Exhibit (a)(5)(iii)
Exhibit (a)(5)(iii)
MERRILL LYNCH
SENIOR FLOATING
RATE FUND II, INC.
FUND LOGO
Annual Report
August 31, 2000
Merrill Lynch Senior Floating Rate II, Inc. seeks as high a level of
current income and such preservation of capital as is consistent
with investment in senior collateralized corporate loans made by
banks and other financial institutions.
This report, including the financial information herein, is
transmitted for use to shareholders of Merrill Lynch Senior Floating
Rate Fund II, Inc. for their information. It is not a prospectus.
Past performance results shown in this report should not be
considered a representation of future performance. The Fund has the
ability to leverage its Common Stock to provide Common Stock
shareholders with a potentially higher rate of return. Leverage
creates risk for Common Stock shareholders, including the likelihood
of greater volatility of net asset value and market price of Common
Stock shares, and the risk that fluctuations in short-term interest
rates may reduce the Common Stock's yield. Statements and other
information herein are as dated and are subject to change.
Merrill Lynch
Senior Floating
Rate Fund II, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
Merrill Lynch Senior Floating Rate Fund II, Inc.
DEAR SHAREHOLDER
The Fund's effective net yield for the fiscal year ended August 31,
2000 was 7.81%. The Fund's net asset value declined from $10.01 per
share to $9.87 per share during the fiscal year. During the same
period, the Fund earned $0.773 per share income dividends,
representing a net annualized yield of 7.81%, based on a year-end
per share net asset value of $9.87. For the 12-month period ended
August 31, 2000, the Fund's total investment return was +6.54%,
based on the $0.14 per share decrease in net asset value and
assuming reinvestment of $0.766 per share income dividends. Since
inception (March 26, 1999) through August 31, 2000, the Fund's total
investment return was +9.76%, based on a change in per share net
asset value from $10.00 to $9.87, and assuming reinvestment of $1.04
per share income dividends.
Investment Approach
Merrill Lynch Senior Floating Rate Fund II, Inc. consists largely of
participations in leveraged bank loans. The high-yield bond and bank
loan markets are comprised of similar industry sectors and often
contain overlapping issuers. As a result, general economic events
and trends tend to move the two markets in the same direction,
although bonds typically experience greater volatility than bank
loans. This can be attributed to two factors. First, bank loans are
typically senior secured obligations, thus generally offering
investors greater principal protection than unsecured bonds. Second,
bank loans are floating rate instruments whose principal value
generally does not move inversely with interest rate movements, as
is the case with fixed rate bonds. In the last two years, both
markets have been adversely affected by the increased premium
accorded to credit risk.
Market Review
Principal (or price) returns were negative in both the high-yield
and leveraged loan markets over the six months ended August 31,
2000. The high-yield market, as measured by the Donaldson, Lufkin,
Jenrette (DLJ) High Yield Bond Index, experienced principal depre-
ciation of 454 basis points (4.54%). The loan market experienced
almost half that decline, reporting a principal loss of 261 basis
points, as measured by the DLJ Leveraged Loan Index. Throughout the
period, "flight-to-quality" remained the performance theme in the
high-yield market. Issues that were higher rated (securities rated
BB), larger ($300 million and greater), and in sectors with
stability or positive event risk (such as cable, wireless
telecommunications, gaming and energy) outperformed their riskier
counterparts. In contrast to the high-yield market, the bank loan
market had mixed results. Both the higher-rated issues (securities
rated BB) and distressed issues (securities rated CCC/CC and C)
performed well, while the B-rated issues underperformed. The loan
market favored the same sectors as the high-yield market.
For the last six months, the total return (principal return plus
interest income earned) of the high-yield bond market was barely in
positive territory as it posted a return of +0.27%, as measured by
the unmanaged DLJ High Yield Bond Index. The loan market fared
better and provided a total return of +2.27%, as measured by the
unmanaged DLJ Leveraged Loan Index. Although a reduction in Treasury
yields helped boost the performance of high-yield bonds, widening
credit spreads more than offset the reduction in underlying interest
rates. During the period, the ten-year Treasury yield fell from
6.41% to 5.73%, or 68 basis points, while high-yield credit spreads
widened 143 basis points. This maintained a continuing market theme
of the last few years whereby credit risk, as measured by the spread
at which issuers' securities trade over US Treasury securities, has
been a stronger force on the price of securities than the effect of
the underlying changes in interest rates. Bank term loan spreads
widened as well, although by only 63 basis points for B-rated
issuers.
During the period, the energy, chemicals, gaming, broadcasting and
wireless telecommunications sectors performed well. These industries
benefited from one or more of the following characteristics:
improving commodity prices, stable cash flows and robust growth
prospects. However, certain sectors such as wired telecommunications,
retail and metals/mining continued to experience difficulties
resulting in credit deterioration and principal losses(realized
and unrealized) for some of the Fund's holdings. The wired
telecommunications industry underperformed because of investor
nervousness about the completion of business plans of some of its
operators. Retailers suffered from a lack of pricing power and an
escalation of competition from e-commerce. The metals/mining
industry continued to suffer through cyclical troughs in a number of
commodities.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
Investment Activities
At August 31, 2000, Merrill Lynch Senior Floating Rate Fund II, Inc.
had approximately $430.8 million out of $447.0 million, or 96%, of
its total investment assets committed for investment in corporate
loan interests, most of which accrued interest at a yield spread
above the London Interbank Offered Rate (LIBOR), the rate that major
international banks charge each other for US dollar-denominated
deposits outside of the United States. LIBOR tracks very closely
with other short-term interest rates, particularly the Federal Funds
rate. Since the reset period on the Fund's floating rate investments
is between 30 days - 90 days, the yield on the bank loan portion of
the Fund is likely to move in the same direction within a short
period of time after any Federal Funds rate change.
