 550,000 598,813
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Kerr-McGee Corp., 6.95%, 2024 1,800,000 1,996,079
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Newfield Exploration Co., 6.625%, 2014## 225,000 243,563
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Plains Exploration & Production Co., 7.125%, 2014 625,000 690,625
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Vintage Petroleum, Inc., 8.25%, 2012 550,000 606,375
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$ 5,653,080
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ENERGY - INTEGRATED - 0.7%
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Amerada Hess Corp., 7.3%, 2031 $ 2,345,000 $ 2,743,106
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Tyumen Oil Co., 11%, 2007 849,000 959,370
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$ 3,702,476
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ENTERTAINMENT - 1.3%
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AMC Entertainment, Inc., 9.5%, 2011 $ 349,000 $ 360,342
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Liberty Media Corp., 5.7%, 2013 1,865,000 1,830,287
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Loews Cineplex Entertainment Corp., 9%, 2014## 675,000 707,063
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Six Flags, Inc., 9.75%, 2013 550,000 522,500
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Turner Broadcasting System, Inc., 8.375%, 2013 1,784,000 2,170,937
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Walt Disney Co., 6.375%, 2012 1,700,000 1,869,043
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$ 7,460,172
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FOOD & NON-ALCOHOLIC BEVERAGES - 0.2%
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Burns, Philp & Co. Ltd., 9.75%, 2012 $ 340,000 $ 375,700
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Seminis Vegetable Seeds, Inc., 10.25%, 2013 360,000 431,100
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Smithfield Foods, Inc., 7%, 2011 $ 550,000 $ 591,250
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$ 1,398,050
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FOREST & PAPER PRODUCTS - 1.2%
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Abitibi-Consolidated, Inc., 7.75%, 2011 $ 915,000 $ 942,450
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Buckeye Technologies, Inc., 8.5%, 2013 460,000 502,550
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Donohue Forest Products, Inc., 7.625%, 2007 1,588,000 1,643,580
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Georgia-Pacific Corp., 9.375%, 2013 995,000 1,150,469
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Georgia-Pacific Corp., 7.25%, 2028 800,000 894,000
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MDP Acquisitions PLC, 9.625%, 2012 515,000 570,363
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Norske Skog Canada Ltd., 7.375%, 2014 695,000 729,750
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$ 6,433,162
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GAMING & LODGING - 1.5%
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Aztar Corp., 7.875%, 2014 $ 640,000 $ 710,400
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Boyd Gaming Corp., 6.75%, 2014 680,000 709,750
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Caesars Entertainment, Inc., 8.125%, 2011 730,000 843,150
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Host Marriott LP, 7.125%, 2013 550,000 584,375
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MGM Mirage, Inc., 8.375%, 2011 1,385,000 1,551,200
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Mandalay Resort Group, 9.375%, 2010 550,000 635,938
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Pinnacle Entertainment, Inc., 8.75%, 2013 295,000 324,500
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Royal Caribbean Cruises Ltd., 8%, 2010 990,000 1,119,938
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Scientific Games Corp., 6.25%, 2012## 80,000 82,400
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Starwood Hotels & Resorts Worldwide, Inc., 7.875%, 2012 1,135,000 1,313,763
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Station Casinos, Inc., 6.5%, 2014 600,000 627,000
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$ 8,502,414
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INDUSTRIAL - 0.2%
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Amsted Industries, Inc., 10.25%, 2011## $ 335,000 $ 378,550
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Valmont Industries, Inc., 6.875%, 2014 730,000 756,463
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Williams Scotsman, Inc., 10%, 2008 205,000 223,963
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$ 1,358,976
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INSURANCE - PROPERTY & CASUALTY - 0.2%
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Fund American Cos., Inc., 5.875%, 2013 $ 1,351,000 $ 1,371,632
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INTERNATIONAL MARKET SOVEREIGN - 18.0%
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Canada Housing Trust, 4.65%, 2009 CAD 260,000 $ 218,595
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Commonwealth of Australia, 6%, 2017 AUD 1,844,000 1,510,392
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Federal Republic of Germany, 4%, 2007 EUR 2,998,000 4,083,658
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Federal Republic of Germany, 3.5%, 2008 EUR 9,128,000 12,349,300
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Federal Republic of Germany, 3.75%, 2015 EUR 1,856,000 2,467,377
