Nuveen Quality Preferred Income Fund 2

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21137

Nuveen Quality Preferred Income Fund 2

(Exact name of registrant as specified in charter)

    333 West Wacker Drive, Chicago, Illinois 60606    

(Address of principal executive offices) (Zip code)

Kevin J. McCarthy—Vice President and Secretary

    333 West Wacker Drive, Chicago, Illinois 60606    

(Name and address of agent for service)

Registrant’s telephone number, including area code:     312-917-7700    

Date of fiscal year end:       July 31      

Date of reporting period:  October 31, 2015  

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

 

 

 

 


Item 1. Schedule of Investments

 

 


JPS

 

Nuveen Quality Preferred Income Fund 2

Portfolio of Investments

   October 31, 2015 (Unaudited)

 

Shares     Description (1)   Coupon            Ratings (2)      Value  
 

LONG-TERM INVESTMENTS – 136.3% (98.2% of Total Investments)

  

  
 

CONVERTIBLE PREFERRED SECURITIES – 0.5% (0.3% of Total Investments)

     
      Banks – 0.5%                         
  4,300     

Wells Fargo & Company

    7.500%              BBB       $ 5,095,500   
 

Total Convertible Preferred Securities (cost $5,004,125)

                           5,095,500   
Shares     Description (1)   Coupon            Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 47.0% (33.9% of Total Investments)

     
      Banks – 12.6%                         
  60,500     

AgriBank FCB, (3)

    6.875%            BBB+       $ 6,329,813   
  23,180     

Bank of America Corporation

    6.500%            BB+         610,098   
  141,489     

Barclays Bank PLC

    8.125%            BB+         3,718,331   
  239,308     

Citigroup Capital XIII

    6.704%            BBB–         6,078,423   
  411,100     

Citigroup Inc.

    6.875%            BB+         11,321,694   
  115,255     

City National Corporation

    5.500%            Baa2         2,849,104   
  50,000     

Cobank Agricultural Credit Bank, (3)

    6.200%            BBB+         5,132,815   
  60,000     

Fifth Third Bancorp.

    6.625%            Baa3         1,674,000   
  105,202     

First Niagara Finance Group

    8.625%            BB–         2,897,263   
  298,442     

General Electric Capital Corporation

    4.875%            AA+         7,649,068   
  35,370     

General Electric Capital Corporation

    4.875%            AA+         905,472   
  123,947     

General Electric Capital Corporation

    4.700%            AA+         3,148,254   
  369,048     

HSBC Holdings PLC

    8.000%            Baa1         9,595,248   
  97,100     

HSBC Holdings PLC

    6.200%            Baa1         2,493,528   
  40,100     

HSBC USA Inc.

    6.500%            BBB+         1,027,362   
  768,094     

ING Groep N.V.

    7.200%            Baa3         20,154,787   
  728,846     

ING Groep N.V.

    7.050%            Baa3         19,183,227   
  12,636     

JPMorgan Chase & Company

    6.300%            BBB–         329,168   
  80,000     

JPMorgan Chase & Company

    6.100%            BBB–         2,024,800   
  59,635     

JPMorgan Chase & Company

    5.500%            BBB–         1,472,388   
  1,214,400     

PNC Financial Services

    6.125%            Baa2         33,821,040   
  170,000     

Wells Fargo & Company

    5.850%              BBB         4,418,300   
 

Total Banks

                           146,834,183   
      Capital Markets – 4.9%                         
  57,278     

Affiliated Managers Group Inc.

    6.375%            BBB+         1,493,237   
  130,000     

Charles Schwab Corporation

    6.000%            BBB         3,368,300   
  1,284,535     

Deutsche Bank Capital Funding Trust II

    6.550%            BB+         33,166,694   
  47,579     

Deutsche Bank Contingent Capital Trust III

    7.600%            BB+         1,272,262   
  333,629     

Goldman Sachs Group, Inc.

