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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, 2012
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Item 1. Reports to Stockholders
[GRAPHIC]
ANNUAL REPORT 2012
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............................... 21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 31
DIRECTORS AND OFFICERS INFORMATION.......................... 32
SHAREHOLDER TAX INFORMATION................................. 35
COMPARISON: FUND VS. INDEX.................................. 36
DECEMBER 31, 2012 ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited)
Dear Shareholders,
We are pleased to present this annual report for the SunAmerica Senior Floating
Rate Fund, Inc. (the "Fund") for the 12 months ended December 31, 2012.
The annual period proved to be a positive but challenging one for many
investors. Indeed, almost all areas of the global financial markets experienced
a broad "risk on/risk off" trading pattern, wherein investors vacillated en
masse between sharply optimistic or pessimistic views toward the financial
markets. By the end of December 2012, however, the more bullish views toward
the financial markets had dominated. Floating rate loans, as represented by the
S&P/LSTA Leveraged Loan Index ("LLI"), returned 9.66% during the annual period.
The LLI significantly outperformed the broad U.S. fixed income market, as
measured by the Barclays U.S. Aggregate Bond Index, which returned 4.21% for
the same period ended December 31, 2012.*
During the first quarter of 2012, the floating rate loan market fared
especially well, with positive developments out of Europe and improving U.S.
economic data helping to boost investor sentiment broadly, and with strong
credit fundamentals for this particular market segment. At the end of March
2012, the default rate within this asset class, whether examined by principal
amount or by issuer count, remained at historical lows (0.21% and 0.61%,
respectively). Only $40 billion was scheduled to mature through 2013 as of
February 29, 2012, supporting the potential for continued low default rates.+
On the other hand, technicals, or supply/demand factors, were challenging.
Bank-loan mutual funds reported net outflows of $254 million during the first
quarter, following net outflows of $7.7 billion over the final 22 weeks of
2011.** With the Federal Reserve Board (the "Fed") vowing to keep interest
rates low through 2014, the floating-rate feature of bank loans had seemingly
lost its near-term appeal. One silver lining to the technical picture was that
the market for collateralized loan obligations ("CLOs"), one of the main
sources of demand for banks loans, appeared to be reviving. In terms of
quality, B-rated loans outperformed both higher-rated (BB) and lower-rated
(CCC) loans.
In stark contrast to the opening months of 2012, the second calendar quarter
saw anxiety over Europe's worsening debt crisis and deteriorating global
economic growth lead to a broad sell-off in risk assets. Uncertainty about the
outlook for the Eurozone, a crisis of confidence in Spanish banks and a host of
sovereign and corporate debt downgrades undermined investor sentiment. Signs of
softening in the U.S. economy added to market tensions. In turn, the floating
rate loan market generated more modest yet still positive returns during the
second quarter of 2012. The asset class continued to benefit from strong credit
fundamentals, as issuers' balance sheets improved. The bank loan default rate
by principal amount and by issuer count remained near historical lows (1.04%
and 1.08%, respectively). Less than $20 billion was scheduled to mature through
2013, supporting continued low defaults.+ The technical picture improved
compared to the prior quarter. Bank loan mutual funds reported net inflows of
$1.95 billion for the second quarter.** Moreover, the market for CLOs revived.
By quality rating, loans rated CCC outperformed higher-rated B-rated and
BB-rated loans during the second quarter.
During the second half of the year, bold policy moves by major central banks,
including the European Central Bank ("ECB") and the U.S. Fed, fueled a
significant rally in risk assets as investors shrugged off mediocre global
economic growth prospects. The ECB announced plans to buy potentially unlimited
amounts of short-dated government bonds in order to reduce borrowing costs in
fiscally challenged countries. The Fed announced a third wave of quantitative
easing, dubbed QE3, aimed at boosting economic growth and reducing U.S.
unemployment. In turn, during the third quarter of 2012, the floating rate loan
market enjoyed its second-strongest gain in the last two and one-half years.
The asset class continued to benefit from strong credit fundamentals, as
evidenced by low interest expense relative to earnings. Further, there were no
loan defaults in September, pushing the bank loan default rate by principal
amount and by issuer count down to 1.00% and 1.06%, respectively.+ With bank
loan mutual funds reporting new inflows of $2.94 billion during the quarter and
the market for CLOs remaining solid, the technical picture remained resilient
as well.** However, with the Fed having stated during the quarter that its
short-term interest rate policy was on hold through at least mid-2015, the
floating-rate feature of bank loans had yet to regain its near-term appeal. In
terms of quality, loans rated CCC outpaced higher-rated B-rated and BB-rated
loans by a wide margin during the quarter.
1
DECEMBER 31, 2012 ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited) (continued)
The floating rate loan market generated positive yet notably more modest
returns during the fourth quarter of 2012. Credit fundamentals remained strong,
and the bank loan default rate by principal amount and issuer count finished
the year at 1.27% and 1.36%, respectively.+ Further, with bank loan mutual
funds reporting net inflows during 43 of the 52 weeks in 2012,** the technical
scenario remained supportive of the asset class. The re-emergence of the CLO
market remained supportive of the bank loan technical picture as well. There
was approximately $55 billion in issuance in 2012, which was roughly four times
the issuance in 2011. For the quarter and for the year, CCC-rated loans
outperformed higher-rated B-rated and BB-rated instruments. For 2012 overall,
loans in the LLI rated CCC returned 18.35%. Loans in the LLI rated B returned
10.42% for the annual period, followed by loans rated BB, which returned 7.17%.
All industries within the LLI generated positive absolute returns for the
annual period as a whole. The strongest performing industries were beverage and
tobacco; publishing; and media. These industries posted returns of 20.34%,
20.32%, and 14.02%, respectively. The weakest performing industries were
aerospace and defense; ecological services and equipment; and
clothing-textiles; which generated returns of 2.10%, 4.73%, and 4.86%,
respectively, during the annual period.
On the following pages, you will find a brief discussion regarding the Fund's
annual results. You will also find detailed financial statements and portfolio
information for the Fund for the annual period ended December 31, 2012.
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.safunds.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 Company, LLP
--------
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 utilized real-time
market weightings, spreads and interest payments. The BARCLAYS 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.
Indices are not managed and an investor cannot invest directly into an index.
+ Source: S&P Leveraged Commentary & Data
** Source: Lipper, Inc.
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, 2012 -- (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, 2012 and
held until December 31, 2012.
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, 2012" 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, 2012" 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, 2012" 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, 2012" 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, 2012"
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, 2012" 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, 2012" 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, 2012 -- (UNAUDITED) (CONTINUED)
ACTUAL HYPOTHETICAL
---------------------------------------------------- ----------------------------------------------------
ENDING ENDING ACCOUNT
ACCOUNT VALUE EXPENSES PAID VALUE USING EXPENSES PAID
BEGINNING USING ACTUAL DURING THE BEGINNING A HYPOTHETICAL 5% DURING THE
ACCOUNT VALUE RETURNS AT SIX MONTHS ENDED ACCOUNT VALUE ASSUMED RETURN AT SIX MONTHS ENDED
AT JULY 1, 2012 DECEMBER 31, 2012 DECEMBER 31, 2012* AT JULY 1, 2012 DECEMBER 31, 2012 DECEMBER 31, 2012*
--------------- ----------------- ------------------ --------------- ----------------- ------------------
Senior Floating
Rate Fund#
Class A.......... $1,000.00 $1,044.16 $7.45 $1,000.00 $1,017.85 $7.35
Class C.......... $1,000.00 $1,042.63 $8.99 $1,000.00 $1,016.34 $8.87
EXPENSE
RATIO
AS OF
DECEMBER 31,
2012*
------------
Senior Floating
Rate Fund#
Class A.......... 1.45%
Class C.......... 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 366
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges and administrative
fees, if applicable to your account. Please refer to your Prospectus, 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, 2012" and the "Expense Ratios" would have been higher.
