<Page>
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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 811-10223
---------------------------------------------
ING Senior Income Fund
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
7337 E. Doubletree Ranch Rd., Scottsdale, AZ 85258
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-800-992-0180
----------------------------
Date of fiscal year end: February 28
----------------------------------
Date of reporting period: March 1, 2004 to August 31, 2004
---------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS.
The following is a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1):
<Page>
SEMI-ANNUAL REPORT
[GRAPHIC]
FUNDS
SEMI-ANNUAL REPORT
AUGUST 31, 2004
ING SENIOR INCOME FUND
[ING LOGO]
<Page>
ING Senior Income Fund
SEMI-ANNUAL REPORT
August 31, 2004
Table of Contents
<Table>
Portfolio Managers' Report 2
Statement of Assets and Liabilities 7
Statement of Operations 9
Statements of Changes in Net Assets 10
Statement of Cash Flows 11
Financial Highlights 12
Notes to Financial Statements 14
Additional Information 20
Portfolio of Investments 21
</Table>
<Page>
ING Senior Income Fund
PORTFOLIO MANAGERS' REPORT
Dear Shareholders:
ING Senior Income Fund (the "Fund") is a diversified, closed-end management
investment company that seeks to provide investors with a high level of monthly
income. The Fund seeks to achieve this objective by investing in a
professionally managed portfolio comprised primarily of senior loans.
PORTFOLIO CHARACTERISTICS
AS OF AUGUST 31, 2004
<Table>
Net Assets $ 1,399,088,157
Total Assets $ 1,634,123,003
Assets Invested in Senior Loans $ 1,544,048,996
Senior Loans Represented 406
Average Amount Outstanding per Loan $ 3,803,076
Industries Represented 37
Average Loan Amount per Industry $ 41,731,054
Portfolio Turnover Rate (YTD) 76%
Weighted Average Days to Interest Rate Reset 41 days
Average Loan Final Maturity 65 months
</Table>
PERFORMANCE SUMMARY
During the six months ended August 31, 2004, the Fund's Class A and Q shares
each distributed total dividends from income of $0.28, resulting in an average
annualized distribution rate of 3.53%(1) and 3.54%(1), respectively. During the
same period, the Fund's Class B and C shares each distributed total dividends
from income of $0.24, representing an average annualized distribution rate of
3.04%(1) and 3.03%(1), respectively. This represents a spread of 2.23%, 1.74%,
1.73% and 2.24%, for Class A, B, C and Q, respectively, over the average 30-day
LIBOR for the period under review.
The Fund's total return for the six months ended August 31, 2004, for each of
the share classes, excluding sales charges, ranged from 2.06% on Class A and Q
to 1.80% on Class B and C. The Fund ran slightly behind the S&P/LSTA Leveraged
Loan Index, which posted a total return of 2.08%(2).
MARKET OVERVIEW
The non-investment grade loan market continued to exhibit both technical and
fundamental strength during the six-month period ended August 31, 2004. The
primary drivers of loan performance continue to be credit market conditions and
liquidity, the overall vigor of the U.S. economy, and the directional nature of
short-term interest rates. Each of these elements has been favorably aligned for
virtually all of this year; the most recent quarter offered no exception.
During the second calendar quarter of 2004, domestic GDP expanded at an
approximate 2.8% pace. While revised downward from earlier estimates, this pace
provides a solid footing from which most economists envision renewed
acceleration into 2005. Clearly, a vigorous economic backdrop is an essential
ingredient to a sustained level of corporate merger and acquisition ("M&A")
activity, and in turn, a hearty pipeline of new loan transactions. Coinciding
with increasingly robust growth, third quarter M&A-related loan volumes posted
their highest totals since the second quarter of 2000. Further, as the economy
continues to expand, even at a somewhat uneven pace, and as commodity prices
move ever upward, so has the expectation of a continued rise in short-term
interest rates. Importantly, unlike fixed rate bonds, returns for which
- ----------
(1) The distribution rate is calculated by dividing the total distributions
declared during the period by the Fund's net asset value at the end of the
period. The distribution rate is based solely on the actual dividends and
distributions, which are made at the discretion of management. The
distribution rate may or may not include all investment income and
ordinarily will not include capital gains or losses, if any.
(2) Source: As tracked by Standard & Poor's Leveraged Commentary & Portfolio
Management Data Group, a leading data provider to the Loan Market. See
additional information regarding the Index on page 5.
2
<Page>
ING Senior Income Fund
PORTFOLIO MANAGERS' REPORT (continued)
are inversely related to changes in interest rates, the loan asset class, by way
of its floating rate profile, is expected to benefit as rates rise. Rounding out
the triumvirate of positive factors affecting the loan market, credit trends
continue to look relatively stable. Trailing default rates continue to hover
near historical lows, and the percentage of the market comprised of loans rated
CCC+ or lower by Standard & Poor's recently fell to a level not seen in roughly
six years.
For the considerable number of favorable trends impacting the loan market, there
are a small number of emerging issues that offer a degree of pause. The price of
oil, for one, if sustained at current levels, will certainly have a crimping
effect on the pace of economic growth, and more specifically, those corporations
that use crude oil as a direct or indirect input. Moreover, strong demand for
loans, coupled with high levels of uninvested cash in the hands of investors,
has bred a bit of an issuer's market. Not unexpectedly, as a result, we've seen
both the compression of borrowing spreads to historical lows over the last few
quarters and an increasing inflow of slightly lower quality loans coming to
market. We are actively monitoring each of these developments.
TOP TEN INDUSTRY SECTORS
AS OF AUGUST 31, 2004
AS A PERCENTAGE OF:
<Table>
<Caption>
TOTAL NET
ASSETS ASSETS
------ ------
Healthcare, Education and Childcare 9.4% 10.9%
Cable Television 7.2% 8.4%
Printing and Publishing 6.8% 8.0%
Chemicals, Plastics and Rubber 6.4% 7.5%
Automobile 4.8% 5.6%
Cellular Communications 4.5% 5.2%
Containers, Packaging and Glass 4.3% 5.0%
Leisure, Amusement and Entertainment 4.2% 5.0%
Utilities 3.9% 4.5%
Radio and TV Broadcasting 3.9% 4.5%
</Table>
Portfolio holdings are subject to change daily.
PORTFOLIO SPECIFICS
The Fund during the period benefited from the robust supply of new loans,
ongoing broad-based price support due to strong demand for floating rate assets,
and solid performance by several of the larger individual holdings. Notable
changes in sector holdings during the period include an increase in healthcare
(9.4% of total assets at period-end, as compared to 7.0% at the end of February
2004), driven largely by new investment in several large cap issuers in the
medical device and or services sub-sectors. We continue to view favorably these
components of the healthcare industry based on high barriers to entry and
relative stability of cash flows. Industry groups that experienced significant
reduction in overall exposure during the period included cable television (7.2%
of total assets at period-end, down from 12.7%) and cellular communications
(4.5%, versus 8.3%). While we still view these as attractive sectors from a
risk-return perspective, increasingly receptive capital markets have offered
cable and wireless companies the option of refinancing substantial debt loads at
lower overall borrowing costs. The two benchmark issuers, Charter Communications
Operating, LLC (third largest U.S. cable operator) and Nextel Finance Company
(one of the largest independent wireless providers) both refinanced (and in the
case of Nextel, substantially reduced) their loan facilities during the period.
We opted at that time to reduce the Fund's respective exposures
TOP TEN SENIOR LOAN ISSUERS
AS OF AUGUST 31, 2004
AS A PERCENTAGE OF:
<Table>
<Caption>
TOTAL NET
ASSETS ASSETS
------ ------
Charter Communications Operating, LLC 1.9% 2.2%
Davita, Inc. 1.5% 1.8%
Allied Waste North America, Inc. 1.2% 1.3%
Community Health Systems, Inc. 1.1% 1.3%
Century Cable Holdings, LLC 1.1% 1.2%
Huntsman International LLC 1.0% 1.2%
Owens-Illinois Group, Inc. 1.0% 1.1%
Nextel Finance Company 0.9% 1.1%
Metro-Goldwyn-Mayer Studios, Inc. 0.9% 1.1%
Dex Media West, LLC 0.9% 1.0%
</Table>
Portfolio holdings are subject to change daily.
3
<Page>
ING Senior Income Fund
PORTFOLIO MANAGERS' REPORT (continued)
to these companies and simultaneously lock in realized gains. Charter at
period-end represented approximately 1.9% of total assets, as compared to 3.2%
at the end of February 2004, and Nextel accounted for 0.9%, versus 3.0% (the
latter representing the Fund's number two holding at that time).
In short, these adjustments were made to improve an already high level of
portfolio diversification. As of August 31, 2004, only seven holdings accounted
for more than 1.0% of total assets, and the average amount outstanding per loan
represented 0.2% of the Fund's total assets (as compared to 0.3% at the end of
February 2004). At approximately 2.6% of total assets, the average sector
concentration remained very comfortable.
Importantly, the level of non-performing loans in the Fund (classified as those
not currently paying interest and/or principal as contractually stipulated)
remained negligible.
[CHART]
INVESTMENT TYPES
AS OF AUGUST 31, 2004
(AS A PERCENT OF TOTAL INVESTMENTS)
<Table>
Short-Term Investments 0.8%
Senior Loans 98.9%
Other Corporate Debt 0.2%
Equities and Other Assets 0.1%
</Table>
PORTFOLIO HOLDINGS ARE SUBJECT TO CHANGE DAILY.
USE OF LEVERAGE
The Fund seeks to prudently utilize financial leverage in order to increase the
yield to shareholders. As of August 31, 2004, the Fund had $125 million
outstanding under a $350 million revolving credit facility.
OUTLOOK
Fundamentally, our near-term outlook for the loan asset class remains positive.
Investor demand for floating rate loans, already at a level not seen in several
years, is expected to remain quite healthy as the Federal Reserve continues on
its path of systematically increasing short-term interest rates. Strong demand
typically translates into firm loan prices and stable net asset values. Further,
at this point, there appears to be little on the immediate horizon that would
threaten what is currently viewed as a fairly benign non-investment grade credit
environment. We are on watch, however, for increasingly aggressive transaction
structures (e.g., second lien and covenant-light loan facilities). Our strategy
remains focused on delivering attractive risk-adjusted returns. As in the past,
we will continue to forfeit yield in order to maintain credit discipline.
We thank you for your continued confidence and encourage your questions and
comments.
/s/ Jeffrey A. Bakalar /s/ Daniel A. Norman
Jeffrey A. Bakalar Daniel A. Norman
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
SENIOR PORTFOLIO MANAGER SENIOR PORTFOLIO MANAGER
ING INVESTMENT MANAGEMENT CO. ING INVESTMENT MANAGEMENT CO.
ING Senior Income Fund
September 27, 2004
4
<Page>
ING Senior Income Fund
PORTFOLIO MANAGERS' REPORT (continued)
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED AUGUST 31, 2004
-------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS A, B AND C OF CLASS Q
1 YEAR 3 YEAR APRIL 2, 2001 DECEMBER 15, 2000
------ ------ ------------------- -----------------
Including Sales Charge:
Class A(1) 1.28% 3.86% 4.38% --
Class B(2) 2.81% 4.37% 4.92% --
Class C(3) 4.80% 5.00% 5.33% --
Class Q 6.28% 5.48% -- 5.77%
Excluding Sales Charge:
Class A 6.33% 5.56% 5.88% --
Class B 5.81% 4.98% 5.31% --
Class C 5.80% 5.00% 5.33% --
Class Q 6.28% 5.48% -- 5.77%
S&P/LSTA Leveraged Loan Index(4) 6.55% 4.78% 4.98% 5.24%
</Table>
The table above illustrates the total return of ING Senior Income Fund against
the S&P/LSTA Leveraged Loan Index. The Index has no cash in its portfolio,
imposes no sales charges and incurs no operating expenses. An investor cannot
invest directly in an index. The Fund's performance is shown both with and
without the imposition of sales charges.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund, subject to possible later
reimbursement during a three-year period. Total returns would have been lower
had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. THE FUND'S PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
SHOWN. PLEASE LOG ON TO www.ingfunds.com OR CALL (800) 992-0180 TO GET
PERFORMANCE THROUGH THE MOST RECENT MONTH-END.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the maximum Class A sales charge of 4.75%. Subsequent
to the period end, on October 11, 2004, the front-end sales load for Class
A Common Shares was reduced to a maximum sales charge of 2.50%. There is no
front-end sales charge if you purchase Class A Common Shares in an amount
of $1 million or more. However, the shares will be subject to a 1.00% EWC
if they are repurchased by the Fund within one year of purchase.
(2) Class B maximum Early Withdrawal Charge ("EWC") is 3% in the first year,
declining to 1% in the fifth year and eliminated thereafter.
(3) Class C maximum EWC is 1% for the first year.
(4) Source: S&P/Loan Syndication Trading Association. The S&P/LSTA Leveraged
Loan Index ("LLI") is an unmanaged total return index that captures accrued
interest, repayments, and market value changes. It represents a broad cross
section of leveraged loans syndicated in the United States, including
dollar-denominated loans to overseas issuers. Standard & Poor's and the
Loan Syndications & Trading Association ("LSTA") conceived the LLI to
establish a performance benchmark for the syndicated leveraged loan
industry. An investor cannot invest directly in an index. Since inception
performance for the index is shown from March 31, 2001 for Class A, B and C
and from December 31, 2000 for Class Q.
5
<Page>
ING Senior Income Fund
PORTFOLIO MANAGERS' REPORT (continued)
YIELDS AND DISTRIBUTIONS RATES
<Table>
<Caption>
30-DAY SEC YIELDS(1) AVERAGE ANNUALIZED DISTRIBUTION RATES(2)
-------------------------------------- ----------------------------------------
CLASS A CLASS B CLASS C CLASS Q CLASS A CLASS B CLASS C CLASS Q
-------------------------------------- ----------------------------------------
August 31, 2004(3) 3.05% 2.71% 2.71% 3.21% 3.53% 3.04% 3.03% 3.54%
February 29, 2004(4) 3.08% 2.73% 2.73% 3.21% 4.24% 3.74% 3.74% 4.25%
</Table>
(1) Yield is calculated by dividing the Fund's net investment income per share
for the most recent thirty days by the net asset value. Yield calculations
do not include any commissions or sales charges, and are compounded for six
months and annualized for a twelve-month period to derive the Fund's yield
consistent with the SEC standardized yield formula for open-end investment
companies.
(2) Distribution Rates are calculated by annualizing dividends declared during
the period (i.e., divide the monthly dividend amount by the number of days
in the month and multiply by the number of days in the fiscal year) and
then dividing the resulting annualized dividend by the month-ending NAV.
(3) If the Investment Manager had not waived certain Fund expenses, the 30-Day
SEC yield would have been 2.94% for Class A shares, 2.60% for Class B and
Class C shares and 3.10% for Class Q shares.
