-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I21tZNSDTOzlZ2iLpWhss4H5cmGyvTcsDTbwgKE/ZQ5lZ+8lpbfnFkitnX4Z4JzI uZdzJ8I8QfoKAyIG19z42g== 0001193125-03-046648.txt : 20030908 0001193125-03-046648.hdr.sgml : 20030908 20030908160242 ACCESSION NUMBER: 0001193125-03-046648 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030908 EFFECTIVENESS DATE: 20030908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA SENIOR FLOATING RATE FUND INC CENTRAL INDEX KEY: 0001059040 IRS NUMBER: 043412472 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08727 FILM NUMBER: 03886143 BUSINESS ADDRESS: STREET 1: 286 CONGRESS ST STREET 2: C/O NORTH AMERICAN FUNDS CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173683535 MAIL ADDRESS: STREET 1: C/O NORTH AMERICAN FUNDS STREET 2: 286 CONGRESS ST CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: NORTH AMERICAN SENIOR FLOATING RATE FUND INC DATE OF NAME CHANGE: 19980401 N-CSRS 1 dncsrs.txt SUNAMERICA SENIOR FLOATING RATE FUND, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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 Financial Center, 3200 Plaza 5, Jersey City, NJ 07311 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Robert M. Zakem, ESQ. Senior Vice President & General Counsel AIG SunAmerica Asset Management Corp. Harborside Financial Center 3200 Plaza 5 Jersey City, NJ 07311 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (201) 324-6363 ---------------------------- Date of fiscal year end: December 31 ------------------------- Date of reporting period: June 30, 2003 ------------------------ Item 1. Reports to Shareholders. SunAmerica Senior Floating Rate Fund, Inc. Semiannual Report at June 30, 2003. [GRAPHIC] SunAmerica THE RETIREMENT SPECIALIST Senior Floating Rate Fund 2003 SEMIANNUAL REPORT [LOGO] AIG Sun America Mutual Funds Table of Contents - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES 1 STATEMENT OF OPERATIONS............ 2 STATEMENTS OF CHANGES IN NET ASSETS 3 STATEMENT OF CASH FLOWS............ 4 FINANCIAL HIGHLIGHTS............... 5 PORTFOLIO OF INVESTMENTS........... 8 NOTES TO FINANCIAL STATEMENTS...... 12 DIRECTORS INFORMATION.............. 20
SunAmerica Senior Floating Rate Fund, Inc. STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2003 -- (unaudited) - --------------------------------------------- ASSETS: Investments in loans and securities, at value (Identified cost, $130,003,599)........................................ $120,555,288 Cash........................................................ 901,006 Receivables: Investments sold........................................... 1,585,485 Fund shares sold........................................... 76,453 Interest and dividends receivable.......................... 681,639 Due from investment adviser................................ 125,232 Prepaid expenses............................................ 2,835 ------------ Total assets............................................... 123,927,938 ------------ LIABILITIES: Payables: Investments purchased...................................... 849,849 Fund shares repurchased.................................... 2,486,058 Dividend payable........................................... 117,294 Investment adviser......................................... 84,627 Distribution and service fees.............................. 66,358 Administration fees........................................ 39,825 Other accrued expenses..................................... 207,368 Commitments (Note 10)...................................... -- ------------ Total liabilities.......................................... 3,851,379 ------------ Net assets............................................... $120,076,559 ============ NET ASSETS CONSIST OF: Capital shares at par value of $.01......................... $ 131,416 Additional paid-in capital.................................. 151,881,667 ------------ 152,013,083 Accumulated undistributed net investment income (loss)...... 67,120 Accumulated net realized gain (loss)........................ (22,555,333) Unrealized appreciation (depreciation) on investments....... (9,448,311) ------------ Net assets................................................. $120,076,559 ============
Class B Class C Class D ----------- ----------- ----------- Net assets at value..................... $28,977,528 $77,711,828 $13,387,203 Shares outstanding...................... 3,171,439 8,505,016 1,465,177 Net Asset Value, offering and redemption price per share (excluding any applicable contingent deferred sales charges)......................... $ 9.14 $ 9.14 $ 9.14 =========== =========== ===========
See Notes to Financial Statements. 1 SunAmerica Senior Floating Rate Fund, Inc. STATEMENT OF OPERATIONS -- For the six months ended June 30, 2003 -- (unaudited) - ----------------------------------------------------- -------------------------- INVESTMENT INCOME: Income: Interest....................................................... $ 3,345,566 Dividends...................................................... 26,215 Facility and other fee income (Note 2)......................... 684,611 ----------- Total income................................................ 4,056,392 ----------- EXPENSES: Investment adviser fee......................................... 529,762 Distribution and service maintenance fee -- for Class B........ 112,017 Distribution and service maintenance fee -- for Class C........ 302,901 Custody fee.................................................... 27,796 Transfer agent fee and expenses -- Class B..................... 7,600 Transfer agent fee and expenses -- Class C..................... 36,080 Transfer agent fee and expenses -- Class D..................... 3,800 Audit fees..................................................... 71,965 Legal fees..................................................... 25,970 Administration fees............................................ 249,501 Accounting service fees........................................ 54,935 Printing expense............................................... 70,073 Directors' fees and expenses................................... 15,025 Interest expense............................................... 11,730 Miscellaneous.................................................. 30,721 ----------- Total expenses before reimbursements and custody credits....... 1,549,876 Expenses waived or reimbursed.................................. (638,591) Custody credits earned on cash balances........................ (2,137) ----------- Net expenses................................................ 909,148 ----------- Net investment income (loss)................................... 3,147,244 ----------- REALIZED AND UNREALIZED GAIN/(LOSS): Net realized gain (loss) on investment transactions............ (1,872,584) Change in unrealized appreciation (depreciation) on investments 6,631,518 ----------- Net realized and unrealized gain (loss) on investments......... 4,758,934 ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,906,178 ===========
