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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
SunAmerica Asset Management Corp.
Harborside Financial Center 3200 Plaza 5
Jersey City, NJ 07311
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(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: December 31, 2011
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Item 1. Reports to Stockholders
[GRAPHIC]
ANNUAL REPORT 2011
SUNAMERICA
Senior Floating Rate Fund
[LOGO]
TABLE OF CONTENTS
SHAREHOLDERS' LETTER.................................... 1
EXPENSE EXAMPLE......................................... 3
STATEMENT OF ASSETS AND LIABILITIES..................... 5
STATEMENT OF OPERATIONS................................. 6
STATEMENT OF CHANGES IN NET ASSETS...................... 7
STATEMENT OF CASH FLOWS................................. 8
FINANCIAL HIGHLIGHTS.................................... 9
PORTFOLIO OF INVESTMENTS................................ 10
NOTES TO FINANCIAL STATEMENTS........................... 22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 30
DIRECTORS AND OFFICERS INFORMATION...................... 31
SHAREHOLDER TAX INFORMATION............................. 34
COMPARISON: FUND VS. INDEX.............................. 35
DECEMBER 31, 2011 ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited)
Dear Shareholders:
We are pleased to present this annual report for the SunAmerica Senior Floating
Rate Fund (the "Fund") for the annual period ended December 31, 2011.
The Fund's annual period proved to be a challenging one for risk assets
generally and for the floating-rate loan market in particular. Indeed, almost
all areas of the global financial markets experienced a broad "risk on/risk
off" trading pattern, with the "risk off" assets winning for the year. The
"risk on/risk off" trading pattern was one in which investors vacillated en
masse between sharply optimistic or pessimistic views toward the financial
markets, such that swings in risk appetite became more frequent and more
dramatic. Amidst such significant volatility, correlations between and within
asset classes markedly increased. By the end of 2011, the floating rate loan
market finished the year with positive, albeit modest, gains.
Early in 2011, positive economic fundamentals led to growing optimism regarding
the recovery in the U.S. However, geopolitical instability in the Middle East
and North Africa and the tragic natural and nuclear disasters in Japan dampened
economic growth expectations and weighed on investor sentiment in the spring
months. Investor risk appetite continued to deteriorate during the third
quarter amid a deepening sovereign debt crisis in Europe, heightening
inflationary pressures in many emerging markets and signs the U.S. economic
recovery was losing momentum. Following political gridlock surrounding the U.S.
debt ceiling debate, Standard & Poor's downgraded the U.S. government's
long-term credit rating one notch from AAA to AA+ for the first time in history
and maintained a negative outlook on U.S. debt. The Federal Reserve (the "Fed")
maintained its accommodative stance, as it had throughout the year, and even
expanded its efforts to spur the economy. In August, the Fed announced that it
would keep short-term interest rates low until at least the middle of 2013.
Then, in early September, the Fed reiterated its commitment to holding down
long-term interest rates through the introduction of a program dubbed Operation
Twist. Operation Twist is a program whereby the Fed would extend the maturity
structure of its holdings through the sale of short-term securities and the
purchase of long-term securities. However, the flight to quality continued.
Volatility remained elevated during the fourth quarter, largely as a result of
shifting headlines on the European sovereign debt crisis. Still, risk assets
generally recovered from a tough third quarter to chalk up solid gains during
the fourth quarter, buoyed by better U.S. economic data and strong reported
business results, which together provided some reassurance that a recession was
not imminent as had been feared in the fall.
For the year as a whole, the U.S. equity market, as measured by the S&P(R) 500
Index/1/, returned 2.11%, while the U.S. fixed income market, as measured by
the Barclays Capital U.S. Aggregate Bond Index/2/, returned 7.84%. Floating
rate loans, as measured by the S&P/LSTA Leveraged Loan Index (LLI)/3/, returned
1.52% for the annual period.
The technical conditions of the floating rate loan market proved most
challenging during the annual period, as the asset class was not immune to the
volatile macro market conditions just described. On the demand side, weekly
flows into U.S. bank loan mutual funds were positive through the first 30 weeks
of 2011, as investors were attracted to the loans' yield and low interest rate
sensitivity. AMG Data Services reported more than $25 billion of inflows into
U.S. bank loan mutual funds during the first half of 2011 alone. However, flows
turned negative in August and remained negative in 20 of the last 22 weeks of
the year, during which the floating rate loan asset class saw an aggregate
outflow of $7.7 billion. On the supply side, new loan issuance peaked during
the first half of 2011 at levels not seen since prior to 2009. New loan
issuance moderated during the second half of 2011 with fewer deals coming to
market.
Fundamentals, on the other hand, generally supported the floating rate loan
market during the annual period. Notably, the default rate within the asset
class reached a new 54-month low of 0.17% in late December, as measured by
principal amount, and reached a new 48-month low of 0.62%, as measured by
issuer count./4/ Also, corporate earnings generally improved and surprised to
the upside in 2011.
1
SHAREHOLDERS' LETTER -- (unaudited) (continued)
By quality rating, higher-quality loans outperformed the lower-quality segments
of the loan market in 2011, a reversal from 2010. The strongest performing loan
group in the S&P/LSTA LLI during the annual period was bonds rated BB, which
returned 2.74%, followed by loans rated B, which returned 2.14%. Loans in the
S&P/LSTA LLI rated CCC trailed, returning -6.31%.
Performance among the various industries within the S&P/LSTA LLI was widely
dispersed. Among the strongest performing industries were clothing-textiles;
home furnishings; oil and gas; containers and glass products; and industrial
equipment. These industries posted returns of 7.87%, 7.32%, 5.70%, 5.43% and
5.16%, respectively, during the annual period. Among the weakest performing
industries were publishing; beverage and tobacco; and media, which generated
returns of -10.03%, -5.13% and -3.83%, respectively, during the annual period.
At the end of the annual period, we remained concerned about global economic
growth trends and continuing uncertainties about resolution to the European
sovereign debt crises, as such persistent conditions may mean continued
volatility in loan prices in the months ahead. However, valuations of floating
rate loans at the end of the annual period were in the bottom decile of
historical levels and, in our view, had already priced in a lot of bad news.
Also, spreads, or yield differentials, between the floating rate loan asset
class and comparable-duration U.S. Treasuries were near historic highs. These
factors, along with solid credit fundamentals, low levels of maturities in the
upcoming year, and the pricing in of a prolonged period of low interest rates
created, in our view, attractive conditions for the asset class going forward.
On the following pages, you will find a brief discussion regarding the Fund's
annual results. You will also find the financial statements and portfolio
information for the Fund for the annual period ended December 31, 2011.
As always, we remain diligent in the management of your assets. If you have any
questions, or require additional information on this or other SunAmerica Funds,
we invite you to visit www.sunamericafunds.com or call the Shareholder Services
Department at 800-858-8850. We value your ongoing confidence in us and look
forward to serving your investment needs in the future.
Sincerely,
THE SUNAMERICA SENIOR FLOATING RATE FUND PORTFOLIO MANAGER
Jeffrey W. Heuer
Wellington Management
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Past performance is no guarantee of future results.
/1/The S&P(R) 500 INDEX is Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
/2/The BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX represents securities that
are U.S. domestic, taxable and dollar denominated. The index covers components
for government and corporate securities, mortgage pass-through securities and
asset-backed securities.
/3/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 utilized real-time
market weightings, spreads and interest payments.
/4/http://www.lsta.org
Indices are not managed and an investor cannot invest directly into an index.
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 an active trading market, in certain cases, 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.
2
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
EXPENSE EXAMPLE -- DECEMBER 31, 2011 -- (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 July 1, 2011 and
held until December 31, 2011.
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 December 31, 2011" to estimate the expenses you paid on your
account during this period. For shareholder accounts in Class A and Class C,
the "Expenses Paid During the Six Months Ended December 31, 2011" column does
not include small account fees that may be charged if your account balance is
below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid
During the Six Months Ended December 31, 2011" column does not include
administrative fees that may apply to qualified retirement plan accounts and
accounts held through financial institutions. See the Fund's prospectus, your
retirement plan documents and/or materials from your financial adviser, for a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended December 31, 2011" 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 Portfolios 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. For shareholder accounts in Class A and
Class C, the "Expenses Paid During the Six Months Ended December 31, 2011"
column does not include small account fees that may be charged if your account
balance is below $500 ($250 for retirement plan accounts). In addition, the
"Expenses Paid During the Six Months Ended December 31, 2011" column does not
include administrative fees that may apply to qualified retirement plan
accounts and accounts held through financial institutions. See the Fund's
prospectus, your retirement plan document and/or materials from your financial
adviser for full description of these fees. Had these fees been included, the
"Expenses Paid During the Six Months Ended December 31, 2011" 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, qualified retirement plan document and/or materials from your
financial adviser, 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.
3
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
EXPENSE EXAMPLE -- DECEMBER 31, 2011 -- (UNAUDITED) (CONTINUED)
ACTUAL HYPOTHETICAL
---------------------------------------------------- ---------------------------------
ENDING ENDING ACCOUNT
ACCOUNT VALUE EXPENSES PAID VALUE USING
BEGINNING USING ACTUAL DURING THE BEGINNING A HYPOTHETICAL 5%
ACCOUNT VALUE RETURNS AT SIX MONTHS ENDED ACCOUNT VALUE ASSUMED RETURN AT
AT JULY 1, 2011 DECEMBER 31, 2011 DECEMBER 31, 2011* AT JULY 1, 2011 DECEMBER 31, 2011
--------------- ----------------- ------------------ --------------- -----------------
Senior Floating Rate Fund#
Class A................. $1,000.00 $979.70 $7.24 $1,000.00 $1,017.90
Class C................. $1,000.00 $978.29 $8.73 $1,000.00 $1,016.38
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EXPENSE
EXPENSES PAID RATIO
DURING THE AS OF
SIX MONTHS ENDED DECEMBER 31,
DECEMBER 31, 2011* 2011*
------------------ ------------
Senior Floating Rate Fund#
Class A................. $7.38 1.45%
Class C................. $8.89 1.75%
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* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 days divided by 365
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges and administrative
fees, if applicable to your account. Please refer to your Prospectus, your
qualified retirement plan document and/or materials from your financial
advisor for more information.
# During the stated period, the investment adviser either waived/reimbursed a
portion of or all of the fees/expenses and assumed a portion of or all
expenses for the Fund. As a result, if these fees and expenses had not been
waived/reimbursed, the "Actual/Hypothetical Ending Account Value" would have
been lower and the "Actual/Hypothetical Expenses Paid During the Six Months
Ended December 31, 2011" and the "Expense Ratios" would have been higher.
