T. Rowe Price Credit Opportunities Fund Inc.
08/01/2024 | Press release | Distributed by Public on 08/01/2024 13:29
Annual Report by Investment Company Form N CSR
Credit Opportunities Fund_CRO_F105-050
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-22939
T. Rowe Price Credit Opportunities Fund, Inc.
(Exact name of registrant as specified in charter)
100 East Pratt Street, Baltimore, MD 21202
(Address of principal executive offices)
David Oestreicher
100 East Pratt Street, Baltimore, MD 21202
(Name and address of agent for service)
Registrant's telephone number, including area code: (410) 345-2000
Date of fiscal year end: May 31
Date of reporting period: May 31, 2024
Item 1. Reports to Shareholders
(a) Report pursuant to Rule 30e-1
Annual Shareholder Report
May 31, 2024
Credit Opportunities Fund
Investor Class(PRCPX)
This annual shareholder report contains important information about Credit Opportunities Fund (the "fund") for the period of June 1, 2023 to May 31, 2024. You can find the fund's prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or [email protected]or contacting your intermediary.
What were the fund costs for the last year? (based on a hypothetical $10,000 investment)
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
|
Credit Opportunities Fund - Investor Class
|
$86
|
0.81%
|
What drove fund performance during the past 12 months?
-
The high yield market posted solid gains in the year ended May 31, 2024, despite diminished expectations for Federal Reserve rate cuts in 2024. The resilient economy, strong equity returns, and supportive technical conditions bolstered the asset class's performance.
-
Compared with the style-specific Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index, the fund's off-benchmark allocation to bank loans-which outpaced high yield bonds over the past year-was a leading contributor to relative results, driven by holdings in Asurion and Ultimate Kronos Group. Credit selection in the utilities segment also added value, partly due to energy company Vistra, whose comprehensive hedging program results in a more stable earnings profile and provides opportunities to lock in significant gross margins.
-
Selection among cable operators was a notable detractor, largely due to Altice France. In March, the company aggressively moved pending asset sales to an unrestricted subsidiary and threatened to withhold them from creditors unless bondholders took a haircut to their claims. Not owning online used car dealer Carvana held back gains relative to the style-specific benchmark in the information technology sector.
-
The fund seeks a combination of long-term capital appreciation and high income. Over the past year, we significantly increased the portfolio's allocation to the financials segment, largely through additional investments in the insurance brokers subsector. We remained confident in the durability of insurance brokers' performance through challenging market environments as property and casualty insurance is a nondiscretionary business expense in both good times and bad.
How has the fund performed?
Cumulative Returns of a Hypothetical $10,000 Investment as of May 31, 2024
|
Investor Class
|
Regulatory Benchmark
|
Strategy Benchmark
|
|
|
2014
|
10,000
|
10,000
|
10,000
|
|
2014
|
10,075
|
10,090
|
10,108
|
|
2014
|
9,596
|
10,192
|
9,941
|
|
2015
|
9,505
|
10,318
|
10,099
|
|
2015
|
9,761
|
10,303
|
10,196
|
|
2015
|
9,123
|
10,247
|
9,812
|
|
2015
|
8,805
|
10,291
|
9,605
|
|
2016
|
8,511
|
10,473
|
9,265
|
|
2016
|
9,159
|
10,612
|
10,118
|
|
2016
|
9,680
|
10,859
|
10,707
|
|
2016
|
9,916
|
10,514
|
10,768
|
|
2017
|
10,342
|
10,621
|
11,288
|
|
2017
|
10,481
|
10,780
|
11,491
|
|
2017
|
10,626
|
10,912
|
11,630
|
|
2017
|
10,698
|
10,852
|
11,754
|
|
2018
|
10,759
|
10,674
|
11,760
|
|
2018
|
10,778
|
10,739
|
11,761
|
|
2018
|
10,941
|
10,798
|
12,026
|
|
2018
|
10,824
|
10,707
|
11,797
|
|
2019
|
11,197
|
11,013
|
12,266
|
|
2019
|
11,413
|
11,426
|
12,409
|
|
2019
|
11,772
|
11,896
|
12,814
|
|
2019
|
11,876
|
11,862
|
12,938
|
|
2020
|
11,804
|
12,299
|
13,014
|
|
2020
|
11,550
|
12,502
|
12,571
|
|
2020
|
12,144
|
12,666
|
13,410
|
|
2020
|
12,507
|
12,726
|
13,866
|
|
2021
|
12,832
|
12,470
|
14,226
|
|
2021
|
13,087
|
12,452
|
14,445
|
|
2021
|
13,356
|
12,655
|
14,769
|
|
2021
|
13,274
|
12,579
|
14,597
|
|
2022
|
13,197
|
12,140
|
14,316
|
|
2022
|
12,640
|
11,428
|
13,683
|
|
2022
|
12,293
|
11,198
|
13,203
|
|
2022
|
12,336
|
10,964
|
13,289
|
|
2023
|
12,693
|
10,960
|
13,535
|
|
2023
|
12,689
|
11,183
|
13,689
|
|
2023
|
13,229
|
11,064
|
14,152
|
|
2023
|
13,524
|
11,094
|
14,444
|
|
2024
|
14,022
|
11,324
|
15,026
|
|
2024
|
14,208
|
11,329
|
15,226
|
202405-3565004, 202407-3567152
F105-052 7/24
Average Annual Total Returns
|
1 Year
|
5 Years
|
10 Years
|
|
|
Credit Opportunities Fund (Investor Class)
|
11.97%
|
4.48%
|
3.57%
|
|
Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark)
|
1.31
|
-
0.17
|
1.26
|
|
Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index (Strategy Benchmark)
|
11.23
|
4.18
|
4.29
|
The preceding line graph shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The fund's performance information included in the line graph and table above is compared with a regulatory required index that represents an overall securities market (Regulatory Benchmark). In addition, the line graph and table may also include one or more indexes that more closely aligns to the fund's investment strategy (Strategy Benchmark(s)). Due to new SEC Rules on shareholder reporting the fund adopted a new broad-based securities market index, referred to as the Regulatory Benchmark. Market index returns do not include expenses, which are deducted from fund returns. The fund's total return figures reflect the reinvestment of dividends and capital gains, if any. Neither the fund's returns nor the index returns reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares. The fund's past performance is not a good predictor of the fund's future performance.Updated performance information can be found at www.troweprice.com.
What are some fund statistics?
Fund Statistics
|
Total Net Assets (000s)
|
$186,789
|
|
Number of Portfolio Holdings
|
317
|
|
Investment Advisory Fees Paid (000s)
|
$412
|
|
Portfolio Turnover Rate
|
36.2%
|
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
|
BBB/BB Rated and Above
|
1.8%
|
|
BB Rated
|
19.5
|
|
BB/B Rated
|
19.8
|
|
B Rated
|
28.8
|
|
B/CCC Rated
|
5.4
|
|
CCC Rated and Below
|
13.6
|
|
Not Rated
|
6.1
|
|
Short-Term Holdings
|
5.0
|
*Credit ratings for the securities held in the Fund are provided by Moody's and Standard & Poor's and are converted to the Standard & Poor's nomenclature. A rating of AAA represents the highest-rated securities, and a rating of D represents the lowest rated securities. Split ratings (e.g., BB/B and B/CCC) are assigned when Moody's and S&P differ. If a rating is not available, the security is classified as Not Rated. The rating of the underlying investment vehicle is used to determine the creditworthiness of credit default swaps and sovereign securities. The Fund is not rated by any agency.
Top Ten Holdings(as a % of Net Assets)
|
Vistra
|
3.8%
|
|
Talen Energy Supply
|
2.5
|
|
HUB International
|
2.1
|
|
TransDigm
|
2.0
|
|
CCO Holdings
|
1.7
|
|
Jones Deslauriers Insurance Management
|
1.7
|
|
Cloud Software Group
|
1.6
|
|
Navient
|
1.6
|
|
Asurion
|
1.6
|
|
UKG
|
1.6
|
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Bloomberg does not accept any liability for any errors or omissions in the indexes or data, and hereby expressly disclaim all warranties of originality, accuracy, completeness, timeliness, merchantability and fitness for a particular purpose. No party may rely on any indexes or data contained in this communication. Visit www.troweprice.com/en/us/market-data-disclosuresfor additional legal notices & disclaimers.
Credit Opportunities Fund
Investor Class(PRCPX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Annual Shareholder Report
May 31, 2024
Credit Opportunities Fund
Advisor Class(PAOPX)
This annual shareholder report contains important information about Credit Opportunities Fund (the "fund") for the period of June 1, 2023 to May 31, 2024. You can find the fund's prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or [email protected]or contacting your intermediary.
What were the fund costs for the last year? (based on a hypothetical $10,000 investment)
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
|
Credit Opportunities Fund - Advisor Class
|
$96
|
0.91%
|
What drove fund performance during the past 12 months?
-
The high yield market posted solid gains in the year ended May 31, 2024, despite diminished expectations for Federal Reserve rate cuts in 2024. The resilient economy, strong equity returns, and supportive technical conditions bolstered the asset class's performance.
-
Compared with the style-specific Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index, the fund's off-benchmark allocation to bank loans-which outpaced high yield bonds over the past year-was a leading contributor to relative results, driven by holdings in Asurion and Ultimate Kronos Group. Credit selection in the utilities segment also added value, partly due to energy company Vistra, whose comprehensive hedging program results in a more stable earnings profile and provides opportunities to lock in significant gross margins.
-
Selection among cable operators was a notable detractor, largely due to Altice France. In March, the company aggressively moved pending asset sales to an unrestricted subsidiary and threatened to withhold them from creditors unless bondholders took a haircut to their claims. Not owning online used car dealer Carvana held back gains relative to the style-specific benchmark in the information technology sector.
-
The fund seeks a combination of long-term capital appreciation and high income. Over the past year, we significantly increased the portfolio's allocation to the financials segment, largely through additional investments in the insurance brokers subsector. We remained confident in the durability of insurance brokers' performance through challenging market environments as property and casualty insurance is a nondiscretionary business expense in both good times and bad.
How has the fund performed?
Cumulative Returns of a Hypothetical $10,000 Investment as of May 31, 2024
|
Advisor Class
|
Regulatory Benchmark
|
Strategy Benchmark
|
|
|
2014
|
10,000
|
10,000
|
10,000
|
|
2014
|
10,073
|
10,090
|
10,108
|
|
2014
|
9,581
|
10,192
|
9,941
|
|
2015
|
9,498
|
10,318
|
10,099
|
|
2015
|
9,751
|
10,303
|
10,196
|
|
2015
|
9,101
|
10,247
|
9,812
|
|
2015
|
8,781
|
10,291
|
9,605
|
|
2016
|
8,485
|
10,473
|
9,265
|
|
2016
|
9,130
|
10,612
|
10,118
|
|
2016
|
9,648
|
10,859
|
10,707
|
|
2016
|
9,869
|
10,514
|
10,768
|
|
2017
|
10,292
|
10,621
|
11,288
|
|
2017
|
10,439
|
10,780
|
11,491
|
|
2017
|
10,581
|
10,912
|
11,630
|
|
2017
|
10,650
|
10,852
|
11,754
|
|
2018
|
10,696
|
10,674
|
11,760
|
|
2018
|
10,712
|
10,739
|
11,761
|
|
2018
|
10,884
|
10,798
|
12,026
|
|
2018
|
10,752
|
10,707
|
11,797
|
|
2019
|
11,120
|
11,013
|
12,266
|
|
2019
|
11,332
|
11,426
|
12,409
|
|
2019
|
11,685
|
11,896
|
12,814
|
|
2019
|
11,773
|
11,862
|
12,938
|
|
2020
|
11,711
|
12,299
|
13,014
|
|
2020
|
11,455
|
12,502
|
12,571
|
|
2020
|
12,056
|
12,666
|
13,410
|
|
2020
|
12,399
|
12,726
|
13,866
|
|
2021
|
12,719
|
12,470
|
14,226
|
|
2021
|
12,968
|
12,452
|
14,445
|
|
2021
|
13,233
|
12,655
|
14,769
|
|
2021
|
13,147
|
12,579
|
14,597
|
|
2022
|
13,067
|
12,140
|
14,316
|
|
2022
|
12,511
|
11,428
|
13,683
|
|
2022
|
12,147
|
11,198
|
13,203
|
|
2022
|
12,198
|
10,964
|
13,289
|
|
2023
|
12,532
|
10,960
|
13,535
|
|
2023
|
12,541
|
11,183
|
13,689
|
|
2023
|
13,055
|
11,064
|
14,152
|
|
2023
|
13,326
|
11,094
|
14,444
|
|
2024
|
13,815
|
11,324
|
15,026
|
|
2024
|
13,995
|
11,329
|
15,226
|
202405-3565004, 202407-3567152
F205-052 7/24
Average Annual Total Returns
|
1 Year
|
5 Years
|
10 Years
|
|
|
Credit Opportunities Fund (Advisor Class)
|
11.59%
|
4.31%
|
3.42%
|
|
Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark)
|
1.31
|
-
0.17
|
1.26
|
|
Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index (Strategy Benchmark)
|
11.23
|
4.18
|
4.29
|
The preceding line graph shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The fund's performance information included in the line graph and table above is compared with a regulatory required index that represents an overall securities market (Regulatory Benchmark). In addition, the line graph and table may also include one or more indexes that more closely aligns to the fund's investment strategy (Strategy Benchmark(s)). Due to new SEC Rules on shareholder reporting the fund adopted a new broad-based securities market index, referred to as the Regulatory Benchmark. Market index returns do not include expenses, which are deducted from fund returns. The fund's total return figures reflect the reinvestment of dividends and capital gains, if any. Neither the fund's returns nor the index returns reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares. The fund's past performance is not a good predictor of the fund's future performance.Updated performance information can be found at www.troweprice.com.
What are some fund statistics?
Fund Statistics
|
Total Net Assets (000s)
|
$186,789
|
|
Number of Portfolio Holdings
|
317
|
|
Investment Advisory Fees Paid (000s)
|
$412
|
|
Portfolio Turnover Rate
|
36.2%
|
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
|
BBB/BB Rated and Above
|
1.8%
|
|
BB Rated
|
19.5
|
|
BB/B Rated
|
19.8
|
|
B Rated
|
28.8
|
|
B/CCC Rated
|
5.4
|
|
CCC Rated and Below
|
13.6
|
|
Not Rated
|
6.1
|
|
Short-Term Holdings
|
5.0
|
*Credit ratings for the securities held in the Fund are provided by Moody's and Standard & Poor's and are converted to the Standard & Poor's nomenclature. A rating of AAA represents the highest-rated securities, and a rating of D represents the lowest rated securities. Split ratings (e.g., BB/B and B/CCC) are assigned when Moody's and S&P differ. If a rating is not available, the security is classified as Not Rated. The rating of the underlying investment vehicle is used to determine the creditworthiness of credit default swaps and sovereign securities. The Fund is not rated by any agency.
Top Ten Holdings(as a % of Net Assets)
|
Vistra
|
3.8%
|
|
Talen Energy Supply
|
2.5
|
|
HUB International
|
2.1
|
|
TransDigm
|
2.0
|
|
CCO Holdings
|
1.7
|
|
Jones Deslauriers Insurance Management
|
1.7
|
|
Cloud Software Group
|
1.6
|
|
Navient
|
1.6
|
|
Asurion
|
1.6
|
|
UKG
|
1.6
|
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Bloomberg does not accept any liability for any errors or omissions in the indexes or data, and hereby expressly disclaim all warranties of originality, accuracy, completeness, timeliness, merchantability and fitness for a particular purpose. No party may rely on any indexes or data contained in this communication. Visit www.troweprice.com/en/us/market-data-disclosuresfor additional legal notices & disclaimers.
Credit Opportunities Fund
Advisor Class(PAOPX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Annual Shareholder Report
May 31, 2024
Credit Opportunities Fund
I Class(TCRRX)
This annual shareholder report contains important information about Credit Opportunities Fund (the "fund") for the period of June 1, 2023 to May 31, 2024. You can find the fund's prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or [email protected]or contacting your intermediary.
What were the fund costs for the last year? (based on a hypothetical $10,000 investment)
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
|
Credit Opportunities Fund - I Class
|
$60
|
0.57%
|
What drove fund performance during the past 12 months?
-
The high yield market posted solid gains in the year ended May 31, 2024, despite diminished expectations for Federal Reserve rate cuts in 2024. The resilient economy, strong equity returns, and supportive technical conditions bolstered the asset class's performance.
-
Compared with the style-specific Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index, the fund's off-benchmark allocation to bank loans-which outpaced high yield bonds over the past year-was a leading contributor to relative results, driven by holdings in Asurion and Ultimate Kronos Group. Credit selection in the utilities segment also added value, partly due to energy company Vistra, whose comprehensive hedging program results in a more stable earnings profile and provides opportunities to lock in significant gross margins.
-
Selection among cable operators was a notable detractor, largely due to Altice France. In March, the company aggressively moved pending asset sales to an unrestricted subsidiary and threatened to withhold them from creditors unless bondholders took a haircut to their claims. Not owning online used car dealer Carvana held back gains relative to the style-specific benchmark in the information technology sector.
-
The fund seeks a combination of long-term capital appreciation and high income. Over the past year, we significantly increased the portfolio's allocation to the financials segment, largely through additional investments in the insurance brokers subsector. We remained confident in the durability of insurance brokers' performance through challenging market environments as property and casualty insurance is a nondiscretionary business expense in both good times and bad.
How has the fund performed?