See Notes to Financial Statements. 2 SunAmerica Senior Floating Rate Fund, Inc. STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
For the six months ended June 30, 2003 For the year ended (unaudited) December 31, 2002 ------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: Operations: Net investment income (loss).......................................................... $ 3,147,244 $ 7,523,444 Net realized gain (loss) on investment transactions................................... (1,872,584) (6,967,383) Change in unrealized appreciation (depreciation) on investments....................... 6,631,518 2,298,689 ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 7,906,178 2,854,750 Distributions to shareholders: From net investment income (Class B).................................................. (743,561) (1,634,402) From net investment income (Class C).................................................. (1,992,113) (4,660,669) From net investment income (Class D).................................................. (362,808) (924,225) ------------ ------------ Total distributions to shareholders..................................................... (3,098,482) (7,219,296) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 3) $(17,776,181) (71,961,280) ------------ ------------ Total increase (decrease) in net assets................................................. (12,968,485) (76,325,826) Net Assets: Beginning of period..................................................................... $133,045,044 $209,370,870 ------------ ------------ End of period........................................................................... $120,076,559 $133,045,044 ============ ============ Accumulated undistributed net investment income (loss).................................. $ 67,120 $ 18,358 ============ ============
See Notes to Financial Statements. 3 SunAmerica Senior Floating Rate Fund, Inc. STATEMENT OF CASH FLOWS -- For the six months ended June 30, 2003 -- (unaudited) INCREASE (DECREASE) IN CASH Cash flows from operating activities: Net increase in net assets from operations....................................................................... $ 7,906,178 Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: Purchase of loans.............................................................................................. (60,146,263) Proceeds from loans sold....................................................................................... 55,158,955 Loan principal paydowns........................................................................................ 33,820,160 Purchases -- funding fees...................................................................................... 1,420,585 Sales of short-term securities, net............................................................................ (10,042,910) Accretion of facility fee income............................................................................... (509,042) Decrease in dividends and interest............................................................................. 99,245 Increase in receivables for investments sold................................................................... (1,362,490) Decrease in amount due from investment adviser................................................................. 80,326 Decrease in other assets....................................................................................... 20,933 Decrease in payable to the adviser............................................................................. (13,636) Increase in payable for investments purchased.................................................................. 849,849 Decrease in other liabilities.................................................................................. (52,124) Unrealized appreciation on investments......................................................................... (6,631,518) Net realized loss from investments............................................................................. 1,872,584 ------------ Net cash provided by operating activities........................................................................ $ 22,470,832 ------------ Cash flows from financing activities: Proceeds from shares sold........................................................................................ 6,302,278 Payment on shares redeemed....................................................................................... (27,338,444) Cash dividends paid (not including reinvested dividends of $2,111,544)........................................... (1,072,320) ------------ Net cash used in financing activities............................................................................ $(22,108,486) ------------ Net increase in cash............................................................................................. 362,346 Cash balance at beginning of period.............................................................................. 538,660 ------------ Cash balance at end of period.................................................................................... $ 901,006 ============
See Notes to Financial Statements. 4 SunAmerica Senior Floating Rate Fund, Inc. FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
Class B -------------------------------------------------------------- Six Months Period from ended Year Year Year Year 8/31/98* 06/30/03 ended ended ended ended through (unaudited) 12/31/02 12/31/01 12/31/00## 12/31/99## 12/31/98## ----------- -------- -------- ---------- ---------- ----------- Net Asset Value, Beginning of Period......... $ 8.78 $ 9.03 $ 9.64 $ 9.98 $ 9.98 $10.00 Investment Operations: Net investment income (loss)................. 0.23@ 0.40@ 0.58@ 0.75 0.69 0.20 Net realized and unrealized gain (loss) on investments................................. 0.35 (0.26) (0.60) (0.33) 0.00 (0.02) ------- ------- ------- ------- ------- ------ Total from investment operations............ 0.58 0.14 (0.02) 0.42 0.69 0.18 ------- ------- ------- ------- ------- ------ Distributions: Dividends from net investment income......... (0.22) (0.39) (0.59) (0.76) (0.69) (0.20) ------- ------- ------- ------- ------- ------ Net Asset Value, End of Period............... $ 9.14 $ 8.78 $ 9.03 $ 9.64 $ 9.98 9.98 ------- ------- ------- ------- ------- ------ Total Return(1).............................. 6.68% 1.54% (0.41%) 4.61% 7.13% 1.89% Ratios/Supplemental Data Net assets, end of period ($000's)........... $28,978 $31,906 $42,335 $50,966 $37,439 $4,826 Ratio of net expenses to average net assets.. 1.45%# 1.45% 1.45% 1.42% 0.70% 0.00%# Ratio of net investment income to average net assets.................................. 5.05%# 4.42% 6.23% 7.85% 6.87% 6.11%# Portfolio turnover rate...................... 46% 112% 69% 41% 30% 18% Expense ratio before waiver of fees and reimbursement of expenses................... 2.55%# 2.51% 2.47% 2.31% 2.29% 4.02%# Net investment income ratio before waiver of fees and reimbursement of expenses.......... 3.96%# 3.36% 5.21% 6.96% 5.28% 2.09%#