4
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- DECEMBER 31, 2011
ASSETS:
Investments at value (unaffiliated)*............................... $359,469,403
Cash............................................................... 2,239
Receivable for:
Fund shares sold................................................. 976,393
Dividends and interest........................................... 2,166,476
Investments sold................................................. 7,098,235
Prepaid expenses and other assets.................................. 6,161
Due from investment adviser for expense reimbursements/fee waivers. 80,610
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Total assets..................................................... 369,799,517
------------
LIABILITIES:
Payable for:
Fund shares redeemed............................................. 852,000
Investments purchased............................................ 7,975,278
Investment advisory and management fees.......................... 262,055
Distribution and service maintenance fees........................ 178,046
Administration fees.............................................. 61,660
Transfer agent fees and expenses................................. 82,182
Directors' fees and expenses..................................... 2,829
Other accrued expenses........................................... 285,040
Dividends payable.................................................. 373,122
Commitments (Note 11).............................................. --
------------
Total liabilities................................................ 10,072,212
------------
Net Assets...................................................... $359,727,305
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NET ASSETS REPRESENTED BY:
Common stock, $.01 par value....................................... $ 452,069
Additional paid-in capital......................................... 435,435,902
------------
435,887,971
Accumulated undistributed net investment income (loss)............. (8,403)
Accumulated undistributed net realized gain (loss) on investments.. (56,985,697)
Unrealized appreciation (depreciation) on investments.............. (19,166,566)
------------
Net Assets...................................................... $359,727,305
============
CLASS A:
Net assets......................................................... $160,949,223
Shares outstanding................................................. 20,218,881
Net asset value and redemption price per share..................... $ 7.96
Maximum sales charge (3.75% of offering price)..................... 0.31
------------
Maximum offering price to public................................... $ 8.27
============
CLASS C:
Net assets......................................................... $198,778,082
Shares outstanding................................................. 24,987,995
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charges)...... $ 7.95
============
*COST
Investment securities (unaffiliated)............................. $378,635,969
============
See Notes to Financial Statements
5
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2011
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $ 22,409,027
Dividends (unaffiliated).......................................................... 7,171
Facility and other fee income (Note 2)............................................ 4,128,430
------------
Total investment income........................................................ 26,544,628
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EXPENSES:
Investment advisory and management fees........................................... 3,927,047
Administration fees............................................................... 924,011
Distribution and service maintenance fees:
Class A......................................................................... 861,200
Class C......................................................................... 1,619,612
Transfer agent fees and expenses:
Class A......................................................................... 563,417
Class C......................................................................... 491,481
Registration fees:
Class A......................................................................... 52,582
Class C......................................................................... 41,265
Accounting service fees........................................................... 100,979
Custodian and accounting fees..................................................... 148,687
Reports to shareholders........................................................... 77,507
Audit and tax fees................................................................ 99,327
Legal fees........................................................................ 29,799
Directors' fees and expenses...................................................... 54,377
Interest expense.................................................................. 10,100
Other expenses.................................................................... 116,951
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Total expenses before fee waivers, expense reimbursements and custody credits.. 9,118,342
Fees waived and expenses reimbursed by investment adviser (Note 5)............. (1,771,408)
Custody credits earned on cash balances........................................ (10)
------------
Net expenses................................................................... 7,346,924
------------
Net investment income (loss)...................................................... 19,197,704
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)............................ (10,179,559)
Change in unrealized appreciation (depreciation) on investments (unaffiliated).... (11,283,617)
------------
Net realized and unrealized gain (loss) on investments............................ (21,463,176)
------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $ (2,265,472)
============
See Notes to Financial Statements
6
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2011 2010
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)......................................... $ 19,197,704 $ 14,523,481
Net realized gain (loss) on investments (unaffiliated)............... (10,179,559) 1,339,860
Net unrealized gain (loss) on investments (unaffiliated)............. (11,283,617) 15,324,752
------------ ------------
Increase (decrease) in net assets resulting from operations........... (2,265,472) 31,188,093
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)...................................... (10,260,446) (8,312,099)
Net investment income (Class C)...................................... (8,385,337) (6,542,623)
------------ ------------
Total distributions to shareholders................................... (18,645,783) (14,854,722)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS (NOTE 3)................................................ (65,226,604) 196,049,379
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... (86,137,859) 212,382,750
NET ASSETS:
Beginning of period................................................... 445,865,164 233,482,414
------------ ------------
End of period+........................................................ $359,727,305 $445,865,164
============ ============
+Includes accumulated undistributed net investment income (loss)...... $ (8,403) $ (560,324)
============ ============
See Notes to Financial Statements
7
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CASH FLOWS -- FOR THE YEAR ENDED DECEMBER 31, 2011
INCREASE (DECREASE) IN CASH
CASH FLOWS FROM OPERATING ACTIVITIES:
Net decrease in net assets from operations.................................................................... $ (2,265,472)
ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES:
Purchase of loans/securities................................................................................ (276,799,998)
Proceeds from loans/securities sold......................................................................... 163,363,201
Loan principal paydowns..................................................................................... 161,968,518
Net sales of short-term securities.......................................................................... 44,514,861
Accretion of facility fee income............................................................................ (2,658,650)
Increase in receivable for dividends and interest........................................................... (304,401)
Increase in receivable for investments sold................................................................. (4,214,266)
Decrease in amount due from investment adviser for expense reimbursements/fee waivers....................... 69,638
Increase in prepaid expenses and other assets............................................................... (599)
Decrease in payable for investments purchased............................................................... (22,499,854)
Decrease in payable for investment advisory and management fees............................................. (46,718)
Decrease in payable for distribution and maintenance fees................................................... (14,339)
Decrease in payable for administration fees................................................................. (10,993)
Increase in other accrued expenses.......................................................................... 26,581
Unrealized depreciation on investments...................................................................... 11,283,617
Net realized loss from investments.......................................................................... 10,179,559
-------------
Net cash provided by operating activities..................................................................... $ 82,590,685
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shares sold..................................................................................... 263,412,548
Payment on shares redeemed.................................................................................... (337,702,665)
Cash dividends paid........................................................................................... (8,298,329)
-------------
Net cash used in financing activities......................................................................... $ (82,588,446)
-------------
Net increase in cash.......................................................................................... 2,239
Cash balance at beginning of period........................................................................... --
-------------
Cash balance at end of period................................................................................. $ 2,239
=============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $10,818,982.
See Notes to Financial Statements
8
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
FINANCIAL HIGHLIGHTS
NET GAIN
(LOSS) ON
NET INVESTMENTS DIVIDENDS NET NET RATIO OF
ASSET (BOTH DIVIDENDS FROM NET ASSET ASSETS, EXPENSES
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF TO AVERAGE
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD NET
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD RETURN(2) (000'S) ASSETS(3)
---------- --------- ---------- ----------- ---------- ---------- ----------- ------- ------ --------- -------- ----------
CLASS A
-------
12/31/07 $9.40 $0.56 $(0.48) $ 0.08 $(0.60) $ -- $(0.60) $8.88 0.84% $ 89,077 1.45%
12/31/08 8.88 0.49 (3.74) (3.25) (0.49) -- (0.49) 5.14 (38.20) 25,546 1.45
12/31/09 5.14 0.32 2.72 3.04 (0.35) -- (0.35) 7.83 60.63 103,932 1.45
12/31/10 7.83 0.34 0.46 0.80 (0.36) -- (0.36) 8.27 10.33 255,026 1.45
12/31/11 8.27 0.36 (0.33) 0.03 (0.34) -- (0.34) 7.96 0.36 160,949 1.45
CLASS C
-------
12/31/07 $9.40 $0.57 $(0.52) $ 0.05 $(0.58) $ -- $(0.58) $8.87 0.43% $235,957 1.75%
12/31/08 8.87 0.47 (3.74) (3.27) (0.46) -- (0.46) 5.14 (38.31) 86,126 1.75
12/31/09 5.14 0.32 2.69 3.01 (0.33) -- (0.33) 7.82 59.94 129,550 1.75
12/31/10 7.82 0.32 0.45 0.77 (0.33) -- (0.33) 8.26 10.01 190,839 1.75
12/31/11 8.26 0.33 (0.32) 0.01 (0.32) -- (0.32) 7.95 0.06 198,778 1.75
RATIO OF
NET
INVESTMENT
INCOME TO
PERIOD AVERAGE PORTFOLIO
ENDED NET ASSETS(3) TURNOVER
---------- ------------- ---------
12/31/07 6.58% 91%
12/31/08 6.05 32
12/31/09 4.94 74
12/31/10 4.34 41
12/31/11 4.27 63
12/31/07 6.24% 91%
12/31/08 5.89 32
12/31/09 4.88 74
12/31/10 4.03 41
12/31/11 4.02 63
--------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3)Net of the following expense waivers and/or reimbursements, if applicable
(based on average daily net assets) (See Note 5):
12/31/07 12/31/08 12/31/09 12/31/10 12/31/11
-------- -------- -------- -------- --------
Class A. 0.59% 0.65% 0.55% 0.38% 0.33%
Class C. 0.65 0.73 0.66 0.48 0.44
See Notes to Financial Statements
9
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO PROFILE -- DECEMBER 31, 2011 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Media....................................................... 10.4%
Hotels, Restaurants & Leisure............................... 8.2
Health Care Providers & Services............................ 6.7
Chemicals................................................... 4.1
IT Services................................................. 3.8
Auto Components............................................. 3.7
Software.................................................... 3.6
Commercial Services & Supplies.............................. 3.6
Diversified Financial Services.............................. 3.1
Registered Investment Companies............................. 2.9
Industrial Conglomerates.................................... 2.9
Wireless Telecommunication Services......................... 2.8
