================================================================================
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
----------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
Date of fiscal year end: December 31
Date of reporting period: June 30, 2015
================================================================================
Item 1. Reports to Stockholders
[GRAPHIC]
SEMI-ANNUAL REPORT 2015
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
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY
AGREEMENTS.................................................. 32
JUNE 30, 2015 SEMI-ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited)
Dear Shareholders:
We are pleased to present this semi-annual report for the SunAmerica Senior
Floating Rate Fund, Inc. (the "Fund") for the six months ended June 30, 2015.
The semi-annual period was a volatile one in the fixed income markets. During
the first quarter of 2015, global government bond yields declined, and credit
spreads tightened as central banks stepped up their efforts to ward off
deflation and revive growth. Nevertheless, market volatility was high.
Investors agonized over when the U.S. Federal Reserve (the "Fed") would begin
to hike rates. Oil prices extended their decline, heightening concerns about
select segments of the economy, and worries about a potential Greek exit from
the Eurozone resurfaced. Geopolitical concerns surrounding the Iran nuclear
negotiations and the Saudi Arabia-led military campaign in Yemen also supported
inflows to perceived safe-haven assets. The U.S. dollar gained sharply versus
most currencies.
Volatility surged across global markets in the second quarter of 2015, as
positive economic growth, especially in developed economies, and accommodative
central bank policies supported markets, and the risk of a Greek exit from the
Eurozone rose considerably. Government bond yields moved sharply higher as
economic outlooks brightened in the U.S. and Europe, global deflation fears
eased, and the Fed appeared on track to raise interest rates later this year.
Greece took center stage at the end of the semi-annual period after debt
negotiations broke down, and the country defaulted on its payments to the
International Monetary Fund, triggering a risk-averse tone throughout global
financial markets. Most of the major fixed income sectors posted negative
returns as government bond yields rose.
Amidst this backdrop, floating rate loans, as represented by the S&P/LSTA
Leveraged Loan Index (LLI)/*/, returned 2.83% during the semi-annual period
ended June 30, 2015. The first quarter of 2015 saw the sector's strongest
quarterly return since the first quarter of 2013. While the S&P/LSTA LLI's
returns were more modest in the second quarter of 2015, it still posted a solid
return relative to other fixed income sectors as rates sold off. Indeed, for
the semi-annual period overall, the S&P/LSTA LLI outperformed the broad U.S.
fixed income market, as represented by the Barclays U.S. Aggregate Bond
Index/*/, which returned -0.10% for the same six-month period ended June 30,
2015.
In a continuation from 2014, credit quality degraded slightly during the first
half of 2015 with the entry of some lower-quality first-time issuers, but the
underlying credit fundamentals of bank loan issuers remained strong. Bank loan
mutual funds experienced withdrawals totaling net outflows of $7.6 billion
during the first half of 2015.+ However, technicals became more supportive
toward the end of the semi-annual period as bank loan mutual fund flows began
to turn positive. Also, issuance of collateralized loan obligations (CLOs), one
of the main sources of demand for bank loans, remained robust, with $57 billion
in new CLOs issued during the first six months of 2015./**/
On the following pages, you will find financial statements and portfolio
information for the Fund for the semi-annual period ended June 30, 2015.
2
JUNE 30, 2015 SEMI-ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited) (continued)
As always, we remain diligent in the management of your assets. We value your
ongoing confidence in us and look forward to serving your investment needs in
the future. 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.
Sincerely,
THE SUNAMERICA SENIOR FLOATING RATE FUND PORTFOLIO MANAGER
Jeffrey W. Heuer
Wellington Management Company LLP
--------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
*The S&P/LSTA LEVERAGED LOAN INDEX (LLI) reflects the market-weighted
performance of U.S. dollar-denominated institutional leveraged loan portfolios.
The LLI is the only domestic leveraged loan index that utilized real-time
market weightings, spreads and interest payments. The BARCLAYS U.S. AGGREGATE
BOND INDEX represents securities that are U.S. domestic, taxable and dollar
denominated. The index covers components for government and corporate
securities, mortgage pass-through securities and asset-backed securities.
Indices are not managed and an investor cannot invest directly into an index.
+Source: Lipper, Inc.
**Source: Wellington Management
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 -- JUNE 30, 2015 -- (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 account
maintenance fees, and other Fund expenses. The example set forth below is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in
other mutual funds. The Example is based on an investment of $1,000 invested at
January 1, 2015 and held until June 30, 2015.
ACTUAL EXPENSES
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended June 30, 2015" to estimate the expenses you paid on your account
during this period. The "Expenses Paid During the Six Months Ended June 30,
2015" column and the "Annualized Expense Ratio" column do 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 June 30, 2015" column and the "Annualized Expense Ratio" column do
not include administrative or other 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 June 30, 2015" column would have
been higher and the "Ending Account Value" column 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 annual rate of return of 5% 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 this Fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds. The "Expenses Paid During the Six Months Ended June 30, 2015"
column and the "Annualized Expense Ratio" column do 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 June 30, 2015" column and the "Annualized Expense Ratio" column do
not include administrative or other 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 June 30, 2015" column would have
been higher and the "Ending Account Value" column 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 -- JUNE 30, 2015 -- (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 ANNUAL RETURN AT SIX MONTHS ENDED
AT JANUARY 1, 2015 JUNE 30, 2015 JUNE 30, 2015* AT JANUARY 1, 2015 JUNE 30, 2015 JUNE 30, 2015*
------------------ ------------- ---------------- ------------------ ----------------- ----------------
Senior Floating
Rate Fund#
Class A.......... $1,000.00 $1,028.46 $7.29 $1,000.00 $1,017.60 $7.25
Class C.......... $1,000.00 $1,025.67 $8.79 $1,000.00 $1,016.12 $8.75
ANNUALIZED
EXPENSE
RATIO*
----------
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 181 days then divided
by 365 days (to reflect the one-half year period). These ratios do not
reflect transaction costs, including sales charges on purchase payments,
contingent deferred sales charges, small account fees 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 a portion of
or all of the fees and assumed a portion of or all expenses for the Fund. As
a result, if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended June 30,
2015" and the "Annualized Expense Ratio" would have been higher.
5
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- JUNE 30, 2015 -- (UNAUDITED)
ASSETS:
Investments at value (unaffiliated)*............................................ $351,150,484
Repurchase agreements (cost approximates value)................................. 3,495,000
------------
Total investments.............................................................. 354,645,484
------------
Receivable for:
Fund shares sold............................................................... 485,662
Dividends and interest......................................................... 2,300,282
Investments sold............................................................... 7,101,530
Prepaid expenses and other assets............................................... 5,186
Due from investment adviser for expense reimbursements/fee waivers.............. 114,234
Unrealized appreciation on forward foreign currency contracts................... 2,088
------------
Total assets................................................................... 364,654,466
------------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................... 941,031
Investments purchased.......................................................... 18,119,225
Investment advisory and management fees........................................ 240,874
Distribution and account maintenance fees...................................... 165,744
Administration fees............................................................ 56,676
Transfer agent fees and expenses............................................... 64,866
Directors' fees and expenses................................................... 1,542
Other accrued expenses......................................................... 205,939
Dividends payable............................................................... 253,091
------------
Total liabilities.............................................................. 20,048,988
------------
Net Assets................................................................... $344,605,478
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value.................................................... $ 425,324
Additional paid-in capital...................................................... 412,320,727
------------
412,746,051
Accumulated undistributed net investment income (loss).......................... (233,362)
Accumulated undistributed net realized gain (loss) on investments and foreign
exchange transactions.......................................................... (57,922,538)
Unrealized appreciation (depreciation) on investments........................... (9,986,761)
Unrealized foreign exchange gain (loss) on other assets and liabilities......... 2,088
------------
Net Assets................................................................... $344,605,478
============
CLASS A:
Net assets...................................................................... $142,690,523
Shares outstanding.............................................................. 17,604,542
Net asset value and redemption price per share.................................. $ 8.11
Maximum sales charge (3.75% of offering price).................................. 0.32
------------
Maximum offering price to public................................................ $ 8.43
============
CLASS C:
Net assets...................................................................... $201,914,955
Shares outstanding.............................................................. 24,927,891
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charges).................................. $ 8.10
============
*COST
Investment securities (unaffiliated)........................................... $361,137,245
============
See Notes to Financial Statements
6
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF OPERATIONS -- FOR THE SIX MONTHS ENDED JUNE 30, 2015 --
(UNAUDITED)
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $ 9,313,164
Dividends (unaffiliated).......................................................... 6,183
Facility and other fee income (Note 2)............................................ 523,919
-----------
Total investment income........................................................ $ 9,843,266
-----------
EXPENSES:
Investment advisory and management fees........................................... 1,489,497
Administration fees............................................................... 350,470
Distribution and account maintenance fees:
Class A......................................................................... 250,153
Class C......................................................................... 778,220
Transfer agent fees and expenses:
Class A......................................................................... 162,023
Class C......................................................................... 232,476
Registration fees:
Class A......................................................................... 18,548
