================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
----------
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08727
SunAmerica Senior Floating Rate Fund, Inc.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311
------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5, 185 Hudson Street, Suite 3300
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: December 31, 2017
================================================================================
Item 1. Reports to Stockholders
ANNUAL REPORT 2017
AIG
Senior Floating
Rate Fund
[GRAPHIC]
[LOGO]
aig.com/funds
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........................... 22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 34
DIRECTORS AND OFFICERS INFORMATION...................... 35
SHAREHOLDER TAX INFORMATION............................. 38
COMPARISON: FUND vs. INDEX.............................. 39
December 31, 2017 ANNUAL REPORT
Shareholders' Letter -- (unaudited)
Dear Shareholders:
We are pleased to present this annual report for the AIG Senior Floating Rate
Fund (the "Fund") for the 12 months ended December 31, 2017. Please note that
effective February 28, 2017, SunAmerica Mutual Funds was rebranded as AIG
Funds, and each Fund's name was changed accordingly. SunAmerica Asset
Management, LLC, the investment adviser to the Fund, continues to serve as
investment adviser of the Fund and retains its current name. In addition, there
was no change in the Fund's investment goals or strategies, portfolio managers
or ticker symbols in connection with the rebranding.
Overall, fixed income markets generated solid gains during the annual period as
bouts of elevated political uncertainty kept government bond yields relatively
low. As the year progressed, escalating geopolitical tensions between the U.S.
and North Korea and serial disappointments in inflation data helped to contain
the modest increase in sovereign yields prompted by central bank policy
normalization. Then, during the fourth quarter of 2017, yields on most
sovereign bonds were either stable or lower, as optimism about U.S. tax reform
and further central bank policy normalization were balanced by ongoing
geopolitical tensions and persistently subdued inflation data. In the U.S.,
yields on longer-term U.S. Treasuries declined, but shorter-term U.S. Treasury
yields actually increased. Meanwhile, despite concerns about prospects for
retailers, generally solid corporate earnings, improving economic data, a rally
in commodity prices in the second-half of 2017, and ongoing demand for
yield-producing assets supported credit markets, and spreads tightened. Indeed,
globally, most non-government bond sectors outperformed government bonds for
the annual period overall, as spreads tightened, led by lower-rated sectors.
Most currencies strengthened versus the U.S. dollar through the first three
calendar quarters of 2017 as political uncertainty and ongoing skepticism about
the U.S. Federal Reserve's (the "Fed") projected interest rate raises weighed
on the American currency. In the fourth quarter of the annual period, however,
the U.S. dollar fluctuated with news flow such as investigations into Russian
influence on the 2016 U.S. elections and the likelihood of tax reform, but
ended up stronger against most currencies.
Meanwhile, on the monetary policy front, most central banks around the world
became incrementally more hawkish during the annual period. The Fed raised
interest rates in March, June and December of 2017 and began tapering its asset
purchases in October 2017. Strong economic growth and inflation data prompted
the Bank of Canada to raise interest rates during July 2017 for the first time
in seven years -- and then it did so again in a surprise move less than two
months later. Through much of the annual period, the Bank of England (BoE)
indicated interest rate increases may be looming for the U.K. to contain
surging inflation, despite uncertainty about the post-Brexit growth outlook.
Then, during the fourth calendar quarter, the BoE raised its interest rates for
the first time in 10 years, noting future rate hikes would depend on the
stability of the Brexit transition. The European Central Bank (ECB) announced
its intention early in 2017 to continue the pace of its bond purchases through
at least December 2017 and pushed back against the notion of initiating
interest rate increases prior to the end of its quantitative easing. The ECB
then announced in October 2017 a reduction in its monthly asset purchases
beginning in January 2018 but extended its purchase program through September
2018. The People's Bank of China raised its open market operations reverse repo
rate during the fourth quarter of 2017. The exception was the Bank of Japan,
which remained accommodative, re-stating its commitment to maintain a
zero-yield policy on 10-year Japanese government bonds.
Amidst this backdrop, floating rate loans, as represented by the S&P/LSTA
Leveraged Loan Index (the "LLI"),/*/ returned 4.12% during the annual period
ended December 31, 2017, outperforming the broad U.S. fixed income market. The
Bloomberg Barclays U.S. Aggregate Bond Index/*/ returned 3.54% for the same
time period. During the annual period, floating rate loans were able to absorb
the volatility associated with increased political uncertainty, a more hawkish
Fed and first-half 2017 oil price weakness and benefit from positive U.S.
economic growth trends and strong demand for yield-producing assets.
2
December 31, 2017 ANNUAL REPORT
Shareholders' Letter -- (unaudited) (continued)
The sector's credit fundamentals generally remained stable -- elevated interest
coverage helped to balance higher leverage -- and bank loan valuations appeared
attractive, in our view. Technicals, or supply/demand factors, generally
remained favorable as well. Bank loan mutual funds experienced outflows of
$4.0 billion in the fourth quarter of 2017, but saw inflows of
$13.5 billion/**/ during the annual period. Issuance of collateralized loan
obligations (CLOs), one of the main sources of demand for bank loans, remained
strong, with $35.6 billion priced in the fourth quarter of 2017, bringing
full-year 2017 issuance to $118 billion, the strongest since 2014.+ The
trailing 12-month loan default rate, examined by principal amount, increased to
1.84% at the end of the annual period, as compared to 1.49% at the end of
2016.++ In terms of quality, as measured by the LLI, lower quality loans
outperformed their higher quality counterparts.
On the following pages, you will find a brief discussion regarding the Fund's
annual results. You will also find financial statements and portfolio
information for the Fund for the annual period ended December 31, 2017.
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.
Sincerely,
THE AIG 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 loans. The LLI
is the only domestic leveraged loan index that utilizes real-time market
weightings, spreads and interest payments. The Bloomberg 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: S&P Leveraged Commentary & Data
++ Source: JP Morgan
The Fund is not a money market fund and its net asset value may fluctuate.
Investments in loans involve certain risks including nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of an active trading market, in certain cases, which
may impair the Fund's ability to obtain full value for loans sold. The Fund may
invest all or substantially all of its assets in loans or other securities
(e.g., unsecured loans or high yield securities) that are rated below
investment grade, or in comparable unrated securities. Credit risks include the
possibility of a default on the loan or bankruptcy of the borrower. The value
of these loans is subject to a greater degree of volatility in response to
interest rate fluctuations.
3
SunAmerica Senior Floating Rate Fund, Inc.
EXPENSE EXAMPLE -- December 31, 2017 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of the AIG Senior Floating Rate Fund (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 July 1, 2017 and held until
December 31, 2017.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended December 31, 2017" to estimate the expenses you paid on your
account during this period. The "Expenses Paid During the Six Months Ended
December 31, 2017" 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 December 31, 2017" 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
December 31, 2017" 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 December 31, 2017"
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 December 31, 2017" 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 December 31, 2017"
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 -- December 31, 2017 -- (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 July 1, 2017 December 31, 2017 December 31, 2017* at July 1, 2017 December 31, 2017 December 31, 2017*
--------------- ----------------- ------------------ --------------- ----------------- ------------------
AIG Senior Floating
Rate Fund#+
Class A.......... $1,000.00 $1,022.00 $7.39 $1,000.00 $1,017.90 $7.38
Class C.......... $1,000.00 $1,020.46 $8.91 $1,000.00 $1,016.38 $8.89
Class W.......... $1,000.00 $1,024.28 $6.38 $1,000.00 $1,018.90 $6.36
Annualized
Expense
Ratio*
----------
AIG Senior Floating
Rate Fund#+
Class A.......... 1.45%
Class C.......... 1.75%
Class W.......... 1.25%
--------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 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 December 31,
2017" and the "Annualized Expense Ratio" would have been higher.
+ See Note 1
5
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 2017
AIG
Senior
Floating Rate
Fund+
-------------
ASSETS:
Investments at value (unaffiliated)*............................................ $245,825,169
Repurchase agreement (cost approximates value).................................. 6,500,000
Cash............................................................................ 1,069,459
Foreign cash*................................................................... 2,170,083
Receivable for:
Fund shares sold............................................................... 111,589
Dividends and interest......................................................... 1,317,924
Investments sold............................................................... 358,725
Investments sold on an extended settlement basis............................... 4,296,659
Prepaid expenses and other assets............................................... 6,226
Due from investment adviser for expense reimbursements/fee waivers.............. 121,730
Unrealized appreciation on forward foreign currency contracts................... 11,686
------------
Total assets................................................................... 261,789,250
------------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................... 389,258
Investments purchased.......................................................... --
Investments purchased on an extended settlement basis.......................... 11,420,125
Investment advisory and management fees........................................ 179,922
Distribution and account maintenance fees...................................... 116,790
Administration fees............................................................ 42,334
Transfer agent fees and expenses............................................... 58,948
Directors' fees and expenses................................................... 175
Other accrued expenses......................................................... 265,899
Dividends payable............................................................... 149,389
Commitments (Note 10)........................................................... 66,667
Unrealized depreciation on forward foreign currency contracts................... 61,907
------------
Total liabilities.............................................................. 12,751,414
------------
Net assets................................................................... $249,037,836
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value.................................................... $ 307,794
Additional paid-in capital...................................................... 277,122,167
------------
277,429,961
Accumulated undistributed net investment income (loss).......................... (37,817)
Accumulated undistributed net realized gain (loss) on investments and foreign
exchange transactions.......................................................... (23,235,829)
Unrealized appreciation (depreciation) on investments........................... (5,034,888)
Unrealized foreign exchange gain (loss) on other assets and liabilities......... (83,591)
------------
Net Assets................................................................... $249,037,836
============
Class A:
Net assets...................................................................... $ 93,345,556
Shares outstanding.............................................................. 11,533,105
Net asset value and redemption price per share.................................. $ 8.09
Maximum sales charge (3.75% of offering price).................................. 0.32
------------
Maximum offering price to public................................................ $ 8.41
============
Class C:
Net assets...................................................................... $135,901,867
Shares outstanding.............................................................. 16,804,618
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charges).................................. $ 8.09
============
Class W:
Net assets...................................................................... $ 19,790,413
Shares outstanding.............................................................. 2,441,698
Net asset value, offering and redemption price per share........................ $ 8.11
============
*COST
Investment securities (unaffiliated)........................................... $250,860,057
============
Foreign Cash................................................................... $ 2,174,424
============
--------
+ See Note 1
See Notes to Financial Statements
6
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF OPERATIONS -- For the year ended December 31, 2017
AIG
Senior
Floating Rate
Fund+
-------------
INVESTMENT INCOME:
Interest (unaffiliated)........................................................... $12,836,161
Dividends (unaffiliated).......................................................... 31,271
Facility and other fee income (Note 2)............................................ 1,115,795
-----------
Total investment income........................................................ $13,983,227
-----------
EXPENSES:
Investment advisory and management fees........................................... 2,316,082
Administration fees............................................................... 544,960
Distribution and account maintenance fees:
Class A......................................................................... 408,223
Class C......................................................................... 1,102,689
Service fees:
Class W......................................................................... 9,427
Transfer agent fees and expenses:
Class A......................................................................... 276,843
Class C......................................................................... 339,722
Class W......................................................................... 17,390
Registration fees:
Class A......................................................................... 28,174
Class C......................................................................... 31,156
Class W......................................................................... 3,518
Accounting service fees........................................................... 22,910
Custodian and accounting fees..................................................... 97,621
Reports to shareholders........................................................... 72,915
Audit and tax fees................................................................ 127,081
Legal fees........................................................................ 79,827
Directors' fees and expenses...................................................... 44,302
Other expenses.................................................................... 43,316
-----------
Total expenses before fee waivers and expense reimbursements................... 5,566,156
Fees waived and expenses reimbursed by investment adviser (Note 5)............. (1,186,147)
-----------
Net expenses................................................................... 4,380,009
-----------
Net investment income (loss)...................................................... 9,603,218
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)...................................................... (2,518,110)
Forward contracts............................................................... (144,733)
Net realized foreign exchange gain (loss) on other assets and liabilities......... 36,366
-----------
Net realized gain (loss) on investments and foreign currencies.................... (2,626,477)
-----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)...................................................... 3,903,864
Forward contracts............................................................... (40,197)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities. (20,827)
-----------
Net unrealized gain (loss) on investments and foreign currencies.................. 3,842,840
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies..... 1,216,363
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $10,819,581
===========
--------
+ See Note 1
See Notes to Financial Statements
7
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
AIG
Senior Floating
Rate Fund*
--------------------------
For the For the year
year ended ended
December 31, December 31,
2017 2016
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)........................................................... $ 9,603,218 $ 10,378,060
Net realized gain (loss) on investments and foreign currencies......................... (2,626,477) (1,667,515)
Net unrealized gain (loss) on investments and foreign currencies....................... 3,842,840 16,908,218
------------ ------------
Net Increase (decrease) in net assets resulting from operations.......................... 10,819,581 25,618,763
------------ ------------
Distributions to Shareholders from:
Net investment income (Class A)........................................................ (4,380,612) (4,365,132)
Net investment income (Class C)........................................................ (4,997,645) (5,735,535)
Net investment income (Class W)........................................................ (251,108) --
------------ ------------
Total distributions to shareholders...................................................... (9,629,365) (10,100,667)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 3). (39,480,646) (14,800,758)
------------ ------------
Total increase (decrease) in net assets.................................................. (38,290,430) 717,338
NET ASSETS:
Beginning of period...................................................................... 287,328,266 286,610,928
------------ ------------
End of period+........................................................................... $249,037,836 $287,328,266
============ ============
+Includes accumulated undistributed net investment income (loss)......................... $ (37,817) $ (60,351)
============ ============
--------
* See Note 1
See Notes to Financial Statements
8
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS
AIG Senior Floating Rate Fund+
------------------------------
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
-------
12/31/13 $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
12/31/15 8.05 0.33 (0.44) (0.11) (0.33) -- (0.33) 7.61 (1.42) 114,375 1.45
12/31/16 7.61 0.31 0.44 0.75 (0.30) -- (0.30) 8.06 10.08 131,640 1.45
12/31/17 8.06 0.30 0.03 0.33 (0.30) -- (0.30) 8.09 4.14 93,346 1.45
Class C
-------
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
12/31/15 8.05 0.31 (0.45) (0.14) (0.31) -- (0.31) 7.60 (1.85) 172,236 1.75
12/31/16 7.60 0.29 0.44 0.73 (0.28) -- (0.28) 8.05 9.76 155,688 1.75
12/31/17 8.05 0.28 0.03 0.31 (0.27) -- (0.27) 8.09 3.96 135,902 1.75
Class W
-------
04/20/17 @ -
12/31/17 $8.11 $0.25 $(0.03) $ 0.22 $(0.22) $ -- $(0.22) $8.11 2.69% $ 19,790 1.25%(4)
Ratio of
net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
3.98% 84%
3.73 65
4.14 48
3.95 60
3.69 68
3.68% 84%
3.44 65
3.84 48
3.68 60
3.38 68
3.72%(4) 68%
--------
(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):
12/31/13 12/31/14 12/31/15 12/31/16 12/31/17
-------- -------- -------- -------- --------
Class A............. 0.34% 0.32% 0.34% 0.33% 0.38%
Class C............. 0.43 0.41 0.44 0.42 0.48
Class W............. -- -- -- -- 0.50(4)
(4)Annualized
@ Inception date of class.
