Annual Report by Investment Company (Form N-CSR)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-23674

TAX-FREE HIGH GRADE PORTFOLIO BOND FUND

FOR PUERTO RICO RESIDENTS, INC.

(Exact name of Registrant as specified in charter)

American International Plaza Building - Tenth Floor

250 Muñoz Rivera Avenue

San Juan, Puerto Rico 00918

(Address of principal executive offices)(Zip code)

Liana Loyola

Secretary

American International Plaza Building - Tenth Floor

250 Muñoz Rivera Avenue

San Juan, Puerto Rico 00918

(Name and Address of Agent for Service)

Copies to:

Registrant's telephone number, including area code: (787) 250-3600

Date of fiscal year end:  September 30

Date of reporting period:  October 1, 2024 - September 30, 2025

Item 1. Report to Shareholders.

(a)   The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the "1940 Act").

TAX-FREE HIGH GRADE PORTFOLIO BOND FUND FOR PUERTO RICO RESIDENTS, INC.

Table of Contents

LETTER TO SHAREHOLDERS

November 14, 2025

Dear Shareholders:

Tax-Free High Grade Portfolio Bond Fund for Puerto Rico Residents, Inc. (the "Fund") is pleased to present this Letter to Shareholders for the fiscal year ended September 30, 2025.

After intense debate about the health of the economy and progress in the fight to lower inflation, the Federal Reserve Board (the "Fed") commenced lowering interest rates at its September 2024 meeting. Overall, the Fed lowered the federal funds rate by a total of 1.00% during the last three meetings of calendar 2024. However, the Fed did not lower interest rates again until its September 2025 meeting. The federal funds rate closed the Fund's fiscal year at 4.00% - 4.25%.

The yield curve steepened 0.40% during the year. The yield of the 2-year U.S. treasury note decreased 0.03% during the fiscal year, closing at 3.61% versus 3.64% at the beginning of fiscal year in response to cuts in the federal funds rate. However, the yield of the 10-year U.S. Treasury note increased 0.37%, closing the fiscal year at 4.15% versus 3.78% at the beginning of the fiscal year as it was more focused on the recent higher inflation numbers.

The U.S. government shut down at midnight on September 30, 2025. While the equity markets seem unphased by the event, treasury yields have trended lower. The shutdown became the longest in history and ended on November 13, 2025. Trade tensions resurfaced when China announced revised rare earth mineral export policies and President Trump threatened to increase tariffs on Chinese imports. Equity markets dropped and volatility spiked. A one-year agreement to resolve the issues was announced after the meeting on October 29, 2025. Equity markets have recovered and volatility has subsided.

The Fed cut the federal funds rate by 0.25% at its October 29, 2025, meeting. The federal funds rate target range decreased to 3.75% - 4.00%. The Fed statement acknowledged both the slowdown in job creation and the increase in inflation that "remains somewhat elevated". Uncertainty about the economic outlook also remains elevated. The yield of the 10-year note decreased slightly to 4.08% as of October 31, 2025.

Uncertainty over the timing of Fed policy, the implementation of tariffs, the ongoing restructuring of the federal government, the shape of the yield curve, and elevated geopolitical risks continue to present a challenging environment for the management of the Fund. Notwithstanding, the investment adviser remains committed to seeking investment opportunities within allowed parameters while

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providing professional management services to the Fund for the benefit of its shareholders.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12- month period ended September 30, 2025. The views and opinions in the letter were current as of November 14, 2025. They are not guarantees of future performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors, and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program.

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MANAGEMENT DISCUSSION OF

FUND PERFORMANCE

REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940

The Fund is a corporation organized under the laws of the Commonwealth of Puerto Rico ("Puerto Rico") and is registered as a closed-end investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), as of May 14, 2021. Prior thereto, the Fund was registered under the Puerto Rico Investment Companies Act of 1954, as amended.

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (Pub. L. No. 115-174) was signed into law and amended the 1940 Act to repeal the exemption from its registration of investment companies created under the laws of Puerto Rico, the U.S. Virgin Islands, or any other U.S. possession under Section 6(a)(1) thereof. The repeal of the exemption took effect on May 24, 2021. Upon registration under the 1940 Act, the Fund must now register its future offerings of securities under the Securities Act of 1933, as amended (the "1933 Act"), absent an available exception. There is limited trading in Fund shares, which are not registered under the 1933 Act, and are only traded via private transactions. The Fund has suspended the issuance of Tax-Exempt Secured Obligations ("TSOs") pending registration under the 1933 Act.