Class C......................................................................... 22,355
Accounting service fees........................................................... 13,399
Custodian and accounting fees..................................................... 46,328
Reports to shareholders........................................................... 46,550
Audit and tax fees................................................................ 64,435
Legal fees........................................................................ 13,636
Directors' fees and expenses...................................................... 28,516
Interest expense.................................................................. 1,356
Other expenses.................................................................... 38,776
-----------
Total expenses before fee waivers and expense reimbursements................... 3,556,738
Fees waived and expenses reimbursed by investment adviser (Note 5)............. (704,543)
-----------
Net expenses................................................................... 2,852,195
-----------
Net investment income (loss)...................................................... 6,991,071
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)............................ (1,034,669)
Net realized foreign exchange gain (loss) on other assets and liabilities......... 3,559
-----------
Net realized gain (loss) on investments and foreign currencies.................... (1,031,110)
-----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated).... 3,430,170
Change in unrealized foreign exchange gain (loss) on other assets and liabilities. 2,088
-----------
Net unrealized gain (loss) on investments and foreign currencies.................. 3,432,258
-----------
Net realized and unrealized gain (loss) on investments............................ 2,401,148
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $ 9,392,219
===========
See Notes to Financial Statements
7
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE
SIX MONTHS
ENDED FOR THE YEAR
JUNE 30, ENDED
2015 DECEMBER 31,
(UNAUDITED) 2014
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)......................................... $ 6,991,071 $ 15,059,817
Net realized gain (loss) on investments and foreign currencies....... (1,031,110) (174,093)
Net unrealized gain (loss) on investments and foreign currencies..... 3,432,258 (14,110,473)
------------ ------------
Net Increase (decrease) in net assets resulting from operations....... 9,392,219 775,251
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)...................................... (2,980,479) (6,863,837)
Net investment income (Class C)...................................... (4,015,377) (8,185,035)
------------ ------------
Total distributions to shareholders................................... (6,995,856) (15,048,872)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS (NOTE 3)................................................ (25,930,799) (54,871,485)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... (23,534,436) (69,145,106)
NET ASSETS:
Beginning of period................................................... 368,139,914 437,285,020
------------ ------------
End of period+........................................................ $344,605,478 $368,139,914
============ ============
+Includes accumulated undistributed net investment income (loss)...... $ (233,362) $ (228,577)
============ ============
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
-------
12/31/10 $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
12/31/14 8.34 0.31 (0.29) 0.02 (0.31) -- (0.31) 8.05 0.20 150,966 1.45
06/30/15(5) 8.05 0.17 0.06 0.23 (0.17) -- (0.17) 8.11 2.85 142,691 1.45(4)
CLASS C
-------
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
12/31/14 8.34 0.29 (0.30) (0.01) (0.28) -- (0.28) 8.05 (0.10) 217,174 1.75
06/30/15(5) 8.05 0.16 0.05 0.21 (0.16) -- (0.16) 8.10 2.57 201,915 1.75(4)
RATIO OF
NET
INVESTMENT
INCOME TO
PERIOD AVERAGE PORTFOLIO
ENDED NET ASSETS(3) TURNOVER
----------- ------------- ---------
12/31/10 4.34% 41%
12/31/11 4.27 63
12/31/12 4.41 61
12/31/13 3.98 84
12/31/14 3.73 65
06/30/15(5) 4.17(4) 26
12/31/10 4.03% 41%
12/31/11 4.02 63
12/31/12 4.12 61
12/31/13 3.68 84
12/31/14 3.44 65
06/30/15(5) 3.87(4) 26
--------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3)Net of the following expense waivers and/or reimbursements, if applicable
(based on average daily net assets) (See Note 5):
12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15(4)(5)
-------- -------- -------- -------- -------- --------------
Class A............. 0.38% 0.33% 0.35% 0.34% 0.32% 0.35%
Class C............. 0.48 0.44 0.44 0.43 0.41 0.44
(4)Annualized
(5)Unaudited
See Notes to Financial Statements
9
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO PROFILE -- JUNE 30, 2015 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Media....................................................... 8.8%
Health Care Providers & Services............................ 6.4
Hotels, Restaurants & Leisure............................... 5.9
Commercial Services & Supplies.............................. 5.7
Specialty Retail............................................ 5.5
Software.................................................... 5.4
Oil, Gas & Consumable Fuels................................. 5.2
Pharmaceuticals............................................. 3.9
Chemicals................................................... 3.7
IT Services................................................. 3.6
Food & Staples Retailing.................................... 3.5
Insurance................................................... 3.3
Diversified Telecommunication Services...................... 2.5
Diversified Financial Services.............................. 2.5
Semiconductors & Semiconductor Equipment.................... 2.2
Machinery................................................... 2.1
Containers & Packaging...................................... 2.1
Energy Equipment & Services................................. 2.1
Food Products............................................... 1.8
Metals & Mining............................................. 1.8
Auto Components............................................. 1.6
Health Care Equipment & Supplies............................ 1.2
Real Estate Management & Development........................ 1.2
Industrial Conglomerates.................................... 1.1
Registered Investment Companies............................. 1.1
Multi Utilities............................................. 1.0
Paper & Forest Products..................................... 1.0
Internet & Catalog Retail................................... 1.0
Repurchase Agreements....................................... 1.0
Construction Materials...................................... 1.0
Road & Rail................................................. 1.0
Wireless Telecommunication Services......................... 1.0
Multiline Retail............................................ 0.9
Air Freight & Logistics..................................... 0.8
Consumer Finance............................................ 0.8
Aerospace & Defense......................................... 0.7
Professional Services....................................... 0.7
Industrial Power Producers & Energy Traders................. 0.6
Building Products........................................... 0.6
Capital Markets............................................. 0.6
Tech Hardware, Storage & Peripheral......................... 0.6
Communications Equipment.................................... 0.5
Life Sciences Tools & Services.............................. 0.5
Biotechnology............................................... 0.5
Internet Software & Services................................ 0.5
Real Estate Investment Trusts............................... 0.4
Leisure Equipment & Products................................ 0.4
Construction & Engineering.................................. 0.4
Electronic Equipment, Instruments & Components.............. 0.3
Automobiles................................................. 0.3
Airlines.................................................... 0.3
Distributors................................................ 0.3
Health Care Technology...................................... 0.3
Banks....................................................... 0.3
Electrical Equipment........................................ 0.2
Gas Utilities............................................... 0.2
-----
102.9%
=====
CREDIT QUALITY+#
BBB......................................................... 0.3%
BBB-........................................................ 2.3
BB+......................................................... 5.2
BB.......................................................... 9.7
BB-......................................................... 16.5
B+.......................................................... 19.6
B........................................................... 20.9
B-.......................................................... 11.7
CCC+........................................................ 8.4
CCC......................................................... 1.3
CCC-........................................................ 0.3
D........................................................... 0.8
Not Rated@.................................................. 3.0
-----
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 -- JUNE 30, 2015 -- (UNAUDITED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT** (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 92.5%
AEROSPACE & DEFENSE -- 0.7%
B.E. Aerospace, Inc............................ BTL-B Ba2 BB+ 4.00% 12/16/2021 $ 999,975 $ 1,004,975
DigitalGlobe, Inc.............................. BTL-B Ba2 BBB- 3.75 01/31/2020 994,257 994,049
Transdigm Group, Inc........................... BTL-C Ba3 B 3.75 02/28/2020 868,965 861,724
-----------
2,860,748
-----------
AIR FREIGHT & LOGISTICS -- 0.8%
Air Medical Group Holdings LLC................. BTL-B B2 B 4.50 04/06/2022 3,000,000 2,976,249
-----------
AIRLINES -- 0.3%
Delta Air Lines, Inc........................... BTL Baa3 BBB- 3.25 04/20/2017 1,074,172 1,071,218
-----------
AUTO COMPONENTS -- 1.6%
Affinia Group.................................. BTL-B2 B2 B 4.75 04/27/2020 938,745 939,331
Goodyear Tire & Rubber Co...................... 2nd Lien Ba1 BBB- 3.75 04/30/2019 416,667 417,188
MPG Holdco I, Inc.............................. BTL-B Ba3 NR 3.75 10/20/2021 1,225,827 1,223,263
TI Group Automotive Systems LLC................ BTL Ba3 NR 4.50 06/24/2022 1,750,000 1,752,188
UCI International, Inc......................... BTL-B B1 B- 5.50 07/26/2017 1,164,702 1,153,055
-----------
5,485,025
-----------
AUTOMOBILES -- 0.3%
Chrysler Group LLC............................. BTL-B Ba1 BB+ 3.50 05/24/2017 1,083,876 1,081,553
-----------
BIOTECHNOLOGY -- 0.5%
Medpace, Inc................................... BTL B2 B+ 4.75 04/01/2021 1,610,566 1,613,251
-----------
BUILDING PRODUCTS -- 0.6%
Nortek, Inc.................................... BTL Ba3 BB- 3.50 10/30/2020 1,010,261 1,003,106
Summit Materials LLC........................... BTL B1 BB 4.25 06/24/2022 950,000 948,813
-----------
1,951,919
-----------
CAPITAL MARKETS -- 0.6%
AlixPartners LLC............................... BTL-B2 B1 B+ 4.00 07/10/2020 676,155 672,211
AlixPartners LLC............................... 2nd Lien Caa1 B- 9.00 07/09/2021 285,000 287,850
Walter Investment Management Co................ Tranche B B2 B+ 4.75 12/19/2020 999,079 943,298
-----------
1,903,359
-----------
CHEMICALS -- 3.7%
Al Chem & Cy SCA............................... BTL-B B1 B+ 4.50 10/03/2019 493,450 493,450
Al Chem & Cy SCA............................... BTL-B1 B1 B+ 4.50 10/03/2019 256,027 256,027
Chemours Co.................................... BTL-B Ba1 BBB- 3.75 05/12/2022 1,280,000 1,272,000
Gates Global, Inc.............................. BTL B2 B+ 4.25 07/05/2021 2,912,988 2,865,651
Ineos U.S. Finance LLC......................... BTL-B Ba3 BB- 3.75 05/04/2018 1,238,692 1,233,118
Ineos U.S. Finance LLC......................... BTL Ba3 BB- 4.25 03/31/2022 773,062 772,095
KP Germany Erste GmbH.......................... 1st Lien B1 B 5.00 04/22/2020 300,819 301,383
MacDermid, Inc................................. BTL-B2 B1 BB 4.75 06/07/2020 1,432,800 1,436,638
Minerals Technologies, Inc..................... BTL-B NR BB 3.75 05/09/2021 1,420,058 1,417,690
Univar, Inc.................................... BTL B2 BB- 4.25 07/01/2022 830,000 827,406
Univar, Inc.................................... BTL-B1 B2 BB- 5.00-7.65 06/30/2017 1,967,878 1,964,188
-----------
12,839,646
-----------
COMMERCIAL SERVICES & SUPPLIES -- 5.7%