+ See Note 1
See Notes to Financial Statements
9
AIG Senior Floating Rate Fund++
PORTFOLIO PROFILE -- December 31, 2017 -- (unaudited)
Industry Allocation*
Commercial Services & Supplies.............................. 9.7%
Hotels, Restaurants & Leisure............................... 7.6
Oil, Gas & Consumable Fuels................................. 7.6
Media....................................................... 7.3
IT Services................................................. 6.2
Health Care Providers & Services............................ 4.9
Machinery................................................... 3.9
Software.................................................... 3.5
Insurance................................................... 3.0
Food Products............................................... 2.9
Chemicals................................................... 2.9
Containers & Packaging...................................... 2.7
Repurchase Agreements....................................... 2.6
Pharmaceuticals............................................. 2.6
Building Products........................................... 2.1
Diversified Telecommunication Services...................... 2.0
Food & Staples Retailing.................................... 1.9
Specialty Retail............................................ 1.8
Household Products.......................................... 1.7
Capital Markets............................................. 1.6
Life Sciences Tools & Services.............................. 1.6
Diversified Financial Services.............................. 1.6
Energy Equipment & Services................................. 1.5
Industrial Conglomerates.................................... 1.5
Health Care Equipment & Supplies............................ 1.5
Real Estate Investment Trusts............................... 1.3
Household Durables.......................................... 1.1
Metals & Mining............................................. 1.1
Wireless Telecommunication Services......................... 1.0
Consumer Finance............................................ 1.0
Banks....................................................... 0.9
Registered Investment Companies............................. 0.8
Internet & Direct Marketing Retail.......................... 0.8
Internet Software & Services................................ 0.7
Construction Materials...................................... 0.6
Aerospace & Defense......................................... 0.6
Professional Services....................................... 0.5
Leisure Equipment & Products................................ 0.5
Electric Utilities.......................................... 0.5
Road & Rail................................................. 0.5
Personal Products........................................... 0.4
Real Estate Management & Development........................ 0.4
Distributors................................................ 0.4
Air Freight & Logistics..................................... 0.4
Automobiles................................................. 0.4
Electrical Equipment........................................ 0.2
Multiline Retail............................................ 0.2
Semiconductors & Semiconductor Equipment.................... 0.2
Construction & Engineering.................................. 0.2
Electronic Equipment, Instruments & Components.............. 0.2
Water Utilities............................................. 0.1
Auto Components............................................. 0.1
Multi Utilities............................................. 0.0
-----
101.3%
=====
Credit Quality+#
Baa3........................................................ 1.0%
Ba3......................................................... 18.2
Ba2......................................................... 11.3
Ba1......................................................... 3.7
B3.......................................................... 7.9
B2.......................................................... 18.5
B1.......................................................... 28.2
Caa2........................................................ 3.1
Caa1........................................................ 5.2
Ca.......................................................... 0.7
Not Rated@ ................................................. 2.2
-----
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: Moody's
# Calculated as a percentage of total debt issues, excluding short-term
securities.
++ See Note 1.
10
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017
Ratings/(1)/
------------
Interest Reference Maturity Principal
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount**
-------------------------------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 90.3%
Aerospace & Defense -- 0.6%
Transdigm Group, Inc....................... BTL-F Ba2 B+ 4.32% 1 ML+2.75% 06/09/2023 $ 914,159
Transdigm Group, Inc....................... BTL-F Ba2 B+ 4.44 3 ML+2.75 06/09/2023 476,905
Air Freight & Logistics -- 0.4%
Air Medical Group Holdings LLC............. BTL-B B1 B 4.94 3 ML+3.25 04/28/2022 702,099
Air Medical Group Holdings LLC............. BTL B1 B TBD 09/07/2024 297,619
Auto Components -- 0.1%
Belron SA.................................. BTL-B Ba3 BB 2.75 3 ME+2.75 11/07/2024 EUR 140,000
Belron SA.................................. BTL-B Ba3 BB 3.89 3 ML+2.50 11/07/2024 125,000
Automobiles -- 0.4%
Navistar International Corp................ 1st Lien Ba3 B+ 4.90 1 ML+3.50 11/01/2024 935,000
Building Products -- 1.6%
Beacon Roofing Supply, Inc................. BTL-B B2 BB+ 6.25 USFRBPLR+1.75 10/01/2022 1,092,700
Beacon Roofing Supply, Inc................. BTL-B B1 BB+ TBD 01/02/2025 450,000
HD Supply, Inc............................. BTL-B4 Ba3 BB+ 4.19 3 ML+2.50 10/17/2023 1,336,525
Summit Materials LLC....................... BTL Ba2 BB+ 3.82 1 ML+2.25 11/11/2024 910,000
Capital Markets -- 1.6%
AlixPartners LLC........................... BTL-B B2 B+ 4.44 3 ML+2.75 04/04/2024 1,702,137
Fortress Investment Group LLC.............. BTL-B Baa3 BB- 2.75 1 ML+2.75 12/27/2022 750,000
Russell Investments U.S. Institutional
Holdco, Inc............................... BTL Ba2 BB 5.94 3 ML+4.25 06/01/2023 1,625,250
Chemicals -- 2.9%
Allnex (Lux) & Cy SCA...................... BTL-B2 B1 B 4.71 3 ML+3.25 09/13/2023 466,932
Allnex USA, Inc............................ BTL-B3 B1 B 4.71 3 ML+3.25 09/13/2023 351,782
Avantor, Inc............................... 1st Lien B2 B 5.51 3 ML+4.00 11/21/2024 500,000
Chemours Co................................ BTL-B1 Baa3 BBB- 4.07 1 ML+2.50 05/12/2022 356,449
DuBois Chemicals, Inc...................... 1st Lien B1 B- 5.32 1 ML+3.75 03/15/2024 926,667
DuBois Chemicals, Inc.(7).................. Delayed Draw B1 B- 1.00 03/15/2024 66,667
Gates Global, Inc.......................... BTL-B B2 B+ 4.69 3 ML+3.00 04/01/2024 985,687
MacDermid, Inc............................. BTL-B6 B2 BB- 4.57 1 ML+3.00 06/07/2023 822,087
Minerals Technologies, Inc................. BTL-B Ba2 BB+ 3.73 1 ML+2.25 02/14/2024 629,673
Minerals Technologies, Inc................. BTL-B Ba2 BB+ 3.93 3 ML+2.25 02/14/2024 263,462
Tronox Blocked Borrower LLC................ BTL-B Ba3 BB- 4.69 3 ML+3.00 09/22/2024 289,846
Tronox Finance LLC......................... BTL-B Ba3 BB- 4.69 3 ML+3.00 09/22/2024 668,876
Univar, Inc................................ BTL-B3 B1 BB 4.07 1 ML+2.50 07/01/2024 744,702
Commercial Services & Supplies -- 8.4%
ADS Waste Holdings, Inc.................... BTL B1 BB+ 3.74 1 WL+2.25 11/10/2023 1,030,185
Aramark Services, Inc...................... BTL-B1 Ba1 BBB- TBD 03/11/2025 640,000
Ascend Learning LLC (Alpine)............... BTL-B B2 B+ 4.57 1 ML+3.00 07/12/2024 683,288
Avolon Holdings, Ltd....................... BTL-B Ba1 BBB- 3.75 1 ML+2.25 04/03/2022 737,285
AVSC Holding Corp.......................... BTL B2 B 4.85-4.88 3 ML+3.50 04/27/2024 1,930,682
Berlin Packaging LLC....................... BTL-B B2 B 4.62-4.82 1 ML+3.25 10/01/2021 309,711
Berlin Packaging LLC....................... BTL-B B2 B 4.95 3 ML+3.25 10/01/2021 183,951
Brand Energy and Infrastructure Services,
Inc....................................... BTL-B B3 B 5.61-5.63 3 ML+4.25 06/21/2024 2,238,750
Brickman Group Holdings, Inc............... 1st Lien B2 B 4.38 3 ML+3.00 12/18/2020 761,559
Brickman Group Holdings, Inc............... 1st Lien B2 B 4.49 1 ML+3.00 12/18/2020 621,087
Brickman Group Holdings, Inc............... 2nd Lien Caa1 CCC+ 7.99 1 ML+6.50 12/17/2021 1,048,979
Value
Industry Description (Note 2)
--------------------------------------------------------
LOANS(3)(4) -- 90.3%
Aerospace & Defense -- 0.6%
Transdigm Group, Inc....................... $ 915,225
Transdigm Group, Inc....................... 477,462
----------
1,392,687
----------
Air Freight & Logistics -- 0.4%
Air Medical Group Holdings LLC............. 698,463
Air Medical Group Holdings LLC............. 298,204
----------
996,667
----------
Auto Components -- 0.1%
Belron SA.................................. 168,959
Belron SA.................................. 126,172
----------
295,131
----------
Automobiles -- 0.4%
Navistar International Corp................ 938,506
----------
Building Products -- 1.6%
Beacon Roofing Supply, Inc................. 1,096,570
Beacon Roofing Supply, Inc................. 450,964
HD Supply, Inc............................. 1,345,992
Summit Materials LLC....................... 914,550
----------
3,808,076
----------
Capital Markets -- 1.6%
AlixPartners LLC........................... 1,710,294
Fortress Investment Group LLC.............. 757,969
Russell Investments U.S. Institutional
Holdco, Inc............................... 1,637,439
----------
4,105,702
----------
Chemicals -- 2.9%
Allnex (Lux) & Cy SCA...................... 469,851
Allnex USA, Inc............................ 353,981
Avantor, Inc............................... 501,964
Chemours Co................................ 358,826
DuBois Chemicals, Inc...................... 928,983
DuBois Chemicals, Inc.(7).................. 66,833
Gates Global, Inc.......................... 990,154
MacDermid, Inc............................. 826,198
Minerals Technologies, Inc................. 634,920
Minerals Technologies, Inc................. 265,657
Tronox Blocked Borrower LLC................ 291,399
Tronox Finance LLC......................... 672,459
Univar, Inc................................ 747,145
----------
7,108,370
----------
Commercial Services & Supplies -- 8.4%
ADS Waste Holdings, Inc.................... 1,032,025
Aramark Services, Inc...................... 642,933
Ascend Learning LLC (Alpine)............... 686,533
Avolon Holdings, Ltd....................... 730,966
AVSC Holding Corp.......................... 1,925,855
Berlin Packaging LLC....................... 311,259
Berlin Packaging LLC....................... 184,871
Brand Energy and Infrastructure Services,
Inc....................................... 2,245,280
Brickman Group Holdings, Inc............... 765,155
Brickman Group Holdings, Inc............... 624,020
Brickman Group Holdings, Inc............... 1,052,163
11
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount** (Note 2)
------------------------------------------------------------------------------------------------------------------------------
Commercial Services & Supplies (continued)
Camelot UK Holdco, Ltd.................... 1st Lien B2 BB- 4.82% 1 ML+3.25% 10/03/2023 $1,017,176 $ 1,021,627
Casella Waste Systems, Inc................ BTL-B1 B1 B+ 3.99 1 ML+2.50 10/17/2023 1,079,100 1,082,472
Clean Harbors, Inc........................ BTL-B Baa3 BBB- 3.57 1 ML+2.00 06/27/2024 751,225 755,920
Element Materials Tech Group.............. BTL-B B1 B 5.19 3 ML+3.50 06/28/2024 575,000 577,396
Fly Funding II SARL....................... BTL Ba2 BB+ 3.40 3 ML+2.00 02/09/2023 1,195,286 1,195,286
Hayward Acquisition, Inc.................. 1st Lien B3 B 5.07 1 ML+3.50 08/05/2024 304,238 304,808
H.B. Fuller Company....................... BTL-B Ba2 BB+ 3.75 1 ML+2.25 10/20/2024 1,640,888 1,645,902
KAR Auction Services, Inc................. BTL-B5 Ba2 BB- 4.25 3 ML+2.50 03/09/2023 435,930 437,928
Nets Holding AS........................... BTL B1 B TBD 11/27/2024 905,000 1,087,221
Plastipak Holdings, Inc................... BTL-B Ba3 BB- 4.45 3 ML+2.75 10/14/2024 633,413 636,844
Sedgwick CMS Holdings, Inc................ 2nd Lien Caa2 CCC+ 7.32 1 ML+5.75 02/28/2022 1,465,000 1,468,663
Weight Watchers International, Inc........ BTL Ba3 B 6.23 1 ML+4.75 11/29/2024 545,000 546,874
-----------
20,962,001
-----------
Construction & Engineering -- 0.2%
Pike Corp................................. BTL B2 B 5.07 1 ML+3.50 09/20/2024 472,628 478,388
-----------
Construction Materials -- 0.6%
Quikrete Companies, Inc................... 1st Lien B1 BB- 4.32 1 ML+2.75 11/15/2023 1,403,846 1,405,601
-----------
Consumer Finance -- 0.7%
