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 811-05870
811-10171
Name of Fund: BlackRock Senior Floating Rate Fund, Inc.
Master Senior Floating Rate LLC
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Senior Floating Rate Fund, Inc. and Master Senior
Floating Rate LLC, 800 Scudders Mill Road, Plainsboro, NJ, 08536.
Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 882-0052
Date of fiscal year end: 08/31/07
Date of reporting period: 09/01/06 - 08/31/07
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
BlackRock
Senior Floating Rate Fund, Inc.
ANNUAL REPORT AUGUST 31, 2007
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Senior Floating Rate Fund, 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 only to the shareholders of BlackRock Senior Floating Rate Fund, Inc. for
their information. It is not a prospectus, circular or representation
intended for use in the purchase of shares of the Fund or any securities
mentioned in this report. Past performance results shown in this report
should not be considered a representation of future performance.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web
site at http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the most recent
12-month period ended June 30 is available (1) at www.blackrock.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
BlackRock Senior Floating Rate Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
It's Fast, Convenient, & Timely!
BlackRock Senior Floating Rate Fund, Inc.
Proxy Results
During the six-month period ended August 31, 2007, the shareholders of
BlackRock Senior Floating Rate Fund, Inc. voted on the following proposal,
which was approved at an annual shareholders' meeting on August 16, 2007. This
proposal was part of the reorganization of the Fund's Board of Directors to
take effect on or about November 1, 2007. A description of the proposal and
number of shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Board of Directors: G. Nicholas Beckwith, III 56,358,139 2,044,684
Richard E. Cavanagh 56,349,458 2,053,366
Richard S. Davis 56,348,796 2,054,028
Kent Dixon 56,353,968 2,048,855
Frank J. Fabozzi 56,365,191 2,037,632
Kathleen F. Feldstein 56,349,349 2,053,474
James T. Flynn 56,354,401 2,048,422
Henry Gabbay 56,361,863 2,040,961
Jerrold B. Harris 56,358,761 2,044,062
R. Glenn Hubbard 56,346,956 2,055,868
W. Carl Kester 56,361,353 2,041,470
Karen P. Robards 56,365,899 2,036,924
Robert S. Salomon, Jr. 56,350,561 2,052,262
Important Tax Information (unaudited)
The following information is provided with respect to the ordinary income
distributions paid monthly by BlackRock Senior Floating Rate Fund, Inc. for
the fiscal year ended August 31, 2007:
Interest-Related Dividends for Non-U.S. Residents*
Month Paid: September 2006 84.33%
October 2006 - December 2006 88.37%
January 2007 - August 2007 84.03%
* Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for non-resident aliens and foreign
corporations.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
A Letter to Shareholders
Dear Shareholder
Financial markets embarked on a wild ride during the August reporting period.
Subprime mortgage troubles intensified in the final months of the period,
spawning a widespread credit and liquidity crisis that crept into other areas
of the market. The U.S. Federal Reserve Board (the Fed) and other countries'
central banks stepped in to inject liquidity into the markets and bolster
investor confidence. In August, the Fed cut the discount rate, the rate
charged to banks to borrow money directly from the Fed, from 6.25% to 5.75%.
Another .50% cut in the discount rate came on September 18, along with a .50%
cut in the more widely followed federal funds rate. This brought the target
short-term interest rate, which had remained unchanged at 5.25% for over a
year, to 4.75%.
Although heightened volatility has been a recurring theme throughout the past
year, the global economy (excluding the U.S. housing market) remained quite
healthy. In general, equity market fundamentals also held firm - second-
quarter corporate earnings exceeded expectations (although future earnings
could be at risk if the economy weakens), dividend payouts and share buybacks
continued to grow, and valuations remained attractive. These tailwinds
generally prevailed over such headwinds as a slowing U.S. economy and troubled
housing market, although the more recent credit crunch dampened corporate
merger-and-acquisition activity, a key source of strength for equity markets.
Stocks recorded their second-worst day of the year in August, yet remained
comfortably in the black year-to-date.
Meanwhile, mixed economic signals and the credit market debacle made for a
volatile backdrop for fixed income, with investors fleeing from bonds
associated with the housing and credit markets in favor of higher-quality
Treasury issues. As a result, the 10-year Treasury yield, which touched 5.30%
in June (its highest level in five years), fell to 4.54% by period-end, while
prices correspondingly rose.
Against this backdrop, financial markets posted mixed results for the six- and
12-month periods ended August 31, 2007:
Total Returns as of August 31, 2007 6-month 12-month
U.S. equities (S&P 500 Index) +5.70% +15.13%
Small cap U.S. equities (Russell 2000 Index) +0.54 +11.36
International equities (MSCI Europe, Australasia, Far East Index) +5.83 +18.71
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +1.54 + 5.26
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) -0.57 + 2.30
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) -1.71 + 6.46
Past performance is no guarantee of future results. Index performance shown
for illustrative purposes only. You cannot invest directly in an index.
As you navigate market volatility, we encourage you to review your
investment goals with your financial professional and to make portfolio
changes, as needed. For more market insight, we invite you to visit
www.blackrock.com/funds. We thank you for entrusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the
months and years ahead.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
Fund President and Director
THIS PAGE NOT PART OF YOUR FUND REPORT
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Fund Summary as of August 31, 2007 BlackRock Senior Floating Rate Fund, Inc.
Fund Information
Initial Offering Date November 3, 1989
Yield based on Net Asset Value as of 8/31/07 ($8.60)* 7.16%
Current Monthly Distribution per share of Common Stock** $.051286
Current Annualized Distribution per share of Common Stock** $.615432
* Yield based on net asset value is calculated by dividing the current
annualized distribution per share by the net asset value. Past performance
does not guarantee future results.
** The distribution is not constant and is subject to change. A portion of the
distribution may be deemed a tax return of capital or net realized gain at
fiscal year end.
The table below summarizes the changes in the Fund's net asset value per
share:
8/31/07 8/31/06 Change High Low
Net Asset Value $8.60 $8.92 (3.59%) $8.96 $8.59
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and exchange
fees; and (b) operating expenses, including advisory fees, distribution fees
including 12b-1 fees, and other Fund expenses. The following example (which is
based on a hypothetical investment of $1,000 invested on March 1, 2007 and
held through August 31, 2007) is intended to assist shareholders both in
calculating expenses based on an investment in the Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during
the period covered by this report, shareholders can divide their account value
by $1,000 and then multiply the result by the number in the first line under
the heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders'
ongoing costs only and do not reflect any transactional expenses, such as
sales charges, redemption fees or exchange fees. Therefore, the second table
is useful in comparing ongoing expenses only, and will not help shareholders
determine the relative total expenses of owning different funds. If these
transactional expenses were included, shareholder expenses would have been
higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value March 1, 2007
March 1, August 31, to August 31,
2007 2007 2007
Actual
BlackRock Senior Floating Rate Fund, Inc. $1,000 $ 992.10 $7.30
Hypothetical (5% annual return before expenses)**
BlackRock Senior Floating Rate Fund, Inc. $1,000 $1,018.27 $7.39
* Expenses are equal to the annualized expense ratio of 1.43%, multiplied by the average account value
over the period, multiplied by 187/365 (to reflect the one-half year period shown). Because the Fund
is a feeder fund, the expense table reflects the expenses of both the feeder fund and the Master LLC
in which it invests.
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in the
most recent fiscal half year divided by 365.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Statement of Assets and Liabilities BlackRock Senior Floating Rate Fund, Inc.
As of August 31, 2007
Assets
Investment in Master Senior Floating Rate LLC (the "Master LLC"), at value
(identified cost--$531,013,919) $ 508,802,474
Prepaid expenses and other assets 214,714
---------------
Total assets 509,017,188
---------------
Liabilities
Payables:
Dividends to shareholders $ 3,114,537
Administrator 117,317
Other affiliates 5,246 3,237,100
---------------
Accrued expenses 264,769
---------------
Total liabilities 3,501,869
---------------
Net Assets
Net assets $ 505,515,319
===============
Net Assets Consist of
Common Stock, par value $.10 per share; 1,000,000,000 shares authorized $ 5,880,648
Paid-in capital in excess of par 880,280,842
Accumulated distributions in excess of investment income--net $ (12,366)
Accumulated realized capital losses allocated from the Master LLC--net (358,422,360)
Unrealized depreciation allocated from the Master LLC--net (22,211,445)
---------------
Total accumulated losses--net (380,646,171)
---------------
Net Assets--Equivalent to $8.60 per share based on 58,806,479 shares of
capital stock outstanding $ 505,515,319
===============
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Statement of Operations BlackRock Senior Floating Rate Fund, Inc.
For the Year Ended August 31, 2007
Investment Income
Net investment income allocated from the Master LLC:
Interest $ 44,139,435
Facility and other fees 439,364
Dividends 62,506
Expenses (5,714,258)
---------------
Total income 38,927,047
---------------
Expenses
Administration fees $ 1,375,575
Transfer agent fees 408,153
Tender offer fees 236,610
Printing and shareholder reports 84,845
Professional fees 58,200
Registration fees 36,402
Other 9,367
---------------
Total expenses 2,209,152
---------------
Investment income--net 36,717,895
---------------
Realized & Unrealized Gain (Loss) Allocated from the Master LLC--Net
Realized loss on investments and swaps--net (30,570,377)
Change in unrealized appreciation/depreciation on investments, swaps and
unfunded corporate loans--net 11,735,034
---------------
Total realized and unrealized loss--net (18,835,343)
---------------
Net Increase in Net Assets Resulting from Operations $ 17,882,552
===============
See Notes to Financial Statements.
Statements of Changes in Net Assets BlackRock Senior Floating Rate Fund, Inc.
For the Year Ended
August 31,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 36,717,895 $ 36,533,747
Realized loss--net (30,570,377) (2,414,857)
Change in unrealized appreciation/depreciation--net 11,735,034 (3,662,991)
--------------- ---------------
Net increase in net assets resulting from operations 17,882,552 30,455,899
--------------- ---------------
Dividends to Shareholders
Investment income--net (36,713,751) (36,533,735)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (36,713,751) (36,533,735)
--------------- ---------------
Capital Share Transactions
Net decrease in net assets derived from capital share transactions (77,460,238) (68,818,345)
--------------- ---------------
Net Assets
Total decrease in net assets (96,291,437) (74,896,181)
Beginning of year 601,806,756 676,702,937
--------------- ---------------
End of year* $ 505,515,319 $ 601,806,756
=============== ===============
* Undistributed (accumulated distributions in excess of) investment income--net $ (12,366) $ 237,092
=============== ===============
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Financial Highlights BlackRock Senior Floating Rate Fund, Inc.
The following per share data and ratios have been derived For the Year Ended August 31,
from information provided in the financial statements. 2007 2006 2005 2004 2003+++
Per Share Operating Performance
Net asset value, beginning of year $ 8.92 $ 9.01 $ 8.91 $ 8.40 $ 8.05
----------- ----------- ----------- ----------- -----------
Investment income--net .60** .52** .37** .30** .38
Realized and unrealized gain (loss)--net (.32) (.08) .10 .51 .36
----------- ----------- ----------- ----------- -----------
Total from investment operations .28 .44 .47 .81 .74
----------- ----------- ----------- ----------- -----------
Less dividends from investment income--net (.60) (.53) (.37) (.30) (.39)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 8.60 $ 8.92 $ 9.01 $ 8.91 $ 8.40
=========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 3.07% 4.97% 5.38% 9.73% 9.61%
=========== =========== =========== =========== ===========
Ratios to Average Net Assets++
Expenses, excluding interest expense 1.44% 1.43% 1.41% 1.44% 1.45%
=========== =========== =========== =========== ===========
Expenses 1.44% 1.43% 1.41% 1.44% 1.46%
=========== =========== =========== =========== ===========
Investment income--net 6.67% 5.84% 4.11% 3.41% 4.81%
=========== =========== =========== =========== ===========
Leverage
Average amount of borrowings during the year (in thousands) -- -- -- -- $ 8,138++++
=========== =========== =========== =========== ===========
Average amount of borrowings outstanding per share
during the year -- -- -- -- $ .07++++
=========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of year (in thousands) $ 505,515 $ 601,807 $ 676,703 $ 756,795 $ 798,320
=========== =========== =========== =========== ===========
Portfolio turnover from the Master LLC 46% 54% 53% 76% 57%
=========== =========== =========== =========== ===========
* 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. No secondary market for the Fund's
shares exists.
** Based on average shares outstanding.
++ Includes the Fund's share of the Master LLC's allocated expenses and/or investment income--net.
++++ Reflects the average amount of borrowings of the Fund prior to the Fund's conversion from a stand-alone
investment company to a "feeder" fund on February 10, 2003.
+++ On February 10, 2003, the Fund converted from a stand-alone investment company to a "feeder" fund that
seeks to achieve its investment objective by investing all of its assets in the Master LLC, which has the
same investment objective as the Fund. All investments are made at the Master LLC level. This structure is
sometimes called a "master/feeder" structure.
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Notes to Financial Statements BlackRock Senior Floating Rate Fund, Inc.
1. Significant Accounting Policies:
BlackRock Senior Floating Rate Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a continuously offered, non-
diversified, closed-end management investment company. The Fund seeks to
achieve its investment objective by investing all of its assets in the Master
Senior Floating Rate LLC (the "Master LLC"), which has the same investment
objective and strategies as the Fund. Effective June 15, 2007, the Master LLC
was converted from a Delaware statutory trust to a Delaware limited liability
company. The value of the Fund's investment in the Master LLC reflects the
Fund's proportionate interest in the net assets of the Master LLC. The
performance of the Fund is directly affected by the performance of the Master
LLC. The financial statements of the Master LLC, including the Schedule of
Investments, are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The Fund's financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. The percentage of the Master
LLC owned by the Fund at August 31, 2007 was 67.1%. The following is a summary
of significant accounting policies followed by the Fund.
(a) Valuation of investments--The Fund records its investment in the Master
LLC at fair value. Valuation of securities held by the Master LLC is discussed
in Note 1(b) of the Master LLC's Notes to Financial Statements, which are
included elsewhere in this report.
(b) Investment income and expenses--The Fund records daily its proportionate
share of the Master LLC's income, expenses and realized and unrealized gains
and losses. In addition, the Fund accrues its own expenses.
(c) 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.
(d) Prepaid registration fees--Prepaid registration fees are charged to
expense as the related shares are issued.
(e) 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.
