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 811-22874
FIRST EAGLE SENIOR LOAN FUND
(Exact name of registrant as specified in charter)
227 West Monroe Street, Suite 3200
Chicago, IL 60606
(Address of principal executive offices) (Zip code)
Sabrina Rusnak-Carlson
500 Boylston Street, Suite 1250
Boston, MA 02116
(Name and address of agent for service)
Copies of Communications to:
Nicole M. Runyan
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Registrant's telephone number, including area code: (312) 702-8199
Date of fiscal year end: December 31
Date of reporting period: June 30, 2021
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR 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 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. Reports to Stockholders.
(a) | The Report to Shareholders is attached herewith. |
President, First Eagle Senior Loan Fund
First Eagle Senior Loan Fund Schedule of Investments† (unaudited) | | | June 30, 2021 | | |||||||||
Investments | | | Principal | | | Value | | ||||||
SENIOR LOANS(a) – 0.6% (1.0% of Total Investments) | | | | ||||||||||
Telecommunications – 0.6% | | | | ||||||||||
GTT Communications, Inc. – Closing Date Term Loan – First Lien, 2.860% (3-Month USD LIBOR + 2.750%), 05/31/25 | | | | | | | | | | | | | |
(Cost $772,428) | | | | $ | 866,599 | | | | | $ | 689,848 | | |
MONEY MARKET FUND – 58.8% (99.0% of Total Investments) | | | | | | | | | | | | | |
| | | Shares | | | | | | | | |||
Morgan Stanley Institutional Liquidity Treasury Portfolio – Institutional Share Class, 0.01%(b)(c) | | | | | | | | | | | | | |
(Cost $68,706,249) | | | | | 68,706,249 | | | | | | 68,706,249 | | |
Total Investments in Securities – 59.4% | | | | ||||||||||
(Cost $69,478,677) | | | | | | | | | | | 69,396,097 | | |
Other Assets in Excess of Liabilities – 40.6% | | | | | | | | | | | 47,414,943 | | |
Net Assets – 100.0% | | | | | | | | | | $ | 116,811,040 | | |
SUMMARY OF SCHEDULE OF INVESTMENTS | | | % of Net Assets | | |||
Telecommunications | | | | | 0.6% | | |
Money Market Fund | | | | | 58.8 | | |
Total Investments | | | | | 59.4 | | |
Other Assets in Excess of Liabilities | | | | | 40.6 | | |
Net Assets | | | | | 100.0% | | |
First Eagle Senior Loan Fund Statement of Assets and Liabilities | | | June 30, 2021 (unaudited) | | |||
ASSETS | | | | | | | |
Investments, at value (cost $69,478,677) | | | | $ | 69,396,097 | | |
Cash | | | | | 109,782 | | |
Receivable for investments sold | | | | | 63,233,296 | | |
Interest receivable | | | | | 215,091 | | |
Due from advisor (Note 5) | | | | | 144,321 | | |
Other assets | | | | | 67,141 | | |
Total Assets | | | | | 133,165,728 | | |
LIABILITIES | | | | | | | |
Payable for securities purchased | | | | | 15,203,880 | | |
Advisory fee payable (Note 5) | | | | | 294,662 | | |
Other accrued expenses | | | | | 856,146 | | |
Total Liabilities | | | | | 16,354,688 | | |
Commitments and Contingencies (Note 9) | | | | | | | |
Net Assets | | | | $ | 116,811,040 | | |
COMPONENTS OF NET ASSETS | | | | | | | |
Paid-in-capital | | | | $ | 140,912,680 | | |
Total distributable loss | | | | | (24,101,640) | | |
Net Assets | | | | $ | 116,811,040 | | |
Common Shares Outstanding (unlimited shares authorized; $0.001 per share par value) | | | | | 7,418,990 | | |
Net Asset Value Per Share | | | | $ | 15.74 | | |
First Eagle Senior Loan Fund Statement of Operations | | | For the Six Months Ended June 30, 2021 (unaudited) | | |||
INVESTMENT INCOME: | | | | | | | |
Interest | | | | $ | 4,089,558 | | |
Dividends | | | | | 3,098 | | |
Total Investment Income | | | | | 4,092,656 | | |
EXPENSES: | | | | | | | |
Professional fees | | | | | 720,506 | | |
Advisory fees (Note 5) | | | | | 643,968 | | |
Interest expense and fees on borrowings (Note 4) | | | | | 534,530 | | |
Trustees’ fees and expenses (Note 5) | | | | | 64,289 | | |
Administration fees | | | | | 62,731 | | |
Insurance expense | | | | | 48,258 | | |