We continue to maintain significant diversification across the
Fund's investments. At August 31, 2000, the Fund was comprised of 86
borrowers across 36 industries. (See the "Portfolio Profile" on page
19 of this report to shareholders, which provides listings of the
Fund's ten largest holdings and five largest industries as of August
31, 2000.)
Investment Strategy
Throughout the six months ended August 31, 2000, the Fund's
investment philosophy remained unchanged: to invest in leveraged
transactions in which borrowers have strong market shares,
experienced managements, consistent cash flows and appropriate
risk/reward characteristics. In addition, we look for companies with
significant underlying asset and franchise value, strong capital
structures and equity sponsors that support their investments. An
example of a credit purchased in the last six months that
demonstrates these criteria is Adelphia Communications Corporation.
Adelphia Communications, through its subsidiary Century Cable LLC,
issued a $1 billion institutional term loan priced at 3% over LIBOR.
Adelphia Communications is one of the top five cable companies with
over 1.5 million paid subscribers. Century Cable, the operating
company borrower, is capitalized with $4.25 billion of equity from
its parent, producing a relatively conservative debt capitalization
ratio of 33%. With average industry transactions occurring at
approximately $4,000 per subscriber, the intrinsic equity value of
our borrower is significant with its debt per subscriber estimated
at $1,350. The loan also has several covenants in the credit
agreement to protect the integrity of the credit. We believe assets
such as Adelphia Communications will lessen the volatility in the
Fund and are likely to consistently generate solid income.
Market Outlook
Compared with the pace of a year ago, the current environment's
leveraged loan and high-yield bond issuance has been limited.
Investors have been very selective, and transactions that are
successfully issued are well structured and attractively priced.
This activity reflects the three large themes--liquidity risk,
default risk and monetary policy risk--that are affecting the
market.
As for the liquidity risk of leveraged finance, retail mutual funds
are playing a significantly reduced role in absorbing the supply of
leveraged loan and high-yield new issuance, as a result of continued
outflows in mutual funds of these asset classes. Over $7 billion in
assets have exited these retail mutual funds thus far in 2000.
However, some of the weakness in retail inflows was offset by more
than $17 billion of structured product issuance, which is targeted
at institutional investors. With new ramp-up institutional activity
being the marginal buyer in the markets, these vehicles take on much
of the new issuance, as well as purchase much of the good-quality
credits in secondary trading. Because of the small per-issue
appetite of a typical structured product and the diversification
requirements that it has, the leveraged finance market has some
breadth, but little depth.
At the same time, and as we mentioned in our last report to
shareholders, ever since the Russian default crisis in the late
summer of 1998, the volatility of the leveraged loan and high-yield
markets has continued to increase from historical norms. A
contributing influence on the elevated risk premium being levied on
the leveraged markets is that investors have tolerance for only a
limited number of credit rating downgrades and defaults. When a
borrower reports weaker-than-expected results, investors attempt to
sell immediately to avoid any potential impairment. If a borrower's
ability to repay its debts (as perceived by the marketplace) drops
precipitously, or if there is no liquidity during its slide
downward, investors are forced to sell at low recovery rates. This
heightened sensitivity creates opportunities because decisions
sometimes are based not on credit fundamentals but on a more
reactionary basis. Nevertheless, these circumstances result in
increased trading activity, and hence volatility, as everyone often
tries to reach the exit first when investors sense a potential
problem.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
Related to this factor is the incidence of issuers in payment
default. Defaults increased in 1999 and some sectors continue to
struggle despite the resilient strength of the domestic economy. For
example, the automotive parts, healthcare, movie theater and textile
sectors have a number of transactions outstanding in our market that
have materially underperformed since origination. The transactions
were well capitalized when originally structured, but cash flow
dropped or did not grow to a sufficient level to support the
existing balance sheets. Affected by these downgrades, investors
scrutinize any news with a jaded view, creating trading activity
before news has been digested and exacerbating volatility.
As of August 31, 2000, the trailing 12-month high-yield market
default rate was 4.8% (dollar-weighted), as measured by Moody's
Investor Services, Inc. In recent months, these figures have shown
some encouraging signs as the default rate has sequentially
decreased from 7.0% to 6.7% for the May--June 2000 period, from 6.7%
to 5.7% for the June--July 2000 period, and then again from 5.7% to
4.8% for the July--August 2000 period. If this trend were to
continue, much of the default risk fears that hang over the
leveraged finance market could ease.
At the same time, monetary policy risk seems lower. The economic
outlook is turning increasingly favorable as the Federal Reserve
Board seems to have engineered a somewhat less torrid pace for the
economy, while "new economy"-driven productivity gains have helped
keep inflation at acceptable levels. Investors seem to accept that
the economy could grow at a sustainable rate of 4% or more without
price pressures. Therefore, most market observers conclude that the
string of Federal Reserve Board tightenings has neared its
conclusion. With the economy likely having avoided a hard landing
and little inflation appearing because of the Federal Reserve
Board's actions to date, the prospects for leveraged credits should
be good.
Two factors on the horizon that could alter these views include the
price of oil and the US presidential election. Oil prices currently
reflect low inventories and some holdback on the part of producers
from increasing production to the higher levels that the market may
have desired. Investor fears are that any further increase in prices
could work their way into core inflation. Separately, the election,
and its resulting impact on taxes and spending issues, leaves many
investors with some uncertainty regarding future fiscal policy.
In Conclusion
The high-yield bond and loan markets continue to experience above-
average volatility as investors remain wary of higher defaults,
mutual fund redemptions, the general level of interest rates and a
lack of liquidity in the dealer community. We are confident in the
Federal Reserve Board's ability to avoid an economic "hard landing,"
which is a positive for the entire leveraged finance asset class.