(f) Investment transactions--Investment transactions in the Master LLC are
accounted for on a trade date basis.
(g) Recent accounting pronouncement--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." FIN 48 prescribes the minimum recognition threshold a tax position must
meet in connection with accounting for uncertainties in income tax positions
taken or expected to be taken by an entity including mutual funds before being
measured and recognized in the financial statements. Adoption of FIN 48 is
required for the last net asset value calculation in the first required
financial statement reporting period for the fiscal years beginning after
December 15, 2006. The impact on the Fund's financial statements, if any, is
currently being assessed.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), was issued and is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provisions of FAS 157. FAS 159
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at
fair value. FAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. At this
time, management is evaluating the implications of FAS 159 and its impact on
the Fund's financial statements, if any, has not been determined.
(h) Reclassifications--U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the
current year, $253,940 has been reclassified between distributions in excess
of net investment income and accumulated net realized capital losses on
investments, $3,365,959 has been reclassified between paid-in capital in
excess of par and accumulated net realized capital losses on investments and
$338 has been reclassified between paid-in capital in excess of par and
distributions in excess of net investment income as a result of permanent
differences attributable to accounting for swap agreements, the expiration of
capital loss carryforwards and nondeductible expenses. These reclassifications
have no effect on net assets or net asset values per share.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Notes to Financial Statements (concluded)
BlackRock Senior Floating Rate Fund, Inc.
2. Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. ("PNC"),
has approximately a 34% economic and voting interest. The new company operates
under the BlackRock name and is governed by a board of directors with a
majority of independent members.
On August 15, 2006, shareholders of the Fund approved a new Investment
Advisory Agreement for the Master LLC with BlackRock Advisors, Inc. BlackRock
Advisors Inc. was reorganized into a limited liability company and renamed
BlackRock Advisors, LLC (the "Manager"), an indirect, wholly owned subsidiary
of BlackRock Inc. The new Investment Advisory Agreement between the Master LLC
and the Manager became effective on September 29, 2006. Prior to September 29,
2006, FAM was the Master LLC's manager. The general partner of FAM is an
indirect, wholly owned subsidiary of Merrill Lynch, which is the limited
partner.
The Fund has entered into an Administration Agreement with the Manager. The
Fund pays a monthly fee at an annual rate of .25% of the Fund's average daily
net assets for the performance of administrative services (other than
investment advice and related portfolio activities) necessary for the
operation of the Fund. Prior to September 29, 2006, FAM acted as the Fund's
administrator and was compensated at the same fee rate. The Fund has entered
into separate Distribution Agreements and Distribution Plans with FAM
Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc. ("BDI")
(collectively, the "Distributor"). FAMD is a wholly owned subsidiary of
Merrill Lynch Group, Inc. and BDI is an affiliate of BlackRock, Inc.
For the year ended August 31, 2007, the Distributor earned early withdrawal
charges of $25,780 relating to the tender of the Fund's shares.
Effective September 29, 2006, PFPC Inc., an indirect, wholly owned subsidiary
of PNC and an affiliate of the Manager, became the Fund's transfer agent.
Prior to September 29, 2006, the Fund's transfer agent was Financial Data
Services, Inc. ("FDS"), a wholly owned subsidiary of Merrill Lynch.
Prior to September 29, 2006, certain officers and/or directors of the Fund
were officers and/or directors of FAM, FAMD, FDS, MLIM, and/or Merrill Lynch.
Commencing September 29, 2006, certain officers and/or directors of the Fund
are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Capital Share Transactions:
Transactions in capital shares were as follows:
For the Year Ended Dollar
August 31, 2007 Shares Amount
Shares sold 2,617,014 $ 23,300,290
Shares issued to shareholders in
reinvestment of dividends 2,075,693 18,417,801
-------------- ---------------
Total issued 4,692,707 41,718,091
Shares tendered (13,354,571) (119,178,329)
-------------- ---------------
Net decrease (8,661,864) $ (77,460,238)
============== ===============
For the Year Ended Dollar
August 31, 2006 Shares Amount
Shares sold 3,288,136 $ 29,489,218
Shares issued to shareholders in
reinvestment of dividends 1,965,892 17,640,346
-------------- ---------------
Total issued 5,254,028 47,129,564
Shares tendered (12,906,388) (115,947,909)
-------------- ---------------
Net decrease (7,652,360) $ (68,818,345)
============== ===============
4. Distributions to Shareholders:
The tax character of distributions paid the fiscal years ended August
31, 2007 and August 31, 2006 was as follows:
8/31/2007 8/31/2006
Distributions paid from:
Ordinary income $ 36,713,751 $ 36,533,735
-------------- ---------------
Total taxable distributions $ 36,713,751 $ 36,533,735
============== ===============
As of August 31, 2007, the components of accumulated losses on a tax
basis were as follows:
Undistributed ordinary income--net $ 107,295
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 107,295
Capital loss carryforward (328,245,470)*
Unrealized losses--net (52,507,996)**
---------------
Total accumulated losses--net $ (380,646,171)
===============
* On August 31, 2007, the Fund had a net capital loss carryforward
of $328,245,470, of which $28,290,011 expires in 2008,
$64,746,799 expires in 2009, $87,904,309 expires in 2010,
$53,409,203 expires in 2011, $34,221,818 expires in 2012,
$56,166,095 expires in 2013, $945,546 expires in 2014 and
$2,561,689 expires in 2015. This amount will be available to offset
like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
losses is attributable primarily to the book/tax difference in the
accrual of income on securities in default and the deferral of post-
October capital losses for tax purposes.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Report of Independent Registered Public Accounting Firm
BlackRock Senior Floating Rate Fund, Inc.
To the Shareholders and Board of Directors of
BlackRock Senior Floating Rate Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
BlackRock Senior Floating Rate Fund, Inc. (the "Fund"), as of August 31, 2007,
and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Fund is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Fund's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock Senior Floating Rate Fund, Inc. as of August 31, 2007, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and its financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
October 26, 2007
Portfolio Information Master Senior Floating Rate LLC
As a Percent of Long-Term Investments
Portfolio Composition
Asset Mix 8/31/07 8/31/06
Floating Rate Loan Interests 93% 92%
Corporate Bonds 7 8
Warrants --* --*
Common Stocks --* --*
Other Interests --* --*
* Amount is less than 1%.
Credit Quality Allocations*
Credit Ratings 8/31/07 8/31/06
BBB/Baa 1% --
BB/Ba 34 34%
B/B 55 54
CCC/Caa 2 5
NR (Not Rated) 8 7
Other** --*** --***
* Using the higher of S&P's or Moody's ratings.
** Includes portfolio holdings in common stocks, warrants
and other interests.
*** Amount is less than 1%.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Schedule of Investments as of August 31, 2007 Master Senior Floating Rate LLC
Face
Amount Floating Rate Loan Interests* Value
Aerospace & Defense--1.3%
Hawker Beechcraft:
$ 195,035 Letter of Credit, 5.26% due 3/31/2014 $ 185,284
2,299,202 Term Loan B, 7.36% - 7.508%
due 3/31/2014 2,184,242
Vought Aircraft Industries, Inc.:
6,151,765 Term Loan, 7.83% due 12/22/2011 5,944,143
1,200,000 Tranche B Line of Credit Deposit, 7.822%
due 12/22/2010 1,159,500
--------------
9,473,169
Airlines--0.5%
1,500,000 Delta Airlines First Lien Term Loan, 7.36%
due 5/15/2012 1,424,063
2,985,000 United Air Lines, Inc. Term Loan B, 7.625%
due 1/30/2014 2,799,058
--------------
4,223,121
Auto Components--0.9%
3,039,851 GenTek, Inc. First Lien Term Loan,
7.36% - 7.61% due 2/28/2011 2,948,655
Metaldyne Corp.:
288,462 Letter of Credit, 5.17% - 9.125%
due 1/15/2012 281,250
1,961,538 Term Loan B, 9.125% due 1/15/2014 1,912,500
1,000,000 TRW Automotive, Inc. Term Loan B, 6.875%
due 2/09/2014 970,000
1,000,000 Visteon Corp. Term Loan B-2, 8.38%
due 12/13/2013 920,625
--------------
7,033,030
Beverages--0.5%
4,000,000 Culligan International Term Loan B,
7.61% - 7.815% due 10/24/2012 3,640,000
Building Products--0.4%
2,386,429 Goodman Global Holdings Term Loan, 7.188%
due 12/23/2011 2,314,836
Ply Gem Industries, Inc.:
35,662 Term Loan, 8.11% due 8/15/2011 33,878
954,335 Term Loan B, 8.11% due 8/15/2011 (b) 906,618
--------------
3,255,332
Chemicals--6.4%
400,000 Arizona Chemical Second Lien Term Loan,
11.01% due 2/28/2014 370,667
1,500,000 BOC Edwards Ltd. Term Loan B, 7.541%
due 5/21/2014 1,372,500
1,980,000 Columbian Chemicals Co. Term Loan B, 7.11%
due 3/16/2013 1,861,200
2,000,000 Flint Group Term Loan, 7.933% due 12/20/2014 1,895,500
8,866,846 Huntsman ICI Holdings Term Loan B, 7.25%
due 4/19/2014 8,676,581
1,500,000 ISP Chemco Term Loan B, 7.125% - 7.313%
due 5/25/2014 1,438,751
Invista:
2,446,695 Term Loan, 6.86% due 4/29/2011 2,364,119
5,269,396 Term Loan B-1, 6.86% due 4/29/2011 5,091,554
2,000,000 KIK Custom Products Inc. First Lien Term Loan,
7.61% due 5/30/2014 1,820,000
3,735,004 Nalco Co. Tranche B Term Loan, 7.10%
due 11/04/2010 3,640,590
Face
Amount Floating Rate Loan Interests* Value
Chemicals (concluded)
$ 1,970,000 Polymer Group, Inc. Term Loan B, 7.61%
due 11/22/2012 $ 1,930,600
3,900,000 Rockwood Specialties Group, Inc. Tranche D
Term Loan, 6.857% due 7/30/2012 3,770,813
Wellman, Inc.:
7,500,000 First Lien Term Loan, 9.356% due 2/10/2009 7,181,250
8,250,000 Second Lien Term Loan, 12.106%
due 2/10/2010 7,177,500
--------------
48,591,625
Commercial Services & Supplies--3.1%
1,965,957 Alliance Laundry Systems LLC Term Loan,
7.58% - 7.61% due 2/01/2012 1,926,638
Allied Waste North America, Inc.:
3,201,616 Term Loan, 6.81% - 6.89% due 1/15/2012 3,105,568
1,742,089 Tranche A Credit Linked Deposit, 5.32%
due 1/15/2012 1,689,826
1,471,014 American Reprographics Co. Term Loan,
7.11% - 7.25% due 6/18/2009 1,423,206
Aramark Corp.:
237,029 Letter of Credit, 5.36% due 1/30/2014 228,081
3,369,115 Term Loan B, 7.36% due 1/30/2014 3,241,931
249,375 Brickman Group, Inc. Term Loan, 7.34%
due 1/30/2014 236,283
2,268,000 Camelbak Products LLC First Lien Term Loan,
9.15% - 9.37% due 8/04/2011 2,103,570
1,000,000 Jason, Inc. Term Loan B, 8.03% - 9.50%
due 4/30/2010 950,000
1,269,709 John Maneely Co. Term Loan B, 8.61%
due 12/15/2013 1,135,860
Kion GmbH:
250,000 Term Loan B, 7.58% due 3/15/2015 236,945
250,000 Term Loan C, 7.83% due 3/15/2016 237,500
1,496,250 RiskMetrics Group, Inc. Term Loan, 7.61%
due 1/15/2014 1,455,103
1,055,629 Sirva Worldwide Tranche B Term Loan, 12.61%
due 12/01/2010 807,556
4,950,187 West Corp. Term Loan, 7.735% - 7.88%
due 10/31/2013 4,774,866
--------------
23,552,933
Computers & Peripherals--1.3%
1,000,000 Intergraph Corp. Term Loan, 11.506%
due 11/15/2014 956,250
Reynolds and Reynolds Co.:
4,941,402 First Lien Term Loan, 7.36% due 10/31/2012 4,725,216
4,000,000 Second Lien Term Loan, 10.86%
due 10/31/2013 3,960,000
--------------
9,641,466
Construction & Engineering--0.1%
997,500 BakerCorp Term Loan C, 7.61% - 7.79%
due 5/15/2014 963,834
Construction Materials--1.0%
2,768,555 Headwaters, Inc. Term Loan B-1, 7.36%
due 4/30/2011 2,699,341
4,850,000 Nortek, Inc. Term Loan, 7.61% due 8/27/2011 4,625,688
--------------
7,325,029
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Schedule of Investments (continued) Master Senior Floating Rate LLC
Face
Amount Floating Rate Loan Interests* Value
Containers & Packaging--2.4%
