================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08727
SunAmerica Senior Floating Rate Fund, Inc.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311
------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5, 185 Hudson Street, Suite 3300
Jersey City, NJ 07311
-------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
Date of fiscal year end: December 31
Date of reporting period: June 30, 2018
================================================================================
Item 1. Reports to Stockholders
SEMI-ANNUAL REPORT 2018
AIG
Senior Floating
Rate Fund
[GRAPHIC]
[LOGO]
aig.com/funds
Table of Contents
SHAREHOLDERS' LETTER................................ 2
EXPENSE EXAMPLE..................................... 4
STATEMENT OF ASSETS AND LIABILITIES................. 6
STATEMENT OF OPERATIONS............................. 7
STATEMENT OF CHANGES IN NET ASSETS.................. 8
FINANCIAL HIGHLIGHTS................................ 9
PORTFOLIO OF INVESTMENTS............................ 10
NOTES TO FINANCIAL STATEMENTS....................... 23
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY
AGREEMENTS.......................................... 38
June 30, 2018 SEMI-ANNUAL REPORT
Shareholders' Letter -- (unaudited)
Dear Shareholders,
We are pleased to present this semi-annual report for the AIG Senior Floating
Rate Fund (the "Fund") for the six-month period ended June 30, 2018.
Overall, fixed income markets struggled during the semi-annual period.
Sovereign yields outside of Europe moved higher, driven by continued global
economic growth momentum and rising inflation expectations. Government bonds
enjoyed short-lived periods of strength amid escalating tensions between the
U.S. and its trade partners, as well as bouts of elevated political uncertainty
in Europe. Most non-government bond sectors underperformed government bonds for
the semi-annual period overall. Credit spreads widened on a pickup in equity
market volatility, lower demand as U.S. firms repatriated overseas funds,
higher currency hedging costs, concerns about increased leverage, and heavy
supply from an increase in mergers and acquisitions. The notable exception was
high yield corporate bonds, which posted positive returns on continued demand
for income and a scarcity of supply. The U.S. dollar came under pressure amid
protectionist rhetoric during the first calendar quarter but then rallied
versus most currencies during the second quarter of 2018 as strong U.S.
economic data reinforced expectations that U.S. policy rates were likely to
continue to move higher.
The U.S. Federal Reserve (the "Fed") raised interest rates in March and June
2018, as expected, and forecasted two additional rate increases later in 2018.
The Fed upgraded its economic growth and employment projections and shifted
inflation expectations higher. Elsewhere, global monetary policies diverged.
The European Central Bank announced its quantitative easing program would end
in December 2018 but pledged to keep policy rates unchanged at least through
the summer of 2019. The People's Bank of China unexpectedly cut its reserve
requirement ratio for most banks to free up lending for small businesses. The
Bank of England maintained its policy rate and asset purchase program after
economic growth in the U.K. fell shy of its forecasts. The Bank of Japan pushed
back against speculation it would unwind stimulus by pledging "unlimited"
purchases of government bonds to maintain its zero-interest rate policy.
Amid this backdrop, floating rate loans, as represented by the S&P/LSTA
Leveraged Loan Index,/*/ returned 2.16% during the semi-annual period ended
June 30, 2018, significantly outperforming the broad U.S. fixed income market.
The Bloomberg Barclays U.S. Aggregate Bond Index/*/ returned -1.62% for the
same time period.
During the semi-annual period, lower quality loans outperformed. The sector's
overall credit fundamentals remained stable -- elevated interest coverage
helped to mitigate higher leverage -- and bank loan valuations appeared
attractive, in our view. Bank loan mutual funds experienced inflows of $11.9
billion during the semi-annual period./**/ Gross U.S. collateralized loan
obligation (CLO) volume, one of the main sources of demand for bank loans,
totaled $64 billion for the six-month period.+ The trailing 12-month loan
default rate, examined by principal amount, was 1.99% at the end of the
semi-annual period, as compared to 1.84% at the end of 2017 and 1.49% at the
end of 2016, but still below historical averages.++
On the following pages, you will find financial statements and portfolio
information for the Fund for the semi-annual period ended June 30, 2018.