Printing and mailing expense | | | | | 20,820 | | |
Custodian fees | | | | | 12,397 | | |
NYSE listing fee | | | | | 11,745 | | |
Transfer Agent fees | | | | | 11,508 | | |
Other expenses | | | | | 59,069 | | |
Total Expenses | | | | | 2,189,821 | | |
Less expense waivers and reimbursements (Note 5) | | | | | (203,689) | | |
Net Expenses | | | | | 1,986,132 | | |
Net Investment Income | | | | | 2,106,524 | | |
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND DELAYED DRAW LOAN COMMITMENTS: | | | | | | | |
Net realized gain investments | | | | | 1,395,953 | | |
Net change in unrealized appreciation (depreciation) Investments | | | | | 1,036,985 | | |
Foreign currency translation | | | | | (1,948) | | |
Delayed draw loan commitments | | | | | (95,627) | | |
Net realized and change in unrealized gain on investments, foreign currency translations and delayed draw loan commitments | | | | | 2,335,363 | | |
Net Increase in Net Assets from Operations | | | | $ | 4,441,887 | | |
First Eagle Senior Loan Fund Statement of Changes in Net Assets | | | Six Months Ended June 30, 2021 (unaudited) | | | Year Ended December 31, 2020 | | ||||||
OPERATIONS | | | | | | | | | | | | | |
Net investment income | | | | $ | 2,106,524 | | | | | $ | 7,016,431 | | |
Net realized gain (loss) on investments | | | | | 1,395,953 | | | | | | (14,771,855) | | |
Net change in unrealized appreciation on investments, foreign currency translations and delayed draw loan commitments | | | | | 939,410 | | | | | | 5,654,341 | | |
Net increase (decrease) in net assets from operations | | | | | 4,441,887 | | | | | | (2,101,083) | | |
Distributions to shareholders* | | | | | | | | | | | | | |
Distributions from distributable earnings | | | | | (3,115,975) | | | | | | (7,357,670) | | |
Distribution of return of capital | | | | | — | | | | | | (328,404) | | |
Total distributions to shareholders | | | | | (3,115,975) | | | | | | (7,686,074) | | |
Net Increase (Decrease) in Net Assets | | | | | 1,325,912 | | | | | | (9,787,157) | | |
NET ASSETS: | | | | | | | | | | | | | |
Beginning of period | | | | $ | 115,485,128 | | | | | $ | 125,272,285 | | |
End of period | | | | $ | 116,811,040 | | | | | $ | 115,485,128 | | |
First Eagle Senior Loan Fund Statement of Cash Flows | | | For the Period Ended June 30, 2021 | | |||
Cash Flows From Operating Activities: | | | | | | | |
Net increase in net assets from operations | | | | $ | 4,441,887 | | |
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: | | | | | | | |
Purchases of investments | | | | | (106,949,225) | | |
Proceeds from sales of investments | | | | | 266,393,012 | | |
Net increase in money market funds | | | | | (58,138,598) | | |
Net change in unrealized appreciation on investments | | | | | (1,036,985) | | |
Net change in unrealized depreciation on foreign currency translation | | | | | 1,948 | | |
Net accretion/amortization of premium or discount | | | | | (290,772) | | |
Net increase in realized gains from principal paydowns | | | | | (360,909) | | |
Net change in unrealized depreciation on delayed draw loan commitments | | | | | 95,627 | | |
Net realized gain on investments | | | | | (1,395,953) | | |
Increase in receivable for investments sold | | | | | (59,446,925) | | |
Decrease in interest receivable | | | | | 132,203 | | |
Decrease in prepaid and other expenses | | | | | 4,452 | | |
Decrease in due from advisor | | | | | 254,362 | | |
Increase in other asset | | | | | (4,090) | | |
Increase in payable for investments purchased | | | | | 4,174,099 | | |
Increase in advisory fee payable | | | | | 185,916 | | |
Increase in other accrued expenses | | | | | 527,656 | | |
Net cash provided by operating activities | | | | | 48,587,705 | | |
Cash Flows from Financing Activities: | | | | | | | |
Repayment of borrowings | | | | | (45,500,000) | | |
Distributions paid | | | | | (3,115,975) | | |
Net cash used by financing activities | | | | | (48,615,975) | | |