Cumulative Returns of a Hypothetical $500,000 Investment as of May 31, 2024
|
I Class
|
Regulatory Benchmark
|
Strategy Benchmark
|
|
|
11/29/16
|
500,000
|
500,000
|
500,000
|
|
11/30/16
|
500,073
|
498,674
|
500,747
|
|
2/28/17
|
521,834
|
503,720
|
524,914
|
|
5/31/17
|
529,102
|
511,246
|
534,377
|
|
8/31/17
|
536,712
|
517,530
|
540,821
|
|
11/30/17
|
540,608
|
514,702
|
546,597
|
|
2/28/18
|
543,431
|
506,265
|
546,850
|
|
5/31/18
|
545,364
|
509,331
|
546,934
|
|
8/31/18
|
553,993
|
512,100
|
559,216
|
|
11/30/18
|
547,740
|
507,795
|
548,575
|
|
2/28/19
|
566,945
|
522,312
|
570,417
|
|
5/31/19
|
578,293
|
541,930
|
577,028
|
|
8/31/19
|
596,807
|
564,193
|
595,881
|
|
11/30/19
|
602,520
|
562,592
|
601,661
|
|
2/29/20
|
599,210
|
583,332
|
605,197
|
|
5/31/20
|
586,658
|
592,956
|
584,585
|
|
8/31/20
|
617,228
|
600,715
|
623,591
|
|
11/30/20
|
636,103
|
603,570
|
644,791
|
|
2/28/21
|
653,049
|
591,403
|
661,535
|
|
5/31/21
|
666,460
|
590,555
|
671,715
|
|
8/31/21
|
680,643
|
600,209
|
686,798
|
|
11/30/21
|
676,846
|
596,608
|
678,773
|
|
2/28/22
|
673,334
|
575,765
|
665,742
|
|
5/31/22
|
645,270
|
541,999
|
636,278
|
|
8/31/22
|
627,891
|
531,089
|
613,957
|
|
11/30/22
|
629,639
|
520,006
|
617,992
|
|
2/28/23
|
648,260
|
519,790
|
629,430
|
|
5/31/23
|
649,295
|
530,385
|
636,581
|
|
8/31/23
|
677,350
|
524,752
|
658,089
|
|
11/30/23
|
692,888
|
526,141
|
671,702
|
|
2/29/24
|
718,876
|
537,084
|
698,752
|
|
5/31/24
|
728,873
|
537,310
|
708,067
|
202405-3565004, 202407-3567152
F406-052 7/24
Average Annual Total Returns
|
1 Year
|
5 Years
|
Since Inception 11/29/2016
|
|
|
Credit Opportunities Fund (I Class)
|
12.26%
|
4.74%
|
5.15%
|
|
Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark)
|
1.31
|
-
0.17
|
0.96
|
|
Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index (Strategy Benchmark)
|
11.23
|
4.18
|
4.75
|
The preceding line graph shows the value of a hypothetical $500,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The fund's performance information included in the line graph and table above is compared with a regulatory required index that represents an overall securities market (Regulatory Benchmark). In addition, the line graph and table may also include one or more indexes that more closely aligns to the fund's investment strategy (Strategy Benchmark(s)). Due to new SEC Rules on shareholder reporting the fund adopted a new broad-based securities market index, referred to as the Regulatory Benchmark. Market index returns do not include expenses, which are deducted from fund returns. The fund's total return figures reflect the reinvestment of dividends and capital gains, if any. Neither the fund's returns nor the index returns reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares. The fund's past performance is not a good predictor of the fund's future performance.Updated performance information can be found at www.troweprice.com.
What are some fund statistics?
Fund Statistics
|
Total Net Assets (000s)
|
$186,789
|
|
Number of Portfolio Holdings
|
317
|
|
Investment Advisory Fees Paid (000s)
|
$412
|
|
Portfolio Turnover Rate
|
36.2%
|
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
|
BBB/BB Rated and Above
|
1.8%
|
|
BB Rated
|
19.5
|
|
BB/B Rated
|
19.8
|
|
B Rated
|
28.8
|
|
B/CCC Rated
|
5.4
|
|
CCC Rated and Below
|
13.6
|
|
Not Rated
|
6.1
|
|
Short-Term Holdings
|
5.0
|
*Credit ratings for the securities held in the Fund are provided by Moody's and Standard & Poor's and are converted to the Standard & Poor's nomenclature. A rating of AAA represents the highest-rated securities, and a rating of D represents the lowest rated securities. Split ratings (e.g., BB/B and B/CCC) are assigned when Moody's and S&P differ. If a rating is not available, the security is classified as Not Rated. The rating of the underlying investment vehicle is used to determine the creditworthiness of credit default swaps and sovereign securities. The Fund is not rated by any agency.
Top Ten Holdings(as a % of Net Assets)
|
Vistra
|
3.8%
|
|
Talen Energy Supply
|
2.5
|
|
HUB International
|
2.1
|
|
TransDigm
|
2.0
|
|
CCO Holdings
|
1.7
|
|
Jones Deslauriers Insurance Management
|
1.7
|
|
Cloud Software Group
|
1.6
|
|
Navient
|
1.6
|
|
Asurion
|
1.6
|
|
UKG
|
1.6
|
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Bloomberg does not accept any liability for any errors or omissions in the indexes or data, and hereby expressly disclaim all warranties of originality, accuracy, completeness, timeliness, merchantability and fitness for a particular purpose. No party may rely on any indexes or data contained in this communication. Visit www.troweprice.com/en/us/market-data-disclosuresfor additional legal notices & disclaimers.
Credit Opportunities Fund
I Class(TCRRX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Item 1. (b) Notice pursuant to Rule 30e-3.
Not applicable.
Item 2. Code of Ethics.
The registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR,applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR.No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors has determined that Mr. Paul F. McBride qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR.Mr. McBride is considered independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) - (d) Aggregate fees billed for the last two fiscal years for professional services rendered to, or on behalf of, the registrant by the registrant's principal accountant were as follows:
| 2024 | 2023 | ||||||||
|
Audit Fees |
$46,029 | $45,097 | |||||||
|
Audit-Related Fees |
- | - | |||||||
|
Tax Fees |
- | - | |||||||
|
All Other Fees |
- | - |
Audit fees include amounts related to the audit of the registrant's annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees include amounts reasonably related to the performance of the audit of the registrant's financial statements and specifically include the issuance of a report on internal controls and, if applicable, agreed-upon procedures related to fund acquisitions. Tax fees include amounts related to services for tax compliance, tax planning, and tax advice. The nature of these services specifically includes the review of distribution calculations and the preparation of Federal, state, and excise tax returns. All other fees include the registrant's pro-ratashare of amounts for agreed-upon procedures in conjunction with service contract approvals by the registrant's Board of Directors/Trustees.
(e)(1) The registrant's audit committee has adopted a policy whereby audit and non-auditservices performed by the registrant's principal accountant for the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant require pre-approvalin advance at regularly scheduled audit committee meetings. If such a service is required between regularly scheduled audit committee meetings, pre-approvalmay be authorized by one audit committee member with ratification at the next scheduled audit committee meeting. Waiver of pre-approvalfor audit or non-auditservices requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01of Regulation S-X.
(f) Less than 50 percent of the hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant's principal accountant for non-auditservices rendered to the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $1,230,000 and $1,521,000, respectively.
(h) All non-auditservices rendered in (g) above were pre-approvedby the registrant's audit committee. Accordingly, these services were considered by the registrant's audit committee in maintaining the principal accountant's independence.
(i) Not applicable.
(j) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable. The complete schedule of investments is included in Item 7 of this Form N-CSR.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-EndManagement Investment Companies.
(a - b) Report pursuant to Regulation S-X.
Financial
Highlights
Portfolio
of
Investments
Financial
Statements
and
Notes
Additional
Fund
Information
May
31,
2024
Financial
Statements
and
Other
Information
For
more
insights
from
T.
Rowe
Price
investment
professionals,
go
to
troweprice.com
.
T.
ROWE
PRICE
PRCPX
Credit
Opportunities
Fund
-
.
PAOPX
Credit
Opportunities
Fund-
.
Advisor Class
TCRRX
Credit
Opportunities
Fund-
.
I Class
T.
ROWE
PRICE
Credit
Opportunities
Fund
Go
Paperless
Going
paperless
offers
a
host
of
benefits,
which
include:
Timely
delivery
of
important
documents
Convenient
access
to
your
documents
anytime,
anywhere
Strong
security
protocols
to
safeguard
sensitive
data
Waive
your
account
service
fee
by
going
paperless.*
To
Enroll:
˃
If
you
invest
directly
with
T.
Rowe
Price,
go
to
troweprice.com/paperless
.
If
you
invest
through
a
financial
intermediary
such
as
an
investment
advisor,
a
bank,
or
a
brokerage
firm,
please
contact
that
organization
and
ask
if
it
can
provide
electronic
documentation.
Log
in
to
your
account
at
troweprice.com
for
more
information.
*
An
account
service
fee
will
be
charged
annually
for
each
T.
Rowe
Price
mutual
fund
account
unless
you
meet
criteria
for
a
fee
waiver.
Go
to
troweprice.com/personal-investing/
help/fees-and-minimums.html
to
learn
more
about
this
account
service
fee,
including
other
ways
to
waive
it.
T.
ROWE
PRICE
Credit
Opportunities
Fund
Financial
Highlights
3
For
a
share
outstanding
throughout
each
period
Investor
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
NET
ASSET
VALUE
Beginning
of
period
$
7.53
$
8.04
$
8.77
$
8.17
$
8.50
Investment
activities
Net
investment
income
(1)(2)
0.55
0.50
0.42
0.44
0.44
Net
realized
and
unrealized
gain/loss
0.33
(0.48)
(0.70)
0.62
(0.34)
Total
from
investment
activities
0.88
0.02
(0.28)
1.06
0.10
Distributions
Net
investment
income
(0.56)
(0.51)
(0.45)
(0.46)
(0.43)
Net
realized
gain
-
(0.02)
-
-
-
Total
distributions
(0.56)
(0.53)
(0.45)
(0.46)
(0.43)
NET
ASSET
VALUE
End
of
period
$
7.85
$
7.53
$
8.04
$
8.77
$
8.17
T.
ROWE
PRICE
Credit
Opportunities
Fund
Financial
Highlights
4
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Investor
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
Ratios/Supplemental
Data
Total
return
(2)(3)
11.97%
0.39%
(3.41)%
13.30%
1.20%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
1.05%
1.19%
1.12%
1.22%
1.20%
Net
expenses
after
waivers/
payments
by
Price
Associates
0.81%
0.82%
0.84%
0.91%
0.91%
Net
investment
income
7.11%
6.60%
4.88%
5.08%
5.26%
Portfolio
turnover
rate
36.2%
28.9%
38.9%
53.5%
53.5%
Net
assets,
end
of
period
(in
thousands)
$91,777
$45,297
$44,737
$56,674
$40,408
0%
0%
0%
0%
0%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
T.
ROWE
PRICE
Credit
Opportunities
Fund
Financial
Highlights
5
For
a
share
outstanding
throughout
each
period
Advisor
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
NET
ASSET
VALUE
Beginning
of
period
$
7.51
$
8.02
$
8.75
$
8.15
$
8.48
Investment
activities
Net
investment
income
(1)(2)
0.54
0.48
0.42
0.43
0.44
Net
realized
and
unrealized
gain/loss
0.31
(0.47)
(0.71)
0.62
(0.35)
Total
from
investment
activities
0.85
0.01
(0.29)
1.05
0.09
Distributions
Net
investment
income
(0.55)
(0.50)
(0.44)
(0.45)
(0.42)
Net
realized
gain
-
(0.02)
-
-
-
Total
distributions
(0.55)
(0.52)
(0.44)
(0.45)
(0.42)
NET
ASSET
VALUE
End
of
period
$
7.81
$
7.51
$
8.02
$
8.75
$
8.15
T.
ROWE
PRICE
Credit
Opportunities
Fund
Financial
Highlights
6
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Advisor
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
Ratios/Supplemental
Data
Total
return
(2)(3)
11.59%
0.24%
(3.53)%
13.21%
1.09%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
1.96%
1.55%
1.65%
1.76%
1.81%
Net
expenses
after
waivers/
payments
by
Price
Associates
0.91%
0.92%
0.94%
1.01%
1.01%
Net
investment
income
7.02%
6.33%
4.84%
5.00%
5.18%
Portfolio
turnover
rate
36.2%
28.9%
38.9%
53.5%
53.5%
Net
assets,
end
of
period
(in
thousands)
$99
$375
$89
$130
$221
0%
0%
0%
0%
0%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
T.
ROWE
PRICE
Credit
Opportunities
Fund
Financial
Highlights
7
For
a
share
outstanding
throughout
each
period
I
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
NET
ASSET
VALUE
Beginning
of
period
$
7.52
$
8.03
$
8.76
$
8.16
$
8.49
Investment
activities
Net
investment
income
(1)(2)
0.57
0.52
0.45
0.46
0.47
Net
realized
and
unrealized
gain/loss
0.32
(0.48)
(0.71)
0.63
(0.35)
Total
from
investment
activities
0.89
0.04
(0.26)
1.09
0.12
Distributions
Net
investment
income
(0.57)
(0.53)
(0.47)
(0.49)
(0.45)
Net
realized
gain
-
(0.02)
-
-
-
Total
distributions
(0.57)
(0.55)
(0.47)
(0.49)
(0.45)
NET
ASSET
VALUE
End
of
period
$
7.84
$
7.52
$
8.03
$
8.76
$
8.16
T.
ROWE
PRICE
Credit
Opportunities
Fund
Financial
Highlights
8
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
I
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
Ratios/Supplemental
Data
Total
return
(2)(3)
12.26%
0.62%
(3.18)%
13.60%
1.45%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
0.84%
0.95%
0.95%
1.09%
1.05%
Net
expenses
after
waivers/
payments
by
Price
Associates
0.57%
0.57%
0.59%
0.65%
0.65%
Net
investment
income
7.36%
6.87%
5.24%
5.37%
5.55%
Portfolio
turnover
rate
36.2%
28.9%
38.9%
53.5%
53.5%
Net
assets,
end
of
period
(in
thousands)
$94,913
$61,427
$46,701
$26,580
$24,092
0%
0%
0%
0%
0%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
T.
ROWE
PRICE
Credit
Opportunities
Fund
May
31,
2024
9
Portfolio
of
Investments
‡
Par/Shares
$
Value
(Amounts
in
000s)
‡
BANK
LOANS
10.8%
(1)
Aerospace
&
Defense
0.4%
Peraton,
FRN,
3M
TSFR
+
7.75%,
2/1/29 (2)
236
237
Peraton,
FRN,
3M
TSFR
+
8.00%,
13.427%,
2/1/29
438
441
678
Airlines
0.4%
AAdvantage
Loyalty
IP,
FRN,
3M
TSFR
+
4.75%,
10.336%,
4/20/28
435
451
Mileage
Plus
Holdings,
FRN,
3M
TSFR
+
5.25%,
10.733%,
6/21/27
328
336
787
Broadcasting
0.2%
Clear
Channel
Outdoor
Holdings,
FRN,
1M
TSFR
+
4.00%,
9.444%,
8/21/28
204
205
Nielsen
Holdings,
FRN,
3M
TSFR
+
9.75%,
15.156%,
10/11/29 (3)
85
83
288
Cable
Operators
0.5%
CSC
Holdings,
FRN,
1M
TSFR
+
4.50%,
9.817%,
1/18/28 (2)
368
354
Radiate
Holdco,
FRN,
1M
TSFR
+
3.25%,
8.694%,
9/25/26
648
510
864
Chemicals
0.2%
Vibrantz
Technologies,
FRN,
3M
TSFR
+
4.25%,
9.706%,
4/23/29
453
447
447
Container
0.2%
Charter
Next
Generation,
FRN,
1M
TSFR
+
3.50%,
8.829%,
12/1/27
450
452
452
Energy
0.2%
Prairie
ECI
Acquiror,
FRN,
1M
TSFR
+
4.75%,
10.079%,
8/1/29
445
446
446
Financial
1.5%
HUB
International,
FRN,
1M
TSFR
+
3.25%,
6/20/30 (2)
360
362
Truist
Insurance
Holdings,
FRN,
1M
TSFR
+
4.75%,
10.086%,
3/8/32
2,320
2,368
2,730
Gaming
0.1%
Ontario
Gaming
GTA,
FRN,
1M
TSFR
+
4.25%,
8/1/30 (2)
180
181
181
Health
Care
0.7%
AthenaHealth
Group,
FRN,
1M
TSFR
+
3.25%,
8.579%,
2/15/29
270
269
T.
ROWE
PRICE
Credit
Opportunities
Fund
10
Par/Shares
$
Value
(Amounts
in
000s)
‡
Bausch
+
Lomb,
FRN,
1M
TSFR
+
3.25%,
8.67%,
5/10/27
993
983
1,252
Information
Technology
2.5%
Applied
Systems,
FRN,
1M
TSFR
+
3.50%,
8.809%,
2/24/31 (2)
715
721
Applied
Systems,
FRN,
1M
TSFR
+
5.25%,
10.559%,
2/23/32
564
584
Boxer
Parent,
FRN,
1M
TSFR
+
4.00%,
9.329%,
12/29/28
537
540
Cloud
Software
Group,
FRN,
1M
TSFR
+
4.00%,
9.331%,
3/30/29 (2)
454
456
Delta
Topco,
FRN,
1M
TSFR
+
3.50%,
8.829%,
11/30/29
220
221
Delta
Topco,
FRN,
1M
TSFR
+
5.25%,
10.579%,
11/29/30 (2)
485
491
RealPage,
FRN,
1M
TSFR
+
6.50%,
11.944%,
4/23/29
1,630
1,597
4,610
Manufacturing
0.9%
Engineered
Machinery
Holdings,
FRN,
3M
TSFR
+
6.00%,
11.571%,
5/21/29
545
545
Engineered
Machinery
Holdings,
FRN,
3M
TSFR
+
6.50%,
12.071%,
5/21/29 (4)
250
250
LTI
Holdings,
FRN,
1M
TSFR
+
3.50%,
8.944%,
9/6/25
654
643
LTI
Holdings,
FRN,
1M
TSFR
+
4.75%,
10.194%,
7/24/26
151
149
LTI
Holdings,
FRN,
1M
TSFR
+
6.75%,
12.194%,
9/6/26
138
130
1,717
Metals
&
Mining
0.2%
Arsenal
AIC
Parent,
FRN,
1M
TSFR
+
3.75%,
9.079%,
8/18/30
360
363
363
Retail
0.0%
At
Home
Group,
FRN,
1M
TSFR
+
4.25%,
9.694%,
7/24/28
178
94
94
Services
1.2%
Ascend
Learning,
FRN,
1M
TSFR
+
5.75%,
11.179%,
12/10/29 (2)
1,400
1,373
CoreLogic,
FRN,
1M
TSFR
+
6.50%,
6/4/29 (2)
232
222
TK
Elevator
U.S.