(4) If the Investment Manager had not waived certain Fund expenses, the 30-Day
SEC yield would have been 3.00% for Class A shares, 2.66% for Class B and
Class C shares and 3.13% for Class Q shares.
PRINCIPAL RISK FACTOR(S): This closed-end Fund may invest in below investment
grade senior loans. Investment in the Fund involves the risk that borrowers may
default on obligations, or that lenders may have difficulty liquidating the
collateral securing the loans or enforcing their rights under the terms of the
senior loans. Senior loans are subject to credit risks and the potential for
non-payment of scheduled principal or interest payments, which may result in a
reduction of the Fund's NAV. The use of leverage for investment purposes
increases both investment opportunity and investment risk. In the event of a
general market decline in the value of assets such as those in which the Fund
invests, the effect of that decline will be magnified in the Fund because of the
additional assets purchased with the proceeds of the leverage.
The Fund may be limited in its ability to sell loans in its portfolio in a
timely fashion and/or at a favorable price due to the limited secondary market
for loans. The price of loans can increase in the secondary market and the rate
of interest payable on new loans can be adversely affected by an increase in
demand for loans. If more than 5% of Common Shares are tendered, investors may
not be able to completely liquidate their holdings in any one month. Investments
in foreign borrowers involve the following possible risks: potential for
political, social and economic adversity, differing legal systems and laws, and
less rigorous regulatory requirements than U.S. borrowers.
INTEREST RATE RISK: Changes in market interest rates will affect the yield on
the Fund's Common Shares. If market interest rates fall, the yield on the Fund's
Common Shares will also fall. In addition, changes in market interest rates may
cause the Fund's NAV to experience moderate volatility because of the lag
between changes in market rates and the resetting of the floating rates on
assets in the Fund's portfolio. To the extent that market interest rate changes
are reflected as a change in the market spreads for loans of the type and
quality in which the Fund invests, the value of the Fund's portfolio may
decrease in response to an increase in such spreads. Finally, substantial
increases in interest rates may cause an increase in loan defaults as borrowers
may lack the resources to meet higher debt service requirements.
6
<Page>
ING Senior Income Fund
STATEMENT OF ASSETS AND LIABILITIES as of August 31, 2004 (Unaudited)
<Table>
ASSETS:
Investments in securities at value (Cost $1,538,178,415) $ 1,548,256,328
Repurchase Agreement 12,000,000
Cash 41,447,226
Receivables:
Fund shares sold 22,074,048
Interest 6,158,869
Investment securities sold 3,670,961
Prepaid expenses 409,081
Prepaid arrangement fees on notes payable 189
Reimbursement due from manager 106,301
-----------------
Total assets 1,634,123,003
-----------------
LIABILITIES:
Payable for investments purchased 102,984,568
Notes payable 125,000,000
Accrued interest payable 164,619
Deferred arrangement fees 1,289,858
Payable to affiliates 1,615,779
Income distribution payable 3,542,869
Accrued trustee fees 1,448
Other accrued expenses and liabilities 435,705
-----------------
Total liabilities 235,034,846
-----------------
NET ASSETS $ 1,399,088,157
=================
NET ASSETS CONSIST OF:
Paid-in capital $ 1,384,831,604
Accumulated distributions in excess of net investment income (1,421,974)
Accumulated net realized gain on investments 5,600,614
Net unrealized appreciation on investments 10,077,913
-----------------
NET ASSETS $ 1,399,088,157
=================
</Table>
See Accompanying Notes to Financial Statements
7
<Page>
ING Senior Income Fund
STATEMENT OF ASSETS AND LIABILITIES as of August 31, 2004 (Unaudited)
(continued)
<Table>
CLASS A:
Net assets $ 451,168,632
Shares authorized unlimited
Par value $ 0.01
Shares outstanding 29,090,243
Net asset value and redemption price per share $ 15.51
Maximum offering price per share (4.75%)(1) $ 16.28
CLASS B:
Net assets $ 108,907,301
Shares authorized unlimited
Par value $ 0.01
Shares outstanding 7,032,915
Net asset value and redemption price per share (2) $ 15.49
Maximum offering price per share $ 15.49
CLASS C:
Net assets $ 600,568,734
Shares authorized unlimited
Par value $ 0.01
Shares outstanding 38,753,017
Net asset value and redemption price per share (2) $ 15.50
Maximum offering price per share $ 15.50
CLASS Q:
Net assets $ 238,443,490
Shares authorized unlimited
Par value $ 0.01
Shares outstanding 15,436,058
Net asset value and redemption price per share $ 15.45
Maximum offering price per share $ 15.45
</Table>
- ----------
(1) Maximum offering price is computed at 100/95.25 of net asset value. On
purchases of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable Early
Withdrawal Charge.
See Accompanying Notes to Financial Statements
8
<Page>
ING Senior Income Fund
STATEMENT OF OPERATIONS for the six months ended August 31, 2004 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest $ 21,150,298
Arrangement fees earned 383,263
Other 824,711
-----------------
Total investment income 22,358,272
-----------------
EXPENSES:
Investment management fees 3,908,008
Administration fees 497,945
Distribution and service fees:
Class A 356,293
Class B 431,165
Class C 1,566,618
Class Q 207,613
Transfer agent fees:
Class A 65,526
Class B 20,304
Class C 97,190
Class Q 38,688
Shareholder reporting expense 220,541
Interest expense 371,216
Custodian fees 229,150
Credit facility fees 262,252
Professional fees 176,872
Trustee fees 5,628
Registration fees 222,680
Miscellaneous expense 21,410
-----------------
Total expenses 8,699,099
-----------------
Less:
Net waived and reimbursed fees 251,178
-----------------
Net expenses 8,447,921
-----------------
Net investment income 13,910,351
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 3,956,809
Net change in value of investments (957,692)
-----------------
Net realized and unrealized gain on investments 2,999,117
-----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 16,909,468
=================
</Table>
See Accompanying Notes to Financial Statements
9
<Page>
ING Senior Income Fund
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, FEBRUARY 29,
2004 2004
----------------- -----------------
FROM OPERATIONS:
Net investment income $ 13,910,351 $ 16,291,872
Net realized gain on investments 3,956,809 5,249,490
Net change in value of investments (957,692) 12,520,783
----------------- -----------------
Net increase in net assets resulting from operations 16,909,468 34,062,145
----------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (4,952,144) (2,804,728)
Class B (1,301,639) (1,277,656)
Class C (6,256,393) (4,349,387)
Class Q (2,931,544) (8,270,536)
Net realized gain on investments:
Class A -- (107,928)
Class B -- (46,487)
Class C -- (181,082)
Class Q -- (159,555)
----------------- -----------------
Total distributions (15,441,720) (17,197,359)
----------------- -----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 878,119,256 585,241,477
Dividends reinvested 7,972,535 9,503,996
----------------- -----------------
886,091,791 594,745,473
Cost of shares repurchased (157,198,271) (219,625,660)
----------------- -----------------
Net increase in net assets resulting from
capital share transactions 728,893,520 375,119,813
----------------- -----------------
Net increase in net assets 730,361,268 391,984,599
----------------- -----------------
NET ASSETS:
Beginning of period 668,726,889 276,742,290
----------------- -----------------
End of period $ 1,399,088,157 $ 668,726,889
================= =================
Undistributed net investment income (accumulated
distributions in excess of net investment income)
at end of period $ (1,421,974) $ 109,395
================= =================
</Table>
See Accompanying Notes to Financial Statements
10
<Page>
ING Senior Income Fund
STATEMENT OF CASH FLOWS for the six months ended August 31, 2004 (Unaudited)
<Table>
INCREASE (DECREASE) IN CASH
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received $ 17,116,111
Facility fees paid (17,779)
Arrangement fee received 527,938
Other income received 824,711
Interest paid (214,900)
Other operating expenses paid (3,463,360)
Purchases of investment securities (2,296,139,282)
Proceeds from disposition of investment securities 1,490,729,140
-----------------
Net cash used in operating activities (790,637,421)
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to common shareholders (7,469,185)
Proceeds from capital shares sold 867,969,255
Disbursements for capital shares repurchased (157,198,271)
Net issuance of notes payable 125,000,000
-----------------
Net cash provided by financing activities 828,301,799
-----------------
Net increase in cash 37,664,378
Cash at beginning of period 3,782,848
-----------------
Cash at end of period $ 41,447,226
=================
RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS TO NET
CASH USED IN OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 16,909,468
-----------------
Adjustments to reconcile net increase in net assets resulting from operations to
net cash used in operating activities:
Change in unrealized appreciation on investments 957,692
Net accretion of discounts on investments (607,489)
Realized gain on sale of investments (3,956,809)
Purchases of investment securities (2,296,139,282)
Proceeds from disposition of investment securities 1,490,729,140
Increase in interest receivable (3,426,698)
Decrease in prepaid arrangement fees on notes payable 244,473
Increase in prepaid expenses (207,170)
Increase in deferred arrangement fees 144,675
Increase in accrued interest payable 156,316
Increase in reimbursement due from manager (10,223)
Increase in payable to affiliates 897,022
Decrease in accrued trustee fees (1,425)
Increase in income distribtuion payable 3,542,869
Increase in accrued expenses 130,020
-----------------
Total adjustments (807,546,889)
-----------------
Net cash used in operating activities $ (790,637,421)
=================
NONCASH FINANCING ACTIVITIES
Receivable for shares sold $ 22,074,048
Reinvestment of dividends $ 7,972,535
</Table>
See Accompanying Notes to Financial Statements
11
<Page>
ING SENIOR INCOME FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
-----------------------------------------------------
SIX
MONTHS YEAR ENDED APRIL 2,
ENDED FEBRUARY 28 OR 29, 2001(1) TO
AUGUST 31, ---------------------- FEBRUARY 28,
2004 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 15.47 14.83 14.92 15.00
Income (loss) from investment operations:
Net investment income $ 0.26 0.61 0.69 0.81
Net realized and unrealized gain (loss) on investments $ 0.06 0.69 (0.09) (0.09)
Total income from investment operations $ 0.32 1.30 0.60 0.72
Less distributions from:
Net investment income $ 0.28 0.64 0.69 0.80
Net realized gain on investments $ -- 0.02 -- --
Total distributions $ 0.28 0.66 0.69 0.80
Net asset value, end of period $ 15.51 15.47 14.83 14.92
TOTAL INVESTMENT RETURN(2) % 2.06 8.93 4.15 4.92
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 451,169 172,975 11,106 2,411
Average borrowings (000's)(3) $ 21,511 20,771 17,655 19,797
Asset coverage per $1,000 of debt $ 1,219 --* 689 3,220
RATIOS TO AVERAGE NET ASSETS AFTER REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.37 1.36 1.42 1.47
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 1.50 1.43 1.63 1.73
Net investment income(4)(5) % 3.17 3.84 4.88 5.58
RATIOS TO AVERAGE NET ASSETS BEFORE REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.40 1.46 1.57 1.82
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 1.53 1.53 1.78 2.07
Net investment income(4)(5) % 3.14 3.74 4.73 5.26
Portfolio turnover rate % 76 72 60 65
Shares outstanding at end of period (000's) 29,090 11,180 749 162
<Caption>
CLASS B
-----------------------------------------------------
SIX
MONTHS YEAR ENDED APRIL 2,
ENDED FEBRUARY 28 OR 29, 2001(1) TO
AUGUST 31, ---------------------- FEBRUARY 28,
2004 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 15.45 14.82 14.92 15.00
Income (loss) from investment operations:
Net investment income $ 0.21 0.53 0.62 0.75
Net realized and unrealized gain (loss) on investments $ 0.07 0.69 (0.10) (0.10)
Total income from investment operations $ 0.28 1.22 0.52 0.65
Less distributions from:
Net investment income $ 0.24 0.57 0.62 0.73
Net realized gain on investments $ -- 0.02 -- --
Total distributions $ 0.24 0.59 0.62 0.73
Net asset value, end of period $ 15.49 15.45 14.82 14.92
TOTAL INVESTMENT RETURN(2) % 1.80 8.33 3.57 4.45
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 108,907 62,852 17,648 12,776
Average borrowings (000's)(3) $ 21,511 20,771 17,655 19,797
Asset coverage per $1,000 of debt $ 1,595 --* 689 3,220
RATIOS TO AVERAGE NET ASSETS AFTER REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.87 1.87 1.91 1.96
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 2.00 1.97 2.09 2.23
Net investment income(4)(5) % 2.67 3.47 4.12 5.19
RATIOS TO AVERAGE NET ASSETS BEFORE REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 2.15 2.22 2.31 2.29
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 2.28 2.31 2.49 2.54
Net investment income(4)(5) % 2.39 3.13 3.72 4.89
Portfolio turnover rate % 76 72 60 65
Shares outstanding at end of period (000's) 7,033 4,068 1,191 856
</Table>
(1) Commencement of operations.
(2) Total investment returns are not annualized for periods of less than one
year and do not include sales load.
(3) Based on the active days of borrowing.
(4) Annualized for periods less than one year.
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage commissions, leverage expenses, other investment related
costs and extraordinary expenses, subject to possible recoupment by the
Investment Manager within three years.
* There were no loans outstanding at period end.
