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 811-08727
---------------------------------------------
SunAmerica Senior Floating Rate Fund, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert M. Zakem, ESQ.
Senior Vice President & General Counsel
AIG SunAmerica Asset Management Corp.
Harborside Financial Center 3200 Plaza 5
Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6363
----------------------------
Date of fiscal year end: December 31
-------------------------
Date of reporting period: June 30, 2003
------------------------
Item 1. Reports to Shareholders.
SunAmerica Senior Floating Rate Fund, Inc. Semiannual Report at June 30,
2003.
[GRAPHIC]
SunAmerica
THE RETIREMENT SPECIALIST
Senior Floating Rate Fund
2003 SEMIANNUAL REPORT
[LOGO] AIG Sun America
Mutual Funds
Table of Contents
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 1
STATEMENT OF OPERATIONS............ 2
STATEMENTS OF CHANGES IN NET ASSETS 3
STATEMENT OF CASH FLOWS............ 4
FINANCIAL HIGHLIGHTS............... 5
PORTFOLIO OF INVESTMENTS........... 8
NOTES TO FINANCIAL STATEMENTS...... 12
DIRECTORS INFORMATION.............. 20
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2003 -- (unaudited)
- ---------------------------------------------
ASSETS:
Investments in loans and securities, at value (Identified
cost, $130,003,599)........................................ $120,555,288
Cash........................................................ 901,006
Receivables:
Investments sold........................................... 1,585,485
Fund shares sold........................................... 76,453
Interest and dividends receivable.......................... 681,639
Due from investment adviser................................ 125,232
Prepaid expenses............................................ 2,835
------------
Total assets............................................... 123,927,938
------------
LIABILITIES:
Payables:
Investments purchased...................................... 849,849
Fund shares repurchased.................................... 2,486,058
Dividend payable........................................... 117,294
Investment adviser......................................... 84,627
Distribution and service fees.............................. 66,358
Administration fees........................................ 39,825
Other accrued expenses..................................... 207,368
Commitments (Note 10)...................................... --
------------
Total liabilities.......................................... 3,851,379
------------
Net assets............................................... $120,076,559
============
NET ASSETS CONSIST OF:
Capital shares at par value of $.01......................... $ 131,416
Additional paid-in capital.................................. 151,881,667
------------
152,013,083
Accumulated undistributed net investment income (loss)...... 67,120
Accumulated net realized gain (loss)........................ (22,555,333)
Unrealized appreciation (depreciation) on investments....... (9,448,311)
------------
Net assets................................................. $120,076,559
============
Class B Class C Class D
----------- ----------- -----------
Net assets at value..................... $28,977,528 $77,711,828 $13,387,203
Shares outstanding...................... 3,171,439 8,505,016 1,465,177
Net Asset Value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charges)......................... $ 9.14 $ 9.14 $ 9.14
=========== =========== ===========
See Notes to Financial Statements.
1
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF OPERATIONS -- For the six months ended June 30,
2003 -- (unaudited)
- -----------------------------------------------------
--------------------------
INVESTMENT INCOME:
Income:
Interest....................................................... $ 3,345,566
Dividends...................................................... 26,215
Facility and other fee income (Note 2)......................... 684,611
-----------
Total income................................................ 4,056,392
-----------
EXPENSES:
Investment adviser fee......................................... 529,762
Distribution and service maintenance fee -- for Class B........ 112,017
Distribution and service maintenance fee -- for Class C........ 302,901
Custody fee.................................................... 27,796
Transfer agent fee and expenses -- Class B..................... 7,600
Transfer agent fee and expenses -- Class C..................... 36,080
Transfer agent fee and expenses -- Class D..................... 3,800
Audit fees..................................................... 71,965
Legal fees..................................................... 25,970
Administration fees............................................ 249,501
Accounting service fees........................................ 54,935
Printing expense............................................... 70,073
Directors' fees and expenses................................... 15,025
Interest expense............................................... 11,730
Miscellaneous.................................................. 30,721
-----------
Total expenses before reimbursements and custody credits....... 1,549,876
Expenses waived or reimbursed.................................. (638,591)
Custody credits earned on cash balances........................ (2,137)
-----------
Net expenses................................................ 909,148
-----------
Net investment income (loss)................................... 3,147,244
-----------
REALIZED AND UNREALIZED GAIN/(LOSS):
Net realized gain (loss) on investment transactions............ (1,872,584)
Change in unrealized appreciation (depreciation) on investments 6,631,518
-----------
Net realized and unrealized gain (loss) on investments......... 4,758,934
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,906,178
===========
See Notes to Financial Statements.
2
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the six
months ended
June 30, 2003 For the year ended
(unaudited) December 31, 2002
------------- ------------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss).......................................................... $ 3,147,244 $ 7,523,444
Net realized gain (loss) on investment transactions................................... (1,872,584) (6,967,383)
Change in unrealized appreciation (depreciation) on investments....................... 6,631,518 2,298,689
------------ ------------
Net increase (decrease) in net assets resulting from operations......................... 7,906,178 2,854,750
Distributions to shareholders:
From net investment income (Class B).................................................. (743,561) (1,634,402)
From net investment income (Class C).................................................. (1,992,113) (4,660,669)
From net investment income (Class D).................................................. (362,808) (924,225)
------------ ------------
Total distributions to shareholders..................................................... (3,098,482) (7,219,296)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 3) $(17,776,181) (71,961,280)
------------ ------------
Total increase (decrease) in net assets................................................. (12,968,485) (76,325,826)
Net Assets:
Beginning of period..................................................................... $133,045,044 $209,370,870
------------ ------------
End of period........................................................................... $120,076,559 $133,045,044
============ ============
Accumulated undistributed net investment income (loss).................................. $ 67,120 $ 18,358
============ ============
See Notes to Financial Statements.