Newco,
FRN,
1M
TSFR
+
3.50%,
8.791%,
4/30/30
394
396
UKG,
FRN,
1M
TSFR
+
3.50%,
8.82%,
2/10/31
180
181
2,172
Wireless
Communications
1.6%
Asurion,
FRN,
1M
TSFR
+
3.25%,
8.694%,
12/23/26
586
582
Asurion,
FRN,
1M
TSFR
+
5.25%,
10.694%,
1/31/28
1,936
1,816
Asurion,
FRN,
1M
TSFR
+
5.25%,
10.694%,
1/20/29
672
624
3,022
Total
Bank
Loans
(Cost
$20,183)
20,103
T.
ROWE
PRICE
Credit
Opportunities
Fund
11
Par/Shares
$
Value
(Amounts
in
000s)
‡
COMMON
STOCKS
0.7%
Health
Care
0.2%
Becton
Dickinson
&
Company
1
313
313
Manufacturing
0.1%
Enpro
1
166
166
Metals
&
Mining
0.3%
Constellium (3)
16
343
Freeport-McMoRan
4
193
536
Other
Telecommunications
0.1%
Ciena (3)
6
275
275
Total
Common
Stocks
(Cost
$1,196)
1,290
CONVERTIBLE
BONDS
0.1%
Automotive
0.1%
Rivian
Automotive,
4.625%,
3/15/29
240
187
Total
Convertible
Bonds
(Cost
$230)
187
CORPORATE
BONDS
82.9%
Aerospace
&
Defense
2.0%
TransDigm,
6.625%,
3/1/32 (5)
1,680
1,684
TransDigm,
6.75%,
8/15/28 (5)
530
536
TransDigm,
6.875%,
12/15/30 (5)
1,080
1,089
TransDigm,
7.125%,
12/1/31 (5)
450
460
3,769
Airlines
0.4%
American
Airlines,
5.50%,
4/20/26 (5)
287
283
American
Airlines,
5.75%,
4/20/29 (5)
350
338
Mileage
Plus
Holdings,
6.50%,
6/20/27 (5)
85
85
United
Airlines,
4.625%,
4/15/29 (5)
110
101
807
Automotive
5.1%
Adient
Global
Holdings,
8.25%,
4/15/31 (5)
695
723
Clarios
Global,
6.75%,
5/15/28 (5)
160
161
Clarios
Global,
8.50%,
5/15/27 (5)
695
698
T.
ROWE
PRICE
Credit
Opportunities
Fund
12
Par/Shares
$
Value
(Amounts
in
000s)
‡
Dana
Financing
Luxembourg,
8.50%,
7/15/31
(EUR) (5)
653
770
Global
Auto
Holdings,
8.75%,
1/15/32 (5)
695
667
Goodyear
Tire
&
Rubber,
5.25%,
7/15/31 (6)
405
364
Goodyear
Tire
&
Rubber,
5.625%,
4/30/33
370
330
Rivian
Holdings,
FRN,
6M
TSFR
+
6.028%,
11.31%,
10/15/26 (5)
2,234
2,189
Tenneco,
8.00%,
11/17/28 (5)
940
855
Velocity
Vehicle
Group,
8.00%,
6/1/29 (5)
185
188
Wand
NewCo
3,
7.625%,
1/30/32 (5)
1,135
1,162
ZF
North
America
Capital,
6.875%,
4/14/28 (5)
300
304
ZF
North
America
Capital,
6.875%,
4/23/32 (5)
550
561
ZF
North
America
Capital,
7.125%,
4/14/30 (5)
450
463
9,435
Broadcasting
3.3%
Clear
Channel
Outdoor
Holdings,
5.125%,
8/15/27 (5)
145
137
Clear
Channel
Outdoor
Holdings,
7.50%,
6/1/29 (5)(6)
710
579
Clear
Channel
Outdoor
Holdings,
7.75%,
4/15/28 (5)(6)
550
474
Clear
Channel
Outdoor
Holdings,
7.875%,
4/1/30 (5)
510
506
Clear
Channel
Outdoor
Holdings,
9.00%,
9/15/28 (5)(6)
665
690
CMG
Media,
8.875%,
12/15/27 (5)
670
337
Neptune
Bidco
U.S.,
9.29%,
4/15/29 (5)
450
430
Outfront
Media
Capital,
7.375%,
2/15/31 (5)
235
242
Sirius
XM
Radio,
4.00%,
7/15/28 (5)
85
76
Sirius
XM
Radio,
5.00%,
8/1/27 (5)
665
629
Sirius
XM
Radio,
5.50%,
7/1/29 (5)
330
306
Stagwell
Global,
5.625%,
8/15/29 (5)
905
826
Univision
Communications,
7.375%,
6/30/30 (5)
400
378
Univision
Communications,
8.00%,
8/15/28 (5)
580
571
6,181
Building
&
Real
Estate
0.9%
Cushman
&
Wakefield
U.S.
Borrower,
6.75%,
5/15/28 (5)
305
303
Cushman
&
Wakefield
U.S.
Borrower,
8.875%,
9/1/31 (5)
260
272
Howard
Hughes,
4.125%,
2/1/29 (5)
295
260
Howard
Hughes,
5.375%,
8/1/28 (5)
860
810
1,645
Building
Products
0.9%
Advanced
Drainage
Systems,
6.375%,
6/15/30 (5)
225
224
Builders
FirstSource,
6.375%,
6/15/32 (5)
103
103
Builders
FirstSource,
6.375%,
3/1/34 (5)
300
294
New
Enterprise
Stone
&
Lime,
5.25%,
7/15/28 (5)
365
342
Summit
Materials,
7.25%,
1/15/31 (5)
660
678
1,641
T.
ROWE
PRICE
Credit
Opportunities
Fund
13
Par/Shares
$
Value
(Amounts
in
000s)
‡
Cable
Operators
4.6%
Altice
Financing,
9.625%,
7/15/27 (5)
900
830
Altice
France,
8.125%,
2/1/27 (5)
200
154
Altice
France
Holding,
6.00%,
2/15/28 (5)
815
254
Altice
France
Holding,
10.50%,
5/15/27 (5)
1,585
582
C&W
Senior
Finance,
6.875%,
9/15/27 (5)
365
348
CCO
Holdings,
4.50%,
8/15/30 (5)
405
336
CCO
Holdings,
4.50%,
6/1/33 (5)
200
154
CCO
Holdings,
4.75%,
2/1/32 (5)
300
241
CCO
Holdings,
6.375%,
9/1/29 (5)
1,652
1,542
CCO
Holdings,
7.375%,
3/1/31 (5)
975
941
CSC
Holdings,
5.50%,
4/15/27 (5)
200
153
CSC
Holdings,
6.50%,
2/1/29 (5)
545
368
CSC
Holdings,
7.50%,
4/1/28 (5)
385
215
CSC
Holdings,
11.25%,
5/15/28 (5)
245
198
CSC
Holdings,
11.75%,
1/31/29 (5)
545
432
DISH
DBS,
5.125%,
6/1/29
130
53
DISH
DBS,
5.25%,
12/1/26 (5)
990
789
DISH
DBS,
5.75%,
12/1/28 (5)
116
81
DISH
DBS,
7.75%,
7/1/26
1,305
832
8,503
Chemicals
2.4%
Avient,
7.125%,
8/1/30 (5)
375
380
Axalta
Coating
Systems
Dutch
Holding
B,
7.25%,
2/15/31 (5)
520
537
Celanese
U.S.
Holdings,
6.55%,
11/15/30
300
313
Celanese
U.S.
Holdings,
6.70%,
11/15/33
625
657
Kobe
U.S.
Midco
2,
(9.25%
Cash
or
10.00%
PIK),
9.25%,
11/1/26 (5)(7)
87
71
Methanex,
5.125%,
10/15/27
82
79
Methanex,
5.25%,
12/15/29
120
115
Methanex,
5.65%,
12/1/44
108
94
Vibrantz
Technologies,
9.00%,
2/15/30 (5)
530
490
Windsor
Holdings
III,
8.50%,
6/15/30 (5)
845
881
WR
Grace
Holdings,
5.625%,
8/15/29 (5)
815
750
WR
Grace
Holdings,
7.375%,
3/1/31 (5)
126
128
4,495
Consumer
Products
0.6%
Acushnet,
7.375%,
10/15/28 (5)
300
308
Life
Time,
5.75%,
1/15/26 (5)
372
370
Life
Time,
8.00%,
4/15/26 (5)
455
458
1,136
T.
ROWE
PRICE
Credit
Opportunities
Fund
14
Par/Shares
$
Value
(Amounts
in
000s)
‡
Container
0.4%
Ball,
6.00%,
6/15/29
800
799
799
Energy
11.4%
Aethon
United
BR,
8.25%,
2/15/26 (5)
785
792
Antero
Resources,
5.375%,
3/1/30 (5)
115
110
Antero
Resources,
7.625%,
2/1/29 (5)
290
298
Chesapeake
Energy,
5.50%,
2/1/26 (5)
135
133
Chesapeake
Energy,
5.875%,
2/1/29 (5)
150
147
Chesapeake
Energy,
6.75%,
4/15/29 (5)
305
305
Comstock
Resources,
6.75%,
3/1/29 (5)
816
787
Crescent
Energy
Finance,
7.625%,
4/1/32 (5)
400
407
Crescent
Energy
Finance,
9.25%,
2/15/28 (5)
1,180
1,245
Gulfport
Energy,
8.00%,
5/17/26 (5)
155
157
Hilcorp
Energy
I,
6.00%,
2/1/31 (5)
466
443
Hilcorp
Energy
I,
8.375%,
11/1/33 (5)
1,210
1,289
Kinetik
Holdings,
5.875%,
6/15/30 (5)
815
794
Kinetik
Holdings,
6.625%,
12/15/28 (5)
507
511
Magnolia
Oil
&
Gas
Operating,
6.00%,
8/1/26 (5)
920
904
NGL
Energy
Operating,
8.125%,
2/15/29 (5)
435
443
NGL
Energy
Operating,
8.375%,
2/15/32 (5)
430
438
NuStar
Logistics,
5.625%,
4/28/27
167
164
NuStar
Logistics,
6.00%,
6/1/26
300
297
Permian
Resources
Operating,
9.875%,
7/15/31 (5)
553
612
Prairie
Acquiror,
9.00%,
8/1/29 (5)
440
452
Range
Resources,
4.75%,
2/15/30 (5)
335
309
Range
Resources,
8.25%,
1/15/29
130
135
Seadrill
Finance,
8.375%,
8/1/30 (5)
1,420
1,491
SilverBow
Resources,
FRN,
3M
TSFR
+
7.75%,
13.079%,
12/15/28 (5)
552
574
Solaris
Midstream
Holdings,
7.625%,
4/1/26 (5)
165
165
Southwestern
Energy,
4.75%,
2/1/32
370
334
Southwestern
Energy,
5.375%,
3/15/30
195
187
Sunoco,
7.00%,
5/1/29 (5)
580
590
Sunoco,
7.25%,
5/1/32 (5)
402
410
Tallgrass
Energy
Partners,
6.00%,
3/1/27 (5)
370
362
Tallgrass
Energy
Partners,
6.00%,
12/31/30 (5)
300
283
Tallgrass
Energy
Partners,
7.375%,
2/15/29 (5)
765
767
Tallgrass
Energy
Partners,
7.50%,
10/1/25 (5)
185
185
Transocean,
6.80%,
3/15/38
290
239
Transocean,
8.25%,
5/15/29 (5)
380
380
Transocean,
8.50%,
5/15/31 (5)
450
448
Transocean,
8.75%,
2/15/30 (5)
185
192
T.
ROWE
PRICE
Credit
Opportunities
Fund
15
Par/Shares
$
Value
(Amounts
in
000s)
‡
Transocean
Aquila,
8.00%,
9/30/28 (5)
240
244
Venture
Global
Calcasieu
Pass,
6.25%,
1/15/30 (5)
885
884
Venture
Global
LNG,
8.125%,
6/1/28 (5)
540
551
Venture
Global
LNG,
8.375%,
6/1/31 (5)
1,165
1,201
Venture
Global
LNG,
9.50%,
2/1/29 (5)
640
692
21,351
Entertainment
&
Leisure
4.0%
Carnival,
7.00%,
8/15/29 (5)
435
446
Carnival,
7.625%,
3/1/26 (5)
525
527
Carnival,
10.50%,
6/1/30 (5)
1,350
1,461
Cedar
Fair,
6.50%,
10/1/28
865
861
Churchill
Downs,
5.75%,
4/1/30 (5)
455
435
Cinemark
USA,
5.25%,
7/15/28 (5)(6)
280
261
Live
Nation
Entertainment,
4.75%,
10/15/27 (5)
580
548
Royal
Caribbean
Cruises,
5.50%,
4/1/28 (5)
230
225
Royal
Caribbean
Cruises,
6.25%,
3/15/32 (5)
215
213
Royal
Caribbean
Cruises,
8.25%,
1/15/29 (5)
575
607
Royal
Caribbean
Cruises,
9.25%,
1/15/29 (5)
280
298
SeaWorld
Parks
&
Entertainment,
5.25%,
8/15/29 (5)
365
341
Six
Flags
Entertainment,
7.25%,
5/15/31 (5)
1,305
1,298
7,521
Financial
12.0%
Acrisure,
8.25%,
2/1/29 (5)
375
375
Acrisure,
10.125%,
8/1/26 (5)
518
533
AG
TTMT
Escrow
Issuer,
8.625%,
9/30/27 (5)
335
346
Alliant
Holdings
Intermediate,
6.75%,
10/15/27 (5)
1,515
1,477
Alliant
Holdings
Intermediate,
7.00%,
1/15/31 (5)
705
707
AssuredPartners,
7.50%,
2/15/32 (5)
823
818
GTCR
AP
Finance,
8.00%,
5/15/27 (5)
165
165
HUB
International,
5.625%,
12/1/29 (5)
180
166
HUB
International,
7.25%,
6/15/30 (5)
1,085
1,103
HUB
International,
7.375%,
1/31/32 (5)
2,205
2,205
Jane
Street
Group,
7.125%,
4/30/31 (5)
900
913
Jones
Deslauriers
Insurance
Management,
8.50%,
3/15/30 (5)
739
776
Jones
Deslauriers
Insurance
Management,
10.50%,
12/15/30 (5)
2,170
2,333
Midcap
Financial
Issuer
Trust,
5.625%,
1/15/30 (5)
200
170
Midcap
Financial
Issuer
Trust,
6.50%,
5/1/28 (5)
790
736
Navient,
5.50%,
3/15/29
960
866
Navient,
5.625%,
8/1/33
740
596
Navient,
9.375%,
7/25/30
585
608
Navient,
11.50%,
3/15/31
870
955
OneMain
Finance,
7.50%,
5/15/31
530
529
T.
ROWE
PRICE
Credit
Opportunities
Fund
16
Par/Shares
$
Value
(Amounts
in
000s)
‡
OneMain
Finance,
9.00%,
1/15/29
2,240
2,349
Osaic
Holdings,
10.75%,
8/1/27 (5)(6)
210
216
Panther
Escrow
Issuer,
7.125%,
6/1/31 (5)
2,690
2,707
PennyMac
Financial
Services,
7.125%,
11/15/30 (5)
740
728
22,377
Food
0.9%
B&G
Foods,
5.25%,
9/15/27 (6)
435
400
BellRing
Brands,
7.00%,
3/15/30 (5)
340
347
Chobani,
7.625%,
7/1/29 (5)
440
447
Darling
Ingredients,
6.00%,
6/15/30 (5)
465
453
1,647
Forest
Products
0.1%
Cascades,
5.125%,
1/15/26 (5)
260
255
255
Gaming
2.9%
Caesars
Entertainment,
6.50%,
2/15/32 (5)
410
405
Caesars
Entertainment,
7.00%,
2/15/30 (5)
950
960
Caesars
Entertainment,
8.125%,
7/1/27 (5)
820
834
CCM
Merger,
6.375%,
5/1/26 (5)
235
233
Churchill
Downs,
6.75%,
5/1/31 (5)
510
507
International
Game
Technology,
6.25%,
1/15/27 (5)
420
420
Light
&
Wonder
International,
7.00%,
5/15/28 (5)
145
146
Light
&
Wonder
International,
7.25%,
11/15/29 (5)
540
547
Light
&
Wonder
International,
7.50%,
9/1/31 (5)
300
308
Ontario
Gaming
GTA,
8.00%,
8/1/30 (5)
610
625
Scientific
Games
Holdings,
6.625%,
3/1/30 (5)
355
336
Wynn
Resorts
Finance,
5.125%,
10/1/29 (5)
200
188
5,509
Health
Care
5.8%
AthenaHealth
Group,
6.50%,
2/15/30 (5)
585
530
Avantor
Funding,
4.625%,
7/15/28 (5)
215
202
Bausch
+
Lomb,
8.375%,
10/1/28 (5)
865
880
CHS,
5.25%,
5/15/30 (5)
175
145
CHS,
6.00%,
1/15/29 (5)
205
183
CHS,
8.00%,
3/15/26 (5)
93
93
CHS,
8.00%,
12/15/27 (5)
320
318
CHS,
10.875%,
1/15/32 (5)
650
672
IQVIA,
6.50%,
5/15/30 (5)
200
202
LifePoint
Health,
9.875%,
8/15/30 (5)
342
366
LifePoint
Health,
10.00%,
6/1/32 (5)
450
448
LifePoint
Health,
11.00%,
10/15/30 (5)
1,245
1,373
Medline
Borrower,
5.25%,
10/1/29 (5)
360
339
Medline
Borrower,
6.25%,
4/1/29 (5)
700
699
T.