See Accompanying Notes to Financial Statements
12
<Page>
ING SENIOR INCOME FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
-----------------------------------------------------
SIX
MONTHS YEAR ENDED APRIL 2,
ENDED FEBRUARY 28 OR 29, 2001(1) TO
AUGUST 31, ---------------------- FEBRUARY 28,
2004 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 15.46 14.82 14.92 15.00
Income (loss) from investment operations:
Net investment income $ 0.22 0.53 0.62 0.75
Net realized and unrealized gain (loss) on investments $ 0.06 0.70 (0.10) (0.10)
Total income from investment operations $ 0.28 1.23 0.52 0.65
Less distributions from:
Net investment income $ 0.24 0.57 0.62 0.73
Net realized gain on investments $ -- 0.02 -- --
Total distributions $ 0.24 0.59 0.62 0.73
Net asset value, end of period $ 15.50 15.46 14.82 14.92
TOTAL INVESTMENT RETURN(2) % 1.80 8.40 3.57 4.45
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 600,569 275,849 32,647 19,391
Average borrowings (000's)(3) $ 21,511 20,771 17,655 19,797
Asset coverage per $1,000 of debt $ 1,595 --* 689 3,220
RATIOS TO AVERAGE NET ASSETS AFTER REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.87 1.86 1.91 1.96
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 2.00 1.94 2.09 2.23
Net investment income(4)(5) % 2.68 3.38 4.19 5.20
RATIOS TO AVERAGE NET ASSETS BEFORE REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.90 1.96 2.06 2.29
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 2.04 2.04 2.24 2.54
Net investment income(4)(5) % 2.65 3.28 4.04 4.89
Portfolio turnover rate % 76 72 60 65
Shares outstanding at end of period (000's) 38,753 17,841 2,202 1,300
<Caption>
CLASS Q
------------------------------------------------------
SIX
MONTHS YEAR ENDED DECEMBER 15,
ENDED FEBRUARY 28 OR 29, 2000(1) TO
AUGUST 31, -------------------------- FEBRUARY 28,
2004 2004 2003 2002(6) 2001
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 15.41 14.79 14.89 15.30 15.02
Income from investment operations:
Net investment income $ 0.26 0.63 0.69 0.81 0.14
Net realized and unrealized gain (loss) on investments $ 0.06 0.65 (0.10) (0.32) 0.14
Total income from investment operations $ 0.32 1.28 0.59 0.49 0.28
Less distributions from:
Net investment income $ 0.28 0.64 0.69 0.90 --
Net realized gain on investments $ -- 0.02 -- -- --
Total distributions $ 0.28 0.66 0.69 0.90 --
Net asset value, end of period $ 15.45 15.41 14.79 14.89 15.30
TOTAL INVESTMENT RETURN(2) % 2.06 8.82 4.09 3.73 1.80
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 238,443 157,051 215,341 215,029 94,096
Average borrowings (000's)(3) $ 21,511 20,771 17,655 19,797 --
Asset coverage per $1,000 of debt $ 1,595 --* 689 3,220 --*
RATIOS TO AVERAGE NET ASSETS AFTER REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.37 1.40 1.41 1.43 --
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 1.50 1.54 1.59 1.63 1.85
Net investment income(4)(5) % 3.17 4.17 4.69 5.94 7.00
RATIOS TO AVERAGE NET ASSETS BEFORE REIMBURSEMENT:
Expenses (before interest and other fees related to revolving credit
facility)(4)(5) % 1.40 1.48 1.56 1.70 --
Expenses (with interest and other fees related to revolving credit
facility)(4)(5) % 1.53 1.62 1.74 1.90 1.85
Net investment income(4)(5) % 3.14 4.09 4.54 5.67 7.00
Portfolio turnover rate % 76 72 60 65 11
Shares outstanding at end of period (000's) 15,436 10,188 14,559 14,439 6,152
</Table>
(1) Commencement of operations.
(2) Total investment returns are not annualized for periods of less than one
year and do not include sales load.
(3) Based on the active days of borrowing.
(4) Annualized for periods less than one year.
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage commissions, leverage expenses, other investment related
costs and extraordinary expenses, subject to possible recoupment by the
Investment Manager within three years.
(6) Effective March 30, 2001, the Management of the Fund effectuated a reverse
stock split of 0.6656 of a Share for one Share. Prior period amounts have
been restated to reflect the reverse stock split.
* There were no loans outstanding at period end.
See Accompanying Notes to Financial Statements
13
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited)
NOTE 1 -- ORGANIZATION
ING Senior Income Fund (the "Fund"), a Delaware business trust, is registered
under the Investment Company Act of 1940 as amended, (the "1940 Act"), as a
continuously-offered, diversified, closed-end, management investment company.
The Fund invests at least 80% of its assets in senior loans which are exempt
from registration under the Securities Act of 1933 as amended (the "'33 Act"),
but contain certain restrictions on resale and cannot be sold publicly. These
loans bear interest (unless otherwise noted) at rates that float periodically at
a margin above the London Inter-Bank Offered Rate ("LIBOR") and other short-term
rates. During the period December 15, 2000 through March 30, 2001, the Fund
issued 19,933,953 Class Q shares to an affiliate of the Fund's manager, ING
Investments, LLC (the "Investment Manager") in exchange for $200,000,000.
Effective April 2, 2001, the Fund commenced the offering of Class A, Class B,
Class C and Class Q shares to the public. The Fund currently offers four classes
of shares; A, B, C and Q. Class A shares are subject to a sales charge of up to
4.75%. Class A shares purchased in excess of $1,000,000 are subject to an Early
Withdrawal Charge ("EWC") of up to 1% over the two year period after purchase.
Class A shares are available upon conversion of Class B shares eight years after
purchase or through an exchange of Class A shares of certain ING Funds. Class B
common shares are subject to an EWC of up to 3% over the five-year period after
purchase and Class C common shares are subject to an EWC of 1% during the first
year after purchase. To maintain a measure of liquidity, the Fund offers to
repurchase between 5% and 25% of its outstanding common shares on a monthly
basis. This is a fundamental policy that can not be changed without shareholder
approval. The Fund currently anticipates offerings to repurchase 5% of its
outstanding common shares each month. The Fund may not repurchase more than 25%
in any calendar quarter. Other than these monthly repurchases, no market for the
Fund's common shares is expected to exist. The separate classes of shares differ
principally in the distribution fees and shareholder servicing fees. All
shareholders bear the common expenses of the Fund and earn income and realized
gains / losses from all portfolios pro rata on the average daily net assets of
each class, without distinction between share classes. No class has preferential
dividend rights. Differences in the per share dividend rates generally result
from the relative weighting of pro rata income and realized gains allocations
and from differences in separate class expenses, including distribution fees and
shareholder servicing fees.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles in the
United States of America.
A. SENIOR LOAN AND OTHER SECURITY VALUATION. Loans are normally valued at the
mean of the means of one or more bid and asked quotations obtained from a
pricing service or other sources determined by the Board of Trustees to be
independent and believed to be reliable. Loans for which reliable market
value quotations are not readily available may be valued with reference to
another loan or a group of loans for which quotations are more readily
available and whose characteristics are comparable to the loan being
valued. Under this approach, the comparable loan or loans serve as a proxy
for changes in value of the loan being valued. The Fund has engaged an
independent pricing service to provide quotations from dealers in loans and
to calculate values under the proxy procedure described above. It is
expected that most of the loans held by the Fund will be valued with
reference to quotations from the independent pricing service or with
reference to the proxy procedure described above. As of August 31, 2004,
98.4% of total investments were valued based on these procedures.
14
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited) (continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Prices from a pricing service may not be available for all loans and the
Investment Manager may believe that the price for a loan derived from
market quotations or the proxy procedure described above is not reliable or
accurate. Among other reasons, this may be the result of information about
a particular loan or borrower known to the Investment Manager that the
Investment Manager believes may not be known to the pricing service or
reflected in a price quote. In this event, the loan is valued at fair value
as determined in good faith under procedures established by the Fund's
Board of Trustees and in accordance with the provisions of the 1940 Act.
Under these procedures, fair value is determined by the Investment Manager
and monitored by the Fund's Board of Trustees through its Valuation
Committee. In fair valuing a loan, consideration is given to several
factors, which may include, among others, the following: (i) the
characteristics of and fundamental analytical data relating to the loan,
including the cost, size, current interest rate, period until the next
interest rate reset, maturity and base lending rate of the loan, the terms
and conditions of the loan and any related agreements, and the position of
the loan in the borrower's debt structure; (ii) the nature, adequacy and
value of the collateral, including the Fund's rights, remedies and
interests with respect to the collateral; (iii) the creditworthiness of the
borrower and the cash flow coverage of outstanding principal and interest,
based on an evaluation of its financial condition, financial statements and
information about the borrower's business, cash flows, capital structure
and future prospects; (iv) information relating to the market for the loan,
including price quotations for, and trading in, the loan and interests in
similar loans and the market environment and investor attitudes towards the
loan and interests in similar loans; (v) the reputation and financial
condition of the agent for the loan and any intermediate participants in
the loan; (vi) the borrower's management; and (vii) the general economic
and market conditions affecting the fair value of the loan. Securities
other than senior loans for which reliable market value quotations are not
readily available and all other assets will be valued at their respective
fair values as determined in good faith by, and under procedures
established by, the Board of Trustees of the Fund. Investments in
securities maturing in 60 days or less from the date of valuation are
valued at amortized cost, which, when combined with accrued interest,
approximates market value.
B. DISTRIBUTIONS TO SHAREHOLDERS. The Fund declares and goes ex-dividend daily
and pays dividends monthly for net investment income. Distributions from
capital gains, if any, are declared and paid annually. The Fund may make
additional distributions to comply with the distribution requirements of
the Internal Revenue Code. The character and amounts of income and gains to
be distributed are determined in accordance with federal income tax
regulations, which may differ from accounting principles generally accepted
in the United States of America for investment companies. Dividends paid by
the Fund from net investment income and distributions of net realized
short-term capital gains are, for federal income tax purposes, taxable as
ordinary income to shareholders. The Fund records distributions to its
shareholders on the ex-dividend date.
C. SECURITY TRANSACTIONS AND REVENUE RECOGNITION. Revolver and delayed draw
loans are booked on a settlement date basis. Security transactions and
senior loans are accounted for on trade date (date the order to buy or sell
is executed). Realized gains or losses are reported on the basis of
identified cost of securities sold. Interest income is recorded on an
accrual basis at the then-current loan rate. The accrual of interest on
loans is discontinued when, in the opinion of management, there is an
indication that the borrower may be unable to meet payments as they become
due. Upon such discontinuance, all unpaid accrued interest is reversed.
Cash collections on non-accrual loans are generally applied as a reduction
to the recorded investment of the loan. Loans are generally returned to
accrual status only after all past due amounts have been received and the
borrower has demonstrated sustained performance. Premium amortization
15
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited) (continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
and discount accretion are determined by the effective yield method over
the shorter of four years or the actual term of the loan. Arrangement fees
received on revolving credit facilities, which represent non-refundable
fees or purchase discounts associated with the acquisition of loans, are
deferred and recognized using the effective yield method over the shorter
of four years or the actual term of the loan. No such fees are recognized
on loans which have been placed on non-accrual status. Arrangement fees
associated with all other loans, except revolving credit facilities, are
treated as discounts and are accreted as described above. Dividend income
is recorded on the ex-dividend date.
D. FEDERAL INCOME TAXES. It is the Fund's policy to comply with subchapter M
of the Internal Revenue Code and related excise tax provisions applicable
to regulated investment companies and to distribute substantially all of
its net investment income and net realized capital gains to its
shareholders. Therefore, no federal income tax provision is required. No
capital gain distributions shall be made until any capital loss
carryforwards have been fully utilized or expire.
E. USE OF ESTIMATES. Management of the Fund has made certain estimates and
assumptions relating to the reporting of assets, liabilities, revenues,
expenses and contingencies to prepare these financial statements in
conformity with accounting principles generally accepted in the United
States of America for investment companies. Actual results could differ
from these estimates.
NOTE 3 -- INVESTMENTS
For the six months ended August 31, 2004, the cost of purchases and the proceeds
from principal repayment and sales of investments, excluding short-term
investments, totaled $1,315,493,213 and $411,900,101, respectively. At August
31, 2004, the Fund held senior loans valued at $1,544,048,996 representing 99.7%
of its total investments (excluding short-term investments). The market value of
these assets is established as set forth in Note 2.
The senior loans acquired by the Fund may take the form of a direct lending
relationship with the borrower or an assignment of a lender's interest in a
loan. The lead lender in a typical corporate loan syndicate administers the loan
and monitors collateral. In the event that the lead lender becomes insolvent,
enters FDIC receivership or, if not FDIC insured, enters into bankruptcy, the
Fund may incur certain costs and delays in realizing payment, or may suffer a
loss of principal and/or interest.
Warrants and shares of common stock held in the portfolio were acquired in
conjunction with loans held by the Fund. Certain of these shares and warrants
are restricted and may not be publicly sold without registration under the '33
Act, or without an exemption under the '33 Act. In some cases, these
restrictions expire after a designated period of time after the issuance of the
stock.
Dates of acquisition and cost or assigned basis of restricted securities are as
follows:
<Table>
<Caption>
DATE OF COST OR
ACQUISITION ASSIGNED BASIS
----------- --------------
Decision One Corporation -- Common Shares 09/27/01 $ --
Galey & Lord -- Common Shares 03/31/04 --
Murray's Discount Auto Stores, Inc. -- Escrow 08/11/03 133,153
Neoplan USA Corporation -- Common Shares 08/29/03 --
Neoplan USA Corporation -- Preferred B Shares 08/29/03 --
Neoplan USA Corporation -- Preferred C Shares 08/29/03 40,207
Neoplan USA Corporation -- Preferred D Shares 08/29/03 330,600
New World Restaurant Group, Inc. -- Warrants 02/20/02 20
Norwood Promotional Products, Inc. -- Common Shares 08/23/04 10,046
Safelite Glass Corporation -- Common Shares 06/21/01 --
Safelite Realty -- Common Shares 06/21/01 --
Targus Group, Inc. -- Warrants 03/11/03 --
--------------
Total restricted securities excluding senior loans (market value
of $1,657,184 was 0.1% of net assets at August 31, 2004.) $ 514,026
==============
</Table>
16
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited) (continued)
NOTE 4 -- MANAGEMENT AND ADMINISTRATION AGREEMENTS
The Fund has entered into an Investment Management Agreement with the Investment
Manager to provide advisory and management services. The Investment Management
Agreement compensates the Investment Manager with a fee, computed daily and
payable monthly, at an annual rate of 0.80% of the Fund's average daily gross
asset value, minus the sum of the Fund's accrued liabilities (other than
liabilities for the principal amount of any borrowings incurred, commercial
paper or notes issued by the Fund) ("Managed Assets"). The Fund is sub-advised
by ING Investment Management Co. (formerly, Aeltus Investment Management, Inc.
"ING IM"). Under the Sub-Advisory Agreement, ING IM is responsible for managing
the assets of the Fund in accordance with its investment objective and policies,
subject to oversight by the Investment Manager. Both ING IM and the Investment
Manager are indirect wholly-owned subsidiaries of ING Groep N.V. and affiliates
of each other.
The Fund has also entered into an Administration Agreement with ING Funds
Services, LLC (the "Administrator"), an indirect wholly-owned subsidiary of ING
Groep N.V., to provide administrative services. The Administrator is compensated
with a fee, computed daily and payable monthly, at an annual rate of 0.10% of
the Fund's Managed Assets.
NOTE 5 -- DISTRIBUTION AND SERVICE FEES
Each share class of the Fund has adopted a Plan pursuant to Rule 12b-1 under the
1940 Act (the "12b-1 Plans"), whereby ING Funds Distributor, LLC (the
"Distributor") is reimbursed or compensated (depending on the class of shares)
by the Fund for expenses incurred in the distribution of the Fund's shares
("Distribution Fees"). Pursuant to the 12b-1 Plans, the Distributor is entitled
to a payment each month for actual expenses incurred in the distribution and
promotion of the Fund's shares, including expenses incurred in printing
prospectuses and reports used for sales purposes, expenses incurred in preparing
and printing sales literature and other such distribution related expenses,
including any distribution or Shareholder Servicing Fees ("Service Fees") paid
to securities dealers who executed a distribution agreement with the
Distributor. Under the 12b-1 plans, each class of shares of the Fund pays the
Distributor a combined Distribution and Service Fee based on average daily net
assets at the following annual rates:
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS Q
------- ------- ------- -------
0.25% 1.00% 0.75% 0.25%
</Table>
During the six months ended August 31, 2004, the Distributor waived 0.25% of the
Service Fee on Class B only.
