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)
Vincent M. Marra
Senior Vice President
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) 324-6464
Date of fiscal year end: December 31
Date of reporting period: June 30, 2007
Item 1. Reports to Stockholders
[GRAPHIC]
SEMI-ANNUAL REPORT 2007
AIG SUNAMERICA
Senior Floating Rate Fund
[LOGO]
AIG
Sun America
Mutual Funds
Table of Contents
SHAREHOLDERS' LETTER............... 1
STATEMENT OF ASSETS AND LIABILITIES 4
STATEMENT OF OPERATIONS............ 6
STATEMENT OF CHANGES IN NET ASSETS. 7
STATEMENT OF CASH FLOWS............ 8
FINANCIAL HIGHLIGHTS............... 9
PORTFOLIO OF INVESTMENTS........... 14
NOTES TO FINANCIAL STATEMENTS...... 23
June 30, 2007 SEMI-ANNUAL REPORT
Shareholders' Letter
Dear Shareholders:
We are pleased to present the semi-annual shareholder report for the
SunAmerica Senior Floating Rate Fund for the six-month period ended June 30,
2007.
The leveraged loan market opened the year as strong as it closed 2006. New
issue institutional volume for the first quarter reached $137 billion, easily
surpassing the previous quarter's record of $100 billion. The momentum
continued into the second quarter as institutional volume reached $169 billion.
The record level of new issuance is being driven by leveraged buy-outs as
private equity firms continue to make acquisitions. Demand for the leveraged
loan asset class continues to stem from record collateralized loan obligation
(CLO) issuance, near-record mutual fund inflows and high-yield investors who
see better relative value in loans versus bonds.
The reference interest rate for which most of our loans are based, the
London Interbank Offer Rate (LIBOR), remained in a narrow range during the
semi-annual period, providing consistent returns for the Fund. Also positively
impacting the Fund's performance was the continued decline in market default
rates, which reached a low of 0.29% as of quarter-end, June 30, 2007. The
SunAmerica Senior Floating Rate Fund didn't own any loans that defaulted during
the semi-annual period.
Concerns over sub-prime mortgages have led investors to reevaluate their
risk exposure. In this evolving environment, we will continue to emphasize
fundamental research and strive to identify attractive investment opportunities.
We thank you for your continued investment in the fund.
Sincerely,
THE AIG SUNAMERICA SENIOR FLOATING RATE FUND PORTFOLIO MANAGERS
AIG Global Investment Group
Thomas G. Brandt
John G. Lapham
Steven S. Oh
- --------
Past performance is no guarantee of future results.
The Fund is not a money market fund and its net asset value may fluctuate.
Investments in loans involve certain risks including nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of full liquidity, which may impair the Fund's ability
to obtain full value for loans sold. The Fund may invest all or substantially
all of its assets in loans or other securities that are rated below investment
grade or in comparable unrated securities. Credit risks include the possibility
of a default on the loan or bankruptcy of the borrower. The value of these
loans is subject to a greater degree of volatility in response to interest-rate
fluctuations.
1
SunAmerica Senior Floating Rate Fund, Inc.
EXPENSE EXAMPLE -- June 30, 2007 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of the SunAmerica Senior Floating Rate Fund, Inc. (the
"Fund"), you may incur two types of costs: (1) transaction costs, including
sales charges on purchase payments and contingent deferred sales charges and
(2) ongoing costs, including management fees, distribution and service fees,
and other Fund expenses. The example set forth below is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at January 1, 2007 and
held until June 30, 2007.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended June 30, 2007" to estimate the expenses you paid on your account
during this period. In addition, the "Expenses Paid During the Six Months Ended
June 30, 2007" column does not include administrative fees that may apply to
qualified retirement plan accounts. See the Fund's prospectus and/or your
retirement plan documents for a full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended June 30, 2007"
column would have been higher and the "Ending Account Value" would have been
lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is
not the Fund's actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder
reports of other funds. In addition, the "Expenses Paid During the Six Months
Ended June 30, 2007" column does not include administrative fees that may apply
to qualified retirement plan accounts. See the Fund's prospectus and/or your
retirement plan document for full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended June 30, 2007"
column would have been higher and the "Ending Account Value" would have been
lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges and
administrative fees, if applicable to your account. Please refer to the Fund's
prospectus and/or qualified retirement plan document for more information.
Therefore, the "Hypothetical" example is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transaction costs and other fees were
included, your costs would have been higher.
2
SunAmerica Senior Floating Rate Fund
EXPENSE EXAMPLE -- June 30, 2007 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------------- -----------------------------------------------------
Ending
Account Ending Account
Value Using Expenses Paid Value using Expenses Paid
Beginning Actual During the Beginning a Hypothetical 5% During the
Account Value Returns at Six Months Ended Account Value Assumed Return at Six Months Ended
at January 1, 2007 June 30, 2007 June 30, 2007* at January 1, 2007 June 30, 2007 June 30, 2007*
------------------ ------------- ---------------- ------------------ ----------------- ----------------
Senior Floating Rate Fund
Class A#+............. $1,000.00 $1,033.04 $7.31 $1,000.00 $1,017.60 $7.25
Class B#.............. $1,000.00 $1,031.52 $8.81 $1,000.00 $1,016.12 $8.75
Class C#.............. $1,000.00 $1,031.52 $8.81 $1,000.00 $1,016.12 $8.75
Class D#.............. $1,000.00 $1,034.08 $6.30 $1,000.00 $1,018.60 $6.26
Class Q#+............. $1,000.00 $1,033.05 $7.31 $1,000.00 $1,017.60 $7.25
Expense
Ratio
as of
June 30,
2007*
--------
Senior Floating Rate Fund
Class A#+............. 1.45%
Class B#.............. 1.75%
Class C#.............. 1.75%
Class D#.............. 1.25%
Class Q#+............. 1.45%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 181 days divided by 365
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges and administrative
fees, if applicable to your account. Please refer to your Prospectus and/or
your qualified retirement plan document for more information.
# During the stated period, the investment adviser and distributor either
waived a portion of or all of the fees and assumed a portion of or all
expenses for the Funds. As a result, if these fees and expenses had not been
waived, the "Actual/Hypothetical Ending Account Value" would have been lower
and the "Actual/Hypothetical Expenses Paid During the Six Months Ended June
30, 2007" and the "Expense Ratios" would have been higher.
+ Effective October 4, 2006, Class A shares were redesignated to Class Q
shares and a new class of shares designated as Class A commenced offering.
3
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2007 -- (unaudited)
ASSETS:
Long-term investment securities, at value (unaffiliated)*............. $347,122,968
Short-term investment securities, at value (unaffiliated)*............ 32,803,013
------------
Total investments.................................................... 379,925,981
Receivable for:
Fund shares sold..................................................... 6,569,806
Dividends and interest............................................... 3,578,495
Investments sold..................................................... 8,569,902
Prepaid expenses and other assets..................................... 19,698
Due from investment adviser for expense reimbursements/fee waivers.... 114,238
Due from distributor for fee waivers.................................. 64,412
------------
Total assets......................................................... 398,842,532
------------
LIABILITIES:
Payable for:
Fund shares redeemed................................................. 720,277
Investments purchased................................................ 25,438,323
Investment advisory and management fees.............................. 251,180
Distribution and service maintenance fees............................ 186,881
Administration fees.................................................. 118,202
Transfer agent fees and expenses..................................... 79,844
Directors' fees and expenses......................................... 29,710
Other accrued expenses............................................... 141,988
Dividends payable..................................................... 676,454
Commitments ( Note 11)................................................ --
------------
Total liabilities.................................................... 27,642,859
------------
Net assets......................................................... $371,199,673
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value.......................................... $ 394,555
Additional paid-in capital............................................ 399,155,613
------------
399,550,168
Accumulated undistributed net investment income (loss)................ (35,884)
Accumulated undistributed net realized gain (loss) on investments..... (27,181,805)
Unrealized appreciation (depreciation) on investments................. (1,132,806)
------------
Net assets........................................................... $371,199,673
============
*COST
Long-term investment securities (unaffiliated).. $348,255,774
============
Short-term investment securities (unaffiliated). $ 32,803,013
============
See Notes to Financial Statements
4
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2007 -- (unaudited)
(continued)
Class A:
Net assets................................................... $ 84,840,377
Shares outstanding........................................... 9,017,493
Net asset value and redemption price per share............... $ 9.41
Maximum sales charge (3.75% of offering price)............... 0.37
------------
Maximum offering price to public............................. $ 9.78
============
Class B:
Net assets................................................... $ 22,920,043
Shares outstanding........................................... 2,436,156
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charges) $ 9.41
============
Class C:
Net assets................................................... $246,577,385
Shares outstanding........................................... 26,209,403
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charges) $ 9.41
============
Class D:
Net assets................................................... $ 13,424,478
Shares outstanding........................................... 1,427,106
Net asset value, offering and redemption price per share..... $ 9.41
============
Class Q:
Net assets................................................... $ 3,437,390
Shares outstanding........................................... 365,329
Net asset value, offering and redemption price per share..... $ 9.41
============
See Notes to Financial Statements
5
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF OPERATIONS -- For the six months ended June 30, 2007 --
(unaudited)
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $10,312,786
Dividends (unaffiliated).......................................................... 762,694
Facility and other fee income (Note 2)............................................ 164,666
-----------
Total investment income........................................................ 11,240,146
-----------
EXPENSES:
Investment advisory and management fees........................................... 1,223,763
Administration fees............................................................... 575,889
Distribution and service maintenance fees:
Class A......................................................................... 71,939
Class B......................................................................... 92,646
Class C......................................................................... 770,866
Class Q......................................................................... 2,347
Transfer agent fees and expenses:
Class A......................................................................... 50,628
Class B......................................................................... 30,601
Class C......................................................................... 236,827
Class D......................................................................... 17,188
Class Q......................................................................... 2,706
Registration fees:
Class A......................................................................... 13,907
Class B......................................................................... 5,460
Class C......................................................................... 9,961
Class D......................................................................... 11,102
Class Q......................................................................... 4,018
Accounting service fees........................................................... 31,716
Custodian and accounting fees..................................................... 51,985
Reports to shareholders........................................................... 55,399
Audit and tax fees................................................................ 40,521
Legal fees........................................................................ 298
Directors' fees and expenses...................................................... 29,954
Other expenses.................................................................... 33,155
-----------
Total expenses before fee waivers, expense reimbursements and custody credits.. 3,362,876
Fees waived and expenses reimbursed by investment adviser and distributor...... (943,200)
Custody credits earned on cash balances........................................ (1,364)
-----------
Net expenses................................................................... 2,418,312
-----------
Net investment income (loss)...................................................... 8,821,834
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)............................ 210,565
Change in unrealized appreciation (depreciation) on investments (unaffiliated).... (429,843)
-----------
Net realized and unrealized gain (loss) on investments............................ (219,278)
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $ 8,602,556
===========
See Notes to Financial Statements
6
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
For the
six months For the year
ended ended
June 30, 2007 December 31,
(unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)......................................... $ 8,821,834 $ 13,291,634
Net realized gain (loss) on investments (unaffiliated)............... 210,565 305,142
Net unrealized gain (loss) on investments (unaffiliated)............. (429,843) (23,250)
------------ ------------
Increase (decrease) in net assets resulting from operations........... 8,602,556 13,573,526
------------ ------------
Distributions To Shareholders From:
Net investment income (Class A)...................................... (1,302,617) (91,162)
Net investment income (Class B)...................................... (748,939) (1,606,103)
Net investment income (Class C)...................................... (6,225,050) (10,179,734)
Net investment income (Class D)...................................... (482,044) (1,385,857)
Net investment income (Class Q)...................................... (59,499) (28,646)
------------ ------------
Total distributions to shareholders................................... (8,818,149) (13,291,502)
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 3)................................................ 137,814,324 30,005,042
------------ ------------
Total increase (decrease) in net assets............................... 137,598,731 30,287,066
============ ============
NET ASSETS:
Beginning of period................................................... 233,600,942 203,313,876
------------ ------------
End of period+........................................................ 371,199,673 233,600,942
============ ============
- --------
+ Includes accumulated undistributed net investment income (loss)..... $ (35,884) $ (39,569)
============ ============
See Notes to Financial Statements
7
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CASH FLOWS -- For the six months ended June 30, 2007 --
(unaudited)
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Net increase in net assets from operations................................................................... $ 8,602,556
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchase of loans.......................................................................................... (296,287,147)
Proceed from loans sold.................................................................................... 96,738,463
Loan principal paydowns.................................................................................... 74,243,274
Net purchases of short-term securities..................................................................... (19,719,926)
Accretion of facility fee income........................................................................... (11,415)
Increase in receivable for dividends and interest.......................................................... (722,728)
Increase in receivable for investments sold................................................................ (4,442,420)
Decrease in amount due from investment adviser for expense reimbursements/fee waivers...................... 7,474
Increase in amount due from distributor for fee waivers.................................................... (20,333)
Decrease in prepaid expenses and other assets.............................................................. 25,828
Increase in payable for investments purchased.............................................................. 16,428,948
Increase in payable for investment advisory and management fees............................................ 87,183
Increase in payable for distribution and maintenance fees.................................................. 56,333
Increase in payable for administration fees................................................................ 41,027
Decrease in other accrued expenses......................................................................... (22,066)
Unrealized depreciation on investments..................................................................... 429,843
Net realized gain from investments......................................................................... (210,565)
-------------
Net cash used in operating activities........................................................................ $(124,775,671)
-------------
Cash flows from financing activities:
Proceeds from shares sold.................................................................................... 171,145,083
Payment on shares redeemed................................................................................... (43,277,623)
Cash dividends paid.......................................................................................... (3,091,789)
-------------
Net cash provided by financing activities.................................................................... $ 124,775,671
-------------
Net increase in cash......................................................................................... --
Cash balance at beginning of period.......................................................................... --
-------------
Cash balance at end of period................................................................................ $ --
=============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $5,484,112.
