SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
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[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12

PILGRIM PRIME RATE TRUST
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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2) Aggregate number of securities to which transaction applies:

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Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PILGRIM PRIME RATE TRUST
7337 EAST DOUBLETREE RANCH ROAD
SCOTTSDALE, ARIZONA 85258
(800) 992-0180
June 6, 2001

Dear Shareholder:

We are pleased to enclose the Notice and Proxy Statement for the Annual
Meeting of Shareholders of Pilgrim Prime Rate Trust (the "Trust") to be held at
8:00 a.m., local time, on June 28, 2001 at the offices of the Trust. Formal
notice of the Meeting appears on the next page, followed by the Proxy Statement.
Please take the time to read the Proxy Statement and cast your vote, since it
covers matters that are important to the Trust and to you as a shareholder.

At the Meeting, you will be asked to consider and vote on the following
matters:

* To elect seven trustees to represent the interests of the holders of
Common Shares to serve until their successors are elected and
qualified.

* To elect two trustees to represent the interests of the holders of
Auction Rate Cumulative Preferred Shares -- Series M, Series T, Series
W, Series Th, and Series F to serve until their successors are elected
and qualified.

* To ratify the appointment of KPMG LLP as independent auditors for the
Trust for the fiscal year ending February 28, 2002.

* To transact such other business as may properly come before the Annual
Meeting of Shareholders or any adjournments thereof.

The Trustees of the Trust have concluded that the proposals are in the best
interests of the Trust and its shareholders and recommend that you vote "FOR"
each of the proposals, which are described in more detail in the enclosed Proxy
Statement.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. TO AVOID
THE ADDED COST OF FOLLOW-UP SOLICITATIONS AND POSSIBLE ADJOURNMENTS, PLEASE TAKE
A FEW MINUTES TO READ THE PROXY STATEMENT AND CAST YOUR VOTE. IT IS IMPORTANT
THAT YOUR VOTE BE RECEIVED NO LATER THAN JUNE 27, 2001.

We appreciate your participation and prompt response in this matter and
thank you for your continued support.

Sincerely,

/s/ James M. Hennessy

JAMES M. HENNESSY
Chief Executive Officer and President

PILGRIM PRIME RATE TRUST
7337 EAST DOUBLETREE RANCH ROAD
SCOTTSDALE, ARIZONA 85258
(800) 992-0180

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
PILGRIM PRIME RATE TRUST
TO BE HELD ON JUNE 28, 2001

To the Shareholders:

An Annual Meeting of Shareholders of Pilgrim Prime Rate Trust (the "Trust")
will be held on June 28, 2001 at 8:00 a.m., local time, at the offices of the
Trust, 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258 for the
following purposes:

1. To elect seven trustees to represent the interests of the holders of
Common Shares to serve until their successors are elected and
qualified;

2. To elect two trustees to represent the interests of the holders of
Auction Rate Cumulative Preferred Shares -- Series M, Series T, Series
W, Series Th, and Series F to serve until their successors are elected
and qualified;

3. To ratify the appointment of KPMG LLP as independent auditors for the
Trust for the fiscal year ending February 28, 2002; and

4. To transact such other business as may properly come before the Annual
Meeting of Shareholders or any adjournments thereof.

Shareholders of record at the close of business on May 22, 2001 are
entitled to notice of, and to vote at, the meeting. Your attention is called to
the accompanying Proxy Statement. Regardless of whether you plan to attend the
meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that a quorum will be present and a maximum number of shares may be voted. If
you are present at the meeting, you may change your vote, if desired, at that
time.

By Order of the Board of Trustees,

/s/ Kimberly A. Anderson

KIMBERLY A. ANDERSON, Secretary

June 6, 2001

PILGRIM PRIME RATE TRUST
PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 28, 2001

This Proxy Statement is being furnished by the Board of Trustees of Pilgrim
Prime Rate Trust (the "Trust") in connection with the Trust's solicitation of
votes regarding matters to be addressed at the Annual Meeting of Shareholders of
the Trust (the "Meeting") to be held on June 28, 2001 at 8:00 a.m., local time,
at the offices of the Trust, 7337 East Doubletree Ranch Road, Scottsdale,
Arizona 85258 for the purposes set forth below and in the accompanying Notice of
Annual Meeting. At the Meeting, the shareholders of the Trust will be asked:

1. To elect seven trustees ("Trustees") to represent the interests of the
holders of Common Shares to serve until their successors are elected
and qualified (Proposal 1);

2. To elect two Trustees to represent the interests of the holders of
Auction Rate Cumulative Preferred Shares -- Series M, Series T, Series
W, Series Th, and Series F ("Preferred Shares") to serve until their
successors are elected and qualified (Proposal 2);.