3
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CASH FLOWS -- For the six months ended June 30,
2003 -- (unaudited)
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Net increase in net assets from operations....................................................................... $ 7,906,178
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:
Purchase of loans.............................................................................................. (60,146,263)
Proceeds from loans sold....................................................................................... 55,158,955
Loan principal paydowns........................................................................................ 33,820,160
Purchases -- funding fees...................................................................................... 1,420,585
Sales of short-term securities, net............................................................................ (10,042,910)
Accretion of facility fee income............................................................................... (509,042)
Decrease in dividends and interest............................................................................. 99,245
Increase in receivables for investments sold................................................................... (1,362,490)
Decrease in amount due from investment adviser................................................................. 80,326
Decrease in other assets....................................................................................... 20,933
Decrease in payable to the adviser............................................................................. (13,636)
Increase in payable for investments purchased.................................................................. 849,849
Decrease in other liabilities.................................................................................. (52,124)
Unrealized appreciation on investments......................................................................... (6,631,518)
Net realized loss from investments............................................................................. 1,872,584
------------
Net cash provided by operating activities........................................................................ $ 22,470,832
------------
Cash flows from financing activities:
Proceeds from shares sold........................................................................................ 6,302,278
Payment on shares redeemed....................................................................................... (27,338,444)
Cash dividends paid (not including reinvested dividends of $2,111,544)........................................... (1,072,320)
------------
Net cash used in financing activities............................................................................ $(22,108,486)
------------
Net increase in cash............................................................................................. 362,346
Cash balance at beginning of period.............................................................................. 538,660
------------
Cash balance at end of period.................................................................................... $ 901,006
============
See Notes to Financial Statements.
4
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Class B
--------------------------------------------------------------
Six Months Period from
ended Year Year Year Year 8/31/98*
06/30/03 ended ended ended ended through
(unaudited) 12/31/02 12/31/01 12/31/00## 12/31/99## 12/31/98##
----------- -------- -------- ---------- ---------- -----------
Net Asset Value, Beginning of Period......... $ 8.78 $ 9.03 $ 9.64 $ 9.98 $ 9.98 $10.00
Investment Operations:
Net investment income (loss)................. 0.23@ 0.40@ 0.58@ 0.75 0.69 0.20
Net realized and unrealized gain (loss) on
investments................................. 0.35 (0.26) (0.60) (0.33) 0.00 (0.02)
------- ------- ------- ------- ------- ------
Total from investment operations............ 0.58 0.14 (0.02) 0.42 0.69 0.18
------- ------- ------- ------- ------- ------
Distributions:
Dividends from net investment income......... (0.22) (0.39) (0.59) (0.76) (0.69) (0.20)
------- ------- ------- ------- ------- ------
Net Asset Value, End of Period............... $ 9.14 $ 8.78 $ 9.03 $ 9.64 $ 9.98 9.98
------- ------- ------- ------- ------- ------
Total Return(1).............................. 6.68% 1.54% (0.41%) 4.61% 7.13% 1.89%
Ratios/Supplemental Data
Net assets, end of period ($000's)........... $28,978 $31,906 $42,335 $50,966 $37,439 $4,826
Ratio of net expenses to average net assets.. 1.45%# 1.45% 1.45% 1.42% 0.70% 0.00%#
Ratio of net investment income to average
net assets.................................. 5.05%# 4.42% 6.23% 7.85% 6.87% 6.11%#
Portfolio turnover rate...................... 46% 112% 69% 41% 30% 18%
Expense ratio before waiver of fees and
reimbursement of expenses................... 2.55%# 2.51% 2.47% 2.31% 2.29% 4.02%#
Net investment income ratio before waiver of
fees and reimbursement of expenses.......... 3.96%# 3.36% 5.21% 6.96% 5.28% 2.09%#
- --------
* Commencement of Operations
# Annualized
@ Calculated based upon average shares outstanding.
## The financial statements of the Fund for the periods prior to January 1,
2001 were audited by other independent auditors whose report dated February
23, 2001 expressed an unqualified opinion on the statements
(1) Total return is not annualized and does not reflect sales load.
See Notes to Financial Statements.
5
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS -- (continued)
- --------------------------------------------------------------------------------
Class C
---------------------------------------------------------------
Six Months Period from
ended Year Year Year Year 8/31/98*
06/30/03 ended ended ended ended through
(unaudited) 12/31/02 12/31/01 12/31/00## 12/31/99## 12/31/98##
----------- -------- -------- ---------- ---------- -----------
Net Asset Value, Beginning of Period......... $ 8.78 $ 9.03 $ 9.64 $ 9.98 $ 9.98 $ 10.00
Investment Operations:
Net investment income (loss)................. 0.23@ 0.40@ 0.57@ 0.76 0.69 0.20
Net realized and unrealized gain(loss) on
investments................................. 0.35 (0.27) (0.60) (0.33) 0.00 (0.02)
------- ------- -------- -------- -------- -------
Total from investment operations............ 0.58 0.13 (0.03) 0.43 0.69 0.18
------- ------- -------- -------- -------- -------
Distributions:
Dividends from net investment income......... (0.22) (0.38) (0.58) (0.77) (0.69) (0.20)
------- ------- -------- -------- -------- -------
Net Asset Value, End of Period............... $ 9.14 $ 8.78 $ 9.03 $ 9.64 $ 9.98 $ 9.98
------- ------- -------- -------- -------- -------
Total Return(1).............................. 6.66% 1.47% (0.45)% 4.60% 7.12% 1.89%
Ratios/Supplemental Data
Net assets, end of period ($000's)........... $77,712 $86,101 $140,664 $227,662 $173,322 $14,259
Ratio of net expenses to average net assets.. 1.50%# 1.50% 1.50% 1.43% 0.79% 0.00%#
Ratio of net investment income to average
net assets.................................. 5.01%# 4.33% 6.28% 7.85% 6.82% 6.11%#
Portfolio turnover rate...................... 46% 112% 69% 41% 30% 18%
Expense ratio before waiver of fees and
reimbursement of expenses................... 2.58%# 2.48% 2.52% 2.32% 2.25% 4.01%#
Net investment income ratio before waiver of
fees and reimbursement of expenses.......... 3.93%# 3.36% 5.26% 6.96% 5.36% 2.10%#
- --------
* Commencement of Operations
# Annualized
@ Calculated based upon average shares outstanding.
## The financial statements of the Fund for the periods prior to January 1,
2001 were audited by other independent auditors whose report dated February
23, 2001 expressed an unqualified opinion on the statements
(1) Total return is not annualized and does not reflect sales load.
See Notes to Financial Statements.