See Notes to Financial Statements
8
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS
Class A+
---------------------
For the For the
six months period from
ended 10/04/06*
06/30/07 through
(unaudited) 12/31/06
----------- -----------
Net Asset Value, Beginning of Period.................................. $ 9.40 $ 9.39
Investment Operations:
Net investment income (loss)@......................................... 0.25 0.38
Net realized and unrealized gain (loss) on investments................ 0.06 (0.22)
------- -------
Total from investment operations..................................... 0.31 0.16
------- -------
Distributions:
Dividends from net investment income.................................. (0.30) (0.15)
------- -------
Net Asset Value, End of Period........................................ $ 9.41 $ 9.40
------- -------
Total Return(1)....................................................... 3.30% 1.75%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $84,840 $14,165
Ratio of net expenses to average net assets........................... 1.45%# 1.45%#
Ratio of net investment income to average net assets.................. 6.34%# 6.78%#
Portfolio turnover rate............................................... 63% 61%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.07%# 3.26%#
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.72%# 4.97%#
- --------
+ Effective October 4, 2006, Class A shares were redesignated to Class Q
shares and a new class of shares designated as Class A commenced offering.
* Inception date of class
@ Calculated based upon average shares outstanding.
# Annualized
(1)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
See Notes to Financial Statements
9
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS -- (continued)
Class B
-------------------------------------------------------
For the
six months
ended Year Year Year Year Year
06/30/07 ended ended ended ended ended
(unaudited) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
----------- -------- -------- -------- -------- --------
Net Asset Value, Beginning of Period.................................. $ 9.40 $ 9.39 $ 9.41 $ 9.33 $ 8.78 $ 9.03
Investment Operations:
Net investment income (loss)@......................................... 0.29 0.59 0.41 0.29 0.40 0.40
Net realized and unrealized gain (loss) on investments................ 0.01 0.01 (0.02) 0.08 0.54 (0.26)
------- ------- ------- ------- ------- -------
Total from investment operations..................................... 0.30 0.60 0.39 0.37 0.94 0.14
------- ------- ------- ------- ------- -------
Distributions:
Dividends from net investment income.................................. (0.29) (0.59) (0.41) (0.29) (0.39) (0.39)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period........................................ $ 9.41 $ 9.40 $ 9.39 $ 9.41 $ 9.33 $ 8.78
------- ------- ------- ------- ------- -------
Total Return(1)....................................................... 3.15% 6.55% 4.24% 3.97% 10.95% 1.54%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $22,920 $25,885 $25,181 $27,530 $26,565 $31,906
Ratio of net expenses to average net assets........................... 1.75%# 1.75% 1.75% 1.75% 1.54% 1.45%
Ratio of net investment income to average net assets.................. 6.07%# 6.25% 4.36% 3.04% 4.35% 4.42%
Portfolio turnover rate............................................... 63% 61% 57% 24% 75% 112%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.47%# 2.45% 2.38% 2.38% 2.57% 2.51%
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.35%# 5.55% 3.73% 2.41% 3.33% 3.36%
- --------
@ Calculated based upon average shares outstanding.
# Annualized
(1)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
See Notes to Financial Statements
10
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS -- (continued)
Class C
---------------------------------------------------
For the
six months
ended Year Year Year Year
06/30/07 ended ended ended ended
(unaudited) 12/31/06 12/31/05 12/31/04 12/31/03
----------- -------- -------- -------- --------
Net Asset Value, Beginning of Period.................................. $ 9.40 $ 9.39 $ 9.41 $ 9.33 $ 8.78
Investment Operations:
Net investment income (loss)@......................................... 0.28 0.59 0.42 0.28 0.38
Net realized and unrealized gain (loss) on investments................ 0.02 0.01 (0.03) 0.09 0.56
-------- -------- -------- -------- --------
Total from investment operations..................................... 0.30 0.60 0.39 0.37 0.94
-------- -------- -------- -------- --------
Distributions:
Dividends from net investment income.................................. (0.29) (0.59) (0.41) (0.29) (0.39)
-------- -------- -------- -------- --------
Net Asset Value, End of Period........................................ $ 9.41 $ 9.40 $ 9.39 $ 9.41 $ 9.33
-------- -------- -------- -------- --------
Total Return(1)....................................................... 3.15% 6.54% 4.24% 3.97% 10.92%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $246,577 $176,743 $154,584 $174,583 $103,726
Ratio of net expenses to average net assets........................... 1.75%# 1.75% 1.75% 1.75% 1.59%
Ratio of net investment income to average net assets.................. 6.06%# 6.26% 4.36% 3.06% 4.22%
Portfolio turnover rate............................................... 63% 61% 57% 24% 75%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.41%# 2.39% 2.32% 2.35% 2.51%
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.40%# 5.62% 3.79% 2.46% 3.31%
--------
Year
ended
12/31/02
--------
Net Asset Value, Beginning of Period.................................. $ 9.03
Investment Operations:
Net investment income (loss)@......................................... 0.40
Net realized and unrealized gain (loss) on investments................ (0.27)
-------
Total from investment operations..................................... 0.13
-------
Distributions:
Dividends from net investment income.................................. (0.38)
-------
Net Asset Value, End of Period........................................ $ 8.78
-------
Total Return(1)....................................................... 1.47%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $86,101
Ratio of net expenses to average net assets........................... 1.50%
Ratio of net investment income to average net assets.................. 4.33%
Portfolio turnover rate............................................... 112%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.48%
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 3.36%
- --------
@ Calculated based upon average shares outstanding.
# Annualized
(1)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
See Notes to Financial Statements
11
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS -- (continued)
Class D
-------------------------------------------------------
For the
six months
ended Year Year Year Year Year
06/30/07 ended ended ended ended ended
(unaudited) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
----------- -------- -------- -------- -------- --------
Net Asset Value, Beginning of Period.... $ 9.40 $ 9.39 $ 9.41 $ 9.33 $ 8.78 $ 9.03
Investment Operations:
Net investment income (loss)@........... 0.31 0.66 0.47 0.33 0.43 0.43
Net realized and unrealized gain (loss)
on investments......................... 0.01 (0.01) (0.03) 0.08 0.54 (0.27)
------- ------- ------- ------- ------- -------
Total from investment operations....... 0.32 0.65 0.44 0.41 0.97 0.16
------- ------- ------- ------- ------- -------
Distributions:
Dividends from net investment income.... (0.31) (0.64) (0.46) (0.33) (0.42) (0.41)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period.......... $ 9.41 $ 9.40 $ 9.39 $ 9.41 $ 9.33 $ 8.78
------- ------- ------- ------- ------- -------
Total Return(1)......................... 3.41% 7.08% 4.76% 4.49% 11.28% 1.72%
Ratios/Supplemental Data
Net assets, end of period ($000's)...... $13,424 $16,034 $23,148 $27,630 $13,369 $15,037
Ratio of net expenses to average net
assets................................. 1.25%# 1.25% 1.25% 1.25% 1.25% 1.25%
Ratio of net investment income to
average net assets..................... 6.57%# 6.71% 4.86% 3.60% 4.63% 4.58%
Portfolio turnover rate................. 63% 61% 57% 24% 75% 112%
Expense ratio before waiver of fees and
reimbursement of expenses.............. 1.81%# 1.72% 1.60% 1.62% 1.86% 1.77%
Net investment income ratio before
waiver of fees and reimbursement of
expenses............................... 6.01%# 6.24% 4.51% 3.23% 4.02% 4.06%
- --------
@ Calculated based upon average shares outstanding.
# Annualized
(1)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
See Notes to Financial Statements
12
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS -- (continued)
Class Q(2)
--------------------------------------
For the For the
six months period from
ended Year Year 4/28/04*
06/30/07 ended ended through
(unaudited) 12/31/06 12/31/05 12/31/04
----------- -------- -------- -----------
Net Asset Value, Beginning of Period.................................. $ 9.40 $ 9.39 $ 9.41 $ 9.42
Investment Operations:
Net investment income (loss)@......................................... 0.25 0.59 0.43 0.22
Net realized and unrealized gain (loss) on investments................ 0.06 0.04 (0.01) (0.01)
------ ------ ------ ------
Total from investment operations..................................... 0.31 0.63 0.42 0.21
------ ------ ------ ------
Distributions:
Dividends from net investment income.................................. (0.30) (0.62) (0.44) (0.22)
------ ------ ------ ------
Net Asset Value, End of Period........................................ $ 9.41 9.40 $ 9.39 $ 9.41
------ ------ ------ ------
Total Return(1)....................................................... 3.31% 6.86% 4.55% 2.22%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $3,437 $ 773 $ 401 $ 224
Ratio of net expenses to average net assets........................... 1.45%# 1.45% 1.45% 1.45%#
Ratio of net investment income to average net assets.................. 6.34%# 6.57% 4.74% 3.44%#
Portfolio turnover rate............................................... 63% 61% 57% 24%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.37%# 4.06% 4.32% 9.31%#
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.42%# 3.97% 1.87% (4.42)%#
- --------
* Inception date of class
@ Calculated based upon average shares outstanding.
# Annualized
(1)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(2)Effective October 4, 2006, Class A shares were redesignated to Class Q
shares and a new class of shares designated as Class A commenced offering.