NOTE 6 -- EXPENSE LIMITATIONS
The Investment Manager has voluntarily agreed to limit expenses, excluding
interest, taxes, brokerage commissions, leverage expenses, other
investment-related costs and extraordinary expenses, to the following:
Class A -- 0.90% of Managed Assets plus 0.45% of average daily net assets
Class B -- 0.90% of Managed Assets plus 1.20% of average daily net assets
Class C -- 0.90% of Managed Assets plus 0.95% of average daily net assets
Class Q -- 0.90% of Managed Assets plus 0.45% of average daily net assets
As of August 31, 2004, the amounts of reimbursed fees that are subject to
possible recoupment by the Investment Manager, and the related expiration dates
are as follows:
<Table>
<Caption>
AUGUST 31,
--------------------------------------------------
2005 2006 2007 TOTAL
--------- --------- --------- -----------
$ 732,873 $ 292,265 $ 419,364 $ 1,444,502
</Table>
17
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited) (continued)
NOTE 7 -- COMMITMENTS
The Fund has entered into a one-year revolving credit agreement, collateralized
by assets of the Fund, to borrow up to $350 million maturing May 26, 2005.
Borrowing rates under this agreement are based on a commercial paper pass
through rate plus 0.25% on the funded portion. A facility fee of 0.15% is
charged on the entire facility. There was $125 million of borrowings outstanding
at August 31, 2004 at a rate of 1.82%, excluding other fees related to the
entire facility. Average borrowings for the six months ended August 31, 2004 was
$21,510,870 and the average annualized interest rate was 1.39%, excluding other
fees related to the entire facility.
NOTE 8 -- SENIOR LOAN COMMITMENTS
At August 31, 2004, the Fund had unfunded loan commitments pursuant to the terms
of the following loan agreements:
<Table>
Allied Waste North America, Inc. $ 1,440,650
Baker & Taylor, Inc. 525,000
Celanese Corporation 2,481,476
Cincinnati Bell, Inc. 1,966,599
Concentra Operating Corporation 4,000,000
Envirosolutions, Inc. 545,455
Federal-Mogul Corporation 171,662
GEO Specialty Chemicals, Inc. 330,000
Huntsman International, LLC 5,000,000
IESI Corporation 1,055,625
Innophos, Inc. $ 286,364
Nutrasweet Acquisition Corporation 670,608
Pinnacle Entertainment 672,981
Primedia, Inc. 3,419,204
Saguara Utility Group 1 Corporation 3,500,000
SBA Senior Finance, Inc. 996,154
Six Flags Theme Parks, Inc. 1,000,000
United Defense Industries, Inc. 2,000,000
United Rentals (North America), Inc. 898,462
---------------
$ 30,960,240
===============
</Table>
NOTE 9 -- TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
At August 31, 2004, the Fund had the following amounts recorded in payable to
affiliates on the accompanying Statement of Assets and Liabilities (see Notes 4
and 5):
<Table>
<Caption>
ACCRUED INVESTMENT ACCRUED ACCRUED DISTRIBUTION
MANAGEMENT FEES ADMINISTRATIVE FEES AND SERVICE FEES TOTAL
--------------- ------------------- ---------------- -----
$ 934,591 $ 120,539 $ 560,649 $ 1,615,779
</Table>
The Fund has adopted a Retirement Policy covering all independent trustees of
the Fund who will have served as an independent trustee for at least five years
at the time of retirement. Benefits under this plan are based on an annual rate
as defined in the plan agreement, as amended.
NOTE 10 -- CUSTODIAL AGREEMENT
State Street Bank and Trust Company ("SSB") serves as the Fund's custodian and
recordkeeper. Custody fees paid to SSB may be reduced by earnings credits based
on the cash balances held by SSB for the Fund. There were no earning credits for
the six months ended August 31, 2004.
NOTE 11 -- SUBORDINATED LOANS AND UNSECURED LOANS
The primary risk arising from investing in subordinated loans or in unsecured
loans is the potential loss in the event of default by the issuer of the loans.
The Fund may invest up to 10% of its total assets, measured at the time of
investment, in subordinated loans and up to 10% of its total assets, measured at
the time of investment, in unsecured loans. As of August 31, 2004, the Fund held
0.16% of its total assets in subordinated loans and unsecured loans.
18
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited) (continued)
NOTE 12 -- CAPITAL SHARES
Transactions in capital shares and dollars were as follows:
<Table>
<Caption>
CLASS A CLASS B
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29,
2004 2004 2004 2004
---- ---- ---- ----
NUMBER OF SHARES
Shares sold 20,288,653 11,471,958 3,328,224 3,176,454
Dividends reinvested 165,742 128,609 43,186 50,168
Shares redeemed (2,543,809) (1,169,710) (406,334) (349,656)
--------------- --------------- --------------- ---------------
Net increase in shares outstanding 17,910,586 10,430,857 2,965,076 2,876,966
=============== =============== =============== ===============
DOLLAR AMOUNT ($)
Shares sold $ 314,655,679 $ 175,247,213 $ 51,531,642 $ 48,393,642
Dividends reinvested 2,571,116 1,970,610 669,010 765,311
Shares redeemed (39,470,449) (17,948,478) (6,292,459) (5,333,591)
--------------- --------------- --------------- ---------------
Net increase $ 277,756,346 $ 159,269,345 $ 45,908,193 $ 43,825,362
=============== =============== =============== ===============
<Caption>
CLASS C CLASS Q
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29,
2004 2004 2004 2004
---- ---- ---- ----
NUMBER OF SHARES
Shares sold 22,400,106 16,799,564 10,666,549 6,897,835
Dividends reinvested 232,677 219,973 72,833 226,785
Shares redeemed (1,721,018) (1,380,540) (5,491,723) (11,495,246)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding 20,911,765 15,638,997 5,247,659 (4,370,626)
=============== =============== =============== ===============
DOLLAR AMOUNT ($)
Shares sold $ 347,148,461 $ 256,292,793 $ 164,783,474 $ 105,307,829
Dividends reinvested 3,606,980 3,363,842 1,125,429 3,404,233
Shares redeemed (26,663,680) (21,108,863) (84,771,683) (175,234,728)
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 324,091,761 $ 238,547,772 $ 81,137,220 $ (66,522,666)
=============== =============== =============== ===============
</Table>
NOTE 13 -- FEDERAL INCOME TAXES
The amount of distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from accounting principles generally accepted in the United States of
America for investment companies. These book/tax differences may be either
temporary or permanent. Permanent differences are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences are not reclassified. Key differences include the treatment of
short-term capital gains, organizational and offering expenses, and wash sale
deferrals. Distributions in excess of net investment income and/or net realized
capital gains for tax purposes are reported as distributions of paid-in capital.
Dividends paid by the Fund from net investment income and distributions of net
realized short-term capital gains are, for federal income tax purposes, taxable
as ordinary income to shareholders.
The tax composition of dividends and distributions to shareholders was as
follows:
<Table>
<Caption>
SIX MONTHS ENDED AUGUST 31, 2004 YEAR ENDED FEBRUARY 29, 2004
-------------------------------- ----------------------------
LONG-TERM
ORDINARY INCOME ORDINARY INCOME CAPITAL GAIN
--------------- --------------- ------------
$ 15,441,720 $ 16,702,307 $ 495,052
</Table>
19
<Page>
ING Senior Income Fund
NOTES TO FINANCIAL STATEMENTS as of August 31, 2004 (Unaudited) (continued)
NOTE 13 -- FEDERAL INCOME TAXES (CONTINUED)
The tax-basis components of distributable earnings and the expiration dates of
the capital loss carryforwards which may be used to offset future realized
capital gains for federal income tax purposes as of February 29, 2004 were as
follows:
<Table>
<Caption>
UNDISTRIBUTED UNREALIZED POST-OCTOBER CAPITAL
UNDISTRIBUTED LONG-TERM APPRECIATION/ CAPITAL LOSSES LOSS EXPIRATION
ORDINARY INCOME CAPITAL GAINS (DEPRECIATION) DEFERRED CARRYFORWARDS DATES
--------------- ------------- -------------- -------- ------------- -----
$ 2,239,630 $ 194,558 $ 11,020,385 $ -- $ -- --
</Table>
NOTE 14 -- SUBSEQUENT EVENTS
DIVIDENDS DECLARED
Subsequent to August 31, 2004, the Fund declared the following dividends:
<Table>
<Caption>
PER SHARE AMOUNT TYPE DECLARATION DATE RECORD DATE PAYABLE DATE
- ---------------- ---- ---------------- ----------- ------------
$ 0.04449(A) NII Daily Daily October 1, 2004
$ 0.03813(B) NII Daily Daily October 1, 2004
</Table>
NII -- Net Investment Income
(A) For Class A and Q shares.
(B) For Class B and C shares.
Effective October 11, 2004, the front-end sales load for Class A Common Shares
was reduced. In addition, the breakpoints in the Early Withdrawal Charge ("EWC")
have been eliminated for purchases of Class A Common Shares of $1 million or
more resulting in a 1.00% EWC for 1 year for all shareholders.
ADDITIONAL INFORMATION
PROXY VOTING INFORMATION
A description of the policies and procedures that the Registrant uses to
determine how to vote proxies related to portfolio securities is available (1)
without charge, upon request, by calling Shareholder Services toll-free at
800-992-0180; (2) on the Registrant's website at www.ingfunds.com and (3) on the
SEC's website at www.sec.gov.
Information regarding how the Registrant voted proxies related to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge on the Registrant's website at www.ingfunds.com and on the SEC's
website at www.sec.gov.
QUARTERLY PORTFOLIO HOLDINGS
The Registrant files its complete schedule of portfolio holdings with the
Commission for the first and third quarters of each fiscal year on Form N-Q. The
Registrant's Forms N-Q are available on the SEC's website at www.sec.gov. The
Registrant's Forms N-Q may be reviewed and copied at the Commissions Public
Reference Room in Washington, DC, and information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330; and is available upon
request from the Registrant by calling Shareholder Services toll-free at
800-992-0180.
20
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited)
SENIOR LOANS*: 110.4%
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
AEROSPACE AND DEFENSE: 1.2%
ALLIANT TECHSYSTEMS, INC. Ba2 BB
$ 1,995,000 Term Loan, maturing March 31, 2011 $ 2,016,197
ARINC, INC. Ba3 BB
997,500 Term Loan, maturing March 10, 2011 1,012,463
CERADYNE, INC. Ba3 BB-
2,500,000 Term Loan, maturing August 18, 2011 2,525,000
STANDARD AERO HOLDINGS, INC. B2 B+
4,500,000 Term Loan, maturing August 20, 2012 4,553,437
TRANSDIGM, INC. B1 B+
3,487,509 Term Loan, maturing July 22, 2010 3,540,913
UNITED DEFENSE INDUSTRIES, INC. Ba2 BB
3,217,255 Term Loan, maturing August 13, 2009 3,247,751
--------------
16,895,761
--------------
AUTOMOBILE: 5.6%
AFTERMARKET TECHNOLOGY CORPORATION Ba3 BB-
723,101 Term Loan, maturing January 08, 2007 712,255
313,301 Term Loan, maturing February 08, 2008 314,448
429,116 Term Loan, maturing February 08, 2008 432,334
CCC INFORMATION SERVICES, INC. B1 B+
3,000,000 Term Loan, maturing August 20, 2010 8,060,000
COLLINS & AIKMAN PRODUCTS B1 B+
1,229,416 Term Loan, maturing December 31, 2005 1,231,721
DAYCO PRODUCTS, LLC B1 BB-
5,500,000 Term Loan, maturing June 23, 2011 5,591,097
DURA OPERATING CORPORATION Ba3 BB
3,992,565 Term Loan, maturing December 31, 2008 4,026,254
(1) FEDERAL-MOGUL CORPORATION Ca NR
3,328,338 Revolver, maturing February 24, 2004 3,097,435
2,024,500 Term Loan, maturing February 24, 2004 1,890,377
5,144,500 Term Loan, maturing February 24, 2005 4,808,502
