0001193125-13-358355.txt : 20130905
0001193125-13-358355.hdr.sgml : 20130905
20130905160304
ACCESSION NUMBER: 0001193125-13-358355
CONFORMED SUBMISSION TYPE: N-CSRS
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20130630
FILED AS OF DATE: 20130905
DATE AS OF CHANGE: 20130905
EFFECTIVENESS DATE: 20130905
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: 131080484
BUSINESS ADDRESS:
STREET 1: HARBORSIDE FINANCIAL CENTER
STREET 2: 3200 PLAZA FIVE
CITY: JERSEY CITY
STATE: NJ
ZIP: 07311-4992
BUSINESS PHONE: 2013246300
MAIL ADDRESS:
STREET 1: HARBORSIDE FINANCIAL CENTER
STREET 2: 3200 PLAZA FIVE
CITY: JERSEY CITY
STATE: NJ
ZIP: 07311-4992
FORMER COMPANY:
FORMER CONFORMED NAME: NORTH AMERICAN SENIOR FLOATING RATE FUND INC
DATE OF NAME CHANGE: 19980401
0001059040
S000012952
SunAmerica Senior Floating Rate Fund
C000034981
Class A
SASFX
C000034983
Class C
NFRCX
N-CSRS
1
d525626dncsrs.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)
John T. Genoy
Senior Vice President
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) 324-6414
Date of fiscal year end: December 31
Date of reporting period: June 30, 2013
================================================================================
Item 1. Reports to Stockholders
[GRAPHIC]
SEMI-ANNUAL REPORT 2013
SUNAMERICA
Senior Floating Rate Fund
[LOGO]
TABLE OF CONTENTS
SHAREHOLDERS' LETTER........................................ 1
EXPENSE EXAMPLE............................................. 3
STATEMENT OF ASSETS AND LIABILITIES......................... 5
STATEMENT OF OPERATIONS..................................... 6
STATEMENT OF CHANGES IN NET ASSETS.......................... 7
STATEMENT OF CASH FLOWS..................................... 8
FINANCIAL HIGHLIGHTS........................................ 9
PORTFOLIO OF INVESTMENTS.................................... 10
NOTES TO FINANCIAL STATEMENTS............................... 21
APPROVAL OF THE INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS...................................... 29
JUNE 30, 2013 SEMI-ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited)
Dear Shareholders:
We are pleased to present this semi-annual report for the SunAmerica Senior
Floating Rate Fund, Inc. (the "Fund") for the six months ended June 30, 2013.
The semi-annual period proved to be a challenging one for many investors.
Central bank easing and signs of gradual global economic recovery imparted a
positive tone to financial markets early in the first quarter of 2013. However,
by March, heightened global political uncertainty and renewed worries about
Europe's sovereign debt crisis took over the headlines, weighing on investor
sentiment. The second calendar quarter got off to a good start but was
subsequently dominated by Federal Reserve (the "Fed") policy statements. On May
22, 2013, Fed Chair Bernanke announced the potential "tapering" of the pace of
quantitative easing asset purchases, which put a halt to the rally that many of
the riskier asset classes, including equities and several spread, or non-U.S.
Treasury, fixed income sectors, had enjoyed year-to-date. The financial markets
reacted negatively again in June to news that the slowing of the asset purchase
program could begin later this year.
For the semi-annual period overall, floating rate loans, as represented by the
S&P/LSTA Leveraged Loan Index ("LLI"), returned 2.31%, outperforming the broad
U.S. fixed income market, as measured by the Barclays U.S. Aggregate Bond
Index, which returned -2.44%.*
During the first quarter of 2013, the floating rate loan market fared well, as
the sector benefited from strong credit fundamentals, evidenced by low interest
expense relative to earnings. The floating rate loan market saw three loan
issuers default in March 2013, pushing the bank-loan default rate by principal
amount and issuer count up to 2.21% and 1.83%, respectively. However, these
metrics remained well below their historical averages of 3.3% and 3.1%,
respectively.+ Furthermore, bank-loan mutual funds benefited from a supportive
technical picture, as evidenced by 41 consecutive weeks of positive net inflows
and year-to-date inflows of $15.8 billion through March 31, 2013.** In terms of
quality, CCC-rated loans outpaced higher-rated instruments (B and BB) by a wide
margin.
The floating rate loan market generated positive, albeit far more modest,
returns during the second quarter of 2013. The sector continued to benefit from
strong credit fundamentals. Further, just two issuers defaulted during the
second quarter, pushing the bank-loan default rate down to 1.37% and 1.49%,
respectively.+ Because issuers had extended maturities via refinancing, less
than $30 billion was scheduled to mature through 2014, supporting continued low
defaults. Bank-loan mutual funds also continued to benefit from a supportive
technical picture, with positive net inflows now being seen for 54 consecutive
weeks. Year-to-date inflows to bank-loan mutual funds totaled $32.2 billion
through June 30, 2013.** Moreover, the market for collateralized loan
obligations ("CLOs"), one of the main sources of demand for bank loans, was
forecast to increase to $70 billion in 2013 from $45 billion in 2012. The month
of June 2013, however, was challenging for many asset classes, particularly for
the floating rate loan market, as the Fed stunned markets with its
earlier-than-expected plan to taper asset purchases. Even with the resulting
heightened risk aversion in June, CCC-rated loans still outpaced B-rated and
BB-rated instruments for the quarter overall.
On the following pages, you will find detailed financial statements and
portfolio information for the Fund for the semi-annual period ended June 30,
2013.
1
JUNE 30, 2013 SEMI-ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited) (continued)
As always, we remain diligent in the management of your assets. If you have any
questions, or require additional information on this or other SunAmerica Funds,
we invite you to visit www.safunds.com or call the Shareholder Services
Department at 800-858-8850. We value your ongoing confidence in us and look
forward to serving your investment needs in the future.
Sincerely,
THE SUNAMERICA SENIOR FLOATING RATE FUND PORTFOLIO MANAGER
Jeffrey W. Heuer
Wellington Management Company, LLP
--------
Past performance is no guarantee of future results.
*The S&P/LSTA LEVERAGED LOAN INDEX (LLI) reflects the market-weighted
performance of U.S. dollar-denominated institutional leveraged loan portfolios.
The LLI is the only domestic leveraged loan index that utilized real-time
market weightings, spreads and interest payments. The BARCLAYS U.S. AGGREGATE
BOND INDEX represents securities that are U.S. domestic, taxable and dollar
denominated. The index covers components for government and corporate
securities, mortgage pass-through securities and asset-backed securities.
Indices are not managed and an investor cannot invest directly into an index.
+Source: S&P Leveraged Commentary & Data.
**Source: Lipper, Inc.
The Fund is not a money market fund and its net asset value may fluctuate.
Investments in loans involve certain risks including nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of an active trading market, in certain cases, which
may impair the Fund's ability to obtain full value for loans sold. The Fund may
invest all or substantially all of its assets in loans or other securities
(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.
2
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
EXPENSE EXAMPLE -- JUNE 30, 2013 -- (UNAUDITED)
DISCLOSURE OF PORTFOLIO EXPENSES IN SHAREHOLDER REPORTS
As a shareholder of the SunAmerica Senior Floating Rate Fund, Inc. (the
"Fund"), you may incur two types of costs: (1) transaction costs, including
sales charges on purchase payments and contingent deferred sales charges and
(2) ongoing costs, including management fees, distribution and service fees,
and other Fund expenses. The example set forth below is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at January 1, 2013 and
held until June 30, 2013.
ACTUAL EXPENSES
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended June 30, 2013" to estimate the expenses you paid on your account
during this period. For shareholder accounts in Class A and Class C, the
"Expenses Paid During the Six Months Ended June 30, 2013" column does not
include small account fees that may be charged if your account balance is below
$500 ($250 for retirement plan accounts). In addition, the "Expenses Paid
During the Six Months Ended June 30, 2013" column does not include
administrative fees that may apply to qualified retirement plan accounts and
accounts held through financial institutions. See the Fund's prospectus, your
retirement plan documents and/or materials from your financial adviser, for a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended June 30, 2013" column would have been higher
and the "Ending Account Value" would have been lower.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is
not the Fund's actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the Portfolios of other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds. For shareholder accounts in Class A and
Class C, the "Expenses Paid During the Six Months Ended June 30, 2013" column
does not include small account fees that may be charged if your account balance
is below $500 ($250 for retirement plan accounts). In addition, the "Expenses
Paid During the Six Months Ended June 30, 2013" column does not include
administrative fees that may apply to qualified retirement plan accounts and
accounts held through financial institutions. See the Fund's prospectus, your
retirement plan document and/or materials from your financial adviser for full
description of these fees. Had these fees been included, the "Expenses Paid
During the Six Months Ended June 30, 2013" column would have been higher and
the "Ending Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges and
administrative fees, if applicable to your account. Please refer to the Fund's
prospectus, qualified retirement plan document and/or materials from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only and will not help you determine the
relative total costs of owning different funds. In addition, if these
transaction costs and other fees were included, your costs would have been
higher.
3
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
EXPENSE EXAMPLE -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
ACTUAL HYPOTHETICAL
------------------------------------------------- -----------------------------------------------------
ENDING ENDING ACCOUNT
ACCOUNT VALUE EXPENSES PAID VALUE USING EXPENSES PAID
BEGINNING USING ACTUAL DURING THE BEGINNING A HYPOTHETICAL 5% DURING THE
ACCOUNT VALUE RETURNS AT SIX MONTHS ENDED ACCOUNT VALUE ASSUMED RETURN AT SIX MONTHS ENDED
AT JANUARY 1, 2013 JUNE 30, 2013 JUNE 30, 2013* AT JANUARY 1, 2013 JUNE 30, 2013 JUNE 30, 2013
------------------ ------------- ---------------- ------------------ ----------------- ----------------
Senior Floating
Rate Fund#
Class A.......... $1,000.00 $1,021.66 $7.27 $1,000.00 $1,017.60 $7.25
Class C.......... $1,000.00 $1,021.36 $8.77 $1,000.00 $1,016.12 $8.75
EXPENSE
RATIO
AS OF
JUNE 30,
2013*
--------
Senior Floating
Rate Fund#
Class A.......... 1.45%
Class C.......... 1.75%
--------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 181 days divided by 365
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges and administrative
fees, if applicable to your account. Please refer to your Prospectus, your
qualified retirement plan document and/or materials from your financial
advisor for more information.
# During the stated period, the investment adviser either waived/reimbursed a
portion of or all of the fees/expenses and assumed a portion of or all
expenses for the Fund. As a result, if these fees and expenses had not been
waived/reimbursed, the "Actual/Hypothetical Ending Account Value" would have
been lower and the "Actual/Hypothetical Expenses Paid During the Six Months
Ended June 30, 2013 and the "Expense Ratios" would have been higher.