3. To ratify the appointment of KPMG LLP ("KPMG") as independent auditors
for the Trust for the fiscal year ending February 28, 2002 (Proposal
3); and

4. To transact such other business as may properly come before the Annual
Meeting of Shareholders or any adjournments thereof.

The date of the first mailing of this Proxy Statement is expected to be on
or about June 6, 2001.

REPORTS TO SHAREHOLDERS

The Trust will furnish, without charge, a copy of the Annual Report and the
most recent Semi-Annual Report regarding the Trust on request. Requests for such
reports should be directed to ING Pilgrim Investments, LLC ("ING Pilgrim
Investments") at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258 or
at (800) 992-0180.

SOLICITATION OF VOTES

The following table indicates which Class of shares is being solicited with
respect to each Proposal to be considered at the Meeting.

HOLDERS OF HOLDERS OF
COMMON SHARES PREFERRED SHARES
------------- ----------------
PROPOSAL 1:
Election of Trustees -- Common Shares Yes No

PROPOSAL 2:
Election of Trustees -- Preferred Shares No Yes

PROPOSAL 3:
Ratify the appointment of KPMG
as Independent Auditors Yes Yes

Transact other business as may properly
come before the Meeting or any adjournments
thereof Yes Yes

PROPOSAL NO. 1
ELECTION OF TRUSTEES -- COMMON SHARES

The Board of Trustees has nominated seven individuals (the "Nominees") for
election to the Board. Holders of Common Shares are being asked to elect the
Nominees to serve as Trustees, each to serve until his successor is elected and
qualified. Pertinent information about each Nominee is set forth below. Each
Nominee has consented to serve as a Trustee if elected. All of the Nominees
currently are Trustees of the Trust. In evaluating the Nominees, the Trustees
took into account their background and experience, including their familiarity
with the issues relating to the Trust and its types of investments as well as
their careers in business, finance, marketing and other areas.

INFORMATION REGARDING NOMINEES

Below are the names, ages, business experience during the past five years
and other directorships of the Nominees. The address of each Nominee is 7337
East Doubletree Ranch Road, Scottsdale, Arizona 85258.

YEAR FIRST BECAME A
NAME AND AGE PRINCIPAL OCCUPATION FOR THE LAST FIVE YEARS BOARD MEMBER
------------ -------------------------------------------- ------------

Paul S. Doherty President of Doherty, Wallace, Pillsbury and Murphy, P.C., 1999
(67) Attorneys. Mr. Doherty was formerly a Director of Tambrands,
Inc. (1993 - 1998). Mr. Doherty is also a Director or
Trustee of each of the funds managed by ING Pilgrim
Investments.

Alan L. Gosule* Partner and Chairman of the Tax Department of Clifford 1999
(60) Chance Rogers & Wells LLP, Attorneys (since 1991). Mr.
Gosule is a Director of F.L. Putnam Investment Management
Co., Inc, Simpson Housing Limited Partnership, Home
Properties of New York, Inc. and Colonnade Partners. Mr.
Gosule is also a Director or Trustee of each of the funds
managed by ING Pilgrim Investments.

Thomas J. McInerney** General Manager and Chief Executive Officer of ING U.S. 2001
(45) Worksite Financial Services (since December 2000). Mr.
McInerney was formerly President of Aetna Financial Services
(August 1997 - December 2000), Senior Vice President of
Strategy for Aetna, Inc. (March 1997 - August 1997), head of
National Accounts and Core Sales and Marketing for Aetna
U.S. Healthcare (April 1996 - March 1997), head of Corporate
Strategies for Aetna, Inc. (July 1995 - April 1996), and
held a variety of line and corporate staff positions since
1978. Mr. McInerney is a member of the Board National
Commission on Retirement Policy, the Governor's Council on
Economics Competitiveness and Technology of Connecticut, the
Board of Directors of the Connecticut Business & Industry
Association, the Board of Trustees of The Bushnell, the
Board for The Connecticut Forum, and the Board of the
MetroHartford Chamber of Commerce, and is Chairman of
Concerned Citizens for Effective Government. Mr. McInerney
is also a Director or Trustee of each of the funds managed
by ING Pilgrim Investments.

David W.C. Putnam President and Director of F.L. Putnam Securities Company, 1999
(61) Inc. and its affiliates (since 1978). Mr. Putnam is Director
of Anchor Investment Trust, the Principled Equity Market
Trust and Progressive Capital Accumulation Trust. Mr. Putnam
was formerly Director of Trust Realty Corp. and Bow Ridge
Mining Co. Mr. Putnam is also a Director or Trustee of each
of the funds managed by ING Pilgrim Investments.