2
June 30, 2018 SEMI-ANNUAL REPORT
Shareholders' Letter -- (unaudited) (continued)
As always, we remain diligent in the management of your assets. We value your
ongoing confidence in us and look forward to serving your investment needs in
the future.
Sincerely,
THE AIG SENIOR FLOATING RATE FUND PORTFOLIO MANAGER
Jeffrey W. Heuer
Wellington Management Company LLP
--------
Past performance is no guarantee of future results.
* The S&P/LSTA Leveraged Loan Index (LLI) reflects the market-weighted
performance of U.S. dollar-denominated institutional leveraged loans. The
LLI is the only domestic leveraged loan index that utilizes real-time market
weightings, spreads and interest payments. The Bloomberg Barclays U.S.
Aggregate Bond Index represents securities that are U.S. domestic, taxable
and dollar denominated. The index covers components for government and
corporate securities, mortgage pass-through securities and asset-backed
securities. Indices are not managed and an investor cannot invest directly
into an index.
** Source: Lipper, Inc.
+ Source: S&P Leveraged Commentary & Data
++ Source: JP Morgan
The Fund is not a money market fund and its net asset value may fluctuate.
Investments in loans involve certain risks including nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of an active trading market, in certain cases, which
may impair the Fund's ability to obtain full value for loans sold. The Fund may
invest all or substantially all of its assets in loans or other securities
(e.g., unsecured loans or high yield securities) that are rated below
investment grade, or in comparable unrated securities. Credit risks include the
possibility of a default on the loan or bankruptcy of the borrower. The value
of these loans is subject to a greater degree of volatility in response to
interest rate fluctuations.
3
SunAmerica Senior Floating Rate Fund, Inc.
EXPENSE EXAMPLE -- June 30, 2018 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of the AIG Senior Floating Rate Fund (the "Fund"), you may
incur two types of costs: (1) transaction costs, including sales charges on
purchase payments and contingent deferred sales charges and (2) ongoing costs,
including management fees, distribution and account maintenance fees, and other
Fund expenses. The example set forth below is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these
costs with the ongoing costs of investing in other mutual funds. The Example is
based on an investment of $1,000 invested at January 1, 2018 and held until
June 30, 2018.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended June 30, 2018" to estimate the expenses you paid on your account
during this period. The "Expenses Paid During the Six Months Ended June 30,
2018" column and the "Annualized Expense Ratio" column do not include small
account fees that may be charged if your account balance is below $500 ($250
for retirement plan accounts). In addition, the "Expenses Paid During the Six
Months Ended June 30, 2018" column and the "Annualized Expense Ratio" column do
not include administrative or other fees that may apply to qualified retirement
plan accounts and accounts held through financial institutions. See the Fund's
prospectus, your retirement plan documents and/or materials from your financial
adviser, for a full description of these fees. Had these fees been included,
the "Expenses Paid During the Six Months Ended June 30, 2018" column would have
been higher and the "Ending Account Value" column would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an annual rate of return of 5% before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in this Fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds. The "Expenses Paid During the Six Months Ended June 30, 2018"
column and the "Annualized Expense Ratio" column do not include small account
fees that may be charged if your account balance is below $500 ($250 for
retirement plan accounts). In addition, the "Expenses Paid During the Six
Months Ended June 30, 2018" column and the "Annualized Expense Ratio" column do
not include administrative or other fees that may apply to qualified retirement
plan accounts and accounts held through financial institutions. See the Fund's
prospectus, your retirement plan document and/or materials from your financial
adviser for full description of these fees. Had these fees been included, the
"Expenses Paid During the Six Months Ended June 30, 2018" column would have
been higher and the "Ending Account Value" column would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges and
administrative fees, if applicable to your account. Please refer to the Fund's
prospectus, qualified retirement plan document and/or materials from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only and will not help you determine the
relative total costs of owning different funds. In addition, if these
transaction costs and other fees were included, your costs would have been
higher.
4
SunAmerica Senior Floating Rate Fund, Inc.
