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(s) 811-22845

Babson Capital Funds Trust

(Exact Name of Registrant as Specified in Charter)

550 South Tryon Street

Suite 3300

Charlotte, NC 28202

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (704) 805-7200

Janice M. Bishop

Secretary and Chief Legal Officer

c/o Babson Capital Management LLC

Independence Wharf

470 Atlantic Avenue, Boston MA 02210

(Name and Address of Agent for Service)

Date of fiscal year end: June 30

Date of reporting period: June 30, 2015

Item 1. Reports to Stockholders.

BABSON CAPITAL FUNDS TRUST

Annual Report

June 30, 2015

BCFT Service Providers

ADVISER

Babson Capital Management LLC

550 South Tryon Street

Suite 3300

Charlotte, NC 28202

SUB-ADVISER

Babson Capital Global Advisors Limited

61 Aldwych

London, UK

WC2B 4AE

COUNSEL TO THE TRUST

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP

200 Berkley Street

Boston, MA 02116

CUSTODIAN

State Street Bank & Trust

One Lincoln Street

Boston, MA 02111

TRANSFER AGENT AND REGISTRAR

State Street Bank & Trust

One Lincoln Street

Boston, MA 02111

FUND ADMINISTRATION/ACCOUNTING

State Street Bank & Trust

One Lincoln Street

Boston, MA 02111

FUND DISTRIBUTOR

ALPS Distributors, Inc.

1290 Broadway

Suite 1100

Denver, CO 80203

BLUE SKY ADMINISTRATION

Boston Financial Data Services

2000 Crown Colony Drive

Quincy, MA 02169

PROXY VOTING POLICIES & PROCEDURES

The Trustees of Babson Capital Funds Trust (the “Trust”) have delegated proxy voting responsibilities relating to the voting of securities held by the Trust to Babson Capital Management LLC (“Babson Capital”). A description of Babson Capital’s proxy voting policies and procedures is available (1) without charge, upon request, by calling, toll-free 1-877-766-0014; (2) on the Trust’s website at http://www.BabsonCapital.com; and (3) on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

FORM N-Q

The Trust will file its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This information is available (i) on the SEC’s website at http://www.sec.gov; and (ii) at the SEC’s Public Reference Room in Washington, DC (which information on their operation may be obtained by calling 1-800-SEC-0330). A complete schedule of portfolio holdings as of each quarter-end is available on the Trust’s website at http://www.BabsonCapital.com or upon request by calling, toll-free, 1-877-766-0014.

Anthony Sciacca

President

Babson Capital Funds Trust

Babson Capital Funds Trust

Babson Global Floating Rate Fund

Babson Global Credit Income Opportunities Fund

Dear Shareholder,

The first half of 2015 brought continued volatility to global markets as central-bank influence remained a driving force across developed and emerging economies. In June, European Central Bank President Mario Draghi warned investors that volatility would likely persist. Greece did not disappoint in this regard, coming perilously close to defaulting on its debt and renewing concerns about a potential exit from the euro. In Asia, weak economic growth from China roiled commodity markets, causing uncertainty across the energy, metals and mining sectors and raising the specter of lower inflation.

In the U.S., as the Federal Reserve (“Fed”) appears to be moving closer to normalizing monetary policy and raising interest rates for the first time in nearly 10 years, lower inflation would not be welcome news. At the July Federal Open Market Committee meeting, Fed Chair Janet Yellen noted continued improvements in the U.S. labor market and reaffirmed the Fed’s intention to raise rates in 2015. If employment data continues to improve and inflation moves toward the Fed’s stated goal of 2%, the likelihood of a September interest-rate hike will increase. If the decline in commodity prices affects the Fed’s inflation outlook, a 2015 interest-rate hike may not materialize.

Against this uncertain backdrop, we expect that volatility will continue to punctuate global markets as we move further into the second half of 2015. While this increasing volatility is presenting risks that must be monitored carefully, it is also – importantly – creating opportunities in global high yield and across credit markets more broadly. To capitalize on these opportunities, we are pleased to announce six new Babson mutual funds that will be available to investors in 2015 that will span investment grade credit, emerging market debt and global high yield. Two of these funds, Babson Active Short Duration Bond Fund and Babson Total Return Bond Fund, are already available for investment, with the remainder scheduled to launch later this year. These new funds present our investors with a broader set of opportunities across global credit markets and enable increased access to Babson’s robust fixed income platform.

As fundamental investors, we employ rigorous, bottom-up analysis across all of our credit strategies and on every company we invest in. We focus on our clients’ long-term goals, while also being mindful of the current macroeconomic environment. This disciplined, time-tested process has served our clients well through many investment cycles and in adverse market conditions.

On behalf of the entire Babson team, we value your continued partnership, and we look forward to helping you achieve your investment objectives.

Sincerely,

Anthony Sciacca

Cautionary Notice: Certain statements contained in this report may be “forward looking” statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date in which they are made and reflect management’s current estimates, projections, expectations or beliefs, and which are subject to risks and uncertainties that may cause actual results to differ materially. These statements are subject to change at any time based upon economic, market or other conditions and may not be relied upon as investment advice or an indication of the Trust’s trading intent. References to specific securities are not recommendations of such securities, and may not be representative of the Trust’s current or future investments. We undertake no obligation to publicly update these forward looking statements, whether as a result of new information, future events, or otherwise.

ALPS Distributors, Inc. is the distributor for the Babson Capital mutual funds. Shares of the funds are offered by Babson Capital Securities LLC, an affiliated broker dealer of Babson Capital Management LLC. ALPS and Babson Capital Management are separate and unaffiliated. A prospectus can be obtained by calling 1.855.439.5459. Read the prospectus carefully before investing. Investors should carefully consider the investment objective, risks, charges and expenses of any mutual fund before investing. This and other important information is contained in the prospectus and summary prospectus.

Babson Global Floating Rate Fund 2015 Annual Report

Investment Objective

The investment objective of the Babson Global Floating Rate Fund (“Global Floating Rate Fund” or the “Fund”) is to seek a high level of current income. Preservation of capital is a secondary goal.

Portfolio Management Commentary

How did the Fund perform?

● The Fund reported a net total rate of return for the annual reporting period from July 1, 2014 through June 30, 2015 of 1.28% and underperformed the Credit Suisse Global Loan Benchmark, which returned 2.42%.¹

What factors influenced performance of the Fund?

● For the annual reporting period, the Fund’s U.S. holdings in both senior secured loans and, to a lesser extent, high yield bonds were the primary detractors from performance relative to the Benchmark. The Fund’s European holdings, however, positively impacted Fund performance as a result of good credit selection within the senior secured loan asset class. European issuers represented eight out of the top ten contributors to Fund performance for this time period.

● U.S. senior secured loans and high yield bonds of commodity-related issuers faced significant selling pressure over the past twelve months. The Fund was negatively impacted by its exposure to these credits relative to the Benchmark. Seven of the Fund’s bottom ten contributors to its underperformance were commodity-related issuers. In our view, the underlying credit fundamentals for many of these issuers imply a higher value than current trading levels. We feel the selling was indiscriminate at times. While it is difficult to predict the price of commodities, we believe that most of these companies have sufficient liquidity and flexibility in their capital expenditure and operating budgets to withstand the volatility in commodity prices for longer than their current prices would suggest.

Describe recent portfolio activity.

● The number of holdings in the portfolio remained relatively unchanged over the year even as the Fund experienced an almost 50% increase in assets. Despite the Fund’s increased size, its positioning across geographies remained fairly consistent and the Fund continues to maintain significant positions in high conviction credits.

● The Fund remained overweight to European assets relative to the global senior secured loan market. Even with the overweight positioning, the Fund increased its exposure to U.S. assets over the past twelve months as prices widened more significantly than Europe which, in our opinion, positions the Fund to capture the best risk-adjusted returns from the market.

● Over the past twelve months, the Fund’s top three industry exposures have remained the same except for slight shifts in positioning with a decrease in the Healthcare, Education and Childcare sector by 0.5%, an increase to the Diversified / Conglomerate Service sector by 1.2% and a decrease to the non-bank related Finance sector by 4.4%.

Describe portfolio positioning at period end.

● The Fund finished the annual reporting period, June 30, 2015, with a 79.9% weighting to global senior secured loans. The remainder of the portfolio was invested in global high yield bonds (13.7%), primarily senior secured bonds. A portion of the Fund is invested in floating rate, high yield bonds (4.2%) predominantly issued by European companies, which increases the total floating rate exposure of the portfolio to 83.7%.

^1.  Total return describes the return to an investor based on the Class Y net expense ratio and includes the reinvestment of dividends and capital gains. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. The net asset value (NAV) will fluctuate with market conditions. All returns 1-year or less are cumulative. The Credit Suisse Global Loan Benchmark is a market capitalization weighted average of the Credit Suisse Leveraged Loan Index and the Credit Suisse Western European Leveraged Loan Index. The Credit Suisse Leveraged Loan Index is designed to mirror the investable universe of the U.S. dollar-denominated leveraged loan market. The Credit Suisse Western European Leveraged Loan Index is designed to mirror the investable universe of the Western European leveraged loan market, with loans denominated in U.S. and Western European currencies. Indices are unmanaged. It is not possible to invest directly in an index.

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Babson Global Floating Rate Fund 2015 Annual Report

n The Fund remains well-diversified across a number of sectors based on Moody’s Industry Classification, with higher concentrations in Healthcare, Education and Childcare (10.4%), Diversified/Conglomerate Service (9.5%), and non-bank related Finance companies (8.2%) as of June 30, 2015.

n As of June 30, 2015, the Fund had the following credit quality breakdown excluding cash and accrued income: 19.7% in Ba assets, 65.2% in single-B credits and a small exposure to Caa and below at 3.4%. Approximately 10.8% of the Fund’s assets are not publicly rated, primarily consisting of European issuers that we believe have a credit quality similar to that of other assets in the portfolio. Baa assets accounted for the remaining 1.0% of the portfolio assets. Over the course of the year, the single-B assets increased as the Fund’s exposure to Caa and below and not publicly rated assets decreased.²

n The top five countries in the portfolio at the end of the annual reporting period are the U.S. (63.2%), the United Kingdom (18.4%), Germany (7.6%), Canada (2.8%) and Switzerland (1.8%). Overall, the Fund has exposure to 17 different countries, and we continue to focus on building a well-diversified portfolio of global floating rate securities.

Describe market and portfolio outlook.

n For the remainder of 2015, monetary policy will be a key theme capturing the attention of financial markets in the coming months as expectations have increased around an eventual interest rate hike by the Federal Reserve in the United States. In Europe, the European Central Bank’s quantitative easing program will still be monitored as well as any lagging headline risk from the Greece debt crisis.

n Further, commodities will be closely watched as the market is looking for signs of stability across the energy and metals and mining sectors. Weak economic data from China has resulted in additional uncertainty surrounding any commodity related credits.

n Excluding any potential commodity centric volatility and market instability from a potential Federal Reserve interest rate increase, we believe corporate fundamentals, such as balance sheet leverage and earnings growth, will continue to support global senior secured loan valuations in the near term and will most likely keep default rates below normal. This fundamental picture coupled with relatively attractive yields compared to other fixed income securities, we believe, should remain favorable for the global high yield market and the Fund.

^2.  Ratings shown are the highest rating given by one of the following national rating agencies: S&P or Moody’s. Additional information about ratings can be found at www.moodys.com and www.standardandpoors.com. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below investment grade ratings. Bonds backed by U.S. Government or agency securities are given an implied rating equal to the rating of such securities. Holdings designated Not Publicly Rated are not rated by these national rating agencies.

3

Babson Global Floating Rate Fund 2015 Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

* The percentages shown above represent a percentage of the assets as of June 30, 2015.

COUNTRY COMPOSITION (% OF ASSETS**)

** Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of June 30, 2015.

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Babson Global Credit Income Opportunities Fund 2015 Annual Report

Investment Objective

The investment objective of the Babson Global Credit Income Opportunities Fund (“Global Credit Income Opportunities Fund” or the “Fund”) is to seek an absolute return, primarily through current income and secondarily through capital appreciation.

Portfolio Management Commentary

How did the Fund perform?

n The Fund reported a net total rate of return for the annual reporting period from July 1, 2014 through June 30, 2015, of 0.05% and underperformed the 3 Month USD LIBOR + 500 basis points¹ Benchmark, which retuned +5.38%.²

What factors influenced performance of the Fund?

n During the annual reporting period, the main contributors to performance were the Fund’s allocations to collateralized loan obligations (“CLOs”), European high yield bonds, and senior secured loans in the U.S. and Europe. European issuers represented five of the top ten contributors to Fund performance for this time period, while three CLO issuers also claimed spots on the top ten contributor list.

n U.S. high yield bonds of commodity-related issuers faced significant selling pressure over the past twelve months. The Fund was negatively impacted by its exposure to these credits. Eight of the Fund’s bottom ten contributors to its performance were commodity-related issuers. In our view, the underlying credit fundamentals for many of these issuers imply a higher value than current trading levels. We feel the selling was indiscriminate at times. While it is difficult to predict the price of commodities, we believe that most of these companies have sufficient liquidity and flexibility in their capital expenditure and operating budgets to withstand the volatility in commodity prices for longer than their current prices would suggest.

n The Fund’s special situation credits had a negative impact on performance during the annual reporting period; however, we believe these assets provide attractive current income to the portfolio and should contribute to the Fund’s performance in the future.

Describe recent portfolio activity.

n The number of holdings in the portfolio has increased moderately over the year as the Fund grew slightly. Despite the increased number of holdings, the Fund’s positioning across geographies remained fairly consistent and the Fund continues to maintain significant positions in high conviction credits.

n Over the course of the year, the Fund slightly trimmed its exposure to global high yield bonds and senior secured loans while increasing its exposure to CLOs in order to focus on what we believe to be a more attractive part of the below investment grade market from a risk-adjusted basis.

n Over the past twelve months, the Fund’s top three industry exposures have remained the same except for slight shifts in positioning with an increase to its CLO position by 3.1%, a decrease in exposure to Oil and Gas companies by approximately 3.3% and an increase to the Healthcare, Education and Childcare sector by 1.3%.

^1.  A basis point is equal to 1/100th of 1% or 0.01%.

^2.  Total return describes the return to an investor based on the Class Y net expense ratio and includes the reinvestment of dividends and capital gains. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. The net asset value (NAV) will fluctuate with market conditions. All returns 1-year or less are cumulative. The 3 Month USD LIBOR (London Interbank Offered Rate) is an average interest rate, determined by the British Bankers Association, that banks charge one another for the use of short-term money (3 months) in England’s Eurodollar market. The return shown includes 3 Month USD LIBOR plus 500 bps, or 5% per annum. LIBOR is unmanaged. It is not possible to invest directly in LIBOR. No assurance can be given that the Fund’s performance will exceed that of LIBOR by any given increment, or at all.

5

Babson Global Credit Income Opportunities Fund 2015 Annual Report

n The Fund in April 2015 sold and purchased a put option on Markit’s North American High Yield CDX Index to help mitigate downside market risk. While the derivatives are a small portion of the overall Fund, they may be used to hedge the Fund when the manager believes the risk of significant market dislocations makes hedging attractive. ³

Describe portfolio positioning at period end.

n The Fund finished the annual reporting period, June 30, 2015, with an allocation of 46.5%, 28.3%, and 16.5% to global high yield bonds, global senior secured loans and CLOs, respectively. The remainder of the portfolio was invested in a few opportunistic special situation credits at 0.7%, derivatives at 0.3% and cash at 7.7%. A significant portion of the portfolio (50.2%) is senior secured in nature, which may mitigate principal loss in the event of a default.

n The Fund remains well-diversified across a number of sectors based on Moody’s Industry Classification, with higher concentrations in CLOs (16.5%), Oil and Gas (7.8%), and Healthcare, Education and Childcare (7.3%) as of June 30, 2015.

n As of June 30, 2015, the Fund had the following credit quality breakdown excluding cash and accrued income: 31.3% in Ba assets, 51.7% in single-B credits and a modest exposure to Caa and below at 11.4%. Approximately 5.1% of the Fund’s assets are not publicly rated, primarily consisting of European issuers that we believe have a credit quality similar to that of other assets in the portfolio. Baa and above assets accounted for the remaining 0.5% of the portfolio assets. Over the course of the year, the single-B assets increased as the Fund’s exposure to assets rated Caa and below and not publicly rated assets decreased.⁴

n The top five countries in the portfolio at the end of the annual reporting period are the U.S. (49.2%), the Cayman Islands (17.3%), the United Kingdom (13.8%), Germany (3.4%) and the Netherlands (3.1%). The Cayman Islands exposure related to the Fund’s CLO holdings is predominantly invested in U.S. senior secured loans. Overall, the Fund has exposure to 19 different countries, and we continue to focus on building a well-diversified portfolio of global high yield securities.

Describe market and portfolio outlook.

n For the remainder of 2015, monetary policy will be a key theme capturing the attention of financial markets in the coming months as expectations have increased around an eventual interest rate hike by the Federal Reserve in the United States. In Europe, the European Central Bank’s quantitative easing program will still be monitored as well as any lagging headline risk from the Greece debt crisis.

n Further, commodities will be closely watched as the market is looking for signs of stability across the energy and metals and mining sectors. Weak economic data from China has resulted in additional uncertainty surrounding any commodity related credits.

n Excluding any potential commodity centric volatility and market instability from a potential Federal Reserve interest rate increase, we believe corporate fundamentals, such as balance sheet leverage and earnings growth, will continue to support global senior secured loan and high yield bond valuations in the near term and will most likely keep default rates below normal. This fundamental picture coupled with relatively attractive yields compared to other fixed income securities, we believe, should remain favorable for the global high yield market and the Fund.

^3.  Markit’s North American High Yield CDX Index is composed of 100 liquid North American entities with high yield credit ratings that trade in the credit default swap market. It is not possible to invest directly in an index. A put option gives the owner the right to sell a security at a specific price and date.

^4.  Ratings shown are the highest rating given by one of the following national rating agencies: S&P or Moody’s. Additional information about ratings can be found at www.moodys.com and www.standardandpoors.com. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below investment grade ratings. Bonds backed by U.S. Government or agency securities are given an implied rating equal to the rating of such securities. Holdings designated Not Publicly Rated are not rated by these national rating agencies

6

Babson Global Credit Income Opportunities Fund 2015 Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

* The percentages shown above represent a percentage of the assets as of June 30, 2015.

COUNTRY COMPOSITION (% OF ASSETS**)

** Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of June 30, 2015.

7

Babson Capital Funds Trust 2015 Annual Report

SHAREHOLDER EXPENSES (UNAUDITED)

As a shareholder of Babson Global Floating Rate Fund or Babson Global Credit Income Opportunities Fund, you incur ongoing expenses, such as management fees, shareholder service fees, distribution fees and other fund expenses. The following table is intended to help you understand your ongoing expenses (in dollars and cents) of investing in the Funds and to compare these expenses with the ongoing expenses of investing in other funds.

The table is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2015 to June 30, 2015.