YEAR FIRST BECAME A
NAME AND AGE PRINCIPAL OCCUPATION FOR THE LAST FIVE YEARS BOARD MEMBER
------------ -------------------------------------------- ------------

Blaine E. Rieke General Partner of Huntington Partners, an investment 2001
(67) partnership (1997 - present). Mr. Rieke was formerly
Chairman and Chief Executive Officer of Firstar Trust
Company (1973 - 1996). Mr. Rieke is also a Director or
Trustee of each of the funds managed by ING Pilgrim
Investments.

John G. Turner** Trustee and Vice Chairman of ING Americas. Director of ING 1999
(61) Pilgrim Investments, ING Pilgrim Securities, Inc. ("ING
Pilgrim Securities") and ING Pilgrim Group, LLC ("ING
Pilgrim Group") and ING Pilgrim Capital Corporation, LLC
("ING Pilgrim Capital Corporation") (since April 2001). Mr.
Turner was formerly Chairman and Chief Executive Officer of
ReliaStar Financial Corp. and ReliaStar Life Insurance Co.
(1993 - 2000), Chairman of ReliaStar United Services Life
Insurance Company and ReliaStar Life Insurance Company of
New York (1995 - 2000), Chairman of Northern Life Insurance
Company (1992 - 2000), and Chairman and Director/Trustee of
the Northstar affiliated investment companies (1993 - 2000).
Mr. Turner was formerly Director of Northstar Investment
Management Corporation and affiliates (1993 - 2000). Mr.
Turner is also Chairman of each of the funds managed by ING
Pilgrim Investments.

Richard A. Wedemeyer Vice President of The Channel Corporation, an importer of 2001
(65) specialty alloy aluminum products (1996 - present). Mr.
Wedemeyer was formerly Vice President of Performance
Advantage, Inc., a provider of training and consultation
services (1992 - 1996), and Vice President, Operations and
Administration, of Jim Henson Productions (1979 - 1997). Mr.
Wedemeyer is a trustee of the First Choice Funds. Mr.
Wedemeyer is also a Director or Trustee of each of the funds
managed by ING Pilgrim Investments.

- ----------
* An "interested person," as defined in the Investment Company Act of 1940
(the "1940 Act"), of the Trust. Mr. Gosule is a partner at Clifford Chance
Rogers & Wells LLP, which has provided certain legal services for the
Trust.

** An "interested person," as defined in the 1940 Act, by virtue of his
affiliation with ING Pilgrim Investments or any of its affiliates.

During the Trust's fiscal year ended February 28, 2001, the Board held
eleven meetings. Each Trustee attended at least 80% of such Board meetings and
the applicable Board committee meetings during the period in which such Trustee
served as a Trustee and committee member. Thomas J. McInerney, Blaine E. Rieke
and Richard A. Wedemeyer commenced service as Trustees on February 26, 2001.
Mary A. Baldwin commenced service as an Advisory Board Member on June 15, 2000.

VOTE REQUIRED

The affirmative vote of a plurality of the Common Shares of the Trust
present at the Meeting is required to approve the election of each Nominee.

THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING A MAJORITY OF THE INDEPENDENT
TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL 1.

PROPOSAL NO. 2
ELECTION OF TRUSTEES -- PREFERRED SHARES

The Board of Trustees has nominated two individuals (the "Nominees") for
election to the Board. Holders of Preferred Shares are being asked to elect the
Nominees to serve as Trustees, each to serve until his successor is elected and
qualified. Pertinent information about each Nominee is set forth below. Each
Nominee has consented to serve as a Trustee if elected. All of the Nominees
currently are Trustees of the Trust. In evaluating the Nominees, the Trustees
took into account their background and experience, including their familiarity
with the issues relating to the Trust and its types of investments as well as
their careers in business, finance, marketing and other areas.

INFORMATION REGARDING NOMINEES

YEAR FIRST BECAME A
NAME AND AGE PRINCIPAL OCCUPATION FOR THE LAST FIVE YEARS BOARD MEMBER
- ------------ -------------------------------------------- ------------

Walter H. May Retired. Mr. May was formerly Managing Director and Director 1999
(64) of Marketing for Piper Jaffray, Inc., an investment
banking/underwriting firm. Mr. May is also a Director or
Trustee of each of the funds managed by ING Pilgrim
Investments.

Jock Patton Private Investor. Director of Hypercom Corporation (since 1995
(55) January 1999), and JDA Software Group, Inc. (since January
1999). Mr. Patton is also a Director of Buick of Scottsdale,
Inc., National Airlines, Inc., BG Associates, Inc., BK
Entertainment, Inc., Arizona Rotorcraft, Inc. and Director
and Chief Executive Officer of Rainbow Multimedia Group,
Inc. Mr. Patton was formerly Director of Stuart
Entertainment, Inc., Director of Artisoft, Inc. (August 1994
- July 1998) and a President and Co-owner of StockVal, Inc.,
a provider of securities analysis software and proprietary
data (April 1993 - June 1997). Mr. Patton is also a Director
or Trustee of each of the funds managed by ING Pilgrim
Investments.

