UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-5822
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MFS CHARTER INCOME TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: November 30
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Date of reporting period: August 31, 2005
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ITEM 1. SCHEDULE OF INVESTMENTS.
MFS(R) Mutual Funds
QUARTERLY PORTFOLIO HOLDINGS 08/31/05
MFS(R) CHARTER INCOME TRUST
[graphic omitted]
[logo] M F S(R)
INVESTMENT MANAGEMENT
MFS Charter Income Trust
PORTFOLIO OF INVESTMENTS (Unaudited) 08/31/2005
ISSUER PAR AMOUNT $ VALUE
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BONDS - 95.3%
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ADVERTISING & BROADCASTING - 1.6%
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Allbritton Communications Co., 7.75%, 2012 $ 365,000 $ 367,281
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DIRECTV Holdings LLC, 8.375%, 2013 884,000 970,190
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EchoStar DBS Corp., 6.375%, 2011 1,945,000 1,932,844
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Intelsat Ltd., 8.625%, 2015## 340,000 352,750
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Lamar Media Corp., 7.25%, 2013 1,140,000 1,199,850
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Liberty Media Corp., 5.7%, 2013 1,865,000 1,725,903
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News America Holdings, 7.7%, 2025 1,140,000 1,379,481
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News America, Inc., 6.2%, 2034 542,000 561,610
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Paxson Communications Corp., 0% to 2006, 12.25% to 2009 580,000 561,150
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$ 9,051,059
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AGENCY - OTHER - 1.0%
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Financing Corp., 10.35%, 2018 $ 3,600,000 $ 5,633,698
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AIRLINES - 0.2%
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Continental Airlines, Inc., 7.566%, 2020 $ 1,049,526 $ 906,604
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APPAREL MANUFACTURERS - 0%
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Quiksilver, Inc., 6.875%, 2015## $ 100,000 $ 99,875
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ASSET BACKED & SECURITIZED - 8.5%
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Airplane Pass-Through Trust, "D", 10.875%, 2019** $ 222,233 $ 667
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Amresco Commercial Mortgage Funding I, 7%, 2029 3,000,000 3,089,053
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Asset Securitization Corp., 7.525%, 2029 1,586,134 1,733,539
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Asset Securitization Corp., FRN, 8.2916%, 2026 2,000,000 2,072,893
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Bear Stearns Commercial Mortgage Securities, Inc., 5.116%, 2041 1,120,248 1,160,239
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Commercial Mortgage Acceptance Corp., 5.44%, 2030## 3,165,000 3,235,934
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Countrywide Asset-Backed Certificates, 5.147%, 2035 2,000,000 2,021,446
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Credit Suisse First Boston Mortgage Securities Corp., 6.75%, 2013## 2,000,000 2,134,364
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Crest Ltd., 7%, 2040## 2,000,000 1,935,680
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DLJ Commercial Mortgage Corp., 6.04%, 2031 2,000,000 2,022,325
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First Union-Lehman Brothers Bank of America, FRN, 0.6976%, 2028^^ 73,940,609 1,450,493
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First Union-Lehman Brothers Commercial Mortgage Trust, 7%, 2029## 850,000 955,898
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First Union-Lehman Brothers Commercial Mortgage Trust, 7.5%, 2029 3,000,000 3,556,752
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J.P. Morgan Chase Commercial Mortgage Securities Corp., 5.038%, 2046 4,000,000 4,122,356
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Morgan Stanley Capital I, 5.168%, 2042 1,532,020 1,590,849
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Mortgage Capital Funding, Inc., FRN, 0.9824%, 2031^^ 20,746,501 365,811
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New Century Home Equity Loan Trust, 4.532%, 2035 2,500,000 2,493,777
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Residential Asset Mortgage Products, Inc., 3.878%, 2035 1,340,523 1,329,403
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Spirit Master Funding, LLC, 5.05%, 2023## 1,992,973 1,988,599
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Structured Asset Securities Corp., 4.67%, 2035 2,484,152 2,471,745
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TIAA Real Estate CDO Ltd., 7.17%, 2032## 3,072,246 3,177,994
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Wachovia Bank Commercial Mortgage Trust, 4.847%, 2041 2,000,000 2,029,923
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Wachovia Bank Commercial Mortgage Trust, 5.083%, 2042 2,000,000 2,063,353
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$ 47,003,093
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AUTOMOTIVE - 1.0%
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Affinia Group, Inc., 9%, 2014## $ 75,000 $ 61,875
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DaimlerChrysler N.A. Holdings Corp., 8.5%, 2031 400,000 501,675
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Ford Motor Credit Co., 5.625%, 2008 185,000 177,918
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Ford Motor Credit Co., 5.7%, 2010 1,400,000 1,314,715
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General Motors Acceptance Corp., 6.125%, 2008 160,000 157,317
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General Motors Acceptance Corp., 5.85%, 2009 285,000 274,156
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General Motors Acceptance Corp., 6.75%, 2014 549,000 504,947
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General Motors Acceptance Corp., 8%, 2031 500,000 462,574
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General Motors Corp., 8.375%, 2033 656,000 551,040
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Lear Corp., 8.11%, 2009 260,000 270,967
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Navistar International Corp., 7.5%, 2011 530,000 536,625
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TRW Automotive, Inc., 9.375%, 2013 781,000 866,910
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$ 5,680,719