- -------- * Commencement of Operations # Annualized @ Calculated based upon average shares outstanding. ## The financial statements of the Fund for the periods prior to January 1, 2001 were audited by other independent auditors whose report dated February 23, 2001 expressed an unqualified opinion on the statements (1) Total return is not annualized and does not reflect sales load. See Notes to Financial Statements. 5 SunAmerica Senior Floating Rate Fund, Inc. FINANCIAL HIGHLIGHTS -- (continued) - --------------------------------------------------------------------------------
Class C --------------------------------------------------------------- Six Months Period from ended Year Year Year Year 8/31/98* 06/30/03 ended ended ended ended through (unaudited) 12/31/02 12/31/01 12/31/00## 12/31/99## 12/31/98## ----------- -------- -------- ---------- ---------- ----------- Net Asset Value, Beginning of Period......... $ 8.78 $ 9.03 $ 9.64 $ 9.98 $ 9.98 $ 10.00 Investment Operations: Net investment income (loss)................. 0.23@ 0.40@ 0.57@ 0.76 0.69 0.20 Net realized and unrealized gain(loss) on investments................................. 0.35 (0.27) (0.60) (0.33) 0.00 (0.02) ------- ------- -------- -------- -------- ------- Total from investment operations............ 0.58 0.13 (0.03) 0.43 0.69 0.18 ------- ------- -------- -------- -------- ------- Distributions: Dividends from net investment income......... (0.22) (0.38) (0.58) (0.77) (0.69) (0.20) ------- ------- -------- -------- -------- ------- Net Asset Value, End of Period............... $ 9.14 $ 8.78 $ 9.03 $ 9.64 $ 9.98 $ 9.98 ------- ------- -------- -------- -------- ------- Total Return(1).............................. 6.66% 1.47% (0.45)% 4.60% 7.12% 1.89% Ratios/Supplemental Data Net assets, end of period ($000's)........... $77,712 $86,101 $140,664 $227,662 $173,322 $14,259 Ratio of net expenses to average net assets.. 1.50%# 1.50% 1.50% 1.43% 0.79% 0.00%# Ratio of net investment income to average net assets.................................. 5.01%# 4.33% 6.28% 7.85% 6.82% 6.11%# Portfolio turnover rate...................... 46% 112% 69% 41% 30% 18% Expense ratio before waiver of fees and reimbursement of expenses................... 2.58%# 2.48% 2.52% 2.32% 2.25% 4.01%# Net investment income ratio before waiver of fees and reimbursement of expenses.......... 3.93%# 3.36% 5.26% 6.96% 5.36% 2.10%#
- -------- * Commencement of Operations # Annualized @ Calculated based upon average shares outstanding. ## The financial statements of the Fund for the periods prior to January 1, 2001 were audited by other independent auditors whose report dated February 23, 2001 expressed an unqualified opinion on the statements (1) Total return is not annualized and does not reflect sales load. See Notes to Financial Statements. 6 SunAmerica Senior Floating Rate Fund, Inc. FINANCIAL HIGHLIGHTS -- (continued) - --------------------------------------------------------------------------------
Class D ----------------------------- Period Six Months from ended Year 05/02/01* 06/30/03 ended through (unaudited) 12/31/02 12/31/01 ----------- -------- --------- Net Asset Value, Beginning of Period........................ $ 8.78 $ 9.03 $ 9.46 Investment Operations: Net investment income (loss)@............................... 0.24 0.43 0.35 Net realized and unrealized gain (loss) on investments...... 0.35 (0.27) (0.42) ------- ------- ------- Total from investment operations........................... 0.59 0.16 (0.07) ------- ------- ------- Distributions: Dividends from net investment income........................ (0.23) (0.41) (0.36) ------- ------- ------- Net Asset Value, End of Period.............................. $ 9.14 $ 8.78 $ 9.03 ------- ------- ------- Total Return(1)............................................. 6.79% 1.72% (0.79)% Ratios/Supplemental Data Net assets, end of period ($000's).......................... $13,387 $15,037 $26,372 Ratio of net expenses to average net assets................. 1.25%# 1.25% 1.25%# Ratio of net investment income to average net assets........ 5.26%# 4.58% 5.66%# Portfolio turnover rate..................................... 46% 112% 69% Expense ratio before waiver of fees and reimbursement of expenses................................................... 1.80%# 1.77% 2.27%# Net investment income ratio before waiver of fees and reimbursement of expenses.................................. 4.71%# 4.06% 4.64%#
- -------- * Commencement of Operations # Annualized @ Calculated based upon average shares outstanding. (1) Total return is not annualized and does not reflect sales load. See Notes to Financial Statements. 7 SunAmerica Senior Floating Rate Fund, Inc. PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited)
Ratings/1/ ------------ Interest Maturity Industry Description Type Moody's S&P Rate Date/2/ Par Value - ----------------------------------------------------------------------------- - ---------------------- LOANS/3 /-- 83.63% Automobile -- 1.24% Polypore, Inc............................ BTL-C Ba3 B+ 4.25% 12/31/07 $1,481,250 $ 1,488,656 ----------- Beverage, Food and Tobacco -- 1.71% Commonwealth Brands, Inc................. BTL B2 B+ 4.00 8/28/07 1,194,333 1,197,319 Doane Pet Care Co........................ BTL-B B2 B+ 4.75 12/31/05 309,345 309,732 Doane Pet Care Co........................ BTL-C B2 B+ 4.75 12/31/06 60,167 60,292 Dole Foods, Inc.......................... BTL-B NR BB 3.75 9/28/08 478,261 482,346 ----------- 2,049,689 Broadcasting and Entertainment -- 14.28% AT&T Comcast Corp........................ BTL NR BBB 1.38 4/26/04 135,220 134,544 CC VI Operating Partnership.............. BTL-B B3 CCC+ 2.50 11/12/08 497,500 445,107 Century Cable Holdings, LLC.............. Discretionary BTL NR NR 4.71 12/31/09 2,500,000 2,108,437 Century -- TCI California LP............. Revolver NR NR 2.00 12/31/07 1,000,000 943,333 Charter Communications Operating, LLC.... BTL-B B3 CCC+ 2.75 3/18/08 1,717,500 1,612,303 Classic Cable, Inc@...................... BTL-A NR NR 4.00 1/16/08 1,430,432 1,330,302 Classic Cable, Inc@...................... BTL-B Caa2 D 4.75 1/16/09 997,216 927,411 DIRECTV Holdings, LLC.................... BTL-B B1 NR 3.50 3/6/10 1,500,000 1,512,095 FrontierVision Operating Partners LP..... BTL-B NR NR 2.38 3/31/06 2,000,000 1,882,500 Insight Midwest Holdings, LLC............ BTL-B B1 BB 2.75 12/31/09 1,000,000 1,001,250 PANAMSAT Corp............................ BTL-B Ba3 B+ 3.50 12/31/08 1,500,000 1,509,242 Pegasus Media and Communications, Inc.@.. Initial BTL Caa1 CCC+ 3.50 4/30/05 3,210,853 3,098,473 RCN Corp................................. BTL-B Caa2 CCC+ 4.00 6/30/07 744,000 641,700 ----------- 17,146,697 Buildings & Real Estate -- 2.50% Interline Brands, Inc.................... BTL NR B+ 4.50 11/30/05 1,000,000 1,007,500 Lennar Corp.............................. Facility C Baa3 BBB- 1.75 12/15/08 993,333 995,196 Therma-Tru Corp.......................... BTL-B B1 BB- 3.00 2/20/10 997,500 1,000,929 ----------- 3,003,625 Cargo Transport -- 0.18% Atlas Freighter Leasing III, Inc.@....... BTL-A Ba3 NR 5.13 4/25/05 383,732 220,646 ----------- Chemicals, Plastics and Rubber -- 5.41% Hercules, Inc. .......................... BTL-B Ba2 BB 3.25 5/15/07 997,500 1,002,904 Huntsman Corp............................ BTL-A B3 B+ 4.75 3/31/07 1,721,318 1,593,448 Huntsman Corp............................ BTL-B B3 B+ 6.75 3/31/07 842,247 779,680 Huntsman International, LLC.............. BTL-B B3 B+ 4.00 6/30/07 1,164,794 1,170,132 Huntsman International, LLC.............. Revolver B3 B+ 3.25 6/30/05 808,306 781,531 Huntsman International, LLC.............. BTL-C B3 B+ 4.25 6/30/08 1,164,794 1,169,890 ----------- 6,497,585
