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corresp

August 18, 2011

VIA EDGAR AND E-MAIL

Securities and Exchange Commission

Division of Investment Management

100 F Street, NE

Washington, DC 20549

    Attention:

    Dominic Minore, Esq.

Richard Pfordte, Esq.

    Re:

    Highland Credit Strategies Fund (the “Trust”)

Pre-Effective Amendment No. 3 to Registration Statement on Form N-2

File Nos. 333-173004 and 811-21869

Dear Mr. Minore:

On August 11, 2011, you provided to my colleague, Laurel Neale, via telephone, comments of the
staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to the Trust’s Pre-Effective Amendment No. 3 to Registration Statement on Form N-2 filed
with the Securities and Exchange Commission (the “Commission”) on July 29, 2011 (File Nos.
333-173004 and 811-21869) (the “Registration Statement”). As you indicated during your
telephone conversation, the Staff has agreed to accept the Trust’s responses and
requested additional exhibits as a Correspondence filing on EDGAR, in order to save the Trust from
the expense of filing another pre-effective amendment.

Please find below the Trust’s responses to the Staff’s comments. For reference purposes, the
comments provided during the August 11, 2011 telephone conversation are reproduced in bold in
numerical sequence in this letter, and the corresponding responses of the Trust are shown below
such comments.

Prospectus

    1.

    Description of Capital Structure — The disclosure on page 82 of the
Registration Statement describes that “pursuant to Section 3.8 of the Trust’s Agreement
and Declaration of Trust, the Board of Trustees of the Trust has the power to cause
each holder of common or preferred shares of the Trust to pay directly, in advance or
arrears, for charges of distribution, of the custodian or transfer, shareholder
servicing or similar agent, a pro rata

    amount as determined from time to time by the Board of Trustees of the Trust, by
setting off such charges due from such shareholder from declared but unpaid
dividends or distributions owed such shareholder and/or by reducing the number of
shares in the account of such shareholder by that number of full and/or fractional
shares which represents the outstanding amount of such charges due from such
shareholder.” Please supplementally confirm to the Staff that the Trust will not
invoke such a power without first informing the Staff and obtaining Staff approval.

    RESPONSE TO COMMENT 1

    The Trust supplementally confirms that it will inform the Staff and obtain its
approval prior to any exercise of power pursuant to Section 3.8 of the Trust’s
Agreement and Declaration of Trust, as described on page 82 of the Registration
Statement. We understand that the Staff desires this prior
notification so that the Staff can discuss with the Trust the accounting treatment for any such action.

Exhibits

    2.

    Please provide the following exhibits:

    (d)(2) — Form of Subscription Certificate

    (h)(1) — Form of Underwriting Agreement

    (h)(2) — Form of Dealer Manager Agreement

    (k)(7) — Form of Subscription Agent Agreement

    On this particular occasion, the Trust may provide these exhibits as a
Correspondence filing, rather than in connection with a Pre-Effective Amendment.
Please file the final forms of these exhibits at the time of any offering pursuant
to the Registration Statement.

    RESPONSE TO COMMENT 2

    The exhibits are attached as Exhibits A, B, C and D,
respectively, to this letter. The Trust supplementally confirms to the Staff that
it will file with the Commission the final forms of the applicable documents
corresponding to these exhibits at the time of a takedown under the Registration
Statement, either as part of a Rule 497 prospectus or by means of an automatically
effective post-effective amendment to the Registration Statement pursuant to Rule
462(d) under the Securities Act of 1933, as amended.

    3.

    Exhibit (l): Opinion and Consent of Special Delaware Counsel to the Trust
—Please supplementally confirm that when the Trust files a firm opinion and consent of
counsel with respect to an offering pursuant to the Registration Statement, such
opinion will exclude all of the assumptions in the current opinion that will no longer
be necessary at that time, in addition to the

- 2 -

    assumption relating to due authorization of the securities. As an example, please
see the opinion filed in connection with Fifth Street Finance Corp.’s registration
statement filed on June 4, 2010 (File No. 333-166012).

    RESPONSE TO COMMENT 3

    The Trust supplementally confirms that it will file an updated Opinion and Consent
of Counsel prior to the closing of each offering pursuant to the Registration
Statement. Such Opinion and Consent of Counsel will exclude all of the assumptions
in the current opinion that will no longer be necessary at that time.

*    *    *

- 3 -

          The Trust has authorized us to acknowledge on its behalf that (i) it is responsible for the
adequacy and accuracy of the disclosure in the filing; (ii) Staff comments or changes to disclosure
in response to Staff comments do not foreclose the Commission from taking any action with respect
to the filing; (iii) the action of the Commission or the Staff, acting pursuant to delegated
authority, in declaring the filing effective, does not relieve the Trust from its full
responsibility for the adequacy and accuracy of the disclosure in the filing; and (iv) it is the
Staff’s view that the Trust may not assert Staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

          I hope that the foregoing has been responsive to your comments. If you should have any
questions about this letter or require any further information, please call me at 212-596-9883.
Thank you for your assistance.

