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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08727
SunAmerica Senior Floating Rate Fund, Inc.
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(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311
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(Address of principal executive offices) (Zip code)
John T. Genoy
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) 324-6414
Date of fiscal year end: December 31
Date of reporting period: June 30, 2008
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Item 1. Reports to Stockholders
[GRAPHIC]
SEMI-ANNUAL REPORT 2008
SUNAMERICA
Senior Floating Rate Fund
[LOGO]
www.sunamericafunds.com
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Table of Contents
SHAREHOLDERS' LETTER................ 1
EXPENSE EXAMPLE..................... 2
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, 2008 SEMI-ANNUAL REPORT
Shareholders' Letter
Dear Shareholder:
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, 2008.
The semi-annual period was a tale of two markets. The first quarter was the
worst performing quarter in the history of the asset class, as measured by the
S&P/LSTA Leveraged Loan Index*. The weak tone in the leveraged loan market was
driven by a number of factors including an overhang of bank loan supply,
negative credit market headlines and declining LIBOR rates.
The second quarter began on a high note as April proved to be the best
performing month in the history of the S&P/LSTA Leveraged Loan Index. The
market rally lasted until early May and then leveled off as investors took
profits and underwriters stepped in with additional supply. Prices showed no
clear direction between mid to late June with the period ending in a downturn.
Difficulties in the automotive sector, concerns over $140 oil, a slowing
economy and a drop in equities moved investors to the sidelines.
Though default rates in the leveraged loan market continue to rise, as
expected, the rate remains below the historical default rate of 3.00%. The Fund
had three defaults during the period, one in the chemicals sector, one in the
energy sector and one in the transportation sector.
As always, 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 Investments
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.
* The S&P/LSTA Leveraged Loan Index (LLI) reflects the market-weighted
performance of U.S. dollar-denominated institutional leveraged loan portfolios.
The LLI is the only domestic leveraged loan index that utilizes real-time
market weightings, spreads and interest payments. Indices are not managed and
an investor cannot invest directly into an index.
1
SunAmerica Senior Floating Rate Fund, Inc.
EXPENSE EXAMPLE -- June 30, 2008 -- (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, 2008 and
held until June 30, 2008.
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, 2008" to estimate the expenses you paid on your account
during this period. In addition, the "Expenses Paid During the Six Months Ended
June 30, 2008" 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, 2008"
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 Funds of 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, 2008" 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, 2008"
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, Inc.
EXPENSE EXAMPLE -- June 30, 2008 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------------- ------------------------------------
Ending
Account Ending Account
Value Using Expenses Paid Value using
Beginning Actual During the Beginning a Hypothetical 5%
Account Value Returns at Six Months Ended Account Value Assumed Return at
at January 1, 2008 June 30, 2008 June 30, 2008* at January 1, 2008 June 30, 2008
------------------ ------------- ---------------- ------------------ -----------------
Senior Floating Rate Fund
Class A#............... $1,000.00 $981.70 $7.14 $1,000.00 $1,017.65
Class B#............... $1,000.00 $980.19 $8.62 $1,000.00 $1,016.16
Class C#............... $1,000.00 $980.18 $8.62 $1,000.00 $1,016.16
Class D#............... $1,000.00 $982.62 $6.16 $1,000.00 $1,018.65
Class Q#............... $1,000.00 $980.54 $7.14 $1,000.00 $1,017.65
-----------------
Expenses Paid Expense
During the Ratio
Six Months Ended as of
June 30, 2008* June 30, 2008*
---------------- --------------
Senior Floating Rate Fund
Class A#............... $7.27 1.45%
Class B#............... $8.77 1.75%
Class C#............... $8.77 1.75%
Class D#............... $6.27 1.25%
Class Q#............... $7.27 1.45%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182 days divided by 366
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, 2008" and the "Expense Ratios" would have been higher.
3
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2008 -- (unaudited)
ASSETS:
Long-term investment securities, at value (unaffiliated)*.......... $296,779,114
Short-term investment securities, at value (unaffiliated)*......... 8,361,208
------------
Total investments................................................ 305,140,322
Cash............................................................... 1,250
Receivable for:
Fund shares sold................................................. 2,065,017
Dividends and interest........................................... 2,971,756
Investments sold................................................. 10,511,888
Prepaid expenses and other assets.................................. 4,182
Due from investment adviser for expense reimbursements/fee waivers. 106,441
Due from distributor for fee waivers............................... 52,864
------------
Total assets..................................................... 320,853,720
------------
LIABILITIES:
Payable for:
Fund shares redeemed............................................. 902,299
Investments purchased............................................ 12,842,435
Investment advisory and management fees.......................... 212,339
Distribution and service maintenance fees........................ 153,724
Administration fees.............................................. 99,924
Transfer agent fees and expenses................................. 77,311
Directors' fees and expenses..................................... 42,117
Other accrued expenses........................................... 164,809
Dividends payable.................................................. 435,962
Commitments (Note 11).............................................. --
------------
Total liabilities................................................ 14,930,920
------------
Net assets...................................................... $305,922,800
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value....................................... $ 361,842
Additional paid-in capital......................................... 373,619,877
------------
373,981,719
Accumulated undistributed net investment income (loss)............. (35,960)
Accumulated undistributed net realized gain (loss) on investments.. (33,467,645)
Unrealized appreciation (depreciation) on investments.............. (34,555,314)
------------
Net assets....................................................... $305,922,800
============
*COST
Long-term investment securities (unaffiliated).. $331,334,428
============
Short-term investment securities (unaffiliated). $ 8,361,208
============
See Notes to Financial Statements
4
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2008 -- (unaudited)
(continued)
Class A:
Net assets.................................................... $ 79,867,018
Shares outstanding............................................ 9,444,017
Net asset value and redemption price per share................ $ 8.46
Maximum sales charge (3.75% of offering price)................ 0.33
------------
Maximum offering price to public.............................. $ 8.79
============
Class B:
Net assets.................................................... $ 15,217,779
Shares outstanding............................................ 1,801,541
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charges). $ 8.45
============
Class C:
Net assets.................................................... $197,095,828
Shares outstanding............................................ 23,313,114
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charges). $ 8.45
============
Class D:
Net assets.................................................... $ 8,342,895
Shares outstanding............................................ 986,927
Net asset value, offering and redemption price per share...... $ 8.45
============
Class Q:
Net assets.................................................... $ 5,399,280
Shares outstanding............................................ 638,594
Net asset value, offering and redemption price per share...... $ 8.45
============
See Notes to Financial Statements
5
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF OPERATIONS -- For the six months ended June 30, 2008 --
(unaudited)
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $ 10,569,160
Dividends (unaffiliated).......................................................... 56,285
Facility and other fee income (Note 2)............................................ 769,790
------------
Total investment income........................................................ 11,395,235
------------
EXPENSES:
Investment advisory and management fees........................................... 1,293,976
Administration fees............................................................... 608,930
Distribution and service maintenance fees:
Class A......................................................................... 133,260
Class B......................................................................... 61,559
Class C......................................................................... 743,864
Class Q......................................................................... 5,851
Transfer agent fees and expenses:
Class A......................................................................... 83,763
Class B......................................................................... 21,586
Class C......................................................................... 233,408
Class D......................................................................... 9,797
Class Q......................................................................... 6,319
Registration fees:
Class A......................................................................... 23,660
Class B......................................................................... 5,451
Class C......................................................................... 12,740
Class D......................................................................... --
Class Q......................................................................... --
Accounting service fees........................................................... 29,900
Custodian and accounting fees..................................................... 52,078
Reports to shareholders........................................................... 34,833
Audit and tax fees................................................................ 42,588
Legal fees........................................................................ 16,648
Directors' fees and expenses...................................................... 29,368
Interest expense.................................................................. 18,166
Other expenses.................................................................... 41,253
------------
Total expenses before fee waivers, expense reimbursements and custody credits.. 3,508,998
Fees waived and expenses reimbursed by investment adviser and distributor...... (988,237)
Custody credits earned on cash balances........................................ (78)
------------
Net expenses................................................................... 2,520,683
------------
Net investment income (loss)...................................................... 8,874,552
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)............................ (6,269,162)
Change in unrealized appreciation (depreciation) on investments (unaffiliated).... (11,317,749)
------------
Net realized and unrealized gain (loss) on investments............................ (17,586,911)
------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $ (8,712,359)
============
See Notes to Financial Statements
6
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
For the
six months
ended For the year
June 30, ended
2008 December 31,
(unaudited) 2007
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)......................................... $ 8,874,552 $ 20,860,330
Net realized gain (loss) on investments (unaffiliated)............... (6,269,162) 193,887
Net unrealized gain (loss) on investments (unaffiliated)............. (11,317,749) (22,534,602)
------------ ------------
Increase (decrease) in net assets resulting from operations........... (8,712,359) (1,480,385)
------------ ------------
Distributions To Shareholders From:
Net investment income (Class A)...................................... (2,289,282) (4,228,420)
Net investment income (Class B)...................................... (472,769) (1,423,645)
Net investment income (Class C)...................................... (5,699,052) (14,137,627)
Net investment income (Class D)...................................... (276,727) (883,440)
Net investment income (Class Q)...................................... (139,399) (180,690)
------------ ------------
Total distributions to shareholders................................... (8,877,229) (20,853,822)
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 3)................................................ (35,781,114) 148,026,767
------------ ------------
Total increase (decrease) in net assets............................... (53,370,702) 125,692,560
NET ASSETS:
Beginning of period................................................... 359,293,502 233,600,942
------------ ------------
End of period+........................................................ $305,922,800 $359,293,502
============ ============
- --------
+ Includes accumulated undistributed net investment income (loss)..... $ (35,960) $ (33,283)
============ ============
See Notes to Financial Statements
7
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CASH FLOWS -- For the six months ended June 30, 2008 --
(unaudited)
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Net decrease in net assets from operations...................... $ (8,712,359)
Adjustments to reconcile net increase in net assets from
operations to net cash used in operating activities:
Purchase of loans.............................................. (51,771,708)
Proceeds from loans sold....................................... 77,044,389
Loan principal paydowns........................................ 15,084,107
Net purchases of short-term securities......................... (8,361,208)
Accretion of facility fee income............................... (115,172)
Decrease in receivable for dividends and interest.............. 1,387,381
Increase in receivable for investments sold.................... (6,082,620)
Decrease in amount due from investment adviser for expense
reimbursements/fee waivers................................... 6,204
Decrease in amount due from distributor for fee waivers........ 14,310
Decrease in prepaid expenses and other assets.................. --
Increase in payable for investments purchased.................. 12,829,957
Decrease in payable for investment advisory and management fees (53,192)
Decrease in payable for distribution and service maintenance
fees......................................................... (40,301)
Decrease in payable for administration fees.................... (25,032)
Decrease in other accrued expenses............................. (2,946,439)
Unrealized depreciation on investments......................... 11,317,749
Net realized loss from investments............................. 6,269,162
-------------
Net cash provided by operating activities....................... $ 45,845,228
-------------
Cash flows from financing activities:
Proceeds from shares sold....................................... 63,582,548
Payment on shares redeemed...................................... (105,499,896)
Cash dividends paid............................................. (3,908,160)
Decrease in due to custodian.................................... (18,470)
-------------
Net cash used by financing activities........................... $ (45,843,978)
-------------
Net increase in cash............................................ 1,250
Cash balance at beginning of period............................. --
-------------
Cash balance at end of period................................... $ 1,250
=============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $5,248,050.
