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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, LLC
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, 2013
================================================================================
Item 1. Reports to Stockholders
[GRAPHIC]
ANNUAL REPORT 2013
SUNAMERICA
Senior Floating Rate Fund
[LOGO]
TABLE OF CONTENTS
SHAREHOLDERS' LETTER........................................ 2
EXPENSE EXAMPLE............................................. 4
STATEMENT OF ASSETS AND LIABILITIES......................... 6
STATEMENT OF OPERATIONS..................................... 7
STATEMENT OF CHANGES IN NET ASSETS.......................... 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, 2013 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, 2013.
The annual period was dominated by global central banks' unconventional policy
measures. As central bank easing and signs of gradual global economic recovery
drove positive investor sentiment, risk assets overall performed well, while
global interest rates largely rose. Floating rate loans, as represented by the
S&P/LSTA Leveraged Loan Index ("LLI")/*/, returned 5.29% during the annual
period ended December 31, 2013. The LLI significantly outperformed the broad
U.S. fixed income market, as measured by the Barclays U.S. Aggregate Bond
Index/**/, which returned -2.02% during the same period.
For the full year 2013, the underlying credit fundamentals of bank loan issuers
were good, even as credit quality began to degrade slightly during the second
half of the year as a result of some lower-quality first-time issuers entering
the market. Interest expense was low relative to earnings for bank loan
issuers, and the default rate for bank loans, examined by principal amount,
ended the annual period at 1.67%, well below its historical average of 3.5%.+
The majority of new issuance represented refinancing, allowing issuers to
reduce their borrowing costs and extend maturities. As a result, at the end of
the year, less than $97 billion was scheduled to mature through 2016,
suggesting that defaults may remain low for some time to come.
The sector's technicals, or supply and demand factors, were also consistently
supportive during the annual period. Bank loan mutual funds reported record net
inflows of $62.9 billion in 2013.++ Additionally, as of December 31, 2013, bank
loan mutual funds had 82 consecutive weeks of inflows. In addition to retail
demand, the market for collateralized loan obligations ("CLOs"), one of the
main sources of demand for bank loans, finished the year strongly, as $87.1
billion in new CLOs were issued, well above market forecasts from earlier in
2013 of $70 billion for the year. In terms of quality, as measured by the LLI,
CCC-rated loans were the top performers in 2013, returning 10.38%, as compared
to 5.89% and 3.80% for bonds rated B and bonds rated BB, respectively.
All industries within the LLI generated positive absolute returns for the
annual period as a whole. The strongest performing industries were radio and
television; farming/agriculture; and forest products. These industries posted
returns for the annual period of 10.76%, 7.82% and 7.14%, respectively. The
weakest performing industries were food service; conglomerates; and cable and
satellite television; which generated returns of 2.70%, 2.93% and 3.17%,
respectively, for the annual period.
Despite bank loans' solid total return in 2013, their valuations remained
attractive, in our view, reflecting persistent investor skittishness about
holding perceived higher-risk assets. We believe the long-term benefits of
diversification and protection from rising interest rates, particularly given
still-low absolute yields across most fixed income sectors, further enhanced
the sector's relative appeal.
On the following pages, you will find a brief discussion regarding the Fund's
annual results. You will also find financial statements and portfolio
information for the Fund for the annual period ended December 31, 2013.
2
DECEMBER 31, 2013 ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited) (continued)
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 utilizes 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
(e.g. unsecured loans or high yield 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.
3
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
EXPENSE EXAMPLE -- DECEMBER 31, 2013 -- (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, 2013 and
held until December 31, 2013.
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, 2013" 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, 2013" 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, 2013" 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, 2013" 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, 2013"
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, 2013" 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, 2013" 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.
4
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
EXPENSE EXAMPLE -- DECEMBER 31, 2013 -- (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, 2013 DECEMBER 31, 2013 DECEMBER 31, 2013* AT JULY 1, 2013 DECEMBER 31, 2013 DECEMBER 31, 2013
--------------- ----------------- ------------------ --------------- ----------------- -----------------
Senior Floating
Rate Fund#
Class A.......... $1,000.00 $1,028.49 $7.41 $1,000.00 $1,017.90 $7.38
Class C.......... $1,000.00 $1,026.94 $8.94 $1,000.00 $1,016.38 $8.89
EXPENSE
RATIO
AS OF
DECEMBER 31,
2013*
------------
Senior Floating
Rate Fund#
Class A.......... 1.45%
Class C.......... 1.75%
--------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 days divided by 365
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges and administrative
fees, if applicable to your account. Please refer to your Prospectus, your
qualified retirement plan document and/or materials from your financial
advisor for more information.
# During the stated period, the investment adviser either waived/reimbursed a
portion of or all of the fees/expenses and assumed a portion of or all
expenses for the Fund. As a result, if these fees and expenses had not been
waived/reimbursed, the "Actual/Hypothetical Ending Account Value" would have
been lower and the "Actual/Hypothetical Expenses Paid During the Six Months
Ended December 31, 2013 and the "Expense Ratios" would have been higher.
5
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- DECEMBER 31, 2013
ASSETS:
Investments at value (unaffiliated)*............................................ $446,484,400
Repurchase agreements (cost approximates value)................................. 7,885,000
------------
Total investments.............................................................. 454,369,400
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Receivable for:
Fund shares sold............................................................... 1,758,081
Dividends and interest......................................................... 2,655,448
Investments sold............................................................... 12,157,056
Prepaid expenses and other assets............................................... 6,421
Due from investment adviser for expense reimbursements/fee waivers.............. 126,395
------------
Total assets................................................................... 471,072,801
------------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................... 988,947
Investments purchased.......................................................... 31,466,147
Investment advisory and management fees........................................ 312,204
Distribution and service maintenance fees...................................... 210,343
Administration fees............................................................ 73,460
Transfer agent fees and expenses............................................... 87,970
Directors' fees and expenses................................................... 1,170
Other accrued expenses......................................................... 233,041
Dividends payable............................................................... 342,934
Commitments (Note 11)........................................................... 71,565
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Total liabilities.............................................................. 33,787,781
------------
Net Assets................................................................... $437,285,020
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value.................................................... $ 524,470
Additional paid-in capital...................................................... 493,023,865
------------
493,548,335
Accumulated undistributed net investment income (loss).......................... (239,522)
Accumulated undistributed net realized gain (loss) on investments............... (56,717,335)
Unrealized appreciation (depreciation) on investments........................... 693,542
------------
Net Assets................................................................... $437,285,020
============
CLASS A:
Net assets...................................................................... $195,308,721
Shares outstanding.............................................................. 23,415,719
Net asset value and redemption price per share.................................. $ 8.34
Maximum sales charge (3.75% of offering price).................................. 0.32
------------
Maximum offering price to public................................................ $ 8.66
============
CLASS C:
Net assets...................................................................... $241,976,299
Shares outstanding.............................................................. 29,031,309
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charges).................................. $ 8.34
============
*COST
Investment securities (unaffiliated)........................................... $445,790,858
============
See Notes to Financial Statements
6
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2013
INVESTMENT INCOME:
Interest (unaffiliated)........................................................ $19,087,338
Dividends (unaffiliated)....................................................... 6,290
Facility and other fee income (Note 2)......................................... 1,983,689