See Notes to Financial Statements. 8 SunAmerica Senior Floating Rate Fund, Inc. PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited) (continued)
Ratings/1/ ----------- Interest Maturity Industry Description Type Moody's S&P Rate Date/2/ Par Value - ---------------------------------------------------------------------- - ---------------------- Containers, Packaging and Glass -- 8.86% Berry Plastics Corp........................ BTL-B B1 B+ 3.00% 6/30/10 $ 990,000 $ 995,445 Consolidated Container Co., LLC@........... BTL-B Caa1 B- 4.25 6/30/07 2,251,323 2,108,740 Constar International, Inc................. BTL-B B2 BB- 4.50 11/20/09 992,500 999,530 Crown Cork & Seal Co....................... BTL-B B1 BB- 4.25 9/15/08 1,500,000 1,509,844 Graham Packaging Co........................ Tranche B3 B 4.00 2/14/10 1,500,000 1,496,325 Pliant Corp. (Huntsman Pack)............... BTL-B B3 B+ 4.75 5/31/08 1,774,075 1,759,882 Riverwood International Corp............... BTL B3 B 2.75 12/31/06 1,776,119 1,774,038 ----------- 10,643,804 Diversified/Conglomerate Manufacturing -- 0.24% Metokote Corp.@............................ BTL-A1 B1 B+ 2.75 11/2/03 294,820 289,477 ----------- Diversified/Conglomerate Service -- 1.46% Bridge Information Systems, Inc.*@......... BTL-B NR NR 4.00 5/29/05 546,098 60,071 United Rental, Inc......................... BTL B1 BB 3.00 8/31/07 1,693,304 1,692,775 ----------- 1,752,846 Ecological -- 0.99% Allied Waste North America, Inc............ BTL B1 NR 3.25 1/15/10 857,143 864,465 Allied Waste North America, Inc............ Tranche A B1 NR 3.25 1/15/10 142,857 143,946 IT Group, Inc.*@........................... BTL-B NR D 3.38 6/1/06 2,114,716 179,751 ----------- 1,188,162 Electronics -- 2.99% Amphenol Corp.............................. BTL-B NR BB+ 2.50 5/10/10 926,000 932,790 Dynamic Details, Inc.@..................... BTL-B NR NR 4.00 4/22/05 82,899 45,594 General Cable Corp......................... BTL-B B2 B 5.00 5/27/07 588,720 494,525 Solectron Corp............................. Revolver Ba3 BB- 3.00 2/12/04 1,500,000 1,455,000 Superior Telecom, Inc.@.................... BTL-A Caa2 NR 5.50 5/26/07 1,035,609 357,285 Superior Telecom, Inc.@.................... BTL-B Caa2 NR 5.50 11/27/05 880,150 303,652 ----------- 3,588,846 Farming and Agriculture -- 1.34% United Industries Corp..................... BTL-B B2 B+ 4.00 1/20/06 1,602,384 1,605,388 ----------- Healthcare, Education and Childcare -- 4.87% Cross Country Healthcare, Inc.............. BTL NR BB- 3.25 6/05/09 1,000,000 1,007,500 Dade Behring, Inc.......................... BTL-A2 B2 B+ 4.25 10/3/08 955,274 961,543 Da Vita, Inc............................... BTL-B B1 BB- 3.00 3/31/09 990,000 992,612 Iasis Healthcare Corp...................... BTL-B B2 B 4.25 2/07/09 1,387,500 1,397,256 Insight Health Services Acquisition Corp... BTL-B B1 B+ 3.50 10/17/08 982,498 985,262 Oxford Health Plans, Inc................... BTL NR BB+ 2.75 4/30/08 500,000 502,500 ----------- 5,846,673 Home and Office Furnishings, Housewares -- 3.15% Buhrmann, Inc. NV.......................... BTL-B B2 B+ 4.00 10/26/07 2,851,873 2,836,544 National Bedding Co........................ BTL-B B2 B+ 3.75 8/31/08 939,857 942,353 ----------- 3,778,897
See Notes to Financial Statements. 9 SunAmerica Senior Floating Rate Fund, Inc. PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited) (continued)
Ratings/1/ ----------- Interest Maturity Industry Description Type Moody's S&P Rate Date/2/ Par Value - ------------------------------------------------------------------ - --------------------- Hotels, Motels, Inns, and Gaming -- 5.61% Extended Stay America, Inc................ BTL-B B1 BB- 3.50% 1/15/08 $1,844,913 $1,850,184 Marina District Finance Co., Inc.......... BTL-B B3 B+ 4.00 12/31/07 1,500,000 1,507,032 Penn National Gaming...................... BTL-B B2 B+ 4.00 9/01/07 809,188 811,110 Wyndham International, Inc................ BTL B2 B- 4.75 6/30/06 3,153,190 2,569,850 ---------- 6,738,176 Mining, Steel, Iron and Nonprecious Metals -- 3.63% CII Carbon, LLC@.......................... BTL NR NR 3.25 6/25/08 204,123 181,669 Ispat Inland LP.@......................... BTL-B Caa2 B- 3.75 7/16/05 1,222,800 841,693 Ispat Inland LP.@......................... BTL-C Caa2 B- 3.75 7/16/06 1,222,800 841,693 Ispat Sidbec, Inc......................... BTL-B Caa2 B- 3.75 7/16/04 305,174 245,665 Ispat Sidbec, Inc......................... BTL-C Caa2 B- 4.20 7/16/05 305,174 245,665 OM Group, Inc............................. BTL-C B3 B+ 5.25 4/01/06 2,000,000 2,002,916 ---------- 4,359,301 Oil and Gas -- 2.80% Tesoro Petroleum Corp..................... BTL B1 BB- 5.50 4/15/08 1,000,000 1,006,429 Tesoro Petroleum Corp..................... BTL B1 BB- 3.25 4/17/07 833,333 839,844 Williams Production Co.................... BTL NR B+ 3.75 5/30/07 1,500,000 1,511,250 ---------- 3,357,523 Personal and Nondurable Consumer Products -- 1.16% Church & Dwight Co., Inc.................. BTL-B Ba2 BB 2.50 9/30/07 1,379,116 1,388,350 ---------- Printing and Publishing -- 5.55% American Color Graphics, Inc.@............ BTL-B B2 B+ 2.50 3/31/05 2,851,172 2,779,893 Dex Media East, LLC....................... BTL-B Ba3 BB- 4.00 11/8/09 910,569 924,391 Moore Corp................................ BTL-B Ba3 NR 3.00 3/15/10 1,000,000 1,008,906 R.H. Donnelly, Inc........................ BTL-B B1 BB 4.00 6/30/10 995,000 1,013,656 Reader's Digest Associations, Inc......... BTL-B Ba3 BB+ 2.75 5/20/08 949,627 942,335 ---------- 6,669,181 Retail Stores -- 0.71% Quality Stores (Central Tractor)*@#....... BTL-B NR D 3.75 4/30/06 878,470 0 Weight Watchers International, Inc........ BTL-D NR BB 2.50 12/31/08 853,952 859,289 ---------- 859,289 Telecommunications -- 7.82% Centennial Puerto Rico Operations Corp.... BTL-B Caa1 B- 3.25 5/31/07 376,063 366,347 Centennial Puerto Rico Operations Corp.... BTL-C Caa1 B- 3.50 11/30/07 586,502 573,305 Global Crossing Holding LTD*@............. BTL-B NR D 3.00 6/30/06 2,490,909 551,560 Nextel Finance Co......................... BTL-B B1 B+ 3.38 6/30/08 1,736,875 1,733,202 Nextel Finance Co......................... BTL-C B1 BB- 3.63 12/31/08 992,500 990,401 Ntelos, Inc............................... BTL-B Caa3 D 4.00 6/25/08 1,446,249 1,229,312 Rural Cellular Corp.@..................... BTL-B B3 B+ 3.25 10/3/08 1,571,562 1,495,603 Rural Cellular Corp.@..................... BTL-C B3 B+ 3.50 4/3/09 1,567,633 1,491,864 TSI Telecommunications Services, Inc...... BTL-B B1 B+ 4.50 12/31/06 966,724 959,474 ---------- 9,391,068