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 Year 10/04/06*
06/30/08 ended through
(unaudited) 12/31/07 12/31/06
----------- -------- -----------
Net Asset Value, Beginning of Period.................................. $ 8.88 $ 9.40 $ 9.39
Investment Operations:
Net investment income (loss)@......................................... 0.25 0.56 0.38
Net realized and unrealized gain (loss) on investments................ (0.42) (0.48) (0.22)
------- ------- -------
Total from investment operations..................................... (0.17) 0.08 0.16
------- ------- -------
Distributions:
Dividends from net investment income.................................. (0.25) (0.60) (0.15)
------- ------- -------
Net Asset Value, End of Period........................................ $ 8.46 $ 8.88 $ 9.40
------- ------- -------
Total Return(1)....................................................... (1.83)% 0.84% 1.75%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $79,867 $89,077 $14,165
Ratio of net expenses to average net assets........................... 1.45%# 1.45% 1.45%#
Ratio of net investment income to average net assets.................. 6.01%# 6.58% 6.78%#
Portfolio turnover rate............................................... 17% 91% 61%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.06%# 2.04% 3.26%#
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.41%# 5.99% 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
06/30/08 ended ended ended ended
(unaudited) 12/31/07 12/31/06 12/31/05 12/31/04
----------- -------- -------- -------- --------
Net Asset Value, Beginning of Period............................................ $ 8.87 $ 9.40 $ 9.39 $ 9.41 $ 9.33
Investment Operations:
Net investment income (loss)@................................................... 0.25 0.58 0.59 0.41 0.29
Net realized and unrealized gain (loss) on investments.......................... (0.43) (0.53) 0.01 (0.02) 0.08
------- ------- ------- ------- -------
Total from investment operations.............................................. (0.18) 0.05 0.60 0.39 0.37
------- ------- ------- ------- -------
Distributions:
Dividends from net investment income............................................ (0.24) (0.58) (0.59) (0.41) (0.29)
------- ------- ------- ------- -------
Net Asset Value, End of Period.................................................. $ 8.45 $ 8.87 $ 9.40 $ 9.39 $ 9.41
------- ------- ------- ------- -------
Total Return(1)................................................................. (1.98)% 0.43% 6.55% 4.24% 3.97%
Ratios/Supplemental Data
Net assets, end of period ($000's).............................................. $15,218 $19,203 $25,885 $25,181 $27,530
Ratio of net expenses to average net assets..................................... 1.75%# 1.75% 1.75% 1.75% 1.75%
Ratio of net investment income to average net assets............................ 5.76%# 6.22% 6.25% 4.36% 3.04%
Portfolio turnover rate......................................................... 17% 91% 61% 57% 24%
Expense ratio before waiver of fees and reimbursement of expenses............... 2.50%# 2.46% 2.45% 2.38% 2.38%
Net investment income ratio before waiver of fees and reimbursement of expenses. 5.00%# 5.51% 5.55% 3.73% 2.41%
--------
Year
ended
12/31/03
--------
Net Asset Value, Beginning of Period............................................ $ 8.78
Investment Operations:
Net investment income (loss)@................................................... 0.40
Net realized and unrealized gain (loss) on investments.......................... 0.54
-------
Total from investment operations.............................................. 0.94
-------
Distributions:
Dividends from net investment income............................................ (0.39)
-------
Net Asset Value, End of Period.................................................. $ 9.33
-------
Total Return(1)................................................................. 10.95%
Ratios/Supplemental Data
Net assets, end of period ($000's).............................................. $26,565
Ratio of net expenses to average net assets..................................... 1.54%
Ratio of net investment income to average net assets............................ 4.35%
Portfolio turnover rate......................................................... 75%
Expense ratio before waiver of fees and reimbursement of expenses............... 2.57%
Net investment income ratio before waiver of fees and reimbursement of expenses. 3.33%
- --------
@ 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
06/30/08 ended ended ended ended
(unaudited) 12/31/07 12/31/06 12/31/05 12/31/04
----------- -------- -------- -------- --------
Net Asset Value, Beginning of Period.................................. $ 8.87 $ 9.40 $ 9.39 $ 9.41 $ 9.33
Investment Operations:
Net investment income (loss)@......................................... 0.24 0.57 0.59 0.42 0.28
Net realized and unrealized gain (loss) on investments................ (0.42) (0.52) 0.01 (0.03) 0.09
-------- -------- -------- -------- --------
Total from investment operations..................................... (0.18) 0.05 0.60 0.39 0.37
-------- -------- -------- -------- --------
Distributions:
Dividends from net investment income.................................. (0.24) (0.58) (0.59) (0.41) (0.29)
-------- -------- -------- -------- --------
Net Asset Value, End of Period........................................ $ 8.45 $ 8.87 $ 9.40 $ 9.39 $ 9.41
-------- -------- -------- -------- --------
Total Return(1)....................................................... (1.98)% 0.43% 6.54% 4.24% 3.97%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $197,096 $235,957 $176,743 $154,584 $174,583
Ratio of net expenses to average net assets........................... 1.75%# 1.75% 1.75% 1.75% 1.75%
Ratio of net investment income to average net assets.................. 5.74%# 6.24% 6.26% 4.36% 3.06%
Portfolio turnover rate............................................... 17% 91% 61% 57% 24%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.42%# 2.40% 2.39% 2.32% 2.35%
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.07%# 5.59% 5.62% 3.79% 2.46%
---------
Year
ended
12/31/03
--------
Net Asset Value, Beginning of Period.................................. $ 8.78
Investment Operations:
Net investment income (loss)@......................................... 0.38
Net realized and unrealized gain (loss) on investments................ 0.56
--------
Total from investment operations..................................... 0.94
--------
Distributions:
Dividends from net investment income.................................. (0.39)
--------
Net Asset Value, End of Period........................................ $ 9.33
--------
Total Return(1)....................................................... 10.92%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $103,726
Ratio of net expenses to average net assets........................... 1.59%
Ratio of net investment income to average net assets.................. 4.22%
Portfolio turnover rate............................................... 75%
Expense ratio before waiver of fees and reimbursement of expenses..... 2.51%
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 3.31%
- --------
@ 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
06/30/08 ended ended ended ended ended
(unaudited) 12/31/07 12/31/06 12/31/05 12/31/04 12/31/03
----------- -------- -------- -------- -------- --------
Net Asset Value, Beginning of Period.... $ 8.87 $ 9.40 $ 9.39 $ 9.41 $ 9.33 $ 8.78
Investment Operations:
Net investment income (loss)@........... 0.26 0.63 0.66 0.47 0.33 0.43
Net realized and unrealized gain (loss)
on investments......................... (0.42) (0.54) (0.01) (0.03) 0.08 0.54
------ ------- ------- ------- ------- -------
Total from investment operations....... (0.16) 0.09 0.65 0.44 0.41 0.97
------ ------- ------- ------- ------- -------
Distributions:
Dividends from net investment income.... (0.26) (0.62) (0.64) (0.46) (0.33) (0.42)
------ ------- ------- ------- ------- -------
Net Asset Value, End of Period.......... $ 8.45 $ 8.87 $ 9.40 $ 9.39 $ 9.41 $ 9.33
------ ------- ------- ------- ------- -------
Total Return(1)......................... (1.74)% 0.93% 7.08% 4.76% 4.49% 11.28%
Ratios/Supplemental Data
Net assets, end of period ($000's)...... $8,343 $10,428 $16,034 $23,148 $27,630 $13,369
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..................... 6.25%# 6.71% 6.71% 4.86% 3.60% 4.63%
Portfolio turnover rate................. 17% 91% 61% 57% 24% 75%
Expense ratio before waiver of fees and
reimbursement of expenses.............. 1.65%# 1.65% 1.72% 1.60% 1.62% 1.86%
Net investment income ratio before
waiver of fees and reimbursement of
expenses............................... 5.85%# 6.31% 6.24% 4.51% 3.23% 4.02%
- --------
@ 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 Year 4/28/04*