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Federal Republic of Germany, 6.25%, 2030 EUR 720,000 1,259,676
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Government of Canada, 5.5%, 2010 CAD 1,761,000 1,542,572
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Government of Canada, 5.25%, 2012 CAD 1,561,000 1,355,900
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Government of Canada, 8%, 2023 CAD 224,000 254,902
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Government of New Zealand, 7%, 2009 NZD 1,373,000 1,029,085
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Government of New Zealand, 6.5%, 2013^ NZD 8,918,000 6,640,920
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Kingdom of Belgium, 3.75%, 2009 EUR 924,000 1,260,787
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Kingdom of Belgium, 5%, 2012 EUR 1,973,000 2,874,633
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Kingdom of Netherlands, 5.75%, 2007 EUR 3,164,000 4,451,231
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Kingdom of Netherlands, 3.75%, 2009 EUR 4,770,000 6,505,983
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Kingdom of Spain, 6%, 2008 EUR 1,600,000 2,315,502
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Kingdom of Spain, 5.35%, 2011 EUR 4,584,000 6,781,645
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Republic of Austria, 5.5%, 2007 EUR 1,838,000 2,608,023
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Republic of Austria, 5%, 2012 EUR 2,313,000 3,367,881
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Republic of Austria, 4.65%, 2018 EUR 358,000 510,133
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Republic of Finland, 3%, 2008 EUR 3,829,000 5,105,572
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Republic of Finland, 5.375%, 2013 EUR 2,014,000 3,014,315
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Republic of France, 4.75%, 2007 EUR 4,665,000 6,481,225
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Republic of France, 4%, 2009 EUR 1,681,000 2,318,229
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Republic of Ireland, 4.25%, 2007 EUR 6,952,000 9,584,021
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Republic of Ireland, 4.6%, 2016 EUR 759,000 1,083,437
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United Kingdom Treasury, 7.25%, 2007 GBP 826,000 1,689,671
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United Kingdom Treasury, 5.75%, 2009 GBP 1,091,000 2,186,039
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United Kingdom Treasury, 8%, 2015 GBP 2,360,000 5,783,562
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$100,634,266
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MACHINERY & TOOLS - 0.5%
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AGCO Corp., 9.5%, 2008 $ 940,000 $ 989,350
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Case New Holland, Inc., 6%, 2009## 550,000 541,750
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Case New Holland, Inc., 9.25%, 2011## 240,000 264,000
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Manitowoc Co., Inc., 10.5%, 2012 331,000 383,133
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Terex Corp., 9.25%, 2011 325,000 362,375
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United Rentals, Inc., 6.5%, 2012 340,000 342,550
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$ 2,883,158
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MEDICAL & HEALTH TECHNOLOGY & SERVICES - 0.8%
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AmerisourceBergen Corp., 7.25%, 2012 $ 550,000 $ 610,500
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Fisher Scientific International, Inc., 8.125%, 2012 1,147,000 1,258,833
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HCA, Inc., 8.75%, 2010 1,100,000 1,258,205
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HCA, Inc., 6.375%, 2015 725,000 735,847
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InSight Health Services Corp., 9.875%, 2011 360,000 369,000
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$ 4,232,385
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METALS & MINING - 0.9%
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Foundation PA Coal Co., 7.25%, 2014 $ 750,000 $ 795,000
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International Steel Group, Inc., 6.5%, 2014 2,100,000 2,247,000
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Peabody Energy Corp., 6.875%, 2013 355,000 384,288
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Peabody Energy Corp., 5.875%, 2016 850,000 858,500
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U.S. Steel Corp., 9.75%, 2010 413,000 470,820
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$ 4,755,608
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MORTGAGE BACKED - 14.5%
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Fannie Mae, 6%, 2016 - 2034 $ 9,109,805 $ 9,432,138
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Fannie Mae, 5.5%, 2019 - 2034 39,042,284 39,569,059
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Fannie Mae, 5.9957%, 2020 3,477 3,477
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Fannie Mae, 6.5%, 2032 - 2033 5,439,727 5,668,479
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Fannie Mae, 5%, 2034 14,292,342 14,123,121
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Freddie Mac, 6%, 2034 2,894,224 2,973,972
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Freddie Mac, 5.5%, 2034 9,150,465 9,250,167
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$ 81,020,413
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NATURAL GAS - DISTRIBUTION - 0.2%