VOTE REQUIRED

The affirmative vote of a plurality of the Preferred Shares of the Trust
present at the Meeting is required to approve the election of each Nominee.

THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING A MAJORITY OF THE INDEPENDENT
TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL 2.

PROPOSAL NO. 3
RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC AUDITORS

At a meeting of the Board of Trustees held on May 9, 2001, the Board,
including a majority of Trustees who are not "interested persons" as defined in
the 1940 Act, as well as the Trustees who are members of the Audit Committee,
selected KPMG LLP to act as the independent auditors of the Trust for the fiscal
year ending February 28, 2002.

KPMG has served as independent auditors for the Trust with respect to its
financial statements for the fiscal years ending February 29, 1996 through
February 28, 2001.

KPMG has advised the Trust that it is an independent auditing firm and has
no direct financial or material indirect financial interest in the Trust.
Representatives of KPMG are not expected to be at the Meeting but have been
given the opportunity to make a statement if they wish, and will be available
telephonically should any matter arise requiring their participation.

The following table shows fees paid to KPMG during the Trust's most recent
fiscal year. The information in the column "Audit Fees" shows the amounts paid
to KPMG for the audit and review of financial statements of the Trust. The
information in the columns "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" shows the aggregate amounts paid to
KPMG by the Trust and ING Pilgrim Securities and all entities controlling,
controlled by, or under common control with ING Pilgrim Investments that provide
services to the Trust. The Audit Committee of the Board will periodically
consider whether KPMG's receipt of non-audit fees from the Trust, ING Pilgrim
Investments and all entities controlling, controlled by, or under common control
with ING Pilgrim Investments that provide services to the Trust is compatible
with maintaining KPMG's independence.

FINANCIAL INFORMATION
SYSTEMS DESIGN AND
AUDIT FEES IMPLEMENTATION FEES ALL OTHER FEES(1)
---------- ------------------- -----------------
$82,000 $0 $20,617

- ----------
(1) In addition to the amount shown in the table for the Trust, KPMG received
an aggregate amount of $713,356, which includes $597,278 for services
performed on behalf of the Trust and other ING Pilgrim Investments-advised
funds and $116,078 for services performed for ING Pilgrim Investments and
other related entities that provide support for the operations of the
funds.

VOTE REQUIRED

The affirmative vote of a majority of the all the shares of the Trust
present at the Meeting is required to ratify the selection of independent
auditors.

THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING A MAJORITY OF THE INDEPENDENT
TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL 3.

FURTHER INFORMATION REGARDING DIRECTORS

COMMITTEES

The Board of Trustees has an Audit Committee whose function is to meet with
the independent auditors of the Trust to review the scope of the Trust's audit,
the Trust's financial statements and internal accounting controls, and to meet
with Trust management concerning these matters, among other things. This
Committee has reviewed and discussed the audited financial statements for the
fiscal year ended February 28, 2001 with ING Pilgrim Investments. The Committee
has discussed the audit for the fiscal year ended February 28, 2001 and KPMG's
independence with KPMG. The Committee has received a letter from KPMG stating
that KPMG is an independent auditor with respect to the Trust. Based on the
aforementioned review and discussions, the Trust's audited financial statements
for the fiscal year ended February 28, 2001 have been included in the Trust's
Annual Report to Shareholders. This Committee currently consists of three
independent Trustees: Paul S. Doherty, Blaine E. Rieke and Richard A. Wedemeyer.

In addition, Mary A. Baldwin serves as an Advisory Committee Member. Prior to
February 26, 2001, the Committee consisted of four independent Trustees: Paul S.
Doherty, Robert B. Goode, Jr., John R. Smith and David W. Wallace. During the
fiscal year ended February 28, 2001, the Audit Committee met five times. Each
member of the Audit Committee attended 100% of such meetings during the period
in which such Trustee was a member of the Committee. The Trustees have adopted
an Audit Committee Charter and an Addendum to the Audit Committee Charter.

The Board of Trustees has a Valuation Committee whose function is to review
the determination of the value of securities held by the Trust for which market
quotations are not available. The Committee currently consists of three
independent Trustees: Walter H. May, Jock Patton and David W.C. Putnam. Prior to
February 26, 2001, the Committee consisted of four independent Trustees: Al
Burton, Walter H. May, Jock Patton and David W.C. Putnam and one Trustee, Alan
L. Gosule, who is an "interested person," as defined in the 1940 Act, of the
Trust. During the fiscal year ended February 28, 2001, the Valuation Committee
met five times. Each member of the Valuation Committee attended at least 80% of
such meetings during the period in which such Trustee was a member of the
Committee.