06/30/08 ended ended ended through
(unaudited) 12/31/07 12/31/06 12/31/05 12/31/04
----------- -------- -------- -------- -----------
Net Asset Value, Beginning of Period.................................. $ 8.88 $ 9.40 $ 9.39 $ 9.41 $ 9.42
Investment Operations:
Net investment income (loss)@......................................... 0.24 0.55 0.59 0.43 0.22
Net realized and unrealized gain (loss) on investments................ (0.42) (0.47) 0.04 (0.01) (0.01)
------ ------ ------ ------ ------
Total from investment operations..................................... (0.18) 0.08 0.63 0.42 0.21
------ ------ ------ ------ ------
Distributions:
Dividends from net investment income.................................. (0.25) (0.60) (0.62) (0.44) (0.22)
------ ------ ------ ------ ------
Net Asset Value, End of Period........................................ $ 8.45 $ 8.88 9.40 $ 9.39 $ 9.41
------ ------ ------ ------ ------
Total Return(1)....................................................... (1.95)% 0.85% 6.86% 4.55% 2.22%
Ratios/Supplemental Data
Net assets, end of period ($000's).................................... $5,399 $4,628 $ 773 $ 401 $ 224
Ratio of net expenses to average net assets........................... 1.45%# 1.45% 1.45% 1.45% 1.45%#
Ratio of net investment income to average net assets.................. 5.96%# 6.58% 6.57% 4.74% 3.44%#
Portfolio turnover rate............................................... 17% 91% 61% 57% 24%
Expense ratio before waiver of fees and reimbursement of expenses..... 1.94%# 2.13% 4.06% 4.32% 9.31%#
Net investment income ratio before waiver of fees and reimbursement
of expenses.......................................................... 5.46%# 5.90% 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, 2008 -- (unaudited)
Industry Allocation*
Broadcasting & Entertainment . . . . . . . . . . . . . . . . . . . ................... 10.3%
Printing and Publishing . . . . . . . . . . . . . . . . . . . . . . . . . ............ 7.8
Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 7.6
Leisure, Amusement, Entertainment . . . . . . . . . . . . . . . ...................... 7.1
Retail Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 6.9
Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5.3
Chemicals, Plastics and Rubber . . . . . . . . . . . . . . . . . . ................... 5.1
Healthcare, Education and Childcare . . . . . . . . . . . . . . . .................... 4.9
Oil and Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 4.3
Telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . ............. 4.3
Buildings & Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . ............ 4.1
Hotels, Motels, Inns and Gaming . . . . . . . . . . . . . . . . . .................... 4.1
Electronics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 3.5
Cargo Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... 3.3
Diversified/Conglomerate Manufacturing . . . . . . . . . . . ......................... 2.9
Beverage, Food & Tobacco . . . . . . . . . . . . . . . . . . . . . . ................. 2.8
Registered Investment Companies....................................................... 2.7
Automobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 2.6
Personal, Goods and Misc. Services . . . . . . . . . . . . . . . ..................... 1.6
Home and Office Furnishings, Housewares and Durables.................................. 1.4
Personal Transportation . . . . . . . . . . . . . . . . . . . . . . . . .............. 1.3
Personal and Nondurable Consumer Products . . . . . . . .............................. 1.3
Containers, Packaging and Glass . . . . . . . . . . . . . . . . . .................... 1.0
Machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 1.0
Mining, Steel, Iron and Nonprecious Metals . . . . . . . . . ......................... 0.8
Diversified/Conglomerate Service . . . . . . . . . . . . . . . . . ................... 0.7
Aerospace/Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............ 0.7
Textiles and Leather . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 0.3
----
99.7%
====
Credit Quality+#
BBB- . . . .......................................................................... 0.3%
BB+ . . . . ......................................................................... 4.3
BB . . . . . ........................................................................ 11.9
BB- . . . . ......................................................................... 23.4
B+ . . . . . ........................................................................ 25.0
B . . . . . . ....................................................................... 20.0
B- . . . . . ........................................................................ 5.6
CCC+ . . . .......................................................................... 5.2
CCC . . . . ......................................................................... 0.7
CC . . . . . ........................................................................ 0.4
D.................................................................................... 0.1
Not Rated@........................................................................... 3.1
-----
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, 2008 -- (unaudited)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ----------------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 96.4%
Aerospace/Defense -- 0.7%
Axle Tech International.............. BTL-B Ba3 BB- 4.45-4.70% 10/21/12 $ 196,429 $ 187,588
McKechnie Aerospace De, Inc.@........ 2nd Lien Ba3 CCC+ 7.49 05/11/15 1,500,000 1,243,799
Wesco International.................. 2nd Lien Caa1 B 8.56 03/28/14 500,000 490,312
-----------
1,921,699
-----------
Automobile -- 2.6%
Allison Transmission, Inc............ BTL-B B1 BB- 5.23-5.47 08/07/14 1,994,975 1,785,502
FleetPride Corp...................... BTL-B Ba3 BB- 5.20-5.38 06/06/13 226,563 206,171
KAR Holdings, Inc.................... BTL Ba3 B+ 5.06 10/20/13 2,972,481 2,695,669
Key Safety Systems, Inc.............. 1st Lien B1 B+ 4.74-5.07 03/08/14 1,481,250 1,307,203
Ozburn-Hessey Holding Co. LLC........ BTL B1 B 5.88-6.33 08/30/12 507,722 454,412
United Components, Inc............... Tranche D Ba3 BB- 4.58-4.72 06/30/12 416,465 399,806
Visteon Corp......................... BTL-B Ba3 BB- 7.19 12/13/13 1,000,000 810,938
-----------
7,659,701
-----------
Beverage, Food & Tobacco -- 2.8%
Aramark Corp......................... BTL Ba3 BB 4.68 01/26/14 1,537,275 1,453,598
Aramark Corp......................... LOC Ba3 BB 5.03 01/26/14 97,663 92,347
B&G Foods, Inc....................... BTL-B Ba2 BB- 4.65 02/26/13 565,217 544,022
Best Brands Corp..................... BTL-C Caa3 CC 18.00 06/30/13 1,499,740 1,327,270
Birds Eye Foods, Inc................. BTL Ba3 B+ 4.56 03/22/13 854,167 820,000
Dean Foods Co........................ BTL-B B1 BB 3.99-4.31 04/02/14 987,500 936,336
Dole Food Co., Inc................... BTL-B Ba3 B+ 4.75-6.00 04/12/13 204,593 190,623
Dole Food Co., Inc................... BTL-C Ba3 B+ 4.75-6.00 04/12/13 681,977 635,411
Dole Food Co., Inc................... CLD Ba3 B+ 4.71 04/12/13 93,023 86,672
Fresh Start Bakeries, Inc.@.......... 2nd Lien Caa1 CCC+ 8.44 03/29/14 250,000 217,500
NPC International, Inc............... BTL Ba3 B 4.23-4.62 05/03/13 1,572,024 1,454,123
Pinnacle Foods Group, Inc............ BTL-B B2 B 5.20-5.56 04/02/14 990,000 925,403
-----------
8,683,305
-----------
Broadcasting & Entertainment -- 10.3%
Century -- TCI California LP+#@(5)... Revolver NR NR 5.00 12/31/07 10,000 9,900
Cequel Communications LLC............ 2nd Lien B1 BB- 4.69-6.00 11/05/13 1,975,000 1,856,006
Charter Communications Operating LLC. BTL B1 B+ 4.90 03/06/14 3,980,000 3,503,757
Citadel Broadcasting Co.............. BTL-B Ba3 BB- 4.12-4.44 05/31/14 6,000,000 5,212,500
Cumulus Media, Inc................... BTL B1 B 4.22-4.23 06/07/14 1,937,361 1,726,673
Gray Television, Inc................. BTL-B B2 B 4.19 11/15/14 924,906 832,415
Haights Cross Operating Co........... BTL B2 B- 7.18 08/20/08 1,426,363 1,386,282
HIT Entertainment, Ltd.@............. 2nd Lien B3 B- 8.29 02/26/13 1,000,000 835,000
Insight Midwest Holdings LLC......... BTL-B B1 B+ 4.69 04/06/14 2,025,000 1,951,600
Intelsat Zeus, Ltd................... BTL B1 BB- 5.93 07/03/13 970,225 946,576
Local TV LLC......................... BTL-B Ba3 B+ 4.80-4.87 05/07/13 851,673 743,085
Mission Broadcasting, Inc............ BTL-B Ba2 BB- 4.55 10/01/12 1,182,752 1,105,873
Nexstar Broadcasting, Inc............ BTL-B Ba2 BB- 4.65 08/14/12 1,119,475 1,046,709
NextMedia Operating, Inc............. 2nd Lien Caa2 CCC 9.48 11/15/13 500,000 403,750
PanAmSat Corp........................ BTL-A3 B1 BB- 5.18 07/06/12 115,741 111,883
PanAmSat Corp........................ BTL-B2A B1 BB- 5.18 01/03/14 1,410,913 1,343,894
PanAmSat Corp........................ BTL-B2B B1 BB- 5.18 01/03/14 1,410,488 1,343,490