6
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS -- (continued)
- --------------------------------------------------------------------------------
Class D
-----------------------------
Period
Six Months from
ended Year 05/02/01*
06/30/03 ended through
(unaudited) 12/31/02 12/31/01
----------- -------- ---------
Net Asset Value, Beginning of Period........................ $ 8.78 $ 9.03 $ 9.46
Investment Operations:
Net investment income (loss)@............................... 0.24 0.43 0.35
Net realized and unrealized gain (loss) on investments...... 0.35 (0.27) (0.42)
------- ------- -------
Total from investment operations........................... 0.59 0.16 (0.07)
------- ------- -------
Distributions:
Dividends from net investment income........................ (0.23) (0.41) (0.36)
------- ------- -------
Net Asset Value, End of Period.............................. $ 9.14 $ 8.78 $ 9.03
------- ------- -------
Total Return(1)............................................. 6.79% 1.72% (0.79)%
Ratios/Supplemental Data
Net assets, end of period ($000's).......................... $13,387 $15,037 $26,372
Ratio of net expenses to average net assets................. 1.25%# 1.25% 1.25%#
Ratio of net investment income to average net assets........ 5.26%# 4.58% 5.66%#
Portfolio turnover rate..................................... 46% 112% 69%
Expense ratio before waiver of fees and reimbursement of
expenses................................................... 1.80%# 1.77% 2.27%#
Net investment income ratio before waiver of fees and
reimbursement of expenses.................................. 4.71%# 4.06% 4.64%#
- --------
* Commencement of Operations
# Annualized
@ Calculated based upon average shares outstanding.
(1) Total return is not annualized and does not reflect sales load.
See Notes to Financial Statements.
7
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited)
Ratings/1/
------------ Interest Maturity
Industry Description Type Moody's S&P Rate Date/2/ Par Value
- ----------------------------------------------------------------------------- - ----------------------
LOANS/3 /-- 83.63%
Automobile -- 1.24%
Polypore, Inc............................ BTL-C Ba3 B+ 4.25% 12/31/07 $1,481,250 $ 1,488,656
-----------
Beverage, Food and Tobacco -- 1.71%
Commonwealth Brands, Inc................. BTL B2 B+ 4.00 8/28/07 1,194,333 1,197,319
Doane Pet Care Co........................ BTL-B B2 B+ 4.75 12/31/05 309,345 309,732
Doane Pet Care Co........................ BTL-C B2 B+ 4.75 12/31/06 60,167 60,292
Dole Foods, Inc.......................... BTL-B NR BB 3.75 9/28/08 478,261 482,346
-----------
2,049,689
Broadcasting and Entertainment -- 14.28%
AT&T Comcast Corp........................ BTL NR BBB 1.38 4/26/04 135,220 134,544
CC VI Operating Partnership.............. BTL-B B3 CCC+ 2.50 11/12/08 497,500 445,107
Century Cable Holdings, LLC.............. Discretionary BTL NR NR 4.71 12/31/09 2,500,000 2,108,437
Century -- TCI California LP............. Revolver NR NR 2.00 12/31/07 1,000,000 943,333
Charter Communications Operating, LLC.... BTL-B B3 CCC+ 2.75 3/18/08 1,717,500 1,612,303
Classic Cable, Inc@...................... BTL-A NR NR 4.00 1/16/08 1,430,432 1,330,302
Classic Cable, Inc@...................... BTL-B Caa2 D 4.75 1/16/09 997,216 927,411
DIRECTV Holdings, LLC.................... BTL-B B1 NR 3.50 3/6/10 1,500,000 1,512,095
FrontierVision Operating Partners LP..... BTL-B NR NR 2.38 3/31/06 2,000,000 1,882,500
Insight Midwest Holdings, LLC............ BTL-B B1 BB 2.75 12/31/09 1,000,000 1,001,250
PANAMSAT Corp............................ BTL-B Ba3 B+ 3.50 12/31/08 1,500,000 1,509,242
Pegasus Media and Communications, Inc.@.. Initial BTL Caa1 CCC+ 3.50 4/30/05 3,210,853 3,098,473
RCN Corp................................. BTL-B Caa2 CCC+ 4.00 6/30/07 744,000 641,700
-----------
17,146,697
Buildings & Real Estate -- 2.50%
Interline Brands, Inc.................... BTL NR B+ 4.50 11/30/05 1,000,000 1,007,500
Lennar Corp.............................. Facility C Baa3 BBB- 1.75 12/15/08 993,333 995,196
Therma-Tru Corp.......................... BTL-B B1 BB- 3.00 2/20/10 997,500 1,000,929
-----------
3,003,625
Cargo Transport -- 0.18%
Atlas Freighter Leasing III, Inc.@....... BTL-A Ba3 NR 5.13 4/25/05 383,732 220,646
-----------
Chemicals, Plastics and Rubber -- 5.41%
Hercules, Inc. .......................... BTL-B Ba2 BB 3.25 5/15/07 997,500 1,002,904
Huntsman Corp............................ BTL-A B3 B+ 4.75 3/31/07 1,721,318 1,593,448
Huntsman Corp............................ BTL-B B3 B+ 6.75 3/31/07 842,247 779,680
Huntsman International, LLC.............. BTL-B B3 B+ 4.00 6/30/07 1,164,794 1,170,132
Huntsman International, LLC.............. Revolver B3 B+ 3.25 6/30/05 808,306 781,531
Huntsman International, LLC.............. BTL-C B3 B+ 4.25 6/30/08 1,164,794 1,169,890
-----------
6,497,585
See Notes to Financial Statements.