4
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- JUNE 30, 2013 -- (UNAUDITED)
ASSETS:
Investments at value (unaffiliated)*............................................ $373,036,099
Receivable for:
Fund shares sold............................................................... 2,653,987
Dividends and interest......................................................... 2,235,339
Investments sold............................................................... 17,826,935
Prepaid expenses and other assets............................................... 8,374
Due from investment adviser for expense reimbursements/fee waivers.............. 130,718
------------
Total assets................................................................... 395,891,452
------------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................... 569,086
Investments purchased.......................................................... 16,002,831
Investment advisory and management fees........................................ 266,313
Distribution and service maintenance fees...................................... 182,525
Administration fees............................................................ 62,662
Transfer agent fees and expenses............................................... 73,323
Directors' fees and expenses................................................... 2,596
Other accrued expenses......................................................... 191,901
Dividends payable............................................................... 287,369
Commitments (Note 11)........................................................... 126,667
------------
Total liabilities.............................................................. 17,765,273
------------
Net Assets................................................................... $378,126,179
============
NET ASSETS REPRESENTED BY:
Common stock, $.01 par value.................................................... $ 457,256
Additional paid-in capital...................................................... 437,222,304
------------
437,679,560
Accumulated undistributed net investment income (loss).......................... 60,096
Accumulated undistributed net realized gain (loss) on investments............... (55,850,071)
Unrealized appreciation (depreciation) on investments........................... (3,763,406)
------------
Net Assets................................................................... $378,126,179
============
CLASS A:
Net assets...................................................................... $162,161,396
Shares outstanding.............................................................. 19,602,049
Net asset value and redemption price per share.................................. $ 8.27
Maximum sales charge (3.75% of offering price).................................. 0.32
------------
Maximum offering price to public................................................ $ 8.59
============
CLASS C:
Net assets...................................................................... $215,964,783
Shares outstanding.............................................................. 26,123,517
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charges).................................. $ 8.27
============
*COST
Investment securities (unaffiliated)........................................... $376,799,505
============
See Notes to Financial Statements
5
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF OPERATIONS -- FOR THE SIX MONTHS ENDED JUNE 30, 2013 --
(UNAUDITED)
INVESTMENT INCOME:
Interest (unaffiliated)........................................................ $ 8,925,234
Dividends (unaffiliated)....................................................... 309
Facility and other fee income (Note 2)......................................... 1,410,756
-----------
Total investment income..................................................... 10,336,299
-----------
EXPENSES:
Investment advisory and management fees........................................ 1,543,464
Administration fees............................................................ 363,168
Distribution and service maintenance fees:
Class A...................................................................... 276,424
Class C...................................................................... 769,542
Transfer agent fees and expenses:
Class A...................................................................... 178,436
Class C...................................................................... 232,390
Registration fees:
Class A...................................................................... 12,942
Class C...................................................................... 17,892
Accounting service fees........................................................ 36,896
Custodian and accounting fees.................................................. 70,921
Reports to shareholders........................................................ 37,395
Audit and tax fees............................................................. 51,411
Legal fees..................................................................... 8,144
Directors' fees and expenses................................................... 27,347
Interest expense............................................................... 145
Other expenses................................................................. 54,568
-----------
Total expenses before fee waivers, expense reimbursements................... 3,681,085
Fees waived and expenses reimbursed by investment adviser (Note 5).......... (740,300)
-----------
Net expenses................................................................ 2,940,785
-----------
Net investment income (loss)................................................... 7,395,514
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (unaffiliated)......................... (416,700)
Change in unrealized appreciation (depreciation) on investments (unaffiliated). 452,052
-----------
Net realized and unrealized gain (loss) on investments......................... 35,352
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................... $ 7,430,866
===========
See Notes to Financial Statements
6
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE
SIX MONTHS
ENDED FOR THE YEAR
JUNE 30, ENDED
2013 DECEMBER 31,
(UNAUDITED) 2012
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)......................................... $ 7,395,514 $ 14,632,010
Net realized gain (loss) on investments (unaffiliated)............... (416,700) (1,946,487)
Net unrealized gain (loss) on investments (unaffiliated)............. 452,052 14,951,108
------------ ------------
Increase (decrease) in net assets resulting from operations........... 7,430,866 27,636,631
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)...................................... (3,218,761) (6,633,424)
Net investment income (Class C)...................................... (3,873,982) (8,232,858)
------------ ------------
Total distributions to shareholders................................... (7,092,743) (14,866,282)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS (NOTE 3)................................................ 34,205,657 (28,915,255)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... 34,543,780 (16,144,906)
NET ASSETS:
Beginning of period................................................... 343,582,399 359,727,305
------------ ------------
End of period+........................................................ $378,126,179 $343,582,399
============ ============
+Includes accumulated undistributed net investment income (loss)...... $ 60,096 $ (242,675)
============ ============
See Notes to Financial Statements
7
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
STATEMENT OF CASH FLOWS -- FOR THE SIX MONTHS ENDED JUNE 30, 2013 --
(UNAUDITED)
INCREASE (DECREASE) IN CASH
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets from operations.................................................................... $ 7,430,866
ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES:
Purchase of loans/securities................................................................................ (219,593,783)
Proceeds from loans/securities sold......................................................................... 111,863,247
Loan principal paydowns..................................................................................... 70,776,488
Net sales of short-term securities.......................................................................... 17,586,093
Accretion of facility fee income............................................................................ (480,426)
Increase in receivable for dividends and interest........................................................... (372,430)
Increase in receivable for investments sold................................................................. (12,662,826)
Increase in amount due from investment adviser for expense reimbursements/fee waivers....................... (29,775)
Increase in prepaid expenses and other assets............................................................... (5,463)
Decrease in payable for investments purchased............................................................... (873,834)
Increase in payable for investment advisory and management fees............................................. 19,863
Increase in payable for distribution and maintenance fees................................................... 14,292
Increase in payable for administration fees................................................................. 4,674
Increase in other accrued expenses.......................................................................... 80,401
Unrealized appreciation on investments...................................................................... (452,052)
Net realized loss from investments.......................................................................... 416,700
-------------
Net cash used in operating activities......................................................................... $ (26,277,965)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shares sold..................................................................................... 89,307,488
Payment on shares redeemed.................................................................................... (62,436,098)
Cash dividends paid........................................................................................... (2,170,841)
-------------
Net cash provided by financing activities..................................................................... $ 24,700,549
-------------
Net decrease in cash.......................................................................................... (1,577,416)
Cash balance at beginning of period........................................................................... 1,577,416
-------------
Cash balance at end of period................................................................................. $ --
=============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $4,986,355.
See Notes to Financial Statements
8
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
FINANCIAL HIGHLIGHTS
NET GAIN
(LOSS) ON
NET INVESTMENTS DIVIDENDS NET NET RATIO OF
ASSET (BOTH DIVIDENDS FROM NET ASSET ASSETS, EXPENSES
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF TO AVERAGE
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD NET
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD RETURN(2) (000'S) ASSETS(3)
----------- --------- ---------- ----------- ---------- ---------- ----------- ------- ------ --------- -------- ----------
CLASS A
-------
12/31/08 $8.88 $0.49 $(3.74) $(3.25) $(0.49) $ -- $(0.49) $5.14 (38.20)% $ 25,546 1.45%
12/31/09 5.14 0.32 2.72 3.04 (0.35) -- (0.35) 7.83 60.63 103,932 1.45
12/31/10 7.83 0.34 0.46 0.80 (0.36) -- (0.36) 8.27 10.33 255,026 1.45
12/31/11 8.27 0.36 (0.33) 0.03 (0.34) -- (0.34) 7.96 0.36 160,949 1.45
12/31/12 7.96 0.36 0.31 0.67 (0.37) -- (0.37) 8.26 8.51 146,103 1.45
06/30/13(5) 8.26 0.17 0.01 0.18 (0.17) -- (0.17) 8.27 2.17 162,161 1.45(4)
CLASS C
-------
12/31/08 $8.87 $0.47 $(3.74) $(3.27) $(0.46) $ -- $(0.46) $5.14 (38.31)% $ 86,126 1.75%
12/31/09 5.14 0.32 2.69 3.01 (0.33) -- (0.33) 7.82 59.94 129,550 1.75
12/31/10 7.82 0.32 0.45 0.77 (0.33) -- (0.33) 8.26 10.01 190,839 1.75
12/31/11 8.26 0.33 (0.32) 0.01 (0.32) -- (0.32) 7.95 0.06 198,778 1.75
12/31/12 7.95 0.34 0.30 0.64 (0.34) -- (0.34) 8.25 8.20 197,480 1.75
06/30/13(5) 8.25 0.16 0.02 0.18 (0.16) -- (0.16) 8.27 2.14 215,965 1.75(4)
RATIO OF
NET
INVESTMENT
INCOME TO
PERIOD AVERAGE PORTFOLIO
ENDED NET ASSETS(3) TURNOVER
----------- ------------- ---------
12/31/08 6.05% 32%
12/31/09 4.94 74
12/31/10 4.34 41
12/31/11 4.27 63
12/31/12 4.41 61
06/30/13(5) 4.24(4) 50
12/31/08 5.89% 32%
12/31/09 4.88 74
12/31/10 4.03 41
12/31/11 4.02 63
12/31/12 4.12 61
06/30/13(5) 3.94(4) 50
--------
(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):
12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 06/30/13(4)(5)
-------- -------- -------- -------- -------- --------------
Class A. 0.65% 0.55% 0.38% 0.33% 0.35% 0.35%
Class C. 0.73 0.66 0.48 0.44 0.44 0.45
(4)Annualized
(5)Unaudited
See Notes to Financial Statements
9
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO PROFILE -- JUNE 30, 2013 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Media....................................... 10.0%
Hotels, Restaurants & Leisure............... 6.5
Commercial Services & Supplies.............. 5.8
Health Care Providers & Services............ 4.4
IT Services................................. 3.8