The Board of Trustees has an Executive Committee to act for the full Board
if necessary in the event that Board action is needed between regularly
scheduled Board meetings. The Committee currently consists of four Trustees:
Walter H. May, Thomas J. McInerney, Jock Patton and John G. Turner. Prior to
February 26, 2001, the Committee consisted of four Trustees: Walter H. May, Jock
Patton, Robert W. Stallings and John G. Turner. During the fiscal year ended
February 28, 2001, the Executive Committee did not meet.

The Board of Trustees has a Nominating Committee for the purpose of
considering candidates to fill independent Trustee vacancies on the Board. The
Nominating Committee currently consists of three independent Trustees: Paul S.
Doherty, Walter H. May and Richard A. Wedemeyer. In addition, Mary A. Baldwin
serves as an Advisory Committee Member. Prior to February 26, 2001, the
Committee consisted of four independent Trustees: Al Burton, Paul S. Doherty,
Robert B. Goode, Jr. and Walter H. May. The Trust currently does not have a
policy regarding whether the Nominating Committee will consider nominees
recommended by shareholders of the Trust. During the fiscal year ended February
28, 2001, the Nominating Committee did not meet.

The Board of Trustees does not have a Compensation Committee.

REMUNERATION OF BOARD MEMBERS AND OFFICERS

The Trust currently pays each Trustee who is not an "interested person" of
ING Pilgrim Investments and Ms. Baldwin a pro rata share, as described below, of
(i) an annual retainer of $35,000 (Messrs. May and Patton, as lead Trustees,
receive an annual retainer of $45,000); (ii) $5,500 per quarterly Board meeting;
(iii) $1,000 per committee meeting; (iv) $1,000 per special or telephonic
meeting; and (v) out-of-pocket expenses. The pro rata share paid by the Trust is
based on the Trust's average net assets as a percentage of the average net
assets of all the funds managed by ING Pilgrim Investments for which the
Trustees serve in common as Directors/Trustees or as Advisory Board Members, if
applicable. Certain of the Pilgrim Funds had different compensation schedules in
place for the Trustees during portions of 2000.

The following table sets forth the compensation paid to each of the
Trustees for the fiscal year ended February 28, 2001. Trustees who are
"interested persons" of ING Pilgrim Investments do not receive any compensation
from the Trust. In the column headed "Total Compensation from Fund Complex Paid
to Trustees," the number in parentheses indicates the total number of Boards in
the Pilgrim Fund complex on which the Trustee served during that year.

COMPENSATION TABLE
FISCAL YEAR ENDED FEBRUARY 28, 2001

AGGREGATE
COMPENSATION TOTAL COMPENSATION FROM FUND
NAME OF PERSON, POSITION FROM TRUST COMPLEX PAID TO TRUSTEES
------------------------ ---------- ------------------------

Mary A. Baldwin, Ph.D., Advisory Board Member(1) ..... $ 4,698 $42,688 (27 boards)

Al Burton, Trustee(5) ................................ $ 5,421 $54,188 (25 boards)

Paul S. Doherty, Trustee ............................. $ 3,936 $47,688 (27 boards)

Robert B. Goode, Jr., Trustee(5) ..................... $ 4,972 $53,688 (25 boards)

Alan L. Gosule, Trustee(2) ........................... $ 5,085 $53,688 (27 boards)

Mark L. Lipson, Trustee(3)(4) ........................ $ 0 $ 0 (12 boards)

Walter H. May, Trustee ............................... $ 5,258 $53,688 (27 boards)

Thomas J. McInerney, Trustee(3)(6) ................... $ 0 $ 0 (27 boards)

Jock Patton, Trustee ................................. $ 5,938 $55,688 (27 boards)

David W.C. Putnam, Trustee ........................... $ 4,509 $48,688 (27 boards)

Blaine E. Rieke, Trustee(6) .......................... $ 0 $14,420 (27 boards)

John R. Smith, Trustee(5) ............................ $ 4,963 $54,188 (25 boards)

Robert W. Stallings, Trustee(3)(5) ................... $ 0 $ 0 (25 boards)

John G. Turner, Trustee(3) ........................... $ 0 $ 0 (27 boards)

David W. Wallace, Trustee(5) ......................... $ 4,924 $54,188 (25 boards)

Richard A. Wedemeyer, Trustee(6) ..................... $ 0 $10,420 (27 boards)

- ----------
(1) Resigned as a Trustee and commenced service as an Advisory Board Member
effective June 15, 2000.
(2) An "interested person," as defined in the 1940 Act, of the Trust. Mr.
Gosule is a partner at Clifford Chance Rogers & Wells LLP, which has
provided certain legal services for the Trust.
(3) An "interested person," as defined in the 1940 Act, because of his
affiliation with ING Pilgrim Investments or any of its affiliates.
(4) Resigned as a Trustee effective July 26, 2000.
(5) Retired as a Trustee effective February 26, 2001.
(6) Commenced service as a Trustee on February 26, 2001.