See Notes to Financial Statements
13
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO PROFILE -- June 30, 2007 -- (unaudited)
Industry Allocation*
Broadcasting & Entertainment........................ 10.6%
Registered Investment Companies..................... 8.8
Printing and Publishing............................. 7.6
Healthcare, Education and Childcare................. 7.5
Retail Stores....................................... 6.1
Telecommunications.................................. 5.3
Utilities........................................... 4.9
Leisure, Amusement, Entertainment................... 4.8
Chemicals, Plastics and Rubber...................... 4.5
Oil and Gas......................................... 4.5
Buildings & Real Estate............................. 4.4
Electronics......................................... 3.7
Hotels, Motels, Inns and Gaming..................... 3.7
Finance............................................. 3.2
Beverage, Food & Tobacco............................ 3.1
Cargo Transport..................................... 3.0
Containers, Packaging and Glass..................... 2.8
Diversified/Conglomerate Manufacturing.............. 2.4
Machinery........................................... 1.7
Personal Transportation............................. 1.6
Automobile.......................................... 1.4
Personal, Goods and Misc. Services.................. 1.4
Diversified/Conglomerate Service.................... 1.1
Aerospace/Defense................................... 0.9
Home and Office Furnishings, Housewares and Durables 0.9
Mining, Steel, Iron and Nonprecious Metals.......... 0.9
Personal and Nondurable Consumer Products........... 0.8
Ecological.......................................... 0.5
Textiles and Leather................................ 0.3
-----
102.4%
=====
Credit Quality+#
BB+............. 1.4%
BB.............. 5.2
BB-............. 16.1
B+.............. 27.5
B............... 28.9
B-.............. 10.8
CCC+............ 1.7
CCC............. 0.6
Not Rated@...... 7.8
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets.
@ Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
+ Source: Standard and Poors
# Calculated as a percentage of total debt issues, excluding short-term
securities.
14
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- -------------------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 92.9%
Aerospace/Defense -- 0.8%
Axle Tech International.............. BTL-B B2 B+ 7.35% 10/21/12 $ 223,214 $ 224,236
McKechnie Aerospace De, Inc.......... 2nd Lien Caa1 CCC+ 10.36 05/11/15 1,500,000 1,515,625
SI International, Inc................ BTL B1 B+ 7.32-7.34 02/09/11 716,804 720,835
Wesco International.................. 2nd Lien Caa1 B+ 11.11 03/28/14 500,000 508,958
-----------
2,969,654
-----------
Automobile -- 1.3%
FleetPride Corp...................... BTL-B B3 B 8.09 06/06/13 226,563 227,057
KAR Holdings, Inc.................... BTL B2 B- 7.61 10/20/13 1,000,000 1,002,000
Key Safety Systems, Inc.............. 1st Lien B2 B+ 7.57-9.50 03/08/14 1,496,250 1,495,314
Ozburn-Hessey Holding Co. LLC........ BTL B3 B 8.57-8.65 08/10/12 514,714 513,427
United Components, Inc............... Tranche D B3 B 7.61 06/30/10 493,182 495,030
Visteon Corp......................... BTL-B B3 B 8.35 04/06/14 1,000,000 1,003,660
-----------
4,736,488
-----------
Beverage, Food & Tobacco -- 3.1%
Aramark Corp......................... LOC B1 B+ 7.35 01/26/14 131,683 131,944
Aramark Corp......................... BTL B1 B+ 7.36 01/26/14 2,537,818 2,542,865
B&G Foods, Inc....................... BTL-B B2 B 7.36 02/23/13 565,217 569,103
Best Brands Corp..................... BTL-C Caa1 B 11.82 06/30/13 1,421,817 1,421,817
Birds Eye Foods, Inc................. BTL B1 B- 7.11 03/22/13 864,167 864,977
Dean Foods Co........................ BTL-B Ba3 BB 6.86 04/02/14 997,500 997,438
Dole Food Co., Inc................... BTL-B B2 B 7.44-9.25 04/12/13 206,686 206,112
Dole Food Co., Inc................... BTL-C B2 B 7.44-9.25 04/12/13 688,953 687,040
Dole Food Co., Inc................... CLD B2 B 5.23 04/12/13 93,023 92,765
Fresh Start Bakeries, Inc............ 2nd Lien Caa1 CCC+ 11.13 03/29/14 250,000 253,125
Leiner Health Products Group, Inc.... BTL-B B3 B- 9.83 05/27/11 491,139 486,382
NPC International, Inc............... BTL B2 B+ 7.07-7.11 05/03/13 1,666,667 1,670,313
Pierre Foods, Inc.................... BTL-B B1 B+ 7.57 06/30/10 702,738 705,813
Pinnacle Foods Group, Inc............ BTL-B B3 B- 8.11 03/30/14 1,000,000 1,001,979
-----------
11,631,673
-----------
Broadcasting & Entertainment -- 10.6%
Century -- TCI California LP(5)...... Revolver NR NR 8.25 12/31/07 10,000 9,900
Cequel Communications LLC............ 2nd Lien B2 B+ 7.36-9.25 11/05/13 1,995,000 1,987,972
Charter Communications Operating LLC. BTL Caa1 B- 7.32 03/06/14 4,000,000 3,970,000
Citadel Broadcasting Co.............. BTL-B Ba3 B+ 6.95 05/31/14 6,000,000 5,962,500
CSC Holdings, Inc.................... BTL-B B2 BB 7.07 02/24/12 2,477,487 2,479,450
Cumulus Media, Inc................... BTL Ba3 B 7.07-7.11 06/07/14 1,973,333 1,979,090
Gray Television, Inc................. BTL-B Ba3 B 6.82-6.86 12/31/14 1,000,000 997,656
Haights Cross Operating Co........... BTL B1 B- 9.86 08/20/08 1,441,338 1,447,644
HIT Entertainment, Ltd............... 2nd Lien B3 B 10.86 02/26/13 1,000,000 1,010,938
Insight Midwest Holdings LLC......... BTL-B B1 BB- 7.35 04/06/14 3,000,000 3,010,548
Intelsat Zeus, Ltd................... BTL B2 B+ 7.35 07/03/13 980,075 983,750
Mission Broadcasting, Inc............ BTL-B B2 B 7.11 08/14/12 1,194,914 1,193,420
Nexstar Broadcasting, Inc............ BTL-B B2 B 7.11 08/14/12 1,131,856 1,130,441
NextMedia Operating.................. 2nd Lien Caa1 B 9.82 11/15/13 500,000 503,282
PanAmSat Corp........................ BTL-A B2 B+ 7.35 07/03/12 129,357 130,146
PanAmSat Corp........................ BTL-B2 B2 B+ 7.35 08/22/11 4,274,853 4,291,555
Persona Communication, Inc........... Delayed Draw B2 B 8.07-10.00 10/12/13 95,750 96,408
Persona Communication, Inc........... 1st Lien B2 B 8.07-10.00 10/12/13 154,250 155,310
Persona Communication, Inc........... 2nd Lien Caa1 B 11.35 10/12/13 1,000,000 1,015,625
Radio Systems Corp................... BTL-B B1 B 8.07-10.00 09/15/13 496,250 501,058
Spanish Broadcasting Systems, Inc.... 1st Lien B1 B- 7.11 06/10/12 977,500 978,722
Univision Communications, Inc.(8).... BTL-B B1 B 7.61 03/28/14 3,758,389 3,711,951
WideOpenWest Finance LLC............. BTL B3 B- 7.60-9.50 06/22/14 1,000,000 995,000
Young Broadcasting, Inc.............. BTL B3 CCC+ 7.88 11/03/12 980,000 984,165
-----------
39,526,531
-----------
15
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Ratings/(1)/
-----------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ------------------------------------------------------------------------------------------------------------------
Buildings & Real Estate -- 4.5%
Atrium Cos., Inc....................... BTL B2 B 8.59-8.61% 05/31/12 $ 440,821 $ 436,046
Brand Services, Inc.................... 1st Lien B1 NR 7.63 02/07/14 1,995,000 2,002,481
Brickman Group Holdings, Inc........... BTL-B B2 B+ 7.40 01/23/14 1,997,500 2,002,494
Building Materials Holding Corp........ Junior 2nd Lien Caa1 BB- 11.13 02/22/15 1,000,000 983,333
Building Materials Holding Corp........ BTL B2 BB- 8.19 02/22/14 995,006 983,439
LandSource Communities Development LLC. 1st Lien Ba3 BB 8.11-10.00 02/27/13 997,500 1,000,227
LandSource Communities Development LLC. 2nd Lien B2 BB 9.86 02/27/14 500,000 504,375
Masonite International Corp............ BTL B2 B+ 7.35-7.36 04/05/13 1,472,480 1,432,049
Masonite International Corp............ CND TL B2 B+ 7.35-7.36 04/05/13 1,469,976 1,429,613
North Las Vegas........................ 1st Lien B2 BB- 8.07 05/09/11 290,911 292,366
North Las Vegas........................ 2nd Lien Caa1 BB- 12.32 05/09/12 250,000 251,875
PGT Industries, Inc.................... BTL-A2 B2 B 8.32 02/14/12 513,979 514,621
Realogy Corp........................... CLD B3 BB 8.32 04/10/13 742,424 736,134
Realogy Corp........................... CLTL B3 B+ 8.35 10/10/13 2,757,576 2,734,214
Tensar Earth Technologies.............. BTL-B B2 B- 8.11 10/31/12 985,018 989,943
Yellowstone Club....................... 2nd Lien B1 B+ 7.70 09/30/10 224,933 225,004
-----------
16,518,214
-----------
Cargo Transport -- 3.0%
Cardinal Logistics Management, Inc..... 2nd Lien NR NR 11.07 03/23/14 1,000,000 970,000
Dockwise Transport BV.................. BTL-B NR NR 8.24 04/01/15 244,379 245,325
Dockwise Transport BV.................. BTL-B2 NR NR 7.74 04/01/15 500,000 500,000
Dockwise Transport BV.................. BTL-C NR NR 8.19 04/01/16 244,379 246,426
Dockwise Transport BV.................. BTL-C2 NR NR 8.19 04/01/16 500,000 500,000
Dockwise Transport BV.................. BTL-D1 NR NR 9.81 07/12/16 500,000 509,999
Dockwise Transport BV.................. BTL-D2 NR NR 9.81 07/12/16 1,000,000 1,000,000
Greatwide Logistics Services, Inc...... 2nd Lien Caa1 B- 11.86 06/19/14 1,000,000 964,375
Hertz Corp............................. Tranche B Ba3 BB- 7.09-7.11 12/21/12 348,906 350,882
RailAmerica, Inc....................... BTL-B Ba3 NR 7.61 12/30/08 1,000,000 1,003,125
Swift Transportation Co., Inc.......... BTL-B B2 B 8.38 05/10/14 5,000,000 4,947,320
-----------
11,237,452
-----------
Chemicals, Plastics & Rubber -- 4.5%
Brenntag AG............................ BTL-B2 B2 B 7.89 01/20/14 200,909 201,725
Brenntag AG............................ BTL B2 B 7.89 01/20/14 49,091 49,582
Celanese AG............................ BTL-B Ba3 BB- 7.10 04/02/14 2,500,000 2,507,813
Cognis GmbH............................ BTL-C B1 B 7.36 05/01/15 1,000,000 1,004,625
Cristal Inorganic Chemicals US, Inc.... 1st Lien B2 B+ 7.57 05/21/14 1,000,000 1,005,625
Hexion Specialty Chemicals, Inc........ BTL-C1 B2 B 7.63 05/05/13 815,377 818,791
Hexion Specialty Chemicals, Inc........ BTL-C2 B2 B 7.63 05/05/13 176,677 177,417
Huntsman International LLC............. BTL-B Ba3 BB- 7.07 04/19/14 2,000,000 2,002,678
Ineos US Finance LLC................... BTL-B Ba3 B+ 7.58 12/16/13 742,500 748,378
Ineos US Finance LLC................... BTL-C Ba3 B+ 8.08 12/16/14 742,500 748,378
ISP Chemco, Inc........................ BTL-B Ba3 BB- 7.13 02/15/13 1,500,000 1,502,813
Kraton Polymers LLC.................... BTL-B B1 B+ 7.37-9.75 05/12/13 436,563 439,474
Momentive Performance.................. BTL B3 B 7.63 12/04/13 995,000 997,591
PQ Corp................................ BTL B1 B+ 7.32 02/11/12 733,125 734,958
Rockwood Specialties Group, Inc........ Tranche D B1 B+ 7.11 12/13/13 1,960,000 1,971,393
Wellman, Inc........................... 2nd Lien Caa1 B- 12.11 02/10/10 1,000,000 926,429
Yankee Candle Co....................... BTL-B B2 B 7.36 02/06/13 1,000,000 1,004,479
-----------
16,842,149
-----------
Containers, Packaging & Glass -- 2.8%
Boise Cascade Holdings LLC(8).......... BTL-E Ba2 BB 6.84-6.88 04/30/14 1,629,961 1,630,572
Captive Plastics....................... BTL B2 B- 8.11 08/18/11 427,426 430,632
Captive Plastics....................... 2nd Lien B3 B- 12.61 02/18/12 1,000,000 1,012,500
Domtar, Inc............................ BTL Ba3 BB- 6.74 03/05/14 1,800,000 1,794,825