Vantiv LLC................................ BTL-B Ba2 BBB- 3.48 1 ML+2.00 08/09/2024 840,000 844,083
Vantiv LLC................................ BTL-B1 Ba2 BBB- TBD 03/31/2025 235,000 235,808
Vantiv LLC................................ BTL-B Ba2 BBB- 3.48 1 ML+2.00 10/14/2023 659,764 663,063
-----------
1,742,954
-----------
Containers & Packaging -- 2.1%
Berry Plastics Holding Corp............... BTL-M Ba3 BBB- 3.68-3.82 1 ML+2.25 10/01/2022 2,373,202 2,381,361
Flex Acquisition Co., Inc................. BTL B1 B 4.34 3 ML+3.00 12/29/2023 1,542,250 1,549,318
ProAmpac PG Borrower LLC.................. 1st Lien B2 B 4.88-5.00 1 ML+3.50 11/18/2023 643,629 648,457
ProAmpac PG Borrower LLC.................. 1st Lien B2 B 4.94 3 ML+3.50 11/18/2023 243,898 245,727
ProAmpac PG Borrower LLC.................. 1st Lien B2 B 7.00 USFRBPLR+2.50 11/18/2023 2,058 2,073
ProAmpac PG Borrower LLC(5)............... 2nd Lien Caa2 CCC+ 9.94 3 ML+8.50 11/18/2024 385,000 388,850
-----------
5,215,786
-----------
Distributors -- 0.4%
ABC Supply Co., Inc....................... BTL-B B1 BB+ 4.07 1 ML+2.50 10/31/2023 1,002,895 1,006,761
-----------
Diversified Financial Services -- 1.3%
Duff & Phelps Corporation................. 1st Lien B2 B 4.94 3 ML+3.25 10/14/2024 430,000 434,300
GreenSky Holdings, Inc.................... BTL B1 B+ 5.63 1 ML+4.00 08/26/2024 1,995,000 1,999,987
NAB Holdings LLC.......................... BTL-B B2 B 4.82 1 ML+3.25 07/01/2024 746,250 747,183
-----------
3,181,470
-----------
Diversified Telecommunication Services -- 2.0%
Altice Financing SA....................... 1st Lien B1 BB- 4.11 3 ML+2.75 01/31/2026 1,290,000 1,260,169
Lumos Networks Operating Company.......... BTL B2 B TBD 11/17/2024 689,985 691,422
Lumos Networks Operating Company.......... 1st Lien B2 B 4.82 1 ML+3.25 11/17/2024 704,511 705,978
Numericable Group SA...................... BTL-B12 B1 B+ 4.35 3 ML+3.00 01/31/2026 1,509,290 1,452,692
Telenet Bidco NV.......................... BTL-AL Ba3 BB- TBD 03/02/2026 300,000 300,825
UPC Financing Partnership................. BTL-AR Ba3 BB 3.98 1 ML+2.50 01/15/2026 500,000 499,469
-----------
4,910,555
-----------
Electric Utilities -- 0.5%
Helix Gen Funding LLC..................... BTL Ba2 BB 5.44 3 ML+3.75 06/02/2024 1,216,037 1,218,698
-----------
Electrical Equipment -- 0.2%
WireCo WorldGroup, Inc.................... 1st Lien Caa1 B+ 6.98 3 ML+5.50 09/30/2023 617,188 619,502
-----------
Electronic Equipment, Instruments & Components -- 0.2%
Ortho Clinical Diagnostics SA............. BTL B1 B- 5.44 3 ML+3.75 06/30/2021 463,002 463,653
-----------
12
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Interest Reference Maturity Principal
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount**
------------------------------------------------------------------------------------------------------------------------
Energy Equipment & Services -- 1.1%
CIRCOR International, Inc................. 1st Lien B1 B+ 4.93% 3 ML+3.50% 11/20/2024 $1,440,000
Paragon Offshore, Ltd.(5)(14)............. BTL-B NR NR 7.35 USFRBPLR+1.75 07/18/2022 42,763
Paragon Offshore, Ltd.(5)(6)(9)+.......... Escrow Holding NR NR 6.00 07/18/2021 4,988
Seadrill Partners Finco LLC............... BTL-B Caa2 CCC+ 4.69 3 ML+3.00 02/21/2021 937,558
Techem GmbH............................... BTL-B Ba3 BB- TBD 10/02/2024 500,000
Food & Staples Retailing -- 1.9%
Albertson's Holdings LLC.................. BTL-B4 Ba2 BB 4.32 1 ML+2.75 08/25/2021 910,465
Rite Aid Corp............................. BTL B2 BB- 5.37 1 WL+3.88 06/21/2021 1,230,000
Rite Aid Corp............................. 2nd Lien B2 BB- 6.24 1 WL+4.75 08/21/2020 1,055,000
SF CC Intermediate Holdings, Inc.......... BTL Caa1 B 5.19 3 ML+3.50 11/15/2022 575,000
U.S. Foods, Inc........................... BTL B1 BBB- 4.07 1 ML+2.50 06/27/2023 995,111
Food Products -- 2.9%
B&G Foods, Inc............................ BTL-B Ba2 BB+ 3.57 1 ML+2.00 11/02/2022 500,421
Hearthside Food Solutions LLC............. BTL-B B1 B 4.57 1 ML+3.00 06/02/2021 1,095,833
Hostess Brands, Inc....................... BTL B1 BB- 3.82 1 ML+2.25 08/03/2022 2,085,394
JBS USA LLC............................... BTL-B B1 BB- 4.10 3 ML+2.50 10/30/2022 579,989
Pinnacle Operating Corp.(5)(13)........... BTL-B2 Caa1 NR 8.82 1 ML+5.50 11/15/2021 744,424
Post Holdings, Inc........................ BTL-B Ba2 BB- 3.82 1 ML+2.25 05/24/2024 2,318,350
Health Care Equipment & Supplies -- 1.5%
Immucor, Inc.............................. BTL-B2 B1 B- 6.57 1 ML+5.00 06/15/2021 991,443
Kinetic Concepts, Inc..................... BTL-E1 B1 B 4.94 3 ML+3.25 02/02/2024 835,800
Sterigenics-Nordion Holdings LLC.......... BTL-B B1 B 4.57 1 ML+3.00 05/15/2022 1,862,472
Health Care Providers & Services -- 4.9%
American Renal Holdings, Inc.............. BTL-B B2 B+ 4.82 1 ML+3.25 06/14/2024 554,578
CHS/Community Health Systems, Inc......... BTL-H Ba3 B+ 4.48 3 ML+3.00 01/27/2021 676,432
Davis Vision, Inc......................... 1st Lien B1 B 4.49 3 ML+3.00 11/01/2024 700,000
DuPage Medical Group, Ltd................. 1st Lien B1 B 4.42 3 ML+3.00 08/15/2024 932,662
DuPage Medical Group, Ltd................. 2nd Lien Caa1 CCC+ 8.42 3 ML+7.00 08/15/2025 765,000
Envision Healthcare Corp.................. BTL-B Ba3 BB- 4.57 1 ML+3.00 12/01/2023 997,541
Genoa, a QoL Healthcare Co. LLC........... 1st Lien B1 B 4.82 1 ML+3.25 10/28/2023 928,285
Genoa, a QoL Healthcare Co. LLC(5)........ 2nd Lien Caa1 CCC+ 9.57 1 ML+8.00 10/25/2024 500,000
Healogics, Inc.(5)........................ 1st Lien B3 B- 5.75 3 ML+4.25 07/01/2021 977,854
MPH Acquisition Holdings LLC.............. BTL-B B1 B+ 4.69 3 ML+3.00 06/07/2023 2,610,396
Opal Acquisition, Inc..................... BTL-B B3 B- 5.33-5.69 3 ML+4.00 11/27/2020 595,558
Surgery Center Holdings, Inc.............. 1st Lien B1 B 4.82 1 ML+3.25 09/02/2024 548,625
Team Health, Inc.......................... 1st Lien B1 B 4.32 1 ML+2.75 02/06/2024 495,616
U.S. Renal Care, Inc...................... BTL-B B2 B 5.94 3 ML+4.25 12/31/2022 1,003,646
Hotels, Restaurants & Leisure -- 7.6%
Aristocrat Leisure, Ltd................... BTL-B Ba1 BB+ TBD 10/19/2024 610,000
Aristocrat Leisure, Ltd................... BTL-B2 Ba1 BB+ 3.36 3 ML+2.00 10/20/2021 642,851
Boyd Gaming Corp.......................... BTL-B2 Ba3 BB 3.98 1 WL+2.50 09/15/2023 953,038
Caesars Entertainment Operating Co., Inc.. BTL Ba3 BB 4.07 1 ML+2.50 10/06/2024 2,145,000
Caesars Resort Collection LLC............. BTL-B Ba3 BB 4.34 3 ML+2.75 12/22/2024 3,450,000
CityCenter Holdings LLC................... BTL-B B1 BB- 4.07 1 ML+2.50 04/18/2024 1,177,327
Eldorado Resorts LLC...................... BTL-B Ba2 BB 3.69-3.81 1 ML+2.25 04/17/2024 1,385,638
Four Seasons Holdings, Inc................ 1st Lien B1 BB 4.07 1 ML+2.50 11/30/2023 613,800
Golden Entertainment, Inc................. 1st Lien B1 B+ 4.51 1 ML+3.00 10/20/2024 1,975,000
Value
Industry Description (Note 2)
--------------------------------------------------------
Energy Equipment & Services -- 1.1%
CIRCOR International, Inc................. $ 1,434,000
Paragon Offshore, Ltd.(5)(14)............. 35,600
Paragon Offshore, Ltd.(5)(6)(9)+.......... 0
Seadrill Partners Finco LLC............... 740,001
Techem GmbH............................... 600,825
-----------
2,810,426
-----------
Food & Staples Retailing -- 1.9%
Albertson's Holdings LLC.................. 891,345
Rite Aid Corp............................. 1,230,000
Rite Aid Corp............................. 1,056,319
SF CC Intermediate Holdings, Inc.......... 561,703
U.S. Foods, Inc........................... 1,000,916
-----------
4,740,283
-----------
Food Products -- 2.9%
B&G Foods, Inc............................ 503,549
Hearthside Food Solutions LLC............. 1,100,627
Hostess Brands, Inc....................... 2,085,828
JBS USA LLC............................... 568,534
Pinnacle Operating Corp.(5)(13)........... 699,759
Post Holdings, Inc........................ 2,324,468
-----------
7,282,765
-----------
Health Care Equipment & Supplies -- 1.5%
Immucor, Inc.............................. 1,006,315
Kinetic Concepts, Inc..................... 831,412
Sterigenics-Nordion Holdings LLC.......... 1,861,695
-----------
3,699,422
-----------
Health Care Providers & Services -- 4.9%
American Renal Holdings, Inc.............. 549,032
CHS/Community Health Systems, Inc......... 643,644
Davis Vision, Inc......................... 705,250
DuPage Medical Group, Ltd................. 937,326
DuPage Medical Group, Ltd................. 765,000
Envision Healthcare Corp.................. 998,788
Genoa, a QoL Healthcare Co. LLC........... 932,540
Genoa, a QoL Healthcare Co. LLC(5)........ 505,000
Healogics, Inc.(5)........................ 844,214
MPH Acquisition Holdings LLC.............. 2,614,066
Opal Acquisition, Inc..................... 556,846
Surgery Center Holdings, Inc.............. 541,996
Team Health, Inc.......................... 482,296
U.S. Renal Care, Inc...................... 987,839
-----------
12,063,837
-----------
Hotels, Restaurants & Leisure -- 7.6%
Aristocrat Leisure, Ltd................... 610,381
Aristocrat Leisure, Ltd................... 642,730
Boyd Gaming Corp.......................... 957,803
Caesars Entertainment Operating Co., Inc.. 2,146,072
Caesars Resort Collection LLC............. 3,463,800
CityCenter Holdings LLC................... 1,182,109
Eldorado Resorts LLC...................... 1,385,638
Four Seasons Holdings, Inc................ 616,997
Golden Entertainment, Inc................. 1,975,000
13
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount** (Note 2)
------------------------------------------------------------------------------------------------------------------------------
Hotels, Restaurants & Leisure (continued)
Golden Entertainment, Inc................... 2nd Lien Caa1 CCC+ 8.51% 1 ML+7.00% 10/20/2025 $ 1,075,000 $ 1,075,672
Hilton Worldwide Finance LLC................ BTL-B2 Ba1 BBB- 3.55 1 ML+2.00 10/25/2023 744,688 748,242
Lindblad Expeditons, Inc.................... BTL B2 BB 6.34 6 ML+4.50 05/08/2021 222,855 223,969
Lindblad Expeditons, Inc.................... CTL B2 BB 6.34 6 ML+4.50 05/08/2021 1,727,145 1,735,781
Scientific Games International, Inc......... BTL-B4 B1 B+ 4.67-4.82 2 ML+3.25 08/14/2024 428,925 432,343
Station Casinos, Inc........................ BTL-B Ba3 BB- 4.06 1 ML+2.50 06/08/2023 693,400 694,353
Town Sports International Holdings, Inc.(5). BTL Caa1 CCC+ 5.07 1 ML+3.50 11/15/2020 1,169,487 1,089,084
-----------
18,979,974
-----------
Household Durables -- 1.1%
Installed Building Products, Inc............ BTL-B B1 BB 4.07 1 ML+2.50 04/15/2024 686,550 689,983
Wilsonart LLC............................... BTL-D B2 B+ 4.95 3 ML+3.25 12/19/2023 2,027,684 2,037,460
-----------
2,727,443
-----------
Household Products -- 1.7%
Diamond (BC) BV............................. BTL B1 B 3.25 2 ME+3.25 09/06/2024 EUR 210,000 251,384
Diamond (BC) BV............................. BTL B1 B 4.42 2 ML+3.00 09/06/2024 915,000 916,967
Prestige Brands, Inc........................ BTL-B4 B1 BB- 4.32 1 ML+2.75 01/26/2024 405,200 407,443
Reynolds Group Holdings, Inc................ BTL B1 B+ 4.32 1 ML+2.75 02/05/2023 2,602,128 2,613,494
-----------
4,189,288
-----------
Industrial Conglomerates -- 1.3%
American Rock Salt Co. LLC.................. BTL-B B3 B 5.23 1 ML+3.75 05/20/2021 1,681,796 1,680,395
American Rock Salt Co. LLC(5)............... 2nd Lien B3 B 5.23 1 ML+3.75 05/20/2021 650,320 648,968
Ameriforge Group, Inc.(8)................... BTL NR NR 10.69 3 ML+8.00 06/08/2022 107,189 107,725
Utex Industries, Inc........................ 1st Lien B3 CCC+ 5.57 1 ML+4.00 05/22/2021 814,450 795,616
-----------
3,232,704
-----------
Insurance -- 2.6%
Asurion Corp................................ BTL-B4 Ba3 B+ 4.32 1 ML+2.75 08/04/2022 968,222 972,718
Asurion Corp................................ BTL-B5 Ba3 B+ 4.57 1 ML+3.00 11/03/2023 878,919 882,529
Asurion Corp................................ 2nd Lien B3 B- 7.57 1 ML+6.00 08/04/2025 850,000 873,021
Compass Investments, Inc.................... BTL-B B2 B 4.69 3 ML+3.00 05/16/2024 2,004,975 2,002,469
Hub International, Ltd...................... BTL B1 B 4.35-4.41 3 ML+3.00 10/02/2020 889,231 892,913
NFP Corp.................................... BTL-B B2 B 5.07 1 ML+3.50 01/08/2024 724,168 727,675
-----------
6,351,325
-----------
Internet & Direct Marketing Retail -- 0.8%
Acosta, Inc................................. BTL B3 B- 4.82 1 ML+3.25 09/26/2021 1,338,489 1,175,919
Lands' End, Inc.(5)......................... BTL-B B3 B- 4.82 1 ML+3.25 04/04/2021 924,032 822,003
-----------
1,997,922
-----------
Internet Software & Services -- 0.7%
Go Daddy Operating Co. LLC.................. BTL-B Ba3 BB- 3.82 1 ML+2.25 02/15/2024 993,926 996,411
Zayo Group LLC.............................. BTL-B Ba2 BB 3.80 1 ML+2.25 01/19/2024 711,388 713,676
-----------
1,710,087
-----------
IT Services -- 5.8%