Furthermore, we believe there will be a moderation in the market
default rate as aggressive transactions underwritten in the past few
years and sectors such as healthcare negatively affected by specific
factors are restructured and exit the system. If general
fundamentals improve, and with market yields at near all-time highs,
we would expect the leveraged finance markets to strengthen over the
next 12 months. Notwithstanding the expectation of better market
conditions ahead, we continue to be conservative in our purchasing
decisions, focusing on large issuers that are well capitalized in
selective industries.
We thank you for your investment in Merrill Lynch Senior Floating
Rate Fund II, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Richard C. Kilbride)
Richard C. Kilbride
Vice President and Co-Portfolio Manager
(Gilles Marchand)
Gilles Marchand
Vice President and Co-Portfolio Manager
October 3, 2000
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
THE BENEFITS AND RISKS OF LEVERAGING
Merrill Lynch Senior Floating Rate Fund II, Inc. has the ability to
utilize leverage through the borrowings or issuance of short-term
debt securities or shares of Preferred Stock. The concept of
leveraging is based on the premise that the cost of assets to be
obtained from leverage will be based on short-term interest rates,
which normally will be lower than the return earned by the Fund on
its longer-term portfolio investments. To the extent that the total
assets of the Fund (including the assets obtained from leverage) are
invested in higher-yielding portfolio investments, the Fund's Common
Stock shareholders will benefit from the incremental yield.
Leverage creates risks for holders of Common Stock including the
likelihood of greater net asset value and market price volatility.
In addition, there is the risk that fluctuations in interest rates
on borrowings (or in the dividend rates on any Preferred Stock, if
the Fund were to issue the Preferred Stock) may reduce the Common
Stock's yield and negatively impact its market price. If the income
derived from securities purchased with assets received from leverage
exceeds the cost of leverage, the Fund's net income will be greater
than if leverage had not been used. Conversely, if the income from
the securities purchased is not sufficient to cover the cost of
leverage, the Fund's net income will be less than if leverage had
not been used, and therefore the amount available for distribution
to Common Stock shareholders will be reduced. In this case, the Fund
may nevertheless decide to maintain its leveraged position in order
to avoid capital losses on securities purchased with leverage.
However, the Fund will not generally utilize leverage if it
anticipates that its leveraged capital structure would result in a
lower rate of return for its Common Stock than would be obtained if
the Common Stock were unleveraged for any significant amount of
time.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
PROXY RESULTS
During the six-month period ended August 31, 2000, Merrill Lynch
Senior Floating Rate Fund II, Inc.'s shareholders voted on the
following proposals. The proposals were approved at a shareholders'
meeting on July 25, 2000. The description of each proposal and
number of shares voted are as follows:
Shares Voted
For
1. To elect the Fund's Board of Directors: Terry K. Glenn 40,769,853
Ronald W. Forbes 40,758,644
Cynthia A. Montgomery 40,760,596
Charles C. Reilly 40,763,939
Kevin A. Ryan 40,767,989
Roscoe S. Suddarth 40,766,156
Richard R. West 40,767,989
Arthur Zeikel 40,755,482
Edward D. Zinbarg 40,766,156
Shares Voted Shares Voted Shares Voted
For Against Abstain
2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the current fiscal year. 39,182,285 413,225 1,955,526
3. To convert the Fund to "master/feeder" structure. 35,829,613 1,448,244 4,273,179
4. To approve proposed Investment Advisory and Administration
Agreements for the Fund. 36,674,370 1,028,993 3,847,673
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
SCHEDULE OF INVESTMENTS
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Value
Air Transporta- NR++ NR++ $ 1,648,125 Gemini Air Cargo, Term A, due 8/12/2005 $ 1,645,551
tion--0.4%
Amusement & NR++ NR++ 5,000,000 Metro-Goldwyn-Mayer Co., Term B, due 12/31/2006 4,960,625
Recreational
Services--1.1%
Apparel--1.1% BB Ba2 5,000,000 Warnaco Inc., Term, due 11/16/2000 4,768,750
Automotive B+ Ba3 2,380,000 Collins & Aikman Corp., Term B, due 6/30/2005 2,350,995
Equipment--1.7% Tenneco Automotive Inc.:
BB Ba3 2,500,000 Term B, due 11/02/2007 2,482,813
BB Ba3 2,500,000 Term C, due 5/02/2008 2,482,813
--------------
7,316,621
Broadcasting NR++ NR++ 3,000,000 Bahakel Communications Ltd., Term B, due 6/30/2008 3,000,000
- --Radio & B1 B1 5,500,000 Benedek Broadcasting Corporation, Term B, due 11/20/2007 5,482,812
Television NR++ NR++ 5,940,000 Corus Entertainment Inc., Tranche II, due 8/31/2007 5,984,550
- --7.1% Cumulus Media Inc.:
B1 B1 1,800,000 Term B, due 9/30/2007 1,777,500
B+ B1 1,200,000 Term C, due 2/28/2008 1,185,000
NR++ Ba3 7,000,000 Gray Communications Systems, Term B, due 12/31/2005 7,032,816
NR++ NR++ 995,000 VHR Broadcasting, Term B, due 9/30/2007 996,866
BB Ba2 6,000,000 Young Broadcasting Inc., Term B, due 12/31/2006 6,038,748
--------------
31,498,292
Building B+ Ba3 2,976,316 Better Minerals, Term B, due 9/30/2007 2,974,456
Materials--1.3% B+ B1 2,940,778 Panolam Industries, Term B, due 12/31/2005 2,944,454
--------------
5,918,910
Business B+ B1 2,985,000 Muzak Audio, Term B, due 12/31/2006 2,960,126
Services--0.7%
Cable NR++ NR++ 4,000,000 Avalon Cable LLC, Term B, due 11/15/2008 3,996,252
Television BB NR++ 5,000,000 CC VI Operating Company LLC, Term B, due 11/12/2008 4,998,750
Services NR++ NR++ 10,000,000 Century Cable LLC, Term, due 6/30/2009 10,017,500
- --10.0% BB+ Ba3 15,000,000 Charter Communications Holdings, Term B, due 3/18/2008 14,948,330
BB NR++ 5,210,526 Classic Cable Inc., Term B, due 1/31/2008 5,195,874
B+ B1 5,000,000 Pegasus Media & Communications, Term, due 4/30/2005 5,016,665
--------------
44,173,371
Chemicals--4.5% BB- Ba2 5,000,000 Huntsman Corp., Term C, due 12/31/2005 4,968,750
Huntsman ICI Chemicals LLC:
BB Ba3 4,950,000 Term B, due 6/30/2007 4,988,932
BB Ba3 4,950,000 Term C, due 6/30/2008 4,988,931
NR++ Ba3 4,937,500 Lyondell Petrochemical Co., Term E, due 5/17/2006 5,117,393
--------------
20,064,006
Computer- Bridge Information Systems:
Related NR++ NR++ 1,846,335 Term, due 5/29/2003 1,490,915
Products--1.1% NR++ NR++ 3,652,470 Term B, due 5/29/2005 2,976,762
BB- Ba3 648,627 Fairchild Holdings Corp., Term, due 4/30/2006 611,872
--------------
5,079,549
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
SCHEDULE OF INVESTMENTS (continued)
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Value
Diversified B+ B1 $ 2,977,500 Blount International Inc., Term B, due 6/30/2006 $ 2,993,007
- --0.7%
Drilling--0.4% B+ B1 1,974,357 Key Energy Group, Inc., Term B, due 9/14/2004 1,978,985
Drug/ B+ B1 2,437,500 Duane Reade Co., Term B, due 2/15/2005 2,434,453
Proprietary
Stores--0.6%
Electronics/ BB Ba2 4,987,500 Amkor Technology Inc., Term B, due 9/30/2005 5,022,233
Electrical B+ B1 1,190,054 DD Inc., Term B, due 10/31/2003 1,178,153
Components-- B+ NR++ 4,980,392 Dynatech LLC, Term B, due 9/30/2007 4,981,015
4.6% Semiconductor Components:
BB- Ba3 1,444,444 Term B, due 8/04/2005 1,455,730
BB- Ba3 1,555,556 Term C, due 8/04/2007 1,567,709
BB- Ba3 2,000,000 Term D, due 8/04/2007 2,004,166
B+ Ba3 4,184,432 Superior Telecom, Term A, due 5/27/2004 4,132,127
--------------
20,341,133
Environmental IT Group Inc:
Services--1.1% BB B1 1,500,000 Term, due 6/08/2007 1,495,000
BB B1 1,484,746 Term B, due 6/11/2006 1,470,826
URS Corp.:
BB Ba3 990,000 Term B, due 6/09/2006 992,475
BB Ba3 990,000 Term C, due 6/09/2007 992,475
--------------
4,950,776
Financial B NR++ 1,828,372 Lodgian Financing Corp., Term B, due 7/15/2006 1,764,379
Services--1.4% NR++ Ba3 4,500,000 Sovereign Bancorp, Inc., Term, due 11/17/2003 4,516,875
--------------
6,281,254
Food & Kindred BB- Ba3 1,995,000 Merisant Company, Term B, due 3/30/2007 2,004,975
Products--0.5%
Furniture & Simmons Co.:
Fixtures--1.4% B+ Ba3 2,486,552 Term B, due 10/29/2005 2,493,390
B+ Ba3 3,656,587 Term C, due 10/29/2006 3,666,643
--------------
6,160,033
Gaming--2.3% Isle of Capri Casinos, Inc.:
BB- Ba2 5,320,000 Term B, due 3/01/2006 5,350,340
BB- Ba2 4,655,000 Term C, due 3/01/2007 4,681,547
--------------
10,031,887
Grocery--0.4% CCC Caa1 3,981,018 Grand Union Co., Term, due 8/17/2003 1,887,667
Hotels & NR++ NR++ 6,256,720 Strategic Holdings Inc., Term, due 11/16/2004 6,282,792
Motels-- Wyndam International, Inc.:
3.9% NR++ NR++ 7,000,000 Term, due 6/30/2004 6,984,446
NR++ NR++ 4,000,000 Term, due 6/30/2006 3,941,000
--------------
17,208,238
Leasing & BB- B1 1,980,000 Anthony Crane Rental L.P., Term, due 7/30/2006 1,823,249
Rental BB- B1 2,970,000 Nations Rent Inc., Term B, due 7/20/2006 2,957,624
Services--1.8% BB- NR++ 2,977,500 Rent Way Inc., Term B, due 9/30/2006 2,973,778
--------------
7,754,651
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
SCHEDULE OF INVESTMENTS (continued)
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Value
Manufacturing B+ NR++ $ 5,000,000 Citation Corporation, Term B, due 12/01/2007 $ 4,931,250
- --3.4% Mueller Industries, Inc.:
B+ B1 2,475,000 Term B, due 8/16/2006 2,478,094
B+ B1 2,475,000 Term C, due 8/16/2007 2,479,255
BB- Ba3 4,916,763 Terex Corp., Term C, due 2/05/2006 4,922,029
--------------
14,810,628
Medical B+ B1 1,990,000 Hanger Orthopedic Group, Inc., Term B, due 12/30/2006 1,900,450
Equipment
- --0.4%
Metals & CCC- B3 960,000 AEI Resources Inc., Term B, due 12/31/2004 864,000
Mining--0.8% BB- Ba2 2,585,000 LTV Corporation, Term, due 11/10/2004 2,552,688
--------------
3,416,688
Paper--2.9% B+ Ba3 319,444 Jefferson Smurfit Company/Container Corp. of America,