8
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited) (continued)
Ratings/1/
----------- Interest Maturity
Industry Description Type Moody's S&P Rate Date/2/ Par Value
- ---------------------------------------------------------------------- - ----------------------
Containers, Packaging and Glass -- 8.86%
Berry Plastics Corp........................ BTL-B B1 B+ 3.00% 6/30/10 $ 990,000 $ 995,445
Consolidated Container Co., LLC@........... BTL-B Caa1 B- 4.25 6/30/07 2,251,323 2,108,740
Constar International, Inc................. BTL-B B2 BB- 4.50 11/20/09 992,500 999,530
Crown Cork & Seal Co....................... BTL-B B1 BB- 4.25 9/15/08 1,500,000 1,509,844
Graham Packaging Co........................ Tranche B3 B 4.00 2/14/10 1,500,000 1,496,325
Pliant Corp. (Huntsman Pack)............... BTL-B B3 B+ 4.75 5/31/08 1,774,075 1,759,882
Riverwood International Corp............... BTL B3 B 2.75 12/31/06 1,776,119 1,774,038
-----------
10,643,804
Diversified/Conglomerate Manufacturing -- 0.24%
Metokote Corp.@............................ BTL-A1 B1 B+ 2.75 11/2/03 294,820 289,477
-----------
Diversified/Conglomerate Service -- 1.46%
Bridge Information Systems, Inc.*@......... BTL-B NR NR 4.00 5/29/05 546,098 60,071
United Rental, Inc......................... BTL B1 BB 3.00 8/31/07 1,693,304 1,692,775
-----------
1,752,846
Ecological -- 0.99%
Allied Waste North America, Inc............ BTL B1 NR 3.25 1/15/10 857,143 864,465
Allied Waste North America, Inc............ Tranche A B1 NR 3.25 1/15/10 142,857 143,946
IT Group, Inc.*@........................... BTL-B NR D 3.38 6/1/06 2,114,716 179,751
-----------
1,188,162
Electronics -- 2.99%
Amphenol Corp.............................. BTL-B NR BB+ 2.50 5/10/10 926,000 932,790
Dynamic Details, Inc.@..................... BTL-B NR NR 4.00 4/22/05 82,899 45,594
General Cable Corp......................... BTL-B B2 B 5.00 5/27/07 588,720 494,525
Solectron Corp............................. Revolver Ba3 BB- 3.00 2/12/04 1,500,000 1,455,000
Superior Telecom, Inc.@.................... BTL-A Caa2 NR 5.50 5/26/07 1,035,609 357,285
Superior Telecom, Inc.@.................... BTL-B Caa2 NR 5.50 11/27/05 880,150 303,652
-----------
3,588,846
Farming and Agriculture -- 1.34%
United Industries Corp..................... BTL-B B2 B+ 4.00 1/20/06 1,602,384 1,605,388
-----------
Healthcare, Education and Childcare -- 4.87%
Cross Country Healthcare, Inc.............. BTL NR BB- 3.25 6/05/09 1,000,000 1,007,500
Dade Behring, Inc.......................... BTL-A2 B2 B+ 4.25 10/3/08 955,274 961,543
Da Vita, Inc............................... BTL-B B1 BB- 3.00 3/31/09 990,000 992,612
Iasis Healthcare Corp...................... BTL-B B2 B 4.25 2/07/09 1,387,500 1,397,256
Insight Health Services Acquisition Corp... BTL-B B1 B+ 3.50 10/17/08 982,498 985,262
Oxford Health Plans, Inc................... BTL NR BB+ 2.75 4/30/08 500,000 502,500
-----------
5,846,673
Home and Office Furnishings, Housewares -- 3.15%
Buhrmann, Inc. NV.......................... BTL-B B2 B+ 4.00 10/26/07 2,851,873 2,836,544
National Bedding Co........................ BTL-B B2 B+ 3.75 8/31/08 939,857 942,353
-----------
3,778,897
See Notes to Financial Statements.
9
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited) (continued)
Ratings/1/
----------- Interest Maturity
Industry Description Type Moody's S&P Rate Date/2/ Par Value
- ------------------------------------------------------------------ - ---------------------
Hotels, Motels, Inns, and Gaming -- 5.61%
Extended Stay America, Inc................ BTL-B B1 BB- 3.50% 1/15/08 $1,844,913 $1,850,184
Marina District Finance Co., Inc.......... BTL-B B3 B+ 4.00 12/31/07 1,500,000 1,507,032
Penn National Gaming...................... BTL-B B2 B+ 4.00 9/01/07 809,188 811,110
Wyndham International, Inc................ BTL B2 B- 4.75 6/30/06 3,153,190 2,569,850
----------
6,738,176
Mining, Steel, Iron and Nonprecious Metals -- 3.63%
CII Carbon, LLC@.......................... BTL NR NR 3.25 6/25/08 204,123 181,669
Ispat Inland LP.@......................... BTL-B Caa2 B- 3.75 7/16/05 1,222,800 841,693
Ispat Inland LP.@......................... BTL-C Caa2 B- 3.75 7/16/06 1,222,800 841,693
Ispat Sidbec, Inc......................... BTL-B Caa2 B- 3.75 7/16/04 305,174 245,665
Ispat Sidbec, Inc......................... BTL-C Caa2 B- 4.20 7/16/05 305,174 245,665
OM Group, Inc............................. BTL-C B3 B+ 5.25 4/01/06 2,000,000 2,002,916
----------
4,359,301
Oil and Gas -- 2.80%
Tesoro Petroleum Corp..................... BTL B1 BB- 5.50 4/15/08 1,000,000 1,006,429
Tesoro Petroleum Corp..................... BTL B1 BB- 3.25 4/17/07 833,333 839,844
Williams Production Co.................... BTL NR B+ 3.75 5/30/07 1,500,000 1,511,250
----------
3,357,523
Personal and Nondurable Consumer Products -- 1.16%
Church & Dwight Co., Inc.................. BTL-B Ba2 BB 2.50 9/30/07 1,379,116 1,388,350
----------
Printing and Publishing -- 5.55%
American Color Graphics, Inc.@............ BTL-B B2 B+ 2.50 3/31/05 2,851,172 2,779,893
Dex Media East, LLC....................... BTL-B Ba3 BB- 4.00 11/8/09 910,569 924,391
Moore Corp................................ BTL-B Ba3 NR 3.00 3/15/10 1,000,000 1,008,906
R.H. Donnelly, Inc........................ BTL-B B1 BB 4.00 6/30/10 995,000 1,013,656
Reader's Digest Associations, Inc......... BTL-B Ba3 BB+ 2.75 5/20/08 949,627 942,335
----------
6,669,181
Retail Stores -- 0.71%
Quality Stores (Central Tractor)*@#....... BTL-B NR D 3.75 4/30/06 878,470 0
Weight Watchers International, Inc........ BTL-D NR BB 2.50 12/31/08 853,952 859,289
----------
859,289
Telecommunications -- 7.82%
Centennial Puerto Rico Operations Corp.... BTL-B Caa1 B- 3.25 5/31/07 376,063 366,347
Centennial Puerto Rico Operations Corp.... BTL-C Caa1 B- 3.50 11/30/07 586,502 573,305
Global Crossing Holding LTD*@............. BTL-B NR D 3.00 6/30/06 2,490,909 551,560
Nextel Finance Co......................... BTL-B B1 B+ 3.38 6/30/08 1,736,875 1,733,202
Nextel Finance Co......................... BTL-C B1 BB- 3.63 12/31/08 992,500 990,401
Ntelos, Inc............................... BTL-B Caa3 D 4.00 6/25/08 1,446,249 1,229,312
Rural Cellular Corp.@..................... BTL-B B3 B+ 3.25 10/3/08 1,571,562 1,495,603
Rural Cellular Corp.@..................... BTL-C B3 B+ 3.50 4/3/09 1,567,633 1,491,864
TSI Telecommunications Services, Inc...... BTL-B B1 B+ 4.50 12/31/06 966,724 959,474
----------
9,391,068
See Notes to Financial Statements.