-----------
Total investment income*.................................................... $21,077,317
-----------
EXPENSES:
Investment advisory and management fees........................................ 3,296,949
Administration fees............................................................ 775,753
Distribution and service maintenance fees:
Class A...................................................................... 589,486
Class C...................................................................... 1,645,889
Transfer agent fees and expenses:
Class A...................................................................... 381,439
Class C...................................................................... 495,372
Registration fees:
Class A...................................................................... 36,573
Class C...................................................................... 44,574
Accounting service fees........................................................ 68,354
Custodian and accounting fees.................................................. 121,393
Reports to shareholders........................................................ 67,658
Audit and tax fees............................................................. 101,679
Legal fees..................................................................... 18,374
Directors' fees and expenses................................................... 51,621
Interest expense............................................................... 449
Other expenses................................................................. 107,840
-----------
Total expenses before fee waivers, expense reimbursements................... 7,803,403
Fees waived and expenses reimbursed by investment adviser (Note 5).......... (1,520,840)
-----------
Net expenses................................................................ 6,282,563
-----------
Net investment income (loss)................................................... 14,794,754
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)......................... (1,295,657)
Change in unrealized appreciation (depreciation) on investments (unaffiliated). 4,909,000
-----------
Net realized and unrealized gain (loss) on investments......................... 3,613,343
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................... $18,408,097
===========
*Net of foreign withholding taxes on interest and dividends of................. $ 2,313
-----------
See Notes to Financial Statements
7
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2013 2012
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)......................................... $ 14,794,754 $ 14,632,010
Net realized gain (loss) on investments (unaffiliated)............... (1,295,657) (1,946,487)
Net unrealized gain (loss) on investments (unaffiliated)............. 4,909,000 14,951,108
------------ ------------
Increase (decrease) in net assets resulting from operations........... 18,408,097 27,636,631
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)...................................... (6,706,870) (6,633,424)
Net investment income (Class C)...................................... (8,083,805) (8,232,858)
------------ ------------
Total distributions to shareholders................................... (14,790,675) (14,866,282)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS (NOTE 3)................................................ 90,085,199 (28,915,255)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... 93,702,621 (16,144,906)
NET ASSETS:
Beginning of period................................................... 343,582,399 359,727,305
------------ ------------
End of period+........................................................ $437,285,020 $343,582,399
============ ============
+Includes accumulated undistributed net investment income (loss)...... $ (239,522) $ (242,675)
============ ============
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
-------
12/31/09 $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
12/31/13 8.26 0.33 0.08 0.41 (0.33) -- (0.33) 8.34 5.08 195,309 1.45
CLASS C
-------
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
12/31/13 8.25 0.30 0.10 0.40 (0.31) -- (0.31) 8.34 4.89 241,976 1.75
RATIO OF
NET
INVESTMENT
INCOME TO
PERIOD AVERAGE PORTFOLIO
ENDED NET ASSETS(3) TURNOVER
---------- ------------- ---------
12/31/09 4.94% 74%
12/31/10 4.34 41
12/31/11 4.27 63
12/31/12 4.41 61
12/31/13 3.98 84
12/31/09 4.88% 74%
12/31/10 4.03 41
12/31/11 4.02 63
12/31/12 4.12 61
12/31/13 3.68 84
--------
(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):
12/31/09 12/31/10 12/31/11 12/31/12 12/31/13
-------- -------- -------- -------- --------
Class A. 0.55% 0.38% 0.33% 0.35% 0.34%
Class C. 0.66 0.48 0.44 0.44 0.43
See Notes to Financial Statements
9
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO PROFILE -- DECEMBER 31, 2013 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Media....................................................... 8.0%
Commercial Services & Supplies.............................. 5.8
Oil, Gas & Consumable Fuels................................. 5.5
Hotels, Restaurants & Leisure............................... 5.3
Health Care Providers & Services............................ 4.0
Software.................................................... 3.9
Capital Markets............................................. 3.6
Food Products............................................... 3.6
Wireless Telecommunication Services......................... 3.4
Diversified Financial Services.............................. 3.4
IT Services................................................. 3.3
Communications Equipment.................................... 3.2
Metals & Mining............................................. 3.1
Machinery................................................... 3.0
Food & Staples Retailing.................................... 3.0
Registered Investment Companies............................. 2.8
Chemicals................................................... 2.7
Pharmaceuticals............................................. 2.6
Insurance................................................... 2.3
Diversified Telecommunication Services...................... 2.3
Energy Equipment & Services................................. 2.1
Industrial Conglomerates.................................... 2.0
Specialty Retail............................................ 1.9
Repurchase Agreements....................................... 1.8
Semiconductors & Semiconductor Equipment.................... 1.7
Multiline Retail............................................ 1.7
Auto Components............................................. 1.5
Airlines.................................................... 1.4
Health Care Equipment & Supplies............................ 1.2
Multi Utilities............................................. 1.2
Industrial Power Producers & Energy Traders................. 1.1
Aerospace & Defense......................................... 1.0
Automobiles................................................. 0.9
Internet Software & Services................................ 0.8
Diversified Consumer Services............................... 0.8
Gas Utilities............................................... 0.6
Leisure Equipment & Products................................ 0.6
Household Durables.......................................... 0.6
Construction Materials...................................... 0.5
Professional Services....................................... 0.5
Pooled Vehicle.............................................. 0.5
Real Estate Investment Trusts............................... 0.4
Containers & Packaging...................................... 0.4
Health Care Technology...................................... 0.4
Real Estate Management & Development........................ 0.4
Consumer Finance............................................ 0.4
Personal Products........................................... 0.4
Life Sciences Tools & Services.............................. 0.4
Electronic Equipment, Instruments & Components.............. 0.4
Paper & Forest Products..................................... 0.3
Road & Rail................................................. 0.3
Distributors................................................ 0.3
Computers & Peripherals..................................... 0.2
Electrical Equipment........................................ 0.2
Household Products.......................................... 0.1
Internet & Catalog Retail................................... 0.1
-----
103.9%
=====
CREDIT QUALITY+#
BBB......................................................... 0.6%
BBB-........................................................ 2.1
BB+......................................................... 4.0
BB.......................................................... 7.6
BB-......................................................... 19.4
B+.......................................................... 28.2
B........................................................... 21.2
B-.......................................................... 6.9
CCC+........................................................ 4.3
CCC......................................................... 0.9
CCC-........................................................ 0.8
Not Rated@.................................................. 4.0
-----
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, 2013
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
------------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 92.4%
AEROSPACE & DEFENSE -- 1.0%
DigitalGlobe, Inc................ BTL-B Ba2 BBB- 3.75% 01/31/2020 $1,895,675 $ 1,904,252
Hamilton Sundstrand Corp......... BTL B1 B+ 4.00 12/13/2019 804,437 806,069
Transdigm Group, Inc............. BTL-C Ba3 B 3.75 02/28/2020 1,997,296 2,005,201
-----------
4,715,522
-----------
AIRLINES -- 1.4%
American Airlines, Inc........... BTL Ba2 BB- 3.75 06/27/2019 1,960,150 1,977,914
Delta Air Lines, Inc............. BTL Ba1 BB+ 3.50 04/20/2017 1,796,382 1,812,459
Delta Air Lines, Inc............. BTL-B1 Ba1 BB 4.00 10/18/2018 1,108,800 1,115,292
United Airlines, Inc............. Tranche B Ba2 BB- 4.00 04/01/2019 1,791,463 1,808,242
-----------
6,713,907
-----------
AUTO COMPONENTS -- 1.5%
Affinia Group.................... BTL-B2 B2 B 4.75 04/25/2020 1,194,000 1,208,924