Food & Staples Retailing.................... 3.6
Food Products............................... 3.6
Software.................................... 3.4
Chemicals................................... 3.3
Capital Markets............................. 3.3
Wireless Telecommunication Services......... 3.2
Diversified Financial Services.............. 3.1
Oil, Gas & Consumable Fuels................. 2.4
Specialty Retail............................ 2.3
Insurance................................... 2.3
Metals & Mining............................. 2.2
Communications Equipment.................... 2.1
Energy Equipment & Services................. 2.0
Auto Components............................. 2.0
Pharmaceuticals............................. 1.9
Semiconductors & Semiconductor Equipment.... 1.7
Health Care Equipment & Supplies............ 1.7
Diversified Telecommunication Services...... 1.7
Machinery................................... 1.6
Aerospace & Defense......................... 1.5
Industrial Conglomerates.................... 1.5
Multi Utilities............................. 1.5
Multiline Retail............................ 1.5
Airlines.................................... 1.3
Gas Utilities............................... 1.1
Automobiles................................. 1.0
Industrial Power Producers & Energy Traders. 1.0
Household Durables.......................... 0.9
Consumer Finance............................ 0.8
Leisure Equipment & Products................ 0.7
Containers & Packaging...................... 0.7
Health Care Technology...................... 0.7
Internet Software & Services................ 0.6
Diversified Consumer Services............... 0.6
Personal Products........................... 0.6
Real Estate Management & Development........ 0.6
Professional Services....................... 0.6
Pooled Vehicle.............................. 0.5
Real Estate Investment Trusts............... 0.5
Electrical Equipment........................ 0.5
Life Sciences Tools & Services.............. 0.4
Road & Rail................................. 0.4
Distributors................................ 0.4
Registered Investment Companies............. 0.3
Computers & Peripherals..................... 0.2
Paper & Forest Products..................... 0.2
Household Products.......................... 0.1
Internet & Catalog Retail................... 0.1
----
98.7%
====
CREDIT QUALITY+#
BBB-................ 1.3%
BB+ . . . . . . .... 3.9
BB . . . . . . . ... 10.0
BB-................. 19.2
B+ . . . . . . . ... 28.8
B . . . . . . . . .. 16.8
B-.................. 7.8
CCC+ . . . . . ..... 4.7
CCC . . . . . . .... 1.7
Not Rated@ ......... 5.8
-----
100.0%
=====
--------
* Calculated as a percentage of net assets.
@ Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
+ Source: Standard and Poor's
# Calculated as a percentage of total debt issues, excluding short-term
securities.
10
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
------------------------------------------------------------------------------------------------------
LOANS(3)(4) -- 93.7%
AEROSPACE & DEFENSE -- 1.5%
DigitalGlobe, Inc................ BTL-B Ba2 BBB- 3.75% 01/31/2020 $1,905,225 $ 1,904,630
Hamilton Sundstrand Corp......... BTL B1 B+ 4.00 12/13/2019 820,875 816,193
Transdigm Group, Inc............. BTL-C Ba3 B 3.75 02/28/2020 3,009,903 2,982,310
-----------
5,703,133
-----------
AIRLINES -- 1.3%
Delta Air Lines, Inc............. BTL-B1 Ba1 BB- 4.00 10/18/2018 1,117,200 1,117,199
Delta Air Lines, Inc............. BTL Ba1 BB 4.25 04/20/2017 1,810,201 1,816,526
United Airlines, Inc............. Tranche B Ba2 BB- 4.00 04/01/2019 1,805,000 1,809,060
-----------
4,742,785
-----------
AUTO COMPONENTS -- 2.0%
Affinia Group.................... BTL-B2 B2 B 4.75 04/25/2020 1,200,000 1,195,499
Allison Transmission, Inc........ BTL-B3 Ba3 BB- 4.25 08/23/2019 857,160 862,650
August LuxUK Holding Co.......... 1st Lien NR NR 5.00 04/27/2018 215,975 218,404
August LuxUK Holding Co.......... 2nd Lien NR NR 10.50 04/27/2019 565,000 569,237
August U.S. Holding Co., Inc..... 1st Lien NR NR 5.00 04/27/2018 166,138 166,034
August U.S. Holding Co., Inc..... 2nd Lien NR NR 10.50 04/27/2019 185,000 186,388
Federal Mogul Corp............... BTL-B NR NR 2.13-2.14 12/27/2014 927,978 888,042
Federal Mogul Corp............... BTL-C NR NR 2.13-2.14 12/27/2015 473,458 453,082
Goodyear Tire & Rubber Co........ 2nd Lien Ba1 BB 4.75 04/30/2019 500,000 502,032
TI Group Automotive Systems LLC.. BTL-B NR NR 5.50 03/27/2019 608,475 613,982
Tower International, Inc......... BTL-B B1 B+ 5.75 04/23/2020 785,000 788,925
UCI International, Inc........... BTL-B Ba2 B+ 5.50 07/26/2017 1,189,094 1,196,526
-----------
7,640,801
-----------
AUTOMOBILES -- 1.0%
Casco Automotive Group, Inc...... BTL B1 B+ 6.25 11/14/2018 995,000 1,002,256
Chrysler Group LLC............... BTL-B Ba1 BB 6.00 05/24/2017 2,817,500 2,854,832
-----------
3,857,088
-----------
CAPITAL MARKETS -- 3.3%
AlixPartners LLC................. BTL-B2 Ba3 B+ 4.50 06/29/2019 688,067 690,218
AlixPartners LLC................. 2nd Lien B3 B- 10.75 12/27/2019 285,000 289,988
ISS Holdings A/S................. BTL-B12 NR NR 3.03 04/30/2018 1,105,000 1,106,900
Nuveen Investments, Inc.......... 1st Lien B2 B 4.20 05/13/2017 3,170,000 3,160,490
Nuveen Investments, Inc.......... 2nd Lien Caa1 CCC 6.50 02/28/2019 2,800,000 2,780,750
Walter Investment Management Co.. Tranche B B2 B+ 5.75 11/28/2017 4,285,440 4,314,367
-----------
12,342,713
-----------
CHEMICALS -- 3.3%
Al Chem & Cy SCA................. BTL-B NR NR 4.50 10/03/2019 503,670 504,299
Al Chem & Cy SCA................. BTL-B1 NR NR 4.50 10/03/2019 261,330 261,657
Al Chem & Cy SCA................. 2nd Lien B3 B- 8.25 04/03/2020 770,000 781,550
Chemtura Corp.................... BTL Ba1 BB+ 5.50-6.25 08/27/2016 1,880,127 1,891,878
General Chemical Corp............ BTL B1 B 5.00-5.75 10/06/2015 623,620 627,713
Houghton International, Inc...... BTL B1 B 4.00 12/20/2019 706,450 711,748
Ineos U.S. Finance LLC........... BTL-B NR NR 4.00 05/04/2018 1,523,186 1,498,276
MacDermid, Inc................... Tranche B Ba3 B 4.00 06/07/2020 575,000 573,922
MacDermid, Inc................... 2nd Lien Caa1 B- 7.75 12/07/2020 1,005,000 1,020,075
PQ Corp.......................... 1st Lien B2 B+ 4.50 08/07/2017 631,825 633,059
Tronox, Inc...................... BTL-B Ba2 BBB- 4.50 03/19/2020 820,000 825,272
U.S. Coatings Acquisition, Inc... BTL-B B1 B+ 4.75 02/01/2020 633,413 634,714
Univar, Inc...................... BTL-B B2 B+ 5.00 06/30/2017 2,515,498 2,466,367
-----------
12,430,530
-----------
11
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES -- 5.4%
ADS Waste Holdings, Inc........................ BTL B1 B+ 4.25% 10/09/2019 $1,517,375 $ 1,514,530
Altegrity, Inc................................. BTL-B B3 B- 7.75 02/21/2015 1,115,231 1,106,867
Aramark Corp................................... BTL-D B1 BB- 4.00 09/09/2019 870,000 873,915
ATI Schools(9)(10)(11)......................... BTL-B Ba3 NR 12.25 12/30/2014 1,149,607 28,740
ATI Schools(6)(8)(10)(11)...................... BTL NR NR 13.25 06/30/2012 258,730 32,341
ATI Schools(6)(8)(10)(11)...................... BTL NR NR 13.25 06/30/2012 15,983 1,998
Atlantic Aviation FBO, Inc..................... BTL-B Ba3 BB- 3.25 05/16/2020 1,105,000 1,104,309
Audio Visual Services Group, Inc............... 1st Lien B1 B+ 6.75 11/09/2018 1,588,000 1,599,910
AWAS Aviation Capital, Ltd..................... BTL NR NR 3.50 07/16/2018 653,093 661,257
Brand Energy and Infrastructure Services, Inc.. BTL-B1 NR NR 6.25 10/16/2018 1,439,221 1,456,611
Brand Energy and Infrastructure Services, Inc.. BTL-B1 NR NR 6.25 10/22/2018 345,413 349,587
Cenveo Corp.................................... BTL-B Ba3 B+ 6.25 02/13/2017 2,159,588 2,159,588
Fly Funding II SARL............................ BTL B1 BBB- 5.75 08/09/2018 1,188,688 1,206,022
KAR Auction Services, Inc...................... BTL-B Ba3 BB- 3.75 05/19/2017 1,388,299 1,394,372
Peak 10, Inc................................... BTL-B B2 B 7.25 10/25/2018 631,825 633,931
Star West Generation LLC....................... BTL-B Ba3 BB- 4.25 03/13/2020 1,052,363 1,058,940
ValleyCrest Cos................................ 1st Lien B3 B- 5.50 06/13/2019 1,321,450 1,321,038
WCA Waste Systems, Inc......................... BTL B1 B+ 4.00 03/23/2018 1,683,688 1,690,001
West Corp...................................... BTL-B8 Ba3 BB 3.75 06/30/2018 2,128,576 2,132,301
-----------
20,326,258
-----------
COMMUNICATIONS EQUIPMENT -- 2.1%
Alcatel-Lucent SA.............................. BTL-C B1 B+ 7.25 01/30/2019 1,537,275 1,554,250
ARRIS Group, Inc............................... BTL-B Ba3 BB- 3.50 04/17/2020 1,680,788 1,671,683
Sorenson Communications, Inc................... BTL-C B2 B- 9.50 10/31/2014 3,211,950 3,215,162
Telesat Holdings, Inc.......................... BTL-B Ba3 BB- 3.50 03/28/2019 1,450,377 1,452,644
-----------
7,893,739
-----------
COMPUTERS & PERIPHERALS -- 0.2%
CDW Corp....................................... BTL Ba3 B+ 3.50 04/29/2020 891,495 883,044
-----------
CONSUMER FINANCE -- 0.5%
Ocwen Financial Corp........................... BTL B1 B 5.00 02/15/2018 1,755,600 1,769,206
-----------
CONTAINERS & PACKAGING -- 0.5%
Consolidated Container Co...................... BTL-B B1 B+ 5.00 07/03/2019 818,813 823,418
Pact Group Pty, Ltd............................ BTL-B Ba3 B+ 3.75 05/29/2020 685,000 682,431
TricorBraun, Inc............................... BTL-B B1 B+ 4.00-5.25 05/03/2018 545,875 548,604
-----------
2,054,453
-----------
DISTRIBUTORS -- 0.4%
ABC Supply Co., Inc............................ BTL-B B1 BB+ 3.50 04/16/2020 1,355,000 1,347,741
-----------
DIVERSIFIED CONSUMER SERVICES -- 0.6%
Bright Horizons Family Solutions, Inc.......... BTL-B B1 B+ 4.00-5.25 01/30/2020 1,154,200 1,159,538
Weight Watchers International, Inc............. BTL-F Ba1 BB 3.75 04/02/2020 1,230,000 1,224,998
-----------
2,384,536
-----------
DIVERSIFIED FINANCIAL SERVICES -- 3.1%
Aptalis Pharma, Inc............................ BTL-B1 B2 B+ 5.50 02/11/2017 2,247,326 2,248,731
BLB Management Services, Inc................... BTL-B B1 BB- 5.25 11/10/2018 605,000 613,319
ION Trading Technologies, Ltd.................. 1st Lien B2 B+ 4.50 05/22/2020 1,025,000 1,021,584
ION Trading Technologies, Ltd.................. 2nd Lien Caa2 CCC+ 8.25 05/22/2021 950,000 947,625
Ipreo Holdings LLC............................. BTL-2 B1 NR 6.50 08/05/2017 1,146,338 1,153,503
Ipreo Holdings LLC............................. BTL-3 B1 NR 6.50 08/05/2017 747,027 751,695
LPL Holdings, Inc.............................. BTL-B Ba2 BB- 3.25-4.75 03/29/2019 3,615,938 3,611,418
Visant Corp.................................... BTL B1 B+ 5.25 12/22/2016 1,346,665 1,289,672
-----------
11,637,547
-----------
12
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
-----------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.3%
Cequel Communications LLC.................... BTL-B Ba2 BB- 3.50% 02/14/2019 $2,434,188 $ 2,423,321
Level 3 Financing, Inc....................... BTL-B3 Ba3 BB- 4.75 08/01/2019 981,000 983,146
Level 3 Financing, Inc....................... Tranche B Ba3 BB- 5.25 08/01/2019 1,425,000 1,427,968
Windstream Corp.............................. BTL-B4 Ba2 BB+ 3.50 01/23/2020 194,025 194,550
-----------
5,028,985
-----------
ELECTRICAL EQUIPMENT -- 0.5%
Generac Power Systems, Inc................... BTL-B B2 B+ 3.50 05/31/2020 1,145,000 1,138,202
WireCo WorldGroup, Inc....................... BTL-B Ba2 B+ 6.00 02/15/2017 674,900 673,213
-----------
1,811,415
-----------
ENERGY EQUIPMENT & SERVICES -- 1.8%
EMG Utica LLC................................ BTL B2 B 4.75 03/27/2020 690,000 690,863
Pacific Drilling SA.......................... BTL-B B1 B+ 4.50 06/04/2018 835,000 833,226
Pinnacle Holdco SARL......................... BTL B1 B+ 4.75 07/24/2019 1,662,458 1,665,230
Pinnacle Holdco SARL......................... 2nd Lien Caa1 CCC+ 10.50 07/24/2020 786,000 795,170
Shelf Drilling International Holdings, Ltd... BTL Ba1 B+ 6.25 10/08/2018 2,985,000 2,999,925
-----------
6,984,414
-----------
FOOD & STAPLES RETAILING -- 3.6%
AdvancePierre Foods, Inc..................... BTL-B1 B1 B 5.75 07/10/2017 1,436,400 1,447,772
BJ's Wholesale Club, Inc..................... 1st Lien B3 B 4.25 09/26/2019 1,810,911 1,808,930
Rite Aid Corp................................ BTL-B6 B1 B+ 4.00 02/21/2020 1,127,175 1,128,020
Rite Aid Corp................................ 2nd Lien B3 B- 5.75 08/21/2020 1,055,000 1,075,441
Rite Aid Corp................................ BTL B3 B- 6.13 06/11/2021 2,230,000 2,227,213
Roundy's Supermarkets, Inc................... BTL-B B1 B+ 5.75 02/13/2019 885,141 864,856
Sprouts Farmers Market LLC................... BTL-B B2 B+ 4.50 04/23/2020 1,695,000 1,697,119
Supervalu, Inc............................... BTL-B B1 B+ 5.00 03/21/2019 1,245,887 1,240,177
U.S. Foodservice............................. BTL B2 B- 4.50 03/29/2019 2,226,003 2,210,421
-----------
13,699,949
-----------
FOOD PRODUCTS -- 3.6%
Brickman Group Holdings, Inc................. BTL-B2 NR B+ 4.00 10/14/2016 883,237 887,653
Brickman Group Holdings, Inc................. BTL-B3 NR B+ 4.00 09/28/2018 1,113,983 1,114,448
H.J. Heinz Co................................ BTL-B2 Ba2 BB 3.50 06/05/2020 3,305,000 3,308,916
Hostess Brands, Inc.......................... BTL-B NR B- 6.75 03/12/2020 1,095,000 1,115,531
Michael Foods, Inc........................... BTL-B Ba3 B+ 4.25 02/25/2018 1,924,575 1,945,424
Pinnacle Foods Group, Inc.................... BTL-B Ba3 BB 3.25 04/29/2020 2,743,125 2,732,553
Pinnacle Operating Corp...................... BTL-B2 NR B 4.75 11/15/2018 1,429,218 1,432,195