10
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited) (continued)
- -----------------------------------
Ratings/1/
----------- Interest Maturity
Industry Description Type Moody's S&P Rate Date/2/ Par/Shares Value
- ---------------------------------------------------------------- - -------------------------
Textiles and Leather -- 2.95%
Globe Manufacturing Corp.*@......... BTL-B NR D 2.75% 7/15/06 $ 850,384 $ 25,512
Levi Strauss & Co................... BTL-B B3 BB- 4.25 7/31/06 976,696 963,267
Samsonite Corp.@.................... BTL B2 B- 3.50 6/24/05 1,522,389 1,400,598
Synthetic Industries, Inc........... BTL-B B3 NR 4.75 12/14/07 1,471,875 1,148,063
------------
3,537,440
Utilities -- 4.18%
Calpine Corp........................ BTL-B B1 B 3.75 5/10/04 1,424,347 1,418,294
CMS Energy.......................... Facility B B3 BB 5.50 4/30/04 171,892 171,999
CMS Energy.......................... Facility C B3 BB 7.00 9/30/04 250,230 251,012
Consumers Energy Co................. BTL Ba1 BB 4.50 7/11/04 166,667 167,813
Michigan Electric Transmission Co... BTL Baa3 NR 2.50 5/1/07 990,000 993,197
Southern California Edison Co....... BTL-B Ba3 BB 3.00 3/1/05 2,000,000 2,007,188
Weststar Energy, Inc................ Revolver Ba2 BB+ 3.00 6/6/05 6,667 6,250
------------
5,015,753
------------
TOTAL LOANS (Cost $109,865,383).................................. $100,417,072
------------
REGISTERED INVESTMENT COMPANIES -- 16.77%
SSgA Money Market Fund (Cost $20,138,216)........................ 20,138,216 $ 20,138,216
------------
TOTAL INVESTMENTS -- 100.40%
(Cost $130,003,599**)................................................. $120,555,288
------------
Liabilities in excess of other assets -- (0.40)%....................... $ (478,729)
------------
NET ASSETS -- 100.00%.................................................. $120,076,559
============
- --------
* Security is in default.
** Approximate cost for Federal Tax purposes.
@ Illiquid security.
# Fair valued.
BTL Bank Term Loan.
NR Security is not rated.
1 Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered below investment grade. Ratings are
unaudited. Ratings provided are as of June 30, 2003.
2 Loans in the Fund's portfolio are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a Borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown. The Fund
estimates that the actual maturity of the Loans held in its portfolio will
be approximately 48 months.
3 The Fund invests in Senior Loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks or the certificate of deposit rate. Senior Loans
are generally considered to be restricted in that the Fund is ordinarily
contractually obligated to receive approval from the Agent Bank and/or
borrower prior to the disposition of a Senior Loan.
See Notes to Financial Statements.
11
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited)
Note 1. Organization of the Fund
The SunAmerica Senior Floating Rate Fund, Inc. (the "Fund", formerly known
as the North American Senior Floating Rate Fund, Inc.) is a non-diversified
closed-end, investment management company. The Fund is organized as a
Maryland Corporation and is registered under the Investment Company Act of
1940, as amended. The Fund is managed by AIG SunAmerica Asset Management
Corp. (the "Adviser" or "SAAMCo"), an indirect wholly-owned subsidiary of
American International Group, Inc. ("AIG"). The Fund's investment objective
is to provide as high a level of current income as is consistent with the
preservation of capital by investing primarily in senior secured floating
rate debt obligations.
The Fund may offer four classes of shares. Class B shares are sold to the
public at net asset value and are subject to an Early Withdrawal Charge
which declines from 3% in the first year after purchase to zero after the
fourth year. Class C shares are sold to the public at net asset value and
are subject to an Early Withdrawal Charge of 1% in the first year after
purchase. Class D shares are sold and redeemed at net asset value, and were
issued to shareholders of the CypressTree Senior Floating Rate Fund upon its
merger into the Fund on May 11, 2001. Class D shares are sold only to
investors participating in a fee-based investment advisory program (wrap
program) or agency commission program, or to current Class D shareholders.
Class A shares are not currently offered, and are available only upon the
conversion of Class B and C shares after being held by the shareholders for
eight and ten years, respectively. The share classes differ in their
respective distribution and service fees. All classes have equal rights to
assets and voting privileges.
Indemnifications: Under the Fund's organizational documents, its officers
and directors are indemnified against certain liability arising out of the
performance of their duties to the Fund. In addition, in the normal course
of business the Fund enters into contracts that contain a variety of
representations and warranties which provide general indemnifications. The
Fund's maximum exposure under these arrangements are unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund expects the risk of loss to be remote.
Note 2. Significant Accounting Policies
The following is a summary of the significant accounting policies followed
by the fund in the preparation of the financial statements:
Estimates: The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make certain estimates and assumptions that affect
the amounts and disclosure reported for the reporting period and as of the
end of the reporting period. Actual results could differ from those
estimates.
Security Valuation: The Fund's investments in loan interests ("Loans") are
valued in accordance with guidelines established by the Board of Directors.
Under the Fund's current guidelines, Loans for which
12
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
an active secondary market exists to a reliable degree in the subadviser's
opinion will be valued at the mean of the last available bid and asked
prices in the market for such Loans, as provided by a Board-approved loan
pricing service. Loans for which an active secondary market does not exist
to a reliable degree in the subadviser's opinion will be valued at fair
value, which is intended to approximate market value. In valuing a Loan at
fair value, the following factors will be considered, (a) the
creditworthiness of the borrower and any intermediate participants, (b) the
terms of the Loan, (c) recent prices in the market for similar Loans, if
any, and (d) recent prices in the market for instruments of similar quality,
rate, and period until next interest rate reset and maturity. Other
portfolio securities may be valued on the basis of prices furnished by one
or more pricing services that determine prices for normal,
institutional-size trading units of such securities using market
information, transactions for comparable securities and various
relationships between securities which are generally recognized by
institutional traders. In certain circumstances, other portfolio securities
are valued at the last sale price on the exchange that is the primary market
for such securities, or the last quoted bid price for those securities for
which the over-the-counter market is the primary market or for listed
securities in which there were no sales during the day. Obligations
purchased with remaining maturities of 60 days or less are valued at
amortized cost unless this method is determined not to produce fair
valuation. Repurchase agreements and investments in money market funds are
valued at cost plus accrued interest and dividends. Securities for which
there exist no price quotations or valuations and all other assets are
valued at fair value as determined in good faith by or on behalf of the
Board of Directors of the Fund.