Georgia-Pacific Corp................... BTL-B Ba3 BB- 7.11 12/20/12 1,970,000 1,976,735
Graham Packaging Co. LP................ BTL-B B2 B 7.63 10/30/11 2,992,500 3,007,196
MMGS Packaging Acquisition............. 2nd Lien NR NR 10.85 03/10/14 500,000 505,938
-----------
10,358,398
-----------
16
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Ratings/(1)/
-----------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------
Diversified/Conglomerate Manufacturing -- 2.4%
Accuride Corp............................... BTL-B B1 B+ 7.38% 01/31/12 $1,107,727 $ 1,115,738
Aearo Technologies, Inc..................... 2nd Lien Caa1 B 10.86 11/30/14 1,340,000 1,358,425
Cinram International, Inc................... BTL-B B1 BB- 7.36 05/05/11 994,975 992,399
Culligan International Co................... BTL-B B2 B 7.57-7.61 11/24/12 1,000,000 1,003,750
Enersys Capital, Inc........................ BTL Ba3 BB 7.11-7.15 03/17/11 582,075 585,349
Maxim Crane Works LP........................ BTL-B B1 B+ 7.36 06/29/14 1,000,000 1,000,000
Oshkosh Truck Corp.......................... BTL-B Ba3 BB 7.11 12/06/13 995,000 999,350
Polypore, Inc............................... BTL B3 B 8.32 11/12/11 941,270 943,623
RGIS LLC(8)................................. BTL-B B2 B- 7.86 05/01/14 952,381 955,754
-----------
8,954,388
-----------
Diversified/Conglomerate Service -- 1.1%
Billing Services Group...................... BTL-A B1 B+ 7.88 05/11/12 468,750 471,094
Bridge Information Systems, Inc.+#@(5)(6)... BTL-B Caa1 D 11.25 05/29/05 412,852 0
Coinstar, Inc............................... BTL Ba2 BB- 7.35 07/07/11 790,473 794,920
NES Rentals Holdings........................ 2nd Lien Caa1 B+ 12.13 07/20/13 2,157,140 2,181,857
Protection One, Inc......................... BTL B2 B+ 7.57-7.61 04/18/11 460,635 462,795
-----------
3,910,666
-----------
Ecological -- 0.5%
Allied Waste North America, Inc............. BTL-B B1 BB 7.06-7.15 03/28/14 1,130,795 1,135,238
Allied Waste North America, Inc............. CLD B1 BB 7.07 03/28/14 614,258 617,099
-----------
1,752,337
-----------
Electronics -- 3.1%
Advanced Micro Devices, Inc................. BTL B1 B+ 7.36 12/31/13 677,422 677,037
Affiliated Computer Services................ FSRI Ba2 B+ 7.32 03/20/13 990,000 993,619
Aspect Software, Inc........................ Tranche A-1 B2 B 8.36 07/11/11 496,250 499,972
Infor Global Solutions...................... Delayed Draw B3 B- 9.10 07/28/12 340,286 342,838
Infor Global Solutions...................... BTL B3 B- 9.11-9.12 07/28/12 652,214 657,187
Itron, Inc.................................. BTL B1 B+ 7.36 04/18/14 997,500 1,003,579
Reynolds & Reynolds Co...................... 1st Lien B1 B+ 7.36 10/25/12 974,207 980,209
Reynolds & Reynolds Co...................... 2nd Lien B3 B+ 10.86 10/25/13 250,000 256,250
Sensata Technologies........................ BTL-B B2 B+ 7.11 04/30/13 1,989,950 1,989,498
Sungard Data Systems, Inc................... BTL-B B2 B+ 7.36 02/28/14 3,920,300 3,941,477
-----------
11,341,666
-----------
Finance -- 3.2%
Amwins Group, Inc........................... 1st Lien B2 B- 7.82-7.84 06/08/13 2,000,000 2,005,000
Bankruptcy Management Solutions............. 2nd Lien Caa1 B 11.57 07/31/13 248,125 253,088
Hub International Holdings, Inc.(8)......... BTL B3 B 7.86 06/13/14 2,450,980 2,451,748
iPayment, Inc............................... BTL-B B2 B 7.32-7.35 05/10/13 1,982,462 1,967,594
Nasdaq Stock Market, Inc.................... BTL-B Ba3 BB+ 7.07 04/18/12 484,419 485,933
Nasdaq Stock Market, Inc.................... BTL-C Ba3 BB+ 7.07 04/18/12 280,806 281,684
National Processing Co. LLC................. 1st Lien B3 B 8.35-10.25 09/29/13 992,308 996,029
National Processing Co. LLC................. 2nd Lien Caa2 B 11.85 09/29/14 500,000 502,188
Neff Corp................................... 2nd Lien B3 B+ 8.90 10/31/14 500,000 503,646
NES Tanks................................... 2nd Lien B2 B 9.11 04/06/14 500,000 504,688
Rental Service Corp......................... 2nd Lien B3 B+ 8.82-10.75 11/30/13 795,841 809,569
RiskMetrics Group Holdings LLC.............. 2nd Lien B3 B 10.86 07/11/14 250,000 253,125
TransFirst Holdings, Inc.................... BTL-B B2 B+ 8.11 08/15/13 1,000,000 1,000,625
-----------
12,014,917
-----------
17
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare, Education & Childcare -- 7.5%
AMR/EmCare Holdings................................... BTL B1 B+ 7.32-7.36% 02/10/12 $ 643,770 $ 646,184
CHG Cos., Inc......................................... 2nd Lien B3 CCC+ 11.32 01/08/14 1,000,000 1,020,000
Community Health Systems, Inc......................... BTL B1 BB- 7.07-7.11 08/19/11 1,295,531 1,299,782
Community Health Systems, Inc......................... Incremental BTL B1 BB- 7.07-7.09 02/28/12 992,500 995,756
Community Health Systems, Inc......................... BTL-B Ba3 NR 7.57 06/01/14 4,000,000 4,000,000
ComPsych Investment Corp.............................. BTL-B B2 NR 8.07 04/20/12 902,500 904,756
DaVita, Inc........................................... BTL-B Ba3 BB- 6.85-6.88 10/05/12 2,000,000 2,005,156
Gambro AB............................................. BTL-B B2 B- 7.87 12/06/14 500,000 503,334
Gambro AB............................................. BTL-C B2 B- 8.37 12/06/15 500,000 505,417
HCA, Inc.............................................. BTL-B B2 B+ 7.61 11/18/13 2,985,000 3,001,615
Health Management Associates.......................... BTL-B Ba3 B+ 7.11 02/16/14 2,992,500 2,998,877
IASIS Healthcare Corp................................. Delayed Draw B2 B 7.36 06/15/14 273,450 273,963
IASIS Healthcare Corp................................. LOC B2 B 7.32 06/15/14 127,186 127,424
IASIS Healthcare Corp................................. BTL B2 B 7.37 06/15/14 1,392,377 1,394,987
Magellan Health Services, Inc......................... BTL Ba2 B+ 7.11 08/15/08 138,889 139,236
Magellan Health Services, Inc......................... CLC Ba2 B+ 5.20 08/15/08 277,778 278,472
PTS Pharmaceuticals................................... BTL-B B2 B+ 7.61 04/10/14 2,000,000 1,996,876
Reable Therapeutics Finance LLC....................... BTL-B B2 B 7.86-7.90 11/03/13 992,500 994,672
Royalty Pharma AG..................................... BTL-B Baa2 BB+ 6.82-6.84 05/14/13 1,496,250 1,502,796
Spectrum Labs......................................... BTL-B NR NR 8.61 12/23/11 985,000 982,538
Team Health, Inc...................................... BTL-B B2 B+ 7.36 11/23/12 246,875 247,698
Vanguard Health Systems, Inc.......................... Tranche 1 Ba3 B 7.61 09/23/11 975,261 980,342
Warner Chilcott Corp.................................. BTL-B B2 B+ 7.36 01/18/12 937,624 942,144
Warner Chilcott Corp.................................. BTL-C B2 B+ 7.36 01/18/12 258,307 259,552
-----------
28,001,577
-----------
Home & Office Furnishings, Housewares & Durables -- 0.9%
Jarden Corp........................................... BTL-B1 B1 B+ 7.11 01/24/12 1,033,162 1,036,176
Jarden Corp........................................... BTL-B2 B1 B+ 7.11 01/24/12 550,300 552,077
National Bedding Co................................... 2nd Lien Caa1 B+ 10.36 08/31/12 1,000,000 1,011,875
Simmons Co............................................ Tranche D B2 B 7.38-7.44 12/19/11 843,120 846,984
-----------
3,447,112
-----------
Hotels, Motels, Inns, & Gaming -- 3.7%
CCM Merger, Inc....................................... BTL-B B1 B 7.36 07/13/12 490,003 493,142
Fairmont Hotels and Resorts........................... BTL-B NR NR 8.57 06/15/11 750,327 756,892
Golden Nugget, Inc.................................... 1st Lien B2 B+ 7.32 06/08/14 1,000,000 1,000,000
Green Valley Ranch Gaming LLC......................... 2nd Lien Caa1 B 8.61 07/08/14 1,000,000 1,007,250
Isle of Capri Casinos, Inc............................ BTL Ba3 BB- 7.09 02/04/11 292,500 293,719
Las Vegas Sands, Inc.................................. BTL Ba3 BB- 7.11 04/17/14 3,000,000 2,997,321
Penn National Gaming, Inc............................. BTL-B Ba2 BB 7.11 10/03/12 1,965,000 1,969,800
Riviera Holdings Corp................................. BTL-B B2 B+ 7.36 05/30/14 2,000,000 2,000,000
Trump Entertainment Resorts Holdings LP............... BTL-B1 B3 B 7.86-9.75 05/20/12 490,000 493,522
Trump Entertainment Resorts Holdings LP............... BTL-B2 B3 B 7.86-7.87 05/20/12 490,000 493,522
Venetian Macau, Ltd................................... BTL B1 BB- 7.61 04/01/13 500,000 504,546
Venetian Macau, Ltd................................... BTL-B B1 BB- 7.61 05/26/13 166,667 168,182
Wembley, Inc.......................................... 1st Lien B1 B+ 7.82-7.88 08/11/11 245,004 245,617
Wembley, Inc.......................................... 2nd Lien B3 B+ 9.63 08/11/11 250,000 251,406
Wimar Landco LLC...................................... BTL B2 B 7.61 01/07/12 1,000,000 1,007,232
-----------
13,682,151
-----------
18
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- --------------------------------------------------------------------------------------------------------------------
Leisure, Amusement, Entertainment -- 4.8%
24 Hour Fitness Worldwide, Inc................ BTL-B B2 B 7.85-7.88% 06/08/12 $1,975,000 $ 1,990,223
Audio Visual Services Group, Inc.............. 2nd Lien B3 CCC+ 10.86 08/28/14 1,000,000 1,003,125
Cedar Fair LP................................. BTL Ba3 B+ 7.32 08/30/12 990,000 995,260
Deluxe Entertainment Service Group, Inc....... CND TL B1 B 7.61 05/11/14 78,740 79,023
Deluxe Entertainment Service Group, Inc....... Tranche A B1 B 5.26 05/11/13 39,370 39,512
Deluxe Entertainment Service Group, Inc....... BTL-B B1 B 7.61 05/11/14 881,890 885,059
Fender Musical Instruments Corp.(8)........... BTL-B B1 B+ 7.65 06/06/14 666,667 669,167
Hicks Sports Group............................ BTL-B NR NR 7.88 12/22/10 3,000,000 3,000,939
Metro-Goldwyn-Mayer Studios, Inc.............. BTL-B Ba3 B 8.61 04/08/12 2,962,500 2,973,032
Panavision, Inc............................... 2nd Lien Caa1 B- 12.32-12.36 03/30/12 500,000 505,313
Six Flags Theme Parks, Inc.................... BTL B3 B 7.61 05/17/14 2,000,000 1,982,678
True Temper Sports, Inc....................... BTL B3 B- 8.54-8.62 03/15/11 357,975 358,870
WMG Acquisition Corp.(8)...................... BTL-B Ba3 BB- 7.36 01/18/12 3,373,479 3,387,769
-----------
17,869,970
-----------
Machinery -- 1.7%
Baldor Electric Co............................ BTL B1 BB- 7.13 01/31/14 1,807,552 1,815,084
Bombardier Capital, Inc....................... BTL B1 B+ 7.86 06/28/13 911,392 913,956
Generac Power Systems, Inc.................... 1st Lien B2 B 7.86 11/09/13 990,000 975,415
Generac Power Systems, Inc.................... 2nd Lien Baa1 B 11.36 05/10/14 1,000,000 957,188
Gleason Corp.................................. BTL B2 B+ 7.63 06/30/13 672,727 676,932
NACCO Materials Handling Group, Inc........... BTL B2 BB- 7.32-7.36 03/21/13 997,487 998,734
-----------
6,337,309
-----------
Mining, Steel, Iron & Nonprecious Metals -- 0.9%
Aleris International, Inc..................... BTL B2 B+ 7.38 12/19/13 997,500 990,331
Algoma Steel, Inc............................. BTL-B B3 B 7.86 06/08/13 1,000,000 1,000,000
Freeport-McMoRan Copper & Gold, Inc........... BTL-B Ba2 BB+ 9.00 03/19/14 653,333 654,464