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BANKS & CREDIT COMPANIES - 4.1%
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Abbey National Capital Trust I, 8.963% to 2030, FRN to 2049 $ 1,500,000 $ 2,169,453
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Banco Mercantil del Norte S.A., 5.875% to 2009, FRN to 2014## 2,408,000 2,426,060
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BNP Paribas, 5.186% to 2015, FRN to 2049## 1,667,000 1,687,211
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Bosphorus Financial Services Ltd., FRN, 5.59%, 2012## 1,500,000 1,462,500
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Chuo Mitsui Trust & Banking Co., 5.506% to 2015, FRN to 2049## 1,676,000 1,654,939
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DFS Funding Corp., FRN, 5.49%, 2010## 2,150,000 2,160,750
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HBOS Capital Funding LP, 6.071% to 2014, FRN to 2049## 1,330,000 1,436,653
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J.P. Morgan Chase & Co., 5.125%, 2014 2,100,000 2,150,969
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Kazkommerts International B.V., 10.125%, 2007## 367,000 396,360
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Kazkommerts International B.V., 10.125%, 2007 128,000 138,240
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Mizuho Financial Group, Inc., 5.79%, 2014## 1,898,000 2,019,485
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RBS Capital Trust II, 6.425% to 2034, FRN to 2049 829,000 915,520
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Russian Standard Finance S.A., 8.125%, 2008## 682,000 697,345
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Turanalem Finance B.V., 8%, 2014## 854,000 877,485
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UFJ Finance Aruba AEC, 6.75%, 2013 1,300,000 1,456,703
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VTB Capital S.A., 6.25%, 2035## 974,000 986,175
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$ 22,635,848
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BROADCAST & CABLE TV - 1.1%
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Charter Communications, Inc., 8.625%, 2009 $ 580,000 $ 479,950
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CSC Holdings, Inc., 8.125%, 2009 1,050,000 1,076,250
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Lenfest Communications, Inc., 10.5%, 2006 1,900,000 1,979,895
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Mediacom Broadband LLC, 9.5%, 2013 280,000 284,900
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Rogers Cable, Inc., 5.5%, 2014 1,025,000 963,500
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TCI Communications, Inc., 9.8%, 2012 1,169,000 1,468,967
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$ 6,253,462
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BROKERAGE & ASSET MANAGERS - 1.0%
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Goldman Sachs Group, Inc., 5.7%, 2012 $ 2,680,000 $ 2,823,308
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Morgan Stanley Dean Witter, Inc., 6.6%, 2012 2,537,000 2,806,589
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$ 5,629,897
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BUILDING - 0%
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Texas Industries, Inc., 7.25%, 2013## $ 40,000 $ 41,700
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BUSINESS SERVICES - 0.2%
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Iron Mountain, Inc., 7.75%, 2015 $ 210,000 $ 214,988
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Xerox Corp., 7.625%, 2013 920,000 979,800
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$ 1,194,788
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CHEMICALS - 1.0%
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BCP Crystal Holdings Corp., 9.625%, 2014 $ 237,000 $ 268,699
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Hercules, Inc., 6.75%, 2029 860,000 851,400
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Huntsman International LLC, 10.125%, 2009 331,000 340,930
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Kronos International, Inc., 8.875%, 2009 EUR 100,000 130,358
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Lyondell Chemical Co., 11.125%, 2012 $ 615,000 699,563
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Methanex Corp., 6%, 2015 220,000 220,856
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Nalco Co., 7.75%, 2011 395,000 413,762
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Nova Chemicals Corp., 6.5%, 2012 420,000 412,650
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Rhodia S.A., 8.875%, 2011 325,000 316,875
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Rockwood Specialties Group, Inc., 7.5%, 2014## 60,000 61,200
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Yara International A.S.A., 5.25%, 2014## 2,000,000 2,026,658
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$ 5,742,951
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CONGLOMERATES - 0.2%
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Kennametal, Inc., 7.2%, 2012 $ 1,140,000 $ 1,267,503
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CONSTRUCTION - 0.3%
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D.R. Horton, Inc., 8%, 2009 $ 935,000 $ 1,013,982
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M/I Homes, Inc., 6.875%, 2012## 675,000 644,625
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$ 1,658,607
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CONSUMER GOODS & SERVICES - 0.1%
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Church & Dwight Co., Inc., 6%, 2012 $ 460,000 $ 457,700
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Service Corp. International, 7%, 2017## 260,000 263,250
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$ 720,950
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CONTAINERS - 0.3%
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Crown European Holdings S.A., 9.5%, 2011 $ 530,000 $ 584,325
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Huntsman Packaging Corp., 13%, 2010 190,000 136,800
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Owens-Brockway Glass Container, Inc., 8.875%, 2009 660,000 697,950
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Owens-Brockway Glass Container, Inc., 8.25%, 2013 85,000 90,950
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$ 1,510,025
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DEFENSE ELECTRONICS - 0.5%
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BAE Systems Holdings, Inc., 5.2%, 2015## $ 2,000,000 $ 2,023,032