4
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- DECEMBER 31, 2012
ASSETS:
Investments at value (unaffiliated)*............................................ $347,237,366
Repurchase agreements (cost approximates value)................................. 5,915,000
------------
Total investments.............................................................. 353,152,366
Cash............................................................................ 1,577,416
Receivable for:
Fund shares sold............................................................... 740,980
Dividends and interest......................................................... 1,862,909
Investments sold............................................................... 5,164,109
Prepaid expenses and other assets............................................... 2,911
Due from investment adviser for expense reimbursements/fee waivers.............. 100,943
------------
Total assets................................................................... 362,601,634
------------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................... 1,003,991
Investments purchased.......................................................... 16,876,665
Investment advisory and management fees........................................ 246,450
Distribution and service maintenance fees...................................... 168,233
Administration fees............................................................ 57,988
Transfer agent fees and expenses............................................... 72,826
Directors' fees and expenses................................................... 2,185
Other accrued expenses......................................................... 239,075
Dividends payable............................................................... 351,822
Commitments (Note 11)........................................................... --
------------
Total liabilities.............................................................. 19,019,235
------------
Net Assets................................................................... $343,582,399
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value.................................................... $ 416,243
Additional paid-in capital...................................................... 403,057,660
------------
403,473,903
Accumulated undistributed net investment income (loss).......................... (242,675)
Accumulated undistributed net realized gain (loss) on investments............... (55,433,371)
Unrealized appreciation (depreciation) on investments........................... (4,215,458)
------------
Net Assets................................................................... $343,582,399
============
CLASS A:
Net assets...................................................................... $146,102,770
Shares outstanding.............................................................. 17,692,785
Net asset value and redemption price per share.................................. $ 8.26
Maximum sales charge (3.75% of offering price).................................. 0.32
------------
Maximum offering price to public................................................ $ 8.58
============
CLASS C:
Net assets...................................................................... $197,479,629
Shares outstanding.............................................................. 23,931,521
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charges).................................. $ 8.25
============
*COST
Investment securities (unaffiliated)........................................... $351,452,824
============
See Notes to Financial Statements
5
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2012
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $18,127,288
Dividends (unaffiliated).......................................................... 1,139
Facility and other fee income (Note 2)............................................ 2,089,358
-----------
Total investment income........................................................ 20,217,785
-----------
EXPENSES:
Investment advisory and management fees........................................... 2,928,632
Administration fees............................................................... 689,090
Distribution and service maintenance fees:
Class A......................................................................... 517,722
Class C......................................................................... 1,474,683
Transfer agent fees and expenses:
Class A......................................................................... 335,048
Class C......................................................................... 444,590
Registration fees:
Class A......................................................................... 24,125
Class C......................................................................... 23,513
Accounting service fees........................................................... 64,462
Custodian and accounting fees..................................................... 120,122
Reports to shareholders........................................................... 75,240
Audit and tax fees................................................................ 101,141
Legal fees........................................................................ 18,965
Directors' fees and expenses...................................................... 49,888
Interest expense.................................................................. 1,329
Other expenses.................................................................... 108,307
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Total expenses before fee waivers, expense reimbursements and custody credits.. 6,976,857
Fees waived and expenses reimbursed by investment adviser (Note 5)............. (1,391,047)
Custody credits earned on cash balances........................................ (35)
-----------
Net expenses................................................................... 5,585,775
-----------
Net investment income (loss)...................................................... 14,632,010
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)............................ (1,946,487)
Change in unrealized appreciation (depreciation) on investments (unaffiliated).... 14,951,108
-----------
Net realized and unrealized gain (loss) on investments............................ 13,004,621
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $27,636,631
===========
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,
2012 2011
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)......................................... $ 14,632,010 $ 19,197,704
Net realized gain (loss) on investments (unaffiliated)............... (1,946,487) (10,179,559)
Net unrealized gain (loss) on investments (unaffiliated)............. 14,951,108 (11,283,617)
------------ ------------
Increase (decrease) in net assets resulting from operations........... 27,636,631 (2,265,472)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)...................................... (6,633,424) (10,260,446)
Net investment income (Class C)...................................... (8,232,858) (8,385,337)
------------ ------------
Total distributions to shareholders................................... (14,866,282) (18,645,783)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS (NOTE 3)................................................ (28,915,255) (65,226,604)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... (16,144,906) (86,137,859)
NET ASSETS:
Beginning of period................................................... 359,727,305 445,865,164
------------ ------------
End of period+........................................................ $343,582,399 $359,727,305
============ ============
+Includes accumulated undistributed net investment income (loss)...... $ (242,675) $ (8,403)
============ ============
See Notes to Financial Statements
7
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CASH FLOWS -- FOR THE YEAR ENDED DECEMBER 31, 2012
INCREASE (DECREASE) IN CASH
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets from operations.................................................................... $ 27,636,631
ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES:
Purchase of loans/securities................................................................................ (204,707,517)
Proceeds from loans/securities sold......................................................................... 115,296,989
Loan principal paydowns..................................................................................... 118,284,732
Net purchases of short-term securities...................................................................... (8,156,903)
Accretion of facility fee income............................................................................ (1,395,643)
Decrease in receivable for dividends and interest........................................................... 303,567
Decrease in receivable for investments sold................................................................. 1,934,126
Increase in amount due from investment adviser for expense reimbursements/fee waivers....................... (20,333)
Decrease in prepaid expenses and other assets............................................................... 3,250
Increase in payable for investments purchased............................................................... 8,901,387
Decrease in payable for investment advisory and management fees............................................. (15,605)
Decrease in payable for distribution and maintenance fees................................................... (9,813)
Decrease in payable for administration fees................................................................. (3,672)
Decrease in other accrued expenses.......................................................................... (55,965)
Unrealized appreciation on investments...................................................................... (14,951,108)
Net realized loss from investments.......................................................................... 1,946,487
-------------
Net cash provided by operating activities..................................................................... $ 44,990,610
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shares sold..................................................................................... 101,605,547
Payment on shares redeemed.................................................................................... (139,423,086)
Cash dividends paid........................................................................................... (5,597,894)
-------------
Net cash used in financing activities......................................................................... $ (43,415,433)
-------------
Net increase in cash.......................................................................................... 1,575,177