    5.500%            Ba1         8,304,026   
  22,888     

Morgan Stanley Capital Trust III

    6.250%            Baa3         592,799   
  790     

Morgan Stanley

    7.125%            Ba1         22,002   
  146,300     

State Street Corporation

    6.000%            Baa1         3,781,855   
  37,600     

State Street Corporation

    5.900%            Baa1         1,000,912   
  167,817     

State Street Corporation

    5.250%              Baa1         4,292,759   
 

Total Capital Markets

                           57,294,846   
      Diversified Telecommunication Services – 3.3%                         
  184,004     

Qwest Corporation

    7.500%            BBB–         4,820,905   
  129,290     

Qwest Corporation

    7.375%            BBB–         3,336,975   
  381,205     

Qwest Corporation

    7.000%            BBB–         9,957,075   
  74,400     

Qwest Corporation

    7.000%            BBB–         1,964,904   
  216,000     

Qwest Corporation

    6.875%            BBB–         5,572,800   
  97,600     

Qwest Corporation

    6.625%            Baa3         2,448,784   
  192,501     

Qwest Corporation

    6.125%            BBB–         4,789,425   
  204,131     

Verizon Communications Inc.

    5.900%              A–         5,429,885   
 

Total Diversified Telecommunication Services

                           38,320,753   

 

Nuveen Investments     1   


JPS    Nuveen Quality Preferred Income Fund 2
   Portfolio of Investments (continued)    October 31, 2015 (Unaudited)

 

Shares     Description (1)   Coupon            Ratings (2)      Value  
      Electric Utilities – 3.0%                         
  360,400     

Alabama Power Company, (3)

    6.450%            A3       $ 9,584,406   
  52,640     

Duke Energy Capital Trust II

    5.125%            Baa1         1,330,739   
  11,968     

Entergy Arkansas Inc.

    5.750%            A–         302,192   
  186,100     

Entergy Arkansas Inc.

    4.750%            A–         4,496,176   
  58,267     

Entergy Louisiana LLC

    5.875%            A2         1,475,903   
  20,485     

Entergy Louisiana LLC

    5.250%            A2         522,572   
  48,934     

Entergy Louisiana LLC

    4.700%            A2         1,179,309   
  25,406     

Entergy Mississippi Inc.

    6.000%            A–         650,394   
  10,000     

Gulf Power Company, (3)

    5.600%            Baa1         1,026,197   
  150,833     

Integrys Energy Group Inc., (3)

    6.000%            Baa1         3,841,536   
  143,100     

Interstate Power and Light Company

    5.100%            BBB         3,684,825   
  77,506     

NextEra Energy Inc.

    5.700%            BBB         2,002,755   
  150,000     

NextEra Energy Inc.

    5.625%            BBB         3,805,500   
  9,985     

NextEra Energy Inc.

    5.125%            BBB         244,133   
  23,066     

NextEra Energy Inc.

    5.000%              BBB         549,663   
 

Total Electric Utilities

                           34,696,300   
      Food Products – 0.7%                         
  53,400     

Dairy Farmers of America Inc., 144A, (3)

    7.875%            Baa3         5,695,446   
  19,000     

Dairy Farmers of America Inc., 144A, (3)

    7.785%              Baa3         1,931,470   
 

Total Food Products

                           7,626,916   
      Insurance – 12.3%                         
  1,717,889     

Aegon N.V.

    6.375%            Baa1         43,977,957   
  477,920     

Aflac Inc.

    5.500%            Baa1         12,206,077   
  175,500     

Allstate Corporation

    6.625%            BBB–         4,771,845   
  393,000     

Allstate Corporation

    5.100%            Baa1         10,111,890   
  147,456     

American Financial Group

    6.250%            Baa2         3,950,346   
  301,725     

Arch Capital Group Limited

    6.750%            BBB+         8,104,334   
  74,981     

Aspen Insurance Holdings Limited

    7.250%            BBB–         1,998,993   
  210,600     

Aspen Insurance Holdings Limited

    5.950%            BBB–         5,368,194   
  496,950     

Axis Capital Holdings Limited

    6.875%            BBB         13,437,528   
  233,038     

Axis Capital Holdings Limited

    5.500%            BBB         5,825,950   
  409,482     

Delphi Financial Group, Inc., (3)

    7.376%            BB+         10,083,494   
  853     

Protective Life Corporation

    6.250%            BBB         22,246   
  317,875     

Prudential PLC

    6.750%            A–         8,337,861   
  280,000     

Reinsurance Group of America Inc.