See Notes to Financial Statements. 10 SunAmerica Senior Floating Rate Fund, Inc. PORTFOLIO OF INVESTMENTS -- June 30, 2003 -- (unaudited) (continued) - -----------------------------------
Ratings/1/ ----------- Interest Maturity Industry Description Type Moody's S&P Rate Date/2/ Par/Shares Value - ---------------------------------------------------------------- - ------------------------- Textiles and Leather -- 2.95% Globe Manufacturing Corp.*@......... BTL-B NR D 2.75% 7/15/06 $ 850,384 $ 25,512 Levi Strauss & Co................... BTL-B B3 BB- 4.25 7/31/06 976,696 963,267 Samsonite Corp.@.................... BTL B2 B- 3.50 6/24/05 1,522,389 1,400,598 Synthetic Industries, Inc........... BTL-B B3 NR 4.75 12/14/07 1,471,875 1,148,063 ------------ 3,537,440 Utilities -- 4.18% Calpine Corp........................ BTL-B B1 B 3.75 5/10/04 1,424,347 1,418,294 CMS Energy.......................... Facility B B3 BB 5.50 4/30/04 171,892 171,999 CMS Energy.......................... Facility C B3 BB 7.00 9/30/04 250,230 251,012 Consumers Energy Co................. BTL Ba1 BB 4.50 7/11/04 166,667 167,813 Michigan Electric Transmission Co... BTL Baa3 NR 2.50 5/1/07 990,000 993,197 Southern California Edison Co....... BTL-B Ba3 BB 3.00 3/1/05 2,000,000 2,007,188 Weststar Energy, Inc................ Revolver Ba2 BB+ 3.00 6/6/05 6,667 6,250 ------------ 5,015,753 ------------ TOTAL LOANS (Cost $109,865,383).................................. $100,417,072 ------------ REGISTERED INVESTMENT COMPANIES -- 16.77% SSgA Money Market Fund (Cost $20,138,216)........................ 20,138,216 $ 20,138,216 ------------ TOTAL INVESTMENTS -- 100.40% (Cost $130,003,599**)................................................. $120,555,288 ------------ Liabilities in excess of other assets -- (0.40)%....................... $ (478,729) ------------ NET ASSETS -- 100.00%.................................................. $120,076,559 ============
- -------- * Security is in default. ** Approximate cost for Federal Tax purposes. @ Illiquid security. # Fair valued. BTL Bank Term Loan. NR Security is not rated. 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 are unaudited. Ratings provided are as of June 30, 2003. 2 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. The Fund estimates that the actual maturity of the Loans held in its portfolio will be approximately 48 months. 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 restricted 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.
See Notes to Financial Statements. 11 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) Note 1. Organization of the Fund The SunAmerica Senior Floating Rate Fund, Inc. (the "Fund", formerly known as the North American Senior Floating Rate Fund, Inc.) is a non-diversified closed-end, investment management company. The Fund is organized as a Maryland Corporation and is registered under the Investment Company Act of 1940, as amended. The Fund is managed by AIG SunAmerica Asset Management Corp. (the "Adviser" or "SAAMCo"), an indirect wholly-owned subsidiary of American International Group, Inc. ("AIG"). The Fund's investment objective is to provide as high a level of current income as is consistent with the preservation of capital by investing primarily in senior secured floating rate debt obligations. The Fund may offer four classes of shares. Class B shares are sold to the public at net asset value and are subject to an Early Withdrawal Charge which declines from 3% in the first year after purchase to zero after the fourth year. Class C shares are sold to the public at net asset value and are subject to an Early Withdrawal Charge of 1% in the first year after purchase. Class D shares are sold and redeemed at net asset value, and were issued to shareholders of the CypressTree Senior Floating Rate Fund upon its merger into the Fund on May 11, 2001. Class D shares are sold only to investors participating in a fee-based investment advisory program (wrap program) or agency commission program, or to current Class D shareholders. Class A shares are not currently offered, and are available only upon the conversion of Class B and C shares after being held by the shareholders for eight and ten years, respectively. The share classes differ in their respective distribution and service fees. All classes have equal rights to assets and voting privileges. Indemnifications: Under the Fund's organizational documents, its officers and directors are indemnified against certain liability arising out of the performance of their duties to the Fund. In addition, in the normal course of business the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund's maximum exposure under these arrangements are unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund expects the risk of loss to be remote. Note 2. Significant Accounting Policies The following is a summary of the significant accounting policies followed by the fund in the preparation of the financial statements: Estimates: The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts and disclosure reported for the reporting period and as of the end of the reporting period. Actual results could differ from those estimates. Security Valuation: The Fund's investments in loan interests ("Loans") are valued in accordance with guidelines established by the Board of Directors. Under the Fund's current guidelines, Loans for which 12 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) an active secondary market exists to a reliable degree in the subadviser's opinion will be valued at the mean of the last available bid and asked prices in the market for such Loans, as provided by a Board-approved loan pricing service. Loans for which an active secondary market does not exist to a reliable degree in the subadviser's opinion will be valued at fair value, which is intended to approximate market value. In valuing a Loan at fair value, the following factors will be considered, (a) the creditworthiness of the borrower and any intermediate participants, (b) the terms of the Loan, (c) recent prices in the market for similar Loans, if any, and (d) recent prices in the market for instruments of similar quality, rate, and period until next interest rate reset and maturity. Other portfolio securities may be valued on the basis of prices furnished by one or more pricing services that determine prices for normal, institutional-size trading units of such securities using market information, transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders. In certain circumstances, other portfolio securities are valued at the last sale price on the exchange that is the primary