EXPENSE EXAMPLE -- June 30, 2018 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------------- -----------------------------------------------------
Ending Ending Account
Account Value Expenses Paid Value Using Expenses Paid
Beginning Using Actual During the Beginning a Hypothetical 5% During the Annualized
Account Value Return at Six Months Ended Account Value Annual Return at Six Months Ended Expense
at January 1, 2018 June 30, 2018 June 30, 2018* at January 1, 2018 June 30, 2018 June 30, 2018* Ratio*
------------------ ------------- ---------------- ------------------ ----------------- ---------------- ----------
AIG Senior Floating Rate Fund#
Class A.. $1,000.00 $1,016.62 $6.70 $1,000.00 $1,018.15 $6.71 1.34%
Class C.. $1,000.00 $1,014.96 $8.44 $1,000.00 $1,016.41 $8.45 1.69%
Class W.. $1,000.00 $1,017.64 $5.70 $1,000.00 $1,019.14 $5.71 1.14%
--------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 181 days then divided
by 365 days (to reflect the one-half year period). These ratios do not
reflect transaction costs, including sales charges on purchase payments,
contingent deferred sales charges, small account fees and administrative
fees, if applicable to your account. Please refer to your Prospectus, your
qualified retirement plan document and/or materials from your financial
advisor for more information.
# During the stated period, the investment adviser either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Fund. As
a result, if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended June 30,
2018" and the "Annualized Expense Ratio" would have been higher.
5
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- June 30, 2018 -- (unaudited)
AIG
Senior
Floating Rate
Fund
-------------
ASSETS:
Investments at value (unaffiliated)*................................................................ $240,220,484
Repurchase agreements (cost approximates value)..................................................... 1,300,000
Cash................................................................................................ 1,000
Foreign cash*....................................................................................... 322,868
Receivable for:.....................................................................................
Fund shares sold.................................................................................. 852,453
Dividends and interest............................................................................ 1,406,962
Investments sold.................................................................................. 524,899
Investments sold on an extended settlement basis.................................................. 6,232,407
Receipts on swap contracts........................................................................ 1,667
Prepaid expenses and other assets................................................................... 7,599
Due from investment adviser for expense reimbursements/fee waivers.................................. 180,519
Swap premiums paid.................................................................................. 119,760
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Total assets...................................................................................... 251,170,618
------------
LIABILITIES:
Payable for:
Fund shares redeemed.............................................................................. 467,623
Investments purchased............................................................................. 1,068,550
Investments purchased on an extended settlement basis............................................. 11,752,379
Investment advisory and management fees........................................................... 165,120
Distribution and service maintenance fees......................................................... 98,344
Administration fees............................................................................... 60,247
Transfer agent fees and expenses.................................................................. 48,285
Directors' fees and expenses...................................................................... 1,208
Other accrued expenses............................................................................ 198,655
Dividends payable................................................................................... 105,126
Commitments (Note 10)............................................................................... 628,646
Due to Broker....................................................................................... 3,369
Unrealized depreciation on forward foreign currency contracts....................................... 26,316
Unrealized depreciation on swap contracts........................................................... 3,094
------------
Total liabilities................................................................................. 14,626,962
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Net Assets....................................................................................... $236,543,656
============
NET ASSETS REPRESENTED BY:
Common stock, $001 par value........................................................................ $ 293,025
Additional paid-in capital.......................................................................... 265,185,032
------------
265,478,057
Accumulated undistributed net investment income (loss).............................................. (4,638)
Accumulated undistributed net realized gain (loss) on investments and foreign exchange transactions. (24,396,600)
Unrealized appreciation (depreciation) on investments............................................... (4,511,985)
Unrealized appreciation on swap contracts........................................................... (3,094)
Unrealized foreign exchange gain (loss) on other assets and liabilities............................. (18,084)
------------
Net Assets....................................................................................... $236,543,656
============
Class A:
Net assets.......................................................................................... $113,713,818
Shares outstanding.................................................................................. 14,084,738
Net asset value and redemption price per share...................................................... 8.07
Maximum sales charge (3.75% of offering price)...................................................... 0.31
------------
Maximum offering price to public.................................................................... $ 8.38
============
Class C:
Net assets.......................................................................................... $101,713,407
Shares outstanding.................................................................................. 12,606,099