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L-3 Communications Holdings, Inc., 5.875%, 2015 750,000 740,625
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$ 2,763,657
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ELECTRONICS - 0.2%
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Flextronics International Ltd., 6.5%, 2013 $ 895,000 $ 910,662
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EMERGING MARKET QUASI-SOVEREIGN - 1.4%
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Gazprom OAO, 9.625%, 2013## $ 1,510,000 $ 1,855,412
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Gazprom OAO, 9.625%, 2013 420,000 516,075
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Pemex Project Funding Master Trust, 7.375%, 2014 1,013,000 1,142,664
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Pemex Project Funding Master Trust, 8.625%, 2022 1,661,000 2,034,725
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Petronas Capital Ltd., 7.875%, 2022## 464,000 588,847
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Petronas Capital Ltd., 7.875%, 2022 1,340,000 1,700,548
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$ 7,838,271
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EMERGING MARKET SOVEREIGN - 3.9%
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Federal Republic of Brazil, 8%, 2018 $ 1,505,000 $ 1,555,417
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Federal Republic of Brazil, FRN, 3.125%, 2012 3,210,982 3,082,543
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Republic of Argentina, FRN, 4.005%, 2012 3,019,000 2,329,870
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Republic of Panama, 9.375%, 2029 509,000 642,613
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Republic of Peru, 5%, 2017 1,675,080 1,622,734
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Republic of Peru, 8.75%, 2033 451,000 532,180
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Republic of South Africa, 9.125%, 2009 469,000 538,764
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Republic of South Africa, 8.5%, 2017 540,000 692,550
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Russian Federation, 3%, 2008 2,955,000 2,802,522
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Russian Federation, 3%, 2011 4,910,000 4,369,900
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State of Qatar, 9.75%, 2030 585,000 909,675
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United Mexican States, 8.125%, 2019 1,426,000 1,760,397
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United Mexican States, 8.3%, 2031 685,000 868,238
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$ 21,707,403
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ENERGY - INDEPENDENT - 0.7%
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Chesapeake Energy Corp., 7.5%, 2014 $ 335,000 $ 361,800
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Chesapeake Energy Corp., 6.875%, 2016 680,000 704,650
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Forest Oil Corp., 7.75%, 2014 550,000 583,000
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Kerr-McGee Corp., 6.95%, 2024 800,000 862,382
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Newfield Exploration Co., 6.625%, 2014 225,000 235,687
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Plains Exploration & Production Co., 7.125%, 2014 625,000 665,625
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Vintage Petroleum, Inc., 8.25%, 2012 550,000 591,250
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$ 4,004,394
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ENERGY - INTEGRATED - 0.3%
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Amerada Hess Corp., 7.3%, 2031 $ 725,000 $ 878,856
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Tyumen Oil Co., 11%, 2007 849,000 946,635
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$ 1,825,491
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ENTERTAINMENT - 0.6%
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AMC Entertainment, Inc., 9.5%, 2011 $ 349,000 $ 342,892
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Loews Cineplex Entertainment Corp., 9%, 2014## 430,000 422,475
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Six Flags, Inc., 9.75%, 2013 220,000 220,550
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Turner Broadcasting System, Inc., 8.375%, 2013 1,784,000 2,149,399
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$ 3,135,316
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FINANCIAL INSTITUTIONS - 0.1%
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International Lease Finance Corp., 5%, 2010 $ 321,000 $ 326,064
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FOOD & NON-ALCOHOLIC BEVERAGES - 0.2%
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Burns, Philp & Co. Ltd., 9.75%, 2012 $ 340,000 $ 370,600
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Smithfield Foods, Inc., 7%, 2011 465,000 478,950
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$ 849,550
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FOREST & PAPER PRODUCTS - 1.2%
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Abitibi-Consolidated, Inc., 7.75%, 2011 $ 720,000 $ 716,400
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Buckeye Technologies, Inc., 8.5%, 2013 460,000 476,100
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Donohue Forest Products, Inc., 7.625%, 2007 1,588,000 1,611,820
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Georgia-Pacific Corp., 9.375%, 2013 1,695,000 1,894,162
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Georgia-Pacific Corp., 7.75%, 2029 1,000,000 1,113,750
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MDP Acquisitions PLC, 9.625%, 2012 310,000 316,975
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Norske Skog Canada Ltd., 7.375%, 2014 695,000 688,050
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$ 6,817,257
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GAMING & LODGING - 1.4%
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Aztar Corp., 7.875%, 2014 $ 235,000 $ 249,100
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Boyd Gaming Corp., 6.75%, 2014 520,000 531,050
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Caesars Entertainment, Inc., 8.125%, 2011 730,000 822,162
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Harrah's Operating Co., Inc., 5.625%, 2015## 483,000 496,252
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Host Marriott LP, 7.125%, 2013 465,000 485,925
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Host Marriott LP, 6.375%, 2015 90,000 89,212
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Mandalay Resort Group, 9.375%, 2010 450,000 501,187