August LuxUK Holding Co.......... 1st Lien B1 B 5.00 04/27/2018 214,887 217,035
August LuxUK Holding Co.......... 2nd Lien Caa1 B- 10.50 04/27/2019 565,000 580,537
August U.S. Holding Co., Inc..... 1st Lien B1 B 5.00 04/27/2018 165,302 166,954
August U.S. Holding Co., Inc..... 2nd Lien Caa1 B- 10.50 04/27/2019 185,000 190,088
Federal Mogul Corp............... BTL-B B1 B 2.11 12/27/2014 800,270 790,211
Federal Mogul Corp............... BTL-C B1 B 2.11 12/27/2015 470,953 465,034
Goodyear Tire & Rubber Co........ 2nd Lien Ba1 BB 4.75 04/30/2019 500,000 505,782
TI Group Automotive Systems LLC.. BTL-B NR NR 5.50 03/28/2019 605,425 610,155
Tower International, Inc......... BTL-B B1 B+ 4.75 04/23/2020 781,080 786,694
UCI International, Inc........... BTL-B Ba2 B 5.50 07/26/2017 1,182,996 1,189,650
-----------
6,711,064
-----------
AUTOMOBILES -- 0.9%
Casco Automotive Group, Inc...... BTL B1 B+ 6.25 11/14/2018 990,000 995,569
Chrysler Group LLC............... BTL-B NR NR 4.25 05/24/2017 2,803,125 2,822,388
-----------
3,817,957
-----------
CAPITAL MARKETS -- 3.6%
AlixPartners LLC................. BTL-B2 B1 B+ 5.00 07/10/2020 679,467 684,732
AlixPartners LLC................. 2nd Lien Caa1 B+ 9.00 07/09/2021 285,000 291,888
Grosvenor Capital Management LP.. BTL-B NR NR 3.75 01/04/2021 2,000,000 2,002,500
Guggenheim Partners LLC.......... BTL NR NR 4.25-5.50 07/22/2020 653,363 660,383
ISS Holdings A/S................. BTL-B12 NR NR 3.75 04/30/2018 1,099,475 1,104,629
Nuveen Investments, Inc.......... 1st Lien B2 B 4.17 05/13/2017 3,170,000 3,159,812
Nuveen Investments, Inc.......... 2nd Lien Caa1 CCC 6.50 02/28/2019 3,800,000 3,767,939
Walter Investment Management Co.. Tranche B B2 B+ 4.75 12/11/2020 4,102,267 4,124,489
-----------
15,796,372
-----------
CHEMICALS -- 2.7%
Al Chem & Cy SCA................. BTL-B Ba3 B+ 4.50 10/03/2019 501,152 506,476
Al Chem & Cy SCA................. BTL-B1 Ba3 B+ 4.50 10/03/2019 260,023 262,786
Al Chem & Cy SCA................. 2nd Lien B3 B- 8.25 04/03/2020 770,000 795,988
CeramTec GmbH.................... BTL-B1 Ba3 B 4.25 08/30/2020 509,756 512,942
CeramTec GmbH.................... BTL-B2 Ba3 B 4.25 08/30/2020 50,194 50,507
CeramTec GmbH.................... BTL-B3 Ba3 B 4.25 08/30/2020 155,050 156,019
Chemtura Corp.................... BTL Ba1 BB+ 3.50 08/27/2016 1,430,127 1,437,278
General Chemical Corp............ BTL B1 B 5.00-5.75 10/06/2015 579,605 582,503
Huntsman International LLC(12)... BTL-B1 Ba2 BB+ 4.25 10/15/2020 960,000 963,600
Ineos U.S. Finance LLC........... BTL-B B1 BB- 4.00 05/04/2018 1,515,493 1,522,241
MacDermid, Inc................... Tranche B B1 BB- 4.00 06/07/2020 572,125 576,774
PQ Corp.......................... 1st Lien B2 B+ 4.50 08/07/2017 628,650 634,446
Tronox, Inc...................... BTL-B Ba2 BBB- 4.50 03/19/2020 815,900 827,629
Univar, Inc...................... BTL-B B2 B+ 5.00 06/30/2017 2,502,620 2,481,506
U.S. Coatings Acquisition, Inc... BTL-B B1 B+ 4.75 02/01/2020 630,238 635,577
-----------
11,946,272
-----------
11
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES -- 5.6%
ADS Waste Holdings, Inc........................ BTL B1 B+ 4.25% 10/09/2019 $1,509,750 $ 1,520,400
Aramark Corp................................... BTL-D B1 BBB- 4.00 09/09/2019 870,000 875,249
ARG IH Corp.................................... BTL-B B3 B 5.00 11/15/2020 1,420,000 1,429,319
ATI Schools(9)(10)(11)(16)..................... BTL-B Ba3 NR 12.25 12/30/2014 1,184,859 23,697
ATI Schools(6)(8)(10)(11)(16).................. BTL NR NR 13.25 06/30/2012 266,663 24,000
ATI Schools(6)(8)(10)(11)(16).................. BTL NR NR 13.25 06/30/2012 16,473 1,483
Audio Visual Services Group, Inc............... 1st Lien B1 B+ 6.75-7.75 11/09/2018 1,580,000 1,591,850
AWAS Aviation Capital, Ltd..................... BTL Ba2 BBB 3.50 07/16/2018 632,813 634,395
Brand Energy and Infrastructure Services, Inc.. BTL-B B1 B 4.75 11/26/2020 4,400,000 4,427,108
Fly Funding II SARL............................ BTL Ba3 NR 4.50 08/06/2019 1,482,813 1,496,899
KAR Auction Services, Inc...................... BTL-B Ba3 BB- 3.75 05/19/2017 1,383,120 1,391,177
Pacific Industrial Service, Inc................ 1st Lien B1 B 5.00 10/02/2018 1,072,313 1,090,073
Pacific Industrial Service, Inc................ 2nd Lien B3 CCC+ 8.75 04/02/2019 1,000,000 1,025,625
Peak 10, Inc................................... BTL-B B2 B 7.25 10/25/2018 628,650 632,776
Quebecor Media, Inc............................ 1st Lien B1 BB- 3.25 08/17/2020 2,134,650 2,122,643
Star West Generation LLC....................... BTL-B Ba3 BB- 4.25 03/13/2020 1,047,088 1,058,213
ValleyCrest Cos................................ 1st Lien B3 B 5.50 06/13/2019 1,314,843 1,317,719
WCA Waste Systems, Inc......................... BTL B1 B+ 4.00 03/23/2018 1,675,163 1,680,397
West Corp...................................... BTL-B8 Ba3 BB 3.75 06/30/2018 2,101,835 2,113,654
-----------
24,456,677
-----------
COMMUNICATIONS EQUIPMENT -- 3.0%
Alcatel-Lucent SA.............................. BTL-C B1 B+ 5.75 01/30/2019 8,236,968 8,294,454
ARRIS Group, Inc............................... BTL-B Ba3 BB- 3.50 04/17/2020 1,417,059 1,414,402
Sorenson Communications, Inc................... BTL-C B2 B- 9.50 10/31/2014 2,197,081 2,233,814
Telesat Holdings, Inc.......................... BTL-B Ba3 BB 3.50 03/28/2019 994,238 999,624
-----------
12,942,294
-----------
COMPUTERS & PERIPHERALS -- 0.2%
CDW Corp....................................... BTL Ba3 BB- 3.25 04/29/2020 887,027 885,420
-----------
CONSTRUCTION MATERIALS -- 0.5%
Quikrete Companies, Inc........................ 2nd Lien B1 B+ 4.00 09/26/2020 1,610,963 1,621,527
Quikrete Companies, Inc........................ 1st Lien B3 B- 7.00 03/26/2021 640,000 656,800
-----------
2,278,327
-----------
CONSUMER FINANCE -- 0.4%
Ocwen Financial Corp........................... BTL B1 B+ 5.00 02/15/2018 1,746,800 1,769,290
-----------
CONTAINERS & PACKAGING -- 0.3%
Ardagh Packaging Finance PLC................... BTL-B Ba3 B+ 4.25 12/17/2019 710,000 715,325
TricorBraun, Inc............................... BTL-B B1 B+ 4.00 05/03/2018 523,073 525,470
-----------
1,240,795
-----------
DISTRIBUTORS -- 0.3%
ABC Supply Co., Inc............................ BTL-B B1 BB+ 3.50 04/16/2020 1,351,613 1,356,153
-----------
DIVERSIFIED CONSUMER SERVICES -- 0.8%
Bright Horizons Family Solutions, Inc.......... BTL-B B1 B+ 4.00 01/30/2020 1,148,400 1,156,116
ServiceMaster Co............................... BTL B1 B 4.42 01/31/2017 1,072,278 1,063,566
Weight Watchers International, Inc............. BTL-F Ba2 BB 3.75 04/02/2020 1,220,775 1,093,103
-----------
3,312,785
-----------
DIVERSIFIED FINANCIAL SERVICES -- 3.4%
BLB Management Services, Inc................... BTL-B B1 BB- 5.25 11/10/2018 600,463 608,719
ION Trading Technologies, Ltd.................. 1st Lien B2 B+ 4.50 05/22/2020 1,019,875 1,029,118
ION Trading Technologies, Ltd.................. 2nd Lien Caa2 CCC+ 8.25 05/22/2021 950,000 964,844
Ipreo Holdings LLC............................. BTL-2 NR BB- 6.50 08/05/2017 1,146,338 1,153,503
Ipreo Holdings LLC............................. BTL-3 B1 BB- 5.00 08/07/2017 742,293 753,427
LPL Holdings, Inc.............................. BTL-B Ba2 BB- 3.25 03/29/2019 2,004,033 2,006,538
Opal Acquisition, Inc.......................... BTL-B B1 B 5.00 11/27/2020 2,785,000 2,790,801
Santander Asset Management..................... BTL Ba2 BB 4.25 12/17/2020 3,195,000 3,208,314
12
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
-------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
TransUnion LLC....................................... BTL Ba2 BB- 4.25% 02/08/2019 $ 804,112 $ 809,941
Visant Corp.......................................... BTL B1 B+ 5.25 12/22/2016 1,346,665 1,331,936
-----------
14,657,141
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.3%
Altice Financing SA.................................. BTL B1 BB- 5.50 07/15/2019 2,965,000 2,987,238
Level 3 Financing, Inc............................... Tranche B Ba3 BB- 4.00 08/01/2019 1,425,000 1,435,509
Level 3 Financing, Inc............................... BTL-B2 Ba3 BB- 4.00 01/15/2020 1,226,000 1,236,421
-----------
5,659,168
-----------
ELECTRICAL EQUIPMENT -- 0.2%
WireCo WorldGroup, Inc............................... BTL-B Ba2 B+ 6.00 02/15/2017 671,500 677,795
-----------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 0.4%
Minimax GmbH & Co. KG................................ BTL-B B2 B 4.50 08/14/2020 1,547,225 1,560,763
-----------
ENERGY EQUIPMENT & SERVICES -- 1.9%
EMG Utica LLC........................................ BTL B2 B 4.75 03/27/2020 690,000 693,450
Pacific Drilling SA.................................. BTL-B B1 B+ 4.50 06/04/2018 830,825 840,864
Pinnacle Holdco SARL................................. BTL B1 B+ 4.75 07/24/2019 1,654,104 1,656,172
Pinnacle Holdco SARL................................. 2nd Lien Caa1 CCC+ 10.50 07/24/2020 786,000 795,497
Shelf Drilling International Holdings, Ltd........... BTL Ba1 BB- 6.25 05/31/2018 2,970,000 2,984,850
Shelf Drilling Midco, Ltd............................ BTL B2 B- 10.00 10/08/2018 1,240,000 1,261,700
-----------
8,232,533
-----------
FOOD & STAPLES RETAILING -- 3.0%
AdvancePierre Foods, Inc............................. BTL-B1 B1 B 5.75 07/10/2017 1,425,600 1,410,453
BJ's Wholesale Club, Inc............................. 1st Lien B3 B- 4.50 09/26/2019 2,801,834 2,822,599
Rite Aid Corp........................................ BTL-B6 B1 BB- 4.00 02/21/2020 1,121,525 1,129,002
Rite Aid Corp........................................ BTL B3 B 4.88 06/21/2021 2,230,000 2,268,095
Rite Aid Corp........................................ 2nd Lien B3 B 5.75 08/21/2020 1,055,000 1,085,991
Sprouts Farmers Market LLC........................... BTL-B B1 B+ 4.00 04/23/2020 766,382 769,256
Supervalu, Inc....................................... BTL-B B1 B+ 5.00 03/21/2019 1,236,441 1,250,608
U.S. Foodservice..................................... BTL B2 B- 4.50 03/29/2019 2,214,873 2,235,037
-----------
12,971,041
-----------
FOOD PRODUCTS -- 3.6%
Brickman Group Holdings, Inc......................... 1st Lien B1 NR 4.00 12/18/2020 815,000 819,075
Brickman Group Holdings, Inc......................... 2nd Lien Caa1 NR 7.50 12/17/2021 1,340,000 1,373,082
Del Monte Foods Co.(12).............................. BTL B2 B+ 4.25 11/06/2020 2,595,000 2,609,057
