Mail Stop 0505 November 12, 2004 David C. Phelan, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, MA 02109 Re: Pioneer Floating Rate Fund (the "Fund") Registration Statement on Form N-2 File Numbers 333-119731; 811-21654 Filed October 13, 2004 Dear Mr. Phelan: We have reviewed the registration statement referenced above and have the following comments. Pursuant to Release No. 33-6510 and in reliance upon the representations contained in your transmittal letter, we performed a limited review of your registration statement. All page references are to the marked courtesy copy. Prospectus Outside Front Cover Page Investment Objectives Revise to indicate whether the Fund will seek to accomplish its secondary investment objective when it is consistent with its primary investment objective. In the alternative, specify the circumstances when the Fund "may" seek to achieve preservation of capital. Portfolio Contents Expand the third sentence to clarify that "other investments that are rated below investment grade or are unrated but are of equivalent credit quality" are commonly referred as "junk bonds." Also indicate that the Fund may invest in securities of issuers that are in default or that have filed a petition in bankruptcy. In this regard, supplementally discuss how investing in securities of issuers that are in default or that have filed a petition in bankruptcy is consistent with the Fund`s investment objective of providing a "high level of current income." Pricing Table Disclose that the amounts appearing under the "Total" column of the pricing table apply to the situation where the overallotment option is not exercised. Inside Cover Page Expand the sentence appearing immediately before the "No Prior Trading History" section to indicate that the Fund`s actual Senior Loan loss recovery rate experience could be materially worse than the Subadviser`s, and that there can be no assurance that the Fund will achieve any level of loss recovery. No Prior Trading History The first sentence of this section must be presented in a prominent fashion. See Item 1.1.i. of Form N-2. Supplementally confirm that the first three sentences of this section will appear on the outside front cover page of the prospectus. See Item 1 of Form N-2. Leverage Provide the approximate time frame during which the Fund is likely to issue preferred shares. Clarify that the holders of the Fund`s common shares will bear all of the expenses of leverage including, among other things, higher effective advisory fees. Table of Contents In the first sentence of the first paragraph that appears after the table of contents, insert the word "in" after the word "contained." Prospectus Summary Investment Objectives and Principal Investment Strategies Specify the maximum amount of Fund assets that can be invested in "obligations of a Borrower issued in connection with a restructuring pursuant to Chapter 11 of the U.S. Bankruptcy Code." If there is no maximum amount, so state. Expand the third paragraph to highlight how the Subadviser will determine which floating rate debt it will recommend that the Fund buy. Revise to provide a plain English version of the last sentence of the last paragraph. Duration Management Expand the discussion to describe duration management in the context of a floating rate security. Credit Management Expand the last sentence to clarify whether the Subadviser will consider either yield or creditworthiness as a more important factor when deciding which securities it will select for the Fund. Portfolio Contents Senior Loans Clarify how an investment in zero coupon bonds, deferred interest bonds and PIK bonds is consistent with an investment objective of providing a high level of current income. Clarify how investing in deferred interest bonds is consistent with a floating rate bond portfolio. Revise the penultimate sentence of the fourth paragraph to indicate that favorable federal income tax treatment is potentially available to regulated investment companies. Provide a brief discussion of how the interest rate on floating rate debt generally is determined (for example, reference rates, reset features, etc.) Disclose the maximum percentage of the Fund`s portfolio that can be invested in illiquid securities. High Yield Securities If the Fund anticipates issuing preferred securities with a minimum credit rating, disclose the various restrictions that a credit rating agency may impose on the Fund`s portfolio characteristics (such as liquidity, credit quality, etc.) Hedging and Interest Rate Risk Indicate whether the Fund may invest in inverse floaters and, if so, highlight the risk of such an investment. Senior Loans Risk Expand the second paragraph to indicate that in a declining interest rate environment floating-rate debt instruments would not experience the price appreciation that fixed-rate debt instruments would generally experience. Investment Adviser Briefly highlight the Adviser`s responsibilities. In the third paragraph, disclose that the Adviser will benefit when the Fund leverages since the amount of the Fund`s managed assets will increase with leverage. Expand the fourth paragraph to describe the extent to which the Adviser may recapture fees that it waived or expenses