Pinnacle Operating Corp...................... BTL-B1 Caa1 CCC+ 11.50 05/13/2019 1,000,000 1,022,500
-----------
13,559,220
-----------
GAS UTILITIES -- 0.7%
EP Energy LLC................................ BTL-B3 Ba3 B+ 3.50 05/24/2018 1,005,000 1,000,760
NGPL PipeCo LLC.............................. BTL-B B2 B 6.75 09/15/2017 691,339 690,907
Ruby Western Pipeline Holdings LLC........... BTL Ba2 BB+ 3.50 03/27/2020 935,000 932,663
-----------
2,624,330
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 1.7%
Bausch & Lomb, Inc........................... BTL-B B1 B+ 4.00 05/17/2019 1,212,773 1,215,957
Catalent Pharma Solutions, Inc............... BTL Ba3 BB- 3.70 09/15/2016 1,880,000 1,873,734
Catalent Pharma Solutions, Inc............... BTL Caa1 B 6.50 12/29/2017 720,000 717,300
Hologic, Inc................................. BTL-B Ba2 BBB- 4.50 08/01/2019 798,963 802,645
Immucor, Inc................................. BTL-B2 B1 BB- 5.00 08/17/2018 1,854,775 1,862,504
-----------
6,472,140
-----------
13
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES -- 4.4%
American Renal Holdings, Inc.............. 1st Lien Ba3 B 4.50% 09/22/2019 $2,119,688 $ 2,107,764
American Renal Holdings, Inc.............. 2nd Lien Caa1 CCC+ 8.50 02/14/2020 1,555,000 1,556,295
ATI Physical Therapy...................... BTL-B Ba3 B+ 5.75 12/20/2019 830,825 835,498
DaVita, Inc............................... BTL-B2 Ba2 BB- 4.00 11/01/2019 1,218,875 1,223,332
DaVita, Inc............................... BTL-B Ba2 BB- 4.50 10/20/2016 1,701,375 1,712,529
HCA, Inc.................................. Tranche B3 Ba3 BB 2.95 05/01/2018 500,000 501,328
Health Management Associates, Inc......... BTL-B Ba3 BB- 3.50 11/18/2018 596,464 596,464
Multiplan, Inc............................ BTL Ba3 B 4.00 08/26/2017 2,009,197 2,018,166
National Surgical Hospitals, Inc.......... BTL B2 B 8.25 02/03/2017 1,336,377 1,336,377
Quintiles Transnational Corp.............. BTL-B2 B1 BB- 4.50 06/08/2018 1,669,910 1,674,085
Sheridan Holdings, Inc.................... 1st Lien B1 B+ 4.50 06/29/2018 1,019,726 1,023,550
Sheridan Holdings, Inc.................... 2nd Lien Caa1 B- 9.00 06/29/2019 721,000 727,909
U.S. Renal Care, Inc...................... 1st Lien B1 B+ 6.25 07/02/2019 801,900 804,907
U.S. Renal Care, Inc...................... 2nd Lien Caa1 CCC+ 10.25 12/27/2019 666,000 679,320
-----------
16,797,524
-----------
HEALTH CARE TECHNOLOGY -- 0.7%
Emdeon Business Services LLC.............. BTL-B2 Ba3 BB- 3.75 11/02/2018 679,199 677,671
IMS Health, Inc........................... BTL-B Ba3 BB- 3.75 09/01/2017 1,805,963 1,808,446
-----------
2,486,117
-----------
HOTELS, RESTAURANTS & LEISURE -- 6.5%
24 Hour Fitness Worldwide, Inc............ BTL-B Ba3 B+ 5.25 04/22/2016 1,561,822 1,577,440
Affinity Gaming LLC....................... BTL-B Ba2 BB 5.50 11/09/2017 898,624 908,733
Caesars Entertainment Operating Co., Inc.. BTL-B2 B3 B- 4.44 01/28/2018 3,193,554 2,758,432
California Pizza Kitchen, Inc............. BTL B2 B 5.25-6.50 03/29/2018 1,500,000 1,501,250
DineEquity, Inc........................... BTL-B Ba2 BB- 3.75 10/19/2017 1,125,965 1,129,249
Four Seasons Holdings, Inc................ 1st Lien B1 BB- 4.25 06/27/2020 770,000 772,888
Four Seasons Holdings, Inc................ 2nd Lien Caa1 B- 6.25 12/28/2020 835,000 843,872
Golden Nugget, Inc.(10)(11)............... Delayed Draw Caa3 B- 3.20 06/30/2014 719,590 700,521
Golden Nugget, Inc.(10)(11)............... 1st Lien Caa3 B- 3.20 06/30/2014 1,264,214 1,230,712
Landry's Restaurants, Inc................. BTL-B Ba3 BB- 4.75 04/24/2018 550,900 552,392
MGM Resorts International................. BTL-B Ba2 BB 3.50 12/20/2019 2,820,825 2,802,137
OSI Restaurant Partners LLC............... BTL-B1 B1 BB 3.50 10/26/2019 2,842,125 2,835,909
Quizno's LLC.............................. 1st Lien NR NR 9.00 01/24/2017 1,788,090 914,906
ROC Finance LLC........................... BTL-B B1 BB- 5.00 05/15/2019 700,000 701,969
Six Flags Theme Parks, Inc................ BTL-B Ba2 BB+ 4.00-5.25 12/20/2018 744,303 749,816
Station Casinos, Inc...................... BTL-B B1 B 5.00 03/01/2020 2,812,950 2,818,576
Town Sports International Holdings, Inc... BTL-B Ba3 B+ 5.75 05/11/2018 1,797,161 1,812,886
-----------
24,611,688
-----------
HOUSEHOLD DURABLES -- 0.9%
Apex Tool Group LLC....................... BTL-B B1 B 4.50 02/01/2020 603,488 604,745
Tempur-Pedic International, Inc........... BTL-B NR BB 3.50 03/18/2020 766,519 761,919
Wilsonart International Holdings LLC...... BTL B2 B+ 4.00 10/31/2019 1,094,500 1,086,634
Yankee Candle Co., Inc.................... BTL B1 B+ 5.25 04/02/2019 772,614 775,189
-----------
3,228,487
-----------
HOUSEHOLD PRODUCTS -- 0.1%
Reynolds Group Holdings, Inc.............. Tranch E B1 B+ 4.75 09/28/2018 469,093 470,950
-----------
INDUSTRIAL CONGLOMERATES -- 1.5%
American Rock Salt Co. LLC................ BTL-B B3 B 5.50 04/25/2017 1,690,500 1,689,232
Fram Group Holdings, Inc.................. 1st Lien B2 B 6.50 07/29/2017 525,643 519,073
Sequa Corp................................ BTL-B B1 B 5.25 06/19/2017 872,611 878,338
UTEX Industries, Inc...................... 1st Lien B2 B 4.75 04/10/2020 545,000 547,214
UTEX Industries, Inc...................... 2nd Lien Caa2 CCC+ 8.75 04/10/2021 2,000,000 2,017,500
-----------
5,651,357
-----------
14
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
----------------------------------------------------------------------------------------------------------------------
INDUSTRIAL POWER PRODUCERS & ENERGY TRADERS -- 1.0%
Calpine Corp...................................... BTL-B B1 BB- 4.00% 04/01/2018 $1,065,463 $ 1,066,034
Calpine Corp...................................... BTL B1 BB- 4.00 10/09/2019 1,534,405 1,533,685
Dynegy Holdings, Inc.............................. BTL-B2 B1 BB- 4.00 04/23/2020 772,308 769,412
LS Power Funding Corp............................. BTL Ba2 BB+ 5.50-6.50 06/28/2019 432,063 435,844
-----------
3,804,975
-----------
INSURANCE -- 2.3%
Asurion Corp...................................... 1st Lien NR B+ 4.50 05/24/2019 3,546,572 3,522,189
Asurion Corp...................................... BTL NR B- 11.00 09/02/2019 550,000 577,500
Compass Investments, Inc.......................... BTL B1 B- 5.25 12/27/2019 1,034,800 1,038,195
Cooper, Gay, Swett & Crawford, Ltd................ 1st Lien B1 B 5.00 04/16/2020 910,000 917,583
Cooper, Gay, Swett & Crawford, Ltd................ 2nd Lien Caa1 CCC+ 8.25 10/16/2020 1,430,000 1,444,300
National Financial Partners Corp.................. BTL-B B2 B+ 5.25 06/24/2020 1,080,000 1,077,750
-----------
8,577,517
-----------
INTERNET & CATALOG RETAIL -- 0.1%
Acosta, Inc....................................... BTL NR B+ 5.00 03/02/2018 443,888 446,801
-----------
INTERNET SOFTWARE & SERVICES -- 0.2%
Web.com Group, Inc................................ BTL-B B1 B 4.50 10/27/2017 899,239 908,606
-----------
IT SERVICES -- 3.4%
Ceridian Corp..................................... BTL B1 B- 5.94 05/09/2017 1,071,392 1,077,921
Evertec, Inc...................................... BTL-B B1 BB- 3.50 04/17/2020 610,000 606,645
First Data Corp................................... BTL-B B1 B+ 4.19 03/24/2018 6,218,681 6,074,874
First Data Corp................................... BTL-1 B1 B+ 4.19 09/24/2018 2,170,000 2,119,276
MoneyGram International, Inc...................... BTL-B B1 BB- 4.25 03/28/2020 2,269,313 2,272,149
Sungard Data Systems, Inc......................... BTL Ba3 BB 3.94 02/28/2017 436,571 437,662
TransFirst Holdings, Inc.......................... 2nd Lien Caa2 CCC+ 11.00 06/27/2018 250,000 255,000
-----------
12,843,527
-----------
LEISURE EQUIPMENT & PRODUCTS -- 0.7%
SRAM LLC.......................................... BTL-B B1 BB- 4.00-5.25 04/10/2020 2,657,224 2,645,598
-----------
LIFE SCIENCES TOOLS & SERVICES -- 0.4%
Pharmaceutical Product Development, Inc........... BTL-B Ba3 B+ 4.25 12/05/2018 1,690,356 1,696,343
-----------
MACHINERY -- 1.6%
Alliance Laundry Systems LLC...................... BTL B2 B 4.50 12/07/2018 569,722 572,096
Edwards (Cayman Islands II), Ltd.................. BTL-B B2 B+ 4.75 03/26/2020 659,936 659,111
Harbor Freight Tools USA, Inc..................... BTL-B B1 B+ 6.50 11/14/2017 1,030,956 1,040,235
Navistar International Corp....................... BTL-B Ba3 B+ 5.75 08/17/2017 645,188 653,252
Pro Mach, Inc..................................... BTL-B B2 B+ 5.00 07/06/2017 1,510,574 1,511,047
Rexnord Corp...................................... BTL-B Ba2 BB 3.75 04/01/2018 1,593,897 1,594,893
-----------
6,030,634
-----------
MEDIA -- 9.6%
Alpha D2, Ltd..................................... BTL-B2 B1 B+ 4.50 04/30/2019 2,468,875 2,475,047
Charter Communications Operating LLC.............. BTL-E Baa3 BB+ 3.00 04/10/2020 2,490,000 2,472,299
Cumulus Media, Inc................................ 1st Lien Ba2 BB- 4.50 09/16/2018 1,776,761 1,785,644
Cumulus Media, Inc................................ 2nd Lien B3 CCC+ 7.50 09/16/2019 1,070,000 1,094,744
Foxco Acquisition LLC............................. BTL-B B2 B 5.50 07/14/2017 1,226,487 1,240,797
Getty Images, Inc................................. BTL-B B1 B 4.75 10/18/2019 1,905,425 1,890,420
Gray Television, Inc.............................. BTL-B B2 B+ 4.75 10/14/2019 1,108,559 1,117,566
Hicks Sports Group+(7)(8)......................... BTL-B NR NR 6.75 12/22/2011 1,172,242 351,673
Hoyts Cinemas Group............................... 1st Lien B1 B+ 4.00 05/30/2020 425,000 425,000
Hoyts Cinemas Group............................... 2nd Lien B3 CCC+ 8.25 11/20/2020 450,000 452,250
Interactive Data Corp............................. BTL-B Ba3 B+ 3.75 02/11/2018 2,240,087 2,233,087
Kabel Deutschland AG.............................. BTL-F1 NR NR 3.25 02/01/2019 1,150,000 1,149,425
LIN Television Corp............................... BTL-B Ba2 BB 4.00 12/21/2018 719,057 725,193
Mediacom LLC...................................... BTL-E Ba3 BB- 4.50 10/23/2017 902,979 903,684
15
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
MEDIA (CONTINUED)
Nine Entertainment Group, Ltd............... BTL-A Ba2 BB 3.50% 02/05/2020 $1,600,000 $ 1,596,667
Salem Communications Corp................... BTL-B B2 B 4.50 03/16/2020 897,867 903,104
The Weather Channel(12)..................... 2nd Lien B3 CCC+ 7.00 06/26/2020 270,000 273,375
Tribune Co.................................. BTL Ba3 BB+ 4.00 12/31/2019 2,587,000 2,610,692
Truven Health Analytics, Inc................ BTL-B NR B+ 4.50 06/06/2019 311,856 311,076
Univision Communications, Inc............... BTL-C1 B2 B+ 4.50 03/01/2020 648,172 643,427
Univision Communications, Inc............... BTL-C2 B2 B+ 4.50 03/01/2020 6,334,125 6,288,880
Velo Holdings, Inc.......................... BTL NR NR 15.00 02/04/2018 335,591 332,235
Virgin Media Investment Holdings, Ltd....... BTL-B Ba3 BB- 3.50 06/07/2020 1,875,000 1,860,353
WideOpenWest Finance LLC.................... BTL-B B1 B 4.75 04/01/2019 925,668 929,429
WMG Acquisition Corp........................ BTL Ba3 BB- 3.75 07/01/2020 2,176,000 2,170,560
-----------
36,236,627
-----------
METALS & MINING -- 2.2%
Ameriforge Group, Inc....................... BTL B1 B+ 5.00 12/19/2019 1,149,225 1,147,788
Doncasters U.S. Finance LLC................. BTL-B B2 B 5.50 04/05/2020 1,630,913 1,631,252
Fortescue Metals Group, Ltd................. BTL Ba1 BB+ 5.25 10/18/2017 3,826,088 3,810,412
Novelis, Inc................................ BTL-B Ba2 BB- 3.75 03/10/2017 1,751,870 1,760,083
-----------
8,349,535
-----------
MULTI UTILITIES -- 1.5%
La Frontera Generation LLC.................. BTL-B B1 BB- 4.50 09/30/2020 1,910,000 1,902,242
Texas Competitive Electric Holdings Co. LLC. BTL Caa3 CCC 4.69-4.78 10/10/2017 5,174,956 3,637,994
-----------
5,540,236
-----------
MULTILINE RETAIL -- 1.5%
99 Cents Only Store......................... BTL-B B2 B+ 5.25-6.25 01/13/2019 522,067 524,024
JC Penny Corp, Inc.......................... BTL B2 B- 6.00 05/21/2018 3,485,000 3,494,922
Neiman Marcus Group, Inc.................... BTL-B B2 B+ 4.00 05/16/2018 1,500,000 1,497,071
-----------
5,516,017
-----------
OIL, GAS & CONSUMABLE FUELS -- 2.0%
Arch Coal, Inc.............................. BTL Ba3 BB 5.75 05/16/2018 1,450,354 1,445,369
Energy Transfer Equity LP................... BTL-B Ba2 BB 3.75 03/23/2017 976,500 981,459
Philadelphia Energy Solutions LLC........... BTL-B B1 BB- 6.25 04/04/2018 952,613 951,422
Power Buyer LLC............................. BTL NR NR 4.25 05/06/2020 1,013,333 1,006,367
Power Buyer LLC(14)......................... Delayed Draw NR NR 0.00 05/06/2020 126,667 125,400
Power Buyer LLC............................. 2nd Lien Caa2 CCC+ 8.25 11/06/2020 1,670,000 1,667,216
Samson Investment Co........................ 2nd Lien B1 B 6.00 09/25/2018 1,500,000 1,500,000
-----------
7,677,233
-----------
PAPER & FOREST PRODUCTS -- 0.2%
Unifrax Corp................................ BTL-B B1 B+ 4.25 11/28/2018 853,710 854,991
-----------
PERSONAL PRODUCTS -- 0.6%
NBTY, Inc................................... BTL-B Ba3 BB- 3.50 10/01/2017 548,719 549,691
Revlon, Inc................................. BTL-B Ba2 BB- 4.00 11/20/2017 1,699,200 1,716,724
-----------
2,266,415
-----------
PHARMACEUTICALS -- 1.9%
Alkermes, Inc............................... BTL-B B1 BB 3.50 09/18/2019 1,513,563 1,500,319
Capsugel Healthcare, Ltd.................... BTL-B Ba3 BB- 4.25 08/01/2018 1,695,918 1,712,877
ConvaTec, Inc............................... BTL-B Ba3 B+ 5.00 12/22/2016 479,951 483,700
Valeant Pharmaceuticals International, Inc.. BTL-E Ba1 BB 4.50 06/24/2020 2,425,000 2,424,030
Warner Chilcott PLC......................... BTL-B1 NR NR 4.25 03/15/2018 202,085 202,564
Warner Chilcott PLC......................... BTL-B3 NR NR 4.25 03/15/2018 365,810 366,679