PanAmSat Corp........................ BTL-B2C B1 BB- 5.18 01/03/14 1,410,488 1,343,490
Spanish Broadcasting Systems, Inc.... 1st Lien B3 B+ 4.56 06/10/12 967,500 783,675
Univision Communications, Inc........ BTL-B Ba3 B 4.73-5.15 09/15/14 4,000,000 3,302,500
WideOpenWest Finance LLC............. BTL B2 B- 5.14-5.40 06/22/14 1,000,000 877,500
Young Broadcasting, Inc.............. BTL B1 B 5.00-5.25 11/03/12 970,000 882,700
-----------
31,549,258
-----------
15
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- -------------------------------------------------------------------------------------------------------------------
Buildings & Real Estate -- 4.1%
Brand Services, Inc..................... BTL B1 B 5.06-5.19% 02/07/14 $1,971,244 $ 1,813,544
Brand Services, Inc..................... BTL-B2 B1 B 6.06-6.19 02/07/14 990,600 941,070
Brickman Group Holdings, Inc............ BTL-B B2 B 4.80 01/23/14 1,975,000 1,836,750
Building Materials Holding Corp......... Junior 2nd Lien Caa2 BB 8.31 09/15/14 1,000,000 800,833
Building Materials Holding Corp......... BTL B3 B+ 5.69 02/22/14 985,093 879,688
LandSource Communities Development LLC.. 1st Lien Ba2 BB+ 6.75 02/27/13 867,571 643,358
LandSource Communities Development LLC@. 2nd Lien B2 BB 10.55 02/27/14 500,000 93,750
North Las Vegas......................... 1st Lien B3 B+ 6.48 05/01/11 223,646 171,089
North Las Vegas@........................ 2nd Lien Caa3 CCC+ 10.73 05/01/12 250,000 75,000
PGT Industries, Inc..................... BTL-A2 Caa1 B- 5.48 02/14/12 439,024 386,341
Realogy Corp............................ CLTL Ba3 BB- 5.55 10/10/14 735,000 627,375
Realogy Corp............................ BTL Ba3 BB- 5.48 04/05/14 2,730,000 2,330,249
Tensar Earth Technologies............... BTL-B Ba3 B+ 6.40 10/31/12 942,305 876,344
ValleyCrest Cos......................... 1st Lien B1 B+ 4.68 10/08/13 1,045,663 941,096
Yellowstone Club........................ 2nd Lien B1 B 4.86 09/30/10 204,667 170,555
-----------
12,587,042
-----------
Cargo Transport -- 3.3%
Cardinal Logistics Management, Inc.@.... 2nd Lien NR NR 8.48 03/23/14 1,000,000 855,000
Dockwise Transport BV................... BTL-B B1 B 5.18 04/01/15 500,000 473,750
Dockwise Transport BV................... BTL-B2 B1 B 5.07 04/01/15 244,379 231,549
Dockwise Transport BV................... BTL-C B1 B 5.68 04/01/16 244,379 231,549
Dockwise Transport BV................... BTL-C2 B1 B 5.68 04/01/16 500,000 473,750
Dockwise Transport BV................... BTL-D B1 B 7.30 07/12/16 500,000 440,834
Dockwise Transport BV................... BTL-D2 B1 B 7.30 07/12/16 1,000,000 881,667
Greatwide Logistics Services, Inc.(11).. 2nd Lien Caa2 CCC 9.31 06/19/14 1,000,000 675,000
Hertz Corp.............................. Tranche B Ba1 BB+ 4.23-4.24 12/21/12 344,566 326,907
RailAmerica, Inc........................ BTL-B B2 B 4.93 08/14/09 1,000,000 987,500
RailAmerica, Inc........................ CND TL B2 B 6.79 06/18/09 60,800 60,040
RailAmerica, Inc........................ BTL-B B2 B 6.79 06/18/09 939,200 927,460
Swift Transportation Co., Inc........... BTL-B B1 B+ 6.13 05/10/14 4,418,605 3,562,500
-----------
10,127,506
-----------
Chemicals, Plastics & Rubber -- 5.1%
AZ Chemicals, Inc....................... 1st Lien B1 BB- 4.64-6.00 02/28/13 938,667 811,947
Brenntag AG............................. BTL B1 B+ 5.79 01/20/14 49,091 46,145
Brenntag AG............................. BTL-B2 B1 B+ 5.79 01/20/14 200,909 188,855
Celanese AG............................. BTL-B Ba2 BB+ 4.19 04/02/14 2,475,000 2,359,370
Cognis GmbH............................. STFA B1 B 4.81 09/15/13 1,000,000 916,250
Cristal Inorganic Chemicals US, Inc..... 1st Lien Ba3 B+ 5.30 05/15/14 995,000 863,163
Hexion Specialty Chemicals, Inc......... BTL-C1 Ba3 B+ 4.94 05/05/13 807,162 728,463
Hexion Specialty Chemicals, Inc......... BTL-C2 Ba3 B+ 5.06 05/05/13 174,892 157,840
Huntsman International LLC.............. BTL-B Ba1 BB+ 4.23 04/19/14 2,878,049 2,676,585
Ineos US Finance LLC.................... BTL-B Ba3 BB- 4.88 12/16/13 713,619 646,717
Ineos US Finance LLC.................... BTL-C Ba3 BB- 5.38 12/16/14 713,423 646,539
ISP Chemco, Inc......................... BTL-B Ba3 BB- 4.00-4.25 06/04/14 1,485,000 1,407,038
Kraton Polymers LLC..................... BTL-B B1 B- 4.75 05/12/13 374,246 354,598
Lyondell Chemical Co.................... BTL-B2 Ba2 BB 7.00 05/28/15 1,097,250 960,094
Lyondell Chemical Co.................... BTL-B3 Ba2 BB 6.53 05/28/15 997,500 868,448
Momentive Performance................... BTL Ba3 BB- 4.75 12/04/13 976,959 897,825
Wellman, Inc.(5)(11).................... 2nd Lien NR D 9.99 02/01/10 1,000,000 261,667
Yankee Candle Co........................ BTL-B Ba3 BB- 4.49-4.81 02/06/14 923,269 843,349
-----------
15,634,893
-----------
Containers, Packaging & Glass -- 1.0%
Graham Packaging Co. LP................. BTL-B B1 B+ 4.88-5.06 10/07/11 2,962,500 2,851,406
MMGS Packaging Acquisition@............. 2nd Lien Caa2 CCC 8.31 03/10/14 500,000 162,500
-----------
3,013,906
-----------
16
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------
Diversified/Conglomerate Manufacturing -- 2.9%
Accuride Corp................................ BTL-B Ba3 BB- 6.00-6.19% 01/31/12 $1,071,364 $ 1,030,295
Cinram International, Inc.................... BTL-B B1 B+ 4.78 05/05/11 984,925 797,789
Culligan International Co.................... BTL-B B2 B 4.73-5.05 11/24/12 987,500 730,750
Maxim Crane Works LP......................... BTL-B B1 B+ 4.45 06/29/14 991,618 988,519
Oshkosh Truck Corp........................... BTL-B Ba3 BBB- 4.20-4.43 12/06/13 977,500 920,479
RGIS LLC..................................... Delayed Draw Ba3 B- 5.30 05/01/14 47,143 41,211
RGIS LLC..................................... BTL-B Ba3 B- 5.30-5.40 04/27/14 942,857 824,215
Veyance Technologies, Inc.................... 1st Lien B1 B+ 5.40 07/02/14 2,605,313 2,354,551
Veyance Technologies, Inc.................... Delayed Draw B1 B+ 4.99 07/02/14 373,125 337,212
X-Rite, Inc.................................. 1st Lien B3 B- 9.50 10/29/12 992,500 873,400
-----------
8,898,421
-----------
Diversified/Conglomerate Service -- 0.7%
Bridge Information Systems, Inc.+#@(5)(6).... BTL-B Caa1 D 8.00 05/29/05 397,353 0
NES Rentals Holdings......................... 2nd Lien Caa1 B 9.63 07/20/13 2,157,140 1,660,998
Protection One, Inc.......................... BTL Ba2 BB 4.64-4.74 04/18/11 455,971 419,493
-----------
2,080,491
-----------
Electronics -- 2.9%
Affiliated Computer Services................. FSRI Ba2 BB 4.45-4.48 03/20/13 980,000 951,365
Aspect Software, Inc......................... Tranche A-1 Ba3 BB- 5.81 07/11/11 418,836 410,459
Infor Global Solutions....................... Delayed Draw B1 B- 6.55 07/28/12 336,857 288,013
Infor Global Solutions....................... BTL B1 B+ 6.55 07/28/12 645,643 552,025
Itron, Inc................................... BTL Ba3 B+ 4.49 04/18/14 625,961 609,138
Radio Systems, Inc........................... BTL-B B2 B+ 5.23 10/05/13 471,505 458,539
Reynolds & Reynolds Co....................... 1st Lien Ba2 BB 4.80 10/26/12 893,476 852,711
Reynolds & Reynolds Co....................... 2nd Lien B3 B 8.30 10/26/13 250,000 240,625
Sensata Technologies BV...................... BTL-B Ba3 BB 4.66 04/30/13 1,969,849 1,830,319
SunGard Data Systems, Inc.................... BTL-B Ba3 BB 4.51 02/28/14 2,880,951 2,734,743
-----------
8,927,937
-----------
Finance -- 7.6%
Alliant Holdings............................. BTL-B B2 B 5.80 11/01/14 992,500 937,913
Amwins Group, Inc............................ 1st Lien B2 B- 4.98-5.15 06/08/13 1,980,000 1,663,200
Bankruptcy Management Solutions.............. 2nd Lien Caa1 CCC 8.73 07/31/13 245,625 185,447
Chrysler Financial Services LLC.............. BTL-B B1 BB- 6.78 08/03/12 992,500 822,038
First Data Corp.............................. BTL-B1 Ba3 BB- 5.23-5.55 09/24/14 1,985,000 1,827,193
First Data Corp.............................. BTL-B3 Ba3 BB- 5.55 09/24/14 992,500 915,443
Hub International Holdings, Inc.(8).......... BTL B2 B+ 5.30 06/13/14 2,426,471 2,259,651
Hub International Holdings, Inc.(8).......... Delayed Draw B2 B+ 5.30 06/13/14 423,814 394,677
iPayment, Inc................................ BTL-B B1 B 4.46-4.80 05/08/13 1,938,218 1,700,786
LPL Holdings, Inc............................ Tranche D B1 B 4.48-4.80 06/29/14 1,984,925 1,885,678
Metavante Corp............................... BTL-B Ba2 BB 4.62 11/01/14 1,995,000 1,915,200
National Processing Co. LLC.................. 1st Lien B2 B+ 5.70 09/29/12 1,423,865 1,217,405
National Processing Co. LLC.................. 2nd Lien Caa2 CCC+ 9.20 09/29/14 500,000 392,500
Neff Corp.................................... 2nd Lien Caa1 B- 6.40 10/31/14 500,000 343,334
NES Tanks.................................... 2nd Lien Caa2 B 6.51 04/06/14 500,000 375,000
Nielsen Finance LLC.......................... BTL-B Ba3 B+ 4.73 08/15/13 992,429 927,212
Rental Service Corp.......................... 2nd Lien B3 B- 6.23 11/30/13 2,295,841 1,958,639