GOODYEAR TIRE & RUBBER COMPANY B1 BB
1,500,000 Term Loan, maturing March 31, 2006 1,522,970
GOODYEAR TIRE & RUBBER COMPANY B2 B
4,000,000 Term Loan, maturing March 31, 2006 4,052,500
GRAND VEHICLE WORKS HOLDINGS CORPORATION B2 B+
3,000,000 Term Loan, maturing July 31, 2010 2,990,625
GUILFORD MILLS, INC. B2 B+
1,826,087 Term Loan, maturing May 31, 2010 1,798,696
HLI OPERATING COMPANY, INC. Ba3 BB-
3,431,667 Term Loan, maturing June 03, 2009 3,502,445
JL FRENCH AUTOMOTIVE CASTINGS B3 B
3,500,000 Term Loan, maturing July 31, 2011 3,530,625
JL FRENCH AUTOMOTIVE CASTINGS Caa1 CCC+
1,500,000 Term Loan, maturing July 31, 2012 1,501,875
KEY AUTOMOTIVE GROUP B1 BB-
2,500,000 Term Loan, maturing June 29, 2010 2,531,250
KEYSTONE AUTOMOTIVE INDUSTRIES, INC. B1 BB-
952,174 Term Loan, maturing October 30, 2009 964,076
</Table>
See Accompanying Notes to Financial Statements
21
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE: (CONTINUED)
MERIDIAN AUTOMOTIVE SYSTEMS, INC. B2 B+
$ 1,997,500 Term Loan, maturing April 28, 2010 $ 1,970,867
METALDYNE COMPANY, LLC B2 BB-
3,202,649 Term Loan, maturing December 31, 2009 3,211,322
PLASTECH, INC. Ba3 BB-
1,484,483 Term Loan, maturing February 12, 2010 1,506,750
RJ TOWER CORPORATION B1 B+
4,000,000 Term Loan, maturing May 21, 2009 4,007,500
SAFELITE GLASS CORPORATION B3 B+
2,156,661 Term Loan, maturing September 30, 2007 2,027,261
3,468,622 Term Loan, maturing September 30, 2007 3,260,505
TENNECO AUTOMOTIVE, INC. B1 B+
1,373,100 Term Loan, maturing December 12, 2010 1,398,846
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC. B2 B
1,496,250 Term Loan, maturing March 14, 2009 1,508,718
TRW AUTOMOTIVE ACQUISITIONS CORPORATION Ba2 BB+
1,600,000 Term Loan, maturing February 28, 2009 1,617,166
4,163,478 Term Loan, maturing February 28, 2011 4,238,941
UNITED COMPONENTS, INC. B1 BB-
1,285,000 Term Loan, maturing June 30, 2010 1,303,472
--------------
78,610,833
--------------
BEVERAGE, FOOD AND TOBACCO: 3.1%
B & G FOODS, INC. B1 B
992,500 Term Loan, maturing August 31, 2009 998,289
BIRDS EYE FOODS, INC. B1 B+
4,672,421 Term Loan, maturing June 30, 2008 4,736,667
COMMONWEALTH BRANDS, INC. Ba3 BB-
814,833 Term Loan, maturing August 28, 2007 824,509
CONSTELLATION BRANDS, INC. Ba1 BB
3,250,000 Term Loan, maturing November 30, 2008 3,267,774
DEL MONTE CORPORATION Ba3 BB-
1,858,600 Term Loan, maturing December 20, 2010 1,888,512
DR. PEPPER BOTTLING COMPANY OF TEXAS B1 BB-
4,786,742 Term Loan, maturing December 19, 2010 4,841,340
DS WATERS ENTERPRISES, L.P. B3 B+
1,462,500 Term Loan, maturing November 07, 2009 1,395,773
GOLDEN STATE FOODS CORPORATION B1 B+
4,488,750 Term Loan, maturing February 28, 2011 4,547,665
INTERSTATE BRANDS CORPORATION B2 CCC+
1,477,157 Term Loan, maturing July 19, 2007 1,377,449
KEYSTONE FOODS HOLDINGS, LLC Ba3 B+
4,500,000 Term Loan, maturing June 16, 2011 4,539,375
MICHAEL FOODS, INC. B1 B+
2,977,500 Term Loan, maturing November 21, 2010 3,023,559
PIERRE FOODS, INC. B1 B+
7,000,000 Term Loan, maturing June 30, 2010 7,056,875
PINNACLE FOODS CORPORATION B1 BB-
1,995,000 Term Loan, maturing November 25, 2010 2,019,938
</Table>
See Accompanying Notes to Financial Statements
22
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
BEVERAGE, FOOD AND TOBACCO: (CONTINUED)
SOUTHERN WINE & SPIRITS OF AMERICA, INC. Ba3 BB+
$ 2,217,466 Term Loan, maturing July 02, 2008 $ 2,244,492
--------------
42,762,217
--------------
BUILDINGS AND REAL ESTATE: 4.0%
ASSOCIATED MATERIALS, INC. Ba3 B+
1,473,684 Term Loan, maturing August 02, 2010 1,493,333
ATRIUM COMPANIES, INC. B1 B+
4,619,643 Term Loan, maturing December 10, 2008 4,675,462
BUILDERS FIRSTSOURCE, INC. B1 B+
2,992,500 Term Loan, maturing February 25, 2010 3,018,684
BUILDING MATERIALS HOLDING CORPORATION Ba2 BB-
990,000 Term Loan, maturing August 21, 2010 993,712
CRESCENT REAL ESTATE EQUITIES, L.P. B1 BB+
5,753,612 Term Loan, maturing January 12, 2006 5,820,141
DMB NEWCO, LLC NR NR
4,962,662 Term Loan, maturing February 28, 2009 4,975,069
GGPLP, LLC Ba1 BBB-
3,387,687 Term Loan, maturing April 16, 2006 3,408,860
7,904,603 Term Loan, maturing April 16, 2006 7,954,007
NCI BUILDING SYSTEMS, INC. Ba2 BB
3,800,000 Term Loan, maturing September 15, 2008 3,848,689
NORTEK, INC. B1 B+
6,000,000 Term Loan, maturing August 25, 2011 6,066,750
PGT INDUSTRIES, INC. B1 B
2,492,487 Term Loan, maturing January 29, 2010 2,529,874
PLY GEM INDUSTRIES B1 B+
822,938 Term Loan, maturing March 15, 2010 826,282
6,163,313 Term Loan, maturing October 01, 2011 6,188,354
ST. MARYS CEMENT, INC. B1 BB-
2,985,000 Term Loan, maturing December 04, 2009 3,011,119
WERNER HOLDINGS COMPANY, INC. B1 B
916,667 Term Loan, maturing June 11, 2009 895,326
--------------
55,705,662
--------------
CABLE TELEVISION: 8.4%
(1) ADELPHIA COMMUNICATIONS CORPORATION NR BBB
1,932,267 Debtor In Possession Term Loan,
maturing March 31, 2005 1,941,526
ATLANTIC BROADBAND FINANCE, LLC B2 B
4,000,000 Term Loan, maturing September 01, 2011 4,055,000
BRAGG COMMUNICATIONS, INC.
2,500,000 Term Loan, maturing August 31, 2011 2,525,000
BRESNAN COMMUNICATIONS, LLC B1 BB-
4,000,000 Term Loan, maturing December 31, 2007 4,058,752
CEBRIDGE CONNECTIONS, INC. NR NR
3,491,250 Term Loan, maturing February 04, 2009 3,395,241
1,496,250 Term Loan, maturing February 23, 2009 1,502,796
</Table>
See Accompanying Notes to Financial Statements
23
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION: (CONTINUED)
(1) CENTURY CABLE HOLDINGS, LLC Caa1 NR
$ 820,000 Revolver, maturing March 31, 2009 $ 791,300
13,000,000 Term Loan, maturing June 30, 2009 12,701,702
4,000,000 Term Loan, maturing December 31, 2009 3,900,832
CHARTER COMMUNICATIONS OPERATING, LLC B2 B
4,750,000 Term Loan, maturing April 27, 2010 4,640,047
26,500,000 Term Loan, maturing April 27, 2011 26,188,069
(1) HILTON HEAD COMMUNICATIONS, L.P. Caa1 NR
3,000,000 Revolver, maturing September 30, 2007 2,888,250
7,000,000 Term Loan, maturing March 31, 2008 6,767,250
INSIGHT MIDWEST HOLDINGS, LLC Ba3 BB+
2,350,000 Term Loan, maturing June 30, 2009 2,352,056
1,990,000 Term Loan, maturing December 31, 2009 2,021,094
7,462,500 Term Loan, maturing December 31, 2009 7,579,684
MEDIACOM COMMUNICATIONS CORPORATION Ba3 BB+
5,250,000 Term Loan, maturing March 31, 2010 5,240,975
5,000,000 Term Loan, maturing September 30, 2010 5,038,670
(1) OLYMPUS CABLE HOLDINGS, LLC B2 NR
7,000,000 Term Loan, maturing June 30, 2010 6,797,497
6,500,000 Term Loan, maturing September 30, 2010 6,353,750
PERSONA COMMUNICATION, INC. B2 B+
2,500,000 Term Loan, maturing May 31, 2011 2,524,220
YANKEENETS, LLC NR NR
2,742,857 Term Loan, maturing June 25, 2007 2,777,143
YANKEES HOLDINGS, L.P. NR NR
1,257,143 Term Loan, maturing June 25, 2007 1,272,857
--------------
117,313,711
--------------
CARGO TRANSPORT: 2.0%
(1) AMERICAN COMMERCIAL LINES, LLC Ba3 NR
282,594 Debtor In Possession Term Loan,
maturing December 31, 2004 282,064
ATLANTIC EXPRESS TRANSPORT B3 B
4,000,000 Floating Rate Note, maturing April 15, 2008 3,880,000
BAKER TANKS, INC. B1 B+
4,370,717 Term Loan, maturing January 30, 2011 4,407,597
HELM HOLDING CORPORATION B2 B+
4,000,000 Term Loan, maturing July 02, 2010 4,051,668
HORIZON LINES, LLC B2 B+
2,500,000 Term Loan, maturing July 04, 2011 2,542,708
NEOPLAN USA CORPORATION NR NR
505,395 Term Loan, maturing June 30, 2006 505,395
PACER INTERNATIONAL, INC. B1 BB-
1,754,902 Term Loan, maturing June 10, 2010 1,780,129
RAILAMERICA, INC. Ba3 BB
406,322 Term Loan, maturing May 22, 2009 412,366
2,769,308 Term Loan, maturing May 22, 2009 2,810,501
TEREX CORPORATION B1 BB-
1,910,182 Term Loan, maturing July 03, 2009 1,936,447
</Table>
See Accompanying Notes to Financial Statements
24
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
CARGO TRANSPORT: (CONTINUED)
TRANSPORT INDUSTRIES, L.P. B2 B+
$ 3,000,000 Term Loan, maturing June 13, 2010 $ 3,005,625
UNITED STATES SHIPPING, LLC Ba2 BB
2,445,988 Term Loan, maturing April 14, 2010 2,471,977
YELLOW ROADWAY CORPORATION Baa3 BBB
389,610 Term Loan, maturing June 11, 2008 393,141
--------------
28,479,618
--------------
CELLULAR COMMUNICATIONS: 5.2%
AIRGATE PCS, INC. B2 CCC+
187,900 Term Loan, maturing June 06, 2007 187,430
8,337,607 Term Loan, maturing September 30, 2008 8,316,763
CELLULAR SOUTH, INC. Ba3 B+
5,275,000 Term Loan, maturing May 04, 2011 5,340,937
CENTENNIAL CELLULAR OPERATING COMPANY B2 B-
9,952,494 Term Loan, maturing February 09, 2011 9,987,487
DOBSON CELLULAR SYSTEMS, INC. B1 B-
4,470,000 Term Loan, maturing March 31, 2010 4,468,324
INDEPENDENT WIRELESS ONE CORPORATION Caa1 NR
3,250,538 Term Loan, maturing December 20, 2007 3,144,895
2,912,873 Term Loan, maturing June 20, 2008 2,818,205
MICROCELL SOLUTIONS, INC. B3 B-
2,962,500 Term Loan, maturing March 17, 2011 2,978,548
MICROCELL SOLUTIONS, INC. Caa2 CCC-
997,500 Term Loan, maturing February 15, 2011 1,022,438
NEXTEL FINANCE COMPANY Ba1 BBB
15,130,708 Term Loan, maturing December 15, 2010 15,227,605
NEXTEL PARTNERS OPERATING CORPORATION B1 B+
6,000,000 Term Loan, maturing May 31, 2011 6,084,750
RURAL CELLULAR CORPORATION B2 B-
1,500,000 Floating Rate Note, maturing March 15, 2010 1,522,500
US UNWIRED, INC. B2 CCC+
1,750,000 Floating Rate Note, maturing June 15, 2010 1,776,250
WESTERN WIRELESS CORPORATION B2 B-
10,000,000 Term Loan, maturing May 31, 2011 10,151,790
--------------
73,027,922
--------------
CHEMICALS, PLASTICS AND RUBBER: 7.5%
BRENNTAG, AG B1 BB-
3,000,000 Term Loan, maturing December 09, 2011 3,039,375
CELANESE Ba3 B+
5,518,524 Term Loan, maturing April 06, 2011 5,593,543
CP KELCO APS B3 B
1,641,645 Term Loan, maturing March 31, 2008 1,651,221
538,748 Term Loan, maturing September 30, 2008 541,442
FMC CORPORATION Ba1 BBB-
4,959,167 Term Loan, maturing December 22, 2007 5,017,283
(1) GEO SPECIALTY CHEMICALS, INC. Caa1 NR
830,101 Term Loan, maturing December 31, 2007 795,859
</Table>
See Accompanying Notes to Financial Statements
25
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
CHEMICALS, PLASTICS AND RUBBER: (CONTINUED)
HERCULES, INC. Ba1 BB
$ 8,553,563 Term Loan, maturing October 08, 2010 $ 8,625,738
HUNTSMAN INTERNATIONAL LLC B1 B
16,500,000 Term Loan, maturing December 31, 2010 16,747,500
HUNTSMAN LLC B2 B
3,536,623 Term Loan, maturing March 31, 2007 3,554,939
557,326 Term Loan, maturing March 31, 2007 560,212
INEOS GROUP HOLDINGS, PLC Ba2 BB+
4,192,083 Term Loan, maturing April 26, 2009 4,254,964
INNOPHOS, INC. B1 B+
1,213,636 Term Loan, maturing August 13, 2010 1,223,497
JOHNSONDIVERSEY, INC. Ba3 BB-
5,873,623 Term Loan, maturing November 03, 2009 5,974,209
KOSA, B.V. Ba3 BB
4,858,824 Term Loan, maturing April 29, 2011 4,889,191
2,141,176 Term Loan, maturing April 29, 2011 2,154,559
KRATON POLYMERS B1 BB-
1,961,668 Term Loan, maturing December 23, 2010 1,964,120
NALCO COMPANY B1 BB-
8,737,015 Term Loan, maturing November 04, 2010 8,881,333
NUTRASWEET ACQUISITION CORPORATION Ba3 NR
346,184 Term Loan, maturing May 24, 2005 330,606
1,152,436 Term Loan, maturing May 25, 2009 1,140,911
POLYPORE, INC. B1 B+
9,000,000 Term Loan, maturing November 12, 2011 9,073,125
RIPPLEWOOD HOLDINGS, LLC NR B+
5,750,000 Term Loan, maturing June 21, 2011 5,807,500
ROCKWOOD SPECIALTIES GROUP, INC. B1 B+
12,000,000 Term Loan, maturing July 30, 2012 12,099,648
WESTLAKE CHEMICAL CORPORATION Ba2 BB+
886,381 Term Loan, maturing July 23, 2010 898,015
--------------
104,818,790
--------------
CONTAINERS, PACKAGING AND GLASS: 5.0%
APPLETON PAPERS, INC. Ba3 BB
