HYB New America High Income Fund Inc

July 28, 2022

Dear Shareholder,

We are pleased to report to our shareholders on the results of The New America High Income Fund (the "Fund") for the six month period ended June 30, 2022. The Fund's net asset value (the "NAV") was $7.61 as of June 30th. The market price for the Fund's shares ended the period at $6.81, representing a market price discount of 10.5%. The Fund paid dividends totaling $0.25 per share from earnings during the six month period.

The financial markets deteriorated significantly during the period as investors focused on a number of concerns. The Federal Reserve (the "Fed") raised the federal funds rate three times in response to inflation reaching levels not seen in 40 years. Worries about the impact of higher interest rates and inflation on economic growth, uncertainties created by the war in Ukraine and the ongoing economic effects of the COVID 19 pandemic created a very negative outlook for the markets. The Fund's investment adviser—T. Rowe Price Associates—discusses the market environment and its market outlook in detail below.

As of June 30th, the Fund's outstanding borrowing through its credit facility (the "Facility") with the Bank of Nova Scotia was $84 million, unchanged from borrowings at year-end. The borrowing represented approximately 32% of the Fund's total assets. Amounts borrowed under the Facility bear interest at an adjustable rate based on a margin above the London Inter-bank Offered Rate. The interest rate on the Facility as of June 30th was 2.47%, more than double the .95% rate the Fund was paying on the Facility at year end 2021. The difference between the market-value weighted average current yield on the portfolio and the rate paid on the Facility has narrowed to 4.68 percentage points at June 30th, compared to a yield spread of 5.06 percentage points as of December 31, 2021.

We remind our shareholders that there is no certainty that the dividend will remain at the current level. The dividend can be affected by portfolio results, the cost and amount of leverage, market conditions, the extent to which the portfolio is fully invested, and operating expenses, among other factors. In addition to increasing the amount of income available for the dividend, leverage magnifies the effect of price movements on the Fund's NAV per share. The Fund's leverage decreased the Fund's total return in the poor high yield market of the first six months of the year. Of course, in a favorable high yield market, the leverage would increase the Fund's total return.

Sources: Credit Suisse and The New America High Income Fund, Inc.

Past performance is no guarantee of future results. Total returns are calculated by determining the percentage change in net asset value or market price (as applicable) and assumes the reinvestment of dividends. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance is for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than quoted.

The Credit Suisse High Yield Index is an unmanaged index. Unlike the Fund, the Index has no trading activity, expenses or leverage.

*  Returns are historical and are calculated by determining the percentage change in NAV or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Because the Fund's shares may trade at either a discount or premium to the Fund's NAV per share, returns based upon the stock price and dividends will tend to differ from those derived from the underlying change in NAV and dividends. The variance between the Fund's total return based on stock price and dividends and the total return based on the Fund's NAV and dividends is due to the widening of the stock price discount to the NAV over the last year.

Commentary by T. Rowe Price Associates, Inc.
Market Review

The first six months of 2022 has presented a challenging return environment for high yield bonds as the Fed began raising rates to battle the highest and most persistent levels of inflation in four decades. Fixed income markets pulled back sharply in the first quarter as Russia's invasion of Ukraine compounded interest rate and inflation fears. Despite increased uncertainty in the macroeconomic backdrop, the yield spread between high yield bonds and U.S. Treasury bonds was remarkably stable in the first quarter of the year. Higher rates and, more specifically, the duration component of the asset class were the primary drivers of negative returns. (Duration is a measure of a bond or bond fund's price sensitivity to changes in interest rates.) The improvement in the average credit quality of the high yield bond asset class in recent years means that it is less vulnerable to credit issues. However, after several years of a low interest rate environment and improved credit quality of high yield bonds, the average high yield bond coupon is at historic lows and has a longer duration profile. Therefore, the high yield asset class is somewhat more interest rate sensitive than it has been historically, which was a significant driver of negative returns over the last six months.

Due to elevated inflation and a strong labor market, the Fed raised the fed funds target rate twice in the second quarter. The central bank increased the fed funds target rate range by 50 basis points (0.50%) in May and 75 basis points (0.75%) in June. At the end of the quarter, the fed funds target rate range was 1.50% to 1.75%. Fears of a 1970s-style, supply-driven "stagflation" period of low growth combined with high inflation turned to worries that the Fed would be unable to achieve a "soft landing" and push the economy into recession, as happened in the early 1980s and early 1990s. The high yield market's yield spread widening (+220 bps) in the second quarter was the fourth largest quarterly change in the past 15 years. High yield capital market activity was anemic during the period as issuers had to contend with higher borrowing costs. In the second quarter just $25 billion in new issues came to the market, compared with a quarterly run rate of over $110 billion in 2021. Although the macro backdrop has become more challenging for risk assets, solid corporate fundamentals and a resilient consumer have enabled measures of distress in the high yield market such as the distressed ratio (the percentage of bonds trading below 60 cents on the dollar), upgrade/downgrade ratio, and default rate to all remain at benign levels. Fundamentals have remained healthy despite mounting inflationary pressures and potential spillover effects from the conflict in Eastern Europe. Corporate leverage has declined, and cash on companies' balance sheets remain at elevated levels.