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AmeriGas Partners LP, 8.875%, 2011 $ 1,190,000 $ 1,297,100
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NATURAL GAS - PIPELINE - 1.3%
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CenterPoint Energy Resources Corp., 7.875%, 2013 $ 1,600,000 $ 1,888,659
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El Paso Energy Corp., 7.625%, 2010 570,000 618,450
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Enterprise Products Operating LP, 6.375%, 2013 2,800,000 3,021,040
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Magellan Midstream Partners LP, 5.65%, 2016 311,000 315,211
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Southern Natural Gas Co., Inc., 8.875%, 2010 550,000 609,125
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Williams Cos., Inc., 8.75%, 2032 800,000 1,012,000
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$ 7,464,485
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OIL SERVICES - 0.2%
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Grant Prideco, Inc., 9%, 2009 $ 550,000 $ 605,000
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GulfMark Offshore, Inc., 7.75%, 2014## 435,000 465,450
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$ 1,070,450
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OILS - 0.2%
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CITGO Petroleum Corp., 6%, 2011## $ 550,000 $ 566,500
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Premcor Refining Group, Inc., 7.5%, 2015 550,000 599,500
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$ 1,166,000
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POLLUTION CONTROL - 0.1%
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Allied Waste North America, Inc., 7.875%, 2013 $ 550,000 $ 574,750
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PRINTING & PUBLISHING - 0.3%
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Dex Media East LLC, 9.875%, 2009 $ 730,000 $ 817,600
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Dex Media West LLC, 9.875%, 2013 327,000 375,232
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MediaNews Group, Inc., 6.875%, 2013 515,000 524,013
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$ 1,716,845
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REAL ESTATE - 0.3%
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HRPT Properties Trust, 6.25%, 2016 $ 1,324,000 $ 1,402,095
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RESTAURANTS - 0.3%
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YUM! Brands, Inc., 8.875%, 2011 $ 1,500,000 $ 1,816,133
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RETAILERS - 1.0%
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Couche-Tard, Inc., 7.5%, 2013 $ 210,000 $ 224,700
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Gap, Inc., 9.8%, 2008 940,000 1,118,600
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JC Penney Co., Inc., 7.4%, 2037 1,544,000 1,749,216
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Limited Brands, Inc., 5.25%, 2014 1,100,000 1,091,695
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Rite Aid Corp., 8.125%, 2010 365,000 381,425
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Saks, Inc., 7%, 2013 756,000 786,240
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$ 5,351,876
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SUPERMARKETS - 0.1%
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Roundy's, Inc., 8.875%, 2012 $ 475,000 $ 515,375
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TELECOMMUNICATIONS - WIRELESS - 1.8%
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AT&T Wireless Services, Inc., 8.75%, 2031 $ 1,500,000 $ 2,040,366
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Centennial Communications Corp., 10.125%, 2013 375,000 435,000
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Cingular Wireless LLC, 6.5%, 2011 1,700,000 1,863,076
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Crown Castle International Corp., 7.5%, 2013 365,000 396,025
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Mobile TeleSystems OJSC, 9.75%, 2008## 1,552,000 1,678,100
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Nextel Communications, Inc., 7.375%, 2015 1,360,000 1,489,200
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Rogers Wireless, Inc., 6.375%, 2014 550,000 564,438
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Rogers Wireless, Inc., 7.5%, 2015 595,000 651,525
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Vimpel-Communications, 10%, 2009## 811,000 881,963
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$ 9,999,693
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TELECOMMUNICATIONS - WIRELINE - 2.7%
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AT&T Corp., 9.05%, 2011 $ 550,000 $ 637,312
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AT&T Corp., 9.75%, 2031 1,005,000 1,277,606
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Citizens Communications Co., 9.25%, 2011 1,045,000 1,204,362
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Citizens Communications Co., 6.25%, 2013 845,000 838,662
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Citizens Communications Co., 9%, 2031 650,000 745,062
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Deutsche Telekom International Finance B.V., 8.75%, 2030 1,500,000 2,021,578
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Eircom Funding PLC, 8.25%, 2013 810,000 905,175
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Qwest Corp., 7.875%, 2011## 1,100,000 1,201,750
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Qwest Corp., 9.125%, 2012## 550,000 636,625