FUND PERFORMANCE

The following table shows the Fund's performance for the fiscal year ended September 30, 2025, vs the Bloomberg Municipal Bond Index.

Past performance is not predictive of future results.

Performance calculations do not reflect any deduction of taxes that a shareholder may have to pay on Fund distributions or any commissions payable on the sale of Fund shares. The return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value ("NAV") on the ex-dividend dates. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted.

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Growth of an assumed $10,000 investment as of September 30, 2025*

* While the Fund commenced operations on January 23, 2004, it did not register with the SEC under the 1940 Act until May 14, 2021.

The following table provides summary data on the Fund's dividends for the fiscal year based on NAV and market price as of September 30, 2025:

The Fund seeks to pay monthly dividends out of its net investment income. To permit the Fund to maintain a more stable monthly dividend, the Fund may pay dividends that are more or less than the amount of net income earned during the year. See Note 9 of the financial statements for more details.

The Fund's net investment income was $7.6 million versus $7.1 million last year. The dividend paid was $7.7 million versus $7.9 million last year. The Fund paid out in dividends all of its net investment income for the year plus approximately $150,000 in undistributed net investment income from prior years.

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The Fund's investment portfolio is comprised of various security classes. UBS Asset Managers of Puerto Rico, a division of UBS Trust Company of Puerto Rico (the "Investment Adviser") considers numerous characteristics of each asset class to meet the Fund's investment objective. A large number of the securities in which the Fund invests have call dates prior to maturity. The Fund also owns mortgage-backed securities ("MBS"). MBS are subject to prepayments or refinancing of the underlying mortgage instruments. As a result, the average life may be substantially less than the original maturity.

The chart below reflects the breakdown of the Fund's investment portfolio (based on % of Total Investments) as of September 30, 2025. For details of the security categories below, please refer to the enclosed Schedule of Investments.

The largest Puerto Rico holdings in the portfolio, representing 12.27%, are the new-issue Puerto Rico Sales Tax Financing Corporation ("COFINA") bonds. The newly exchanged bonds are secured by 53.65% of the pledged sales and use tax through 2058, which amounts to $552.9 million for fiscal year 2026, and a 4% increase each year, capping out at $992.5 million in fiscal year 2041. The valuation of the COFINA bonds decreased in response to higher long-term yields. Transfers to the bonds' trustee for the redemption of the bonds for fiscal 2026 commenced on July 1, 2025. On October 21, 2025, COFINA announced that 100% of the required Puerto Rico sales and use tax ("IVU") collections had been transferred to the bond trustee.

The second largest holding of Puerto Rico securities are Government National Mortgage Association ("GNMA"), Federal National Mortgage Association ("FNMA"), and Federal Home Loan Mortgage Corporation ("FHLMC") MBS. The MBS balance decreased to approximately 5.82% of the total investment portfolio mostly from repayments in the underlying mortgages. The valuation of the MBS

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was similar to last year. Most of the MBS have final maturities between seven and ten years and shorter average lives.

The Fund's U.S. holdings are comprised of U.S. agencies and U.S. municipal bonds representing 51.97% and 29.94%, respectively of the portfolio. The valuation of the U.S. agencies and municipal bonds decreased during the year in response to higher yields on the 10-year U.S. treasury note.

There were approximately $9.8 million in U.S. agencies calls and municipal bond maturities. The proceeds were used to reinvest in U.S. agency notes. The Fund also used leverage to purchase additional U.S. agency notes.

The NAV of the Fund decreased $0.16 during the year from $6.74 at the beginning of the year to $6.58 at fiscal year-end. There was a decrease in the valuation of the portfolio. At fiscal year-end the Fund's indicated market value was a 43.8% discount to its NAV, a decrease from the discount of 47.6% at fiscal year-end 2024.

FUND HOLDINGS SUMMARIES

The following tables show the allocation of the Fund's portfolio (based on % of Total Investments) using various metrics as of fiscal year end. It should not be construed as a measure of performance for the Fund itself. The portfolio is actively managed, and holdings are subject to change.