The senior Loans in which the Fund primarily invests are generally not
listed on any exchange and the secondary market for those senior Loans is
comparatively illiquid relative to markets for other fixed income
securities. Consequently, obtaining valuations for those Loans may be more
difficult than obtaining valuations for actively traded securities. Thus,
the value upon disposition on any given Loan may differ from its current
valuation.
Repurchase Agreements: The Fund may enter into repurchase agreements. When
the Fund enters into a repurchase agreement through its custodian, it
receives delivery of the underlying securities, the amount of which at the
time of purchase and each subsequent business day is required to be
maintained at such a level that the market value is equal to at least 102%
of the resale price, and the Fund will take constructive receipt of all
securities underlying the repurchase agreements until such agreements
expire. If the seller defaults, the Fund would suffer a loss to the extent
that proceeds from the sale of underlying securities were less than the
repurchase price. At June 30, 2003, the Fund did not enter into any
repurchase agreements.
Investment Income, Expenses, Dividends and Distributions to Shareholders and
Income Taxes: Interest income is determined on the basis of interest
accrued, adjusted for amortization of premium or discount. Dividend income
is recorded on the ex-dividend date. Facility fees received, which were
$509,042 for the six months ended June 30, 2003, are recognized as income
over the stated life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $175,569 for the
six months ended June 30, 2003, are recorded as income when received or
13
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
contractually due to the Fund. Net investment income, other than
class-specific expenses, and realized and unrealized gains and losses, are
allocated daily to each class of shares based upon the relative net asset
value of outstanding shares of each class of shares at the beginning of the
day (after adjusting for the current capital share activity of the
respective class).
Expenses common to each class of share are allocated among the classes based
upon their relative net asset values of each class or other appropriate
methods. Interest earned on cash balances held at the custodian are shown as
custody credits on the Statement of Operations.
The Fund issues and redeems shares, invests in securities and distributes
dividends from net investment income and net realized gains which are paid
in cash or are reinvested at the discretion of shareholders. These
activities are reported in the Statement of Changes in Net Assets.
Dividends from net investment income are accrued daily and paid monthly.
Capital gain distributions, if any, are paid annually. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined and presented in accordance with federal income
tax regulations, which may differ from accounting principles generally
accepted in the United States of America. These "book/tax" differences which
include different treatments for interest on defaulted securities, post
October losses and organization costs, are either considered temporary or
permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital accounts at fiscal
year end based on their federal tax-basis treatment; temporary differences
do not require reclassification. Net investment income/loss, net realized
gain/loss, and net assets are not affected. The Fund intends to comply with
the requirements of the Internal Revenue Code, as amended, applicable to
regulated investment companies and distribute all of its taxable income,
including any net realized gain on investments, to its shareholders.
Therefore, no federal tax provision is required.
Securities Transactions. Realized gains or losses on the sale of portfolio
assets are recognized on the settlement date using the specific
identification method.
Statement of Cash Flows: Information on financial transactions which have
been settled through the receipt or disbursement of cash is presented in the
Statement of Cash Flows. The cash amount shown in the Statement of Cash
Flows is the amount included in the Fund's Statement of Assets and
Liabilities and represents cash on hand at its custodian bank account, and
does not include any short-term investments at June 30, 2003.
14
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
Note 3. Capital Shares
The Fund has 1,000,000,000 of $.01 par value shares authorized that may be
issued in four different classes, of which three classes were outstanding
for the six months ended June 30, 2003. Share activity for the six months
ended June 30, 2003, and the year ended December 31, 2002, was as follows:
For the
six months ended
June 30, 2003 Year Ended
(unaudited) December 31, 2002
------------------------ ------------------------
Shares Capital Shares Capital
Class B ---------- ------------ ---------- ------------
Sold......................... 85,041 $ 753,063 378,450 $ 3,414,848
Reinvestment of distributions 50,613 450,875 113,871 1,013,694
Redeemed..................... (596,682) (5,285,424) (1,549,117) (13,874,711)
---------- ------------ ---------- ------------
Net increase (decrease)... (461,028) $ (4,081,486) (1,056,796) $ (9,446,169)
========== ============ ========== ============
For the
six months ended
June 30, 2003 Year Ended
(unaudited) December 31, 2002
------------------------ ------------------------
Shares Capital Shares Capital
Class C ---------- ------------ ---------- ------------
Sold......................... 589,600 $ 5,251,621 510,065 $ 4,590,514
Reinvestment of distributions 155,566 1,385,745 395,405 3,533,372
Redeemed..................... (2,043,211) (18,141,367) (6,686,276) (59,883,782)
---------- ------------ ---------- ------------
Net increase (decrease)... (1,298,045) $(11,504,001) (5,780,806) $(51,759,896)
========== ============ ========== ============
For the
six months ended
June 30, 2003 Year Ended
(unaudited) December 31, 2002
------------------------ ------------------------
Shares Capital Shares Capital
Class D ---------- ------------ ---------- ------------
Sold......................... 25,410 $ 228,386 44,039 $ 397,771
Reinvestment of distributions 30,860 274,924 80,245 717,010
Redeemed..................... (303,208) (2,694,004) (1,331,606) (11,869,996)
---------- ------------ ---------- ------------
Net increase (decrease)... (246,938) $ (2,190,694) (1,207,322) $(10,755,215)
========== ============ ========== ============
15
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
In order to provide shareholders with liquidity and the ability to receive
net asset value on a disposition of shares, the Fund will make monthly
offers to repurchase a percentage (usually 10%) of outstanding shares at net
asset value. Shareholders are sent a Notification of Repurchase Offer seven
to fourteen days before each monthly repurchase offer. During the six months
ended June 30, 2003 the Fund made six Repurchase Offers, and redeemed the
amounts shown in the table below. In no case was a monthly Repurchase Offer
oversubscribed.
Amount Tendered
------------------
Shares Capital
------- ----------
January. 544,789 $4,783,248
February 512,120 4,486,319
March... 959,429 8,480,084
April... 425,988 3,814,635
May..... 222,556 2,013,990
June.... 278,219 2,542,519
Note 4. Purchases And Sales Of Securities
During the six months ended June 30, 2003, the Fund's cost of purchases of
Loans and proceeds from Loan sales were $60,146,263 and $55,158,955,
respectively.