Cash balance at beginning of period........................................................................... 2,239
-------------
Cash balance at end of period................................................................................. $ 1,577,416
=============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $9,289,688.
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
-------
12/31/08 $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
12/31/12 7.96 0.36 0.31 0.67 (0.37) -- (0.37) 8.26 8.51 146,103 1.45
CLASS C
-------
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
12/31/12 7.95 0.34 0.30 0.64 (0.34) -- (0.34) 8.25 8.20 197,480 1.75
RATIO OF
NET
INVESTMENT
INCOME TO
PERIOD AVERAGE PORTFOLIO
ENDED NET ASSETS(3) TURNOVER
---------- ------------- ---------
12/31/08 6.05% 32%
12/31/09 4.94 74
12/31/10 4.34 41
12/31/11 4.27 63
12/31/12 4.41 61
12/31/08 5.89% 32%
12/31/09 4.88 74
12/31/10 4.03 41
12/31/11 4.02 63
12/31/12 4.12 61
--------
(1)Calculated based upon average shares outstanding.
(2)Total return 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):
12/31/08 12/31/09 12/31/10 12/31/11 12/31/12
-------- -------- -------- -------- --------
Class A. 0.65% 0.55% 0.38% 0.33% 0.35%
Class C. 0.73 0.66 0.48 0.44 0.44
See Notes to Financial Statements
9
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO PROFILE -- DECEMBER 31, 2012 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Media....................................................... 8.5%
Hotels, Restaurants & Leisure............................... 6.5
Commercial Services & Supplies.............................. 5.1
IT Services................................................. 4.2
Health Care Providers & Services............................ 3.9
Software.................................................... 3.8
Registered Investment Companies............................. 3.7
Chemicals................................................... 3.2
Food & Staples Retailing.................................... 3.2
Diversified Telecommunication Services...................... 3.1
Pharmaceuticals............................................. 3.0
Capital Markets............................................. 2.8
Auto Components............................................. 2.7
Energy Equipment & Services................................. 2.6
Diversified Financial Services.............................. 2.5
Metals & Mining............................................. 2.4
Oil, Gas & Consumable Fuels................................. 2.4
Semiconductors & Semiconductor Equipment.................... 2.3
Aerospace & Defense......................................... 2.3
Food Products............................................... 2.2
Wireless Telecommunication Services......................... 2.2
Specialty Retail............................................ 2.2
Health Care Equipment & Supplies............................ 2.1
Communications Equipment.................................... 1.8
Machinery................................................... 1.8
Repurchase Agreements....................................... 1.7
Insurance................................................... 1.4
Household Durables.......................................... 1.3
Industrial Power Producers & Energy Traders................. 1.3
Airlines.................................................... 1.3
Multi Utilities............................................. 1.2
Internet Software & Services................................ 1.2
Automobiles................................................. 1.1
Industrial Conglomerates.................................... 1.1
Gas Utilities............................................... 0.8
Leisure Equipment & Products................................ 0.8
Electronic Equipment, Instruments & Components.............. 0.8
Personal Products........................................... 0.7
Household Products.......................................... 0.7
Multiline Retail............................................ 0.6
Professional Services....................................... 0.6
Health Care Technology...................................... 0.6
Containers & Packaging...................................... 0.6
Diversified Consumer Services............................... 0.6
Road & Rail................................................. 0.6
Consumer Finance............................................ 0.5
Real Estate Management & Development........................ 0.5
Marine...................................................... 0.5
Life Sciences Tools & Services.............................. 0.5
Building Products........................................... 0.4
Thrifts & Mortgage Finance.................................. 0.3
Paper & Forest Products..................................... 0.2
Electrical Equipment........................................ 0.2
Textiles, Apparel & Luxury Goods............................ 0.1
Internet & Catalog Retail................................... 0.1
-----
102.8%
=====
CREDIT QUALITY+#
BBB-........................................................ 2.1%
BB+......................................................... 4.7
BB.......................................................... 9.4
BB-......................................................... 17.0
B+.......................................................... 31.6
B........................................................... 18.0
B-.......................................................... 5.3
CCC+........................................................ 2.8
CCC......................................................... 1.5
Not Rated@ ................................................. 7.6
-----
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, 2012
RATINGS/(1)/
(UNAUDITED)
-----------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
----------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 93.4%
AEROSPACE & DEFENSE -- 2.3%
DigitalGlobe, Inc................ BTL-B Ba3 BB+ 5.75% 10/07/2018 $1,237,500 $1,243,170
Hamilton Sundstrand Corp......... 1st Lien B1 B+ 5.00 12/05/2019 650,000 656,557
Transdigm Group, Inc............. BTL-B Ba2 BB- 4.00 02/14/2017 1,979,798 1,995,574
Transdigm Group, Inc............. BTL-B2 Ba2 BB- 4.00 02/14/2017 793,974 800,353
WESCO Distribution, Inc.......... BTL-B Ba3 B+ 4.50 12/04/2019 1,725,000 1,736,643
Wyle Laboratories, Inc........... BTL-B Ba3 BB 5.00 03/26/2017 1,354,965 1,363,432
----------
7,795,729
----------
AIRLINES -- 1.3%
Delta Air Lines, Inc............. BTL-B1 Ba2 B+ 5.25 10/18/2018 1,120,000 1,130,150
Delta Air Lines, Inc............. BTL Ba2 BB- 5.50 04/20/2017 1,814,807 1,837,936
United Airlines, Inc............. Tranche B Ba3 BB- 2.25 02/01/2014 1,086,304 1,085,286
----------
4,053,372
----------
AUTO COMPONENTS -- 2.7%
Allison Transmission, Inc........ BTL-B3 Ba3 BB- 4.25 08/23/2019 861,478 871,170
August LuxUK Holding Co.......... 1st Lien B1 B 6.25 04/27/2018 217,063 220,319
August LuxUK Holding Co.......... 2nd Lien Caa1 B- 10.50 04/27/2019 565,000 570,650
August U.S. Holding Co., Inc..... 1st Lien B1 B 6.25 04/27/2018 166,975 169,479
August U.S. Holding Co., Inc..... 2nd Lien Caa1 B- 10.50 04/27/2019 435,000 439,350
Federal Mogul Corp............... BTL-B Ba3 B+ 2.15 12/27/2014 932,888 858,840
Federal Mogul Corp............... BTL-C Ba3 B+ 2.15 12/27/2015 475,963 438,184
Goodyear Tire & Rubber Co........ 2nd Lien Ba1 BB 4.75 04/12/2019 500,000 504,250
Remy International, Inc.......... BTL-B B1 B+ 6.25 12/16/2016 942,304 949,960
UCI International, Inc........... BTL-B Ba2 B+ 5.50 07/26/2017 2,200,100 2,222,101
Viking Acquisition, Inc.......... BTL-B B1 B- 6.00 11/05/2016 1,700,300 1,650,707
----------
8,895,010
----------
AUTOMOBILES -- 1.1%
Casco Automotive Group, Inc...... BTL B1 NR 7.25 11/14/2018 1,000,000 1,000,417
Chrysler Group LLC............... BTL-B Ba2 BB 6.00 05/24/2016 2,831,875 2,897,937
----------
3,898,354
----------
BUILDING PRODUCTS -- 0.4%
Armstrong World Industries, Inc.. BTL-B B1 BB- 4.00 03/10/2018 321,981 324,899
HD Supply, Inc................... BTL-B B2 B+ 7.25 10/12/2017 1,014,900 1,044,502
----------
1,369,401
----------
CAPITAL MARKETS -- 2.8%
AlixPartners LLC................. BTL-B2 Ba3 B+ 6.50 05/29/2019 691,525 700,451
AlixPartners LLC................. 2nd Lien B3 B- 10.75 11/29/2019 285,000 288,741
BNY ConvergEX Group LLC.......... BTL-B B1 B+ 5.25 12/17/2016 191,951 187,032
BNY ConvergEX Group LLC.......... BTL-B B1 B+ 5.25 12/19/2016 422,936 412,098
BNY ConvergEX Group LLC.......... BTL-A B2 B- 8.75 12/17/2017 613,325 579,592
BNY ConvergEX Group LLC.......... BTL-A B2 B- 8.75 12/17/2017 1,461,675 1,381,283
Nuveen Investments, Inc.......... BTL-B B2 B 5.81 05/13/2017 1,553,480 1,561,247
Nuveen Investments, Inc.......... BTL B2 B 5.81 05/13/2017 1,616,520 1,627,634
Walter Investment Management Co.. Tranche B B1 B+ 5.75 11/15/2017 3,021,750 3,038,747
----------
9,776,825
----------
11
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
CHEMICALS -- 3.2%
Chemtura Corp.................................. BTL Ba1 BB+ 5.50% 08/27/2016 $1,890,000 $ 1,921,501
General Chemical Corp.......................... BTL B1 B 5.00-5.75 10/06/2015 703,994 708,394
Hexion Specialty Chemicals, Inc................ BTL-C1 Ba3 B- 4.00 05/05/2015 463,446 464,604
Hexion Specialty Chemicals, Inc................ BTL-C2 Ba3 B- 4.06 05/05/2015 209,978 210,503
Houghton International, Inc.................... BTL-B Ba3 B 5.25 12/16/2019 710,000 715,325
Ineos U.S. Finance LLC......................... BTL-B B1 B+ 6.50 04/27/2018 1,240,625 1,255,939
OMNOVA Solutions, Inc.......................... BTL-B Ba2 B+ 5.50 05/31/2017 539,000 545,738
PQ Corp........................................ 1st Lien B2 B+ 5.25 04/10/2017 635,000 639,128
Styron LLC..................................... BTL-B B1 B+ 8.00 08/02/2017 1,140,569 1,118,114
Univar, Inc.................................... BTL-B B2 B+ 5.00 06/30/2017 2,528,375 2,527,672
Veyance Technologies, Inc...................... 2nd Lien NR NR 5.96 07/31/2015 950,000 916,750
-----------
11,023,668
-----------
COMMERCIAL SERVICES & SUPPLIES -- 4.0%
ACCO Brands Corp............................... BTL-B Ba1 BB+ 4.25 04/30/2019 871,333 879,502
ADS Waste Holdings, Inc........................ BTL B1 B+ 5.25 10/09/2019 1,305,000 1,322,944
Altegrity, Inc................................. BTL-B B1 B 7.75 02/21/2015 1,115,231 1,109,655
ATI Schools(9)(10)............................. BTL-B Caa3 NR 12.25 12/30/2014 1,138,627 85,397
ATI Schools(6)(8)(10).......................... BTL NR NR 13.25 06/30/2012 256,258 57,658
ATI Schools(6)(8)(10).......................... BTL NR NR 13.25 06/30/2012 15,830 3,562
Audio Visual Services Group, Inc............... 1st Lien B1 B+ 6.75 11/09/2018 1,596,000 1,572,060
AWAS Aviation Capital, Ltd..................... BTL Ba2 BBB- 4.75 06/18/2018 669,613 674,635
Brand Energy and Infrastructure Services, Inc.. BTL-B1 B2 B 6.25 10/16/2018 2,051,310 2,030,157
Brand Energy and Infrastructure Services, Inc.. BTL-B1 B2 B 6.25 10/22/2018 492,315 487,238