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charges)....................................... $ 8.07
============
Class W:
Net assets.......................................................................................... $ 21,116,431
Shares outstanding.................................................................................. 2,611,635
Net asset value, offering and redemption price per share............................................ $ 8.09
============
*Cost
Investments securities (unaffiliated)............................................................. $244,732,469
============
Foreign cash...................................................................................... $ 322,840
============
See Notes to Financial Statements
6
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF OPERATIONS -- For the six months ended June 30, 2018 --
(unaudited)
AIG
Senior
Floating Rate
Fund
-------------
INVESTMENT INCOME:
Interest (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... $ 6,004,983
Dividends (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 20,658
Facility and other fee income (Note 2).................................................................... 197,078
-------------
Total investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............... 6,222,719
-------------
EXPENSES:
Investment advisory and management fees . . . . . . . . . . . . . . . . . . . . .......................... 1,013,897
Administrative fees....................................................................................... 238,564
Distribution and account maintenance fees:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 177,272
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 438,551
Service fees:
Class W . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 14,522
Transfer agent fees and expenses:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 118,031
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 133,999
Class W . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 21,425
Registration fees:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 17,050
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 17,031
Class W . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 13,704
Accounting service fees................................................................................... 9,240
Custodian and accounting fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................ 40,635
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............ 76,484
Audit and tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 50,960
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 22,421
Directors' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............. 39,615
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... --
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 18,183
-------------
Total expenses before fee waivers and expense reimbursements........................................... 2,461,584
Fees waived and expenses reimbursed by the investment adviser (Note 5)................................. (677,173)
-------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ 1,784,411
-------------
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 4,438,308
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated).............................................................................. (1,428,160)
Forward contracts....................................................................................... 280,657
Swap contracts.......................................................................................... 32,854
Net realized foreign exchange gain (loss) on other assets and liabilities . . . . . . . . . . . . . . . .. (46,122)
-------------
Net realized gain (loss) on investments and foreign currencies . . . . . . . ............................. (1,160,771)
-------------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated).............................................................................. 522,903
Forward contracts....................................................................................... 23,905
Swap contracts.......................................................................................... (3,094)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities......................... 41,602
-------------
Net unrealized gain (loss) on investments and foreign currencies.......................................... 585,316
-------------
Net realized and unrealized gain (loss) on investments and foreign currencies............................. (575,455)
-------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................................... $ 3,862,853
=============
See Notes to Financial Statements.
7
SunAmerica Senior Floating Rate Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
AIG
Senior Floating
Rate Fund
--------------------------------
For the
six months
ended For the year
June 30, ended
2018 December 31,
(unaudited) 2017
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss).......................................................... $ 4,438,308 $ 9,603,218
Net realized gain (loss) on investments and foreign currencies........................ (1,160,771) (2,626,477)
Net unrealized gain (loss) on investments and foreign currencies...................... 585,316 3,842,840
--------------- ---------------
Net increase (decrease) in net assets resulting from operations......................... 3,862,853 10,819,581
--------------- ---------------
Distributions to shareholders from:
Net investment income (Class A)....................................................... (1,989,110) (4,380,612)
Net investment income (Class C)....................................................... (2,021,740) (4,997,645)
Net investment income (Class W)....................................................... (394,279) (251,108)
--------------- ---------------
Total distributions to shareholders..................................................... (4,405,129) (9,629,365)
--------------- ---------------
Net increase (decrease) in net assets resulting from capital share transactions (Note3). (11,951,904) (39,480,646)
--------------- ---------------
Total increase (decrease) in net assets................................................. (12,494,180) (38,290,430)
NET ASSETS:
Beginning of period..................................................................... 249,037,836 287,328,266
--------------- ---------------
End of period+.......................................................................... $ 236,543,656 $ 249,037,836
=============== ===============
+Includes accumulated undistributed net investment income (loss)........................ $ (4,638) $ (37,817)
=============== ===============
--------
+ See Note 1
See Notes to Financial Statements
8
SunAmerica Senior Floating Rate Fund, Inc.