    Very truly yours,

Lauren D. Macioce

    cc:

    Gregory D. Sheehan

Michael G. Doherty

Brian Mitts

- 4 -

Exhibit A

Exhibit (d)(2) to the Registration Statement — Form of Subscription Certificate

    Control No.

    Maximum Primary Subscription Shares Available:

Number of Rights Issued:

SUBSCRIPTION CERTIFICATE

THE OFFER EXPIRES AT [          ], EASTERN TIME ON [          ] (unless extended)

HIGHLAND CREDIT STRATEGIES FUND

SUBSCRIPTION RIGHTS FOR COMMON SHARES OF BENEFICIAL INTEREST

IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST COMPLETE THIS CARD AND RETURN IT TO THE SUBSCRIPTION
AGENT.

Dear Shareholder:

You are entitled to exercise the Rights issued to you as of [          ], the Record Date for the
Offer, to subscribe for the number of common shares of beneficial interest of Highland Credit
Strategies Fund (the “Trust”) shown on this Subscription Certificate pursuant to the primary
subscription upon the terms and conditions specified in the Trust’s prospectus supplement dated [
] (the “Prospectus”). The terms and conditions of the Offer set forth in the Prospectus
are incorporated by reference herein. Capitalized terms not defined herein have the meanings
attributed to them in the Prospectus. As a Rights holder, you are entitled to purchase [    ] common
share[s] for each [    ] Right[s] you exercise. If you hold fewer than [    ] Rights, you are
entitled to subscribe for one common share. In accordance with the over-subscription privilege, as
a Rights holder, you also are entitled to subscribe for additional common shares, subject to
certain limitations and subject to allotment, if common shares remaining after the exercise of
Rights pursuant to the primary subscription are available and you have fully exercised all Rights
issued to you. To the extent that sufficient common shares are not available to honor all
over-subscription requests, unsubscribed common shares will be allocated pro-rata among those
Record Date Shareholders who over-subscribe based on the number of shares of the Trust’s common
shares they owned on the Record Date. The Trust will not offer or sell any common shares that are
not subscribed for pursuant to the primary subscription or the over-subscription privilege.

In order to exercise your Rights, you must present to [the subscription agent], by [    ],
Eastern time, on [          ] (unless extended, the “Expiration Date”), either (1) a properly
completed and executed subscription certificate and a money order or check drawn on a bank located
in the United States of America and payable to Highland Credit Strategies Fund for an amount equal
to the number of Shares subscribed for under the primary subscription and over-subscription (if
applicable) multiplied by the estimated Subscription Price of [], or (2) a Notice of Guaranteed
Delivery guaranteeing delivery of (i) a properly completed and executed subscription certificate
and (ii) a money order or check drawn on a bank located in the United States of America and payable
to Highland Credit Strategies Fund for an amount equal to the number of common shares subscribed
for under the primary subscription and over-subscription (if applicable) multiplied by the
estimated Subscription Price of $[ ].

If a Notice of Guaranteed Delivery is used, a properly completed subscription certificate, together
with payment in full, as described above, must be received by [the subscription agent] no later
than [          ], unless the Offer is extended. See “Summary of the Terms of the Rights
Offering” in the Prospectus.

No later than [          ], [the subscription agent] will send you a confirmation (or, if you
own your shares through a depository or nominee, to such depository or nominee), showing (i) the
number of common shares acquired pursuant to the primary subscription, (ii) the number of common
shares, if any, acquired pursuant to the over-subscription privilege, (iii) the per share and total
purchase price for the common shares, and (iv) any additional amount payable by you or any excess
to be refunded to you. Any excess payment to be refunded will be mailed as promptly as practicable.

A-1

Participants in the Trust’s dividend reinvestment plan (the “Plan”) will have any common shares
acquired pursuant to the primary subscription or over-subscription privilege credited to their
shareholder dividend reinvestment accounts in the Plan. Shareholders whose common shares are held
of record by Cede & Co. or by any other depository or nominee on their behalf or their
broker-dealers’ behalf will have any common shares acquired during the subscription period credited
to the account of Cede & Co. or other depository or nominee. Common shares acquired pursuant to the
over-subscription privilege will be certificated and share certificates representing these common
shares will be sent directly to Cede & Co. or other depository or nominee. With respect to all
other shareholders, share certificates for all common shares acquired pursuant to the primary
subscription or over-subscription privilege will be mailed promptly after payment for the common
shares subscribed for has cleared.