    6.200%            BBB         8,114,400   
  66,028     

RenaissanceRe Holdings Limited

    5.375%            BBB+         1,640,136   
  124,009     

Torchmark Corporation

    5.875%            BBB+         3,174,630   
  77,034     

W.R. Berkley Corporation

    5.625%              BBB–         1,919,687   
 

Total Insurance

                           143,045,568   
      Machinery – 1.2%                         
  518,351     

Stanley Black and Decker Inc.

    5.750%              BBB+         13,523,778   
      Media – 0.1%                         
  68,154     

Comcast Corporation

    5.000%              A–         1,796,539   
      Multi-Utilities – 0.2%                         
  104,929     

DTE Energy Company

    5.250%              Baa1         2,577,056   
      Real Estate Investment Trust – 7.2%                         
  5,000     

Alexandria Real Estate Equities Inc., Series B

    6.450%            Baa3         128,350   
  100,000     

DDR Corporation

    6.250%            Baa3         2,578,000   
  98,467     

Digital Realty Trust Inc.

    7.375%            Baa3         2,702,919   
  15,675     

Digital Realty Trust Inc.

    7.000%            Baa3         405,512   
  3,000     

Digital Realty Trust Inc.

    6.350%            Baa3         75,270   
  63,611     

Digital Realty Trust Inc.

    5.875%            Baa3         1,545,111   
  321,594     

Hospitality Properties Trust

    7.125%            Baa3         8,474,002   
  58,372     

Kimco Realty Corporation

    6.900%            Baa2         1,469,807   
  251,438     

Kimco Realty Corporation

    5.625%            Baa2         6,328,694   
  133,372     

National Retail Properties Inc.

    6.625%            Baa2         3,529,023   

 

  2      Nuveen Investments


Shares     Description (1)   Coupon              Ratings (2)      Value  
      Real Estate Investment Trust (continued)                           
  82,301     

Prologis Inc., (3)

    8.540%            BBB–       $ 5,305,847   
  152,633     

PS Business Parks, Inc.

    6.450%            BBB         3,992,879   
  483,895     

PS Business Parks, Inc.

    6.000%            BBB         12,547,397   
  6,371     

PS Business Parks, Inc.

    5.700%            BBB         156,663   
  3,400     

Public Storage, Inc.

    6.500%            A3         87,006   
  200,757     

Public Storage, Inc.

    5.750%            A3         5,161,462   
  193,922     

Public Storage, Inc., (4)

    5.900%            A3         4,993,492   
  213,778     

Public Storage, Inc., (4)

    6.375%            A3         5,718,562   
  104,090     

Public Storage, Inc., (4)

    5.875%            A3         2,712,585   
  18,609     

Public Storage, Inc., (4)

    5.625%            A3         479,368   
  99,006     

Public Storage, Inc., (4)

    5.200%            A3         2,458,319   
  44,071     

Public Storage, Inc., (4)

    5.200%            A3         1,088,994   
  183,646     

Realty Income Corporation

    6.625%            Baa2         4,872,128   
  146,600     

Regency Centers Corporation

    6.625%            Baa2         3,808,668   
  113,899     

Ventas Realty LP

    5.450%            BBB+         3,011,490   
  3,203     

Welltower Inc.

    6.500%                  Baa3         85,040   
 

Total Real Estate Investment Trust

                               83,716,588   
      U.S. Agency – 1.3%                           
  144,000     

Farm Credit Bank of Texas, 144A, (3)

    6.750%                  Baa1         15,142,507   
      Wireless Telecommunication Services – 0.2%                           
  2,150     

Telephone and Data Systems Inc.

    7.000%            BB+         55,040   
  81,428     

Telephone and Data Systems Inc.