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Qwest Services Corp., 14%, 2010## 230,000 273,125
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SBC Communications, Inc., 5.1%, 2014 2,500,000 2,498,268
-----------------------------------------------------------------------------------------------------------------------------------
Verizon New York, Inc., 6.875%, 2012 2,542,000 2,816,828
-----------------------------------------------------------------------------------------------------------------------------------
$ 15,056,353
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TOBACCO - 0.2%
-----------------------------------------------------------------------------------------------------------------------------------
R.J. Reynolds Tobacco Holdings, Inc., 7.25%, 2012 $ 818,000 $ 860,945
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TRANSPORTATION - SERVICES - 0.3%
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Stena AB, 7%, 2016 $ 330,000 $ 325,050
-----------------------------------------------------------------------------------------------------------------------------------
TFM S.A. de C.V., 12.5%, 2012 1,225,000 1,433,250
-----------------------------------------------------------------------------------------------------------------------------------
$ 1,758,300
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES - 5.0%
-----------------------------------------------------------------------------------------------------------------------------------
Fannie Mae, 6%, 2011 $ 5,005,000 $ 5,426,701
-----------------------------------------------------------------------------------------------------------------------------------
Freddie Mac, 7%, 2005 6,100,000 6,193,354
-----------------------------------------------------------------------------------------------------------------------------------
Small Business Administration, 4.34%, 2024 8,022,510 7,793,717
-----------------------------------------------------------------------------------------------------------------------------------
Small Business Administration, 4.77%, 2024 6,248,570 6,229,291
-----------------------------------------------------------------------------------------------------------------------------------
Small Business Administration, 5.19%, 2024 2,449,042 2,493,318
-----------------------------------------------------------------------------------------------------------------------------------
$ 28,136,381
-----------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 11.7%
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 10.75%, 2005 $ 8,000,000 $ 8,286,248
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 12%, 2013 7,500,000 9,463,478
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 10.625%, 2015 3,350,000 5,082,710
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 9.875%, 2015 5,025,000 7,338,857
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.375%, 2031 10,000,000 10,995,310
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, 6.875%, 2006 8,000,000 8,329,688
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, 3.375%, 2007### 3,405,629 3,578,968
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, 2%, 2014 10,463,146 10,788,895
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, 4.25%, 2014 1,263,000 1,251,012
-----------------------------------------------------------------------------------------------------------------------------------
$ 65,115,166
-----------------------------------------------------------------------------------------------------------------------------------
UTILITIES - ELECTRIC POWER - 3.4%
-----------------------------------------------------------------------------------------------------------------------------------
CMS Energy Corp., 8.5%, 2011 $ 320,000 $ 364,800
-----------------------------------------------------------------------------------------------------------------------------------
Calpine Corp., 8.75%, 2013## 435,000 349,087
-----------------------------------------------------------------------------------------------------------------------------------
DPL, Inc., 6.875%, 2011 1,258,000 1,383,121
-----------------------------------------------------------------------------------------------------------------------------------
Duke Capital Corp., 8%, 2019 2,300,000 2,805,846
-----------------------------------------------------------------------------------------------------------------------------------
Dynegy Holdings, Inc., 9.875%, 2010## 240,000 268,800
-----------------------------------------------------------------------------------------------------------------------------------
Empresa Nacional de Electricidad S.A., 8.35%, 2013 919,000 1,065,936
-----------------------------------------------------------------------------------------------------------------------------------
Enersis S.A., 7.375%, 2014 1,233,000 1,332,387
-----------------------------------------------------------------------------------------------------------------------------------
FirstEnergy Corp., 6.45%, 2011 1,130,000 1,221,607
-----------------------------------------------------------------------------------------------------------------------------------
FirstEnergy Corp., 7.375%, 2031 1,547,000 1,817,298
-----------------------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings LLC, 7.375%, 2010 545,000 569,525
-----------------------------------------------------------------------------------------------------------------------------------
Nevada Power Co., 5.875%, 2015## 1,140,000 1,154,250
-----------------------------------------------------------------------------------------------------------------------------------
NorthWestern Corp., 5.875%, 2014## 995,000 1,007,046