Term B, due 3/24/2006 320,103
B B1 3,596,650 Riverwood International Inc., Term B, due 2/28/2004 3,609,389
Stone Container Corp.:
B+ Ba3 2,396,930 Term E, due 10/01/2003 2,404,881
B+ Ba3 2,486,957 Term F, due 12/31/2005 2,493,756
B+ Ba3 1,967,778 Term G, due 12/31/2006 1,968,833
B+ Ba3 2,058,500 Term H, due 12/31/2007 2,059,603
--------------
12,856,565
Pharmaceuticals Dade Behring Inc.:
- --0.5% B+ Ba3 1,237,500 Term B, due 6/30/2006 1,133,196
B+ Ba3 1,237,500 Term C, due 6/30/2007 1,133,196
--------------
2,266,392
Printing & B+ Ba3 1,971,637 Advanstar Communications Inc., Term C, due 6/30/2007 1,973,486
Publishing NR++ Ba1 11,000,000 Hollinger International Publishing Inc., Term B,
- --5.9% due 12/31/2004 11,020,625
B+ B1 5,000,000 Liberty Group Operating, Term B, due 3/31/2007 5,000,000
NR++ NR++ 995,948 Reiman Publications, Term B, due 12/01/2005 999,890
Trader.com:
B Ba3 1,045,399 Term B, due 12/31/2006 1,037,558
B Ba3 704,601 Term C, due 12/31/2007 699,317
NR++ B1 2,995,000 Vertis, Term B, due 12/06/2008 2,995,000
B+ Ba3 2,495,412 Ziff-Davis Inc., Term B, due 3/31/2007 2,497,595
--------------
26,223,471
Property NR++ Ba3 5,000,000 NRT Inc., Term, due 7/31/2004 4,968,750
Management-- Prison Realty Trust Inc.:
2.2% NR++ Ba3 721,058 Term B, due 12/31/2002 638,136
NR++ Ba3 4,743,326 Term C, due 12/31/2002 4,197,844
--------------
9,804,730
Restaurants Domino's & Bluefence:
& Food B+ B1 971,202 Term B, due 12/21/2006 975,572
Service--0.4% B+ B1 972,724 Term C, due 12/21/2007 977,182
--------------
1,952,754
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
SCHEDULE OF INVESTMENTS (continued)
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Value
Tower BB- B1 $ 5,000,000 American Towers, Inc., Term B, due 12/30/2007 $ 5,027,840
Construction & BB- Ba3 3,896,000 Crown Castle International Corporation, Term B, due
Leasing--3.2% 3/31/2008 3,907,092
NR++ NR++ 5,000,000 Spectrasite Communications, Term B, due 6/30/2006 5,011,250
--------------
13,946,182
Transportation BB+ Ba1 5,000,000 Kansas City Southern Railroad, Term B, due 12/29/2006 5,025,780
Services--2.2% B+ B1 1,990,000 North American Van Lines Inc., Term B, due 11/18/2007 1,820,850
BB- Ba2 2,966,877 Travel Centers of America, Term, due 3/27/2005 2,974,911
--------------
9,821,541
Utilities NR++ NR++ 7,500,000 AES Texas Funding II, Term, due 5/19/2001 7,494,142
- --3.6% BB+ Ba2 4,987,500 TNP Enterprises, Inc., Term, due 6/30/2006 5,009,320
BBB- Ba1 3,500,000 Western Resources Inc., Term B, due 3/17/2003 3,507,291
--------------
16,010,753
Waste Allied Waste North America Inc.:
Management-- BB Ba3 2,272,727 Term B, due 6/30/2006 2,182,236
1.1% BB Ba3 2,727,273 Term C, due 6/30/2007 2,618,684
--------------
4,800,920
Wired BBB- Ba1 10,000,000 Global Crossing Holdings Ltd., Term, due 6/30/2006 10,058,040
Telecommun-
ications--2.3%
Wireless American Cellular Corp.:
Telecommun- B+ Ba3 3,500,000 Term B, due 3/31/2008 3,499,027
ications NR++ Ba3 4,000,000 Term C, due 3/31/2009 3,998,888
- --12.7% B+ B1 4,421,250 Centennial Cellular Operating Co., Term C, due
11/30/2007 4,434,430
Dobson/Sygnet Operating Co.:
NR++ B3 1,673,911 Term B, due 3/23/2007 1,674,060
NR++ B3 1,696,000 Term C, due 12/23/2007 1,697,060
Nextel Communications, Inc.:
BB- Ba2 2,500,000 Term B, due 6/30/2008 2,513,543
BB- Ba2 2,500,000 Term C, due 12/31/2008 2,513,543
BB- Ba2 9,438,000 Term D, due 3/31/2009 9,399,389
BB- NR++ 5,000,000 PowerTel PCS, Inc., Term B, due 2/06/2003 4,996,875
Rural Cellular Corp.:
B+ B1 2,750,000 Term B, due 10/03/2008 2,749,142
B+ B1 2,750,000 Term C, due 4/03/2009 2,749,142
NR++ B2 1,000,000 Tritel PCS Inc., Term B, due 12/31/2007 1,003,000
VoiceStream PCS Holdings Corp.:
B+ B1 10,000,000 Tranche A Vendor Facility, due 6/30/2009 9,922,220
B+ B1 5,000,000 Term B, due 1/15/2009 4,983,335
--------------
56,133,654
Total Senior Secured Floating Rate Loan Interests
(Cost--$398,486,967)--89.7% 396,415,628
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
SCHEDULE OF INVESTMENTS (concluded)
Face
Amount Short-Term Securities Value
Commercial Paper** $ 8,400,000 Gannett Co., 6.47% due 9/07/2000 $ 8,390,942
- --5.5% 3,734,000 General Motors Acceptance Corp., 6.69% due 9/01/2000 3,734,000
12,000,000 Metropolitan Life Insurance Company, 6.47% due 9/08/2000 11,984,903
--------------
24,109,845
US Government Agency Federal Home Loan Mortgage Corporation:
Obligations**--4.0% 15,000,000 6.42% due 9/12/2000 14,970,575
2,800,000 6.42% due 9/14/2000 2,793,509
--------------
17,764,084
Total Short-Term Securities
(Cost--$41,873,929)--9.5% 41,873,929
Total Investments (Cost--$440,360,896)--99.2% 438,289,557
Other Assets Less Liabilities--0.8% 3,718,782
--------------
Net Assets--100.0% $ 442,008,339
==============
*The interest rates on senior secured floating rate loan interests
are subject to change periodically based on the change in the prime
rate of a US Bank, LIBOR (London Interbank Offered Rate), or, in
some cases, another base lending rate.
**Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown reflect the
discount rates paid at the time of purchase by the Fund.
++Not Rated.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of August 31, 2000
Assets: Investments, at value (identified cost--$440,360,896) $ 438,289,557
Cash 72,734
Receivables:
Interest $ 4,008,469
Capital shares sold 1,041,475 5,049,944
----------------
Prepaid registration fees and other assets 295,897
----------------
Total assets 443,708,132
----------------
Liabilities: Payables:
Dividends to shareholders 992,475
Investment adviser 286,830
Administrator 120,770
Commitment fees 8,556 1,408,631
----------------
Deferred income 1,643
Accrued expenses and other liabilities 289,519
----------------
Total liabilities 1,699,793
----------------
Net Assets: Net assets $ 442,008,339
================
Net Assets Common Stock, par value $.10 per share; 1,000,000,000 shares
Consist of: authorized $ 4,477,980
Paid-in capital in excess of par 442,778,939
Accumulated realized capital losses on investments--net (3,178,897)
Unrealized depreciation on investments--net (2,069,683)
----------------
Net Assets--Equivalent to $9.87 per share based on shares of
44,779,796 capital stock outstanding $ 442,008,339
================
See Notes to Financial Statements.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
FINANCIAL INFORMATION (continued)
Statement of Operations
For the Year Ended
August 31, 2000
Investment Interest and discount earned $ 32,618,380
Income: Facility and other fees 496,515
----------------
Total income 33,114,895
----------------
Expenses: Investment advisory fees $ 3,345,377
Administrative fees 1,408,580
Registration fees 336,812
Professional fees 238,473
Tender offer costs 155,677
Accounting services 142,683
Transfer agent fees 113,863
Custodian fees 46,536
Assignment fees 39,228
Directors' fees and expenses 29,369
Borrowing costs 23,834
Printing and shareholder reports 23,216
Other 26,655
----------------
Total expenses before reimbursement 5,930,303
Reimbursement of expenses (364,530)
----------------
Total expenses after reimbursement 5,565,773
----------------
Investment income--net 27,549,122
----------------
Realized & Realized loss on investments--net (3,173,858)
Unrealized Loss on Change in unrealized appreciation/depreciation on
Investments--Net: investments--net (2,119,451)
----------------
Net Increase in Net Assets Resulting from Operations $ 22,255,813
================
See Notes to Financial Statements.
Statements of Changes in Net Assets
For the For the Period
Year Ended March 26, 1999++
Increase (Decrease) in Net Assets: August 31, 2000 to August 31, 1999
Operations: Investment income--net $ 27,549,122 $ 4,460,004
Realized loss on investments--net (3,173,858) (5,039)
Change in unrealized appreciation/depreciation on
investments--net (2,119,451) 49,768
---------------- ----------------
Net increase in net assets resulting from operations 22,255,813 4,504,733
---------------- ----------------
Dividends to Investment income--net (27,549,122) (4,460,004)
Shareholders: ---------------- ----------------
Net decrease in net assets resulting from dividends to
shareholders (27,549,122) (4,460,004)
---------------- ----------------
Capital Share Net increase in net assets resulting from capital shares
Transactions: transactions 217,875,943 229,280,976
---------------- ----------------
Net Assets: Total increase in net assets 212,582,634 229,325,705
Beginning of period 229,425,705 100,000
---------------- ----------------
End of period $ 442,008,339 $ 229,425,705
================ ================
++Commencement of operations.