$ 1,866,312 Anchor Glass Container Corp. Term Loan B,
7.61% - 7.791% due 5/03/2013 $ 1,810,322
750,000 Consolidated Container Second Lien Term Loan,
10.86% - 11.065% due 10/15/2014 675,000
6,982,500 Graham Packaging Term Loan B, 7.625%
due 4/15/2011 6,784,665
1,990,000 Graphic Packaging International Term Loan B,
7.36% - 7.51% due 5/16/2014 1,959,320
997,500 SCA Packaging First Lien Term Loan, 8.11%
due 3/03/2015 937,650
Smurfit-Stone Container Corp.:
1,698,760 Term Loan B, 7.375% due 11/01/2011 1,661,864
2,107,696 Term Loan C, 7.375% due 11/01/2011 2,061,919
2,241,039 Smurfit-Stone Container Corp. Deposit Account,
5.62% due 11/01/2010 2,192,366
--------------
18,083,106
Distributors--1.1%
5,790,900 Buhrmann USA, Inc. Term Loan C,
7.32% - 7.36% due 12/23/2010 5,638,889
2,736,250 Keystone Automotive Operations, Inc. Term
Loan B, 8.828% - 9% due 1/15/2012 2,496,828
--------------
8,135,717
Diversified Financial Services--1.7%
7,000,000 JG Wentworth Manufacturing Term Loan B,
7.61% due 4/15/2014 6,492,500
6,912,806 LPL Holdings, Inc. Term Loan C, 7.36%
due 6/28/2013 6,567,166
--------------
13,059,666
Diversified Telecommunication Services--1.5%
7,998,750 Consolidated Communications, Inc. Term Loan D,
7.11% due 10/14/2011 7,758,787
1,500,000 Hawaiian Telcom Term Loan C, 7.61%
due 5/25/2014 1,420,500
497,500 Kentucky Data Link, Inc. Term Loan B, 7.815%
due 2/26/2014 478,844
1,990,000 Time Warner Telecom Term Loan, 7.36%
due 1/07/2013 1,970,100
--------------
11,628,231
Electrical Equipment--0.2%
Generac Portable Products, Inc.:
990,000 First Lien Term Loan, 7.86% due 11/15/2013 875,443
1,500,000 Second Lien Term Loan, 11.36%
due 5/15/2014 998,750
--------------
1,874,193
Electronic Equipment & Instruments--0.5%
1,000,000 CoCreate Software, Inc. Second Lien Term Loan,
12.608% due 5/30/2014 960,000
3,000,000 SafeNet, Inc. Second Lien Term Loan, 11.36%
due 5/11/2015 2,805,000
--------------
3,765,000
Energy Equipment & Services--1.5%
1,500,000 Bobcat Gas Storage Term Loan B, 7.485%
due 9/15/2014 1,425,000
1,496,250 Brock Holdings Term Loan, 7.36% due 2/28/2014 1,432,659
Dresser, Inc.:
3,000,000 First Lien Term Loan, 8.01% - 8.038%
due 5/15/2014 2,881,875
2,000,000 Second Lien Term Loan, 11.129%
due 5/04/2015 1,890,000
Face
Amount Floating Rate Loan Interests* Value
Energy Equipment & Services (concluded)
$ 2,955,000 Key Energy Services, Inc. Term Loan B,
7.856% - 8.065% due 6/30/2012 $ 2,888,513
1,234,375 MEG Energy Corp. Term Loan B, 7.36%
due 4/03/2013 1,191,172
--------------
11,709,219
Food & Staples Retailing--2.4%
1,551,667 Advance Food Co. Term Loan B, 7.11%
due 3/31/2014 1,458,567
2,917,485 American Seafood Group LLC Delay Draw Term
Loan, 7.25% due 9/30/2012 2,829,960
DS Waters LP Term Loan B:
1,496,241 7.61% - 7.753% due 3/31/2012 1,406,466
500,000 9.36% due 3/31/2012 470,000
Dole Food Co., Inc.:
819,174 Letter of Credit, 5.23% due 4/12/2013 770,023
1,654,793 Term Loan B, 7.438% - 9.25%
due 4/12/2013 1,555,505
5,515,973 Term Loan C, 7.438% - 9.25%
due 4/04/2013 5,185,014
726,913 Eight O'Clock Coffee Second Lien Term Loan,
8.125% due 7/21/2012 690,567
497,500 McJunkin Corp. Term Loan B, 7.815%
due 1/30/2014 483,197
491,342 Pierre Foods, Inc. Term Loan B, 7.78%
due 6/30/2010 482,744
Sturm Foods, Inc.:
2,493,750 First Lien Term Loan, 7.875% - 7.938%
due 1/30/2014 2,319,188
1,000,000 Second Lien Term Loan, 11.438%
due 6/30/2014 932,500
--------------
18,583,731
Food Products--0.6%
4,322,844 Del Monte Term Loan B, 7% due 2/08/2012 4,239,089
Health Care Providers & Services--3.5%
1,750,000 Aearo Technologies, Inc. Term Loan B, 7.61%
due 5/14/2014 1,662,500
748,101 CCS Medical First Lien Term Loan, 8.82%
due 10/31/2012 722,853
4,690,622 Community Health Term Loan B, 7.76%
due 6/18/2014 4,498,438
4,000,000 DaVita, Inc. Term Loan B, 6.86% - 7.01%
due 7/30/2012 3,870,000
1,995,000 Health Management Associates, Inc. Term Loan B,
7.11% due 1/15/2014 1,870,937
3,946,549 LifePoint Hospitals, Inc. Term Loan B, 6.985%
due 4/15/2012 3,804,276
744,375 Sterigenics International, Inc. Term Loan B,
7.61% due 11/30/2013 714,600
9,762,436 Vanguard Health Systems Term Loan B, 7.61%
due 9/23/2011 9,335,329
--------------
26,478,933
Hotels, Restaurants & Leisure--5.2%
248,615 Arby's Restaurant Group Term Loan B,
7.61% - 7.82% due 7/31/2012 241,157
Green Valley Ranch Gaming LLC Term Loan:
480,568 7.36% - 7.565% due 2/16/2014 456,540
1,750,000 8.791% due 8/30/2014 1,645,000
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Schedule of Investments (continued) Master Senior Floating Rate LLC
Face
Amount Floating Rate Loan Interests* Value
Hotels, Restaurants & Leisure (concluded)
$ 361,111 Lake Las Vegas Resort Revolving Credit,
15.46% due 12/14/2012 $ 325,000
2,638,889 Lake Las Vegas Resort Term Loan B,15.46%
due 12/14/2012 2,375,000
2,700,000 Las Vegas Sands Term Loan B, 7.11%
due 5/04/2014 2,561,963
1,932,434 MotorCity Casino Term Loan B,
7.36% - 7.51% due 7/21/2012 1,869,629
992,500 OSI Group Term Loan B, 7.36% due 9/02/2011 955,281
OSI Restaurant Partners, Inc.:
75,188 Revolving Credit, 5.18% due 6/14/2013 71,170
924,812 Term Loan B, 7.625% due 5/15/2014 875,393
2,431,628 Penn National Gaming, Inc. Term Loan B,
7.11% due 10/03/2012 2,393,128
QCE LLC:
1,980,000 First Lien Term Loan, 7.61% due 5/05/2013 1,885,950
6,800,000 Second Lien Term Loan, 11.11%
due 11/05/2013 6,477,000
2,000,000 Riviera Holdings Corp. Term Loan B, 7.36%
due 5/11/2017 1,940,000
1,031,315 Tropicana Opco Term Loan B, 7.61%
due 12/15/2011 979,381
Trump Entertainment Resorts Holdings LP:
2,450,000 Delay Draw Term Loan, 7.86% - 8.01%
due 4/28/2012 2,397,938
575,000 Revolving Credit, 7.83% due 5/01/2010 546,250
2,450,000 Term Loan B-1, 7.86% - 7.90%
due 5/01/2012 2,397,938
Venetian Macau US Finance Co. LLC:
3,083,333 Delay Draw Term Loan, 7.61% - 7.76%
due 5/25/2012 2,977,618
6,166,667 Term Loan B, 7.61% due 5/25/2013 5,955,236
--------------
39,326,572
Household Durables--2.3%
1,681,004 American Achievement Corp. Term Loan B,
7.58% - 9.50% due 3/22/2011 1,630,574
1,818,966 Josten's, Inc. Term Loan B, 7.33%
due 10/04/2011 1,742,309
14,503,664 Simmons Co. Tranche B Term Loan,
7.25% - 7.56% due 12/19/2011 14,068,554
--------------
17,441,437
IT Services--2.5%
11,540,598 Activant Solutions Term Loan B,
7.375% due 5/02/2013 10,761,608
Audio Visual Services Corp.:
1,500,000 Second Lien Term Loan, 10.86%
due 2/28/2014 1,425,000
2,000,000 Term Loan B, 7.61% due 2/28/2014 1,880,000
RedPrairie Corp. Term Loan:
496,241 8.50% - 10.25% due 7/31/2012 476,391
298,500 8.375% due 7/31/2012 286,560
3,920,300 SunGard Data Systems, Inc. Term Loan B, 7.356%
due 2/11/2013 3,787,990
475,000 Verifone, Inc. Term Loan B, 7.09% - 7.11%
due 10/31/2013 456,000
--------------
19,073,549
Independent Power Producers & Energy Traders--0.3%
2,000,000 AES Corp. Term Loan, 7% - 7.25%
due 4/30/2008 1,963,334
Face
Amount Floating Rate Loan Interests* Value
Industrial Conglomerates--0.6%
Trimas Corp.:
$ 937,500 Letter of Credit, 7.91% due 8/02/2011 $ 914,063
4,032,031 Term Loan B, 7.59% - 7.61%
due 2/28/2012 3,931,230
--------------
4,845,293
Insurance--0.1%
1,000,000 USI Holdings Corp. Term Loan B, 7.95%
due 5/15/2014 935,000
Internet Software & Services--0.0%
Channel Master Holdings, Inc. (e):
128,199 Revolving Credit, 8.313% due 11/15/2004 0
1,013,568 Term Loan, 9% due 11/15/2004 0
--------------
0
Leisure Equipment & Products--0.8%
1,975,000 Easton-Bell Sports, Inc. Term Loan B, 7.11%
due 3/27/2012 1,882,422
1,666,667 Fender Musical Instruments Corp. Term Loan B,
7.65% due 5/25/2014 1,550,000
497,500 Kerasotes Showplace Theatres LLC Term Loan B,
7.875% due 11/01/2011 490,038
2,075,142 True Temper Sports, Inc. Term Loan B,
8.538% - 8.745% due 3/15/2011 1,971,385
--------------
5,893,845
Machinery--2.0%
997,500 Harrington Holdings, Inc. Term Loan, 7.61%
due 1/15/2014 947,625
5,664,340 Mueller Water Products Term Loan B,
7.108% - 7.315% due 5/16/2014 5,503,852
Navistar International Transportation Corp.:
1,600,000 Revolving Credit, 5.17% - 8.61%
due 1/19/2012 1,536,000
4,400,000 Term Loan, 8.61% due 1/19/2012 4,224,000
2,985,000 OshKosh Truck Corp. Term Loan B, 7.11%
due 11/30/2013 2,862,803
--------------
15,074,280
Media--20.8%
3,000,000 Bragg Communications, 7.83% due 8/06/2014 2,992,500
Cequel Communications LLC:
2,969,224 First Lien Term Loan, 7.36% - 7.505%
due 4/04/2013 2,800,145
7,000,000 Second Lien Term Loan, 9.856%
due 3/31/2015 6,755,000
9,310,345 Term Loan B, 7.36% - 7.505%
due 4/04/2013 8,780,176
2,000,000 Charter Communications, Inc. Term Loan B,
7.361% due 4/30/2014 1,889,108
3,000,000 Clarke American Corp. Term Loan B, 7.86%
due 6/30/2014 2,737,500
973,460 ClientLogic Holding Corp. Term Loan B,
7.86% - 8.065% due 1/30/2014 934,522
6,253,568 DIRECTV Holdings, Inc. Tranche B Term Loan,
7% due 4/13/2013 6,133,381
Dex Media West LLC Term Loan B:
2,151,532 6.86% - 7.01% due 3/09/2010 2,098,511
2,027,791 7.08% - 7.09% due 3/09/2010 1,977,096
5,000,000 Discovery Communications Term Loan B, 7.36%
due 5/14/2014 4,854,165
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Schedule of Investments (continued) Master Senior Floating Rate LLC
Face
Amount Floating Rate Loan Interests* Value
Media (continued)
$ 2,422,500 EMMIS Communications Term Loan B,
7.36% due 10/31/2013 $ 2,328,023
Formula One Group:
1,000,000 Second Lien Term Loan, 9.04%
due 6/30/2014 953,333
1,500,000 Term Loan B, 7.915% due 12/31/2013 1,428,428
GateHouse Media, Inc.:
591,667 Delay Draw Term Loan, 7.36% - 7.51%
due 9/15/2014 535,458
4,000,000 Term Loan B, 7.51% due 9/15/2014 3,620,000
Gray Communications Systems, Inc.:
916,667 First Lien Delay Draw Term Loan, 6.86%
due 9/18/2014 858,802
1,950,000 Term Loan B, 6.86% due 9/18/2014 1,826,906
133,333 Term Loan D, 6.86% due 9/18/2014 124,917
7,965,000 Idearc, Inc. Term Loan B, 7.36% due 11/15/2014 7,697,089
12,000,000 Insight Midwest Holdings LLC Delay Draw Term
Loan, 7.11% due 4/03/2014 11,660,628
16,619,413 Intelsat Corp. Term Loan B, 7.36%
due 1/03/2014 16,062,662
2,500,000 Knology, Inc. Term Loan B, 7.61% due 3/15/2012 2,412,500
1,500,000 LodgeNet Entertainment Corp. Term Loan,
7.36% due 4/04/2014 1,427,501
4,093,750 Mediacom Broadband Group Tranche A Term
Loan, 7.02% - 7.07% due 3/31/2010 3,827,656
2,955,000 Merrill Corp. Term Loan, 7.59% - 7.815%
due 5/15/2011 2,881,125
11,820,301 Metro-Goldwyn-Mayer Studios, Inc. Term Loan B,
8.61% due 4/08/2012 11,129,889
630,500 Multicultural Radio Broadcasting Inc. Term Loan,
8.288% due 12/15/2012 611,585
1,246,873 NEP Supershooters, LP Term Loan B, 7.61%
due 2/13/2014 1,186,608
2,500,000 National Cinemedia LLC Term Loan B, 7.11%
due 2/28/2015 2,350,000
NextMedia Group, Inc.:
1,482,412 Delay Draw Term Loan, 7.33%
due 11/15/2012 1,393,467
2,595,427 First Lien Term Loan, 7.569%
due 11/15/2012 2,439,701
3,250,000 Second Lien Term Loan, 10.01%
due 11/15/2013 3,103,750
6,947,500 Nielsen Finance LLC Term Loan B, 7.36%
due 8/09/2013 6,671,531
11,750,000 Paxson Communications Corp. First Lien Term
Loan, 8.61% due 1/15/2012 11,368,125
Penton Media Term Loan:
498,750 7.61% due 2/15/2013 471,319
500,000 10.36% due 2/15/2014 468,750
2,041,825 RH Donnelley, Inc. Term Loan D-2,
6.86% - 7.05% due 8/30/2011 1,972,346
2,497,494 Riverdeep Group Ltd. Term Loan B, 8.11%
due 12/21/2013 2,443,798
1,000,000 San Juan Cable Term Loan B, 11.82%
due 3/15/2013 957,500
Face
Amount Floating Rate Loan Interests* Value
Media (concluded)
$ 3,000,000 Thomson Learning Inc. Term Loan, 8.10%
due 7/04/2014 $ 2,832,501
9,395,973 Univision Communications, Inc. Delay Draw
Term Loan, 7.61% due 9/30/2014 8,675,612
--------------
157,673,614
Metals & Mining--0.1%
1,000,000 Algoma Steel Term Loan B, 7.86%
due 6/20/2013 952,500
Multi-Utilities--1.9%
997,500 Brand Energy Term Loan B, 7.625% - 7.813%
due 2/15/2014 945,962
2,592,055 Cogentrix Delaware Holdings, Inc. Term Loan,
6.86% due 4/15/2012 2,514,293
750,000 Energy Transfer Equity LP Term Loan B, 7.106%
due 11/01/2012 726,563
KGen Partners:
750,000 Letter of Credit, 7.125% due 2/15/2014 712,500
1,243,750 Term Loan B, 7.125% due 2/15/2014 1,181,563
La Paloma:
118,920 Delay Draw Term Loan, 7.11%
due 8/16/2012 114,758
262,295 Letter of Credit, 7.315% due 8/16/2012 253,115
2,000,000 Second Lien Term Loan, 8.698%
due 8/16/2013 1,913,334
1,493,161 Term Loan, 7.11% due 8/16/2012 1,440,900
MACH Gen LLC:
70,313 Letter of Credit, 7.36% due 2/22/2014 66,855
676,289 Term Loan, 7.50% due 2/22/2014 643,038