Food & Staples Retailing.................................... 2.7
Aerospace & Defense......................................... 2.4
Communications Equipment.................................... 2.2
Energy Equipment & Services................................. 2.1
Semiconductors & Semiconductor Equipment.................... 1.8
Capital Markets............................................. 1.8
Pharmaceuticals............................................. 1.7
Specialty Retail............................................ 1.7
Biotechnology............................................... 1.6
Food Products............................................... 1.5
Consumer Finance............................................ 1.4
Insurance................................................... 1.4
Health Care Technology...................................... 1.3
Containers & Packaging...................................... 1.3
Oil, Gas & Consumable Fuels................................. 1.3
Multiline Retail............................................ 1.2
Industrial Power Producers & Energy Traders................. 1.2
Diversified Telecommunication Services...................... 1.2
Multi Utilities............................................. 1.1
Airlines.................................................... 1.0
Road & Rail................................................. 1.0
Professional Services....................................... 0.9
Personal Products........................................... 0.9
Health Care Equipment & Supplies............................ 0.9
Thrifts & Mortgage Finance.................................. 0.9
Metals & Mining............................................. 0.8
Automobiles................................................. 0.8
Distributors................................................ 0.7
Machinery................................................... 0.7
Leisure Equipment & Products................................ 0.6
Building Products........................................... 0.6
Household Products.......................................... 0.6
Internet Software & Services................................ 0.5
Real Estate Management & Development........................ 0.5
Marine...................................................... 0.4
Life Sciences Tools & Services.............................. 0.4
Transportation Infrastructure............................... 0.3
Paper & Forest Products..................................... 0.3
Textiles, Apparel & Luxury Goods............................ 0.2
Diversified Consumer Services............................... 0.2
----
99.9%
====
CREDIT QUALITY+#
BBB......................................................... 0.3%
BBB-........................................................ 3.2
BB+......................................................... 4.8
BB.......................................................... 9.1
BB-......................................................... 26.5
B+.......................................................... 24.9
B........................................................... 15.9
B-.......................................................... 5.7
CCC+........................................................ 1.3
CCC......................................................... 1.7
CC.......................................................... 1.0
Not Rated@.................................................. 5.6
-----
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 Poor's
# Calculated as a percentage of total debt issues, excluding short-term
securities.
10
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
-----------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 95.4%
AEROSPACE & DEFENSE -- 2.4%
DigitalGlobe, Inc............... BTL-B Ba3 BB+ 5.75% 10/12/18 $1,250,000 $ 1,231,249
SI Organization, Inc............ BTL-B Ba3 B+ 4.50 11/22/16 2,291,850 2,200,175
Transdigm Group, Inc............ BTL-B Ba2 BB- 4.00 02/14/17 3,049,200 3,028,237
Wesco International, Inc........ BTL-B Ba3 BB- 4.25 04/07/17 587,122 587,611
Wyle Laboratories, Inc.......... BTL-B B1 BB 5.75 05/14/17 2,125,145 2,082,642
-----------
9,129,914
-----------
AIRLINES -- 1.0%
Delta Air Lines, Inc............ BTL Ba2 BB- 5.50 04/20/17 2,835,750 2,693,963
United Airlines, Inc............ Tranche B Ba3 BB- 2.31 02/01/14 1,354,444 1,299,691
-----------
3,993,654
-----------
AUTO COMPONENTS -- 3.7%
Allison Transmission, Inc....... BTL-B B1 BB- 2.78 08/07/14 3,202,379 3,133,755
Federal Mogul Corp.............. BTL-B Ba3 B+ 2.21-2.22 06/27/15 1,606,599 1,490,791
Federal Mogul Corp.............. BTL-C Ba3 B+ 2.21-2.22 06/27/15 819,693 760,607
Metaldyne Co. LLC............... BTL-B B1 B+ 5.25 05/18/17 992,500 982,575
Remy International, Inc......... BTL-B B1 B+ 6.25 12/17/16 2,004,750 1,976,349
Tenneco, Inc.................... BTL-B Baa3 BBB- 4.80 06/03/16 985,000 985,000
UCI International, Inc.......... BTL-B Ba2 B+ 5.50 07/26/17 2,222,550 2,230,885
Viking Acquisition, Inc......... BTL-B Ba3 B+ 6.00 11/05/16 1,717,650 1,627,473
-----------
13,187,435
-----------
AUTOMOBILES -- 0.8%
Chrysler Group LLC.............. BTL-B Ba2 BB 6.00 05/24/17 2,860,625 2,714,018
-----------
BIOTECHNOLOGY -- 1.6%
Alkermes, Inc................... BTL-B B1 BB 6.75 09/16/17 2,500,000 2,487,500
Alkermes, Inc................... 2nd Lien Caa1 B 9.50 09/16/18 1,750,000 1,732,500
Grifols SA...................... BTL-B Ba3 BB 6.00 06/01/17 1,524,831 1,523,403
-----------
5,743,403
-----------
BUILDING PRODUCTS -- 0.6%
Brand Services, Inc............. BTL B2 B 2.69-2.88 02/07/14 1,819,984 1,484,803
Brand Services, Inc............. BTL-B2 B2 B 3.69-3.81 02/07/14 914,683 772,907
-----------
2,257,710
-----------
CAPITAL MARKETS -- 1.8%
BNY ConvergEX Group LLC......... BTL-A B1 B+ 5.00 12/16/16 614,696 597,024
BNY ConvergEX Group LLC......... BTL-B B1 B+ 8.75 12/16/16 270,654 268,407
BNY ConvergEX Group LLC......... BTL-A B2 B- 8.75 12/16/17 1,461,675 1,439,750
BNY ConvergEX Group LLC......... BTL-B B2 B- 8.75 12/16/17 613,325 604,125
Nuveen Investments, Inc......... BTL-B B2 B 3.42-3.58 11/13/14 1,383,480 1,322,607
Nuveen Investments, Inc......... BTL B2 B 5.92-6.08 05/13/17 1,616,520 1,558,427
Tensar Earth Technologies, Inc.. BTL-B B2 B- 7.75 10/31/12 704,938 692,602
-----------
6,482,942
-----------
11
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
---------------------------------------------------------------------------------------------------------
CHEMICALS -- 3.8%
Ashland, Inc......................... BTL-B Baa3 BB 3.75% 08/23/18 $1,570,219 $ 1,578,437
Chemtura Corp........................ BTL Ba1 BB+ 5.50 08/27/16 1,890,000 1,902,994
GenTek............................... BTL B1 B 5.00-5.75 03/09/18 1,751,836 1,743,808
Hexion Specialty Chemicals, Inc...... BTL-C1 Ba3 B- 4.06 05/05/15 473,260 457,140
Hexion Specialty Chemicals, Inc...... BTL-C2 Ba3 B- 4.38 05/05/15 212,224 204,995
Houghton International, Inc.......... BTL-B B1 B 6.75 01/31/16 494,106 493,180
Huntsman International LLC........... BTL-C Ba2 BB 2.55-2.63 06/30/16 264,918 253,129
Momentive Performance................ BTL-B Ba3 B 3.81 05/05/15 1,956,271 1,897,583
OMNOVA Solutions, Inc................ BTL-B Ba2 B+ 5.75 05/31/17 544,500 536,333
PolyOne Corp......................... BTL-B Ba1 BB- 5.00 12/21/17 475,000 476,579
Solutia, Inc......................... BTL-B Ba1 BB+ 3.50 08/01/17 654,493 655,720
Styron LLC........................... BTL-B B1 B+ 6.00 08/02/17 1,275,891 1,104,708
Univar, Inc.......................... BTL-B B2 B+ 5.00 04/28/17 2,554,175 2,471,164
-----------
13,775,770
-----------
COMMERCIAL SERVICES & SUPPLIES -- 3.6%
Altegrity, Inc....................... BTL-B B1 B+ 7.75 08/03/15 1,235,459 1,225,164
ATI Schools@#(7)..................... BTL NR NR 8.25 06/30/12 224,025 217,741
ATI Schools(7)....................... BTL-B Ba3 CC 12.25 12/31/14 1,004,992 326,622
ATI Schools@#(7)..................... BTL NR NR 13.25 06/30/12 19,856 18,856
Audio Visual Services Group, Inc..... 2nd Lien NR NR 6.08 08/28/14 1,077,040 597,757
KAR Auction Services, Inc............ BTL-B Ba3 BB- 5.00 05/19/17 1,044,750 1,032,997
New Holdings I LLC................... BTL-B Ba3 B+ 6.00 03/23/16 2,614,286 2,424,750
New Holdings I LLC................... BTL B3 B- 9.50 03/23/17 1,750,000 1,522,500
Quad Graphics, Inc................... BTL-B Ba2 BBB- 4.00 07/26/18 748,125 740,006
Reynolds Group Holdings, Inc......... Tranch E Ba3 BB- 6.50 02/09/18 3,915,008 3,885,645
ValleyCrest Cos...................... 1st Lien NR NR 6.50 10/04/16 873,836 830,144
-----------
12,822,182
-----------
COMMUNICATIONS EQUIPMENT -- 2.2%
Aeroflex, Inc........................ BTL-B B1 BB- 4.25 05/09/18 2,074,575 1,960,473
CommScope, Inc....................... BTL-B Ba3 BB 5.00 01/14/18 994,987 990,841
Sorenson Communications, Inc......... BTL-C NR NR 6.00 08/16/13 5,196,096 5,025,924
-----------
7,977,238
-----------
CONSUMER FINANCE -- 1.4%
Fifth Third Processing Solutions LLC. BTL-B Ba3 BB- 4.50 11/18/16 4,989,695 4,985,538
-----------
CONTAINERS & PACKAGING -- 1.3%
Anchor Glass Container Corp.......... 1st Lien B1 BB- 6.00 02/03/16 1,000,000 998,750
Anchor Glass Container Corp.......... 2nd Lien B3 B- 10.00 09/02/16 560,000 558,600
BWAY Corp............................ BTL-B Ba3 B+ 4.50 02/09/18 825,004 815,379
BWAY Corp............................ BTL-C Ba3 B+ 4.50 02/09/18 76,051 75,164
Consolidated Container Co............ 2nd Lien Caa1 CCC+ 5.81 09/28/14 1,250,000 1,062,500
Tank Intermediate Holding Corp....... BTL-A B1 B+ 5.00-6.00 04/15/16 1,086,792 1,085,434
-----------
4,595,827
-----------
DISTRIBUTORS -- 0.7%
CDW Corp............................. BTL-B B2 B 4.00 07/15/17 2,784,560 2,648,813
-----------
DIVERSIFIED CONSUMER SERVICES -- 0.2%
Vertrue, Inc.(7)..................... BTL B3 CCC+ 5.81 08/18/14 2,111,645 570,144
Vertrue, Inc.(7)..................... 2nd Lien Caa3 CCC- 9.37 08/14/15 1,490,000 26,075
-----------
596,219
-----------
12
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
----------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 3.1%
Axcan Pharma, Inc............................ BTL-B B1 BB 5.50% 02/11/17 $2,281,900 $ 2,247,672
BLB Management Services, Inc................. 1st Lien B2 BB 7.75 11/05/15 126,867 127,026
BRSP LLC..................................... BTL B1 BB 7.50 06/04/14 1,526,677 1,534,310
Foxco Acquisition LLC........................ BTL-B B1 B+ 4.75 07/21/15 1,969,872 1,928,816
Global Cash Access LLC....................... BTL B1 BB- 7.00 03/01/16 1,657,143 1,656,107
Pinnacle Foods Group, Inc.................... BTL-B Ba3 B+ 2.77-2.87 04/02/14 954,420 933,237
Visant Corp.................................. BTL Ba3 BB- 5.25-6.25 12/22/16 2,886,814 2,713,605
-----------
11,140,773
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.2%
Level 3 Financing, Inc....................... BTL-B3 Ba3 B+ 5.75 09/01/18 445,000 439,159
Telcordia Technologies, Inc.................. BTL-B B1 B+ 6.75 04/28/16 972,736 967,872
U.S. TelePacific Corp........................ BTL B3 B- 5.75 02/23/17 1,927,881 1,792,929
West Corp.................................... BTL-B2 Ba3 BB- 2.65-2.90 10/24/13 986,558 981,008
-----------
4,180,968
-----------
ELECTRIC UTILITIES -- 0.0%
Mach Gen LLC................................. LOC Ba3 B 2.58 02/22/13 88,760 83,434
-----------
ENERGY EQUIPMENT & SERVICES -- 1.9%
Aquilex Holdings LLC......................... BTL-B Caa3 CC 7.00 04/01/16 1,959,613 1,758,753
Frac Tech International LLC.................. BTL-B B2 B+ 6.25 05/06/16 2,373,597 2,347,079
MEG Energy Corp.............................. BTL-B Ba3 BBB- 4.00 03/18/18 2,768,063 2,766,332
-----------
6,872,164
-----------
FOOD & STAPLES RETAILING -- 2.7%
BJ's Wholesale Club, Inc..................... 1st Lien B1 B+ 7.00 09/29/18 800,000 803,892
Great Atlantic & Pacific Tea Co., Inc.(5).... DIP NR NR 8.75 06/14/12 1,150,000 1,156,708
Rite Aid Corp................................ BTL-B2 B3 B+ 2.03-2.05 06/04/14 1,886,109 1,791,411
Rite Aid Corp................................ BTL-B5 B3 B+ 4.50 03/03/18 2,401,707 2,298,433
Smart & Final, Inc........................... 1st Lien B3 B+ 5.05 05/31/16 416,420 404,968
Smart & Final, Inc........................... 2nd Lien Caa1 CCC+ 9.05 11/30/14 1,000,000 972,500
Sprouts Farmers Market LLC................... BTL-B B2 B+ 6.00 04/18/18 2,262,900 2,204,913
-----------
9,632,825
-----------
FOOD PRODUCTS -- 1.5%
B&G Foods, Inc............................... BTL-B Ba2 BB 4.50 11/30/18 1,050,000 1,054,266
Brickman Group Holdings, Inc................. BTL-B B1 B+ 7.25 10/14/16 2,069,100 2,075,566
Darling International, Inc................... BTL-B Ba1 BBB- 5.75 12/17/16 137,000 137,557
Michael Foods, Inc........................... BTL-B B1 B+ 4.25 02/25/18 2,051,908 2,028,824
-----------
5,296,213
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.9%
Carestream Health, Inc....................... BTL-B B1 BB- 5.00 02/25/17 25,477 23,088
Immucor, Inc................................. BTL-B Ba3 BB- 7.25 07/02/18 872,813 878,995
Kinetic Concepts, Inc........................ BTL-B Ba2 BB- 7.00 05/04/18 410,000 414,213
PTS Pharmaceuticals.......................... BTL-B Ba3 BB- 2.55 04/10/14 1,910,000 1,842,354
-----------
3,158,650
-----------
13
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES -- 6.6%
Alliance HealthCare Services, Inc......... BTL-B Ba3 B+ 7.25% 06/01/16 $ 308,746 $ 272,083
Community Health Systems, Inc............. BTL Ba3 BB 3.80-4.02 01/25/17 825,272 800,169
DaVita, Inc............................... BTL-B Ba2 BB 4.50 10/20/16 1,727,550 1,728,414
HCA, Inc.................................. Tranche B3 Ba3 BB 3.55 05/01/18 1,000,000 947,708
Health Management Associates, Inc......... BTL-B Ba3 BB- 4.50 11/18/18 615,000 612,844
HealthSpring, Inc......................... BTL-B Ba3 BB- 6.00 10/22/16 2,804,499 2,783,465