that it reimbursed the Fund. Subadviser`s Composite Performance The section should be removed from the Prospectus Summary since it is inappropriate to present any non-Fund performance information, or references to such information, prior to the Fund`s fee and expense presentation. Summary of Fund Expenses Clarify in footnote (1) that the Fund will not reimburse the Adviser for the organizational expenses that it paid. Disclose in footnote (3) the approximate amount of the preferred share dividends expected to be incurred by the Fund, expressed as a percentage of net assets attributable to common shares. Expand footnote (4) to indicate that the advisory fee payable to the Adviser will increase when the Fund incurs leverage because leverage will increase the amount of Fund assets under management. Also, disclose the incentive for, as well as the conflict faced by, the Adviser to reduce the amount of Fund leverage, and therefore Fund expenses, in any particular year in which the Adviser seeks recovery of fees waived or expenses reimbursed. Disclose any input that the Fund`s board is required to contribute when deciding whether the Fund will use leverage. Reduce the size of the table presented in footnote (5) so that it is given less prominence than the fee table presented on page 22. Expand footnote (6) to clarify that the fee waiver is a contractual arrangement that may not be terminated by the Adviser during the first three years of the Fund`s investment operations. Also indicate that there can be no assurances that the fee wavier will extend beyond its initial three-year term. Footnote (6) indicates that the expense limitation, and any reimbursed expenses that the Adviser may subsequently recover, are based on the Fund`s managed assets. However, the fee table presents Fund expenses and amounts waived pursuant to the expense limitation in the context of net assets. Disclose how managed assets are converted to net assets when calculating the fee waiver (as well as any amounts that are subsequently recovered by the Adviser) and disclose the assumptions, if any, that are used when making these determinations. In the last sentence of the paragraph appearing after footnote (6), insert the word "fiscal" before the word "year." Example In the introductory paragraph, delete the word "net" from the phrase "(1) total net annual expenses." Supplementally confirm that the Example gives effect to the sales load, fees and expenses presented in the Fund`s primary fee table (including the effect of the fee waiver only for years 1-3). Investment Objectives Clarify whether the Fund`s secondary investment objective is a fundamental policy of the Fund. Risk Factors Move the "Risk Factors" section so that it immediately follows the "Summary of Fund Expenses" section. Remove any mitigating language from the risk factors; for example, remove the phrase "although this risk is mitigated by the Fund`s investment in Senior Loans, which pay floating rates of interest" from the "Income and Interest Rate Risk" discussion and delete the last sentence of the "Inflation Risk" discussion. Derivatives Risk Disclose any maximum amount of Fund assets that may be invested in derivatives. In the alternative, disclose that there is no such maximum. Subadviser`s Composite Performance The caption should be revised to indicate that this section discusses the "Subadviser`s Prior Performance" or the "Subadviser`s Prior Performance of Similar Accounts." Also, please make a conforming revision to the caption of the tabular presentation. Revise the first sentence 1) to delete the word "composites;" and 2) to indicate that the table presents the past performance of all accounts managed by the Subadviser that have substantially similar investment objective, policies and strategies as the Fund. In the second sentence, substitute the phrase "Subadviser`s prior performance" for the phrase "Subadviser`s Senior Loan composite." Also, delete the phrase "fee paying." Update the presentation to at least September 30, 2004. The discussion contained in the second and third paragraphs makes unclear the manner by which the performance presentation has been adjusted to reflect sales loads, fees and expenses. Related performance must be presented either a) net of all actual fees and expenses, including sales loads relating to the accounts and funds, or, b) adjusted to reflect all of the Fund`s expenses listed in the Fund`s fee table, including sales load, provided that the adjustment does not result in higher performance. Accordingly, revise the discussion to disclose one of the following items, as applicable: a) where related performance is net of all actual fees and expenses of the accounts/funds, the Fund should disclose that the related performance is net of all actual fees and expenses incurred by the accounts/funds, including any sales load. If the actual fees and expenses of the accounts/funds are lower than the Fund`s fees and expenses, disclose that the use of the Fund`s expense structure would have lowered the performance results; or b) where the related performance is adjusted to reflect the Fund`s fees and expenses, the Fund should disclose that the related performance is adjusted by deducting the Fund`s