2,750,000 Metcalf Energy Center LLC Tranche 1 Term Loan,
8.542% due 5/20/2010 2,695,000
500,000 Thermal North America, Inc. Letter of Credit,
8.07% due 10/24/2008 495,000
1,000,000 USPF Holdings Term Loan, 7.082% - 7.09%
due 4/15/2014 950,000
--------------
14,652,881
Multiline Retail--0.6%
4,053,425 Neiman Marcus Group, Inc. Term Loan,
7.09% - 7.11% due 4/06/2013 3,930,375
Oil, Gas & Consumable Fuels--2.9%
787,500 Big West Oil & Gas Term Loan B, 7.61%
due 5/15/2014 744,187
1,843,144 Carrizo Oil & Gas, Inc. Second Lien Term Loan,
10.11% due 7/21/2010 1,815,496
6,434,611 Helix Energy Solutions Term Loan B,
7.33% - 7.541% due 7/01/2013 6,223,478
2,500,000 Petroleum Geo-Services ASA Term Loan B, 7.11%
due 6/30/2015 2,414,583
7,000,000 Scorpion Drilling Ltd. Second Lien Term Loan,
12.86% due 5/05/2015 7,455,000
Western Refining Co. LP:
500,000 Delay Draw Term Loan, 7.07%
due 3/15/2014 475,000
3,214,286 Term Loan B, 7.07% due 3/15/2014 3,053,571
--------------
22,181,315
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Schedule of Investments (continued) Master Senior Floating Rate LLC
Face
Amount Floating Rate Loan Interests* Value
Paper & Forest Products--1.4%
Cenveo, Inc.:
$ 55,035 Delay Draw Term Loan, 7.11%
due 9/07/2013 $ 52,420
1,651,034 Term Loan C, 7.11% due 9/07/2013 1,572,610
Georgia-Pacific Corp.:
2,955,000 First Lien Term Loan B, 7.264%
due 12/20/2012 2,823,446
3,000,000 Term Loan B, 7.264% due 12/20/2012 2,866,443
3,182,818 SP Newsprint Co. Tranche B-1 Credit Linked
Deposit, 5.565% due 1/09/2010 3,023,677
--------------
10,338,596
Pharmaceuticals--0.4%
3,000,000 Pharmaceutical Technologies & Services (PTS)
Term Loan, 7.61% due 4/15/2014 2,737,500
Real Estate Management & Development--1.6%
9,302,629 Capital Automotive Term Loan B, 7.07%
due 12/16/2010 9,023,550
497,500 LandSource Communities Development LLC
Term Loan, 8.24% - 8.25% due 5/25/2012 450,238
2,962,500 Mattamy Group Term Loan B, 7.813%
due 4/11/2013 2,858,813
--------------
12,332,601
Road & Rail--0.7%
2,500,000 Rail America, Inc. Term Loan, 7.81%
due 8/14/2008 2,418,750
3,418,605 Swift Transportation Co., Inc. Term Loan B,
8.375% due 5/15/2014 3,021,903
--------------
5,440,653
Semiconductors & Semiconductor Equipment--0.3%
1,983,750 Marvell Technology Group Term Loan B, 8.003%
due 11/15/2009 1,904,400
Specialty Retail--0.8%
1,000,000 ADESA, Inc. Term Loan B, 7.61%
due 10/30/2013 935,625
1,000,000 Burlington Coat Factory Warehouse Corp. Term
Loan B, 7.76% due 4/15/2013 936,071
4,000,000 Claire's Stores Term Loan B, 8.11%
due 5/24/2014 3,661,668
748,125 Mattress Giant Term Loan B, 7.61%
due 2/28/2014 710,719
--------------
6,244,083
Textiles, Apparel & Luxury Goods--0.3%
350,000 Gold Toe Investment Corp. Second Lien Term
Loan, 11.36% due 4/30/2014 339,500
2,052,771 Propex Fabrics, Inc. Term Loan B, 8.575%
due 7/31/2012 1,847,494
--------------
2,186,994
Trading Companies & Distributors--0.3%
992,500 Beacon Sales Co. Term Loan B,
7.36% - 9% due 10/31/2013 942,875
United Rentals, Inc.:
722,760 Term Loan, 7.32% due 2/14/2011 713,274
329,825 Tranche B Credit Linked Deposit, 5.32%
due 2/14/2011 325,496
--------------
1,981,645
Face
Amount Floating Rate Loan Interests* Value
Wireless Telecommunication Services--2.3%
$ 7,187,500 American Cellular Network Term Loan B, 7.36%
due 3/15/2014 $ 7,110,234
1,500,000 Cellular South Term Loan B, 7.11% - 9%
due 5/16/2014 1,455,000
2,941,667 Centennial Cellular Operating Co. Term Loan,
7.36% - 7.541% due 2/09/2011 2,854,887
2,992,500 Crown Castle Operating Co. Term Loan,
6.82% - 6.84% due 3/15/2014 2,842,875
2,500,000 IPC Systems First Lien Term Loan, 7.61%
due 5/25/2014 2,220,833
609,626 Ng Wireless Term Loan, 10% due 7/31/2014 597,433
--------------
17,081,262
Total Floating Rate Loan Interests
(Cost--$628,372,596)--79.1% 599,448,153
Corporate Bonds
Chemicals--1.4%
5,992,000 GEO Specialty Chemicals, Inc., 13.85%
due 12/31/2009 (b) 4,943,400
6,255,000 NOVA Chemicals Corp., 8.484%
due 11/15/2013 (a) 6,067,350
--------------
11,010,750
Diversified Financial Services--0.1%
750,000 Ford Motor Credit Co. LLC, 9.81%
due 4/15/2012 (a) 755,516
Diversified Telecommunication Services--0.9%
6,333,000 Qwest Communications International, Inc.,
8.86% due 2/15/2009 (a) 6,348,833
275,000 Qwest Corp., 8.61% due 6/15/2013 (a) 290,125
--------------
6,638,958
Hotels, Restaurants & Leisure--0.5%
3,300,000 Galaxy Entertainment Finance Co. Ltd., 10.409%
due 12/15/2010 (a)(i) 3,333,000
250,000 Universal City Florida Holding Co. I, 10.106%
due 5/01/2010 (a) 252,500
--------------
3,585,500
Media--1.1%
7,875,000 Intelsat Bermuda Ltd., 8.886%
due 1/15/2015 (a) 7,934,063
210,000 Intelsat Corp., 9% due 6/15/2016 214,200
--------------
8,148,263
Paper & Forest Products--2.2%
6,000,000 Ainsworth Lumber Co. Ltd., 9.36%
due 4/01/2013 (a) 4,560,000
250,000 Boise Cascade LLC, 8.235% due 10/15/2012 (a) 247,500
650,000 NewPage Corp., 11.606% due 5/01/2012 (a) 689,000
11,400,000 Verso Paper Holdings LLC Series B, 9.106%
due 8/01/2014 (a) 11,343,000
--------------
16,839,500
Total Corporate Bonds
(Cost--$49,955,535)--6.2% 46,978,487
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Schedule of Investments (concluded) Master Senior Floating Rate LLC
Shares
Held Common Stocks Value
Chemicals--0.0%
39,151 GEO Specialty Chemicals, Inc. (d)(h) $ 39,151
Metals & Mining--0.0%
51,714 Acme Package Corp. Senior Holdings (d)(h) 1,551
Total Common Stocks
(Cost--$0)--0.0% 40,702
Warrants (f)
Electric Utilities--0.0%
9,115 Reliant Resources (expires 10/25/2008) 177,743
Total Warrants
(Cost--$0)--0.0% 177,743
Shares
Held Other Interests (j) Value
Paper & Forest Products--0.0%
57 Cellu Tissue Holdings, Inc. (Escrow Shares) $ 0
Total Other Interests
(Cost--$0)--0.0% 0
Beneficial
Interest Short-Term Securities
$ 97,552,357 BlackRock Liquidity Series, LLC
Cash Sweep Series, 5.33% (c)(g) 97,552,357
Total Short-Term Securities
(Cost--$97,552,357)--12.9% 97,552,357
Total Investments (Cost--$775,880,488**)--98.2% 744,197,442
Other Assets Less Liabilities--1.8% 14,130,324
--------------
Net Assets--100.0% $ 758,327,766
==============
* Senior Secured Floating Rate Loan Interests in which the Master LLC
invests generally pay interest at rates that are periodically
redetermined by reference to a base lending rate plus a premium.
These base lending rates are generally (i) the lending rate offered
by one or more major European banks, such as LIBOR (London InterBank
Offered Rate), (ii) the prime rate offered by one or more major U.S.
banks or (iii) the certificate of deposit rate.
** The cost and unrealized appreciation (depreciation) of investments,
as of August 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 776,033,533
================
Gross unrealized appreciation $ 533,403
Gross unrealized depreciation (32,369,494)
----------------
Net unrealized depreciation $ (31,836,091)
================
(a) Floating rate security.
(b) Convertible security.
(c) Investments in companies considered to be an affiliate of the Master LLC,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Interest
Issue Activity Income
BlackRock Liquidity Series, LLC
Cash Sweep Series $13,184,933 $3,680,618
(d) Non-income producing security.
(e) As a result of bankruptcy proceedings, the issuer did not repay the
principal amount of the security upon maturity and is non-income producing.
(f) Warrants entitle the Master LLC to purchase a predetermined number
of shares of common stock and are non-income producing. The purchase
price and number of shares are subject to adjustment under certain
conditions until the expiration date.
(g) Represents the current yield as of August 31, 2007.
(h) Restricted security as to resale, representing 0.0% of net assets,
was as follows:
Acquisition
Issue Date Cost Value
Acme Package Corp. Senior Holdings 11/25/2002 $ -- $ 1,551
(i) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(j) Other interests represent beneficial interests in liquidation trust and
other reorganization entities and are non-income producing.
o For Master LLC compliance purposes, the Master LLC's industry
classifications refer to any one or more of the industry sub-
classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Master LLC management.
This definition may not apply for purposes of this report, which may
combine industry sub-classifications for reporting ease. Industries are
shown as a percent of net assets. These industry classifications are
unaudited.
o Swaps outstanding as of August 31, 2007 were as follows:
Unrealized
Notional Appreciation
Amount (Depreciation)
Bought a credit default protection on
LCDX Index and pay 1.20%
Broker, JPMorgan Chase
Expires June 2012 $5,000,000 $ (57,001)
Bought credit default protection on
LCDX Index and pay 1.20%
Broker, Morgan Stanley Capital Services, Inc.
Expires June 2012 $5,000,000 (57,002)
Sold credit default protection on LCDX
Index and receive 1.20%
Broker, Morgan Stanley Capital Services, Inc.
Expires June 2012 $5,000,000 107,335
----------
Total $ (6,668)
==========
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Statement of Assets and Liabilities Master Senior Floating Rate LLC
As of August 31, 2007
Assets
Investments in unaffiliated securities, at value (identified cost--$678,328,131) $ 646,645,085
Investments in affiliated securities, at value (identified cost--$97,552,357) 97,552,357
Unrealized appreciation on swaps 107,335
Swap premiums paid 603,646
Receivables:
Securities sold $ 12,671,821
Interest 7,953,307
Contributions 2,251,188
Paydowns 202,232
Commitment fees 29,883
Swaps 12,667 23,121,098
---------------
Prepaid expenses and other assets 13,249
---------------
Total assets 768,042,770
---------------
Liabilities
Swap premiums received 349,510
Unfunded loan commitment 948,403
Unrealized depreciation on swaps 114,003
Bank overdraft 2,024,560
Payables:
Securities purchased 5,341,440
Investment adviser 666,764
Swaps 34,667
Other affiliates 5,723 6,048,594
---------------
Accrued expenses and other liabilities 229,934
---------------
Total liabilities 9,715,004
---------------
Net Assets
Net assets $ 758,327,766
===============
Net Assets Consist of
Investors' capital $ 790,926,662
Unrealized depreciation--net (32,598,896)
---------------
Net Assets $ 758,327,766
===============
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Statement of Operations Master Senior Floating Rate LLC
For the Year Ended August 31, 2007
Investment Income
Interest (including $3,680,618 from affiliates) $ 65,310,702
Facility and other fees 648,216
Dividends 93,085
---------------
Total income 66,052,003
---------------
Expenses
Investment advisory fees $ 7,742,975
Accounting services 263,891
Professional fees 201,501
Loan interest expense 106,022
Custodian fees 52,506
Directors' fees and expenses 40,631
Pricing fees 16,969
Printing and shareholder reports 3,460
Other 25,864
---------------
Total expenses 8,453,819
---------------
Investment income--net 57,598,184
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net (35,174,775)
Swaps--net 174,070 (35,000,705)
---------------
Change in unrealized appreciation/depreciation on:
Investments--net 7,438,667
Swaps--net (6,668)
Unfunded corporate loans--net (575,835) 6,856,164
--------------- ---------------
Total realized and unrealized loss--net (28,144,541)
---------------
Net Increase in Net Assets Resulting from Operations $ 29,453,643
===============
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Statements of Changes in Net Assets Master Senior Floating Rate LLC
For the Year Ended
August 31,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 57,598,184 $ 59,752,417
Realized loss--net (35,000,705) (1,597,921)
Change in unrealized appreciation/depreciation--net 6,856,164 (7,721,712)
--------------- ---------------
Net increase in net assets resulting from operations 29,453,643 50,432,784
--------------- ---------------
Capital Transactions
Proceeds from contributions 58,523,411 66,317,763
Fair value of withdrawals (255,559,328) (223,659,634)
--------------- ---------------
Net decrease in net assets derived from capital transactions (197,035,917) (157,341,871)
--------------- ---------------
Net Assets
Total decrease in net assets (167,582,274) (106,909,087)
Beginning of year 925,910,040 1,032,819,127
--------------- ---------------
End of year $ 758,327,766 $ 925,910,040
=============== ===============
See Notes to Financial Statements.