Fly Funding II SARL............................ BTL NR NR 5.75 08/09/2018 1,219,563 1,229,853
KAR Auction Services, Inc...................... BTL-B Ba3 BB- 5.00 05/18/2017 1,034,250 1,045,239
Peak 10, Inc................................... BTL-B B2 B 7.25 10/29/2019 635,000 638,572
ValleyCrest Cos................................ 1st Lien NR NR 8.00 10/04/2016 858,294 849,711
WCA Waste Systems, Inc......................... BTL B1 B+ 5.50 03/23/2018 1,692,213 1,704,904
-----------
13,691,087
-----------
COMMUNICATIONS EQUIPMENT -- 1.8%
Sorenson Communications, Inc................... BTL-C NR NR 6.00 08/16/2013 4,852,958 4,786,230
Telesat Holdings, Inc.......................... BTL-B Ba3 BB- 4.25 03/28/2019 1,457,675 1,470,430
-----------
6,256,660
-----------
CONSUMER FINANCE -- 0.5%
Fifth Third Processing Solutions LLC........... BTL-B Ba2 BBB- 3.75 02/27/2019 1,880,788 1,884,314
-----------
CONTAINERS & PACKAGING -- 0.6%
Consolidated Container Co...................... BTL-B B1 B 5.00 07/03/2019 822,938 828,595
FleetPride, Inc................................ 1st Lien B1 B 5.25 11/19/2019 680,000 682,834
TricorBraun, Inc............................... BTL-B B1 B 5.50-6.50 05/10/2018 548,625 552,968
-----------
2,064,397
-----------
DIVERSIFIED CONSUMER SERVICES -- 0.6%
Vertrue, Inc.(7)(9)............................ BTL NR NR 5.25 08/16/2014 1,558,451 467,535
Vertrue, Inc.(7)(9)............................ 2nd Lien NR NR 13.25 08/14/2015 1,490,000 11,175
Weight Watchers International, Inc............. BTL-F Ba1 BB+ 4.00 03/15/2019 1,533,413 1,546,347
-----------
2,025,057
-----------
DIVERSIFIED FINANCIAL SERVICES -- 2.5%
Aptalis Pharma, Inc............................ BTL-B2 B2 B+ 5.50 02/10/2017 997,487 1,004,138
Aptalis Pharma, Inc............................ BTL-B1 B1 BB 5.50 02/11/2017 2,258,851 2,273,911
BLB Management Services, Inc................... 1st Lien B1 NR 8.50 11/05/2015 118,299 119,236
Foxco Acquisition LLC.......................... BTL-B B1 NR 5.50 07/14/2017 932,663 947,041
Global Cash Access LLC......................... BTL Ba3 B+ 7.00 03/01/2016 1,157,143 1,164,375
Ipreo Holdings LLC............................. BTL-2 B1 BB- 6.50 08/05/2017 1,157,100 1,164,332
Ipreo Holdings LLC............................. BTL-3 B1 NR 6.50 08/05/2017 754,039 758,752
Visant Corp.................................... BTL B1 BB- 5.25 12/22/2016 1,360,835 1,236,319
-----------
8,668,104
-----------
12
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
---------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 3.1%
Cequel Communications LLC............................ BTL-B Ba2 BB- 4.00% 02/14/2019 $2,446,513 $ 2,461,463
IPC Systems, Inc..................................... 2nd Lien Caa2 CCC 5.46 06/01/2015 1,000,000 808,750
Level 3 Financing, Inc............................... BTL-B3 Ba3 B+ 4.75 08/01/2019 981,000 986,620
Level 3 Financing, Inc............................... Tranche B Ba3 B+ 5.25 08/01/2019 1,425,000 1,440,809
SBA Finance.......................................... BTL-B Ba2 BB 3.75 09/20/2019 835,000 840,219
U.S. TelePacific Corp................................ BTL B3 B- 5.75 02/23/2017 1,910,472 1,888,183
West Corp............................................ BTL-B2 Ba3 B+ 5.75 06/30/2018 2,149,200 2,180,095
-----------
10,606,139
-----------
ELECTRICAL EQUIPMENT -- 0.2%
WireCo WorldGroup, Inc............................... BTL-B Ba2 BB- 6.00 02/15/2017 678,300 688,475
-----------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 0.8%
Aeroflex, Inc........................................ BTL-B B1 BB- 5.75 05/09/2018 1,743,851 1,763,469
CDW Corp............................................. BTL-B B1 B+ 4.00 07/15/2017 921,239 919,758
-----------
2,683,227
-----------
ENERGY EQUIPMENT & SERVICES -- 2.4%
Aquilex Holdings LLC................................. BTL-B B3 NR 8.75 04/01/2016 1,204,280 1,207,290
FTS International LLC................................ BTL-B B3 CCC+ 8.50-9.25 05/06/2016 2,011,038 1,677,960
Pinnacle Holdco SARL................................. BTL B1 B+ 6.50 07/24/2019 1,670,813 1,674,572
Pinnacle Holdco SARL................................. 2nd Lien Caa1 CCC+ 10.50 07/24/2020 786,000 798,773
Shelf Drilling International Holdings, Ltd........... BTL Ba1 B+ 6.25 05/31/2018 3,000,000 2,970,000
-----------
8,328,595
-----------
FOOD & STAPLES RETAILING -- 3.2%
AdvancePierre Foods, Inc............................. BTL-B1 B1 B 5.75 07/10/2017 1,440,000 1,458,900
BJ's Wholesale Club, Inc............................. 1st Lien B3 B 5.75 09/20/2019 1,820,000 1,847,626
Rite Aid Corp........................................ BTL-B2 B2 B+ 1.97 06/04/2014 1,370,085 1,363,920
Rite Aid Corp........................................ BTL-B5 B2 B+ 4.50 03/02/2018 2,383,512 2,382,022
Roundy's Supermarkets, Inc........................... BTL-B B1 B+ 5.75 02/13/2019 889,883 839,383
Sprouts Farmers Market LLC........................... BTL-B B2 B+ 6.00 04/18/2018 2,240,100 2,265,301
Sprouts Farmers Market LLC........................... BTL B2 B+ 6.00 04/20/2018 165,170 167,028
U.S. Foodservice..................................... BTL B3 B- 5.75 03/31/2017 658,001 661,703
-----------
10,985,883
-----------
FOOD PRODUCTS -- 2.2%
Brickman Group Holdings, Inc......................... BTL-B B1 B+ 5.50 10/14/2016 2,001,323 2,036,346
Michael Foods, Inc................................... BTL-B Ba3 B+ 4.25 02/25/2018 1,950,041 1,965,886
Pinnacle Foods Group, Inc............................ BTL-B Ba3 B+ 3.71 10/02/2016 944,782 950,687
Pinnacle Foods Group, Inc............................ BTL-E Ba3 B+ 4.75 10/17/2018 337,450 340,463
Pinnacle Operating Corp.............................. BTL-B1 B2 B 6.75 11/14/2018 1,436,400 1,409,468
Pinnacle Operating Corp.............................. BTL-B2 Caa1 CCC+ 11.50 05/13/2019 1,000,000 955,000
-----------
7,657,850
-----------
GAS UTILITIES -- 0.4%
EP Energy LLC........................................ BTL-B1 Ba3 B+ 5.00 05/24/2018 735,000 741,169
NGPL PipeCo LLC...................................... BTL-B Ba3 B+ 6.75 09/15/2017 699,107 717,109
-----------
1,458,278
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 2.1%
Bausch & Lomb, Inc................................... BTL-B B1 B+ 5.25 05/17/2019 1,218,875 1,231,499
Catalent Pharma Solutions, Inc....................... BTL Ba3 BB- 4.21 09/15/2016 1,890,000 1,903,585
Hologic, Inc......................................... BTL-B Ba2 BBB- 4.50 08/01/2019 802,988 813,610
Immucor, Inc......................................... BTL-B Ba3 BB- 5.75 08/17/2018 864,095 875,977
Kinetic Concepts, Inc................................ BTL-B NR NR 5.50 05/04/2018 405,900 411,354
Vantage Oncology, Inc................................ BTL-B B2 B 7.75 01/31/2017 204,773 196,582
Vantage Oncology, Inc................................ BTL B2 B 7.75 01/31/2017 1,685,530 1,618,109
-----------
7,050,716
-----------
13
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (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 -- 3.9%
Alliance HealthCare Services, Inc......... BTL-B Ba3 BB- 7.25% 06/01/2016 $ 242,335 $ 239,609
DaVita, Inc............................... BTL-B2 Ba2 BB- 4.00 08/23/2019 1,225,000 1,236,225
DaVita, Inc............................... BTL-B Ba2 BB- 4.50 10/20/2016 1,710,100 1,724,208
HCA, Inc.................................. Tranche B3 Ba3 BB 3.46 03/31/2018 500,000 501,920
Health Management Associates, Inc......... BTL-B Ba3 BB- 4.50 11/18/2018 608,850 614,501
inVentiv Health, Inc...................... BTL-B NR B 6.50 08/04/2016 1,175,506 1,131,425
MModal, Inc............................... 1st Lien Ba3 BB- 6.75 08/17/2019 1,346,663 1,296,163
Multiplan, Inc............................ BTL Ba3 B 4.75 08/26/2017 2,130,967 2,146,949
National Surgical Hospitals, Inc.......... BTL B2 B 8.25 02/03/2017 1,336,377 1,306,308
Sheridan Holdings, Inc.................... 1st Lien B1 B+ 6.00 06/29/2018 1,024,850 1,039,582
Sheridan Holdings, Inc.................... 2nd Lien Caa1 B- 9.00 06/29/2019 721,000 732,266
U.S. Renal Care, Inc...................... 1st Lien B1 B+ 6.25 07/02/2019 805,950 818,039
U.S. Renal Care, Inc...................... 2nd Lien Caa1 CCC+ 10.25 12/27/2019 666,000 675,158
-----------
13,462,353
-----------
HEALTH CARE TECHNOLOGY -- 0.6%
Emdeon Business Services LLC.............. BTL-B Ba3 BB- 5.00 11/02/2018 271,585 274,674
IMS Health, Inc........................... BTL-B Ba3 BB- 4.50 08/26/2017 1,822,373 1,836,748
-----------
2,111,422
-----------
HOTELS, RESTAURANTS & LEISURE -- 6.2%
24 Hour Fitness Worldwide, Inc............ BTL-B Ba3 B+ 7.50 04/22/2016 1,569,862 1,585,169
Affinity Gaming LLC....................... BTL-B Ba3 BB 5.50 11/09/2017 927,988 937,267
Caesars Entertainment Operating Co., Inc.. BTL-B2 B2 B 4.46 01/28/2018 4,000,000 3,467,224
DineEquity, Inc........................... BTL-B Ba2 BB- 4.25 10/19/2017 1,131,719 1,143,036
Golden Nugget, Inc.(10)(11)............... Delayed Draw Caa3 B- 3.21 06/30/2014 719,760 692,769
Golden Nugget, Inc.(10)(11)............... 1st Lien Caa3 B- 3.22 06/30/2014 1,264,488 1,217,070
Greektown Casino LLC(15).................. BTL-B B2 BB- 5.00 12/18/2018 2,345,000 2,347,931
Landry's Restaurants, Inc................. BTL-B B1 B+ 6.50 04/24/2018 555,800 562,748
MGM Resorts International................. BTL-B Ba2 BB 4.25 12/27/2019 2,835,000 2,869,553
OSI Restaurant Partners LLC............... BTL-B1 B1 BB 4.75-5.75 10/26/2019 1,515,000 1,531,886
Quizno's LLC(10)(11)...................... 1st Lien NR NR 9.00 01/24/2017 1,797,166 1,419,761
Rock Ohio Caesars LLC..................... BTL NR BB- 8.50 08/19/2017 800,000 820,000
Six Flags Theme Parks, Inc................ BTL-B Ba2 BB+ 4.00-5.25 12/20/2018 748,043 752,785
Town Sports International Holdings, Inc... BTL-B Ba3 B+ 5.75 05/11/2018 1,797,161 1,818,128
-----------
21,165,327
-----------
HOUSEHOLD DURABLES -- 1.3%
NXP BV.................................... BTL-B B2 B+ 5.25 03/19/2019 992,500 1,002,631
NXP BV.................................... BTL-A2 B2 B+ 5.50 03/04/2017 691,250 706,263
Tempur-Pedic International, Inc.(15)...... BTL-B Ba3 BB -- 11/20/2019 900,000 912,562
Wilsonart International Holdings LLC...... BTL B2 BB- 5.50 10/19/2019 1,100,000 1,109,900
Yankee Candle Co., Inc.................... BTL B1 B+ 5.25 04/02/2019 772,614 782,271
-----------
4,513,627
-----------
HOUSEHOLD PRODUCTS -- 0.7%
Reynolds Group Holdings, Inc.............. Tranch E B1 B+ 4.75 09/20/2018 1,940,138 1,966,704
Spectrum Brands, Inc...................... BTL-B1 Ba3 B 4.50 11/06/2019 540,000 545,358
-----------
2,512,062
-----------
INDUSTRIAL CONGLOMERATES -- 1.1%
American Rock Salt Co. LLC................ BTL-B B3 B 5.50 04/25/2017 1,699,125 1,679,301
Fram Group Holdings, Inc.................. 1st Lien B1 B 6.50 07/29/2017 538,188 539,869
Harland Clarke Holdings Corp.............. BTL-B2 B1 NR 5.46 06/30/2017 713,129 691,736
Sequa Corp................................ BTL-B B1 B 5.25 05/29/2017 876,996 877,361
-----------
3,788,267
-----------
14