ROWE
PRICE
Credit
Opportunities
Fund
17
Par/Shares
$
Value
(Amounts
in
000s)
‡
MPT
Operating
Partnership,
0.993%,
10/15/26
(EUR)
420
356
Select
Medical,
6.25%,
8/15/26 (5)
530
530
Star
Parent,
9.00%,
10/1/30 (5)
542
566
Tenet
Healthcare,
6.125%,
10/1/28
290
286
Tenet
Healthcare,
6.125%,
6/15/30
435
430
Tenet
Healthcare,
6.875%,
11/15/31
290
302
Teva
Pharmaceutical
Finance
Netherlands
III,
4.75%,
5/9/27
240
230
Teva
Pharmaceutical
Finance
Netherlands
III,
5.125%,
5/9/29
245
234
Teva
Pharmaceutical
Finance
Netherlands
III,
7.875%,
9/15/29
595
632
Teva
Pharmaceutical
Finance
Netherlands
III,
8.125%,
9/15/31
665
726
10,742
Information
Technology
4.7%
Boxer
Parent,
7.125%,
10/2/25 (5)
180
180
Boxer
Parent,
9.125%,
3/1/26 (5)
450
450
Central
Parent,
7.25%,
6/15/29 (5)
1,075
1,079
Central
Parent,
8.00%,
6/15/29 (5)
600
615
Cloud
Software
Group,
8.25%,
6/30/32 (5)
450
452
Cloud
Software
Group,
9.00%,
9/30/29 (5)
2,250
2,166
Dye
&
Durham,
8.625%,
4/15/29 (5)
532
538
Entegris,
5.95%,
6/15/30 (5)
900
883
Gen
Digital,
6.75%,
9/30/27 (5)
440
442
Gen
Digital,
7.125%,
9/30/30 (5)
417
423
Match
Group
Holdings
II,
4.625%,
6/1/28 (5)
305
283
Match
Group
Holdings
II,
5.625%,
2/15/29 (5)
115
109
McAfee,
7.375%,
2/15/30 (5)
970
898
SS&C
Technologies,
6.50%,
6/1/32 (5)
315
315
8,833
Lodging
0.3%
Hilton
Domestic
Operating,
4.875%,
1/15/30
180
170
Hilton
Domestic
Operating,
5.75%,
5/1/28 (5)
165
163
Park
Intermediate
Holdings,
7.00%,
2/1/30 (5)
290
291
624
Manufacturing
0.4%
EMRLD
Borrower,
6.625%,
12/15/30 (5)
210
210
Madison
IAQ,
5.875%,
6/30/29 (5)
500
460
670
Metals
&
Mining
2.3%
Arsenal
AIC
Parent,
8.00%,
10/1/30 (5)
505
525
Arsenal
AIC
Parent,
11.50%,
10/1/31 (5)
545
606
ATI,
5.125%,
10/1/31
235
214
ATI,
5.875%,
12/1/27
480
470
ATI,
7.25%,
8/15/30
380
388
Carpenter
Technology,
7.625%,
3/15/30
1,085
1,109
T.
ROWE
PRICE
Credit
Opportunities
Fund
18
Par/Shares
$
Value
(Amounts
in
000s)
‡
Hecla
Mining,
7.25%,
2/15/28
300
301
Hudbay
Minerals,
6.125%,
4/1/29 (5)
120
119
TMS
International,
6.25%,
4/15/29 (5)
630
578
4,310
Other
Telecommunications
0.2%
Frontier
Communications
Holdings,
8.75%,
5/15/30 (5)
350
361
361
Real
Estate
Investment
Trust
Securities
1.1%
Service
Properties
Trust,
8.625%,
11/15/31 (5)
1,895
1,983
1,983
Retail
0.6%
At
Home
Group,
4.875%,
7/15/28 (5)
125
58
Bath
&
Body
Works,
6.625%,
10/1/30 (5)
315
315
Bath
&
Body
Works,
6.75%,
7/1/36
265
263
Bath
&
Body
Works,
6.95%,
3/1/33
103
100
Bath
&
Body
Works,
9.375%,
7/1/25 (5)
150
155
PetSmart,
7.75%,
2/15/29 (5)
255
242
1,133
Satellites
0.8%
Connect
Finco,
6.75%,
10/1/26 (5)
960
905
Intelsat
Jackson
Holdings,
6.50%,
3/15/30 (5)
340
320
Viasat,
7.50%,
5/30/31 (5)(6)
340
231
1,456
Services
5.9%
Albion
Financing
1,
6.125%,
10/15/26 (5)
490
485
Albion
Financing
2,
8.75%,
4/15/27 (5)
675
682
Allied
Universal
Holdco,
6.00%,
6/1/29 (5)(6)
798
679
Allied
Universal
Holdco,
7.875%,
2/15/31 (5)
672
670
Allied
Universal
Holdco,
9.75%,
7/15/27 (5)
780
772
Boost
Newco
Borrower,
7.50%,
1/15/31 (5)
1,380
1,427
eG
Global
Finance,
12.00%,
11/30/28 (5)
580
598
Fortress
Intermediate
3,
7.50%,
6/1/31 (5)
350
354
GFL
Environmental,
6.75%,
1/15/31 (5)
400
408
Ritchie
Bros
Holdings,
6.75%,
3/15/28 (5)
140
141
Ritchie
Bros
Holdings,
7.75%,
3/15/31 (5)
293
305
TK
Elevator
Holdco,
6.625%,
7/15/28
(EUR)
828
863
TK
Elevator
U.S.
Newco,
5.25%,
7/15/27 (5)
890
857
UKG,
6.875%,
2/1/31 (5)
2,790
2,808
11,049
Transportation
0.5%
Watco,
6.50%,
6/15/27 (5)
894
877
877
T.
ROWE
PRICE
Credit
Opportunities
Fund
19
Par/Shares
$
Value
(Amounts
in
000s)
‡
Utilities
8.3%
Calpine,
5.00%,
2/1/31 (5)
295
271
Calpine,
5.125%,
3/15/28 (5)
400
381
HAT
Holdings
I,
8.00%,
6/15/27 (5)
848
877
NRG
Energy,
VR,
10.25% (5)(8)(9)
104
113
PG&E,
5.00%,
7/1/28
358
343
PG&E,
5.25%,
7/1/30
615
585
Talen
Energy
Supply,
8.625%,
6/1/30 (5)
4,419
4,739
Terraform
Global
Operating,
6.125%,
3/1/26 (5)
555
545
Vistra,
VR,
8.00% (5)(8)(9)
2,684
2,711
Vistra,
Series C,
VR,
8.875% (5)(8)(9)
4,250
4,399
Vistra
Operations,
7.75%,
10/15/31 (5)
565
586
15,550
Wireless
Communications
0.1%
U.S.
Cellular,
6.70%,
12/15/33
212
223
223
Total
Corporate
Bonds
(Cost
$156,337)
154,882
MUNICIPAL
SECURITIES
0.7%
Puerto
Rico
0.7%
Puerto
Rico
Commonwealth,
GO,
VR,
11/1/43 (10)
2,115
1,312
Total
Municipal
Securities
(Cost
$1,182)
1,312
SHORT-TERM
INVESTMENTS
4.3%
Money
Market
Funds
4.3%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (11)(12)
8,055
8,055
Total
Short-Term
Investments
(Cost
$8,055)
8,055
T.
ROWE
PRICE
Credit
Opportunities
Fund
20
Par/Shares
$
Value
(Amounts
in
000s)
‡
SECURITIES
LENDING
COLLATERAL
1.7%
INVESTMENTS
IN
A
POOLED
ACCOUNT
THROUGH
SECURITIES
LENDING
PROGRAM
WITH
STATE
STREET
BANK
AND
TRUST
COMPANY 1.7%
Money
Market
Funds 1.7%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (11)(12)
3,125
3,125
Total
Investments
in
a
Pooled
Account
through
Securities
Lending
Program
with
State
Street
Bank
and
Trust
Company
3,125
Total
Securities
Lending
Collateral
(Cost
$3,125)
3,125
Total
Investments
in
Securities
101.2%
of
Net
Assets
(Cost
$190,308)
$
188,954
‡
Par/Shares
and
Notional
Amount
are
denominated
in
U.S.
dollars
unless
otherwise
noted.
(1)
Bank
loan
positions
may
involve
multiple
underlying
tranches.
In
those
instances,
the
position
presented
reflects
the
aggregate
of
those
respective
underlying
tranches
and
the
rate
presented
reflects
the
weighted
average
rate
of
the
settled
positions.
(2)
All
or
a
portion
of
this
loan
is
unsettled
as
of
May
31,
2024.
The
interest
rate
for
unsettled
loans
will
be
determined
upon
settlement
after
period
end.
(3)
Non-income
producing
(4)
See
Note
2.
Level
3
in
fair
value
hierarchy.
(5)
Security
was
purchased
pursuant
to
Rule
144A
under
the
Securities
Act
of
1933
and
may
be
resold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers.
Total
value
of
such
securities
at
period-end
amounts
to
$134,501
and
represents
72.0%
of
net
assets.
(6)
See
Note
4
.
All
or
a
portion
of
this
security
is
on
loan
at
May
31,
2024.
(7)
Security
has
the
ability
to
pay
in-kind
or
pay
in
cash.
When
applicable,
separate
rates
of
such
payments
are
disclosed.
(8)
Perpetual
security
with
no
stated
maturity
date.
(9)
Security
is
a
fix-to-float
security,
which
carries
a
fixed
coupon
until
a
certain
date,
upon
which
it
switches
to
a
floating
rate.
Reference
rate
and
spread
are
provided
if
the
rate
is
currently
floating.
(10)
Contingent
value
instrument
that
only
pays
out
if
a
portion
of
the
territory's
Sales
and
Use
Tax
outperforms
the
projections
in
the
Oversight
Board's
Certified
Fiscal
Plan.
(11)
Seven-day
yield
(12)
Affiliated
Companies
T.
ROWE
PRICE
Credit
Opportunities
Fund
21
1M
TSFR
One
month
term
SOFR
(Secured
overnight
financing
rate)
3M
TSFR
Three
month
term
SOFR
(Secured
overnight
financing
rate)
6M
TSFR
Six
month
Term
SOFR
(Secured
overnight
financing
rate)
EUR
Euro
FRN
Floating
Rate
Note
GO
General
Obligation
PIK
Payment-in-kind
VR
Variable
Rate;
rate
shown
is
effective
rate
at
period-end.
The
rates
for
certain
variable
rate
securities
are
not
based
on
a
published
reference
rate
and
spread
but
are
determined
by
the
issuer
or
agent
and
based
on
current
market
conditions.
T.
ROWE
PRICE
Credit
Opportunities
Fund
22
(Amounts
in
000s)
SWAPS
(0.0)%
Description
Notional
Amount
$
Value
Initial
$
Value
Unrealized
$
Gain/(Loss)
CENTRALLY
CLEARED
SWAPS
(0.0)%
Credit
Default
Swaps,
Protection
Sold
(0.0)%
Protection
Sold
(Relevant
Credit:
CHS/
Community
Health
Systems,
Ca*),
Receive
5.00%
Quarterly,
Pay
upon
credit
default,
12/20/26
*
216
(15)
(8)
(7)
Total
Centrally
Cleared
Credit
Default
Swaps,
Protection
Sold
(7)
Total
Centrally
Cleared
Swaps
(7)
Net
payments
(receipts)
of
variation
margin
to
date
6
Variation
margin
receivable
(payable)
on
centrally
cleared
swaps
$
(1)
*
Credit
ratings
as
of
May
31,
2024.
Ratings
shown
are
from
Moody's
Investors
Service
and
if
Moody's
does
not
rate
a
security,
then
Standard
&
Poor's
(S&P)
is
used.
Fitch
is
used
for
securities
that
are
not
rated
by
either
Moody's
or
S&P.
T.
ROWE
PRICE
Credit
Opportunities
Fund
23
(Amounts
in
000s)
FORWARD
CURRENCY
EXCHANGE
CONTRACTS
Counterparty
Settlement
Receive
Deliver
Unrealized
Gain/(Loss)
UBS
Investment
Bank
8/23/24
USD
1,976
EUR
1,811
$
4
Net
unrealized
gain
(loss)
on
open
forward
currency
exchange
contracts
$
4
T.
ROWE
PRICE
Credit
Opportunities
Fund
24
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
AFFILIATED
COMPANIES
($000s)
The
fund
may
invest
in
certain
securities
that
are
considered
affiliated
companies.
As
defined
by
the
1940
Act,
an
affiliated
company
is
one
in
which
the
fund
owns
5%
or
more
of
the
outstanding
voting
securities,
or
a
company
that
is
under
common
ownership
or
control.
The
following
securities
were
considered
affiliated
companies
for
all
or
some
portion
of
the
year
ended
May
31,
2024.
Net
realized
gain
(loss),
investment
income,
change
in
net
unrealized
gain/loss,
and
purchase
and
sales
cost
reflect
all
activity
for
the
period
then
ended.
Affiliate
Net
Realized
Gain
(Loss)
Change
in
Net
Unrealized
Gain/Loss
Investment
Income
T.
Rowe
Price
Government
Reserve
Fund,
5.39%
$
-
$
-
$
409++
Totals
$
-#
$
-
$
409+
Supplementary
Investment
Schedule
Affiliate
Value
05/31/23
Purchase
Cost
Sales
Cost
Value
05/31/24
T.
Rowe
Price
Government
Reserve
Fund,
5.39%
$
3,016
¤
¤
$
11,180
Total
$
11,180^
#
Capital
gain
distributions
from
underlying
Price
funds
represented
$0
of
the
net
realized
gain
(loss).
++
Excludes
earnings
on
securities
lending
collateral,
which
are
subject
to
rebates
and
fees
as
described
in
Note
4
.
+
Investment
income
comprised
$409
of
dividend
income
and
$0
of
interest
income.
¤
Purchase
and
sale
information
not
shown
for
cash
management
funds.
^
The
cost
basis
of
investments
in
affiliated
companies
was
$11,180.
T.
ROWE
PRICE
Credit
Opportunities
Fund
May
31,
2024
Statement
of
Assets
and
Liabilities
25
($000s,
except
shares
and
per
share
amounts)
Assets
Investments
in
securities,
at
value
(cost
$190,308)
$
188,954
Interest
receivable
3,511
Receivable
for
investment
securities
sold
605
Receivable
for
shares
sold
512
Cash
deposits
on
centrally
cleared
swaps
154
Cash
24
Due
from
affiliates
19
Unrealized
gain
on
forward
currency
exchange
contracts
4
Foreign
currency
(cost
$1)
1
Other
assets
66
Total
assets
193,850
Liabilities
Payable
for
investment
securities
purchased
3,379
Obligation
to
return
securities
lending
collateral
3,125
Payable
for
shares
redeemed
423
Investment
management
fees
payable
86
Variation
margin
payable
on
centrally
cleared
swaps
1
Other
liabilities
47
Total
liabilities
7,061
Commitments
and
Contingent
Liabilities
(note
6
)
NET
ASSETS
$
186,789
T.
ROWE
PRICE
Credit
Opportunities
Fund
May
31,
2024
Statement
of
Assets
and
Liabilities
26
($000s,
except
shares
and
per
share
amounts)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Net
Assets
Consist
of:
Total
distributable
earnings
(loss)
$
(24,558)
Paid-in
capital
applicable
to
23,816,351
shares
of
$0.0001
par
value
capital
stock
outstanding;
1,000,000,000
shares
authorized
211,347
NET
ASSETS
$
186,789
NET
ASSET
VALUE
PER
SHARE
Investor
Class
(Net
assets:
$91,777;
Shares
outstanding:
11,693,518)
$
7.85
Advisor
Class
(Net
assets:
$99;
Shares
outstanding:
12,668)
$
7.81
I
Class
(Net
assets:
$94,913;
Shares
outstanding:
12,110,165)
$
7.84
T.
ROWE
PRICE
Credit
Opportunities
Fund
Statement
of
Operations
27
($000s)
Year
Ended
5/31/24
Investment
Income
(Loss)
Income
Interest
$
10,547
Dividend
416
Securities
lending
32
Total
income
10,995
Expenses
Investment
management
770
Shareholder
servicing
Investor
Class
$
138
Advisor
Class
1
I
Class
16
155
Prospectus
and
shareholder
reports
Investor
Class
12
I
Class
7
19
Custody
and
accounting
196
Registration
89
Legal
and
audit
51
Proxy
and
annual
meeting
2
Miscellaneous
17
Waived
/
paid
by
Price
Associates
(358)
Total
expenses
941
Net
investment
income
10,054
T.