Financial Highlights Master Senior Floating Rate LLC
The following per share data and ratios have been derived For the Year Ended August 31,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Total Investment Return
Total investment return 3.49% 5.37% 5.78% 10.15% 11.07%
=========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses, excluding interest expense 1.02% 1.03% 1.01% 1.02% 1.04%
=========== =========== =========== =========== ===========
Expenses 1.04% 1.04% 1.01% 1.02% 1.05%
=========== =========== =========== =========== ===========
Investment income--net 7.07% 6.22% 4.52% 3.81% 4.80%
=========== =========== =========== =========== ===========
Leverage
Amount of borrowings outstanding, end of year (in thousands) -- -- -- -- --
=========== =========== =========== =========== ===========
Average amount of borrowings outstanding during
the year (in thousands) $ 2,255 $ 1,932 -- -- $ 3,187
=========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of year (in thousands) $ 758,328 $ 925,910 $ 1,032,819 $ 1,052,881 $ 942,878
=========== =========== =========== =========== ===========
Portfolio turnover 46% 54% 53% 76% 57%
=========== =========== =========== =========== ===========
See Notes to Financial Statements.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Notes to Financial Statements Master Senior Floating Rate LLC
1. Significant Accounting Policies:
Master Senior Floating Rate LLC (the "Master LLC") is registered under the
Investment Company Act of 1940, as amended, and is organized as a Delaware
limited liability company. Prior to June 15, 2007, the Master LLC was
organized as a Delaware statutory trust (the "Trust"). The Limited Liability
Company Agreement (the "LLC Agreement") permits Directors (and prior to June
15, 2007, the Declaration of Trust permitted the Trustees) to issue
nontransferable interests in the Master LLC/Trust, subject to certain
limitations. Throughout this report the Trust and the Master LLC are referred
to as the Master LLC and the Board of Trustees is referred to as the Board of
Directors. The Master LLC's financial statements are prepared in conformity
with U.S. generally accepted accounting principles, which may require the use
of management accruals and estimates. Actual results may differ from these
estimates. The following is a summary of significant accounting policies
followed by the Master LLC.
(a) Loan participation interests--The Master LLC primarily invests in senior
secured floating rate loan interests ("Loan Interests") with collateral having
a market value, at the time of acquisition by the Master LLC, which Master LLC
management believes equals or exceeds the principal amount of the Loan
Interests. The Master LLC may invest up to 20% of its total assets in loans
made on an unsecured basis. The Master LLC's investment in loan participation
interests involves the risk of insolvency of the financial intermediaries who
are parties to the transactions.
(b) Valuation of investments--Loan Interests are valued in accordance with
guidelines established by the Board of Directors. As of October 2, 2006, loan
interests are valued at the mean between the last available bid prices from
one or more brokers or dealers as obtained from the Loan Pricing Corporation.
Previously, floating rate loan interests were valued at the mean between the
last available bid and asked prices as obtained from the same pricing source.
This change has no significant effect on the valuation of these loans. For the
limited number of Loan Interests for which no reliable price quotes are
available, such Loan Interests will be valued by Loan Pricing Corporation
through the use of pricing matrixes to determine valuations. If the pricing
service does not provide a value for the Loan Interests, BlackRock Advisors,
LLC (the "Manager"), an indirect, wholly owned subsidiary of BlackRock, Inc.
will value the Loan Interests at fair value, which is intended to approximate
market value.
Debt securities are traded primarily in the over-the-counter ("OTC") markets
and are valued at the last available bid price in the OTC market or on the
basis of values obtained by a pricing service. Pricing services use valuation
matrixes that incorporate both dealer-supplied valuations and valuation
models. The procedures of the pricing service and its valuations are reviewed
by the officers of the Master LLC under the general direction of the Board of
Directors. Such valuations and procedures will be reviewed periodically by the
Board Directors of the Master LLC.
Securities that are held by the Master LLC that are traded on stock exchanges
or the NASDAQ Global Market are valued at the last sale price or official
close price on the exchange on which such securities are traded, as of the
close of business on the day the securities are being valued or, lacking any
sales, at the last available bid price for long positions, and at the last
available asked price for short positions. In cases where securities are
traded on more than one exchange, the securities are valued on the exchange
designated as the primary market by or under the authority of the Board of
Directors of the Master LLC. Long positions in securities traded in the OTC
market, NASDAQ Capital Market or Bulletin Board are valued at the last
available bid price or yield equivalent obtained from one or more dealers or
pricing services approved by the Board of Directors of the Master LLC. Short
positions in securities traded in the OTC market are valued at the last
available asked price. Portfolio securities that are traded both in the OTC
market and on a stock exchange are valued according to the broadest and most
representative market. When the Master LLC writes an option, the amount of the
premium received is recorded on the books of the Master LLC as an asset and an
equivalent liability. The amount of the liability is subsequently valued to
reflect the current market value of the option written, based on the last sale
price in the case of exchange-traded options or, in the case of options traded
in the OTC market, the last asked price. Options purchased by the Master LLC
are valued at their last sale price in the case of exchange-traded options or,
in the case of options traded in the OTC market, the last bid price. Swap
agreements are valued based upon quoted fair valuations received daily by the
Master LLC from a pricing service or counterparty. Other investments,
including futures contracts and related options, are stated at market value.
Valuation of short-term investment vehicles is generally based upon the net
asset value of the underlying investment vehicle or amortized cost. Repurchase
agreements will be valued at cost plus accrued interest.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Notes to Financial Statements (continued) Master Senior Floating Rate LLC
Generally, trading in foreign securities, as well as U.S. government
securities, money market instruments and certain fixed income securities, is
substantially completed each day at various times prior to the close of
business on the New York Stock Exchange ("NYSE"). The values of such
securities used in computing the net assets of the Master LLC are determined
as of such times. Foreign currency exchange rates are generally determined as
of the close of business on the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times
at which they are determined and the close of business on the NYSE that may
not be reflected in the computation of the Master LLC's net assets. If events
(for example, a company announcement, market volatility or a natural disaster)
occur during such periods that are expected to materially affect the value of
such securities, those securities will be valued at their fair value as
determined in good faith by the Board of Directors or by the Manager using a
pricing service and/or procedures approved by the Board of Directors.
(c) Derivative financial instruments--The Master LLC may engage in various
portfolio investment strategies both to increase the return of the Master LLC
and to hedge, or protect, its exposure to interest rate movements and
movements in the securities markets. Losses may arise due to changes in the
value of the contract due to an unfavorable change in the price of the
underlying security or index, or if the counterparty does not perform under
the contract. The counterparty for certain instruments may pledge cash or
securities as collateral.
* Swaps--The Master LLC may enter into swap agreements, which are OTC
contracts in which the Master LLC and counterparty agree to make periodic net
payments on a specified notional amount. The net payments can be made for a
set period of time or may be triggered by a predetermined credit event. The
net periodic payments may be based on a fixed or variable interest rate; the
change in market value of a specified security, basket of securities, or
index; or the return generated by a security. These periodic payments received
or made by the Master LLC are recorded in the accompanying Statement of
Operations as realized gains and losses, respectively. Gains or losses are
also realized upon termination of the swap agreements. Swaps are marked-to-
market daily and changes in value are recorded as unrealized appreciation
(depreciation). Risks include changes in the returns of the underlying
instruments, failure of the counterparties to perform under the contracts'
terms and the possible lack of liquidity with respect to the swap agreements.
(d) Income taxes--The Master LLC is classified as a partnership for federal
income tax purposes. As such, each investor in the Master LLC is treated as
owner of its proportionate share of the net assets, income, expenses and
realized and unrealized gains and losses of the Master LLC. Therefore, no
federal income tax provision is required. It is intended that the Master LLC's
assets will be managed so an investor in the Master LLC can satisfy the
requirements of Subchapter M of the Internal Revenue Code.
(e) Security transactions and investment income--Security transactions are
recorded on the dates the trans-actions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Master LLC amortizes
all premiums and discounts on debt securities. The Master LLC earns facility
and other fees on loan participation interests. Other fees earned include
amendment, consent and prepayment fees.
(f) Securities lending--The Master LLC may lend securities to financial
institutions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities.
The market value of the loaned securities is determined at the close of
business of the Master LLC and any additional required collateral is delivered
to the Master LLC on the next business day. Where the Master LLC receives
securities as collateral for the loaned securities, it receives a fee from the
borrower. The Master LLC typically receives the income on the loaned
securities, but does not receive the income on the collateral. Where the
Master LLC receives cash collateral, it may invest such collateral and retain
the amount earned on such investment, net of any amount rebated to the
borrower. Loans of securities are terminable at any time and the borrower,
after notice, is required to return borrowed securities within five business
days. The Master LLC may pay reasonable finder's, lending agent, administrative
and custodial fees in connection with its loans. In the event that the borrower
defaults on its obligation to return borrowed securities because of insolvency
or for any other reason, the Master LLC could experience delays and costs in
gaining access to the collateral. The Master LLC also could suffer a loss
where the value of the collateral falls below the market value of the borrowed
securities, in the event of borrower default or in the event of losses on
investments made with cash collateral.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Notes to Financial Statements (continued) Master Senior Floating Rate LLC
(g) Bank overdraft--The Master LLC recorded a bank overdraft, which resulted
from incorrect postings by the custodian.
(h) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet
in connection with accounting for uncertainties in income tax positions taken
or expected to be taken by an entity, including mutual funds, before being
measured and recognized in the financial statements. Adoption of FIN 48 is
required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on the Master LLC's financial statements, if any, is
currently being assessed.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Master LLC's financial statements, if any, has not
been determined.
In addition, in February 2007, FASB issued Statement of Financial Accounting
Standards No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), was issued and is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provisions of FAS 157. FAS 159
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at
fair value. FAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. At this
time, management is evaluating the implications of FAS 159 and its impact on
the Master LLC's financial statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. has
approximately a 34% economic and voting interest. The new company operates
under the BlackRock name and is governed by a board of directors with a
majority of independent members.
On August 15, 2006, shareholders of the investors of the Master LLC approved a
new Investment Advisory Agreement with BlackRock Advisors Inc., which was
reorganized into a limited liability company and renamed BlackRock Advisors,
LLC (the "Manager"), an indirect, wholly owned subsidiary of BlackRock Inc.
The new Investment Advisory Agreement between the Master LLC and the Manager
became effective on September 29, 2006 and the investment advisory fee is
unchanged. Prior to September 29, 2006, FAM was the Fund's manager. The
general partner of FAM is an indirect, wholly owned subsidiary of Merrill
Lynch, which is the limited partner.
The Manager is responsible for the management of the Master LLC's portfolio
and provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Master LLC. For such services, the
Master LLC pays a monthly fee at an annual rate of .95% of the average daily
value of the Master LLC's net assets.
In addition, the Manager has entered into a Sub- Advisory agreement with
BlackRock Financial Management, Inc., an affiliate of the Manager, under which
the Manager pays the Sub-Adviser for services it provides a monthly fee at an
annual rate equal to a percentage of the management fee paid by the Master LLC
to the Manager.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Notes to Financial Statements (concluded) Master Senior Floating Rate LLC
The Master LLC has received an exemptive order from the Securities and
Exchange Commission permitting it to lend portfolio securities to Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of
Merrill Lynch or its affiliates. Pursuant to that order, the Master LLC has
retained BlackRock Investment Management, LLC ("BIM") an affiliate of the
Manager, as the securities lending agent for a fee based on a share of the
returns on investment of cash collateral. Prior to September 29, 2006, BIM was
organized as Merrill Lynch Investment Managers, LLC ("MLIM, LLC"), an
affiliate of FAM, and MLIM, LLC was the securities lending agent. BIM may, on
behalf of the Master LLC, invest cash collateral received by the Master LLC
for such loans, among other things, in a private investment company advised by
the Manager or in registered money market funds advised by the Manager or its
affiliates.
For the year ended August 31, 2007, the Master LLC reimbursed FAM and the
Manager $2,295 and $13,688, for certain accounting services.
Prior to September 29, 2006, certain officers and/or directors of the Master
LLC were officers and directors of MLIM, FAM, Merrill Lynch, and/or MLIM, LLC.
Commencing September 29, 2006, certain officers and/or directors of the Master
LLC are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales (including paydowns) of investments, excluding short-term
securities, for the year ended August 31, 2007 were $345,100,644 and
$493,669,980, respectively.
4. Unfunded Loan Commitments:
As of August 31, 2007, the Master LLC had unfunded loan commitments of
approximately $16,177,000, which would be extended at the option of the
borrower, pursuant to the following loan agreements:
(in Thousands)
Value of
Unfunded Underlying
Borrower Commitment Loan
Advance Food Co. $ 445 $ 419
Big West Oil & Gas $ 963 $ 910
Cellular South $ 500 $ 481
Community Health $ 217 $ 208
Fender Musical $ 833 $ 775
Las Vegas Sands $ 800 $ 760
MEG Energy Corp $1,250 $1,196
N Wireless $ 140 $ 137
Trump Entertainment Resorts
Holdings LP, Revolving $4,425 $4,204
Vought Aircraft Industries, Inc. $6,000 $5,580
Univision Communications, Inc. $ 604 $ 559
5. Short-Term Borrowings:
The Master LLC, along with certain other funds managed by the Manager and its
affiliates, is party to a $500,000,000 credit agreement with a group of
lenders, which expires November 2007. The Master LLC may borrow under the
credit agreement to fund shareholder redemptions and for other lawful purposes
other than for leverage. The Master LLC may borrow up to the maximum amount
allowable under the Master LLC's current prospectus and statement of
additional information, subject to various other legal, regulatory or
contractual limits. The Master LLC pays a commitment fee of .06% per annum
based on the Master LLC's pro rata share of the unused portion of the credit
agreement. Amounts borrowed under the credit agreement bear interest at a rate
equal to, at each fund's election, the federal funds rate plus .35% or a base
rate as defined in the credit agreement.