Novelis, Inc.................................. BTL B1 BB- 7.59 01/07/12 345,621 346,404
Novelis, Inc.................................. CND TL B1 BB- 7.61 01/07/12 193,579 194,018
Walter Industries, Inc........................ BTL Ba3 B+ 7.07-7.11 10/03/12 122,020 122,264
-----------
3,307,481
-----------
Oil & Gas -- 4.5%
Alon USA, Inc. (Edgington Facility)........... BTL B2 B+ 7.57-7.61 06/22/13 27,500 27,663
Alon USA, Inc. (Paramount Facility)........... BTL B2 B+ 7.57-7.61 06/22/13 220,000 221,306
ATP Oil & Gas Corp............................ BTL NR NR 8.82-10.75 04/14/10 997,489 1,005,438
Big West Oil LLC(8)........................... BTL-B B1 B+ 7.61 05/15/14 900,000 902,532
Calumet Lubricants Co. LP..................... BTL B2 BB- 8.86 11/09/12 109,444 109,718
Calumet Lubricants Co. LP..................... CLD B2 B 5.21 11/09/12 111,111 111,389
CDX Funding LLC............................... 2nd Lien NR NR 11.57 03/31/13 1,000,000 1,026,875
Coffeyville Resources LLC..................... LOC B2 B+ 8.35 12/28/10 162,162 163,378
Coffeyville Resources LLC..................... BTL-B B2 B+ 8.35-10.25 12/28/13 835,743 847,235
Connacher Oil & Gas, Ltd...................... BTL-B B1 BB- 8.61 10/20/13 1,000,000 1,010,000
Dresser, Inc.................................. 1st Lien B2 B 7.86 05/04/14 2,000,000 2,011,042
Dresser, Inc.................................. 2nd Lien B3 B 11.11 05/04/14 1,000,000 1,014,625
Helix Energy Solutions Group, Inc............. BTL-B B2 BB- 7.32-7.35 05/05/13 992,455 996,074
Key Energy Services, Inc...................... Tranche C B3 CCC 7.82-7.86 06/30/12 985,000 990,233
Kinder Morgan, Inc............................ BTL-B Ba2 BB- 6.82 05/08/14 2,000,000 2,000,892
McJunkin Corp................................. BTL B1 B+ 7.59 01/30/14 995,000 1,001,219
Targa Resources, Inc.......................... LOC B1 B+ 7.24 10/31/12 96,774 97,334
Targa Resources, Inc.......................... BTL-B B1 B+ 7.36 10/31/12 396,169 398,460
Venoco, Inc................................... 2nd Lien Caa1 B- 9.36 04/01/14 1,000,000 1,010,000
Western Refining Co. LP(8).................... BTL B1 BB- 7.07 02/28/14 1,607,143 1,609,152
-----------
16,554,565
-----------
19
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ------------------------------------------------------------------------------------------------------------------------
Personal & Nondurable Consumer Products -- 0.8%
American Achievement Corp....................... BTL-B Ba3 B 7.57-9.50% 03/25/11 $ 606,948 $ 610,868
Bushnell Performance Optics..................... BTL-B B2 B 8.32-10.00 08/19/11 491,463 494,126
Hillman Group, Inc.............................. BTL-B B2 B 8.38 03/30/11 806,437 811,982
Huish Detergents, Inc........................... 2nd Lien Caa1 CCC+ 9.57 10/26/14 1,000,000 992,500
-----------
2,909,476
-----------
Personal, Goods & Misc. Services -- 1.4%
Central Parking Corp............................ LOC Ba2 B 7.57 05/22/14 189,655 190,841
Central Parking Corp............................ 1st Lien Ba2 B 7.57 05/22/14 810,345 815,409
Garden Fresh Restaurants Corp................... BTL-B B2 B 8.60 06/22/11 738,982 741,754
NEP, Inc........................................ BTL-B B1 B 7.61 02/16/14 997,498 1,002,175
Sabre Holdings Corp............................. BTL-B B2 B+ 7.61 03/30/13 1,943,615 1,929,341
Travelport, Inc................................. BTL-B B2 B 7.82 08/23/13 419,677 422,085
Travelport, Inc................................. LOC B2 B+ 7.86 08/08/13 44,611 44,867
-----------
5,146,472
-----------
Personal Transportation -- 1.6%
Continental Airlines, Inc....................... BTL-A1 B2 B 8.74 06/01/11 285,714 286,071
Continental Airlines, Inc....................... BTL-A2 B2 B 8.74 06/01/11 714,286 715,179
Delta Air Lines, Inc............................ 2nd Lien B2 B 8.61 04/01/14 1,000,000 1,008,500
United Airlines, Inc............................ Tranche B B1 B 7.38 02/02/14 2,000,000 1,996,720
US Airways Group, Inc........................... BTL B3 B- 7.86 03/21/14 2,000,000 2,007,916
-----------
6,014,386
-----------
Printing & Publishing -- 7.6%
Advanstar Communications, Inc................... 2nd Lien Caa2 B 10.32 11/30/14 1,000,000 1,005,208
Affinity Group, Inc............................. BTL Ba1 B 7.82 06/24/09 1,126,163 1,128,978
Affinity Group, Inc............................. BTL-A Ba1 B+ 7.84 03/20/14 243,210 243,818
Caribe Information Investment, Inc.............. BTL-B B2 B 7.61 03/31/13 1,882,086 1,886,791
Discovery Communications, Inc................... BTL-B NR NR 7.36 05/01/14 3,000,000 3,016,407
GateHouse Media Operating, Inc.................. Delayed Draw B1 B+ 7.35-7.36 08/28/07 543,478 540,353
GateHouse Media Operating, Inc.................. BTL B1 B+ 7.36 08/28/14 2,456,522 2,442,397
Idearc, Inc..................................... BTL-B Ba3 BB 7.36 11/17/11 1,990,000 2,000,288
National CineMedia, Inc......................... BTL B1 B+ 7.11 02/13/15 1,000,000 999,196
Penton Media, Inc............................... BTL-B B1 B+ 7.60-7.61 02/01/13 997,500 1,001,241
Primedia, Inc................................... BTL B2 B 7.57 09/30/13 1,081,624 1,080,272
Reader's Digest Associations, Inc............... BTL-B B2 B 7.33-7.38 03/01/14 997,500 998,201
Thomas Nelson Publishers........................ BTL-B B2 B 7.54-7.61 06/12/12 496,250 498,111
Thompson Publishing Group, Inc.................. BTL B3 NR 8.07 07/05/14 3,000,000 2,970,000
Tribune Co...................................... BTL-B Ba3 BB- 8.32 05/01/14 6,000,000 5,872,500
Valassis Communications, Inc.(8)................ BTL B1 B+ 7.11 03/02/14 1,502,733 1,498,789
Yell Group, Ltd................................. BTL-B Ba3 BB- 7.32 10/27/12 1,000,000 1,006,970
-----------
28,189,520
-----------
Retail Stores -- 6.1%
Claire's Stores, Inc............................ BTL-B B3 B 8.11 05/29/14 3,000,000 2,953,125
CSK Automotive, Inc............................. BTL B1 B+ 8.35 06/30/12 992,519 1,006,166
David's Bridal, Inc............................. BTL B2 B 7.40 01/31/14 2,000,000 1,985,416
General Nutrition Centers....................... BTL-B B3 B- 7.60 08/16/13 2,000,000 1,989,376
JRD Holdings, Inc............................... BTL B1 B+ 7.82 05/15/17 1,000,000 1,003,125
Michaels Stores, Inc............................ BTL B2 B- 7.63 10/31/13 3,000,000 2,975,418
Neiman-Marcus Group, Inc........................ BTL B1 B+ 7.32-7.36 04/06/13 860,760 864,727
Petco Animal Supplies, Inc...................... BTL-B B2 B 7.86 10/25/13 497,500 501,009
Quality Stores, Inc. (Central Tractor)+#@(5)(6). BTL-B Caa2 NR 10.75 04/30/07 833,705 0
Sally Holdings LLC.............................. BTL-B B2 B 7.86 11/01/13 992,500 998,221
Smart & Final, Inc.............................. 1st Lien B1 B 8.36 05/21/14 597,990 597,990
Smart & Final, Inc.............................. 2nd Lien B3 CCC 12.13 11/21/14 1,000,000 1,000,000
Supervalu, Inc.................................. BTL-B Ba3 BB- 6.82-6.86 06/02/12 990,000 993,455
The Pantry, Inc.(8)............................. BTL B1 BB- 7.07 05/04/14 1,555,556 1,560,743
Toys R Us, Inc.................................. BTL B2 B 9.61 07/19/12 2,000,000 2,039,306
VCA Antech, Inc................................. BTL-B Ba3 BB- 6.82 02/11/11 2,000,000 1,997,500
-----------
22,465,577
-----------
20
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Ratings/(1)/
-----------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------
Telecommunications -- 5.3%
American Cellular Corp................ BTL-B B1 B- 7.32% 04/01/14 $1,995,000 $ 1,995,832
Centennial Cellular Operating Co. LLC. BTL B2 B- 7.36 02/09/11 1,375,000 1,383,471
Cricket Communications, Inc........... BTL-B B2 B- 7.36 06/16/13 2,970,000 2,981,880
Crown Castle Operating Co............. BTL Ba3 BB 6.82-6.90 01/26/14 2,000,000 2,002,188
FairPoint Communications, Inc......... BTL-B B1 BB- 7.13 02/08/12 1,000,000 1,001,719
Hargray Communications Group, Inc..... BTL B2 B 7.57 06/29/14 2,000,000 2,005,000
Hawaiian Telecom...................... BTL-B B2 B- 7.61 06/01/14 991,111 991,111
IPC Systems, Inc...................... 1st Lien B2 B 7.57 05/31/14 1,000,000 994,063
IPC Systems, Inc...................... 2nd Lien Caa1 B 10.57 05/31/14 1,000,000 997,500
MetroPCS Wireless, Inc................ BTL-B B2 B- 7.63 11/02/13 992,500 996,718
Ntelos, Inc........................... BTL-B1 Ba3 B 7.57 08/24/11 1,448,137 1,455,378
Paetec Communications, Inc............ 1st Lien B2 B 8.82 02/15/13 997,500 1,003,360
Sorenson Communications, Inc.......... Tranche B B2 B 7.86 11/15/12 489,254 489,254
Syniverse Technologies, Inc........... BTL-B Ba3 BB- 7.11 02/15/12 1,187,281 1,189,507
------------
19,486,981
------------
Textiles & Leather -- 0.3%
Globe Manufacturing Corp.+#@(5)(6).... BTL-B Caa2 NR 11.00 07/16/06 837,014 0
Hanesbrands, Inc...................... BTL-B Ba3 B+ 7.11 09/05/13 926,071 929,913
William Carter Co..................... BTL-B Ba3 BB 6.82-6.86 07/14/12 343,280 343,709
------------
1,273,622
------------
Utilities -- 4.9%
Boston Generating LLC................. BTL-B B1 B+ 7.61 12/20/13 775,414 779,506
Boston Generating LLC................. Synthetic LOC B1 B+ 5.23 12/20/13 172,414 173,324
Boston Generating LLC................. Synthetic LOC B1 B+ 7.48 12/20/13 48,276 48,531
Calpine Corp.......................... BTL Ba3 BB- 7.61 04/01/09 997,500 999,890
Concho Resources, Inc................. 2nd Lien NR NR 9.10 03/28/12 2,000,000 2,003,750
Entegra Power Group LLC............... 2nd Lien B3 B+ 7.86 03/30/14 498,750 500,075
KGen Power Corp....................... LOC Ba3 BB- 7.13 01/31/14 375,000 375,703
KGen Power Corp....................... BTL Ba3 BB- 7.13 01/31/14 621,875 623,041
La Paloma Generating Co............... Delayed Draw B1 BB- 7.11 08/16/12 14,865 14,846
La Paloma Generating Co............... LOC B1 BB- 7.07 08/16/12 32,787 32,746
La Paloma Generating Co............... BTL-C B3 BB- 8.85 11/18/12 250,000 251,354
La Paloma Generating Co............... BTL-B B1 BB- 7.11 08/16/12 186,645 186,412
LS Power Acquisition Co............... 1st Lien B1 BB- 7.36 05/01/14 1,595,000 1,596,246
Mach Gen LLC.......................... LOC B2 B 7.36 02/22/13 281,250 281,355
Mach Gen LLC.......................... BTL-B B2 B 7.36 02/22/14 2,705,156 2,706,171
NE Energy, Inc........................ 2nd Lien B2 B- 9.88 05/01/11 250,000 253,646
NRG Energy, Inc.(8)................... CLD Ba3 B+ 7.07 02/01/13 878,527 876,095
NRG Energy, Inc.(8)................... BTL Ba3 B+ 7.11 02/01/13 2,116,170 2,110,312
NSG Holdings II LLC................... LOC Ba2 BB 6.86 06/15/14 102,041 102,105
NSG Holdings II LLC................... BTL Ba2 BB 6.86 06/15/14 884,732 885,285
Reliant Energy, Inc................... LOC B2 B 5.19 12/01/13 2,000,000 1,997,500
TPF Generation Holdings LLC........... 2nd Lien B3 B+ 9.61 12/15/14 1,500,000 1,525,982
------------
18,323,875
------------
Total Loans (cost $346,129,793).......................................... 344,804,607
------------
CORPORATE BONDS -- 0.6%
Electronics -- 0.6%
NXP BV * (7)
Note
8.11% due 10/15/13 (cost $2,000,000).................................... 2,000,000 2,002,500
------------
21