inVentiv Health, Inc...................... BTL-B B1 BB- 6.50 08/04/16 2,187,932 2,100,414
Kindred Healthcare, Inc................... BTL-B Ba3 B+ 5.25 06/01/18 1,592,000 1,487,194
Multiplan, Inc............................ BTL Ba3 B 4.75 08/18/17 2,471,922 2,363,775
National Surgical Hospitals, Inc.(8)...... BTL B2 B 8.25 01/04/17 3,097,346 2,896,019
Prime Healthcare Services, Inc............ BTL-B B1 NR 7.25 04/28/15 872,222 841,695
Quintiles Transnational Corp.............. BTL-B B1 BB- 5.00 06/08/18 1,713,881 1,687,428
Renal Advantage Holdings, Inc............. BTL-B Ba3 B 5.75 12/17/16 648,400 648,806
Universal Health Services, Inc............ BTL-B Ba2 BB+ 3.75-5.00 11/15/16 746,532 746,248
Vantage Oncology, Inc..................... BTL-B B2 B 6.25 02/28/17 421,429 404,571
Vantage Oncology, Inc..................... BTL B2 B 6.25 02/28/17 3,468,874 3,330,119
-----------
23,650,952
-----------
HEALTH CARE TECHNOLOGY -- 1.3%
Emdeon Business Services LLC.............. BTL-B Ba3 BB- 6.75 08/03/18 145,000 146,427
IMS Health, Inc........................... BTL-B Ba3 BB 4.50 08/31/17 2,677,350 2,674,003
MedAssets, Inc............................ BTL Ba3 BB- 5.25 11/16/16 1,822,520 1,819,102
-----------
4,639,532
-----------
HOTELS, RESTAURANTS & LEISURE -- 7.9%
24 Hour Fitness Worldwide, Inc............ BTL-B Ba3 B+ 7.50 04/22/16 1,711,282 1,642,117
Burger King Corp.......................... BTL-B Ba3 BB- 4.50 10/19/16 3,130,953 3,083,337
Caesars Entertainment Operating Co., Inc.. BTL-B2 B3 B 4.67 01/28/18 4,000,000 3,320,000
CCM Merger, Inc........................... BTL-B B3 B+ 7.00 03/01/17 3,830,319 3,804,782
Cedar Fair LP............................. BTL-B Ba2 BB- 4.00 12/15/17 2,130,947 2,130,137
Denny's Corp.............................. BTL-B B1 B+ 5.25 09/30/16 1,584,000 1,582,681
DineEquity, Inc........................... BTL-B Ba2 BB- 4.25-5.25 10/19/17 1,636,437 1,616,391
Golden Nugget, Inc.(10)................... 1st Lien Caa3 B- 3.30 06/30/14 1,264,621 1,088,627
Golden Nugget, Inc.(10)................... Delayed Draw Caa3 B- 3.30 06/30/14 719,864 619,682
Isle of Capri Casinos, Inc................ BTL-B Ba3 BB- 4.75 03/25/17 2,943,755 2,930,237
Penn National Gaming...................... BTL-B Ba1 BBB- 3.75 07/14/18 1,134,300 1,139,525
Quizno's LLC.............................. 1st Lien NR NR 5.01 05/05/13 1,984,763 1,658,696
Rock Ohio Caesars LLC..................... BTL Ba3 BB- 8.50 08/19/17 800,000 802,000
Six Flags Theme Parks, Inc................ BTL-B B1 BB+ 5.25 12/20/18 1,105,000 1,101,772
Town Sports International Holdings, Inc... BTL-B B1 B 7.00 05/11/18 1,633,800 1,623,589
Travelport, Inc........................... Delayed Draw Ba3 B 4.87 08/23/15 181,549 151,795
-----------
28,295,368
-----------
HOUSEHOLD PRODUCTS -- 0.6%
Scotsman Industries, Inc.................. BTL-B B1 B+ 5.75-6.50 04/30/16 1,433,407 1,419,073
Spectrum Brands, Inc...................... BTL B1 B 5.00-6.25 06/17/16 613,240 614,517
-----------
2,033,590
-----------
INDUSTRIAL CONGLOMERATES -- 2.6%
American Rock Salt Co. LLC................ BTL-B B2 B+ 5.50 04/25/17 1,716,375 1,699,211
Diversified Machines, Inc................. BTL-B B3 B 9.25 12/01/16 1,000,000 1,002,500
Fram Group Holdings, Inc.................. 1st Lien B1 B+ 6.50 07/29/17 543,638 543,977
Harland Clarke Holdings Corp.............. BTL-B B1 B+ 2.80-3.08 06/30/14 2,920,676 2,486,225
Sequa Corp................................ BTL-B B1 B- 3.63-3.70 12/03/14 2,999,706 2,929,714
TriMas Corp............................... BTL-B Ba2 BB 4.25 06/21/17 567,150 564,314
-----------
9,225,941
-----------
14
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
---------------------------------------------------------------------------------------------------------------------
INDUSTRIAL POWER PRODUCERS & ENERGY TRADERS -- 1.2%
AES Corp.......................................... BTL-B Ba1 BB+ 4.25% 05/27/18 $1,151,300 $ 1,151,840
Calpine Corp...................................... BTL-B B1 BB- 4.50 04/01/18 1,081,813 1,063,332
EquiPower Resources Corp.......................... BTL-B Ba3 BB- 5.75 01/28/18 2,105,588 2,000,309
-----------
4,215,481
-----------
INSURANCE -- 1.4%
Alliant Holdings, Inc............................. BTL-D B2 B- 6.75 08/21/14 1,315,516 1,318,805
Asurion Corp...................................... BTL-B Ba3 B+ 5.50 05/24/18 1,845,362 1,822,295
Asurion Corp...................................... 2nd Lien B2 B- 9.00 05/24/19 1,750,000 1,732,500
-----------
4,873,600
-----------
INTERNET SOFTWARE & SERVICES -- 0.5%
Go Daddy Group, Inc............................... BTL-B Ba3 B 7.00 12/17/18 448,875 449,660
Web.com Group, Inc................................ BTL-B Ba3 B 7.00 10/27/17 1,000,000 927,499
Zayo Group........................................ BTL-B B2 B 7.00 09/15/16 445,000 443,887
-----------
1,821,046
-----------
IT SERVICES -- 3.8%
Fidelity National Information Services, Inc....... BTL-B Ba1 BBB- 4.25 07/18/16 2,511,818 2,517,457
First Data Corp................................... BTL-B B1 B+ 4.29 03/24/18 6,468,681 5,441,778
MoneyGram International, Inc...................... BTL-B Ba2 BB- 4.50 11/18/17 1,115,897 1,101,251
Sungard Data Systems, Inc......................... BTL Ba3 BB 3.78 02/28/14 1,000,000 990,313
Sungard Data Systems, Inc......................... BTL-B Ba3 BB 3.97-4.06 02/28/16 930,065 908,558
TransFirst Holdings, Inc.......................... BTL-B B2 B 3.05 06/15/14 2,869,787 2,686,838
-----------
13,646,195
-----------
LEISURE EQUIPMENT & PRODUCTS -- 0.6%
SRAM LLC.......................................... BTL-B Ba3 B+ 4.75-5.75 06/07/18 1,778,206 1,787,097
SRAM LLC.......................................... 2nd Lien B3 B- 8.50 12/07/18 475,000 476,188
-----------
2,263,285
-----------
LIFE SCIENCES TOOLS & SERVICES -- 0.4%
Pharmaceutical Product Development, Inc........... BTL-B Ba3 BB- 6.25 12/05/18 1,615,000 1,612,981
-----------
MACHINERY -- 0.7%
NACCO Materials Handling Group, Inc............... BTL NR NR 1.80-2.40 03/21/13 949,749 940,251
Pro Mach, Inc..................................... BTL-B B2 B+ 6.25 07/06/17 1,537,275 1,498,843
-----------
2,439,094
-----------
MARINE -- 0.4%
Dockwise Transport BV............................. BTL-B NR NR 2.33 04/01/15 184,219 168,192
Dockwise Transport BV............................. BTL-B2 NR NR 2.33 04/01/15 376,912 344,120
Dockwise Transport BV............................. BTL-C NR NR 3.20 04/01/16 154,414 140,980
Dockwise Transport BV............................. BTL-C2 NR NR 3.20 04/01/16 376,912 344,120
Dockwise Transport BV............................. BTL-D NR NR 5.08 07/12/16 241,913 205,626
Dockwise Transport BV............................. BTL-D2 NR NR 5.08 07/12/16 483,825 411,251
-----------
1,614,289
-----------
15
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
MEDIA -- 10.4%
Advanstar Communications, Inc............... 1st Lien Caa1 CC 2.83% 05/31/14 $1,912,393 $ 1,357,799
AMC Entertainment, Inc.(10)................. BTL Caa1 CCC+ 5.55 06/13/12 223,909 217,752
Bresnan Communications, Inc................. BTL-B Ba3 BB+ 4.50-5.25 12/14/17 1,217,700 1,207,426
Cinram International, Inc.(10).............. 1st Lien B3 NR 12.25 12/31/13 489,983 208,855
Cumulus Media, Inc.......................... 1st Lien Ba2 BB- 5.75 09/16/18 2,100,000 2,060,188
Cumulus Media, Inc.......................... 2nd Lien B2 CCC+ 7.50 09/16/19 1,070,000 1,039,684
Entercom Communications Corp................ BTL-B Ba3 BB- 6.25-7.25 11/23/18 350,000 350,583
Fender Musical Instruments Corp............. Delayed Draw B2 B 2.55 06/07/14 275,469 253,891
Fender Musical Instruments Corp............. BTL-B B2 B 2.55 06/07/14 545,214 502,506
Formula One Holdings........................ BTL-B1 NR NR 2.42 12/31/13 1,035,718 987,385
Formula One Holdings........................ BTL-B2 NR NR 2.42 12/31/13 712,230 678,992
Formula One Holdings........................ BTL-D2 NR NR 3.80 06/30/14 1,500,000 1,402,500
Getty Images, Inc........................... BTL-B Ba3 BB- 5.25 11/04/16 2,240,874 2,248,343
Gray Television, Inc........................ BTL-B B2 B 3.78 12/31/14 2,435,438 2,368,451
Hicks Sports Group+(5)(6)................... BTL-B NR NR 6.75 06/22/11 1,706,844 896,093
HIT Entertainment, Ltd...................... BTL B2 NR 5.52 06/01/12 882,313 881,210
HIT Entertainment, Ltd...................... 2nd Lien Caa3 NR 5.78 02/05/13 1,000,000 991,875
Interactive Data Corp....................... BTL-B Ba3 B+ 4.50 02/11/18 2,320,627 2,301,289
Knology, Inc................................ BTL-B B1 B+ 4.00 08/18/17 1,066,938 1,045,599
LIN Television Corp......................... BTL-B Ba3 BB- 5.00 12/21/18 730,000 727,263
Mediacom Broadband LLC...................... BTL-F Ba3 BB- 4.50 10/23/17 1,718,726 1,682,203
Mediacom LLC................................ BTL-E Ba3 BB- 4.50 10/23/17 2,713,675 2,636,788
Mediacom LLC................................ BTL-D Ba3 BB- 5.50 03/31/17 943,288 933,560
Mission Broadcasting, Inc................... BTL Ba3 B+ 5.00 09/30/16 384,150 383,190
Nexstar Broadcasting, Inc................... BTL-B Ba3 B+ 5.00 09/30/16 1,097,100 1,094,357
NextMedia Operating, Inc.................... BTL-B B3 B 8.25 05/21/16 2,893,463 2,828,360
Regal Cinemas, Inc.......................... BTL-B Ba2 BB- 3.58 08/23/17 1,361,250 1,352,459
Sinclair Television Group, Inc.............. BTL-B Ba1 BB+ 4.00 10/29/16 1,527,373 1,531,179
Sinclair Television Group, Inc.............. BTL-B2 Ba1 BB+ 4.00 10/29/16 361,745 358,128
Spanish Broadcasting Systems, Inc........... 1st Lien Caa1 B- 2.05 06/10/12 932,500 865,477
Univision Communications, Inc............... BTL-B B2 B+ 4.55 03/31/17 487,801 446,795
WideOpenWest Finance LLC.................... BTL-B B1 B- 6.77-8.75 06/27/14 1,477,795 1,420,530
Yell Group, Ltd............................. BTL-B NR NR 4.05 07/31/14 784,964 219,790
-----------
37,480,500
-----------
METALS & MINING -- 0.8%
Novelis, Inc................................ BTL-B NR BB- 3.75 03/10/17 2,895,750 2,853,762
-----------
MULTI UTILITIES -- 1.1%
Texas Competitive Electric Holdings Co. LLC. BTL B2 CCC 4.78 10/10/17 6,174,956 3,931,391
-----------
MULTILINE RETAIL -- 1.2%
99 Cents Only Store......................... BTL-B B2 B+ 6.00 10/04/18 530,000 525,363
Lord & Taylor, Ltd.......................... BTL-B Ba3 BB 5.75 12/02/18 535,000 533,663
Neiman Marcus Group, Inc.................... BTL-B B2 BB- 4.75 05/16/18 2,500,000 2,418,230
RGIS LLC.................................... BTL-B Ba3 B 3.08 04/30/14 812,397 790,056
RGIS LLC.................................... Delayed Draw Ba3 B 3.08 04/30/14 40,620 39,503
-----------
4,306,815
-----------
OIL, GAS & CONSUMABLE FUELS -- 1.1%
Alon USA, Inc. (Edgington Facility)......... BTL B1 B+ 2.55-2.77 08/02/13 26,249 24,822
Alon USA, Inc. (Paramount Facility)......... BTL B1 B+ 2.55-2.77 08/02/13 210,000 198,581
Great Point Power LLC....................... BTL Ba1 BB+ 4.25-5.50 06/04/17 1,300,259 1,275,879
Pilot Travel Centers LLC.................... BTL-B Ba2 BB+ 4.25 03/25/18 2,379,853 2,380,969
-----------
3,880,251
-----------
16
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
----------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS -- 0.3%
NewPage Corp.(5)............................... DIP NR BB- 8.00% 03/07/13 $ 425,000 $ 430,844
Unifrax Corp................................... BTL-B B2 B+ 7.00 11/28/18 700,000 701,750
-----------
1,132,594
-----------
PERSONAL PRODUCTS -- 0.9%
NBTY, Inc...................................... BTL-B Ba3 BB- 4.25 10/01/17 1,048,719 1,040,067
Revlon, Inc.................................... BTL-B Ba3 BB- 4.75-5.75 11/19/17 2,154,175 2,136,224
-----------
3,176,291
-----------
PHARMACEUTICALS -- 1.7%
Capsugel Healthcare, Ltd....................... BTL-B B1 BB- 5.25 08/01/18 1,935,150 1,940,955
ConvaTec, Inc.................................. BTL Ba3 B+ 5.75 12/22/16 1,603,800 1,594,759
Harvard Drug Group LLC......................... BTL-B B1 B+ 6.50 04/05/16 693,901 683,493
Harvard Drug Group LLC......................... Delayed Draw B1 B+ 6.50 04/05/16 95,411 93,980
Warner Chilcott PLC............................ BTL-B3 Ba3 BBB- 4.25 03/03/18 593,442 587,137
Warner Chilcott PLC............................ Tranche B1 Ba3 BBB- 4.25 03/03/18 863,189 854,017
Warner Chilcott PLC............................ Tranche B2 Ba3 BBB- 4.25 03/03/18 431,594 427,009
-----------
6,181,350
-----------
PROFESSIONAL SERVICES -- 0.9%
Bankruptcy Management Solutions, Inc.(10)...... 2nd Lien NR NR 8.37 08/20/15 129,145 1,614
Nexeo Solutions LLC............................ BTL-B B1 B 5.00 09/30/17 2,528,388 2,466,758
Scitor Corp.................................... BTL-B B2 B 5.00 02/15/17 905,825 856,005
-----------
3,324,377
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.5%
Realogy Corp................................... CLTL B1 B- 3.20 10/10/16 226,510 212,779
Realogy Corp................................... BTL B1 B- 4.69 10/10/16 1,596,593 1,432,658
-----------
1,645,437
-----------
ROAD & RAIL -- 1.0%
Avis Budget Car Rental LLC..................... BTL-B Ba1 BB 6.25 09/22/18 320,000 322,933
Cardinal Logistics Management, Inc.(10)........ 2nd Lien NR NR 9.50 03/23/14 1,130,976 282,744
Evergreen Tank Solutions, Inc.................. 2nd Lien B3 B- 6.00 04/07/14 497,500 463,919
NES Rentals Holdings........................... 2nd Lien Caa2 CCC+ 10.00 07/20/13 798,142 750,253
Swift Transportation Co., Inc.................. BTL-B B1 BB- 6.00 12/21/16 1,864,411 1,870,625
-----------
3,690,474
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 1.8%
Freescale Semiconductor, Inc................... BTL Ba3 B 4.52 12/01/16 4,824,472 4,655,616
Microsemi Corp................................. BTL-B Ba2 BB 5.75 02/02/18 1,287,024 1,290,242
NXP BV......................................... BTL-A2 B2 B+ 5.50 03/04/17 698,250 665,956
-----------
6,611,814
-----------
SOFTWARE -- 3.6%