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (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 -- 1.3%
AES Corp.......................................... BTL-B Ba1 BB+ 4.25% 06/01/2018 $ 891,129 $ 901,950
Calpine Corp...................................... BTL-B B1 BB- 4.50 04/01/2018 1,070,913 1,083,265
Calpine Corp...................................... BTL B1 NR 4.50 10/09/2019 1,542,135 1,559,308
LS Power Funding Corp............................. BTL Ba2 BB+ 5.50 06/28/2019 780,175 792,853
-----------
4,337,376
-----------
INSURANCE -- 1.4%
Asurion Corp...................................... BTL-B NR BB- 5.50 05/24/2018 2,364,394 2,391,485
Asurion Corp...................................... 2nd Lien NR B- 9.00 05/24/2019 780,255 805,613
Asurion Corp...................................... BTL NR B- 11.00 09/02/2019 550,000 585,063
USI Holdings Corp................................. BTL B3 B- 5.25 12/27/2019 1,040,000 1,039,134
-----------
4,821,295
-----------
INTERNET & CATALOG RETAIL -- 0.1%
Acosta, Inc....................................... BTL NR NR 5.00 03/02/2018 443,888 446,939
-----------
INTERNET SOFTWARE & SERVICES -- 1.1%
Web.com Group, Inc................................ BTL-B Ba3 B 5.50 10/27/2017 946,794 955,670
Zayo Group LLC.................................... 1st Lien B1 B 5.25 07/02/2019 2,642,720 2,674,433
-----------
3,630,103
-----------
IT SERVICES -- 3.5%
Ceridian Corp..................................... BTL B1 B- 5.96 05/09/2017 1,073,743 1,074,280
Evertec, Inc...................................... BTL-B Ba3 BB- 5.50 09/30/2016 435,000 438,534
First Data Corp................................... BTL-B B1 B+ 4.21 03/24/2018 6,218,681 5,936,682
First Data Corp................................... BTL-1 B3 B+ 5.21 09/24/2018 1,800,000 1,769,625
MoneyGram International, Inc...................... BTL-B Ba2 BB- 4.25 11/18/2017 490,897 490,284
Sungard Data Systems, Inc......................... BTL-B Ba3 BB 3.84-3.94 02/28/2016 664,060 668,617
Sungard Data Systems, Inc......................... BTL Ba3 BB 3.96 02/28/2017 713,992 718,893
TransFirst Holdings, Inc.......................... BTL-B B1 B 6.25 12/05/2017 590,000 591,475
TransFirst Holdings, Inc.......................... 2nd Lien Caa2 CCC+ 11.00 05/04/2018 250,000 247,500
-----------
11,935,890
-----------
LEISURE EQUIPMENT & PRODUCTS -- 0.8%
Freedom Group, Inc................................ BTL-B Ba3 B+ 5.50 04/19/2019 290,675 284,135
SRAM LLC.......................................... BTL-B Ba3 B+ 4.75-5.75 06/07/2018 1,616,709 1,624,792
SRAM LLC.......................................... 2nd Lien B3 B- 8.50 12/07/2018 875,000 888,125
-----------
2,797,052
-----------
LIFE SCIENCES TOOLS & SERVICES -- 0.5%
Pharmaceutical Product Development, Inc........... BTL-B Ba3 B+ 6.25 12/05/2018 1,598,850 1,626,331
-----------
MACHINERY -- 1.8%
Alliance Laundry Systems LLC...................... BTL B2 NR 5.50 12/07/2018 580,000 586,525
Harbor Freight Tools USA, Inc..................... BTL-B B1 B+ 5.50 11/14/2017 1,036,150 1,048,239
Navistar International Corp....................... BTL-B Ba3 B+ 7.00 08/17/2017 925,000 931,938
Pro Mach, Inc..................................... BTL-B B2 B+ 5.00 07/06/2017 1,511,129 1,530,019
Rexnord Corp...................................... BTL-B Ba2 BB 4.50 04/01/2018 1,906,776 1,926,441
-----------
6,023,162
-----------
MARINE -- 0.5%
Dockwise Transport BV............................. BTL-B NR NR 1.96 04/10/2015 175,933 175,053
Dockwise Transport BV............................. BTL-B2 NR NR 2.06 01/11/2015 359,958 358,159
Dockwise Transport BV............................. BTL-C2 NR NR 2.94 01/11/2016 360,227 358,425
Dockwise Transport BV............................. BTL-C NR NR 2.94 04/10/2016 147,578 146,840
Dockwise Transport BV............................. BTL-D NR NR 4.71 07/11/2016 241,913 240,703
Dockwise Transport BV............................. BTL-D2 NR NR 4.71 07/11/2016 483,825 481,406
-----------
1,760,586
-----------
15
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
---------------------------------------------------------------------------------------------------------------
MEDIA -- 7.7%
Advanstar Communications, Inc.......... 1st Lien Caa2 CCC+ 2.57% 05/31/2014 $1,892,368 $ 1,654,246
Alpha D2, Ltd.......................... BTL-B2 Ba3 B+ 6.00 04/30/2019 2,481,281 2,521,602
Charter Communications Operating LLC... BTL-D Baa3 BB+ 4.00 05/15/2019 1,538,375 1,552,557
Cinram International, Inc.(9)(10)(12).. 1st Lien NR NR 19.25 12/31/2013 470,666 97,663
Cumulus Media, Inc..................... 1st Lien Ba2 NR 4.50 09/16/2018 1,531,642 1,538,753
Cumulus Media, Inc..................... 2nd Lien B2 CCC+ 7.50 09/16/2019 1,070,000 1,104,775
Dallas Sports & Entertainment LP....... BTL NR NR 4.46 11/16/2018 534,602 498,516
Fender Musical Instruments Corp........ Delayed Draw B2 B 2.47 06/09/2014 261,386 261,386
Fender Musical Instruments Corp........ BTL-B B2 B 2.47 06/09/2014 517,274 517,274
Getty Images, Inc...................... BTL-B B1 B 4.75 10/18/2019 1,915,000 1,920,086
Gray Television, Inc................... BTL-B B2 B+ 4.75 10/14/2019 1,108,559 1,116,180
Hicks Sports Group+(7)(8).............. BTL-B NR NR 6.75 12/22/2011 1,172,242 334,089
Interactive Data Corp.................. BTL-B Ba3 B+ 4.50 02/11/2018 2,240,087 2,254,773
Kabel Deutschland AG................... BTL-F NR NR 4.25 01/20/2019 1,010,000 1,017,365
LIN Television Corp.................... BTL-B Ba2 BB- 5.00 12/21/2018 722,700 728,120
Mediacom Broadband LLC................. BTL-F Ba3 BB- 4.50 10/23/2017 1,453,185 1,457,726
Mediacom LLC........................... BTL-E Ba3 BB- 4.50 10/23/2017 1,693,759 1,692,700
Rovi Solutions Corp.................... BTL-B Ba2 BB 4.00 02/07/2018 803,925 794,881
Sinclair Television Group, Inc......... BTL-B Ba1 BB+ 4.00 10/28/2016 765,661 771,078
Tribune Co............................. BTL Ba3 NR 4.00 12/17/2019 2,600,000 2,600,325
Truven Health Analytics, Inc........... BTL-B Ba3 B+ 5.75 06/06/2019 313,425 314,404
Univision Communications, Inc.......... BTL-B B2 B+ 4.46 03/31/2017 649,797 640,405
WideOpenWest Finance LLC............... BTL-B B1 B 6.25 07/12/2018 930,325 942,463
-----------
26,331,367
-----------
METALS & MINING -- 2.4%
Fortescue Metals Group, Ltd............ BTL Ba1 BB+ 5.25 10/18/2017 3,845,363 3,884,116
Novelis, Inc........................... BTL-B Ba2 BB- 4.00 03/10/2017 1,760,839 1,778,007
Tube City IMS Corp..................... BTL-B B1 B+ 5.75 03/20/2019 2,640,050 2,673,051
-----------
8,335,174
-----------
MULTI UTILITIES -- 1.2%
Texas Competitive Electric Holdings
Co. LLC.............................. BTL Caa1 CCC 4.71-4.81 10/10/2017 6,174,956 4,158,172
-----------
MULTILINE RETAIL -- 0.6%
99 Cents Only Store.................... BTL-B B2 B+ 5.25 01/13/2019 524,710 531,361
Lord & Taylor, Ltd..................... BTL-B Ba3 BB 5.75 01/11/2019 176,881 178,788
Neiman Marcus Group, Inc............... BTL-B B2 B+ 4.75 05/16/2018 1,500,000 1,504,791
-----------
2,214,940
-----------
OIL, GAS & CONSUMABLE FUELS -- 2.2%
Arch Coal, Inc......................... BTL Ba3 BB 5.75 05/17/2018 1,457,676 1,476,158
Energy Transfer Equity LP.............. BTL-B Ba2 BB 3.75 03/23/2017 2,170,000 2,190,174
MEG Energy Corp........................ BTL-B Ba1 BBB- 4.00 03/18/2018 750,375 757,996
Pilot Travel Centers LLC............... BTL-B2 Ba2 BB 4.25 08/07/2019 299,250 301,931
Plains Exploration & Production Co..... BTL-B Ba1 BB 4.00 09/13/2019 1,305,000 1,310,981
Samson Investment Co................... 2nd Lien B1 B+ 6.00 09/19/2018 1,500,000 1,515,938
-----------
7,553,178
-----------
PAPER & FOREST PRODUCTS -- 0.2%
Unifrax Corp........................... BTL-B B2 B+ 6.50 11/28/2018 693,000 701,085
-----------
PERSONAL PRODUCTS -- 0.7%
NBTY, Inc.............................. BTL-B Ba3 BB- 4.25 10/01/2017 548,719 554,788
Revlon, Inc............................ BTL-B Ba3 BB- 4.75 11/19/2017 1,983,658 1,999,901
-----------
2,554,689
-----------
16
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS -- 3.0%
Alkermes, Inc.................................. BTL-B B1 BB 4.50% 09/18/2019 $1,521,188 $ 1,538,935
Capsugel Healthcare, Ltd....................... BTL-B B1 BB- 4.75 08/01/2018 1,748,521 1,770,378
ConvaTec, Inc.................................. BTL-B Ba3 B+ 5.00 12/22/2016 495,000 502,425
Grifols SA..................................... BTL-B Ba2 BB+ 4.50 06/01/2017 1,505,098 1,521,717
Jazz Pharmaceuticals PLC....................... BTL-B Ba3 BBB- 5.25 06/12/2018 307,125 311,476
Quintiles Transnational Corp................... BTL-B NR BB- 5.00 06/08/2018 1,696,656 1,710,442
Quintiles Transnational Corp................... BTL B3 B 7.50 02/26/2017 800,000 813,000
Valeant Pharmaceuticals International, Inc..... BTL-B Ba1 BBB- 4.25 09/27/2019 875,000 881,198
Warner Chilcott PLC............................ BTL-B3 Ba3 BBB- 4.25 03/15/2018 367,682 370,472
Warner Chilcott PLC............................ Tranche B1 Ba3 BBB- 4.25 03/15/2018 534,809 538,868
Warner Chilcott PLC............................ Tranche B2 Ba3 BBB- 4.25 03/15/2018 267,405 269,434
Warner Chilcott PLC............................ BTL-B1 Ba3 BBB- 4.25 03/15/2018 203,105 204,647
-----------
10,432,992
-----------
PROFESSIONAL SERVICES -- 0.6%
Bankruptcy Management Solutions, Inc.(10)(11).. 2nd Lien NR NR 8.21 08/20/2015 140,547 5,622
Nexeo Solutions LLC............................ BTL-B1 B1 B 5.00 09/08/2017 1,510,488 1,485,943
Nexeo Solutions LLC............................ BTL-B2 B1 B 5.00 09/08/2017 663,338 653,111
-----------
2,144,676
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.5%
Realogy Corp................................... CLTL B1 B- 4.46 10/10/2016 208,340 209,252
Realogy Corp................................... BTL B1 B- 4.46 10/10/2016 1,596,593 1,603,579
-----------
1,812,831
-----------
ROAD & RAIL -- 0.6%
Swift Transportation Co., Inc.................. BTL-B B1 BB 5.00 12/21/2017 1,957,862 1,980,092
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 2.3%
Freescale Semiconductor, Inc................... BTL B1 B 4.46 12/01/2016 4,074,472 4,006,563
Freescale Semiconductor, Inc................... BTL-B2 B1 B 6.00 12/01/2016 2,858,400 2,844,108
Microsemi Corp................................. BTL-B Ba2 BB 4.00 02/03/2018 1,193,238 1,204,276
-----------
8,054,947
-----------
SOFTWARE -- 3.8%
Attachmate Corp................................ BTL B1 BB- 7.25 11/22/2017 693,963 701,645
Eagle Parent, Inc.............................. BTL-B B1 B+ 5.00 05/16/2018 2,807,250 2,831,813
Hyland Software, Inc........................... BTL B2 B 5.50 10/25/2019 1,835,000 1,842,742
Kronos, Inc.................................... BTL-C Ba3 B 5.50 10/30/2019 2,435,000 2,463,916
Kronos, Inc.................................... 2nd Lien Caa1 CCC+ 9.75 04/30/2020 1,745,000 1,753,725
Lawson Software, Inc........................... BTL-B Ba3 B+ 5.25 04/05/2018 1,090,168 1,102,262
Magic Newco LLC................................ BTL Ba3 B+ 7.25 12/12/2018 1,481,288 1,495,360