See Notes to Financial Statements.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
FINANCIAL INFORMATION (continued)
Statement of Cash Flows
For the Year Ended
August 31, 2000
Cash Provided Net increase in net assets resulting from operations $ 22,255,813
by Operating Adjustments to reconcile net increase in net assets resulting from
Activities: operations to net cash provided by operating activities:
Increase in receivables (2,613,403)
Increase in other assets (108,445)
Increase in other liabilities 309,486
Realized and unrealized loss on investments--net 5,293,309
Amortization of discount (2,708,844)
----------------
Net cash provided by operating activities 22,427,916
----------------
Cash Used for Proceeds from principal payments and sales of loan interests 142,620,942
Investing Purchases of loan interests (345,336,223)
Activities: Purchases of short-term investments (3,670,733,352)
Proceeds from sales and maturities of short-term investments 3,656,901,663
----------------
Net cash used for investing activities (216,546,970)
----------------
Cash Provided Cash receipts on capital shares sold 274,409,435
by Financing Cash payments on capital shares tendered (67,641,618)
Activities: Dividends paid to shareholders (12,616,237)
----------------
Net cash provided by financing activities 194,151,580
----------------
Cash: Net increase in cash 32,526
Cash at beginning of year 40,208
----------------
Cash at end of year $ 72,734
================
Non-Cash Capital shares issued in reinvestment of dividends paid
Financing to shareholders $ 14,304,352
Activities: ================
See Notes to Financial Statements.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
FINANCIAL INFORMATION (concluded)
Financial Highlights
The following per share data and ratios have been derived For the For the Period
from information provided in the financial statements. Year Ended March 26, 1999++
Increase (Decrease) in Net Asset Value: August 31, 2000 to August 31, 1999
Per Share Net asset value, beginning of period $ 10.01 $ 10.00
Operating ---------------- ----------------
Performance: Investment income--net .77 .27
Realized and unrealized gain (loss) on investments--net (.14) .01
---------------- ----------------
Total from investment operations .63 .28
---------------- ----------------
Less dividends from investment income--net (.77) (.27)
---------------- ----------------
Net asset value, end of period $ 9.87 $ 10.01
================ ================
Total Investment Based on net asset value per share 6.54% 3.02%+++
Return:** ================ ================
Ratio to Average Expenses, net of reimbursement 1.58% .55%*
Net Assets: ================ ================
Expenses 1.68% 1.77%*
================ ================
Investment income--net 7.80% 6.77%*
================ ================
Supplemental Net assets, end of period (in millions) $ 442 $ 229
Data: ================ ================
Portfolio turnover 46.95% 28.49%
================ ================
*Annualized.
**Total investment returns exclude the early withdrawal charge, if
any. The Fund is a continuously offered closed-end fund, the shares
of which are offered at net asset value. Therefore, no separate
market exists. The Fund's investment adviser voluntarily waived a
portion of its management fee. Without such waiver, the Fund's
returns would have been lower.
++Commencement of operations.
+++Aggregrate total investment return.
See Notes to Financial Statements.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Senior Floating Rate Fund II, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a
continuously offered, non-diversified, closed-end management
investment company. The Fund's financial statements are prepared in
accordance with accounting principles generally accepted in the
United States of America, which may require the use of management
accruals and estimates.
(a) Loan participation interests--The Fund invests in senior secured
floating rate loan interests ("Loan Interests") with collateral
having a market value, at time of acquisition by the Fund, which
Fund management believes equals or exceeds the principal amount of
the corporate loan. The Fund may invest up to 20% of its total
assets in loans made on an unsecured basis. Depending on how the
loan was acquired, the Fund will regard the issuer as including the
corporate borrower along with an agent bank for the syndicate of
lenders and any intermediary of the Fund's investment. Because
agents and intermediaries are primarily commercial banks, the Fund's
investment in corporate loans at August 31, 2000 could be considered
to be concentrated in commercial banking.
(b) Valuation of investments--Loan Interests are valued in
accordance with guidelines established by the Board of Directors.
Loan Interests are valued at the mean between the last available bid
and asked prices from one or more brokers or dealers as obtained
from Loan Pricing Corporation. For Loan Interests for which an
active secondary market does not exist to a reliable degree in the
opinion of the Investment Adviser, such Loan Interests will be
valued by the Investment Adviser at fair value, which is intended to
approximate market value.
Other portfolio securities may be valued on the basis of prices
furnished by one or more pricing services which determine prices for
normal, institutional-size trading units of such securities using
market information, transactions for comparable securities and
various relationships between securities which are generally
recognized by institutional traders. In certain circumstances,
portfolio securities are valued at the last sale price on the
exchange that is the primary market for such securities, or the last
quoted bid price for those securities for which the over-the-counter
market is the primary market or for listed securities in which there
were no sales during the day. Short-term securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund.
(c) Derivative financial instruments--The Fund may engage in various
portfolio investment strategies to increase or decrease the level of
risk to which the Fund is exposed more quickly and efficiently than
transactions in other types of instruments. Losses may arise due to
changes in the value of the contract or if the counterparty does not
perform under the contract.
* Interest rate transactions--The Fund is authorized to enter into
interest rate swaps and purchase or sell interest rate caps and
floors. In an interest rate swap, the Fund exchanges with another
party their respective commitments to pay or receive interest on a
specified notional principal amount. The purchase of an interest
rate cap (or floor) entitles the purchaser, to the extent that a
specified index exceeds (or falls below) a predetermined interest
rate, to receive payments of interest equal to the difference
between the index and the predetermined rate on a notional principal
amount from the party selling such interest rate cap (or floor).
(d) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
discount) is recognized on the accrual basis. Realized gains and
losses on security transactions are determined on the identified
cost basis. Facility fees are accreted into income over the term of
the related loan.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
2. Investment Advisory and Administrative Services
Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Investment Managers, L.P. ("MLIM"). The general
partner of MLIM is Princeton Services, Inc. ("PSI"), an indirect
wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."),
which is the limited partner.
MLIM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to perform this investment advisory
function. For such services, the Fund pays a monthly fee at an
annual rate of .95% of the Fund's average daily net assets. For the
year ended August 31, 2000, MLIM earned fees of $3,345,377, of which
$364,530 was waived.
The Fund also has an Administrative Services Agreement with MLIM
whereby MLIM will receive a fee equal to an annual rate of .40% of
the Fund's average daily net assets on a monthly basis, in return
for the performance of administrative services (other than
investment advice and related portfolio activities) necessary for
the operation of the Fund.
For the year ended August 31, 2000, FAM Distributors, Inc. ("FAMD"),
a wholly-owned subsidiary of Merrill Lynch Group, Inc., earned early
withdrawal charges of $267,748 relating to the tender of the Fund's
shares.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLIM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLIM, PSI, FDS, FAMD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended August 31, 2000 were $345,336,223 and
$142,615,917, respectively.