Portfolio Review

The portfolio's allocation to bank loans was a top contributor to relative performance, as were our holdings of convertible preferred securities. The off-benchmark allocation to loans (also known as leveraged loans) have floating rate coupons and are therefore less affected by rising interest rates which helped insulate the portfolio from duration risk during the period. Within the modest allocation to convertibles, our investment in midstream energy infrastructure corporation Targa Resources added value. Targa's growth strategy is focused on the best-in-class Permian Basin, where its natural gas and natural gas liquid gathering and processing assets are well integrated with its Gulf Coast downstream assets. As the energy industry faced a second downturn in five years during 2020, Targa took decisive actions that stabilized its liquidity and credit profile, which ultimately positioned the company for an upgrade to investment grade status in 2022.

Our underweight to and credit selection within information technology was a meaningful contributor to relative results. Avoiding weaker credits within the automotive industry also added value.

In the information technology sector, not owning Coinbase, the largest cryptocurrency exchange in North America, was beneficial. The majority of the company's revenue is generated from transaction fees tied to its customers' trading of Bitcoin. Given the continued precipitous decline in the price of the world's leading cryptocurrency during the quarter, transaction volume and consequently revenue are expected to be negatively impacted.

The portfolio's holdings of Entegris, a company that specializes in chemical and liquid purification filters used in the wafer and integrated circuit fabrication process for semiconductors, contributed to relative performance. The company finalized an agreement to purchase CMC Materials, a leading manufacturer of chemical mechanical planarization (CMP) slurries and pads. In our view, this vertically integrated specialty semiconductor materials supplier benefits from a duopoly-like position in its market. Additionally, the nature of highly customized customer specs (i.e., no "off-the-shelf" products) translates to onerous switching costs for its growing customer base (TSMC, Samsung, and Intel are the three largest). Entegris bonds produced positive returns during the second quarter as the company closed on its acquisition of CMC Materials.

Conversely, credit selection in the building and real estate segment detracted from returns, partly due to the portfolio's modest holdings of Chinese property developers Country Garden and Shimao Group. We recognized a breakdown in our investment thesis in January as four distressed exchanges in China's property market dampened investor sentiment, and the recent surge in domestic Omicron coronavirus cases cooled the nascent demand recovery in big cities. We have since exited our position in Shimao, the weaker of the two names, and have sought to aggressively reduce our exposure in Country Garden.

In the healthcare industry, pharmaceutical and medical device company Bausch Health was a notable detractor from performance. The capital structure came under pressure after management split the company into two operating entities. Specifically, they spun off eye health products company Bausch & Lomb and subsequently announced an initial public offering of its shares. As a result, Bausch Health retained the high yield capital structure, putting bondholders in a less favorable position. We are continuing to reduce our holdings in the near term.

The portfolio's holdings of for-profit hospital system Community Health Systems also adversely affected returns. While the company's first-quarter earnings were above expectations, the bonds traded down after management lowered guidance for full-year adjusted earnings due to higher 2022 labor cost estimates. The labor shortage in nursing since the emergence of the coronavirus pandemic contributed to recent weakness in the health care space as companies had to increase compensation to attract/retain nurses, which had a negative short-term impact on margins. However, Community Health Systems remains a high-conviction holding that continues to generate positive free cash, and management is committed to further reducing leverage.

Outlook

Fundamental conditions in the high yield asset class and its underlying credit quality remain solid. We do not expect a meaningful increase in default activity during the rest of the year despite the challenging performance environment. The upgrade cycle that has led to many of our companies being elevated to investment-grade status also remains largely intact. The number of issuers to receive credit rating upgrades has exceeded downgrades for several consecutive quarters, and we believe this trend will continue.

The high yield market's performance is strongly correlated with that of other risk assets. Therefore, we anticipate that events in the broader market such as equity sell-offs in response to the Fed continuing to raise rates could lead to additional credit spread widening. Historically, when the risk-free rate and credit spreads have reached current levels—as they have four times since the Global Financial Crisis—we have seen strong one-year forward returns in the high yield asset class, which bodes well for its performance in 2023.

As always, we aim to deliver high current income while seeking to contain the volatility inherent in this market. Our team maintains a commitment to credit research and risk-conscious investing that has led to favorable returns for our high yield clients over various market cycles.

Past performance is no guarantee of future results. The views expressed in this update are as of the date of this letter. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The Fund and T. Rowe Price Associates, Inc. disclaim any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies' securities should not be regarded as investment recommendations or indicative of the Fund's portfolio as a whole.