Dole Food Co., Inc................................... BTL B2 B- 4.50 11/01/2018 1,065,000 1,070,991
H.J. Heinz Co........................................ BTL-B2 Ba2 BB 3.50 06/05/2020 2,290,981 2,311,408
Hostess Brands, Inc.................................. BTL-B NR B- 6.75 04/09/2020 1,095,000 1,136,063
JBS USA LLC.......................................... BTL-B Ba2 BB 3.75 09/18/2020 1,042,388 1,041,085
Michael Foods, Inc................................... BTL-B Ba3 B+ 4.25 02/25/2018 1,871,095 1,886,297
Pinnacle Foods Group, Inc............................ BTL-B Ba3 BB- 3.25 04/29/2020 2,032,884 2,033,790
Pinnacle Operating Corp.............................. BTL-B2 B1 B 4.75 11/15/2018 1,422,054 1,430,942
-----------
15,711,790
-----------
GAS UTILITIES -- 0.3%
EP Energy LLC........................................ BTL-B3 Ba3 B+ 3.50 05/24/2018 670,000 671,017
NGPL PipeCo LLC...................................... BTL-B B2 B- 6.75 09/15/2017 672,302 628,813
-----------
1,299,830
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 1.2%
Biomet, Inc.......................................... BTL-B2 B1 BB- 3.75 07/25/2017 972,183 981,142
Catalent Pharma Solutions, Inc....................... BTL Ba3 BB- 3.67 09/15/2016 1,870,550 1,881,852
Catalent Pharma Solutions, Inc....................... BTL Caa1 B 6.50 12/29/2017 720,000 730,800
Immucor, Inc......................................... BTL-B2 B1 BB- 5.00 08/17/2018 1,845,454 1,857,758
-----------
5,451,552
-----------
13
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (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 -- 3.2%
American Renal Holdings, Inc...................... 1st Lien Ba3 B 4.50% 09/22/2019 $2,109,063 $ 2,118,290
American Renal Holdings, Inc...................... 2nd Lien Caa1 CCC+ 8.50 02/14/2020 1,555,000 1,560,831
DaVita, Inc....................................... BTL-B2 Ba2 BB- 4.00 11/01/2019 1,212,750 1,222,604
DaVita, Inc....................................... BTL-B Ba2 BB- 4.50 10/20/2016 1,692,650 1,707,197
Multiplan, Inc.................................... BTL Ba2 B+ 4.00 08/26/2017 1,960,276 1,977,224
Sheridan Holdings, Inc............................ 1st Lien B1 B 4.50 06/29/2018 1,614,604 1,626,461
Sheridan Holdings, Inc............................ Delayed Draw B1 B 4.50 06/29/2018 395,000 395,000
Sheridan Holdings, Inc............................ 2nd Lien Caa1 CCC+ 8.25 12/13/2021 1,220,000 1,241,350
U.S. Renal Care, Inc.............................. 1st Lien NR B 4.25 07/03/2019 1,039,295 1,056,184
U.S. Renal Care, Inc.............................. BTL B3 CCC+ 8.50 07/03/2020 435,000 442,069
U.S. Renal Care, Inc.............................. 2nd Lien B3 CCC+ 10.25 12/27/2019 666,000 680,985
-----------
14,028,195
-----------
HEALTH CARE TECHNOLOGY -- 0.4%
IMS Health, Inc................................... BTL-B Ba3 BB- 3.75 09/01/2017 1,803,775 1,813,695
-----------
HOTELS, RESTAURANTS & LEISURE -- 5.3%
24 Hour Fitness Worldwide, Inc.................... BTL-B Ba3 B+ 5.25 04/22/2016 1,553,792 1,572,567
Bally Technologies, Inc........................... BTL-B Ba3 BB 4.25 11/25/2020 1,541,138 1,553,967
Caesars Entertainment Operating Co., Inc.......... BTL-B2 B3 B- 4.49 01/28/2018 3,193,554 3,015,248
California Pizza Kitchen, Inc..................... BTL B2 B 5.25-6.50 03/29/2018 1,488,750 1,460,215
CityCenter Holdings LLC........................... BTL-B B3 B+ 5.00 10/16/2020 2,625,000 2,668,349
DineEquity, Inc................................... BTL-B Ba2 BB- 3.75 10/19/2017 1,120,210 1,126,707
Four Seasons Holdings, Inc........................ 1st Lien NR NR 3.50 06/27/2020 768,075 771,435
Four Seasons Holdings, Inc........................ 2nd Lien Caa1 B- 6.25 12/24/2020 835,000 857,963
Hilton Worldwide Finance LLC...................... BTL-B2 Ba3 BB 3.75 10/26/2020 3,765,789 3,800,310
MGM Resorts International......................... BTL-B Ba2 BB 3.50 12/20/2019 1,011,184 1,011,921
Station Casinos, Inc.............................. BTL-B B1 B 5.00 03/02/2020 2,798,850 2,834,272
Town Sports International Holdings, Inc........... BTL Ba3 B+ 4.50 11/15/2020 2,380,000 2,400,082
-----------
23,073,036
-----------
HOUSEHOLD DURABLES -- 0.6%
Apex Tool Group LLC............................... BTL-B B1 B 4.50 02/01/2020 600,463 604,704
Tempur-Pedic International, Inc................... BTL-B Ba3 BB 3.50 03/18/2020 762,676 763,550
Wilsonart International Holdings LLC.............. BTL B2 B+ 4.00 10/31/2019 1,089,000 1,082,058
-----------
2,450,312
-----------
HOUSEHOLD PRODUCTS -- 0.1%
Reynolds Group Holdings, Inc...................... Tranch E B1 B+ 4.00 12/01/2018 467,912 472,591
-----------
INDUSTRIAL CONGLOMERATES -- 2.0%
American Rock Salt Co. LLC........................ BTL-B NR NR 4.75 04/25/2017 3,861,875 3,885,046
Filtration Group Corp............................. 1st Lien B1 B+ 4.50 11/21/2020 655,000 662,369
Filtration Group Corp............................. 2nd Lien Caa1 B- 8.25 11/22/2021 790,000 807,775
Sequa Corp........................................ BTL-B B2 B 5.25 06/19/2017 868,226 850,319
UTEX Industries, Inc.............................. 1st Lien B2 B 4.50 04/10/2020 542,275 545,213
UTEX Industries, Inc.............................. 2nd Lien Caa2 CCC+ 8.75 04/10/2021 2,000,000 2,050,000
-----------
8,800,722
-----------
INDUSTRIAL POWER PRODUCERS & ENERGY TRADERS -- 1.1%
Calpine Corp...................................... BTL-B B1 BB- 4.00 04/01/2018 1,060,013 1,068,957
Calpine Corp...................................... BTL B1 BB- 4.00 10/09/2019 1,526,675 1,539,504
Dynegy Holdings, Inc.............................. BTL-B2 B1 BB- 4.00 04/23/2020 768,446 774,050
EFS Cogen Holdings I LLC.......................... BTL-B Ba1 BB+ 5.00 12/17/2020 1,015,000 1,022,613
LS Power Funding Corp............................. BTL Ba2 BB+ 5.50 06/28/2019 386,669 390,697
-----------
4,795,821
-----------
14
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------
INSURANCE -- 2.3%
Asurion Corp............................. 1st Lien Ba2 B+ 4.50% 05/24/2019 $3,528,750 $ 3,531,594
Asurion Corp............................. BTL B2 B- 11.00 09/02/2019 550,000 569,250
Compass Investments, Inc................. BTL B1 B 5.00 12/27/2019 1,029,620 1,035,411
Cooper, Gay, Swett & Crawford, Ltd....... 1st Lien B2 B 5.00 04/16/2020 905,450 885,077
Cooper, Gay, Swett & Crawford, Ltd....... 2nd Lien Caa2 CCC+ 8.25 10/16/2020 1,430,000 1,337,050
Hub International, Ltd................... BTL B1 B 4.75 10/02/2020 1,576,050 1,600,019
National Financial Partners Corp......... BTL-B B2 B+ 5.25 06/24/2020 1,074,600 1,089,376
-----------
10,047,777
-----------
INTERNET & CATALOG RETAIL -- 0.1%
Acosta, Inc.............................. BTL B1 B+ 4.25 03/03/2018 442,778 446,306
-----------
INTERNET SOFTWARE & SERVICES -- 0.7%
Web.com Group, Inc....................... BTL-B Ba3 B+ 4.50 10/27/2017 510,480 516,648
Zayo Group LLC........................... BTL-B B1 B 4.00 07/02/2019 2,453,779 2,459,037
-----------
2,975,685
-----------
IT SERVICES -- 2.9%
Ceridian Corp............................ BTL B1 B- 4.41 05/09/2017 1,071,392 1,077,642
Evertec, Inc............................. BTL-B B1 BB- 3.50 04/17/2020 606,950 591,963
First Data Corp.......................... BTL-B B1 B+ 4.16 03/23/2018 6,218,681 6,233,842
First Data Corp.......................... BTL-1 B1 B+ 4.16 09/24/2018 2,170,000 2,175,575
MoneyGram International, Inc............. BTL-B B1 BB- 4.25 03/27/2020 2,257,938 2,282,619
TransFirst Holdings, Inc................. 2nd Lien Caa1 CCC+ 11.00 06/27/2018 250,000 253,438
-----------
12,615,079
-----------
LEISURE EQUIPMENT & PRODUCTS -- 0.6%
SRAM LLC................................. BTL-B B1 BB- 4.00-5.25 04/10/2020 2,613,298 2,613,298
-----------
LIFE SCIENCES TOOLS & SERVICES -- 0.4%
Pharmaceutical Product Development, Inc.. BTL-B Ba3 B+ 4.00 12/05/2018 1,681,861 1,696,872
-----------
MACHINERY -- 3.0%
Alliance Laundry Systems LLC............. BTL B2 B 4.25-5.25 12/10/2018 521,266 524,850
Gardner Denver, Inc...................... BTL B1 B 4.25 07/30/2020 1,361,588 1,365,842
Harbor Freight Tools USA, Inc............ BTL-B B1 B+ 4.75 07/26/2019 1,028,379 1,042,385
Navistar International Corp.............. BTL-B Ba3 B 5.75 08/17/2017 645,188 656,277
Paladin Brands Holding, Inc.............. BTL B2 B+ 6.75 08/16/2019 1,975,000 1,960,188
Pro Mach, Inc............................ BTL-B B2 B+ 4.75 07/06/2017 1,503,018 1,511,473
Rexnord Corp............................. BTL-B B2 B+ 4.00-5.25 08/21/2020 5,939,012 5,960,025
-----------
13,021,040
-----------
MEDIA -- 7.5%
Advantage Sales & Marketing LLC.......... BTL B1 B+ 4.25 12/18/2017 1,140,000 1,145,344
Charter Communications Operating LLC..... BTL-E Baa3 BB+ 3.00 07/01/2020 1,480,056 1,469,187
Delta 2 (Lux) SARL....................... BTL-B B1 B+ 4.50 04/30/2019 2,456,500 2,483,917
Getty Images, Inc........................ BTL-B B2 B 4.75 10/18/2019 2,890,825 2,704,127
Hicks Sports Group+(7)(8)................ BTL-B NR NR 6.75 12/22/2011 1,101,919 190,081
Hoyts Cinemas Group...................... 1st Lien B1 B+ 4.00 05/30/2020 422,875 424,329
Hoyts Cinemas Group...................... 2nd Lien B3 CCC+ 8.25 11/20/2020 450,000 457,313
Interactive Data Corp.................... BTL-B2 Ba3 BB- 3.75 02/11/2018 2,229,521 2,235,792
ION Media Networks, Inc.................. BTL B1 B+ 5.00 12/18/2020 1,880,000 1,894,100
LIN Television Corp...................... BTL-B Ba2 BB+ 4.00 12/21/2018 715,414 720,332
Media General, Inc....................... BTL-B B1 BB- 4.25 07/31/2020 970,000 980,907
Mediacom LLC............................. BTL-E Ba3 BB- 4.50 10/23/2017 898,325 900,211
Nine Entertainment Group, Ltd............ BTL-A Ba2 BB- 3.25 02/05/2020 1,588,000 1,586,015
Salem Communications Corp................ BTL-B B2 B 4.50 03/16/2020 883,458 890,084
The Weather Channel...................... 2nd Lien B3 CCC+ 7.00 06/26/2020 270,000 278,100
Tribune Co............................... BTL Ba3 BB+ 4.00 12/27/2020 5,390,000 5,373,717
Truven Health Analytics, Inc............. BTL-B NR B+ 4.50 06/06/2019 310,293 311,115
Univision Communications, Inc............ BTL-C1 B2 B+ 4.50 03/01/2020 644,923 649,415
15
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
MEDIA (CONTINUED)
Univision Communications, Inc............... BTL-C2 B2 B+ 4.50% 03/01/2020 $6,053,003 $ 6,098,401
WideOpenWest Finance LLC.................... BTL-B B1 B 4.75 04/01/2019 921,028 926,732
WMG Acquisition Corp........................ BTL Ba3 BB- 3.75 07/01/2020 998,498 1,001,306