GENERAL INFORMATION

OTHER MATTERS TO COME BEFORE THE MEETING

The Trust's management does not know of any matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the proxyholders will vote thereon in
accordance with their best judgment.

VOTING RIGHTS

Each share of beneficial interest of the Trust is entitled to one vote.
Shareholders of the Trust at the close of business on May 22, 2001 (the "Record
Date") will be entitled to be present and to give voting instructions for the
Trust at the Meeting and any adjournments thereof with respect to their shares
owned as of the Record Date. As of the Record Date, the Trust had 137,437,648
Common Shares outstanding. As of the Record Date, the Trust had the following
Preferred Shares outstanding: 3,600 shares of Series M, 3,600 shares of Series
T, 3,600 shares of Series W, 3,600 shares of Series Th, and 3,600 shares of
Series F.

A majority of the outstanding shares of the Trust on the Record Date
entitled to vote for each Proposal, present in person or represented by proxy,
must be present to constitute a quorum. If a quorum is not present at the
Meeting, or if a quorum is present but sufficient votes to approve any or all of
the Proposals are not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of proxies. A
shareholder vote may be taken on one or more of the Proposals in this Proxy
Statement prior to any adjournment if sufficient votes have been received with
respect to a Proposal. Any adjournment will require the affirmative vote of a
majority of those shares represented at the Meeting in person or by proxy. The
persons named in the enclosed proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of any Proposal that has
not been adopted, will vote against any adjournments those proxies required to
be voted against any Proposal that has not been adopted, and will not vote any
proxies that direct them to abstain from voting on such Proposals.

The Trust expects that, before the Meeting, broker-dealer firms holding
shares of the Trust in "street name" for their customers will request voting
instructions from their customers and beneficial owners. If these instructions
are not received by the date specified in the broker-dealer firms' proxy
solicitation materials, the Trust understands that the broker-dealers that are
members of the New York Stock Exchange may vote on the items to be considered at
the Meeting on behalf of their customers and beneficial owners under rules of
the New York Stock Exchange.

If a shareholder abstains from voting as to any matter, or if a broker
returns a "non-vote" proxy, indicating a lack of authority to vote on a matter,
then the shares represented by such abstention or non-vote will be considered to
be present at the Meeting for purposes of determining the existence of a quorum.
However, abstentions and broker non-votes will be disregarded in determining the
"votes cast" on an issue. For this reason, with respect to matters requiring the
affirmative vote of a majority of the total shares outstanding, an abstention or
broker non-vote will have the effect of a vote against such matters.

To the knowledge of the Trust, as of May 1, 2001, no current Trustee of the
Trust owned 1% or more of the outstanding Common Shares of the Trust and the
officers and Trustees of the Trust own, as a group, less than 1% of the Common
Shares of the Trust.

To the knowledge of the Trust, as of May 1, 2001, no current Trustee of the
Trust owned 1% or more of the outstanding Preferred Shares of the Trust and the
officers and Trustees of the Trust own, as a group, less than 1% of the
Preferred Shares of the Trust.

BENEFICIAL OWNERS

As of May 1, 2001, no person, to the knowledge of the Trust, owned
beneficially or of record more than 5% of the outstanding Common Shares of the
Trust.

As of May 1, 2001, no person, to the knowledge of the Trust, owned
beneficially or of record more than 5% of the outstanding Preferred Shares of
the Trust.

SOLICITATION OF PROXIES

Solicitation of proxies is being made primarily by the mailing of this
Notice and Proxy Statement with its enclosures on or about June 6, 2001.
Shareholders of the Trust whose shares are held by nominees, such as brokers,
can vote their proxies by contacting their respective nominee. In addition to
the solicitation of proxies by mail, officers of the Trust and employees of ING
Pilgrim Investments and its affiliates, without additional compensation, may
solicit proxies in person or by telephone, telegraph, facsimile, or oral
communication.

A shareholder may revoke the accompanying proxy at any time prior to its
use by filing with the Trust a written revocation or duly executed proxy bearing
a later date. In addition, any shareholder who attends the Meeting in person may
vote by ballot at the Meeting, thereby canceling any proxy previously given. The
persons named in the accompanying proxy will vote as directed by the proxy, but
in the absence of voting directions in any proxy that is signed and returned,
they intend to vote "FOR" each of the proposals and may vote in their discretion
with respect to other matters not now known to the Board of Trustees that may be
presented at the Meeting.

EXPENSES

The Trust will pay the expenses incurred by it in connection with this
Notice and Proxy Statement and the Meeting, including the printing, mailing,
solicitation and vote tabulation expenses, legal fees, and out of pocket
expenses.