ROWE
PRICE
Credit
Opportunities
Fund
Statement
of
Operations
28
($000s)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
Ended
5/31/24
Realized
and
Unrealized
Gain
/
Loss
-
Net
realized
gain
(loss)
Securities
(2,380)
Swaps
73
Options
written
7
Forward
currency
exchange
contracts
13
Net
realized
loss
(2,287)
Change
in
net
unrealized
gain
/
loss
Securities
7,243
Swaps
30
Forward
currency
exchange
contracts
(3)
Change
in
net
unrealized
gain
/
loss
7,270
Net
realized
and
unrealized
gain
/
loss
4,983
INCREASE
IN
NET
ASSETS
FROM
OPERATIONS
$
15,037
T.
ROWE
PRICE
Credit
Opportunities
Fund
Statement
of
Changes
in
Net
Assets
29
($000s)
Year
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ended
.
.
.
.
.
.
.
.
.
.
.
.
.
.
5/31/24
5/31/23
Increase
(Decrease)
in
Net
Assets
Operations
Net
investment
income
$
10,054
$
6,415
Net
realized
loss
(2,287)
(2,189)
Change
in
net
unrealized
gain
/
loss
7,270
(3,520)
Increase
in
net
assets
from
operations
15,037
706
Distributions
to
shareholders
Net
earnings
Investor
Class
(4,536)
(2,953)
Advisor
Class
(8)
(9)
I
Class
(5,536)
(3,780)
Decrease
in
net
assets
from
distributions
(10,080)
(6,742)
Capital
share
transactions
*
Shares
sold
Investor
Class
69,510
27,921
Advisor
Class
478
1,960
I
Class
63,369
31,102
Distributions
reinvested
Investor
Class
4,315
2,451
Advisor
Class
7
7
I
Class
4,815
2,103
Shares
redeemed
Investor
Class
(29,419)
(26,896)
Advisor
Class
(766)
(1,690)
I
Class
(37,576)
(15,350)
Increase
in
net
assets
from
capital
share
transactions
74,733
21,608
T.
ROWE
PRICE
Credit
Opportunities
Fund
Statement
of
Changes
in
Net
Assets
30
($000s)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ended
.
.
.
.
.
.
.
.
.
.
.
.
.
.
5/31/24
5/31/23
Net
Assets
Increase
during
period
79,690
15,572
Beginning
of
period
107,099
91,527
End
of
period
$
186,789
$
107,099
*Share
information
(000s)
Shares
sold
Investor
Class
8,910
3,646
Advisor
Class
63
258
I
Class
8,189
4,080
Distributions
reinvested
Investor
Class
554
322
Advisor
Class
1
1
I
Class
619
277
Shares
redeemed
Investor
Class
(3,783)
(3,518)
Advisor
Class
(101)
(220)
I
Class
(4,864)
(2,007)
Increase
in
shares
outstanding
9,588
2,839
T.
ROWE
PRICE
Credit
Opportunities
Fund
NOTES
TO
FINANCIAL
STATEMENTS
31
T.
Rowe
Price
Credit
Opportunities
Fund,
Inc. (the
fund) is
registered
under
the
Investment
Company
Act
of
1940
(the
1940
Act)
as a
diversified, open-
end
management
investment
company.
The
fund
seeks
a
combination
of
long-term
capital
appreciation
and
high
income.
The
fund
has three classes
of
shares:
the
Credit
Opportunities
Fund
(Investor
Class),
the
Credit
Opportunities
Fund-Advisor
Class
(Advisor
Class)
and
the
Credit
Opportunities
Fund-I
Class
(I
Class).
Advisor
Class
shares
are
sold
only
through
various
brokers
and
other
financial
intermediaries.
I
Class
shares
require
a
$500,000
initial
investment
minimum,
although
the
minimum
generally
is
waived
or
reduced
for
financial
intermediaries,
eligible
retirement
plans,
and
certain
other
accounts.
The
Advisor
Class
operates
under
a
Board-approved
Rule
12b-1
plan
pursuant
to
which
the
class
compensates
financial
intermediaries
for
distribution,
shareholder
servicing,
and/or
certain
administrative
services;
the
Investor
and
I
Classes
do
not
pay
Rule
12b-1
fees. Each
class
has
exclusive
voting
rights
on
matters
related
solely
to
that
class;
separate
voting
rights
on
matters
that
relate
to
all
classes;
and,
in
all
other
respects,
the
same
rights
and
obligations
as
the
other
classes.
NOTE
1
-
SIGNIFICANT
ACCOUNTING
POLICIES
Basis
of
Preparation
The fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
in
the
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946
(ASC
946).
The
accompanying
financial
statements
were
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(GAAP),
including,
but
not
limited
to,
ASC
946.
GAAP
requires
the
use
of
estimates
made
by
management.
Management
believes
that
estimates
and
valuations
are
appropriate;
however,
actual
results
may
differ
from
those
estimates,
and
the
valuations
reflected
in
the
accompanying
financial
statements
may
differ
from
the
value
ultimately
realized
upon
sale
or
maturity.
Investment
Transactions,
Investment
Income,
and
Distributions
Investment
transactions
are
accounted
for
on
the
trade
date
basis.
Income
and
expenses
are
recorded
on
the
accrual
basis.
Realized
gains
and
losses
are
reported
on
the
identified
cost
basis. Premiums
and
discounts
on
debt
securities
are
amortized
for
financial
reporting
purposes. Income
tax-related
interest
and
penalties,
if
incurred,
are
recorded
as
income
tax
expense. Dividends
received
from other
investment
companies are
reflected
as
dividend income;
capital
T.
ROWE
PRICE
Credit
Opportunities
Fund
32
gain
distributions
are
reflected
as
realized
gain/loss. Dividend
income and
capital
gain
distributions
are
recorded
on
the
ex-dividend
date. Earnings
on
investments
recognized
as
partnerships
for
federal
income
tax
purposes
reflect
the
tax
character
of
such
earnings. Non-cash
dividends,
if
any,
are
recorded
at
the
fair
market
value
of
the
asset
received. Proceeds
from
litigation
payments,
if
any,
are
included
in
either
net
realized
gain
(loss)
or
change
in
net
unrealized
gain/loss
from
securities. Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date. Income
distributions,
if
any, are
declared
by
each
class daily
and
paid
monthly. A
capital
gain
distribution,
if
any, may
also
be
declared
and
paid
by
the
fund
annually.
Currency
Translation
Assets,
including
investments,
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollar
values
each
day
at
the
prevailing
exchange
rate,
using
the
mean
of
the
bid
and
asked
prices
of
such
currencies
against
U.S.
dollars
as
provided
by
an
outside
pricing
service.
Purchases
and
sales
of
securities,
income,
and
expenses
are
translated
into
U.S.
dollars
at
the
prevailing
exchange
rate
on
the
respective
date
of
such
transaction.
The
effect
of
changes
in
foreign
currency
exchange
rates
on
realized
and
unrealized
security
gains
and
losses
is
not
bifurcated
from
the
portion
attributable
to
changes
in
market
prices.
Class
Accounting
Shareholder
servicing,
prospectus,
and
shareholder
report
expenses
incurred
by
each
class
are
charged
directly
to
the
class
to
which
they
relate.
Expenses
common
to
all
classes
and
investment
income
are
allocated
to
the
classes
based
upon
the
relative
daily
net
assets
of
each
class's
settled
shares;
realized
and
unrealized
gains
and
losses
are
allocated
based
upon
the
relative
daily
net
assets
of
each
class's
outstanding
shares.
The
Advisor
Class
pays
Rule
12b-1
fees,
in
an
amount
not
exceeding
0.25%
of
the
class's
average
daily
net
assets;
during
the
year
ended
May
31,
2024,
the
Advisor
Class
incurred
less
than
$1,000
in
these
fees.
Capital
Transactions
Each
investor's
interest
in
the
net
assets
of the
fund
is
represented
by
fund
shares. The
fund's
net
asset
value
(NAV)
per
share
is
computed
at
the
close
of
the
New
York
Stock
Exchange
(NYSE),
normally
4
p.m.
ET,
each
day
the
NYSE
is
open
for
business.
However,
the
NAV
per
share
may
be
calculated
at
a
time
other
than
the
normal
close
of
the
NYSE
if
trading
on
the
NYSE
is
restricted,
if
the
NYSE
closes
earlier,
or
as
may
be
permitted
by
the
SEC.
Purchases
and
redemptions
of
fund
shares
are
transacted
at
the
next-computed
NAV
per
share,
after
receipt
of
the
transaction
order
by
T.
Rowe
Price
Associates,
Inc.,
or
its
agents.
T.
ROWE
PRICE
Credit
Opportunities
Fund
33
Indemnification
In
the
normal
course
of
business, the
fund
may
provide
indemnification
in
connection
with
its
officers
and
directors,
service
providers,
and/or
private
company
investments. The
fund's
maximum
exposure
under
these
arrangements
is
unknown;
however,
the
risk
of
material
loss
is
currently
considered
to
be
remote.
NOTE
2
-
VALUATION
Fair
Value
The
fund's
financial
instruments
are
valued
at
the
close
of
the
NYSE
and
are
reported
at
fair
value,
which
GAAP
defines
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
at
the
measurement
date. The fund's
Board
of
Directors
(the
Board)
has
designated
T.
Rowe
Price
Associates,
Inc.
as
the
fund's
valuation
designee
(Valuation
Designee).
Subject
to
oversight
by
the
Board,
the
Valuation
Designee
performs
the
following
functions
in
performing
fair
value
determinations:
assesses
and
manages
valuation
risks;
establishes
and
applies
fair
value
methodologies;
tests
fair
value
methodologies;
and
evaluates
pricing
vendors
and
pricing
agents.
The
duties
and
responsibilities
of
the
Valuation
Designee
are
performed
by
its
Valuation
Committee. The
Valuation
Designee provides
periodic
reporting
to
the
Board
on
valuation
matters.
Various
valuation
techniques
and
inputs
are
used
to
determine
the
fair
value
of
financial
instruments.
GAAP
establishes
the
following
fair
value
hierarchy
that
categorizes
the
inputs
used
to
measure
fair
value:
Level
1
-
quoted
prices
(unadjusted)
in
active
markets
for
identical
financial
instruments
that
the
fund
can
access
at
the
reporting
date
Level
2
-
inputs
other
than
Level
1
quoted
prices
that
are
observable,
either
directly
or
indirectly
(including,
but
not
limited
to,
quoted
prices
for
similar
financial
instruments
in
active
markets,
quoted
prices
for
identical
or
similar
financial
instruments
in
inactive
markets,
interest
rates
and
yield
curves,
implied
volatilities,
and
credit
spreads)
Level
3
-
unobservable
inputs
(including
the Valuation
Designee's assumptions
in
determining
fair
value)
Observable
inputs
are
developed
using
market
data,
such
as
publicly
available
information
about
actual
events
or
transactions,
and
reflect
the
assumptions
that
market
participants
would
use
to
price
the
financial
instrument.
Unobservable
inputs
are
those
for
which
market
data
are
not
available
and
are
developed
T.
ROWE
PRICE
Credit
Opportunities
Fund
34
using
the
best
information
available
about
the
assumptions
that
market
participants
would
use
to
price
the
financial
instrument.
GAAP
requires
valuation
techniques
to
maximize
the
use
of
relevant
observable
inputs
and
minimize
the
use
of
unobservable
inputs.
When
multiple
inputs
are
used
to
derive
fair
value,
the
financial
instrument
is
assigned
to
the
level
within
the
fair
value
hierarchy
based
on
the
lowest-level
input
that
is
significant
to
the
fair
value
of
the
financial
instrument.
Input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level
but
rather
the
degree
of
judgment
used
in
determining
those
values.
Valuation
Techniques
Debt
securities
generally
are
traded
in
the over-the-
counter
(OTC)
market
and
are
valued
at
prices
furnished
by
independent
pricing
services
or
by
broker
dealers
who
make
markets
in
such
securities.
When
valuing
securities,
the
independent
pricing
services
consider
factors
such
as,
but
not
limited
to,
the
yield
or
price
of
bonds
of
comparable
quality,
coupon,
maturity,
and
type,
as
well
as
prices
quoted
by
dealers
who
make
markets
in
such
securities.
Equity
securities,
including
exchange-traded
funds, listed
or
regularly
traded
on
a
securities
exchange
or
in
the
over-the-counter
(OTC)
market
are
valued
at
the
last
quoted
sale
price
or,
for
certain
markets,
the
official
closing
price
at
the
time
the
valuations
are
made.
OTC
Bulletin
Board
securities
are
valued
at
the
mean
of
the
closing
bid
and
asked
prices.
A
security
that
is
listed
or
traded
on
more
than
one
exchange
is
valued
at
the
quotation
on
the
exchange
determined
to
be
the
primary
market
for
such
security.
Listed
securities
not
traded
on
a
particular
day
are
valued
at
the
mean
of
the
closing
bid
and
asked
prices
for
domestic
securities.
Investments
in
mutual
funds
are
valued
at
the
mutual
fund's
closing
NAV
per
share
on
the
day
of
valuation.
Forward
currency
exchange
contracts
are
valued
using
the
prevailing
forward
exchange
rate.
Swaps
are
valued
at
prices
furnished
by
an
independent
pricing
service
or
independent
swap
dealers.
Assets
and
liabilities
other
than
financial
instruments,
including
short-term
receivables
and
payables,
are
carried
at
cost,
or
estimated
realizable
value,
if
less,
which
approximates
fair
value.
Investments
for
which
market
quotations are
not
readily
available
or
deemed
unreliable
are
valued
at
fair
value
as
determined
in
good
faith
by
the
Valuation
Designee.
The
Valuation
Designee
has
adopted
methodologies
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
or
deemed
unreliable,
including
the
use
of
other
pricing
sources.
Factors
used
in
determining
fair
value
vary
by
type
of
investment
T.
ROWE
PRICE
Credit
Opportunities
Fund
35
and
may
include
market
or
investment
specific
considerations.
The
Valuation
Designee typically
will
afford
greatest
weight
to
actual
prices
in
arm's
length
transactions,
to
the
extent
they
represent
orderly
transactions
between
market
participants,
transaction
information
can
be
reliably
obtained,
and
prices
are
deemed
representative
of
fair
value.
However,
the
Valuation
Designee may
also
consider
other
valuation
methods
such
as
market-based
valuation
multiples;
a
discount
or
premium
from
market
value
of
a
similar,
freely
traded
security
of
the
same
issuer;
discounted
cash
flows;
yield
to
maturity;
or
some
combination.
Fair
value
determinations
are
reviewed
on
a
regular
basis.
Because
any
fair
value
determination
involves
a
significant
amount
of
judgment,
there
is
a
degree
of
subjectivity
inherent
in
such
pricing
decisions. Fair
value
prices
determined
by
the
Valuation
Designee could
differ
from
those
of
other
market
participants,
and
it
is
possible
that
the
fair
value
determined
for
a
security
may
be
materially
different
from
the
value
that
could
be
realized
upon
the
sale
of
that
security.
Valuation
Inputs
The
following
table
summarizes
the
fund's
financial
instruments,
based
on
the
inputs
used
to
determine
their
fair
values
on
May
31,
2024
(for
further
detail
by
category,
please
refer
to
the
accompanying
Portfolio
of
Investments):
($000s)
Level
1
Level
2
Level
3
Total
Value
Assets
Bank
Loans
$
-
$
19,853
$
250
$
20,103
Common
Stocks
1,290
-
-
1,290
Fixed
Income
Securities
1
-
156,381
-
156,381
Short-Term
Investments
8,055
-
-
8,055
Securities
Lending
Collateral
3,125
-
-
3,125
Total
Securities
12,470
176,234
250
188,954
Forward
Currency
Exchange
Contracts
-
4
-
4
Total
$
12,470
$
176,238
$
250
$
188,958
Liabilities
Swaps*
$
-
$
7
$
-
$
7
1
Includes
Convertible
Bonds,
Corporate
Bonds
and
Municipal
Securities.
T.
ROWE
PRICE
Credit
Opportunities
Fund
36
NOTE
3
-
DERIVATIVE
INSTRUMENTS
During
the
year ended
May
31,
2024,
the
fund
invested
in
derivative
instruments.
As
defined
by
GAAP,
a
derivative
is
a
financial
instrument
whose
value
is
derived
from
an
underlying
security
price,
foreign
exchange
rate,
interest
rate,
index
of
prices
or
rates,
or
other
variable;
it
requires
little
or
no
initial
investment
and
permits
or
requires
net
settlement.
The
fund
invests
in
derivatives
only
if
the
expected
risks
and
rewards
are
consistent
with
its
investment
objectives,
policies,
and
overall
risk
profile,
as
described
in
its
prospectus
and
Statement
of
Additional
Information.
The
fund
may
use
derivatives
for
a
variety
of
purposes
and
may
use
them
to
establish
both
long
and
short
positions
within
the
fund's
portfolio.
Potential
uses
include
to
hedge
against
declines
in
principal
value,
increase
yield,
invest
in
an
asset
with
greater
efficiency
and
at
a
lower
cost
than
is
possible
through
direct
investment,
to
enhance
return,
or
to
adjust
portfolio
duration
and
credit
exposure.
The
risks
associated
with
the
use
of
derivatives
are
different
from,
and
potentially
much
greater
than,
the
risks
associated
with
investing
directly
in
the
instruments
on
which
the
derivatives
are
based.
The
fund
values
its
derivatives
at
fair
value
and
recognizes
changes
in
fair
value
currently
in
its
results
of
operations.
Accordingly,
the
fund
does
not
follow
hedge
accounting,
even
for
derivatives
employed
as
economic
hedges.
Generally,
the
fund
accounts
for
its
derivatives
on
a
gross
basis.
It
does
not
offset
the
fair
value
of
derivative
liabilities
against
the
fair
value
of
derivative
assets
on
its
financial
statements,
nor
does
it
offset
the
fair
value
of
derivative
instruments
against
the
right
to
reclaim
or
obligation
to
return
collateral.