TransFirst Holdings, Inc..................... BTL-B B2 B 5.56 06/15/14 2,974,962 2,662,591
USI Holdings Corp............................ BTL-B B2 B 5.56 05/04/14 992,481 923,008
-----------
23,306,915
-----------
17
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare, Education & Childcare -- 4.9%
AMR/EmCare Holdings.................................... BTL Ba1 BB 4.48-4.70% 02/10/12 $ 637,184 $ 623,644
Biomet, Inc.(7)........................................ BTL-B B1 BB- 5.80 03/25/15 1,985,000 1,948,746
CHG Cos., Inc.......................................... 2nd Lien B1 B 8.71 12/08/13 1,000,000 885,000
Community Health Systems, Inc.(8)...................... BTL-B Ba3 BB 4.73-4.90 07/15/14 1,756,137 1,657,776
Gambro AB.............................................. BTL-B B2 B- 5.22 06/05/14 430,973 381,411
Gambro AB.............................................. BTL-C B2 B- 5.72 06/05/15 430,973 379,256
Health Management Associates........................... BTL-B Ba3 BB- 4.55 02/28/14 2,829,409 2,637,009
IASIS Healthcare Corp.................................. Delayed Draw Ba2 B+ 4.48 03/15/14 476,948 453,299
IASIS Healthcare Corp.................................. LOC Ba2 B+ 6.63 03/15/14 127,186 120,880
IASIS Healthcare Corp.................................. BTL Ba2 B+ 4.48 03/15/14 1,378,418 1,310,072
PTS Pharmaceuticals.................................... BTL-B Ba3 BB- 5.05 04/10/14 1,980,000 1,770,863
Spectrum Labs.......................................... BTL-B NR NR 6.05 12/23/11 975,000 887,250
Team Health, Inc....................................... BTL-B B1 BB- 4.66-4.80 11/23/12 243,750 227,906
Vanguard Health Systems, Inc........................... Tranche 1 Ba3 B+ 5.05 09/25/11 965,545 934,165
Warner Chilcott Corp................................... BTL-B Ba3 BB- 4.48-4.80 01/18/12 656,579 640,575
Warner Chilcott Corp................................... BTL-C Ba3 BB- 4.80 01/18/12 255,664 249,433
-----------
15,107,285
-----------
Home & Office Furnishings, Housewares & Durables -- 1.4%
Jarden Corp............................................ BTL-B1 Ba3 BB- 4.55 01/24/12 1,022,569 977,547
Jarden Corp............................................ BTL-B2 Ba3 BB- 4.55 01/24/12 544,684 520,703
National Bedding Co.................................... 1st Lien B1 BB 4.48-6.00 02/28/14 1,425,067 1,151,928
National Bedding Co.@.................................. 2nd Lien Caa1 B 7.48 08/31/11 1,000,000 727,500
Simmons Co............................................. BTL-C Ba2 BB- 4.50-7.25 12/19/11 816,772 760,619
-----------
4,138,297
-----------
Hotels, Motels, Inns, & Gaming -- 4.1%
CCM Merger, Inc........................................ BTL-B B1 BB- 4.64-4.81 07/13/12 481,047 453,988
Fairmont Hotels and Resorts............................ BTL-B NR NR 5.63 06/15/11 362,353 349,671
Golden Nugget, Inc.(8)................................. 1st Lien B1 BB- 4.49 06/08/14 1,272,727 1,164,545
Green Valley Ranch Gaming LLC@......................... 2nd Lien Caa1 CCC+ 5.89 07/08/14 1,000,000 652,500
Harrah's Operating Co., Inc............................ BTL-B1 Ba2 B 5.80-5.92 02/03/14 997,500 914,895
Harrah's Operating Co., Inc............................ BTL-B2 Ba2 B 5.80-5.92 01/28/15 997,500 913,267
Isle of Capri Casinos, Inc............................. BTL Ba3 BB+ 4.55 07/26/14 1,164,706 1,039,500
Isle of Capri Casinos, Inc............................. Delayed Draw A Ba3 BB+ 4.55 07/26/14 351,176 313,425
Isle of Capri Casinos, Inc............................. Delayed Draw B Ba3 BB+ 4.55 07/26/14 465,882 415,800
Las Vegas Sands, Inc................................... BTL Ba3 BB 4.45 05/23/14 2,970,000 2,712,394
New World Gaming Partners, Ltd......................... Delayed Draw Ba3 BB- 5.19 09/30/14 500,000 442,188
New World Gaming Partners, Ltd......................... 1st Lien Ba3 BB- 5.19 09/30/14 2,487,500 2,199,883
Venetian Macau, Ltd.................................... BTL B1 BB- 5.06 05/23/13 500,000 486,953
Venetian Macau, Ltd.................................... BTL-B B1 BB- 5.06 05/26/13 166,667 162,318
Wembley, Inc.@......................................... 1st Lien Caa1 CCC+ 6.71-7.19 08/18/12 243,243 164,189
Wembley, Inc.@......................................... 2nd Lien Ca C 6.93-7.19 07/18/12 250,000 93,750
-----------
12,479,266
-----------
18
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- ------------------------------------------------------------------------------------------------------------------------
Leisure, Amusement, Entertainment -- 7.1%
24 Hour Fitness Worldwide, Inc................. BTL-B Ba3 B+ 4.99-5.20% 06/08/12 $1,955,000 $ 1,847,475
Audio Visual Services Group, Inc.@............. 2nd Lien B3 CCC+ 8.31 08/28/14 1,000,000 900,000
Cedar Fair LP.................................. BTL Ba3 BB 4.48 08/30/12 1,972,405 1,874,333
Deluxe Entertainment Service Group, Inc........ CND TL B1 B 5.05 05/14/13 73,787 66,409
Deluxe Entertainment Service Group, Inc........ Tranche A B1 B 4.95 05/11/13 39,370 35,433
Deluxe Entertainment Service Group, Inc........ BTL-B B1 B 4.90-5.15 05/11/13 776,606 698,946
Fender Musical Instruments Corp................ Delayed Draw B2 B+ 5.06 06/06/14 333,333 308,333
Fender Musical Instruments Corp................ BTL-B B2 B+ 4.70-5.17 06/06/14 661,667 612,042
Formula One Holdings........................... BTL-B1 NR NR 4.86 12/31/12 1,142,857 1,092,381
Formula One Holdings........................... BTL-B2 NR NR 4.86 12/31/12 785,714 751,012
Formula One Holdings........................... BTL-D2 NR NR 6.63 06/30/14 1,500,000 1,351,875
Hicks Sports Group............................. BTL-B B2 CCC+ 5.31 12/22/10 3,000,000 2,640,000
Metro-Goldwyn-Mayer Studios, Inc............... BTL-B Ba3 CCC+ 6.05 04/08/12 2,932,500 2,414,075
Panavision, Inc.@.............................. 2nd Lien Caa2 CCC+ 10.40-10.42 03/30/12 500,000 412,500
Six Flags Theme Parks, Inc..................... BTL B1 B 4.60-5.33 04/30/15 3,960,000 3,508,314
WMG Acquisition Corp.(8)....................... BTL-B Ba3 BB- 4.48-4.92 02/28/11 3,332,803 3,163,387
-----------
21,676,515
-----------
Machinery -- 1.0%
Generac Power Systems, Inc..................... 1st Lien B1 B 5.18 11/06/13 479,538 402,512
Generac Power Systems, Inc..................... 2nd Lien Caa1 CCC+ 8.63 05/07/14 1,000,000 717,500
Gleason Corp................................... BTL-B Ba3 B+ 4.44-4.50 06/30/13 974,912 935,916
NACCO Materials Handling Group, Inc............ BTL NR NR 4.48-6.00 03/21/13 984,925 886,432
-----------
2,942,360
-----------
Mining, Steel, Iron & Nonprecious Metals -- 0.8%
Aleris International, Inc...................... BTL B2 BB- 4.56 12/19/13 985,000 855,308
Algoma Steel, Inc.............................. BTL-B B3 BB- 4.99 06/08/13 708,611 671,409
Novelis, Inc................................... CND TL Ba2 BB 4.81 06/28/14 309,375 296,098
Novelis, Inc................................... BTL Ba2 BB 4.81 06/28/14 680,625 651,415
Walter Industries, Inc......................... BTL B2 BB 5.48-5.80 10/03/12 77,584 75,451
-----------
2,549,681
-----------
Oil & Gas -- 4.3%
Alon USA, Inc. (Edgington Facility)............ BTL B1 BB 4.90 06/22/13 27,025 23,309
Alon USA, Inc. (Paramount Facility)............ BTL B1 BB 4.73-4.90 06/22/13 216,202 186,475
Atlas Pipeline Partners LP..................... BTL-B Ba2 BB- 5.14-5.24 07/19/14 1,412,952 1,407,653
ATP Oil & Gas Corp............................. BTL-B1 B1 B- 8.50 07/15/14 636,364 620,455
ATP Oil & Gas Corp............................. BTL-B2 B1 B- 8.50 01/15/11 363,636 354,545
Big West Oil LLC............................... Delayed Draw B1 BB 4.48-4.72 05/15/14 1,100,000 1,032,625
Big West Oil LLC............................... BTL-B B1 BB 4.48 05/31/14 880,000 826,100
CDX Funding LLC(11)............................ 2nd Lien NR NR 8.73 03/01/13 1,000,000 847,500
Coffeyville Resources LLC...................... LOC B2 BB- 5.45 12/27/10 162,162 154,054
Coffeyville Resources LLC...................... BTL-B B2 BB- 5.45-6.75 12/27/13 526,226 499,915
Dresser, Inc................................... 1st Lien B2 B+ 4.98-5.22 05/04/14 1,948,846 1,879,662
Dresser, Inc................................... 2nd Lien B3 B- 8.47 05/04/15 1,000,000 966,875
Helix Energy Solutions Group, Inc.............. BTL-B Ba2 BB+ 4.48-4.71 07/01/13 504,498 491,255
McJunkin Corp.................................. BTL B1 B+ 6.05 01/30/14 985,000 970,636
Targa Resources, Inc........................... LOC Ba3 B+ 4.70 10/31/12 96,774 94,435
Targa Resources, Inc........................... BTL-B Ba3 B+ 4.65-4.80 10/31/12 170,460 166,340
Venoco, Inc.................................... 2nd Lien Caa1 B 6.69 05/07/14 1,000,000 975,000
Western Refining Co. LP........................ BTL B1 BB- 4.65 05/30/14 1,838,571 1,719,064
-----------
13,215,898
-----------
Personal & Nondurable Consumer Products -- 1.3%