ADVISER, PRINCIPAL UNDERWRITER AND ADMINISTRATOR

ING Pilgrim Investments, ING Pilgrim Securities and ING Pilgrim Group serve
as the Trust's investment adviser, distributor and administrator, respectively.
Their address is 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258.

EXECUTIVE OFFICERS OF THE TRUST

Officers of the Trust are elected by the Board of Trustees of the Trust and
hold office until they resign, are removed or are otherwise disqualified to
serve. The chart below lists the principal executive officers of the Trust,
together with such person's position with the Trust and principal occupation for
the last five years.

NAME AND AGE POSITION WITH THE TRUST PRINCIPAL OCCUPATION FOR THE LAST FIVE YEARS
------------ ----------------------- --------------------------------------------

James M. Hennessy President and Chief Executive President and Chief Executive Officer of each of the Pilgrim
(52) Officer (since February 2001) Funds (since February 2001), Chief Operating Officer of each
and Chief Operating Officer of the Pilgrim Funds (since July 2000), Director, President
(since July 2000) and Chief Executive Officer of ING Pilgrim Group, ING
Pilgrim Investments, ING Pilgrim Capital Corporation, ING
Pilgrim Advisors, Inc., Express America T.C. Corporation,
and EAMC Liquidation Corp. (since December 2000), and
Director of ING Pilgrim Securities, ING Pilgrim Quantitative
Management, Inc. and Lexington Funds Distributor, Inc.
(since December 2000). Mr. Hennessy has held various other
senior executive positions with ING Pilgrim Group and its
affiliates for more than the last five years.

Daniel A. Norman Senior Vice President (since Senior Vice President of ING Pilgrim Investments and ING
(43) April 1995), Treasurer (since Pilgrim Securities (since December 1994). Presently serves
June 1997), and Co-Senior or has served as an officer of other affiliates of ING
Portfolio Manager (since Pilgrim Capital Corporation.
December 1999)

NAME AND AGE POSITION WITH THE TRUST PRINCIPAL OCCUPATION FOR THE LAST FIVE YEARS
------------ ----------------------- --------------------------------------------

Jeffrey A. Bakalar Senior Vice President (since Senior Vice President of ING Pilgrim Investments (since
(41) November 1999) and Co-Senior November 1999). Formerly served as Vice President and
Portfolio Manager (since Assistant Portfolio Manager of the Trust (February 1998 -
December 1999) December 1999). Formerly Vice President of the
Communications Positions of First National Bank of Chicago
(July 1994 - January 1998).

Michael J. Roland Senior Vice President and Senior Vice President and Chief Financial Officer of ING
(43) Principal Financial Officer Pilgrim Group, ING Pilgrim Investments and ING Pilgrim
(since June 1998) Securities (since June 1998); Senior Vice President and
Chief Financial Officer (since June 1998) of each of the
Pilgrim Funds. Formerly served in same capacity (January
1995 - April 1997). Formerly Chief Financial Officer of
Endeavor Group (April 1997 - June 1998).

Robert S. Naka Senior Vice President (since Senior Vice President of ING Pilgrim Investments (since
(37) November 1999) and Assistant November 1999) and ING Pilgrim Group (since August 1999).
Secretary (since July 1996) Senior Vice President and Assistant Secretary of each of the
Pilgrim Funds. Formerly Vice President of ING Pilgrim
Investments (April 1997 - October 1999) and ING Pilgrim
Group (February 1997 - August 1999). Formerly Assistant Vice
President of ING Pilgrim Group (August 1995 - February
1997).

Kimberly A. Anderson Vice President (since January Vice President of ING Pilgrim Group (since January 2001) and
(36) 2001) and Secretary (since Vice President and Secretary of each of the Pilgrim Funds
February 2001) (since February 2001). Formerly Assistant Vice President and
Assistant Secretary of each of the Pilgrim Funds (August
1999 - February 2001) and Assistant Vice President of ING
Pilgrim Group (November 1999 - January 2001). Ms. Anderson
has held various other positions with ING Pilgrim Group for
more than the last five years.

SHAREHOLDER PROPOSALS

It is anticipated that the next annual meeting of the Trust will be held in
June 2002. Any proposals of shareholders that are intended to be presented at
the Trust's next annual meeting must be received at the Trust's principal
executive offices within a reasonable time before the Trust begins to print and
mail the proxy materials and must comply with all other legal requirements in
order to be included in the Trust's Proxy Statement and form of proxy for that
meeting.

SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934: BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

U.S. securities laws require that the Trust's shareholders owning more than
ten percent of the outstanding shares of the Trust, Trustees, and officers, as
well as affiliated persons of the Trust's Investment Manager, report their
ownership of the Trust's shares and any changes in that ownership. Such reports
are filed on Form 3, Form 4 and Form 5 under the Securities Exchange Act of
1934. Officers, directors and greater than ten percent shareholders are required
to furnish the Trust with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by the Trust or
written representation from certain reporting persons that no Form 5's were
required for those persons, the Trust believes that during the fiscal year ended
February 28, 2001 all officers, directors, and greater than ten percent
beneficial owners complied with the applicable Section 16(a) filing
requirements; however, Messrs. Wedemeyer, McInerney and Rieke each filed a Form
3 subsequent to the required date and Messrs. Hennessy, Norman and Turner each
filed a Form 4 reporting one transaction each subsequent to the required date.

PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.

/s/ Kimberly A. Anderson

KIMBERLY A. ANDERSON, Secretary

June 6, 2001
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258

PILGRIM PRIME RATE TRUST

COMMON SHARES

The undersigned hereby instructs James M. Hennessy or Kimberly A. Anderson
(Proxies) to vote the Common Shares held by the undersigned at the Annual
Meeting of Shareholders of Pilgrim Prime Rate Trust to be held at 8:00 a.m.,
local time, on June 28, 2001 at 7337 East Doubletree Ranch Road, Scottsdale,
Arizona 85258 and at any adjournment thereof, in the manner directed below with
respect to the matters referred to in the Proxy Statement for the Meeting,
receipt of which is hereby acknowledged, and in the Proxies' discretion, upon
such other matters as may properly come before the meeting or any adjournment
thereof.

Please vote, sign and date this voting instruction and return it in the enclosed
envelope.

These voting instructions will be voted as specified. IF NO SPECIFICATION IS
MADE, THIS VOTING INSTRUCTION WILL BE VOTED "FOR" ALL PROPOSALS.

IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE STRONGLY
URGE YOU TO REVIEW, COMPLETE AND RETURN YOUR BALLOT AS SOON AS POSSIBLE. YOUR
VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.

Please indicate your vote by an "x" in the appropriate box below.

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.

1. To elect seven Trustees. For All Against All For all Except Abstain
[ ] [ ] [ ] [ ]

Nominees: Paul S. Doherty David W. C. Putnam John G. Turner
Alan L. Gosule Blaine E. Rieke Richard A. Wedemeyer
Thomas J. McInerney

TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX AND STRIKE THROUGH THAT NOMINEE'S NAME.

3. To ratify the appointment of KPMG LLP as For Against Abstain
independent auditors for the Trust for [ ] [ ] [ ]
the fiscal year ending February 28,
2002.

4. To transact such other business as may For Against Abstain
properly come before the Meeting of [ ] [ ] [ ]
Shareholders or any adjournments
thereof.

This proxy must be signed exactly as your name(s) appears hereon. If as an
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add titles as such. Joint owners must each sign.

- ------------------------------------- -------------------
Signature Date

- ------------------------------------- -------------------
Signature (if held jointly) Date

PILGRIM PRIME RATE TRUST

AUCTION RATE CUMULATIVE PREFERRED SHARES
SERIES M, SERIES T, SERIES W, SERIES TH, AND SERIES F
("PREFERRED SHARES")

The undersigned hereby instructs James M. Hennessy or Kimberly A. Anderson
(Proxies) to vote the Preferred Shares held by the undersigned at the Annual
Meeting of Shareholders of Pilgrim Prime Rate Trust to be held at 8:00 a.m.,
local time, on June 28, 2001 at 7337 East Doubletree Ranch Road, Scottsdale,
Arizona 85258 and at any adjournment thereof, in the manner directed below with
respect to the matters referred to in the Proxy Statement for the Meeting,
receipt of which is hereby acknowledged, and in the Proxies' discretion, upon
such other matters as may properly come before the meeting or any adjournment
thereof.

Please vote, sign and date this voting instruction and return it in the enclosed
envelope.

These voting instructions will be voted as specified. IF NO SPECIFICATION IS
MADE, THIS VOTING INSTRUCTION WILL BE VOTED "FOR" ALL PROPOSALS.

Please indicate your vote by an "x" in the appropriate box below.

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.

2. To elect two Trustees. For All Against All For all Except Abstain
[ ] [ ] [ ] [ ]

Nominees: Walter H. May
Jock Patton

TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX AND STRIKE THROUGH THAT NOMINEE'S NAME.

3. To ratify the appointment of KPMG LLP as For Against Abstain
independent auditors for the Trust for [ ] [ ] [ ]
the fiscal year ending February 28,
2002.

4. To transact such other business as may For Against Abstain
properly come before the Meeting of [ ] [ ] [ ]
Shareholders or any adjournments
thereof.

- ------------------------------------- -------------------
Signature Date

- ------------------------------------- -------------------
Signature (if held jointly) Date