-----------
32,720,525
-----------
METALS & MINING -- 3.1%
Ameriforge Group, Inc....................... BTL B1 B+ 5.00 12/19/2019 1,761,922 1,775,871
Crosby Worldwide, Ltd....................... 1st Lien B1 B 4.00 11/18/2020 4,520,000 4,538,835
Doncasters U.S. Finance LLC................. BTL-B B2 B 5.50 04/05/2020 1,622,738 1,646,572
Fortescue Metals Group, Ltd................. BTL Baa3 BBB- 4.25 06/30/2019 4,230,846 4,295,189
Novelis, Inc................................ BTL-B Ba2 BB- 3.75 03/10/2017 1,145,974 1,152,414
-----------
13,408,881
-----------
MULTI UTILITIES -- 1.2%
La Frontera Generation LLC.................. BTL-B B1 BB- 4.50 09/30/2020 1,784,189 1,805,935
Texas Competitive Electric Holdings Co. LLC. BTL Caa3 CCC- 4.67-4.74 10/10/2017 5,174,956 3,574,601
-----------
5,380,536
-----------
MULTILINE RETAIL -- 1.7%
99 Cents Only Store......................... BTL-B B2 B+ 4.50 01/11/2019 1,191,718 1,203,629
JC Penny Corp, Inc.......................... BTL B2 B- 6.00 05/21/2018 3,467,575 3,392,925
Neiman Marcus Group, Inc.................... BTL-B B2 B 5.00 10/25/2020 2,675,000 2,712,498
-----------
7,309,052
-----------
OIL, GAS & CONSUMABLE FUELS -- 4.4%
Arch Coal, Inc.............................. BTL B1 B+ 6.25 05/16/2018 3,518,517 3,477,175
Energy Transfer Equity LP................... BTL-B Ba2 BB 3.25 12/02/2019 976,500 974,821
Fieldwood Energy LLC........................ 1st Lien Ba2 BB- 3.88 09/30/2018 1,371,563 1,383,849
Philadelphia Energy Solutions LLC........... BTL-B B1 BB- 6.25 04/04/2018 947,838 838,836
Power Buyer LLC............................. BTL B2 B 4.25 05/06/2020 1,008,267 999,948
Power Buyer LLC(15)......................... Delayed Draw B2 B 4.25 05/06/2020 126,667 125,558
Power Buyer LLC............................. 2nd Lien Caa2 CCC+ 8.25 11/06/2020 1,670,000 1,647,038
Samson Investment Co........................ 2nd Lien B1 B- 5.00 09/25/2018 1,500,000 1,507,500
Sandy Creek Energy Associates............... BTL-B Ba3 BB- 5.00 11/08/2020 3,375,000 3,383,438
Templar Energy LLC.......................... 2nd Lien B3 B- 8.00 11/25/2020 1,825,000 1,835,266
Western Refining LP......................... BTL-B B1 BB- 4.25 11/12/2020 3,180,000 3,215,114
-----------
19,388,543
-----------
PAPER & FOREST PRODUCTS -- 0.3%
Exopack LLC................................. BTL B1 B 5.25 05/08/2019 1,405,000 1,432,222
-----------
PERSONAL PRODUCTS -- 0.4%
Revlon, Inc................................. BTL-B Ba2 B+ 4.00 11/20/2017 1,699,200 1,714,333
-----------
PHARMACEUTICALS -- 2.5%
Alkermes, Inc............................... BTL-B Ba3 BB+ 3.50 09/18/2019 1,505,938 1,513,467
Capsugel Healthcare, Ltd.................... BTL-B Ba3 B+ 3.50 08/01/2018 1,544,296 1,548,640
PRA Holdings, Inc........................... 1st Lien B1 B 5.00 09/23/2020 2,428,913 2,440,795
Salix Pharmaceuticals, Ltd.................. BTL Ba1 BB 4.25 01/02/2020 2,795,000 2,825,278
Valeant Pharmaceuticals International, Inc.. BTL-E Ba1 BB 4.50 08/05/2020 2,406,813 2,425,617
-----------
10,753,797
-----------
POOLED VEHICLE -- 0.5%
Bombardier Recreational Products, Inc....... 1st Lien B1 B+ 4.00 01/30/2019 1,961,143 1,970,541
-----------
PROFESSIONAL SERVICES -- 0.5%
Nexeo Solutions LLC......................... BTL-B1 B2 B 5.00 09/08/2017 1,495,114 1,498,852
Nexeo Solutions LLC......................... BTL-B2 B2 B 5.00 09/08/2017 656,688 657,508
-----------
2,156,360
-----------
16
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -- 0.4%
Capital Automotive LP.......................... BTL-B Ba2 BB- 4.00% 04/10/2019 $ 763,196 $ 769,993
Capital Automotive LP.......................... 2nd Lien B1 B- 6.00 04/30/2020 1,090,000 1,128,150
------------
1,898,143
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.4%
Realogy Corp................................... CLTL NR BB- 4.45 10/10/2016 186,337 186,337
Realogy Corp................................... BTL Ba3 BB- 4.50 03/05/2020 1,584,619 1,603,189
------------
1,789,526
------------
ROAD & RAIL -- 0.3%
Swift Transportation Co., Inc.................. BTL-B Ba2 NR 4.00 12/21/2017 1,391,202 1,402,679
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 1.5%
Freescale Semiconductor, Inc................... BTL-B4 B1 B 5.00 03/01/2020 5,392,126 5,458,967
Microsemi Corp................................. BTL-B NR BB+ 3.75 02/19/2020 1,074,109 1,080,822
------------
6,539,789
------------
SOFTWARE -- 3.9%
Activision Blizzard, Inc....................... BTL-B Baa3 BBB 3.25 10/12/2020 1,995,000 2,010,489
Attachmate Corp................................ BTL B1 BB- 7.25 11/22/2017 647,671 659,680
Eagle Parent, Inc.............................. BTL-B Ba3 B+ 4.50 05/16/2018 2,742,128 2,760,553
Hyland Software, Inc........................... BTL B2 B 5.50 10/25/2019 1,816,650 1,827,550
Infor (US), Inc................................ BTL-B3 Ba3 B+ 3.75 06/03/2020 209,472 209,184
Kronos, Inc.................................... BTL-C B1 B 4.50 10/30/2019 3,202,600 3,233,290
Kronos, Inc.................................... 2nd Lien Caa2 CCC+ 9.75 04/30/2020 2,410,000 2,502,383
Lawson Software, Inc........................... BTL-B Ba3 B+ 5.25 04/05/2018 984,139 985,164
Magic Newco LLC................................ BTL B1 B+ 5.00 12/12/2018 2,114,802 2,133,307
RedPrairie Corp................................ 1st Lien NR B+ 6.00 12/21/2018 754,300 759,957
------------
17,081,557
------------
SPECIALTY RETAIL -- 1.7%
J Crew Operating Corp.......................... BTL-B1 Ba3 B 4.00 03/07/2018 1,798,863 1,811,780
Michaels Stores, Inc........................... BTL-B2 Ba3 BB- 3.75 01/28/2020 1,564,125 1,572,553
Party City Holdings, Inc....................... BTL B2 B 4.25-5.50 07/29/2019 2,554,547 2,568,277
Serta Simmons Holdings LLC..................... BTL-B B1 B+ 4.25 10/01/2019 1,468,943 1,479,954
------------
7,432,564
------------
WIRELESS TELECOMMUNICATION SERVICES -- 1.9%
Cricket Communications, Inc.................... BTL Ba3 B+ 4.75 10/10/2019 490,050 492,296
Cricket Communications, Inc.................... BTL-C Ba3 B+ 4.75 03/08/2020 1,577,075 1,582,707
Crown Castle International Corp................ BTL-B Ba2 BBB- 3.25 01/31/2019 989,899 992,149
Intelsat Jackson Holdings, Ltd................. BTL-B2 Ba3 BB 3.75 06/30/2019 1,915,416 1,934,570
LTS Buyer LLC.................................. 1st Lien B1 B 4.50 04/11/2020 791,025 796,793
LTS Buyer LLC.................................. 2nd Lien Caa1 CCC+ 8.00 04/12/2021 430,000 434,031
Syniverse Technologies, Inc.................... BTL-B B1 BB- 4.00 04/23/2019 2,203,761 2,208,352
------------
8,440,898
------------
TOTAL LOANS (cost $402,272,591)................ 403,834,823
------------
U.S. CORPORATE BONDS & NOTES -- 4.4%
COMMERCIAL SERVICES & SUPPLIES -- 0.2%
Ladder Capital Finance Holdings LLP............ Senior Notes Ba3 B+ 7.38 10/01/2017 840,000 882,000
------------
COMMUNICATIONS EQUIPMENT -- 0.2%
Alcatel-Lucent USA, Inc.*...................... Company Guar. Notes B3 CCC+ 6.75 11/15/2020 890,000 924,488
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.1%
Level 3 Financing, Inc.*....................... Company Guar. Notes B3 CCC+ 6.13 01/15/2021 365,000 368,650
------------
GAS UTILITIES -- 0.3%
EP Energy LLC.................................. Senior Notes B2 B 9.38 05/01/2020 1,258,000 1,451,418
------------
17
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (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 -- 0.8%
Tenet Healthcare Corp.*.......................... Senior Sec. Notes Ba3 B+ 6.00% 10/01/2020 $1,015,000 $ 1,059,406
Tenet Healthcare Corp............................ Senior Notes B3 CCC+ 8.13 04/01/2022 1,235,000 1,330,713
WellCare Health Plans, Inc....................... Senior Notes Ba2 BB 5.75 11/15/2020 950,000 971,375
-----------
3,361,494
-----------
INTERNET SOFTWARE & SERVICES -- 0.1%
Zayo Group LLC................................... Senior Sec. Notes B1 B 8.13 01/01/2020 340,000 372,300
-----------
IT SERVICES -- 0.4%
First Data Corp.*................................ Senior Sec. Notes B1 B+ 7.38 06/15/2019 1,635,000 1,745,363
-----------
MEDIA -- 0.3%
Gray Television, Inc............................. Company Guar. Notes Caa1 B+ 7.50 10/01/2020 1,435,000 1,524,688
-----------
OIL, GAS & CONSUMABLE FUELS -- 0.5%
Antero Resources Finance Corp.*.................. Company Guar. Notes B1 BB- 5.38 11/01/2021 580,000 585,800
Rosetta Resources, Inc........................... Company Guar. Notes B2 BB- 5.88 06/01/2022 1,475,000 1,463,938
-----------
2,049,738
-----------
PHARMACEUTICALS -- 0.1%
Salix Pharmaceuticals, Ltd.*..................... Company Guar. Notes B2 B 6.00 01/15/2021 635,000 650,875
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.2%
Freescale Semiconductor, Inc.*................... Senior Sec. Notes B1 B 6.00 01/15/2022 1,015,000 1,027,688
-----------
SPECIALTY RETAIL -- 0.2%
Party City Holdings, Inc......................... Company Guar. Notes Caa1 CCC+ 8.88 08/01/2020 540,000 604,800
-----------
WIRELESS TELECOMMUNICATION SERVICES -- 1.0%
Sprint Corp.*.................................... Company Guar. Notes B1 BB- 7.13 09/15/2021 1,980,000 2,126,025
Sprint Corp.*.................................... Company Guar. Notes B1 BB- 7.25 06/15/2024 735,000 746,025
T Mobile USA, Inc................................ Company Guar. Notes Ba3 BB 6.13 04/28/2019 1,000,000 1,062,500
T Mobile USA, Inc................................ Company Guar. Notes Ba3 BB 6.46 01/15/2022 415,000 422,263
-----------
4,356,813
-----------
TOTAL U.S. CORPORATE BONDS & NOTES (cost
$18,390,284)................................... 19,320,315
-----------
FOREIGN CORPORATE BONDS & NOTES -- 2.5%
CONTAINERS & PACKAGING -- 0.1%
Ardagh Packaging Finance PLC*.................... Senior Sec. Notes Ba3 B+ 4.88 11/15/2022 590,000 584,100
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.9%
Altice Financing SA*............................. Company Guar. Notes B1 BB- 6.50 01/15/2022 2,410,000 2,434,100
Wind Acquisition Finance SA*..................... Senior Sec. Notes Ba3 BB 6.50 04/30/2020 1,415,000 1,506,975
-----------
3,941,075
-----------
ENERGY EQUIPMENT & SERVICES -- 0.2%
Shelf Drilling Holdings, Ltd.*................... Senior Sec. Notes B1 B+ 8.63 11/01/2018 695,000 750,600
-----------
MEDIA -- 0.2%
Unitymedia Hessen GmbH & Co. KG*................. Senior Sec. Notes Ba3 BB- 5.50 01/15/2023 870,000 843,900
-----------
OIL, GAS & CONSUMABLE FUELS -- 0.6%