Note 5. Investment Advisory Agreement And Other Transactions With Affiliates
The Fund currently maintains an Investment Advisory Agreement with SAAMCo,
who is responsible for managing the corporate and business affairs of the
Fund, and selects, contracts with and compensates the subadviser to manage
the Fund's assets. As compensation for its services the Adviser receives
from the Fund an annual fee equal to the following percentage of average
daily gross assets: 0.85% for the first $1 billion of average daily gross
assets; 0.80% for average daily gross assets between $1 billion and $2
billion; and 0.75% for average daily gross assets of more than $2 billion.
For purposes of computing the advisory fee, average daily gross assets are
determined by deducting from total assets of the Fund all liabilities except
the principal amount of any indebtedness from money borrowed, including debt
securities issued by the Fund. For the six months ended June 30, 2003,
SAAMCo received advisory fees in the amount of $529,762.
Stanfield Capital Partners, LLC ("Stanfield") acts as sub-adviser to the
Fund pursuant to a Subadvisory Agreement with SAAMCo. Under the Subadvisory
Agreement, the Adviser manages the investment and reinvestment of the Fund's
assets. As compensation for its services as subadviser, Stanfield is
entitled to receive from SAAMCo an annual fee paid monthly equal to the
following percentage of average daily gross assets: 0.25% for the first $1
billion of average daily gross assets; 0.20% for average daily gross of more
than $1 billion. Stanfield received $155,813 as compensation for its
services. Average daily gross assets are computed as described above. The
fee paid to the subadviser is not an additional charge to the Fund or its
shareholders.
16
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
SAAMCo also serves as the Fund's Administrator under an Administration
Agreement and is responsible for managing the Fund's business affairs,
subject to supervision by the Fund's Board of Directors. For its services,
SAAMCo receives an annual fee equal to 0.40% of average daily gross assets
of the Fund. Average daily gross assets are computed as described above. For
the six months ended June 30, 2003 SAAMCo received administrator fees in the
amount of $249,501.
The Fund has adopted Distribution Plans ("Plans") applicable to Class B and
C shares to use the assets attributable to that class of shares of the Fund
to finance certain activities relating to the distribution of shares to
investors. The Plans are compensation plans providing for the payment to
SACS, of a fixed percentage of 0.50% of average net assets to finance
distribution expenses, and 0.25% of average net assets to finance service
fees. For the six months ended June 30, 2003 SACS received distribution fees
and early withdrawal charges on redemptions in the amount of $414,918 and
$40,803, respectively. For the six months ended June 30, 2003 SACS
voluntarily waived fees for the following classes: Class B $82,310, Class C
$202,092.
Pursuant to the Investment Advisory Agreement, the Adviser voluntarily
waived the advisory fee and reimbursed expenses in order to maintain an
expense ratio on the Fund that did not exceed a certain voluntary rate.
These rates are 1.45% for Class B, 1.50% for Class C, and 1.25% for Class D.
For the six months ended June 30, 2003, the Adviser waived fees and
reimbursed expenses for the following classes: Class B $81,156, Class C
$234,800, and Class D $38,233.
Note 6. Federal Income Taxes
The tax components of distributable earnings differs from the amounts
reflected in the Statement of Assets and Liabilities by temporary book/tax
differences primarily arising from post-October losses of $1,426,247. On a
tax basis, the Fund distributed ordinary income dividends of $7,219,296
during the year ended December 31, 2002 and had undistributed ordinary
income of $89,476 at December 31, 2002.
Capital Loss Carryforwards. At December 31, 2002 capital loss carryforwards
available to offset future recognized gains were approximately $19,256,504,
with $9,669 expiring in 2005, $334,309 expiring in 2007, $1,179,134 expiring
in 2008, $9,997,029 expiring in 2009, and $7,736,363 expiring in 2010.
Unrealized appreciation and depreciation in the value of investments at June
30, 2003 for federal income tax purposes were as follows:
Gross unrealized appreciation $ 250,333
Gross unrealized depreciation (9,698,644)
-----------
Net unrealized depreciation.. $(9,448,311)
===========
17
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
Note 7. Director Retirement Plan
The Directors of the SunAmerica Senior Floating Rate Fund, Inc. participate
in the SunAmerica Senior Floating Rate Fund's Disinterested Trustees' and
Directors' Retirement Plan ("Retirement Plan"). The Retirement Plan provides
generally that if an unaffiliated Director who has at least 10 years of
consecutive service as a Disinterested Director of the Fund (an "Eligible
Director") retires after reaching age 60 but before age 70, or dies while a
Director, such person will be eligible to receive a retirement or death
benefit from the Fund. As of each birthday, prior to the 70th birthday, but
in no event for a period greater than 10 years, each Eligible Director will
be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Director of the
Fund for the calendar year in which such birthday occurs. In addition, an
amount equal to 8.50% of any amounts credited under the preceding clause
during prior years, is added to each Eligible Director's account until such
Eligible Director reaches his or her 70th birthday. An Eligible Director may
elect to receive any benefits payable under the Retirement Plan, at his or
her election either in one lump sum or in up to fifteen annual installments.
Any undistributed amounts continue to accrue interest at 8.50% per year. As
of June 30, 2003, the Fund had accrued $745 for the Retirement Plan, which
is included in accrued expenses on the Statement of Assets and Liabilities
and for the six months ended June 30, 2003, expensed $745 for the Retirement
Plan, which is included in Directors fee and expenses on the Statement of
Operations.
Note 8. Line Of Credit
The Fund currently has an agreement with State Street Bank & Trust Company
that provides a $20,000,000 committed unsecured Line of Credit to the Fund
which will be used for cash overdraft protection. The Fund pays a commitment
fee of 0.10% on the unused portion annually, and interest is charged on any
borrowed amounts at the currently effective Federal Funds Rate plus 0.50%.
During the six months ended June 30, 2003, the Fund had borrowings
outstanding for 54 days under the line of credit and incurred $11,730 in
interest charges related to these borrowings. The Fund's average amount of
debt under the line of credit for the days utilized was $4,409,553 at a
weighted average interest of 1.80%.
Note 9. Senior Loan Participation Commitments
The Fund invests primarily in participations and assignments, or acts as a
party to the primary lending syndicate of a Variable Rate Senior Loan
interest to United States corporations, partnerships, and other entities. If
the lead lender in a typical lending syndicate becomes insolvent, enters
receivership or, if not FDIC insured, enters into bankruptcy, the Fund may
incur certain costs and delays in receiving payment, or may suffer a loss of
principal and/or interest. When the Fund purchases a participation of a
Senior Loan interest, the Fund typically enters into a contractual agreement
with the lender or other third party selling the participation, but not with
the borrower directly. As such, the Fund assumes the credit risk of the
Borrower, Selling Participant or other persons positioned between the Fund
and the Borrower.