market for such securities, or the last quoted bid price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales during the day. Obligations purchased with remaining maturities of 60 days or less are valued at amortized cost unless this method is determined not to produce fair valuation. Repurchase agreements and investments in money market funds are valued at cost plus accrued interest and dividends. Securities for which there exist no price quotations or valuations and all other assets are valued at fair value as determined in good faith by or on behalf of the Board of Directors of the Fund. The senior Loans in which the Fund primarily invests are generally not listed on any exchange and the secondary market for those senior Loans is comparatively illiquid relative to markets for other fixed income securities. Consequently, obtaining valuations for those Loans may be more difficult than obtaining valuations for actively traded securities. Thus, the value upon disposition on any given Loan may differ from its current valuation. Repurchase Agreements: The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is equal to at least 102% of the resale price, and the Fund will take constructive receipt of all securities underlying the repurchase agreements until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase price. At June 30, 2003, the Fund did not enter into any repurchase agreements. Investment Income, Expenses, Dividends and Distributions to Shareholders and Income Taxes: Interest income is determined on the basis of interest accrued, adjusted for amortization of premium or discount. Dividend income is recorded on the ex-dividend date. Facility fees received, which were $509,042 for the six months ended June 30, 2003, are recognized as income over the stated life of the Loans. Other income, including amendment fees, commitment fees, letter of credit fees, etc., which were $175,569 for the six months ended June 30, 2003, are recorded as income when received or 13 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) 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 of each class of shares at the beginning of the day (after adjusting for the current capital share activity of the respective class). Expenses common to each class of share are allocated among the classes based upon their relative net asset values of each class or other appropriate methods. Interest earned on cash balances held at the custodian are shown as custody credits on the Statement of Operations. The Fund issues and redeems shares, invests in securities and distributes dividends from net investment income and net realized gains which are paid in cash or are reinvested at the discretion of shareholders. These activities are reported in the Statement of Changes in Net Assets. Dividends from net investment income are accrued daily and paid monthly. Capital gain distributions, if any, are paid annually. The amount of dividends and distributions from net investment income and net realized capital gains are determined and presented in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These "book/tax" differences which include different treatments for interest on defaulted securities, post October losses and organization costs, are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts at fiscal year end based on their federal tax-basis treatment; temporary differences do not require reclassification. Net investment income/loss, net realized gain/loss, and net assets are not affected. The Fund 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 realized gain on investments, to its shareholders. Therefore, no federal tax provision is required. Securities Transactions. Realized gains or losses on the sale of portfolio assets are recognized on the settlement date using the specific identification method. Statement of Cash Flows: Information on financial transactions which have been settled through the receipt or disbursement of cash is presented in the Statement of Cash Flows. The cash amount shown in the Statement of Cash Flows is the amount included in the Fund's Statement of Assets and Liabilities and represents cash on hand at its custodian bank account, and does not include any short-term investments at June 30, 2003. 14 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) Note 3. Capital Shares The Fund has 1,000,000,000 of $.01 par value shares authorized that may be issued in four different classes, of which three classes were outstanding for the six months ended June 30, 2003. Share activity for the six months ended June 30, 2003, and the year ended December 31, 2002, was as follows:
For the six months ended June 30, 2003 Year Ended (unaudited) December 31, 2002 ------------------------ ------------------------ Shares Capital Shares Capital Class B ---------- ------------ ---------- ------------ Sold......................... 85,041 $ 753,063 378,450 $ 3,414,848 Reinvestment of distributions 50,613 450,875 113,871 1,013,694 Redeemed..................... (596,682) (5,285,424) (1,549,117) (13,874,711) ---------- ------------ ---------- ------------ Net increase (decrease)... (461,028) $ (4,081,486) (1,056,796) $ (9,446,169) ========== ============ ========== ============ For the six months ended June 30, 2003 Year Ended (unaudited) December 31, 2002 ------------------------ ------------------------ Shares Capital Shares Capital Class C ---------- ------------ ---------- ------------ Sold......................... 589,600 $ 5,251,621 510,065 $ 4,590,514 Reinvestment of distributions 155,566 1,385,745 395,405 3,533,372 Redeemed..................... (2,043,211) (18,141,367) (6,686,276) (59,883,782) ---------- ------------ ---------- ------------ Net increase (decrease)... (1,298,045) $(11,504,001) (5,780,806) $(51,759,896) ========== ============ ========== ============ For the six months ended June 30, 2003 Year Ended (unaudited) December 31, 2002 ------------------------ ------------------------ Shares Capital Shares Capital Class D ---------- ------------ ---------- ------------ Sold......................... 25,410 $ 228,386 44,039 $ 397,771 Reinvestment of distributions 30,860 274,924 80,245 717,010 Redeemed..................... (303,208) (2,694,004) (1,331,606) (11,869,996) ---------- ------------ ---------- ------------ Net increase (decrease)... (246,938) $ (2,190,694) (1,207,322) $(10,755,215) ========== ============ ========== ============
15 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) In order to provide shareholders with liquidity and the ability to receive net asset value on a disposition of shares, the Fund will make monthly offers to repurchase a percentage (usually 10%) of outstanding shares at net asset value. Shareholders are sent a Notification of Repurchase Offer seven to fourteen days before each monthly repurchase offer. During the six months ended June 30, 2003 the Fund made six Repurchase Offers, and redeemed the amounts shown in the table below. In no case was a monthly Repurchase Offer oversubscribed.
