Company: VVR
Filing Date: 2025-05-02
Form Type: N-CSR
Source: 0001193125-25-111542
Chunk: 1

Company: Invesco Senior Income Trust
Filing Date: 2025-05-02
Form: N-CSR
Chunk 1
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 be more measured in its pace of cutting in 2025. While additional rate cuts would be beneficial for loan issuers, interest coverage ratios have already improved over the course of the fiscal year ended February 28, 2025. We anticipate loan returns will remain robust and well above historical averages moving forward. At fiscal year-end,yields remain robust in our opinion on both a historical and relative value basis, with average loan coupons continuing to outyield the average coupon for high-yield bonds. 1,2Given the price of senior loans at the end of the fiscal year, they provided an 8.51% yield (represented by the yield to three-year life). 1 During the fiscal year, the Trust employed leverage, which allowed us to enhance the Trust’s yield while keeping credit standards high relative to the benchmark. As of the close of the fiscal year, leverage accounted for approximately 31% of the Trust’s total assets. Leverage involves borrowing at a floating short-term rate and reinvesting the proceeds at a higher rate. Unlike other fixed-income asset classes, using leverage in conjunction with senior loans does not involve the same degree of risk from rising short-term interest rates since the income from senior loans generally adjusts to changes in interest rates, as do the rates which determine the Trust’s borrowing costs. (Similarly, should short-term rates fall, borrowing costs also would decline.) For more information about the Trust’s use of leverage and the associated risks, see the Notes to Financial Statements and Additional Information - Investment Objective, Policies and Principal Risks of the Trust, later in this report. During the fiscal year ended February 28, 2025, Teasdale Foods, Keg Logistics,and Monitronicswere the largest contributors to the Trust’s absolute performance, while Robertshaw, City Brewingand Hurtigrutenwere the largest detractors from absolute performance. Robertshaw was 0% at fiscal year-endas the issuer was acquired during the fiscal year. On an industry basis, the service, health care and chemicals industries provided the largest contributors to absolute return, while broadcasting was the only detractor from absolute performance. In managing the Trust, we take a multi-strategy approach to private credit – allocating across direct lending, broadly syndicated loans and special situations, seeking to take advantage of market opportunities and potential market inefficiencies. We seek to efficiently allocate risk within the portfolio in order to maximize risk-adjusted returns through five different considerations consisting of credit selection, sector migration, risk positioning, asset selection and trading.

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