Warner Chilcott PLC......................... Tranche B1 NR NR 4.25 03/15/2018 464,216 465,318
Warner Chilcott PLC......................... Tranche B2 NR NR 4.25 03/15/2018 62,428 62,577
-----------
7,218,064
-----------
16
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
INTEREST MATURITY PRINCIPAL VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ AMOUNT (NOTE 2)
--------------------------------------------------------------------------------------------------------------------
POOLED VEHICLE -- 0.5%
Bombardier Recreational Products, Inc.......... 1st Lien B1 B+ 4.00% 01/30/2019 $1,961,143 $ 1,961,757
------------
PROFESSIONAL SERVICES -- 0.6%
Nexeo Solutions LLC............................ BTL-B1 B2 B 5.00 09/08/2017 1,502,801 1,476,502
Nexeo Solutions LLC............................ BTL-B2 B2 B 5.00 09/08/2017 660,013 650,112
------------
2,126,614
------------
REAL ESTATE INVESTMENT TRUSTS -- 0.5%
Capital Automotive LP.......................... BTL-B Ba2 BB- 4.00 04/05/2019 792,050 792,545
Capital Automotive LP.......................... 2nd Lien B1 B- 6.00 04/30/2020 1,090,000 1,114,525
------------
1,907,070
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.5%
Realogy Corp................................... CLTL B1 BB- 4.45 10/10/2016 187,278 187,390
Realogy Corp................................... BTL B1 BB- 4.50 03/05/2020 1,592,602 1,601,560
------------
1,788,950
------------
ROAD & RAIL -- 0.4%
Swift Transportation Co., Inc.................. BTL-B Ba2 NR 4.00-4.25 12/21/2017 1,391,202 1,402,722
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 1.7%
Freescale Semiconductor, Inc................... BTL-B4 B1 B 5.00 03/01/2020 5,419,290 5,383,729
Microsemi Corp................................. BTL-B Ba2 BB 3.75 02/19/2020 1,110,654 1,117,133
------------
6,500,862
------------
SOFTWARE -- 3.4%
Attachmate Corp................................ BTL B1 BB- 7.25-8.00 11/22/2017 666,925 670,022
Eagle Parent, Inc.............................. BTL-B Ba3 NR 4.50 05/16/2018 2,793,214 2,801,943
Hyland Software, Inc........................... BTL B2 B 5.50 10/25/2019 1,825,825 1,826,738
Infor (US), Inc................................ BTL-B3 NR B+ 3.75 05/22/2020 210,000 209,318
Kronos, Inc.................................... BTL-C Ba3 B 4.50 10/30/2019 2,422,825 2,439,482
Kronos, Inc.................................... 2nd Lien Caa1 CCC+ 9.75 04/30/2020 1,745,000 1,810,438
Lawson Software, Inc........................... BTL-B Ba3 B+ 5.25 04/05/2018 986,881 994,283
Magic Newco LLC................................ BTL Ba3 NR 7.25 12/12/2018 1,473,863 1,484,457
RedPrairie Corp................................ 1st Lien B1 B+ 6.75 12/21/2018 756,200 759,981
------------
12,996,662
------------
SPECIALTY RETAIL -- 2.1%
J Crew Operating Corp.......................... BTL-B1 B1 B 4.00 03/07/2018 1,808,088 1,802,061
Michaels Stores, Inc........................... BTL-B2 B1 BB- 3.75 01/28/2020 2,175,000 2,171,148
Party City Holdings, Inc....................... BTL B1 B 4.25 07/29/2019 2,567,448 2,565,043
Serta Simmons Holdings LLC..................... BTL-B B1 B+ 5.00-6.00 10/01/2019 1,511,213 1,516,880
------------
8,055,132
------------
WIRELESS TELECOMMUNICATION SERVICES -- 2.3%
Cricket Communications, Inc.................... BTL Ba3 B+ 4.75 10/10/2019 492,525 490,062
Cricket Communications, Inc.................... BTL-C Ba3 B+ 4.75 03/01/2020 1,585,000 1,573,442
Crown Castle International Corp................ BTL-B Ba2 B+ 3.25 01/31/2019 994,882 993,845
Intelstat Jackson Holdings, Ltd................ BTL Ba3 BB- 4.25 04/02/2018 1,987,475 1,994,308
LTS Buyer LLC.................................. 1st Lien B1 B 4.50 04/11/2020 795,000 793,172
LTS Buyer LLC.................................. 2nd Lien Caa1 CCC+ 8.00 04/12/2021 430,000 430,179
Syniverse Technologies, Inc.................... BTL-B B1 BB- 5.00 04/23/2019 2,273,040 2,283,696
------------
8,558,704
------------
TOTAL LOANS (cost $355,904,679)................ 354,351,742
------------
17
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
RATINGS/(1)/
(UNAUDITED)
------------
PRINCIPAL
INTEREST MATURITY AMOUNT/ VALUE
INDUSTRY DESCRIPTION TYPE MOODY'S S&P RATE DATE/(2)/ SHARES (NOTE 2)
----------------------------------------------------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES -- 2.5%
COMMERCIAL SERVICES & SUPPLIES -- 0.4%
Ladder Capital Finance Holdings LLP*.................... Bond Ba3 B+ 7.38% 10/01/2017 $1,710,000 $1,744,200
----------
CONSUMER FINANCE -- 0.3%
General Motors Financial Co.*........................... Bond Ba3 BB- 2.75 05/15/2016 985,000 968,994
----------
GAS UTILITIES -- 0.4%
EP Energy LLC........................................... Bond B2 B 9.38 05/01/2020 1,258,000 1,421,540
----------
INTERNET SOFTWARE & SERVICES -- 0.4%
Equinix, Inc............................................ Bond Ba3 BB 5.38 04/01/2023 1,245,000 1,220,100
Zayo Group LLC.......................................... Bond B1 B 8.13 01/01/2020 340,000 368,900
----------
1,589,000
----------
IT SERVICES -- 0.4%
First Data Corp.*....................................... Bond B1 B+ 7.38 06/15/2019 1,635,000 1,679,963
----------
OIL, GAS & CONSUMABLE FUELS -- 0.3%
Denbury Resources, Inc.................................. Bond B1 BB 4.63 07/15/2023 1,215,000 1,120,838
----------
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.1%
CBRE Services, Inc...................................... Bond Ba1 B+ 5.00 03/15/2023 420,000 397,950
----------
SPECIALTY RETAIL -- 0.2%
Party City Holdings, Inc.*.............................. Bond Caa1 CCC+ 8.88 08/01/2020 540,000 579,150
----------
TOTAL U.S. CORPORATE BONDS & NOTES (cost $9,341,260).... 9,501,635
----------
FOREIGN CORPORATE BONDS & NOTES -- 2.0%
CONTAINERS & PACKAGING -- 0.2%
Ardagh Packaging Finance PLC*........................... Bond Ba3 B+ 4.88 11/15/2022 590,000 551,650
----------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.4%
Wind Acquisition Finance SA*............................ Bond Ba3 BB- 6.50 04/30/2020 1,415,000 1,404,388
----------
ENERGY EQUIPMENT & SERVICES -- 0.2%
Shelf Drilling Holdings, Ltd.*.......................... Bond B1 B 8.63 11/01/2018 695,000 722,800
----------
MEDIA -- 0.2%
Unitymedia Hessen GmbH & Co. KG*........................ Bond Ba3 B+ 5.50 01/15/2023 870,000 822,150
----------
OIL, GAS & CONSUMABLE FUELS -- 0.1%
MEG Energy Corp.*....................................... Bond B1 BB 6.38 01/30/2023 570,000 552,900
----------
WIRELESS TELECOMMUNICATION SERVICES -- 0.9%
Intelsat Luxembourg SA*................................. Bond Caa2 CCC+ 7.75 06/01/2021 2,365,000 2,388,650
NII Internet Telecom SCA*............................... Bond B2 B- 7.88 08/15/2019 1,125,000 1,065,938
----------
3,454,588
----------
TOTAL FOREIGN CORPORATE BONDS & NOTES (cost $7,630,000). 7,508,476
----------
COMMON STOCK -- 0.1%-
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
BLB Management Services, Inc.+.......................... 5,141 113,745
----------
MEDIA -- 0.1%
Berry Co. LLC+(5)(6).................................... 1,136 66,524
Velo Holdings, Inc.+.................................... 158,341 95,005
----------
161,529
----------
TOTAL COMMON STOCK (cost $1,276,448).................... 275,274
----------
MEMBERSHIP INTEREST -- 0.1%
MEDIA -- 0.1%
NextMedia Operating, Inc.+(5)(6)........................ 7,916 258,220
VSS-AHC Holdings LLC+(5)(6)............................. 12,608 0
----------
TOTAL MEMBERSHIP INTEREST (cost $1,506,366)............. 258,220
----------
18
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
VALUE
INDUSTRY DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------------------------
WARRANTS -- 0.0%
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
Bankruptcy Management Solutions, Inc.
Expires 10/01/2017
(Strike Price $30.00)+(5)(6)
(cost $0)................................................. 126 $ 0
------------
TOTAL LONG-TERM INVESTMENT SECURITIES (cost $375,658,753).. 371,895,347
------------
SHORT-TERM INVESTMENT SECURITIES -- 0.3%
REGISTERED INVESTMENT COMPANIES -- 0.3%
SSgA Money Market Fund (cost $1,140,752)................... 1,140,752 1,140,752
------------
TOTAL INVESTMENTS
(cost $376,799,505) (13)................................... 98.7% 373,036,099
OTHER ASSETS LESS LIABILITIES.................................. 1.3% 5,090,080
--------- ------------
NET ASSETS -- 100.0%........................................... 100.0% $378,126,179
========= ============
--------
BTL Bank Term Loan
CLTLCredit Linked Term Loan
NR Security is not rated.
+ Non-income producing security
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
rights to demand registration of these securities. At June 30, 2013, the
aggregate value of these securities was $12,480,783, representing 3.3% of
net assets. Unless otherwise indicated, these securities are not considered
to be illiquid.
(1) Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered below investment grade. Ratings
provided are as of June 30, 2013.
(2) Based on the stated maturity, the weighted average to maturity of the loans
held in the portfolio will be approximately 66 months. Loans in the Fund's
portfolio are generally subject to mandatory and/or optional prepayment.
Because of these mandatory prepayment conditions and because there may be
significant economic incentives for a Borrower to prepay, prepayments may
occur. As a result, the actual remaining maturity may be substantially less
than the stated maturities shown.
(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 June 30, 2013, the aggregate value of these
securities was $324,744, representing 0.1% of net assets.
(6) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(7) Company has filed for Chapter 11 bankruptcy protection.
(8) Loan is in default and did not pay principal at maturity. Final outcome of
Chapter 11 bankruptcy still to be determined.
(9) Loan is in default.
(10)PIK ("Payment-In-Kind") security. Income may be paid in additional loans or
cash at the discretion of the issuer.
(11)Security currently paying interest in the form of additional loans.
(12)As of June 30, 2013, the loan has not settled and as a result, the interest
rate is estimated based on information available.
(13)See Note 6 for cost of investments on a tax basis.
(14)All or a portion of this holding is subject to unfunded loan commitments.
Interest rate will be determined at the time of funding. See Note 11.
19
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2013 -- (UNAUDITED) (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of June 30, 2013 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Assets:
Long-Term Investment Securities:
Loans:
Commercial Services & Supplies.. $ -- $ 20,263,179 $ 63,079 $ 20,326,258
Hotels, Restaurants & Leisure... -- 24,611,688 -- 24,611,688
Media........................... -- 35,552,719 683,908 36,236,627
Other Industries*............... -- 273,177,169 -- 273,177,169
U.S. Corporate Bonds & Notes..... -- 9,501,635 -- 9,501,635
Foreign Corporate Bonds & Notes.. -- 7,508,476 -- 7,508,476
Common Stock:
Diversified Financial Services.. -- 113,745 -- 113,745
Media........................... -- -- 161,529 161,529
Membership Interest.............. -- -- 258,220 258,220
Warrants......................... -- -- 0 0
Short-Term Investments:
Registered Investment Companies.. 1,140,752 -- -- 1,140,752
---------- ------------ ---------- ------------
TOTAL.............................. $1,140,752 $370,728,611 $1,166,736 $373,036,099
========== ============ ========== ============
--------
* Sum of all other industries each of which individually has an aggregate
market value of less than 5% of net assets. For a detailed presentation of
securities by industry classification, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund.
See Notes to Financial Statements
20
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
Note 1. Organization of the Fund
SunAmerica Senior Floating Rate Fund, Inc. (the "Fund") is an open-end,
non-diversified management investment company. The Fund was organized as a
Maryland corporation in 1998 and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Fund is managed by SunAmerica
Asset Management Corp. (the "Adviser" or "SunAmerica"), an indirect
wholly-owned subsidiary of American International Group, Inc. ("AIG"). The
Fund's investment goal and principal investment techniques are to provide as
high a level of current income as is consistent with the preservation of
capital by investing, under normal market conditions, at least 80% of its
net assets, plus any borrowings for investment purposes, in senior secured
floating rate loans and other institutionally traded secured floating rate
debt obligations. The Fund may also purchase both investment grade and high
yield fixed income securities and money market instruments, although the
Fund may not invest more than 10% of its total assets in high yield fixed
income securities.
The Fund offers two classes of shares. Class A shares are offered at net
asset value per share plus an initial sales charge. Additionally, purchases
of Class A shares in excess of $1,000,000 will be purchased at net asset
value but will be subject to a contingent deferred sales charge ("CDSC") on
redemptions made within two years of purchase. Class C shares are offered
for sale at net asset value without a front-end sales charge, although a
CDSC may be imposed on redemptions made within 12 months of purchase. The
share classes differ in their respective distribution and service
maintenance fees. All classes have equal rights to assets and voting
privileges except as may otherwise be provided in the Fund's registration
statement.