American Achievement Corp...................... BTL-B Ba3 BB- 4.73-6.25 03/25/11 487,001 482,131
Hillman Group, Inc............................. BTL-B Ba3 BB- 5.69 03/31/11 772,839 722,604
Huish Detergents, Inc.......................... 1st Lien B1 B+ 4.81 04/25/14 1,980,000 1,796,850
Huish Detergents, Inc.......................... 2nd Lien Caa1 CCC+ 7.06 10/26/14 1,000,000 860,000
-----------
3,861,585
-----------
19
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- -----------------------------------------------------------------------------------------------------------------------
Personal, Goods & Misc. Services -- 1.6%
Central Parking Corp............................ LOC Ba2 B 5.13% 05/22/13 $ 379,310 $ 353,707
Central Parking Corp............................ 1st Lien Ba2 B 4.93 05/22/14 1,116,288 1,040,939
NEP, Inc........................................ BTL-B B2 B 5.05 02/16/14 987,492 898,618
Sabre Holdings Corp............................. BTL-B B1 B+ 4.48-4.90 09/30/14 2,943,615 2,440,048
Travelport, Inc................................. BTL-B Ba3 BB- 4.73 08/23/13 265,601 239,631
-----------
4,972,943
-----------
Personal Transportation -- 1.3%
Continental Airlines, Inc....................... BTL-A1 Ba3 B 6.06 06/01/11 285,714 268,571
Continental Airlines, Inc....................... BTL-A2 Ba3 B 6.06 06/01/11 714,286 671,429
Delta Air Lines, Inc............................ 2nd Lien B2 B 6.15 04/30/14 990,000 659,588
United Airlines, Inc............................ Tranche B B1 BB- 4.50-4.94 02/02/14 1,424,444 1,070,708
US Airways Group, Inc........................... BTL B2 B+ 4.98 03/21/14 1,980,000 1,316,700
-----------
3,986,996
-----------
Printing & Publishing -- 7.8%
Advanstar Communications, Inc................... 1st Lien B1 B+ 5.05 05/31/14 1,982,481 1,645,459
Advanstar Communications, Inc................... 2nd Lien Caa2 CCC+ 7.80 11/30/14 1,000,000 715,000
Affinity Group, Inc............................. BTL Ba3 B+ 4.98-5.40 06/24/09 1,111,163 1,055,605
Affinity Group, Inc............................. BTL-A Ba3 B+ 4.98-5.40 03/20/14 240,710 228,674
Caribe Information Investment, Inc.............. BTL-B B1 B+ 4.74-4.96 03/31/13 1,707,399 1,528,122
Discovery Communications, Inc................... BTL-B NR NR 4.80 04/30/14 980,050 963,389
GateHouse Media Operating, Inc.................. Delayed Draw B2 BB- 4.65-4.72 08/28/14 543,478 385,870
GateHouse Media Operating, Inc.................. BTL B2 BB- 4.65 08/28/14 2,456,522 1,744,130
GateHouse Media Operating, Inc.................. BTL-C B2 BB- 4.93 05/07/14 1,000,000 705,000
Idearc, Inc..................................... BTL-B Ba3 BB 4.49-4.80 11/17/14 1,970,000 1,580,925
Local Insight Regatta Holdings, Inc............. BTL Ba3 BB- 7.75 04/23/13 750,000 690,938
National CineMedia, Inc......................... BTL B1 B+ 4.54 01/29/15 1,000,000 918,393
Penton Media, Inc............................... BTL-B B1 BB- 4.73-5.15 02/01/13 987,500 834,438
Reader's Digest Associations, Inc............... BTL-B B1 B 4.45-4.68 03/02/14 987,500 863,445
Thomas Nelson Publishers........................ BTL-B B1 B 4.73-4.96 06/12/12 485,366 431,976
Thompson Publishing Group, Inc.................. BTL B1 B+ 4.98 07/05/14 2,977,500 2,711,758
Tribune Co...................................... BTL-B B2 B 5.48 05/01/14 5,955,000 4,396,773
Valassis Communications, Inc.................... BTL Ba2 BB 4.56 03/02/14 1,287,000 1,229,622
Valassis Communications, Inc.................... Delayed Draw Ba2 BB 4.56 03/02/14 426,667 407,645
Yell Group, Ltd................................. BTL-B Ba3 BB- 4.48 08/10/13 1,000,000 900,714
-----------
23,937,876
-----------
Retail Stores -- 6.9%
Claire's Stores, Inc............................ BTL-B B1 B 5.40-5.55 05/29/14 2,970,000 2,165,005
David's Bridal, Inc............................. BTL B2 B 4.80 01/31/14 1,975,000 1,757,750
Dollar General Corp............................. BTL-B1 B2 B+ 5.65 07/06/14 1,000,000 935,694
General Nutrition Centers....................... BTL-B B1 B- 4.94-5.06 09/16/13 1,975,000 1,820,292
JRD Holdings, Inc............................... BTL Ba3 B+ 4.95 05/15/17 968,750 910,625
KIK Custom Products............................. CND TL B1 CCC+ 5.17 05/23/14 580,976 439,605
KIK Custom Products............................. BTL B1 CCC+ 5.17 05/23/14 3,389,024 2,564,363
Michaels Stores, Inc............................ BTL B2 B 5.00-5.75 10/31/13 2,969,849 2,480,442
Neiman-Marcus Group, Inc........................ BTL Ba3 BB+ 4.42 04/06/13 822,785 786,377
Petco Animal Supplies, Inc...................... BTL-B B1 BB- 4.73-5.15 10/25/13 492,500 455,809
Quality Stores, Inc. (Central Tractor)+#@(5)(6). BTL-B Caa2 NR 7.50 04/30/07 833,705 0
Quizno's LLC.................................... 1st Lien B2 B+ 4.81 05/05/13 2,196,348 1,928,393
Sally Holdings LLC.............................. BTL-A B2 BB- 5.14 11/15/12 1,539,254 1,448,592
Smart & Final, Inc.............................. Delayed Draw B2 B 5.38-5.92 05/21/13 402,010 371,859
Smart & Final, Inc.............................. 1st Lien B1 B 5.65-5.80 05/21/14 587,940 543,844
Smart & Final, Inc.@............................ 2nd Lien Caa1 CCC 9.55 11/30/14 1,000,000 785,000
The Pantry, Inc................................. BTL Ba3 BB 4.24 05/15/14 1,540,000 1,397,550
The Pantry, Inc................................. Delayed Draw Ba3 BB 4.24 05/04/14 443,333 402,325
-----------
21,193,525
-----------
20
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Ratings/(1)/
------------
Interest Maturity Principal Value
Industry Description Type Moody's S&P Rate Date/(2)/ Amount (Note 2)
- -----------------------------------------------------------------------------------------------------------------------
Telecommunications -- 4.3%
Alltel Communications, Inc.................... BTL-B1 Ba3 BB- 5.23% 05/15/16 $1,994,975 $ 1,970,870
Cricket Communications, Inc................... BTL-B Ba2 B+ 6.30 06/16/13 2,940,000 2,902,841
Crown Castle Operating Co..................... BTL Ba3 BB+ 4.30 01/26/14 1,975,000 1,887,359
Hargray Communications Group, Inc............. BTL B1 B 5.05 06/29/14 1,818,589 1,668,555
Hawaiian Telecom.............................. BTL-B Ba3 B- 5.31 06/01/14 558,595 459,910
IPC Systems, Inc.............................. 1st Lien B1 B+ 5.05 05/31/14 990,000 782,100
IPC Systems, Inc.............................. 2nd Lien Caa1 CCC+ 7.95 05/31/15 1,000,000 710,000
MetroPCS Wireless, Inc........................ BTL-B Ba3 B+ 4.75-5.13 11/03/13 982,500 941,051
Ntelos, Inc................................... 1st Lien Ba3 BB- 5.27 08/24/11 1,433,354 1,405,285
Sorenson Communications, Inc.................. Tranche B B2 B+ 5.30 08/16/13 435,635 414,942
------------
13,142,913
------------
Textiles & Leather -- 0.3%
Hanesbrands, Inc.............................. BTL-B Ba2 BB 4.55-4.66 09/05/13 697,321 676,184
William Carter Co............................. BTL-B Ba3 BB 3.98-4.40 07/14/12 339,778 324,912
------------
1,001,096
------------
Utilities -- 5.3%
Boston Generating LLC......................... BTL-B B1 B+ 5.05 12/20/13 767,621 721,152
Boston Generating LLC......................... Synthetic LOC B1 B+ 7.08 12/20/13 172,414 161,977
Boston Generating LLC......................... Synthetic LOC B1 B+ 5.07 12/20/13 48,276 45,353
Calpine Corp.................................. BTL B2 B+ 5.69 03/29/14 987,538 941,024
Concho Resources, Inc......................... 2nd Lien NR NR 6.73 03/28/12 1,109,000 1,109,000
Entegra Power Group LLC....................... 2nd Lien B3 B+ 5.20 03/30/14 468,861 425,491
KGen Power Corp............................... LOC Ba3 BB 4.34 01/31/14 375,000 358,125
KGen Power Corp............................... BTL Ba3 BB 4.56 01/31/14 615,625 587,922
La Paloma Generating Co....................... Delayed Draw B1 B+ 4.55 08/16/12 14,705 13,234
La Paloma Generating Co....................... LOC B1 B+ 4.13 08/16/12 32,787 29,508
La Paloma Generating Co....................... BTL-B B1 B+ 4.55 08/16/12 184,633 166,170
La Paloma Generating Co....................... BTL-C B3 CCC+ 6.30 08/16/13 250,000 224,375
Mach Gen LLC.................................. LOC B2 B+ 4.45 02/22/13 281,250 272,953
Mach Gen LLC.................................. BTL-B B2 B+ 4.64 02/22/14 2,673,935 2,595,054
NE Energy, Inc................................ 2nd Lien B3 B- 7.31 05/01/14 250,000 225,000
NRG Energy, Inc............................... CLD Ba1 BB 4.20 02/01/13 878,527 839,054
NRG Energy, Inc............................... BTL Ba1 BB 4.30 02/01/13 1,793,506 1,712,922
NSG Holdings II LLC........................... LOC Ba2 BB 4.28 06/15/14 102,041 94,643
NSG Holdings II LLC........................... BTL Ba2 BB 4.28 06/15/14 745,069 691,051
Reliant Energy, Inc........................... LOC Ba3 BB+ 2.34 06/30/14 2,000,000 1,910,000
Texas Competitive Electric Holdings Co., Inc.. BTL-B3 Ba3 B+ 6.23-6.48 10/10/14 1,994,975 1,849,404
TPF Generation Holdings LLC................... 2nd Lien B3 B- 7.05 12/15/14 1,500,000 1,363,751