Actual Expenses

The first line in the table below provides information about the actual account values and actual expenses. You may use the information in this line, 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 first line for the Fund under the heading entitled “Operating Expenses Incurred” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line in the table below provides information about the 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 value 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 your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Babson Global Floating Rate Fund

	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.05	%	$	1,000.00	$	1,028.00	$	1,014.00	$	5.28
Hypothetical		1.05	%		1,000.00		1,019.60		1,009.80		5.26
Class C
Actual		1.80	%		1,000.00		1,025.30		1,012.65		9.04
Hypothetical		1.80	%		1,000.00		1,015.90		1,007.95		9.00
Class I
Actual		0.75	%		1,000.00		1,030.60		1,015.30		3.78
Hypothetical		0.75	%		1,000.00		1,021.10		1,010.55		3.76
Class Y
Actual		0.75	%		1,000.00		1,030.00		1,015.00		3.77
Hypothetical		0.75	%		1,000.00		1,021.10		1,010.55		3.76

* For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 181/365.

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Babson Capital Funds Trust 2015 Annual Report

SHAREHOLDER EXPENSES (UNAUDITED)(CONTINUED)

Babson Global Credit Income Opportunities Fund

	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.20	%	$	1,000.00	$	1,039.90	$	1,019.95	$	6.07
Hypothetical		1.20	%		1,000.00		1,018.80		1,009.40		6.01
Class C
Actual		1.95	%		1,000.00		1,036.10		1,018.05		9.84
Hypothetical		1.95	%		1,000.00		1,015.10		1,007.55		9.74
Class I
Actual		0.95	%		1,000.00		1,041.20		1,020.60		4.81
Hypothetical		0.95	%		1,000.00		1,020.10		1,010.05		4.76
Class Y
Actual		0.95	%		1,000.00		1,041.20		1,020.60		4.81
Hypothetical		0.95	%		1,000.00		1,020.10		1,010.05		4.76

* For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 181/365.

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Babson Capital Funds Trust 2015 Annual Report

FINANCIAL REPORT

Statements of Assets and Liabilities	11
Statements of Operations	13
Statements of Changes in Net Assets	14
Financial Highlights	15
Schedule of Investments	23-44
Notes to the Financial Statements	45-63
Report of Independent Registered Public Accounting Firm	64
Interested Trustee	65
Independent Trustees	66-67
Officers of the Trust	68-69
Joint Privacy Notice	70

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Babson Capital Funds Trust 2015 Annual Report

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2015

	BABSON GLOBAL FLOATING RATE FUND			BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND
Assets
Investments, at fair value (cost $183,779,073 and $87,211,696, respectively)	$	178,945,642		$	83,439,026
Foreign currency, at value (cost $187,148 and $828,874, respectively)		188,172			827,846
Receivable for investments sold		7,522,395			1,321,634
Receivable for Fund shares sold		439,981			548,379
Interest receivable		1,060,641			1,077,097
Receivable from adviser (see Note 3)		–			10,439
Foreign tax reclaims receivable		–			499
Unrealized appreciation on forward foreign currency exchange contracts		153,124			98,939
Prepaid expenses		14,479			14,362
Total assets		188,324,434			87,338,221
Liabilities
Payable for investments purchased		21,215,008			4,798,806
Payable for Fund shares repurchased		188,148			59,294
Investment advisory fee payable (see Note 3)		6,682			–
Directors’ fees payable		25,191			22,457
Distribution fees payable		4,510			4,953
Dividends payable		30,800			8,138
Written options, at fair value (premiums of $382,000)		–			319,477
Unrealized depreciation on forward foreign currency exchange contracts		523,194			242,571
Unrealized depreciation on unfunded loan commitments		4,592			4,592
Accrued expenses and other liabilities		167,172			145,304
Total liabilities		22,165,297			5,605,592
Total net assets	$	166,159,137		$	81,732,629
Composition of net assets
Shares of beneficial interest outstanding (par value $0.00001 per share), unlimited number of shares authorized	$	173		$	86
Additional paid-in capital		172,113,692			86,777,920
Undistributed net investment income		385,459			832,841
Accumulated net realized loss		(1,236,004	)		(2,089,794	)
Net unrealized depreciation		(5,104,183	)		(3,788,424	)
Total net assets	$	166,159,137		$	81,732,629

See accompanying Notes to Financial Statements.

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Babson Capital Funds Trust 2015 Annual Report

STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)

June 30, 2015

	BABSON GLOBAL FLOATING RATE FUND		BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND
Class A
Net assets applicable to outstanding shares	$	5,153,390	$	12,718,453
Shares of beneficial interest outstanding		536,621		1,337,125
Net asset value per share outstanding	$	9.60	$	9.51
Maximum offering price per share outstanding (Net asset value plus sales charge of 3.00% and 3.75%, respectively)	$	9.90	$	9.88
Class C
Net assets applicable to outstanding shares	$	5,461,107	$	3,579,214
Shares of beneficial interest outstanding		570,658		376,719
Net asset value per share outstanding	$	9.57	$	9.50
Class I
Net assets applicable to outstanding shares	$	25,885,261	$	26,428,486
Shares of beneficial interest outstanding		2,690,564		2,778,924
Net asset value per share outstanding	$	9.62	$	9.51
Class Y
Net assets applicable to outstanding shares	$	129,659,379	$	39,006,476
Shares of beneficial interest outstanding		13,480,746		4,101,804
Net asset value per share outstanding	$	9.62	$	9.51

See accompanying Notes to Financial Statements.

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Babson Capital Funds Trust 2015 Annual Report

STATEMENTS OF OPERATIONS

For the Year Ended June 30, 2015

	BABSON GLOBAL FLOATING RATE FUND			BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND
Investment Income
Interest income	$	6,512,192		$	5,117,388
Other income		4,314			1,892
Total investment income		6,516,506			5,119,280
Operating Expenses
Advisory fees		788,308			578,488
12b-1 distribution and servicing plan
Class A		26,347			35,043
Class C		32,479			18,556
Administrator fees		167,393			114,506
Custody fees		141,692			100,173
Professional fees		134,906			134,906
Transfer agent fees		126,095			132,698
Directors’ fees		104,974			89,727
Registration fees		62,198			62,773
Printing and mailing expenses		28,787			28,787
Other operating expenses		30,462			25,347
Total operating expenses		1,643,641			1,321,004
Reimbursement of expenses
Class A		(72,972	)		(109,328	)
Class C		(42,980	)		(39,700	)
Class I		(172,893	)		(163,439	)
Class Y		(379,508	)		(222,205	)
Net operating expenses		975,288			786,332
Net investment income		5,541,218			4,332,948
Realized and Unrealized Gains (Losses) on Investments
Net realized loss on investments		(3,012,607	)		(3,177,577	)
Net realized gain on forward foreign currency exchange contracts		5,210,733			3,726,491
Net realized loss on foreign currency and translation		(639,717	)		(96,926	)
Net realized gain		1,558,409			451,988
Net change in unrealized depreciation on investments		(5,833,597	)		(5,178,072	)
Net change in unrealized depreciation on unfunded loan commitments		(4,592	)		(4,592	)
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts		(35,901	)		72,833
Net change in unrealized appreciation on foreign currency and translation		53,872			76,427
Net change in unrealized appreciation on written option contracts		–			62,523
Net change in unrealized depreciation		(5,820,218	)		(4,970,881	)
Net realized and unrealized losses on investments		(4,261,809	)		(4,518,893	)
Net increase (decrease) in net assets resulting from operations	$	1,279,409		$	(185,945	)

See accompanying Notes to Financial Statements.

13

Babson Capital Funds Trust 2015 Annual Report

STATEMENTS OF CHANGES IN NET ASSETS

	BABSON GLOBAL FLOATING RATE FUND						BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)			FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Operations
Net investment income	$	5,541,218		$	2,203,083		$	4,332,948		$	2,096,689
Net realized gain (loss) on investments		1,558,409			(139,670	)		451,988			541,842
Net change in unrealized appreciation (depreciation) on investments		(5,820,218	)		716,035			(4,970,881	)		1,182,457
Net increase (decrease) in net assets from operations		1,279,409			2,779,448			(185,945	)		3,820,988
Dividends to Common Shareholders
Net investment income
Class A		(805,770	)		(140,982	)		(1,114,861	)		(36,805	)
Class C		(199,251	)		(26,146	)		(136,768	)		(10,571	)
Class I		(2,251,195	)		(610,026	)		(2,110,134	)		(734,939	)
Class Y		(4,937,396	)		(1,014,718	)		(2,778,042	)		(790,102	)
Net realized gain
Class A		(11,345	)		–			(186,020	)		–
Class C		(2,779	)		–			(25,871	)		–
Class I		(27,574	)		–			(340,131	)		–
Class Y		(49,009	)		–			(416,997	)		–
Total dividends to common shareholders		(8,284,319	)		(1,791,872	)		(7,108,824	)		(1,572,417	)
Capital Share Transactions
Net proceeds from sale of shares		103,090,790			114,172,093			42,681,717			60,160,874
Net Asset Value of shares issued to shareholders in payment of distributions declared		8,079,411			1,770,684			6,926,691			1,559,384
Cost of shares redeemed		(52,643,055	)		(2,298,911	)		(24,420,068	)		(143,371	)
Redemption fees		5,459			–			13,600			–
Net increase in net assets resulting from capital stock transactions		58,532,605			113,643,866			25,201,940			61,576,887
Total increase in net assets		51,527,695			114,631,442			17,907,171			63,825,458
Net Assets
Beginning of year		114,631,442			–			63,825,458			–
End of year (includes undistributed net investment income of $385,459, $334,169, $832,841 and $216,465, respectively)	$	166,159,137		$	114,631,442		$	81,732,629		$	63,825,458

(1) Fund commenced operations on September 16, 2013.

See accompanying Notes to Financial Statements.

14

Babson Global Floating Rate Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS

	CLASS A
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.20		$	10.00
Income from investment operations:
Net investment income (2)		0.44			0.30
Net realized and unrealized gain (loss) on investments		(0.35	)		0.08
Total increase from investment operations		0.09			0.38
Less dividends and distributions:
From net investment income		(0.68	)		(0.18	)
From net realized gain		(0.01	)		–
Total dividends and distributions		(0.69	)		(0.18	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.60		$	10.20
Total investment return (4)		0.95	%		3.81	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	5,153		$	12,464
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		1.74	%		2.27	%(7)
Ratio of net expenses to average net assets		1.05	%		1.05	%(7)
Ratio of net investment income to average net assets		4.44	%		3.76	%(7)
Portfolio turnover rate		63.17	%		49.51	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.05% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

15

Babson Global Floating Rate Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS C
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.16		$	10.00
Income from investment operations:
Net investment income (2)		0.35			0.24
Net realized and unrealized gain (loss) on investments		(0.33	)		0.07
Total increase from investment operations		0.02			0.31
Less dividends and distributions:
From net investment income		(0.60	)		(0.15	)
From net realized gain		(0.01	)		–
Total dividends and distributions		(0.61	)		(0.15	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.57		$	10.16
Total investment return (4)		0.30	%		3.15	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	5,461		$	2,396
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		3.12	%		4.97	%(7)
Ratio of net expenses to average net assets		1.80	%		1.80	%(7)
Ratio of net investment income to average net assets		3.60	%		3.07	%(7)
Portfolio turnover rate		63.17	%		49.51	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.80% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

16

Babson Global Floating Rate Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS I
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.21		$	10.00
Income from investment operations:
Net investment income (2)		0.46			0.30
Net realized and unrealized gain (loss) on investments		(0.34	)		0.10
Total increase from investment operations		0.12			0.40
Less dividends and distributions:
From net investment income		(0.70	)		(0.19	)
From net realized gain		(0.01	)		–
Total dividends and distributions		(0.71	)		(0.19	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.62		$	10.21
Total investment return (4)		1.34	%		4.04	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	25,885		$	32,772
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		1.31	%		1.52	%(7)
Ratio of net expenses to average net assets		0.75	%		0.75	%(7)
Ratio of net investment income to average net assets		4.69	%		3.72	%(7)
Portfolio turnover rate		63.17	%		49.51	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .75% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

17

Babson Global Floating Rate Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS Y
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.21		$	10.00
Income from investment operations:
Net investment income (2)		0.45			0.30
Net realized and unrealized gain (loss) on investments		(0.33	)		0.10
Total increase from investment operations		0.12			0.40
Less dividends and distributions:
From net investment income		(0.70	)		(0.19	)
From net realized gain		(0.01	)		–
Total dividends and distributions		(0.71	)		(0.19	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.62		$	10.21
Total investment return (4)		1.28	%		4.04	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	129,659		$	66,999
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		1.25	%		1.53	%(7)
Ratio of net expenses to average net assets		0.75	%		0.75	%(7)
Ratio of net investment income to average net assets		4.58	%		3.80	%(7)
Portfolio turnover rate		63.17	%		49.51	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .75% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

18

Babson Global Credit Income Opportunities Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS A
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.45		$	10.00
Income from investment operations:
Net investment income (2)		0.54			0.40
Net realized and unrealized gain (loss) on investments		(0.57	)		0.33
Total increase (decrease) from investment operations		(0.03	)		0.73
Less dividends and distributions:
From net investment income		(0.78	)		(0.28	)
From net realized gain		(0.13	)		–
Total dividends and distributions		(0.91	)		(0.28	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.51		$	10.45
Total investment return (4)		(0.11	)%		7.30	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	12,718		$	2,591
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		1.98	%		3.95	%(7)
Ratio of net expenses to average net assets		1.20	%		1.20	%(7)
Ratio of net investment income to average net assets		5.46	%		4.88	%(7)
Portfolio turnover rate		84.65	%		99.72	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.20% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

19

Babson Global Credit Income Opportunities Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS C
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.45		$	10.00
Income from investment operations:
Net investment income (2)		0.47			0.35
Net realized and unrealized gain (loss) on investments		(0.58	)		0.32
Total increase (decrease) from investment operations		(0.11	)		0.67
Less dividends and distributions:
From net investment income		(0.71	)		(0.22	)
From net realized gain		(0.13	)		–
Total dividends and distributions		(0.84	)		(0.22	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.50		$	10.45
Total investment return (4)		(0.93	)%		6.75	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	3,579		$	944
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		4.09	%		10.50	%(7)
Ratio of net expenses to average net assets		1.95	%		1.95	%(7)
Ratio of net investment income to average net assets		4.79	%		4.39	%(7)
Portfolio turnover rate		84.65	%		99.72	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.95% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

20

Babson Global Credit Income Opportunities Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS I
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.46		$	10.00
Income from investment operations:
Net investment income (2)		0.56			0.41
Net realized and unrealized gain (loss) on investments		(0.58	)		0.35
Total increase (decrease) from investment operations		(0.02	)		0.76
Less dividends and distributions:
From net investment income		(0.80	)		(0.30	)
From net realized gain		(0.13	)		–
Total dividends and distributions		(0.93	)		(0.30	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.51		$	10.46
Total investment return (4)		0.05	%		7.59	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	26,428		$	26,406
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		1.58	%		1.83	%(7)
Ratio of net expenses to average net assets		0.95	%		0.95	%(7)
Ratio of net investment income to average net assets		5.69	%		5.02	%(7)
Portfolio turnover rate		84.65	%		99.72	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .95% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

21

Babson Global Credit Income Opportunities Fund 2015 Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)

	CLASS Y
	FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
Per Common Share Data
Net asset value, beginning of year	$	10.46		$	10.00
Income from investment operations:
Net investment income (2)		0.56			0.41
Net realized and unrealized gain (loss) on investments		(0.58	)		0.35
Total increase (decrease) from investment operations		(0.02	)		0.76
Less dividends and distributions:
From net investment income		(0.80	)		(0.30	)
From net realized gain		(0.13	)		–
Total dividends and distributions		(0.93	)		(0.30	)
Redemption fees		0.00	(3)		–
Net asset value, at end of year	$	9.51		$	10.46
Total investment return (4)		0.05	%		7.59	%(5)
Supplemental Data and Ratios
Net assets, end of year (000’s)	$	39,006		$	33,885
Ratio of total expenses (before reductions and reimbursements) to average net assets (6)		1.58	%		1.84	%(7)
Ratio of net expenses to average net assets		0.95	%		0.95	%(7)
Ratio of net investment income to average net assets		5.67	%		5.04	%(7)
Portfolio turnover rate		84.65	%		99.72	%(5)

(1) Fund commenced operations on September 16, 2013.

(2) Calculated using average shares outstanding.

(3) Amount rounds to less than $.01 per share.

(4) Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5) Not annualized.

(6) The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .95% as a percentage of average daily net assets.

(7) Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

22

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Fixed Income — 93.6%*:
Bank Loans — 79.9%*§:
Automobile — 2.3%*:
Gates Global, Inc.		4.25	%		7/5/2021		1,493,731		$1,488,312		$1,469,458
RAC Finance (Holdings) Ltd.+		5.03			12/17/2021		995,000		1,487,022		1,561,439
RAC Finance (Holdings) Ltd.+		8.25			12/17/2022		500,000		791,316		790,048
Total Automobile							2,988,731		3,766,650		3,820,945
Beverage, Food and Tobacco — 1.7%*:
1011778 B.C. Unlimited Liability Co.+		3.75			12/10/2021		956,012		953,644		954,683
Acosta Holdco, Inc.		4.25			9/26/2021		406,859		406,859		405,207
Del Monte Foods, Inc.		4.25			2/18/2021		246,875		245,879		234,944
Deoleo SA+		4.50			6/11/2021		500,000		676,961		541,098
JBS USA Holdings, Inc.		3.75			9/18/2020		491,250		492,191		489,614
Telepizza SA+		7.00			10/20/2020		250,000		315,291		277,609
Total Beverage, Food and Tobacco							2,850,996		3,090,825		2,903,155
Broadcasting and Entertainment — 4.8%*:
All3Media International+		5.25			6/30/2021		1,500,000		2,301,024		2,337,525
All3Media International+		8.25			6/30/2022		500,000		671,306		548,133
Charter Communications Operating LLC		3.00			1/3/2021		492,462		491,478		485,957
Cumulus Media Holdings, Inc.		4.25			12/23/2020		1,352,647		1,338,028		1,283,324
Learfield Communications, Inc.		4.50			10/9/2020		413,325		412,906		412,808
Telecommunications Management LLC		4.75			4/30/2020		13,378		13,377		13,311
Univision Communications, Inc.		4.00			3/1/2020		1,496,060		1,496,059		1,482,700
Yankee Cable Acquisition LLC		4.25			3/1/2020		1,486,294		1,493,736		1,486,294
Total Broadcasting and Entertainment							7,254,166		8,217,914		8,050,052
Buildings and Real Estate — 0.7%*:
Alison Bidco Sarl+		5.50			8/29/2021		295,028		292,418		285,440
DTZ US Borrower LLC		5.50			11/4/2021		315,331		310,910		316,318
Jeld-Wen, Inc.		5.25			10/15/2021		507,482		502,905		508,436
Total Buildings and Real Estate							1,117,841		1,106,233		1,110,194
Cargo Transport — 0.6%*:
Direct ChassisLink, Inc.¤		8.25			11/12/2019		492,857		487,415		483,000
Direct ChassisLink, Inc. (Add-On Facility)¤		8.25			11/12/2019		503,175		503,175		493,111
Total Cargo Transport							996,032		990,590		976,111
Chemicals, Plastics and Rubber — 6.8%*:
Chromaflo Technologies Corp.		4.50			12/2/2019		1,215,245		1,213,118		1,205,122
Colouroz Investment 1 GmbH+		4.50			9/7/2021		641,644		635,899		641,644
Ineos Finance PLC+		4.25			3/31/2022		1,496,249		1,678,570		1,645,390
Methanol Holdings (Trinidad) Ltd.		4.25			6/2/2022		1,135,461		1,124,106		1,124,106
OXEA Finance & Cy S.C.A.+		4.50			1/15/2020		500,000		527,613		542,285
OXEA Finance LLC+		4.25			1/15/2020		355,927		349,033		342,875

See accompanying Notes to Financial Statements.