    6.875%                  BB+         2,081,300   
 

Total Wireless Telecommunication Services

                               2,136,340   
 

Total $25 Par (or similar) Retail Preferred (cost $517,212,767)

  

                       546,711,374   
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CORPORATE BONDS – 5.0% (3.6% of Total Investments)

  

        
      Banks – 3.0%                           
$ 1,000     

Den Norske Bank

    0.625%         2/18/35         Baa2       $ 617,500   
  1,000     

Den Norske Bank

    0.482%         2/24/37         Baa2         617,500   
  700     

ING Groep N.V.

    6.500%         10/16/65         Ba1         673,313   
  19,000     

JPMorgan Chase & Company

    6.750%         12/31/49         BBB–         20,615,000   
  7,600     

Nordea Bank AB, 144A

    5.500%         9/23/49         BBB         7,463,200   
  5,000     

Societe Generale, Reg S

    8.250%         12/31/49         BB+         5,263,330   
  34,300     

Total Banks

                               35,249,843   
      Capital Markets – 0.2%                           
  1,700     

Macquarie Bank Limited, Reg S

    10.250%         6/20/57         BB+         1,812,610   
      Construction & Engineering – 0.2%                           
  1,800     

Hutchison Whampoa International 12 Limited, 144A

    6.000%         11/07/62         BBB         1,881,004   
      Electric Utilities – 0.2%                           
  2,900     

WPS Resource Corporation

    6.110%         12/01/16         Baa1         2,439,625   
      Insurance – 1.2%                           
  2,800     

AIG Life Holdings Inc., 144A

    7.570%         12/01/45         BBB         3,654,000   
  2,300     

Liberty Mutual Group Inc., 144A

    7.697%         10/15/97         BBB+         2,882,850   
  6,300     

Mitsui Sumitomo Insurance Company Limited, 144A

    7.000%         3/15/72         A–         7,308,000   
  11,400     

Total Insurance

                               13,844,850   
      Multi-Utilities – 0.1%                           
  2,000     

WEC Energy Group, Inc.

    6.250%         5/15/67         Baa1         1,675,000   
      Wireless Telecommunication Services – 0.1%                           
  1,600     

Koninklijke KPN NV, 144A

    7.000%         3/28/73         BB         1,654,591   
$ 55,700     

Total Corporate Bonds (cost $56,607,084)

                               58,557,523   

 

Nuveen Investments     3   


JPS    Nuveen Quality Preferred Income Fund 2
   Portfolio of Investments (continued)    October 31, 2015 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 82.6% (59.5% of Total Investments)

  

  
      Banks – 32.8%                           
  7,400     

Banco Bilbao Vizcaya Argentaria S.A, Reg S

    9.000%         N/A (5)         BB       $ 7,973,870   
  10,980     

Bank of America Corporation

    8.125%         N/A (5)         BB+         11,433,913   
  2,394     

Bank of America Corporation

    8.000%         N/A (5)         BB+         2,495,984   
  10,800     

Bank of America Corporation

    6.500%         N/A (5)         BB+         11,286,108   
  3,400     

Bank One Capital III

    8.750%         9/01/30         Baa2         4,830,574   
  1,600     

Barclays Bank PLC, 144A

    6.860%         N/A (5)         BBB–         1,832,000   
  10,500     

Barclays PLC

    8.250%         N/A (5)         BB+         11,179,403   
  17,575     

Barclays PLC

    7.434%         N/A (5)         BB+         17,343,362   
  1,200     

Chase Capital Trust II, Series B

    0.725%         2/01/27         Baa2         1,026,000   
  20,000     

Chase Capital Trust III, Series C, (6)

    0.777%         3/01/27         Baa2         16,900,000   
  5,400     

Citigroup Capital III

    7.625%         12/01/36         BBB–         6,702,637   
  6,000     

Citigroup Inc.

    8.400%         N/A (5)         BB+         6,690,000   
  5,500     

Citigroup Inc.