Eagle Parent, Inc.............................. BTL-B Ba3 B+ 5.00 05/16/18 2,835,750 2,677,422
Infor Global Solutions......................... Delayed Draw B1 B+ 6.05 07/28/15 324,618 308,387
Infor Global Solutions......................... BTL B1 B+ 6.05 07/28/15 622,184 585,631
IPC Systems, Inc............................... 2nd Lien Caa2 CCC 5.55-5.83 05/31/15 1,000,000 830,000
Kronos, Inc.................................... BTL-C B1 B+ 6.25 12/28/17 1,880,000 1,842,400
Lawson Software, Inc........................... BTL-B Ba3 B+ 6.75 07/05/17 1,995,000 1,952,606
Open Solutions, Inc............................ BTL-B B1 B+ 2.55 01/23/14 1,050,156 905,468
Reynolds & Reynolds Co......................... BTL-B Ba2 BB+ 3.75 04/21/18 1,179,043 1,174,916
Sensata Technologies BV........................ BTL-B Ba3 BB+ 4.00 05/12/18 671,625 666,588
VeriFone....................................... BTL-B Ba3 BB 4.25 12/28/18 625,000 625,391
Verint Systems, Inc............................ BTL-B B1 B+ 4.50 04/29/17 819,819 813,670
Vertafore, Inc................................. BTL-B B1 B+ 5.25 07/29/16 581,547 569,432
-----------
12,951,911
-----------
17
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
---------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL -- 1.5%
J Crew Operating Corp..................... BTL-B B1 B 4.75% 03/07/18 $1,835,763 $ 1,729,288
Michaels Stores, Inc...................... BTL-B2 B2 B+ 4.94-5.13 07/31/16 1,468,693 1,445,287
National Bedding Co....................... 1st Lien B1 BB- 4.13-5.75 11/30/13 1,133,302 1,119,609
National Bedding Co....................... 2nd Lien Caa1 B 5.50 02/28/14 1,000,000 977,500
------------
5,271,684
------------
TEXTILES, APPAREL & LUXURY GOODS -- 0.2%
Phillips-Van Heusen Corp.................. BTL-B Ba1 BBB 3.50 05/06/16 868,438 870,971
------------
THRIFTS & MORTGAGE FINANCE -- 0.9%
Ocwen Financial Corp...................... BTL B1 B 7.00 09/01/16 785,000 775,188
Ocwen Financial Corp...................... BTL-B B1 B 7.00 09/01/16 2,323,700 2,294,654
------------
3,069,842
------------
TRANSPORTATION INFRASTRUCTURE -- 0.3%
Central Parking Corp...................... 1st Lien Ba3 CCC 2.81 05/22/14 1,025,694 896,201
Central Parking Corp...................... LOC Ba3 CCC 2.56 05/22/14 379,310 331,422
------------
1,227,623
------------
WIRELESS TELECOMMUNICATION SERVICES -- 2.8%
Intelstat Jackson Holdings, Ltd........... BTL B1 BB- 5.25 04/02/18 2,982,506 2,976,294
MetroPCS Wireless, Inc.................... BTL-B3 Ba1 BB 4.06 03/17/18 3,061,857 2,985,311
Syniverse Technologies, Inc............... BTL-B B1 BB- 5.25 12/21/17 3,960,000 3,964,950
------------
9,926,555
------------
TOTAL LOANS (cost $357,884,639)............................................................... 343,140,686
------------
U.S. CORPORATE BONDS & NOTES -- 1.1%
CHEMICALS -- 0.3%
LyondellBassell Industries NV*............ Bond Ba2 BB+ 6.00 11/15/21 521,000 540,537
------------
ENERGY EQUIPMENT & SERVICES -- 0.2%
Transocean, Inc........................... Bond Baa3 BBB- 6.38 12/15/21 815,000 866,250
------------
HEALTH CARE PROVIDERS & SERVICES -- 0.1%
Fresenius Medical Care US Finance, Inc.*.. Bond Ba2 BB 6.50 09/15/18 425,000 445,188
------------
INDUSTRIAL CONGLOMERATES -- 0.3%
J.M. Huber Corp.*......................... Bond B2 BB- 9.88 11/01/19 1,135,000 1,191,750
------------
SPECIALTY RETAIL -- 0.2%
Sally Holdings LLC*....................... Bond B1 BB+ 9.88 11/15/19 730,000 759,200
------------
TOTAL U.S. CORPORATE BONDS & NOTES (cost $3,612,386).......................................... 3,802,925
------------
18
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
VALUE
INDUSTRY DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------------------------
COMMON STOCK -- 0.3%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
Bankruptcy Management Solutions, Inc.+@#.................. 1,360 $ 0
BLB Management Services, Inc.+............................ 5,141 34,702
------------
34,702
------------
HOTELS, RESTAURANTS & LEISURE -- 0.3%
MGM Holdings, Inc.+@#(11)................................. 52,273 1,123,870
------------
MEDIA -- 0.0%
Berry Co. LLC+@........................................... 1,136 64,957
Cinram International Income Fund+@........................ 898,980 21,576
------------
86,533
------------
TOTAL COMMON STOCK (cost $3,812,637)...................... 1,245,105
------------
MEMBERSHIP INTEREST -- 0.2%
MEDIA -- 0.0%
Advanstar Communications, Inc.+@#......................... 12,608 0
NextMedia Operating, Inc.+@#.............................. 7,916 42,246
------------
42,246
------------
OIL, GAS & CONSUMABLE FUELS -- 0.2%
Vitruvian Exploration LLC+................................ 23,875 668,499
------------
TOTAL MEMBERSHIP INTEREST (cost $2,506,365)............... 710,745
------------
RIGHTS -- 0.0%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
BLB Management Services, Inc.
Expires 11/05/17+@
(cost $250,000).......................................... 250 0
------------
WARRANTS -- 0.0%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
Bankruptcy Management Solutions, Inc.
Expires 10/01/17
(Strike Price $30.00)+@#
(cost $0)................................................ 126 0
------------
TOTAL LONG-TERM INVESTMENT SECURITIES (cost $368,066,027). 348,899,461
------------
SHORT-TERM INVESTMENT SECURITIES -- 2.9%
REGISTERED INVESTMENT COMPANIES -- 2.9%
SSgA Money Market Fund (cost $10,569,942)................. 10,569,942 10,569,942
------------
TOTAL INVESTMENTS
(cost $378,635,969)(9).................................... 99.9% 359,469,403
OTHER ASSETS LESS LIABILITIES............................... 0.1% 257,902
---------- ------------
NET ASSETS.................................................. 100.0% $359,727,305
========== ============
--------
BTL Bank Term Loan
CLTLCredit Linked Term Loan
DIP Debtor in Possession
LOC Letter of Credit
NR Security is not rated.
+ Non-income producing security
@ Illiquid security. At December 31, 2011, the aggregate value of these
securities was $1,489,246, representing 0.4% of net assets.
# Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
rights to demand registration of these securities. At December 31, 2011,
the aggregate value of these securities was $2,936,675 representing 0.8% of
net assets. Unless otherwise indicated, these securities are not considered
to be illiquid.
(1) Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered below investment grade. Ratings
provided are as of December 31, 2011.
19
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
(2) Based on the stated maturity, the weighted average to maturity of the loans
held in the portfolio will be approximately 57 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 for 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) Subsequent to December 31, 2011, loan is in default.
(8) Loan is subject to an unfunded loan commitment. See Note 11 for details.
(9) See Note 6 for cost of investments on a tax basis. See Notes to Portfolio
of Investments
(10)PIK ("Payment-In-Kind") security. Loan that pays interest in the form of
additional loans.
(11)Fair valued security. Securities are classified as Level 2 based on the
securities valuation inputs; see Note 2.
The following is a summary of the inputs used to value the Fund's net assets as
of December 31, 2011 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- -----------
ASSETS;
Long-Term Investment Securities:
Loans:
Aerospace & Defense.......................... $-- $ 3,615,848 $ 5,514,066 $ 9,129,914
Airlines..................................... -- 1,299,691 2,693,963 3,993,654
Auto Components.............................. -- 8,988,975 4,198,460 13,187,435
Automobiles.................................. -- 2,714,018 -- 2,714,018
Biotechnology................................ -- 1,523,403 4,220,000 5,743,403
Building Products............................ -- 1,484,803 772,907 2,257,710
Capital Markets.............................. -- 3,753,566 2,729,376 6,482,942
Chemicals.................................... -- 8,945,680 4,830,090 13,775,770
Commercial Services & Supplies............... -- 6,883,812 5,938,370 12,822,182
Communications Equipment..................... -- 7,977,238 -- 7,977,238
Consumer Finance............................. -- 4,985,538 -- 4,985,538
Containers & Packaging....................... -- 1,953,043 2,642,784 4,595,827
Distributors................................. -- 2,648,813 -- 2,648,813
Diversified Consumer Services................ -- -- 596,219 596,219
Diversified Financial Services............... -- 5,702,684 5,438,089 11,140,773
Diversified Telecommunication Services....... -- 1,420,167 2,760,801 4,180,968
Electric Utilities........................... -- -- 83,434 83,434
Energy Equipment & Services.................. -- 6,872,164 -- 6,872,164
Food & Staples Retailing..................... -- 6,050,444 3,582,381 9,632,825
Food Products................................ -- -- 5,296,213 5,296,213
Health Care Equipment & Supplies............. -- 3,158,650 -- 3,158,650
Health Care Providers & Services............. -- 8,010,005 15,640,947 23,650,952
Health Care Technology....................... -- 2,820,430 1,819,102 4,639,532
Hotels, Restaurants & Leisure................ -- 25,869,779 2,425,589 28,295,368
Household Products........................... -- 614,517 1,419,073 2,033,590
Industrial Conglomerates..................... -- 5,415,939 3,810,002 9,225,941
Industrial Power Producers & Energy Traders.. -- 2,215,172 2,000,309 4,215,481
Insurance.................................... -- 1,318,805 3,554,795 4,873,600
Internet Software & Services................. -- 1,377,159 443,887 1,821,046
IT Services.................................. -- 7,340,649 6,305,546 13,646,195
Leisure Equipment & Products................. -- -- 2,263,285 2,263,285
Life Sciences Tools & Services............... -- 1,612,981 -- 1,612,981
Machinery.................................... -- -- 2,439,094 2,439,094
Marine....................................... -- 1,614,289 -- 1,614,289
Media........................................ -- 27,349,542 10,130,958 37,480,500
Metals & Mining.............................. -- 2,853,762 -- 2,853,762
Multi Utilities.............................. -- 3,931,391 -- 3,931,391
Multiline Retail............................. -- 2,943,593 1,363,222 4,306,815
Oil, Gas & Consumable Fuels.................. -- 2,604,372 1,275,879 3,880,251
Paper & Forest Products...................... -- -- 1,132,594 1,132,594
Personal Products............................ -- 3,176,291 -- 3,176,291
Pharmaceuticals.............................. -- 3,809,118 2,372,232 6,181,350
20
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Professional Services..................... $-- $ 3,322,763 $ 1,614 $ 3,324,377
Real Estate Management & Development...... -- 1,645,437 -- 1,645,437
Road & Rail............................... -- 2,193,558 1,496,916 3,690,474
Semiconductors & Semiconductor Equipment.. -- -- 6,611,814 6,611,814
Software.................................. -- 8,532,063 4,419,848 12,951,911
Specialty Retail.......................... -- 4,294,184 977,500 5,271,684
Textiles, Apparel & Luxury Goods.......... -- 870,971 -- 870,971
Thrifts & Mortgage Finance................ -- -- 3,069,842 3,069,842
Transportation Infrastructure............. -- -- 1,227,623 1,227,623
Wireless Telecommunication Services....... -- 9,926,555 -- 9,926,555
U.S. Corporate Bonds & Notes............... -- 3,802,925 -- 3,802,925
Common Stock............................... -- 1,223,529 21,576 1,245,105
Membership Interest........................ -- -- 710,745 710,745
Rights..................................... -- -- 0 0
Warrants................................... -- -- 0 0
Short-Term Investments:
Registered Investment Companies............ -- 10,569,942 -- 10,569,942
--- ------------ ------------ ------------
TOTAL........................................ $-- $231,238,258 $128,231,145 $359,469,403
=== ============ ============ ============
The following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
CONVERTIBLE COMMON MEMBERSHIP
LOANS BONDS & NOTES STOCK INTEREST RIGHTS WARRANTS TOTAL
------------ ------------- ----------- ---------- ------ -------- ------------
Balance as of 12/31/2010............. $111,082,728 $ 0 $ 1,217,271 $ 452,483 $ 0 $ 0 $112,752,482
Accrued discounts.................... 492,835 -- -- -- -- -- 492,835
Accrued premiums..................... (77,753) -- -- -- -- -- (77,753)
Realized gain........................ 976,752 -- -- -- -- -- 976,752
Realized loss........................ (2,382,715) (935,160) -- -- -- -- (3,317,875)
Change in unrealized appreciation(1). 2,292,981 1,014,537 (257,803) 420,797 -- -- 3,470,512
Change in unrealized depreciation(1). (6,706,162) -- -- (162,535) -- -- (6,868,697)
Purchases............................ 84,277,609 4,958 220,679 -- -- -- 84,503,246
(Sales).............................. (69,865,519) (84,335) -- -- -- -- (69,949,854)
Transfers into Level 3(2)............ 28,882,776# -- -- -- -- -- 28,882,776
Transfers out of Level 3(2).......... (21,474,708)* -- (1,158,571) -- -- -- (22,633,279)
------------ ---------- ----------- --------- --- --- ------------
Balance as of 12/31/2011............. $127,498,824 $ -- $ 21,576 $ 710,745 $ 0 $ 0 $128,231,145
============ ========== =========== ========= === === ============
--------
(1)The total change in unrealized appreciation (depreciation) included in the
statement of operations attributable to level 3 investments still held at
December 31, 2011 includes:
CONVERTIBLE COMMON MEMBERSHIP
LOANS BONDS & NOTES STOCK INTEREST RIGHTS WARRANTS
----------- ------------- --------- ---------- ------ --------
$(3,631,568) $-- $(199,104) $258,262 $-- $--
=========== === ========= ======== === ===
(2)The Fund's policy is to recognize transfers in and transfers out as of the
end of the reporting period.