18
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued)
Note 10. Unfunded Loan Commitments
On June 30, 2003, the Fund had the following unfunded loan commitment
securities which could be extended at the option of the Borrower:
Name Type Amount
---- ----------------------------- ----------
Amkor Technology, Inc.......... Revolver $1,969,294
Amkor Technology, Inc.......... Letter of Credit 19,343
Huntsman International LLC..... Revolver 1,194,967
Level 3 Communications, Inc.... Revolver 2,141,462
Lyondell Chemical Co........... Revolver 1,500,000
Ntelos, Inc.................... Debtor in Possession Revolver 500,000
Pacificare Health Systems, Inc. Revolver 176,423
Purina Mills, Inc.............. Revolver 165,967
Westar Energy, Inc............. Revolver 993,333
19
SunAmerica Senior Floating Rate Fund, Inc.
DIRECTORS INFORMATION -- June 30, 2003 -- (unaudited)
- ---------------------------------
The following table contains basic information regarding the Directors that
oversee operations of the Fund and other investment companies within the
Fund complex.
Number of
Term of Funds in
Position Office and Fund Other
Name, Held With Length of Complex Directorships
Address and SunAmerica Time Principal Occupations Overseen by Held by
Date of Birth* Complex Served During Past 5 Years Director(1) Director(2)
-------------- ---------- ---------- ------------------------------- ----------- ---------------------
Judith L. Craven Director Since Retired Administrator. 75 Director, A.G. Belo
DOB: October 6, 1945 June Corporation
2000 (1992 to present);
Director, Sysco
Corporation
(1996 to present);
Director, Luby's Inc.
(1998 to present).
William F. Devin Director Since Retired. 75 Member of the Board
DOB: December 30, 1938 August of Governors,
1998 Boston Stock
Exchange (1985-
Present).
Samual M Eisenstat Director Since Attorney, solo practitioner. 46 Director of North
DOB: March 7, 1940 November European Oil
2001 Royalty Trust.
Stephen J. Gutman Director Since Partner and Managing 46 None
DOB: May 10, 1943 November Member of B.B. Associates
2001 LLC (menswear specialty
retailing and other activities)
(June 1988 to present).
Peter A. Harbeck(3) Director Since President, CEO and Director, 83 None
DOB: January 23, 1954 November SAAMCo (August 1995 to
2001 present). Director, SACS
(August 1995 to present).
- --------
* The business address for each Director is the Haborside Financial
Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" consists of all registered investment company
portfolios for which SAAMCo serves as investment advisor or business
manager. The "Fund Complex" includes the SunAmerica Equity Funds (7
funds), SunAmerica Income Funds (6 funds), SunAmerica Money Market Funds
(2 funds), SunAmerica Senior Floating Rate Fund, Inc. (1 fund),
SunAmerica Strategic Investment Series, Inc. (7 funds), SunAmerica Style
Select Series, Inc. (15 portfolios), Anchor Pathway Fund (7 funds),
Anchor Series Trust (8 portfolios), Seasons Series Trust (19
portfolios), SunAmerica Series Trust (33 portfolios), VALIC Company I
(22 portfolios), and VALIC Company II (15 funds).
20
SunAmerica Senior Floating Rate Fund, Inc.
DIRECTORS INFORMATION -- June 30, 2003 -- (unaudited) (continued)
- ---------------------------------
(2) Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.
"public companies") or other investment companies registered under the
Investment Company Act of 1940.
(3) Interested Director, as defined in the Investment Company Act of 1940.
Additional information concerning the Directors is contained in the
Statement of Additional Information and is available without charge by
calling (800) 858-8850.
21
[LOGO] AIG Sun America
Mutual Funds
AIG SunAmerica Asset Management Corp.
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors Investment Adviser This report is submitted solely for the general
Judith L. Craven AIG SunAmerica Asset Management Corp. information of shareholders of the Fund.
William F. Devin Harborside Financial Center Distribution of this report to persons other
Samuel M. Eisenstat 3200 Plaza 5 than shareholders of the Fund is authorized
Stephen J. Gutman Jersey City, NJ 07311-4992 only in connection with a currently effective
Peter A. Harbeck prospectus, setting forth details of the Fund,
Distributor which must precede or accompany this report.
Officers AIG SunAmerica Capital Services, Inc.
Robert M. Zakem, President Harborside Financial Center The accompanying report has not been
Donna M. Handel, Treasurer 3200 Plaza 5 examined by independent accountants, and
Vacant, Secretary Jersey City, NJ 07311-4992 accordingly no opinion has been expressed
J. Steven Neamtz, Vice thereon.
President Shareholder Servicing Agent
Abbe P. Stein, Vice AIG SunAmerica Fund Services, Inc.
President and Assistant Harborside Financial Center
Secretary 3200 Plaza 5
Joseph P. Kelly, Assistant Jersey City, NJ 07311-4992
Secretary
Stacey V. Morrison, Custodian and Transfer Agent
Assistant Secretary State Street Bank and Trust Company
Laura E. Filippone, P.O. Box 219373
Assistant Treasurer Kansas City, MO 64141
Gregory R. Kingston, Vice
President and Assistant
Treasurer
Donald H. Guire, Assistant
Treasurer
Distributed by:
AIG SunAmerica Capital Services, Inc.
SFSAN-6/03
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Reserved.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Reserved.
Item 9. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures. Based on that evaluation, the
registrant's management, including the President and Treasurer,
concluded that the registrant's disclosure controls and procedures are
effective.
(b) During the period covered in this report there were no significant
changes in the registrant's internal controls. However, a situation
was discovered at the registrant's transfer agent which circumvented
internal controls related to abandoned property procedures. The
registrant is working with the transfer agent in developing corrective
actions and enhancing the existing internal controls.
Item 10. Exhibits.
(a) Not applicable.
(b) (1) Certification pursuant to Rule 30a-2 under the Investment Company
Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit 99.CERT.
(2) Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 attached hereto as Exhibit 99.906.CERT.
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.
SunAmerica Senior Floating Rate Fund, Inc.
By: /s/Robert M. Zakem
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Robert M. Zakem
President
Date: September 8, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/Robert M. Zakem
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Robert M. Zakem
President
Date: September 8, 2003
By: /s/Donna M. Handel
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Donna M. Handel
Treasurer
Date: September 8, 2003