    5.950%         N/A (5)         BB+         5,458,750   
  5,500     

Citizens Financial Group Inc., 144A

    5.500%         N/A (5)         BB+         5,403,750   
  3,000     

Credit Agricole SA, 144A

    7.875%         N/A (5)         BB+         3,078,369   
  17,095     

First Union Capital Trust II, Series A

    7.950%         11/15/29         Baa1         22,528,663   
  35,500     

General Electric Capital Corporation

    7.125%         N/A (5)         Baa1         41,712,499   
  3,200     

General Electric Capital Corporation

    6.250%         N/A (5)         Baa1         3,566,720   
  10,000     

Groupe BCPE

    3.300%         N/A (5)         BBB–         8,150,000   
  10,500     

HSBC Bank PLC

    0.688%         N/A (5)         A3         6,090,000   
  5,500     

HSBC Bank PLC

    0.600%         N/A (5)         A3         3,250,500   
  13,850     

HSBC Capital Funding LP, Debt, 144A

    10.176%         N/A (5)         Baa1         20,913,500   
  7,800     

JPMorgan Chase & Company

    6.000%         N/A (5)         BBB–         7,913,100   
  1,400     

JPMorgan Chase & Company

    5.150%         N/A (5)         BBB–         1,347,500   
  2,800     

JPMorgan Chase Capital XXIII

    1.324%         5/15/47         Baa2         2,079,000   
  6,000     

KeyCorp Capital III, (6)

    7.750%         7/15/29         Baa2         7,187,532   
  1,802     

Lloyd’s Banking Group PLC

    7.500%         N/A (5)         BB+         1,914,625   
  6,350     

Lloyd’s Banking Group PLC, 144A

    6.657%         N/A (5)         Ba1         7,112,000   
  6,200     

M&T Bank Corporation

    6.375%         N/A (5)         Baa1         6,399,563   
  26,000     

M&T Bank Corporation

    6.875%         N/A (5)         Baa2         26,113,750   
  10,400     

Nordea Bank AB, 144A

    6.125%         N/A (5)         BBB         10,270,000   
  20,000     

PNC Financial Services Inc.

    6.750%         N/A (5)         Baa2         21,554,200   
  3,400     

Royal Bank of Scotland Group PLC

    7.648%         N/A (5)         BB         4,233,000   
  3,000     

Royal Bank of Scotland Group PLC

    8.000%         N/A (5)         BB–         3,135,000   
  3,000     

Royal Bank of Scotland Group PLC, 144A

    7.500%         N/A (5)         BB–         3,105,000   
  25,600     

Societe Generale, 144A

    8.000%         N/A (5)         BB+         25,864,191   
  2,000     

Societe Generale, 144A

    7.875%         N/A (5)         BB+         2,006,260   
  800     

Societe Generale, 144A

    1.074%         N/A (5)         BB+         736,000   
  2,000     

Societe Generale, 144A

    7.875%         N/A (5)         BB+         2,006,260   
  6,450     

Standard Chartered PLC, 144A

    7.014%         N/A (5)         Baa2         6,966,000   
  20,000     

Wells Fargo & Company

    7.980%         N/A (5)         BBB         21,300,000   
 

Total Banks

                               381,089,583   
      Capital Markets – 4.0%                           
  9,000     

Bank of New York Mellon Corporation

    4.950%         N/A (5)         Baa1         9,000,000   
  11,000     

Charles Schwab Corporation

    7.000%         N/A (5)         BBB         12,787,500   
  14,600     

Credit Suisse Group AG, 144A

    7.500%         N/A (5)         BB+         15,413,074   
  1,200     

Credit Suisse Group AG, 144A

    6.250%         N/A (5)         BB+         1,191,857   
  1,800     

Credit Suisse Guernsey, Reg S

    7.875%         2/24/41         BBB–         1,866,470   
  750     

Goldman Sachs Group Inc.

    5.700%         N/A (5)         Ba1         760,313   
  1,200     

Macquarie PMI LLC, Reg S

    8.375%         N/A (5)         Ba1         1,202,790   
  4,000     

Morgan Stanley

    5.550%         N/A (5)         Ba1         3,995,000   
 

Total Capital Markets

                               46,217,004   
      Diversified Financial Services – 3.3%                           
  3,000     

BNP Paribas, 144A

    7.375%         N/A (5)         BBB–         3,105,000   
  2,861     

Countrywide Capital Trust III, Series B

    8.050%         6/15/27         BBB–         3,565,639   
  23,730     

Rabobank Nederland, 144A

    11.000%         N/A (5)         Baa2         29,514,188   
  2,300     

Voya Financial Inc.