------------
16,337,163
------------
Total Loans (cost $329,208,447).................................................. 294,934,473
------------
21
SunAmerica Senior Floating Rate Fund, Inc.
PORTFOLIO OF INVESTMENTS -- June 30, 2008 -- (unaudited) (continued)
Principal Value
Industry Description Amount/Shares (Note 2)
- ---------------------------------------------------------------------------------------
CORPORATE BONDS -- 0.6%
Electronics -- 0.6%
NXP BV(9)
Note
5.46% due 10/15/13 (cost $2,000,000)..................... $2,000,000 $ 1,760,000
------------
COMMON STOCK -- 0.0%
Telecommunications -- 0.0%
Global Crossing, Ltd.+.................................... 175 3,140
SAVVIS Communications Corp.+.............................. 6,313 81,501
------------
Total Common Stock (cost $125,981)........................ 84,641
------------
Total Long-Term Investment Securities (cost $331,334,428). 296,779,114
------------
SHORT-TERM INVESTMENT SECURITIES -- 2.7%
Registered Investment Companies -- 2.7%
SSgA Money Market Fund (cost $8,361,208).................. 8,361,208 8,361,208
------------
TOTAL INVESTMENTS -- 99.7%
(cost $339,695,636)(10)................................... 305,140,322
Other assets less liabilities -- 0.3%....................... 782,478
------------
NET ASSETS -- 100.0%........................................ $305,922,800
============
- --------
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
STFA -- Senior Term Facilities Agreement
NR -- Security is not rated.
+ Non-income producing security
@ Illiquid security. At June 30, 2008, the aggregate value of these
securities was $7,227,888, representing 2.4% of net assets.
# Fair valued security; see Note 2
(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, 2008.
(2) Based on the stated maturity, the weighted average to maturity of
the Loans held in the portfolio will be approximately 64 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) Loan was purchased through a participation agreement.
(8) Loan is subject to an unfunded loan commitment. See Note 11 for
details.
(9) 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,
2008.
(10) See Note 6 for cost of investments on a tax basis.
(11) Loan is in default.
See Notes to Financial Statements
22
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
Note 1. Organization of the Fund
SunAmerica Senior Floating Rate Fund, Inc. (the "Fund"), is an open-end,
non-diversified management investment company. The Fund was organized as a
Maryland corporation in 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 strategy is to
provide a high 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 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 into an open-end investment management
company. Concurrently 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 to
existing Class D shareholders 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 August 18, 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 investments by the SunAmerica Senior Floating Rate
Fund, Inc. (the "Fund") 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
23
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
(continued)
reported trade for the stock is outside the range of the 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, 2008, 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 $115,172 for the
period ended June 30, 2008, are accreted to income over the life of the
Loans. Other income, including amendment fees, commitment fees, letter of
credit fees, etc., which were $654,618 for the period ended June 30, 2008,
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, 2008 -- (unaudited)
(continued)
The Fund files U.S. Federal and certain state income tax returns. With few
exceptions, the Fund is no longer subject to U.S. federal and state tax
examinations by tax authorities for tax years ending before 2004.
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. Various inputs are used in
determining the value of the Funds' investments. These inputs are summarized
in the three broad levels listed below:
Level 1 -- Quoted prices in active markets for identical securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, quoted
prices in inactive markets, etc.)
Level 3 -- Significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund's net assets
as of June 30, 2008:
Valuation Inputs Investments in Securities Other Financial Instruments*
- ---------------- ------------------------- ----------------------------
Level 1....................... $ 84,640 $ --
Level 2....................... $297,827,794 $ --
Level 3....................... $ 7,227,888 $ --
------------ ----
Total......................... $305,140,322 $ --
============ ====
The following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
Investments in Securities Other Financial Instruments*
------------------------- ----------------------------
Balance as of 12/31/2007...... $ 54,233 $ --
Accrued discounts/premiums.... $ -- $ --
Realized gain (loss).......... $ (761,655) $ --
Change in unrealized
appreciation (depreciation). $ 837,125 $ --
Net purchases (sales)......... $ (119,803) $ --
Transfers in and/or out of
Level 3..................... $7,217,988 $ --
---------- ----
Balance as of 06/30/2008...... $7,227,888 $ --
========== ====
-----
* Other financial instruments are derivative instruments not reflected in
the Portfolio of investments such as future, written option, swap and
forward contracts, which are valued at the unrealized
appreciation/depreciation on the instrument.
25
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
(continued)
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, 2008.
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 ended year ended
June 30, 2008 (unaudited) December 31, 2007
--------------------------- ---------------------------
Shares Amount Shares Amount
Class A ---------- ------------ ---------- ------------
Shares sold................. 4,238,805 $ 35,873,481 16,345,482 $151,739,920
Reinvested distributions.... 143,972 1,203,513 261,188 2,384,009
Shares redeemed............. (4,975,244) (41,926,276) (8,076,898) (73,605,625)
---------- ------------ ---------- ------------
Net increase (decrease).. (592,467) $ (4,849,282) 8,529,772 $ 80,518,304
========== ============ ========== ============
For the For the
period ended year ended
June 30, 2008 (unaudited) December 31, 2007
--------------------------- ---------------------------
Shares Amount Shares Amount
Class B ---------- ------------ ---------- ------------
Shares sold................. 43,027 $ 333,972 319,757 $ 2,962,829
Reinvested distributions.... 40,396 336,924 107,332 990,697
Shares redeemed............. (445,697)(1) (3,721,999)(1) (1,016,781)(3) (9,403,485)(3)
---------- ------------ ---------- ------------
Net increase (decrease).. (362,274) $ (3,051,103) (589,692) $ (5,449,959)
========== ============ ========== ============
For the For the
period ended year ended
June 30, 2008 (unaudited) December 31, 2007
--------------------------- ---------------------------
Shares Amount Shares Amount
Class C ---------- ------------ ---------- ------------
Shares sold................. 3,026,304 $ 25,417,781 14,008,359 $130,699,614
Reinvested distributions.... 407,770 3,405,953 940,512 8,648,660
Shares redeemed............. (6,708,747)(2) (56,102,090)(2) (7,162,128)(4) (65,556,497)(4)
---------- ------------ ---------- ------------
Net increase (decrease).. (3,274,673) $(27,278,356) 7,786,743 $ 73,791,777
========== ============ ========== ============
For the For the
period ended year ended
June 30, 2008 (unaudited) December 31, 2007
--------------------------- ---------------------------
Shares Amount Shares Amount
Class D ---------- ------------ ---------- ------------
Shares sold................. 4,529 $ 38,200 41,222 $ 381,302
Reinvested distributions.... 25,579 213,631 73,932 683,176
Shares redeemed............. (218,447) (1,835,183) (645,739) (5,976,532)
---------- ------------ ---------- ------------
Net increase (decrease).. (188,339) $ (1,583,352) (530,585) $ (4,912,054)
========== ============ ========== ============
26
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
(continued)
For the For the
period ended year ended
June 30, 2008 (unaudited) December 31, 2007
------------------------ ------------------------
Shares Amount Shares Amount
Class Q ------- ---------- ------- ----------
Shares sold................. 196,456(1)(2) $1,642,476(1)(2) 526,688(3)(4) $4,876,693(3)(4)
Reinvested distributions.... 10,540 88,029 11,501 105,134
Shares redeemed............. (89,886) (749,526) (98,969) (903,128)
------- ---------- ------- ----------
Net increase (decrease).. 117,110 $ 980,979 439,220 $4,078,699
======= ========== ======= ==========
-----
(1)Includes automatic conversion of 189,350 shares of Class B shares in the
amount of $1,581,579 to 189,188 shares of Class Q shares in the amount of
$1,581,579.