# Transferred from Level 2 to Level 3 due to an decrease in market activity
and observable market data for these securities.
* Transferred from Level 3 to Level 2 due to an increase in market activity
and observable market data for these securities.
See Notes to Financial Statements
21
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011
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 SunAmerica
Asset Management Corp. (the "Adviser" or "SunAmerica"), an indirect
wholly-owned subsidiary of American International Group, Inc. ("AIG"). The
Fund's investment goal and principal investment techniques are to provide as
high a level of current income as is consistent with the preservation of
capital by investing, under normal market conditions, at least 80% of its
net assets, plus any borrowings for investment purposes, in senior secured
floating rate loans and other institutionally traded secured floating rate
debt obligations. The Fund may also purchase both investment grade and high
yield fixed income securities and money market instruments, although the
Fund may not invest more than 10% of its total assets in high yield fixed
income securities.
The Fund offers two 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 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. The
share classes differ in their respective distribution and service
maintenance fees. All classes have equal rights to assets and voting
privileges except as may otherwise be provided in the Fund's registration
statement.
Effective as of the close of business on June 26, 2009 (the "Liquidation
Date"), the Fund liquidated its Class B, Class D and Class Q shares, as well
as those Class C shares purchased before August 18, 1999 ("Old Class C
Shares"), including those shares purchased through the reinvestment of
dividends and distributions paid on Old Class C Shares and held in a
separate sub-account, as described in the Fund's Prospectus, that were
eligible for conversion to Class Q shares. Any shares outstanding as of the
Liquidation Date were automatically redeemed by the Fund on that date and
shareholders received proceeds equal to the net asset value of their shares.
INDEMNIFICATIONS: The Fund's organizational documents provide current and
former officers and directors with a limited indemnification against
liabilities arising out of the performance of their duties to the Fund. In
addition, pursuant to Indemnification Agreements between the Fund and each
of the current directors who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Fund (collectively, the
"Disinterested Directors"), the Fund provides the Disinterested Directors
with a limited indemnification against liabilities arising out of the
performance of their duties to the Fund, whether such liabilities are
asserted during or after their service as directors. In addition, in the
normal course of business the Fund enters into contracts that 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 and
those differences could be significant. 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 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
22
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
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 for which the securities are principally
traded. Stocks listed on the NASDAQ are valued using the NASDAQ Official
Closing Price ("NOCP"). Generally, the NOCP will be the last sale price
unless the reported trade for the stock is outside the range of the 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. The pricing services may use valuation
models or matrix pricing which considers information with respect to
comparable bond and note transactions, quotations from bond dealers, or by
reference to other securities that are considered comparable in such
characteristics as rating, interest rate, and maturity date, option adjusted
spreads models, prepayments projections, interest rate spreads, and yield
curves to determine current value. If a vendor quote is unavailable the
securities may be priced at the mean of two independent quotes obtained from
brokers.
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 60th day, are amortized to
maturity based on the value determined on the 61st day.
Investments in open end and closed end registered investment companies that
do not trade on an exchange are valued at the end of day net asset value per
share. Investments in open end and closed end registered investment
companies that trade on an exchange are valued at the last sales price or
official closing price as of the close of the customary trading session on
the exchange where the security is principally traded.
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 fair valued, as determined
pursuant to procedures adopted in good faith by the Board. There is no
single standard for making fair value determinations, which may result in
prices that vary from those of other funds.
The Loans in which the Fund primarily invests are generally not listed on
any exchange and the secondary market for the Loans is comparatively
illiquid relative to markets for other fixed income securities.
Consequently, obtaining valuations for the Loans may be more difficult than
obtaining valuations for more actively traded securities. Thus, the value
upon disposition on any given Loan may differ from its current valuation.
The various inputs that may be used to determine the value of the Fund's
investments are summarized into three broad levels listed below:
Level 1 -- Unadjusted 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,
referenced indicies, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices on foreign equity
securities that were adjusted in accordance with pricing procedures approved
by the Board, etc.)
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Fund's own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances or for certain loans, a minimal amount of market
activity and observable market data provided by market participants.)
23
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The summary of the inputs used to value the Fund's net assets as of December
31, 2011 are reported on a schedule following the Portfolio of Investments.
REPURCHASE AGREEMENTS: The Fund, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission, may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. For
repurchase agreements and joint repurchase agreements, the Fund's custodian
takes possession of the collateral pledged for investments in such
repurchase agreements. The underlying collateral is valued daily on a
mark-to-market basis, plus accrued interest, to ensure that the value, at
the time the agreement is entered into, is equal to at least 102% of the
repurchase price, including accrued interest. In the event of default of the
obligation to repurchase, a 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
December 31, 2011, 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 from
settlement date 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 $2,658,650 for the year ended December 31, 2011, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $1,469,780 for the
year ended December 31, 2011, 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 (or the value
of dividend-eligible shares, as appropriate) 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 by the
reclassifications.
The Fund intends to comply with the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal tax provision is
required. 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 2008.
NEW ACCOUNTING PRONOUNCEMENTS: In April 2011, the Financial Accounting
Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
2011-03, "Reconsideration of Effective Control for Repurchase Agreements."
ASU 2011-03 changes the assessment of effective control for repurchase
agreements including dollar
24
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
roll transactions. The new and revised disclosures are effective for interim
and annual reporting periods beginning after December 15, 2011. At this
time, management is evaluating the implications of ASU No. 2011-03 and its
impact on the financial statements.
In May 2011, the FASB issued ASU No. 2011-04, "Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs."
ASU 2011-04 requires common fair value measurement and disclosure
requirements between U.S. GAAP and International Financial Reporting
Standards. The new and revised disclosures are effective for interim and
annual reporting periods beginning after December 15, 2011. At this time,
management is evaluating the implications of ASU No. 2011-04 and its impact
on the financial statements.
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 December 31, 2011.
Note 3. Capital Share Transactions
The Fund has 1,000,000,000 of $.01 par value shares authorized that may be
issued in two different classes. Transactions in shares of each class were
as follows:
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2011 DECEMBER 31, 2010
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A ----------- ------------- ----------- ------------
Shares sold................. 22,268,025 $ 184,329,786 27,777,461 $225,844,201
Reinvested distributions.... 770,385 6,329,878 656,689 5,340,187
Shares redeemed............. (33,660,398) (273,254,039) (10,875,323) (88,357,357)
----------- ------------- ----------- ------------
Net increase (decrease).. (10,621,988) $ (82,594,375) 17,558,827 $142,827,031
=========== ============= =========== ============
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2011 DECEMBER 31, 2010
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS C ----------- ------------- ----------- ------------
Shares sold................. 9,204,874 $ 76,496,972 10,408,539 $ 84,640,136
Reinvested distributions.... 550,109 4,489,104 439,751 3,572,201
Shares redeemed............. (7,863,582) (63,618,305) (4,319,972) (34,989,989)
----------- ------------- ----------- ------------
Net increase (decrease).. 1,891,401 $ 17,367,771 6,528,318 $ 53,222,348
=========== ============= =========== ============
Note 4. Purchases and Sales of Securities
During the year ended December 31, 2011, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns were $276,799,998 and $325,331,719, 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 SunAmerica. Pursuant to the Advisory
Agreement, 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, 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 SunAmerica and its affiliates.
SunAmerica also selects, contracts with and compensates the subadviser to
manage the Fund's assets. The Fund will pay 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.
25
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
Wellington Management Company, LLP ("Wellington") acts as subadviser to the
Fund pursuant to a Subadvisory Agreement with SunAmerica. Under the
Subadvisory Agreement, Wellington manages the investment and reinvestment of
the Fund's assets. For compensation for its services as subadviser,
Wellington is entitled to receive from SunAmerica a monthly fee payable at
the following annual rates: 0.30% of average daily net assets on the first
$500 million and 0.25% thereafter. The fee paid to the subadviser is paid by
SunAmerica and not the Fund.
Pursuant to the Administrative Services Agreement (the "Administrative
Agreement") 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, SunAmerica receives an
annual fee equal to 0.20% of average daily net assets of the Fund. For the
year ended December 31, 2011, the Fund incurred administration fees in the
amount of $924,011.
The Fund has entered into a Distribution Agreement with SunAmerica Capital
Services, Inc. ("SACS" or the "Distributor"), an affiliate of the Adviser.
The Fund has adopted a Distribution Plan on behalf of each class of shares
(each a "Plan" and collectively, the "Plans") in accordance with the
provisions of Rule 12b-1 under the 1940 Act, hereinafter referred to as the
"Class A Plan" and "Class C 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.
Under the Class A Plan and Class C Plan, the Distributor receives payments
from the Fund at an annual rate of 0.10% and 0.50%, respectively, of the
average daily net assets of the Fund's Class A and Class 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 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 each Class' Plan may
exceed the Distributor's distribution costs as described above. The Plans
provide that the Class A and Class C shares of the Fund will pay the
Distributor an account maintenance fee up to an annual rate of 0.25% of the
aggregate average daily net assets of such class of shares for payments to
compensate the Distributor and certain securities firms for account
maintenance activities. Accordingly, for the year ended December 31, 2011,
SACS received fees (see Statement of Operations) based upon the
aforementioned rates. For the year ended December 31, 2011 SACS received
sales charges on Class A shares of $461,473, of which $66,851 was reallowed
to affiliated broker-dealers and $304,655 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 and Class C
shares. For the year ended December 31, 2011, SACS received early withdrawal
charges of $89,538.
The Fund has entered into a Service Agreement with SunAmerica Fund Services,
Inc. ("SAFS") an affiliate of 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 year ended December 31, 2011, 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 DECEMBER 31, 2011
-------- -----------------
Class A....................... $541,155 $30,413
Class C....................... 474,951 37,413
26
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
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 C, of average daily net assets. For purposes
of waived fees and/or reimbursed expense calculations, annual Fund operating
expenses do not include extraordinary expenses, as determined under
generally accepted accounting principles or acquired fees and expenses. The
expense reimbursements and fee waivers will continue in effect indefinitely,
unless terminated by the Board, including a majority of the Disinterested
Directors. For the year ended December 31, 2011, SunAmerica waived fees and
reimbursed expenses as follows: Class A $824,269 and Class C $947,139.
On September 22, 2008, AIG, the ultimate parent of SunAmerica, SACS and
SAFS, entered into a revolving credit facility ("FRBNY Credit Facility")
with the Federal Reserve Bank of New York ("NY Fed"). In connection with the
FRBNY Credit Facility, on March 4, 2009, AIG issued its Series C Perpetual,
Convertible, Participating Preferred Stock (the "Series C Preferred Stock")
to the AIG Credit Facility Trust, a trust established for the sole benefit
of the United States Treasury (the "Trust"). The Series C Preferred Stock
was entitled to approximately 77.8% of the voting power of AIG's outstanding
stock.
On January 14, 2011, AIG completed a series of previously announced
integrated transactions (the "Recapitalization") to recapitalize AIG. In the
Recapitalization, AIG repaid the NY Fed approximately $21 billion in cash,
representing all amounts owing under the FRBNY Credit Facility and the
facility was terminated. Also as part of the Recapitalization, (i) the
Series C Preferred Stock was exchanged for shares of AIG Common Stock, which
was then transferred to the U.S. Department of the Treasury, and the Trust,
which had previously held all shares of the Series C Preferred Stock, was
terminated, and, (ii) AIG's Series E Preferred Shares and Series F Preferred
Shares were exchanged for shares of AIG Common Stock and a new Series G
Preferred Shares (which functions as a $2 billion commitment to provide
funding that AIG will have the discretion and option to use). As a result of
the Recapitalization, the United States Treasury held a majority of
outstanding shares of AIG Common Stock.
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, post October losses, and treatment of defaulted securities.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
----------------------------------------- ---------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2011 FOR THE YEAR ENDED DECEMBER 31, 2011 FOR THE YEAR ENDED DECEMBER 31, 2010
----------------------------------------- ------------------------------------- -------------------------------------
LONG-TERM GAINS/ UNREALIZED LONG-TERM LONG-TERM
ORDINARY CAPITAL AND OTHER APPRECIATION/ ORDINARY CAPITAL ORDINARY CAPITAL
INCOME LOSSES (DEPRECIATION) INCOME GAINS INCOME GAINS
-------- ----------------- -------------- ------------ --------- ------------ ---------
$436 $(56,199,320) $(19,166,566) $18,645,783 $ -- $14,854,722 $ --
CAPITAL LOSS CARRYFORWARDS. At December 31, 2011 capital loss carryforward
available to offset future recognized gains were $46,805,017 with $3,498,813
expiring in 2012, $16,003,027 expiring in 2016, and $27,303,177 expiring in
2017. Additionally, the fund generated unlimited short-term capital losses
of $3,141,474 and unlimited long-term capital losses of $6,252,829.
On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changed various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective for taxable years beginning after the date of enactment.
Under the Act, the fund will be permitted to carry forward capital losses
incurred in taxable years beginning after the date of enactment for an
unlimited period. However, any losses incurred during those future taxable
years will be required to be utilized prior to the losses incurred in
pre-enactment taxable years, which carry an expiration date. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
27
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
During the year ended December 31, 2011, the Senior Floating Rate Fund had
$4,956,144 of capital loss carryforwards expire.