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MGM Mirage, Inc., 8.375%, 2011 1,155,000 1,256,063
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Pinnacle Entertainment, Inc., 8.75%, 2013 295,000 305,325
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Royal Caribbean Cruises Ltd., 8%, 2010 990,000 1,084,050
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Scientific Games Corp., 6.25%, 2012 80,000 81,000
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Starwood Hotels & Resorts Worldwide, Inc., 7.875%, 2012 895,000 991,213
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Station Casinos, Inc., 6.5%, 2014 440,000 446,600
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Wynn Las Vegas LLC, 6.625%, 2014 155,000 150,738
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$ 7,489,877
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INDUSTRIAL - 0.2%
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Amsted Industries, Inc., 10.25%, 2011## $ 335,000 $ 368,500
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Valmont Industries, Inc., 6.875%, 2014 730,000 745,513
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Williams Scotsman, Inc., 10%, 2008 205,000 224,520
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$ 1,338,533
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INSURANCE - 0.8%
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American International Group, Inc., 4.25%, 2013 $ 4,250,000 $ 4,140,150
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INSURANCE - PROPERTY & CASUALTY - 0.9%
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Ace Ina Holdings, Inc., 5.875%, 2014 $ 1,700,000 $ 1,784,124
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AXIS Capital Holdings Ltd., 5.75%, 2014 1,879,000 1,938,981
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Fund American Cos., Inc., 5.875%, 2013 1,351,000 1,403,066
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$ 5,126,171
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INTERNATIONAL MARKET SOVEREIGN - 23.5%
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Canada Housing Trust, 4.65%, 2009 CAD 260,000 $ 229,684
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Federal Republic of Germany, 3.5%, 2008 EUR 8,759,000 11,171,122
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Federal Republic of Germany, 3.75%, 2015 EUR 2,125,000 2,762,908
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Federal Republic of Germany, 6.25%, 2030 EUR 920,000 1,625,622
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Government of Australia, 6.25%, 2015 AUD 2,785,000 2,286,624
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Government of Canada, 5.25%, 2012 CAD 1,488,000 1,377,267
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Government of New Zealand, 7%, 2009 NZD 1,773,000 1,287,343
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Government of New Zealand, 6.5%, 2013 NZD 14,100,000 10,307,256
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Government of New Zealand, 6%, 2015 NZD 3,691,000 2,626,641
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Kingdom of Netherlands, 5.75%, 2007 EUR 6,515,000 8,440,090
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Kingdom of Netherlands, 3.75%, 2009 EUR 6,006,000 7,761,171
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Kingdom of Norway, 6.5%, 2013 NOK 8,809,000 1,670,870
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Kingdom of Spain, 6%, 2008 EUR 7,080,000 9,480,216
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Kingdom of Spain, 5.35%, 2011 EUR 5,693,000 8,033,684
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Republic of Austria, 5.5%, 2007 EUR 4,953,000 6,512,795
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Republic of Finland, 3%, 2008 EUR 5,529,000 6,945,527
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Republic of Finland, 5.375%, 2013 EUR 3,809,000 5,496,807
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Republic of France, 4.75%, 2007 EUR 8,645,000 11,144,592
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Republic of France, 6%, 2025 EUR 309,000 516,639
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Republic of Ireland, 4.25%, 2007 EUR 10,057,000 12,912,897
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Republic of Ireland, 4.6%, 2016 EUR 1,059,000 1,477,363
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United Kingdom Treasury, 5.75%, 2009 GBP 3,640,000 6,986,685
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United Kingdom Treasury, 8%, 2015 GBP 3,727,000 8,868,561
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$ 129,922,364
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MACHINERY & TOOLS - 0.4%
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Case New Holland, Inc., 6%, 2009 $ 1,415,000 $ 1,358,400
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Manitowoc Co., Inc., 10.5%, 2012 331,000 374,030
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Terex Corp., 9.25%, 2011 325,000 351,813
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United Rentals, Inc., 6.5%, 2012 185,000 180,606
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$ 2,264,849
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MEDICAL & HEALTH TECHNOLOGY & SERVICES - 0.6%
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AmerisourceBergen Corp., 7.25%, 2012 $ 550,000 $ 636,625
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DaVita, Inc., 6.625%, 2013## 170,000 172,550
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Fisher Scientific International, Inc., 6.125%, 2015## 200,000 200,000
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HCA, Inc., 8.75%, 2010 1,100,000 1,240,582
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HCA, Inc., 6.375%, 2015 955,000 980,477
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$ 3,230,234
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METALS & MINING - 0.6%
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Foundation PA Coal Co., 7.25%, 2014 $ 520,000 $ 546,650
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Ispat Inland ULC, 9.75%, 2014 1,200,000 1,404,000
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Peabody Energy Corp., 5.875%, 2016 425,000 422,875
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Peabody Energy Corp., "B", 6.875%, 2013 355,000 369,644
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U.S. Steel Corp., 9.75%, 2010 413,000 452,235
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$ 3,195,404
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MORTGAGE BACKED - 15.2%
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Fannie Mae, 6.8%, 2011 $ 553,557 $ 609,136