The weighted average annual interest rate was 4.70% and the average borrowing
was approximately $2,255,000 for the year ended August 31, 2007.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Report of Independent Registered Public Accounting Firm
Master Senior Floating Rate LLC
To the Investors and Board of Directors of
Master Senior Floating Rate LLC:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments of Master Senior Floating Rate LLC (the
"Master LLC") as of August 31, 2007, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Master LLC's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Master LLC is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Master LLC's internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
Our procedures included confirmation of securities owned as of August 31, 2007,
by correspondence with the custodian and financial intermediaries; where
replies were not received from financial intermediaries, we performed other
auditing procedures. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Master Senior Floating Rate LLC as of August 31, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and its financial highlights for each
of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
October 26, 2007
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Officers and Directors
Number of
Funds and
Portfolios in
Position(s) Length of Fund Complex Other Public
Name, Address Held with Time Overseen by Directorships
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years Director Held by Director
Interested Director
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, Inc., 120 Funds None
P.O. Box 9011 President present Global Chief Investment Officer for Equities, 161 Portfolios
Princeton, NJ and Chairman of the BlackRock Retail Operating
08543-9011 Director Committee, and member of the BlackRock Executive
1954 Committee since 2006; President of the funds
advised by Merrill Lynch Investment Managers,
L.P. ("MLIM") and its affiliates ("MLIM/FAM-advised
funds") from 2005 to 2006 and Chief Investment
Officer thereof from 2001 to 2006; President of
MLIM and Fund Asset Management, L.P. ("FAM") from
2001 to 2006; Co-Head (Americas Region) thereof
from 2000 to 2001 and Senior Vice President from
1999 to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") and President
of Princeton Administrators, L.P. ("Princeton
Administrators") from 2001 to 2006; Chief Investment
Officer of OppenheimerFunds, Inc. in 1999 and Executive
Vice President thereof from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock Advisors, LLC and its affiliates act as
investment adviser. Mr. Doll is an "interested person," as defined in the
Investment Company Act, of the Fund based on his positions with BlackRock, Inc.
and its affiliates. Directors serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72. As Fund President, Mr. Doll
serves at the pleasure of the Board of Directors.
Independent Directors*
Ronald W. Forbes** Director 1989 to Professor Emeritus of Finance, School of 46 Funds None
P.O. Box 9095 present Business, State University of New York at 48 Portfolios
Princeton, NJ Albany since 2000 and Professor thereof from
08543-9095 1989 to 2000; International Consultant, Urban
1940 Institute, Washington, D.C. from 1995 to 1999.
Cynthia A. Montgomery Director 1994 to Professor, Harvard Business School since 1989; 46 Funds Newell
P.O. Box 9095 present Associate Professor, J.L. Kellogg Graduate 48 Portfolios Rubbermaid, Inc.
Princeton, NJ School of Management, Northwestern University (manufacturing)
08543-9095 from 1985 to 1989; Associate Professor, Graduate
1952 School of Business Administration, University of
Michigan from 1979 to 1985; Director, Harvard
Business School Publishing since 2005; Director,
McLean Hospital since 2005.
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; Counsel 46 Funds None
P.O. Box 9095 present of Alliance Capital Management (investment 48 Portfolios
Princeton, NJ adviser) in 2000; General Counsel, Director
08543-9095 and Secretary of Sanford C. Bernstein & Co.,
1945 Inc. (investment adviser/broker-dealer) from
1997 to 2000; Secretary, Sanford C. Bernstein
Fund, Inc. from 1994 to 2000; Director and
Secretary of SCB, Inc. since 1998; Director
and Secretary of SCB Partners, Inc. since 2000;
and Director of Covenant House from 2001 to 2004.
Roscoe S. Suddarth Director 2003 to President, Middle East Institute, from 1995 46 Funds None
P.O. Box 9095 present to 2001; Foreign Service Officer, United 48 Portfolios
Princeton, NJ States Foreign Service, from 1961 to 1995
08543-9095 and Career Minister from 1989 to 1995; Deputy
1935 Inspector General, U.S. Department of State,
from 1991 to 1994; U.S. Ambassador to the
Hashemite Kingdom of Jordan from 1987 to 1990.
Richard R. West Director 1989 to Professor of Finance from 1984 to 1995, Dean 46 Funds Bowne & Co., Inc.
P.O. Box 9095 present from 1984 to 1993 and since 1995 Dean Emeritus 48 Portfolios (financial
Princeton, NJ of New York University's Leonard N. Stern printers);
08543-9095 School of Business Administration. Vornado Realty
1938 Trust (real
estate company );
Alexander's, Inc.
(real estate
company)
* Directors serve until their resignation, removal or death, or until December 31
of the year in which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Officers and Directors (concluded)
Position(s) Length of
Name, Address Held with Time
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill
P.O. Box 9011 President present Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM")
Princeton, NJ and and in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer
08543-9011 Treasurer 1999 to thereof from 1999 to 2006); Vice President of MLIM and FAM from 1990 to 1997.
1960 present
Karen Clark Fund Chief 2007 to Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance present BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to
Princeton, NJ Officer 2007; Principal and Senior Compliance Officer, State Street Global Advisors,
08543-9011 from 2001 to 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998
1965 to 2001; and Branch Chief, Division of Investment Management and Office of
Compliance Inspections and Examinations, U.S. Securities and Exchange Commission,
from 1993 to 1998.
Alice A. Pellegrino Fund 2004 to Director of BlackRock, Inc. from 2006 to 2007; Director (Legal Advisory) of
P.O. Box 9011 Secretary 2007 MLIM from 2002 to 2006; Vice President of MLIM from 1999 to 2002; Attorney
Princeton, NJ associated with MLIM from 1997 to 1999; Secretary of MLIM, FAM, FAM
08543-9011 Distributors, Inc. and Princeton Services from 2004 to 2006.
1960
Howard Surloff Fund 2007 to Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at
P.O. Box 9011 Secretary present BlackRock, Inc. since 2006; General Counsel (U.S.), Goldman Sachs Asset
Princeton, NJ Management from 1993 to 2006.
08543-9011
1965
* Officers of the Fund serve at the pleasure of the Board of Directors.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, "Clients") and to
safeguarding their nonpublic personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any
nonpublic personal information about its Clients, except as permitted by law
or as is necessary to respond to regulatory requests or to service Client
accounts. These nonaffiliated third parties are required to protect the
confidentiality and security of this information and to use it only for its
intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that
may be of interest to you. In addition, BlackRock restricts access to
nonpublic personal information about its Clients to those BlackRock employees
with a legitimate business need for the information. BlackRock maintains
physical, electronic and procedural safeguards that are designed to protect
the nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
BLACKROCK SENIOR FLOATING RATE FUND, INC. AUGUST 31, 2007
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, applicable to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. During the period covered by this report, there
have been no amendments to or waivers granted under the code of
ethics. A copy of the code of ethics is available without charge at
www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent: (1) Ronald W. Forbes, (2)
Richard R. West, and (3) Edward D. Zinbarg (retired as of December
31, 2006).
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees (b) Audit-Related Fees (1) (c) Tax Fees (2) (d) All Other Fees (3)
Current Previous Current Previous Current Previous Current Previous
Entity Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Name End End End End End End End End
BlackRock
Senior
Floating $6,600 $6,600 $0 $0 $6,100 $6,000 $1,042 $0
Rate
Fund, Inc.
Master
Senior
Floating $73,500 $73,500 $0 $0 $9,200 $9,200 $0 $0
Rate LLC
(1) The nature of the services include assurance and related services reasonably
related to the performance of the audit of financial statements not included
in Audit Fees.
(2) The nature of the services include tax compliance, tax advice and tax planning.
(3) The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services provided
to the registrant on an annual basis require specific pre-approval
by the Committee. The Committee also must approve other non-audit
services provided to the registrant and those non-audit services
provided to the registrant's affiliated service providers that
relate directly to the operations and the financial reporting of the
registrant. Certain of these non-audit services that the Committee
believes are a) consistent with the SEC's auditor independence rules
and b) routine and recurring services that will not impair the
independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis
("general pre-approval"). However, such services will only be
deemed pre-approved provided that any individual project does not
exceed $5,000 attributable to the registrant or $50,000 for all of
the registrants the Committee oversees. Any proposed services
exceeding the pre-approved cost levels will require specific pre-
approval by the Committee, as will any other services not subject to
general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to
general pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
Current Previous
Fiscal Year Fiscal Year
Entity Name End End
BlackRock Senior
Floating Rate
Fund, Inc. $291,642 $3,104,500
Master Senior
Floating Rate LLC $293,700 $3,107,700
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's investment
adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $284,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
Ronald W. Forbes
Cynthia A. Montgomery
Jean Margo Reid
Roscoe S. Suddarth
Richard R. West
Edward D. Zinbarg (retired as of December 31, 2006)
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - The registrant has delegated the
voting of proxies relating to Fund portfolio securities to its
investment adviser, BlackRock Advisors, LLC and its sub-adviser, as
applicable. The Proxy Voting Policies and Procedures of the adviser
and sub-adviser are attached hereto as Exhibit 99.PROXYPOL.
Proxy Voting Policies and Procedures
For BlackRock Advisors, LLC
And Its Affiliated SEC Registered Investment Advisers
September 30, 2006
Table of Contents
Page
Introduction
Scope of Committee Responsibilities
Special Circumstances
Voting Guidelines
Boards of Directors
Auditors
Compensation and Benefits
Capital Structure
Corporate Charter and By-Laws
Corporate Meetings
Investment Companies
Environmental and Social Issues
Notice to Clients
Proxy Voting Policies and Procedures
These Proxy Voting Policies and Procedures ("Policy") for BlackRock
Advisors, LLC and its affiliated U.S. registered investment advisers (1)
("BlackRock") reflect our duty as a fiduciary under the Investment Advisers Act
of 1940 (the "Advisers Act") to vote proxies in the best interests of our
clients. BlackRock serves as the investment manager for investment companies,
other commingled investment vehicles and/or separate accounts of institutional
and other clients. The right to vote proxies for securities held in such
accounts belongs to BlackRock's clients. Certain clients of BlackRock have
retained the right to vote such proxies in general or in specific
circumstances. (2) Other clients, however, have delegated to BlackRock the
right to vote proxies for securities held in their accounts as part of
BlackRock's authority to manage, acquire and dispose of account assets.
When BlackRock votes proxies for a client that has delegated to
BlackRock proxy voting authority, BlackRock acts as the client's agent. Under
the Advisers Act, an investment adviser is a fiduciary that owes each of its
clients a duty of care and loyalty with respect to all services the adviser
undertakes on the client's behalf, including proxy voting. BlackRock is
therefore subject to a fiduciary duty to vote proxies in a manner BlackRock
believes is consistent with the client's best interests, (3) whether or not the
client's proxy voting is subject to the fiduciary standards of the Employee
Retirement Income Security Act of 1974 ("ERISA"). (4) When voting proxies for
client accounts (including investment companies), BlackRock's primary objective
is to make voting decisions solely in the best interests of clients and ERISA
clients' plan beneficiaries and participants. In fulfilling its obligations to
clients, BlackRock will seek to act in a manner that it believes is most likely
to enhance the economic value of the underlying securities held in client
accounts. (5) It is imperative that BlackRock considers the interests of its
clients, and not the interests of BlackRock, when voting proxies and that real
(or perceived) material conflicts that may arise between BlackRock's interest
and those of BlackRock's clients are properly addressed and resolved.
(1) The Policy does not apply to BlackRock Asset Management U.K. Limited and
BlackRock Investment Managers International Limited, which are U.S.
registered investment advisers based in the United Kingdom.
(2) In certain situations, a client may direct BlackRock to vote in accordance
with the client's proxy voting policies. In these situations, BlackRock
will seek to comply with such policies to the extent it would not be
inconsistent with other BlackRock legal responsibilities.
(3) Letter from Harvey L. Pitt, Chairman, SEC, to John P.M. Higgins,
President, Ram Trust Services (February 12, 2002) (Section 206 of the
Investment Advisers Act imposes a fiduciary responsibility to vote proxies
fairly and in the best interests of clients); SEC Release No. IA-2106
(February 3, 2003).
(4) DOL Interpretative Bulletin of Sections 402, 403 and 404 of ERISA at 29
C.F.R. 2509.94-2
(5) Other considerations, such as social, labor, environmental or other
policies, may be of interest to particular clients. While BlackRock is
cognizant of the importance of such considerations, when voting proxies it
will generally take such matters into account only to the extent that they
have a direct bearing on the economic value of the underlying securities.
To the extent that a BlackRock client desires to pursue a particular
social, labor, environmental or other agenda through the proxy votes made
for its securities held through BlackRock as investment adviser, BlackRock
encourages the client to consider retaining direct proxy voting authority
or to appoint independently a special proxy voting fiduciary other than
BlackRock.
Advisers Act Rule 206(4)-6 was adopted by the SEC in 2003 and requires,
among other things, that an investment adviser that exercises voting authority
over clients' proxy voting adopt policies and procedures reasonably designed to
ensure that the adviser votes proxies in the best interests of clients,
discloses to its clients information about those policies and procedures and
also discloses to clients how they may obtain information on how the adviser
has voted their proxies.
In light of such fiduciary duties, the requirements of Rule 206(4)-6,
and given the complexity of the issues that may be raised in connection with
proxy votes, BlackRock has adopted these policies and procedures. BlackRock's
Equity Investment Policy Oversight Committee, or a sub-committee thereof (the
"Committee"), addresses proxy voting issues on behalf of BlackRock and its
clients. (6) The Committee is comprised of senior members of BlackRock's
Portfolio Management Group and advised by BlackRock's Legal and Compliance
Department.
(6) Subject to the Proxy Voting Policies of Merrill Lynch Bank & Trust
Company FSB, the Committee may also function jointly as the Proxy Voting
Committee for Merrill Lynch Bank & Trust Company FSB trust accounts
managed by personnel dually-employed by BlackRock.