23

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Chemicals, Plastics and Rubber (Continued)
Styrolution Group GmbH+		6.50	%		11/7/2019		597,000	$	734,695	$	668,267
Univar, Inc.		4.50			6/30/2022		2,079,426		2,069,029		2,076,183
Univar, Inc.		5.00			6/30/2017		1,583,000		1,581,824		1,580,910
Vantage Specialty Chemicals, Inc.		5.00			2/10/2019		1,446,367		1,433,685		1,417,440
Total Chemicals, Plastics and Rubber							11,050,319		11,347,572		11,244,222
Containers, Packaging and Glass — 4.4%*:
BWAY Holding Co., Inc.		5.50			8/14/2020		232,238		230,245		232,238
CD&R Millennium Holdco 6 Sarl+		4.50			7/31/2021		1,572,310		1,572,380		1,567,404
Chesapeake Corp.		4.25			9/30/2020		1,138,233		1,137,862		1,132,064
Consolidated Container Co. LLC		5.00			7/3/2019		1,496,154		1,494,170		1,461,249
Consolidated Container Co. LLC		7.75			1/3/2020		188,280		185,199		175,100
Coveris		4.50			5/8/2019		492,500		677,167		549,063
Coveris		4.50			5/8/2019		309,131		308,034		309,387
Hilex Poly Co. LLC		6.00			12/5/2021		404,843		401,072		407,037
Onex Wizard Acquisition Co. I Sarl+		4.25			3/13/2022		553,612		626,914		617,139
Onex Wizard US Acquisition, Inc.+		4.25			3/13/2022		445,069		442,934		444,290
Tekni-Plex, Inc.		4.50			6/1/2022		373,750		371,898		373,377
Total Containers, Packaging and Glass							7,206,120		7,447,875		7,268,348
Diversified Natural Resources, Precious Metals and Minerals — 0.3%*:
Cemex Espana S.A.+		4.78			2/14/2017		97,200		103,433		107,867
Cemex SAB de CV+		4.78			2/14/2017		441,850		441,297		440,745
Total Diversified Natural Resources, Precious Metals and Minerals							539,050		544,730		548,612
Diversified/Conglomerate Manufacturing — 1.7%*:
Capital Safety North America Holdings, Inc.		3.75			3/29/2021		344,257		343,898		343,251
Capital Safety North America Holdings, Inc.		6.50			3/28/2022		251,661		251,392		253,549
Information Resources, Inc.		4.75			9/30/2020		156,647		156,055		157,105
Pelican Products, Inc.		5.25			4/10/2020		994,962		992,632		989,371
Quality Home Brands Holdings LLC		7.75			5/25/2018		259,718		257,990		260,042
STS Operating, Inc.		4.75			2/12/2021		312,931		313,224		311,366
West Corp.		2.53			7/1/2019		495,181		479,727		480,325
Total Diversified/Conglomerate Manufacturing							2,815,357		2,794,918		2,795,009
Diversified/Conglomerate Service — 8.1%*:
Aquilex Holdings LLC		5.00			12/31/2020		197,140		196,749		196,647
Atrium Innovations, Inc.+		4.25			2/13/2021		827,738		826,451		802,906
Brock Holdings III, Inc.		6.00			3/16/2017		1,595,585		1,571,455		1,585,613
EIG Investors Corp.		5.00			11/9/2019		827,183		827,978		823,047
Garda World Security Corp.+		4.00			11/6/2020		1,169,214		1,162,059		1,164,338
Go Daddy Operating Co. LLC		4.25			5/13/2021		862,427		859,106		862,565
MH Sub I LLC		4.75			7/8/2021		586,811		583,899		585,162

See accompanying Notes to Financial Statements.

24

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Diversified/Conglomerate Service (Continued)
MH Sub I LLC		8.50	%		7/8/2022		400,000	$	396,478	$	394,000
MPH Acquisition Holdings LLC		3.75			3/31/2021		749,302		747,732		744,215
Northgate Information Solutions Ltd.+		4.28			3/18/2018		507,622		680,154		547,999
Northgate Information Solutions Ltd.+		4.78			3/18/2018		503,801		675,369		543,875
Power Team Services LLC		8.25			11/6/2020		500,000		496,132		492,500
RP Crown Parent LLC		6.00			12/21/2018		548,203		549,858		525,935
RP Crown Parent LLC		11.25			12/20/2019		678,571		690,366		621,741
Sabre, Inc.		4.00			2/19/2019		738,728		734,430		737,575
SkillSoft Corp.		5.75			4/28/2021		945,084		939,631		916,731
Triple Point Technology, Inc.		5.25			7/10/2020		341,331		316,095		306,345
Triple Point Technology, Inc.††		9.25			7/10/2021		145,677		136,543		122,368
Vogue International, Inc.		5.75			2/14/2020		1,440,373		1,452,180		1,442,174
Total Diversified/Conglomerate Service							13,564,790		13,842,665		13,415,736
Ecological — 2.5%*:
Biffa Waste Services Ltd.+		5.68			1/30/2018		2,000,000		3,170,356		3,065,069
Emerald 3 Ltd.+		8.00			5/31/2022		390,426		386,999		389,450
PHS Group PLC+		6.00			4/17/2020		500,000		769,929		761,074
Total Ecological							2,890,426		4,327,284		4,215,593
Electronics — 2.6%*:
CDW LLC		3.25			4/29/2020		1,196,940		1,191,136		1,186,024
Freescale Semiconductor, Inc.		4.25			2/28/2020		736,263		736,263		736,469
Kronos, Inc.		4.50			10/30/2019		196,597		195,522		196,401
Magic Newco LLC+		5.00			12/12/2018		95,132		95,132		95,156
Renaissance Learning, Inc.		4.50			4/9/2021		1,493,700		1,473,169		1,473,788
SS&C Technologies, Inc.		4.00			6/23/2022		104,284		103,763		104,220
SS&C Technologies, Inc.		4.00			6/23/2022		462,921		460,607		462,634
Total Electronics							4,285,837		4,255,592		4,254,692
Finance — 5.5%*:
AssuredPartners Capital, Inc.		5.00			3/31/2021		305,536		304,273		305,347
AssuredPartners Capital, Inc.		7.75			4/2/2022		136,522		135,363		134,303
Confie Seguros Holdings II Co.		5.75			11/9/2018		534,085		532,263		533,861
Cunningham Lindsey US, Inc.		5.00			12/10/2019		488,697		486,942		477,701
Cunningham Lindsey US, Inc.		9.25			6/10/2020		748,546		750,073		712,990
Eze Castle Software, Inc.		4.00			4/6/2020		971,818		966,843		966,958
First Data Corp.		4.03			6/23/2022		806,874		802,840		802,840
Intertrust Group Holding B.V.+		8.00			4/16/2022		192,451		191,220		191,392
Intertrust Group Holding B.V.+		8.00			4/16/2022		500,000		680,712		556,031
Moneygram International, Inc.		4.25			3/27/2020		1,083,758		1,010,598		1,028,671
National Financial Partners Corp.		4.50			7/1/2020		131,865		131,865		131,495
P2 Newco Acquisition, Inc.		5.50			10/22/2020		402,751		399,680		403,254
P2 Newco Acquisition, Inc.		9.50			10/22/2021		500,000		496,038		497,500
SAM Finance Lux Sarl+		5.00			12/17/2020		343,568		554,751		538,287

See accompanying Notes to Financial Statements.

25

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Finance (Continued)
Sedgwick, Inc.		3.75	%		3/1/2021		493,750	$	492,748	$	485,460
Sedgwick, Inc.		6.75			2/28/2022		561,418		560,813		550,016
VFH Parent LLC		5.25			11/6/2019		648,329		644,402		649,950
Wall Street Systems Delaware, Inc.		4.50			4/30/2021		248,399		247,362		247,935
Total Finance							9,098,367		9,388,786		9,213,991
Healthcare, Education and Childcare — 8.9%*:
Accellent, Inc.		4.50			3/12/2021		1,537,578		1,535,443		1,526,692
ADMI Corp.		5.50			4/30/2022		1,500,000		1,511,068		1,503,750
Britax US Holdings, Inc.		4.50			10/15/2020		432,963		431,316		338,434
CareCore National LLC		5.50			3/5/2021		679,619		679,200		680,754
Drumm Investors LLC		6.75			5/4/2018		869,028		863,021		877,180
Endo Luxembourg Finance Co. I Sarl		3.75			6/11/2022		540,680		539,328		541,697
Heartland Dental LLC		5.50			12/21/2018		386,125		384,790		385,159
Kindred Healthcare, Inc.		4.25			4/9/2021		700,787		695,741		700,612
Ortho-Clinical Diagnostics, Inc.		4.75			6/30/2021		1,046,342		1,037,380		1,024,673
PharMedium Healthcare Corp.		4.25			1/28/2021		1,092,879		1,090,711		1,081,043
PRA Holdings, Inc.		4.50			9/23/2020		680,303		675,197		680,303
Rodenstock GmbH+		4.78			5/31/2019		1,500,000		1,763,719		1,649,281
RPI Finance Trust		3.50			11/9/2020		599,806		599,806		600,178
Synarc-Biocore Holdings LLC		5.50			3/10/2021		493,750		489,713		481,406
Synarc-Biocore Holdings LLC		9.25			3/10/2022		500,000		495,798		455,000
Tecomet, Inc.		5.75			12/5/2021		975,782		945,813		959,925
Tunstall Group Holdings Ltd.+		5.28			10/16/2020		500,000		793,369		663,853
Valeant Pharmaceuticals International		4.00			4/1/2022		593,681		590,796		592,689
Total Healthcare, Education and Childcare							14,629,323		15,122,209		14,742,629
Home and Office Furnishings, Housewares, and Durable Consumer Products — 1.3%*:
HMK Intermediate Holdings LLC		5.00			3/30/2019		476,795		476,209		474,411
Leslie’s Poolmart, Inc.		4.25			10/16/2019		539,942		539,942		540,071
WMF AG+		4.78			9/22/2021		1,000,000		1,086,819		1,110,201
Total Home and Office Furnishings, Housewares, and Durable Consumer Products							2,016,737		2,102,970		2,124,683
Hotels, Motels, Inns and Gaming — 0.5%*:
Cyan Blue Holdco 3 Ltd.+		6.50			2/25/2022		500,000		731,588		783,904
Insurance — 1.8%*:
AmWINS Group LLC		5.25			9/6/2019		151,371		151,097		152,582
Asurion LLC		5.00			5/24/2019		967,980		967,303		969,597
Hub International Ltd.		4.00			10/2/2020		1,730,041		1,723,376		1,715,992
York Risk Services Holding Corp.		4.75			10/1/2021		192,678		191,372		188,343
Total Insurance							3,042,070		3,033,148		3,026,514

See accompanying Notes to Financial Statements.

26

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Leisure, Amusement, Entertainment — 3.2%*:
AP NMT Acquisition B.V.+		7.00	%		8/13/2021		540,400	$	650,891	$	600,458
Delta 2 (Lux) Sarl+		4.75			7/30/2021		1,587,247		1,582,406		1,576,756
Delta 2 (Lux) Sarl+		7.75			7/31/2022		437,500		436,731		436,406
SeaWorld Parks & Entertainment, Inc.		3.00			5/14/2020		647,432		622,921		622,507
SeaWorld Parks & Entertainment, Inc.		4.00			5/14/2020		1,112,596		1,113,359		1,107,378
WMG Acquisition Corp.		3.75			7/1/2020		994,937		977,937		978,928
Total Leisure, Amusement, Entertainment							5,320,112		5,384,245		5,322,433
Machinery Non-Agriculture, Non-Construction, Non-Electronic — 4.3%*:
Doncasters Finance US LLC		4.50			4/9/2020		962,057		960,121		960,258
Gardner Denver, Inc.		4.25			7/30/2020		1,292,671		1,262,408		1,259,100
Husky Injection Molding Systems Ltd.+		4.25			6/30/2021		943,171		942,338		937,474
Husky Injection Molding Systems Ltd.+		7.25			6/30/2022		450,443		431,161		444,249
Intelligrated, Inc.		4.50			7/30/2018		1,109,949		1,100,391		1,107,174
Schenck Measuring and Process Technologies+		3.78			4/28/2017		2,000,000		1,923,771		1,975,000
Silver II US Holdings LLC		4.00			12/13/2019		445,480		441,087		429,220
TCH-2 Holding LLC		5.50			5/6/2021		108,172		107,263		107,767
Total Machinery Non-Agriculture, Non-Construction, Non-Electronic							7,311,943		7,168,540		7,220,242
Mining, Steel, Iron and Non-Precious Metals — 2.3%*:
Arch Coal, Inc.		6.25			5/16/2018		1,987,254		1,701,461		1,352,585
Boomerang Tube LLC††~		11.00			10/11/2017		249,123		245,561		125,807
H.C. Starck GmbH+		3.03			5/30/2016		500,000		492,500		497,500
H.C. Starck GmbH+		3.03			5/30/2016		500,000		679,250		553,010
Metal Services LLC		6.00			6/30/2017		105,283		105,284		105,107
Murray Energy Corp.		7.50			4/16/2020		750,000		728,179		693,630
Peabody Energy Corp.		4.25			9/24/2020		623,551		561,694		523,066
Total Mining, Steel, Iron and Non-Precious Metals							4,715,211		4,513,929		3,850,705
Oil and Gas — 4.9%*:
Caelus Energy Alaska O3 LLC		8.75			4/15/2020		1,692,308		1,518,379		1,370,769
CITGO Holding, Inc.		9.50			5/12/2018		1,073,131		1,054,991		1,075,277
Drillships Financing Holding, Inc.		6.00			3/31/2021		1,500,000		1,278,240		1,219,995
Drillships Ocean Ventures, Inc.		5.50			7/25/2021		253,325		251,118		215,010
Fieldwood Energy LLC		8.38			9/30/2020		1,725,000		1,391,284		1,317,469
Floatel International Ltd.		6.00			6/27/2020		406,468		403,039		321,110
Paragon Offshore Finance Co.+		3.75			7/18/2021		548,627		441,258		397,755
Sabine Oil & Gas LLC~		8.75			12/31/2018		700,000		708,817		239,169
Seadrill Partners Finco LLC		4.00			2/21/2021		932,636		926,259		702,396
Southcross Holdings Borrower LP		6.00			8/4/2021		145,959		145,319		141,580
Templar Energy LLC		8.50			11/25/2020		750,000		561,094		550,500
TPF II Power LLC		5.50			10/2/2021		521,067		517,557		525,256
Total Oil and Gas							10,248,521		9,197,355		8,076,286

See accompanying Notes to Financial Statements.

27

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Personal and Non-Durable Consumer Products Mfg. Only — 0.2%*:
Berlin Packaging LLC		4.50	%		10/1/2021		336,937	$	335,429	$	336,833
Personal Transportation — 0.2%*:
Travelport Finance (Luxembourg) Sarl		5.75			9/2/2021		319,245		315,714		319,587
Personal, Food and Miscellaneous — 0.1%*:
Redtop Acquisitions Ltd.+		8.25			6/3/2021		156,777		155,224		156,973
Printing and Publishing — 2.7%*:
Cengage Learning Acquisitions, Inc.		7.00			3/31/2020		1,097,730		1,092,485		1,097,730
Eden Bidco Ltd.+		6.00			4/28/2022		550,000		576,192		608,569
EMI Music Publishing Ltd.		3.75			6/29/2018		242,664		242,664		242,118
Houghton Mifflin Harcourt Publishing Co.		4.00			5/31/2021		1,368,236		1,366,406		1,361,394
R.H. Donnelley, Inc.		9.75			12/31/2016		103,399		82,095		51,010
Springer Science+Business Media Deutschland GmbH+		4.75			8/14/2020		909,272		911,304		907,572
SuperMedia, Inc.		11.60			12/30/2016		262,823		228,657		155,723
Total Printing and Publishing							4,534,124		4,499,803		4,424,116
Retail Stores — 4.2%*:
Advantage Sales & Marketing, Inc.		4.25			7/23/2021		993,984		990,653		988,457
BJ’s Wholesale Club, Inc.		4.50			9/26/2019		134,413		133,926		134,153
Burlington Coat Factory Warehouse Corp.		4.25			8/13/2021		429,744		427,861		429,405
Dollar Tree, Inc.		3.50			3/9/2022		382,829		382,825		382,511
Douglas Holding AG+		5.00			6/26/2022		800,000		889,172		887,420
FleetPride Corp.		5.25			11/19/2019		1,481,709		1,466,698		1,468,122
J. Crew Group, Inc.		4.00			3/5/2021		1,227,891		1,163,664		1,056,833
Maxeda DIY B.V.+		5.28			6/29/2017		500,000		556,683		529,932
Staples, Inc.		3.50			4/7/2021		431,902		429,742		430,913
Talbots, Inc. (The)		5.50			3/19/2020		741,241		730,208		722,710
Total Retail Stores							7,123,713		7,171,432		7,030,456
Telecommunications — 2.6%*:
Altice Financing SA+		5.50			7/2/2019		261,641		263,676		263,537
Carros Finance Luxembourg Sarl		4.50			9/30/2021		291,518		290,862		291,518
Eircom Finco Sarl+		4.78			9/30/2019		988,319		1,322,736		1,078,215
ION Trading Technologies Ltd.		1.00			6/16/2021		1,140,458		1,129,054		1,129,054
ION Trading Technologies Sarl+		7.25			6/10/2022		842,143		836,513		840,037
Numericable US LLC+		4.50			5/21/2020		665,852		660,407		667,277
Total Telecommunications							4,189,931		4,503,248		4,269,638
Textiles and Leather — 0.4%*:
Fullbeauty Brands, Inc.		4.75			3/18/2021		741,508		737,936		738,727

See accompanying Notes to Financial Statements.