INDEMNIFICATIONS: The Fund's organizational documents provide current and
former officers and directors with a limited indemnification against
liabilities arising out of the performance of their duties to the Fund. In
addition, pursuant to Indemnification Agreements between the Fund and each
of the current directors who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Fund (collectively, the
"Disinterested Directors"), the Fund provides the Disinterested Directors
with a limited indemnification against liabilities arising out of the
performance of their duties to the Fund, whether such liabilities are
asserted during or after their service as directors. In addition, in the
normal course of business the Fund enters into contracts that contain the
obligation to indemnify others. The Fund's maximum exposure under these
arrangements is unknown. Currently, however, the Fund expects the risk of
loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from these
estimates and those differences could be significant. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements:
SECURITY VALUATION: In accordance with the authoritative guidance on fair
value measurements and disclosures under accounting principles generally
accepted in the United States of America, the Fund discloses the fair value
of its investments in a hierarchy that prioritizes the inputs to valuation
techniques used to measure the fair value. In accordance with GAAP, fair
value is defined as the price that the Fund would receive upon selling an
asset or transferring a liability in a timely transaction to an independent
third party in the principal or most advantageous market. GAAP established a
three-tier hierarchy to provide more transparency around the inputs used to
measure fair value and to establish classification of fair value
measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
21
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices on foreign equity
securities that were adjusted in accordance with pricing procedures approved
by the Board of Directors (the "Board"), etc.).
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Fund's own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances.)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments are not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
The summary of inputs used to value the Fund's net assets as of June 30,
2013 are reported on a schedule following the Portfolio of Investments.
The investments by the Fund in loan interests ("Loans") are valued in
accordance with guidelines established by the Board. Under the Fund's
current guidelines, Loans for which an active secondary market exists to a
reliable degree will be valued at the mean of the last available bid and
asked prices in the market for such Loans, as provided by a Board-approved
loan pricing service, and are generally categorized as Level 2. Loans for
which an active secondary market does not exist to a reliable degree will be
valued at fair value, which is intended to approximate market value, and are
generally categorized as Level 3. In valuing a Loan at fair value, the
following factors will be considered, (a) the creditworthiness of the
borrower and any intermediate participants, (b) the terms of the Loan, (c)
recent prices in the market for similar Loans, if any, and (d) recent prices
in the market for instruments of similar quality, rate, and period until the
next interest rate reset and maturity.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
Bonds and debentures, other long-term debt securities and short term debt
securities with maturities in excess of 60 days are valued at bid prices
obtained for the day of valuation from a bond pricing service, when such
prices are available and are generally categorized as Level 2. The pricing
services may use valuation models or matrix pricing which considers
information with respect to comparable bond and note transactions,
quotations from bond dealers, or by reference to other securities that are
considered comparable in such characteristics as rating, interest rate, and
maturity date, option adjusted spreads models, prepayments projections,
interest rate spreads, and yield curves to determine current value. If a
vendor quote is unavailable, the securities may be priced at the mean of two
independent quotes obtained from brokers.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the
22
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
last sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Registered investment companies are generally categorized as Level 1.
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost to the Fund if acquired within 60 days of
maturity or, if already held by the Fund on the 60th day, are amortized to
maturity based on the value determined on the 61st day, and are generally
categorized as Level 2.
The Board is responsible for the share valuation process and has adopted a
policy and procedures (the "PRC Procedures") for valuing the securities and
other assets held by the Fund, including procedures for the fair valuation
of securities and other assets for which market quotations are not readily
available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the Fund's
fair valuation procedures. Securities for which market quotations are not
readily available or the values of which may be significantly impacted by
the occurrence of developments or significant events are generally
categorized as Level 3. There is no single standard for making fair value
determinations, which may result in prices that vary from those of other
funds.
The Loans in which the Fund primarily invests are generally not listed on
any exchange and the secondary market for the Loans is comparatively
illiquid relative to markets for other fixed income securities.
Consequently, obtaining valuations for the Loans may be more difficult than
obtaining valuations for more actively traded securities. Thus, the value
upon disposition on any given Loan may differ from its current valuation.
REPURCHASE AGREEMENTS: The Fund, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Fund's custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). The underlying collateral is
valued daily on a mark to market basis, plus accrued interest, to ensure
that the value, at the time the agreement is entered into, is equal to at
least 102% of the repurchase price, including accrued interest. In the event
of default of the obligation to repurchase, a Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited. At June 30, 2013, the Fund did not enter into any repurchase
agreements.
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is accrued daily from
settlement date except when collection is not expected. Dividend income is
recorded on the ex-dividend date. For financial statement purposes, the Fund
amortizes all premiums and accretes all discounts. Facility fees received,
which were $480,426 for the six months ended June 30, 2013, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $930,330 for the
six months ended June 30, 2013, are recorded as income when received or
contractually due to the Fund.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital share activity
of the respective class).
Dividends from net investment income are normally declared daily and paid
monthly. Capital gain distributions, if any, are paid annually. The Fund
records dividends and distributions to the shareholders on the ex-dividend
date. The
23
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from U.S. generally accepted accounting
principles. These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital accounts at fiscal
year end based on their federal tax-basis treatment; temporary differences
do not require reclassification. Net assets are not affected by the
reclassifications.
The Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. The Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that the Fund will not be subject
to excise tax on undistributed income and gains. Therefore, no federal
income tax or excise tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed the Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2009-2011 or expected to be taken in the Fund's 2012 tax return. The Fund is
not aware of any tax provisions for which it is reasonably possible that the
total amounts of unrecognized tax benefits will change materially in the
next twelve months. The Fund files U.S. federal and certain state income tax
returns. With few exceptions, the Fund is no longer subject to U.S. federal
and state tax examinations by tax authorities for tax returns ending before
2009.
NEW ACCOUNTING PRONOUNCEMENTS: In December 2011, the FASB issued Accounting
Standards Update ("ASU") No. 2011-11, "Disclosures about Offsetting Assets
and Liabilities", which was subsequently clarified in ASU 2013-01
"Clarifying the Scope of Disclosures about Offsetting Assets and
Liabilities" which was issued in January 2013. The amended Standard requires
an entity to disclose information about offsetting and related arrangements
to enable users of its financial statements to understand the effect of
those arrangements on its financial position. The new and revised
disclosures are effective for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. All
required changes to accounting policies have been made in accordance with
ASU No. 2011-11 and No. 2013-01.
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, 2013.
Note 3. Capital Share Transactions
The Fund has 1,000,000,000 of $.01 par value shares authorized that may be
issued in two different classes. Transactions in shares of each class were
as follows:
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 2013 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2012
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A ----------- ------------ ----------- ------------
Shares sold................. 6,811,684 $ 56,739,188 8,881,584 $ 72,332,575
Reinvested distributions.... 299,238 2,492,405 532,619 4,345,084
Shares redeemed............. (5,201,658) (43,296,950) (11,940,299) (97,056,449)
----------- ------------ ----------- ------------
Net increase (decrease).. 1,909,264 $ 15,934,643 (2,526,096) $(20,378,790)
=========== ============ =========== ============
24
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 2013 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2012
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS C ----------- ------------- ---------- ------------
Shares sold................. 4,138,230 $ 34,481,307 3,562,608 $ 29,037,559
Reinvested distributions.... 299,567 2,493,950 606,703 4,944,604
Shares redeemed............. (2,245,801) (18,704,243) (5,225,785) (42,518,628)
----------- ------------- ---------- ------------
Net increase (decrease).. 2,191,996 $ 18,271,014 (1,056,474) $ (8,536,465)
=========== ============= ========== ============
Note 4. Purchases and Sales of Securities
During the six months ended June 30, 2013, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns were $219,593,783 and $182,639,735, respectively.
Note 5. Investment Advisory Agreement and Other Transactions with Affiliates
The Fund has entered into an Investment Advisory and Management Agreement
(the "Advisory Agreement") with SunAmerica. Pursuant to the Advisory
Agreement, SunAmerica provides continuous supervision of the Fund and
administers its corporate affairs, subject to the general review and
oversight of the Board. In connection therewith, SunAmerica furnishes the
Fund with office facilities, maintains certain of the Fund's books and
records and pays the salaries and expenses of all personnel, including
officers of the Fund who are employees of SunAmerica and its affiliates.
SunAmerica also selects, contracts with and compensates the subadviser to
manage the Fund's assets. The Fund will pay SunAmerica a monthly management
fee at the following annual rates, based on the average daily net assets of
the Fund: 0.85% on the first $1 billion; 0.80% on the next $1 billion; and
0.75% in excess of $2 billion.
Wellington Management Company, LLP ("Wellington") acts as subadviser to the
Fund pursuant to a Subadvisory Agreement with SunAmerica. Under the
Subadvisory Agreement, Wellington manages the investment and reinvestment of
the Fund's assets. For compensation for its services as subadviser,
Wellington is entitled to receive from SunAmerica a monthly fee payable at
the following annual rates: 0.30% of average daily net assets on the first
$500 million and 0.25% thereafter. The fee paid to the subadviser is paid by
SunAmerica and not the Fund.
Pursuant to the Administrative Services Agreement (the "Administrative
Agreement") SunAmerica acts as the Fund's administrator and is responsible
for providing and supervising the performance by others, of administrative
services in connection with the operations of the Fund, subject to
supervision by the Fund's Board. For its services, SunAmerica receives an
annual fee equal to 0.20% of average daily net assets of the Fund. For the
six months ended June 30, 2013, the Fund incurred administration fees in the
amount of $363,168.
The Fund has entered into a Distribution Agreement with SunAmerica Capital
Services, Inc. ("SACS" or the "Distributor"), an affiliate of the Adviser.
The Fund has adopted a Distribution Plan on behalf of each class of shares
(each a "Plan" and collectively, the "Plans") in accordance with the
provisions of Rule 12b-1 under the 1940 Act, hereinafter referred to as the
"Class A Plan" and "Class C Plan". In adopting the Plans, the Board
determined that there was a reasonable likelihood that each such Plan would
benefit the Fund and the shareholders of the respective class. The sales
charge and distribution fees of a particular class will not be used to
subsidize the sale of shares of any other class.
Under the Class A Plan and Class C Plan, the Distributor receives payments
from the Fund at an annual rate of 0.10% and 0.50%, respectively, of the
average daily net assets of the Fund's Class A and Class C shares to
compensate the Distributor and certain securities firms for providing sales
and promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated include fees
paid to broker- dealers that have sold Fund shares, commissions and other
expenses such as those incurred for sales literature, prospectus printing
and distribution and compensation to wholesalers. It is possible that in any
given year the amount paid to the Distributor under each Class' Plan may
exceed the Distributor's distribution costs as described above. The Plans
provide that the Class A and Class C
25
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
shares of the Fund will pay the Distributor an account maintenance fee up to
an annual rate of 0.25% of the aggregate average daily net assets of such
class of shares for payments to compensate the Distributor and certain
securities firms for account maintenance activities. Accordingly, for the
six months ended June 30, 2013, SACS received fees (see Statement of
Operations) based upon the aforementioned rates. For the six months ended
June 30, 2013 SACS received sales charges on Class A shares of $149,698, of
which $47,542 was reallowed to affiliated broker-dealers and $74,786 to
non-affiliated broker-dealers. In addition, SACS receives the proceeds of
early withdrawal charges paid by investors in connection with certain
redemptions of Class A and Class C shares. For the six months ended June 30,
2013, SACS received early withdrawal charges of $17,436.
The Fund has entered into a Service Agreement with SunAmerica Fund Services,
Inc. ("SAFS") an affiliate of SunAmerica. Under the Service Agreement, SAFS
performs certain shareholder account functions by assisting the Fund's
transfer agent in connection with the services that it offers to the
shareholders of the Fund. The Service Agreement, which permits the Fund to
compensate SAFS for services rendered based upon an annual rate of 0.22% of
average daily net assets, is approved annually by the Board of Directors.
For the six months ended June 30, 2013, the Fund incurred the following
expenses, which are included in the transfer agent fees and expenses payable
on the Statement of Assets and Liabilities and in transfer agent fees and
expenses in the Statement of Operations to compensate SAFS pursuant to the
terms of the Service Agreement.
PAYABLE AT
EXPENSE JUNE 30, 2013
-------- -------------
Class A....................... $173,753 $30,017
Class C....................... 225,732 38,912
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Fund's annual operating expenses at 1.45%
for Class A and 1.75% for Class C, of average daily net assets. For purposes
of waived fees and/or reimbursed expense calculations, annual Fund operating
expenses do not include extraordinary expenses, as determined under
generally accepted accounting principles or acquired fees and expenses. The
expense reimbursements and fee waivers will continue in effect indefinitely,
unless terminated by the Board, including a majority of the Disinterested
Directors. For the six months ended June 30, 2013, SunAmerica waived fees
and reimbursed expenses as follows: Class A $276,749 and Class C $463,551.
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable, post October losses, and treatment of defaulted
securities.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
------------------------------------------------------------- -------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2012 FOR THE YEAR ENDED DECEMBER 31, 2012
------------------------------------------------------------- -------------------------------------
LONG-TERM
ORDINARY LONG-TERM GAINS/CAPITAL AND UNREALIZED APPRECIATION/ ORDINARY CAPITAL
INCOME OTHER LOSSES (DEPRECIATION) INCOME GAINS
-------- --------------------------- ------------------------ ------------ ---------
$-- $(55,358,517) $(4,215,458) $14,866,282 $--
CAPITAL LOSS CARRYFORWARDS. At December 31, 2012 capital loss carryforward
available to offset future recognized gains were $43,306,204 with
$16,003,027 expiring in 2016, and $27,303,177 expiring in 2017.