1,500,000 Term Loan, maturing June 11, 2010 1,517,812
BERRY PLASTICS CORPORATION B1 B+
4,776,739 Term Loan, maturing June 30, 2010 4,838,440
BWAY CORPORATION B1 B+
1,500,000 Term Loan, maturing June 30, 2011 1,522,500
CROWN CORK & SEAL COMPANY, INC. Ba3 BB-
1,425,000 Term Loan, maturing September 15, 2008 1,427,227
GRAPHIC PACKAGING INTERNATIONAL, INC. B1 B+
11,944,925 Term Loan, maturing August 09, 2010 12,124,099
GREIF BROS. CORPORATION Ba3 BB
2,662,801 Term Loan, maturing August 23, 2009 2,694,089
INTERTAPE POLYMER GROUP Ba3 B+
2,750,000 Term Loan, maturing July 28, 2011 2,780,938
</Table>
See Accompanying Notes to Financial Statements
26
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- ------------------------------------------------------------------------------------------------------------------------
CONTAINERS, PACKAGING AND GLASS: (CONTINUED)
JEFFERSON SMURFIT CORPORATION B1 B+
$ 2,234,910 Term Loan, maturing March 31, 2007 $ 2,254,117
KERR GROUP, INC. B1 BB-
1,307,128 Term Loan, maturing August 13, 2010 1,320,363
KOCH CELLULOSE B1 BB
1,496,250 Term Loan, maturing May 07, 2011 1,510,277
OWENS-ILLINOIS GROUP, INC. B1 BB-
7,500,000 Term Loan, maturing April 01, 2008 7,512,503
8,000,000 Term Loan, maturing April 01, 2008 8,124,168
SILGAN HOLDINGS, INC. Ba3 BB
4,944,925 Term Loan, maturing November 30, 2008 4,996,693
SMURFIT-STONE CONTAINER CANADA, INC. B1 B+
777,035 Term Loan, maturing June 30, 2009 785,777
SOLO CUP, INC. B1 B+
7,961,259 Term Loan, maturing February 27, 2011 8,052,479
STONE CONTAINER CORPORATION B1 B+
5,869,868 Term Loan, maturing June 30, 2009 5,924,898
U.S. CAN COMPANY B2 B
2,493,750 Term Loan, maturing June 21, 2011 2,499,984
--------------
69,886,364
--------------
DATA AND INTERNET SERVICES: 0.2%
MITCHELL INTERNATIONAL, INC. B1 B+
2,500,000 Term Loan, maturing August 15, 2011 2,518,750
--------------
2,518,750
--------------
DIVERSIFIED / CONGLOMERATE MANUFACTURING: 2.1%
AXIA, INC. B2 B
1,916,667 Term Loan, maturing November 30, 2010 1,939,427
BRAND SERVICES, INC. B1 B
793,372 Term Loan, maturing October 16, 2009 799,818
CINRAM INTERNATIONAL, INC. Ba3 BB
3,817,708 Term Loan, maturing September 30, 2009 3,862,448
1,000,000 Term Loan, maturing September 30, 2009 1,002,969
DRESSER, INC. Ba3 BB-
951,220 Term Loan, maturing April 10, 2009 965,637
FLOWSERVE CORPORATION Ba3 BB-
2,138,121 Term Loan, maturing June 30, 2009 2,167,520
ITRON, INC. Ba3 BB-
1,000,000 Term Loan, maturing June 28, 2011 1,010,000
MUELLER GROUP, INC. B2 B+
5,669,725 Term Loan, maturing April 23, 2011 5,698,074
RLC INDUSTRIES COMPANY B1 BB+
2,977,506 Term Loan, maturing February 26, 2010 3,007,281
ROPER INDUSTRIES, INC. Ba2 BB+
1,950,000 Term Loan, maturing December 29, 2008 1,979,250
SENSUS METERING SYSTEMS, INC. B2 B+
1,713,043 Term Loan, maturing December 17, 2010 1,731,244
256,957 Term Loan, maturing December 17, 2010 259,687
</Table>
See Accompanying Notes to Financial Statements
27
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED / CONGLOMERATE MANUFACTURING: (CONTINUED)
SPX CORPORATION Ba2 BBB-
$ 5,216,363 Term Loan, maturing September 30, 2009 $ 5,295,422
--------------
29,718,777
--------------
DIVERSIFIED / CONGLOMERATE SERVICE: 1.2%
AMERCO, INC. NR BB
8,469,566 Term Loan, maturing February 27, 2009 8,660,131
IRON MOUNTAIN, INC. B1 BB-
5,320,000 Term Loan, maturing April 02, 2011 5,354,915
RELIZON COMPANY B1 BB-
3,112,187 Term Loan, maturing February 20, 2011 3,129,693
--------------
17,144,739
--------------
ECOLOGICAL: 2.0%
ALLIED WASTE NORTH AMERICA, INC. Ba3 BB
59,350 Revolver, maturing June 30, 2010 58,682
16,515,179 Term Loan, maturing January 15, 2010 16,788,307
1,000,000 Term Loan, maturing January 15, 2010 1,015,625
1,000,000 Term Loan, maturing January 15, 2010 1,016,563
ENVIROSOLUTIONS, INC. NR NR
1,423,636 Term Loan, maturing March 01, 2009 1,423,636
30,909 Term Loan, maturing March 31, 2009 30,909
GREAT LAKES DREDGE & DOCK CORPORATION B2 B-
958,541 Term Loan, maturing December 22, 2010 958,541
IESI COPRORATION B1 B+
194,375 Revolver, maturing September 30, 2008 191,945
992,500 Term Loan, maturing September 30, 2010 1,009,249
WASTE CONNECTIONS, INC. Ba2 BB+
5,500,000 Term Loan, maturing October 22, 2010 5,555,000
--------------
28,048,457
--------------
ELECTRONICS: 0.5%
ANTEON CORPORATION Ba3 BB
995,000 Term Loan, maturing December 31, 2010 1,007,231
DECISION ONE CORPORATION B3 CCC
2,789,500 (2) Term Loan, maturing April 18, 2005 1,436,593
INVENSYS INTERNATIONAL HOLDINGS, LTD. Ba3 B+
997,923 Term Loan, maturing September 05, 2009 1,011,644
KNOWLES ELECTRONICS, INC. B3 B-
1,832,013 Term Loan, maturing June 29, 2007 1,850,714
SEAGATE TECHNOLOGY (US) HOLDINGS, INC. Ba1 BB+
1,960,000 Term Loan, maturing May 13, 2007 1,986,705
--------------
7,292,887
--------------
FARMING AND AGRICULTURE: 1.4%
AGCO CORPORATION Ba1 BB+
4,615,833 Term Loan, maturing January 31, 2006 4,646,127
SCOTTS COMPANY Ba1 BB
1,000,000 Term Loan, maturing September 30, 2010 1,000,000
</Table>
See Accompanying Notes to Financial Statements
28
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
FARMING AND AGRICULTURE: (CONTINUED)
UNITED INDUSTRIES CORPORATION B1 B+
$ 101,538 Revolver, maturing April 30, 2010 $ 100,015
8,492,500 Term Loan, maturing April 29, 2011 8,603,964
VICAR OPERATING, INC. Ba3 BB-
5,165,546 Term Loan, maturing June 30, 2009 5,243,029
--------------
19,593,135
--------------
FINANCE: 0.6%
REFCO GROUP B1 BB-
5,000,000 Term Loan, maturing August 05, 2011 4,991,145
RENT-A-CENTER, INC. Ba2 BB+
4,000,000 Term Loan, maturing June 30, 2010 4,049,500
--------------
9,040,645
--------------
FOREIGN CABLE, FOREIGN TV, RADIO AND EQUIPMENT: 0.2%
NTL INVESTMENT HOLDING, LTD. B1 BB-
3,000,000 Term Loan, maturing May 19, 2012 2,970,000
--------------
2,970,000
--------------
GAMING: 2.3%
ALLIANCE GAMING CORPORATION Ba3 BB-
3,638,651 Term Loan, maturing September 04, 2009 3,687,165
AMERISTAR CASINOS, INC. Ba3 BB-
1,787,698 Term Loan, maturing December 20, 2006 1,811,721
ARGOSY GAMING COMPANY Ba2 BB
1,914,084 Term Loan, maturing July 31, 2008 1,936,216
BOYD GAMING CORPORATION Ba2 BB
5,000,000 Term Loan, maturing June 30, 2011 5,055,470
GLOBAL CASH ACCESS, LLC B2 B+
2,962,500 Term Loan, maturing March 10, 2010 3,006,938
GREEN VALLEY RANCH GAMING, LLC B1 B+
995,000 Term Loan, maturing December 22, 2010 1,009,925
ISLE OF CAPRI CASINOS, INC. Ba2 BB-
827,500 Term Loan, maturing April 26, 2008 837,844
PENN NATIONAL GAMING Ba3 BB-
945,590 Term Loan, maturing September 01, 2007 960,956
RUFFIN GAMING, LLC NR NR
4,000,000 Term Loan, maturing July 14, 2007 4,032,500
UNITED AUBURN INDIAN COMMUNITY Ba3 BB
985,843 Term Loan, maturing January 24, 2009 990,772
VENETIAN CASINO RESORTS, LLC B1 B+
8,635,000 Term Loan, maturing August 06, 2011 8,753,731
--------------
32,083,238
--------------
GROCERY: 0.4%
GIANT EAGLE, INC. Ba2 BB+
1,904,667 Term Loan, maturing August 02, 2009 1,927,285
2,989,763 Term Loan, maturing August 06, 2009 3,025,266
--------------
4,952,551
--------------
</Table>
See Accompanying Notes to Financial Statements
29
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- -------------------------------------------------------------------------------------------------------------------------
HEALTHCARE, EDUCATION AND CHILDCARE: 10.9%
ACCREDO HEALTH, INC. Ba2 BB
$ 8,500,000 Term Loan, maturing March 31, 2009 $ 8,553,125
1,852,740 Term Loan, maturing April 30, 2011 1,864,320
ADVANCED MEDICAL OPTICS, INC. B1 BB-
3,825,000 Term Loan, maturing June 25, 2009 3,882,375
ALLIANCE IMAGING, INC. B1 B+
354,962 Term Loan, maturing November 02, 2006 350,525
2,000,000 Term Loan, maturing June 10, 2008 1,992,500
APRIA HEALTHCARE GROUP, INC. Ba1 BBB-
4,776,271 Term Loan, maturing July 20, 2008 4,831,795
ARDENT HEALTHCARE B1 B+
6,000,000 Term Loan, maturing August 12, 2011 6,015,000
BEVERLY ENTERPRISES, INC. Ba3 BB
3,471,256 Term Loan, maturing October 22, 2008 3,523,325
COLGATE MEDICAL, LTD. Ba2 BB-
3,824,359 Term Loan, maturing December 30, 2008 3,866,190
COMMUNITY HEALTH SYSTEMS, INC. Ba3 BB-
17,659,100 Term Loan, maturing August 19, 2011 17,659,100
CONCENTRA OPERATING CORPORATION B1 B+
3,000,000 Term Loan, maturing June 30, 2009 3,015,624
DAVITA, INC. Ba2 BB
21,350,195 Term Loan, maturing March 31, 2009 21,565,597
3,000,000 Term Loan, maturing June 30, 2010 3,023,439
DJ ORTHOPEDICS, LLC Ba3 BB-
975,000 Term Loan, maturing May 15, 2009 985,969
EMPI CORPORATION B1 B+
1,400,795 Term Loan, maturing November 24, 2009 1,404,297
EXPRESS SCRIPTS, INC. Ba1 BBB
997,500 Term Loan, maturing February 13, 2010 1,007,267
FISHER SCIENTIFIC INTERNATIONAL, INC. Ba2 BBB
2,500,000 Term Loan, maturing August 02, 2011 2,524,220
FRESENIUS MEDICAL CARE HOLDINGS, INC. Ba1 BB+
3,000,000 Term Loan, maturing October 31, 2007 3,010,314
7,730,625 Term Loan, maturing February 21, 2010 7,795,044
HCA, INC. Ba1 BBB-
937,500 Term Loan, maturing April 30, 2006 937,207
IASIS HEALTHCARE CORPORATION B1 B+
6,500,000 Term Loan, maturing June 30, 2011 6,588,361
INSIGHT HEALTH SERVICES CORPORATION B1 B+
1,933,333 Term Loan, maturing October 07, 2008 1,928,500
600,000 Term Loan, maturing October 07, 2008 598,500
300,000 Term Loan, maturing October 07, 2008 299,250
661,561 Term Loan, maturing October 17, 2008 666,523
KINETIC CONCEPTS, INC. B1 BB-
5,020,417 Term Loan, maturing August 11, 2010 5,089,448
LEINER HEALTH PRODUCTS GROUP, INC. B1 B
3,500,000 Term Loan, maturing May 27, 2011 3,543,750
</Table>
See Accompanying Notes to Financial Statements
30
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
HEALTHCARE, EDUCATION AND CHILDCARE: (CONTINUED)
MAGELLAN HEALTH SERVICES, INC. B1 B+
$ 770,833 Term Loan, maturing August 15, 2008 $ 781,432
MEDCATH CORPORATION B2 B+
1,000,000 Term Loan, maturing June 30, 2011 1,014,375
MEDICAL DEVICE MANUFACTURING, INC. B2 B+
1,750,000 Term Loan, maturing June 30, 2010 1,767,500
PACIFICARE HEALTH SYSTEMS, INC. Ba3 BBB-
990,000 Term Loan, maturing June 03, 2008 1,004,025
SKILLED HEALTHCARE GROUP B1 B
4,000,000 Term Loan, maturing June 28, 2010 4,038,752
SOLA INTERNATIONAL, INC. Ba3 BB-
1,975,000 Term Loan, maturing December 11, 2009 2,002,156
STERIGENICS INTERNATIONAL, INC. B2 B+
4,500,000 Term Loan, maturing June 14, 2011 4,556,250
TRIAD HOSPITALS, INC. Ba3 BB
3,347,291 Term Loan, maturing September 30, 2008 3,406,705
VANGUARD HEALTH SYSTEMS, INC. Ba3 B
13,000,000 Term Loan, maturing May 18, 2009 13,000,000
VWR INTERNATIONAL, INC. B1 BB-
5,034,334 Term Loan, maturing April 07, 2011 5,115,513
---------------
153,208,273
---------------
HOME AND OFFICE FURNISHING, HOUSEWARES: 2.6%
BUHRMANN U.S., INC. Ba3 BB-
3,990,000 Term Loan, maturing December 31, 2010 4,044,033
GLOBAL IMAGING SYSTEMS, INC. Ba3 BB-
3,481,250 Term Loan, maturing May 10, 2010 3,520,414
HILLMAN GROUP, INC. B2 B
1,995,000 Term Loan, maturing March 30, 2011 2,017,444
HOLMES GROUP, INC. B1 B
6,000,000 Term Loan, maturing November 08, 2010 5,970,000
MAAX CORPORATION B1 B+
4,000,000 Term Loan, maturing June 04, 2011 4,022,500
SEALY MATTRESS COMPANY B2 B+
6,687,500 Term Loan, maturing August 06, 2012 6,764,125
SIMMONS COMPANY B2 B+
7,420,479 Term Loan, maturing December 19, 2011 7,488,888
XEROX CORPORATION Ba1 BB-
2,000,000 Term Loan, maturing September 30, 2008 2,010,416
---------------
35,837,820
---------------
INSURANCE: 0.7%
CONSECO, INC. B2 BB-
10,000,000 Term Loan, maturing June 22, 2010 10,152,080
---------------
10,152,080
---------------
LEISURE, AMUSEMENT AND ENTERTAINMENT: 5.0%