28

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Utilities — 0.3%*:
Bayonne Energy Center LLC		5.00	%		8/19/2021		49,292	$	49,075	$	49,292
Calpine Construction Finance Co. LP		3.00			5/3/2020		492,462		486,761		482,204
Total Utilities							541,754		535,836		531,496
Total Bank Loans							132,385,938		136,630,240		132,771,882
Corporate Bonds — 13.7%*:
Automobile — 0.1%*:
Grupo Antolin Dutch B.V.+		5.13			6/30/2022		200,000		226,590		226,497
Banking — 0.1%*:
Lock AS+		7.00			8/15/2021		100,000		134,225		117,617
Beverage, Food and Tobacco — 1.0%*:
1011778 B.C. Unlimited Liability Co.+^		4.63			1/15/2022		121,000		121,000		119,185
EWOS Holding AS+		6.51	#		11/1/2020		1,000,000		166,715		126,268
Findus Bondco SA+		9.13			7/1/2018		100,000		139,419		116,781
Iglo Foods Bondco PLC+		4.49	#		6/15/2020		1,000,000		1,116,476		1,114,848
Twinkle Pizza PLC+		6.63			8/1/2021		100,000		169,730		162,184
Total Beverage, Food and Tobacco							2,321,000		1,713,340		1,639,266
Broadcasting and Entertainment — 0.1%*:
Univision Communications, Inc.^		5.13			2/15/2025		149,000		151,017		143,815
Buildings and Real Estate — 0.1%*:
Paroc Group Oy+		5.24	#		5/15/2020		100,000		137,565		105,799
Paroc Group Oy+		6.25			5/15/2020		100,000		137,565		109,557
Total Buildings and Real Estate							200,000		275,130		215,356
Cargo Transport — 0.4%*:
Florida East Coast Holdings Corp.^		6.75			5/1/2019		550,000		542,425		551,375
WFS Global Holding SAS+		9.50			7/15/2022		100,000		113,435		112,600
Total Cargo Transport							650,000		655,860		663,975
Chemicals, Plastics and Rubber — 0.4%*:
Ineos Finance PLC+		4.00			5/1/2023		150,000		162,382		158,879
Pinnacle Operating Corp.^		9.00			11/15/2020		500,000		533,754		496,250
Total Chemicals, Plastics and Rubber							650,000		696,136		655,129
Containers, Packaging and Glass — 0.3%*:
Innovia Group Finance PLC+		4.99	#		3/31/2020		500,000		684,986		552,965
Diversified/Conglomerate Manufacturing — 0.3%*:
Appvion, Inc.^		9.00			6/1/2020		460,000		467,776		289,800
Galapagos SA+		4.74	#		6/15/2021		200,000		272,630		220,740
Total Diversified/Conglomerate Manufacturing							660,000		740,406		510,540

See accompanying Notes to Financial Statements.

29

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Diversified/Conglomerate Service — 1.4%*:
Carlson Travel Holdings, Inc. PIK^		7.50	%		8/15/2019		470,000	$	475,196	$	477,050
Sabre GLBL, Inc.^		5.38			4/15/2023		1,061,000		1,082,049		1,045,085
United Rentals North America, Inc.		4.63			7/15/2023		176,000		176,000		172,586
Verisure Holding AB+		8.75			9/1/2018		500,000		580,755		588,083
Total Diversified/Conglomerate Service							2,207,000		2,314,000		2,282,804
Finance — 2.7%*:
Equiniti Newco 2 PLC+		6.32	#		12/15/2018		750,000		1,211,979		1,154,869
Equiniti Newco 2 PLC+		7.13			12/15/2018		550,000		868,440		868,508
Galaxy Bidco Ltd.+		5.57	#		11/15/2019		100,000		161,051		155,554
Lowell Group Financing PLC+		5.88			4/1/2019		100,000		166,730		152,443
Marlin Intermediate Holdings PLC+		10.50			8/1/2020		500,000		838,625		867,094
Travelex Financing PLC+		6.57	#		8/1/2018		700,000		1,121,314		1,094,375
Travelex Financing PLC+		8.00			8/1/2018		100,000		158,548		163,423
Total Finance							2,800,000		4,526,687		4,456,266
Grocery — 0.1%*:
Premier Foods Finance PLC+		5.57	#		3/16/2020		100,000		167,370		146,833
Healthcare, Education and Childcare — 1.5%*:
Care UK Health & Social Care PLC+		5.57	#		7/15/2019		800,000		1,161,107		1,219,290
Tenet Healthcare Corp.^		3.79	#		6/15/2020		819,000		814,936		826,166
Unilabs Subholding AB+		7.26	#		7/15/2018		400,000		550,402		445,940
Total Healthcare, Education and Childcare							2,019,000		2,526,445		2,491,396
Hotels, Motels, Inns and Gaming — 0.5%*:
Gala Group Finance PLC+		8.88			9/1/2018		450,000		711,992		740,648
Insurance — 0.9%*:
Hastings Insurance Group Finance PLC+		6.57	#		10/21/2019		150,000		238,061		235,572
Hastings Insurance Group Finance PLC+		8.00			10/21/2020		500,000		824,102		832,616
TIG Finco PLC+		8.50	#		3/2/2020		46,609		68,205		76,896
TIG Finco PLC+^		8.75			4/2/2020		207,453		308,378		322,701
Total Insurance							904,062		1,438,746		1,467,785
Leisure, Amusement, Entertainment — 0.3%*:
Vougeot Bidco PLC+		5.26	#		7/15/2020		100,000		135,168		111,206
WMG Acquisition Corp.		6.25			1/15/2021		387,000		468,087		437,919
Total Leisure, Amusement, Entertainment							487,000		603,255		549,125
Oil and Gas — 0.6%*:
Halcon Resources Corp.^		8.63			2/1/2020		144,000		144,000		142,200
Sabine Pass Liquefaction LLC^		5.63			3/1/2025		495,000		495,000		490,050
Shelf Drilling Holdings Ltd.+^		8.63			11/1/2018		438,000		361,149		389,820
Total Oil and Gas							1,077,000		1,000,149		1,022,070

See accompanying Notes to Financial Statements.

30

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Personal Transportation — 0.1%*:
AA Bond Co. Ltd.+		5.50	%		7/31/2043		150,000	$	223,140	$	234,273
Personal, Food and Miscellaneous — 0.5%*:
Brakes Capital+		4.99	#		12/15/2018		100,000		136,645		111,296
Brakes Capital+		7.13			12/15/2018		300,000		514,604		483,178
Financiere Quick SAS+		4.76	#		4/15/2019		200,000		275,616		193,984
TeamSystem Holding SpA+		7.38			5/15/2020		100,000		132,587		118,118
Total Personal, Food and Miscellaneous							700,000		1,059,452		906,576
Retail Stores — 1.6%*:
Boing Group Financing PLC+		6.63			7/15/2019		350,000		396,245		377,703
Brighthouse Group PLC+		7.88			5/15/2018		150,000		243,460		230,974
HD Supply, Inc.^		5.25			12/15/2021		1,000,000		1,025,911		1,013,750
House of Fraser Funding PLC+		8.88			8/15/2018		500,000		798,609		819,485
HSS Financing PLC+		6.75			8/1/2019		65,774		108,872		107,998
Takko Luxembourg 2 S.C.A.+		9.88			4/15/2019		100,000		132,433		51,395
Total Retail Stores							2,165,774		2,705,530		2,601,305
Telecommunications — 0.7%*:
Numericable-SFR+		5.38			5/15/2022		100,000		138,295		113,157
Numericable-SFR+		5.63			5/15/2024		100,000		138,165		112,321
Numericable-SFR+^		6.00			5/15/2022		646,000		645,234		636,714
Wind Acquisition Finance SA+		4.00			7/15/2020		150,000		161,192		166,809
Wind Acquisition Finance SA+		4.15	#		7/15/2020		150,000		159,292		166,743
Total Telecommunications							1,146,000		1,242,178		1,195,744
Total Corporate Bonds							19,635,836		23,796,634		22,819,985
Total Fixed Income							152,021,774		160,426,874		155,591,867
Short-Term Investments — 14.1%*:
Bank Deposit — 14.0%*:
State Street Bank & Trust Co. Euro Time Deposit		0.01			7/1/2015		23,274,995		23,274,995		23,274,995
Bank Loan — 0.1%*§:
Mining, Steel, Iron and Non-Precious Metals — 0.1%*:
Boomerang Tube LLC¤		11.28			10/7/2015		78,780		77,204		78,780
Total Short-Term Investments							23,353,775		23,352,199		23,353,775
Total Investments							175,375,549		183,779,073		178,945,642
Other assets and liabilities — (7.7%)*											(12,786,505	)
Net Assets — 100.0%											$166,159,137

See accompanying Notes to Financial Statements.

31

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

PIK – Payment-in-kind

‡‡ Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

* Calculated as a percentage of net assets applicable to common shareholders.

+ Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:

United States	63.2%
United Kingdom	18.4%
Germany	7.6%
Canada	2.8%
Switzerland	1.8%
Netherlands	1.2%
France	1.2%
Spain	1.0%
Other (Individually less than 1%)	2.8%
Total	100.0%

^ Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

§ Bank loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for bank loans are the current interest rates at June 30, 2015. Bank loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown.

¤ For fair value measurement disclosure purposes, security is categorized as Level 3 (see Note 2).

†† Illiquid security.

~ Defaulted security.

# Variable rate security. The interest rate shown is the rate in effect at June 30, 2015.

A summary of outstanding derivatives at June 30, 2015 is as follows:

Forward Foreign Currency Exchange Contracts to Buy

EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED DEPRECIATION
07/14/15	Morgan Stanley		EUR	1,500,000		1,672,544		1,687,479	$	(14,935	)

See accompanying Notes to Financial Statements.

32

Babson Global Floating Rate Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

Forward Foreign Currency Exchange Contracts to Sell

EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
07/14/15	Morgan Stanley		EUR	17,509,486		19,523,594		19,676,718	$	153,124
07/14/15	Morgan Stanley		GBP	11,930,996		18,745,001		18,237,334		(507,667	)
07/14/15	Morgan Stanley		NOK	1,019,018		129,934		129,342		(592	)
Net unrealized depreciation on forward foreign exchange contracts to sell									$	(355,135	)

Currency Legend

EUR	–	Euro
GBP	–	British Pound Sterling
NOK	–	Norwegian Krona

See accompanying Notes to Financial Statements.

33

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Fixed Income — 91.9%*:
Asset-Backed Securities — 16.5%*:
CDO/CLO — 16.5%*:
Apidos CLO XII^		5.15	#%		4/15/2025		500,000		$448,151		$414,870
Apidos CLO XV^		5.76	#		10/20/2025		500,000		462,554		425,939
Atlas Senior Loan Fund Ltd.^		5.45	#		10/15/2026		800,000		731,231		747,276
Avery Point CLO Ltd. 2014-1 AE^		4.88	#		4/25/2026		500,000		461,217		441,101
BlueMountain CLO Ltd.^		Zero Coupon			4/30/2026		250,000		238,762		200,149
Carlyle Global Market Strategies CLO 2013-3 Ltd.^		4.85	#		7/15/2025		500,000		457,710		457,341
Carlyle Global Market Strategies CLO 2013-4 Ltd.^		4.75	#		10/15/2025		500,000		462,990		457,222
Carlyle Global Market Strategies CLO 2013-4 Ltd.^		5.45	#		10/15/2025		500,000		455,271		423,363
Carlyle Global Market Strategies CLO 2014-1 Ltd.^		4.72	#		4/17/2025		500,000		447,087		453,308
Dryden XXXI Senior Loan Fund^		4.51	#		4/18/2026		1,000,000		891,308		883,819
Dryden XXXI Senior Loan Fund^		5.61	#		4/18/2026		500,000		461,311		412,069
Eaton Vance CLO 2013-1 Ltd.^		5.26	#		11/13/2024		500,000		465,238		466,605
GoldenTree Loan Opportunities VII Ltd.^		5.51	#		4/25/2025		500,000		466,866		433,377
LCM XIII LP^		5.11	#		1/19/2023		750,000		702,854		706,815
LCM XV LP^		4.71	#		8/25/2024		500,000		467,184		451,859
LCM XVII LP^		5.02	#		10/15/2026		500,000		450,940		457,177
Newhaven CLO Ltd.+^		5.19	#		11/15/2028		500,000		619,360		537,954
Oak Hill Credit Partners X Ltd.^		Zero Coupon			7/20/2026		500,000		449,138		384,808
OHA Credit Partners IX Ltd.^		5.28	#		10/20/2025		500,000		468,255		472,566
Pinnacle Park CLO Ltd.^		5.20	#		4/15/2026		500,000		469,792		465,909
Seneca Park CLO Ltd.^		4.96	#		7/17/2026		1,020,000		927,562		935,585
Silver Spring CLO Ltd.^		5.16	#		10/15/2026		1,000,000		904,874		861,314
Tryon Park CLO Ltd.^		4.65	#		7/15/2025		500,000		463,736		456,584
Voya CLO 2013-2 Ltd.^		5.76	#		4/25/2025		500,000		466,449		429,757
Voya CLO 2013-3 Ltd.^		4.76	#		1/18/2026		750,000		675,717		675,579
Voya CLO 2014-3 Ltd.^		5.28	#		7/25/2026		500,000		457,168		462,406
Total CDO/CLO							15,070,000		13,972,725		13,514,752
Total Asset-Backed Securities							15,070,000		13,972,725		13,514,752
Bank Loans — 28.9%*§:
Automobile — 1.0%*:
RAC Finance (Holdings) Ltd.+		8.25			12/17/2022		500,000		791,319		790,048
Beverage, Food and Tobacco — 1.0%*:
Deoleo SA+		4.50			6/11/2021		500,000		552,606		541,098
Telepizza SA+		7.00			10/20/2020		250,000		315,291		277,608
Total Beverage, Food and Tobacco							750,000		867,897		818,706

See accompanying Notes to Financial Statements.

34

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Broadcasting and Entertainment — 0.9%*:
All3Media International+		5.25	%		6/30/2021		500,000		$834,051		$779,175
Buildings and Real Estate — 0.4%*:
Alison Bidco Sarl+		5.50			8/29/2021		147,514		146,209		142,720
Jeld-Wen, Inc.		5.25			10/15/2021		218,418		216,448		218,828
Total Buildings and Real Estate							365,932		362,657		361,548
Cargo Transport — 0.9%*:
Direct ChassisLink, Inc.¤		8.25			11/12/2019		492,857		487,416		483,000
Direct ChassisLink, Inc. (Add-On Facility)¤		8.25			11/12/2019		251,587		251,587		246,555
Total Cargo Transport							744,444		739,003		729,555
Chemicals, Plastics and Rubber — 1.3%*:
Methanol Holdings (Trinidad) Ltd.		4.25			6/2/2022		352,490		348,965		348,965
Styrolution Group GmbH+		6.50			11/7/2019		497,500		612,246		556,890
Univar, Inc.		4.50			6/30/2022		150,675		149,922		150,440
Total Chemicals, Plastics and Rubber							1,000,665		1,111,133		1,056,295
Containers, Packaging and Glass — 1.3%*:
Consolidated Container Co. LLC		7.75			1/3/2020		94,140		92,599		87,550
Coveris		4.50			5/8/2019		492,500		677,167		549,063
Hilex Poly Co. LLC		6.00			12/5/2021		191,958		190,183		192,999
Onex Wizard US Acquisition, Inc.+		4.25			3/13/2022		210,395		209,386		210,027
Total Containers, Packaging and Glass							988,993		1,169,335		1,039,639
Diversified/Conglomerate Manufacturing — 1.3%*:
Capital Safety North America Holdings, Inc.		3.75			3/29/2021		485,750		484,103		484,332
Capital Safety North America Holdings, Inc.		6.50			3/28/2022		125,831		125,696		126,774
Quality Home Brands Holdings LLC		7.75			5/25/2018		129,859		128,995		130,021
West Corp.		2.53			7/1/2019		366,003		354,581		355,023
Total Diversified/Conglomerate Manufacturing							1,107,443		1,093,375		1,096,150
Diversified/Conglomerate Service — 2.7%*:
Aquilex Holdings LLC		5.00			12/31/2020		98,570		98,374		98,324
Atrium Innovations, Inc.+		4.25			2/13/2021		464,051		462,647		450,129
MH Sub I LLC		4.75			7/8/2021		182,552		181,646		182,039
MH Sub I LLC		8.50			7/8/2022		150,000		148,679		147,750
Power Team Services LLC		8.25			11/6/2020		300,000		298,816		295,500
RP Crown Parent LLC		6.00			12/21/2018		548,203		549,858		525,934
RP Crown Parent LLC		11.25			12/20/2019		178,571		183,005		163,616
Triple Point Technology, Inc.		5.25			7/10/2020		341,331		316,095		306,345
Triple Point Technology, Inc.††		9.25			7/10/2021		50,846		47,339		42,710
Total Diversified/Conglomerate Service							2,314,124		2,286,459		2,212,347

See accompanying Notes to Financial Statements.

35

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Ecological — 0.2%*:
Emerald 3 Ltd.+		8.00	%		5/31/2022		196,488		$194,751		$195,997
Electronics — 0.2%*:
SS&C Technologies, Inc.		4.00			6/23/2022		31,918		31,759		31,899
SS&C Technologies, Inc.		4.00			6/23/2022		141,686		140,977		141,598
Total Electronics							173,604		172,736		173,497
Finance — 2.3%*:
AssuredPartners Capital, Inc.		7.75			4/2/2022		68,261		67,681		67,151
Confie Seguros Holdings II Co.		5.75			11/9/2018		224,949		224,205		224,854
First Data Corp.		3.94			6/23/2022		246,959		245,725		245,725
Intertrust Group Holding B.V.+		8.00			4/16/2022		96,225		95,607		95,696
Moneygram International, Inc.		4.25			3/27/2020		639,168		602,919		606,679
P2 Newco Acquisition, Inc.		9.50			10/22/2021		103,373		102,554		102,856
Sedgwick, Inc.		3.75			3/1/2021		294,918		294,320		289,967
VFH Parent LLC		5.25			11/6/2019		213,434		212,547		213,968
Total Finance							1,887,287		1,845,558		1,846,896
Healthcare, Education and Childcare — 1.8%*:
Endo Luxembourg Finance Co. I Sarl		3.75			6/11/2022		164,854		164,442		165,164
RPI Finance Trust		3.50			11/9/2020		227,537		227,537		227,678
Synarc-Biocore Holdings LLC		5.50			3/10/2021		395,870		392,633		385,973
Synarc-Biocore Holdings LLC		9.25			3/10/2022		500,000		495,798		455,000
Tecomet, Inc.		5.75			12/5/2021		208,807		202,982		205,414
Total Healthcare, Education and Childcare							1,497,068		1,483,392		1,439,229
Leisure, Amusement, Entertainment — 0.9%*:
AP NMT Acquisition B.V.+		7.00			8/13/2021		403,285		490,083		448,105
AP NMT Acquisition B.V.+		10.00			8/13/2022		300,000		278,490		287,625
Total Leisure, Amusement, Entertainment							703,285		768,573		735,730
Machinery Non-Agriculture, Non-Construction, Non-Electronic — 0.9%*:
Gardner Denver, Inc.		4.25			7/30/2020		496,212		487,902		483,326
Husky Injection Molding Systems Ltd.+		7.25			6/30/2022		217,593		213,066		214,601
TCH-2 Holding LLC		5.50			5/6/2021		54,086		53,631		53,883
Total Machinery Non-Agriculture, Non-Construction, Non-Electronic							767,891		754,599		751,810
Mining, Steel, Iron and Non-Precious Metals — 1.0%*:
Arch Coal, Inc.		6.25			5/16/2018		742,364		733,523		505,275
Boomerang Tube LLC††~		11.00			10/11/2017		249,123		245,561		125,807
Murray Energy Corp.		7.50			4/16/2020		199,844		194,029		184,824
Total Mining, Steel, Iron and Non-Precious Metals							1,191,331		1,173,113		815,906

See accompanying Notes to Financial Statements.