I. Scope of Committee Responsibilities
The Committee shall have the responsibility for determining how to
address proxy votes made on behalf of all BlackRock clients, except for clients
who have retained the right to vote their own proxies, either generally or on
any specific matter. In so doing, the Committee shall seek to ensure that proxy
votes are made in the best interests of clients, and that proxy votes are
determined in a manner free from unwarranted or inappropriate influences. The
Committee shall also oversee the overall administration of proxy voting for
BlackRock accounts. (7)
The Committee shall establish BlackRock's proxy voting guidelines, with
such advice, participation and research as the Committee deems appropriate from
portfolio managers, proxy voting services or other knowledgeable interested
parties. As it is anticipated that there will not necessarily be a "right" way
to vote proxies on any given issue applicable to all facts and circumstances,
the Committee shall also be responsible for determining how the proxy voting
guidelines will be applied to specific proxy votes, in light of each issuer's
unique structure, management, strategic options and, in certain circumstances,
probable economic and other anticipated consequences of alternative actions. In
so doing, the Committee may determine to vote a particular proxy in a manner
contrary to its generally stated guidelines.
The Committee may determine that the subject matter of certain proxy
issues are not suitable for general voting guidelines and requires a case-by-
case determination, in which case the Committee may elect not to adopt a
specific voting guideline applicable to such issues. BlackRock believes that
certain proxy voting issues - such as approval of mergers and other significant
corporate transactions - require investment analysis akin to investment
decisions, and are therefore not suitable for general guidelines. The Committee
may elect to adopt a common BlackRock position on certain proxy votes that are
akin to investment decisions, or determine to permit portfolio managers to make
individual decisions on how best to maximize economic value for the accounts
for which they are responsible (similar to normal buy/sell investment decisions
made by such portfolio managers). (8)
While it is expected that BlackRock, as a fiduciary, will generally seek
to vote proxies over which BlackRock exercises voting authority in a uniform
manner for all BlackRock clients, the Committee, in conjunction with the
portfolio manager of an account, may determine that the specific circumstances
of such account require that such account's proxies be voted differently due to
such account's investment objective or other factors that differentiate it from
other accounts. In addition, on proxy votes that are akin to investment
decisions, BlackRock believes portfolio managers may from time to time
legitimately reach differing but equally valid views, as fiduciaries for
BlackRock's clients, on how best to maximize economic value in respect of a
particular investment.
(7) The Committee may delegate day-to-day administrative responsibilities
to other BlackRock personnel and/or outside service providers, as
appropriate.
(8) The Committee will normally defer to portfolio managers on proxy votes
that are akin to investment decisions except for proxy votes that
involve a material conflict of interest, in which case it will
determine, in its discretion, the appropriate voting process so as to
address such conflict.
The Committee will also be responsible for ensuring the maintenance of
records of each proxy vote, as required by Advisers Act Rule 204-2. (9) All
records will be maintained in accordance with applicable law. Except as may be
required by applicable legal requirements, or as otherwise set forth herein,
the Committee's determinations and records shall be treated as proprietary,
nonpublic and confidential.
The Committee shall be assisted by other BlackRock personnel, as may be
appropriate. In particular, the Committee has delegated to the BlackRock
Operations Department responsibility for monitoring corporate actions and
ensuring that proxy votes are submitted in a timely fashion. The Operations
Department shall ensure that proxy voting issues are promptly brought to the
Committee's attention and that the Committee's proxy voting decisions are
appropriately disseminated and implemented.
To assist BlackRock in voting proxies, the Committee may retain the
services of a firm providing such services. BlackRock has currently retained
Institutional Shareholder Services ("ISS") in that role. ISS is an independent
adviser that specializes in providing a variety of fiduciary-level proxy-
related services to institutional investment managers, plan sponsors,
custodians, consultants, and other institutional investors. The services
provided to BlackRock may include, but are not limited to, in-depth research,
voting recommendations (which the Committee is not obligated to follow), vote
execution, and recordkeeping.
(9) The Committee may delegate the actual maintenance of such records to an
outside service provider. Currently, the Committee has delegated the
maintenance of such records to Institutional Shareholder Services.
II Special Circumstances
Routine Consents. BlackRock may be asked from time to time to consent
to an amendment to, or grant a waiver under, a loan agreement, partnership
agreement, indenture or other governing document of a specific financial
instrument held by BlackRock clients. BlackRock will generally treat such
requests for consents not as "proxies" subject to these Proxy Voting Policies
and Procedures but as investment matters to be dealt with by the responsible
BlackRock investment professionals would, provided that such consents (i) do
not relate to the election of a board of directors or appointment of auditors
of a public company, and (ii) either (A) would not otherwise materially affect
the structure, management or control of a public company, or (B) relate to a
company in which BlackRock clients hold only interests in bank loans or debt
securities and are consistent with customary standards and practices for such
instruments.
Securities on Loan. Registered investment companies that are advised by
BlackRock as well as certain of our advisory clients may participate in
securities lending programs. Under most securities lending arrangements,
securities on loan may not be voted by the lender (unless the loan is
recalled). BlackRock believes that each client has the right to determine
whether participating in a securities lending program enhances returns, to
contract with the securities lending agent of its choice and to structure a
securities lending program, through its lending agent, that balances any
tension between loaning and voting securities in a matter that satisfies such
client. If client has decided to participate in a securities lending program,
BlackRock will therefore defer to the client's determination and not attempt to
seek recalls solely for the purpose of voting routine proxies as this could
impact the returns received from securities lending and make the client a less
desirable lender in a marketplace. Where a client retains a lending agent that
is unaffiliated with BlackRock, BlackRock will generally not seek to vote
proxies relating to securities on loan because BlackRock does not have a
contractual right to recall such loaned securities for the purpose of voting
proxies. Where BlackRock or an affiliate acts as the lending agent, BlackRock
will also generally not seek to recall loaned securities for proxy voting
purposes, unless the portfolio manager responsible for the account or the
Committee determines that voting the proxy is in the client's best interest and
requests that the security be recalled.
Voting Proxies for Non-US Companies. While the proxy voting process is
well established in the United States, voting proxies of non-US companies
frequently involves logistical issues which can affect BlackRock's ability to
vote such proxies, as well as the desirability of voting such proxies. These
issues include (but are not limited to): (i) untimely notice of shareholder
meetings, (ii) restrictions on a foreigner's ability to exercise votes, (iii)
requirements to vote proxies in person, (iv) "shareblocking" (requirements that
investors who exercise their voting rights surrender the right to dispose of
their holdings for some specified period in proximity to the shareholder
meeting), (v) potential difficulties in translating the proxy, and (vi)
requirements to provide local agents with unrestricted powers of attorney to
facilitate voting instructions.
As a consequence, BlackRock votes proxies of non-US companies only on a
"best-efforts" basis. In addition, the Committee may determine that it is
generally in the best interests of BlackRock clients not to vote proxies of
companies in certain countries if the Committee determines that the costs
(including but not limited to opportunity costs associated with shareblocking
constraints) associated with exercising a vote generally are expected to
outweigh the benefit the client will derive by voting on the issuer's proposal.
If the Committee so determines in the case of a particular country, the
Committee (upon advice from BlackRock portfolio managers) may override such
determination with respect to a particular issuer's shareholder meeting if the
Committee believes the benefits of seeking to exercise a vote at such meeting
outweighs the costs, in which case BlackRock will seek to vote on a best-
efforts basis.
Securities Sold After Record Date. With respect to votes in connection
with securities held on a particular record date but sold from a client account
prior to the holding of the related meeting, BlackRock may take no action on
proposals to be voted on in such meeting.
Conflicts of Interest. From time to time, BlackRock may be required to
vote proxies in respect of an issuer that is an affiliate of BlackRock (a
"BlackRock Affiliate"), or a money management or other client of BlackRock (a
"BlackRock Client").(10) In such event, provided that the Committee is aware of
the real or potential conflict, the following procedures apply:
* The Committee intends to adhere to the voting guidelines set forth
herein for all proxy issues including matters involving BlackRock
Affiliates and BlackRock Clients. The Committee may, in its
discretion for the purposes of ensuring that an independent
determination is reached, retain an independent fiduciary to advise
the Committee on how to vote or to cast votes on behalf of
BlackRock's clients; and
* if the Committee determines not to retain an independent fiduciary,
or does not desire to follow the advice of such independent
fiduciary, the Committee shall determine how to vote the proxy after
consulting with the BlackRock Legal and Compliance Department and
concluding that the vote cast is in the client's best interest
notwithstanding the conflict.
(10) Such issuers may include investment companies for which BlackRock
provides investment advisory, administrative and/or other services.
III. Voting Guidelines
The Committee has determined that it is appropriate and in the best
interests of BlackRock's clients to adopt the following voting guidelines,
which represent the Committee's usual voting position on certain recurring
proxy issues that are not expected to involve unusual circumstances. With
respect to any particular proxy issue, however, the Committee may elect to vote
differently than a voting guideline if the Committee determines that doing so
is, in the Committee's judgment, in the best interest of its clients. The
guidelines may be reviewed at any time upon the request of any Committee member
and may be amended or deleted upon the vote of a majority of voting Committee
members present at a Committee meeting for which there is a quorum.
A. Boards of Directors
These proposals concern those issues submitted to shareholders relating
to the composition of the Board of Directors of companies other than investment
companies. As a general matter, the Committee believes that a company's Board
of Directors (rather than shareholders) is most likely to have access to
important, nonpublic information regarding a company's business and prospects,
and is therefore best-positioned to set corporate policy and oversee
management. The Committee therefore believes that the foundation of good
corporate governance is the election of qualified, independent corporate
directors who are likely to diligently represent the interests of shareholders
and oversee management of the corporation in a manner that will seek to
maximize shareholder value over time. In individual cases, the Committee may
look at a Director nominee's history of representing shareholder interests as a
director of other companies, or other factors to the extent the Committee deems
relevant.
The Committee's general policy is to vote:
# VOTE and DESCRIPTION
A.1 FOR nominees for director of United States companies in uncontested
elections, except for nominees who
* have missed at least two meetings and, as a result, attended less
than 75% of meetings of the Board of Directors and its committees
the previous year, unless the nominee missed the meeting(s) due to
illness or company business
* voted to implement or renew a "dead-hand" poison pill
* ignored a shareholder proposal that was approved by either a
majority of the shares outstanding in any year or by the majority of
votes cast for two consecutive years
* failed to act on takeover offers where the majority of the
shareholders have tendered their shares
* are corporate insiders who serve on the audit, compensation or
nominating committees or on a full Board that does not have such
committees composed exclusively of independent directors
* on a case-by-case basis, have served as directors of other companies
with allegedly poor corporate governance
* sit on more than six boards of public companies
A.2 FOR nominees for directors of non-U.S. companies in uncontested
elections, except for nominees from whom the Committee determines to
withhold votes due to the nominees' poor records of representing
shareholder interests, on a case-by-case basis
A.3 FOR proposals to declassify Boards of Directors, except where there
exists a legitimate purpose for classifying boards
A.4 AGAINST proposals to classify Boards of Directors, except where there
exists a legitimate purpose for classifying boards
A.5 AGAINST proposals supporting cumulative voting
A.6 FOR proposals eliminating cumulative voting
A.7 FOR proposals supporting confidential voting
A.8 FOR proposals seeking election of supervisory board members
A.9 AGAINST shareholder proposals seeking additional representation of
women and/or minorities generally (i.e., not specific individuals) to a
Board of Directors
A.10 AGAINST shareholder proposals for term limits for directors
A.11 FOR shareholder proposals to establish a mandatory retirement age for
directors who attain the age of 72 or older
A.12 AGAINST shareholder proposals requiring directors to own a minimum
amount of company stock
A.13 FOR proposals requiring a majority of independent directors on a Board
of Directors
A.14 FOR proposals to allow a Board of Directors to delegate powers to a
committee or committees
A.15 FOR proposals to require audit, compensation and/or nominating
committees of a Board of Directors to consist exclusively of independent
directors
A.16 AGAINST shareholder proposals seeking to prohibit a single person from
occupying the roles of chairman and chief executive officer
A.17 FOR proposals to elect account inspectors
A.18 FOR proposals to fix the membership of a Board of Directors at a
specified size
A.19 FOR proposals permitting shareholder ability to nominate directors
directly
A.20 AGAINST proposals to eliminate shareholder ability to nominate directors
directly
A.21 FOR proposals permitting shareholder ability to remove directors
directly
A.22 AGAINST proposals to eliminate shareholder ability to remove directors
directly
B. Auditors
These proposals concern those issues submitted to shareholders related
to the selection of auditors. As a general matter, the Committee believes that
corporate auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of financial
reporting decisions of corporate management. While the Committee will generally
defer to a corporation's choice of auditor, in individual cases, the Committee
may look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.
The Committee's general policy is to vote:
B.1 FOR approval of independent auditors, except for
* auditors that have a financial interest in, or material association
with, the company they are auditing, and are therefore believed by
the Committee not to be independent
* auditors who have rendered an opinion to any company which in the
Committee's opinion is either not consistent with best accounting
practices or not indicative of the company's financial situation
* on a case-by-case basis, auditors who in the Committee's opinion
provide a significant amount of non-audit services to the company
B.2 FOR proposals seeking authorization to fix the remuneration of auditors
B.3 FOR approving internal statutory auditors
B.4 FOR proposals for audit firm rotation, except for proposals that would
require rotation after a period of less than 5 years
C. Compensation and Benefits
These proposals concern those issues submitted to shareholders related
to management compensation and employee benefits. As a general matter, the
Committee favors disclosure of a company's compensation and benefit policies
and opposes excessive compensation, but believes that compensation matters are
normally best determined by a corporation's board of directors, rather than
shareholders. Proposals to "micro-manage" a company's compensation practices or
to set arbitrary restrictions on compensation or benefits will therefore
generally not be supported.
The Committee's general policy is to vote:
C.1 IN ACCORDANCE WITH THE RECOMMENDATION OF ISS on compensation plans if
the ISS recommendation is based solely on whether or not the company's
plan satisfies the allowable cap as calculated by ISS. If the
recommendation of ISS is based on factors other than whether the plan
satisfies the allowable cap the Committee will analyze the particular
proposed plan. This policy applies to amendments of plans as well as to
initial approvals.
C.2 FOR proposals to eliminate retirement benefits for outside directors
C.3 AGAINST proposals to establish retirement benefits for outside directors
C.4 FOR proposals approving the remuneration of directors or of supervisory
board members
C.5 AGAINST proposals to reprice stock options
C.6 FOR proposals to approve employee stock purchase plans that apply to all
employees. This policy applies to proposals to amend ESPPs if the plan
as amended applies to all employees.