ADS Waste Holdings, Inc........................ BTL B2 B+ 3.75 10/09/2019 974,995 962,564
ARG IH Corp.................................... BTL-B B3 B 4.75 11/15/2020 1,004,265 1,006,776
ATI Schools(5)(6)(8)(9)........................ BTL-B NR NR 8.25 12/30/2014 1,184,859 0
ATI Schools(5)(6)(8)(9)........................ BTL NR NR 13.25 06/30/2012 266,663 0
ATI Schools(5)(6)(8)(9)........................ BTL NR NR 13.25 06/30/2012 16,473 0
Audio Visual Services Group, Inc............... BTL-B B1 B+ 4.50 01/24/2021 2,852,927 2,845,795
Brand Energy and Infrastructure Services, Inc.. BTL-B B1 B 4.75 11/26/2020 3,391,179 3,310,109
Brickman Group Holdings, Inc................... BTL B2 B 4.00 12/18/2020 1,444,254 1,435,829
Brickman Group Holdings, Inc................... 2nd Lien Caa1 CCC+ 7.50 12/18/2021 1,340,000 1,340,670
Fly Funding II SARL............................ BTL Ba3 BBB- 3.50 08/06/2019 1,371,602 1,371,602
11
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT** (NOTE 2)
--------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (CONTINUED)
Peak 10, Inc......................................... 2nd Lien Caa2 CCC+ 8.25% 06/17/2022 $ 845,000 $ 814,016
Sedgwick CMS Holdings, Inc........................... 2nd Lien Caa2 CCC+ 6.75 02/28/2022 2,565,000 2,512,630
ServiceMaster Co..................................... BTL-B B1 B+ 4.25 07/01/2021 1,385,719 1,386,708
Waste Industries USA, Inc............................ BTL-B B1 BB- 4.25 02/27/2020 1,037,400 1,039,994
WCA Waste Systems, Inc............................... BTL B1 B+ 4.00 03/23/2018 1,649,588 1,637,216
-----------
19,663,909
-----------
COMMUNICATIONS EQUIPMENT -- 0.2%
CommScope, Inc....................................... BTL-B Ba2 BB 3.75 12/29/2022 705,000 703,899
-----------
CONSTRUCTION & ENGINEERING -- 0.4%
Pike Corp............................................ 1st Lien B2 B+ 5.50 12/22/2021 1,274,119 1,275,181
-----------
CONSTRUCTION MATERIALS -- 1.0%
Headwaters, Inc...................................... BTL-B B1 BB- 4.50 03/24/2022 1,875,000 1,877,344
Quikrete Companies, Inc.............................. 1st Lien B1 B+ 4.00 09/28/2020 955,240 954,841
Quikrete Companies, Inc.............................. 2nd Lien B3 B- 7.00 03/26/2021 565,895 568,017
-----------
3,400,202
-----------
CONSUMER FINANCE -- 0.8%
TransFirst Holdings, Inc............................. 1st Lien B2 B 4.75 11/12/2021 875,600 874,232
TransFirst Holdings, Inc............................. 2nd Lien Caa2 CCC+ 9.00 11/12/2022 700,000 700,350
Vantiv LLC........................................... BTL-B Ba3 BB+ 3.75 06/13/2021 1,033,181 1,035,442
-----------
2,610,024
-----------
CONTAINERS & PACKAGING -- 2.1%
Ardagh Packaging Finance PLC......................... BTL Ba3 B+ 4.00 12/17/2019 651,750 649,958
BWAY Holding Corp.................................... BTL-B B2 B- 5.50 08/14/2020 2,192,850 2,202,444
Klockner Pentaplast of America....................... BTL B1 B 5.00 04/28/2020 698,764 700,074
Mauser Holding GmbH.................................. 2nd Lien Caa2 CCC+ 8.75 07/31/2022 1,605,000 1,580,925
Novelis, Inc......................................... BTL-B Ba2 BB 4.00 06/02/2022 1,131,232 1,124,162
Tekni-Plex, Inc...................................... 2nd Lien Caa2 CCC+ 8.75 06/01/2023 1,095,000 1,093,631
-----------
7,351,194
-----------
DISTRIBUTORS -- 0.3%
ABC Supply Co., Inc.................................. BTL-B B1 BB+ 3.50 04/16/2020 1,007,112 1,003,545
-----------
DIVERSIFIED FINANCIAL SERVICES -- 1.8%
ION Trading Technologies, Ltd........................ 2nd Lien Caa1 B- 7.25 06/10/2022 2,345,000 2,339,138
Media General, Inc................................... BTL-B Ba3 BB+ 4.00 07/31/2020 895,024 894,185
Opal Acquisition, Inc................................ BTL-B B1 B 5.00 11/27/2020 864,122 848,731
Santander Asset Management........................... BTL Ba2 BB 4.25 12/17/2020 993,358 994,290
TransUnion LLC....................................... BTL B1 B+ 3.75 04/09/2021 1,005,203 995,151
-----------
6,071,495
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 2.2%
Altice Financing SA.................................. BTL B1 BB- 5.25 02/04/2022 680,000 683,966
Altice Financing SA.................................. BTL B1 B- 5.25 02/04/2022 EUR 335,000 373,941
Altice Financing SA.................................. BTL B1 BB- 5.50 07/02/2019 2,920,525 2,941,211
Level 3 Financing, Inc............................... BTL-B Ba2 BB 3.50 05/31/2022 1,300,000 1,289,844
Level 3 Financing, Inc............................... BTL-B2 Ba2 BB 4.00 08/01/2019 1,425,000 1,422,774
XO Communications, Inc............................... BTL B2 BB- 4.25 03/19/2021 866,948 864,997
-----------
7,576,733
-----------
ELECTRICAL EQUIPMENT -- 0.2%
WireCo WorldGroup, Inc............................... BTL-B Ba3 B+ 6.00 02/15/2017 625,271 624,098
-----------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 0.3%
Ortho Clinical Diagnostics SA........................ BTL B1 B 4.75 06/30/2021 1,227,538 1,201,111
-----------
ENERGY EQUIPMENT & SERVICES -- 1.9%
Drillships Financing Holding, Inc.................... BTL-B B2 B 5.50 07/25/2021 996,480 843,520
Pacific Drilling SA.................................. BTL-B B3 B+ 4.50 06/04/2018 818,300 659,413
12
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT** (NOTE 2)
---------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (CONTINUED)
Paragon Offshore, Ltd.................. BTL-B Ba3 B+ 3.75% 07/18/2021 $ 992,500 $ 754,300
Pinnacle Holdco SARL................... BTL B1 B+ 4.75 07/30/2019 1,018,665 921,892
Seadrill Partners Finco LLC............ BTL-B Ba3 BB- 4.00 02/21/2021 3,229,047 2,431,011
Shelf Drilling Midco, Ltd.............. BTL B1 B- 10.00 10/08/2018 1,240,000 892,800
-----------
6,502,936
-----------
FOOD & STAPLES RETAILING -- 3.5%
Albertson's Holdings LLC............... BTL-B4 Ba3 BB- 5.50 08/25/2021 4,618,425 4,638,367
BJ's Wholesale Club, Inc............... 1st Lien B3 B- 4.50 09/26/2019 1,077,820 1,077,140
Rite Aid Corp.......................... BTL B2 B+ 4.88 06/21/2021 2,230,000 2,229,304
Rite Aid Corp.......................... 2nd Lien B2 B+ 5.75 08/21/2020 1,055,000 1,063,791
Roundy's Supermarkets.................. BTL-B B2 B 5.75 03/03/2021 1,008,091 974,068
U.S. Foodservice....................... BTL B2 B- 4.50 03/31/2019 2,181,483 2,183,756
-----------
12,166,426
-----------
FOOD PRODUCTS -- 1.8%
H.J. Heinz Co.......................... BTL-B2 Ba1 BB+ 3.25 06/05/2020 1,008,423 1,008,171
Hearthside Food Solutions LLC.......... BTL B1 B 4.50 06/02/2021 1,727,550 1,727,507
Hostess Brands, Inc.................... BTL-B NR B+ 6.75 04/09/2020 752,813 765,987
Jacobs Douwe Egberts................... BTL-B Ba3 BB 4.25 07/23/2021 1,285,000 1,286,606
Pinnacle Operating Corp................ BTL-B2 B1 B+ 4.75 11/15/2018 1,400,562 1,399,687
-----------
6,187,958
-----------
GAS UTILITIES -- 0.2%
NGPL PipeCo LLC........................ BTL-B Caa2 CCC 6.75 09/15/2017 593,496 566,788
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 1.0%
Alere Inc.............................. BTL-B Ba3 B+ 4.25 06/18/2022 550,000 550,229
Immucor, Inc........................... BTL-B2 B1 B+ 5.00 08/17/2018 1,817,493 1,822,037
Sterigenics-Nordion Holdings LLC....... BTL-B B1 B 4.25 05/15/2022 1,180,000 1,180,000
-----------
3,552,266
-----------
HEALTH CARE PROVIDERS & SERVICES -- 5.8%
American Renal Holdings, Inc........... 1st Lien Ba3 B 4.50 09/22/2019 2,035,636 2,026,730
American Renal Holdings, Inc........... 2nd Lien Caa1 CCC+ 8.50 03/20/2020 1,879,617 1,870,219
Aspen Dental Management, Inc........... BTL-B B1 B 5.50 04/30/2022 1,300,000 1,302,167
CHS/Community Health Systems, Inc...... BTL-F Ba2 BB 3.53 12/31/2018 1,995,000 1,992,149
CHS/Community Health Systems, Inc...... BTL-G Ba2 BB 3.75 12/31/2019 994,464 994,049
CHS/Community Health Systems, Inc...... BTL-H Ba2 BB 4.00 01/27/2021 1,829,786 1,830,804
Healogics, Inc......................... 1st Lien B2 B 5.25 07/01/2021 1,003,122 997,479
Inventiv Health, Inc................... BTL-B4 B2 B- 7.75 05/15/2018 1,100,000 1,096,791
MPH Acquisition Holdings LLC........... BTL B1 B+ 3.75 03/31/2021 1,051,136 1,044,731
Surgery Center Holdings, Inc........... 1st Lien B1 B 5.25 11/03/2020 1,223,850 1,217,731
Surgery Center Holdings, Inc........... 2nd Lien Caa2 CCC+ 8.50 11/03/2021 3,000,000 2,985,000
U.S. Renal Care, Inc................... 1st Lien Ba3 B 4.25 07/03/2019 1,118,338 1,116,241
U.S. Renal Care, Inc................... 2nd Lien Caa1 CCC+ 8.50 01/03/2020 735,000 740,513
U.S. Renal Care, Inc................... 2nd Lien Caa1 CCC+ 10.25 12/27/2019 666,000 670,995
-----------
19,885,599
-----------
HEALTH CARE TECHNOLOGY -- 0.3%
IMS Health, Inc........................ BTL-B Ba3 BB- 3.50 03/17/2021 989,247 981,828
-----------
HOTELS, RESTAURANTS & LEISURE -- 5.9%
1011778 B.C. ULC....................... BTL-B Ba3 B+ 3.75 12/10/2021 1,533,136 1,531,219
Aristocrat Leisure, Ltd................ BTL-B Ba2 BB 4.75 10/20/2021 1,953,846 1,960,630
Caesars Entertainment Operating Co.,
Inc.+(7)............................. BTL-B6 NR D 1.50 03/01/2017 3,023,792 2,704,673
Caesars Growth Properties Holdings LLC. BTL B2 B+ 6.25 05/08/2021 1,086,891 918,423
California Pizza Kitchen, Inc.......... BTL B2 B- 5.25 03/29/2018 1,456,520 1,433,762
CityCenter Holdings LLC................ BTL-B B2 BB- 4.25 10/16/2020 1,136,820 1,136,211
Four Seasons Holdings, Inc............. 2nd Lien Caa1 B- 6.25 12/27/2020 835,000 835,000
Hilton Worldwide Finance LLC........... BTL-B2 Ba2 BBB- 3.50 10/26/2020 1,617,655 1,616,082
13
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT** (NOTE 2)
-----------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (CONTINUED)
La Quinta Intermediate Holdings LLC............... BTL-B B1 BB 4.00% 04/14/2021 $1,151,168 $ 1,149,010
Lindblad Expeditons, Inc.......................... BTL B2 BB+ 5.50 06/17/2022 1,771,431 1,771,431
Lindblad Expeditons, Inc.......................... BTL B2 BB+ 5.50 06/17/2022 228,569 228,569
Scientific Games International, Inc............... BTL-B2 Ba3 BB- 6.00 10/01/2021 1,074,600 1,073,134
Station Casinos, Inc.............................. BTL-B B1 B+ 4.25 03/02/2020 2,086,327 2,082,975
Town Sports International Holdings, Inc........... BTL B3 B 4.50 11/15/2020 2,246,186 1,767,000
-----------
20,208,119
-----------
INDUSTRIAL CONGLOMERATES -- 1.1%
American Rock Salt Co. LLC........................ BTL-B B2 B 4.75 05/20/2021 1,762,200 1,760,549
American Rock Salt Co. LLC........................ 2nd Lien B2 B 4.75 05/20/2021 1,246,851 1,240,617
Filtration Group Corp............................. 1st Lien B1 B 4.25 11/21/2020 931,813 933,366
-----------
3,934,532
-----------
INDUSTRIAL POWER PRODUCERS & ENERGY TRADERS -- 0.3%
Calpine Corp...................................... BTL Ba3 BB 4.00 10/09/2019 1,007,312 1,005,895
-----------
INSURANCE -- 3.3%
Asurion Corp...................................... 1st Lien Ba3 B 5.00 05/24/2019 3,708,621 3,711,195
Asurion Corp...................................... 2nd Lien B3 CCC+ 8.50 03/03/2021 3,450,000 3,498,300
Compass Investments, Inc.......................... BTL B1 B 4.25 12/27/2019 1,122,755 1,122,053
Cooper, Gay, Swett & Crawford, Ltd................ 1st Lien B2 B- 5.00 04/16/2020 891,800 811,538
Cooper, Gay, Swett & Crawford, Ltd................ 2nd Lien Caa2 CCC 8.25 10/16/2020 1,430,000 1,201,200
National Financial Partners Corp.................. BTL-B B1 B 4.50 07/01/2020 1,160,936 1,159,484
-----------
11,503,770
-----------
INTERNET & CATALOG RETAIL -- 1.0%
Acosta, Inc....................................... BTL B1 B 4.25 09/26/2021 2,129,275 2,121,733
Lands' End, Inc................................... BTL-B B1 B+ 4.25 04/04/2021 1,450,578 1,382,884
-----------
3,504,617
-----------
INTERNET SOFTWARE & SERVICES -- 0.5%
Zayo Group LLC.................................... BTL-B Ba2 BB- 3.75 05/06/2021 1,622,821 1,609,129
-----------
IT SERVICES -- 3.3%
Ceridian Corp..................................... BTL-B2 Ba3 B- 4.50 09/15/2020 527,194 521,790
Evertec, Inc...................................... BTL-B B1 BB- 3.50 04/17/2020 597,800 588,833
First Data Corp................................... BTL-B B1 BB- 3.69 03/24/2018 5,718,681 5,697,236
First Data Corp................................... BTL B1 BB- 3.69 09/24/2018 2,170,000 2,162,314
First Data Corp................................... BTL-1 B1 BB- 3.94 06/23/2022 1,955,000 1,945,837
MoneyGram International, Inc...................... BTL-B B1 B+ 4.25 03/27/2020 420,398 397,801
-----------
11,313,811
-----------
LEISURE EQUIPMENT & PRODUCTS -- 0.4%
SRAM LLC.......................................... BTL-B B1 BB- 4.00-5.25 04/10/2020 1,320,481 1,317,180
-----------
LIFE SCIENCES TOOLS & SERVICES -- 0.5%