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Fannie Mae, 4.845%, 2013 254,936 259,605
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Fannie Mae, 4.1%, 2013 958,488 936,340
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Fannie Mae, 4.19%, 2013 971,270 953,304
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Fannie Mae, 3.81%, 2013 596,182 572,601
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Fannie Mae, 4.6%, 2014 768,391 772,357
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Fannie Mae, 4.667%, 2014 1,358,001 1,374,037
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Fannie Mae, 4.518%, 2014 917,490 919,579
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Fannie Mae, 4.56%, 2015 321,914 322,545
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Fannie Mae, 4.665%, 2015 260,638 263,039
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Fannie Mae, 4.7%, 2015 248,664 251,540
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Fannie Mae, 4.89%, 2015 175,097 179,442
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Fannie Mae, 4.74%, 2015 600,000 606,980
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Fannie Mae, 4.87%, 2015 524,898 537,227
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Fannie Mae, 4.925%, 2015 1,957,027 2,014,727
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Fannie Mae, 6%, 2016 - 2034 7,840,711 8,070,592
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Fannie Mae, 5.5%, 2019 - 2035 47,744,832 48,362,267
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Fannie Mae, 4.88%, 2020 593,856 600,369
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Fannie Mae, 5.9958%, 2020 3,413 3,413
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Fannie Mae, 6.5%, 2032 - 2033 4,388,679 4,545,031
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Freddie Mac, 6%, 2034 2,748,916 2,816,618
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Freddie Mac, 5.5%, 2034 8,751,361 8,856,642
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$ 83,827,391
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MUNICIPALS - 1.0%
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Massachusetts State Water Resources Authority, "A", MBIA, 5.25%, 2015 $ 4,800,000 $ 5,446,080
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NATURAL GAS - DISTRIBUTION - 0.1%
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AmeriGas Partners LP, 7.25%, 2015## $ 470,000 $ 498,200
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NATURAL GAS - PIPELINE - 1.0%
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CenterPoint Energy Resources Corp., 7.875%, 2013 $ 1,600,000 $ 1,898,274
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Colorado Interstate Gas Co., 5.95%, 2015## 45,000 44,662
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Enterprise Products Operating LP, 6.375%, 2013 1,800,000 1,941,665
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Magellan Midstream Partners LP, 5.65%, 2016 311,000 324,279
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Southern Natural Gas Co., Inc., 8.875%, 2010 550,000 600,026
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Williams Cos., Inc., 8.75%, 2032 800,000 972,000
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$ 5,780,906
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NETWORK & TELECOM - 2.1%
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AT&T Corp., 9.05%, 2011 $ 260,000 $ 298,350
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AT&T Corp., 9.75%, 2031 785,000 1,028,350
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Citizens Communications Co., 9.25%, 2011 815,000 902,612
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Citizens Communications Co., 6.25%, 2013 645,000 623,231
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Citizens Communications Co., 9%, 2031 650,000 674,375
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Deutsche Telekom International Finance B.V., 8.75%, 2030 1,500,000 2,026,684
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Eircom Funding PLC, 8.25%, 2013 515,000 553,625
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Espirit Telecom Group PLC, 10.875%, 2008** 165,000 0
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Qwest Corp., 7.875%, 2011 860,000 894,400
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Qwest Corp., 8.875%, 2012 450,000 491,625
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Qwest Services Corp., 13.5%, 2010 230,000 265,075
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Telecom Italia Capital, 6%, 2034## 1,000,000 1,026,606
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Verizon New York, Inc., 6.875%, 2012 2,542,000 2,803,440
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$ 11,588,373
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OIL SERVICES - 0.1%
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GulfMark Offshore, Inc., 7.75%, 2014 $ 435,000 $ 464,362
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Petroleum Export Peloil, 5.265%, 2011## 280,000 282,520
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$ 746,882
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OILS - 0.2%
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CITGO Petroleum Corp., 6%, 2011 $ 550,000 $ 550,000
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Premcor Refining Group, Inc., 7.5%, 2015 550,000 594,000
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$ 1,144,000
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POLLUTION CONTROL - 0.1%
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Allied Waste North America, Inc., 7.875%, 2013 $ 480,000 $ 494,400
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PRINTING & PUBLISHING - 0.5%
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Dex Media East LLC, 9.875%, 2009 $ 565,000 $ 616,556
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Dex Media West LLC, 9.875%, 2013 1,527,000 1,727,419
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MediaNews Group, Inc., 6.875%, 2013 515,000 513,069
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$ 2,857,044
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RAILROAD & SHIPPING - 0.4%
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TFM S.A. de C.V., 9.375%, 2012## $ 1,809,000 $ 1,953,720
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REAL ESTATE - 0.3%
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HRPT Properties Trust, 6.25%, 2016 $ 1,324,000 $ 1,427,714
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RESTAURANTS - 0.3%
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YUM! Brands, Inc., 8.875%, 2011 $ 1,500,000 $ 1,806,420
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RETAILERS - 0.5%