MEG Energy Corp.*................................ Company Guar. Notes B1 BB 6.38 01/30/2023 570,000 573,563
Tullow Oil PLC*.................................. Company Guar. Notes B1 BB- 6.00 11/01/2020 1,300,000 1,319,500
Ultra Petroleum Corp.*........................... Senior Notes B2 BB 5.75 12/15/2018 750,000 770,625
-----------
2,663,688
-----------
WIRELESS TELECOMMUNICATION SERVICES -- 0.5%
Intelsat Luxembourg SA*.......................... Company Guar. Notes Caa2 B- 7.75 06/01/2021 1,365,000 1,463,963
NII International Telecom SCA*................... Company Guar. Notes B2 B- 7.88 08/15/2019 1,125,000 849,375
-----------
2,313,338
-----------
TOTAL FOREIGN CORPORATE BONDS & NOTES (cost
$11,090,000)................................... 11,096,701
-----------
18
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
SHARES/
PRINCIPAL VALUE
INDUSTRY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------------------------
COMMON STOCKS -- 0.0%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
BLB Management Services, Inc.................................. 5,141 $ 129,810
------------
MEDIA -- 0.0%
Berry Co. LLC+(5)(6).......................................... 1,136 35,432
------------
TOTAL COMMON STOCK (cost $704,457)............................ 165,242
------------
PREFERRED SECURITIES -- 0.0%
COMMERCIAL SERVICES & SUPPLIES -- 0.0%
Ancora Holdings LLC
6.00%(6) (cost $0)........................................... 56 0
------------
MEMBERSHIP INTEREST -- 0.0%
MEDIA -- 0.0%
NextMedia Operating, Inc.+(5)(6).............................. 7,916 115,811
VSS-AHC Holdings LLC+(5)(6)................................... 12,608 0
------------
TOTAL MEMBERSHIP INTEREST (cost $1,382,018)................... 115,811
------------
WARRANTS -- 0.0%
COMMERCIAL SERVICES & SUPPLIES -- 0.0%
Ancora Holdings LLC
Expires 08/12/2020
(Strike Price $1.90)+(6)..................................... 3 0
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
Bankruptcy Management Solutions, Inc.
Expires 10/01/2017
(Strike Price $30.00)+(5)(6)................................. 126 0
------------
TOTAL WARRANTS (cost $0)...................................... 0
------------
TOTAL LONG-TERM INVESTMENT SECURITIES (cost $433,839,350)..... 434,532,892
------------
SHORT-TERM INVESTMENT SECURITIES -- 2.8%
REGISTERED INVESTMENT COMPANIES -- 2.8%
SSgA Money Market Fund (cost $11,951,508)..................... 11,951,508 11,951,508
------------
REPURCHASE AGREEMENTS -- 1.8%
Bank of America Securities LLC Joint Repurchase Agreement(13). $ 2,005,000 2,005,000
Barclays Capital, Inc. Joint Repurchase Agreement(13)......... 1,470,000 1,470,000
BNP Paribas SA Joint Repurchase Agreement(13)................. 1,470,000 1,470,000
Deutsche Bank AG Joint Repurchase Agreement(13)............... 1,690,000 1,690,000
UBS Securities LLC Joint Repurchase Agreement(13)............. 1,250,000 1,250,000
------------
TOTAL REPURCHASE AGREEMENTS (cost $7,885,000)................. 7,885,000
------------
TOTAL INVESTMENTS
(cost $453,675,858)(14)....................................... 103.9% 454,369,400
LIABILITIES IN EXCESS OF OTHER ASSETS........................... (3.9) (17,084,380)
----------- ------------
NET ASSETS...................................................... 100.0% $437,285,020
=========== ============
--------
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, 2013,
the aggregate value of these securities was $20,331,021, representing 4.6%
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, 2013.
(2) Based on the stated maturity, the weighted average to maturity of the loans
held in the portfolio will be approximately 66 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.
19
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
(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, 2013, the aggregate value of these
securities was $151,243, representing 0.0% 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 of interest and did not pay principal at maturity.
(9) Loan is in default of interest.
(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)As of December 31, 2013, the loan has not settled and as a result, the
interest rate is estimated based on information available.
(13)See Note 2 for details of the Joint Repurchase Agreement.
(14)See Note 6 for cost of investments on a tax basis.
(15)All or a portion of this holding is subject to unfunded loan commitments.
Interest rate will be determined at the time of funding. See Note 11.
(16)Subsequent to December 31, 2013, company has filed for Chapter 7 bankruptcy.
The following is a summary of the inputs used to value the Fund's net assets as
of December 31, 2013 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Assets:
Long-Term Investment Securities:
Loans:
Commercial Services & Supplies.. $ -- $ 24,407,497 $ 49,180 $ 24,456,677
Hotels, Restaurants & Leisure... -- 23,073,036 -- 23,073,036
Media........................... -- 32,530,444 190,081 32,720,525
Other Industries*............... -- 323,584,585 -- 323,584,585
U.S. Corporate Bonds & Notes..... -- 19,320,315 -- 19,320,315
Foreign Corporate Bonds & Notes.. -- 11,096,701 -- 11,096,701
Common Stocks:
Diversified Financial Services.. -- 129,810 -- 129,810
Media........................... -- -- 35,432 35,432
Preferred Securities............. -- -- 0 0
Membership Interest.............. -- -- 115,811 115,811
Warrants......................... -- -- 0 0
Short-Term Investments:
Registered Investment Companies.. 11,951,508 -- -- 11,951,508
Repurchase Agreements.............. -- 7,885,000 -- 7,885,000
----------- ------------ -------- ------------
TOTAL.............................. $11,951,508 $442,027,388 $390,504 $454,369,400
=========== ============ ======== ============
--------
* 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. There were no transfers between Levels during the reporting
period.
At the beginning and 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, 2013
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, LLC. (formerly 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 significant accounting policies consistently 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, 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
--------
* Effective upon the close of business on December 31, 2013, SunAmerica Asset
Management Corp. was reorganized as a Delaware limited liability company and
its name concurrently changed to SunAmerica Asset Management, LLC.
21
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
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
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 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 is 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,
2013 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 on 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
22
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
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 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
policies 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.
MASTER AGREEMENTS: The Fund has entered into Master Repurchase Agreements
("Master Agreements") with certain counterparties that govern repurchase
agreement transactions. The Master Agreements may contain provisions
regarding, among other things, the parties' general obligations,
representations, agreements, collateral requirements and events of default.
Collateral can be in the form of cash or securities as agreed to by the Fund
and applicable counterparty. The Master Agreements typically specify certain
standard termination events, such as failure of a party to pay or deliver,
credit support defaults and other events of default. Upon the occurrence of
an event of default, the other party may elect to terminate early and cause
settlement of all repurchase agreement transactions outstanding pursuant to
a particular Master Agreement, including the payment of any losses and costs
resulting from such early termination, as reasonably determined by the
terminating party. Any decision by one or more of the Fund's counterparties
to elect early termination could cause the Fund to accelerate the payment of
liabilities. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events.
23
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
As of December 31, 2013, the following tables represent financial assets and
liabilities (by type) on a gross basis and related collateral pledged for
financial instruments subject to master netting arrangements:
ASSETS:
-------
NET AMOUNTS
GROSS GROSS AMOUNTS OFFSET OF ASSETS PRESENTED
AMOUNTS OF IN THE STATEMENT OF IN THE STATEMENT OF
DESCRIPTION: RECOGNIZED ASSETS ASSETS AND LIABILITIES ASSETS AND LIABILITIES
------------ ----------------- ---------------------- ----------------------
Repurchase agreements,
subject to a master netting
arrangement or similar
arrangement................. $7,885,000 $ -- $7,885,000
========== ==== ==========
GROSS AMOUNTS NOT OFFSET IN THE
STATEMENT OF ASSETS AND LIABILITIES
- NET AMOUNT -----------------------------------
OF ASSETS
IN THE STATEMENT FINANCIAL COLLATERAL
COUNTERPARTY: OF ASSETS AND LIABILITIES INSTRUMENTS@ RECEIVED@ NET AMOUNT#
------------- ------------------------- ------------ ---------- -----------
Bank of America Securities LLC $2,005,000 ($2,005,000) -- --
Barclays Capital, Inc......... 1,470,000 (1,470,000) -- --
BNP Paribas SA................ 1,470,000 (1,470,000) -- --
Deutsche Bank AG.............. 1,690,000 (1,690,000) -- --
UBS Securities LLC............ 1,250,000 (1,250,000) -- --
---------- ------------ ---- ----
$7,885,000 $ (7,885,000) $ -- $ --
========== ============ ==== ====
-
@ For each respective counterparty, collateral received or (pledged) is
limited to an amount not to exceed 100% of the net amount of the
financial asset/liability in the table above.
# Net amount represents the net amount due from (due to) the
counterparty in the event of a default based on the contractual
set-off rights under the master netting arrangement.
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, 2013, 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......................... 1.48% $2,005,000
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, 2013, bearing interest at
a rate of 0.00% per annum, with a principal amount of $135,375,000, a
repurchase price of $135,375,008, and a maturity date of January 2, 2014.