Pharmaceutical Product Development, Inc........... BTL-B Ba2 B+ 4.00 12/05/2018 1,656,379 1,654,050
-----------
MACHINERY -- 2.1%
Alliance Laundry Systems LLC...................... BTL B2 B 4.25 12/10/2018 702,284 703,162
Gardner Denver, Inc............................... BTL B1 B 4.25 07/30/2020 1,837,325 1,792,999
Harbor Freight Tools USA, Inc..................... BTL-B B1 BB- 4.75 07/26/2019 974,254 978,394
Husky International, Ltd.......................... 1st Lien B1 B 4.25 06/30/2021 457,371 455,198
Husky International, Ltd.......................... 2nd Lien Caa1 B- 7.25 06/30/2022 674,403 666,816
Paladin Brands Holding, Inc....................... BTL B2 BB- 6.75-7.75 08/16/2019 1,795,304 1,793,060
Rexnord Corp...................................... BTL-B B2 BB- 4.00 08/21/2020 1,001,339 997,584
-----------
7,387,213
-----------
14
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT** (NOTE 2)
---------------------------------------------------------------------------------------------------------------------------
MEDIA -- 7.9%
Advantage Sales & Marketing LLC..................... 1st Lien B1 B 4.25% 07/25/2021 $3,004,302 $ 2,987,136
Advantage Sales & Marketing LLC..................... 2nd Lien Caa1 CCC+ 7.50 07/25/2022 2,525,000 2,535,822
Delta 2 (Lux) SARL.................................. BTL-B3 B2 B 4.75 07/31/2021 4,894,124 4,862,009
Delta 2 (Lux) SARL.................................. 2nd Lien Caa2 CCC+ 7.75 07/31/2022 2,495,000 2,491,103
Getty Images, Inc................................... BTL-B B2 B- 4.75 10/18/2019 1,854,658 1,374,765
Hicks Sports Group+(7)(9)........................... BTL-B NR NR 6.75 12/22/2011 1,006,858 30,206
Hoyts Cinemas Group................................. 2nd Lien B3 CCC+ 8.25 11/20/2020 450,000 441,000
Interactive Data Corp............................... BTL B2 B+ 4.75 05/02/2021 3,083,375 3,089,798
ION Media Networks, Inc............................. BTL-B B1 B+ 4.75 12/18/2020 2,131,191 2,128,527
Numericable Finance & Co. SCA....................... BTL-B1 Ba3 B+ 4.50 05/21/2020 1,242,992 1,245,394
Numericable Finance & Co. SCA....................... BTL-B2 Ba3 B+ 4.50 05/21/2020 1,075,358 1,077,435
Salem Communications Corp........................... BTL-B B2 B 4.50 03/16/2020 831,133 826,458
Truven Health Analytics, Inc........................ BTL-B B1 B 4.50 06/06/2019 1,105,376 1,101,922
Univision Communications, Inc....................... BTL-C4 B2 B+ 4.00 03/01/2020 2,973,820 2,951,517
-----------
27,143,092
-----------
METALS & MINING -- 1.4%
Ameriforge Group, Inc............................... BTL B3 B+ 5.00 12/19/2019 928,890 773,301
Crosby Worldwide, Ltd............................... 1st Lien B1 B 3.75 11/23/2020 1,040,081 984,176
Dynacast International, Inc......................... BTL Ba3 B 4.50 01/30/2022 748,125 750,930
Fortescue Metals Group, Ltd......................... BTL Ba1 BB+ 3.75 06/30/2019 1,018,752 902,551
Signode Industrial Group U.S., Inc.................. BTL-B B1 B+ 3.75 05/01/2021 1,337,167 1,330,481
-----------
4,741,439
-----------
MULTI UTILITIES -- 1.0%
Energy Future Intermediate Holding Co. LLC(7)....... DIP NR NR 4.25 06/19/2016 1,215,000 1,216,012
Texas Competitive Electric Holdings Co. LLC+(7)(10). BTL NR NR 4.67 10/10/2017 4,174,956 2,390,162
-----------
3,606,174
-----------
MULTILINE RETAIL -- 0.7%
Dollar Tree, Inc.................................... BTL-B Ba1 BB+ 3.50 07/06/2022 1,349,241 1,348,678
Neiman Marcus Group, Inc............................ BTL-B B2 B 4.25 10/25/2020 1,089,763 1,082,580
-----------
2,431,258
-----------
OIL, GAS & CONSUMABLE FUELS -- 4.3%
American Energy Marcellus LLC....................... 1st Lien Ba3 CCC+ 5.25 08/04/2020 1,565,000 1,204,268
American Energy Marcellus LLC....................... 2nd Lien Caa1 CCC- 8.50 08/04/2021 835,000 442,550
Arch Coal, Inc...................................... BTL Caa1 B- 6.25 05/16/2018 1,723,367 1,178,352
Callon Petroleum Co................................. 2nd Lien NR NR 8.50 10/08/2021 1,620,000 1,599,750
Chief Exploration & Development LLC................. 2nd Lien NR NR 7.50 05/12/2021 1,785,000 1,684,594
Energy Transfer Equity LP........................... BTL Ba2 BB 4.00 12/02/2019 929,412 928,582
Philadelphia Energy Solutions LLC................... BTL-B B1 BB- 6.25 04/04/2018 933,513 931,179
Power Buyer LLC..................................... BTL B2 B+ 4.25 05/06/2020 993,067 990,584
Power Buyer LLC..................................... Delayed Draw B2 B+ 4.25 05/06/2020 53,296 53,030
Power Buyer LLC..................................... 2nd Lien Caa2 CCC+ 7.53 11/06/2020 1,670,000 1,644,950
Samson Investment Co................................ 2nd Lien Caa2 CCC- 5.00 09/25/2018 1,500,000 592,500
Templar Energy LLC.................................. 2nd Lien B3 B- 8.50 11/25/2020 1,825,000 1,355,063
Western Refining LP................................. BTL-B B1 BB- 4.25 11/12/2020 2,142,350 2,132,309
-----------
14,737,711
-----------
PAPER & FOREST PRODUCTS -- 0.3%
Exopack LLC......................................... BTL B1 B 4.50 05/08/2019 1,117,546 1,118,942
-----------
PHARMACEUTICALS -- 3.3%
Alkermes, Inc....................................... BTL-B Ba3 BB+ 3.50 09/18/2019 990,657 989,832
Catalent Pharma Solutions, Inc...................... BTL-B2 B1 BB 4.25 05/20/2021 2,447,441 2,449,888
Endo Luxembourg Finance Co.(16)..................... BTL-B Ba1 BB 3.75 06/11/2022 2,795,000 2,801,988
PRA Holdings, Inc................................... 1st Lien B1 B+ 4.50 09/23/2020 1,912,433 1,912,830
Valeant Pharmaceuticals International, Inc.......... BTL-F1 Ba1 BB+ 4.00 04/01/2022 3,138,559 3,135,706
-----------
11,290,244
-----------
15
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT** (NOTE 2)
------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL SERVICES -- 0.7%
Nexeo Solutions LLC............................ BTL-B1 B3 B 5.00% 09/08/2017 $1,472,054 $ 1,446,906
On Assignment, Inc............................. BTL Ba2 BB 3.75 05/19/2022 1,043,939 1,043,939
------------
2,490,845
------------
REAL ESTATE INVESTMENT TRUSTS -- 0.4%
Capital Automotive LP.......................... 2nd Lien B1 B- 6.00 04/30/2020 1,405,000 1,425,489
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 1.2%
DTZ US Borrower LLC............................ 1st Lien B1 B+ 5.50 11/04/2021 1,357,133 1,364,767
DTZ US Borrower LLC............................ 2nd Lien B3 B- 9.25 11/05/2022 1,085,000 1,086,809
Realogy Corp................................... CLTL Ba2 BB 0.12 10/10/2016 86,092 85,231
Realogy Corp................................... BTL Ba2 BB 3.75 03/05/2020 1,560,850 1,556,461
------------
4,093,268
------------
ROAD & RAIL -- 1.0%
Neff Rental LLC................................ 2nd Lien Caa1 B- 7.25 06/09/2021 1,782,757 1,763,815
Swift Transportation Co., Inc.................. BTL-B Ba2 BB+ 3.75 06/09/2021 1,609,625 1,612,308
------------
3,376,123
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 1.9%
Avago Technologies, Ltd........................ BTL-B Ba1 BBB- 3.75 05/06/2021 1,249,499 1,250,777
Entegris, Inc.................................. BTL-B Ba3 BB+ 3.50 04/30/2021 805,595 801,063
Freescale Semiconductor, Inc................... BTL-B4 B1 B 4.25 03/01/2020 2,987,177 2,989,044
Lattice Semiconductor Corp..................... 1st Lien Ba3 BB- 5.25 03/10/2021 1,496,250 1,498,120
------------
6,539,004
------------
SOFTWARE -- 5.1%
Epicore Software Co............................ 1st Lien B2 B 4.75 06/01/2022 2,060,000 2,051,847
Hyland Software, Inc........................... BTL B2 B 4.75 02/19/2021 2,091,934 2,094,549
Kronos, Inc.................................... BTL-C B1 B- 4.50 10/30/2019 3,597,862 3,594,264
Kronos, Inc.................................... 2nd Lien Caa2 CCC 9.75 04/30/2020 2,678,362 2,748,669
Lawson Software, Inc........................... BTL-B5 Ba3 B+ 3.75 06/03/2020 950,532 936,512
Magic Newco LLC................................ BTL B1 B+ 5.00 12/12/2018 2,082,717 2,082,067
M.A.FinanceCo LLC.............................. BTL B1 BB- 5.25 11/19/2021 882,353 883,141
SS& C Technologies, Inc........................ BTL-B1 NR BB 4.00 07/08/2022 2,465,000 2,463,972
SS& C Technologies, Inc........................ BTL-B2 NR BB 4.00 07/08/2022 555,000 554,769
------------
17,409,790
------------
SPECIALTY RETAIL -- 5.3%
At Home Holding III, Inc....................... BTL B2 B- 5.00 06/03/2022 7,000,000 6,965,000
Bass Pro Group LLC............................. BTL-B B1 BB- 4.00 06/05/2020 1,361,588 1,361,588
J Crew Operating Corp.......................... BTL-B1 B2 B- 4.00 03/05/2021 748,872 646,487
Michaels Stores, Inc........................... BTL-B2 Ba3 BB- 3.75 01/28/2020 996,101 992,158
Party City Holdings, Inc....................... BTL B1 B 4.00 07/27/2019 1,985,271 1,979,998
PetSmart, Inc.................................. BTL-B Ba3 BB- 4.25 03/11/2022 4,485,000 4,477,864
Serta Simmons Holdings LLC..................... BTL-B B1 B+ 4.25 10/01/2019 961,398 961,278
Staples, Inc.(16).............................. BTL-B Baa2 BBB 3.50 04/07/2021 1,000,000 998,056
------------
18,382,429
------------
TECH HARDWARE, STORAGE & PERIPHERAL -- 0.3%
CDW Corp....................................... BTL Ba2 BB+ 3.25 04/29/2020 873,626 865,375
------------
WIRELESS TELECOMMUNICATION SERVICES -- 0.7%
LTS Buyer LLC.................................. 2nd Lien Caa1 CCC+ 8.00 04/12/2021 271,975 270,162
Syniverse Technologies, Inc.................... BTL-B B1 B+ 4.00 04/23/2019 2,203,761 2,076,357
------------
2,346,519
------------
TOTAL LOANS (cost $327,793,698)................ $318,544,178
------------
U.S. CORPORATE BONDS & NOTES -- 5.5%
COMMUNICATIONS EQUIPMENT -- 0.3%
Alcatel-Lucent USA, Inc.*...................... Company Guar. Notes B3 B 6.75 11/15/2020 890,000 941,175
------------
16
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT**
-------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 0.7%
Argos Merger Sub, Inc.*............................... Senior Notes B3 B- 7.13% 03/15/2023 $ 805,000
ZF NA Capital*........................................ Company Guar. Notes Ba2 BB 4.00 04/29/2020 1,406,000
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.0%
Level 3 Financing, Inc................................ Company Guar. Notes B3 B 5.38 08/15/2022 500,000
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.2%
Hologic, Inc.*........................................ Company Guar. Notes B1 BB 5.25 07/15/2022 570,000
HEALTH CARE PROVIDERS & SERVICES -- 0.6%
CHS/Community Health Systems, Inc..................... Company Guar. Notes B3 B- 6.88 02/01/2022 620,000
MPH Acquisition Holdings LLC*......................... Company Guar. Notes Caa1 CCC+ 6.63 04/01/2022 285,000
Tenet Healthcare Corp................................. Senior Notes B3 CCC+ 8.13 04/01/2022 1,035,000
INDUSTRIAL POWER PRODUCERS & ENERGY TRADERS -- 0.3%
Dynegy Finance, Inc.*................................. Senior Sec. Notes B3 B+ 6.75 11/01/2019 1,020,000
IT SERVICES -- 0.3%
First Data Corp.*..................................... Senior Sec. Notes B1 BB- 7.38 06/15/2019 1,135,000
MEDIA -- 0.9%
Cequel Communications Holdings I LLC*................. Senior Notes B3 B- 5.13 12/15/2021 975,000
LIN Television Corp.*................................. Senior Notes B3 B+ 5.88 11/15/2022 1,000,000
Tribune Media Co.*.................................... Company Guar. Notes B2 BB- 5.88 07/15/2022 1,190,000
MULTILINE RETAIL -- 0.2%
Family Tree Escrow LLC*............................... Senior Notes Ba3 B+ 5.75 03/01/2023 495,000
OIL, GAS & CONSUMABLE FUELS -- 0.6%
EP Energy LLC......................................... Company Guar. Notes B1 B 9.38 05/01/2020 758,000
Rosetta Resources, Inc................................ Company Guar. Notes B1 B+ 5.88 06/01/2022 975,000
WPX Energy, Inc....................................... Senior Notes Ba1 BB 5.25 09/15/2024 315,000
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.3%
Freescale Semiconductor, Inc.*........................ Senior Sec. Notes B1 B 6.00 01/15/2022 815,000
SOFTWARE -- 0.3%
Infor Software Parent LLC*............................ Company Guar. Notes Caa1 CCC+ 7.13 05/01/2021 895,000
SS&C Technologies, Inc.*.............................. Senior Notes B3 B+ 5.88 07/15/2023 380,000
SPECIALTY RETAIL -- 0.2%
Party City Holdings, Inc.............................. Company Guar. Notes Caa1 CCC+ 8.88 08/01/2020 540,000
TECH HARDWARE, STORAGE & PERIPHERAL -- 0.3%
CDW LLC/CDW Finance Corp.............................. Company Guar. Notes B1 B+ 6.00 08/15/2022 1,000,000
WIRELESS TELECOMMUNICATION SERVICES -- 0.3%
Sprint Corp........................................... Company Guar. Notes B2 B+ 7.25 09/15/2021 1,000,000
TOTAL U.S. CORPORATE BONDS & NOTES (cost $18,564,865).