CCC Information Services, Inc............... 1st Lien B2 B 4.57 1 ML+3.00 04/27/2024 656,700 657,657
Ceridian Corp............................... BTL-B2 Ba3 B- 5.05 1 ML+3.50 09/15/2020 733,177 734,322
Evo Payments International.................. 1st Lien B1 B 5.57 1 ML+4.00 12/22/2023 1,607,850 1,613,209
Evo Payments International(5)............... 2nd Lien Caa1 B- 10.57 1 ML+9.00 11/15/2024 645,000 648,225
First Data Corp............................. BTL Ba3 BB 3.80 1 ML+2.25 04/26/2024 2,681,026 2,681,983
First Data Corp............................. BTL Ba3 BB 3.80 1 ML+2.25 07/08/2022 1,571,195 1,571,632
Global Payments, Inc........................ BTL-B2 Ba2 BBB- 3.57 1 ML+2.00 04/21/2023 955,994 960,774
iPayment, Inc............................... 1st Lien B1 B+ 6.62 3 ML+5.00 04/11/2023 778,390 778,390
Tempo Acquisition LLC....................... BTL B1 B 4.57 1 ML+3.00 05/01/2024 1,012,282 1,008,486
14
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount** (Note 2)
------------------------------------------------------------------------------------------------------------------------------
IT Services (continued)
WEX, Inc.................................. BTL-B2 Ba3 BB- 4.32% 1 ML+2.75% 06/30/2023 $ 2,103,474 $ 2,111,738
Xerox Business Services LLC............... BTL-B2 Ba2 BB+ 4.57 1 ML+3.00 12/07/2023 1,762,200 1,771,011
-----------
14,537,427
-----------
Leisure Equipment & Products -- 0.5%
SRAM LLC.................................. BTL-B NR B 4.63 2 ML+3.25 03/15/2024 772,321 777,148
SRAM LLC.................................. BTL-B NR B 4.69 3 ML+3.25 03/15/2024 487,823 490,872
SRAM LLC.................................. BTL-B NR B 6.75 USFRBPLR+2.25 03/15/2024 21,074 21,206
-----------
1,289,226
-----------
Life Sciences Tools & Services -- 1.6%
INC Research LLC (inVentiv)............... BTL-B Ba2 BB- 3.82 1 ML+2.25 08/01/2024 1,356,250 1,357,606
Pharmaceutical Product Development, Inc... BTL-B Ba3 B 4.32 1 ML+2.75 08/18/2022 1,261,269 1,262,373
Pharmaceutical Product Development, Inc... BTL-B Ba3 B 4.44 3 ML+2.75 08/18/2022 1,396,878 1,398,100
-----------
4,018,079
-----------
Machinery -- 3.8%
Ceramtec Group GMBH....................... BTL-B B2 NR TBD 11/29/2024 EUR 410000 491,016
Clark Equipment Co........................ BTL-B Ba3 BB- 4.19 3 ML+2.50 05/18/2024 918,151 921,976
Columbus McKinnon Corp.................... BTL-B Ba3 B+ 4.69 3 ML+3.00 01/31/2024 1,066,094 1,075,423
Gardner Denver, Inc....................... BTL-B B2 B+ 4.44 3 ML+2.75 07/30/2024 1,306,222 1,309,226
Gardner Denver, Inc....................... BTL-B B2 B+ 3.00 3 ME+3.00 07/30/2024 1,048,372 1,257,497
Harbor Freight Tools USA, Inc............. BTL-B Ba3 BB- 4.82 1 ML+3.25 08/18/2023 1,000,101 1,005,882
Harsco Corp............................... BTL-B Ba1 NR 4.63 1 ML+3.00 12/05/2024 1,121,525 1,132,740
NN, Inc................................... BTL B2 B+ 4.82 1 ML+3.25 03/22/2021 1,731,450 1,740,107
Utility One Source LP..................... BTL B2 B 7.07 1 ML+5.50 04/18/2023 622,124 634,567
-----------
9,568,434
-----------
Media -- 7.3%
Advantage Sales & Marketing LLC........... 1st Lien B1 B 4.63 3 ML+3.25 07/23/2021 1,698,269 1,654,043
Advantage Sales & Marketing LLC........... 2nd Lien Caa1 CCC+ 7.88 3 ML+6.50 07/25/2022 1,000,000 916,667
Charter Communications Operating LLC...... BTL-B Ba1 BBB- TBD 04/30/2025 815,063 815,445
CSC Holdings, Inc......................... 1st Lien Ba1 BB 3.74 1 ML+2.25 07/17/2025 508,072 505,532
Delta 2 (Lux) SARL........................ BTL-B3 B2 B+ 4.57 1 ML+3.00 02/01/2024 2,874,124 2,887,296
Galleria Co............................... BTL-B Ba1 BB+ 4.38 1 ML+3.00 09/29/2023 992,512 995,614
Getty Images, Inc......................... BTL-B B3 CCC 5.19 1 WL+3.50 10/18/2019 1,807,103 1,635,428
ION Media Networks, Inc................... BTL-B3 B1 B+ 4.18 1 ML+2.75 12/18/2020 2,412,221 2,420,261
Sinclair Television Group, Inc............ BTL-B Ba1 BB+ TBD 12/12/2024 2,150,000 2,147,983
Unitymedia Hessen GmbH & Co. KG........... BTL-B Ba3 BB- TBD 01/15/2026 1,085,000 1,082,513
Unitymedia Hessen GmbH & Co. KG........... BTL-B Ba3 BB- 3.73 1 ML+2.25 09/30/2025 1,260,000 1,260,450
Univision Communications, Inc............. BTL-C4 B2 BB- 4.32 1 ML+2.75 03/15/2024 756,075 753,145
Virgin Media Investments, Ltd............. BTL-I Ba3 BB- 3.98 1 ML+2.50 01/15/2026 500,000 499,822
Ziggo Secured Finance Partners............ BTL-E B1 BB- 3.98 1 ML+2.50 04/15/2025 500,000 495,715
-----------
18,069,914
-----------
Metals & Mining -- 0.8%
Crosby Worldwide, Ltd..................... 1st Lien Caa1 B- 4.45 3 ML+3.00 11/23/2020 1,013,683 984,793
Signode Industrial Group U.S., Inc........ BTL-B B1 B 4.32 1 ML+2.75 05/04/2021 486,652 487,868
Signode Industrial Group U.S., Inc........ BTL-B B1 B 4.44 3 ML+2.75 05/04/2021 450,604 451,731
-----------
1,924,392
-----------
Multiline Retail -- 0.2%
Neiman Marcus Group, Inc.................. BTL-B Caa1 CCC 4.64 1 ML+3.25 10/25/2020 670,316 545,638
-----------
15
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount** (Note 2)
-------------------------------------------------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 6.4%
American Energy Marcellus LLC(5)(15)........ 1st Lien Ca D 5.47% 1 ML+4.25% 08/04/2020 $1,478,241 $ 1,082,812
Arch Coal, Inc.............................. BTL B1 BB- 4.82 1 ML+3.25 03/07/2024 2,173,575 2,187,838
BCP Raptor LLC.............................. BTL-B B3 B+ 5.73 3 ML+4.25 06/24/2024 825,850 828,259
BCP Renaissance Parent LLC.................. BTL-B B1 B+ 5.38 3 ML+4.00 10/31/2024 1,405,000 1,421,392
California Resources Corp................... 2nd Lien B2 B 6.24 1 ML+4.75 12/31/2022 395,000 395,987
California Resources Corp.(5)............... 2nd Lien Caa1 B 11.88 1 ML+10.38 12/31/2021 500,000 547,500
Chesapeake Energy Corp...................... BTL B1 B+ 8.95 3 ML+7.50 08/23/2021 630,000 669,375
Chief Exploration & Development LLC(5)...... 2nd Lien NR NR 7.96 3 ML+6.50 05/16/2021 2,160,000 2,130,300
Energy Transfer Equity LP................... BTL Ba2 BB- 3.50 1 ML+2.00 02/02/2024 793,908 790,559
Foresight Energy LLC........................ 1st Lien B2 B 7.44 3 ML+5.75 03/28/2022 2,025,922 1,891,705
Medallion Midland Acquisition LLC........... 1st Lien B2 BB- 4.82 1 ML+3.25 10/30/2024 475,000 474,703
Peabody Energy Corp......................... 1st Lien Ba3 B+ 5.07 1 WL+3.50 03/31/2022 495,301 501,493
Philadelphia Energy Solutions LLC(5)........ BTL-B Ca CCC- 8.50 USFRBPLR+4.00 04/04/2018 909,638 672,086
Power Buyer LLC............................. BTL B2 B+ 4.94 3 ML+3.25 05/06/2020 1,020,630 1,021,056
Power Buyer LLC(5).......................... 2nd Lien Caa2 CCC+ 8.94 3 ML+7.25 11/06/2020 670,000 670,000
Traverse Midstream Partners LLC............. BTL B1 B+ 5.85 6 ML+4.00 09/27/2024 750,000 759,750
-----------
16,044,815
-----------
Personal Products -- 0.3%
Revlon Consumer Products Corp............... BTL-B B1 B- 5.07 1 ML+3.50 09/07/2023 1,086,250 809,256
-----------
Pharmaceuticals -- 2.0%
Albany Molecular Research, Inc.............. BTL B2 B 4.82 1 ML+3.25 08/30/2024 324,188 319,325
Albany Molecular Research, Inc.............. 2nd Lien Caa2 B- 8.57 1 ML+7.00 08/30/2025 295,000 287,994
Catalent Pharma Solutions, Inc.............. BTL-B2 Ba3 BB 3.82 1 ML+2.25 05/20/2024 1,147,594 1,151,078
Endo Luxembourg Finance Co.................. BTL-B Ba2 BB- 5.88 1 ML+4.25 04/29/2024 1,610,653 1,618,131
PAREXEL International Corp.................. BTL-B B1 B 4.57 1 ML+3.00 09/27/2024 653,363 656,085
Valeant Pharmaceuticals International, Inc.. BTL-F1 NR BB- 4.94 1 ML+3.50 04/01/2022 857,635 870,040
-----------
4,902,653
-----------
Professional Services -- 0.5%
Nexeo Solutions LLC......................... BTL-B1 B3 B 4.58-4.94 3 ML+3.25 06/09/2023 1,312,064 1,318,625
-----------
Real Estate Investment Trusts -- 1.3%
Capital Automotive LP....................... 2nd Lien NR CCC+ 7.57 1 ML+6.00 03/24/2025 470,971 478,035
MGM Growth Properties LLC................... BTL Ba3 BB+ 3.82 1 ML+2.25 04/25/2023 983,700 987,038
VICI Properties 1 LLC....................... BTL-B Ba3 BB+ TBD 12/20/2024 1,785,000 1,785,371
-----------
3,250,444
-----------
Real Estate Management & Development -- 0.4%
DTZ US Borrower LLC......................... 1st Lien B1 B+ 4.63-4.94 3 ML+3.25 11/04/2021 1,003,856 989,695
DTZ US Borrower LLC(5)...................... 2nd Lien B3 B- 9.63 3 ML+8.25 11/04/2022 92,340 90,494
-----------
1,080,189
-----------
Road & Rail -- 0.5%
Kenan Advantage Group, Inc.................. BTL B1 B+ 4.57 1 ML+3.00 07/31/2022 915,545 916,404
Kenan Advantage Group, Inc.................. BTL-B B1 B+ 4.57 1 ML+3.00 07/31/2022 221,254 221,461
-----------
1,137,865
-----------
Semiconductors & Semiconductor Equipment -- 0.2%
Integrated Device Technology, Inc........... BTL-B Baa3 BB 4.57 1 ML+3.00 04/04/2024 535,950 537,290
-----------
Software -- 3.5%
Almonde, Inc................................ BTL-B B2 B 4.98 3 ML+3.50 06/13/2024 1,251,862 1,254,888
Almonde, Inc................................ BTL Caa2 CCC+ 8.73 3 ML+7.25 06/13/2025 230,000 230,000
Change Healthcare Holdings, Inc............. BTL-B8 Ba3 B+ 4.32 1 ML+2.75 03/01/2024 1,488,750 1,490,379
Epicore Software Co......................... 1st Lien B2 B- 5.32 1 ML+3.75 06/01/2022 1,016,723 1,017,782
Hyland Software, Inc........................ BTL-B1 B1 B 4.82 1 ML+3.25 07/01/2022 710,595 714,592
Hyland Software, Inc........................ 2nd Lien Caa1 CCC+ 8.57 1 ML+7.00 07/07/2025 315,000 318,150
Lawson Software, Inc........................ BTL-B6 B1 B 4.44 3 ML+2.75 02/01/2022 690,419 691,775
16
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Interest Reference Maturity Principal
Industry Description Type Moody's S&P Rate Rate Date/(2)/ Amount**
--------------------------------------------------------------------------------------------------------------------------------
Software (continued)
MA FinanceCo. LLC............................... BTL-B3 B1 BB- 4.32% 1 ML+2.75% 06/21/2024 $ 128,978
Quest Software US Holdings, Inc................. BTL-B2 B2 B 6.92 3 ML+5.50 10/31/2022 255,000
RP Crown Parent LLC............................. BTL-B B1 B 4.57 1 ML+3.00 10/12/2023 881,100
Seattle Spinco, Inc............................. BTL-B3 B1 BB- 4.32 1 ML+2.75 06/21/2024 871,022
SS&C Technologies, Inc.......................... BTL-B1 Ba2 BB+ 3.82 1 ML+2.25 07/08/2022 873,424
SS&C Technologies, Inc.......................... BTL-B2 Ba2 BB+ 3.82 1 ML+2.25 07/08/2022 16,388
Specialty Retail -- 1.8%
At Home Holding III, Inc........................ BTL B2 B 4.88 3 ML+3.50 06/03/2022 685,520
Bass Pro Group LLC.............................. BTL-B B1 B+ 6.57 1 ML+5.00 09/25/2024 1,735,650
J Crew Operating Corp........................... BTL-B1 Caa2 CCC 4.50-4.57 1 ML+3.00 03/05/2021 340,039
J Crew Operating Corp........................... BTL-B1 Caa2 CCC 4.69 3 ML+3.00 03/05/2021 388,913
PetSmart, Inc................................... BTL-B2 Ba3 CCC+ 4.57 1 ML+3.00 03/11/2022 1,065,248
Staples, Inc.................................... BTL-B B1 B+ 5.49 3 ML+4.00 09/12/2024 870,000
Water Utilities -- 0.1%
HD Supply Waterworks, Inc....................... BTL-B B2 B+ 4.46 6 ML+3.00 08/01/2024 320,000
Wireless Telecommunication Services -- 1.0%
Maxar Technologies Ltd.......................... BTL-B Ba3 BB 4.10 3 ML+2.75 10/04/2024 620,000
Sprint Communications, Inc...................... BTL-B Ba2 BB- 4.13 1 ML+2.50 02/02/2024 1,985,000
Total Loans (cost $226,435,909).................
U.S. CORPORATE BONDS & NOTES -- 4.6%
Building Products -- 0.5%
Beacon Escrow Corp.*............................ Senior Notes B3 B+ 4.88 11/01/2025 705,000
FBM Finance, Inc.*.............................. Sec. Notes B3 B+ 8.25 08/15/2021 516,000
Commercial Services & Supplies -- 1.3%
Brand Energy and Infrastructure Services, Inc.*. Senior Notes Caa2 CCC+ 8.50 07/15/2025 1,000,000
Hertz Corp.*.................................... Sec. Notes B1 BB- 7.63 06/01/2022 750,000
Reynolds Group Issuer, Inc. FRS*................ Senior Sec. Notes B1 B+ 4.86 3 ML+3.50 07/15/2021 1,245,000
Consumer Finance -- 0.3%
Freedom Mortgage Corp.*......................... Senior Notes B2 B 6.50 11/15/2024 500,000
Navient Corp.................................... Senior Notes Ba3 B+ 6.50 06/15/2022 300,000
Containers & Packaging -- 0.3%
Flex Acquisition Co., Inc.*..................... Senior Notes Caa1 CCC+ 6.88 01/15/2025 635,000
Diversified Financial Services -- 0.3%
Arch Merger Sub, Inc.*.......................... Senior Notes B3 B- 8.50 09/15/2025 650,000
Insurance -- 0.4%
Springleaf Finance Corp......................... Company Guar. Notes B2 B 6.13 05/15/2022 500,000
USIS Merger Sub, Inc.*.......................... Senior Notes Caa2 CCC+ 6.88 05/01/2025 500,000
IT Services -- 0.4%
First Data Corp.*............................... Company Guar. Notes B3 B 7.00 12/01/2023 1,000,000
Multi Utilities -- 0.0%
Texas Competitive Electric Holdings Co.