The
following
table
summarizes
the
fair
value
of
the
fund's
derivative
instruments
held
as
of
May
31,
2024,
and
the
related
location
on
the
accompanying
Statement
of
Assets
and
Liabilities,
presented
by
primary
underlying
risk
exposure:
*
The
fair
value
presented
includes
cumulative
gain
(loss)
on
centrally
cleared
swaps;
however,
the
net
value
reflected
on
the
accompanying
Portfolio
of
Investments
is
only
the
unsettled
variation
margin
receivable
(payable)
at
that
date.
T.
ROWE
PRICE
Credit
Opportunities
Fund
37
Additionally,
the
amount
of
gains
and
losses
on
derivative
instruments
recognized
in
fund
earnings
during
the
year ended
May
31,
2024,
and
the
related
location
on
the
accompanying
Statement
of
Operations
is
summarized
in
the
following
table
by
primary
underlying
risk
exposure:
($000s)
Location
on
Statement
of
Assets
and
Liabilities
Fair
Value*
Assets
Foreign
exchange
derivatives
Forwards
$
4
*
Total
$
4
*
Liabilities
Credit
derivatives
Centrally
Cleared
Swaps
$
7
Total
$
7
*
The
fair
value
presented
includes
cumulative
gain
(loss)
on
centrally
cleared
swaps;
however,
the
value
reflected
on
the
accompanying
Statement
of
Assets
and
Liabilities
is
only
the
unsettled
variation
margin
receivable
(payable)
at
that
date.
($000s)
Location
of
Gain
(Loss)
on
Statement
of
Operations
Options
Written
Forward
Currency
Exchange
Contracts
Swaps
Total
Realized
Gain
(Loss)
Foreign
exchange
derivatives
$
-
$
13
$
-
$
13
Credit
derivatives
7
-
73
80
Total
$
7
$
13
$
73
$
93
Change
in
Unrealized
Gain
(Loss)
Foreign
exchange
derivatives
$
-
$
(3)
$
-
$
(3)
Credit
derivatives
-
-
30
30
Total
$
-
$
(3)
$
30
$
27
T.
ROWE
PRICE
Credit
Opportunities
Fund
38
Counterparty
Risk
and
Collateral
The
fund
invests
in
derivatives
in
various
markets,
which
expose
it
to
differing
levels
of
counterparty
risk.
Counterparty
risk
on
exchange-traded
and
centrally
cleared
derivative
contracts,
such
as
futures,
exchange-traded
options,
and
centrally
cleared
swaps,
is
minimal
because
the
clearinghouse
provides
protection
against
counterparty
defaults.
For
futures
and
centrally
cleared
swaps,
the
fund
is
required
to
deposit
collateral
in
an
amount
specified
by
the
clearinghouse
and
the
clearing
firm
(margin
requirement),
and
the
margin
requirement
must
be
maintained
over
the
life
of
the
contract.
Each
clearinghouse
and
clearing
firm,
in
its
sole
discretion,
may
adjust
the
margin
requirements
applicable
to
the
fund.
Derivatives,
such
as
non-cleared bilateral
swaps,
forward
currency
exchange
contracts,
and
OTC
options,
that
are
transacted
and
settle
directly
with
a
counterparty
(bilateral
derivatives)
may
expose
the
fund
to
greater
counterparty
risk.
To
mitigate
this
risk,
the
fund
has
entered
into
master
netting
arrangements
(MNAs)
with
certain
counterparties
that
permit
net
settlement
under
specified
conditions
and,
for
certain
counterparties,
also
require
the
exchange
of
collateral
to
cover
mark-to-market
exposure.
MNAs
may
be
in
the
form
of
International
Swaps
and
Derivatives
Association
master
agreements
(ISDAs)
or
foreign
exchange
letter
agreements
(FX
letters).
MNAs
provide
the
ability
to
offset
amounts
the
fund
owes
a
counterparty
against
amounts
the
counterparty
owes
the
fund
(net
settlement).
Both
ISDAs
and
FX
letters
generally
allow
termination
of
transactions
and
net
settlement
upon
the
occurrence
of
contractually
specified
events,
such
as
failure
to
pay
or
bankruptcy.
In
addition,
ISDAs
specify
other
events,
the
occurrence
of
which
would
allow
one
of
the
parties
to
terminate.
For
example,
a
downgrade
in
credit
rating
of
a
counterparty
below
a
specified
rating
would
allow
the
fund
to
terminate,
while
a
decline
in
the
fund's
net
assets
of
more
than
a
specified
percentage
would
allow
the
counterparty
to
terminate.
Upon
termination,
all
transactions
with
that
counterparty
would
be
liquidated
and
a
net
termination
amount
settled.
ISDAs
typically
include
collateral
agreements
whereas
FX
letters
do
not.
Collateral
requirements
are
determined
daily
based
on
the
net
aggregate
unrealized
gain
or
loss
on
all
bilateral
derivatives
with
a
counterparty,
subject
to
minimum
transfer
amounts
that
typically
range
from
$100,000
to
$250,000.
Any
additional
collateral
required
due
to
changes
in
security
values
is
typically
transferred
the
next
business
day.
Collateral
may
be
in
the
form
of
cash
or
debt
securities
issued
by
the
U.S.
government
or
related
agencies,
although
other
securities
may
be
used
depending
on
the
terms
outlined
in
the
applicable
MNA.
Cash
posted
by
the
T.
ROWE
PRICE
Credit
Opportunities
Fund
39
fund
is
reflected
as
cash
deposits
in
the
accompanying
financial
statements
and
generally
is
restricted
from
withdrawal
by
the
fund;
securities
posted
by
the
fund
are
so
noted
in
the
accompanying
Portfolio
of
Investments;
both
remain
in
the
fund's
assets.
Collateral
pledged
by
counterparties
is
not
included
in
the
fund's
assets
because
the
fund
does
not
obtain
effective
control
over
those
assets.
For
bilateral
derivatives,
collateral
posted
or
received
by
the
fund
is
held
in
a
segregated
account
at
the
fund's
custodian.
While
typically
not
sold
in
the
same
manner
as
equity
or
fixed
income
securities,
exchange-traded
or
centrally
cleared
derivatives
may
be
closed
out
only
on
the
exchange
or
clearinghouse
where
the
contracts
were
cleared,
and
OTC
and
bilateral
derivatives
may
be
unwound
with
counterparties
or
transactions
assigned
to
other
counterparties
to
allow
the
fund
to
exit
the
transaction.
This
ability
is
subject
to
the
liquidity
of
underlying
positions. As
of
May
31,
2024,
no
collateral
was
pledged
by
either
the
fund
or
counterparties for
bilateral
derivatives. As
of
May
31,
2024,
cash
of $154,000 had
been
posted
by
the
fund
for
exchange-traded
and/or
centrally
cleared
derivatives.
Forward
Currency
Exchange
Contracts
The
fund
is
subject
to
foreign
currency
exchange
rate
risk
in
the
normal
course
of
pursuing
its
investment
objectives.
It may use
forward
currency
exchange
contracts
(forwards)
primarily
to
protect
its
non-U.S.
dollar-denominated
securities
from
adverse
currency
movements
or
to
increase
exposure
to
a
particular
foreign
currency,
to
shift
the
fund's
foreign
currency
exposure
from
one
country
to
another,
or
to
enhance
the
fund's
return.
A
forward
involves
an
obligation
to
purchase
or
sell
a
fixed
amount
of
a
specific
currency
on
a
future
date
at
a
price
set
at
the
time
of
the
contract.
Although
certain
forwards
may
be
settled
by
exchanging
only
the
net
gain
or
loss
on
the
contract,
most
forwards
are
settled
with
the
exchange
of
the
underlying
currencies
in
accordance
with
the
specified
terms.
Forwards
are
valued
at
the
unrealized
gain
or
loss
on
the
contract,
which
reflects
the
net
amount
the
fund
either
is
entitled
to
receive
or
obligated
to
deliver,
as
measured
by
the
difference
between
the
forward
exchange
rates
at
the
date
of
entry
into
the
contract
and
the
forward
rates
at
the
reporting
date.
Appreciated
forwards
are
reflected
as
assets
and
depreciated
forwards
are
reflected
as
liabilities
on
the
accompanying
Statement
of
Assets
and
Liabilities.
When
a
contract
is
closed,
a
realized
gain
or
loss
is
recorded
on
the
accompanying
Statement
of
Operations.
Risks
related
to
the
use
of
forwards
include
the
possible
failure
of
counterparties
to
meet
the
terms
of
the
agreements;
that
anticipated
currency
movements
will
not
occur,
thereby
reducing
the
fund's
total
return;
and
the
potential
for
losses
in
excess
of
the
fund's
initial
investment.
During
T.
ROWE
PRICE
Credit
Opportunities
Fund
40
the
year ended
May
31,
2024,
the
volume
of
the
fund's
activity
in
forwards,
based
on
underlying
notional
amounts,
was
generally
between
0%
and
2%
of
net
assets.
Options
The
fund
is
subject
to credit
risk in
the
normal
course
of
pursuing
its
investment
objectives
and
uses
options
to
help
manage
such
risk.
The
fund
may
use
options
to
manage
exposure
to
security
prices,
interest
rates,
foreign
currencies,
and
credit
quality;
as
an
efficient
means
of
adjusting
exposure
to
all
or
a
part
of
a
target
market;
to
enhance
income;
as
a
cash
management
tool;
or
to
adjust
credit
exposure.
The
fund
may
buy
or
sell
options
that
can
be
settled
either
directly
with
the
counterparty
(OTC
option)
or
through
a
central
clearinghouse
(exchange-traded
option).
Options
are
included
in
net
assets
at
fair
value,
options
purchased
are
included
in
Investments
in
Securities,
and
options
written
are
separately
reflected
as
a
liability
on
the
accompanying
Statement
of
Assets
and
Liabilities.
Premiums
on
unexercised,
expired
options
are
recorded
as
realized
gains
or
losses
on
the
accompanying
Statement
of
Operations;
premiums
on
exercised
options
are
recorded
as
an
adjustment
to
the
proceeds
from
the
sale
or
cost
of
the
purchase.
The
difference
between
the
premium
and
the
amount
received
or
paid
in
a
closing
transaction
is
also
treated
as
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations.
In
return
for
a
premium
paid,
options
on
swaps
give
the
holder
the
right,
but
not
the
obligation,
to
enter
a
specified
swap
contract
on
predefined
terms.
The
exercise
price
of
an
option
on
a
credit
default
swap
is
stated
in
terms
of
a
specified
spread
that
represents
the
cost
of
credit
protection
on
the
reference
asset,
including
both
the
upfront
premium
to
open
the
position
and
future
periodic
payments.
The
exercise
price
of
an
interest
rate
swap
is
stated
in
terms
of
a
fixed
interest
rate;
generally,
there
is
no
upfront
payment
to
open
the
position. Risks related
to
the
use
of
options
include
possible
illiquidity
of
the
options
markets;
trading
restrictions
imposed
by
an
exchange
or
counterparty;
possible
failure
of
counterparties
to
meet
the
terms
of
the
agreements;
movements
in
the
underlying
asset
values
and
credit
ratings;
and,
for
options
written,
the
potential
for
losses
to
exceed
any
premium
received
by
the
fund.
During
the
year ended
May
31,
2024,
the
volume
of
the
fund's
activity
in
options,
based
on
underlying
notional
amounts,
was
generally
less
than
1%
of
net
assets.
Swaps
The
fund
is
subject
to
credit
risk in
the
normal
course
of
pursuing
its
investment
objectives
and
uses
swap
contracts
to
help
manage
such
risk.
The
fund
may
use
swaps
in
an
effort
to
manage
both
long
and
short
exposure
to
changes
in
interest
rates,
inflation
rates,
and
credit
quality;
to
adjust
overall
exposure
to
certain
markets;
to
enhance
total
return
or
protect
the
value
of
T.
ROWE
PRICE
Credit
Opportunities
Fund
41
portfolio
securities;
to
serve
as
a
cash
management
tool;
or
to
adjust
portfolio
duration
and
credit
exposure.
Swap
agreements
can
be
settled
either
directly
with
the
counterparty
(bilateral
swap)
or
through
a
central
clearinghouse
(centrally
cleared
swap).
Fluctuations
in
the
fair
value
of
a
contract
are
reflected
in
unrealized
gain
or
loss
and
are
reclassified
to
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations upon
contract
termination
or
cash
settlement.
Net
periodic
receipts
or
payments
required
by
a
contract
increase
or
decrease,
respectively,
the
value
of
the
contract
until
the
contractual
payment
date,
at
which
time
such
amounts
are
reclassified
from
unrealized
to
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations.
For
bilateral
swaps,
cash
payments
are
made
or
received
by
the
fund
on
a
periodic
basis
in
accordance
with
contract
terms;
unrealized
gain
on
contracts
and
premiums
paid
are
reflected
as
assets
and
unrealized
loss
on
contracts
and
premiums
received
are
reflected
as
liabilities
on
the
accompanying
Statement
of
Assets
and
Liabilities.
For
bilateral
swaps,
premiums
paid
or
received
are
amortized
over
the
life
of
the
swap
and
are
recognized
as
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations.
For
centrally
cleared
swaps,
payments
are
made
or
received
by
the
fund
each
day
to
settle
the
daily
fluctuation
in
the
value
of
the
contract
(variation
margin).
Accordingly,
the
value
of
a
centrally
cleared
swap
included
in
net
assets
is
the
unsettled
variation
margin;
net
variation
margin
receivable
is
reflected
as
an
asset
and
net
variation
margin
payable
is
reflected
as
a
liability
on
the
accompanying
Statement
of
Assets
and
Liabilities.
Credit
default
swaps
are
agreements
where
one
party
(the
protection
buyer)
agrees
to
make
periodic
payments
to
another
party
(the
protection
seller)
in
exchange
for
protection
against
specified
credit
events,
such
as
certain
defaults
and
bankruptcies
related
to
an
underlying
credit
instrument,
or
issuer
or
index
of
such
instruments.
Upon
occurrence
of
a
specified
credit
event,
the
protection
seller
is
required
to
pay
the
buyer
the
difference
between
the
notional
amount
of
the
swap
and
the
value
of
the
underlying
credit,
either
in
the
form
of
a
net
cash
settlement
or
by
paying
the
gross
notional
amount
and
accepting
delivery
of
the
relevant
underlying
credit.
For
credit
default
swaps
where
the
underlying
credit
is
an
index,
a
specified
credit
event
may
affect
all
or
individual
underlying
securities
included
in
the
index
and
will
be
settled
based
upon
the
relative
weighting
of
the
affected
underlying
security(ies)
within
the
index. Generally,
the
payment
risk
for
the
seller
of
protection
is
inversely
related
to
the
current
market
price
or
credit
rating
of
the
underlying
credit
or
the
market
value
of
the
contract
relative
to
the
notional
amount,
which
are
indicators
of
the
markets'
valuation
of
credit
quality.
As
of
May
31,
2024,
the
notional
amount
of
protection
sold
by
T.
ROWE
PRICE
Credit
Opportunities
Fund
42
the
fund
totaled $216,000
(0.1%
of
net
assets),
which
reflects
the
maximum
potential
amount
the
fund
could
be
required
to
pay
under
such
contracts.
Risks
related
to
the
use
of
credit
default
swaps
include
the
possible
inability
of
the
fund
to
accurately
assess
the
current
and
future
creditworthiness
of
underlying
issuers,
the
possible
failure
of
a
counterparty
to
perform
in
accordance
with
the
terms
of
the
swap
agreements,
potential
government
regulation
that
could
adversely
affect
the
fund's
swap
investments,
and
potential
losses
in
excess
of
the
fund's
initial
investment.
During
the
year ended
May
31,
2024,
the
volume
of
the
fund's
activity
in
swaps,
based
on
underlying
notional
amounts,
was
generally
between
0%
and
3%
of
net
assets.
NOTE
4
-
OTHER
INVESTMENT
TRANSACTIONS
Consistent
with
its
investment
objective, the
fund
engages
in
the
following
practices
to
manage
exposure
to
certain
risks
and/or
to
enhance
performance.
The
investment
objective,
policies,
program,
and
risk
factors
of the
fund
are
described
more
fully
in the
fund's prospectus
and
Statement
of
Additional
Information.
Emerging
and
Frontier
Markets
The fund
invests,
either
directly
or
through
investments
in
other
T.
Rowe
Price
funds,
in
securities
of
companies
located
in,
issued
by
governments
of,
or
denominated
in
or
linked
to
the
currencies
of
emerging
and
frontier
market
countries.
Emerging
markets,
and
to
a
greater
extent
frontier
markets, tend
to
have
economic
structures
that
are
less
diverse
and
mature,
less
developed
legal
and
regulatory
regimes,
and
political
systems
that
are
less
stable,
than
those
of
developed
countries.
These
markets
may
be
subject
to
greater
political,
economic,
and
social
uncertainty
and
differing
accounting
standards
and
regulatory
environments
that
may
potentially
impact
the
fund's
ability
to
buy
or
sell
certain
securities
or
repatriate
proceeds
to
U.S.
dollars.
Emerging
markets
securities
exchanges
are
more
likely
to
experience
delays
with
the
clearing
and
settling
of
trades,
as
well
as
the
custody
of
holdings
by
local
banks,
agents,
and
depositories.
Such
securities
are
often
subject
to
greater
price
volatility,
less
liquidity,
and
higher
rates
of
inflation
than
U.S.
securities.
Investing
in
frontier
markets
is
typically
significantly
riskier
than
investing
in
other
countries,
including
emerging
markets.
Noninvestment-Grade
Debt
The
fund
invests,
either
directly
or
through
its
investment
in
other
T.
Rowe
Price
funds,
in
noninvestment-grade
debt,
including
"high
yield"
or
"junk"
bonds
or
leveraged
loans.
Noninvestment-grade
debt
T.