---------------------------------------------------------------------------------------------------------------------------------
Couche-Tard, Inc., 7.5%, 2013 $ 210,000 $ 219,975
---------------------------------------------------------------------------------------------------------------------------------
Gap, Inc., 9.55%, 2008 940,000 1,076,356
---------------------------------------------------------------------------------------------------------------------------------
Limited Brands, Inc., 5.25%, 2014 1,100,000 1,059,678
---------------------------------------------------------------------------------------------------------------------------------
Rite Aid Corp., 8.125%, 2010 365,000 371,388
---------------------------------------------------------------------------------------------------------------------------------
$ 2,727,397
---------------------------------------------------------------------------------------------------------------------------------
SUPERMARKETS - 0.1%
---------------------------------------------------------------------------------------------------------------------------------
Roundy's, Inc., 8.875%, 2012 $ 475,000 $ 505,875
---------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - WIRELESS - 1.5%
---------------------------------------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 8.75%, 2031 $ 1,500,000 $ 2,106,057
---------------------------------------------------------------------------------------------------------------------------------
Centennial Communications Corp., 10.125%, 2013 240,000 267,600
---------------------------------------------------------------------------------------------------------------------------------
Cingular Wireless LLC, 6.5%, 2011 1,700,000 1,874,456
---------------------------------------------------------------------------------------------------------------------------------
Dolphin Telecom PLC, 11.5%, 2008** 1,600,000 0
---------------------------------------------------------------------------------------------------------------------------------
Dolphin Telecom PLC, "B", 14%, 2009** 750,000 0
---------------------------------------------------------------------------------------------------------------------------------
Mobile TeleSystems OJSC, 9.75%, 2008## 1,552,000 1,685,860
---------------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 5.95%, 2014 1,315,000 1,366,236
---------------------------------------------------------------------------------------------------------------------------------
Rogers Wireless, Inc., 6.375%, 2014 550,000 559,625
---------------------------------------------------------------------------------------------------------------------------------
Rogers Wireless, Inc., 7.5%, 2015 450,000 492,188
---------------------------------------------------------------------------------------------------------------------------------
$ 8,352,022
---------------------------------------------------------------------------------------------------------------------------------
TOBACCO - 0.4%
---------------------------------------------------------------------------------------------------------------------------------
R.J. Reynolds Tobacco Holdings, Inc., 7.25%, 2012 $ 818,000 $ 842,540
---------------------------------------------------------------------------------------------------------------------------------
R.J. Reynolds Tobacco Holdings, Inc., 7.3%, 2015## 1,300,000 1,339,000
---------------------------------------------------------------------------------------------------------------------------------
$ 2,181,540
---------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - SERVICES - 0.1%
---------------------------------------------------------------------------------------------------------------------------------
Stena AB, 7%, 2016 $ 330,000 $ 310,200
---------------------------------------------------------------------------------------------------------------------------------
Westinghouse Air Brake Technologies Corp., 6.875%, 2013 100,000 103,125
---------------------------------------------------------------------------------------------------------------------------------
$ 413,325
---------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES - 3.0%
---------------------------------------------------------------------------------------------------------------------------------
Small Business Administration, 4.34%, 2024 $ 7,836,324 $ 7,783,861
---------------------------------------------------------------------------------------------------------------------------------
Small Business Administration, 4.77%, 2024 6,094,037 6,184,092
---------------------------------------------------------------------------------------------------------------------------------
Small Business Administration, 5.11%, 2025 2,700,000 2,782,694
---------------------------------------------------------------------------------------------------------------------------------
$ 16,750,647
---------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 7.2%
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 12%, 2013 $ 7,500,000 $ 9,199,808
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 10.625%, 2015 3,350,000 5,133,483
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 9.875%, 2015 5,025,000 7,431,699
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.375%, 2031 635,000 744,488
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, 4.25%, 2014 1,263,000 1,283,819
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, 4.125%, 2015 1,285,000 1,293,282
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, TIPS, 2%, 2014### 10,692,514 11,022,474
---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes, TIPS, 1.625%, 2015 3,673,072 3,668,624
---------------------------------------------------------------------------------------------------------------------------------
$ 39,777,677
---------------------------------------------------------------------------------------------------------------------------------
UTILITIES - ELECTRIC POWER - 3.1%
---------------------------------------------------------------------------------------------------------------------------------
CMS Energy Corp., 8.5%, 2011 $ 320,000 $ 360,800
---------------------------------------------------------------------------------------------------------------------------------
DPL, Inc., 6.875%, 2011 772,000 845,340
---------------------------------------------------------------------------------------------------------------------------------
Duke Capital Corp., 8%, 2019 1,350,000 1,676,020
---------------------------------------------------------------------------------------------------------------------------------