The following table shows the ratings of the Fund's portfolio securities (based on % of Total Investments) as of September 30, 2025. The ratings used are the highest rating given by one of the three nationally recognized rating agencies, Fitch Ratings (Fitch), Moody's Investors Service (Moody's), and S&P Global Ratings (S&P). Ratings are subject to change.

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During the Fund's fiscal year, the United States lost its last remaining sovereign AAA rating when Moody's downgraded it to AA1, citing as rational "the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns." Both S&P and Fitch had already downgraded the rating to their equivalent rating of AA+.

The "Not-Rated" category is comprised of the new-issue COFINA bonds issued in 2019. The bonds were issued without a rating from any of the rating agencies pending a determination by the Board of Directors of COFINA on the appropriate timing to apply for such rating. As of September 30, 2025, the COFINA Board had not applied for a rating.

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell, or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not consider the specific objectives or circumstances of any particular investor or suggest any specific course of action. Investment decisions should be made based on an investor's objectives and circumstances and in consultation with his or her financial advisors. The views expressed herein are those of the Investment Adviser as of the date of this report. The Fund disclaims any obligation to update publicly the views expressed herein.

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FUND LEVERAGE

THE BENEFITS AND RISKS OF LEVERAGE

As a fundamental policy the Fund may only issue senior securities, as defined in the 1940 Act ("Senior Securities"), representing indebtedness to the extent that immediately after their issuance, the value of its total assets, less all the Fund's liabilities and indebtedness that are not represented by Senior Securities being issued or already outstanding, is equal to or greater than the total of 300% of the aggregate par value of all outstanding indebtedness issued by the Fund. The Fund may only issue Senior Securities representing preferred stock to the extent that immediately after any such issuance, the value of its total assets, less all the Fund's liabilities and indebtedness that are not represented by Senior Securities being issued or already outstanding, is equal to or greater than the total of 200% of the aggregate par value of all outstanding preferred stock (not including any accumulated dividends or other distributions attributable to such preferred stock) issued by the Fund. These asset coverage requirements must also be met any time the Fund pays a dividend or makes any other distribution on its issued and outstanding shares of common stock or any shares of its preferred stock (other than a dividend or other distribution payable in additional shares of common stock) as well as any time the Fund repurchases any shares of common stock, in each case after giving effect to such repurchase of shares of common stock or issuance of preferred stock, debt securities, or other forms of leverage in order to maintain asset coverage at the required levels. To the extent necessary, the Fund may purchase or redeem preferred stock, debt securities, or other forms of leverage in order to maintain asset coverage at the required levels. In such instances, the Fund will redeem Senior Securities, as needed, to maintain such asset coverage.

Subject to the above percentage limitations, the Fund may also engage in certain additional borrowings from banks or other financial institutions through reverse repurchase agreements. In addition, the Fund may also borrow for temporary or emergency purposes in an amount of up to an additional 5% of its total assets.

Leverage can produce additional income when the income derived from investments financed with borrowed funds exceeds the cost of such borrowed funds. In such an event, the Fund's net income will be greater than it would be without leverage. On the other hand, if the income derived from securities purchased with borrowed funds is not sufficient to cover the cost of such funds, the Fund's net income will be less than it would be without leverage.

To obtain leverage, the Fund may enter into collateralized reverse repurchase agreements with major institutions in the U.S. and/or issue TSOs in the local market. Both, if applicable, are accounted for as collateralized borrowings in the financial statements. Typically, the Fund borrows for approximately 30-90 days at

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a variable borrowing rate based on short-term rates. The TSO program was suspended in May 2021, pending registration under the 1933 Act.

As of September 30, 2025, the Fund had the following leverage outstanding:

Refer to the Schedule of Investments for details of the securities pledged as collateral and to Note 5 to Financial Statements for further details on outstanding leverage during the year. Fund leverage increased by $29,435,072 during the year.

*Asset Leverage ratio: The sum of (i) the aggregate principal amount of outstanding TSOs plus (ii) the aggregate principal amount of other borrowings by the Fund, including borrowings resulting from the issuance of any other series and other forms of leverage, and from the compliance date of Rule 18f-4 going forward, including borrowings in the form of reverse repurchase agreements, divided by the fair market value of the assets of the Fund on any given day.

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The following table includes selected data for a share outstanding throughout the periods and other performance information derived from the financial statements. It should be read in conjunction with the financial statements and notes thereto.

The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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