Net realized losses for the year ended August 31, 2000 and net
unrealized gains (losses) as of August 31, 2000 were as follows:
Realized Unrealized
Losses Gains (Losses)
Loan interests $ (3,173,655) $ (2,071,339)
Short-term investments (203) --
Unfunded loan interests -- 1,656
------------ ------------
Total $ (3,173,858) $ (2,069,683)
============ ============
As of August 31, 2000, net unrealized depreciation for financial
reporting and Federal income tax purposes aggregated $2,071,339, of
which $1,541,286 related to appreciated securities and $3,612,625
related to depreciated securities. The aggregate cost of investments
at August 31, 2000 for Federal income tax purposes was $440,360,896.
4. Capital Share Transactions:
Transactions in capital shares were as follows:
For the Year Ended Dollar
August 31, 2000 Shares Amount
Shares sold 27,234,679 $271,213,209
Shares issued to share-
holders in reinvestment
of dividends 1,438,383 14,304,352
------------ ------------
Total issued 28,673,062 285,517,561
Shares tendered (6,818,025) (67,641,618)
------------ ------------
Net increase 21,855,037 $217,875,943
============ ============
For the Period March 26, 1999++ Dollar
to August 31, 1999 Shares Amount
Shares sold 23,185,920 $231,994,651
Shares issued to share-
holders in reinvestment
of dividends 204,831 2,051,012
------------ ------------
Total issued 23,390,751 234,045,663
Shares tendered (475,992) (4,764,687)
------------ ------------
Net increase 22,914,759 $229,280,976
============ ============
++Prior to March 26, 1999 (commencement of operations), the Fund
issued 10,000 shares to MLIM for $100,000.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
5. Short-Term Borrowings:
On July 1, 2000, the Fund became a party to a $1,000,000,000 credit
agreement dated as of December 3, 1999 among certain other funds
managed by MLIM and its affiliates, Bank of America, N.A., and
certain other lenders. The Fund may borrow under the credit
agreement to fund shareholder redemptions and other lawful purposes
other than for leverage. The Fund may borrow up to the maximum
amount allowable under the fund's current prospectus and statement
of additional information, subject to various other legal,
regulatory or contractual limits. The Fund pays a commitment fee of
.09% per annum based on the Fund's pro rata share of the unused
portion of the facility. Amounts borrowed under the facility bear
interest at a rate equal to, at each fund's election, the Federal
Funds rate plus .50% or a base rate as determined by Bank of
America, N.A. The Fund did not borrow under this facility, or under
its former credit facility with The Bank of New York during the year
ended August 31, 2000.
For the year ended August 31, 2000, the facility and commitment fees
paid by the Fund aggregated approximately $24,000.
6. Capital Loss Carryforward:
At August 31, 2000, the Fund had a net capital loss carryforward of
approximately $63,000, of which $5,000 expires in 2007 and $58,000
expires in 2008. This amount will be available to offset like
amounts of any future taxable gains.
7. Subsequent Events:
The Fund began a quarterly tender offer on October 17, 2000 which
concludes on November 14, 2000.
On October 6, 2000, the Fund converted into a "master/feeder"
structure. In the "master/feeder"structure, the Fund is a "feeder"
fund that invests its assets in the corresponding "master"portfolio
of Master Senior Floating Rate Trust (the "Trust"). The Trust has
the same investment objective as the Fund. All portfolio investments
are made at the Trust level. Fund Asset Management, L.P. ("FAM"), an
affiliate of MLIM, provides investment advisory services to the
Trust and provides administrative services to the Fund. The Trust
has become, and the Fund is no longer, a party to the $1,000,000,000
credit agreement referred to above.
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Senior Floating Rate Fund II, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Senior Floating Rate Fund II, Inc. as of August 31, 2000, the
related statements of operations and cash flows for the year then
ended and changes in net assets and the financial highlights for the
year then ended and for the period March 26, 1999 (commencement of
operations) to August 31, 1999. These financial statements and the
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned at August 31, 2000 by
correspondence with the custodian and financial intermediaries or
other alternative procedures. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Senior Floating Rate Fund II, Inc. as of August 31,
2000, the results of its operations, the changes in its net assets,
cash flows and the financial highlights for the respective stated
periods in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
October 17, 2000
Merrill Lynch Senior Floating Rate Fund II, Inc.
August 31, 2000
PORTFOLIO PROFILE (unaudited)
AS OF AUGUST 31, 2000
Percent of
Ten Largest Holdings Total Assets
Charter Communications Holdings 3.4%
VoiceStream PCSHoldings Corp. 3.4
Nextel Communications, Inc. 3.3
Hollinger International Publishing Inc. 2.5
Wyndam International, Inc. 2.5
Global Crossing Holdings Ltd. 2.3
Isle of Capri Casinos, Inc. 2.3
Century Cable LLC 2.3
Huntsman ICI Chemicals LLC 2.2
Stone Container Corp. 2.0
Percent of
Five Largest Industries Total Assets
Wireless Telecommunications 12.7%
Cable Television Services 10.0
Broadcasting--Radio & Television 7.1
Printing & Publishing 5.9
Electronics/Electrical Components 4.6
Percent of
Quality Rating Long-Term
S&P/Moody's Investments
BBB/Baa 3.4%
BB/Ba 56.3
B/B 23.2
CCC/Caa or lower 0.5
NR(Not Rated) 16.2
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Joseph T. Monagle Jr., Senior Vice President
Richard C. Kilbride, Vice President
Gilles Marchand, Vice President
Donald C. Burke, Vice President and Treasurer
Bradley J. Lucido, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863