C.7 FOR proposals to pay retirement bonuses to directors of Japanese
companies unless the directors have served less than three years
C.8 AGAINST proposals seeking to pay outside directors only in stock
C.9 FOR proposals seeking further disclosure of executive pay or requiring
companies to report on their supplemental executive retirement benefits
C.10 AGAINST proposals to ban all future stock or stock option grants to
executives
C.11 AGAINST option plans or grants that apply to directors or employees of
"related companies" without adequate disclosure of the corporate
relationship and justification of the option policy
C.12 FOR proposals to exclude pension plan income in the calculation of
earnings used in determining executive bonuses/compensation__
D. Capital Structure
These proposals relate to various requests, principally from management,
for approval of amendments that would alter the capital structure of a company,
such as an increase in authorized shares. As a general matter, the Committee
will support requests that it believes enhance the rights of common
shareholders and oppose requests that appear to be unreasonably dilutive.
The Committee's general policy is to vote:
D.1 AGAINST proposals seeking authorization to issue shares without
preemptive rights except for issuances up to 10% of a non-US company's total
outstanding capital
D.2 FOR management proposals seeking preemptive rights or seeking
authorization to issue shares with preemptive rights
D.3 FOR management proposals approving share repurchase programs
D.4 FOR management proposals to split a company's stock
D.5 FOR management proposals to denominate or authorize denomination of
securities or other obligations or assets in Euros
D.6 FOR proposals requiring a company to expense stock options (unless the
company has already publicly committed to do so by a certain date).
E. Corporate Charter and By-Laws
These proposals relate to various requests for approval of amendments to
a corporation's charter or by-laws, principally for the purpose of adopting or
redeeming "poison pills". As a general matter, the Committee opposes poison
pill provisions.
The Committee's general policy is to vote:
E.1 AGAINST proposals seeking to adopt a poison pill
E.2 FOR proposals seeking to redeem a poison pill
E.3 FOR proposals seeking to have poison pills submitted to shareholders for
ratification
E.4 FOR management proposals to change the company's name__
F. Corporate Meetings
These are routine proposals relating to various requests regarding the
formalities of corporate meetings.
The Committee's general policy is to vote:
F.1 AGAINST proposals that seek authority to act on "any other business that
may arise"
F.2 FOR proposals designating two shareholders to keep minutes of the
meeting
F.3 FOR proposals concerning accepting or approving financial statements and
statutory reports
F.4 FOR proposals approving the discharge of management and the supervisory
board
F.5 FOR proposals approving the allocation of income and the dividend
F.6 FOR proposals seeking authorization to file required documents/other
formalities
F.7 FOR proposals to authorize the corporate board to ratify and execute
approved resolutions
F.8 FOR proposals appointing inspectors of elections
F.9 FOR proposals electing a chair of the meeting
F.10 FOR proposals to permit "virtual" shareholder meetings over the Internet
F.11 AGAINST proposals to require rotating sites for shareholder meetings
G. Investment Companies
These proposals relate to proxy issues that are associated solely with
holdings of shares of investment companies, including, but not limited to,
investment companies for which BlackRock provides investment advisory,
administrative and/or other services. As with other types of companies, the
Committee believes that a fund's Board of Directors (rather than its
shareholders) is best-positioned to set fund policy and oversee management.
However, the Committee opposes granting Boards of Directors authority over
certain matters, such as changes to a fund's investment objective, that the
Investment Company Act of 1940 envisions will be approved directly by
shareholders.
The Committee's general policy is to vote:
G.1 FOR nominees for director of mutual funds in uncontested elections,
except for nominees who
* have missed at least two meetings and, as a result, attended less
than 75% of meetings of the Board of Directors and its committees
the previous year, unless the nominee missed the meeting due to
illness or fund business
* ignore a shareholder proposal that was approved by either a majority
of the shares outstanding in any year or by the majority of votes
cast for two consecutive years
* are interested directors who serve on the audit or nominating
committees or on a full Board that does not have such committees
composed exclusively of independent directors
* on a case-by-case basis, have served as directors of companies with
allegedly poor corporate governance
G.2 FOR the establishment of new series or classes of shares
G.3 AGAINST proposals to change a fund's investment objective to
nonfundamental
G.4 FOR proposals to establish a master-feeder structure or authorizing the
Board to approve a master-feeder structure without a further shareholder
vote
G.5 AGAINST a shareholder proposal for the establishment of a director
ownership requirement
G.6 FOR classified boards of closed-end investment companies
H. Environmental and Social Issues
These are shareholder proposals to limit corporate conduct in some
manner that relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are inappropriate
forums for the discussion of larger social issues, and opposes shareholder
resolutions "micromanaging" corporate conduct or requesting release of
information that would not help a shareholder evaluate an investment in the
corporation as an economic matter. While the Committee is generally supportive
of proposals to require corporate disclosure of matters that seem relevant and
material to the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate matters for
other purposes.
The Committee's general policy is to vote:
H.1 AGAINST proposals seeking to have companies adopt international codes
of conduct
H.2 AGAINST proposals seeking to have companies provide non-required
reports on:
* environmental liabilities;
* bank lending policies;
* corporate political contributions or activities;
* alcohol advertising and efforts to discourage drinking by minors;
* costs and risk of doing business in any individual country;
* involvement in nuclear defense systems
H.3 AGAINST proposals requesting reports on Maquiladora operations or
on CERES principles
H.4 AGAINST proposals seeking implementation of the CERES principles
Notice to Clients
BlackRock will make records of any proxy vote it has made on behalf of a
client available to such client upon request.(11) BlackRock will use its best
efforts to treat proxy votes of clients as confidential, except as it may
decide to best serve its clients' interests or as may be necessary to effect
such votes or as may be required by law.
BlackRock encourage clients with an interest in particular proxy voting
issues to make their views known to BlackRock, provided that, in the absence of
specific written direction from a client on how to vote that client's proxies,
BlackRock reserves the right to vote any proxy in a manner it deems in the best
interests of its clients, as it determines in its sole discretion.
These policies are as of the date indicated on the cover hereof. The
Committee may subsequently amend these policies at any time, without notice.
(11) Such request may be made to the client's portfolio or relationship
manager or addressed in writing to Secretary, BlackRock Equity
Investment Policy Oversight Committee, Legal and Compliance Department,
BlackRock Inc., 40 East 52nd Street, New York, New York 10022.
Information about how a Fund voted proxies relating to securities
held in the Fund's portfolio during the most recent 12 month period
ended June 30 is available without charge (1) at www.blackrock.com
and (2) on the Commission's web site at http://www.sec.gov.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of August 31, 2007.
(a)(1) The Fund is managed by a team of investment professionals
that is responsible for the day-to-day management of the Fund's
portfolio. The lead members of this team are Mark J. Williams,
Managing Director at BlackRock, and Kevin J. Booth, Managing
Director at BlackRock. Mr. Williams and Mr. Booth each has been a
portfolio manager of the Fund since 2006. Mr. Williams is
responsible for setting the Fund's overall investment strategy and
overseeing the management of the Fund. Mr. Booth is responsible for
the day-to-day management of the Fund's portfolio and the selection
of its investments.
Mr. Williams is the head of BlackRock's bank loan group and a member
of the Investment Strategy Group. His primary responsibility is
originating and evaluating bank loan investments for the firm's
collateralized bond obligations. He is also involved in the
evaluation and sourcing of mezzanine investments. Prior to joining
BlackRock in 1998, Mr. Williams spent eight years with PNC Bank's
New York office and was a founding member of the bank's Leveraged
Finance Group. In that capacity he was responsible for structuring
proprietary middle market leveraged deals and sourcing and
evaluating broadly syndicated leveraged loans in the primary and
secondary markets for PNC Bank's investment portfolio. From 1984
until 1990, Mr. Williams worked in PNC Bank's Philadelphia office in
a variety of marketing and corporate finance positions.
Mr. Booth is a member of BlackRock's bank loan group. He joined
BlackRock in 2006. Prior to joining BlackRock, Mr. Booth was a
Managing Director (Global Fixed Income) of Merrill Lynch Investment
Managers, L.P. ("MLIM") since 2006 and a member of MLIM's bank loan
group from 2000 to 2006. He was a Director of MLIM from 2000 to 2006
and was a Vice President of MLIM from 1994 to 2000. He has been
portfolio manager with BlackRock or MLIM since 2000.
(a)(2) As of August 31, 2007:
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
Other Other
(i) Name of Registered Other Pooled Registered Other Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
Mark Williams 9 16 2 0 11 1
$ 4,139,754,762 $5,753,879,192 $ 178,074,057 $0 $4,071,710,403 $ 27,207,438
Kevin Booth 22 9 7 0 4 3
$10,969,049,340 $3,305,024,401 $1,224,383,989 $0 $1,483,112,004 $539,887,685
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made to the Fund.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
and employees of any of them has any substantial economic interest
or possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for the Fund. In this connection,
it should be noted that certain portfolio managers currently manage
certain accounts that are subject to performance fees. In addition,
certain portfolio managers assist in managing certain hedge funds
and may be entitled to receive a portion of any incentive fees
earned on such funds and a portion of such incentive fees may be
voluntarily or involuntarily deferred. Additional portfolio managers
may in the future manage other such accounts or funds and may be
entitled to receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of August 31, 2007:
Portfolio Manager Compensation
BlackRock's financial arrangements with its portfolio managers, its
competitive compensation and its career path emphasis at all levels
reflect the value senior management places on key resources.
Compensation may include a variety of components and may vary from
year to year based on a number of factors. The principal components
of compensation include a base salary, a discretionary bonus,
participation in various benefits programs and one or more of the
incentive compensation programs established by BlackRock such as its
Long-Term Retention and Incentive Plan and Restricted Stock Program.
Base compensation
Generally, portfolio managers receive base compensation based on
their seniority and/or their position with the firm.
Discretionary compensation
In addition to base compensation, portfolio managers may receive
discretionary compensation, which can be a substantial portion of
total compensation. Discretionary compensation can include a
discretionary cash bonus as well as one or more of the following:
Long-Term Retention and Incentive Plan (LTIP)
The LTIP is a long-term incentive plan that seeks to reward certain
key employees. The plan provides for the grant of awards that are
expressed as an amount of cash that, if properly vested and subject
to the attainment of certain performance goals, will be settled in
cash and/or in BlackRock, Inc. common stock.
Deferred Compensation Program
A portion of the compensation paid to each portfolio manager may be
voluntarily deferred by the portfolio manager into an account that
tracks the performance of certain of the firm's investment products.
Each portfolio manager is permitted to allocate his deferred amounts
among various options, including to certain of the firm's hedge
funds and other unregistered products. In addition, prior to 2005, a
portion of the annual compensation of certain senior managers was
mandatorily deferred in a similar manner for a number of years.
Beginning in 2005, a portion of the annual compensation of certain
senior managers was paid in the form of BlackRock, Inc. restricted
stock units which vest ratably over a number of years.
Options and Restricted Stock Awards
While incentive stock options are not currently being awarded to
BlackRock employees, BlackRock, Inc. previously granted stock
options to key employees, including certain portfolio managers who
may still hold unexercised or unvested options. BlackRock, Inc. also
has a restricted stock award program designed to reward certain key
employees as an incentive to contribute to the long-term success of
BlackRock. These awards vest over a period of years.
Incentive Savings Plans
BlackRock, Inc. has created a variety of incentive savings plans in
which BlackRock employees are eligible to participate, including an
Employee Stock Purchase Plan (ESPP) and a 401(k) plan. The 401(k)
plan may involve a company match of 50% of the employee's pre-tax
contribution of up to 6% of the employee's salary, limited to $4,000
per year. BlackRock also offers a Company Retirement Contribution
equal to 3% to 5% of eligible compensation, depending on BlackRock,
Inc.'s overall net operating income. The company match is made in
cash. The firm's 401(k) plan offers a range of investment options,
including registered investment companies managed by the firm. Each
portfolio manager is eligible to participate in these plans.
Annual incentive compensation for each portfolio manager is a
function of several components: the performance of BlackRock, Inc.,
the performance of the portfolio manager's group within BlackRock,
the investment performance, including risk-adjusted returns and
income generation, of the firm's assets under management or
supervision by that portfolio manager relative to predetermined
benchmarks, and the individual's teamwork and contribution to the
overall performance of these portfolios and BlackRock. Unlike many
other firms, portfolio managers at BlackRock compete against
benchmarks rather than each other. In most cases, including for the
portfolio managers of the Registrant, these benchmarks are the same
as the benchmark or benchmarks against which the investment
performance, including risk-adjusted returns and income generation,
of the Registrant or other accounts are measured. These benchmarks
include customized benchmarks, Lipper peer groups and a subset of
other closed-end taxable debt funds. A group of BlackRock, Inc.'s
officers determines which benchmarks against which to compare the
performance of funds and other accounts managed by each portfolio
manager. With respect to the Registrant, such benchmarks include the
Credit Suisse Leveraged Loan Index.
The group of BlackRock, Inc.'s officers then makes a subjective
determination with respect to the portfolio manager's compensation
based on the performance of the funds and other accounts managed by
each portfolio manager relative to the various benchmarks. This
determination may take into consideration the fact that a benchmark
may not perfectly correlate to the way the Registrant or other
accounts are managed, even if it is the benchmark that is most
appropriate for the Registrant or other account. For example, a
benchmark's return may be based on the total return of the
securities comprising the benchmark, but the Registrant or other
account may be managed to maximize income and not total return.
Senior portfolio managers who perform additional management
functions within BlackRock may receive additional compensation for
serving in these other capacities.
(a)(4) Beneficial Ownership of Securities. As of August 31, 2007,
neither of Messrs. Booth or Williams beneficially owned any
stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable due to no such
purchases during the period covered by this report.
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(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")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
13a-15(b) under the Securities and Exchange Act of 1934, as amended.
11(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)
that occurred during the second fiscal quarter of 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 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
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.
BlackRock Senior Floating Rate Fund, Inc. and
Master Senior Floating Rate LLC
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer (principal executive officer) of
BlackRock Senior Floating Rate Fund, Inc. and
Master Senior Floating Rate LLC
Date: October 22, 2007
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: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer (principal executive officer) of
BlackRock Senior Floating Rate Fund, Inc. and
Master Senior Floating Rate LLC
Date: October 22, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Financial Officer (principal financial officer) of
BlackRock Senior Floating Rate Fund, Inc. and
Master Senior Floating Rate LLC
Date: October 22, 2007