36

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)
Oil and Gas — 3.3%*:
American Energy—Marcellus LLC		8.50	%		8/4/2021		60,369		$59,578		$32,398
Caelus Energy Alaska O3 LLC		8.75			4/15/2020		846,154		755,361		685,385
CITGO Holding, Inc.		9.50			5/12/2018		138,565		131,183		138,843
Drillships Ocean Ventures, Inc.		5.50			7/25/2021		126,663		125,559		107,505
Fieldwood Energy LLC		8.38			9/30/2020		1,124,231		825,259		858,631
Floatel International Ltd.		6.00			6/27/2020		203,234		201,520		160,555
Jonah Energy LLC		7.50			5/12/2021		173,566		171,379		164,020
Paragon Offshore Finance Co.+		3.75			7/18/2021		482,303		375,222		349,670
Seadrill Partners Finco LLC		4.00			2/21/2021		129,018		102,383		97,167
Southcross Holdings Borrower LP		6.00			8/4/2021		72,979		72,660		70,790
Total Oil and Gas							3,357,082		2,820,104		2,664,964
Printing and Publishing — 1.7%*:
Cengage Learning Acquisitions, Inc.		7.00			3/31/2020		548,865		546,243		548,865
Eden Bidco Ltd.+		6.00			4/28/2022		500,000		523,810		553,244
Houghton Mifflin Harcourt Publishing Co.		4.00			5/31/2021		132,829		132,169		132,165
R.H. Donnelley, Inc.		9.75			12/31/2016		103,399		82,095		51,010
SuperMedia, Inc.		11.60			12/30/2016		225,663		196,485		133,705
Total Printing and Publishing							1,510,756		1,480,802		1,418,989
Retail Stores — 2.0%*:
Bass Pro Group LLC		4.00			6/5/2020		179,357		178,911		179,166
J. Crew Group, Inc.		4.00			3/5/2021		498,741		468,144		429,261
Maxeda DIY B.V.+		5.28			6/29/2017		500,000		556,683		529,932
Maxeda DIY B.V.+		8.50			6/30/2018		602,231		724,213		369,268
Staples, Inc.		3.50			4/7/2021		163,843		163,023		163,468
Total Retail Stores							1,944,172		2,090,974		1,671,095
Telecommunications — 3.3%*:
Altice Financing SA+		5.50			7/2/2019		759,115		760,003		764,619
Eircom Finco Sarl+		4.78			9/30/2019		494,160		657,581		539,107
ION Trading Technologies Ltd.		1.00			6/16/2021		349,059		345,569		345,569
ION Trading Technologies Sarl+		7.25			6/10/2022		894,762		888,780		892,525
SBA Senior Finance II LLC		3.25			6/1/2022		137,594		136,221		135,961
Total Telecommunications							2,634,690		2,788,154		2,677,781
Utilities — 0.5%*:
Texas Competitive Electric Holdings Co. LLC		4.67			10/10/2017		650,000		533,851		372,645
Total Bank Loans							24,785,255		25,361,836		23,648,002
Corporate Bonds — 46.5%*:
Aerospace and Defense — 0.9%*:
CPI International, Inc.		8.75			2/15/2018		387,000		396,756		395,707
TransDigm, Inc.		6.50			7/15/2024		315,000		315,000		311,063
Total Aerospace and Defense							702,000		711,756		706,770

See accompanying Notes to Financial Statements.

37

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Automobile — 3.1%*:
Allied Specialty Vehicles, Inc.^		8.50	%		11/1/2019		1,000,000		$1,028,015		$1,040,000
International Automotive Components Group SA^		9.13			6/1/2018		940,000		963,841		958,800
JB Poindexter & Co., Inc.^		9.00			4/1/2022		500,000		524,251		535,000
Total Automobile							2,440,000		2,516,107		2,533,800
Banking — 0.4%*:
Lock AS+		7.00			8/15/2021		250,000		335,562		294,041
Beverage, Food and Tobacco — 1.2%*:
Dean Foods Co.^		6.50			3/15/2023		291,000		291,000		296,820
EWOS Holding AS+		6.75			11/1/2020		200,000		273,839		221,298
Findus Bondco SA+		9.13			7/1/2018		200,000		291,224		233,561
Twinkle Pizza PLC+		6.63			8/1/2021		150,000		254,595		243,276
Total Beverage, Food and Tobacco							841,000		1,110,658		994,955
Broadcasting and Entertainment — 3.3%*:
Harron Communications LP/Harron Finance Corp.^		9.13			4/1/2020		500,000		541,099		540,625
RCN Telecom Services LLC/RCN Capital Corp.^		8.50			8/15/2020		775,000		777,921		811,813
Sirius XM Radio, Inc.^		5.38			4/15/2025		959,000		959,000		925,435
Unitymedia GmbH+		3.75			1/15/2027		300,000		335,460		322,749
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH+		6.25			1/15/2029		100,000		133,825		125,281
Total Broadcasting and Entertainment							2,634,000		2,747,305		2,725,903
Buildings and Real Estate — 1.5%*:
Deutsche Raststaetten Gruppe IV GmbH+		6.75			12/30/2020		100,000		135,605		119,289
Keystone Financing PLC+		9.50			10/15/2019		350,000		563,603		576,747
Paroc Group Oy+		5.24	#		5/15/2020		100,000		137,565		105,799
Paroc Group Oy+		6.25			5/15/2020		100,000		137,565		109,556
Roofing Supply Group LLC/Roofing Supply Finance, Inc.^		10.00			6/1/2020		271,000		290,623		277,098
Total Buildings and Real Estate							921,000		1,264,961		1,188,489
Cargo Transport — 1.9%*:
Kenan Advantage Group, Inc. (The)^		8.38			12/15/2018		1,000,000		1,037,765		1,041,250
Moto Finance PLC+		6.38			9/1/2020		200,000		301,036		320,535
WFS Global Holding SAS+		9.50			7/15/2022		150,000		170,153		168,900
Total Cargo Transport							1,350,000		1,508,954		1,530,685
Chemicals, Plastics and Rubber — 2.4%*:
A. Schulman, Inc.^		6.88			6/1/2023		257,000		257,000		262,140
Ineos Finance PLC+		4.00			5/1/2023		400,000		433,020		423,679

See accompanying Notes to Financial Statements.

38

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Chemicals, Plastics and Rubber (Continued)
Monitchem HoldCo 3 SA+		5.25	%		6/15/2021		150,000		$183,938		$168,080
OMNOVA Solutions, Inc.		7.88			11/1/2018		500,000		513,853		500,000
Pinnacle Operating Corp.^		9.00			11/15/2020		600,000		615,682		595,500
Total Chemicals, Plastics and Rubber							1,907,000		2,003,493		1,949,399
Containers, Packaging and Glass — 3.3%*:
Ardagh Finance Holdings SA PIK^		8.63			6/15/2019		359,323		356,604		371,899
Coveris Holdings SA^		7.88			11/1/2019		900,000		903,112		895,500
Innovia Group Finance PLC+		4.99	#		3/31/2020		100,000		136,098		110,593
Mustang Merger Corp.^		8.50			8/15/2021		750,000		746,116		761,250
ProGroup AG+		5.13			5/1/2022		100,000		108,255		113,715
SIG Combibloc Holdings SCA+		7.75			2/15/2023		400,000		459,340		464,090
Total Containers, Packaging and Glass							2,609,323		2,709,525		2,717,047
Diversified Natural Resources, Precious Metals and Minerals — 0.1%*:
Cemex SAB de CV+		4.38			3/5/2023		100,000		111,980		107,165
Diversified/Conglomerate Manufacturing — 1.5%*:
Appvion, Inc.^		9.00			6/1/2020		500,000		512,945		315,000
CTP Transportation Products LLC/CTP Finance, Inc.^		8.25			12/15/2019		448,000		458,465		463,680
Galapagos SA+		5.38			6/15/2021		175,000		219,269		195,512
West Corp.^		5.38			7/15/2022		250,000		238,217		233,750
Total Diversified/Conglomerate Manufacturing							1,373,000		1,428,896		1,207,942
Diversified/Conglomerate Service — 1.3%*:
Carlson Travel Holdings, Inc. PIK^		7.50			8/15/2019		665,000		674,250		674,975
Zachry Holdings, Inc.^		7.50			2/1/2020		391,000		392,460		389,045
Total Diversified/Conglomerate Service							1,056,000		1,066,710		1,064,020
Electronics — 0.2%*:
SS&C Technologies Holdings, Inc.^		5.88			7/15/2023		166,000		166,000		167,660
Finance — 2.4%*:
Arrow Global Finance PLC+		5.24	#		11/1/2021		100,000		123,118		112,265
Cabot Financial Luxembourg SA+		10.38			10/1/2019		100,000		173,823		170,984
Equiniti Newco 2 PLC+		7.13			12/15/2018		200,000		314,474		315,821
Galaxy Bidco Ltd.+		6.38			11/15/2020		100,000		161,665		157,321
Galaxy Finco Ltd.+		7.88			11/15/2021		100,000		165,396		155,213
Lowell Group Financing PLC+		5.88			4/1/2019		100,000		166,730		152,443
National Financial Partners Corp.^		9.00			7/15/2021		279,000		277,628		275,513
TMF Group Holding B.V.+		9.88			12/1/2019		500,000		717,174		595,374
Total Finance							1,479,000		2,100,008		1,934,934

See accompanying Notes to Financial Statements.

39

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Grocery — 0.4%*:
Premier Foods PLC+		6.50	%		3/15/2021		200,000		$339,387		$295,709
Healthcare, Education and Childcare — 5.5%*:
Alere, Inc.^		6.38			7/1/2023		490,000		490,000		498,575
BioScrip, Inc.		8.88			2/15/2021		410,000		423,779		348,500
Care UK Health & Social Care PLC+		5.57	#		7/15/2019		100,000		152,699		152,411
Cerberus Nightingale 1 Sarl+		8.25			2/1/2020		300,000		342,042		339,472
HomeVi SAS+		6.88			8/15/2021		250,000		334,500		291,673
Priory Group No. 3 PLC+		8.88			2/15/2019		500,000		806,718		813,122
Surgical Care Affiliates, Inc.^		6.00			4/1/2023		406,000		406,000		406,000
Tenet Healthcare Corp.^		3.79	#		6/15/2020		750,000		746,278		756,562
Tenet Healthcare Corp.^		6.75			6/15/2023		294,000		292,536		299,880
Unilabs Subholding AB+		8.50			7/15/2018		200,000		284,664		231,220
VRX Escrow Corp.^		6.13			4/15/2025		339,000		339,000		348,746
Total Healthcare, Education and Childcare							4,039,000		4,618,216		4,486,161
Hotels, Motels, Inns and Gaming — 0.2%*:
Gala Electric Casinos PLC+		11.50			6/1/2019		100,000		176,735		167,102
Insurance — 0.7%*:
Hastings Insurance Group Finance PLC+		8.00			10/21/2020		100,000		159,915		166,523
TIG Finco PLC+		8.50	#		3/2/2020		15,734		25,272		25,958
TIG Finco PLC+^		8.75			4/2/2020		266,163		409,278		414,027
Total Insurance							381,897		594,465		606,508
Leisure, Amusement, Entertainment — 2.7%*:
Allegiant Travel Co.		5.50			7/15/2019		700,000		718,326		705,250
Dometic Group AB PIK+		9.50			6/26/2019		500,000		679,476		560,212
Interval Acquisition Corp.^		5.63			4/15/2023		459,000		459,000		464,738
Vougeot Bidco PLC+		7.88			7/15/2020		300,000		510,665		499,676
Total Leisure, Amusement, Entertainment							1,959,000		2,367,467		2,229,876
Machinery Non-Agriculture, Non-Construction, Non-Electronic — 1.1%*:
KraussMaffei Group GmbH+		8.75			12/15/2020		90,000		129,685		107,360
Xerium Technologies, Inc.		8.88			6/15/2018		720,000		737,219		745,200
Total Machinery Non-Agriculture, Non-Construction, Non-Electronic							810,000		866,904		852,560
Mining, Steel, Iron and Non-Precious Metals — 0.5%*:
Constellium NV		7.00			1/15/2023		250,000		307,212		278,713
Paprec Holding+		5.25			4/1/2022		100,000		108,105		113,993
Total Mining, Steel, Iron and Non-Precious Metals							350,000		415,317		392,706
Oil and Gas — 4.5%*:
Baytex Energy Corp.+^		5.63			6/1/2024		350,000		286,996		324,625
California Resources Corp.		6.00			11/15/2024		400,000		400,000		344,000

See accompanying Notes to Financial Statements.

40

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Oil and Gas (Continued)
Calumet Specialty Products Partners LP/Calumet Finance Corp.		6.50	%		4/15/2021		500,000		$500,000		$492,500
Citgo Holding, Inc.^		10.75			2/15/2020		350,000		338,439		357,875
Halcon Resources Corp.^		8.63			2/1/2020		331,000		331,000		326,863
Kosmos Energy Ltd.^		7.88			8/1/2021		571,000		526,550		552,442
Millennium Offshore Services Superholdings LLC+^		9.50			2/15/2018		500,000		516,870		467,500
Seventy Seven Energy, Inc.		6.50			7/15/2022		440,000		440,000		281,600
Shelf Drilling Holdings Ltd.+^		8.63			11/1/2018		439,000		361,973		390,710
Welltec A/S+^		8.00			2/1/2019		174,000		145,412		166,170
Total Oil and Gas							4,055,000		3,847,240		3,704,285
Personal Transportation — 0.3%*:
AA Bond Co. Ltd.+		5.50			7/31/2043		150,000		223,140		234,273
Personal, Food and Miscellaneous — 1.5%*:
Brakes Capital+		7.13			12/15/2018		500,000		842,431		805,297
TeamSystem Holding SpA+		7.38			5/15/2020		350,000		476,299		413,414
Total Personal, Food and Miscellaneous							850,000		1,318,730		1,218,711
Printing and Publishing — 0.3%*:
CEB, Inc.^		5.63			6/15/2023		273,000		273,000		274,365
Retail Stores — 2.7%*:
Boing Group Financing PLC+		6.63			7/15/2019		200,000		272,200		215,830
Brighthouse Group PLC+		7.88			5/15/2018		150,000		243,459		230,974
Family Tree Escrow LLC^		5.25			3/1/2020		50,000		51,406		52,312
Family Tree Escrow LLC^		5.75			3/1/2023		700,000		722,747		731,500
HSS Financing PLC+		6.75			8/1/2019		65,774		108,872		107,998
Kirk Beauty Zero GmbH+		6.25			7/15/2022		550,000		614,378		604,767
Pendragon PLC+		6.88			5/1/2020		100,000		171,016		165,613
Takko Luxembourg 2 S.C.A.+		9.88			4/15/2019		200,000		258,634		102,789
Total Retail Stores							2,015,774		2,442,712		2,211,783
Telecommunications — 2.6%*:
Altice US Finance I Corp.^		5.38			7/15/2023		341,000		341,000		332,475
CCO Holdings LLC/CCO Holdings Capital Corp.^		5.88			5/1/2027		391,000		391,000		381,714
CommScope Technologies Finance LLC^		6.00			6/15/2025		338,000		338,000		336,732
eircom Finance Ltd.+		9.25			5/15/2020		100,000		147,539		120,961
Numericable-SFR+		5.63			5/15/2024		100,000		138,165		112,321
Numericable-SFR+^		6.00			5/15/2022		315,000		315,000		310,472
UPC Holding B.V.+		6.75			3/15/2023		200,000		213,359		231,831
Wind Acquisition Finance SA+		4.00			7/15/2020		200,000		243,426		222,412

See accompanying Notes to Financial Statements.

41

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)
Telecommunications (Continued)
Wind Acquisition Finance SA+		4.01	#%		7/15/2020		100,000		$135,965		$110,649
Total Telecommunications							2,085,000		2,263,454		2,159,567
Total Corporate Bonds							35,096,994		39,528,682		37,956,416
Total Fixed Income							74,952,249		78,863,243		75,119,170
	STRIKE PRICE			EXPIRATION DATE		NOTIONAL		COST		FAIR VALUE
Purchased Options — 0.7%*:
Put Options — 0.7%*:
OTC—Markit CDX.NA.HY.24 Swaption with Credit Suisse International		$105.00			09/16/2015		20,000,000		446,000		415,368
OTC—Markit CDX.NA.HY.24 Swaption with JPMorgan Chase Bank, N.A.		105.00			09/16/2015		10,000,000		172,000		172,459
Total Purchased Options							30,000,000		618,000		587,827
	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Short-Term Investments — 9.5%*:
Bank Deposit — 9.4%*:
State Street Bank & Trust Co. Euro Time Deposit		0.01	%		7/1/2015		7,653,249		7,653,249		7,653,249
Bank Loan — 0.1%*§:
Mining, Steel, Iron and Non-Precious Metals — 0.1%*:
Boomerang Tube LLC¤		11.28			10/7/2015		78,780		77,204		78,780
Total Short-Term Investments							7,732,029		7,730,453		7,732,029
Total Investments							112,684,278		87,211,696		83,439,026
Other assets and liabilities — (2.1%)*											(1,706,397	)
Net Assets — 100.0%											$81,732,629

OTC Over the Counter

PIK Payment-in-kind

‡‡ Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

* Calculated as a percentage of net assets applicable to common shareholders.

+ Foreign security.

See accompanying Notes to Financial Statements.

42

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:

	United States	49.2%
	Cayman Islands	17.3%
	United Kingdom	13.8%
	Germany	3.4%
	Netherlands	3.1%
	France	1.8%
	Switzerland	1.8%
	Ireland	1.6%
	Canada	1.3%
	United Arab Emirates	1.1%
	Spain	1.1%
	Sweden	1.1%
	Portugal	1.0%
	Italy	1.0%
Other (Individually less than 1%)		1.4%
	Total	100.0%

^ Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

§ Bank loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for bank loans are the current interest rates at June 30, 2015. Bank loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown.

¤ For fair value measurement disclosure purposes, security is categorized as Level 3 (see Note 2).

†† Illiquid security.

~ Defaulted security.

# Variable rate security. The interest rate shown is the rate in effect at June 30, 2015.

A summary of outstanding derivatives at June 30, 2015 is as follows:

Forward Foreign Currency Exchange Contracts to Buy

EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED DEPRECIATION
07/14/15	Morgan Stanley		EUR	540,000		602,116		607,260	$	(5,144	)
07/14/15	Morgan Stanley		GBP	500,000		785,559		786,918		(1,359	)
Net unrealized depreciation on forward foreign exchange contracts to buy									$	(6,503	)

See accompanying Notes to Financial Statements.