-----------------------------------------------------------------------------------------------------------------------------------
PSEG Energy Holdings LLC, 7.75%, 2007 265,000 278,913
-----------------------------------------------------------------------------------------------------------------------------------
Reliant Resources, Inc., 9.5%, 2013 430,000 483,750
-----------------------------------------------------------------------------------------------------------------------------------
System Energy Resources, Inc., 5.129%, 2014## 2,478,257 2,437,217
-----------------------------------------------------------------------------------------------------------------------------------
TECO Energy, Inc., 7.5%, 2010 550,000 610,500
-----------------------------------------------------------------------------------------------------------------------------------
TXU Corp., 6.5%, 2024## 1,753,000 1,792,639
-----------------------------------------------------------------------------------------------------------------------------------
Texas Genco LLC, 6.875%, 2014## 160,000 170,800
-----------------------------------------------------------------------------------------------------------------------------------
$ 19,113,522
-----------------------------------------------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $516,408,796) $535,639,748
-----------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES $ VALUE
-----------------------------------------------------------------------------------------------------------------------------------
STOCKS - 0.1%
-----------------------------------------------------------------------------------------------------------------------------------
APPAREL MANUFACTURERS - 0.1%
-----------------------------------------------------------------------------------------------------------------------------------
Sind Holdings, Inc.* 5,720 $ 562,848
-----------------------------------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 0%
-----------------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.* 6 $ 270
-----------------------------------------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $2,127,651) $ 563,118
-----------------------------------------------------------------------------------------------------------------------------------
ISSUER STRIKE PRICE FIRST EXERCISE SHARES $ VALUE
-----------------------------------------------------------------------------------------------------------------------------------
WARRANTS - 0%
-----------------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. (Business Services)* $ 0.14 1/28/97 1,625 $ 0
-----------------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. (Business Services)* 0.14 1/28/97 750 0
-----------------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. (Specialty Chemicals)* 52.00 12/31/02 11 19
-----------------------------------------------------------------------------------------------------------------------------------
Thermadyne Holdings Corp. (Machinery & Tools)* 20.78 5/29/03 760 304
-----------------------------------------------------------------------------------------------------------------------------------
Total Warrants (Identified Cost, $39,014) $ 323
-----------------------------------------------------------------------------------------------------------------------------------
COLLATERAL FOR SECURITIES LOANED - 0.7%
-----------------------------------------------------------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio, at Cost and Net Asset Value 3,950,107 $ 3,950,107
-----------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
-----------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 3.1%
-----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs, 2.61%, dated 02/28/2005, due 03/01/2005, total to be received
$17,252,251 (secured by various U.S. Treasury and Federal Agency obligations
in a jointly traded account), at Cost $ 17,251,000 $ 17,251,000
-----------------------------------------------------------------------------------------------------------------------------------
Total Investments ~ (Identified Cost, $539,776,568) $557,404,296
-----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES - 0.3% 1,397,150
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $558,801,446
-----------------------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
^ All or a portion of this security is on loan.
^^ Interest only security for which the fund receives interest on the
notional principal (Par amount). Par amount shown is the notional
principal and does not reflect the cost of the security.
## SEC Rule 144A restriction.
### Security segregated as collateral for open futures contracts.
~ As of February 28, 2005, the fund had 2 securities representing $976,918
and 0.2% of net assets that were fair valued in accordance with the
policies adopted by the Board of Trustees.
All amounts are stated in U.S. dollars unless otherwise indicated.
Abbreviations have been used throughout this report to indicate amounts shown in
currencies other than the U.S. dollar. A list of abbreviations is shown below
AUD = Australian Dollar
CAD = Canadian Dollar
CNY = Chinese Yuan Renminbi
DKK = Danish Krone
EUR = Euro
GBP = British Pound
MXN = Mexican Peso
NZD = New Zealand Dollar
SEK = Swedish Krona
Country weighting percentages of portfolio holdings based on total net assets as
of February 28, 2005, are as follows:
United States 67.1%
Germany 4.2%
Great Britain 2.7%
Ireland 2.2%
Brazil 2.1%
Russia 2.1%
Netherlands 2.0%
Canada 1.8%
Mexico 1.7%
Other 14.1%
See attached schedules. For more information see notes to financial statements
as disclosed in the most recent semiannual or annual report.