Net decrease in cash | | | | | (28,270) | | |
Cash, beginning of period | | | | | 138,052 | | |
Cash, end of period | | | | $ | 109,782 | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash paid for interest on borrowings | | | | $ | 394,997 | | |
First Eagle Senior Loan Fund Financial Highlights | | | Six Months Ended June 30, 2021 (unaudited) | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | | ||||||||||||||||||
Common Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Per Share Operating Performance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | | | $ | 15.57 | | | | | $ | 16.89 | | | | | $ | 17.29 | | | | | $ | 18.37 | | | | | $ | 18.64 | | | | | $ | 17.25 | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(1) | | | | | 0.28 | | | | | | 0.95 | | | | | | 1.24 | | | | | | 1.27 | | | | | | 1.26 | | | | | | 1.37 | | |
Net realized and change in unrealized gain (loss) on investments, foreign currency translations and delayed draw loan commitments(2) | | | | | 0.31 | | | | | | (1.23) | | | | | | (0.43) | | | | | | (1.19) | | | | | | (0.31) | | | | | | 1.29 | | |
Total income (loss) from operations | | | | | 0.59 | | | | | | (0.28) | | | | | | 0.81 | | | | | | 0.08 | | | | | | 0.95 | | | | | | 2.66 | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | | | (0.42) | | | | | | (0.99) | | | | | | (1.21) | | | | | | (1.16) | | | | | | (1.22) | | | | | | (1.27) | | |
Return of capital | | | | | — | | | | | | (0.05) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total distributions to shareholders | | | | | (0.42) | | | | | | (1.04) | | | | | | (1.21) | | | | | | (1.16) | | | | | | (1.22) | | | | | | (1.27) | | |
Net asset value per share, end of period | | | | $ | 15.74 | | | | | $ | 15.57 | | | | | $ | 16.89 | | | | | $ | 17.29 | | | | | $ | 18.37 | | | | | $ | 18.64 | | |
Market price per share, end of period | | | | $ | 15.78 | | | | | $ | 13.97 | | | | | $ | 15.17 | | | | | $ | 14.86 | | | | | $ | 16.86 | | | | | $ | 18.74 | | |
Total return:(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value | | | | | 3.80% | | | | | | (1.25)% | | | | | | 4.80% | | | | | | 0.24% | | | | | | 5.23% | | | | | | 15.99% | | |
Market value | | | | | 16.19% | | | | | | (0.21)% | | | | | | 10.57% | | | | | | (5.55)% | | | | | | (3.65)% | | | | | | 27.75% | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | | | $ | 116,811 | | | | | $ | 115,485 | | | | | $ | 125,272 | | | | | $ | 128,250 | | | | | $ | 136,299 | | | | | $ | 138,258 | | |
Ratio of expenses, including interest on borrowings, to average net assets | | | | | 3.41%(4) | | | | | | 2.44% | | | | | | 2.85% | | | | | | 3.13% | | | | | | 3.03% | | | | | | 2.65% | | |
Ratio of net investment income, including interest on borrowings, to average net assets | | | | | 3.61%(4) | | | | | | 6.23% | | | | | | 7.20% | | | | | | 6.89% | | | | | | 6.76% | | | | | | 7.72% | | |
Portfolio turnover rate | | | | | 101% | | | | | | 81% | | | | | | 65% | | | | | | 57% | | | | | | 59% | | | | | | 41% | | |
Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Aggregate principal amount, end of period (000s) | | | | $ | — | | | | | $ | 45,500 | | | | | $ | 48,000 | | | | | $ | 50,000 | | | | | $ | 58,000 | | | | | $ | 52,000 | | |
Average borrowings outstanding during the period (000s) | | | | $ | 44,750 | | | | | $ | 44,721 | | | | | $ | 47,649 | | | | | $ | 57,978 | | | | | $ | 57,329 | | | | | $ | 52,929 | | |
Asset coverage, end of period per $1,000 of debt(5) | | | | $ | — | | | | | $ | 3,538 | | | | | $ | 3,610 | | | | | $ | 3,565 | | | | | $ | 3,350 | | | | | $ | 3,658 | | |
Asset Type | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Senior Loans | | | | | | | | | | | | | | | | | | | | | | | | | |
Telecommunications | | | | $ | — | | | | | $ | 689,848 | | | | | $ | — | | | | | $ | 689,848 | | |
Money Market Fund | | | | | 68,706,249 | | | | | | — | | | | | | — | | | | | | 68,706,249 | | |