Dynegy Holdings, Inc., 9.875%, 2010## 240,000 261,600
---------------------------------------------------------------------------------------------------------------------------------
Enersis S.A., 7.375%, 2014 1,812,000 1,965,404
---------------------------------------------------------------------------------------------------------------------------------
FirstEnergy Corp., 6.45%, 2011 1,130,000 1,223,911
---------------------------------------------------------------------------------------------------------------------------------
FirstEnergy Corp., 7.375%, 2031 1,547,000 1,894,906
---------------------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings LLC, 7.375%, 2010 545,000 566,800
---------------------------------------------------------------------------------------------------------------------------------
Nevada Power Co., 5.875%, 2015## 900,000 909,000
---------------------------------------------------------------------------------------------------------------------------------
NorthWestern Corp., 5.875%, 2014## 1,010,000 1,042,954
---------------------------------------------------------------------------------------------------------------------------------
NRG Energy, Inc., 8%, 2013 1,190,000 1,285,200
---------------------------------------------------------------------------------------------------------------------------------
PSEG Energy Holdings LLC, 7.75%, 2007 265,000 272,288
---------------------------------------------------------------------------------------------------------------------------------
Reliant Resources, Inc., 9.5%, 2013 235,000 261,438
---------------------------------------------------------------------------------------------------------------------------------
System Energy Resources, Inc., 5.129%, 2014## 2,478,257 2,456,101
---------------------------------------------------------------------------------------------------------------------------------
TECO Energy, Inc., 7.5%, 2010 450,000 488,250
---------------------------------------------------------------------------------------------------------------------------------
Tenaska Alabama Partners LP, 7%, 2021## 108,000 112,665
---------------------------------------------------------------------------------------------------------------------------------
Texas Genco LLC, 6.875%, 2014## 275,000 285,313
---------------------------------------------------------------------------------------------------------------------------------
TXU Corp., 6.5%, 2024 1,215,000 1,190,227
---------------------------------------------------------------------------------------------------------------------------------
$ 17,098,217
---------------------------------------------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $516,518,170) $ 527,294,256
---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES $ VALUE
---------------------------------------------------------------------------------------------------------------------------------
STOCKS - 0.1%
---------------------------------------------------------------------------------------------------------------------------------
PRINTING & PUBLISHING - 0%
---------------------------------------------------------------------------------------------------------------------------------
Golden Books Family Entertainment, Inc.* 3,683 $ 0
---------------------------------------------------------------------------------------------------------------------------------
SPECIAL PRODUCTS & SERVICES - 0.1%
---------------------------------------------------------------------------------------------------------------------------------
Sind Holdings, Inc.* 5,720 $ 602,888
---------------------------------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 0%
---------------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.* 6 $ 192
---------------------------------------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $2,127,667) $ 603,080
---------------------------------------------------------------------------------------------------------------------------------
ISSUER STRIKE PRICE FIRST EXERCISE SHARES $ VALUE
---------------------------------------------------------------------------------------------------------------------------------
WARRANTS - 0%
---------------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. (Business Services)* $0.14 1/28/97 1,625 $ 0
---------------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. (Business Services)* $0.14 1/28/97 750 $ 0
---------------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. (Specialty Chemicals)* 52.00 12/31/02 11 13
---------------------------------------------------------------------------------------------------------------------------------
Thermadyne Holdings Corp. (Machinery & Tools)* 20.78 5/29/03 760 152
---------------------------------------------------------------------------------------------------------------------------------
Total Warrants (Identified Cost, $39,014) $ 165
---------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
---------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 1.1%
---------------------------------------------------------------------------------------------------------------------------------
American Express Credit Corp., 3.55%, due 9/23/05, at Amortized Cost< $ 6,000,000 $ 5,986,983
---------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.4%
---------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley, 3.58%, dated 8/31/05, due 9/01/05, total to be received $13,443,337
(secured by various U.S. Treasury and Federal Agency obligations in a jointly traded
account), at Cost $ 13,442,000 $ 13,442,000
---------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $538,113,834) ~ $ 547,326,484
---------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES - 1.1% 5,858,085
---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 553,184,569
---------------------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
** Non income producing security - in default.
^^ Interest only security for which the fund receives interest on notional principal (Par amount). Par amount shown is the
notional principal and does not reflect the cost of the security.
## SEC Rule 144A restriction.
### All or a portion of the security has been segregated as collateral for an open futures contract.
< The rate shown represents an annualized yield at time of purchase.
~ As of August 31, 2005, the fund had five securities representing $602,888 and 0.1% of net assets that were fair valued
in accordance with the policies adopted by the Board of Trustees.
Abbreviations:
FRN = Floating Rate Note. The interest rate is the rate in effect as of period end.
MBIA = Municipal Bond Insurance Corp.
TIPS = Treasury Inflation Protected Security.