MFS CHARTER INCOME TRUST
SUPPLEMENTAL SCHEDULES (UNAUDITED)
(1) PORTFOLIO SECURITIES
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the trust, as computed on a federal income tax basis, are
as follows:
Aggregate cost $546,497,474
============
Gross unrealized appreciation $ 19,970,795
Gross unrealized depreciation (9,063,973)
------------
Net unrealized appreciation (depreciation) $ 10,906,822
============
(2) FINANCIAL INSTRUMENTS
The trust trades financial instruments with off-balance-sheet risk in the normal
course of its investing activities in order to manage exposure to market risks
such as interest rates and foreign currency exchange rates. These financial
instruments include forward foreign currency exchange contracts and futures
contracts. The notional or contractual amounts of these instruments represent
the investment the trust has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
Forward Foreign Currency Exchange Contracts
NET UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
----------------------------------------------------------------------------------------------------------
SALES
4/11/05 AUD 3,107,893 $ 2,365,946 $ 2,452,488 ($ 86,542)
4/11/05 DKK 2,836,694 487,865 505,435 (17,570)
3/4/05-5/16/05 EUR 69,453,707 90,375,994 92,118,993 (1,742,999)
3/10/05 GBP 5,503,029 10,290,664 10,571,466 (280,802)
4/6/05 MXN 64,428,000 5,662,009 5,759,391 (97,382)
4/11/05 NZD 10,660,952 7,395,875 7,721,975 (326,100)
3/14/05 SEK 2,018,612 286,060 295,456 (9,396)
------------ ------------ ------------
$116,864,413 $119,425,204 ($ 2,560,791)
============ ============ ============
PURCHASES
4/11/05 AUD 1,334,141 $ 1,046,720 $ 1,052,792 $ 6,072
2/6/06 CNY 42,072,400 5,350,000 5,292,720 (57,280)
3/31/05 DKK 2,622,369 478,962 467,154 (11,808)
4/6/05-5/16/05 EUR 9,324,735 12,119,419 12,370,103 250,684
3/31/05-5/16/05 GBP 3,499,437 6,520,618 6,700,300 179,682
4/6/05-8/1/05 MXN 129,427,200 11,200,000 11,452,515 252,515
4/14/05 SEK 7,670,131 1,087,607 1,123,389 35,782
------------ ------------ ------------
$ 37,803,326 $ 38,458,973 $ 655,647
============ ============ ============
At February 28, 2005, forward foreign currency purchases and sales under master
netting agreements excluded above amounted to a net payable of $67,640 with
Merrill Lynch International.
At February 28, 2005, the trust had sufficient cash and/or securities to cover
any commitments under these contracts.
Futures Contracts
Unrealized
Appreciation
Description Expiration Contracts Position (Depreciation)
-------------------------------------------------------------------------------------------
U.S. Treasury Notes 10 Year March 2005 444 Short $ 144,553
U.S. Treasury Notes 5 Year March 2005 400 Short 416,551
U.S. Treasury Notes 2 Year March 2005 75 Short 92,166
------------
$ 653,270
============
At February 28, 2005, the trust had sufficient cash and/or securities to cover
any margin requirements under these contracts. (C)2005 MFS Investment Management
(C) 2005 MFS Investment Management
ITEM 2. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-Q,
the registrant's principal financial officer and principal executive
officer have concluded that those disclosure controls and procedures
provide reasonable assurance that the material information required to be
disclosed by the registrant on this report is recorded, processed,
summarized and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of
1940 (the "Act")) that occurred during the registrant's last fiscal quarter
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
ITEM 3. EXHIBITS.
File as exhibits as part of this Form a separate certification for each
principal executive officer and principal financial officer of the registrant
as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: MFS CHARTER INCOME TRUST
------------------------------------
By (Signature and Title)* ROBERT J. MANNING
----------------------------------------------------
Robert J. Manning, President
Date: April 22, 2005
--------------
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)* ROBERT J. MANNING
----------------------------------------------------
Robert J. Manning, President (Principal Executive
Officer)
Date: April 22, 2005
--------------
By (Signature and Title)* RICHARD M. HISEY
----------------------------------------------------
Richard M. Hisey, Treasurer (Principal Financial
Officer and Accounting Officer)
Date: April 22, 2005
--------------
* Print name and title of each signing officer under his or her signature.