Additionally, the fund generated unlimited short-term capital losses of
$2,567,644 and unlimited long-term losses of $9,484,669.
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changed various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective for taxable years beginning after the date of enactment.
Under the Act, the fund will be permitted to carry forward capital losses
incurred in taxable years beginning after the date of enactment for an
unlimited period. However, any losses incurred during those future taxable
years will be required to be utilized prior to the losses incurred in
pre-enactment taxable years, which carry an expiration date. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
26
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
Unrealized appreciation and depreciation in the value of investments at June
30, 2013 for federal income tax purposes were as follows:
Cost (tax basis)............................................ $376,799,505
============
Gross unrealized appreciation............................... $ 3,779,485
Gross unrealized depreciation............................... (7,542,891)
------------
Net unrealized depreciation................................. $ (3,763,406)
============
Note 7. Director Retirement Plan
The Directors of the Fund have adopted the SunAmerica Disinterested
Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective
January 1, 1993, as amended, for the Disinterested Directors. The Retirement
Plan provides generally that a Disinterested Director may become a
participant ("Participant") in the Retirement Plan if he or she has at least
10 years of consecutive service as a Disinterested Director of any of the
adopting SunAmerica mutual funds (the "Adopting Funds") or has attained the
age of 60 while a Director and completed five (5) consecutive years of
service as a Director of any Adopting Fund (an "Eligible Director").
Pursuant to the Retirement Plan, an Eligible Director may receive benefits
upon (i) his or her death or disability while a Director or (ii) the
termination of his or her tenure as a Director, other than removal for cause
from each of the Adopting Funds with respect to which he or she is an
Eligible Director.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Director and Participant, each Eligible Director
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Director of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding clause during prior years is added to each Eligible Director's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Director may receive any benefits payable under the Retirement
Plan, at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
Effective December 3, 2008, the Retirement Plan was amended to, among other
things, (1) freeze the Retirement Plan as to future accruals for active
Participants as of December 31, 2008, (2) prohibit Disinterested Directors
from first becoming participants in the Retirement Plan after December 31,
2008 and (3) permit active Participants to elect to receive a distribution
of their entire Retirement Plan account balance in 2009. The freeze on
future accruals does not apply to Participants that have commenced receiving
benefits under the Retirement Plan on or before December 31, 2008.
Note 8. Line of Credit
The SunAmerica family of mutual funds has established a $75 million
committed and $50 million uncommitted line of credit with State Street
Bank and Trust Company, the Fund's custodian. Interest is currently payable
at the higher of the Federal Funds Rate plus 125 basis points or the
overnight London Interbank Offered Rate plus 125 basis points on the
committed line and State Street Bank and Trust Company's discretionary bid
rate on the uncommitted line of credit. There is also a commitment fee of 10
basis points per annum on the daily unused portion of the committed line of
credit which is included in the other expenses line on the Statement of
Operations. Borrowings under the line of credit will commence when the
respective Fund's cash shortfall exceeds $100,000. For the six months ended
June 30, 2013, the Fund had borrowings outstanding for 2 days under the line
of credit and incurred $145 in interest charges related to these borrowings.
The Fund's average amount of debt under the line of credit for the days
utilized was $1,845,002 at a weighted average interest rate of 1.42%. At
June 30, 2013, there were no borrowings outstanding.
27
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2013 -- (UNAUDITED)
(CONTINUED)
Note 9. Interfund Lending
Pursuant to the exemptive relief granted by the SEC, the Fund is permitted
to participate in an interfund lending program among investment companies
advised by SunAmerica or an affiliate. The interfund lending program allows
the participating funds to borrow money from and lend money to each other
for temporary or emergency purposes. An interfund loan will be made under
this facility only if the participating funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction. For the six months ended June 30, 2013, the Fund did
not participate in this program.
Note 10. Investment Concentration
The Fund invests primarily in participations and assignments, or acts as a
party to the primary lending syndicate of a variable rate senior loan
interest to United States corporations, partnerships, and other entities. If
the lead lender in a typical lending syndicate becomes insolvent, enters
receivership or, if not FDIC insured, enters into bankruptcy, the Fund may
incur certain costs and delays in receiving payment, or may suffer a loss of
principal and/or interest. When the Fund purchases a participation of a
senior loan interest, the Fund typically enters into a contractual agreement
with the lender or other third party selling the participation but not with
the borrower directly. As such, the Fund is subject to the credit risk of
the borrower, selling participant, lender or other persons positioned
between the Fund and the borrower.
Note 11. Unfunded Loan Commitments
At June 30, 2013, the Fund had the following unfunded loan commitment which
could be extended at the option of the Borrower:
MATURITY PRINCIPAL
BORROWER TYPE DATE AMOUNT VALUE
-------- ------------ -------- --------- --------
Power Buyer LLC............... Delayed Draw 09/24/16 $126,667 $125,400
28
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2013 -- (UNAUDITED)
The Board of the Fund, including the Disinterested Directors, approved the
continuation of the Advisory Agreement between the Fund and SunAmerica for a
one-year period ending June 30, 2014 at an in-person meeting held on June 4-5,
2013 (the "Meeting"). At the Meeting, the Board, including the Disinterested
Directors, also approved the continuation of the Subadvisory Agreement between
SunAmerica and Wellington with respect to the Fund for a one-year period ending
June 30, 2014 (the "Subadvisory Agreement," and together with the Advisory
Agreement, the "Agreements").
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and Wellington, provided materials relating to the Board's
consideration of whether to approve the continuation of the Agreements. These
materials included (a) a summary of the services provided to the Fund by
SunAmerica and its affiliates, and by Wellington; (b) information independently
compiled and prepared by Lipper, Inc. ("Lipper") on fees and expenses of the
Fund, and the investment performance of the Fund as compared with a peer group
of funds, along with fee and performance data with respect to the Fund and any
other mutual funds or accounts advised or subadvised by SunAmerica or
Wellington with similar investment objectives and/or strategies, as applicable;
(c) information on the profitability of SunAmerica and its affiliates, and a
discussion relating to indirect benefits; (d) information relating to economies
of scale; (e) information about SunAmerica's general compliance policies and
procedures and the services it provides in connection with its oversight of
subadvisers, (f) information about SunAmerica's and Wellington's risk
management process; (g) information regarding brokerage and soft dollar
practices; and (h) information about the key personnel of SunAmerica and its
affiliates, and Wellington, that are involved in the investment management,
administration, compliance and risk management activities with respect to the
Fund, as well as current and projected staffing levels and compensation
practices.
In determining whether to approve the continuation of the Agreements, the
Board, including Disinterested Directors, considered at the Meeting, and from
time to time as appropriate, factors it deemed relevant, including the
following information:
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY SUNAMERICA AND WELLINGTON.
The Board, including the Disinterested Directors, considered the nature,
quality and extent of services provided by SunAmerica. The Board noted that the
services include acting as investment manager and adviser to the Fund, managing
the daily business affairs of the Fund, and obtaining and evaluating economic,
statistical and financial information to formulate and implement the Fund's
investment policies. Additionally, the Board observed that SunAmerica provides
office space, bookkeeping, accounting, clerical, secretarial and certain
administrative services (excusive of, and in addition to, any such service
provided by any other party retained by the Fund) and has authorized its
officers and employees, if elected, to serve as officers or directors of the
Fund without compensation. Finally, the Board noted that SunAmerica is
responsible for monitoring and reviewing the activities of affiliated and
unaffiliated third-party service providers, including Wellington. In addition
to the quality of the advisory services provided by SunAmerica, the Board
considered the quality of the administrative and other services provided by
SunAmerica to the Fund pursuant to the Advisory Agreement. Additionally, the
Board observed that SunAmerica performs or supervises the performance by others
of other administrative services in connection with the operation of the Fund
pursuant to the Administrative Services Agreement between SunAmerica and the
Fund (the "Administrative Services Agreement").
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Fund. The Board also reviewed the personnel
responsible for providing advisory services to the Fund and other key personnel
of SunAmerica in addition to current and projected staffing levels and
compensation practices. The Board further considered certain strategic changes
that SunAmerica intended to implement with respect to its investment
department, and concluded, based on their experience and interaction with
SunAmerica, that: (i) SunAmerica would continue to be able to retain quality
investment and other personnel; (ii) SunAmerica has exhibited a high level of
diligence and attention to detail in carrying out its advisory and other
responsibilities under the Advisory Agreement; (iii) SunAmerica has been
responsive to requests of the Board; and (iv) SunAmerica has kept the Board
apprised of developments relating to the Fund and the industry in general. The
Board concluded that the nature and extent of services provided under the
Advisory Agreement were reasonable and appropriate in relation to the
management fee and that the quality of services continues to be high. The Board
also noted the high quality of services under the Administrative Services
Agreement.
29
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2013 -- (UNAUDITED) (CONTINUED)
The Board also considered SunAmerica's reputation and relationship with the
Fund and considered the benefit to shareholders of investing in funds that are
part of a family of funds offering a variety of types of mutual funds and
shareholder services. The Board considered SunAmerica's experience in providing
management and investment advisory and administrative services to advisory
clients and noted that as of March 31, 2013, SunAmerica managed, advised and/or
administered approximately $54.8 billion in assets. In addition, the Board
considered SunAmerica's code of ethics and its commitment to compliance
generally and with respect to its management and administration of the Fund.
The Board also considered SunAmerica's risk management process. The Board
further observed that SunAmerica has developed internal procedures for
monitoring compliance with the investment objectives, policies and restrictions
of the Fund as set forth in the Fund's prospectus. The Board also reviewed
SunAmerica's compliance and regulatory history and noted that there were no
material legal, regulatory or compliance issues that would potentially impact
SunAmerica from effectively serving as the investment adviser to the Fund.
The Board also considered the nature, quality and extent of services to be
provided by Wellington. The Board observed that Wellington is responsible for
providing day-to-day investment management services, including investment
research, advice and supervision, and determining which securities will be
purchased or sold by the Fund, or portion thereof, that Wellington manages,
subject to the oversight and review of SunAmerica. The Board reviewed
Wellington's history, structure, size, visibility and resources, which are
needed to attract and retain highly qualified investment professionals. The
Board reviewed the personnel that are responsible for providing subadvisory
services to the Fund, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with Wellington,
that Wellington: (i) has been able to retain high quality portfolio managers
and other investment personnel; (ii) has exhibited a high level of diligence
and attention to detail in carrying out its responsibilities under the
Subadvisory Agreement; and (iii) has been responsive to requests of the Board
and of SunAmerica. In addition, the Board considered Wellington's code of
ethics and risk management process. The Board further observed that Wellington
has developed internal policies and procedures for monitoring compliance with
the investment objectives, policies and restrictions of the Fund as set forth
in the Fund's prospectus. The Board also reviewed Wellington's compliance and
regulatory history and noted that there were no material legal, regulatory or
compliance issues that would potentially impact Wellington from effectively
serving as a subadviser to the Fund. The Board concluded that the nature and
extent of services provided by Wellington under the Subadvisory Agreement were
reasonable and appropriate in relation to the subadvisory fees and that the
quality of services continues to be high.
INVESTMENT PERFORMANCE.
The Board, including the Disinterested Directors, also considered the
investment performance of SunAmerica and Wellington with respect to the Fund.
In connection with its review, the Board received and reviewed information
regarding the investment performance of the Fund as compared to the Fund's peer
group ("Peer Group") and peer universe ("Peer Universe") as independently
determined by Lipper and to an appropriate index or combination of indices,
including the Fund's benchmarks. The Board was provided with a description of
the methodology used by Lipper to select the funds in the Peer Group and Peer
Universe.
It was noted that performance information was for the periods ended March 31,
2013. The Board also noted that it regularly reviews the performance of the
Fund throughout the year. The Board further noted that, while it monitors
performance of the Fund closely, it generally attaches more importance to
performance over relatively long periods of time, typically three to five years.
The Board considered that the Fund's performance was below the median of its
Peer Group and Peer Universe for the one-, three- and five- year periods. The
Board further considered the improvement in the Fund's more recent performance.
The Board noted management's discussion of the Fund's performance, including
the continued monitoring of the Fund, and also considered the fact that the
Fund ranked in the first quintile of its Peer Group and Peer Universe for the
four-year period. The Board concluded that the Fund's overall performance was
satisfactory.
30
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2013 -- (UNAUDITED) (CONTINUED)
CONSIDERATION OF THE MANAGEMENT FEE AND THE COST OF THE SERVICES AND PROFITS TO
BE REALIZED BY SUNAMERICA, WELLINGTON AND THEIR AFFILIATES FROM THE
RELATIONSHIP WITH THE FUND.
The Board, including the Disinterested Directors, received and reviewed
information regarding the fees to be paid by the Fund to SunAmerica pursuant to
the Advisory Agreement and the fees paid by SunAmerica to Wellington pursuant
to the Subadvisory Agreement. The Board examined this information in order to
determine the reasonableness of the fees in light of the nature and quality of
services to be provided and any potential additional benefits to be received by
SunAmerica, Wellington or their affiliates in connection with providing such
services to the Fund.