AMF BOWLING WORLDWIDE, INC. B1 B
1,496,250 Term Loan, maturing August 27, 2009 1,509,811
CINEMARK USA, INC. Ba3 BB-
2,493,750 Term Loan, maturing March 31, 2011 2,512,453
</Table>
See Accompanying Notes to Financial Statements
31
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
LEISURE, AMUSEMENT AND ENTERTAINMENT: (CONTINUED)
FITNESS HOLDINGS WORLDWIDE, INC. B1 B
$ 3,980,000 Term Loan, maturing July 01, 2009 $ 4,029,750
LODGENET ENTERTAINMENT CORPORATION B1 B+
1,847,917 Term Loan, maturing June 30, 2006 1,859,466
LOEWS CINEPLEX ENTERTAINMENT CORPORATION B1 B
7,500,000 Term Loan, maturing July 31, 2011 7,564,845
METRO-GOLDWYN-MAYER STUDIOS, INC. Ba3 B+
15,000,000 Term Loan, maturing April 30, 2011 15,073,125
PURE FISHING B1 BB-
2,760,937 Term Loan, maturing September 30, 2010 2,798,900
REGAL CINEMAS, INC. Ba3 BB-
7,737,576 Term Loan, maturing November 10, 2010 7,834,296
SIX FLAGS THEME PARKS, INC. Ba3 B
8,790,820 Term Loan, maturing June 30, 2009 8,837,526
UNIVERSAL CITY DEVELOPMENT PARTNERS, L.P. B1 B+
5,000,000 Term Loan, maturing June 30, 2007 5,018,750
WALLACE THEATERS B2 B
2,750,000 Term Loan, maturing July 15, 2009 2,763,750
WARNER MUSIC GROUP B1 B+
9,458,734 Term Loan, maturing February 28, 2011 9,593,861
---------------
69,396,533
---------------
LODGING: 1.0%
BOCA RESORTS HOTEL CORPORATION NR NR
7,000,000 Term Loan, maturing July 22, 2009 7,000,000
CNL HOSPITALITY PARTNERS, L.P. NR NR
5,281,690 Term Loan, maturing January 02, 2005 5,281,690
WYNDHAM INTERNATIONAL, INC. NR NR
1,095,520 Term Loan, maturing June 30, 2006 1,073,382
---------------
13,355,072
---------------
MACHINERY: 1.8%
ALLIANCE LAUNDRY HOLDINGS, LLC B1 B
1,481,865 Term Loan, maturing August 02, 2007 1,487,422
BLOUNT, INC. B2 B+
2,000,000 Term Loan, maturing July 31, 2010 2,030,000
BUCYRUS INTERNATIONAL, INC. Ba3 BB-
2,500,000 Term Loan, maturing July 28, 2010 2,523,438
ENERSYS, INC. Ba3 BB
3,326,262 Term Loan, maturing March 17, 2011 3,365,242
JUNO LIGHTING, INC. B1 B+
2,372,538 Term Loan, maturing November 21, 2010 2,408,126
NATIONAL WATERWORKS, INC. B1 BB-
1,423,469 Term Loan, maturing November 22, 2009 1,445,711
REXNORD CORPORATION B1 B+
1,777,778 Term Loan, maturing November 25, 2009 1,795,926
UNITED RENTALS (NORTH AMERICA), INC. Ba3 BB
8,116,754 Term Loan, maturing February 14, 2011 8,211,111
VUTEK, INC. B1 B+
2,000,000 Term Loan, maturing June 25, 2010 1,995,000
---------------
25,261,976
---------------
</Table>
See Accompanying Notes to Financial Statements
32
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
MINING, STEEL, IRON AND NON-PRECIOUS METALS: 1.0%
FOUNDATION COAL CORPORATION Ba3 BB-
$ 3,750,000 Term Loan, maturing July 30, 2011 $ 3,791,719
PEABODY ENERGY CORPORATION Ba1 BB+
7,962,500 Term Loan, maturing March 21, 2010 10,079,251
---------------
13,870,970
---------------
OIL AND GAS: 2.2%
GETTY PETROLEUM MARKETING, INC. B1 BB-
4,500,000 Term Loan, maturing May 19, 2010 4,574,533
LA GRANGE ACQUISTION, L.P. NR NR
5,500,000 Term Loan, maturing January 18, 2008 5,582,500
LYONDELL-CITGO REFINING, L.P. Ba3 BB
5,000,000 Term Loan, maturing May 21, 2007 5,084,375
TRANSWESTERN PIPELINE COMPANY B1 BB
5,500,000 Term Loan, maturing April 30, 2009 5,550,419
VULCAN ENERGY CORPORATION B1 BB
5,000,000 Term Loan, maturing March 31, 2010 5,071,875
WILLIAMS PRODUCTION RMT COMPANY B2 BB
4,961,328 Term Loan, maturing May 30, 2007 5,037,817
---------------
30,901,519
---------------
OTHER BROADCASTING AND ENTERTAINMENT: 1.5%
DIRECTV HOLDINGS, LLC Ba2 BB
5,390,714 Term Loan, maturing March 06, 2010 5,468,206
LIBERTY MEDIA CORPORATION Baa3 BBB-
6,000,000 Floating Rate Note,
maturing September 17, 2006 6,072,120
RAINBOW NATIONAL SERVICES, LLC B1 B+
9,250,000 Term Loan, maturing March 31, 2012 9,370,250
---------------
20,910,576
---------------
OTHER TELECOMMUNICATIONS: 4.0%
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC. Ba3 BB-
1,492,500 Term Loan, maturing February 14, 2009 1,507,735
CINCINNATI BELL, INC. B1 B+
35,316 Revolver, maturing November 09, 2004 34,932
7,685,744 Term Loan, maturing June 30, 2008 7,767,405
CONSOLIDATED COMMUNICATIONS, INC. B1 B+
2,500,000 Term Loan, maturing March 31, 2010 2,506,250
3,500,000 Term Loan, maturing October 14, 2011 3,548,125
D&E COMMUNICATIONS, INC. Ba3 BB-
1,989,947 Term Loan, maturing March 05, 2012 2,020,419
ECHOSTAR DBS CORPORATION Ba3 BB-
5,000,000 Floating Rate Note,
maturing October 01, 2008 5,200,000
FAIRPOINT COMMUNICATIONS, INC. B2 B+
2,500,000 Term Loan, maturing March 31, 2009 2,519,533
GCI HOLDINGS, INC. Ba3 BB+
1,394,858 Term Loan, maturing October 31, 2007 1,407,500
PANAMSAT CORPORATION Ba3 BB+
10,000,000 Term Loan, maturing August 20, 2011 10,019,690
</Table>
See Accompanying Notes to Financial Statements
33
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
OTHER TELECOMMUNICATIONS: (CONTINUED)
QWEST COMMUNICATIONS INTERNATIONAL, INC. B3 CCC+
$ 10,000,000 Floating Rate Note,
maturing February 15, 2009 $ 9,300,000
QWEST CORPORATION B2 BB-
2,500,000 Term Loan, maturing June 30, 2007 2,586,875
TIME WARNER TELECOM HOLDINGS B1 B
2,000,000 Floating Rate Note,
maturing February 15, 2011 1,950,000
VALOR COMMUNICATIONS GROUP B2 B+
5,000,000 Term Loan, maturing June 15, 2010 5,062,500
---------------
55,430,964
---------------
PERSONAL AND NON-DURABLE CONSUMER PRODUCTS: 1.7%
AMSCAN HOLDINGS, INC. B1 B+
2,000,000 Term Loan, maturing April 30, 2012 2,025,000
CHURCH & DWIGHT COMPANY, INC. Ba2 BB
6,500,000 Term Loan, maturing May 30, 2011 6,586,326
JARDEN CORPORATION Ba3 B+
1,333,333 Term Loan, maturing April 08, 2008 1,342,500
992,500 Term Loan, maturing April 24, 2008 999,323
JOSTENS, INC. Ba3 B+
2,694,150 Term Loan, maturing July 29, 2010 2,734,562
NORWOOD PROMOTIONAL PRODUCTS, INC. NR NR
3,700,076 Term Loan, maturing August 16, 2009 3,589,074
NORWOOD PROMOTIONAL PRODUCTS HOLDINGS, INC. NR NR
1,673,710 (2) Term Loan, maturing August 16, 2011 753,170
PRESTIGE BRANDS HOLDINGS, INC. B1 B
3,985,000 Term Loan, maturing April 06, 2011 3,998,282
RAYOVAC CORPORATION B1 B+
1,443,091 Term Loan, maturing September 30, 2009 1,459,626
---------------
23,487,863
---------------
PERSONAL, FOOD AND MISCELLANEOUS SERVICES: 2.1%
AFC ENTERPRISES, INC. B1 B
1,841,718 Term Loan, maturing May 23, 2009 1,848,625
ALDERWOODS GROUP, INC. B1 BB-
3,621,824 Term Loan, maturing August 19, 2009 6,021,002
ALLIED SECURITY HOLDINGS B2 B+
2,000,000 Term Loan, maturing June 30, 2010 2,020,000
COINMACH CORPORATION B1 B+
2,925,000 Term Loan, maturing July 25, 2009 2,959,003
COINSTAR, INC. Ba3 BB-
3,250,000 Term Loan, maturing July 07, 2011 3,312,675
DOMINO'S, INC. Ba3 B+
5,702,900 Term Loan, maturing June 25, 2010 5,800,026
JACK IN THE BOX, INC. Ba2 BB
5,480,000 Term Loan, maturing January 09, 2010 5,555,350
N.E.W. CUSTOMER SERVICES COMPANIES, INC. B1 B+
1,666,667 Term Loan, maturing August 01, 2009 1,677,084
---------------
29,193,765
---------------
</Table>
See Accompanying Notes to Financial Statements
34
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
PRINTING AND PUBLISHING: 8.0%
ADAMS OUTDOOR ADVERTISING, L.P. B1 B+
$ 6,549,606 Term Loan, maturing October 15, 2011 $ 6,628,745
AMERICAN ACHIEVEMENT CORPORATION B1 B+
995,000 Term Loan, maturing March 25, 2011 1,003,706
AMERICAN MEDIA OPERATIONS, INC. Ba3 B+
20,146 Term Loan, maturing April 01, 2006 20,121
2,954,196 Term Loan, maturing April 01, 2007 3,003,126
AMERICAN REPROGRAPHICS COMPANY B1 BB
2,487,500 Term Loan, maturing June 18, 2009 2,524,813
AMERICAN REPROGRAPHICS COMPANY B3 B
948,284 Term Loan, maturing December 18, 2009 993,327
CANWEST MEDIA, INC. Ba3 B+
6,024,372 Term Loan, maturing August 15, 2009 6,103,442
DEX MEDIA EAST, LLC Ba2 BB-
6,570,917 Term Loan, maturing November 08, 2008 6,650,313
6,055,132 Term Loan, maturing May 08, 2009 6,139,649
DEX MEDIA WEST, LLC Ba2 BB-
4,024,288 Term Loan, maturing September 09, 2009 4,077,944
10,148,340 Term Loan, maturing March 09, 2010 10,304,797
FREEDOM COMMUNICATIONS Ba3 BB
8,000,000 Term Loan, maturing May 18, 2012 8,123,752
HERALD MEDIA, INC. B1 B
2,500,000 Term Loan, maturing July 22, 2011 2,531,250
JOURNAL REGISTER COMPANY Ba2 BB+
5,000,000 Term Loan, maturing September 29, 2006 5,019,530
LAMAR MEDIA CORPORATION Ba2 BB-
4,500,000 Term Loan, maturing June 30, 2009 4,526,721
5,200,000 Term Loan, maturing June 30, 2010 5,252,000
MC COMMUNICATIONS, LLC B2 B
3,500,000 Term Loan, maturing December 31, 2010 3,465,000
MERRILL COMMUNICATIONS, LLC B1 B
2,000,000 Term Loan, maturing July 30, 2009 2,020,000
PRIMEDIA, INC. B3 B
1,580,796 Revolver, maturing June 30, 2008 1,483,479
4,970,712 Term Loan, maturing June 30, 2009 4,780,582
1,500,000 Term Loan, maturing December 31, 2009 1,477,500
R.H. DONNELLEY, INC. Ba3 BB
1,989,932 Term Loan, maturing December 31, 2008 2,000,505
1,970,518 Term Loan, maturing June 30, 2010 1,987,760
READER'S DIGEST ASSOCIATIONS, INC. Ba1 BB
3,000,000 Term Loan, maturing May 21, 2007 3,040,314
1,995,000 Term Loan, maturing May 20, 2008 2,021,809
TRANSWESTERN PUBLISHING COMPANY B1 B+
5,193,782 Term Loan, maturing February 25, 2011 5,237,607
TRANSWESTERN PUBLISHING COMPANY B3 B-
2,992,500 Term Loan, maturing February 25, 2012 3,014,477
ZIFF DAVIS MEDIA, INC. B3 CCC
8,149,269 Term Loan, maturing March 31, 2007 8,105,980
---------------
111,538,249
---------------
</Table>
See Accompanying Notes to Financial Statements
35
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
RADIO AND TV BROADCASTING: 4.5%
CUMULUS MEDIA, INC. Ba3 B+
$ 2,000,000 Term Loan, maturing March 28, 2009 $ 2,013,750
3,500,000 Term Loan, maturing March 28, 2010 3,529,533
EMMIS OPERATING COMPANY Ba2 B+
11,000,000 Term Loan, maturing November 10, 2011 11,089,375
ENTRAVISION COMMUNICATIONS CORPORATION B1 B+
2,500,000 Term Loan, maturing February 24, 2012 2,519,792
FISHER BROADCASTING, INC. Ba3 B+
633,111 Term Loan, maturing February 28, 2010 635,881
GRAY TELEVISION, INC. Ba2 B+
5,500,000 Term Loan, maturing June 30, 2011 5,544,687
LIN TELEVISION CORPORATION Ba1 BB
498,571 Term Loan, maturing December 31, 2007 505,026
MISSION BROADCASTING, INC. Ba3 B+
3,072,340 Term Loan, maturing December 31, 2010 3,080,021
NEP BROADCASTING B1 B
3,000,000 Term Loan, maturing November 30, 2010 3,033,750
NEXSTAR BROADCASTING Ba3 B+
1,677,660 Term Loan, maturing December 31, 2010 1,681,854
PAXSON COMMUNICATIONS CORPORATION B1 B
7,500,000 Floating Rate Note,
maturing January 15, 2010 7,462,500
SINCLAIR BROADCAST GROUP, INC. Ba2 BB
3,000,000 Term Loan, maturing June 30, 2009 3,018,750
4,000,000 Term Loan, maturing December 31, 2009 4,045,832
SPANISH BROADCASTING SYSTEMS B1 B+
5,223,750 Term Loan, maturing October 30, 2009 5,308,636
SUSQUEHANNA MEDIA COMPANY Ba2 BB-
9,000,000 Term Loan, maturing March 31, 2012 9,126,567
TELEVICENTRO OF PUERTO RICO, LLC Ba1 BB
461,429 Term Loan, maturing December 31, 2007 467,403
---------------
63,063,357
---------------
RETAIL: 3.7%
ADVANCE STORES COMPANY, INC. Ba2 BB
380,682 Term Loan, maturing November 30, 2006 385,560
3,390,645 Term Loan, maturing November 30, 2007 3,437,266
ALIMENTATION COUCHE-TARD, INC. Ba2 BB
609,184 Term Loan, maturing December 17, 2010 613,372
BAKER & TAYLOR, INC. B1 B
975,000 Revolver, maturing May 06, 2009 965,250
1,000,000 Term Loan, maturing May 06, 2011 1,012,500
BLOCKBUSTER ENTERTAINMENT CORPORATION Ba2 BB
12,000,000 Term Loan, maturing August 19, 2011 12,003,756
CH OPERATING, LLC B2 B+
554,446 Term Loan, maturing June 21, 2007 555,832
CSK AUTOMOTIVE, INC.