(2)Includes automatic conversion of 6,352 shares of Class C shares in the
amount of $52,812 to 6,352 shares of Class Q shares in the amount of
$52,812.
(3)Includes automatic conversion of 523,771 shares of Class B shares in the
amount of $4,850,526 to 523,771 shares of Class Q shares in the amount of
$4,850,526.
(4)Includes automatic conversion of 1,596 shares of Class C shares in the
amount of $14,348 to 1,596 shares of Class Q shares in the amount of
$14,348.
Note 4. Purchases and Sales of Securities
During the period ended June 30, 2008, the Fund's cost of purchases of Loans
and proceeds from Loan sales were $51,771,708 and $92,128,496, 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 year ended June 30, 2008, AIG SunAmerica accrued
administration fees in the amount of $608,930.
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
27
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
(continued)
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, 2008 SACS received sales charges on Class A shares
of $82,132, of which $14,651 was reallowed to affiliated broker-dealers and
$53,435 to non-affiliated broker-dealers. In addition, 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, 2008, SACS received early withdrawal charges of $118,636. For
the period ended June 30, 2008 SACS voluntarily waived fees for the
following classes: Class A $56,984, Class B $20,537, Class C $248,049, and
Class Q $1,171. 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. ("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 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, 2008, 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 SAFS pursuant to the terms of the Service Agreement.
Payable at
Expense June 30, 2008
-------- -------------
Class A....................... $ 83,763 $14,404
Class B....................... 18,057 2,797
Class C....................... 218,200 35,288
Class D....................... 9,742 1,549
Class Q....................... 5,148 783
AIG SunAmerica has 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 Board, 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 is voluntarily waiving fees and/or reimbursing expenses, so that
the total net expense ratios do not exceed 1.45% for Class Q and 1.25% for
Class D of average daily net assets. The voluntary fee waivers and/or
expense reimbursements may be terminated at any time at the option of AIG
SunAmerica. For the period ended June 30, 2008, AIG SunAmerica waived fees
and reimbursed expenses as follows: Class A $173,521, Class B $41,346, Class
C $418,741, Class D $17,505, and Class Q $10,383.
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.
28
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
(continued)
Distributable Earnings Tax Distributions
- ---------------------------------------- ---------------------------------------------
For the year ended December 31, 2007 For the year ended December 31, 2007
- ---------------------------------------- ---------------------------------------------
Long-term Gains/ Unrealized Long-term
Ordinary Capital Loss Appreciation Ordinary Capital
Income Carryover (Depreciation) Income Gains
- -------- ---------------- -------------- --------------------- ---------------------
$23,381 $(27,197,362) $(23,237,922) $20,853,822 $ --
Capital Loss Carryforwards. At December 31, 2007 capital loss carryforwards
available to offset future recognized gains were $27,192,362 with $1,009,013
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, 2007, the Senior Floating Rate Fund
utilized $186,815 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, 2007, the Fund elected to defer $764 of
Post-October Capital Losses.
Unrealized appreciation and depreciation in the value of investments at June
30, 2008 for federal income tax purposes were as follows:
Cost (tax basis)............................................ $339,695,993
============
Gross unrealized appreciation............................... $ 158,758
Gross unrealized depreciation............................... (34,714,429)
------------
Net unrealized depreciation................................. $(34,555,671)
============
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.
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, 2008, the Fund had accrued $37,182 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, 2008, expensed
$6,853 for the Retirement Plan, which is included in Directors' fees and
expenses line on the Statement of Operations.
29
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2008 -- (unaudited)
(continued)
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 ("State Street"), 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. For the period ended June 30, 2008, the Fund had
borrowings outstanding for 42 days under the line of credit and incurred
$18,166 in interest charges related to these borrowings. The Fund's average
amount of debt under the line of credit for the days utilized was $4,238,125
at a weighted average interest rate of 3.77%. At June 30, 2008, there were
no borrowings outstanding.
Note 9. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the Securities and Exchange
Commission (the "Commission"), 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, 2008, 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, 2008, the Fund had the following unfunded loan commitments which
could be extended at the option of the Borrower:
Maturity
Name Type Date Amount
---- ---------------------- -------- --------
Community Health Systems, Inc. Delayed Draw Term Loan 07/15/14 $ 89,845
Golden Nugget, Inc............ Delayed Draw Term Loan 06/08/14 727,273
Hub International Holdings,
Inc......................... Delayed Draw Term Loan 06/13/14 121,569
WMG Acquisition Corp.......... Revolver 01/18/11 500,000
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
John T. Genoy, President policies and proce-dures on Form N-Q. The Fund's
and Chief Executive that the Fund uses to Forms N-Q are available
Officer determine how to vote on the U.S. Securities
Donna M. Handel, proxies related to and Exchange Commission's
Treasurer securities held in the website at
James Nichols, Vice Fund's portfolio, which http://www.sec.gov. You
President is available in the can also review and
Cynthia A. Skrehot, Vice Fund's Statement of obtain copies of the
President and Chief Additional Information, Forms N-Q at the U.S.
Compliance Officer may be ob-tained without Securities and Exchange
Gregory N. Bressler, charge upon request, by Commission's Public
Chief Legal calling (800) 858-8850. Refer-ence Room in
Officer and Secretary This in-formation is also Washington, DC
Gregory R. Kingston, available from the EDGAR (information on the
Vice President and database on the U.S. operation of the Public
Assistant Treasurer Secu-rities and Exchange Reference Room may be
Nori L. Gabert, Vice Commission's website at ob-tained by calling
President and http://www.sec.gov. 1-800-SEC-0330).
Assistant Secretary
John E. McLean, DELIVERY OF SHAREHOLDER PROXY VOTING RECORD ON
Assistant Secretary DOCUMENTS FUND PORTFOLIO SECURITIES
Kathleen Fuentes, The Fund has adopted a Information regarding how
Assistant Secretary policy that allows them the Fund voted proxies
Diedre L. Shepherd, to send only one copy of relating to securities
Assistant Treasurer a Fund's prospectus, held in the Fund's
Matthew J. Hackethal, proxy material, annual portfolio during the most
Anti-Money Laundering report and semi-annual recent twelve month
Compliance Officer report (the "shareholder period ended June 30 is
documents") to available, once filed
Investment Adviser shareholders with with the U.S. Securities
AIG SunAmerica Asset multiple accounts and Exchange Commis-sion,
Management Corp. residing at the same without charge, upon
Harborside Financial "household." This request, by calling
Center practice is called (800) 858-8850 or on the
3200 Plaza 5 householding and reduces U.S. Securities and
Jersey City, NJ Fund expenses, which Exchange Commission's
07311-4992 benefits you and other website at
shareholders. Unless the http://www.sec.gov.
Distributor Funds receive
AIG SunAmerica Capital instructions to the This report is submitted
Services, Inc. con-trary, you will only solely for the general
Harborside Financial receive one copy of the information of
Center shareholder documents. shareholders of the Fund.
3200 Plaza 5 The Funds will continue Distribution of this
Jersey City, NJ to household the report to persons other
07311-4992 share-holder documents than shareholders of the
indefinitely, until we Fund is authorized only
Shareholder Servicing are instructed otherwise. in connection with a
Agent If you do not wish to currently effective
AIG SunAmerica Fund participate in prospectus, setting forth
Services, Inc. householding, please details of the Fund,
Harborside Financial contact Shareholder which must precede or
Center Services at (800) accompany this report.
3200 Plaza 5 858-8850 ext. 6010 or
Jersey City, NJ send a written request The accompanying report
07311-4992 with your name, the name has not been audited by
of your fund(s) and your independent accountants
Transfer Agent account number(s) to AIG and accordingly no
State Street Bank and SunAmerica Mutual Funds opinion has been
Trust Company c/o BFDS, P.O. Box expressed thereon.
P.O. Box 219373 219186, Kansas City MO,
Kansas City, MO 64141 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 a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
AIG SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at
www.sunamericafunds.com. Read the prospectus carefully before investing.
www.sunamericafunds.com
SFSAN - 06/08
[LOGO] AIG
Sun America
Mutual Funds
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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. 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 CFR 229. 407)
(as required by 22(b)(15)) of Schedule 14A (17 CFR 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 CFR 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 CFR 270.30a-3(d))) that occurred during the
registrant's 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 CFR 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 CFR 270.30a-2(a)) and Section 906 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Senior Floating Rate Fund, Inc.
By: /s/ John T. Genoy
---------------------------------
John T. Genoy
President
Date: September 5, 2008
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/ John T. Genoy
---------------------------------
John T. Genoy
President
Date: September 5, 2008
By: /s/ Donna M. Handel
---------------------------------
Donna M. Handel
Treasurer
Date: September 5, 2008