43

Babson Global Credit Income Opportunities Fund 2015 Annual Report

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2015

Forward Foreign Currency Exchange Contracts to Sell

EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
07/14/15	Morgan Stanley		CHF	230,728		246,885		247,564	$	679
07/14/15	Morgan Stanley		EUR	11,320,994		12,623,243		12,721,503		98,260
07/14/15	Morgan Stanley		GBP	5,547,959		8,716,498		8,480,430		(236,068	)
Net unrealized depreciation on forward foreign exchange contracts to sell									$	(137,129	)

Currency Legend

CHF	–	Swiss Franc
EUR	–	Euro
GBP	–	British Pound Sterling

Written Options

TYPE OF CONTRACT	EXPIRATION DATE	STRIKE PRICE		COUNTERPARTY	NUMBER OF CONTRACTS/ NOTIONAL AMOUNTS		PREMIUMS RECEIVED		VALUE AT JUNE 30, 2015
Put—Markit CDX.NA.HY.24 Swaption	09/16/15	$	102.25	Credit Suisse International		20,000,000	$	278,000	$	(225,997	)
Put—Markit CDX.NA.HY.24 Swaption	09/16/15		102.25	JPMorgan Chase Bank, N.A.		10,000,000		104,000		(93,480	)
							$	382,000	$	(319,477	)

See accompanying Notes to Financial Statements.

44

Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS

June 30, 2015

1. Organization

Babson Capital Funds Trust (the “Trust”) was organized as a business trust under the laws of the Commonwealth of Massachusetts on May 3, 2013 and commenced operations on September 16, 2013. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of June 30, 2015, the Trust currently consists of two non-diversified funds (separately, a “Fund” and collectively, the “Funds”): Babson Global Floating Rate Fund (“Global Floating Rate Fund”) and Babson Global Credit Income Opportunities Fund (“Global Credit Income Opportunities Fund”).

Babson Capital Management LLC (the “Adviser”), a wholly-owned indirect subsidiary of Massachusetts Mutual Life Insurance Company, is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and serves as investment adviser to the Funds.

Babson Capital Global Advisors Limited (the “Sub-Adviser”), an indirect wholly-owned subsidiary of the Adviser, serves as a sub-adviser with respect to the Funds’ European investments.

The primary investment objective of the Global Floating Rate Fund is to seek a high level of current income. The Fund seeks preservation of capital as a secondary investment objective. The primary investment objective of the Global Credit Income Opportunities Fund is to seek an absolute return, primarily through current income and secondarily through capital appreciation.

There can be no assurance that the Funds will achieve their investment objectives. The Funds will seek to take advantage of inefficiencies between geographies, primarily the North American and European high yield bond, loan and other debt markets. Under normal market conditions, the Global Floating Rate Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in income-producing floating rate debt securities, consisting of floating rate loans, bonds and notes, issued primarily by North American and Western European companies that are, at the time of purchase, rated below investment grade (below Baa3 by Moody’s Investors Service, Inc. (“Moody’s”) or below BBB- by either Standard & Poor’s Rating Services, a division of the McGraw-Hill Company, Inc. (“S&P”) or Fitch, Inc. (“Fitch”)) or unrated but judged by the Adviser or Sub-Adviser to be of comparable quality. Under normal market conditions, the Global

Credit Income Opportunities Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in debt instruments, consisting of loans, bonds and notes, based in U.S. and non-U.S. markets, as well as over-the-counter and exchange-traded derivatives. Investments may be issued or guaranteed by governments and their agencies, corporations, financial institutions and supranational organizations that the Funds believe have the potential to provide a high total return over time. A significant portion of the Funds’ investments in debt instruments will be denominated in a currency other than the U.S. dollar. Although the investments in non-U.S. dollar denominated assets may be on a currency hedged or unhedged basis, the Funds expect that, under current market conditions, they will seek to hedge substantially all of their exposure to foreign currencies.

Each Fund has four classes of shares: Class A, C, I, and Y, each with different expenses and dividends. A front-end sales charge is normally added to the net asset value (“NAV”) for Class A shares. There is no front-end sales charge in the case of Class C, I, and Y shares. There may be a contingent deferred sales charge (“CDSC”) in certain cases as follows: Class A shares purchased without an initial sales charge and redeemed within the first year of purchase (subject to certain exceptions as set forth in each Fund’s prospectus) and Class C shares redeemed within the first year of purchase. All classes of shares have equal voting rights, with the exception of matters that relate solely to one class.

2. Significant Accounting Policies

The following is a summary of significant accounting policies followed consistently by the Funds in the preparation of their financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

A. Valuation of Investments

The Funds’ investments in fixed income securities are generally valued using the prices provided directly by independent third party services or provided directly from one or more broker dealers or market makers, each in accordance with the valuation policies and procedures approved by the Funds’ Board of Trustees (the “Board”).

The pricing services may use valuation models or matrix pricing, which consider yield or prices with respect to comparable bond quotations from bond dealers or by reference to other securities that are considered

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comparable in such characteristics as credit rating, interest rates and maturity date to determine the current value. The Funds’ investments in bank loans are normally valued at the bid quotation obtained from dealers in loans by an independent pricing service in accordance with the Funds’ valuation policies and procedures approved by the Board. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value. Over-the-counter (“OTC”) options are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

A Valuation Committee, made up of officers of the Trust and employees of the Adviser, is responsible for determining, in accordance with the Funds’ valuation policies and procedures approved by the Board; (1) whether market quotations are readily available for investments held by the Fund; and (2) the fair value of investments held by the Fund for which market quotations are not readily available or are deemed not reliable by the Adviser. In certain cases, authorized pricing service vendors may not provide prices for a security held by the Funds, or the price provided by such pricing service vendor is deemed unreliable by the Adviser. In such cases, the Funds may use market maker quotations provided by an established market maker for that security (i.e., broker quotes) to value the security if the Adviser has experience obtaining quotations from the market maker and the Adviser determines that quotations obtained from the market maker in the past have generally been reliable (or, if the Adviser has no such experience with respect to a market maker, it determines based on other information available to it that quotations to be obtained by it from the market maker are reasonably likely to be reliable). In any such case, the Adviser will review any market quotations so obtained in light of other information in its possession for their general reliability.

Bond investments are valued on the basis of last available bid prices or current market quotations provided by dealers or pricing services. Bank loan positions are valued at the bid price from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between

investments and calculated yield measures. Asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche.

Bank loans in which the Funds may invest have similar risks to lower-rated fixed income securities. Changes in the financial condition of the borrower or economic conditions or other circumstances may reduce the capacity of the borrower to make principal and interest payments on such instruments and may lead to defaults. Senior secured bank loans are supported by collateral; however, the value of the collateral may be insufficient to cover the amount owed to the Funds. By relying on a third party to administer a loan, the Funds are subject to the risk that the third party will fail to perform its obligations. The loans in which the Funds will invest are largely floating rate instruments; therefore, the interest rate risk generally is lower than for fixed-rate debt obligations. However, from the perspective of the borrower, an increase in interest rates may adversely affect the borrower’s financial condition. Due to the unique and customized nature of loan agreements evidencing loans and the private syndication thereof, loans are not as easily purchased or sold as publicly traded securities. Although the range of investors in loans has broadened in recent years, there can be no assurance that future levels of supply and demand in loan trading will provide the degree of liquidity which currently exists in the market. In addition, the terms of the loans may restrict their transferability without borrower consent. These factors may have an adverse effect on the market price and the Funds’ ability to dispose of particular portfolio investments. A less liquid secondary market also may make it more difficult for the Funds to obtain precise valuations of the high yield loans in its portfolio.

The Funds may invest in collateralized debt obligations (“CDOs”), which include collateralized bond obligations (“CBOs”) and collateralized loan obligations (“CLOs”). CBOs and CLOs are types of asset-backed securities. A CDO is an entity that is backed by a diversified pool of debt securities (CBOs) or syndicated bank loans (CLOs). The cash flows of the CDO can be split into multiple segments, called “tranches,” which will vary in risk profile and yield. The riskiest segment is the subordinated or “equity” tranche. This tranche bears the greatest risk of defaults from the underlying assets in the CDO and

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serves to protect the other, more senior, tranches from default in all but the most severe circumstances. Since it is shielded from defaults by the more junior tranches, a “senior” tranche will typically have higher credit ratings and lower yields than their underlying securities, and often receive investment grade ratings from one or more of the nationally recognized rating agencies. Despite the protection from the more junior tranches, senior tranches can experience substantial losses due to actual defaults, increased sensitivity to future defaults and the disappearance of one or more protecting tranches as a result of changes in the credit profile of the underlying pool of assets.

Fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is utilized to maximize the use of observable market data and minimize the use of unobservable inputs 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. For example, market participants would consider the risk inherent in a particular valuation technique used to measure fair value, such as a pricing model, and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability and are 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 and are developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 – quoted prices in active markets for identical securities

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

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 new 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 inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

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The following is a summary of the inputs used as of June 30, 2015 in valuing the Funds’ investments:

Global Floating Rate Fund

DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS
Assets:*
Fixed Income:
Bank Loans	$	–	$	131,795,771		$	976,111	$	132,771,882
Corporate Bonds		–		22,819,985			–		22,819,985
Total Fixed Income		–		154,615,756			976,111		155,591,867
Short-Term Investments:
Bank Deposit		–		23,274,995			–		23,274,995
Bank Loan		–		–			78,780		78,780
Total Short-Term Investments		–		23,274,995			78,780		23,353,775
Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		153,124			–		153,124
Total	$	–	$	178,043,875		$	1,054,891	$	179,098,766
Liabilities:*
Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		(523,194	)		–		(523,194	)
Total Investments	$	–	$	177,520,681		$	1,054,891	$	178,575,572

* There were no transfers between levels during the year ended June 30, 2015.

The following is a reconciliation of investments with unobservable inputs (Level 3) that were used in determining fair value:

INVESTMENTS IN SECURITIES	BALANCE AS OF JULY 1, 2014		REALIZED GAIN (LOSS)		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)			NET TRANSFERS IN (OUT) OF LEVEL 3		ACCRUED PREMIUMS/ DISCOUNTS		PURCHASES		SALES			BALANCE AS OF JUNE 30, 2015		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS HELD AT JUNE 30, 2015
Fixed Income
Bank Loans	$	497,619	$	57	$	(19,651	)	$	–	$	1,249	$	585,462	$	(9,845	)	$	1,054,891	$	(19,651	)
Total	$	497,619	$	57	$	(19,651	)	$	–	$	1,249	$	585,462	$	(9,845	)	$	1,054,891	$	(19,651	)

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Global Credit Income Opportunities Fund

DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS
Assets:*
Fixed Income:
Asset-Backed Securities	$	–	$	13,514,752		$	–	$	13,514,752
Bank Loans		–		22,918,447			729,555		23,648,002
Corporate Bonds		–		37,956,416			–		37,956,416
Total Fixed Income		–		74,389,615			729,555		75,119,170
Purchased Options:
Put Options		–		587,827			–		587,827
Total Purchased Options		–		587,827			–		587,827
Short-Term Investments:
Bank Deposit		–		7,653,249			–		7,653,249
Bank Loan		–		–			78,780		78,780
Total Short-Term Investments		–		7,653,249			78,780		7,732,029
Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		98,939			–		98,939
Total	$	–	$	82,729,630		$	808,335	$	83,537,965
Liabilities:*
Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		(242,571	)		–		(242,571	)
Written Options		–		(319,477	)		–		(319,477	)
Total Derivative Securities		–		(562,048	)		–		(562,048	)
Total Investments	$	–	$	82,167,582		$	808,335	$	82,975,917

* There were no transfers between levels during the year ended June 30, 2015.

The following is a reconciliation of investments with unobservable inputs (Level 3) that were used in determining fair value:

INVESTMENTS IN SECURITIES	BALANCE AS OF JULY 1, 2014		REALIZED GAIN (LOSS)		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)			NET TRANSFERS IN (OUT) OF LEVEL 3		ACCRUED PREMIUMS/ DISCOUNTS		PURCHASES		SALES			BALANCE AS OF JUNE 30, 2015		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS HELD AT JUNE 30, 2015
Fixed Income
Bank Loans	$	497,619	$	57	$	(14,619	)	$	–	$	1,248	$	331,333	$	(7,303	)	$	808,335	$	(14,619	)
Total	$	497,619	$	57	$	(14,619	)	$	–	$	1,248	$	331,333	$	(7,303	)	$	808,335	$	(14,619	)

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B. Forward Commitments and When-Issued Delayed Delivery Securities

The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedule of Investments.

C. Cash and Short-Term Investments

Cash and cash equivalents consist principally of short-term investments that are readily convertible into cash and have original maturities of three months or less. At June 30, 2015, all cash and cash equivalents are held by the custodian.

D. Investment Transactions, Related Investment Income and Expenses

Investment transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis, including the amortization of premiums and accretion of discounts on bonds held using the yield-to-maturity method.

Realized gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement and Federal income tax purposes on the identified cost method.

Expenses are recorded on the accrual basis as incurred.

E. Redemption Fees

Redemptions of Fund shares held for 60 days or less may be assessed a 1% short-term trading fee and recorded as paid-in capital.

F. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

G. Federal Income Taxation

The Funds have elected to be taxed as a Regulated Investment Company (“RIC”) under sub-chapter M of the U.S. Internal Revenue Code of 1986, as amended, and intend to maintain this qualification and to distribute substantially all of their net taxable income to their shareholders. As of June 30, 2015, the Funds had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Funds file a U.S. federal income tax return annually after their fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of the filings.

H. Dividends and Distributions

For the period July 1, 2014 through December 31, 2014, the Funds declared and paid dividends monthly from net investment income. Per the Funds’ prospectuses, effective January 1, 2015, each Fund declares a dividend daily based on the Adviser’s projections of the Funds’ estimated net investment income and distributes such dividend monthly. To the extent that these distributions exceed net investment income, they may be classified as return of capital. The Funds also pay a distribution at least annually from their net realized capital gains, if any. Dividends and distributions are recorded on the ex-dividend date. All common shares have equal dividend and other distribution rights. A notice disclosing the source(s) of a distribution will be provided if payment is made from any source other than net investment income. Any such notice would be provided only for informational purposes in order to comply with the requirements of Section 19(a) of the 1940 Act and not for tax reporting purposes. The tax composition of the Funds’ distributions for each calendar year is reported on Internal Revenue Service Form 1099-DIV.

Dividends from net investment income and distributions from realized gains from investment transactions have been determined in accordance with Federal income tax regulations and may differ from net investment income

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and realized gains recorded by the Funds for financial reporting purposes. These differences, which could be temporary or permanent in nature may result in reclassification of distributions; however, net investment income, net realized gains and losses, and net assets are not affected.

I. Bank Loans

The Funds may invest in bank loans, which usually take the form of loan participations and assignments. Loan participations and assignments are agreements to make money available to U.S. or foreign corporations, partnerships or other business entities (the “Borrower”) in a specified amount, at a specified rate and within a specified time. A loan is typically originated, negotiated and structured by a U.S. or foreign bank, insurance company or other financial institution (the “Agent”) for a group of loan investors (“Loan Investors”). The Agent typically administers and enforces the loan on behalf of the other Loan Investors in the syndicate and may hold any collateral on behalf of the Loan Investors. Such loan participations and assignments are typically senior, secured and collateralized in nature. The Funds record an investment when the Borrower withdraws money and records interest as earned. These loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or London InterBank Offered Rate (“LIBOR”).

The loans in which the Funds invest may be subject to some restrictions on resale. For example, the Funds may be contractually obligated to receive approval from the Agent and/or Borrower prior to the sale of these investments. The Funds generally have no right to enforce compliance with the terms of the loan agreement with the Borrower. As a result, the Funds assume the credit risk of the Borrower, the selling participant and any other persons interpositioned between the Funds and the Borrower (“Intermediate Participants”). In the event that the Borrower, selling participant or Intermediate Participants become insolvent or enter into bankruptcy, the Funds may incur certain costs and delays in realizing payment or may suffer a loss of principal and/or interest.

Unfunded commitments represent the remaining obligation of the Funds to the Borrower. At any point in time, up to the maturity date of the issue, the Borrower may demand the unfunded portion. Until demanded by the Borrower, unfunded commitments are not

recognized as an asset on the Statements of Assets and Liabilities. Unrealized appreciation/depreciation on unfunded commitments presented on the Statements of Assets and Liabilities represents mark to market of the unfunded portion of the Funds’ bank loans. As of June 30, 2015, the Global Floating Rate Fund and Global Credit Income Opportunities Fund each had one unfunded loan commitment which amounted to $500,000 of par and had cost and fair value of $557,747 and $553,155, respectively.

J. Derivative Instruments

The following is a description of the derivative instruments that the Funds utilize as part of their investment strategy, including the primary underlying risk exposures related to the instrument.

Forward Foreign Currency Exchange Contracts – The Funds are subject to foreign currency exchange rate risk in the normal course of pursuing their investment objectives. The Funds may use forward foreign currency exchange contracts to hedge against changes in the value of foreign currencies. The Funds may enter into forward foreign currency exchange contracts obligating the Funds to deliver or receive a currency at a specified future date. Forward contracts are valued daily and unrealized appreciation or depreciation is recorded daily as the difference between the contract exchange rate and the closing forward rate applied to the face amount of the contract. A realized gain or loss is recorded at the time the forward contract expires. Credit risk may arise as a result of the failure of the counterparty to comply with the terms of the contract. The Funds consider the creditworthiness of each counterparty to a contract in evaluating potential credit risk quarterly. The Funds are also subject to credit risk with respect to the counterparties to derivative contracts that are not cleared through a central counterparty but instead are traded over-the-counter between two counterparties. If a counterparty to an over-the-counter derivative becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Funds may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Funds may obtain only a limited recovery or may obtain no recovery in such circumstances. The counterparty risk for cleared derivatives is generally lower than for uncleared over-the-counter derivative transactions since generally a clearing organization becomes substituted for

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each counterparty to a cleared derivative contract and, in effect, guarantees the parties’ performance under the contract as each party to a trade looks only to the clearing house for performance of financial obligations. However, there can be no assurance that the clearing house, or its members, will satisfy its obligations to the Funds. In addition, in the event of a bankruptcy of a clearing house, the Funds could experience a loss of the funds deposited with such clearing house as margin and of any profits on its open positions. The counterparty risk to the Funds is limited to the net unrealized gain, if any, on the contract.

The use of forward foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the Funds’ investment securities; however, it does establish a rate of exchange that can be achieved in the future. The use of forward foreign currency exchange contracts involves the risk that anticipated currency movements will not be accurately predicted. A forward foreign currency exchange contract would limit the risk of loss due to a decline in the value of a particular currency; however, it would also limit any potential gain that might result should the value of the currency increase instead of decrease. These contracts may involve market risk in excess of the amount of receivable or payable reflected on the Statement of Assets and Liabilities.

The Funds may purchase call or put options. When a Fund purchases an option, the premium paid by the Fund is recorded as an asset and is subsequently adjusted to the current fair value of the option purchased. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. Premiums paid for purchasing options that expire are treated as realized losses. Premiums paid for purchasing options that are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying security to determine the realized gain or loss. The risks associated with purchasing put and call options are potential loss of the premium paid and, in the instances of over-the-counter derivatives, the failure of the counterparty to honor its obligation under the contract.