FOREIGN CORPORATE BONDS & NOTES -- 2.8%
BANKS -- 0.3%
Banco Bilbao Vizcaya Argentaria SA VRS(11)............ Jr. Sub. Notes NR NR 9.00 05/09/2018 400,000
Societe Generale SA VRS(11)........................... Jr. Sub. Notes Ba2 BB+ 8.25 11/29/2018 400,000
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.3%
Altice Financing SA*.................................. Senior Sec. Notes B1 BB- 6.50 01/15/2022 1,000,000
ENERGY EQUIPMENT & SERVICES -- 0.2%
Shelf Drilling Holdings, Ltd.*........................ Senior Sec. Notes Ba3 B+ 8.63 11/01/2018 695,000
VALUE
INDUSTRY DESCRIPTION (NOTE 2)
--------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 0.7%
Argos Merger Sub, Inc.*............................... $ 843,238
ZF NA Capital*........................................ 1,404,243
-----------
2,247,481
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.0%
Level 3 Financing, Inc................................ 505,000
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.2%
Hologic, Inc.*........................................ 582,113
-----------
HEALTH CARE PROVIDERS & SERVICES -- 0.6%
CHS/Community Health Systems, Inc..................... 654,100
MPH Acquisition Holdings LLC*......................... 291,056
Tenet Healthcare Corp................................. 1,131,773
-----------
2,076,929
-----------
INDUSTRIAL POWER PRODUCERS & ENERGY TRADERS -- 0.3%
Dynegy Finance, Inc.*................................. 1,061,310
-----------
IT SERVICES -- 0.3%
First Data Corp.*..................................... 1,179,833
-----------
MEDIA -- 0.9%
Cequel Communications Holdings I LLC*................. 885,422
LIN Television Corp.*................................. 1,012,500
Tribune Media Co.*.................................... 1,198,925
-----------
3,096,847
-----------
MULTILINE RETAIL -- 0.2%
Family Tree Escrow LLC*............................... 517,275
-----------
OIL, GAS & CONSUMABLE FUELS -- 0.6%
EP Energy LLC......................................... 810,075
Rosetta Resources, Inc................................ 1,040,813
WPX Energy, Inc....................................... 290,194
-----------
2,141,082
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.3%
Freescale Semiconductor, Inc.*........................ 863,900
-----------
SOFTWARE -- 0.3%
Infor Software Parent LLC*............................ 897,238
SS&C Technologies, Inc.*.............................. 383,800
-----------
1,281,038
-----------
SPECIALTY RETAIL -- 0.2%
Party City Holdings, Inc.............................. 576,450
-----------
TECH HARDWARE, STORAGE & PERIPHERAL -- 0.3%
CDW LLC/CDW Finance Corp.............................. 1,032,500
-----------
WIRELESS TELECOMMUNICATION SERVICES -- 0.3%
Sprint Corp........................................... 975,000
-----------
TOTAL U.S. CORPORATE BONDS & NOTES (cost $18,564,865). 19,077,933
-----------
FOREIGN CORPORATE BONDS & NOTES -- 2.8%
BANKS -- 0.3%
Banco Bilbao Vizcaya Argentaria SA VRS(11)............ 430,000
Societe Generale SA VRS(11)........................... 419,420
-----------
849,420
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.3%
Altice Financing SA*.................................. 1,000,000
-----------
ENERGY EQUIPMENT & SERVICES -- 0.2%
Shelf Drilling Holdings, Ltd.*........................ 618,550
-----------
17
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
-----------
INTEREST
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE
---------------------------------------------------------------------------------------------------------------------------
METALS & MINING -- 0.4%
Constellium NV*................................................................ Senior Notes B1 B 8.00%
Essar Steel Algoma, Inc.*...................................................... Senior Sec. Notes B2 B- 9.50
OIL, GAS & CONSUMABLE FUELS -- 0.3%
Tullow Oil PLC*................................................................ Company Guar. Notes B3 B+ 6.00
PAPER & FOREST PRODUCTS -- 0.7%
Norbord, Inc.*................................................................. Senior Sec. Notes Ba2 BB- 6.25
Tembec Industries, Inc.*....................................................... Senior Sec. Notes B3 B- 9.00
PHARMACEUTICALS -- 0.6%
Endo International PLC*........................................................ Company Guar. Notes B1 B 6.00
Valeant Pharmaceuticals International, Inc.*................................... Senior Notes B1 B 5.38
TOTAL FOREIGN CORPORATE BONDS & NOTES (cost $9,923,840)........................
COMMON STOCKS -- 0.0%
MEDIA -- 0.0%
Berry Co. LLC+(5)(6)(12) (cost $668,529).......................................
PREFERRED SECURITIES -- 0.0%
COMMERCIAL SERVICES & SUPPLIES -- 0.0%
Ancora Holdings LLC 6.00%(5)(6)(12) (cost $0)..................................
MEMBERSHIP INTEREST -- 0.0%
MEDIA -- 0.0%
NextMedia Operating, Inc.+(5)(6)(12)...........................................
VSS-AHC Holdings LLC+(5)(6)(12)................................................
TOTAL MEMBERSHIP INTEREST (cost $285,132)......................................
WARRANTS -- 0.0%
COMMERCIAL SERVICES & SUPPLIES -- 0.0%
Ancora Holdings LLC Expires 08/12/2020 (Strike Price $1.90)+(5)(6)(12) (cost
$0)..........................................................................
TOTAL LONG-TERM INVESTMENT SECURITIES (cost $357,236,064)......................
SHORT-TERM INVESTMENT SECURITIES -- 1.1%
REGISTERED INVESTMENT COMPANIES -- 1.1%
SSgA Money Market Fund, Class N 0.00%(15) (cost $3,901,181)....................
REPURCHASE AGREEMENTS -- 1.0%
Bank of America Securities LLC Joint Repurchase Agreement(13)..................
Barclays Capital, Inc. Joint Repurchase Agreement(13)..........................
BNP Paribas SA Joint Repurchase Agreement(13)..................................
Deutsche Bank AG Joint Repurchase Agreement(13)................................
RBS Securities, Inc. Joint Repurchase Agreement(13)............................
TOTAL REPURCHASE AGREEMENTS (cost $3,495,000)..................................
TOTAL INVESTMENTS
(cost $364,632,245)(14)........................................................
LIABILITIES IN EXCESS OF OTHER ASSETS...........................................
NET ASSETS......................................................................
PRINCIPAL
MATURITY AMOUNT**/ VALUE
INDUSTRY DESCRIPTION DATE/(2)/ SHARES (NOTE 2)
----------------------------------------------------------------------------------------------------------------------
METALS & MINING -- 0.4%
Constellium NV*................................................................ 01/15/2023 $ 545,000 $ 558,625
Essar Steel Algoma, Inc.*...................................................... 11/15/2019 970,000 822,075
------------
1,380,700
------------
OIL, GAS & CONSUMABLE FUELS -- 0.3%
Tullow Oil PLC*................................................................ 11/01/2020 1,300,000 1,178,125
------------
PAPER & FOREST PRODUCTS -- 0.7%
Norbord, Inc.*................................................................. 04/15/2023 1,000,000 1,012,500
Tembec Industries, Inc.*....................................................... 12/15/2019 1,495,000 1,420,250
------------
2,432,750
------------
PHARMACEUTICALS -- 0.6%
Endo International PLC*........................................................ 11/29/2019 560,000 572,600
Valeant Pharmaceuticals International, Inc.*................................... 03/15/2020 1,500,000 1,548,750
------------
2,121,350
------------
TOTAL FOREIGN CORPORATE BONDS & NOTES (cost $9,923,840)........................ 9,580,895
------------
COMMON STOCKS -- 0.0%
MEDIA -- 0.0%
Berry Co. LLC+(5)(6)(12) (cost $668,529)....................................... 1,136 34,977
------------
PREFERRED SECURITIES -- 0.0%
COMMERCIAL SERVICES & SUPPLIES -- 0.0%
Ancora Holdings LLC 6.00%(5)(6)(12) (cost $0).................................. 56 0
------------
MEMBERSHIP INTEREST -- 0.0%
MEDIA -- 0.0%
NextMedia Operating, Inc.+(5)(6)(12)........................................... 7,916 1,108
VSS-AHC Holdings LLC+(5)(6)(12)................................................ 12,608 10,212
------------
TOTAL MEMBERSHIP INTEREST (cost $285,132)...................................... 11,320
------------
WARRANTS -- 0.0%
COMMERCIAL SERVICES & SUPPLIES -- 0.0%
Ancora Holdings LLC Expires 08/12/2020 (Strike Price $1.90)+(5)(6)(12) (cost
$0).......................................................................... 3 0
------------
TOTAL LONG-TERM INVESTMENT SECURITIES (cost $357,236,064)...................... 347,249,303
------------
SHORT-TERM INVESTMENT SECURITIES -- 1.1%
REGISTERED INVESTMENT COMPANIES -- 1.1%
SSgA Money Market Fund, Class N 0.00%(15) (cost $3,901,181).................... 3,901,181 3,901,181
------------
REPURCHASE AGREEMENTS -- 1.0%
Bank of America Securities LLC Joint Repurchase Agreement(13).................. $ 750,000 750,000
Barclays Capital, Inc. Joint Repurchase Agreement(13).......................... 660,000 660,000
BNP Paribas SA Joint Repurchase Agreement(13).................................. 660,000 660,000
Deutsche Bank AG Joint Repurchase Agreement(13)................................ 765,000 765,000
RBS Securities, Inc. Joint Repurchase Agreement(13)............................ 660,000 660,000
------------
TOTAL REPURCHASE AGREEMENTS (cost $3,495,000).................................. 3,495,000
------------
TOTAL INVESTMENTS
(cost $364,632,245)(14)........................................................ 102.9% 354,645,484
LIABILITIES IN EXCESS OF OTHER ASSETS........................................... (2.9)% (10,040,006)
---------- ------------
NET ASSETS...................................................................... 100.0% $344,605,478
========== ============
--------
BTLBank Term Loan
CLTLCredit Linked Term Loan
EUREuro Dollar
DIPDebtor in Possession
NR Security is not rated.
18
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
VRS--VariableRate Security
The rates shown on VRS are the current interest rates as of June 30, 2015 and
unless noted otherwise, the dates shown are the original maturity dates.
+ 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 June 30, 2015, the aggregate value of
these securities was $20,793,503, representing 6.0% of net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
** Denominated in United States Dollars unless otherwise indicated.
(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 June 30, 2015.
(2)Based on the stated maturity, the weighted average maturity of the loans
held in the portfolio is approximately 64 months. Loans in the Fund's
portfolio are generally subject to mandatory and/or optional prepayment.
Because of these mandatory prepayment conditions and because there may be
significant economic incentives for a Borrower to prepay, prepayments may
occur. As a result, the actual remaining maturity may be substantially less
than the stated maturities shown.
(3)The Fund invests in senior loans which generally pay interest at rates which
are periodically re-determined by reference to a base lending rate plus a
premium. These base lending rates are generally either the lending rate
offered by one or more major European banks, such as the London Inter-Bank
Offer Rate ("LIBOR") or the prime rate offered by one or more major United
States banks, or the certificate of deposit rate. The rates shown are the
current rates as of June 30, 2015. 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 June 30, 2015, the aggregate value of these securities
was $46,297, 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)Company has filed for Chapter 7 bankruptcy.
(9)Loan is in default of interest and did not pay principal at maturity.
(10)Loan is in default of interest.
(11)Perpetual maturity--maturity date reflects the next call date.
(12)Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note 2.
Certain restricted securities held by the Fund may not be sold except in
exempt transactions or in a public offering registered under the 1933 Act.
The Fund has no right to demand registration of these securities. The risk
of investing in certain restricted securities is greater than the risk of
investing in the securities of widely held, publicly traded companies. To
the extent applicable, lack of a secondary market and resale restrictions
may result in the inability of a Fund to sell a security at a fair price
and may substantially delay the sale of the security. In addition, certain
restricted securities may exhibit greater price volatility than securities
for which secondary markets exist. As of June 30, 2015, the Fund held the
following restricted securities:
ACQUISITION ACQUISITION VALUE PER % OF NET
DESCRIPTION DATE SHARES COST VALUE SHARE ASSETS
----------- ----------- ------ ----------- ------- --------- --------
COMMON STOCKS
Berry Co. LLC.............. 04/24/2008 1,136 $668,529 $34,977 $30.79 0.00%
PREFERRED SECURITIES
Ancora Holdings LLC
6.00%.................... 08/12/2013 56 0 0 0.00 0.00
MEMBERSHIP INTEREST
NextMedia Operating, Inc... 06/16/2010 7,916 270,682 1,108 0.14 0.00
VSS-AHC Holdings LLC...... 06/01/2007 12,608 14,450 10,212 0.81 0.00
WARRANTS
Ancora Holdings LLC
Expire 08/12/2020........ 08/12/2013 3 0 0 0.00 0.00
------- ----
$46,297 0.00%
======= ====
(13)See Note 2 for details of the Joint Repurchase Agreement.