FINANCIAL HIGHLIGHTS
AIG Senior Floating Rate Fund
-----------------------------
Net gain
(loss) on
Net investments Dividends Net Net Ratio of
Asset (both Dividends from net Asset Assets, expenses
Value, Net realized Total from from net realized Total Value, end of to average
Period beginning investment and investment investment gains on Distri- end of Total period net
Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) assets(3)
------------ --------- ---------- ----------- ---------- ---------- ----------- ------- ------ --------- -------- ----------
Class A
-------
12/31/13 $8.26 $0.33 $ 0.08 $ 0.41 $(0.33) $ -- $(0.33) $8.34 5.08% $195,309 1.45%
12/31/14 8.34 0.31 (0.29) 0.02 (0.31) -- (0.31) 8.05 0.20 150,966 1.45
12/31/15 8.05 0.33 (0.44) (0.11) (0.33) -- (0.33) 7.61 (1.42) 114,375 1.45
12/31/16 7.61 0.31 0.44 0.75 (0.30) -- (0.30) 8.06 10.08 131,640 1.45
12/31/17 8.06 0.30 0.03 0.33 (0.30) -- (0.30) 8.09 4.14 93,346 1.45
06/30/18(5) 8.09 0.15 (0.01) 0.14 (0.16) -- (0.16) 8.07 1.66 113,714 1.34(4)
Class C
-------
12/31/13 $8.25 $0.30 $ 0.10 $ 0.40 $(0.31) $ -- $(0.31) $8.34 4.89% $241,976 1.75%
12/31/14 8.34 0.29 (0.30) (0.01) (0.28) -- (0.28) 8.05 (0.10) 217,174 1.75
12/31/15 8.05 0.31 (0.45) (0.14) (0.31) -- (0.31) 7.60 (1.85) 172,236 1.75
12/31/16 7.60 0.29 0.44 0.73 (0.28) -- (0.28) 8.05 9.76 155,688 1.75
12/31/17 8.05 0.28 0.03 0.31 (0.27) -- (0.27) 8.09 3.96 135,902 1.75
06/30/18(5) 8.09 0.15 (0.03) 0.12 (0.14) -- (0.14) 8.07 1.50 101,713 1.69(4)
Class W
-------
04/20/17 @ -
12/31/17 $8.11 $0.25 $(0.03) $ 0.22 $(0.22) $ -- $(0.22) $8.11 2.69% $ 19,790 1.25%(4)
06/30/18(5) 8.11 0.16 (0.02) 0.14 (0.16) -- (0.16) 8.09 1.76 21,116 1.14(4)
Ratio of
net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
3.98% 84%
3.73 65
4.14 48
3.95 60
3.69 68
3.85(4) 25
3.68% 84%
3.44 65
3.84 48
3.68 60
3.38 68
3.55(4) 25
3.72%(4) 68%
4.08(4) 25
--------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3)Net of the following expense waivers and/or reimbursements, if applicable
(based on average daily net assets) (see Note 5):
12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 06/30/18(4)(5)
-------- -------- -------- -------- -------- --------------
Class A............. 0.34% 0.32% 0.34% 0.33% 0.38% 0.54%
Class C............. 0.43 0.41 0.44 0.42 0.48 0.58
Class W............. -- -- -- -- 0.50(4) 0.64
(4)Annualized
(5)Unaudited
@ Inception date of class.