To assist in analyzing the reasonableness of the management fee for the Fund,
the Board received reports independently prepared by Lipper. The reports showed
comparative fee information for the Fund's Peer Group and Peer Universe as
determined by Lipper, including rankings within each category. In considering
the reasonableness of the management fee to be paid by the Fund to SunAmerica,
the Board reviewed a number of expense comparisons, including: (i) contractual
and actual management fees; and (ii) actual total operating expenses. In
considering the Fund's total operating expenses, the Board analyzed the level
of fee waivers and expense reimbursements and the net expense caps
contractually agreed upon by SunAmerica. The Board further considered that,
unlike the funds in the Peer Group and Peer Universe, the fee waivers and/or
reimbursements being made by SunAmerica with respect to the Funds are only
reflected in the total expenses category of the Lipper reports, rather than
also being reflected as specific management fee waivers in the actual
management fees category of the Lipper reports. As a result, the Board took
into account that the actual management fees presented by Lipper for the funds
in the Peer Group and Peer Universe may appear lower on a relative basis. The
Board also considered the various expense components of the Fund and compared
the Fund's net expense ratio to those of other funds within its Peer Group and
Peer Universe as a guide to help assess the reasonableness of the management
fee for the Fund. The Board acknowledged that it was difficult to make precise
comparisons with other funds in the Peer Group and Peer Universe since the
exact nature of services provided under the various fund agreements is often
not apparent. The Board also noted the relative small size of the Fund's Peer
Group. The Board noted, however, that the comparative fee information provided
by Lipper as a whole was useful in assessing whether SunAmerica was providing
services at a cost that was competitive with other, similar funds.
The Board did not consider services and fees paid under investment advisory
contracts that SunAmerica has with other registered investment companies or
other types of clients with similar investment strategies to the Fund since
SunAmerica informed the Board that there were no such Funds or accounts.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to Wellington pursuant to the Subadvisory Agreement. To assist in
analyzing the reasonableness of the subadvisory fees, the Board received a
report independently prepared by Lipper. The report showed comparative fee
information of each Portfolio's Peer Group and/or Peer Universe that the
Directors used as a guide to help assess the reasonableness of the subadvisory
fees. The Directors noted that the Peer Group/Universe information as a whole
was useful in assessing whether Wellington was providing services at a cost
that was competitive with other, similar funds. The Directors also considered
that the subadvisory fees are paid by SunAmerica out of its management fee and
not by the Fund, and that subadvisory fees may vary widely within a Peer Group
for various reasons, including market pricing demands, existing relationships,
experience and success, and individual client needs. The Board further
considered the amount of subadvisory fees paid out by SunAmerica and the amount
of the management fees which it retained and determined that these amounts were
reasonable in light of the services performed by SunAmerica and the Subadviser,
respectively.
The Board also considered fees received by Wellington with respect to other
mutual funds and accounts with similar investment strategies to the Fund, to
the extent applicable. The Board noted in particular that the similar accounts
identified by Wellington were institutional separate accounts, and Wellington
highlighted certain differences between these separate accounts and the Fund,
including that these separate accounts are subject to different investment
limitations and restrictions and do not experience daily cash flows in a manner
similar to the Fund. The Board then noted that the subadvisory fees paid by
SunAmerica to Wellington were reasonable as compared to fees Wellington
receives for other comparable accounts for which they serve as adviser or
subadviser.
31
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2013 -- (UNAUDITED) (CONTINUED)
The Board considered that the Fund's actual management fees were above the
median of its Peer Group and Peer Universe. The Board also considered that the
Fund's total expenses were above the median of its Peer Group and Peer
Universe. The Board noted that the Fund's advisory fee contains breakpoints and
further noted management's discussions regarding the Fund's expenses.
PROFITABILITY.
The Board also considered SunAmerica's profitability and the benefits
SunAmerica and its affiliates received from their relationship with the Fund.
The Board received and reviewed financial statements relating to SunAmerica's
financial condition and profitability with respect to the services it provided
the Fund and considered how profit margins could affect SunAmerica's ability to
attract and retain high quality investment professionals and other key
personnel. The Board was also provided with a profitability analysis that
detailed the revenues earned and the expenses incurred by SunAmerica and its
affiliates that provide services to the Fund. In particular, the Board
considered the contractual fee waivers and/or expense reimbursements agreed to
by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, including the amount of management fees retained after payment to
the Subadviser, as well as the profitability of SunAmerica under the
Administrative Services Agreement, and considered the profitability of
SunAmerica's affiliates under the Service Agreement and Rule 12b-1 Plans.
Additionally, the Board considered whether SunAmerica, Wellington and their
affiliates received any indirect benefits from the relationship with the Fund.
Specifically, the Board observed that AIG Federal Savings Bank, an affiliate of
SunAmerica, serves as custodian with respect to certain shareholder retirement
accounts that are administered by SunAmerica and receives a fee payable by the
qualifying shareholders. The Board further considered whether there were any
collateral or "fall-out" benefits that SunAmerica and its affiliates may derive
as a result of their relationship with the Fund. The Board noted that
SunAmerica believes that any such benefits are de minimis and do not impact the
reasonableness of the management fees.
The Board also reviewed financial statements and/or other reports from the
Wellington and considered whether Wellington had the financial resources
necessary to attract and retain high quality investment management personnel
and to provide a high quality of services.
The Board concluded that SunAmerica and Wellington had the financial resources
necessary to perform its obligations under the Agreements and to continue to
provide the Fund with the high quality services that they had provided in the
past. The Board further concluded that the management fee was reasonable in
light of the factors discussed above.
ECONOMIES OF SCALE.
The Board, including the Disinterested Directors, considered whether the
shareholders would benefit from economies of scale and whether there was
potential for future realization of economies with respect to the Fund. The
Board considered that as a result of being part of the SunAmerica fund complex,
the Fund shares common resources and may share certain expenses, and if the
size of the complex increases, the Fund could incur lower expenses than it
otherwise would achieve as a stand-alone entity. The Board also took into
account that the Fund had a management fee arrangement that included
breakpoints that will adjust the fee downward as the size of the Fund
increases, thereby allowing the shareholders to potentially participate in any
economies of scale. The Board further noted that SunAmerica has agreed to
contractually cap the total annual operating expenses of the Fund at certain
levels. The Board observed that those expense caps benefited shareholders by
keeping total fees down even in the absence of breakpoints or economies of
scale. The Board concluded that the Fund's management fee structure was
reasonable and that it would continue to review fees in connection with the
renewal of the Advisory Agreement, including whether the implementation of
additional breakpoints would be appropriate in the future due to an increase in
asset size or otherwise.
The Board noted that the Subadvisory Agreement included breakpoints, but did
not review specific information regarding whether there have been economies of
scale with respect to Wellington's management of the Fund because it regards
that information as less relevant at the subadviser level. Rather, the Board
considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
32
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- JUNE
30, 2013 -- (UNAUDITED) (CONTINUED)
OTHER FACTORS.
In consideration of the Agreements, the Board also received information
regarding SunAmerica's and Wellington's brokerage and soft dollar practices.
The Board considered that Wellington is responsible for decisions to buy and
sell securities for the Fund, selection of broker-dealers and negotiation of
commission rates, as applicable. The Board also considered that the Fund
invests primarily in senior secured floating rate loans and, therefore, the
Fund generally does not incur significant brokerage commissions.
CONCLUSION.
After a full and complete discussion, the Board approved the Agreements, each
for a one-year period ending June 30, 2014. Based upon its evaluation of all
these factors in their totality, the Board, including the Disinterested
Directors, was satisfied that the terms of the Agreements were fair and
reasonable and in the best interests of the Fund and the Fund's shareholders.
In arriving at a decision to approve the Agreements, the Board did not identify
any single factor or group of factors as all-important or controlling, but
considered all factors together, and each Disinterested Director may have
attributed different weights to different factors. The Disinterested Directors
were also assisted by the advice of independent counsel in making this
determination.
33
[LOGO] AIG Sun America
Mutual Funds
HARBORSIDE FINANCIAL CENTER
3200 PLAZA 5
JERSEY CITY, NJ 07311-4992
DIRECTORS CUSTODIAN DISCLOSURE OF QUARTERLY
Dr. Judith L. Craven State Street Bank and PORTFOLIO HOLDINGS
William F. Devin Trust Company The Fund is required to
Richard W. Grant P.O. Box 5607 file its com-plete
Stephen J. Gutman Boston, MA 02110 schedule of portfolio
Peter A. Harbeck holdings with the U.S.
William J. Shea VOTING PROXIES ON FUND Securities and Exchange
PORTFOLIO SECURITIES Commission for its first
OFFICERS A description of the and third fiscal quarters
John T. Genoy, President policies and proce-dures on Form N-Q. The Fund's
and Chief Executive that the Fund uses to Forms N-Q are available
Officer determine how to vote on the U.S. Securities
Donna M. Handel, proxies related to and Exchange Commission's
Treasurer securities held in the website at
James Nichols, Vice Fund's portfolio, which http://www.sec.gov. You
President is available in the can also review and
Katherine Stoner, Chief Fund's Statement of obtain copies of the
Compliance Officer Additional Information Forms N-Q at the U.S.
Gregory N. Bressler, may be ob-tained without Securities and Exchange
Chief Legal charge upon request, by Commission's Public
Officer and Secretary calling (800) 858-8850. Refer-ence Room in
Gregory R. Kingston, This in-formation is also Washington, DC
Vice President and available from the EDGAR (information on the
Assistant Treasurer database on the U.S. operation of the Public
Nori L. Gabert, Vice Secu-rities and Exchange Reference Room may be
President and Commission's website at ob-tained by calling
Assistant Secretary http://www.sec.gov. 1-800-SEC-0330).
John E. McLean,
Assistant Secretary DELIVERY OF SHAREHOLDER PROXY VOTING RECORD ON
Kathleen Fuentes, DOCUMENTS FUND PORTFOLIO SECURITIES
Assistant Secretary The Fund has adopted a Information regarding how
Diedre L. Shepherd, policy that allows it to the Fund voted proxies
Assistant Treasurer send only one copy of the relating to securities
Matthew J. Hackethal, Fund's prospectus, proxy held in the Fund's
Anti-Money Laundering material, annual report portfolio during the most
Compliance Officer and semi-annual report recent twelve month
(the "shareholder period ended June 30 is
INVESTMENT ADVISER documents") to available, once filed
SunAmerica Asset shareholders with with the U.S. Securities
Management Corp. multiple accounts and Exchange Commis-sion,
Harborside Financial residing at the same without charge, upon
Center "household." This request, by calling
3200 Plaza 5 practice is called (800) 858-8850 or on the
Jersey City, NJ householding and reduces U.S. Securities and
07311-4992 Fund expenses, which Exchange Commission's
benefits you and other website at
DISTRIBUTOR shareholders. Unless the http://www.sec.gov.
SunAmerica Capital Fund receives
Services, Inc. instructions to the This report is submitted
Harborside Financial con-trary, you will only solely for the general
Center receive one copy of the information of
3200 Plaza 5 shareholder documents. shareholders of the Fund.
Jersey City, NJ The Fund will continue to Distribution of this
07311-4992 household the report to persons other
share-holder documents than shareholders of the
SHAREHOLDER SERVICING indefinitely, until we Fund is authorized only
AGENT are instructed otherwise. in connection with a
SunAmerica Fund If you do not wish to currently effective
Services, Inc. participate in prospectus, setting forth
Harborside Financial householding, please details of the Fund,
Center contact Shareholder which must precede or
3200 Plaza 5 Services at (800) accompany this report.
Jersey City, NJ 858-8850 ext. 6010 or
07311-4992 send a written request The accompanying report
with your name, the name has not been audited by
TRANSFER AGENT of your fund(s) and your independent accountants
State Street Bank and account number(s) to and accordingly no
Trust Company SunAmerica Mutual Funds opinion has been
P.O. Box 219373 c/o BFDS, P.O. Box expressed thereon.
Kansas City, MO 64141 219186, Kansas City MO,
64121-9186. We will
resume individual
mailings for your account
within thirty (30) days
of receipt of your
request.
[GRAPHIC]
GO PAPERLESS!!
DID YOU KNOW THAT YOU HAVE THE OPTION TO
RECEIVE YOUR SHAREHOLDER REPORTS ONLINE?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
IT'S QUICK -- Fund documents will be received faster than via traditional mail.
IT'S CONVENIENT -- Elimination of bulky documents from personal files.
IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs.
TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW
THESE SIMPLE STEPS:
1
GO TO WWW.SAFUNDS.COM
2
CLICK ON THE LINK TO "GO PAPERLESS!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.safunds.com at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
FOR INFORMATION ON RECEIVING THIS REPORT ONLINE, SEE INSIDE BACK COVER.
DISTRIBUTED BY:
SUNAMERICA CAPITAL SERVICES, INC.
This fund report must be preceded by or accompanied by a prospectus.
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at www.safunds.com. Read
the prospectus carefully before investing.
WWW.SAFUNDS.COM
SFSAN - 6/13
[LOGO]
Sun America
Mutual Funds
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors that were
implemented after the registrant last provided disclosure in response to
the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407),
(as required by 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this
Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the
registrant's last fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) Not Applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Senior Floating Rate Fund, Inc.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: September 5, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: September 5, 2013
By: /s/ Donna M. Handel
------------------------------------
Donna M. Handel
Treasurer
Date: September 5, 2013
EX-99.CERT
2
d525626dex99cert.txt
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
EXHIBIT 99.CERT
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT
I, John T. Genoy, 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) and internal control
over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) 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
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter of the period covered by this 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: September 4, 2013
/s/ John T. Genoy
----------------------------------------
John T. Genoy
President
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT
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) and internal control
over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) 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
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter of the period covered by this 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: September 4, 2013
/s/ Donna M. Handel
----------------------------------------
Donna M. Handel
Treasurer
EX-99.906CT
3
d525626dex99906ct.txt
CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
EXHIBIT 99.906.CERT
CERTIFICATIONS PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT
John T. Genoy, 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: September 4, 2013
/s/ John T. Genoy
------------------------------------
John T. Genoy
President
/s/ Donna M. Handel
------------------------------------
Donna M. Handel
Treasurer