The Funds may enter into swap options (“swaptions”). A swaption is an option to enter into a pre-defined swap agreement by some specified date in the future. The writer of the swaption becomes the counterparty to the

swap if the buyer exercises. The interest rate swaption agreement will specify whether the buyer of the swaption will be a fixed rate receiver or a fixed rate buyer. Depending on the terms of the particular option agreement, a Fund generally will incur a greater degree of risk when the Fund writes a swaption than the Fund will incur when it purchases a swaption. When a Fund purchases a swaption, the Fund’s risk of loss is limited to the amount of the premium it has paid should it decide to let the swaption expire unexercised.

When a Fund writes a covered call or a put option, an amount equal to the premium received by the Fund is included in the Fund’s Statement of Assets and Liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. The Fund receives a premium on the sale of a call option but gives up the opportunity to profit from any increase in stock value above the exercise price of the option, and when a Fund writes a put option, it is exposed to a decline in the price of the underlying security.

Whether an option which a Fund has written expires on its stipulated expiration date or a Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss, if the cost of a closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a call option which a Fund has written is exercised, the Fund realizes a capital gain or loss from the sale of the underlying security, and the cost basis of the lots sold are decreased by the premium originally received. When a put option which a Fund has written is exercised, the amount of the premium originally received will reduce the cost of the security which the Fund purchases upon exercise of the option. Realized gains (losses) on purchased options are included in net realized gain (loss) from investments.

The Funds’ use of written options involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities. The face or contract amounts of these instruments reflect the extent of the Funds’ exposure to market risk. The risks may be caused by an imperfect correlation between movements in the price of the instrument and the price of the underlying securities, currencies and interest rates.

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Transactions in written option contracts for the Global Credit Income Opportunities Fund for the year ended June 30, 2015 are as follows:

	NUMBER OF CONTRACTS/ NOTIONAL AMOUNT		PREMIUMS RECEIVED
Options outstanding at June 30, 2014		–	$	–
Options written		30,000,000		382,000
Options terminated in closing purchase transactions		–		–
Options expired		–		–
Options outstanding at June 30, 2015		30,000,000	$	382,000

During the year ended June 30, 2015, the Funds’ direct investment in derivatives consisted of forward foreign currency exchange contracts, purchased options, and written options.

The following is a summary of the fair value of derivative instruments held directly by the Funds as of June 30, 2015:

Global Floating Rate Fund

ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	Unrealized appreciation on forward foreign currency exchange contracts	$	153,124
Total		$	153,124
LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	Unrealized depreciation on forward foreign currency exchange contracts	$	523,194
Total		$	523,194

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Global Credit Income Opportunities Fund

ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		CREDIT RISK		TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized appreciation on forward foreign currency exchange contracts	$	98,939	$	–	$	98,939
Purchased Options	Investments, at fair value		–		587,827		587,827
Total		$	98,939	$	587,827	$	686,766
LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		CREDIT RISK		TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized depreciation on forward foreign currency exchange contracts	$	242,571	$	–	$	242,571
Written Options	Written options, at fair value		–		319,477		319,477
Total		$	242,571	$	319,477	$	562,048

Amount of Realized Gain/(Loss) on Derivatives:

Global Floating Rate Fund

	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	5,210,733
Total	$	5,210,733

Global Credit Income Opportunities Fund

	FOREIGN EXCHANGE CONTRACTS RISK		CREDIT RISK			TOTAL
Forward Foreign Currency Exchange Contracts	$	3,726,491	$	–		$	3,726,491
Purchased Options		–		(75,183	)		(75,183	)
Total	$	3,726,491	$	(75,183	)	$	3,651,308

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Change in Unrealized Appreciation/(Depreciation) on Derivatives:

Global Floating Rate Fund

	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	(35,901	)
Total	$	(35,901	)

Global Floating Rate Fund

NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts(1)		37,338,297
Total		37,338,297

(1) Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

Global Credit Income Opportunities Fund

	FOREIGN EXCHANGE CONTRACTS RISK		CREDIT RISK			TOTAL
Forward Foreign Currency Exchange Contracts	$	72,833	$	–		$	72,833
Purchased Options		–		(40,866	)		(40,866	)
Written Options		–		62,523			62,523
Total	$	72,833	$	21,657		$	94,490

Global Credit Income Opportunities Fund

NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK		CREDIT RISK			TOTAL
Forward Foreign Currency Exchange Contracts(1)		26,141,491		–			26,141,491
Purchased Options(1)		–		15,461,538			15,461,538
Written Options(1)		–		(6,923,077	)		(6,923,077	)
Total		26,141,491		8,538,461			34,679,952

(1) Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

K. Disclosures about Offsetting Assets and Liabilities

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-11 “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). These disclosure requirements are intended to help better assess the effect or potential effect of offsetting

arrangements on a fund’s financial position. In addition, FASB issued Accounting Standards Update No. 2013-01 “Clarifying the Scope of Offsetting Assets and Liabilities” (“ASU 2013-01”), specifying which transactions are subject to disclosures about offsetting.

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

The following tables illustrate gross and net information about recognized assets eligible for offset in the Statement of Assets and Liabilities; and disclose such amounts subject to an enforceable master netting agreement or similar agreement, by counterparty. A master netting agreement is an agreement between two counterparties who have multiple contracts with each other that provides for the net settlement of all contracts, as well as cash collateral, through a single payment in the event of default on or termination of any one contract:

Global Floating Rate Fund

DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND  LIABILITIES
Forward Foreign Currency Exchange Contracts	$	153,124	$	–	$	153,124
Total	$	153,124	$	–	$	153,124

			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND  LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND  LIABILITIES		FINANCIAL INSTRUMENT (a)			CASH COLLATERAL RECEIVED (a)		NET AMOUNT (b)
Morgan Stanley	$	153,124	$	(153,124	)	$	–	$	–
Total	$	153,124	$	(153,124	)	$	–	$	–

(a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b) Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of June 30, 2015.

DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	523,194	$	–	$	523,194
Total	$	523,194	$	–	$	523,194

			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND  LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS  AND LIABILITIES		FINANCIAL INSTRUMENT (a)			CASH COLLATERAL PLEDGED (a)		NET AMOUNT (b)
Morgan Stanley	$	523,194	$	(153,124	)	$	–	$	370,070
Total	$	523,194	$	(153,124	)	$	–	$	370,070

(a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b) Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of June 30, 2015.

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

Global Credit Income Opportunities Fund

DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND  LIABILITIES
Forward Foreign Currency Exchange Contracts	$	98,939	$	–	$	98,939
Purchased Options		587,827		–		587,827
Total	$	686,766	$	–	$	686,766

			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND  LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT (a)			CASH COLLATERAL RECEIVED (a)		NET AMOUNT (b)
Credit Suisse International	$	415,368	$	(225,997	)	$	–	$	189,371
JPMorgan Chase Bank, N.A.		172,459		(93,480	)		–		78,979
Morgan Stanley		98,939		(98,939	)		–		–
Total	$	686,766	$	(418,416	)	$	–	$	268,350

(a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b) Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of June 30, 2015.

DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	242,571	$	–	$	242,571
Written Options		319,477		–		319,477
Total	$	562,048	$	–	$	562,048

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

			GROSS AMOUNTS NOT OFFSET IN  THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT (a)			CASH COLLATERAL PLEDGED (a)		NET AMOUNT (b)
Credit Suisse International	$	225,997	$	(225,997	)	$	–	$	–
JPMorgan Chase Bank, N.A.		93,480		(93,480	)		–		–
Morgan Stanley		242,571		(98,939	)		–		143,632
Total	$	562,048	$	(418,416	)	$	–	$	143,632

(a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b) Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of June 30, 2015.

L. Foreign Securities

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and the U.S. government. These risks include valuation of currencies and adverse political and economic developments. Moreover, securities of many foreign companies, foreign governments, and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government.

M. Foreign Currency Translation

The books and records of the Funds are maintained in U.S. dollars. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities. However, for Federal income tax purposes, the

Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gain or loss from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences.

N. Counterparty Risk

The Funds seek to manage counterparty credit risk by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations. The Adviser monitors the financial stability of the Funds’ counterparties.

3. Advisory Fee

The Funds have entered into an Investment Management Agreement (the “Agreement”) with the Adviser. Pursuant to the Agreement, the Global Floating Rate Fund agrees to pay the Adviser a fee payable at the end of each calendar month, at an annual rate of 0.65% of the Fund’s average daily net assets during such month. The Global Credit Income Opportunities Fund agrees to pay the Adviser a fee payable at the end of each calendar month, at an annual rate of 0.75% of the Fund’s average daily net assets during such month.

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

The Adviser has contractually agreed to waive and/or reimburse a portion of its fees and/or reimburse expenses (excluding 12b-1 fees, interest expenses, taxes, fees incurred in acquiring and disposing of securities and extraordinary expenses) such that total net annual operating expenses for each class do not exceed the following rates:

	CLASS A			CLASS C			CLASS I			CLASS Y
Global Floating Rate Fund		1.05	%		1.80	%		0.75	%		0.75	%
Global Credit Income Opportunities Fund		1.20	%		1.95	%		0.95	%		0.95	%

Pursuant to the expense waiver/reimbursement agreement, the Adviser is entitled to be reimbursed for any fees the Adviser waives and Fund expenses that the Adviser reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Adviser by a Fund will not cause the Fund to exceed any applicable expense limitation that is in place for the Fund.

The contractual management fee waiver and expense reimbursement agreements between the Funds and the Adviser will remain in effect until November 1, 2016 and may be terminated only upon the approval of the Funds’ Board of Trustees.

Subject to the supervision of the Adviser and the Board, the Sub-Adviser manages the investment and reinvestment of a portion of the assets of the Funds, as allocated from time to time to the Sub-Adviser. The Adviser (not the Funds) will pay a portion of the fees it receives to the Sub-Adviser in return for its services.

4. 12b-1 Distribution and Service Plan

ALPS Distributors, Inc. (the “Distributor”) is the Distributor of the Funds’ shares as of June 30, 2015.

The Funds have adopted a Distribution and Shareholder Services Plan (the “Plan”), pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund’s Class A and Class C shares may compensate certain financial institutions, including the Distributor, for certain distribution and shareholder servicing activities. The Funds’ Class A shares may expend an aggregate amount, on an annual basis, not to exceed 0.25% of the value of the average daily net assets of a Fund attributable to

Class A shares and 1.00% of the value of the average daily net assets of a Fund attributable to Class C shares. The Plan provides that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Funds’ shares and service activities.

Under its terms, the Funds’ Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of the Boards’ members and a majority of those Boards’ members who are not “interested persons” of the Funds and who have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan.

5. Sales Charges and Commissions

For the year ended June 30, 2015, the amount of sales charges retained by the Distributor on sales of Class A and Class C shares of the Funds were as follows:

	CLASS C
Global Floating Rate Fund	$	27,409
Global Credit Income Opportunities Fund		20,691

For the year ended June 30, 2015, the Distributor received the following commissions on sales of shares of the Funds, after concessions were paid to authorized dealers:

	DISTRIBUTOR COMMISSIONS		DEALERS’ CONCESSIONS
Global Floating Rate Fund	$	2,988	$	42,363
Global Credit Income Opportunities Fund		18,168		102,312

6. Administrator, Custody, and Transfer Agent Fees

The Funds have engaged State Street Bank and Trust (“SSB”) to serve as the Funds’ administrator, custodian, fund accountant, and transfer agent. For each of these services, the Funds have agreed to pay SSB a fee payable at the end of each calendar month pursuant to fee agreements between SSB and the Funds. For the year ended June 30, 2015, the aggregate effective fee for these services was at an annual rate of 0.36% and 0.45% of Global Floating Rate Fund and Global Credit Income Opportunities Fund’s average daily managed assets, respectively.

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

7. Income Taxes

It is the Funds’ intention to qualify as a RIC under subchapter M of the Internal Revenue Code and distribute all of its taxable income. Accordingly, no provision for Federal income taxes is required in the financial statements.

The tax character of dividends paid to shareholders during the tax period ended June 30, 2014 was as follows:

	ORDINARY INCOME		RETURN OF CAPITAL		TOTAL DISTRIBUTIONS PAID
Global Floating Rate Fund	$	1,730,080	$	61,792	$	1,791,872
Global Credit Income Opportunities Fund		1,572,417		–		1,572,417

The tax character of dividends paid to shareholders during the year ended June 30, 2015 was as follows:

	ORDINARY INCOME		NET LONG-TERM CAPITAL GAINS		TOTAL DISTRIBUTIONS PAID
Global Floating Rate Fund	$	8,284,319	$	–	$	8,284,319
Global Credit Income Opportunities Fund		7,108,559		265		7,108,824

As of June 30, 2015, the components of distributable earnings on a tax-basis were as follows:

	UNDISTRIBUTED ORDINARY INCOME		CAPITAL LOSS CARRYFORWARDS			OTHER TEMPORARY DIFFERENCES			UNREALIZED APPRECIATION (DEPRECIATION)			TOTAL DISTRIBUTABLE EARNINGS
Global Floating Rate Fund	$	45,559	$	(1,215,117	)	$	(30,800	)	$	(4,754,370	)	$	(5,954,728	)
Global Credit Income Opportunities Fund		697,347		(2,073,127	)		(8,138	)		(3,661,459	)		(5,045,377	)

In accordance with the Regulated Investment Company Modernization Act of 2010, the Funds will carryforward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) indefinitely. Post-enactment losses will also retain their character as either short-term or long-term and be utilized before any pre-enactment losses.

On June 30, 2015, the Global Floating Rate Fund had capital loss carryforwards available to be offset against future net capital gains through the indicated expiration dates as follows:

EXPIRING JUNE 30,
2016	2017		2018		2019		UNLIMITED
$        –	$	–	$	–	$	–	$	100

Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year. As of June 30, 2015, Global Floating Rate Fund and Global Credit Income Opportunities Fund have elected to defer current year post-October losses of $1,215,017 and $2,073,127, respectively.

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

As of June 30, 2015, the aggregate unrealized security gains and losses based on cost for U.S. federal income tax purposes were as follows:

	COST OF INVESTMENTS		GROSS UNREALIZED APPRECIATION		GROSS UNREALIZED DEPRECIATION			NET UNREALIZED APPRECIATION (DEPRECIATION)
Global Floating Rate Fund	$	183,799,960	$	783,725	$	(5,638,043	)	$	(4,854,318	)
Global Credit Income Opportunities Fund		87,228,363		567,939		(4,357,276	)		(3,789,337	)

The difference between book-basis and tax-basis unrealized gains (losses) is attributable to wash sales.

Permanent items identified during the year ended June 30, 2015 have been reclassified among the components of net assets based on their tax basis treatment as follows:

	UNDISTRIBUTED NET INVESTMENT INCOME		ACCUMULATED NET REALIZED GAIN (LOSS)
Global Floating Rate Fund	$	2,703,684	$	(2,703,684	)
Global Credit Income Opportunities Fund		2,423,233		(2,423,233	)

The permanent differences are primarily attributable to foreign currency gains (losses) and the tax treatment of certain distributions.

8. Investment Transactions

Purchases and sales of securities (excluding short-term debt securities) for the year ended June 30, 2015 were as follows:

	PURCHASES		SALES
Global Floating Rate Fund	$	124,382,078	$	73,185,705
Global Credit Income Opportunities Fund		84,486,687		61,007,687

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

9. Common Stock

Transactions in common stock for the year ended June 30, 2015 were as follows:

Global Floating Rate Fund

	FOR THE YEAR ENDED JUNE 30, 2015						PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
CLASS A	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		1,046,486		$	10,379,529			1,222,507		$	12,481,232
Shares sold through reinvestments of distributions		83,026			807,940			13,651			139,125
Shares redeemed		(1,815,123	)		(17,653,590	)		(13,926	)		(142,258	)
Redemption fees(2)		–			676			–			–
Net increase (decrease)		(685,611	)	$	(6,465,445	)		1,222,232		$	12,478,099
CLASS C
Shares sold		335,871		$	3,264,612			233,502		$	2,379,349
Shares sold through reinvestments of distributions		19,258			185,848			2,446			24,864
Shares redeemed		(20,267	)		(195,905	)		(152	)		(1,544	)
Redemption fees(2)		–			169			–			–
Net increase		334,862		$	3,254,724			235,796		$	2,402,669
CLASS I
Shares sold		–		$	–			3,150,134		$	31,550,060
Shares sold through reinvestments of distributions		234,264			2,279,655			59,739			610,026
Shares redeemed		(753,573	)		(7,271,983	)		–			–
Redemption fees(2)		–			1,694			–			–
Net increase (decrease)		(519,309	)	$	(4,990,634	)		3,209,873		$	32,160,086
CLASS Y
Shares sold		9,236,912		$	89,446,649			6,676,274		$	67,761,452
Shares sold through reinvestments of distributions		493,939			4,805,968			97,618			996,669
Shares redeemed		(2,813,208	)		(27,521,577	)		(210,789	)		(2,155,109	)
Redemption fees(2)		–			2,920			–			–
Net increase		6,917,643		$	66,733,960			6,563,103		$	66,603,012

(1) Fund commenced operations on September 16, 2013.

(2) On May 7, 2015, the Funds’ Board of Trustees voted to remove redemption fees from future transactions.

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Babson Capital Funds Trust 2015 Annual Report

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015

Global Credit Income Opportunities Fund

	FOR THE YEAR ENDED JUNE 30, 2015						PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 (1)
CLASS A	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		2,316,931		$	23,545,838			250,892		$	2,588,194
Shares sold through reinvestments of distributions		127,930			1,237,474			3,520			36,805
Shares redeemed		(1,355,520	)		(13,184,266	)		(6,628	)		(69,594	)
Redemption fees(2)		–			2,624			–			–
Net increase		1,089,341		$	11,601,670			247,784		$	2,555,405
CLASS C
Shares sold		285,284		$	2,802,118			89,635		$	933,045
Shares sold through reinvestments of distributions		13,552			130,085			900			9,400
Shares redeemed		(12,493	)		(121,540	)		(159	)		(1,661	)
Redemption fees(2)		–			343			–			–
Net increase		286,343		$	2,811,006			90,376		$	940,784
CLASS I
Shares sold		–		$	–			2,455,000		$	24,550,000
Shares sold through reinvestments of distributions		253,647			2,450,842			70,277			734,939
Shares redeemed		–			–			–			–
Redemption fees(2)		–			4,679			–			–
Net increase		253,647		$	2,455,521			2,525,277		$	25,284,939
CLASS Y
Shares sold		1,654,908		$	16,333,761			3,172,809		$	32,089,635
Shares sold through reinvestments of distributions		321,379			3,108,290			74,417			778,240
Shares redeemed		(1,114,834	)		(11,114,262	)		(6,875	)		(72,116	)
Redemption fees(2)		–			5,954			–			–
Net increase		861,453		$	8,333,743			3,240,351		$	32,795,759

(1) Fund commenced operations on September 16, 2013.

(2) On May 7, 2015, the Funds’ Board of Trustees voted to remove redemption fees from future transactions.