LLC*(5)........................................ Escrow Notes NR NR 6.25 10/01/2020 4,174,956
Value
Industry Description (Note 2)
---------------------------------------------------------------
Software (continued)
MA FinanceCo. LLC............................... $ 129,236
Quest Software US Holdings, Inc................. 258,698
RP Crown Parent LLC............................. 883,119
Seattle Spinco, Inc............................. 872,662
SS&C Technologies, Inc.......................... 878,201
SS&C Technologies, Inc.......................... 16,481
------------
8,755,963
------------
Specialty Retail -- 1.8%
At Home Holding III, Inc........................ 684,234
Bass Pro Group LLC.............................. 1,725,344
J Crew Operating Corp........................... 202,607
J Crew Operating Corp........................... 231,727
PetSmart, Inc................................... 852,199
Staples, Inc.................................... 849,881
------------
4,545,992
------------
Water Utilities -- 0.1%
HD Supply Waterworks, Inc....................... 321,600
------------
Wireless Telecommunication Services -- 1.0%
Maxar Technologies Ltd.......................... 622,712
Sprint Communications, Inc...................... 1,982,519
------------
2,605,231
------------
Total Loans (cost $226,435,909)................. 224,899,017
------------
U.S. CORPORATE BONDS & NOTES -- 4.6%
Building Products -- 0.5%
Beacon Escrow Corp.*............................ 707,644
FBM Finance, Inc.*.............................. 548,250
------------
1,255,894
------------
Commercial Services & Supplies -- 1.3%
Brand Energy and Infrastructure Services, Inc.*. 1,050,000
Hertz Corp.*.................................... 785,625
Reynolds Group Issuer, Inc. FRS*................ 1,263,674
------------
3,099,299
------------
Consumer Finance -- 0.3%
Freedom Mortgage Corp.*......................... 509,375
Navient Corp.................................... 314,850
------------
824,225
------------
Containers & Packaging -- 0.3%
Flex Acquisition Co., Inc.*..................... 657,606
------------
Diversified Financial Services -- 0.3%
Arch Merger Sub, Inc.*.......................... 601,250
------------
Insurance -- 0.4%
Springleaf Finance Corp......................... 518,750
USIS Merger Sub, Inc.*.......................... 505,000
------------
1,023,750
------------
IT Services -- 0.4%
First Data Corp.*............................... 1,057,500
------------
Multi Utilities -- 0.0%
Texas Competitive Electric Holdings Co.
LLC*(5)........................................ 31,312
------------
17
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Ratings/(1)/
------------
Principal
Interest Maturity Amount**/
Industry Description Type Moody's S&P Rate Date/(2)/ Shares
-----------------------------------------------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 0.9%
Foresight Energy/Finance*............................... Sec. Notes Caa2 CCC 11.50% 04/01/2023 $ 715,000
Vine Oil & Gas LP/Vine Oil & Gas Finance Corp.*......... Company Guar. Notes Caa2 CCC+ 8.75 04/15/2023 1,215,000
Warrior Met Coal, Inc.*................................. Senior Sec. Notes B3 B- 8.00 11/01/2024 525,000
Machinery -- 0.1%
BlueLine Rental LLC*.................................... Sec. Notes Caa1 B 9.25 03/15/2024 325,000
Personal Products -- 0.1%
Revlon Escrow Corp...................................... Company Guar. Notes Caa1 CCC+ 6.25 08/01/2024 505,000
Real Estate Investment Trusts -- 0.0%
VICI Properties 1 LLC / VICI FC, Inc.................... Sec. Notes B1 B 8.00 10/15/2023 56,060
Total U.S. Corporate Bonds & Notes (cost $11,681,831)...
FOREIGN CORPORATE BONDS & NOTES -- 2.0%
Banks -- 0.2%
Itau Unibanco Holding SA*(10)........................... Sub. Notes B2 NR 7.25 12/12/2022 500,000
Containers & Packaging -- 0.3%
Ardagh Packaging Finance PLC*........................... Company Guar. Notes B3 B 7.25 05/15/2024 685,000
Energy Equipment & Services -- 0.4%
Shelf Drilling Holdings, Ltd.*.......................... Sec. Notes B2 B- 9.50 11/02/2020 936,977
Metals & Mining -- 0.3%
Costellium NV*.......................................... Senior Notes B3 B- 6.63 03/01/2025 655,000
Oil, Gas & Consumable Fuels -- 0.2%
Tullow Oil PLC*......................................... Company Guar. Notes Caa1 B- 6.00 11/01/2020 500,000
Pharmaceuticals -- 0.6%
Endo International PLC*................................. Company Guar. Notes B3 CCC+ 6.00 07/15/2023 560,000
Valeant Pharmaceuticals*................................ Senior Sec. Notes Ba3 BB- 7.00 03/15/2024 630,000
Valeant Pharmaceuticals*................................ Senior Sec. Notes Caa1 B- 7.00 12/15/2025 385,000
Total Foreign Corporate Bonds & Notes (cost $5,755,481).
COMMON STOCKS -- 0.3%
Energy Equipment & Services -- 0.0%
Paragon Offshore, Litigation Trust, Class A+(5)(9)...... 1,242
Paragon Offshore, Litigation Trust, Class B+(5)(9)...... 621
Paragon Offshore, Ltd.+(5)(9)........................... 1,242
Industrial Conglomerates -- 0.2%
AFG Holdings, Inc.+(5)(9)............................... 14,309
Media -- 0.0%
Vivial+(5)(6)(9)........................................ 1,136
Oil, Gas & Consumable Fuels -- 0.1%
TE Holdcorp LLC, Class A+(5)(6)(9)...................... 44,278
Total Common Stocks (cost $3,245,263)...................
PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.7%
Banks -- 0.7%
Banco Bilbao Vizcaya Argentaria SA(10).................. Ba2 NR 6.13 11/16/2027 800,000
Banco Bilbao Vizcaya Argentaria SA(10).................. NR NR 9.00 05/09/2018 400,000
Societe Generale SA(10)................................. Ba2 BB+ 8.25 11/29/2018 400,000
Total Preferred Securities/Capital Securities
(cost $1,654,503)......................................
Total Long-Term Investment Securities
(cost $248,772,987)....................................
Value
Industry Description (Note 2)
-----------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 0.9%
Foresight Energy/Finance*............................... $ 584,513
Vine Oil & Gas LP/Vine Oil & Gas Finance Corp.*......... 1,178,549
Warrior Met Coal, Inc.*................................. 542,063
------------
2,305,125
------------
Machinery -- 0.1%
BlueLine Rental LLC*.................................... 346,938
------------
Personal Products -- 0.1%
Revlon Escrow Corp...................................... 308,050
------------
Real Estate Investment Trusts -- 0.0%
VICI Properties 1 LLC / VICI FC, Inc.................... 62,636
------------
Total U.S. Corporate Bonds & Notes (cost $11,681,831)... 11,573,585
------------
FOREIGN CORPORATE BONDS & NOTES -- 2.0%
Banks -- 0.2%
Itau Unibanco Holding SA*(10)........................... 505,275
------------
Containers & Packaging -- 0.3%
Ardagh Packaging Finance PLC*........................... 745,794
------------
Energy Equipment & Services -- 0.4%
Shelf Drilling Holdings, Ltd.*.......................... 954,545
------------
Metals & Mining -- 0.3%
Costellium NV*.......................................... 690,206
------------
Oil, Gas & Consumable Fuels -- 0.2%
Tullow Oil PLC*......................................... 504,400
------------
Pharmaceuticals -- 0.6%
Endo International PLC*................................. 439,600
Valeant Pharmaceuticals*................................ 674,100
Valeant Pharmaceuticals*................................ 401,247
------------
1,514,947
------------
Total Foreign Corporate Bonds & Notes (cost $5,755,481). 4,915,167
------------
COMMON STOCKS -- 0.3%
Energy Equipment & Services -- 0.0%
Paragon Offshore, Litigation Trust, Class A+(5)(9)...... 1,242
Paragon Offshore, Litigation Trust, Class B+(5)(9)...... 14,179
Paragon Offshore, Ltd.+(5)(9)........................... 22,666
------------
38,087
------------
Industrial Conglomerates -- 0.2%
AFG Holdings, Inc.+(5)(9)............................... 565,206
------------
Media -- 0.0%
Vivial+(5)(6)(9)........................................ 22,572
------------
Oil, Gas & Consumable Fuels -- 0.1%
TE Holdcorp LLC, Class A+(5)(6)(9)...................... 72,174
------------
Total Common Stocks (cost $3,245,263)................... 698,039
------------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.7%
Banks -- 0.7%
Banco Bilbao Vizcaya Argentaria SA(10).................. 825,000
Banco Bilbao Vizcaya Argentaria SA(10).................. 409,000
Societe Generale SA(10)................................. 418,500
------------
Total Preferred Securities/Capital Securities
(cost $1,654,503)...................................... 1,652,500
------------
Total Long-Term Investment Securities
(cost $248,772,987).................................... 243,738,308
------------
18
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
Principal
Amount**/ Value
Industry Description Shares (Note 2)
----------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES -- 0.8%
Registered Investment Companies -- 0.8%
State Street Institutional Liquid Reserves Fund, Administration Class
1.18%(11)
(cost $2,087,070)................................................................ 2,087,070 $ 2,086,861
------------
REPURCHASE AGREEMENTS -- 2.6%
Bank of America Securities LLC Joint Repurchase Agreement(12).................... $ 995,000 995,000
Barclays Capital, Inc. Joint Repurchase Agreement(12)............................ 1,105,000 1,105,000
BNP Paribas SA Joint Repurchase Agreement(12).................................... 1,895,000 1,895,000
Deutsche Bank AG Joint Repurchase Agreement(12).................................. 735,000 735,000
RBS Securities, Inc. Joint Repurchase Agreement(12).............................. 1,770,000 1,770,000
------------
Total Repurchase Agreements (cost $6,500,000).................................... 6,500,000
------------
TOTAL INVESTMENTS
(cost $257,360,057)(16).......................................................... 101.3% 252,325,169
Liabilities in excess of other assets................................................ (1.3)% (3,287,333)
---------- ------------
NET ASSETS........................................................................... 100.0% $249,037,836
========== ============
--------
BTL Bank Term Loan
CTL Cayman Term Loan
EUR Euro Currency
NR Security is not rated.
FRS--FloatingRate Security
The rates shown on FRS are the current interest rates as of December 31, 2017
and unless noted otherwise, the dates shown are the original maturity dates.
TBD--Seniorloan purchased on a when-issued or delayed-delivery basis. Certain
details associated with this purchase are not known prior to the
settlement date of the transaction. In addition, senior loans
typically trade without accrued interest and therefore a coupon rate
is not available prior to the settlement.
+ Non-income producing security
++ See Note 1
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
rights to demand registration of these securities. At December 31, 2017,
the aggregate value of these securities was $15,284,466, representing 6.1%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
** Denominated in United States Dollars unless otherwise noted.
(1) Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered below investment grade. Ratings
provided are as of December 31, 2017.
(2) Based on the stated maturity, the weighted average to maturity of the loans
held in the portfolio is approximately 69 months. Loans in the Fund's
portfolio are generally subject to mandatory and/or optional prepayment.
Because of these mandatory prepayment conditions and because there may be
significant economic incentives for a Borrower to prepay, prepayments may
occur. As a result, the actual remaining maturity may be substantially less
than the stated maturities shown.
(3) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior loans
are generally considered to be restrictive in that the Fund is ordinarily
contractually obligated to receive approval from the Agent Bank and/or
borrower prior to the disposition of a senior loan.
(4) All loans in the portfolio were purchased through assignment agreements
unless otherwise indicated.
(5) Illiquid security. At December 31, 2017, the aggregate value of these
securities was $11,604,246 representing 4.7% of net assets.
(6) Security classified as Level 3 (see Note 2).
(7) All or a portion of this holding is subject to unfunded loan commitments
(see Note 10).
(8) "Payment-in-Kind" (PIK) security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at 9.69%. The security is also currently
paying interest in the form of additional loans at 1.00%.
19
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
(9) 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 December 31, 2017, the Fund held
the following restricted securities:
Acquisition Acquisition Value Per % of Net
Description Date Shares Cost Value Share Assets
----------- ----------- ------ ----------- -------- --------- --------
Loans
-----
Paragon Offshore, Ltd. Escrow Holding...... 07/18/2016 4,988 $ 53 $ 0 $ 0.00 0.00%
Common Stocks
-------------
AFG Holdings, Inc.......................... 01/22/2013 14,309 911,112 565,206 39.50 0.23
Paragon Offshore Litigation Trust, Class A. 07/11/2014 1,242 704 1,242 1.00 0.00
Paragon Offshore Litigation Trust, Class B. 10/21/2014 621 10,557 14,179 22.83 0.01
Paragon Offshore, Ltd...................... 07/11/2014 1,242 16,146 22,666 18.25 0.01
TE Holdcorp LLC, Class A................... 12/31/2016 44,278 1,638,216 72,174 1.63 0.03
Vivial..................................... 04/24/2008 1,136 668,529 22,572 19.87 0.01
-------- ----
$698,039 0.29%
======== ====
(10)Perpetual maturity -- maturity date reflects the next call date.
(11)The rate shown is the 7-day yield as of December 31, 2017.
(12)See Note 2 for details of the Joint Repurchase Agreement.
(13)"Payment-in-Kind" (PIK) security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at 7.28%. The security is also currently
paying interest in the form of additional loans at 1.54%.
(14)"Payment-in-Kind" (PIK) security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at 1.00%. The security is also currently
paying interest in the form of additional loans at 6.35%.
(15)Loan is in default of interest.
(16)See Note 6 for cost of investments on a tax basis.
INDEX LEGEND
1 ML-- 1 Month USD LIBOR
1 WL-- 1 Week USD LIBOR
2 ML-- 2 Month USD LIBOR
2 ME-- 2 Month Euribor
3 ME-- 3 Month Euribor
3 ML-- 3 Month USD LIBOR
USFRBPLR-- US Federal Reserve Bank Prime Loan Rate
Forward Foreign Currency Contracts
------------------------------------------------------------------------------------------------------------
Contract to In Exchange Delivery Unrealized Unrealized
Counterparty Deliver For Date Appreciation Depreciation
------------------------------------------------------------------------------------------------------------
Bank of America, N.A....................... EUR 2,167,000 USD 2,568,599 01/31/2018 $ -- $(35,672)
Citibank, N.A.............................. EUR 2,167,000 USD 2,578,037 01/31/2018 -- (26,235)
HSBC Bank USA.............................. USD 1,346,486 EUR 1,130,128 01/31/2018 11,686 --
------- --------
Net Unrealized Appreciation/(Depreciation). $11,686 $(61,907)
======= ========
--------
EUR--EuroCurrency
USD--UnitedStates Dollar
20
AIG Senior Floating Rate Fund++
PORTFOLIO OF INVESTMENTS -- December 31, 2017 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of December 31, 2017 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Loans:
Energy Equipment & Services........... $ -- $ 2,810,426 $ 0 $ 2,810,426
Other Industries...................... -- 222,088,591 -- 222,088,591
U.S. Corporate Bonds & Notes............ -- 11,573,585 -- 11,573,585
Foreign Corporate Bonds & Notes......... -- 4,915,167 -- 4,915,167
Common Stocks:
Energy Equipment & Services........... -- 38,087 -- 38,087
Industrial Conglomerates.............. -- 565,206 -- 565,206
Media................................. -- -- 22,572 22,572
Oil, Gas & Consumable Fuels........... -- -- 72,174 72,174
Preferred Securities/Capital Securities. -- 1,652,500 -- 1,652,500
Short-Term Investment Securities........ 2,086,861 -- -- 2,086,861
Repurchase Agreements................... -- 6,500,000 -- 6,500,000
---------- ------------ ------- ------------
Total Investments at Value.............. $2,086,861 $250,143,562 $94,746 $252,325,169
========== ============ ======= ============
Other Financial Instruments:@
Forward Foreign Currency Contracts...... $ -- $ 11,686 $ -- $ 11,686
========== ============ ======= ============
LIABILITIES:
Other Financial Instruments:@
Forward Foreign Currency Contracts...... $ -- $ 61,907 $ -- $ 61,907
========== ============ ======= ============
--------
* 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 Note 1
See Notes to Financial Statements
21
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017
Note 1. Organization of the Fund
SunAmerica Senior Floating Rate Fund, Inc. (the "Corporation") is an
open-end, diversified management investment company organized as a Maryland
corporation in 1998 and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Corporation consists of one series --
AIG Senior Floating Rate Fund (the "Fund"). 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.