SAMPLE CALCULATION:

To subscribe for your primary subscription shares please complete line “A” on the card below.

[ ] Shares = [ ] Rights. [ ] Rights divided by [ ] = [ ] primary subscription shares. The
maximum number of primary subscription shares would be [ ]. Fractional shares will be dropped. If
you hold less than [ ] Rights in total, you can subscribe for one common share.

    A.

    [ ]

    /[ ] =

    [ ]

    X

    $[ ]

    =

    $[ ]

    (No. of Rights)

    (No. of shares)

    (Estimated

subscription price)

    (Payment to be
remitted)

Please note that $[ ] is an estimated Subscription Price only. The Subscription Price will be
determined on [ ], the Expiration Date (unless extended) and could be higher or
lower than the estimated Subscription Price depending on changes in the net asset value and the
price of a common share.

To subscribe for any common shares pursuant to the over-subscription privilege please complete line
“B” below.

Please Note: Only Record Date Shareholders who have exercised their primary subscription in full
may apply for common shares pursuant to the over-subscription privilege.

METHOD OF EXERCISE OF RIGHTS:

    By First Class Mail:

    By Express Mail or Overnight

    By Hand:

    Courier:

    [Subscription Agent]

[Address]

[Address]

[Address]

    [Subscription Agent]

[Address]

[Address]

[Address]

    [Subscription Agent]

[Address]

[Address]

[Address]

Confirm by Telephone: [ ]-[  ]-[  ]-[   ]. Delivery to an address other than one of the
addresses listed above will not constitute valid delivery.

These Subscription Rights Are Transferable

Expiration Date ([       ] unless extended)

A-2

PLEASE FILL IN ALL APPLICABLE INFORMATION

    A.

    Primary
Subscription

([ ] Right[s] = [ ]
Share[s])

    (Rights

Exercised)

    ÷

    [ ]

    =

    (No. of
Shares
requested
rounded
down to
nearest
whole
shares)

    x

    $

    (Estimated

Subscription
Price)

    =

    $

    B.

    Over-
Subscription
Privilege

    (No. of
Shares)

    x

    $

    (Estimated

Subscription
Price)

    =

    $

    C.

    Amount of Check
Enclosed (A + B)
(or amount in
Notice of
Guaranteed
Delivery)

    =

    $

    D.

    The following
broker-dealer is
being designated as
having been
instrumental in the
exercise of this
Subscription Right:

    [          ]

Representative Name

_________

    E.

    Sell any remaining

Rights o

    F.

    Sell all of my

Rights o

SECTION 1. TO SUBSCRIBE: I hereby irrevocably subscribe for the number of common shares indicated
as the total of A and B hereon upon the terms and conditions specified in the Prospectus relating
thereto, receipt of which is acknowledged. I hereby agree that if I fail to pay for the common
shares for which I have subscribed (or are deemed to have subscribed for as set forth above), the
Fund may exercise any of the remedies set forth in the Prospectus.

TO SELL: If I have checked either the box on line E or line F, I authorize the sale of Rights by
the Subscription Agent according to the procedures described in the Prospectus.

A-3

Signature(s) of Subscriber(s)/Seller(s)

Address for delivery of shares if other than shown on front

If permanent change of address, check here [    ]

Please give your telephone number:                (       )

Please give your e-mail address:

SECTION 2. TO TRANSFER RIGHTS (except pursuant to E or F above): For value received, ___of the
Rights represented by this Subscription Certificate are assigned to:

    (Print Full Name of Assignee)

    Social Security Number

(Print Full Address)

(Print Full Address)

Signature(s) of Assignor(s)

IMPORTANT: The signature(s) must correspond in every particular, without alteration, with the
name(s) as printed on your Subscription Certificate.

Your Signature must be guaranteed by an Eligible Guarantor Institution as that term is defined
under Rule 17Ad-15 of the Securities Exchange Act of 1934, which may include:

a) a commercial bank or trust company, or

b) a member firm of a domestic stock exchange, or

c) a savings bank or credit union.

Signature

Guaranteed

    By

    (name of Bank or Firm)

    (Signature of Officer and Title)

A-4

Exhibit B

Exhibit (h)(1) to the Registration Statement — Form of Underwriting Agreement

_______________ Shares

HIGHLAND CREDIT STRATEGIES FUND

COMMON SHARES OF BENEFICIAL INTEREST

(Par Value $0.001 Per Share)

UNDERWRITING AGREEMENT

     ____________, ____

[       ]

Ladies and Gentlemen:

     Highland Credit Strategies Fund, a statutory trust organized under the laws of Delaware (the
“Fund”), is a non-diversified closed-end management investment company registered under the
Investment Company Act of 1940, as amended (the “Investment Company Act”). The Fund proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”)
___________of its common shares of