Amount Tendered ------------------ Shares Capital ------- ---------- January. 544,789 $4,783,248 February 512,120 4,486,319 March... 959,429 8,480,084 April... 425,988 3,814,635 May..... 222,556 2,013,990 June.... 278,219 2,542,519
Note 4. Purchases And Sales Of Securities During the six months ended June 30, 2003, the Fund's cost of purchases of Loans and proceeds from Loan sales were $60,146,263 and $55,158,955, respectively. Note 5. Investment Advisory Agreement And Other Transactions With Affiliates The Fund currently maintains an Investment Advisory Agreement with SAAMCo, who is responsible for managing the corporate and business affairs of the Fund, and selects, contracts with and compensates the subadviser to manage the Fund's assets. As compensation for its services the Adviser receives from the Fund an annual fee equal to the following percentage of average daily gross assets: 0.85% for the first $1 billion of average daily gross assets; 0.80% for average daily gross assets between $1 billion and $2 billion; and 0.75% for average daily gross assets of more than $2 billion. For purposes of computing the advisory fee, average daily gross assets are determined by deducting from total assets of the Fund all liabilities except the principal amount of any indebtedness from money borrowed, including debt securities issued by the Fund. For the six months ended June 30, 2003, SAAMCo received advisory fees in the amount of $529,762. Stanfield Capital Partners, LLC ("Stanfield") acts as sub-adviser to the Fund pursuant to a Subadvisory Agreement with SAAMCo. Under the Subadvisory Agreement, the Adviser manages the investment and reinvestment of the Fund's assets. As compensation for its services as subadviser, Stanfield is entitled to receive from SAAMCo an annual fee paid monthly equal to the following percentage of average daily gross assets: 0.25% for the first $1 billion of average daily gross assets; 0.20% for average daily gross of more than $1 billion. Stanfield received $155,813 as compensation for its services. Average daily gross assets are computed as described above. The fee paid to the subadviser is not an additional charge to the Fund or its shareholders. 16 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) SAAMCo also serves as the Fund's Administrator under an Administration Agreement and is responsible for managing the Fund's business affairs, subject to supervision by the Fund's Board of Directors. For its services, SAAMCo receives an annual fee equal to 0.40% of average daily gross assets of the Fund. Average daily gross assets are computed as described above. For the six months ended June 30, 2003 SAAMCo received administrator fees in the amount of $249,501. The Fund has adopted Distribution Plans ("Plans") applicable to Class B and C shares to use the assets attributable to that class of shares of the Fund to finance certain activities relating to the distribution of shares to investors. The Plans are compensation plans providing for the payment to SACS, of a fixed percentage of 0.50% of average net assets to finance distribution expenses, and 0.25% of average net assets to finance service fees. For the six months ended June 30, 2003 SACS received distribution fees and early withdrawal charges on redemptions in the amount of $414,918 and $40,803, respectively. For the six months ended June 30, 2003 SACS voluntarily waived fees for the following classes: Class B $82,310, Class C $202,092. Pursuant to the Investment Advisory Agreement, the Adviser voluntarily waived the advisory fee and reimbursed expenses in order to maintain an expense ratio on the Fund that did not exceed a certain voluntary rate. These rates are 1.45% for Class B, 1.50% for Class C, and 1.25% for Class D. For the six months ended June 30, 2003, the Adviser waived fees and reimbursed expenses for the following classes: Class B $81,156, Class C $234,800, and Class D $38,233. Note 6. Federal Income Taxes The tax components of distributable earnings differs from the amounts reflected in the Statement of Assets and Liabilities by temporary book/tax differences primarily arising from post-October losses of $1,426,247. On a tax basis, the Fund distributed ordinary income dividends of $7,219,296 during the year ended December 31, 2002 and had undistributed ordinary income of $89,476 at December 31, 2002. Capital Loss Carryforwards. At December 31, 2002 capital loss carryforwards available to offset future recognized gains were approximately $19,256,504, with $9,669 expiring in 2005, $334,309 expiring in 2007, $1,179,134 expiring in 2008, $9,997,029 expiring in 2009, and $7,736,363 expiring in 2010. Unrealized appreciation and depreciation in the value of investments at June 30, 2003 for federal income tax purposes were as follows: Gross unrealized appreciation $ 250,333 Gross unrealized depreciation (9,698,644) ----------- Net unrealized depreciation.. $(9,448,311) ===========
17 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) Note 7. Director Retirement Plan The Directors of the SunAmerica Senior Floating Rate Fund, Inc. participate in the SunAmerica Senior Floating Rate Fund's Disinterested Trustees' and Directors' Retirement Plan ("Retirement Plan"). The Retirement Plan provides generally that if an unaffiliated Director who has at least 10 years of consecutive service as a Disinterested Director of the Fund (an "Eligible Director") retires after reaching age 60 but before age 70, or dies while a Director, such person will be eligible to receive a retirement or death benefit from the Fund. As of each birthday, prior to the 70th birthday, but in no event for a period greater than 10 years, each Eligible Director will be credited with an amount equal to 50% of his or her regular fees (excluding committee fees) for services as a Disinterested Director of the Fund for the calendar year in which such birthday occurs. In addition, an amount equal to 8.50% of any amounts credited under the preceding clause during prior years, is added to each Eligible Director's account until such Eligible Director reaches his or her 70th birthday. An Eligible Director may elect to receive any benefits payable under the Retirement Plan, at his or her election either in one lump sum or in up to fifteen annual installments. Any undistributed amounts continue to accrue interest at 8.50% per year. As of June 30, 2003, the Fund had accrued $745 for the Retirement Plan, which is included in accrued expenses on the Statement of Assets and Liabilities and for the six months ended June 30, 2003, expensed $745 for the Retirement Plan, which is included in Directors fee and expenses on the Statement of Operations. Note 8. Line Of Credit The Fund currently has an agreement with State Street Bank & Trust Company that provides a $20,000,000 committed unsecured Line of Credit to the Fund which will be used for cash overdraft protection. The Fund pays a commitment fee of 0.10% on the unused portion annually, and interest is charged on any borrowed amounts at the currently effective Federal Funds Rate plus 0.50%. During the six months ended June 30, 2003, the Fund had borrowings outstanding for 54 days under the line of credit and incurred $11,730 in interest charges related to these borrowings. The Fund's average amount of debt under the line of credit for the days utilized was $4,409,553 at a weighted average interest of 1.80%. Note 9. Senior Loan Participation Commitments 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 assumes the credit risk of the Borrower, Selling Participant or other persons positioned between the Fund and the Borrower. 18 SunAmerica Senior Floating Rate Fund, Inc. NOTES TO FINANCIAL STATEMENTS -- June 30, 2003 -- (unaudited) (continued) Note 10. Unfunded Loan Commitments On June 30, 2003, the Fund had the following unfunded loan commitment securities which could be extended at the option of the Borrower:
Name Type Amount ---- ----------------------------- ---------- Amkor Technology, Inc.......... Revolver $1,969,294 Amkor Technology, Inc.......... Letter of Credit 19,343 Huntsman International LLC..... Revolver 1,194,967 Level 3 Communications, Inc.... Revolver 2,141,462 Lyondell Chemical Co........... Revolver 1,500,000 Ntelos, Inc.................... Debtor in Possession Revolver 500,000 Pacificare Health Systems, Inc. Revolver 176,423 Purina Mills, Inc.............. Revolver 165,967 Westar Energy, Inc............. Revolver 993,333
19 SunAmerica Senior Floating Rate Fund, Inc. DIRECTORS INFORMATION -- June 30, 2003 -- (unaudited) - --------------------------------- The following table contains basic information regarding the Directors that oversee operations of the Fund and other investment companies within the Fund complex.