Total Investments | | | | $ | 68,706,249 | | | | | $ | 689,848 | | | | | $ | — | | | | | $ | 69,396,097 | | |
| | | Senior Loans | | | Common Stocks | | | Warrants | | | Total | | ||||||||||||
Balance as of December 31, 2020 . | | | | $ | 21,729,054 | | | | | $ | 192,990 | | | | | $ | 53,261 | | | | | $ | 21,975,305 | | |
Realized gain (loss) | | | | | (135,497) | | | | | | (29,413) | | | | | | 62,235 | | | | | | (102,675) | | |
Change in unrealized appreciation /(depreciation) | | | | | (1,911,034) | | | | | | 155,014 | | | | | | (17,610) | | | | | | (1,773,630) | | |
Amortization (accretion) | | | | | 26,121 | | | | | | — | | | | | | — | | | | | | 26,121 | | |
Purchases | | | | | 1,797,520 | | | | | | — | | | | | | — | | | | | | 1,797,520 | | |
Sales and principal paydowns | | | | | (21,506,164) | | | | | | (318,591) | | | | | | (97,886) | | | | | | (21,922,641) | | |
Transfers into Level 3 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Transfers out of Level 3 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance as of June 30, 2021 | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Net change in unrealized appreciation /(depreciation) attributable to level 3 investments held at June 30, 2021 | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| Shares of common stock, beginning of period | | | | | 7,418,990 | | |
| Change in shares of common stock outstanding | | | | | — | | |
| Shares of common stock, end of period | | | | | 7,418,990 | | |
| | | Ordinary Income | | | Return of Capital | | | Long-Term Capital Gain | | |||||||||
2019 | | | | $ | 8,991,816 | | | | | $ | — | | | | | $ | — | | |
2020 | | | | $ | 7,357,670 | | | | | $ | 328,404 | | | | | $ | — | | |
Short-Term | | | Long-Term | | | Total | |
$3,214,942 | | | $21,188,671 | | | $24,403,613 | |
Undistributed Net Investment Income | | | Accumulated Net Realized Loss on Investments | | | Net Unrealized Depreciation on Investments | |
$0 | | | $24,403,613 | | | $1,023,938 | |
Shareholder | | | Percent of Ownership | | |||
First Trust Portfolios LP | | | | | 17.2% | | |
Saba Capital Management LP | | | | | 14.1% | | |
Wells Fargo & Company | | | | | 5.7% | | |
| Trustees | |
| Robert J. Hickey | |
| Joseph L. Morea*# | |
| Laurie A. Hesslein*# | |
| Ronald J. Burton*# | |
| Michael Perino*# | |
| Officers | |
| Robert J. Hickey | |
| Jennifer Wilson | |
| Andrew Morris | |
| Sabrina Rusnak-Carlson | |
| Investment Adviser | |
| First Eagle Alternative Credit, LLC | |
| Administrator, Custodian & Accounting Agent | |
| The Bank of New York Mellon | |
| Transfer Agent, Dividend Paying Agent and Registrar | |
| American Stock Transfer and Trust Company | |
| Independent Registered Public Accounting Firm | |
| RSM US LLP | |
| Legal Counsel | |
| Proskauer Rose LLP | |
(b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1(a) of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a) | Not applicable. |
(b) | There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. 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 the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (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 period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are 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) | FIRST EAGLE SENIOR LOAN FUND |
By (Signature and Title)* | /s/ Robert J. Hickey | |
Robert J. Hickey, President and Principal Executive Officer | ||
(principal executive officer) |
Date | 9/1/21 |
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/ Robert J. Hickey | |
Robert J. Hickey, President and Principal Executive Officer | ||
(principal executive officer) |
Date | 9/1/21 |
By (Signature and Title)* | /s/ Jennifer Wilson | |
Jennifer Wilson, Treasurer, Principal Financial Officer, Principal | ||
Accounting Officer and Secretary | ||
(principal financial officer) |
Date | 9/1/21 |
* Print the name and title of each signing officer under his or her signature.