    5.650%         5/15/53         Baa3         2,328,750   
 

Total Diversified Financial Services

                               38,513,577   

 

  4      Nuveen Investments


Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Electric Utilities – 2.3%                           
  15,900     

Electricite de France, 144A

    5.250%         N/A (5)         Baa1       $ 15,820,500   
  5,000     

FPL Group Capital Inc., (6)

    6.650%         6/15/67         BBB         4,040,625   
  7,700     

PPL Capital Funding Inc.

    6.700%         3/30/67         BBB         6,506,500   
 

Total Electric Utilities

                               26,367,625   
      Insurance – 34.1%                           
  800     

Ace Capital Trust II

    9.700%         4/01/30         BBB+         1,170,000   
  6,200     

AG Insurance SA/NV, Reg S

    6.750%         N/A (5)         BBB+         6,677,400   
  6,400     

AIG Life Holdings Inc., (6)

    8.500%         7/01/30         BBB         8,480,000   
  2,000     

Allstate Corporation

    5.750%         8/15/53         Baa1         2,082,500   
  1,200     

Allstate Corporation

    6.500%         5/15/57         Baa1         1,326,000   
  6,805     

American International Group, Inc.

    8.175%         5/15/58         BBB         8,982,600   
  11,350     

AXA SA, (6)

    8.600%         12/15/30         A3         15,542,462   
  9,450     

AXA SA, 144A

    6.380%         N/A (5)         Baa1         10,146,938   
  19,659     

Catlin Insurance Company Limited, 144A

    7.249%         N/A (5)         BBB+         16,857,592   
  4,400     

Chubb Corporation

    6.375%         4/15/37         A3         4,224,000   
  6,500     

Dai-Ichi Life Insurance Company Ltd, 144A

    7.250%         N/A (5)         A–         7,621,250   
  2,500     

Dai-Ichi Life Insurance Company Ltd, 144A

    5.100%         N/A (5)         A–         2,603,125   
  1,200     

Everest Reinsurance Holdings, Inc.

    6.600%         5/15/37         BBB         1,113,000   
  16,150     

Glen Meadows Pass Through Trust, 144A

    6.505%         2/12/67         BBB–         13,969,750   
  2,600     

Great West Life & Annuity Capital I, 144A

    6.625%         11/15/34         A–         2,887,092   
  6,600     

Great West Life & Annuity Insurance Capital LP II, 144A

    7.153%         5/16/46         A–         6,641,250   
  2,488     

Hartford Financial Services Group Inc.

    8.125%         6/15/38         BBB–         2,762,924   
  13,669     

Liberty Mutual Group, 144A, (6)

    7.000%         3/15/37         Baa3         13,105,154   
  10,481     

Liberty Mutual Group, 144A

    7.800%         3/15/37         Baa3         12,288,973   
  2,500     

Lincoln National Corporation

    6.050%         4/20/67         BBB         2,075,000   
  16,600     

MetLife Capital Trust IV, 144A

    7.875%         12/15/37         BBB         20,584,000   
  31,100     

MetLife Capital Trust X, 144A

    9.250%         4/08/38         BBB         43,235,220   
  2,000     

MetLife Inc.

    10.750%         8/01/39         BBB         3,150,000   
  23,754     

National Financial Services Inc.

    6.750%         5/15/37         Baa2         24,347,850   
  8,200     

Nippon Life Insurance Company, 144A

    5.100%         10/16/44         A–         8,548,500   
  4,200     

Oil Insurance Limited, 144A

    3.309%         N/A (5)         Baa1         3,696,000   
  3,750     

Provident Financing Trust I

    7.405%         3/15/38         Baa3         4,239,863   
  28,850     

Prudential Financial Inc., (6)

    5.625%         6/15/43         BBB+         30,191,525   
  6,225     

Prudential Financial Inc.