On November 18, 2016, the Board of Directors approved a change in the name
of the SunAmerica Senior Floating Rate Fund to the AIG Senior Floating Rate
Fund effective February 28, 2017. SunAmerica Asset Management, LLC continues
to serve as investment adviser of the Fund and retains its current name. In
addition, there was no change in the Fund's investment goal or strategy,
portfolio manager or ticker symbols in connection with the rebranding.
The Fund offers three classes of shares: Class A, Class C and Class W. These
classes within the Fund are presented in the Statement of Assets and
Liabilities. The cost structure for each class is as follows:
Class A shares-- 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-- Offered for sale at net asset value without a front-end
sales charge, although a CDSC may be imposed on redemptions
made within 12 months of purchase.
Class W shares-- Offered at net asset value per share. The class is offered
exclusively through advisory fee-based programs sponsored
by certain financial intermediaries and other programs.
Class W shares of the Fund commenced operations effective
April 20, 2017.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Fund's
registration statement. Class A and Class C shares each make distribution
and account maintenance fee payments under the distribution plans pursuant
to Rule 12b-1 under the 1940 Act, with Class C shares being subject to
higher distribution fee rates. Class W shares have not adopted a 12b-1 plan
and make no payments thereunder, however, Class W shares pay a service fee
to the Fund's distributor for providing administrative and shareholder
services.
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.
22
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
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 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 December 31, 2017, 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.
23
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
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 the 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.
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. Investments in 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: During the period, the Fund used forward
contracts to protect against uncertainty in the level of future exchange
rates.
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.
24
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
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 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.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule following the Fund's Portfolio of
Investments.
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. 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 December
31, 2017, 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 year ended December 31, 2017. The
derivative contracts held during the period are not accounted for as hedging
instruments under GAAP. For a detailed presentation of derivatives held as
of December 31, 2017, 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)
------------------------------------- --------------------
$11,686 $61,907
======= =======
Statement of Assets and Liabilities Location:
(1) Unrealized appreciation on forward foreign currency contracts
(2) Unrealized depreciation on forward foreign currency contracts
25
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (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)
------------------------------------- -------------------
$(144,733) $(40,197)
========== ========
Statement of Operations Location:
(1) Net realized gain (loss) on forward contracts
(2) Change in unrealized appreciation (depreciation) on forward
contracts
The following table represents the average monthly balance of derivatives
held during the year ended December 31, 2017:
Average Amount
Outstanding
During the Period
---------------------
Foreign
Fund Exchange Contracts(1)
---- ---------------------
Senior Floating Rate............... $2,591,727
==========
-
(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 December 31,
2017. The repurchase agreements held by the Fund as of December 31, 2017,
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.
AIG 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 Written Total (Liabilities) (Received)(2)
------------ --------- ----- --------- ------- --------- ----- ------- ------- ------------- -------------
Bank of America, N.A.......... $ -- $-- $-- $ -- $35,672 $-- $-- $35,672 $(35,672) $--
Citibank N.A.................. -- -- -- -- 26,235 -- -- 26,235 (26,235) --
HSBC Bank USA, N.A............ 11,686 -- -- 11,686 -- -- -- -- 11,686 --
------- --- --- ------- ------- --- --- ------- -------- ---
Total......................... $11,686 $-- $-- $11,686 $61,907 $-- $-- $61,907 $(50,221) $--
======= === === ======= ======= === === ======= ======== ===
Net
Counterparty Amount(3)
------------ ---------
Bank of America, N.A.......... $(35,672)
Citibank N.A.................. (26,235)
HSBC Bank USA, N.A............ 11,686
--------
Total......................... $(50,221)
========
-
(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
26
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
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.
As of December 31, 2017, 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......................... 2.21% $995,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Bank of America Securities LLC, dated December 29, 2017, bearing interest at
a rate of 1.38% per annum, with principal amount of $45,000,000, a
repurchase price of $45,006,900, and a maturity date of January 2, 2018. The
repurchase agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 1.13% 09/30/2021 $47,460,900 $45,894,320
As of December 31, 2017, the Fund held an undivided interest in a joint
repurchase agreement with Barclays Capital, Inc.:
Percentage Principal
Ownership Amount
---------- ----------
Senior Floating Rate Fund......................... 2.21% $1,105,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Barclays Capital, Inc., dated December 29, 2017, bearing interest at a rate
of 1.35% per annum, with a principal amount of $50,000,000, a repurchase
price of $50,007,500, and a maturity date of January 2, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 2.00% 11/15/2026 $52,646,000 $50,985,545
As of December 31, 2017, the Fund held an undivided interest in a joint
repurchase agreement with BNP Paribas SA:
Percentage Principal
Ownership Amount
---------- ----------
Senior Floating Rate Fund.......... 2.23% $1,895,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated December 29, 2017, bearing interest at a rate of 1.35%
per annum, with a principal amount of $85,000,000, a repurchase price of
$85,012,750, and a maturity date of January 2, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 2.13% 05/15/2025 $87,944,000 $86,671,643
27
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
As of December 31, 2017, the Fund held an undivided interest in a joint
repurchase agreement with Deutsche Bank AG:
Percentage Principal
Ownership Amount
---------- ---------
Senior Floating Rate Fund......................... 2.21% $735,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated December 29, 2017, bearing interest at a rate of
1.39% per annum, with a principal amount of $33,185,000, a repurchase price
of $33,190,125, and a maturity date of January 2, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 3.63% 08/15/2019 $32,518,000 $33,857,416
As of December 31, 2017, the Fund held an undivided interest in a joint
repurchase agreement with RBS Securities, Inc.:
Percentage Principal
Ownership Amount
---------- ----------
Senior Floating Rate Fund......................... 2.21% $1,770,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
RBS Securities, Inc., dated December 29, 2017, bearing interest at a rate of
1.34% per annum, with a principal amount of $80,000,000, a repurchase price
of $80,011,911, and a maturity date of January 2, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes........... 1.25% 10/31/2018 $81,840,000 $81,664,044
When-Issued Securities and Forward Commitments: The Fund may purchase or
sell when-issued securities that have been authorized, but not yet issued in
the market. In addition, the Fund may purchase or sell securities on a
forward commitment basis. A forward commitment involves entering into a
contract to purchase or sell securities, typically on an extended settlement
basis, for a fixed price at a future date. The Fund may engage in
when-issued or forward commitment transactions in order to secure what is
considered to be an advantageous price and yield at the time of entering
into the obligation. The purchase of securities on a when-issued or forward
commitment basis involves a risk of loss if the value of the security to be
purchased declines before the settlement date. Conversely, the sale of
securities on a when-issued or forward commitment basis involves the risk
that the value of the securities sold may increase before the settlement
date. Securities purchased or sold on a when-issued or forward commitment
basis outstanding at the end of the period, if any, are included in
investments purchased/sold on an extended settlement basis in the Statement
of Assets and Liabilities.
Loans: The Fund invests in senior loans which generally consist of direct
debt obligations of companies (collectively, "Borrowers"), primarily U.S.
companies and their affiliates, undertaken to finance the growth of the
Borrower's business internally and externally, or to finance a capital
restructuring. Transactions in senior loans may settle on a delayed basis.
Loans outstanding at the end of the period, if any, are included in
investments purchased/sold on an extended settlement basis in the Statement
of Assets and Liabilities.
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
28
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
amortizes all premiums and accretes all discounts. Facility fees received,
which were $226,822 for the year ended December 31, 2017, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $888,973 for the
year ended December 31, 2017, 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.
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
2014-2016 or expected to be taken in the Fund's 2017 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
2014.
Foreign Currency Translation: The books and records of the Fund is
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Fund does not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates.
New Accounting Pronouncement: In October 2016, the SEC adopted amendments to
rules under the 1940 Act ("final rules") intended to modernize the reporting
and disclosure of information by registered investment companies. The final
rules amend Regulation S-X and require funds to provide standardized,
enhanced derivative disclosure in
29
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
fund financial statements in a format designed for individual investors. The
amendments to Regulation S-X also update the disclosures for other
investments and investments in and advances to affiliates and amend the
rules regarding the general form and content of fund financial statements.
The compliance date for the amendments to Regulation S-X was August 1, 2017.
All required changes have been made in accordance with Regulation S-X.
Note 3. Capital Share Transactions
Transactions in capital shares of each class of the Fund were as follows:
For the For the
year ended year ended
December 31, 2017 December 31, 2016
------------------------ ------------------------
Shares Amount Shares Amount
Class A ---------- ------------ ---------- ------------
Shares sold................. 3,434,101 $ 27,824,751 4,951,013 $ 39,136,197
Reinvested distributions.... 421,399 3,408,788 440,371 3,436,435
Shares redeemed............. (8,657,492) (70,030,581) (4,091,329) (31,742,954)
---------- ------------ ---------- ------------
Net increase (decrease).. (4,801,992) $(38,797,042) 1,300,055 $ 10,829,678
========== ============ ========== ============
For the For the
year ended year ended
December 31, 2017 December 31, 2016
------------------------ ------------------------
Shares Amount Shares Amount
Class C ---------- ------------ ---------- ------------
Shares sold................. 1,459,830 $ 11,815,111 1,250,845 $ 9,840,545
Reinvested distributions.... 487,601 3,943,236 545,310 4,246,724
Shares redeemed............. (4,475,181) (36,188,359) (5,119,483) (39,717,705)
---------- ------------ ---------- ------------
Net increase (decrease).. (2,527,750) $(20,430,012) (3,323,328) $(25,630,436)
========== ============ ========== ============
For the
period April 20, 2017@
through
December 31, 2017
------------------------
Shares Amount
Class W ---------- ------------
Shares sold................. 3,180,792 $ 25,734,259
Reinvested distributions.... 24,217 196,167
Shares redeemed............. (763,311) (6,184,018)
---------- ------------
Net increase (decrease).. 2,441,698 $ 19,746,408
========== ============
-----
@ Inception date of class
Note 4. Purchases and Sales of Securities
During the year ended December 31, 2017, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns, were $188,916,735 and $224,477,679, 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
30
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
reinvestment of the Fund's assets. For compensation for its services as
subadviser, Wellington is entitled to receive from SunAmerica a monthly fee
payable at the following annual rates: 0.30% of average daily net assets on
the first $500 million and 0.25% thereafter. The fee paid to the subadviser
is paid by SunAmerica and not the Fund.
Pursuant to the Administrative Services Agreement (the "Administrative
Agreement"), SunAmerica acts as the Fund's administrator and is responsible
for providing and supervising the performance by others, of administrative
services in connection with the operations of the Fund, subject to
supervision by the Fund's Board. For its services, SunAmerica receives an
annual fee equal to 0.20% of average daily net assets of the Fund. For the
year ended December 31, 2017, SunAmerica earned fees as reflected in the
Statement of Operations based upon the aforementioned rate.
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
(other than Class W 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 year ended December 31, 2017, ACS received
fees (see Statement of Operations) based upon the aforementioned rates. The
Fund has entered into an Administrative and Shareholder Services Agreement
with ACS, pursuant to which ACS is paid an annual fee of 0.15% of average
daily net assets of Class W shares as compensation for providing additional
shareholder services to Class W shareholders. For the year ended December
31, 2017, ACS earned fees as reflected in the Statements of Operations based
on the aforementioned rate.
For the year ended December 31, 2017, ACS received sales charges on Class A
shares of $109,033, of which $48,333 was reallowed to affiliated
broker-dealers and $39,243 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 year ended December 31, 2017, ACS received contingent
deferred sales charges of $8,268
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 year
ended December 31, 2017, the Fund incurred the following expenses, which are
included in the transfer agent fees and expenses payable in the Statement of
Assets and Liabilities and in transfer agent fees and expenses in the
Statement of Operations to compensate SAFS pursuant to the terms of the
Service Agreement.
Payable at
Expense December 31, 2017
- -------- -----------------
Class A............................ $261,253 $17,151
Class C............................ 323,606 25,463
Class W............................ 13,827 3,953
31
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Fund's annual operating expenses at 1.45%
for Class A, 1.75% for Class C and 1.25% for Class W of average daily net
assets. For purposes of waived fees and/or reimbursed expense calculations,
annual Fund operating expenses shall not include extraordinary expenses,
(i.e., expenses that are unusual in nature and/or infrequent in occurrence,
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 year ended December 31, 2017, SunAmerica waived fees
and/or reimbursed expenses as follows: Class A $447,622, Class C $707,019
and Class W $31,506.
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 and wash sales.
Distributable Earnings Tax Distributions Tax Distributions
---------------------------------------- ------------------------------------- -------------------------------------
For the year ended December 31, 2017 For the year ended December 31, 2017 For the year ended December 31, 2016
---------------------------------------- ------------------------------------- -------------------------------------
Long-term Gains/ Unrealized Long-term Long-term
Ordinary Capital and Appreciation/ Ordinary Capital Ordinary Capital
Income Other Losses (Depreciation) Income Gains Income Gains
-------- ---------------- -------------- ----------- --------- ------------ ---------
$6,252 $(22,880,388) $(5,072,933) $9,629,365 $-- $10,100,667 $--
Capital Loss Carryforwards: At December 31, 2017 for Federal income tax
purposes, the Fund has $22,880,388 of unlimited long-term capital losses.
For the year ended December 31, 2017, the fund utilized short-term capital
losses of $307,778 and expired capital loss carryforwards of $27,303,177.+
-----
+ 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, a 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.
Under the current law, capital losses realized after October 31 and
specified ordinary losses may be deferred and treated as occurring on the
first day of the following year. For the year ended December 31, 2017, the
fund deferred $38,019 of late year ordinary losses, $214,499 of post-October
short-term capital gains and $565,264 of post-October long-term capital
losses.
For the year ended December 31, 2017, reclassifications were made to
increase accumulated net realized gain (loss) by $27,254,496 and
undistributed net investment income by $48,681, with an offsetting reduction
to paid in capital of $27,303,177. The reclassifications arising from
book/tax differences were due primarily to the reclassification of foreign
currency gains and losses and expiration of capital loss carryforwards.
Unrealized appreciation and depreciation in the value of investments at
December 31, 2017 for federal income tax purposes were as follows:
Cost (tax basis)................... $257,364,732
============
Gross unrealized appreciation...... 1,898,505
Gross unrealized depreciation...... (6,938,068)
------------
Net unrealized depreciation........ $ (5,039,563)
============
32
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2017 -- (continued)
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into
law. Certain provisions of the Act were effective upon enactment with the
remainder becoming effective for tax years beginning after December 31,
2017. Management is currently evaluating the impact, if any, on the
financial statements and the accompanying notes to financial statements.
Note 7. Line of Credit
The Fund, along with certain other funds managed by the Adviser has access
to a $75 million committed unsecured line of credit and a $50 million
uncommitted unsecured line of credit. The committed and uncommitted lines of
credit are renewable on an annual basis with State Street Bank and Trust
Company ("State Street"), the Fund's custodian. Interest is currently
payable on the committed line of credit at the higher of the Federal Funds
Rate (but not less than zero) plus 125 basis points or the One-Month London
Interbank Offered Rate (but not less than zero) plus 125 basis points and
State Street's discretionary bid rate on the uncommitted line of credit.
There is also a commitment fee of 25 basis points per annum on the daily
unused portion of the committed line of credit and an upfront fee of $25,000
on the uncommitted line of credit. Borrowings under the line of credit will
commence when the respective Fund's cash shortfall exceeds $100,000.