(14)See Note 6 for cost of investments on a tax basis.
(15)The rate shown is the 7-day yield as of June 30, 2015.
(16)As of June 30, 2015, the loan has not settled and as a result, the interest
rate is estimated based on information available.
FORWARD FOREIGN CURRENCY CONTRACTS
--------------------------------------------------------------------------------
CONTRACT TO IN EXCHANGE DELIVERY UNREALIZED UNREALIZED
COUNTERPARTY DELIVER FOR DATE APPRECIATION DEPRECIATION
-------------- ----------- ----------- ---------- ------------ ------------
Citibank N.A.. EUR 333,000 USD 373,472 07/31/2015 $2,088 $--
====== ===
19
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2015 -- (UNAUDITED) (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of June 30, 2015 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
ASSETS:
Investments at Value:*
Loans:
Commercial Services & Supplies... $ -- $ 19,663,909 $ 0 $ 19,663,909
Media............................ -- 27,112,886 30,206 27,143,092
Other Industries................. -- 271,737,177 -- 271,737,177
U.S. Corporate Bonds & Notes....... -- 19,077,933 -- 19,077,933
Foreign Corporate Bonds & Notes.... -- 9,580,895 -- 9,580,895
Common Stocks...................... -- -- 34,977 34,977
Preferred Securities............... -- -- 0 0
Membership Interest................ -- -- 11,320 11,320
Warrants........................... -- -- 0 0
Short-Term Investment Securities... 3,901,181 -- -- 3,901,181
Repurchase Agreements.............. -- 3,495,000 -- 3,495,000
---------- ------------ ------- ------------
TOTAL INVESTMENTS AT VALUE......... $3,901,181 $350,667,800 $76,503 $354,645,484
========== ============ ======= ============
Other Financial Instruments:@
Forward Foreign Currency Contracts. $ -- $ 2,088 $ -- $ 2,088
========== ============ ======= ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
@ Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation(depreciation) on
the instrument.
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 -- JUNE 30, 2015 -- (UNAUDITED)
Note 1. Organization of the Fund
SunAmerica Senior Floating Rate Fund, Inc. (the "Fund") is an open-end,
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. (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 ("Loans"). 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 may invest in foreign securities,
including up to 10% of its total assets in non-U.S. dollar denominated Loans
and high yield fixed income securities and up to 25% of its total assets in
U.S. dollar denominated Loans issued by non-U.S. companies.
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 account
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 GAAP, the Fund discloses the fair
value of its investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Fund would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
establishes 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
21
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
entity's own assumptions about the assumptions market participants would use
in pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
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 the Fund's assets and liabilities classified in the fair
value hierarchy as of June 30, 2015, is reported on a schedule following the
Portfolio of Investments.
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.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Fund uses the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Fund's shares, and the Fund may determine that certain closing
prices do not reflect the fair value of the security. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If the Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Fund may also fair value securities in other situations, for example, when a
particular foreign market is closed but the Fund is open. For foreign equity
securities and foreign equity futures contracts, the Fund uses an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices, and when so adjusted, such securities and
futures are generally categorized as Level 2.
22
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
Bonds, debentures, and other debt securities are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service, and are generally categorized as Level 2. The pricing service 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 spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Senior secured floating rate loans ("Loans") are valued at the average of
available bids in the market for such Loans, as provided by a Board-approved
loan pricing service, and are generally categorized as Level 2.
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.
Forward foreign currency contracts ("forward contracts") are valued at the
4:00 pm Eastern time forward rate 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.
DERIVATIVE INSTRUMENTS:
FORWARD FOREIGN CURRENCY CONTRACTS: The Fund may enter into forward
contracts for various purposes, including to facilitate settlement of
foreign currency denominated portfolio transactions, to attempt to protect
the value of securities and related receivables and payables against changes
in future foreign exchange rates, to hedge portfolio exposure to benchmark
currency allocations, to manage and/or gain exposure to certain foreign
currencies or to enhance total return. During the period ended June 30,
2015, the Fund used forward contracts to protect securities and related
receivables and payables against changes in future foreign exchange rates
and to enhance return. As of June 30, 2015, the Fund had open forward
contracts, which are reported on a schedule following the Fund's Portfolio
of Investments.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by the Fund as unrealized appreciation or
depreciation. On the settlement date, the Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Risks to the Fund of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, the
Fund's loss will generally consist of the net amount of contractual payments
that the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statement of Assets and Liabilities.
Illiquidity risk arises
23
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
because the secondary market for forwards may have less liquidity relative
to markets for other securities. Currency transactions are also subject to
risks different from those of other portfolio transactions. Because currency
control is of great importance to the issuing governments and influences
economic planning and policy, purchases and sales of currency and related
instruments can be adversely affected by government exchange controls,
limitations or restrictions on repatriation of currency, and manipulations
or exchange restrictions imposed by governments.
MASTER AGREEMENTS: The Fund holds derivative instruments and other financial
instruments whereby the Fund may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern such
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on the Fund's net position with each counterparty. Master Agreements
may also include certain provisions that require the Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, 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. Termination events applicable to the Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments 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, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. 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. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to the Fund's financial statements. See
additional information on specific types of derivative instruments and other
financial instruments as disclosed in the Notes to the Financial Statements.
The Fund does not offset derivative assets and derivative liabilities that
are subject to netting arrangements in the Statement of Assets and
Liabilities.
The following tables represent the value of derivatives held as of June 30,
2015, by their primary underlying risk exposure and respective location on
the Statement of Assets and Liabilities and the effect of derivatives on the
Statement of Operations for the period ended June 30, 2015. The Fund's
derivative contracts held during the period are not accounted for as hedging
instruments under GAAP. For a detailed presentation of derivatives held as
of June 30, 2015, please refer to a schedule following the Fund's Portfolio
of Investments.
ASSET DERIVATIVES LIABILITY DERIVATIVES
----------------- --------------------
FOREIGN
FOREIGN EXCHANGE CONTRACTS EXCHANGE CONTRACTS
-------------------------- -----------------
FORWARD FOREIGN
FORWARD FOREIGN CURRENCY CONTRACTS(1) CURRENCY CONTRACTS(2)
------------------------------------- --------------------
$2,088 $--
====== ===
STATEMENT OF ASSETS AND LIABILITIES LOCATION:
(1) Unrealized appreciation on forward foreign currency contracts
(2) Unrealized depreciation on forward foreign currency contracts
24
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
CHANGE IN UNREALIZED
REALIZED GAIN (LOSS) APPRECIATION (DEPRECIATION)
ON DERIVATIVES RECOGNIZED ON DERIVATIVES RECOGNIZED
IN STATEMENT OF OPERATIONS IN STATEMENT OF OPERATIONS
-------------------------- -------------------------
FOREIGN
FOREIGN EXCHANGE CONTRACTS EXCHANGE CONTRACTS
-------------------------- ----------------
FORWARD FOREIGN
FORWARD FOREIGN CURRENCY CONTRACTS(1) CURRENCY CONTRACTS(2)
------------------------------------- -------------------
$3,272 $2,088
====== ======
STATEMENT OF OPERATIONS LOCATION:
(1) Net realized foreign exchange gain (loss) on other assets and
liabilities
(2) Change in unrealized foreign exchange gain (loss) on other
assets and liabilities
The following table represents the average monthly balance of derivatives
held during the six months ended June 30, 2015:
AVERAGE AMOUNT
OUTSTANDING
DURING THE PERIOD
---------------------
FOREIGN
FUND EXCHANGE CONTRACTS(1)
---- ---------------------
Senior Floating Rate.......... $369,473
========
-
(1) Amounts represent notional amounts in US dollars.
The following table sets forth the Fund's derivative assets and liabilities
by counterparty, net of amounts available for offset under Master Agreements
and net of the related collateral pledged/(received) as of June 30, 2015.
The repurchase agreements held by the Fund as of June 30, 2015, are also
subject to Master Agreements but are not included in the following tables.
See the Portfolio of Investments and the Notes to the Financial Statements
for more information about the Fund's holdings in repurchase agreements.
SENIOR FLOATING RATE FUND
----------------------------------------------------------------
DERIVATIVE ASSETS(1) DERIVATIVE LIABILITIES(1)
-------------------------------- -------------------------------
FORWARD FORWARD NET
FOREIGN FOREIGN DERIVATIVE COLLATERAL
CURRENCY OTC OPTIONS CURRENCY OTC OPTIONS ASSETS PLEDGED/
COUNTERPARTY CONTRACTS SWAPS PURCHASED TOTAL CONTRACTS SWAPS PURCHASED TOTAL (LIABILITIES) (RECEIVED)(2)
------------ --------- ----- --------- ------ --------- ----- --------- ----- ------------- -------------
Citibank N.A.................. $2,088 $-- $-- $2,088 $-- $-- $-- $-- 2,088 $--
====== === === ====== === === === === ===== ===
NET
COUNTERPARTY AMOUNTS(3)
------------ ----------
Citibank N.A.................. 2,088
=====
-
(1)Gross amounts of recognized assets and liabilities not offset in the
Statement of Assets and Liabilities.
(2)For each respective counterparty, collateral pledged or (received) is
limited to an amount not to exceed 100% of the net amount of the
derivative asset/liability in the above table.
(3)Net amount represents the net amount due (to)/from counterparty in
the event of a default based on the contractual set-off rights under
the agreement.
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, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
25
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
As of June 30, 2015, 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......................... 0.88% $750,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Bank of America Securities LLC, dated June 30, 2015, bearing interest at a
rate of 0.10% per annum, with a principal amount of $84,805,000, a
repurchase price of $84,805,236, and a maturity date of July 1, 2015. The
repurchase agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 1.50% 01/31/2022 $57,561,500 $56,091,379
U.S. Treasury Notes........... 2.00 08/31/2021 30,317,000 30,628,659
As of June 30, 2015, the Fund held an undivided interest in a joint
repurchase agreement with Barclay's Capital, Inc.:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ---------
Senior Floating Rate Fund......................... 0.88% $660,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Barclay's Capital, Inc., dated June 30, 2015, bearing interest at a rate of
0.10% per annum, with a principal amount of $74,960,000, a repurchase price
of $74,960,208, and a maturity date of July 1, 2015. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 1.63% 06/30/2020 $76,596,000 $76,593,702
As of June 30, 2015, the Fund held an undivided interest in a joint
repurchase agreement with BNP Paribas SA:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ---------
Senior Floating Rate Fund......................... 0.88% $660,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated June 30, 2015, bearing interest at a rate of 0.08% per
annum, with a principal amount of $74,960,000, a repurchase price of
$74,960,167, and a maturity date of July 1, 2015. The repurchase agreement
is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 2.25% 04/30/2021 $74,725,300 $76,596,422
As of June 30, 2015, the Fund held an undivided interest in a joint
repurchase agreement with Deutsche Bank AG:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ---------
Senior Floating Rate Fund......................... 0.90% $765,000
26
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated June 30, 2015, bearing interest at a rate of
0.11% per annum, with a principal amount of $85,165,000, a repurchase price
of $85,165,260, and a maturity date of July 1, 2015. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 1.38% 02/29/2020 $87,898,000 $87,587,720
As of June 30, 2015, the Fund held an undivided interest in a joint
repurchase agreement with RBS Securities, Inc.:
PERCENTAGE PRINCIPAL
OWNERSHIP AMOUNT
---------- ---------
Senior Floating Rate Fund......................... 0.88% $660,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
RBS Securities, Inc., dated June 30, 2015, bearing interest at a rate of
0.08% per annum, with a principal amount of $74,960,000, a repurchase price
of $74,960,167, and a maturity date of July 1, 2015. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY
TYPE OF COLLATERAL RATE DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 2.38% 12/31/2020 $74,212,000 $76,524,446
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 $369,073 for the six months ended June 30, 2015, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $154,846 for the
six months ended June 30, 2015, 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 GAAP. 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.
27
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
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
2011-2013 or expected to be taken in the Fund's 2014 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
2011.
Note 3. Capital Share Transactions
Transactions in capital shares of each class of the Fund were as follows:
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 2015 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2014
------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A ---------- ------------ ----------- -------------
Shares sold................. 1,990,679 $ 16,190,215 7,402,040 $ 61,531,989
Reinvested distributions.... 278,547 2,263,715 609,379 5,045,586
Shares redeemed............. (3,412,976) (27,658,917) (12,678,846) (104,799,731)
---------- ------------ ----------- -------------
Net increase (decrease).. (1,143,750) $ (9,204,987) (4,667,427) $ (38,222,156)
========== ============ =========== =============
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 2015 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2014
------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS C ---------- ------------ ----------- -------------
Shares sold................. 1,277,645 $ 10,368,458 5,241,629 $ 43,534,663
Reinvested distributions.... 357,061 2,899,974 696,794 5,762,846
Shares redeemed............. (3,695,655) (29,994,244) (7,980,892) (65,946,838)
---------- ------------ ----------- -------------
Net increase (decrease).. (2,060,949) $(16,725,812) (2,042,469) $ (16,649,329)
========== ============ =========== =============
Note 4. Purchases and Sales of Securities
During the six months ended June 30, 2015, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns were $91,446,387 and $107,054,710, 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.
