NOTIFICATION OF REPURCHASE OFFER
                             PURSUANT TO RULE 23c-3

1.  Investment Company Act File Number 811-08953
    Date of Notification:  August 22, 2002

2.  Exact name of investment company as specified in registration
    statement:

      LIBERTY FLOATING RATE FUND

3.  Address of principal executive office:

      One Financial Center
      Boston, MA 02111

A. [X]  The notification pertains to a periodic repurchase offer
        under paragraph (b) of Rule 23c-3.

B. [ ] The notification pertains to a discretionary repurchase
       offer under paragraph (c) of Rule 23c-3.

C. [ ] The  notification  pertains  to a  periodic  repurchase  offer  under
       paragraph (b) of Rule 23c-3 and a  discretionary  repurchase  offer under
       paragraph (c) of Rule 23c-3.


By:  Ellen Harrington
     Assistant Secretary




               This is notification of the quarterly Tender Offer.
            If you are not interested in selling your shares at this
                      time, kindly disregard this notice.



August 22, 2002

Dear Shareholder:

This letter is to announce the regular quarterly repurchase offer ("Tender
Offer") for the Liberty Floating Rate Fund (the "fund"). The purpose of this
Tender Offer is to provide access and liquidity to your assets by allowing you
to sell your shares at net asset value. The fund repurchases fund shares only by
Tender Offer and only during the fund's regularly scheduled quarterly Tender
Offers.

The Tender Offer period will begin on August 22, 2002 and end on September 16,
2002. All Tender Offer Requests received during this period will be processed on
September 16, 2002.

Repurchase requests for Class B shares held for less than five years and Class C
shares held for less than one year may be subject to an early withdrawal charge.

If you have no desire to sell your shares of the fund, please disregard this
notice. We will contact you again next quarter to remind you of your share sale
privileges. However, if you would like to sell shares for cash in this Tender
Offer, call your financial advisor or complete the Tender Offer Form included
with this letter and return it in the enclosed envelope to Liberty Funds
Services, Inc., P. O. Box 8081, Boston, MA 02266-8081.

All requests to tender shares must be received in good order by the fund by 4:00
p.m. Eastern time on September 16, 2002. A signature guarantee is required when
you liquidate over $100,000 or in certain other circumstances.

If you have any questions, please call your financial advisor or call one of our
Shareholder Service Representatives at 800-345-6611.

Sincerely,

Liberty Floating Rate Fund




TENDER OFFER DOCUMENT
Liberty Floating Rate Fund

Dated August 22, 2002

This repurchase offer ("Tender Offer") of Liberty Floating Rate Fund ("the
fund") and acceptance of the Tender Offer for tender of shares of the fund are
made upon the terms and conditions stated in this Tender Offer Document/Tender
Offer Form and the fund's prospectus and statement of additional information
("SAI").

1.   The Repurchase Offer. The fund is offering to repurchase for cash up to
     fifteen percent (15%) (the "Repurchase Offer Amount") of its issued and
     outstanding shares ("shares"), with all classes being treated in the
     aggregate, at a price equal to the net asset value per share ("NAV") as of
     the close of business on the New York Stock Exchange on the Repurchase
     Pricing Date (defined below) less any early withdrawal charge (described
     below) upon the terms and conditions set forth herein. The purpose of the
     Tender Offer is to provide liquidity to shareholders because no secondary
     market exists for the shares. The Tender Offer is not conditioned upon the
     tender for repurchase of any minimum number of shares.

2.   Repurchase Request Deadline.  All tenders of shares for repurchase must be
     received in proper form by the fund on or before 4 p.m. Eastern time on
     September 16, 2002 which is the "Repurchase Request Deadline."

3.   Repurchase Pricing Date. The NAV for the repurchase will be determined no
     later than September 23, 2002 (the "Repurchase Pricing Date"), which is
     within seven days following the Repurchase Request Deadline. The fund
     anticipates, however, that normally the Repurchase Pricing Date will be the
     same date as the Repurchase Request Deadline.

4.   Payment for Shares Repurchased.  The fund will pay repurchase proceeds
     within seven calendar days after the Repurchase Pricing Date.  The fund
     will not charge a repurchase fee.

5.   Net Asset Value. The NAV of the fund on August 15, 2002 was $8.85 per share
     for Class A shares, $8.85 per share for Class B shares, $8.85 per share for
     Class C shares  and $8.85 per  share  for Class Z shares.  You must  decide
     whether to tender shares prior to the Repurchase Request Deadline,  but the
     NAV at which the fund will repurchase  shares will not be calculated  until
     the Repurchase  Pricing Date.  The NAV of the shares may fluctuate  between
     the date of your repurchase  request or the Repurchase Request Deadline and
     the Repurchase  Pricing Date. There can be no assurance that the NAV of the
     shares  on the  Repurchase  Pricing  Date will be as high as the NAV of the
     shares on the date of your  repurchase  request or the  Repurchase  Request
     Deadline.   Please  call  the  fund  at  800-345-6611   for  current  price
     information.  The fund's shares are not traded on any  organized  market or
     exchange.

6.   Increase in Number of Shares Repurchased; Pro Rata Repurchases. If
     shareholders tender more shares for repurchase than the Repurchase Offer
     Amount, the fund may (but is not obligated to) repurchase an additional two
     percent (2%) of the shares above the Repurchase Offer Amount. If the fund
     determines not to repurchase the additional 2%, or if shareholders tender
     shares in excess of the Repurchase Offer Amount plus the 2%, the fund will
     repurchase shares tendered on a pro rata basis. The fund may, however, in
     its discretion accept all shares tendered by shareholders who own less than
     100 shares and who tender all their shares, before prorating the shares
     tendered by other shareholders.