See Notes to Financial Statements
9
AIG Senior Floating Rate Fund
PORTFOLIO PROFILE -- June 30, 2018 -- (unaudited)
Industry Allocation*
Media....................................................... 8.0%
Hotels, Restaurants & Leisure............................... 8.0
Health Care Providers & Services............................ 6.9
IT Services................................................. 6.1
Machinery................................................... 5.6
Software.................................................... 5.4
Oil, Gas & Consumable Fuels................................. 5.4
Containers & Packaging...................................... 5.2
Insurance................................................... 4.1
Chemicals................................................... 3.3
Food Products............................................... 3.2
Specialty Retail............................................ 3.0
Commercial Services & Supplies.............................. 2.7
Construction & Engineering.................................. 2.5
Trading Companies & Distributors............................ 2.3
Consumer Finance............................................ 2.0
Capital Markets............................................. 2.0
Pharmaceuticals............................................. 1.9
Health Care Equipment & Supplies............................ 1.8
Diversified Telecommunication Services...................... 1.7
Personal Products........................................... 1.5
Metals & Mining............................................. 1.4
Electronic Equipment, Instruments & Components.............. 1.3
Internet & Direct Marketing Retail.......................... 1.3
Building Products........................................... 1.3
Food & Staples Retailing.................................... 1.0
Diversified Financial Services.............................. 1.0
Real Estate Investment Trusts............................... 1.0
Wireless Telecommunication Services......................... 0.9
Internet Software & Services................................ 0.8
Industrial Conglomerates.................................... 0.8
Household Products.......................................... 0.8
Electric Utilities.......................................... 0.7
Road & Rail................................................. 0.7
Life Sciences Tools & Services.............................. 0.7
Aerospace & Defense......................................... 0.7
Banks....................................................... 0.7
Semiconductors & Semiconductor Equipment.................... 0.7
Leisure Equipment & Products................................ 0.7
Construction Materials...................................... 0.6
Professional Services....................................... 0.4
Energy Equipment & Services................................. 0.4
Real Estate Management & Development........................ 0.3
Household Durables.......................................... 0.3
Multiline Retail............................................ 0.3
Electrical Equipment........................................ 0.3
Diversified Consumer Services............................... 0.2
Water Utilities............................................. 0.2
Multi Utilities............................................. 0.0
-----
102.1%
=====
Credit Quality+#
Baa3........................................................ 1.5%
Baa2........................................................ 0.4
Ba3......................................................... 17.1
Ba2......................................................... 16.0
Ba1......................................................... 3.1
B3.......................................................... 9.0
B2.......................................................... 17.8
B1.......................................................... 25.1
Caa3........................................................ 0.1
Caa2........................................................ 4.1
Caa1........................................................ 4.5
Not Rated@.................................................. 1.3
-----
100.0%
=====
--------
* Calculated as a percentage of net assets.
@ Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
+ Source: Moody's
# Calculated as a percentage of total debt issues, excluding short-term
securities.
10
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited)
Ratings /(1)/
------------
Interest Reference Maturity Principal
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount**