28
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (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
six months ended June 30, 2015, the Fund incurred administration fees in the
amount of $350,470.
The Fund has entered into a Distribution Agreement with AIG Capital
Services, Inc. ("ACS" 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. For the six months ended June 30, 2015, ACS received
fees (see Statement of Operations) based upon the aforementioned rates. For
the six months ended June 30, 2015, ACS received sales charges on Class A
shares of $91,658, of which $46,995 was reallowed to affiliated
broker-dealers and $27,076 to non-affiliated broker-dealers. In addition,
ACS receives the proceeds of contingent deferred sales charges paid by
investors in connection with certain redemptions of Class A and Class C
shares. For the six months ended June 30, 2015, ACS received contingent
deferred sales charges of $(4,126).
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. For the six
months ended June 30, 2015, the Fund incurred the following expenses, which
are included in the transfer agent fees and expenses payable on the
Statement of Assets and Liabilities and in transfer agent fees and expenses
in the Statement of Operations to compensate SAFS pursuant to the terms of
the Service Agreement.
PAYABLE AT
EXPENSE JUNE 30, 2015
-------- -------------
Class A....................... $157,239 $25,736
Class C....................... 228,278 36,608
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 shall not include extraordinary expenses, as determined under GAAP,
such as litigation, or acquired fund fees and expenses, brokerage
commissions and other transactional expenses relating to the purchase and
sale of portfolio securities, interest, taxes and governmental fees and
other expenses not incurred in the ordinary course of the Fund's business.
The expense reimbursements and fee waivers will continue indefinitely,
unless terminated by the Board, including a majority of the Disinterested
Directors. For the six months ended June 30, 2015, SunAmerica waived fees
and/or reimbursed expenses as follows: Class A $248,060 and Class C $456,483.
29
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable, post October losses, and treatment of defaulted
securities.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
----------------------------------------- -------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2014 FOR THE YEAR ENDED DECEMBER 31, 2014
----------------------------------------- -------------------------------------
LONG-TERM GAINS/ UNREALIZED LONG-TERM
ORDINARY CAPITAL AND OTHER APPRECIATION/ ORDINARY CAPITAL
INCOME LOSSES (DEPRECIATION) INCOME GAINS
-------- ----------------- -------------- ------------ ---------
$44,828 $(55,354,216) $(13,416,931) $15,048,872 $--
CAPITAL LOSS CARRYFORWARDS. At December 31, 2014, capital loss carryforwards
available to offset future recognized gains were $55,354,216 with
$16,003,027 expiring in 2016, $27,303,177 expiring in 2017 and 12,048,012 of
unlimited long-term losses.+
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changed various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective for taxable years beginning after the date of enactment.
Under the Act, the Fund will be permitted to carry forward capital losses
incurred in taxable years beginning after the date of enactment for an
unlimited period. However, any losses incurred during those future taxable
years will be required to be utilized prior to the losses incurred in
pre-enactment taxable years, which carry an expiration date. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
Unrealized appreciation and depreciation in the value of investments at June
30, 2015 for federal income tax purposes were as follows:
Cost (tax basis).............. $364,632,245
============
Gross unrealized appreciation. $ 2,369,255
Gross unrealized depreciation. (12,356,016)
------------
Net unrealized depreciation... $ (9,986,761)
============
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 15
basis points per annum on the daily unused portion of the committed line of
credit and a one-time closing fee of 5 basis points on the uncommitted line
of credit, both of which are included in other expenses on the Statements of
Operations. Borrowings under the line of credit will commence when the
respective Fund's cash shortfall exceeds $100,000. For the six months ended
June 30, 2015, the Fund had borrowings outstanding for 29 days under the
line of credit and incurred $1,356 in interest charges related to these
borrowings. The Fund's average amount of debt under the line of credit for
the days utilized was $1,219,135 at a weighted average interest rate of
1.38%. At June 30, 2015, there were no borrowings outstanding.
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
30
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
than would otherwise be available from a typical bank for a comparable
transaction. For the six months ended June 30, 2015, 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 June 30, 2015, the Fund had no unfunded loan commitments.
31
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2015 -- (UNAUDITED)
The Board of Directors (the "Board" the members of which are referred to as
"Directors") of SunAmerica Senior Floating Rate Fund, Inc (the "Fund"),
including the Directors who are not "interested persons," as defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act")
(the "Independent Directors"), of the Fund, SunAmerica Asset Management, LLC
("SunAmerica") or Wellington Management Company LLP ("Wellington"), approved
the continuation of the Investment Advisory and Management Agreement between
the Fund and SunAmerica (the "Advisory Agreement") for a one-year period ending
June 30, 2016 at an in-person meeting held on June 2, 2015 (the "Meeting"). At
the Meeting, the Board, including the Independent Directors, also approved the
continuation of the Subadvisory Agreement between SunAmerica and Wellington
with respect to the Fund for a one-year period ending June 30, 2016 (the
"Subadvisory Agreement," and together with the Advisory Agreement, the
"Agreements").
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and Wellington, provided materials relating to the Board's
consideration of whether to approve the continuation of the Agreements. These
materials included: (a) a summary of the services provided to the Fund by
SunAmerica and its affiliates, and by Wellington; (b) information independently
compiled and prepared by Lipper, Inc. ("Lipper"), an independent third-party
provider of mutual fund data on fees and expenses of the Fund, and the
investment performance of the Fund as compared with a peer group of funds,
along with fee and performance data with respect to the Fund and any other
mutual funds or accounts advised or subadvised by SunAmerica or Wellington with
similar investment objectives and/or strategies, as applicable; (c) information
on the profitability of SunAmerica and its affiliates, and a discussion
relating to indirect benefits; (d) information relating to economies of scale;
(e) information about SunAmerica's general compliance policies and procedures
and the services it provides in connection with its oversight of subadvisers:
(f) information about SunAmerica's and Wellington's risk management processes;
(g) information regarding brokerage and soft dollar practices; and
(h) information about the key personnel of SunAmerica and its affiliates, and
Wellington, that are involved in the investment management, administration,
compliance and risk management activities with respect to the Fund, as well as
current and projected staffing levels and compensation practices.
In determining whether to approve the continuation of the Agreements, the
Board, including Independent Directors, considered at the Meeting, and from
time to time as appropriate, factors it deemed relevant, including the
following information:
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY SUNAMERICA AND WELLINGTON
The Board, including the Independent Directors, considered the nature, extent
and quality of services provided by SunAmerica. The Board noted that the
services include acting as investment manager and adviser to the Fund, managing
the daily business affairs of the Fund, and obtaining and evaluating economic,
statistical and financial information to formulate and implement the Fund's
investment policies. Additionally, the Board observed that SunAmerica provides
office space, bookkeeping, accounting, clerical, secretarial and certain
administrative services (excusive of, and in addition to, any such service
provided by any other party retained by the Fund) and has authorized its
officers and employees, if elected, to serve as officers or directors of the
Fund without compensation. The Board also noted that SunAmerica is responsible
for monitoring and reviewing the activities of affiliated and unaffiliated
third-party service providers, including Wellington. In addition to the quality
of the advisory services provided by SunAmerica, the Board considered the
quality of the administrative and other services provided by SunAmerica to the
Fund pursuant to the Advisory Agreement. Additionally, the Board observed that
SunAmerica performs or supervises the performance by others of other
administrative services in connection with the operation of the Fund pursuant
to the Administrative Services Agreement between SunAmerica and the Fund (the
"Administrative Services Agreement").
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Fund. The Board also reviewed the personnel
responsible for providing advisory services to the Fund and other key personnel
of SunAmerica in addition to current and projected staffing levels and
compensation practices. The Board further considered certain strategic changes
that SunAmerica had implemented with respect to its investment department, and
concluded, based on their experience and interaction with SunAmerica, that:
(i) SunAmerica would continue to be able to retain quality investment and other
personnel; (ii) SunAmerica has exhibited a high level of
32
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2015 -- (UNAUDITED) (CONTINUED)
diligence and attention to detail in carrying out its advisory and other
responsibilities under the Advisory Agreement; (iii) SunAmerica has been
responsive to requests of the Board; and (iv) SunAmerica has kept the Board
apprised of developments relating to the Fund and the industry in general. The
Board concluded that the nature and extent of services provided under the
Advisory Agreement were reasonable and appropriate in relation to the
management fees and that the quality of services continues to be high. The
Board also noted the high quality of services under the Administrative Services
Agreement.
The Board also considered SunAmerica's reputation and relationship with the
Fund and considered the benefit to shareholders of investing in funds that are
part of a family of funds offering a variety of types of mutual funds and
shareholder services. The Board considered SunAmerica's experience in providing
management and investment advisory and administrative services to advisory
clients and noted that as of March 31, 2015, SunAmerica managed, advised and/or
administered approximately $74.7 billion in assets. In addition, the Board
considered SunAmerica's code of ethics and its commitment to compliance
generally and with respect to its management and administration of the Fund.
The Board also considered SunAmerica's risk management processes. The Board
further observed that SunAmerica has developed internal procedures for
monitoring compliance with the investment objectives, policies and restrictions
of the Fund as set forth in the Fund's prospectus. The Board also reviewed
SunAmerica's compliance and regulatory history and noted that there were no
material legal, regulatory or compliance issues that would potentially impact
SunAmerica from effectively serving as the investment adviser to the Fund.
The Board also considered the nature, extent and quality of services to be
provided by Wellington. The Board observed that Wellington is responsible for
providing day-to-day investment management services, including investment
research, advice and supervision, and determining which securities will be
purchased or sold by the Fund, or portion thereof, that Wellington manages,
subject to the oversight and review of SunAmerica. The Board reviewed
Wellington's history, structure, size, visibility and resources, which are
needed to attract and retain highly qualified investment professionals. The
Board reviewed the personnel that are responsible for providing subadvisory
services to the Fund, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with Wellington,
that Wellington: (i) has been able to retain high quality portfolio managers
and other investment personnel; (ii) has exhibited a high level of diligence
and attention to detail in carrying out its responsibilities under the
Subadvisory Agreement; and (iii) has been responsive to requests of the Board
and of SunAmerica. In addition, the Board considered Wellington's code of
ethics and risk management process. The Board further observed that Wellington
has developed internal policies and procedures for monitoring compliance with
the investment objectives, policies and restrictions of the Fund as set forth
in the Fund's prospectus. The Board also reviewed Wellington's compliance and
regulatory history and noted that there were no material legal, regulatory or
compliance issues that would potentially impact Wellington from effectively
serving as a subadviser to the Fund. The Board concluded that the nature and
extent of services provided by Wellington under the Subadvisory Agreement were
reasonable and appropriate in relation to the subadvisory fees and that the
quality of services continues to be high.
INVESTMENT PERFORMANCE
The Board, including the Independent Directors, also considered the investment
performance of SunAmerica and Wellington with respect to the Fund. In
connection with its review, the Board received and reviewed information
regarding the investment performance of the Fund as compared to the Fund's peer
group ("Peer Group") and peer universe ("Peer Universe") as independently
determined by Lipper and to an appropriate index or combination of indices,
including the Fund's benchmarks. The Board was provided with a description of
the methodology used by Lipper to select the funds in the Peer Group and Peer
Universe.
The Board noted that performance information was for the periods ended March
31, 2015. The Board also noted that it regularly reviews the performance of the
Fund throughout the year. The Board further noted that, while it monitors
performance of the Fund closely, it generally attaches more importance to
performance over relatively long periods of time, typically three to five years.
33
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2015 -- (UNAUDITED) (CONTINUED)
The Board considered that the Fund's performance was below the median of its
Peer Group and Peer Universe for the one-, three- and five-year periods. The
Board further considered that the Fund underperformed its Lipper Index for the
one-, three- and five-year periods. The Board noted management's discussion of
the Fund's performance, and also considered the fact that it had approved
certain changes to the Fund's strategy, effective July 2014. The Board
concluded that the Fund's performance was being addressed.