     There can be no assurance that the fund will be able to repurchase all
     shares that you have tendered, even if you tender all shares held in your
     account. In the event of an oversubscribed Tender Offer, you may be unable
     to sell some or all of your investment. You may have to wait until a
     subsequent Tender Offer to tender shares that the fund is unable to
     repurchase, and you would be subject to the risk of NAV fluctuations during
     that time period.

7.   Withdrawal of Shares to be Repurchased.  Tenders of shares may be withdrawn
     or modified at any time prior to 4 p.m. Eastern time on September 16, 2002,
     by submitting  written notice to Liberty Funds Services,  Inc. at P. O. Box
     8081, Boston, MA 02266-8081.

8.   Suspension  or  Postponement  of  Tender  Offer.  The fund may  suspend  or
     postpone  a Tender  Offer in limited  circumstances,  and only by vote of a
     majority of the Board of Trustees,  including a majority of the independent
     Trustees. These circumstances are limited and include the following:

     (a) if the repurchase of shares would cause the fund to lose its status as
         a regulated investment company under Subchapter M of the Internal
         Revenue Code;

     (b) for any period during which an emergency exists as a result of which it
         is not reasonably practicable for the fund to dispose of securities it
         owns or to determine the value of the fund's net assets;

     (c) for any other  periods that the  Securities  and  Exchange  Commission
         permits by order for the protection of shareholders;

     (d) if the shares are listed on a national securities exchange or quoted in
         an inter-dealer quotation system of a national securities association
         and the repurchase of shares would cause the shares to lose that
         status; or

     (e) during any period in which any market on which the shares are
         principally traded is closed, or during any period in which trading on
         the market is restricted.

     You will be notified if the fund suspends or postpones the Tender Offer. If
     the fund renews the Tender Offer after a suspension or postponement, you
     will be sent a new notification.

9.   Tax Consequences. You should review the tax information in the fund's
     prospectus and SAI. Shareholders should consult their tax advisors
     regarding the specific tax consequences, including state and local tax
     consequences, of participating in the Tender Offer. The fund intends to
     take the position that shareholders tendering shares will qualify for sale
     treatment. If the transaction is treated as a sale for tax purposes, any
     gain or loss recognized will be treated as a capital gain or loss by
     shareholders that hold their shares as a capital asset.

10.  Documents in Proper Form. All questions as to validity, form, eligibility
     (including time of receipt) and acceptance of tenders of shares will be
     determined by the fund, in its sole discretion, which determination shall
     be final and binding. The fund reserves the absolute right to reject any or
     all tenders of shares determined not to be in appropriate form or to refuse
     to accept for payment, purchase or pay for any shares if, in the opinion of
     the fund's counsel, accepting, purchasing or paying for such shares would
     be unlawful. The fund also reserves the absolute right to waive any of the
     conditions of the Tender Offer or any defect in any tender of shares
     whether generally or with respect to any particular shares(s) or
     shareholders. The fund's interpretations of the terms and conditions of the
     Tender Offer shall be final and binding. Unless waived, any defects or
     irregularities in connection with tenders of shares must be cured within
     such times as the fund shall determine. Tenders of shares will not be
     deemed to have been made until the defects or irregularities have been
     cured or waived. A signature guarantee is required when a shareholder
     liquidates over $100,000 or in certain other circumstances at the
     discretion of the fund and its transfer agent.



11.  Early Withdrawal Charges. Class B shares are subject to an early withdrawal
     charge ("EWC") imposed on those Class B shares accepted for repurchase that
     have been held for less than five years. Specifically, Class B shares
     repurchased through the (i) first year after purchase are subject to an EWC
     of 3.25%; (ii) second year after purchase are subject to an EWC of 3.00%;
     (iii) third year after purchase are subject to an EWC of 2.00%; (iv) fourth
     year after purchase are subject to an EWC of 1.50%; (v) fifth year after
     purchase are subject to an EWC of 1.00%. Class C shares are subject to an
     EWC of 1% for those Class C shares accepted for repurchase that have been
     held less than one year. Certain purchases of A shares between $1 million
     and $25 million may be subject to an EWC. Please check your holdings and
     the fund's prospectus for more information on EWC.

                                    * * * * *

Neither the fund, Stein Roe & Farnham Incorporated, the fund's investment
advisor, Liberty Funds Distributor, Inc., the fund's distributor, Liberty Funds
Services, Inc., the fund's transfer agent, nor any other person is or will be
obligated to give notice of any defects or irregularities in tender offers, nor
shall any of them incur any liability for failure to give any such notice.

Neither the fund nor its Board of Trustees makes any recommendation to any
shareholder as to whether or not to tender shares. Each shareholder must make an
independent decision whether to tender shares and, if so, how many shares to
tender.

No person has been authorized to make any recommendation on behalf of the fund
as to whether shareholders should tender shares pursuant to this Tender Offer.
No person has been authorized to give any information or to make any
representations in connection with the Tender Offer other than those contained
herein or in the fund's prospectus, SAI or account application. If given or
made, such recommendation and such information and representation may not be
relied upon as having been authorized by the fund.

For per share net asset value and other information, or for a copy of the fund's
prospectus, call the fund at 800-345-6611.