2,492,500 Term Loan, maturing June 19, 2009 2,522,099
</Table>
See Accompanying Notes to Financial Statements
36
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
RETAIL: (CONTINUED)
HARBOR FREIGHT TOOLS B1 B+
$ 5,000,000 Term Loan, maturing June 24, 2010 $ 5,028,125
JEAN COUTU GROUP, INC. B1 BB
7,000,000 Term Loan, maturing July 30, 2011 7,068,411
NEBRASKA BOOK COMPANY, INC. B2 B
1,496,250 Term Loan, maturing March 04, 2011 1,516,823
ORIENTAL TRADING COMPANY, INC. B1 B+
2,372,241 Term Loan, maturing August 06, 2010 2,405,849
ORIENTAL TRADING COMPANY, INC. B2 B-
1,411,696 Term Loan, maturing January 08, 2011 1,438,754
PANTRY, INC. B1 B+
5,436,232 Term Loan, maturing March 12, 2011 5,517,775
PETCO ANIMAL SUPPLIES, INC. Ba3 BB
723,928 Term Loan, maturing October 26, 2008 733,656
RITE AID CORPORATION Ba3 BB
3,980,000 Term Loan, maturing April 30, 2008 4,029,750
TRAVELCENTERS OF AMERICA, INC. Ba3 BB
2,624,600 Term Loan, maturing November 14, 2008 2,659,594
---------------
51,894,372
---------------
TELECOMMUNICATIONS EQUIPMENT: 2.0%
AAT COMMUNICATIONS CORPORATION B1 B-
3,500,000 Term Loan, maturing January 16, 2012 3,543,750
AMERICAN TOWER, L.P. B1 B
5,000,000 Term Loan, maturing August 31, 2011 5,075,780
CROWN CASTLE OPERATING COMPANY B1 B-
1,239,729 Term Loan, maturing September 15, 2007 1,242,829
SBA SENIOR FINANCE, INC. B2 CCC+
8,253,846 Term Loan, maturing October 31, 2008 8,327,355
SPECTRASITE COMMUNICATIONS, INC. B1 B+
7,288,221 Term Loan, maturing December 31, 2007 7,397,544
1,790,735 Term Loan, maturing December 31, 2007 1,800,061
---------------
27,387,319
---------------
TEXTILES AND LEATHER: 0.3%
(1) GALEY & LORD, INC. NR NR
650,310 (2) Term Loan, maturing September 05, 2009 268,253
POLYMER GROUP, INC. B2 B+
2,000,000 Term Loan, maturing April 27, 2010 2,014,584
WILLIAM CARTER COMPANY Ba3 BB+
2,430,064 Term Loan, maturing September 08, 2008 2,452,846
---------------
4,735,683
---------------
UTILITIES: 4.5%
ALLEGHENY ENERGY SUPPLY COMPANY B1 B+
7,318,333 Term Loan, maturing March 08, 2011 7,434,512
3,659,167 Term Loan, maturing June 08, 2011 3,722,822
ASTORIA ENERGY, LLC Ba3 B+
8,500,000 Term Loan, maturing April 15, 2012 8,634,580
CALPINE CONSTRUCTION FINANCE COMPANY, L.P. NR B+
2,979,950 Term Loan, maturing August 26, 2009 3,191,526
</Table>
See Accompanying Notes to Financial Statements
37
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
BANK LOAN
RATINGS+
(UNAUDITED)
PRINCIPAL AMOUNT BORROWER/TRANCHE DESCRIPTION MOODY'S S&P VALUE
- --------------------------------------------------------------------------------------------------------------------------
UTILITIES: (CONTINUED)
CALPINE CORPORATION B2 B
$ 1,970,050 Term Loan, maturing July 16, 2007 $ 1,977,847
1,994,962 Term Loan, maturing July 16, 2007 1,695,718
CALPINE GENERATING COMPANY, LLC B1 B+
3,500,000 Term Loan, maturing March 23, 2009 3,511,596
CENTERPOINT ENERGY, INC. Ba1 BBB
6,978,349 Term Loan, maturing October 07, 2006 7,012,368
COLETO CREEK WLE, L.P. Ba2 BB
1,000,000 Term Loan, maturing June 30, 2011 1,015,625
COLETO CREEK WLE, L.P. Ba3 BB-
1,000,000 Term Loan, maturing June 30, 2012 1,016,250
DYNEGY HOLDINGS, INC. B2 BB-
6,000,000 Term Loan, maturing May 27, 2010 6,114,378
PIKE ELECTRIC, INC. Ba3 BB
4,428,750 Term Loan, maturing July 01, 2012 4,510,868
RIVERSIDE ENERGY CENTER, LLC Ba3 BB-
403,552 Term Loan, maturing June 24, 2010 407,588
3,804,306 Term Loan, maturing June 24, 2011 3,842,349
5,292,139 Term Loan, maturing June 24, 2011 5,345,060
TETON POWER FUNDING Ba3 B+
4,084,615 Term Loan, maturing March 12, 2011 4,125,461
---------------
63,558,548
---------------
TOTAL SENIOR LOANS
(COST $1,535,106,708) 1,544,048,996
---------------
OTHER CORPORATE DEBT: 0.2%
FINANCE: 0.1%
VALUE ASSET MANAGEMENT, INC. B3 B
1,558,824 Senior Subordinated Bridge Note,
maturing August 31, 2005 1,527,648
---------------
1,527,648
---------------
HOME AND OFFICE FURNISHINGS, HOUSEWARES: 0.1%
SEALY MATTRESS COMPANY B3 B-
1,000,000 Unsecured Term Loan,
maturing April 05, 2013 1,022,500
---------------
1,022,500
---------------
TOTAL OTHER CORPORATE DEBT
(COST $2,557,681) 2,550,148
---------------
EQUITIES AND OTHER ASSETS: 0.1%
<Caption>
SECURITY DESCRIPTION VALUE
- --------------------------------------------------------------------------------------------------------------------------
(@), (R) Decision One Corporation (92,638 Common Shares) $ --
(@), (R) Galey & Lord (49,843 Common Shares) --
(@), (R) Murray's Discount Auto Stores, Inc. (Escrow Interest) 133,153
(@), (R) Neoplan USA Corporation (1,627 Common Shares) --
</Table>
See Accompanying Notes to Financial Statements
38
<Page>
ING Senior Income Fund
PORTFOLIO OF INVESTMENTS as of August 31, 2004 (Unaudited) (continued)
<Table>
<Caption>
SECURITY DESCRIPTION VALUE
- --------------------------------------------------------------------------------------------------------------------------
(@), (R) Neoplan USA Corporation (170,180 Series B Preferred Shares) $ --
(@), (R) Neoplan USA Corporation (101,690 Series C Preferred Shares) 19,321
(@), (R) Neoplan USA Corporation (330,600 Series D Preferred Shares) 330,600
(@), (R) New World Restaurant Group, Inc. (Warrants for 2,244 Common
Shares, Expires June 15, 2006) 30,788
(@), (R) Norwood Promotional Products, Inc. (16,551 Common Shares) --
(@), (R) Safelite Glass Corporation (99,495 Common Shares) 1,106,384
(@), (R) Safelite Realty (6,716 Common Shares) 36,938
(@), (R) Targus Group, Inc. (Warrants for 47,931 Common Shares,
Expires December 6, 2012) --
---------------
TOTAL FOR EQUITIES AND OTHER ASSETS
(COST $514,026) 1,657,184
---------------
TOTAL LONG-TERM INVESTMENTS
(COST $1,538,178,415) 1,548,256,328
---------------
SHORT-TERM INVESTMENTS: 0.8%
<Caption>
PRINCIPAL AMOUNT SECURITY DESCRIPTION VALUE
- --------------------------------------------------------------------------------------------------------------------------
$ 12,000,000 State Street Repurchase Agreement dated 08/31/04, 0.750%
due 09/01/04, $12,000,250 due upon repurchase (Collateralized
by $11,650,000 Federal Home Loan Mortgage Association, 7.000%,
Market Value $12,240,224 due 07/15/05) 12,000,000
---------------
TOTAL SHORT-TERM INVESTMENTS
(COST $12,000,000) 12,000,000
---------------
TOTAL INVESTMENTS
(COST $1,550,178,415)** 111.5% $ 1,560,256,328
OTHER ASSETS AND LIABILITIES -- NET (11.5) (161,168,171)
----- ---------------
NET ASSETS 100.0% $ 1,399,088,157
===== ===============
</Table>
- ----------
* Senior loans, while exempt from registration under the Securities Act of
1933, as amended, contain certain restrictions on resale and cannot be sold
publicly. These senior loans bear interest (unless otherwise noted) at
rates that float periodically at a margin above the London Inter-Bank
Offered Rate ("LIBOR") and other short-term rates.
+ Bank Loans rated below Baa by Moody's Investor Services, Inc. or BBB by
Standard & Poor's Group are considered to be below investment grade.
(1) The borrower filed for protection under Chapter 11 of the U.S. Federal
Bankruptcy code.
NR Not Rated.
(2) Loan is on non-accrual basis.
(@) Non-income producing security.
(R) Restricted security.
** For federal income tax purposes cost of investments is $1,550,193,635 and
net unrealized appreciation consists of the following:
<Table>
Gross Unrealized Appreciation $ 14,463,860
Gross Unrealized Depreciation (4,401,167)
-------------
Net Unrealized Appreciation $ 10,062,693
=============
</Table>
See Accompanying Notes to Financial Statements
39
<Page>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<Page>
INVESTMENT MANAGER
ING Investments, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
SUB-ADVISER
ING Investment Management Co.
230 Park Avenue
New York, NY 10169
ADMINISTRATOR
ING Funds Services, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
1-800-992-0180
INSTITUTIONAL INVESTORS AND ANALYSTS
Call ING Senior Income Fund
1-800-336-3436
DISTRIBUTOR
ING Funds Distributor, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
1-800-334-3444
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 219368
Kansas City, Missouri 64141
CUSTODIAN
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, Missouri 64105
LEGAL COUNSEL
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
355 South Grand Avenue
Los Angeles, California 90071
WRITTEN REQUESTS
Please mail all account inquiries and other comments to:
ING Senior Income Fund
c/o ING Funds Services, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
TOLL-FREE SHAREHOLDER INFORMATION
Call us from 9:00 a.m. to 7:00 p.m. Eastern time on any business day for account
or other information, at (800) 992-0180
FOR MORE COMPLETE INFORMATION, OR TO OBTAIN A PROSPECTUS ON ANY ING FUND, PLEASE
CALL YOUR INVESTMENT PROFESSIONAL OR ING FUNDS DISTRIBUTOR, LLC AT (800)
992-0180 OR LOG ON TO www.ingfunds.com. THE PROSPECTUS SHOULD BE READ CAREFULLY
BEFORE INVESTING. CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND
EXPENSES CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS INFORMATION
AND OTHER INFORMATION ABOUT THE FUND.
[ING FUNDS LOGO] PRSAR-SIF (0804-102904)
<Page>
ITEM 2. CODE OF ETHICS.
Not required for semi-annual filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required for semi-annual filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required for semi-annual filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not required for semi-annual filing.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule is included as part of the report to shareholders filed under Item 1 of
this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not required for semi-annual filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Board has a Nominating Committee for the purpose of considering and
presenting to the Board candidates it proposes for nomination to fill
Independent Trustee vacancies on the Board. The Committee currently consists of
all Independent Trustees of the Board (6 individuals). The Nominating Committee
operates pursuant to a Charter approved by the Board. The primary purpose of the
Nominating Committee is to consider and present to the Board the candidates it
proposes for nomination to fill vacancies on the Board. In evaluating
candidates, the Nominating Committee may consider a variety of factors, but it
has not at this time set any specific minimum qualifications that must be met.
Specific qualifications of candidates for Board membership will be based on the
needs of the Board at the time of nomination.
The Nominating Committee is willing to consider nominations received from
shareholders and shall assess shareholder nominees in the same manner as it
reviews its own nominees. A shareholder nominee for director should be submitted
in writing to the Fund's Secretary. Any such shareholder nomination should
include at a minimum the following information as to each individual proposed
for nomination as trustee: such individual's written consent to be named in the
proxy statement as a nominee (if nominated) and to serve as a trustee (if
elected), and all information relating to such individual that is required to be
disclosed in the solicitation of proxies for election of trustees, or is
otherwise required, in each case under applicable federal securities laws, rules
and regulations.
The Secretary shall submit all nominations received in a timely manner to the
Nominating Committee. To be timely, any such submission must be delivered to the
Fund's Secretary not
<Page>
earlier than the 90th day prior to such meeting and not later than the close of
business on the later of the 60th day prior to such meeting or the 10th day
following the day on which public announcement of the date of the meeting is
first made, by either disclosure in a press release or in a document publicly
filed by the Fund with the Securities and Exchange Commission.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based on our evaluation conducted within 90 days of the filing date,
hereof, the design and operation of the registrant's disclosure
controls and procedures are effective to ensure that material
information relating to the registrant is made known to the certifying
officers by others within the appropriate entities, particularly
during the period in which Forms N-CSR are being prepared, and the
registrant's disclosure controls and procedures allow timely
preparation and review of the information for the registrant's Form
N-CSR and the officer certifications of such Form N-CSR.
(b) There were no significant changes in the registrant's internal
controls that occurred during the second fiscal quarter of the period
covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
(a)(1) The Code of Ethics is not required for the semi-annual filing.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule
30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as
EX-99.CERT.
(a)(3) Not required for semi-annual filing.
(b) The officer certifications required by Section 906 of the
Sarbanes-Oxley Act of 2002 are attached hereto as EX-99.906CERT
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): ING SENIOR INCOME FUND
By /s/ James M. Hennessy
---------------------
James M. Hennessy
President and Chief Executive Officer
Date: NOVEMBER 5, 2004
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/ James M. Hennessy
---------------------
James M. Hennessy
President and Chief Executive Officer
Date: NOVEMBER 5, 2004
By /s/ Michael J. Roland
---------------------
Michael J. Roland
Executive Vice President and Chief Financial Officer
Date: NOVEMBER 5, 2004