CONSIDERATION OF THE MANAGEMENT FEES AND THE COST OF THE SERVICES AND PROFITS
TO BE REALIZED BY SUNAMERICA, WELLINGTON AND THEIR AFFILIATES FROM THE
RELATIONSHIP WITH THE FUND
The Board, including the Independent Directors, received and reviewed
information regarding the fees to be paid by the Fund to SunAmerica pursuant to
the Advisory Agreement and the fees paid by SunAmerica to Wellington pursuant
to the Subadvisory Agreement. The Board examined this information in order to
determine the reasonableness of the fees in light of the nature and quality of
services to be provided and any potential additional benefits to be received by
SunAmerica, Wellington or their affiliates in connection with providing such
services to the Fund.
To assist in analyzing the reasonableness of the management fees for the Fund,
the Board received reports independently prepared by Lipper. The reports showed
comparative fee information for the Fund's Peer Group and Peer Universe as
determined by Lipper, including rankings within each category. In considering
the reasonableness of the management fees to be paid by the Fund to SunAmerica,
the Board reviewed a number of expense comparisons, including: (i) contractual
and actual management fees; and (ii) actual total operating expenses. In
considering the Fund's total operating expenses, the Board analyzed the level
of fee waivers and expense reimbursements and the net expense caps
contractually agreed upon by SunAmerica. The Board further considered that,
unlike the funds in the Peer Group and Peer Universe, the fee waivers and/or
reimbursements being made by SunAmerica with respect to the Funds are only
reflected in the total expenses category of the Lipper reports, rather than
also being reflected as specific management fee waivers in the actual
management fees category of the Lipper reports. As a result, the Board took
into account that the actual management fees presented by Lipper for the funds
in the Peer Group and Peer Universe may appear lower on a relative basis. The
Board also considered the various expense components of the Fund and compared
the Fund's net expense ratio to those of other funds within its Peer Group and
Peer Universe as a guide to help assess the reasonableness of the management
fee for the Fund. The Board acknowledged that it was difficult to make precise
comparisons with other funds in the Peer Group and Peer Universe since the
exact nature of services provided under the various fund agreements is often
not apparent. The Board also noted the relative small size of the Fund's Peer
Group. The Board noted, however, that the comparative fee information provided
by Lipper as a whole was useful in assessing whether SunAmerica was providing
services at a cost that was competitive with other, similar funds.
The Board did not consider services and fees paid under investment advisory
contracts that SunAmerica has with other registered investment companies or
other types of clients with similar investment strategies to the Fund since
SunAmerica informed the Board that there were no such Funds or accounts.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to Wellington pursuant to the Subadvisory Agreement. To assist in
analyzing the reasonableness of the subadvisory fee, the Board received a
report independently prepared by Lipper. The report showed comparative fee
information of the Fund's Peer Group and/or Peer Universe that the Directors
used as a guide to help assess the reasonableness of the subadvisory fee. The
Directors noted that the Peer Group/Universe information as a whole was useful
in assessing whether Wellington was providing services at a cost that was
competitive with other, similar funds. The Directors also considered that the
subadvisory fee is paid by SunAmerica out of its management fees and not by the
Fund, and that subadvisory fees may vary widely within a Peer Group for various
reasons, including market pricing demands, existing relationships, experience
and success, and individual client needs. The Board further considered the
amount of subadvisory fee paid out by SunAmerica and the amount of the
management fees which it retained and determined that these amounts were
reasonable in light of the services performed by SunAmerica and the Subadviser,
respectively.
The Board also considered fees received by Wellington with respect to other
mutual funds and accounts with similar investment strategies to the Fund, to
the extent applicable. The Board noted in particular that the similar accounts
34
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2015 -- (UNAUDITED) (CONTINUED)
identified by Wellington were institutional separate accounts, and Wellington
highlighted certain differences between these separate accounts and the Fund,
including that these separate accounts are subject to different investment
limitations and restrictions and do not experience daily cash flows in a manner
similar to the Fund. The Board then noted that the subadvisory fee paid by
SunAmerica to Wellington was reasonable as compared to fees Wellington receives
for other comparable accounts for which they serve as adviser or subadviser.
The Board considered that the Fund's actual management fees were above the
median of its Peer Group and Peer Universe. The Board also considered that the
Fund's total expenses were above the median of its Peer Group and Peer
Universe. The Board noted that the Fund's advisory fee contains breakpoints and
further noted management's discussions regarding the Fund's expenses.
PROFITABILITY
The Board also considered SunAmerica's profitability and the benefits
SunAmerica and its affiliates received from their relationship with the Fund.
The Board received and reviewed financial statements relating to SunAmerica's
financial condition and profitability with respect to the services it provided
the Fund and considered how profit margins could affect SunAmerica's ability to
attract and retain high quality investment professionals and other key
personnel. The Board was also provided with a profitability analysis that
detailed the revenues earned and the expenses incurred by SunAmerica and its
affiliates that provide services to the Fund. In particular, the Board
considered the contractual fee waivers and/or expense reimbursements agreed to
by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, including the amount of management fees retained after payment to
the Subadviser, as well as the profitability of SunAmerica under the
Administrative Services Agreement, and considered the profitability of
SunAmerica's affiliates under the Service Agreement and Rule 12b-1 Plans.
Additionally, the Board considered whether SunAmerica, Wellington and their
affiliates received any indirect benefits from the relationship with the Fund.
Specifically, the Board observed that AIG Federal Savings Bank, an affiliate of
SunAmerica, serves as custodian with respect to certain shareholder retirement
accounts that are administered by SunAmerica and receives a fee payable by the
qualifying shareholders. The Board further considered whether there were any
collateral or "fall-out" benefits that SunAmerica and its affiliates may derive
as a result of their relationship with the Fund. The Board noted that
SunAmerica believes that any such benefits are de minimis and do not impact the
reasonableness of the management fees.
The Board also reviewed financial statements and/or other reports from the
Wellington and considered whether Wellington had the financial resources
necessary to attract and retain high quality investment management personnel
and to provide a high quality of services.
The Board concluded that SunAmerica and Wellington had the financial resources
necessary to perform its obligations under the Agreements and to continue to
provide the Fund with the high quality services that they had provided in the
past. The Board further concluded that the management fees were reasonable in
light of the factors discussed above.
ECONOMIES OF SCALE
The Board, including the Independent Directors, considered whether the
shareholders would benefit from economies of scale and whether there was
potential for future realization of economies with respect to the Fund. The
Board considered that as a result of being part of the SunAmerica fund complex,
the Fund shares common resources and may share certain expenses, and if the
size of the complex increases, the Fund could incur lower expenses than it
otherwise would achieve as a stand-alone entity. The Board also took into
account that the Fund had a management fee arrangement that included
breakpoints that will adjust the fee downward as the size of the Fund
increases, thereby allowing the shareholders to potentially participate in any
economies of scale. The Board further noted that SunAmerica has agreed to
contractually cap the total annual operating expenses of the Fund at certain
levels. The Board observed that those expense caps benefited shareholders by
limiting total fees even in the absence of breakpoints or economies of scale.
The Board concluded that the Fund's management fee structure was reasonable and
that it would continue to review fees in connection with the renewal of the
Advisory Agreement, including whether the implementation of additional
breakpoints would be appropriate in the future due to an increase in asset size
or otherwise.
35
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2015 -- (UNAUDITED) (CONTINUED)
The Board noted that the Subadvisory Agreement included breakpoints, but did
not review specific information regarding whether there have been economies of
scale with respect to Wellington's management of the Fund because it regards
that information as less relevant at the subadviser level. Rather, the Board
considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
OTHER FACTORS
In consideration of the Agreements, the Board also received information
regarding SunAmerica's and Wellington's brokerage and soft dollar practices.
The Board considered that Wellington is responsible for decisions to buy and
sell securities for the Fund, selection of broker-dealers and negotiation of
commission rates, as applicable. The Board also considered that the Fund
invests primarily in senior secured floating rate loans and, therefore, the
Fund generally does not incur significant brokerage commissions.
CONCLUSION
After a full and complete discussion, the Board approved the Agreements, each
for a one-year period ending June 30, 2016. Based upon its evaluation of all
these factors in their totality, the Board, including the Independent
Directors, was satisfied that the terms of the Agreements were fair and
reasonable and in the best interests of the Fund and the Fund's shareholders.
In arriving at a decision to approve the Agreements, the Board did not identify
any single factor or group of factors as all-important or controlling, but
considered all factors together, and each Independent Director may have
attributed different weights to different factors. The Independent Directors
were also assisted by the advice of independent legal counsel in making this
determination.
36
[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 VOTING PROXIES ON FUND holdings with the U.S.
William J. Shea PORTFOLIO SECURITIES Securities and Exchange
OFFICERS A description of the Commission for its first
John T. Genoy, President policies and proce-dures and third fiscal quarters
and Chief Executive that the Fund uses to on Form N-Q. The Fund's
Officer determine how to vote Forms N-Q are available
James Nichols, Vice proxies related to on the U.S. Securities
President securities held in the and Exchange Commission's
Katherine Stoner, Chief Fund's portfolio, which website at
Compliance Officer is available in the http://www.sec.gov. You
Gregory N. Bressler, Fund's Statement of can also review and
Secretary Additional Information obtain copies of the
Gregory R. Kingston, may be ob-tained without Forms N-Q at the U.S.
Treasurer charge upon request, by Securities and Exchange
Kathleen Fuentes, Chief calling (800) 858-8850. Commission's Public
Legal Officer and This in-formation is also Refer-ence Room in
Assistant Secretary available from the EDGAR Washington, DC
Matthew J. Hackethal, database on the U.S. (information on the
Anti-Money Laundering Secu-rities and Exchange operation of the Public
Compliance Officer Commission's website at Reference Room may be
Donna McManus, Vice http://www.sec.gov. ob-tained by calling
President and DELIVERY OF SHAREHOLDER 1-800-SEC-0330).
Assistant Treasurer DOCUMENTS PROXY VOTING RECORD ON
Shawn Parry, Vice The Fund has adopted a FUND PORTFOLIO SECURITIES
President and policy that allows it to Information regarding how
Assistant Treasurer send only one copy of the the Fund voted proxies
INVESTMENT ADVISER Fund's prospectus, proxy relating to securities
SunAmerica Asset material, annual report held in the Fund's
Management, LLC and semi-annual report portfolio during the most
Harborside Financial (the "shareholder recent twelve month
Center documents") to period ended June 30 is
3200 Plaza 5 shareholders with available, once filed
Jersey City, NJ multiple accounts with the U.S. Securities
07311-4992 residing at the same and Exchange Commis-sion,
DISTRIBUTOR "household." This without charge, upon
AIG Capital Services, practice is called request, by calling
Inc. householding and reduces (800) 858-8850 or on the
Harborside Financial Fund expenses, which U.S. Securities and
Center benefits you and other Exchange Commission's
3200 Plaza 5 shareholders. Unless the website at
Jersey City, NJ Fund receives http://www.sec.gov.
07311-4992 instructions to the This report is submitted
SHAREHOLDER SERVICING con-trary, you will only solely for the general
AGENT receive one copy of the information of
SunAmerica Fund shareholder documents. shareholders of the Fund.
Services, Inc. The Fund will continue to Distribution of this
Harborside Financial household the report to persons other
Center share-holder documents than shareholders of the
3200 Plaza 5 indefinitely, until we Fund is authorized only
Jersey City, NJ are instructed otherwise. in connection with a
07311-4992 If you do not wish to currently effective
TRANSFER AGENT participate in prospectus, setting forth
State Street Bank and householding, please details of the Fund,
Trust Company contact Shareholder which must precede or
P.O. Box 219373 Services at (800) accompany this report.
Kansas City, MO 64141 858-8850 ext. 6010 or The accompanying report
send a written request has not been audited by
with your name, the name independent accountants
of your fund(s) and your and accordingly no
account number(s) to opinion has been
SunAmerica Mutual Funds expressed thereon.
c/o BFDS, P.O. Box
219186, Kansas City MO,
64121-9186. We will
resume individual
mailings for your account
within thirty (30) days
of receipt of your
request.
[GRAPHIC]
GO PAPERLESS!!
DID YOU KNOW THAT YOU HAVE THE OPTION TO
RECEIVE YOUR SHAREHOLDER REPORTS ONLINE?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
IT'S QUICK -- Fund documents will be received faster than via traditional mail.
IT'S CONVENIENT -- Elimination of bulky documents from personal files.
IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs.
TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW
THESE SIMPLE STEPS:
1 GO TO WWW.SAFUNDS.COM
2 CLICK ON THE LINK TO "GO PAPERLESS!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.safunds.com at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
FOR INFORMATION ON RECEIVING THIS REPORT ONLINE, SEE INSIDE BACK COVER.
DISTRIBUTED BY:
AIG 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
SFSAN - 6/15
[LOGO]
Sun America
Mutual Funds
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. 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) Not Applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Senior Floating Rate Fund, Inc.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: September 4, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: September 4, 2015
By: /s/ Gregory R. Kingston
------------------------------------
Gregory R. Kingston
Treasurer
Date: September 4, 2015