expenses listed in its fee table, including the maximum applicable sales load. Note, however, that related performance adjusted to reflect the Fund`s projected fees and expenses is only permissible where the Fund`s projected fees and expenses are higher than the actual fees and expense of the accounts/funds included in the related performance presentation. Add a separate bold face introductory paragraph to the tabular presentation to indicate that the performance represents the historical performance for similarly managed accounts/funds and is neither a presentation of the Fund`s performance nor indicative of the Fund`s future performance. Add one-year performance data to the first table. Disclose the benchmark index that will be included in the tabular presentation and its relevance to the presentation. Clearly state the source of the prior performance information. Underwriting Please confirm to the staff whether the NASD has approved the underwriting terms of the Fund`s offering. Expand the last sentence of the second paragraph to indicate whether the Fund and the Adviser have agreed to indemnify the underwriters in equal amounts against the referenced "certain liabilities" and also have agreed to contribute in equal amounts the payments that the underwriters may be required to make for any of those certain liabilities. Other Relationships All consideration paid to the underwriters, irrespective of its source, must be reflected in the pricing table. Accordingly, revise the pricing table appearing on the outside front cover page of the prospectus as appropriate. See Instruction 2 to Item 1.1.g. of Form N-2. Statement of Additional Information Ranking in Capital Structure; Loan Collateral Expand the discussion to describe the risks presented by structural subordination, including when the Fund holds a Senior Loan. Other Information Regarding Senior Loans Clarify that neither Highland nor its affiliates will be an obligor of any Senior Loan or obligation underlying a participation in which the Fund may invest. Supplementally confirm that neither Highland nor its affiliates will be affiliated with any of the banks described in this section. Investment Restrictions Is the Fund`s policy to invest at least 80% of its assets in floating rate loans and other floating rate debt securities a fundamental policy? If it is not, then provide prospectus disclosure regarding the Fund`s policy to provide notice to its shareholders of any change in its investment policy. Expand investment restrictions (1) & (2) to describe briefly what is currently "permitted by applicable law, as amended and interpreted or modified." Refer to investment restriction (4). Disclose any plans for interfund lending. Disclose the Fund`s plans to invest in other funds. Investment Adviser Expand the last sentence of the third paragraph to explain why Highland is in a "unique position to arbitrage disparities in the historical spread relationship between various below investment grade asset classes." Also, provide a plain English description of what this means. Closing We note that portions of the filing are incomplete. We may have additional comments on such portions when you complete them in a pre- effective amendment, on disclosures made in response to this letter, on information supplied supplementally, or on exhibits added in any pre-effective amendments. Whenever a comment is made in one location, it is considered applicable to all similar disclosure appearing elsewhere in the registration statement. Response to this letter should be in the form of a pre-effective amendment filed pursuant to Rule 472 under the Securities Act. Where no change will be made in the filing in response to a comment, please indicate this fact in a supplemental letter and briefly state the basis for your position. Please advise us if you have submitted or expect to submit an exemptive application or no-action request in connection with your registration statement. You should review and comply with all applicable requirements of the federal securities laws in connection with the preparation and distribution of a preliminary prospectus. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an informed decision. Since the Company and its management are in possession of all facts relating to the Company`s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In the event the Company requests acceleration of the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that * the Company is responsible for the adequacy and accuracy of the disclosure in the filing; * should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; * the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and * the Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Investment Management in connection with our review of your filing or in response to our comments on your filing. We will consider a written request for acceleration of the effective date of the registration statement as confirmation of the fact that those requesting acceleration are aware of their respective responsibilities. Should you have any questions regarding this letter, please contact me at (202) 942-0627. Sincerely, Dominic Minore Attorney ?? ?? ?? ?? David C. Phelan, Esq. Page 1