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2007 -- (unaudited) (continued)
Shares/
Principal Value
Industry Description Amount (Note 2)
----------------------------------------------------------------------------------------
COMMON STOCK -- 0.1%
Telecommunications -- 0.1%
Global Crossing, Ltd. +................................. 175 $ 3,304
SAVVIS Communications Corp. +........................... 6,313 312,557
------------
Total Common Stock (cost $125,981)...................... 315,861
------------
Total Long-Term Investment Securities (cost $348,255,774) 347,122,968
------------
SHORT-TERM INVESTMENT SECURITIES -- 8.8%
Registered Investment Companies -- 8.8%
SSgA Money Market Fund (cost $32,803,013)............... $32,803,013 32,803,013
------------
TOTAL INVESTMENTS -- 102.4%
(cost $381,058,787)(9).................................. 379,925,981
Liabilities in excess of other assets -- (2.4)%............. (8,726,308)
------------
NET ASSETS -- 100.0%........................................ $371,199,673
============
- --------
BTL Bank Term Loan
CND TL Canadian Term Loan
LOC Letter of Credit
FSRI First Securities Repurchase Increase
CLD Credit Linked Deposit
CLC Credit Linked Commitment
CLTL Credit Linked Term Loan
NR Security is not rated.
+ Non-income producing security
@ Illiquid security. At June 30, 2007, the aggregate value of these
securities was $0, representing 0.0% of net assets.
# Fair valued security; see Note 2
* Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has
no rights to demand registration of these securities. At June 30, 2007,
the aggregate value of these securities was $2,002,500 representing 0.6%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
(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, 2007.
(2) Based on the stated maturity, the weighted average to maturity of the
Loans held in the portfolio will be approximately 71 months. 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.
(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 restrictive 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.
(4) All loans in the portfolio were purchased through assignment agreements
unless otherwise indicated.
(5) Company has filed Chapter 11 bankruptcy protection.
(6) Loan is in default and did not pay principal at maturity. Final outcome
of Chapter 11 bankruptcy still to be determined.
(7) Floating rate security where the rate fluctuates. The rate moves up or
down at each reset date. The rate reflected is as of June 30, 2007.
(8) Loan is subject to an unfunded loan commitment. See Note 11 for details.
(9) See Note 6 for cost of investments on a tax basis.
See Notes to Financial Statements
22
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007-- (unaudited)
Note 1. Organization of the Fund
The SunAmerica Senior Floating Rate Fund, Inc. (the "Fund"), is a
non-diversified open-end management investment company. The Fund was
organized as a Maryland corporation on March 6, 1998, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Fund is managed by AIG SunAmerica Asset Management Corp. (the "Adviser" or
"AIG SunAmerica"), an indirect wholly-owned subsidiary of American
International Group, Inc. ("AIG"). The Fund's investment goal and principal
investment techniques are to provide as high a level of current income as is
consistent with the preservation of capital by investing, under normal
market conditions, at least 80% of its net assets plus any borrowings for
investment purposes in senior secured floating rate loans and other
institutionally traded senior secured floating rate debt obligations. The
Fund may also purchase investment grade fixed income debt securities and
money market instruments.
Prior to October 4, 2006, the Fund operated as a closed-end investment
management company. On October 4, 2006, the Fund converted from a closed-end
investment management company to an open-end investment management company.
Coincident with the conversion, the Class A shares were redesignated as
Class Q shares and a new class of shares designated as Class A commenced
offering.
The Fund offers four classes of shares. Class A shares are offered at net
asset value per share plus an initial sales charge. Additionally, purchases
of Class A shares in excess of $1,000,000 will be purchased at net asset
value but will be subject to a contingent deferred sales charge ("CDSC") on
redemptions made within two years of purchase. Class B shares are offered
for sale at net asset value without a front-end sales charge, although a
declining CDSC charge may be imposed on redemptions made within four years
of purchase. Class C shares are offered for sale at net asset value without
a front-end sales charge, although a CDSC may be imposed on redemptions made
within 12 months of purchase. Class D shares are offered for sale at net
asset value without a front-end sales charge and no CDSC. Class Q shares are
not currently offered for sale and are available only through a conversion
of Class B shares eight years after purchase and Class C shares purchased
before 1999, after ten years from purchase. The share classes differ in
their respective distribution and service fees. All classes have equal
rights to assets and voting privileges except as may otherwise be provided
in the Fund's registration statement.
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 may contain the obligation
to indemnify others. The Fund's maximum exposure under these arrangements is
unknown. Currently, however, the Fund expects the risk of loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles (GAAP) requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates. The
following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements:
Security Valuation: The Fund's investments in loan interests ("Loans") are
valued in accordance with guidelines established by the Board of Directors
(the "Board"). Under the Fund's current guidelines, Loans for which an
active secondary market exists to a reliable degree 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 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 the next interest rate reset and maturity. Stocks are
generally valued based upon closing sales prices reported on recognized
securities exchanges. Stocks listed on the NASDAQ are valued using the
NASDAQ Official Closing Price ("NOCP"). Generally, the NOCP will be the last
sale price unless the reported trade for the stock is outside the range of
the
23
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
bid/ ask price. In such cases, the NOCP will be normalized to the nearer of
the bid or ask price. For listed securities having no sales reported and for
unlisted securities, such securities will be valued based upon the last
reported bid price. Non-convertible bonds and debentures, other long-term
debt securities, and short-term debt securities with maturities in excess of
60 days, are valued at bid prices obtained for the day of valuation from a
bond pricing service, when such prices are available. If a vendor quote is
unavailable the securities may be priced at the mean of two independent
quotes obtained from brokers. Securities for which market quotations are not
readily available are valued as determined pursuant to procedures adopted in
good faith by the Board. Short-term securities with 60 days or less to
maturity are amortized to maturity based on their cost to the Fund if
acquired within 60 days of maturity or, if already held by the Fund on the
60/th/ day, are amortized to maturity based on the value determined on the
61/st/ day. Securities for which market quotations are not readily available
or if a development/significant event occurs that may significantly impact
the value of the security, then these securities are valued, as determined
pursuant to procedures adopted in good faith by the Board.
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. The
Fund's custodian takes possession of the collateral pledged for investments
in repurchase agreements. The underlying collateral is valued daily on a
mark to market basis to ensure that the value, including accrued interest,
is at least 102% of the repurchase price. In the event of default of the
obligation to repurchase, the Fund has the right to liquidate the collateral
and apply the proceeds in satisfaction of the obligation. If the seller
defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June
30, 2007, the Fund did not enter into any repurchase agreements.
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is accrued daily except when
collection is not expected. Dividend income is recorded on the ex-dividend
date. For financial statement purposes, the Fund amortizes all premiums and
accretes all discounts. Facility fees received, which were $11,415 for the
period ended June 30, 2007, are accreted to income over the life of the
Loans. Other income, including amendment fees, commitment fees, letter of
credit fees, etc., which were $153,251 for the period ended June 30, 2007,
are recorded as income when received or 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). Interest earned on cash
balances held at the custodian are shown as custody credits on the Statement
of Operations.
Dividends from net investment income are normally declared daily and paid
monthly. Capital gain distributions, if any, are paid annually. The Fund
records dividends and distributions to the shareholders on the ex-dividend
date. The amount of dividends and distributions from net investment income
and net realized capital gains are determined in accordance with federal
income tax regulations, which may differ from U.S. generally accepted
accounting principles. These "book/tax" differences 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.
24
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
New Accounting Pronouncements: On July 13, 2006, the Financial Accounting
Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how
uncertain tax positions should be recognized, measured, presented and
disclosed in the financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing the
Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority.
Adoption of FIN 48 is required for fiscal years beginning after December 15,
2006 and is to be applied to all open tax years as of the effective date.
However, Registered Investment Companies are not required to implement FIN
48 until their last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after
December 15, 2006. Management has evaluated the implications of FIN 48 and
determined there is no impact to the financial statements.
In September 2006, the FASB issued Statement on Financial Accounting
Standards No. 157, "Fair Value Measurements" (FAS 157). This standard
clarifies the definition of fair value for financial reporting, establishes
a framework for measuring fair value and requires additional disclosures
about the use of fair value measurements. FAS 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and
interim periods within those fiscal years. As of June 30, 2007, the Fund
does not believe the adoption of FAS 157 will impact the amounts reported in
the financial statements, however, additional disclosures will be required
about the inputs used to develop the measurements of fair value.