    5.875%         9/15/42         BBB+         6,598,500   
  1,135     

Prudential Financial Inc.

    8.875%         6/15/38         BBB+         1,294,615   
  14,250     

Prudential PLC, Reg S

    6.500%         N/A (5)         A–         14,428,125   
  29,870     

QBE Cap Funding III Limited, 144A

    7.250%         5/24/41         BBB         33,081,024   
  20,500     

Sompo Japan Insurance, 144A

    5.325%         3/28/73         A–         21,730,000   
  5,000     

Sumitomo Life Insurance Company, 144A

    4.000%         9/20/73         A3         5,630,100   
  9,400     

Swiss Re Capital I, 144A

    6.854%         N/A (5)         A         9,533,950   
  1,400     

Swiss Re Capital I, Reg S

    6.854%         N/A (5)         A         1,419,950   
  1,000     

XL Capital Ltd

    6.500%         N/A (5)         BBB         797,700   
  6,000     

XLIT Limited

    3.687%         N/A (5)         BBB–         4,950,000   
  18,257     

ZFS Finance USA Trust V, 144A

    6.500%         5/09/37         A         18,667,783   
 

Total Insurance

                               396,681,715   
      Machinery – 0.3%                           
  3,450     

Stanley Black & Decker Inc.

    5.750%         12/15/53         BBB+         3,648,375   
      Multi-Utilities – 0.5%                           
  6,400     

Dominion Resources Inc.

    7.500%         6/30/66         BBB         5,728,000   
      Real Estate Investment Trust – 0.2%                           
  2,772     

Sovereign Capital Trusts

    7.908%         6/13/36         Ba1         2,839,373   
      Road & Rail – 1.1%                           
  11,400     

Burlington Northern Santa Fe Funding Trust I

    6.613%         12/15/55         BBB         12,779,400   
      U.S. Agency – 0.2%                           
  1,700     

Farm Credit Bank of Texas, 144A

    10.000%         N/A (5)         Baa1         2,142,000   

 

Nuveen Investments     5   


JPS    Nuveen Quality Preferred Income Fund 2
   Portfolio of Investments (continued)    October 31, 2015 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Wireless Telecommunication Services – 3.8%                           
  36,228     

Centaur Funding Corporation, Series B, 144A

    9.080%         4/21/20         BBB–       $ 44,741,580   
 

Total $1,000 Par (or similar) Institutional Preferred (cost $896,316,872)

  

                       960,748,232   
Shares     Description (1), (7)                           Value  
 

INVESTMENT COMPANIES – 1.2% (0.9% of Total Investments)

  

     
  599,835     

Blackrock Credit Allocation Income Trust IV

           $ 7,515,933   
  395,914     

John Hancock Preferred Income Fund III

                               6,797,843   
 

Total Investment Companies (cost $21,285,098)

                               14,313,776   
 

Total Long-Term Investments (cost $1,496,425,946)

                               1,585,426,405   
Principal
Amount (000)
    Description (1)   Coupon      Maturity              Value  
 

SHORT-TERM INVESTMENTS – 2.5% (1.8% of Total Investments)

  

        
 

REPURCHASE AGREEMENTS – 2.5% (1.8% of Total Investments)

  

        
$ 29,039     

Repurchase Agreement with Fixed Income Clearing Corporation, dated 10/30/15, repurchase price $29,038,727,
collateralized by $29,885,000 U.S. Treasury Bonds,
2.875%, due 8/15/45, value $29,623,506

    0.000%         11/02/15                $ 29,038,727   
 

Total Short-Term Investments (cost $29,038,727)

                               29,038,727   
 

Total Investments (cost $1,525,464,673) – 138.8%

                               1,614,465,132   
 

Borrowings – (40.0)% (8), (9)

                               (465,800,000
 

Other Assets Less Liabilities – 1.2% (10)

                               14,660,610   
 

Net Assets Applicable to Common Shares – 100%

                             $ 1,163,325,742   

Investments in Derivatives as of October 31, 2015

Interest Rate Swaps outstanding:

 