10. Line of Credit

During the year ended June 30, 2015, the Trust (the “Borrower”) entered into a Credit Agreement (the “Credit Agreement”) with State Street Bank and Trust Company (the “Bank”). The Credit Agreement provides for a revolving credit facility of $20,000,000 (the “Facility Amount”) to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. Per the Credit Agreement, outstanding principal on the loan shall bear interest at a variable rate per annum equal to the higher of (a) the

Federal Funds Rate as in effect on the day of the borrowing plus 1.25% and (b) the Overnight LIBOR rate as in effect on the day of the borrowing plus 1.25%. In addition, the Borrower shall pay to the Bank a commitment fee at the rate of 0.125% per annum on the daily unused portion of the Facility Amount. As of June 30, 2015, there were no loans outstanding pursuant to the Credit Agreement.

Effective July 22, 2015, the Facility Amount increased from $20,000,000 to $40,000,000.

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Babson Capital Funds Trust 2015 Annual Report

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees of Babson Capital Funds Trust and Shareholders of

Babson Global Floating Rate Fund and Babson Global Credit Income Opportunities:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Babson Capital Funds Trust, comprising Babson Global Floating Rate Fund and Babson Global Credit Income Opportunities Fund (collectively, the “Funds”) as of June 30, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year then ended and for the period September 16, 2013 (commencement of operations) through June 30, 2014. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2015, by correspondence with the custodian, brokers, and agent banks; where replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of June 30, 2015, the results of their operations for the year then ended, and the statements of changes in net assets and the financial highlights for the year then ended and for the period September 16, 2013 (commencement of operations) through June 30, 2014, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts

August 25, 2015

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Babson Capital Funds Trust 2015 Annual Report

INTERESTED TRUSTEE

NAME (AGE), ADDRESS	POSITION(S) WITH THE TRUST	OFFICE TERM AND LENGTH OF TIME SERVED	PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS	PORTFOLIOS OVERSEEN IN FUND COMPLEX	OTHER DIRECTORSHIPS HELD BY DIRECTOR
Thomas M. Finke (51) 550 South Tryon Street Suite 3300 Charlotte, NC 28202	Trustee	Trustee since 2013	Chairman and Chief Executive Officer (since 2008), Member of the Board of Managers (since 2006), President (2007-2008), Managing Director (2002-2008), Babson Capital; Chief Investment Officer and Executive Vice President (2008-2011), Massachusetts Mutual Life Insurance Company.	3	Trustee (since 2013), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital); Chairman (2012-2015), Director (since 2008), Babson Capital Management (UK) Limited (investment advisory firm); Chairman and Director (2012-2015), Babson Capital Global Advisors Limited (investment advisory firm); Director (since 2008), Babson Capital Guernsey Limited (holding company); Vice Chairman and Manager (since 2011), MM Asset Management Holding LLC (holding company); Manager (since 2011), Wood Creek Capital Management, LLC (investment advisory firm); Chairman and Director (since 2007), Cornerstone Real Estate Advisers LLC (real estate advisory firm); Director (since 2004), Jefferies Finance LLC (finance company); Manager (2007-2015), Credit Strategies Management LLC (general partner of an investment fund); Manager (since 2005), Loan Strategies Management, LLC (general partner of an investment fund); Manager (since 2005), Jefferies Finance CP Funding LLC (investment company); Manager (2004-2012), Class C Member LLC (equity holding company); Chairman, Chief Executive Officer and Director (2009-2011), MassMutual Capital Partners, LLC (investment company); Director (2007-2011), Scottish Re Group Limited (reinsurance specialist).

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Babson Capital Funds Trust 2015 Annual Report

INDEPENDENT TRUSTEES (CONTINUED)

NAME (AGE), ADDRESS	POSITION(S) WITH THE TRUST	OFFICE TERM AND LENGTH OF TIME SERVED	PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS	PORTFOLIOS OVERSEEN IN FUND COMPLEX	OTHER DIRECTORSHIPS HELD BY DIRECTOR
Thomas W. Bunn (61) 550 South Tryon Street Suite 3300 Charlotte, NC 28202	Trustee	Trustee since 2013	Retired (since 2009); Vice Chairman (2002-2009), Head of National Banking (2006-2009), Head of Corporate and Investment Banking (2002-2006), KeyCorp (commercial and investment banking firm).	3	Trustee (since 2013), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital); Director (since 2010), SquareTwo Financial (asset recovery and management firm); Director (since 2010), Southern Weaving Co. (webbing and sleeving design and manufacturing company); Trustee (since 2010), Wake Forest University Board of Trustees; Member (since 1998), Babcock School of Business Board of Visitors; Senior Operating Advisor (since 2010), Sound Harbor Partners (investment management firm); Director (since 2009), Nature Conservancy of North Carolina; Director (2009-2014), Kiawah Island Conservancy; Director (2007-2009), Victory Asset Management (mutual fund complex).
Rodney J. Dillman (63) 550 South Tryon Street Suite 3300 Charlotte, NC 28202	Trustee, Chairman	Trustee since 2013	Retired (since 2012); Deputy General Counsel (2011-2012), Senior Vice President (2008-2012), Vice President (2000-2008), Massachusetts Mutual Life Insurance Company; Member of the Board of Directors and President (2008-2011), MassMutual International LLC; General Counsel (2006-2008), Babson Capital.	3	Trustee (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital); Director (2008-2011), Compania de Seguros CorpVida S.A. (insurance company); Director (2009-2011), MassMutual Europe S.A. (insurance company); Director (2009-2010), Yingda Taihe Life Insurance Co.; Director (2008-2011), MassMutual Asia Limited (insurance company); Director (2008-2011), MassMutual Life Insurance Company; Director (2008-2010), MassMutual Mercuries Life Insurance Company; Director (2005-2010), The MassMutual Trust Company.
Bernard A. Harris, Jr. (58) 550 South Tryon Street Suite 3300 Charlotte, NC 28202	Trustee	Trustee since 2013	Chief Executive Officer and Managing Partner (since 2002), Vesalius Ventures, Inc.; Director and President (since 1998), The Space Agency; President (since 1999), The Harris Foundation; Clinical Scientist, Flight Surgeon and Astronaut (1986-1996), NASA.	3	Trustee (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital); Trustee (since 2011), Salient Midstream & MLP Fund and Salient MLP & Energy Infrastructure Fund; Trustee (since 2010), Salient Absolute Return Fund; Director (since 2009), Monebo Technologies Inc. (medical technology design company); Director (since 2008), US Physical Therapy (USPH: NYSE); Director (since 2012), E-Cardio, Inc. (provides services for cardiac monitoring).

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INDEPENDENT TRUSTEES (CONTINUED)

NAME (AGE), ADDRESS	POSITION(S) WITH THE TRUST	OFFICE TERM AND LENGTH OF TIME SERVED	PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS	PORTFOLIOS OVERSEEN IN FUND COMPLEX	OTHER DIRECTORSHIPS HELD BY DIRECTOR
Thomas W. Okel (52) 550 South Tryon Street Suite 3300 Charlotte, NC 28202	Trustee	Trustee since 2013	Executive Director (since 2011), Catawba Lands Conservancy; Global Head of Syndicated Capital Markets (1998-2010), Bank of America Merrill Lynch.	3	Trustee (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital).
Martin A. Sumichrast (48) 550 South Tryon Street Suite 3300 Charlotte, NC 28202	Trustee	Trustee since 2013	Vice Chairman and Prinicipal (since 2013), Siskey Capital, LLC (merchant banking); Managing Director (2012-2013), Washington Capital, LLC (family office); Managing Director (2009-2012), Lomond International (business advisory firm).	3	Trustee (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital); Director (since 2014), Kure Corp. (retail); Director (since 2014), Jadeveon Clowney Help-InTime Foundation; Director (since 2015), Social Realty, Inc. (digital platform technology and management software company for internet advertising); Chairman and Director (since 2015), Level Beauty Group Inc. (a retail/e-commerce beauty investment/management company).

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OFFICERS OF THE TRUST

NAME (AGE), ADDRESS	POSITION(S) WITH THE TRUST	OFFICE TERM* AND LENGTH OF TIME SERVED	PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
Anthony J. Sciacca (44) 550 South Tryon Street Charlotte, NC 28202	President	Since 2013	Head of Babson Capital Strategic Investors (since 2014), Head of Global Business Development Group (since 2008), Managing Director (since 2006), Babson Capital.
Russell D. Morrison (49) 550 South Tryon Street Charlotte, NC 28202	Senior Vice President	Since 2013	Vice Chairman (since 2014), Member of the Board of Managers (since 2014), Head of Global Fixed Income Group (since 2012), Head of Global High Yield Investments Group (since 2010); Co-Head U.S. Loan Team (2006-2009), Managing Director (since 2002), Babson Capital; Chairman and Director (since 2015), Babson Capital Management (UK) Limited (investment advisory firm); Chairman and Director (since 2015), Babson Capital Global Advisors Limited (investment advisory firm); President (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital).
Patrick Hoefling (34) 550 South Tryon Street Charlotte, NC 28202	Chief Financial Officer	Since 2013	Treasurer (since 2015), Managing Director (since 2015), Director (2008-2015), Babson Capital; Chief Financial Officer (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital); Manager (2005-2008), Deloitte and Touche.
Andrew Lennon (39) 550 South Tryon Street Charlotte, NC 28202	Treasurer	Since 2013	Managing Director (since 2010), Director (2005-2009), Babson Capital; Treasurer (since 2013), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital).
Paul J. Thompson (42) 550 South Tryon Street Charlotte, NC 28202	Vice President	Since 2013	Chief Financial Officer (since 2015), Chief Operating Officer and Head of Global Investment Services (since 2010), Head of Operations and Portfolio/Client Services (2002-2010), Managing Director (since 2008), Babson Capital.
Paul Gehrig (46) 550 South Tryon Street Charlotte, NC 28202	Vice President	Since 2013	Managing Director (since 2008), Babson Capital.
Brian W. Pope (35) 550 South Tryon Street Charlotte, NC 28202	Vice President	Since 2013	Director (since 2009), Babson Capital
Duncan Robertson (46) 550 South Tryon Street Charlotte, NC 28202	Vice President	Since 2014	Managing Director (since 2008), Babson Capital.

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OFFICERS OF THE TRUST (CONTINUED)

NAME (AGE), ADDRESS	POSITION(S) WITH THE TRUST	OFFICE TERM* AND LENGTH OF TIME SERVED	PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
Melissa LaGrant (42) 550 South Tryon Street Charlotte, NC 28202	Chief Compliance Officer	Since 2013	Managing Director (since 2005), Babson Capital; Chief Compliance Officer (since 2013), Babson Capital Finance LLC; Chief Compliance Officer (since 2006), Babson Capital Corporate Investors and Babson Capital Participation Investors (closed-end investment companies advised by Babson Capital); Chief Compliance Officer (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital).
Janice M. Bishop (49) 550 South Tryon Street Charlotte, NC 28202	Secretary and Chief Legal Officer	Since 2013	Senior Counsel and Managing Director (since 2014), Counsel (2007-2014), Babson Capital; Associate Secretary (since 2008), Babson Capital Corporate Investors and Babson Capital Participation Investors (closed-end investment companies advised by Babson Capital); Secretary and Chief Legal Officer (since 2012), Babson Capital Global Short Duration High Yield Fund (closed-end investment company advised by Babson Capital).
Michelle Manha (41) 550 South Tryon Street Charlotte, NC 28202	Assistant Secretary	Since 2013	Associate General Counsel and Managing Director (since 2014), Counsel (2008-2014), Babson Capital; Assistant Secretary (since 2012), Babson Capital Global Short Duration High Yield Fund, (closed-end investment company advised by Babson Capital).

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JOINT PRIVACY NOTICE OF BABSON CAPITAL MANAGEMENT LLC AND

BABSON CAPITAL FUNDS TRUST

This privacy notice is being provided by the following entities: Babson Capital Management LLC; Babson Capital Securities LLC; Babson Capital Management (Japan) KK; Babson Capital Cornerstone Asia Ltd.; Babson Capital Funds Trust; Babson Capital Global Short Duration High Yield Fund; Babson Capital Corporate Investors and Babson Capital Participation Investors (together, for purposes of this privacy notice, “Babson Capital”).

When you use Babson Capital you entrust us not only with your hard-earned assets but also with your personal and financial data. We consider your data to be private and confidential, and protecting its confidentiality is important to us. Our policies and procedures regarding your personal information are summarized below.

We may collect non-public personal information about you from:

n Applications or other forms, interviews, or by other means;

n Consumer or other reporting agencies, government agencies, employers or others;

n Your transactions with us, our affiliates, or others; and

n Our Internet website.

We may share the financial information we collect with our financial service affiliates, such as insurance companies, investment companies and securities broker-dealers. Additionally, so that we may continue to offer you products and services that best meet your investment needs and to effect transactions that you request or authorize, we may disclose the information we collect, as described above, to companies that perform administrative or marketing services on our behalf, such as transfer agents, custodian banks, service providers or printers and mailers that assist us in the distribution of investor materials or that provide operational support to Babson Capital. These companies are required to protect this information and will use this information only for the services for which we hire them, and are not permitted to use or share this information for any other purpose. Some of these companies may perform such services in jurisdictions other than the United States. We may share some or all of the information we collect with other financial institutions with whom we jointly market products. This may be done only if it is permitted by the state in which you live. Some disclosures may be limited to your name, contact and transaction information with us or our affiliates.

Any disclosures will be only to the extent permitted by federal and state law. Certain disclosures may require us to get an “opt-in” or “opt-out” from you. If this is required, we will do so before information is shared. Otherwise, we do not share any personal information about our customers or former customers unless authorized by the customer or as permitted by law.

We restrict access to personal information about you to those employees who need to know that information to provide products and services to you. We maintain physical, electronic and procedural safeguards that comply with legal standards to guard your personal information. As an added measure, we do not include personal or account information in non-secure e-mails that we send you via the Internet without your prior consent. We advise you not to send such information to us in non-secure e-mails.

This notice describes the privacy policies of Babson Capital, and applies to all accounts you presently have, or may open in the future, with Babson Capital using your social security number or federal taxpayer identification number. As mandated by various regulators, including rules issued by the Securities and Exchange Commission, we will be sending you this notice annually, as long as you remain a customer of Babson Capital.

Babson Capital Securities LLC is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Investors may obtain information about SIPC including the SIPC brochure by contacting SIPC online at www.sipc.org or calling (202) 371-8300. Investors may obtain information about FINRA including the FINRA Investor Brochure by contacting FINRA online at www.finra.org or by calling (800) 289-9999.

June 2015

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ANNUAL REPORT

June 30, 2015

Item 2. Code of Ethics.

The Registrant adopted a Code of Ethics for Principal Executive and Senior Financial Officers (the “Code”) on July 29, 2013, which is available on the Registrant’s website at www.babsoncapital.com/funds/mutual-funds. During the period covered by this Form N-CSR, there were no amendments to, or waivers from, the Code.

Item 3. Audit Committee Financial Expert.

The Registrant’s Board of Trustees has determined that Dr. Bernard A. Harris, Jr., Mr. Thomas W. Okel and Mr. Martin A. Sumichrast, constituting all the members of the Registrant’s Audit Committee, are audit committee financial experts. Dr. Harris, Mr. Okel and Mr. Sumichrast are “independent” for purposes of this Item 3 as required by applicable regulation.

Item 4. Principal Accountant Fees and Services.

The Registrant has engaged its principal accountant, Deloitte & Touche LLP (“Deloitte”), to perform audit services, audit-related services, tax services and other services. The following tables detail the aggregate fees billed or expected to be billed for each of the last two fiscal years by Deloitte.

Fees Billed to the Registrant:

	Year Ended June 30, 2015		Year Ended June 30, 2014
Audit Fees	$	130,850	$	123,750
Audit-Related Fees	$	0	$	0
Tax Fees	$	54,000	$	18,000
All Other Fees	$	0	$	0
Total Fees	$	184,850	$	141,750

Non-Audit Fees Billed to Babson Capital and MassMutual:

	Year Ended June 30, 2015		Year Ended June 30, 2014
Audit Fees	$	3,396,868	$	2,982,385
Audit-Related Fees	$	0	$	0
Tax Fees	$	1,687,113	$	1,994,907
All Other Fees	$	2,031,819	$	4,880,709
Total Fees	$	7,115,800	$	9,858,001

The category “Audit Fees” refers to performing an audit of the Registrant’s, Babson Capital Management LLC’s (“Babson Capital”) or Massachusetts Mutual Life Insurance Company’s (“MassMutual”) annual financial statements or services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements. The category “Audit-Related Fees” reflects fees billed by Deloitte for various non-audit and non-tax services rendered to the Registrant, Babson Capital, and MassMutual. Preparation of Federal, state and local income tax and tax compliance work are representative of the fees reported in the “Tax Fees” category. The category “All Other Fees” represents fees billed by Deloitte for consulting rendered to the Registrant, Babson Capital, and MassMutual.

The Sarbanes-Oxley Act of 2002 and its implementing regulations allow the Registrant’s Audit Committee to establish a pre-approval policy for certain services rendered by the Registrant’s principal accountant, Deloitte. During the fiscal year ended June 30, 2015, the Registrant’s Audit Committee approved all of the services rendered to the Registrant by Deloitte and did not rely on such a pre-approval policy for any such services.

The Audit Committee has also reviewed the aggregate fees billed for professional services rendered by Deloitte for the years ended June 30, 2014 and June 30, 2015 for the Registrant and for the non-audit services provided to Babson Capital, and Babson Capital’s parent, MassMutual. As part of this review, the Audit Committee considered whether the provision of such non-audit services was compatible with maintaining the principal accountant’s independence.

The June 30, 2014 fees billed represent final 2014 amounts, which may differ from the preliminary figures available as of the filing date of the Registrant’s 2014 Annual Form N-CSR and includes, among other things, fees for services that may not have been billed as of the filing date of the Registrant’s 2014 Annual Form N-CSR, but are now properly included in the June 30, 2014 fees billed to the Registrant, Babson Capital and MassMutual.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

(a) The Registrant’s Consolidated Schedule of Investments as of the close of the reporting period is included in the Report to Stockholders filed under Item 1 of this form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Investment Management 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 have been no material changes to procedures by which the shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a) The Registrant’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”), are effective as of the date within 90 days of the filing date of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)	The Registrant has posted its Code of Ethics on its website at www.babsoncapital.com/funds/mutual-funds.
(a)(2)	Certifications pursuant to Rule 30a-2(a) under the 1940 Act are attached hereto.
	Exhibit 99.1 Cert
	Exhibit 99.2 Cert
(a)(3)	Not applicable.
(b)	Certification pursuant to Rule 30a-2(b) under the 1940 Act is attached hereto.
	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.

(Registrant) Babson Capital Funds Trust

By (Signature and Title)	/s/ Anthony J. Sciacca
	Anthony J. Sciacca, President (Principal Executive Officer)

Date  September 4, 2015

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 (Signature and Title)	/s/ Anthony J. Sciacca
	Anthony J. Sciacca, President (Principal Executive Officer)

Date  September 4, 2015

By (Signature and Title)	/s/ Patrick Hoefling
	Patrick Hoefling, Chief Financial Officer (Principal Financial Officer)

Date  September 4, 2015