The repurchase agreement is collateralized by the following:
24
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 1.38% 09/30/2018 $100,000,000 $99,250,000
U.S. Treasury Notes........... 2.38 02/28/2015 8,363,000 8,640,902
U.S. Treasury Notes........... 2.38 07/31/2017 29,207,000 30,820,687
As of December 31, 2013, the Fund held an undivided interest in a joint
repurchase agreement with Barclay's Capital, Inc.:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ----------
Senior Floating Rate Fund......................... 1.47% $1,470,000
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, 2013, bearing interest at a rate
of 0.01% per annum, with a principal amount of $99,945,000, a repurchase
price of $99,945,056, and a maturity date of January 2, 2014. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- ------------
U.S. Treasury Notes........... 2.00% 11/30/2020 $104,482,000 $102,053,838
As of December 31, 2013, the Fund held an undivided interest in a joint
repurchase agreement with BNP Paribas SA:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ----------
Senior Floating Rate Fund......................... 1.47% $1,470,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated December 31, 2013, bearing interest at a rate of 0.01%
per annum, with a principal amount of $100,000,000, a repurchase price of
$100,000,028, and a maturity date of January 2, 2014. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- ------------
U.S. Treasury Notes........... 1.75% 01/31/2014 $101,240,700 $102,124,531
As of December 31, 2013, the Fund held an undivided interest in a joint
repurchase agreement with Deutsche Bank AG:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ----------
Senior Floating Rate Fund......................... 1.47% $1,690,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated December 31, 2013, bearing interest at a rate of
0.01% per annum, with a principal amount of $115,000,000, a repurchase price
of $115,000,064, and a maturity date of January 2, 2014. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- ------------
U.S. Treasury Notes........... 0.25% 04/15/2016 $117,882,000 $117,327,955
25
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
As of December 31, 2013, the Fund held an undivided interest in a joint
repurchase agreement with UBS Securities LLC:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ----------
Senior Floating Rate Fund......................... 1.47% $1,250,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
UBS Securities LLC, dated December 31, 2013, bearing interest at a rate of
0.01% per annum, with a principal amount of $84,955,000, a repurchase price
of $84,955,047, and a maturity date of January 2, 2014. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 2.13% 12/31/2015 $84,075,000 $86,969,702
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 $809,619 for the year ended December 31, 2013, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $1,174,070 for the
year ended December 31, 2013, 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).
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, 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
2010-2012 or expected to be taken in the Fund's 2013 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
2010.
26
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS: In December 2011, the FASB issued Accounting
Standards Update ("ASU") No. 2011-11, "Disclosures about Offsetting Assets
and Liabilities", which was subsequently clarified in ASU 2013-01
"Clarifying the Scope of Disclosures about Offsetting Assets and
Liabilities" which was issued in January 2013. The amended Standard 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. All
required changes to accounting policies have been made in accordance with
ASU No. 2011-11 and No. 2013-01.
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, 2013 DECEMBER 31, 2012
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A ---------- ------------ ----------- ------------
Shares sold................. 14,522,838 $120,864,898 8,881,584 $ 72,332,575
Reinvested distributions.... 607,488 5,054,754 532,619 4,345,084
Shares redeemed............. (9,407,392) (78,252,775) (11,940,299) (97,056,449)
---------- ------------ ----------- ------------
Net increase (decrease).. 5,722,934 $ 47,666,877 (2,526,096) $(20,378,790)
========== ============ =========== ============
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2013 DECEMBER 31, 2012
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS C ---------- ------------ ----------- ------------
Shares sold................. 9,683,350 $80,521,886 3,562,608 $ 29,037,559
Reinvested distributions.... 633,446 5,267,346 606,703 4,944,604
Shares redeemed............. (5,217,008) (43,370,910) (5,225,785) (42,518,628)
---------- ------------ ----------- ------------
Net increase (decrease).. 5,099,788 $ 42,418,322 (1,056,474) $ (8,536,465)
========== ============ =========== ============
Note 4. Purchases and Sales of Securities
During the year ended December 31, 2013, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns were $418,639,878 and $322,955,441, 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.
27
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
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, 2013, the Fund incurred administration fees in the
amount of $775,753.
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, 2013,
SACS received fees (see Statement of Operations) based upon the
aforementioned rates. For the year ended December 31, 2013 SACS received
sales charges on Class A shares of $439,799, of which $151,716 was reallowed
to affiliated broker-dealers and $215,304 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, 2013, SACS received early withdrawal
charges of $46,251.
The Fund has entered into a Service Agreement with SunAmerica Fund Services,
Inc. ("SAFS") an affiliate of the Adviser. 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, 2013, 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, 2013
-------- -----------------
Class A....................... $370,497 $35,822
Class C....................... 482,722 44,984
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, 2013, SunAmerica waived fees and
reimbursed expenses as follows: Class A $567,050 and Class C $953,790.
28
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable, wash sales, and treatment of defaulted securities.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
----------------------------------------- ---------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2013 FOR THE YEAR ENDED DECEMBER 31, 2013 FOR THE YEAR ENDED DECEMBER 31, 2012
----------------------------------------- ------------------------------------- -------------------------------------
LONG-TERM GAINS/ UNREALIZED LONG-TERM LONG-TERM
ORDINARY CAPITAL AND OTHER APPRECIATION/ ORDINARY CAPITAL ORDINARY CAPITAL
INCOME LOSSES (DEPRECIATION) INCOME GAINS INCOME GAINS
-------- ----------------- -------------- ------------ --------- ------------ ---------
$-- $(56,717,145) $693,353 $14,790,675 $-- $14,866,282 $--
CAPITAL LOSS CARRYFORWARDS+. At December 31, 2013 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
$827,079 and unlimited long-term losses of $12,583,862.
--------
+ 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.
During the year ended December 31, 2013, the Senior Floating Rate Fund
utilized $1,740,565 of capital loss carryforwards to offset current year
capital gains.
For the year ended December 31, 2013, reclassifications were made to
increase accumulated net realized gain/(loss) by $11,693 decrease
accumulated net investment income (loss) by $(926) with an offsetting
adjustment to paid-in capital of $(10,767). The reclassifications arising
from book/tax differences were due primarily to investments in partnerships.
Unrealized appreciation and depreciation in the value of investments at
December 31, 2013 for federal income tax purposes were as follows:
Cost (tax basis)............................................ $453,676,047
============
Gross unrealized appreciation............................... $ 6,892,070
Gross unrealized depreciation............................... (6,198,717)
------------
Net unrealized appreciation................................. $ 693,353
============
Note 7. 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, 2013, the Fund had borrowings outstanding for 8 days under the
line of credit and incurred $449 in interest charges related to these
borrowings. The Fund's average amount of debt under the line of credit for
the days utilized was $1,456,555 at a weighted average interest rate of
1.38%. At December 31, 2013, there were no borrowings outstanding.
29
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2013 -- (CONTINUED)
Note 8. 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, 2013, the Fund did
not participate in this program.
Note 9. 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 10. Unfunded Loan Commitments
At December 31, 2013, the Fund had the following unfunded loan commitment
which could be extended at the option of the Borrower:
MATURITY PRINCIPAL
BORROWER TYPE DATE AMOUNT VALUE
-------- ------------ ---------- --------- -------
Power Buyer LLC............... Delayed Draw 05/06/2020 $71,565 $70,939
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, 2013, the results of its operations and
its cash flows 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, 2013 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, 2014
31
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2013
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. 76 Director, Sysco Corp. (1996
Age: 68 present to present); Director, Luby's
Inc. (1998 to present).
William F. Devin Director 1998- Retired. 76 Director, Boston Options
Age: 75 present Exchange (2001 to 2010).
Richard W. Grant Director 2011 to Retired. Prior to that, 27 None
Age: 68 Present attorney and Partner at
Morgan Lewis & Brockius
LLP (1989 to 2011).
Stephen J. Gutman Director 2001- Senior Vice President and 27 None
Age: 70 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 27 Chairman of the Board,
Age: 66 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 76 None
Age: 60 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, 2013 -- (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
Age: 45 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
Age: 47 present SunAmerica (2004 to
present).
Gregory N. Bressler Secretary 2005- Senior Vice President and N/A N/A
Age: 47 Present General Counsel,
SunAmerica (2005 to
present).
James Nichols Vice 2006- Director, President and N/A N/A
Age: 47 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
Age: 57 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).
Kathleen D. Fuentes Chief Legal 2013- Vice President and Deputy N/A N/A
Age: 44 Officer and Present General Counsel (2006-
Assistant Present)
Secretary
Gregory R. Kingston Vice 2002- Vice President, SunAmerica N/A N/A
Age: 48 President present (2001 to present)
and
Assistant
Treasurer
33
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2013 -- (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
Age: 60 President present General Counsel,
and SunAmerica (2005 to
Assistant present).
Secretary
Thomas D. Peeney Assistant 2013 to Vice President, Assistant N/A N/A
Age: 40 Secretary present General Counsel
SunAmerica (2013 to
Present); Attorney, Paul
Hastings LLP (2006-2013)
Diedre L. Shepherd Assistant 2008 to Assistant Vice President, N/A N/A
Age: 38 Treasurer Present SunAmerica (2008 to
present)
Matthew J. Hackethal Anti-Money 2006- Chief Compliance Officer, N/A N/A
Age: 42 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 (2 funds), SunAmerica Income Funds (4 funds), SunAmerica Series,
Inc. (4 portfolios), Anchor Series Trust (8 portfolios), the Fund, (1
fund), SunAmerica Series Trust (40 portfolios), SunAmerica Specialty
Series (7 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, 2013. The information necessary to complete your income
tax returns is included with your Form 1099-DIV, which will be mailed to
shareholders in early 2014.
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 4.89% for the annual period
ended December 31, 2013, modestly underperforming its benchmark, the S&P/LSTA
Leveraged Loan Index ("LLI")*, which returned 5.29% during the same period.
Detracting from the Fund's relative performance was its slightly lesser
positioning in loans rated CCC 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, underweighted
allocations to the wireline and media non-cable industries, which outpaced the
LLI during the annual period, and an overweight position in the entertainment
industry, 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 included those of submarine sandwich shop
chain Quiznos, business event and publications provider Advanstar
Communications, mobile communications provider NII Holdings, oil and gas
exploration and production company Denbury Resources and sports team owner and
operator Hicks Sports Group.