Number of Term of Funds in Position Office and Fund Other Name, Held With Length of Complex Directorships Address and SunAmerica Time Principal Occupations Overseen by Held by Date of Birth* Complex Served During Past 5 Years Director(1) Director(2) -------------- ---------- ---------- ------------------------------- ----------- --------------------- Judith L. Craven Director Since Retired Administrator. 75 Director, A.G. Belo DOB: October 6, 1945 June Corporation 2000 (1992 to present); Director, Sysco Corporation (1996 to present); Director, Luby's Inc. (1998 to present). William F. Devin Director Since Retired. 75 Member of the Board DOB: December 30, 1938 August of Governors, 1998 Boston Stock Exchange (1985- Present). Samual M Eisenstat Director Since Attorney, solo practitioner. 46 Director of North DOB: March 7, 1940 November European Oil 2001 Royalty Trust. Stephen J. Gutman Director Since Partner and Managing 46 None DOB: May 10, 1943 November Member of B.B. Associates 2001 LLC (menswear specialty retailing and other activities) (June 1988 to present). Peter A. Harbeck(3) Director Since President, CEO and Director, 83 None DOB: January 23, 1954 November SAAMCo (August 1995 to 2001 present). Director, SACS (August 1995 to present).
- -------- * The business address for each Director is the Haborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992. (1) The "Fund Complex" consists of all registered investment company portfolios for which SAAMCo serves as investment advisor or business manager. The "Fund Complex" includes the SunAmerica Equity Funds (7 funds), SunAmerica Income Funds (6 funds), SunAmerica Money Market Funds (2 funds), SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Strategic Investment Series, Inc. (7 funds), SunAmerica Style Select Series, Inc. (15 portfolios), Anchor Pathway Fund (7 funds), Anchor Series Trust (8 portfolios), Seasons Series Trust (19 portfolios), SunAmerica Series Trust (33 portfolios), VALIC Company I (22 portfolios), and VALIC Company II (15 funds). 20 SunAmerica Senior Floating Rate Fund, Inc. DIRECTORS INFORMATION -- June 30, 2003 -- (unaudited) (continued) - --------------------------------- (2) Directorships of companies required to report to the Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e. "public companies") or other investment companies registered under the Investment Company Act of 1940. (3) Interested Director, as defined in the Investment Company Act of 1940. Additional information concerning the Directors is contained in the Statement of Additional Information and is available without charge by calling (800) 858-8850. 21 [LOGO] AIG Sun America Mutual Funds AIG SunAmerica Asset Management Corp. Harborside Financial Center 3200 Plaza 5 Jersey City, NJ 07311-4992 Directors Investment Adviser This report is submitted solely for the general Judith L. Craven AIG SunAmerica Asset Management Corp. information of shareholders of the Fund. William F. Devin Harborside Financial Center Distribution of this report to persons other Samuel M. Eisenstat 3200 Plaza 5 than shareholders of the Fund is authorized Stephen J. Gutman Jersey City, NJ 07311-4992 only in connection with a currently effective Peter A. Harbeck prospectus, setting forth details of the Fund, Distributor which must precede or accompany this report. Officers AIG SunAmerica Capital Services, Inc. Robert M. Zakem, President Harborside Financial Center The accompanying report has not been Donna M. Handel, Treasurer 3200 Plaza 5 examined by independent accountants, and Vacant, Secretary Jersey City, NJ 07311-4992 accordingly no opinion has been expressed J. Steven Neamtz, Vice thereon. President Shareholder Servicing Agent Abbe P. Stein, Vice AIG SunAmerica Fund Services, Inc. President and Assistant Harborside Financial Center Secretary 3200 Plaza 5 Joseph P. Kelly, Assistant Jersey City, NJ 07311-4992 Secretary Stacey V. Morrison, Custodian and Transfer Agent Assistant Secretary State Street Bank and Trust Company Laura E. Filippone, P.O. Box 219373 Assistant Treasurer Kansas City, MO 64141 Gregory R. Kingston, Vice President and Assistant Treasurer Donald H. Guire, Assistant Treasurer
Distributed by: AIG SunAmerica Capital Services, Inc. SFSAN-6/03 Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Item 4. Principal Accountant Fees and Services. Not applicable. Item 5. Reserved. Item 6. Reserved. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Reserved. Item 9. 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. 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) During the period covered in this report there were no significant changes in the registrant's internal controls. However, a situation was discovered at the registrant's transfer agent which circumvented internal controls related to abandoned property procedures. The registrant is working with the transfer agent in developing corrective actions and enhancing the existing internal controls. Item 10. Exhibits. (a) Not applicable. (b) (1) Certification pursuant to Rule 30a-2 under the Investment Company Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit 99.CERT. (2) Certification pursuant to 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/Robert M. Zakem ------------------ Robert M. Zakem President Date: September 8, 2003 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/Robert M. Zakem ------------------ Robert M. Zakem President Date: September 8, 2003 By: /s/Donna M. Handel ------------------ Donna M. Handel Treasurer Date: September 8, 2003 EX-99.CERT 3 dex99cert.txt CERTIFICATION PURSUANT TO SECTION 302 Exhibit EX-99.CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Robert M. Zakem, certify that 1. I have reviewed this report on Form N-CSR of SunAmerica Senior Floating Rate Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 28, 2003 /s/ Robert M. Zakem ------------------- Robert M. Zakem President I, Donna M. Handel, certify that 1. I have reviewed this report on Form N-CSR of SunAmerica Senior Floating Rate Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 28, 2003 /s/ Donna M. Handel ------------------- Donna M. Handel Treasurer EX-99.906CERT 4 dex99906cert.txt CERTIFICATION PURSUANT TO SECTION 906 Exhibit EX-99.906.CERT CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Robert M. Zakem, President, and Donna M. Handel, Treasurer of SunAmerica Senior Floating Rate Fund, Inc. (the "Registrant"), each certify to the best of his or her knowledge that: 1. The attached Form N-CSR report of the Registrant fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in such N-CSR report fairly represents, in all material respects, the financial conditions and results of operations of the Registrant as of, and for, the periods presented in the report. Dated: August 28, 2003 /s/ Robert M. Zakem - ------------------- Robert M. Zakem President /s/ Donna M. Handel - ------------------- Donna M. Handel Treasurer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----