RedPrairie Corp................................ 1st Lien B1 B+ 6.75 12/14/2018 760,000 760,136
-----------
12,951,599
-----------
SPECIALTY RETAIL -- 2.0%
J Crew Operating Corp.......................... BTL-B B1 B 4.50 03/07/2018 1,817,313 1,827,282
Michaels Stores, Inc........................... BTL-B2 B1 BB- 4.81 07/31/2016 1,468,693 1,483,905
Party City Holdings, Inc....................... BTL B1 B 5.75 07/27/2019 1,855,350 1,877,963
Serta Simmons Holdings LLC..................... BTL-B B1 B+ 5.00 10/01/2019 1,515,000 1,519,313
-----------
6,708,463
-----------
TEXTILES, APPAREL & LUXURY GOODS -- 0.1%
Phillips-Van Heusen Corp.(15).................. BTL-B Ba1 BBB- 3.25 12/19/2019 445,000 448,258
-----------
THRIFTS & MORTGAGE FINANCE -- 0.3%
Ocwen Financial Corp........................... BTL-B NR B 7.00 09/01/2016 978,778 983,672
-----------
17
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT/SHARES (NOTE 2)
---------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES -- 2.2%
Cricket Communications, Inc...................... BTL Ba2 B+ 4.75% 10/10/2019 $ 495,000 $ 499,022
Crown Castle International Corp.................. BTL-B Ba2 B+ 4.00 01/31/2019 999,900 1,006,899
Intelstat Jackson Holdings, Ltd.................. BTL B1 BB- 4.50 04/02/2018 1,997,462 2,016,010
MetroPCS Wireless, Inc........................... BTL-B3 Ba1 BB 4.00 05/18/2018 1,753,817 1,761,125
Syniverse Technologies, Inc...................... BTL-B B1 BB- 5.00 04/23/2019 2,284,520 2,304,510
------------
7,587,566
------------
TOTAL LOANS (cost $324,013,843).................. 320,746,634
------------
U.S. CORPORATE BONDS & NOTES -- 3.8%
COMMERCIAL SERVICES & SUPPLIES -- 1.1%
Reynolds Group Issuer, Inc.*..................... Bond B1 B+ 5.75 10/15/2020 2,000,000 2,065,000
Ladder Capital Finance Holdings LLP*............. Bond Ba3 B+ 7.38 10/01/2017 1,710,000 1,757,025
------------
3,822,025
------------
ENERGY EQUIPMENT & SERVICES -- 0.2%
Shelf Drilling Holdings, Ltd.*................... Bond B1 B 8.63 11/01/2018 695,000 712,375
------------
GAS UTILITIES -- 0.4%
EP Energy LLC.................................... Bond NR B 9.38 05/01/2020 1,258,000 1,418,395
------------
HOTELS, RESTAURANTS & LEISURE -- 0.3%
Caesars Entertainment Operating Co., Inc......... Bond B2 B 8.50 02/15/2020 1,225,000 1,215,813
------------
INTERNET SOFTWARE & SERVICE -- 0.1%
Zayo Group LLC................................... Bond B1 B 8.13 01/01/2020 340,000 378,250
------------
IT SERVICES -- 0.7%
Ceridian Corp.*.................................. Bond B1 B- 8.88 07/15/2019 590,000 640,150
First Data Corp.*................................ Bond B1 B+ 7.38 06/15/2019 1,635,000 1,692,225
------------
2,332,375
------------
MEDIA -- 0.6%
CCO Holdings LLC................................. Bond B1 BB- 5.25 09/30/2022 1,000,000 1,012,500
Unitymedia Hessen GmbH & Co. KG*................. Bond Ba3 BB- 5.50 01/15/2023 870,000 898,275
------------
1,910,775
------------
OIL, GAS & CONSUMABLE FUELS -- 0.2%
MEG Energy Corp.*................................ Bond B1 BB 6.38 01/30/2023 570,000 594,225
------------
SPECIALTY RETAIL -- 0.2%
Party City Holdings, Inc.*....................... Bond Caa1 CCC+ 8.88 08/01/2020 540,000 579,150
------------
TOTAL U.S. CORPORATE BONDS & NOTES (cost
$12,416,313)..................................... 12,963,383
------------
COMMON STOCK -- 0.0%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
Bankruptcy Management Solutions, Inc.+(5)(6)..... 1,360 0
BLB Management Services, Inc.+................... 5,141 92,538
------------
92,538
------------
MEDIA -- 0.0%
Berry Co. LLC+(5)(6)............................. 1,136 51,415
------------
TOTAL COMMON STOCK (cost $704,457)............... 143,953
------------
MEMBERSHIP INTEREST -- 0.2%
MEDIA -- 0.2%
VSS-AHC Holdings LLC+(5)(6)...................... 12,608 370,801
NextMedia Operating, Inc.+(5)(6)................. 7,916 200,750
------------
TOTAL MEMBERSHIP INTEREST (cost $1,506,366)...... 571,551
------------
18
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
PRINCIPAL VALUE
INDUSTRY DESCRIPTION AMOUNT/SHARES (NOTE 2)
------------------------------------------------------------------------------------------------------
WARRANTS -- 0.0%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
Bankruptcy Management Solutions, Inc.
Expires 10/01/2017
(Strike Price $30.00)+(5)(6)
(cost $0).................................................... 126 $ 0
------------
TOTAL LONG-TERM INVESTMENT SECURITIES (cost $338,640,979)..... 334,425,521
------------
SHORT-TERM INVESTMENT SECURITIES -- 3.7%
REGISTERED INVESTMENT COMPANIES -- 3.7%
SSgA Money Market Fund (cost $12,811,845)..................... $12,811,845 12,811,845
------------
REPURCHASE AGREEMENTS -- 1.7%
Bank of America Securities LLC Joint Repurchase Agreement(13). 1,055,000 1,055,000
Barclays Capital, Inc. Joint Repurchase Agreement(13)......... 975,000 975,000
BNP Paribas SA Joint Repurchase Agreement(13)................. 975,000 975,000
Deutsche Bank AG Joint Repurchase Agreement(13)............... 380,000 380,000
Royal Bank of Scotland Joint Repurchase Agreement(13)......... 1,310,000 1,310,000
UBS Securities LLC Joint Repurchase Agreement(13)............. 1,220,000 1,220,000
------------
Total Repurchase Agreements (cost $5,915,000)................. 5,915,000
------------
TOTAL INVESTMENTS
(cost $357,367,824) (14)...................................... 102.8% 353,152,366
LIABILITIES IN EXCESS OF OTHER ASSETS........................... (2.8) (9,569,967)
----------- ------------
NET ASSETS...................................................... 100.0% $343,582,399
=========== ============
--------
BTL Bank Term Loan
CLTLCredit Linked Term Loan
NR Security is not rated.
+ Non-income producing security
* 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, 2012,
the aggregate value of these securities was $8,938,425, representing 2.6%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
(1) Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered below investment grade. Ratings
provided are as of December 31, 2012.
(2) Based on the stated maturity, the weighted average to maturity of the loans
held in the portfolio will be approximately 62 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) Illiquid security. At December 31, 2012, the aggregate value of these
securities was $622,966, representing 0.2% of net assets.
(6) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(7) Company has filed for Chapter 11 bankruptcy protection.
(8) Loan is in default and did not pay principal at maturity. Final outcome of
Chapter 11 bankruptcy still to be determined.
(9) Loan is in default.
(10)PIK ("Payment-In-Kind") security. Income may be paid in additional loans or
cash at the discretion of the issuer.
(11)Security currently paying interest in the form of additional loans.
(12)Company has filed for bankruptcy protection in country of issuance.
(13)See Note 2 for details of the Joint Repurchase Agreement.
(14)See Note 6 for cost of investments on a tax basis.
(15)As of December 31, 2012, the loan has not settled and as a result, the
interest rate is estimated based on information available.
19
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of December 31, 2012 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFCANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- ------------------- ------------
ASSETS:
Long-Term Investment Securities:
Loans:
Commercial Services & Supplies.. $ -- $ 13,544,470 $ 146,617 $ 13,691,087
Diversified Consumer Services... -- 1,546,347 478,710 2,025,057
Hotels, Restaurants & Leisure... -- 21,165,327 -- 21,165,327
Media........................... -- 25,997,278 334,089 26,331,367
Professional Services........... -- 2,139,054 5,622 2,144,676
Other Industries*............... -- 255,389,120 -- 255,389,120
U.S. Corporate Bonds & Notes..... -- 12,963,383 -- 12,963,383
Common Stock:
Diversified Financial Services.. -- 92,538 0 92,538
Media........................... -- -- 51,415 51,415
Membership Interest.............. -- -- 571,551 571,551
Warrants......................... -- -- 0 0
Short-Term Investments:
Registered Investment Companies.. 12,811,845 -- -- 12,811,845
Repurchase Agreements.............. -- 5,915,000 -- 5,915,000
----------- ------------ ---------- ------------
TOTAL.............................. $12,811,845 $338,752,517 $1,588,004 $353,152,366
=========== ============ ========== ============
* Sum of all other industries each of which individually has an aggregate
market value of less than 5% of net assets. For a detailed presentation of
securities by industry classification, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. A security in the amount of $12,811,845 was held at the
beginning of the period and transferred from Level 2 to Level 1 and securities
in the amount of $20,416,920 were held at the beginning of the period and
transferred from Level 3 to Level 2 following a reassessment of valuation
inputs. In addition, securities in the amount of $21,816,321 were held at the
beginning of the period and transferred from Level 3 to Level 2 due to an
increase in market activity and observable market data including the number of
identified market makers and/or trading activity. There were no additional
material transfers between Levels.
The following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
COMMON MEMBERSHIP
LOANS STOCK INTEREST RIGHTS WARRANTS TOTAL
------------ --------- ---------- --------- -------- ------------
Balance as of 12/31/2011........... $127,498,824 $ 21,576 $ 710,745 $ 0 $ 0 $128,231,145
Accrued discounts.................. 426,383 -- -- -- -- 426,383
Accrued premiums................... (345) -- -- -- -- (345)
Realized gain...................... 558,531 -- -- -- -- 558,531
Realized loss...................... (1,230,787) (220,679) (307,625) (237,500) -- (1,996,591)
Change in unrealized appreciation@. 4,221,289 199,103 860,806 250,000 -- 5,531,198
Change in unrealized depreciation@. (1,146,201) -- -- -- -- (1,146,201)
Purchases.......................... 5,004,843 -- -- -- -- 4,227,485
Sales.............................. (92,134,258) (0) (692,375) (12,500) -- (92,061,775)
Transfers into Level 3............. -- 51,415 -- -- -- 51,415
Transfers out of Level 3........... (42,233,241) -- -- -- -- (42,233,241)
------------ --------- --------- --------- --- ------------
Balance as of 12/31/2012........... $ 965,038 $ 51,415 $ 571,551 $ -- $ 0 $ 1,588,004
============ ========= ========= ========= === ============
--------
@ The total change in unrealized appreciation (depreciation) attributable to
Level 3 investments still held at December 31, 2012 includes:
COMMON MEMBERSHIP
LOANS STOCK INTEREST WARRANTS
----------- ------ ---------- --------
$(307,064) $-- $529,305 $--
=========== === ======== ===
At the end of the reporting period, Level 3 investments in securities were not
considered a material portion of the Fund.
See Notes to Financial Statements
20
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012
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.