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, 2007.
Note 3. Capital Share Transactions
The Fund has 1,000,000,000 of $.01 par value shares authorized that may be
issued in five different classes. Transactions in shares of each class were
as follows:
For the For the period
period ended October 4, 2006**-
June 30, 2007 (unaudited) December 31, 2006
------------------------- -------------------------
Shares Amount Shares Amount
Class A# ---------- ------------ ---------- ------------
Shares sold................. 8,879,911 $ 83,790,805 1,759,134 $ 16,531,338
Reinvested distributions.... 74,782 705,248 5,048 47,437
Shares redeemed............. (1,443,912) (13,622,367) (257,470) (2,418,681)
---------- ------------ ---------- ------------
Net increase (decrease).. 7,510,781 $ 70,873,686 1,506,712 $ 14,160,094
========== ============ ========== ============
For the For the
period ended year ended
June 30, 2007 (unaudited) December 31, 2006
------------------------- -------------------------
Shares Amount Shares Amount
Class B ---------- ------------ ---------- ------------
Shares sold................. 165,582 $ 1,562,313 453,924 $ 4,269,518
Reinvested distributions.... 54,855 517,554 118,659 1,116,260
Shares redeemed............. (537,788)@ (5,073,640)@ (501,412)* (4,716,044)*
---------- ------------ ---------- ------------
Net increase (decrease).. (317,351) $ (2,993,773) 71,171 $ 669,734
========== ============ ========== ============
For the For the
period ended year ended
June 30, 2007 (unaudited) December 31, 2006
------------------------- -------------------------
Shares Amount Shares Amount
Class C ---------- ------------ ---------- ------------
Shares sold................. 9,221,066 $ 86,998,092 6,565,881 $ 61,753,971
Reinvested distributions.... 408,053 3,848,953 673,809 6,338,411
Shares redeemed............. (2,220,760) (20,953,636) (4,906,086) (46,157,931)
---------- ------------ ---------- ------------
Net increase (decrease).. 7,408,359 $ 69,893,409 2,333,604 $ 21,934,451
========== ============ ========== ============
25
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
For the
period ended For the
June 30, 2007 year ended
(unaudited) December 31, 2006
--------------------- ------------------------
Shares Amount Shares Amount
Class D -------- ----------- ---------- ------------
Shares sold................. 23,485 $ 221,678 819,357 $ 7,710,168
Reinvested distributions.... 39,971 376,986 110,443 1,039,375
Shares redeemed............. (342,201) (3,228,526) (1,689,707) (15,879,854)
-------- ----------- ---------- ------------
Net increase (decrease).. (278,745) $(2,629,862) (759,907) $ (7,130,311)
======== =========== ========== ============
For the
period ended For the
June 30, 2007 year ended
(unaudited) December 31, 2006
--------------------- ------------------------
Shares Amount Shares Amount
Class Q# -------- ----------- ---------- ------------
Shares sold................. 300,088@ $ 2,831,569@ 49,174* $ 462,208*
Reinvested distributions.... 3,750 35,371 2,075 19,516
Shares redeemed............. (20,773) (196,076) (11,733) (110,650)
-------- ----------- ---------- ------------
Net increase (decrease).. 283,065 $ 2,670,864 39,516 $ 371,074
======== =========== ========== ============
-----
@ Includes automatic conversion of 299,933 shares of Class B shares in the
amount of $2,830,099 to 299,933 shares of Class Q shares in the amount of
$2,830,099.
* Includes automatic conversion of 45,900 shares of Class B shares in the
amount of $431,458 to 45,900 shares of Class Q shares in the amount of
$431,458.
** Inception date of class.
# Effective October 4, 2006, Class A shares were redesignated to Class Q
shares and a new class of shares designated as Class A commenced offering.
Note 4. Purchases and Sales of Securities
During the period ended June 30, 2007, the Fund's cost of purchases of Loans
and proceeds from Loan sales were $296,287,147 and $170,981,737,
respectively.
Note 5. Investment Advisory Agreement and Other Transactions with Affiliates
The Fund has entered into an Investment Advisory and Management Agreement
(the "Advisory Agreement") with AIG SunAmerica. Pursuant to the Advisory
Agreement, AIG SunAmerica provides continuous supervision of the Fund and
administers its corporate affairs, subject to the general review and
oversight of the Board. In connection therewith, AIG SunAmerica furnishes
the Fund with office facilities, maintains certain of the Fund's books and
records and pays the salaries and expenses of all personnel, including
officers of the Fund who are employees of AIG SunAmerica and its affiliates.
AIG SunAmerica also selects, contracts with and compensates the subadviser
to manage the Fund's assets. The Fund will pay AIG SunAmerica a monthly
advisory fee at the following annual rates, based on the average daily net
assets of the Fund: 0.85% on the first $1 billion; 0.80% on the next $1
billion; and 0.75% thereafter.
AIG Global Investment Corp. ("AIGGIC") acts as subadviser to the Fund
pursuant to a Subadvisory Agreement with AIG SunAmerica. AIGGIC is an
indirect wholly-owned subsidiary of AIG and is an affiliate of AIG
SunAmerica. Under the Subadvisory Agreement, AIGGIC manages the investment
and reinvestment of the Fund's assets. As compensation for its services as
subadviser, AIGGIC is entitled to receive from AIG SunAmerica a monthly fee
payable at the following annual rates: 0.25% for the first $1 billion of
average daily net assets; and 0.20% for average daily net assets of more
than $1 billion. The fee paid to the subadviser is paid by AIG SunAmerica
and not the Fund.
Pursuant to the Administrative Services Agreement (the "Administrative
Agreement") AIG SunAmerica acts as the Fund's administrator and is
responsible for providing and supervising the performance by others, of
administrative services in connection with the operations of the Fund,
subject to supervision by the Fund's Board. For its services, AIG SunAmerica
receives an annual fee equal to 0.40% of average daily net assets of the
Fund. For the period ended June 30, 2007, AIG SunAmerica accrued
administration fees in the amount of $575,889.
26
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
The Fund has entered into a Distribution Agreement with AIG SunAmerica
Capital Services, Inc. ("AIG SACS" or the "Distributor"), an affiliate of
AIG SunAmerica. The Fund, on behalf of each Class, except Class D, has
adopted a plan of distribution pursuant to Rule 12b-1 under the 1940 Act
(each a "Plan" and collectively, the "Plans"). Hereinafter referred to as
the "Class A Plan," "Class B Plan," "Class C Plan," and "Class Q Plan." In
adopting the Plans, the Board determined that there was a reasonable
likelihood that each such Plan would benefit the Fund and the shareholders
of the respective class. The sales charge and distribution fees of a
particular class will not be used to subsidize the sale of shares of any
other class.
The Class A, Class B and Class C Plans provide that the Fund, on behalf of
the respective classes, shall pay the Distributor a distribution fee at an
annual rate of 0.10% of average daily net assets of Class A shares and 0.50%
of average daily net assets of Class B and C shares, to compensate the
Distributor and certain securities firms for providing sales and promotional
activities for distributing that class of shares. The distribution costs for
which the Distributor may be compensated for include fees paid to
broker-dealers that have sold Fund shares, commissions and other expenses
such as those incurred for sales literature, prospectus printing and
distribution and compensation to wholesalers. It is possible that in any
given year the amount paid to the distributor under the Class A, Class B and
Class C Plans may exceed the Distributor's distribution costs as described
above. The Plans also provide that Class A, Class B, Class C and Class Q
shares of the Fund shall pay the Distributor an account maintenance fee of
0.25% of the average daily net assets of such class of shares to compensate
the Distributor and securities firms for account maintenance activities. For
the period ended June 30, 2007 AIG SACS received sales charges on Class A
shares of $252,240, of which $32,933 was reallowed to affiliated
broker-dealers and $171,413 to non-affiliated broker-dealers. In addition,
AIG SACS receives the proceeds of early withdrawal charges paid by investors
in connection with certain redemptions of Class A, Class B and Class C
shares. For the period ended June 30, 2007, AIG SACS received early
withdrawal charges of $39,638. For the period ended June 30, 2007 AIG SACS
voluntarily waived fees for the following classes: Class A $30,845, Class B
$30,883, Class C $257,000, and Class Q $471. The fee waiver and expense
reimbursement will continue indefinitely but may be terminated at any time.
The Fund has entered into a Service Agreement with AIG SunAmerica Fund
Services, Inc. ("AIG SAFS"), an indirect wholly-owned subsidiary of AIG
SunAmerica. Under the Service Agreement, SAFS performs certain shareholder
account functions by assisting the Fund's transfer agent in connection with
the services that it offers to the shareholders of the Fund. The Service
Agreement, which permits the Fund to compensate AIG SAFS for services
rendered based upon an annual rate of 0.22% of average daily net assets, is
approved annually by the Board of Directors. For the period ended June 30,
2007, the Fund incurred the following expenses, which are included in the
transfer agent fees and expenses payable on the Statement of Assets and
Liabilities and in transfer agent fees and expenses in the Statement of
Operations to compensate AIG SAFS pursuant to the terms of the Service
Agreement.
Payable at
Expense June 30, 2007
-------- -------------
Class A+...................... $ 45,219 $13,606
Class B....................... 27,176 4,387
Class C....................... 226,121 43,916
Class D....................... 16,158 2,541
Class Q+...................... 2,065 573
- --------
+ Effective October 4, 2006, Class A shares were redesignated to Class Q
shares and a new class of shares designated as Class A commenced offering.
AIG SunAmerica contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Fund's annual operating expenses at 1.45%
for Class A, and 1.75% for Class B and Class C of average daily net assets.
The expense reimbursements and fee waivers will continue indefinitely,
subject to termination by the Directors, including a majority of the
directors that are not deemed to be "interested persons" of the Fund, as
defined by Section 2(a)(19) of the 1940 Act ("Disinterested Directors"). AIG
SunAmerica voluntarily agreed to waive fees or reimburse expenses, if
necessary, at or below 1.45% for Class Q and 1.25% for Class D of average
daily net assets. The expense waiver and fee reimbursement will continue
indefinitely but may be terminated at any time. For the period ended June
30, 2007, AIG SunAmerica waived fees and reimbursed expenses as follows:
Class A $96,864, Class B $57,417, Class C $420,502, Class D $41,019, and
Class Q $8,199.
27
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from wash
sales, retirement pension expense, dividends payable and treatment of
defaulted securities.
Distributable Earnings Tax Distributions
- ---------------------------------------- -------------------------------------
For the year ended
For the year ended December 31, 2006 December 31, 2006
- ---------------------------------------- -------------------------------------
Long-term Gains/ Unrealized Long-term
Ordinary Capital Loss Appreciation Ordinary Capital
Income Carryover (Depreciation) Income Gains
- -------- ---------------- -------------- ----------- -------------------------
$2,886 $(27,384,177) $(703,790) $13,291,502 $ --
Capital Loss Carryforwards. At December 31, 2006 capital loss carryforwards
available to offset future recognized gains were $27,384,177, with $16,694
expiring in 2007, $1,179,134 expiring in 2008, $9,997,029 expiring in 2009,
$7,736,363 expiring in 2010, $4,956,144 expiring in 2011, and $3,498,813
expiring in 2012.
During the year ending December 31, 2006, the Senior Floating Rate Fund
utilized $312,979 of capital loss carry forwards to offset current year
capital gains.
Under the current tax law, capital losses related to securities and foreign
currency realized after October 31 and prior to the Fund's fiscal year end
may be deferred as occurring on the first day of the following year. For the
fiscal year ended December 31, 2006, the Fund elected to defer $7,366 of
Post-October Capital Losses.