Abbreviations have been used throughout this report to indicate amounts shown in currencies other than the U.S. dollar. All
amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below:
AUD = Australian Dollar
CAD = Canadian Dollar
CNY = Chinese Yuan Renminbi
EUR = Euro
GBP = British Pound
NOK = Norwegian Krone
NZD = New Zealand Dollar
SEK = Swedish Krona
Country Weightings
---------------------------------------
United States 62.4%
---------------------------------------
United Kingdom 3.8%
---------------------------------------
Germany 3.4%
---------------------------------------
Spain 3.3%
---------------------------------------
Netherlands 3.0%
---------------------------------------
Ireland 2.8%
---------------------------------------
New Zealand 2.6%
---------------------------------------
Russia 2.5%
---------------------------------------
France 2.5%
---------------------------------------
Other 13.5%
---------------------------------------
Percentages as based on total net assets as of August 31, 2005.
See attached schedules. For more information see notes to financial statements as disclosed in the most recent semiannual or
annual report.
MFS CHARTER INCOME TRUST
SUPPLEMENTAL SCHEDULES (UNAUDITED) 08/31/2005
(1) Portfolio Securities
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the trust as computed on a federal income tax basis, are
as follows:
Aggregate Cost $ 539,697,582
=============
Gross unrealized appreciation $ 15,020,279
Gross unrealized depreciation (7,391,377)
-------------
Net unrealized appreciation(depreciation) $ 7,628,902
=============
(2) Financial Instruments
The fund trust trades financial instruments with off-balance-sheet risk in the
normal course of its investing activities in order to manage exposure to market
risks such as interest rates and foreign currency exchange rates. These
financial instruments include forward foreign currency exchange contracts and
futures contracts. The notional or contractual amounts of these instruments
represent the investment the trust has in particular classes of financial
instruments and does not necessarily represent the amounts potentially subject
to risk. The measurement of the risks associated with these instruments is
meaningful only when all related and offsetting transactions are considered.
Forward Foreign Currency Exchange Contracts
Sales and purchases in the table below are netted by currency.
NET UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
-----------------------------------------------------------------------------------------------------------------------
SALES
-----
10/05/05 AUD 2,289,464 $ 1,760,295 $ 1,722,042 $ 38,253
09/22/05 - 10/04/05 EUR 77,114,460 94,760,578 95,182,551 (421,973)
09/01/05 - 12/01/05 GBP 15,287,751 27,379,154 27,543,805 (164,651)
09/07/05 NOK 7,689,274 1,161,522 1,205,131 (43,609)
09/01/05 - 10/05/05 NZD 19,662,871 13,508,443 13,601,785 (93,342)
------------ ------------ ---------
$138,569,992 $139,255,314 $(685,322)
============ ============ =========
PURCHASES
---------
02/06/06 CNY 42,072,400 $ 5,350,000 $ 5,270,968 $ (79,032)
10/04/05 EUR 1,992,268 2,472,163 2,459,607 (12,556)
09/01/05 - 09/06/05 GBP 7,643,875 13,770,261 13,779,685 9,424
09/01/05 NZD 895,242 616,106 621,106 5,000
10/17/05 SEK 1,151,519 155,014 152,606 (2,408)
------------ ------------ ---------
$ 22,363,544 $ 22,283,972 $ (79,572)
============ ============ =========
At August 31, 2005, forward foreign currency purchases and sales under master
netting agreements excluded above amounted to a net payable of $39,701 with
Merrill Lynch International.
At August 31, 2005, the trust had sufficient cash and/or securities to cover
any commitments under these contracts.
Futures Contracts
Unrealized
Appreciation
Description Expiration Contracts Position (Depreciation)
------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes 10 Year December 2005 183 Short $ (70,809)
U.S. Treasury Notes 5 Year December 2005 200 Short (68,012)
U.S. Treasury Notes 2 Year December 2005 170 Short (56,482)
----------
$ (195,303)
==========
At August 31, 2005, the trust had sufficient cash and/or securities to cover
any margin requirements under these contracts.
THE TRUST IS A CLOSED-END INVESTMENT PRODUCT. SHARES OF THE TRUST ARE ONLY
AVAILABLE FOR PURCHASE/SALE ON THE NYSE AT THE CURRENT MARKET PRICE. SHARES MAY
TRADE AT A PREMIUM OR DISCOUNT TO NAV.
(C)2005 MFS Investment Management
ITEM 2. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940 (the "Act")) as conducted within 90 days of the filing date of this
Form N-Q, the registrant's principal financial officer and principal
executive officer have concluded that those disclosure controls and
procedures provide reasonable assurance that the material information
required to be disclosed by the registrant on this report is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Act that occurred during
the registrant's last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 3. EXHIBITS.
File as exhibits as part of this Form a separate certification for each
principal executive officer and principal financial officer of the registrant
as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: MFS CHARTER INCOME TRUST
-------------------------------------------------------------------
By (Signature and Title)* ROBERT J. MANNING
-----------------------------------------------------
Robert J. Manning, President
Date: October 24, 2005
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* ROBERT J. MANNING
-----------------------------------------------------
Robert J. Manning, President (Principal Executive
Officer)
Date: October 24, 2005
----------------
By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: October 24, 2005
----------------
* Print name and title of each signing officer under his or her signature.