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: In accordance with the authoritative guidance on fair
value measurements and disclosures under accounting principles generally
accepted in the United States of America ("GAAP"), the Fund discloses the
fair value of its investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Fund would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
established a three-tier hierarchy to provide more transparency around the
inputs used to measure fair value and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
21
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, 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 Fund's Board of Directors (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.)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments are not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
The summary of inputs used to value the Fund's net assets as of December 31,
2012 are reported on a schedule following the Portfolio of Investments.
The investments by the Fund in loan interests ("Loans") are valued in
accordance with guidelines established by 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, and are generally categorized as Level 2. 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, and are
generally categorized as Level 3. In valuing a Loan at fair value, the
following factors will be considered, (a) the creditworthiness of the
borrower and any intermediate participants, (b) the terms of the Loan, (c)
recent prices in the market for similar Loans, if any, and (d) recent prices
in the market for instruments of similar quality, rate, and period until the
next interest rate reset and maturity.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges for which the securities are principally
traded and are generally categorized as Level 1. 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.
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 and are generally categorized as Level 2. 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.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the
22
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
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.
Registered investment companies are generally categorized as Level 1.
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, and are generally
categorized as Level 2.
The Board is responsible for the share valuation process and has adopted a
policy and procedures (the "PRC Procedures") for valuing the securities and
other assets held by the Fund, including procedures for the fair valuation
of securities and other assets for which market quotations are not readily
available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the Fund's
fair valuation procedures. Securities for which market quotations are not
readily available or the values of which may be significantly impacted by
the occurrence of developments or significant events are generally
categorized as Level 3. 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.
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 ("SEC"), 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. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Fund's custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). 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.
As of December 31, 2012, the Fund held an undivided interest in a joint
repurchase agreement with Bank of America Securities LLC:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
- ---------- ----------
Senior Floating Rate Fund..... 1.30% $1,055,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Bank of America Securities LLC, dated December 31, 2012, bearing interest at
a rate of 0.14% per annum, with a principal amount of $81,105,000, a
repurchase price of $81,105,631, and a maturity date of January 2, 2013. The
repurchase agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- --------- ----------- ------------
U.S. Treasury Notes........... 0.25% 5/31/2014 $82,729,000 $82,779,465
23
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
As of December 31, 2012, the Fund held an undivided interest in a joint
repurchase agreement with Barclay's Capital, Inc.:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ---------
Senior Floating Rate Fund..... 1.30% $975,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Barclay's Capital, Inc., dated December 31, 2012, bearing interest at a rate
of 0.20% per annum, with a principal amount of $74,950,000, a repurchase
price of $74,950,833, and a maturity date of January 2, 2013. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- --------- ----------- ------------
U.S. Treasury Bonds........... 4.50% 5/15/2038 $57,037,000 $76,317,217
As of December 31, 2012, the Fund held an undivided interest in a joint
repurchase agreement with BNP Paribas SA:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ---------
Senior Floating Rate Fund..... 1.30% $975,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated December 31, 2012, bearing interest at a rate of 0.17%
per annum, with a principal amount of $74,950,000, a repurchase price of
$74,950,708, and a maturity date of January 2, 2013. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- --------- ----------- ------------
U.S. Treasury Notes........... 2.50% 3/31/2015 $72,511,900 $76,578,367
As of December 31, 2012, the Fund held an undivided interest in a joint
repurchase agreement with Deutsche Bank AG:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
- ---------- ---------
Senior Floating Rate Fund..... 1.30% $380,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated December 31, 2012, bearing interest at a rate of
0.14% per annum, with a principal amount of $29,315,000, a repurchase price
of $29,315,228, and a maturity date of January 2, 2013. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- --------- ----------- ------------
U.S. Treasury Notes........... 1.88% 6/30/2015 $28,827,000 $29,947,794
As of December 31, 2012, the Fund held an undivided interest in a joint
repurchase agreement with Royal Bank of Scotland:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
- ---------- ----------
Senior Floating Rate Fund..... 1.31% $1,310,000
24
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Royal Bank of Scotland, dated December 31, 2012, bearing interest at a rate
of 0.19% per annum, with a principal amount of $100,215,000, a repurchase
price of $100,216,058, and a maturity date of January 2, 2013. The
repurchase agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- --------- ----------- ------------
U.S. Treasury Notes........... 3.63% 2/15/2021 $85,749,000 $102,062,747
As of December 31, 2012, the Fund held an undivided interest in a joint
repurchase agreement with UBS Securities LLC:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
- ---------- ----------
Senior Floating Rate Fund..... 1.30% $1,220,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
UBS Securities LLC, dated December 31, 2012, bearing interest at a rate of
0.17% per annum, with a principal amount of $93,655,000, a repurchase price
of $93,655,885, and a maturity date of January 2, 2013. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- ---------- ----------- ------------
U.S. Treasury Notes........... 0.25% 11/30/2014 $95,793,000 $95,814,074
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 $1,395,643 for the year ended December 31, 2012, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $693,715 for the
year ended December 31, 2012, 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 assets are not
affected by the reclassifications.
The Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income,
25
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
including any net capital gains on investments, to its shareholders. The
Fund also intends to distribute sufficient net investment income and net
capital gains, if any, so that the Fund will not be subject to excise tax on
undistributed income and gains. Therefore, no federal income tax or excise
tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed the Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2009-2011 or expected to be taken in the Fund's 2012 tax return. The Fund is
not aware of any tax provisions for which it is reasonably possible that the
total amounts of unrecognized tax benefits will change materially in the
next twelve months. 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 returns ending before
2009.
NEW ACCOUNTING PRONOUNCEMENTS: 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.
All required changes to accounting policies have been made in accordance
with ASU No. 2011-04.
In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about
Offsetting Assets and Liabilities". ASU 2011-11 requires an entity to
disclose information about offsetting and related arrangements to enable
users of its financial statements to understand the effect of those
arrangements on its financial position. The new and revised disclosures are
effective for annual reporting periods beginning on or after January 1,
2013, and interim periods within those annual periods. At this time,
management is evaluating the implications of ASU 2011-11 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, 2012.
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, 2012 DECEMBER 31, 2011
------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A ----------- ------------ ----------- -------------
Shares sold................. 8,881,584 $ 72,332,575 22,268,025 $ 184,329,786
Reinvested distributions.... 532,619 4,345,084 770,385 6,329,878
Shares redeemed............. (11,940,299) (97,056,449) (33,660,398) (273,254,039)
----------- ------------ ----------- -------------
Net increase (decrease).. (2,526,096) $(20,378,790) (10,621,988) $ (82,594,375)
=========== ============ =========== =============
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2012 DECEMBER 31, 2011
------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS C ----------- ------------ ----------- -------------
Shares sold................. 3,562,608 $ 29,037,559 9,204,874 $ 76,496,972
Reinvested distributions.... 606,703 4,944,604 550,109 4,489,104
Shares redeemed............. (5,225,785) (42,518,628) (7,863,582) (63,618,305)
----------- ------------ ----------- -------------
Net increase (decrease).. (1,056,474) $ (8,536,465) 1,891,401 $ 17,367,771
=========== ============ =========== =============
26
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
Note 4. Purchases and Sales of Securities
During the year ended December 31, 2012, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns were $204,707,517 and $233,581,721, 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 management
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% in excess of $2 billion.
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, 2012, the Fund incurred administration fees in the
amount of $689,090.
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, 2012,
SACS received fees (see Statement of Operations) based upon the
aforementioned rates. For the year ended December 31, 2012 SACS received
sales charges on Class A shares of $120,319, of which $45,436 was reallowed
to affiliated broker-dealers and $52,661 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, 2012, SACS received early withdrawal
charges of $29,215.
27
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
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, 2012, 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, 2012
-------- -----------------
Class A....................... $325,320 $27,073
Class C....................... 432,506 36,715
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, 2012, SunAmerica waived fees and
reimbursed expenses as follows: Class A $516,665 and Class C $874,382.
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
dividends payable, post October losses, and treatment of defaulted
securities.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
----------------------------------------- ---------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2012 FOR THE YEAR ENDED DECEMBER 31, 2012 FOR THE YEAR ENDED DECEMBER 31, 2011
----------------------------------------- ------------------------------------- -------------------------------------
LONG-TERM GAINS/ UNREALIZED LONG-TERM LONG-TERM
ORDINARY CAPITAL AND OTHER APPRECIATION/ ORDINARY CAPITAL ORDINARY CAPITAL
INCOME LOSSES (DEPRECIATION) INCOME GAINS INCOME GAINS
-------- ----------------- -------------- ------------ --------- ------------ ---------
$-- $(55,358,517) $(4,215,458) $14,866,282 $-- $18,645,783 $--
CAPITAL LOSS CARRYFORWARDS. At December 31, 2012 capital loss carryforward
available to offset future recognized gains were $43,306,204 with
$16,003,027 expiring in 2016, and $27,303,177 expiring in 2017.
Additionally, the fund generated unlimited short-term capital losses of
$2,567,644 and unlimited long-term losses of $9,484,669.
During the year ended December 31, 2012, the Senior Floating Rate Fund had
$3,498,813 of capital loss carryforward expire and utilized $573,830 of
capital loss carryforwards to offset current year capital gains.
Under the current tax law, capital losses realized after October 31 and
prior to the Fund's fiscal year end and late year ordinary losses may be
deferred as occurring on the first day of the following year. For the year
ended December 31, 2012, the fund elected to defer $74,853 of Post-October
long-term capital losses.
--------
+ 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.
28
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
For the year ended December 31, 2012, reclassifications were made to
increase accumulated net realized gain/(loss) by $3,498,813 with an
offsetting adjustment to paid-in capital of $(3,498,813). 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, 2012 for federal income tax purposes were as follows:
Cost (tax basis)............................................ $357,367,824
============
Gross unrealized appreciation............................... $ 5,540,334
Gross unrealized depreciation............................... (9,755,792)
------------
Net unrealized depreciation................................. $ (4,215,458)
============
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.
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 the
overnight 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, 2012, the Fund had borrowings outstanding for 9 days under the
line of credit and incurred $1,329 in interest charges related to these
borrowings. The Fund's average amount of debt under the line of credit for
the days utilized was $3,756,866 at a weighted average interest rate of
1.42%. At December 31, 2012, there were no borrowings outstanding.
29
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2012 -- (CONTINUED)
Note 9. Interfund Lending
Pursuant to the exemptive relief granted by the SEC, 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, 2012, 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, 2012, the Fund did not have any unfunded loan commitments
which could be extended at the option of the Borrower.
30
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 statement of assets and liabilities, including
the portfolio 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, 2012, 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 audits 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, 2012 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 our opinion.
PricewaterhouseCoopers LLP
Houston, Texas
February 27, 2013
31
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2012 -- (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. 78 Director, Belo Corp. (1992 to
67 present present); Director, Sysco
Corp. (1996 to present);
Director, Luby's Inc. (1998 to
present).