For the year ended December 31, 2017, the Fund did not utilize the line of
credit.
Note 8. Interfund Lending
Pursuant to the exemptive relief granted by the SEC, the Fund is permitted
to participate in an interfund lending program among investment companies
advised by SunAmerica or an affiliate. The interfund lending program allows
the participating funds to borrow money from and lend money to each other
for temporary or emergency purposes. An interfund loan will be made under
this facility only if the participating funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction. For the year ended December 31, 2017, the Fund did
not participate in this program.
Note 9. Investment Concentration
The Fund invests primarily in participations and assignments, or acts as a
party to the primary lending syndicate of a variable rate senior loan
interest to United States corporations, partnerships, and other entities. If
the lead lender in a typical lending syndicate becomes insolvent, enters
receivership or, if not FDIC insured, enters into bankruptcy, the Fund may
incur certain costs and delays in receiving payment, or may suffer a loss of
principal and/or interest. When the Fund purchases a participation of a
senior loan interest, the Fund typically enters into a contractual agreement
with the lender or other third party selling the participation but not with
the borrower directly. As such, the Fund is subject to the credit risk of
the borrower, selling participant, lender or other persons positioned
between the Fund and the borrower.
Note 10. Unfunded Loan Commitments
At December 31, 2017, the Fund had the following unfunded loan commitments
which could be extended at the option of the Borrower:
Borrower Type Maturity Date Principal Amount Value
-------- ------------ ------------- ---------------- -------
DuBois Chemicals, Inc.............. Delayed Draw 03/15/2024 $66,667 $66,833
33
SunAmerica Senior Floating Rate Fund, Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of SunAmerica Senior Floating Rate Fund, Inc. and
Shareholders of the AIG Senior Floating Rate Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of AIG Senior Floating Rate Fund (formerly
SunAmerica Senior Floating Rate Fund) (the "Fund") as of December 31, 2017, the
related statement of operations for the year ended December 31, 2017, the
statement of changes in net assets for each of the two years in the period
ended December 31, 2017, including the related notes, and the financial
highlights for each of the five years in the period ended December 31, 2017
(collectively referred to as the "financial statements"). In our opinion, the
financial statements present fairly, in all material respects, the financial
position of the Fund as of December 31, 2017, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period ended December 31, 2017 and the financial highlights for each of the
five years in the period ended December 31, 2017 in conformity with accounting
principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund's management. Our
responsibility is to express an opinion on the Fund's financial statements
based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to the Fund in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. Our procedures
included confirmation of securities owned as of December 31, 2017 by
correspondence with the custodian, brokers and selling or agent banks; when
replies were not received from brokers, we performed other auditing procedures.
We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
February 27, 2018
We have served as the auditor of one or more investment companies in the AIG
Funds family of funds since 1984.
34
SunAmerica Senior Floating Rate Fund, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2017 -- (unaudited)
The following table contains basic information regarding the Trustees and
Officers that oversee operations of the Funds and other investment companies
within the Fund complex. Unless otherwise noted, the address of each Director
and executive officer is Harborside 5, 185 Hudson Street, Suite 3300, Jersey
City, NJ 07311.
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by
Age* Complex Time Served(4) During Past 5 Years Trustee(1)
----------------------- ------------ -------------- ------------------------------- -------------
Disinterested Trustees
Dr. Judith L. Craven Trustee 2000- Retired. 77
Age: 72 present
William F. Devin Trustee 1998- Retired. 77
Age: 79 present
Richard W. Grant Trustee 2011- Retired. 28
Age: 72 Chairman present
of the
Board
Stephen J. Gutman Trustee 2001- Senior Vice President and 28
Age: 74 present Associate Broker, Corcoran
Group (real estate) (2002 to
present); President, SJG
Marketing, Inc. (2009 to
present).
Interested Trustee
Peter A. Harbeck(3) Trustee 2001- President (1995 to present), 152
Age: 63 present CEO and Director,
SunAmerica. (1992 to
present); Director, AIG
Capital Services, Inc. ("ACS")
(1993 to present); Chairman,
President and CEO, Advisor
Group, Inc. (2004 to 2016).
Officers
John T. Genoy President 2007- Chief Financial Officer, N/A
Age: 49 present SunAmerica (2002 to
present); Senior Vice
President, SunAmerica (2003
to present); Chief Operating
Officer, SunAmerica (2006
to present).
Gregory N. Bressler Secretary 2005- Senior Vice President and N/A
Age: 51 present General Counsel,
SunAmerica (2005 to
present).
Kathleen D. Fuentes Chief Legal 2013- Vice President and Deputy N/A
Age: 48 Officer and present General Counsel,
Assistant SunAmerica (2006 to
Secretary present).
James Nichols Vice 2006- Director, President and CEO, N/A
Age: 51 President present ACS (2006 to present);
Senior Vice President,
SunAmerica (2002 to
present).
Kara Murphy Vice 2014- Director of Research, N/A
Age: 45 President present SunAmerica (2007-2013);
Chief Investment Officer,
SunAmerica (2013 to
present).
Name,
Address and Other Directorships
Age* Held by Trustee(2)
----------------------- ---------------------------------
Disinterested Trustees
Dr. Judith L. Craven Director, Sysco Corp. (1996
Age: 72 to 2017); Director, Luby's, Inc.
(1998 to present).
William F. Devin None
Age: 79
Richard W. Grant None
Age: 72
Stephen J. Gutman None
Age: 74
Interested Trustee
Peter A. Harbeck(3) None
Age: 63
Officers
John T. Genoy N/A
Age: 49
Gregory N. Bressler N/A
Age: 51
Kathleen D. Fuentes N/A
Age: 48
James Nichols N/A
Age: 51
Kara Murphy N/A
Age: 45
35
SunAmerica Senior Floating Rate Fund, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2017 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Age* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
--------------------- ----------- -------------- ------------------------------ ------------- -------------------
Officers
Gregory R. Kingston Treasurer 2014- Vice President, SunAmerica N/A N/A
Age: 51 present (2001 to present); Head of
Address: Mutual Fund Administration,
2919 Allen Parkway SunAmerica (2014 to
Houston, Texas 77019 present).
Shawn Parry Vice 2014- Vice President (2014 to N/A N/A
Age: 45 President present present) and Assistant Vice
Address: and President, SunAmerica
2919 Allen Parkway Assistant (2005 to 2014).
Houston, Texas 77019 Treasurer
Donna McManus Vice 2014- Vice President, SunAmerica, N/A N/A
Age: 56 President present (2014 to present); Managing
and Director, BNY Mellon (2009-
Assistant 2014).
Treasurer
Christopher C. Joe Chief 2017 to Chief Compliance Officer, N/A N/A
Age: 47 Compliance Present AIG Funds, Anchor Series
Address: Officer Trust, Seasons Series Trust,
2919 Allen Parkway SunAmerica Series Trust,
Houston, Texas 77019 VALIC Company I and VALIC
Company II (2017-Present);
Chief Compliance Officer,
VALIC Retirement Services
Company (2017-Present);
Chief Compliance Officer,
The Variable Annuity Life
Insurance Company (2017 to
Present); Chief Compliance
Officer, Invesco PowerShares
(2012-2017); Chief
Compliance Officer, Invesco
Investment Advisers, LLC
(2010-2013); U.S.
Compliance Director, Invesco
Ltd. (2006-2014); Deputy
Chief Compliance Officer,
Invesco Advisers, LLC (2014-
2015).
Matthew J. Hackethal Anti-Money 2006- Acting Chief Compliance N/A N/A
Age: 46 Laundering present Officer, AIG Funds, Anchor
Compliance Series Trust, Seasons Series
Officer Trust, SunAmerica Series
Trust, VALIC Company I and
VALIC Company II (2016 to
2017); Chief Compliance
Officer, SunAmerica (2006 to
Present); AML Compliance
Officer, AIG Funds, Anchor
Series Trust, Seasons Series
Trust, SunAmerica Series
Trust, VALIC Company I and
VALIC Company II (2006 to
Present); and Vice President,
SunAmerica (2011 to
Present).
36
SunAmerica Senior Floating Rate Fund, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2017 -- (unaudited)
(continued)
--------
* The business address for each Trustee is the Harborside 5, 185 Hudson
Street, Suite 3300, Jersey City, NJ 07311.
(1) The "Fund Complex" means two or more registered investment companies that
hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the Adviser. The "Fund Complex"
includes the Fund (1 fund), SunAmerica Money Market Funds Inc. (1 fund),
SunAmerica Equity Funds (2 funds), SunAmerica Income Funds (3 funds),
SunAmerica Series, Inc. (6 funds), Anchor Series Trust (8 portfolios),
SunAmerica Specialty Series (7 funds), SunAmerica Series Trust
(55 portfolios), VALIC Company I (34 portfolios), VALIC Company II (15
funds), Seasons Series Trust (20 portfolios).
(2) Directorships of companies required to report to the SEC under the
Securities Exchange Act of 1934 (i.e., "public companies") or other
investment companies registered under the 1940 Act.
(3) Interested Trustee, as defined within the 1940 Act, because he is an
officer and a director of the Adviser and a director of the principal
underwriter of the Fund.
(4) Trustees serve until their successors are duly elected and qualified. Each
officer will hold office for an indefinite term, until the date he or she
resigns or retires or until his/her successor is duly elected and qualifies.
Additional information concerning the Trustees is contained in the Statement of
Additional Information which is available, without charge, by calling (800)
858-8850.
37
SunAmerica Senior Floating Rate Fund, Inc.
SHAREHOLDER TAX INFORMATION -- (unaudited)
Certain tax information regarding the Fund is required to be provided to
shareholders based upon the Fund's income and distributions for the taxable
year ended December 31, 2017. The information necessary to complete your income
tax returns is included with your Form 1099-DIV, which will be mailed to
shareholders in early 2018.
During the year ended December 31, 2017, the Fund paid the following dividends
along with the percentage of ordinary income dividends that qualified for the
70% dividends received deductions for corporations:
Net Qualifying % for
Long-Term the 70% Dividends
Capital Gains Received Deduction
- ------------- ------------------
Class A............................ $ -- --%
Class C............................ -- --
For the year ended December 31, 2017, certain dividends paid by the Fund may be
subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax
Relief Reconciliation Act of 2003. Of the distributions paid during the fiscal
year, none may be considered qualified dividend income.
38
SunAmerica Senior Floating Rate Fund, Inc.
COMPARISON: FUND vs. INDEX -- (unaudited)
As required by the Securities and Exchange Commission, the graph on the
following pages compares the performance of a $10,000 investment in the Fund to
a similar investment in the index. Please note that the term "inception," as
used herein, reflects the date on which a specific class of shares commenced
operations. It is important to note that the Fund is a professionally managed
mutual fund while the index is not available for investment and is unmanaged.
The comparison is shown for illustrative purposes only. The graph presents the
performance of Class C shares of the Fund. The performance of the other class
will vary based upon the difference in sales charges and fees assessed to
shareholders of that class. Past performance does not predict future results.
39
SunAmerica Senior Floating Rate Fund, Inc.
COMPARISON: FUND vs. INDEX -- (unaudited) (continued)
The AIG Senior Floating Rate Fund (Class C) returned 3.96%, only modestly
underperforming its benchmark, the S&P/LSTA Leveraged Loan Index (the "LLI"),*
which returned 4.12% for the annual period ended December 31, 2017. The Fund
outperformed the Bloomberg Barclays U.S. Aggregate Bond Index,* a broad-based
fixed income market index, which returned 3.54% for the same annual period.
In aggregate, security selection contributed most favorably to the Fund's
results, driven primarily by strong selection within the energy, retailers,
leisure and financial institutions industries. This was partially offset by
weaker selection within the consumer products and consumer cyclical services
industries, which detracted.
Industry allocation overall added value as well, albeit far more modestly. The
Fund's overweight position in energy contributed positively to relative
results, as oil prices rose and the energy industry outpaced the LLI during the
annual period as a whole. Our focus in this industry was on companies that
operate in low cost basins and those reducing their cost structures, improving
their balance sheets and growing production. The Fund's underweight to
retailers, which underperformed the LLI during the annual period, also boosted
relative results. As traditional brick and mortar retailers continued to lose
share to online retailers like Amazon.com during the annual period, we remained
cautious on retail and thus took on an idiosyncratic approach to the industry
within the Fund. Detracting from the Fund's relative performance was its
underweight to media and entertainment, which outperformed the LLI during the
annual period. We remained cautious on this industry, focusing on television
and theater-related issues, as we believe several other sub-industries,
including radio, printing and newspapers, appear to be in decline. Having an
underweight to automotive, one of the strongest performing industries in the
LLI during the annual period, also hurt. We remained cautious on this industry
based on concerns about the auto cycle and the potential for capital
expenditures to increase materially due to autonomous driving vehicles.
Quality allocation as a whole contributed positively. Compared to the LLI, we
maintained overweight positions in loans rated single-B and lower, as we
believed they offered the best risk/reward profiles.
Among individual loans, we found what we considered to be the best
opportunities among higher quality, U.S.-focused issuers in less cyclical
industries. The individual loans that contributed most positively to the Fund's
absolute returns were those of fitness club owner and operator Town Sports
International Holdings, Inc., oil and gas properties owner and operator
American Energy Marcellus LLC, application software provider to the oil and gas
exploration and production industry Pinnacle Holdco SARL and shallow water
jack-up drilling services provider Shelf Drilling Holdings, Ltd. Significant
detractors from the Fund's absolute returns included loans issued by wind
producing power plant owner and operator TE Holdcorp LLC, beauty and personal
care products manufacturer and seller Revlon Consumer Products Corp., coal
miner Foresight Energy LLC and weight control program provider Weight Watchers
International, Inc.
--------
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 loans. The LLI
is the only domestic leveraged loan index that utilizes real-time market
weightings, spreads and interest payments. The Bloomberg 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.
Securities listed may or may not be a part of current portfolio construction.
The Fund is not a money market fund and its net asset value may fluctuate.
Investments in loans involve certain risks including nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of an active trading market, in certain cases, which
may impair the Fund's ability to obtain full value for loans sold. The Fund may
invest all or substantially all of its assets in loans or other securities
(e.g., unsecured loans or high yield securities) that are rated below
investment grade, or in comparable unrated securities. Credit risks include the
possibility of a default on the loan or bankruptcy of the borrower. The value
of these loans is subject to a greater degree of volatility in response to
interest rate fluctuations.
40
SunAmerica Senior Floating Rate Fund, Inc.
COMPARISON: FUND vs. INDEX -- (unaudited) (continued)
[CHART]
Senior Floating S&P/LSTA Leveraged Bloomberg Barclays U.S.