ROWE
PRICE
Credit
Opportunities
Fund
43
issuers
are
more
likely
to
suffer
an
adverse
change
in
financial
condition
that
would
result
in
the
inability
to
meet
a
financial
obligation.
The
noninvestment-
grade
debt
market
may
experience
sudden
and
sharp
price
swings
due
to
a
variety
of
factors
that
may
decrease
the
ability
of
issuers
to
make
principal
and
interest
payments
and
adversely
affect
the
liquidity
or
value,
or
both,
of
such
securities.
Accordingly,
securities
issued
by
such
companies
carry
a
higher
risk
of
default
and
should
be
considered
speculative.
Restricted
Securities
The
fund
invests
in
securities
that
are
subject
to
legal
or
contractual
restrictions
on
resale.
Prompt
sale
of
such
securities
at
an
acceptable
price
may
be
difficult
and
may
involve
substantial
delays
and
additional
costs.
Bank
Loans
The
fund
invests
in
bank
loans,
which
represent
an
interest
in
amounts
owed
by
a
borrower
to
a
syndicate
of
lenders.
Bank
loans
are
generally
noninvestment
grade
and
often
involve
borrowers
whose
financial
condition
is
highly
leveraged.
The
fund
may
invest
in
fixed
and
floating
rate
loans,
which
may
include
senior
floating
rate
loans;
secured
and
unsecured
loans,
second
lien
or
more
junior
loans;
and
bridge
loans
or
bridge
facilities.
Certain
bank
loans
may
be
revolvers
which
are
a
form
of
senior
bank
debt,
where
the
borrower
can
draw
down
the
credit
of
the
revolver
when
it
needs
cash
and
repays
the
credit
when
the
borrower
has
excess
cash.
Certain
loans
may
be
"covenant-lite"
loans,
which
means
the
loans
contain
fewer
maintenance
covenants
than
other
loans
(in
some
cases,
none)
and
do
not
include
terms
which
allow
the
lender
to
monitor
the
performance
of
the
borrower
and
declare
a
default
if
certain
criteria
are
breached.
As
a
result
of
these
risks,
the
fund's
exposure
to
losses
may
be
increased.
Bank
loans
may
be
in
the
form
of
either
assignments
or
participations.
A
loan
assignment
transfers
all
legal,
beneficial,
and
economic
rights
to
the
buyer,
and
transfer
typically
requires
consent
of
both
the
borrower
and
agent.
In
contrast,
a
loan
participation
generally
entitles
the
buyer
to
receive
the
cash
flows
from
principal,
interest,
and
any
fee
payments
on
a
portion
of
a
loan;
however,
the
seller
continues
to
hold
legal
title
to
that
portion
of
the
loan.
As
a
result,
the
buyer
of
a
loan
participation
generally
has
no
direct
recourse
against
the
borrower
and
is
exposed
to
credit
risk
of
both
the
borrower
and
seller
of
the
participation.
Bank
loans
often
have
extended
settlement
periods,
generally
may
be
repaid
at
any
time
at
the
option
of
the
borrower,
and
may
require
additional
principal
to
be
funded
at
the
borrowers'
discretion
at
a
later
date
(e.g.
unfunded
commitments
and
revolving
debt
instruments).
Until
settlement,
the
fund
maintains
liquid
T.
ROWE
PRICE
Credit
Opportunities
Fund
44
assets
sufficient
to
settle
its
unfunded
loan
commitments.
The
fund
reflects
both
the
funded
portion
of
a
bank
loan
as
well
as
its
unfunded
commitment
in
the
Portfolio
of
Investments.
However,
if
a
credit
agreement
provides
no
initial
funding
of
a
tranche,
and
funding
of
the
full
commitment
at
a
future
date(s)
is
at
the
borrower's
discretion
and
considered
uncertain,
a
loan
is
reflected
in
the
Portfolio
of
Investments
only
if,
and
only
to
the
extent
that,
the
fund
has
actually
settled
a
funding
commitment.
Securities
Lending
The fund
may
lend
its
securities
to
approved
borrowers
to
earn
additional
income.
Its
securities
lending
activities
are
administered
by
a
lending
agent
in
accordance
with
a
securities
lending
agreement.
Security
loans
generally
do
not
have
stated
maturity
dates,
and
the
fund
may
recall
a
security
at
any
time.
The
fund
receives
collateral
in
the
form
of
cash
or
U.S.
government
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
the
value
of
loaned
securities;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
fund
the
next
business
day.
Cash
collateral
is
invested
in
accordance
with
investment
guidelines
approved
by
fund
management.
Additionally,
the
lending
agent
indemnifies
the
fund
against
losses
resulting
from
borrower
default.
Although
risk
is
mitigated
by
the
collateral
and
indemnification,
the
fund
could
experience
a
delay
in
recovering
its
securities
and
a
possible
loss
of
income
or
value
if
the
borrower
fails
to
return
the
securities,
collateral
investments
decline
in
value,
and
the
lending
agent
fails
to
perform.
Securities
lending
revenue
consists
of
earnings
on
invested
collateral
and
borrowing
fees,
net
of
any
rebates
to
the
borrower,
compensation
to
the
lending
agent,
and
other
administrative
costs.
In
accordance
with
GAAP,
investments
made
with
cash
collateral
are
reflected
in
the
accompanying
financial
statements,
but
collateral
received
in
the
form
of
securities
is
not.
At
May
31,
2024,
the
value
of
loaned
securities
was
$3,070,000;
the
value
of
cash
collateral
and
related
investments
was
$3,125,000.
Other
Purchases
and
sales
of
portfolio
securities
other
than
in-kind
transactions,
if
any,
and short-term securities
aggregated $117,126,000 and
$48,012,000,
respectively,
for
the
year ended
May
31,
2024.
T.
ROWE
PRICE
Credit
Opportunities
Fund
45
NOTE
5
-
FEDERAL
INCOME
TAXES
Generally,
no
provision
for
federal
income
taxes
is
required
since
the
fund
intends
to continue
to
qualify
as
a
regulated
investment
company
under
Subchapter
M
of
the
Internal
Revenue
Code
and
distribute
to
shareholders
all
of
its taxable
income
and
gains.
Distributions
determined
in
accordance
with
federal
income
tax
regulations
may
differ
in
amount
or
character
from
net
investment
income
and
realized
gains
for
financial
reporting
purposes.
The
fund
files
U.S.
federal,
state,
and
local
tax
returns
as
required.
The
fund's
tax
returns
are
subject
to
examination
by
the
relevant
tax
authorities
until
expiration
of
the
applicable
statute
of
limitations,
which
is
generally
three
years
after
the
filing
of
the
tax
return
but
which
can
be
extended
to
six
years
in
certain
circumstances.
Tax
returns
for
open
years
have
incorporated
no
uncertain
tax
positions
that
require
a
provision
for
income
taxes.
Capital
accounts
within
the
financial
reporting
records
are
adjusted
for
permanent
book/tax
differences
to
reflect
tax
character
but
are
not
adjusted
for
temporary
differences.
The
permanent
book/tax
adjustments,
if
any,
have
no
impact
on
results
of
operations
or
net
assets.
The
permanent
book/tax
adjustments
relate
primarily
to
the
character
of
market
discount
at
time
of
sale
and
differences
between
book/tax
amortization
policies.
The
tax
character
of
distributions
paid
for
the
periods
presented
was
as
follows:
At
May
31,
2024,
the
tax-basis
cost
of
investments
(including
derivatives,
if
any)
and
gross
unrealized
appreciation
and
depreciation
were as
follows:
($000s)
May
31,
2024
May
31,
2023
Ordinary
income
(including
short-term
capital
gains,
if
any)
$
10,080
$
6,742
($000s)
Cost
of
investments
$
189,881
Unrealized
appreciation
$
3,440
Unrealized
depreciation
(4,375)
Net
unrealized
appreciation
(depreciation)
$
(935)
T.
ROWE
PRICE
Credit
Opportunities
Fund
46
At
May
31,
2024,
the
tax-basis
components
of
accumulated
net
earnings
(loss)
were
as
follows:
Temporary
differences
between
book-basis
and
tax-basis
components
of
total
distributable
earnings
(loss)
arise
when
certain
items
of
income,
gain,
or
loss
are
recognized
in
different
periods
for
financial
statement
purposes
versus
for
tax
purposes;
these
differences
will
reverse
in
a
subsequent
reporting
period.
The
temporary
differences
relate
primarily
to
the
deferral
of
losses
from
wash
sales,
the
recognition
of
market
discount
and
premium
amortization
and
the
character
of
income
on
certain
derivatives
contracts.
The
loss
carryforwards
and
deferrals
primarily
relate
to
capital
loss
carryforwards
and
straddle
deferrals.
Capital
loss
carryforwards
are
available
indefinitely
to
offset
future
realized
capital
gains.
Further,
a
portion
of
the
fund's
available
capital
loss
carryforwards
are
subject
to
certain
limitations
on
amount
or
timing
of
use
related
to
an
ownership
change.
NOTE
6
-
RELATED
PARTY
TRANSACTIONS
The
fund
is
managed
by
T.
Rowe
Price
Associates,
Inc.
(Price
Associates),
a
wholly
owned
subsidiary
of
T.
Rowe
Price
Group,
Inc.
(Price
Group).
The
investment
management
agreement
between
the
fund
and
Price
Associates
provides
for
an
annual
investment
management
fee,
which
is
computed
daily
and
paid
monthly. The
fee
consists
of
an
individual
fund
fee,
equal
to
0.27%
of
the
fund's
average
daily
net
assets,
and
a
group
fee.
The
group
fee
rate
is
calculated
based
on
the
combined
net
assets
of
certain
mutual
funds
sponsored
by
Price
Associates
(the
group)
applied
to
a
graduated
fee
schedule,
with
rates
ranging
from
0.48%
for
the
first
$1
billion
of
assets
to
0.260%
for
assets
in
excess
of
$845
billion.
The
fund's
group
fee
is
determined
by
applying
the
group
fee
rate
to
the
fund's
average
daily
net
assets. At
May
31,
2024,
the
effective
annual
group
fee
rate
was
0.29%.
($000s)
Overdistributed
ordinary
income
$
(211)
Net
unrealized
appreciation
(depreciation)
(935)
Loss
carryforwards
and
deferrals
(23,412)
Total
distributable
earnings
(loss)
$
(24,558)
T.
ROWE
PRICE
Credit
Opportunities
Fund
47
The Investor
Class and Advisor
Class are
each
subject
to
a
contractual
expense
limitation
through
the
expense
limitation
dates
indicated
in
the
table
below.
This
agreement
will
continue
through
the
expense
limitation
date
indicated
in
the
table
below,
and
may
be
renewed,
revised,
or
revoked
only
with
approval
of
the
fund's
Board.
During
the
limitation
period,
Price
Associates
is required
to
waive
or
pay
any
expenses
(excluding
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage;
non-recurring,
extraordinary
expenses;
and
acquired
fund
fees
and
expenses)
that
would
otherwise
cause
the
class's
ratio
of
annualized
total
expenses
to
average
net
assets
(net
expense
ratio)
to
exceed
its
expense
limitation.
Each
class
is
required
to
repay
Price
Associates
for
expenses
previously
waived/paid
to
the
extent
the
class's
net
assets
grow
or
expenses
decline
sufficiently
to
allow
repayment
without
causing
the
class's
net
expense
ratio
(after
the
repayment
is
taken
into
account)
to
exceed
the
lesser
of:
(1)
the
expense
limitation
in
place
at
the
time
such
amounts
were
waived;
or
(2)
the
class's
current
expense
limitation.
However,
no
repayment
will
be
made
more
than
three
years
after
the
date
of
a
payment
or
waiver.
The
I
Class
is
also
subject
to
an
operating
expense
limitation
(I
Class
Limit)
pursuant
to
which
Price
Associates
is
contractually
required
to
pay
all
operating
expenses
of
the
I
Class,
excluding
management
fees;
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage; non-recurring,
extraordinary expenses; and
acquired
fund
fees
and
expenses, to
the
extent
such
operating
expenses,
on
an
annualized
basis,
exceed
the
I
Class
Limit. This
agreement
will
continue
through
the
expense
limitation
date
indicated
in
the
table
below,
and
may
be
renewed,
revised,
or
revoked
only
with
approval
of
the
fund's
Board.
The
I
Class
is
required
to
repay
Price
Associates
for
expenses
previously
paid
to
the
extent
the
class's
net
assets
grow
or
expenses
decline
sufficiently
to
allow
repayment
without
causing
the
class's
operating
expenses
(after
the
repayment
is
taken
into
account)
to
exceed
the
lesser
of:
(1)
the
I
Class
Limit
in
place
at
the
time
such
amounts
were
paid;
or
(2)
the
current
I
Class
Limit.
However,
no
repayment
will
be
made
more
than
three
years
after
the
date
of
a
payment
or
waiver.
Pursuant
to
these
agreements,
expenses
were
waived/paid
by
and/or
repaid
to
Price
Associates
during
the
year ended May
31,
2024
as
indicated
in
the
table
below.
Including these
amounts,
expenses
previously
waived/paid
by
Price
Associates
in
the
amount
of $988,000 remain
subject
to
repayment
by
the
fund
at
May
31,
2024.
Any
repayment
of
expenses
previously
waived/paid
by
Price
Associates
during
the
period
would
be
included
in
the
net
investment
income
and
expense
ratios
presented
on
the
accompanying
Financial
Highlights.
T.
ROWE
PRICE
Credit
Opportunities
Fund
48
In
addition,
the
fund
has
entered
into
service
agreements
with
Price
Associates
and
two
wholly
owned
subsidiaries
of
Price
Associates,
each
an
affiliate
of
the
fund
(collectively,
Price).
Price
Associates
provides
certain
accounting
and
administrative
services
to
the
fund.
T.
Rowe
Price
Services,
Inc.
provides
shareholder
and
administrative
services
in
its
capacity
as
the
fund's
transfer
and
dividend-disbursing
agent.
T.
Rowe
Price
Retirement
Plan
Services,
Inc.
provides
subaccounting
and
recordkeeping
services
for
certain
retirement
accounts
invested
in
the
Investor
Class
and
Advisor
Class.
For
the
year
ended
May
31,
2024,
expenses
incurred
pursuant
to
these
service
agreements
were
$114,000
for
Price
Associates;
$85,000
for
T.
Rowe
Price
Services,
Inc.;
and
less
than
$1,000
for
T.
Rowe
Price
Retirement
Plan
Services,
Inc.
All
amounts
due
to
and
due
from
Price,
exclusive
of
investment
management
fees
payable,
are
presented
net
on
the
accompanying
Statement
of
Assets
and
Liabilities.
T.
Rowe
Price
Investment
Services,
Inc.
(Investment
Services)
serves
as
distributor
to
the
fund.
Pursuant
to
an
underwriting
agreement,
no
compensation
for
any
distribution
services
provided
is
paid
to
Investment
Services
by
the
fund
(except
for
12b-1
fees
under
a
Board-approved
Rule
12b-1
plan).
The fund
may
invest
its
cash
reserves
in
certain
open-end
management
investment
companies
managed
by
Price
Associates
and
considered
affiliates
of
the
fund:
the
T.
Rowe
Price
Government
Reserve
Fund
or
the
T.
Rowe
Price
Treasury
Reserve
Fund,
organized
as
money
market
funds
(together,
the
Price
Reserve
Funds).
The
Price
Reserve
Funds
are
offered
as
short-term
investment
options
to
mutual
funds,
trusts,
and
other
accounts
managed
by
Price
Associates
or
its
affiliates
and
are
not
available
for
direct
purchase
by
members
of
the
public.
Cash
collateral
from
securities
lending,
if
any,
is
invested
in
the
T.
Rowe
Price
Government
Reserve Fund. The
Price
Reserve
Funds
pay
no
investment
management
fees.
The fund may
participate
in
securities
purchase
and
sale
transactions
with
other
funds
or
accounts
advised
by
Price
Associates
(cross
trades),
in
accordance
with
procedures
adopted
by the
fund's
Board
and
Securities
and
Exchange
Commission
rules,
which
require,
among
other
things,
that
such
purchase
and
Investor
Class
Advisor
Class
I
Class
Expense
limitation/I
Class
Limit
0.81%
0.91%
0.01%
Expense
limitation
date
09/30/25
09/30/25
09/30/25
(Waived)/repaid
during
the
period
($000s)
$(149)
$(1)
$(208)
T.
ROWE
PRICE
Credit
Opportunities
Fund
49
sale
cross
trades
be
effected
at
the
independent
current
market
price
of
the
security.
During
the
year
ended
May
31,
2024,
the
fund
had
no
purchases
or
sales
cross
trades
with
other
funds
or
accounts
advised
by
Price
Associates.
NOTE
7
-
OTHER
MATTERS
Unpredictable environmental,
political,
social
and
economic
events,
including
but
not
limited
to,
environmental
or
natural
disasters,
war
and
conflict
(including
Russia's
military
invasion
of
Ukraine
and
the
conflict
in
Israel,
Gaza
and
surrounding
areas),
terrorism,
geopolitical
developments
(including
trading
and
tariff
arrangements,
sanctions
and
cybersecurity
attacks),
and
public
health
epidemics
(including
the
global
outbreak
of
COVID-19)
and
similar
public
health
threats,
may
significantly
affect
the
economy
and
the
markets
and
issuers
in
which
a
fund
invests.
The
extent
and
duration
of
such
events
and
resulting
market
disruptions
cannot
be
predicted.
These
and
other
similar
events
may
cause
instability
across
global
markets,
including
reduced
liquidity
and
disruptions
in
trading
markets,
while
some
events
may
affect
certain
geographic
regions,
countries,
sectors,
and
industries
more
significantly
than
others,
and
exacerbate
other
pre-existing
political,
social,
and
economic
risks.