On the positive side, contributing to the Fund's relative performance, albeit
modestly, was its underweight position in higher quality loans, which as
indicated, lagged the performance of lower rated loans during the annual
period. Overweighted allocations to the energy and technology industries
boosted the Fund's relative results, as these market segments outperformed 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, semiconductor device manufacturer Freescale
Semiconductor, casino resorts operator and gaming company Caesars
Entertainment, communications products and services provider for deaf and
hard-of-hearing individuals Sorenson Communications and workforce management
software and services company Kron Ad Beograd.
--------
Past performance is no guarantee of future results.
*The S&P/LSTA LEVERAGED LOAN INDEX (LLI) reflects the market-weighted
performance of U.S. dollar-denominated institutional leveraged loan portfolios.
The LLI is the only domestic leveraged loan index that utilizes real-time
market weightings, spreads and interest payments. Indices are not managed and
an investor cannot invest directly into an index.
Securities listed may or may not be a part of current portfolio construction.
The Fund is not a money market fund and its net asset value may fluctuate.
Investments in loans involve certain risks including nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of an active trading market, in certain cases, which
may impair the Fund's ability to obtain full value for loans sold. The Fund may
invest all or substantially all of its assets in loans or other securities
(e.g. unsecured loans or high yield 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 $14,293. The same amount invested in securities
mirroring the performance of the S&P/LSTA Leveraged Loan Index++ would be
valued at $16,704, while the Barclays U.S. Aggregate Bond Index** would be
valued at $15,599.
[CHART]
Senior Floating S&P/LSTA Leveraged Barclays US Aggregate
Rate Class C Loan Index++ Bond Index**
--------------- ------------------- ----------------------
12/31/2002 $10,000 $10,000.00 $10,000.00
1/31/2003 10,113 10,086.20 10,080.47
2/28/2003 10,127 10,117.87 10,189.54
3/31/2003 10,148 10,154.40 10,265.92
4/30/2003 10,215 10,204.15 9,998.78
5/31/2003 10,219 10,215.68 9,958.76
6/30/2003 10,254 10,279.12 10,015.03
7/31/2003 10,278 10,312.74 10,114.31
8/31/2003 10,270 10,330.89 10,307.26
9/30/2003 10,295 10,373.76 10,335.21
10/31/2003 10,335 10,426.15 10,421.87
11/30/2003 10,376 10,472.86 10,338.74
12/31/2003 10,408 10,516.42 10,433.89
1/31/2004 10,451 10,558.91 10,499.36
2/29/2004 10,503 10,615.61 10,437.44
3/31/2004 10,538 10,659.77 10,383.78
4/30/2004 10,518 10,652.20 10,524.30
5/31/2004 10,509 10,658.38 10,638.16
6/30/2004 10,569 10,727.45 10,696.17
7/31/2004 10,640 10,808.87 10,598.88
8/31/2004 10,704 10,873.51 10,734.75
9/30/2004 10,733 10,917.76 10,624.08
10/31/2004 10,756 10,951.17 10,540.04
11/30/2004 10,801 10,992.35 10,586.68
12/31/2004 10,850 11,050.39 10,687.27
1/31/2005 10,924 11,126.85 10,687.92
2/28/2005 10,994 11,197.29 10,723.37
3/31/2005 11,072 11,265.03 10,618.16
4/30/2005 11,128 11,320.00 10,598.94
5/31/2005 11,140 11,348.42 10,587.59
6/30/2005 11,174 11,380.31 10,610.06
7/31/2005 11,226 11,444.83 10,753.49
8/31/2005 11,301 11,515.33 10,918.14
9/30/2005 11,361 11,577.17 11,014.04
10/31/2005 11,447 11,653.93 11,086.91
11/30/2005 11,484 11,715.69 11,215.56
12/31/2005 11,560 11,798.87 11,150.44
1/31/2006 11,657 11,901.89 11,145.84
2/28/2006 11,736 11,983.71 11,317.72
3/31/2006 11,772 12,031.60 11,318.08
4/30/2006 11,844 12,103.08 11,379.12
5/31/2006 11,903 12,176.76 11,292.83
6/30/2006 11,924 12,203.91 11,259.45
7/31/2006 11,541 11,795.36 11,353.38
8/31/2006 11,554 11,822.79 11,492.54
9/30/2006 11,731 12,053.80 11,579.69
10/31/2006 11,807 12,168.87 11,683.73
11/30/2006 11,610 11,999.97 11,893.82
12/31/2006 11,609 12,037.47 11,927.25
1/31/2007 11,189 11,648.66 12,127.65
2/28/2007 10,893 11,356.49 12,144.43
3/31/2007 10,834 11,346.27 12,185.86
4/30/2007 11,196 11,766.60 12,160.41
5/31/2007 11,337 11,877.23 12,071.23
6/30/2007 11,379 11,906.90 12,061.55
7/31/2007 11,209 11,815.87 12,051.69
8/31/2007 11,185 11,800.44 12,166.03
9/30/2007 10,458 11,074.71 12,002.64
10/31/2007 8,749 9,610.95 11,719.33
11/30/2007 7,727 8,793.53 12,100.78
12/31/2007 7,148 8,534.53 12,552.28
1/31/2008 7,569 9,166.27 12,441.50
2/29/2008 7,508 9,237.71 12,394.52
3/31/2008 7,490 9,370.96 12,566.83
4/30/2008 8,409 10,185.83 12,626.97
5/31/2008 9,100 10,807.26 12,718.53
6/30/2008 9,691 11,281.00 12,790.82
7/31/2008 10,188 11,815.37 12,997.18
8/31/2008 10,485 12,082.93 13,131.75
9/30/2008 10,892 12,469.38 13,269.72
10/31/2008 11,092 12,538.42 13,335.26
11/30/2008 11,150 12,570.68 13,507.88
12/31/2008 11,455 12,940.22 13,296.68
1/31/2009 11,773 13,204.34 13,499.83
2/28/2009 11,780 13,242.26 13,550.23
3/31/2009 12,053 13,540.45 13,533.61
4/30/2009 12,235 13,739.49 13,674.50
5/31/2009 11,974 13,430.04 13,789.51
6/30/2009 11,891 13,367.33 14,005.76
7/31/2009 12,050 13,572.86 14,155.26
8/31/2009 12,105 13,618.85 14,337.37
9/30/2009 12,254 13,810.13 14,352.66
10/31/2009 12,421 14,026.38 14,403.73
11/30/2009 12,465 14,076.05 14,320.94
12/31/2009 12,602 14,250.81 14,166.52
1/31/2010 12,793 14,531.63 14,182.96
2/28/2010 12,890 14,598.91 14,218.45
3/31/2010 12,887 14,596.88 14,226.31
4/30/2010 12,944 14,689.91 14,406.93
5/31/2010 12,940 14,676.66 14,594.97
6/30/2010 12,890 14,622.35 14,552.22
7/31/2010 12,899 14,643.79 14,783.15
8/31/2010 12,271 13,998.76 14,999.15
9/30/2010 12,314 14,058.75 15,108.22
10/31/2010 12,613 14,465.21 15,124.48
11/30/2010 12,562 14,394.14 15,111.33
12/31/2010 12,610 14,467.51 15,277.42
1/31/2011 12,829 14,783.34 15,411.50
2/28/2011 12,917 14,897.35 15,407.98
3/31/2011 13,012 15,011.77 15,323.56
4/30/2011 13,089 15,122.62 15,493.48
5/31/2011 13,009 15,020.46 15,633.65
6/30/2011 13,086 15,124.16 15,639.79
7/31/2011 13,211 15,299.23 15,855.52
8/31/2011 13,340 15,471.18 15,865.91
9/30/2011 13,483 15,642.68 15,887.68
10/31/2011 13,499 15,692.15 15,918.93
11/30/2011 13,544 15,740.88 15,944.05
12/31/2011 13,643 15,864.65 15,921.34
1/31/2012 13,804 16,033.44 15,809.99
2/29/2012 13,814 16,067.05 15,889.28
3/31/2012 13,908 16,199.46 15,901.95
4/30/2012 14,033 16,296.12 16,062.90
5/31/2012 14,026 16,326.94 15,776.18
6/30/2012 13,935 16,230.51 15,532.18
7/31/2012 14,064 16,390.73 15,553.41
8/31/2012 14,057 16,384.58 15,473.87
9/30/2012 14,066 16,424.56 15,620.36
10/31/2012 14,178 16,544.18 15,746.64
11/30/2012 14,237 16,626.00 15,687.74
12/31/2012 14,293 16,703.59 15,599.09
Class A Class C
Senior -------------------------------------
Floating Average Average
Rate Annual Cumulative Annual Cumulative
Fund# Return Return+ Return Return+
- -------------------------------------
1 Year Return 1.16% 5.08% 3.89% 4.89%
-------------------------------------------------------
5 Year Return 14.31% 102.79% 14.87% 99.96%
-------------------------------------------------------
10 Year Return N/A N/A 3.64% 42.93%
-------------------------------------------------------
Since Inception* 2.98% 28.60% 4.00% 82.55%
-------------------------------------------------------
# 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 S&P/LSTA Leveraged Loan Index (LLI) reflects the
market-weighted performance of U.S. dollar-denominated
institutional leveraged loan portfolios. The LLI is the
only domestic leveraged loan index that utilizes
real-time market weightings, spreads and interest
payments.
** 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.
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, 2013, the
SunAmerica Senior Floating Rate Class C returned 3.89%
compared to 5.29% for the S&P/LSTA Leveraged Loan Index
and (2.02)% for the Barclays U.S. Aggregate Bond 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
Secretary charge upon request, by Commission's Public
Gregory R. Kingston, calling (800) 858-8850. Refer-ence Room in
Vice President and This in-formation is also Washington, DC
Assistant Treasurer available from the EDGAR (information on the
Nori L. Gabert, Vice database on the U.S. operation of the Public
President and Secu-rities and Exchange Reference Room may be
Assistant Secretary Commission's website at ob-tained by calling
Thomas D. Peeney, http://www.sec.gov. 1-800-SEC-0330).
Assistant Secretary
Kathleen Fuentes, Chief DELIVERY OF SHAREHOLDER PROXY VOTING RECORD ON
Legal Officer and 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, LLC. 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.
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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 - 12/13
[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 2013, 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:
2012 2013
------- -------
(a) Audit Fees $90,569 $93,285
(b) Audit-Related Fees $ 0 $ 0
(c) Tax Fees $13,122 $12,722
(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:
2012 2013
---- ----
(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 2012 and 2013 were $66,712 and $58,704, 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 10, 2014
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 10, 2014
By: /s/ Donna M. Handel
------------------------------------
Donna M. Handel
Treasurer
Date: March 10, 2014