Counterparty    Notional
Amount
     Fund
Pay/Receive
Floating Rate
     Floating Rate Index      Fixed Rate
(Annualized)
     Fixed Rate
Payment
Frequency
     Effective
Date (11)
     Termination
Date
     Unrealized
Appreciation
(Depreciation)
 

JPMorgan

   $ 134,344,000         Receive         1-Month USD-LIBOR-ICE         1.462      Monthly         12/01/15         12/01/20       $ (2,711,585

JPMorgan

     134,344,000         Receive         1-Month USD-LIBOR-ICE         1.842         Monthly         12/01/15         12/01/22         (4,231,438
     $ 268,688,000                                                             $ (6,943,023

Fair Value Measurements

Fair value is defined as the price that would be received upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

 

Level 1 –   Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 –   Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 –   Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).

 

  6      Nuveen Investments


The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of the Fund’s fair value measurements as of the end of the reporting period:

 

      Level 1      Level 2      Level 3      Total  

Long-Term Investments:

           

Convertible Preferred Securities

   $ 5,095,500       $       $       $ 5,095,500   

$25 Par (or similar) Retail Preferred

     482,637,843         64,073,531                 546,711,374   

Corporate Bonds

             58,557,523                 58,557,523   

$1,000 Par (or similar) Institutional Preferred

             960,748,232                 960,748,232   

Investment Companies

     14,313,776                         14,313,776   

Short-Term Investments:

           

Repurchase Agreements

             29,038,727                 29,038,727   

Investments in Derivatives:

           

Interest Rate Swaps*

             (6,943,023              (6,943,023

Total

   $ 502,047,119       $ 1,105,474,990       $       $ 1,607,522,109   
* Represents net unrealized appreciation (depreciation).

Income Tax Information

The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to recognition of premium amortization, timing differences in the recognition of income and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

As of October 31, 2015, the cost of investments (excluding investments in derivatives) was $1,538,043,578.

Gross unrealized appreciation and gross unrealized depreciation of investments (excluding investments in derivatives) as of October 31, 2015, were as follows:

 

Gross unrealized:

          

Appreciation

     $ 107,640,490   

Depreciation

       (31,218,936

Net unrealized appreciation (depreciation) of investments

     $ 76,421,554   

 

Nuveen Investments     7   


JPS    Nuveen Quality Preferred Income Fund 2
   Portfolio of Investments (continued)    October 31, 2015 (Unaudited)

 

For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

 

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.

 

(2) Ratings: Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

 

(3) For fair value measurement disclosure purposes, investment classified as Level 2.

 

(4) Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives.

 

(5) Perpetual security. Maturity date is not applicable.

 

(6) Investment, or a portion of investment, is out on loan. The total value of investments hypothecated as of the end of the reporting period was $68,137,794.

 

(7) A copy of the most recent financial statements for these investment companies can be obtained directly from the Securities and Exchange Commission on its website at http://www.sec.gov.

 

(8) Borrowings as a percentage of Total Investments is 28.9%.

 

(9) The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) as collateral for borrowings. As of the end of the reporting period, investments with a value of $944,976,702 have been pledged as collateral for borrowings.

 

(10) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter derivatives as well as the exchange-cleared and exchange-traded derivatives, when applicable.

 

(11) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract.

 

144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

 

Reg S Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States.

 

REIT Real Estate Investment Trust

 

USD-LIBOR-ICE United States Dollar – London Inter-Bank Offered Rate – Intercontinental Exchange

 

  8      Nuveen Investments


Item 2. Controls and Procedures.

 

  a. The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  b. There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are 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 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT 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)   

Nuveen Quality Preferred Income Fund 2

  
By (Signature and Title)    /s/ Kevin J. McCarthy                                                               
   Kevin J. McCarthy   
   Vice President and Secretary   

Date: December 30, 2015

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)    /s/ Gifford R. Zimmerman                                                        
   Gifford R. Zimmerman   
   Chief Administrative Officer (principal executive officer)   
Date: December 30, 2015      
By (Signature and Title)    /s/ Stephen D. Foy                                                                    
   Stephen D. Foy   
   Vice President and Controller (principal financial officer)   
Date: December 30, 2015