The
fund's
performance
could
be
negatively
impacted
if
the
value
of
a
portfolio
holding
were
harmed
by
these
or
such
events.
Management
actively
monitors
the
risks
and
financial
impacts
arising
from
such
events.
T.
ROWE
PRICE
Credit
Opportunities
Fund
50
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
To
the
Board
of
Directors
and
Shareholders
of
T.
Rowe
Price
Credit
Opportunities
Fund,
Inc.
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
portfolio
of
investments,
of
T.
Rowe
Price
Credit
Opportunities
Fund,
Inc.
(the
"Fund")
as
of
May
31,
2024,
the
related
statement
of
operations
for
the
year
ended
May
31,
2024,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
May
31,
2024,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
May
31,
2024
(collectively
referred
to
as
the
"financial
statements").
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
May
31,
2024,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
May
31,
2024
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
May
31,
2024,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund's
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
T.
ROWE
PRICE
Credit
Opportunities
Fund
51
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
May
31,
2024
by
correspondence
with
the
custodians,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
Baltimore,
Maryland
July
18,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
T.
Rowe
Price
group
of
investment
companies
since
1973.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
(continued)
T.
ROWE
PRICE
Credit
Opportunities
Fund
52
TAX
INFORMATION
(UNAUDITED)
FOR
THE
TAX
YEAR
ENDED 5/31/24
We
are
providing
this
information
as
required
by
the
Internal
Revenue
Code.
The
amounts
shown
may
differ
from
those
elsewhere
in
this
report
because
of
differences
between
tax
and
financial
reporting
requirements.
For
taxable
non-corporate
shareholders,
$7,000
of
the
fund's
income
represents
qualified
dividend
income
subject
to
a
long-term
capital
gains
tax
rate
of
not
greater
than
20%.
For
corporate
shareholders,
$6,000
of
the
fund's
income
qualifies
for
the
dividends-
received
deduction.
For
shareholders
subject
to
interest
expense
deduction
limitation
under
Section
163(j),
$9,474,000
of
the
fund's
income
qualifies
as
a
Section
163(j)
interest
dividend
and
can
be
treated
as
interest
income
for
purposes
of
Section
163(j),
subject
to
holding
period
requirements
and
other
limitations.
T.
ROWE
PRICE
Credit
Opportunities
Fund
53
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENT
Each
year,
the
fund's
Board
of
Directors
(Board)
considers
the
continuation
of
the
investment
management
agreement
(Advisory
Contract)
between
the
fund
and
its
investment
adviser,
T.
Rowe
Price
Associates,
Inc.
(Adviser).
In
that
regard,
at
a
meeting
held
on
March
11-12,
2024
(Meeting),
the
Board,
including
all
of
the
fund's
independent
directors
present
in
person
at
the
Meeting,
approved
the
continuation
of
the
fund's
Advisory
Contract.
At
the
Meeting,
the
Board
considered
the
factors
and
reached
the
conclusions
described
below
relating
to
the
selection
of
the
Adviser
and
the
approval
of
the
Advisory
Contract.
The
independent
directors
were
assisted
in
their
evaluation
of
the
Advisory
Contract
by
independent
legal
counsel
from
whom
they
received
separate
legal
advice
and
with
whom
they
met
separately.
In
providing
information
to
the
Board,
the
Adviser
was
guided
by
a
detailed
set
of
requests
for
information
submitted
by
independent
legal
counsel
on
behalf
of
the
independent
directors.
In
considering
and
approving
the
continuation
of
the
Advisory
Contract,
the
Board
considered
the
information
it
believed
was
relevant,
including,
but
not
limited
to,
the
information
discussed
below.
The
Board
considered
not
only
the
specific
information
presented
in
connection
with
the
Meeting,
but
also
the
knowledge
gained
over
time
through
interaction
with
the
Adviser
about
various
topics.
The
Board
meets
regularly
and,
at
each
of
its
meetings,
covers
an
extensive
agenda
of
topics
and
materials
and
considers
factors
that
are
relevant
to
its
annual
consideration
of
the
renewal
of
the
T.
Rowe
Price
funds'
advisory
contracts,
including
performance
and
the
services
and
support
provided
to
the
funds
and
their
shareholders.
Services
Provided
by
the
Adviser
The
Board
considered
the
nature,
quality,
and
extent
of
the
services
provided
to
the
fund
by
the
Adviser.
These
services
included,
but
were
not
limited
to,
directing
the
fund's
investments
in
accordance
with
its
investment
program
and
the
overall
management
of
the
fund's
portfolio,
as
well
as
a
variety
of
related
activities
such
as
financial,
investment
operations,
and
administrative
services;
compliance;
maintaining
the
fund's
records
and
registrations;
and
shareholder
communications.
The
Board
also
reviewed
the
background
and
experience
of
the
Adviser's
senior
management
team
and
investment
personnel
involved
in
the
management
of
the
fund,
as
well
as
the
Adviser's
compliance
record.
The
Board
concluded
that
the
information
it
considered
with
respect
to
the
nature,
quality,
and
extent
of
the
services
provided
by
the
Adviser,
as
well
as
the
other
factors
considered
at
the
Meeting,
supported
the
Board's
approval
of
the
continuation
of
the
Advisory
Contract.
T.
ROWE
PRICE
Credit
Opportunities
Fund
54
Investment
Performance
of
the
Fund
The
Board
took
into
account
discussions
with
the
Adviser
and
detailed
reports
that
it
regularly
receives
throughout
the
year
on
relative
and
absolute
performance
for
the
T.
Rowe
Price
funds.
In
connection
with
the
Meeting,
the
Board
reviewed
information
provided
by
the
Adviser
that
compared
the
fund's
total
returns,
as
well
as
a
wide
variety
of
other
previously
agreed-upon
performance
measures
and
market
data,
against
relevant
benchmark
indexes
and
peer
groups
of
funds
with
similar
investment
programs
for
various
periods
through
December
31,
2023.
Additionally,
the
Board
reviewed
the
fund's
relative
performance
information
as
of
September
30,
2023,
which
ranked
the
returns
of
the
fund's
Investor
Class
for
various
periods
against
a
universe
of
funds
with
similar
investment
programs
selected
by
Broadridge,
an
independent
provider
of
mutual
fund
data.
In
the
course
of
its
deliberations,
the
Board
considered
performance
information
provided
throughout
the
year
and
in
connection
with
the
Advisory
Contract
review
at
the
Meeting,
as
well
as
information
provided
during
investment
review
meetings
conducted
with
portfolio
managers
and
senior
investment
personnel
during
the
course
of
the
year
regarding
the
fund's
performance.
The
Board
also
considered
relevant
factors,
such
as
overall
market
conditions
and
trends
that
could
adversely
impact
the
fund's
performance,
the
length
of
the
fund's
performance
track
record,
and
how
closely
the
fund's
strategies
align
with
its
benchmarks
and
peer
groups.
The
Board
concluded
that
the
information
it
considered
with
respect
to
the
fund's
performance,
as
well
as
the
other
factors
considered
at
the
Meeting,
supported
the
Board's
approval
of
the
continuation
of
the
Advisory
Contract.
Costs,
Benefits,
Profits,
and
Economies
of
Scale
The
Board
reviewed
detailed
information
regarding
the
revenues
received
by
the
Adviser
under
the
Advisory
Contract
and
other
direct
and
indirect
benefits
that
the
Adviser
(and
its
affiliates)
may
have
realized
from
its
relationship
with
the
fund.
In
considering
soft-dollar
arrangements
pursuant
to
which
research
may
be
received
from
broker-dealers
that
execute
the
fund's
portfolio
transactions,
the
Board
noted
that
during
2023
the
Adviser
paid
the
costs
of
research
services
for
all
client
accounts
that
it
advises,
including
the
T.
Rowe
Price
funds.
However,
effective
January
1,
2024,
the
Adviser
will
begin
using
brokerage
commissions
in
connection
with
certain
T.
Rowe
Price
funds'
securities
transactions
to
pay
for
research
when
permissible.
The
Board
received
information
on
the
estimated
costs
incurred
and
profits
realized
by
the
Adviser
from
managing
the
T.
Rowe
Price
funds.
While
the
Board
did
not
review
information
regarding
profits
realized
from
managing
the
fund
in
particular
because
the
fund
had
either
not
achieved
sufficient
portfolio
asset
size
or
not
recognized
sufficient
revenues
to
produce
meaningful
profit
margin
percentages,
the
Board
concluded
that
the
Adviser's
profits
were
reasonable
in
light
of
the
services
provided
to
the
T.
Rowe
Price
funds.
T.
ROWE
PRICE
Credit
Opportunities
Fund
55
The
Board
also
considered
whether
the
fund
benefits
under
the
fee
levels
set
forth
in
the
Advisory
Contract
or
otherwise
from
any
economies
of
scale
realized
by
the
Adviser.
Under
the
Advisory
Contract,
the
fund
pays
a
fee
to
the
Adviser
for
investment
management
services
composed
of
two
components-a
group
fee
rate
based
on
the
combined
average
net
assets
of
most
of
the
T.
Rowe
Price
funds
(including
the
fund)
that
declines
at
certain
asset
levels
and
an
individual
fund
fee
rate
based
on
the
fund's
average
daily
net
assets-and
the
fund
pays
its
own
expenses
of
operations.
The
group
fee
rate
decreases
as
total
T.
Rowe
Price
fund
assets
grow,
which
reduces
the
management
fee
rate
for
any
fund
that
has
a
group
fee
component
to
its
management
fee,
and
reflects
that
certain
resources
utilized
to
operate
the
fund
are
shared
with
other
T.
Rowe
Price
funds,
thus
allowing
shareholders
of
those
funds
to
share
potential
economies
of
scale.
The
fund's
shareholders
also
benefit
from
potential
economies
of
scale
through
a
decline
in
certain
operating
expenses
as
the
fund
grows
in
size.
However,
the
fund
is
also
subject
to
contractual
expense
limitations
that
require
the
Adviser
to
waive
its
fees
and/or
bear
any
expenses
that
would
otherwise
cause
the
expenses
of
a
share
class
of
the
fund
to
exceed
a
certain
percentage
based
on
the
class's
net
assets.
The
expense
limitations
mitigate
the
potential
for
an
increase
in
operating
expenses
above
a
certain
level
that
could
impact
shareholders.
In
addition,
the
Board
noted
that
the
fund
potentially
shares
in
indirect
economies
of
scale
through
the
Adviser's
ongoing
investments
in
its
business
in
support
of
the
T.
Rowe
Price
funds,
including
investments
in
trading
systems,
technology,
and
regulatory
support
enhancements,
and
the
ability
to
possibly
negotiate
lower
fee
arrangements
with
third-party
service
providers.
The
Board
concluded
that
the
advisory
fee
structure
for
the
fund
provides
for
a
reasonable
sharing
of
benefits
from
any
economies
of
scale
with
the
fund's
investors.
Fees
and
Expenses
The
Board
was
provided
with
information
regarding
industry
trends
in
management
fees
and
expenses.
Among
other
things,
the
Board
reviewed
data
for
peer
groups
that
were
compiled
by
Broadridge,
which
compared:
(i)
contractual
management
fees,
actual
management
fees,
nonmanagement
expenses,
and
total
expenses
of
the
Investor
Class
of
the
fund
with
a
group
of
competitor
funds
selected
by
Broadridge
(Investor
Class
Expense
Group);
(ii)
actual
management
fees
and
total
expenses
of
the
Advisor
Class
of
the
fund
with
a
group
of
competitor
funds
selected
by
Broadridge
(Advisor
Class
Expense
Group);
and
(iii)
actual
management
fees,
nonmanagement
expenses,
and
total
expenses
of
the
Investor
Class
of
the
fund
with
a
broader
set
of
funds
within
the
Lipper
investment
classification
(Expense
Universe).
The
Board
considered
the
fund's
contractual
management
fee
rate,
actual
management
fee
rate
(which
reflects
the
management
fees
actually
received
from
the
fund
by
the
Adviser
after
any
applicable
waivers,
reductions,
or
reimbursements),
operating
expenses,
and
total
expenses
(which
reflect
the
net
total
expense
ratio
of
the
fund
after
any
waivers,
reductions,
or reimbursements)
T.
ROWE
PRICE
Credit
Opportunities
Fund
56
in
comparison
with
the
information
for
the
Broadridge
peer
groups.
Broadridge
generally
constructed
the
peer
groups
by
seeking
the
most
comparable
funds
based
on
similar
investment
classifications
and
objectives,
expense
structure,
asset
size,
and
operating
components
and
attributes
and
ranked
funds
into
quintiles,
with
the
first
quintile
representing
the
funds
with
the
lowest
relative
expenses
and
the
fifth
quintile
representing
the
funds
with
the
highest
relative
expenses.
The
information
provided
to
the
Board
indicated
that
the
fund's
contractual
management
fee
ranked
in
the
third
quintile
(Investor
Class
Expense
Group),
the
fund's
actual
management
fee
rate
ranked
in
the
first
quintile
(Investor
Class
Expense
Group,
Advisor
Class
Expense
Group,
and
Expense
Universe),
and
the
fund's
total
expenses
ranked
in
the
fourth
quintile
(Investor
Class
Expense
Group
and
Expense
Universe)
and
first
quintile
(Advisor
Class
Expense
Group).
The
Board
also
reviewed
the
fee
schedules
for
other
investment
portfolios
with
similar
mandates
that
are
advised
or
subadvised
by
the
Adviser
and
its
affiliates,
including
separately
managed
accounts
for
institutional
and
individual
investors;
subadvised
funds;
and
other
sponsored
investment
portfolios,
including
collective
investment
trusts
and
pooled
vehicles
organized
and
offered
to
investors
outside
the
United
States.
Management
provided
the
Board
with
information
about
the
Adviser's
responsibilities
and
services
provided
to
subadvisory
and
other
institutional
account
clients,
including
information
about
how
the
requirements
and
economics
of
the
institutional
business
are
fundamentally
different
from
those
of
the
proprietary
mutual
fund
business.
The
Board
considered
information
showing
that
the
Adviser's
mutual
fund
business
is
generally
more
complex
from
a
business
and
compliance
perspective
than
its
institutional
account
business
and
considered
various
relevant
factors,
such
as
the
broader
scope
of
operations
and
oversight,
more
extensive
shareholder
communication
infrastructure,
greater
asset
flows,
heightened
business
risks,
and
differences
in
applicable
laws
and
regulations
associated
with
the
Adviser's
proprietary
mutual
fund
business.
In
assessing
the
reasonableness
of
the
fund's
management
fee
rate,
the
Board
considered
the
differences
in
the
nature
of
the
services
required
for
the
Adviser
to
manage
its
mutual
fund
business
versus
managing
a
discrete
pool
of
assets
as
a
subadviser
to
another
institution's
mutual
fund
or
for
an
institutional
account
and
that
the
Adviser
generally
performs
significant
additional
services
and
assumes
greater
risk
in
managing
the
fund
and
other
T.
Rowe
Price
funds
than
it
does
for
institutional
account
clients,
including
subadvised
funds.
On
the
basis
of
the
information
provided
and
the
factors
considered,
the
Board
concluded
that
the
fees
paid
by
the
fund
under
the
Advisory
Contract
are
reasonable.
T.
ROWE
PRICE
Credit
Opportunities
Fund
57
Approval
of
the
Advisory
Contract
As
noted,
the
Board
approved
the
continuation
of
the
Advisory
Contract.
No
single
factor
was
considered
in
isolation
or
to
be
determinative
to
the
decision.
Rather,
the
Board
concluded,
in
light
of
a
weighting
and
balancing
of
all
factors
considered,
that
it
was
in
the
best
interests
of
the
fund
and
its
shareholders
for
the
Board
to
approve
the
continuation
of
the
Advisory
Contract
(including
the
fees
to
be
charged
for
services
thereunder).
100
East
Pratt
Street
Baltimore,
MD
21202
T.
Rowe
Price
Investment
Services,
Inc.
Call
1-800-225-5132
to
request
a
prospectus
or
summary
prospectus;
each
includes
investment
objectives,
risks,
fees,
expenses,
and
other
information
that
you
should
read
and
consider
carefully
before
investing.
F105-050
7/24
Item 8. Changes in and Disagreements with Accountants for Open-EndManagement Investment Companies.
Not applicable.
Item 9. Proxy Disclosures for Open-EndManagement Investment Companies.
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-EndManagement Investment Companies.
Remuneration paid to Directors is included in Item 7 of this Form N-CSR.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
If applicable, see Item 7.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-EndManagement Investment Companies.
Not applicable.
Item 13. Portfolio Managers of Closed-EndManagement Investment Companies.
Not applicable.
Item 14. Purchases of Equity Securities by Closed-EndManagement Investment Company and Affiliated Purchasers.
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
There has been no change to the procedures by which shareholders may recommend nominees to the registrant's board of directors.
Item 16. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures 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-CSRwas recorded, processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal financial officer are aware of no change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-EndManagement Investment Companies.
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
| (a)(1) | The registrant's code of ethics pursuant to Item 2 of Form N-CSR is attached. | |
| (2) | Listing standards relating to recovery of erroneously awarded compensation: not applicable. | |
|
(3) |
Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached. |
|
|
(b) |
A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached. |
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.
| T. Rowe Price Credit Opportunities Fund | ||||
| By |
/s/ David Oestreicher |
|||
| David Oestreicher | ||||
| Principal Executive Officer | ||||
| Date | July 18, 2024 |
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 |
/s/ David Oestreicher |
|||
| David Oestreicher | ||||
| Principal Executive Officer | ||||
| Date |
July 18, 2024 |
| By |
/s/ Alan S. Dupski |
|||
| Alan S. Dupski | ||||
| Principal Financial Officer | ||||
| Date |
July 18, 2024 |