FORM N-23c-3

             NOTIFICATION OF REPURCHASE OFFER PURSUANT TO RULE 23c-3

1.   Investment Company Act File Number: 817-00819
     Date of Notification: May 18, 2005

2.   Exact name of Investment Company as specified in registration statement:

     HIGHLAND FLOATING RATE FUND
     (f/k/a) Columbia Floating Rate Fund

3.   Address of principal executive office:
     c/o Highland Capital Management, L.P.
     13455 Noel Road, Suite 1300
     Dallas, Texas 75240

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:  /s/ M. JASON BLACKBURN
     ----------------------
     M. Jason Blackburn
     Secretary


                                [OBJECT OMITTED]
                                 HIGHLAND FUNDS
                                   MANAGED BY
                       HIGHLAND CAPITAL MANAGEMENT, L.P.

               THIS IS NOTIFICATION OF THE QUARTERLY TENDER OFFER.
      IF YOU ARE NOT INTERESTED IN SELLING YOUR SHARES AT THIS TIME, KINDLY
                             DISREGARD THIS NOTICE.


May 18, 2005

Dear Shareholder:

This letter is to announce the regular quarterly repurchase offer ("Tender
Offer") for Highland 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 its shares only by Tender
Offer and only during its regular quarterly Tender Offers.

The Tender Offer period will begin on May 18, 2005, and end on June 15, 2005.
All Tender Offer requests received during this period will be processed on June
15, 2005.

Repurchase requests for certain Class A shares, Class B shares held for less
than five years and Class C shares held for less than one year may be subject to
a contingent deferred sales 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 Highland Floating
Rate Fund, P.O. Box 9840, Providence, Rhode Island 02940-8040.

ALL REQUESTS TO TENDER SHARES MUST BE RECEIVED IN GOOD ORDER BY THE FUND'S
TRANSFER AGENT BY 4:00 P.M., EASTERN TIME ON JUNE 15, 2005. A MEDALLION
SIGNATURE GUARANTEE IS REQUIRED WHEN YOU REQUEST LIQUIDATION OF OVER $100,000 OR
IN CERTAIN OTHER CIRCUMSTANCES AT THE DISCRETION OF THE FUND AND ITS TRANSFER
AGENT.

The Fund will only accept signature guarantees from Medallion guarantors meeting
the STAMP2000 requirements. Any transaction received on behalf of the Fund by
PFPC Inc., the Fund's transfer agent, with a non-Medallion Signature Guarantee
will be rejected.

If you have any questions, please call your financial advisor or call one of our
Shareholder Services Representatives at (877) 665-1287.

Sincerely,

Highland Floating Rate Fund



                                                                 HLC-TEN-2-06/05


                                            -----------------------------------
                                               Not FDIC    May Lose Value
                                               Insured
                                            -----------------------------------
                                                           No Bank Guarantee
                                            -----------------------------------


TENDER OFFER DOCUMENT
Highland Floating Rate Fund

Dated May 18, 2005

This repurchase offer ("Tender Offer") of Highland 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 current prospectus and statement of additional
information ("SAI").

1.   REPURCHASE OFFER. The Fund is offering to repurchase for cash up to ten
     percent (10%) (the "Repurchase Offer Amount") of its issued and outstanding
     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 contingent deferred sales 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 Fund's
     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's transfer agent by 4:00 p.m., Eastern
     Time on June 15, 2005, which is the "Repurchase Request Deadline."

3.   REPURCHASE PRICING DATE. It is intended that the NAV for the repurchase of
     the Fund's shares will be determined following the close of business June
     on 15, 2005 (the "Repurchase Pricing Date"), which is within fourteen days
     following the Repurchase Request Deadline. However, the Fund has up to
     fourteen days after the Repurchase Request Deadline to determine the NAV.
     If the Fund chooses a Repurchase Pricing Date later than the close of
     business on June 15, 2005, there is a risk that the NAV may fluctuate
     between those dates.

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, although certain Class A shares, Class B and
     Class C shares may be subject to a contingent deferred sales charge
     (described below).

5.   NET ASSET VALUE. The NAV of the Fund on May 4, 2005 was $9.80 per share for
     each of Class A, Class B, Class C and Class Z shares. You must decide
     whether to tender your 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 you submit your repurchase request or the
     Repurchase Request Deadline. Please call the Fund's Shareholder Services
     Representatives at (877) 665-1287 for current price information. The Fund's
     shares are not traded on any organized market or exchange.

                                                                 HLC-TEN-3-06/05


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 additional 2%, the
     Fund will repurchase shares tendered on a pro rata basis. The Fund may,
     however, in its discretion either (i) 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 or (ii) accept
     by lot shares tendered by shareholders who tender all their shares held by
     them and who, when tendering their shares, elect to have either all or none
     or at least a minimum amount or none accepted by the Fund, if the Fund
     first accepts all shares tendered by shareholders who do not so elect.

     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 4:00 p.m., Eastern Time on June 15, 2005,
     by submitting written notice to Highland Floating Rate Fund at P.O. Box
     9840, Providence, Rhode Island 02940-8040.

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 Trustees who
     are not "interested persons" (as defined in the Investment Company Act of
     1940, as amended). 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 of 1986, as amended;

     (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, other than customary weekend and holiday
          closings, 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
     current 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 share(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 Medallion 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.  CONTINGENT DEFERRED SALES CHARGE. Class B shares are subject to a
     contingent deferred sales charge ("CDSC") 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 a CDSC of 3.25%; (ii) second year after purchase
     are subject to a CDSC of 3.00%; (iii) third year after purchase are subject
     to a CDSC of 2.00%; (iv) fourth year after purchase are subject to a CDSC
     of 1.50%; and (v) fifth year after purchase are subject to a CDSC of 1.00%.
     Class C shares are subject to a CDSC of 1.00% for those Class C shares
     accepted for repurchase that have been held less than one year. Certain
     purchases of Class A shares between $1 million and $25 million may be
     subject to a CDSC. Please check your holdings and the Fund's current
     prospectus and SAI for more information on CDSCs.



                                    * * * * *

Neither the Fund, Highland Capital Management, L.P., the Fund's investment
adviser, PFPC Distributors, Inc., the Fund's distributor, PFPC Inc., the Fund's
transfer agent, nor any other person is or will be obligated to give notice of
any defects or irregularities in the Tender Offer, 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 current 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 NAV and other information, or for a copy of the Fund's current
prospectus or SAI, call the Fund's Shareholder Services Representatives at (877)
665-1287.