William F. Devin Director 1998- Retired. 78 None
74 present
Richard W. Grant Director 2011 to Retired. Prior to that, 29 None
67 Present attorney and Partner at
Morgan Lewis & Brockius
LLP (1989 to 2011).
Stephen J. Gutman Director 2001- Senior Vice President and 29 None
69 present Associate Broker, The
Corcoran Group (real estate)
(2002 to present); Managing
Member, 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, Caliber 29 Chairman of the Board,
65 present ID, Inc. (medical devices) Royal and SunAlliance Co.
(2007 to present); Managing U.S.A., Inc. (2004 to 2006);
Partner, DLB Capital, LLC Director, Boston Private
(private equity) (2006 to Financial Holdings (2004 to
2007). present); Chairman,
Demoulas Supermarkets
(1999 to present).
INTERESTED DIRECTOR
Peter A. Harbeck(3) Director 2001- President, CEO and 78 None
59 present Director, SunAmerica (1995
to present); Director,
SunAmerica Capital
Services, Inc. ("SACS")
(1993 to present); Chairman,
Advisor Group, Inc. (2004 to
present).
32
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2012 -- (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
44 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
46 present SunAmerica (2004 to
present).
Gregory N. Bressler Secretary 2005- Senior Vice President and N/A N/A
46 and Chief Present General Counsel,
Legal SunAmerica (2005 to
Officer present).
James Nichols Vice 2006- Director, President and N/A N/A
46 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
56 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
47 President present (2001 to present)
and
Assistant
Treasurer
33
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2012 -- (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
59 President present General Counsel,
and SunAmerica (2005 to
Assistant present).
Secretary
Matthew J. Hackethal Anti-Money 2006- Chief Compliance Officer, N/A N/A
41 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 (1 fund), SunAmerica Equity
Funds (3 funds), SunAmerica Income Funds (4 funds), SunAmerica Series,
Inc. (7 portfolios), Anchor Series Trust (8 portfolios), the Fund, (1
fund), SunAmerica Series Trust (38 portfolios), SunAmerica Specialty
Series (5 funds), VALIC Company I (34 funds), VALIC Company II (15 funds)
and Seasons Series Trust (21 portfolios).
(2) Directorships of companies required to report to the SEC 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.
34
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, 2012. The information necessary to complete your income
tax returns is included with your Form 1099-DIV, which will be mailed to
shareholders in early 2013.
During the year ended December 31, 2012 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....................... -- -- --
35
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.
36
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
COMPARISON: FUND VS. INDEX -- (UNAUDITED) (CONTINUED)
The Senior Floating Rate Fund (Class C) returned 8.20%, underperforming its
benchmark, the S&P/LSTA Leveraged Loan Index ("LLI")*, which returned 9.66% for
the annual period ended December 31, 2012.
Detracting from the Fund's relative performance was its greater positioning in
higher quality loans compared to the LLI, as prices for lower rated, riskier
assets rose more than prices for higher rated loans during the annual period
overall. From an industry allocation perspective, an underweight position in
the media non-cable industry, which outpaced the LLI during the annual period,
and overweight positions in the pharmaceuticals and energy industries, which
lagged the LLI during the annual period, detracted most from the Fund's
relative results. Among individual loans, significant detractors from the
Fund's absolute returns during the annual period included those of
career-oriented adult school operator ATI Enterprises, pre-recorded media
products maker and distributor Cinram International, professional ice hockey
team operator Dallas Stars, oilfield services company Frac Tech International,
and third-party logistics and freight transportation solutions provider
Cardinal Logistics Management.
On the positive side, contributing to the Fund's relative performance were its
underweight allocations to the food and beverage, lodging, and utilities
industries, as these market segments underperformed the LLI during the annual
period. Among the individual loans that contributed most positively to the
Fund's absolute returns were those of electronic payments processor First Data,
scaffolding and concrete construction, forming and shoring company Brand
Services, audiovisual equipment rental and services provider Audio Visual
Services, extended service contract and product protection program provider
N.E.W. Customer Service Companies, and electric generation, transmission and
distribution company TXU.
--------
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 utilized 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.
37
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 $15,117. The same amount invested in securities
mirroring the performance of the S&P/LSTA Leveraged Loan Index would be valued
at $17,447.
[CHART]
Senior Floating Rate Class C S&P/LSTA Leveraged Loan Index
----------------------------- -----------------------------
12/31/2002 $10,000 $10,000.00
1/31/2003 10,044 10,121.70
2/28/2003 10,059 10,165.83
3/31/2003 10,195 10,205.58
4/30/2003 10,379 10,326.52
5/31/2003 10,523 10,438.56
6/30/2003 10,666 10,565.59
7/31/2003 10,732 10,635.96
8/31/2003 10,759 10,660.11
9/30/2003 10,867 10,760.84
10/31/2003 10,947 10,859.09
11/30/2003 11,015 10,929.35
12/31/2003 11,080 10,997.11
1/31/2004 11,205 11,091.91
2/29/2004 11,220 11,126.73
3/31/2004 11,244 11,166.90
4/30/2004 11,318 11,221.62
5/31/2004 11,322 11,234.30
6/30/2004 11,361 11,304.06
7/31/2004 11,387 11,341.03
8/31/2004 11,379 11,360.99
9/30/2004 11,406 11,408.14
10/31/2004 11,451 11,465.75
11/30/2004 11,496 11,517.11
12/31/2004 11,532 11,565.03
1/31/2005 11,580 11,611.75
2/28/2005 11,638 11,674.10
3/31/2005 11,676 11,722.67
4/30/2005 11,653 11,714.35
5/31/2005 11,643 11,721.14
6/30/2005 11,710 11,797.09
7/31/2005 11,789 11,886.63
8/31/2005 11,860 11,957.71
9/30/2005 11,892 12,006.38
10/31/2005 11,917 12,043.12
11/30/2005 11,967 12,088.40
12/31/2005 12,021 12,152.23
1/31/2006 12,103 12,236.32
2/28/2006 12,182 12,313.78
3/31/2006 12,268 12,388.28
4/30/2006 12,330 12,448.73
5/31/2006 12,342 12,479.98
6/30/2006 12,381 12,515.05
7/31/2006 12,438 12,586.01
8/31/2006 12,522 12,663.54
9/30/2006 12,588 12,731.54
10/31/2006 12,683 12,815.95
11/30/2006 12,724 12,883.88
12/31/2006 12,808 12,975.35
1/31/2007 12,915 13,088.64
2/28/2007 13,003 13,178.62
3/31/2007 13,043 13,231.28
4/30/2007 13,123 13,309.89
5/31/2007 13,188 13,390.92
6/30/2007 13,212 13,420.77
7/31/2007 12,787 12,971.48
8/31/2007 12,802 13,001.65
9/30/2007 12,998 13,255.69
10/31/2007 13,082 13,382.24
11/30/2007 12,863 13,196.50
12/31/2007 12,863 13,237.74
1/31/2008 12,397 12,810.16
2/29/2008 12,070 12,488.85
3/31/2008 12,004 12,477.61
4/30/2008 12,405 12,939.86
5/31/2008 12,561 13,061.52
6/30/2008 12,608 13,094.15
7/31/2008 12,419 12,994.04
8/31/2008 12,393 12,977.07
9/30/2008 11,587 12,178.98
10/31/2008 9,694 10,569.26
11/30/2008 8,561 9,670.35
12/31/2008 7,920 9,385.52
1/31/2009 8,387 10,080.25
2/28/2009 8,318 10,158.82
3/31/2009 8,299 10,305.35
4/30/2009 9,318 11,201.47
5/31/2009 10,082 11,884.86
6/30/2009 10,738 12,405.84
7/31/2009 11,288 12,993.50
8/31/2009 11,617 13,287.73
9/30/2009 12,069 13,712.72
10/31/2009 12,290 13,788.64
11/30/2009 12,354 13,824.11
12/31/2009 12,692 14,230.50
1/31/2010 13,044 14,520.96
2/28/2010 13,052 14,562.66
3/31/2010 13,355 14,890.58
4/30/2010 13,556 15,109.47
5/31/2010 13,267 14,769.17
6/30/2010 13,175 14,700.19
7/31/2010 13,351 14,926.22
8/31/2010 13,413 14,976.80
9/30/2010 13,577 15,187.15
10/31/2010 13,762 15,424.96
11/30/2010 13,811 15,479.58
12/31/2010 13,962 15,671.78
1/31/2011 14,174 15,980.60
2/28/2011 14,282 16,054.59
3/31/2011 14,278 16,052.34
4/30/2011 14,341 16,154.65
5/31/2011 14,338 16,140.08
6/30/2011 14,281 16,080.36
7/31/2011 14,292 16,103.94
8/31/2011 13,596 15,394.59
9/30/2011 13,644 15,460.56
10/31/2011 13,976 15,907.55
11/30/2011 13,918 15,829.39
12/31/2011 13,971 15,910.08
1/31/2012 14,214 16,257.40
2/29/2012 14,311 16,382.78
3/31/2012 14,417 16,508.61
4/30/2012 14,503 16,630.51
5/31/2012 14,414 16,518.17
6/30/2012 14,499 16,632.21
7/31/2012 14,637 16,824.73
8/31/2012 14,781 17,013.83
9/30/2012 14,939 17,202.43
10/31/2012 14,957 17,256.83
11/30/2012 15,007 17,310.42
12/31/2012 15,117 17,446.53
Class A Class C
Senior -------------------------------------
Floating Average Average
Rate Annual Cumulative Annual Cumulative
Fund# Return Return+ Return Return+
- -------------------------------------
1 Year Return 4.44% 8.51% 7.20% 8.20%
-------------------------------------------------------
5 Year Return 2.81% 19.41% 3.28% 17.52%
-------------------------------------------------------
10 Year Return N/A N/A 4.22% 51.17%
-------------------------------------------------------
Since Inception* 2.65% 22.39% 3.95% 74.25%
-------------------------------------------------------
# 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, 2012, the
SunAmerica Senior Floating Rate Class C returned 7.20%
compared to 9.66% 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.safunds.com
38
[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.SAFUNDS.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.safunds.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.safunds.com. Read
the prospectus carefully before investing.
WWW.SAFUNDS.COM
SFANN - 12/12
[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 2012, 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:
2011 2012
------- -------
(a) Audit Fees $85,833 $90,569
(b) Audit-Related Fees $ 0 $ 0
(c) Tax Fees $12,744 $13,122
(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:
2011 2012
---- ----
(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 2011 and 2012 were $104,590 and $66,712, 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 8, 2013
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 8, 2013
By: /s/ Donna M. Handel
------------------------------------
Donna M. Handel
Treasurer
Date: March 8, 2013