Rate Class C Loan Index++ Aggregate Bond Index**
--------------- ------------------- ----------------------
12/31/2006 $10,000.00 $10,000.00 $10,000.00
1/31/2007 10,084.00 10,087.31 9,995.87
2/28/2007 10,153.00 10,156.66 10,150.02
3/31/2007 10,184.00 10,197.25 10,150.35
4/30/2007 10,246.00 10,257.83 10,205.09
5/31/2007 10,297.00 10,320.28 10,127.70
6/30/2007 10,315.00 10,343.28 10,097.76
7/31/2007 9,984.00 9,997.02 10,182.00
8/31/2007 9,995.00 10,020.27 10,306.80
9/30/2007 10,148.00 10,216.06 10,384.97
10/31/2007 10,214.00 10,313.59 10,478.27
11/30/2007 10,043.00 10,170.44 10,666.69
12/31/2007 10,043.00 10,202.22 10,696.66
1/31/2008 9,679.00 9,872.69 10,876.39
2/29/2008 9,424.00 9,625.06 10,891.44
3/31/2008 9,372.00 9,616.40 10,928.59
4/30/2008 9,685.00 9,972.65 10,905.77
5/31/2008 9,807.00 10,066.41 10,825.79
6/30/2008 9,844.00 10,091.56 10,817.11
7/31/2008 9,697.00 10,014.41 10,808.27
8/31/2008 9,676.00 10,001.33 10,910.81
9/30/2008 9,047.00 9,386.24 10,764.27
10/31/2008 7,569.00 8,145.65 10,510.19
11/30/2008 6,684.00 7,452.86 10,852.29
12/31/2008 6,184.00 7,233.34 11,257.21
1/31/2009 6,548.00 7,768.77 11,157.85
2/28/2009 6,495.00 7,829.32 11,115.72
3/31/2009 6,480.00 7,942.25 11,270.25
4/30/2009 7,275.00 8,632.88 11,324.19
5/31/2009 7,872.00 9,159.57 11,406.30
6/30/2009 8,384.00 9,561.09 11,471.14
7/31/2009 8,813.00 10,013.98 11,656.20
8/31/2009 9,070.00 10,240.75 11,776.89
9/30/2009 9,423.00 10,568.28 11,900.63
10/31/2009 9,596.00 10,626.79 11,959.40
11/30/2009 9,646.00 10,654.13 12,114.21
12/31/2009 9,909.00 10,967.33 11,924.81
1/31/2010 10,185.00 11,191.19 12,107.00
2/28/2010 10,191.00 11,223.33 12,152.19
3/31/2010 10,427.00 11,476.05 12,137.29
4/30/2010 10,584.00 11,644.75 12,263.64
5/31/2010 10,359.00 11,382.48 12,366.79
6/30/2010 10,287.00 11,329.32 12,560.73
7/31/2010 10,424.00 11,503.52 12,694.80
8/31/2010 10,472.00 11,542.50 12,858.12
9/30/2010 10,601.00 11,704.61 12,871.84
10/31/2010 10,745.00 11,887.90 12,917.64
11/30/2010 10,783.00 11,929.99 12,843.39
12/31/2010 10,901.00 12,078.11 12,704.90
1/31/2011 11,067.00 12,316.12 12,719.65
2/28/2011 11,151.00 12,373.14 12,751.47
3/31/2011 11,148.00 12,371.41 12,758.52
4/30/2011 11,197.00 12,450.26 12,920.50
5/31/2011 11,194.00 12,439.03 13,089.14
6/30/2011 11,150.00 12,393.01 13,050.80
7/31/2011 11,159.00 12,411.17 13,257.91
8/31/2011 10,615.00 11,864.49 13,451.62
9/30/2011 10,653.00 11,915.33 13,549.44
10/31/2011 10,912.00 12,259.82 13,564.02
11/30/2011 10,867.00 12,199.58 13,552.23
12/31/2011 10,908.00 12,261.77 13,701.18
1/31/2012 11,098.00 12,529.45 13,821.43
2/29/2012 11,174.00 12,626.08 13,818.27
3/31/2012 11,256.00 12,723.05 13,742.56
4/30/2012 11,323.00 12,817.00 13,894.96
5/31/2012 11,254.00 12,730.42 14,020.66
6/30/2012 11,320.00 12,818.31 14,026.16
7/31/2012 11,428.00 12,966.68 14,219.64
8/31/2012 11,540.00 13,112.42 14,228.96
9/30/2012 11,664.00 13,257.78 14,248.48
10/31/2012 11,678.00 13,299.70 14,276.50
11/30/2012 11,717.00 13,341.00 14,299.03
12/31/2012 11,803.00 13,445.90 14,278.67
1/31/2013 11,942.00 13,588.96 14,178.81
2/28/2013 11,950.00 13,617.44 14,249.91
3/31/2013 12,031.00 13,729.67 14,261.28
4/30/2013 12,139.00 13,811.59 14,405.62
5/31/2013 12,134.00 13,837.71 14,148.48
6/30/2013 12,055.00 13,755.98 13,929.66
7/31/2013 12,166.00 13,891.78 13,948.70
8/31/2013 12,160.00 13,886.56 13,877.36
9/30/2013 12,168.00 13,920.45 14,008.74
10/31/2013 12,265.00 14,021.83 14,121.99
11/30/2013 12,316.00 14,091.18 14,069.17
12/31/2013 12,365.00 14,156.94 13,989.67
1/31/2014 12,443.00 14,249.59 14,196.38
2/28/2014 12,461.00 14,274.71 14,271.83
3/31/2014 12,498.00 14,326.22 14,247.53
4/30/2014 12,487.00 14,342.41 14,367.79
5/31/2014 12,522.00 14,441.56 14,531.33
6/30/2014 12,585.00 14,524.60 14,538.84
7/31/2014 12,561.00 14,520.45 14,502.36
8/31/2014 12,583.00 14,542.91 14,662.47
9/30/2014 12,496.00 14,456.13 14,562.95
10/31/2014 12,518.00 14,493.57 14,706.08
11/30/2014 12,557.00 14,565.56 14,810.40
12/31/2014 12,367.00 14,382.78 14,824.25
1/31/2015 12,376.00 14,430.51 15,135.10
2/28/2015 12,568.00 14,634.10 14,992.80
3/31/2015 12,609.00 14,688.46 15,062.43
4/30/2015 12,725.00 14,823.58 15,008.38
5/31/2015 12,753.00 14,851.41 14,972.24
6/30/2015 12,684.00 14,789.29 14,808.98
7/31/2015 12,661.00 14,788.37 14,911.92
8/31/2015 12,546.00 14,684.93 14,890.51
9/30/2015 12,441.00 14,589.56 14,991.23
10/31/2015 12,436.00 14,562.93 14,993.72
11/30/2015 12,285.00 14,435.36 14,954.10
12/31/2015 12,138.00 14,283.79 14,905.77
1/31/2016 12,034.00 14,190.52 15,110.89
2/29/2016 11,977.00 14,115.75 15,218.08
3/31/2016 12,323.00 14,504.75 15,357.71
4/30/2016 12,573.00 14,792.69 15,416.65
5/31/2016 12,694.00 14,924.57 15,420.60
6/30/2016 12,700.00 14,927.72 15,697.68
7/31/2016 12,869.00 15,141.26 15,796.92
8/31/2016 12,957.00 15,254.97 15,778.85
9/30/2016 13,060.00 15,386.75 15,769.61
10/31/2016 13,149.00 15,513.76 15,648.99
11/30/2016 13,168.00 15,554.82 15,278.83
12/31/2016 13,323.00 15,735.68 15,300.37
Class A Class C Class W
Senior --------------------------------------------------------
Floating Average Average Average
Rate Annual Cumulative Annual Cumulative Annual Cumulative
Fund# Return Return+ Return Return+ Return Return+
- --------------------------------------------------------
1 Year Return 0.29% 4.14% 2.96% 3.96% N/A N/A
--------------------------------------------------------------------------
5 Year Return 2.75% 18.98% 3.25% 17.35% N/A N/A
--------------------------------------------------------------------------
10 Year Return 3.17% 42.07% 3.27% 37.91% N/A N/A
--------------------------------------------------------------------------
Since Inception* 3.04% 45.61% 3.77% 104.49% N/A 2.69%
--------------------------------------------------------------------------
# For the purposes of the table, it has been assumed that
the maximum sales charge of 3.75% with respect to Class
A shares was deducted from the initial investment in
the Fund and that the CDSCs with respect to the Class C
shares have been deducted, as applicable.
+ Cumulative returns do not include sales load. If sales
load had been included, the return would have been
lower.
* Inception date: Class A: 10/04/2006; Class C:
08/31/1998; Class W: 04/20/2017
++ The S&P/LSTA Leveraged Loan Index (LLI) reflects the
market-weighted performance of U.S. dollar-denominated
institutional leveraged loan portfolios. The LLI is the
only domestic leveraged loan index that utilizes
real-time market weightings, spreads and interest
payments.
** The Bloomberg Barclays U.S. Aggregate Bond Index
represents securities that are U.S. domestic, taxable
and dollar denominated. The index covers components for
government and corporate securities, mortgage
pass-through securities and asset-backed securities.
Indices are not managed and an investor cannot invest
directly into an index.
The Fund operated as a closed-end investment company with
monthly repurchase offers until October 4, 2006, whereupon
it converted to an open-end investment company.
Information in the graph and table reflects performance of
the Fund as a closed-end investment company through
October 3, 2006, and the Fund may have performed
differently if it were an open-end investment company
prior to that date.
For the 12 month period ended December 31, 2017, the AIG
Senior Floating Rate Class C returned 2.96% compared to
4.12% for the S&P/LSTA Leveraged Loan Index and 3.54% for
the Bloomberg Barclays U.S. Aggregate Bond Index. (The
performance data and graph do not reflect the deduction of
taxes that a shareholder would pay on fund distributions
or the redemption of fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 3.75%; Contingent Deferred Sales
Charge (CDSC): Class C: 1.00% CDSC. The fund's daily net asset values are not
guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or
any other agency. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be higher or
lower than the original cost. Current performance may be higher or lower than
that shown. Performance as of the most recent month end is available at
www.safunds.com
41
[LOGO]
AIG Funds
HARBORSIDE 5
185 HUDSON STREET, SUITE 3300
JERSEY CITY, NJ 07311
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 One Lincoln St. file its com-plete
Stephen J. Gutman Boston, MA 02111 schedule of portfolio
Peter A. Harbeck VOTING PROXIES ON FUND holdings with the U.S.
OFFICERS PORTFOLIO SECURITIES Securities and Exchange
John T. Genoy, President A description of the Commission for its first
and Chief Executive policies and proce-dures and third fiscal quarters
Officer that the Fund uses to on Form N-Q. The Fund's
James Nichols, Vice determine how to vote Forms N-Q are available
President proxies related to on the U.S. Securities
Kara Murphy, Vice securities held in the and Exchange Commission's
President Fund's portfolio, which website at
Christopher C. Joe, is available in the http://www.sec.gov. You
Chief Compliance Fund's Statement of can also review and
Officer Additional Information obtain copies of the
Gregory N. Bressler, may be ob-tained without Forms N-Q at the U.S.
Secretary charge upon request, by Securities and Exchange
Gregory R. Kingston, calling (800) 858-8850. Commission's Public
Treasurer This in-formation is also Refer-ence Room in
Kathleen Fuentes, Chief available from the EDGAR Washington, DC
Legal Officer and database on the U.S. (information on the
Assistant Secretary Secu-rities and Exchange operation of the Public
Matthew J. Hackethal, Commission's website at Reference Room may be
Anti-Money Laundering http://www.sec.gov. ob-tained by calling
Compliance Officer DELIVERY OF SHAREHOLDER 1-800-SEC-0330).
Donna McManus, Vice DOCUMENTS PROXY VOTING RECORD ON
President and The Fund has adopted a FUND PORTFOLIO SECURITIES
Assistant Treasurer policy that allows it to Information regarding how
Shawn Parry, Vice send only one copy of the the Fund voted proxies
President and Fund's prospectus, proxy relating to securities
Assistant Treasurer material, annual report held in the Fund's
INVESTMENT ADVISER and semi-annual report portfolio during the most
SunAmerica Asset (the "shareholder recent twelve month
Management, LLC documents") to period ended June 30 is
Harborside 5 shareholders with available, once filed
185 Hudson Street, Suite multiple accounts with the U.S. Securities
3300 residing at the same and Exchange Commis-sion,
Jersey City, NJ 07311 "household." This without charge, upon
DISTRIBUTOR practice is called request, by calling
AIG Capital Services, householding and reduces (800) 858-8850 or on the
Inc. Fund expenses, which U.S. Securities and
Harborside 5 benefits you and other Exchange Commission's
185 Hudson Street, Suite shareholders. Unless the website at
3300 Fund receives http://www.sec.gov.
Jersey City, NJ 07311 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
AIG Fund Services, Inc. shareholder documents. shareholders of the Fund.
Harborside 5 The Fund will continue to Distribution of this
185 Hudson Street, Suite household the report to persons other
3300 share-holder documents than shareholders of the
Jersey City, NJ 07311 indefinitely, until we Fund is authorized only
TRANSFER AGENT are instructed otherwise. in connection with a
State Street Bank and If you do not wish to currently effective
Trust Company participate in prospectus, setting forth
P.O. Box 219373 householding, please details of the Fund,
Kansas City, MO 64141 contact Shareholder which must precede or
Services at (800) accompany this report.
858-8850 ext. 6010 or
send a written request
with your name, the name
of your fund(s) and your
account number(s) to AIG
Funds c/o BFDS, P.O. Box
219186, Kansas City MO,
64121-9186. We will
resume in-dividual
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.aig.com/funds
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.aig.com/funds 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.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and
distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside
5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo
and ACS are members of American International Group, Inc. (AIG).
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
AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the
prospectus carefully before investing.
[LOGO]
aig.com/funds
SFANN - 12/17
Item 2. Code of Ethics
The SunAmerica Senior Floating Rate Fund, Inc. (the "registrant") has
adopted a Code of Ethics applicable to its Principal Executive and
Principal Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley
Act of 2002 (the "Code"). During the fiscal year ended December 31, 2017,
there were no reportable waivers or implicit waivers to a provision of the
Code of Ethics that applies to the registrant's Principal Executive and
Principal Accounting Officers (the "Covered Officers"). During the fiscal
year ended December 31, 2017, however, there were reportable amendments to
the Code that apply to the Covered Officers, and that relate to one or more
of the items set forth in paragraph (b) of Item 2 of Form N-CSR. In
particular, the Code has been amended to provide an enhanced description of
the Covered Officers' responsibilities, which include a responsibility to
observe the ethical principles contained in the Code.
Item 3. Audit Committee Financial Expert.
As of January 16, 2018, the registrant's Board of Directors has determined
that Eileen A. Kamerick, a Director of the registrant, qualifies as an
audit committee financial expert, as defined in Item 3(b) of Form N-CSR.
Ms. Kamerick is considered to be independent for purposes of Item 3(a)(2)
of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two fiscal
years for professional services rendered by the registrant's principal
accountant were as follows:
2016 2017
-------- --------
(a) Audit Fees $104,777 $107,713
(b) Audit-Related Fees $ 0 $ 0
(c) Tax Fees $ 15,872 $ 16,216
(d) All Other Fees $ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the principal
accountant in connection with statutory and regulatory filings. Tax Fees
principally include tax compliance, tax advice, tax planning and
preparation of tax returns.
Aggregate fees billed to the investment adviser and Adviser Affiliates (as
defined below in Item 4(e)) that are required to be pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for the last two
fiscal years for services rendered by the registrant's principal accountant
were as follows:
2016 2017
------- -------
(b) Audit-Related Fees $ 0 $ 0
(c) Tax Fees $ 0 $ 0
(d) All Other Fees $ 0 $ 0
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliate relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for non-
audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation
S-X as set forth in the registrant's audit committee charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provides ongoing services to the
registrant for 2016 and 2017 were $15,872 and $16,216, respectively.
(h) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors that were
implemented after the registrant last provided disclosure in response to
the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407)
(as required by 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this
Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the
registrant's last fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the registrant's internal contro1 over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and Principle
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act
of 2002 attached hereto as Exhibit 99.406. Code of Ethics.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Senior Floating Rate Fund, Inc.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: March 9, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: March 9, 2018
By: /s/ Gregory R. Kingston
------------------------------------
Gregory R. Kingston
Treasurer
Date: March 9, 2018