Under the current tax law, capital losses realized after October 31 and
specified ordinary losses may be deferred and treated as occurring on the
first day of the following year. For the fiscal year ended December 31,
2011, the fund elected to defer $442,131 of Post-October short-term capital
losses and $344,245 of Post-October long-term capital losses.
For the period ended December 31, 2011, reclassifications were made to
increase accumulated net realized gain/(loss) by $4,956,144 with an
offsetting adjustment to decrease paid-in capital by $(4,956,144). The
reclassifications arising from book/tax differences were due primarily to
the expiration of capital loss carryforwards.
Unrealized appreciation and depreciation in the value of investments at
December 31, 2011 for federal income tax purposes were as follows:
Cost (tax basis)............................................ $378,635,969
============
Gross unrealized appreciation............................... $ 1,681,095
Gross unrealized depreciation............................... (20,847,661)
------------
Net unrealized depreciation................................. $(19,166,566)
============
Note 7. Director Retirement Plan
The Directors of the Fund have adopted the SunAmerica Disinterested
Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective
January 1, 1993, as amended, for the Disinterested Directors. The Retirement
Plan provides generally that a Disinterested 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 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%.
Effective December 3, 2008, the Retirement Plan was amended to, among other
things, (1) freeze the Retirement Plan as to future accruals for active
Participants as of December 31, 2008, (2) prohibit Disinterested Directors
from first becoming participants in the Retirement Plan after December 31,
2008 and (3) permit active Participants to elect to receive a distribution
of their entire Retirement Plan account balance in 2009. The freeze on
future accruals does not apply to Participants that have commenced receiving
benefits under the Retirement Plan on or before December 31, 2008.
28
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2011 -- (CONTINUED)
Note 8. Line of Credit
The SunAmerica family of mutual funds has established a $75 million
committed and $50 million uncommitted line of credit with State Street
Bank and Trust Company, the Fund's custodian. Interest is currently payable
at the higher of the Federal Funds Rate plus 125 basis points or London
Interbank Offered Rate plus 125 basis points on the committed line and State
Street Bank and Trust Company'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 committed line of credit which is
included in the other expenses line on the Statement of Operations.
Borrowings under the line of credit will commence when the respective Fund's
cash shortfall exceeds $100,000. For the year ended December 31, 2011, the
Fund had borrowings outstanding for 57 days under the line of credit and
incurred $10,100 in interest charges related to these borrowings. The Fund's
average amount of debt under the line of credit for the days utilized was
$4,562,539 at a weighted average interest rate of 1.40%. At December 31,
2011, there were no borrowings outstanding.
Note 9. Interfund Lending
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 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 year ended December 31, 2011, 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 is subject to the credit risk of
the borrower, selling participant, lender or other persons positioned
between the Fund and the borrower.
Note 11. Unfunded Loan Commitments
At December 31, 2011, the Fund had the following unfunded loan commitments
which could be extended at the option of the Borrower:
MATURITY PRINCIPAL
NAME TYPE DATE AMOUNT
---- ------------ -------- ---------
National Surgical Hospitals, Inc.............. Delayed Draw 02/03/17 $544,307
29
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of SunAmerica Senior Floating Rate
Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of SunAmerica Senior
Floating Rate Fund, Inc. (the "Fund") at December 31, 2011, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements'') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 2011 by
correspondence with the custodian, brokers, and selling or agent banks, and the
application of alternative auditing procedures where securities purchased had
not been received, provide a reasonable basis for the opinion.
PricewaterhouseCoopers LLP
Houston, Texas
February 28, 2012
30
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2011 -- (UNAUDITED)
The following table contains basic information regarding the Directors and
Officers who oversee operations of the Fund and other investment companies
within the Fund complex.
NUMBER OF
TERM OF FUNDS IN
NAME, POSITION(S) OFFICE AND FUND COMPLEX
ADDRESS AND HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
AGE* THE FUND TIME SERVED(4) DURING PAST 5 YEARS DIRECTOR(1) HELD BY DIRECTOR(2)
-------------------- ----------- -------------- ----------------------------- ------------ -------------------------------
DISINTERESTED
DIRECTORS
Dr. Judith L. Craven Director 2000- Retired. 83 Director, Belo Corp. (1992 to
66 present present); Director, Sysco
Corp. (1996 to present);
Director, Luby's Inc. (1998 to
present).
William F. Devin Director 1998- Retired. 83 None
73 present
Richard W. Grant Director 2011 to Retired. Prior to that, 35 None
66 Present attorney and Partner at
Morgan Lewis & Brockius
LLP (1989 to 2011).
Stephen J. Gutman Director 2001- Vice President and 35 None
68 present Associate Broker, Corcoran
Group (real estate) (2002 to
present); President and
member of Managing
Directors, Beau Brummel
Soho, LLC (licensing of
menswear specialty
retailing) (1995 to 2009);
President, SJG Marketing,
Inc. (2009 to present).
William J. Shea Director 2004- Executive Chairman, Lucid, 35 Chairman of the Board,
64 present Inc. (medical technology and Royal and SunAlliance Co.
information) (2007 to U.S.A., Inc. (2004 to
present); Managing Partner, present); Director, Boston
DLB Capital, LLC (private Private Financial Holdings
equity) (2006 to present). (2004 to present); Chairman,
Demoulas Supermarkets
(1999 to present); Director,
NASDAQ OMX BX. (2008 to
present)
INTERESTED DIRECTOR
Peter A. Harbeck(3) Director 2001- President, CEO and 83 None
58 present Director, SunAmerica (1995
to present); Director,
SunAmerica Capital
Services, Inc. ("SACS")
(1993 to present); Chairman,
Advisor Group, Inc. (2004 to
present).
31
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2011 -- (UNAUDITED)
(CONTINUED)
NUMBER OF
TERM OF FUNDS IN
NAME, POSITION(S) OFFICE AND FUND COMPLEX
ADDRESS AND HELD WITH LENGTH OF PRINCIPAL OCCUPATIONS OVERSEEN BY OTHER DIRECTORSHIPS
AGE THE FUND TIME SERVED(4) DURING PAST 5 YEARS DIRECTOR(1) HELD BY DIRECTOR(2)
------------------- ----------- -------------- ---------------------------- ------------ -------------------
OFFICERS
John T. Genoy President 2007- Chief Financial Officer, N/A N/A
43 present SunAmerica (2002 to
present); Senior Vice
President, SunAmerica
(2003 to present); Chief
Operating Officer,
SunAmerica (2006 to
present).
Donna M. Handel Treasurer 2002- Senior Vice President, N/A N/A
45 present SunAmerica (2004 to
present).
Gregory N. Bressler Secretary 2005- Senior Vice President and N/A N/A
45 and Chief Present General Counsel,
Legal SunAmerica (2005 to
Officer present).
James Nichols Vice 2006- Director, President and N/A N/A
45 President Present CEO, SACS (2006 to
present); Senior Vice
President, SACS (2002 to
2006); Senior Vice
President, SunAmerica
(2002 to present)
Katherine Stoner Vice 2011 to Vice President, SunAmerica N/A N/A
55 President Present (2011 to present); Vice
and Chief President, The Variable
Compliance Annuity Life Insurance
Officer Company ("VALIC"),
Western National Life
Insurance Company ("WNL")
and American General
Distributors, Inc. (2006 to
present); Deputy General
Counsel and Secretary,
VALIC and WNL (2007 to
May 2011); Vice President,
VALIC Financial Advisors,
Inc. (2010 to 2011) and
VALIC Retirement Services
Company (2010 to present).
Gregory R. Kingston Vice 2002- Vice President, SunAmerica N/A N/A
46 President present (2001 to present)
and
Assistant
Treasurer
32
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2011 -- (UNAUDITED)
(CONTINUED)
NUMBER OF
TERM OF FUNDS IN
NAME, OFFICE AND FUND COMPLEX
ADDRESS AND POSITION(S) HELD LENGTH OF PRINCIPAL OCCUPATIONS OVERSEEN BY OTHER DIRECTORSHIPS
AGE* WITH THE FUND TIME SERVED(4) DURING PAST 5 YEARS DIRECTOR(1) HELD BY DIRECTOR(2)
-------------------- ---------------- -------------- -------------------------- ------------ -------------------
Nori L. Gabert Vice 2002- Vice President and Deputy N/A N/A
58 President present General Counsel,
and SunAmerica (2005 to
Assistant present).
Secretary
Matthew J. Hackethal Anti-Money 2006- Chief Compliance Officer, N/A N/A
40 Laundering present SunAmerica (2006 to
Compliance present); Vice President,
Officer Credit Suisse Asset
Management LLC (2005 to
2006).
--------
* The business address for each Director and Officer is Harborside Financial
Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" means two or more registered investment companies that
hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the Adviser. The "Fund Complex"
includes the SunAmerica Money Market Funds (2 funds), SunAmerica Equity
Funds (3 funds), SunAmerica Income Funds (4 funds), SunAmerica Series,
Inc. (11 portfolios), Anchor Series Trust (8 portfolios), the Fund, (1
fund), SunAmerica Series Trust (36 portfolios), SunAmerica Specialty
Series (6 funds), VALIC Company I (33 funds), VALIC Company II (15 funds)
and Seasons Series Trust (21 portfolios).
(2) Directorships of companies required to report to the Commission under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies registered under the 1940 Act, other than those
listed under the preceding column.
(3) Interested Director, as defined within the Investment Company Act of 1940,
because he or she is an officer and a director of the Adviser and a
director of the principal underwriter of the Fund.
(4) Directors serve until their successors are duly elected and qualified,
subject to the Directors' retirement plan as discussed in Note 7 of the
financial statements. Each officer will hold office for an indefinite term
until the date he or she resigns or retires or until his/her successor is
duly elected and qualifies.
Additional information concerning the Directors is contained in the Statement
of Additional Information and is available without charge by calling (800)
858-8850.
33
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
SHAREHOLDER TAX INFORMATION -- (UNAUDITED)
Certain tax information regarding the Fund is required to be provided to
shareholders based upon the Fund's income and distributions for the taxable
year ended December 31, 2011. The information necessary to complete your income
tax returns is included with your Form 1099-DIV, which will be mailed to
shareholders in early 2012.
During the year ended December 31, 2011 the Fund paid the following dividends:
NET QUALIFYING % FOR QUALIFYING
LONG-TERM THE 70% DIVIDENDS DIVIDEND
CAPITAL GAINS RECEIVED DEDUCTION INCOME %
------------- ------------------ ----------
Class A....................... $-- --% --%
Class C....................... -- -- --
34
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
COMPARISON: FUND VS. INDEX -- (UNAUDITED)
As required by the Securities and Exchange Commission, the following graph
compares the performance of a $10,000 investment in the Fund to a similar
investment in the index. Please note that the term "inception," as used herein,
reflects the date on which a specific class of shares commenced operations. It
is important to note that the Fund is a professionally managed mutual fund
while the index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only. The graph presents the
performance of Class C shares of the Fund. The performance of the other class
will vary based upon the difference in sales charges and fees assessed to
shareholders of that class. Past performance does not predict future results.
35
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
COMPARISON: FUND VS. INDEX -- (UNAUDITED) (CONTINUED)
The Senior Floating Rate Fund (Class C) returned 0.06%, underperforming its
benchmark, the S&P/LSTA Leveraged Loan Index (LLI)*, which returned 1.52% for
the annual period ended December 31, 2011.
Detracting from the Fund's relative performance from an industry allocation
perspective were an overweight exposure to the restaurant industry, which
lagged the S&P/LSTA LLI during the annual period, and an underweight position
in the telecommunications-wireline industry, which outpaced the S&P/LSTA LLI
during the annual period. Among individual loans, significant detractors from
the Fund's absolute returns during the annual period included those of Internet
marketing services provider Vertrue; yellow pages directories publisher in
Puerto Rico and the Dominican Republic Caribe Media; and health imaging systems
provider Carestream Health.
On the positive side, contributing to the Fund's relative performance were
its underweighted allocations to the media non-cable and utilities industries,
as these market segments underperformed the S&P/LSTA LLI during the annual
period. Also additive to the Fund's relative results were overweighted
allocations to the technology and pharmaceuticals industries, which outpaced
the S&P/LSTA LLI during the annual period. Having an underweighted exposure to
riskier, lower-rated bank loans, which underperformed higher-quality segments
of the loan market during the annual period, further added value to the Fund's
relative results. Among the individual loans that contributed most positively
to the Fund's absolute returns were those of Vitruvian Exploration, an onshore
natural gas exploration and production company; Sorenson Communications, which
provides communications products and services for deaf and hard-of-hearing
individuals worldwide; and Cumulus Media, a radio broadcasting company.
At the end of the annual period, we continued to seek out situations where
we felt negative technicals, or supply/demand imbalances, created dislocations
and thus, attractive buying opportunities for the Fund. Examples included the
pricing of new issues at premium yields to clear the market and/or forced sales
of more liquid loans by retail mutual funds to meet redemptions.
--------
Past performance is no guarantee of future results.
*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.
Securities listed may or may not be a part of current portfolio construction.
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 an active trading market, in certain cases, 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.
36
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
COMPARISON: FUND VS. INDEX -- (UNAUDITED) (CONTINUED)
Over the past ten years, $10,000 invested in Senior Floating Rate Fund Class C
shares would have increased to $14,161. The same amount invested in securities
mirroring the performance of the S&P/LSTA Leveraged Loan Index would be valued
at $16,214.