Unrealized appreciation and depreciation in the value of investments at June
30, 2007 for federal income tax purposes were as follows:
Cost (tax basis)............................................ $381,059,614
============
Gross unrealized appreciation............................... $ 1,335,930
Gross unrealized depreciation............................... (2,469,563)
------------
Net unrealized depreciation................................. $ (1,133,633)
============
Note 7. Director Retirement Plan
The Directors of the Corporation have adopted the AIG SunAmerica
Disinterested Trustees' and Directors' Retirement Plan (the "Retirement
Plan") effective January 1, 1993, as amended December 9, 2006 for the
unaffiliated Directors. The Retirement Plan provides generally that an
unaffiliated Director may become a participant ("Participant") in the
Retirement Plan if he or she has at least 10 years of consecutive service as
a Disinterested Director of any of the adopting AIG SunAmerica mutual funds
(the "Adopting Funds") or has attained the age of 60 while a Director and
completed five (5) consecutive years of service as a Director of any
Adopting Fund (an "Eligible Director"). Pursuant to the Retirement Plan, an
Eligible Director may receive benefits upon (i) his or her death or
disability while a Director or (ii) the termination of his or her tenure as
a Director, other than removal for cause from each of the Adopting Funds
with respect to which he or she is an Eligible Director.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Director and Participant, 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 each
Adopting 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. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds.
28
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
An Eligible Director may receive any benefits payable under the Retirement
Plan, at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
As of June 30, 2007, the Fund had accrued $23,317 for the Retirement Plan,
which is included in Directors' fees and expenses line on the Statement of
Assets and Liabilities and for the period ended June 30, 2007, expensed
$6,974 for the Retirement Plan, which is included in Directors' fees and
expenses line on the Statement of Operations.
Note 8. Line of Credit
The AIG SunAmerica Family of Mutual Funds has established $75 million
committed and $50 million uncommitted lines of credit with State Street Bank
& Trust Company, the Fund's custodian. Interest is currently payable at the
Federal Funds rate plus 50 basis points on the committed line and State
Street's discretionary bid rate on the uncommitted line of credit. There is
also a commitment fee of 10 basis points per annum on the daily unused
portion of the $75 million committed line of credit, which is included in
other expenses on the Statement of Operations. Borrowings under the line of
credit will commence when the Fund's cash shortfall exceeds $100,000. The
committed and uncommitted lines of credit were not used during the period
ended June 30, 2007.
Note 9. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the Securities and Exchange
Commission (the "SEC"), the Fund is permitted to participate in an interfund
lending program among investment companies advised by AIG SunAmerica or an
affiliate. The interfund lending program allows the participating funds to
borrow money from and lend money to each other for temporary or emergency
purposes. An interfund loan will be made under this facility only if the
participating funds receive a more favorable interest rate than would
otherwise be available from a typical bank for a comparable transaction. For
the period ended June 30, 2007, the Fund did not participate in this program.
Note 10. Investment Concentration
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.
Note 11. Unfunded Loan Commitments
On June 30, 2007, the Fund had the following unfunded loan commitments which
could be extended at the option of the Borrower:
Maturity
Name Type Date Amount
---- ---------------------- -------- ----------
Big West Oil LLC.............. Delayed Draw Term Loan 05/15/14 $1,100,000
Boise Cascade Holdings LLC.... Delayed Draw Term Loan 04/30/14 365,954
Fender Musical Instruments
Corp........................ Delayed Draw Term Loan 06/06/14 333,333
Hub International Holdings,
Inc......................... Delayed Draw Term Loan 06/13/14 549,020
NRG Energy, Inc............... Delayed Draw Term Loan 05/23/14 2,000,000
RGIS LLC...................... Delayed Draw Term Loan 05/01/14 47,619
The Pantry, Inc............... Delayed Draw Term Loan 05/04/14 444,444
Univision Communications, Inc. Delayed Draw Term Loan 03/28/14 241,611
Valassis Communications, Inc.. Delayed Draw Term Loan 03/02/14 426,667
Western Refining Co. LP....... Delayed Draw Term Loan 02/28/14 392,857
WMG Acquisition Corp.......... Revolver 01/18/11 500,000
29
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2007 -- (unaudited)
(continued)
Note 12. Other Information
On February 9, 2006, AIG, the parent company and an affiliated person of AIG
SunAmerica, AIG SACS, and AIGGIC, announced that it had consented to the
settlement of an injunctive action instituted by the SEC. In its complaint,
the SEC alleged that AIG violated Section 17(a) of the Securities Act of
1933, as amended, Sections 10(b), 13(a), 13(b)(2) and 13(b)(5) of the
Securities Exchange Act of 1934, as amended, and Rules 10b-5, 12b-20, 13a-1
and 13b2-1 promulgated thereunder, in connection with AIG's accounting and
public reporting practices. The conduct described in the complaint did not
involve any conduct of AIG or its subsidiaries related to their investment
advisory or distribution activities with respect to the assets of the Fund.
AIG, without admitting or denying the allegations in the complaint (except
as to jurisdiction), consented to the entry of an injunction against further
violations of the statutes referred to above. Absent exemptive relief
granted by the SEC, the entry of such an injunction would prohibit AIG and
its affiliated persons from, among other things, serving as an investment
adviser of any registered investment management company or principal
underwriter for any registered open-end investment company pursuant to
Section 9(a) of the 1940 Act. Certain affiliated persons of AIG, including
the Adviser, received a temporary order from the SEC pursuant to Section
9(c) of the 1940 Act with respect to the entry of the injunction, granting
exemptive relief from the provisions of Section 9(a) of the 1940 Act. The
temporary order permits AIG and its affiliated persons, including AIG's
investment management subsidiaries, to serve as investment adviser,
sub-adviser, principal underwriter or sponsor of the Fund. The Adviser
expects that a permanent exemptive order will be granted, although there is
no assurance the SEC will issue the order.
Additionally, AIG and its subsidiaries reached a resolution of claims and
matters under investigation with the United States Department of Justice
("DOJ"), the Attorney General of the State of New York ("NYAG") and the New
York State Department of Insurance ("DOI"), regarding accounting, financial
reporting and insurance brokerage practices of AIG and its subsidiaries, as
well as claims relating to the underpayment of certain workers compensation
premium taxes and other assessments.
As a result of the settlements with the SEC, the DOJ, the NYAG and the DOI,
AIG will make payments totaling approximately $1.64 billion. In addition, as
part of its settlements, AIG has agreed to retain for a period of three
years an Independent Consultant who will conduct a review that will include
the adequacy of AIG's internal controls over financial reporting and the
remediation plan that AIG has implemented as a result of its own internal
review.
Subject to receipt of permanent relief, the Adviser, Distributor and AIGGIC
believe that the settlements are not likely to have a material adverse
effect on their ability to perform their respective investment advisory or
distribution services relating to the Fund.
30
[LOGO] AIG Sun America
Mutual Funds
AIG SunAmerica Asset Management Corp.
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors Custodian DISCLOSURE OF QUARTERLY
Dr. Judith L. Craven State Street Bank and PORTFOLIO HOLDINGS
William F. Devin Trust Company The Fund is required to
Samuel M. Eisenstat P.O. Box 5607 file its com-plete
Stephen J. Gutman Boston, MA 02110 schedule of portfolio
Peter A. Harbeck holdings with the U.S.
William J. Shea VOTING PROXIES ON FUND Securities and Exchange
PORTFOLIO SECURITIES Commission for its first
Officers A description of the and third fiscal quarters
Vincent M. Marra, policies and proce-dures on Form N-Q. The Fund's
President that the Fund uses to Forms N-Q are available
Donna M. Handel, determine how to vote on the U.S. Securities
Treasurer proxies related to and Exchange Commission's
James Nichols, Vice securities held in the website at www.sec.gov.
President Fund's portfolio, which You can also review and
Cynthia A. Gibbons, Vice is available in the obtain copies of the
President and Chief Fund's Statement of Forms N-Q at the U.S.
Compliance Officer Additional Information, Securities and Ex-change
Gregory N. Bressler, may be ob-tained without Commission's Public
Chief Legal charge upon request, by Reference Room in
Officer and Secretary calling (800) 858-8850. Washington, DC
Gregory R. Kingston, This in-formation is also (information on the
Vice President and available from the EDGAR operation of the Public
Assistant Treasurer database on the U.S. Reference Room may be
Nori L. Gabert, Vice Secu-rities and Exchange ob-tained by calling
President and Commission's website at 1-800-SEC-0330).
Assistant Secretary http://www.sec.gov.
Corey A. Issing, PROXY VOTING RECORD ON
Assistant Secretary DELIVERY OF SHAREHOLDER FUND PORTFOLIO SECURITIES
Kathleen Fuentes, DOCUMENTS Information regarding how
Assistant Secretary The Funds have adopted a the Fund voted proxies
Kathryn A. Pearce, policy that allows them relating to securities
Assistant Treasurer to send only one copy of held in the Fund's
Matthew J. Hackethal, a Fund's prospectus, portfolio during the most
Anti-Money Laundering proxy material, annual recent twelve month
Compliance Officer report and semi-annual period ended June 30 is
report (the "shareholder available, once filed
Investment Adviser documents") to with the U.S. Securities
AIG SunAmerica Asset shareholders with and Exchange Commis-sion,
Management Corp. multiple accounts without charge, upon
Harborside Financial residing at the same request, by calling
Center "household." This (800) 858-8850 or on the
3200 Plaza 5 practice is called U.S. Securities and
Jersey City, NJ householding and reduces Exchange Commission's
07311-4992 Fund expenses, which website at
benefits you and other http://www.sec.gov.
Distributor shareholders. Unless the
AIG SunAmerica Capital Funds receive This report is submitted
Services, Inc. instructions to the solely for the general
Harborside Financial con-trary, you will only information of
Center receive one copy of the shareholders of the Fund.
3200 Plaza 5 shareholder documents. Distribution of this
Jersey City, NJ The Funds will continue report to persons other
07311-4992 to household the than shareholders of the
share-holder documents Fund is authorized only
Shareholder Servicing indefinitely, until we in connection with a
Agent are instructed otherwise. currently effective
AIG SunAmerica Fund If you do not wish to prospectus, setting forth
Services, Inc. participate in details of the Fund,
Harborside Financial householding, please which must precede or
Center contact Shareholder accompany this report.
3200 Plaza 5 Services at (800)
Jersey City, NJ 858-8850 ext. 6010 or The accompanying report
07311-4992 send a written request has not been audited by
with your name, the name independent accountants
Transfer Agent of your fund(s) and your and accordingly no
State Street Bank and account number(s) to AIG opinion has been
Trust Company SunAmerica Mutual Funds expressed thereon.
P.O. Box 219373 c/o BFDS, P.O. Box
Kansas City, MO 64141 219186, Kansas City MO,
64121-9186. We will
resume individual
mailings for your account
within thirty (30) days
of receipt of your
request.
31
Distributed by:
AIG SunAmerica Capital Services, Inc.
Investors should carefully consider the investment objectives, risks, charges
and expenses of any mutual fund before investing. This and other important
information is contained in the prospectus, which can be obtained from your
financial adviser or from the AIG SunAmerica Sales Desk at 800-858-8850, ext.
6003. Read the prospectus carefully before investing.
www.sunamericafunds.com
SFSAN - 6/07
[LOGO]
AIG
Sun America
Mutual Funds
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. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors that were
implemented after the registrant last provided disclosure in response to
the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 AFR 229.
407) (as required by 22(b)(15)) of Schedule 14A (17 AFR 240. 14a-101), or
this Item 10.
Item 11. 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, as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 AFR 270.30a-3(c)). 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) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 AFR 270.30a-3(d))) that occurred during the last 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 12. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 AFR 270.30a-2(a)) attached hereto as
Exhibit 99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 AFR 270.30a-2(a)) and Section 906 of the
Banes-Axel 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/ Vincent M. Marra
--------------------
Vincent M. Marra
President
Date: September 7, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Vincent M. Marra
--------------------
Vincent M. Marra
President
Date: September 7, 2007
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: September 7, 2007