[CHART]
Senior Floating Rate Class C S&P/LSTA Leveraged Loan Index
----------------------------- -----------------------------
12/31/2001 $10,000 $10,000.00
1/31/2002 $10,035 $10,051.00
2/28/2002 $10,026 $10,021.15
3/31/2002 $10,097 $10,140.90
4/30/2002 $10,157 $10,258.64
5/31/2002 $10,221 $10,268.69
6/30/2002 $10,209 $10,167.65
7/31/2002 $10,110 $10,076.75
8/31/2002 $10,060 $10,043.29
9/30/2002 $10,065 $10,050.02
10/31/2002 $9,915 $9,931.03
11/30/2002 $10,025 $10,070.96
12/31/2002 $10,136 $10,191.31
1/31/2003 $10,180 $10,315.33
2/28/2003 $10,195 $10,360.31
3/31/2003 $10,333 $10,400.82
4/30/2003 $10,520 $10,524.07
5/31/2003 $10,666 $10,638.25
6/30/2003 $10,810 $10,767.72
7/31/2003 $10,878 $10,839.43
8/31/2003 $10,905 $10,864.04
9/30/2003 $11,015 $10,966.70
10/31/2003 $11,096 $11,066.83
11/30/2003 $11,164 $11,138.43
12/31/2003 $11,230 $11,207.49
1/31/2004 $11,357 $11,304.10
2/29/2004 $11,372 $11,339.59
3/31/2004 $11,397 $11,380.53
4/30/2004 $11,472 $11,436.30
5/31/2004 $11,476 $11,449.22
6/30/2004 $11,515 $11,520.32
7/31/2004 $11,542 $11,557.99
8/31/2004 $11,533 $11,578.33
9/30/2004 $11,561 $11,626.38
10/31/2004 $11,606 $11,685.09
11/30/2004 $11,652 $11,737.44
12/31/2004 $11,689 $11,786.27
1/31/2005 $11,737 $11,833.89
2/28/2005 $11,796 $11,897.44
3/31/2005 $11,835 $11,946.93
4/30/2005 $11,811 $11,938.45
5/31/2005 $11,802 $11,945.37
6/30/2005 $11,869 $12,022.78
7/31/2005 $11,949 $12,114.03
8/31/2005 $12,021 $12,186.47
9/30/2005 $12,054 $12,236.07
10/31/2005 $12,079 $12,273.51
11/30/2005 $12,130 $12,319.66
12/31/2005 $12,184 $12,384.71
1/31/2006 $12,268 $12,470.41
2/28/2006 $12,347 $12,549.35
3/31/2006 $12,435 $12,625.27
4/30/2006 $12,497 $12,686.88
5/31/2006 $12,510 $12,718.73
6/30/2006 $12,549 $12,754.47
7/31/2006 $12,607 $12,826.79
8/31/2006 $12,691 $12,905.80
9/30/2006 $12,759 $12,975.10
10/31/2006 $12,855 $13,061.13
11/30/2006 $12,897 $13,130.35
12/31/2006 $12,982 $13,223.58
1/31/2007 $13,091 $13,339.03
2/28/2007 $13,180 $13,430.74
3/31/2007 $13,220 $13,484.41
4/30/2007 $13,301 $13,564.52
5/31/2007 $13,367 $13,647.10
6/30/2007 $13,391 $13,677.52
7/31/2007 $12,961 $13,219.64
8/31/2007 $12,975 $13,250.38
9/30/2007 $13,174 $13,509.28
10/31/2007 $13,259 $13,638.25
11/30/2007 $13,038 $13,448.95
12/31/2007 $13,038 $13,490.98
1/31/2008 $12,566 $13,055.22
2/29/2008 $12,233 $12,727.77
3/31/2008 $12,167 $12,716.32
4/30/2008 $12,573 $13,187.41
5/31/2008 $12,731 $13,311.39
6/30/2008 $12,779 $13,344.65
7/31/2008 $12,588 $13,242.63
8/31/2008 $12,561 $13,225.33
9/30/2008 $11,745 $12,411.97
10/31/2008 $9,825 $10,771.46
11/30/2008 $8,677 $9,855.35
12/31/2008 $8,027 $9,565.07
1/31/2009 $8,501 $10,273.09
2/28/2009 $8,431 $10,353.16
3/31/2009 $8,412 $10,502.49
4/30/2009 $9,444 $11,415.76
5/31/2009 $10,219 $12,112.22
6/30/2009 $10,884 $12,643.18
7/31/2009 $11,441 $13,242.07
8/31/2009 $11,775 $13,541.94
9/30/2009 $12,232 $13,975.05
10/31/2009 $12,457 $14,052.42
11/30/2009 $12,522 $14,088.58
12/31/2009 $12,864 $14,502.74
1/31/2010 $13,221 $14,798.75
2/28/2010 $13,229 $14,841.26
3/31/2010 $13,536 $15,175.45
4/30/2010 $13,740 $15,398.52
5/31/2010 $13,447 $15,051.71
6/30/2010 $13,354 $14,981.42
7/31/2010 $13,533 $15,211.77
8/31/2010 $13,595 $15,263.31
9/30/2010 $13,762 $15,477.69
10/31/2010 $13,949 $15,720.05
11/30/2010 $13,999 $15,775.72
12/31/2010 $14,152 $15,971.59
1/31/2011 $14,367 $16,286.31
2/28/2011 $14,476 $16,361.72
3/31/2011 $14,472 $16,359.44
4/30/2011 $14,536 $16,463.70
5/31/2011 $14,532 $16,448.85
6/30/2011 $14,475 $16,387.99
7/31/2011 $14,486 $16,412.01
8/31/2011 $13,780 $15,689.10
9/30/2011 $13,829 $15,756.33
10/31/2011 $14,165 $16,211.87
11/30/2011 $14,107 $16,132.22
12/31/2011 $14,161 $16,214.45
Class A Class C
Senior -------------------------------------
Floating Average Average
Rate Annual Cumulative Annual Cumulative
Fund# Return Return+ Return Return+
- -------------------------------------
1 Year Return (3.38)% 0.36% (0.90)% 0.06%
-------------------------------------------------------
5 Year Return 1.30% 10.85% 1.75% 9.08%
-------------------------------------------------------
10 Year Return NA NA 3.54% 41.61%
-------------------------------------------------------
Since Inception* 1.57% 12.79% 3.64% 61.05%
-------------------------------------------------------
# For the purposes of the table, it has been assumed that
the maximum sales charge of 3.75% with respect to Class
A shares was deducted from the initial investment in
the Fund and that the CDSCs with respect to the Class C
shares have been deducted, as applicable.
+ Cumulative returns do not include sales load. If sales
load had been included, the return would have been
lower.
* Inception date: Class A: 10/04/2006; Class C:
08/31/1998.
The Fund operated as a closed-end investment company with
monthly repurchase offers until October 4, 2006, whereupon
it converted to an open-end investment company.
Information in the graph and table reflects performance of
the Fund as a closed-end investment company through
October 3, 2006, and the Fund may have performed
differently if it were an open-end investment company
prior to that date.
For the 12 month period ended December 31, 2011, the
SunAmerica Senior Floating Rate Class C returned (0.90)%
compared to 1.52% for the S&P/LSTA Leveraged Loan Index.
(The performance data and graph do not reflect the
deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 3.75%; Contingent Deferred Sales
Charge (CDSC): Class C: 1.00% CDSC. The fund's daily net asset values are not
guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or
any other agency. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be higher or
lower than the original cost. Current performance may be higher or lower than
that shown. Performance as of the most recent month end is available at
www.sunamericafunds.com
37
[LOGO] AIG Sun America
Mutual Funds
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
Richard W. Grant 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
Katherine Stoner, Chief Fund's Statement of obtain copies of the
Compliance Officer Additional Information Forms N-Q at the U.S.
Gregory N. Bressler, may be ob-tained without Securities and Exchange
Chief Legal charge upon request, by Commission's Public
Officer and Secretary calling (800) 858-8850. Refer-ence Room in
Gregory R. Kingston, This in-formation is also Washington, DC
Vice President and available from the EDGAR (information on the
Assistant Treasurer database on the U.S. operation of the Public
Nori L. Gabert, Vice Secu-rities and Exchange Reference Room may be
President and Commission's website at ob-tained by calling
Assistant Secretary http://www.sec.gov. 1-800-SEC-0330).
John E. McLean,
Assistant Secretary DELIVERY OF SHAREHOLDER PROXY VOTING RECORD ON
Kathleen Fuentes, DOCUMENTS FUND PORTFOLIO SECURITIES
Assistant Secretary The Fund has adopted a Information regarding how
Diedre L. Shepherd, policy that allows it to the Fund voted proxies
Assistant Treasurer send only one copy of the relating to securities
Matthew J. Hackethal, Fund's prospectus, proxy held in the Fund's
Anti-Money Laundering material, annual report portfolio during the most
Compliance Officer and semi-annual report recent twelve month
(the "shareholder period ended June 30 is
INVESTMENT ADVISER documents") to available, once filed
SunAmerica Asset shareholders with with the U.S. Securities
Management Corp. multiple accounts and Exchange Commis-sion,
Harborside Financial residing at the same without charge, upon
Center "household." This request, by calling
3200 Plaza 5 practice is called (800) 858-8850 or on the
Jersey City, NJ householding and reduces U.S. Securities and
07311-4992 Fund expenses, which Exchange Commission's
benefits you and other website at
DISTRIBUTOR shareholders. Unless the http://www.sec.gov.
SunAmerica Capital Fund receives
Services, Inc. instructions to the This report is submitted
Harborside Financial con-trary, you will only solely for the general
Center receive one copy of the information of
3200 Plaza 5 shareholder documents. shareholders of the Fund.
Jersey City, NJ The Fund will continue to Distribution of this
07311-4992 household the report to persons other
share-holder documents than shareholders of the
SHAREHOLDER SERVICING indefinitely, until we Fund is authorized only
AGENT are instructed otherwise. in connection with a
SunAmerica Fund If you do not wish to currently effective
Services, Inc. participate in prospectus, setting forth
Harborside Financial householding, please details of the Fund,
Center contact Shareholder which must precede or
3200 Plaza 5 Services at (800) accompany this report.
Jersey City, NJ 858-8850 ext. 6010 or
07311-4992 send a written request
with your name, the name
TRANSFER AGENT of your fund(s) and your
State Street Bank and account number(s) to
Trust Company SunAmerica Mutual Funds
P.O. Box 219373 c/o BFDS, P.O. Box
Kansas City, MO 64141 219186, Kansas City MO,
64121-9186. We will
resume individual
mailings for your account
within thirty (30) days
of receipt of your
request.
[GRAPHIC]
GO PAPERLESS!!
DID YOU KNOW THAT YOU HAVE THE OPTION TO
RECEIVE YOUR SHAREHOLDER REPORTS ONLINE?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
IT'S QUICK -- Fund documents will be received faster than via traditional mail.
IT'S CONVENIENT -- Elimination of bulky documents from personal files.
IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs.
TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW
THESE SIMPLE STEPS:
1 GO TO
WWW.SUNAMERICAFUNDS.COM
2
CLICK ON THE LINK TO "GO PAPERLESS!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.sunamericafunds.com at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
FOR INFORMATION ON RECEIVING THIS REPORT ONLINE, SEE INSIDE BACK COVER.
DISTRIBUTED BY:
SUNAMERICA CAPITAL SERVICES, INC.
This fund report must be preceded by or accompanied by a prospectus.
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
SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at
www.sunamericafunds.com. Read the prospectus carefully before investing.
WWW.SUNAMERICAFUNDS.COM
SFANN - 12/11
[LOGO]
Sun America
Mutual Funds
Item 2. Code of Ethics
The SunAmerica Senior Floating Rate Fund, Inc. (the "registrant") has
adopted a Code of Ethics applicable to its Principal Executive and
Principal Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley
Act of 2002. During the fiscal year ended 2011, there were no reportable
amendments, waivers or implicit waivers to a provision of the code of
ethics that applies to the registrant's Principal Executive and Principal
Accounting Officers.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors has determined that William J. Shea,
the Chairman of the registrant's Audit Committee, qualifies as an audit
committee financial expert, as defined in Item 3(b) of Form N-CSR.
Mr. Shea is considered to be "independent" for purposes of Item 3(a)(2)
of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two fiscal
years for professional services rendered by the registrant's principal
accountant were as follows:
2010 2011
------- -------
(a) Audit Fees $81,940 $85,833
(b) Audit-Related Fees $ 0 $ 0
(c) Tax Fees $12,172 $12,744
(d) All Other Fees $ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the principal
accountant in connection with statutory and regulatory filings. Tax Fees
principally include tax compliance, tax advice, tax planning and
preparation of tax returns.
Aggregate fees billed to the investment adviser and Adviser Affiliates (as
defined below in Item 4(e)) that are required to be pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for the last two
fiscal years for services rendered by the registrant's principal accountant
were as follows:
2010 2011
---- ----
(b) Audit-Related Fees $ 0 $ 0
(c) Tax Fees $ 0 $ 0
(d) All Other Fees $ 0 $ 0
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliate relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for non-
audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation
S-X as set forth in the registrant's audit committee charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provides ongoing services to the
registrant for 2010 and 2011 were $12,172 and $104,590, respectively.
(h) 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 contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and Principle
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act
of 2002 attached hereto as Exhibit 99.406. Code of Ethics.
(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: March 9, 2012
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: March 9, 2012
By: /s/ Donna M. Handel
------------------------------------
Donna M. Handel
Treasurer
Date: March 9, 2012