------------------------------------------------------------------------------------------------------------------------
LOANS /(3) (4)/ -- 94.1%
Aerospace & Defense -- 0.7%
TransDigm Group, Inc..................... BTL-F Ba2 B+ 4.59% 1 ML+2.50% 06/09/2023 $ 1,135,359
TransDigm Group, Inc..................... BTL-E Ba2 B+ 4.59 1 ML+2.50% 05/30/2025 453,863
Building Products -- 1.2%
Summit Materials LLC..................... BTL-B Ba2 BBB- 4.10 1 ML+2.00% 11/21/2024 905,450
Wilsonart LLC............................ BTL-D B2 B+ 5.59 3 ML+3.25% 12/19/2023 2,017,495
Capital Markets -- 2.0%
AlixPartners LLP......................... BTL-B B2 B+ 4.84 3 ML+2.75% 04/04/2024 1,693,562
Fortress Investment Group LLC............ BTL-B Baa3 BB 4.09 1 ML+2.00% 12/27/2022 643,454
NFP Corp................................. BTL-B B2 B 5.09 1 ML+3.00% 01/08/2024 720,510
Russell Investments U.S. Institutional
Holdco, Inc............................. BTL-B Ba2 BB- 5.58 3 ML+3.25% 06/01/2023 1,617,000
Chemicals -- 3.3%
Allnex (Lux) & Cy SCA.................... BTL-B2 B1 B 5.57 3 ML+3.25% 09/13/2023 333,775
Allnex USA, Inc.......................... BTL-B3 B1 B 5.57 3 ML+3.25% 09/13/2023 251,474
CTC AcquiCo GmbH......................... BTL-B B2 B 3.00 3 ME+3.00% 03/07/2025 EUR 410,000
Chemours Co.............................. BTL-B Baa3 BBB- 3.85 1 ML+1.75% 04/03/2025 354,663
DuBois Chemicals, Inc.................... 1st Lien B1 B- 5.34 1 ML+3.25% 03/15/2024 988,517
Gates Global LLC......................... BTL-B B1 B+ 5.08 3 ML+2.75% 04/01/2024 506,940
H.B. Fuller Company...................... BTL-B Ba2 BB+ 4.08 1 ML+2.00% 10/20/2024 1,625,298
MacDermid, Inc........................... BTL-B6 B2 BB- 5.09 1 ML+3.00% 06/07/2023 502,087
Minerals Technologies, Inc............... BTL-B Ba2 BB+ 4.33-4.35 1 ML+2.25% 02/14/2024 667,311
Minerals Technologies, Inc............... BTL-B Ba2 BB+ 4.59 3 ML+2.25% 02/14/2024 225,824
Tronox Blocked Borrower LLC.............. BTL-B Ba3 BB- 5.09 3 ML+3.00% 09/22/2024 288,397
Tronox Finance LLC....................... BTL-B Ba3 BB- 5.09 1 ML+3.00% 09/22/2024 665,531
U.S. Coating Acquisition, Inc............ BTL-B3 Ba1 BBB- 4.08 3 ML+1.75% 06/01/2024 458,850
WR Grace & Co............................ BTL-B1 Ba1 BBB- 4.08 1 ML+1.75% 04/03/2025 186,053
WR Grace & Co............................ BTL-B2 Ba1 BBB- 4.08 3 ML+1.75% 04/03/2025 318,947
Commercial Services & Supplies -- 2.7%
ADS Waste Holdings, Inc.................. BTL-B3 Ba3 BB+ 4.23 1 WL+2.25% 11/10/2023 1,009,016
Brickman Group, Ltd...................... 1st Lien B2 B 5.09 1 ML+3.00% 12/18/2020 1,104,759
Brickman Group, Ltd...................... 1st Lien B2 B 7.00 USFRBPLR+2.00% 12/18/2020 270,574
Brickman Group, Ltd...................... 2nd Lien Caa1 CCC+ 8.59 1 ML+6.50% 12/17/2021 1,048,979
Clean Harbors, Inc....................... BTL-B Ba1 BBB- 3.84 1 ML+1.75% 06/27/2024 747,450
KAR Auction Services, Inc................ BTL-B5 Ba2 BB- 4.63 1 ML+2.50% 03/09/2023 435,050
PSAV Holdings LLC........................ 1st Lien B2 B 5.23-5.25 1 ML+3.25% 03/01/2025 867,825
PSAV Holdings LLC........................ 2nd Lien Caa2 CCC+ 9.34 1 ML+7.25% 09/01/2025 870,000
Construction & Engineering -- 2.1%
ATS Consolidated, Inc.................... 1st Lien B1 B 5.84 1 ML+3.75% 02/28/2025 364,087
ATS Consolidated, Inc.................... 2nd Lien Caa1 CCC+ 9.84 1 ML+7.75% 02/23/2026 225,000
Brand Energy & Infrastructure Services,
Inc..................................... BTL B3 B 6.58-6.61 3 ML+4.25% 06/21/2024 2,227,500
Gopher Sub, Inc.(7)...................... Delayed Draw B2 B 3.00 02/03/2025 26,582
Gopher Sub, Inc.......................... Delayed Draw B2 B 5.09 1 ML+3.00% 02/03/2025 10,509
Gopher Sub, Inc.......................... 1st Lien B2 B 5.09 1 ML+3.00% 02/03/2025 345,319
Gopher Sub, Inc.......................... 2nd Lien Caa2 CCC 9.08 3 ML+6.75% 02/02/2026 190,000
Ply Gem Industries, Inc.................. BTL-B B2 B 6.09 3 ML+3.75% 04/12/2025 835,000
Reece Ltd................................ BTL-B Ba1 BB+ TBD 07/02/2025 630,000
Value
Industry Description (Note 2)
------------------------------------------------------
LOANS /(3) (4)/ -- 94.1%
Aerospace & Defense -- 0.7%
TransDigm Group, Inc..................... $1,129,752
TransDigm Group, Inc..................... 451,431
----------
1,581,183
----------
Building Products -- 1.2%
Summit Materials LLC..................... 902,055
Wilsonart LLC............................ 2,011,442
----------
2,913,497
----------
Capital Markets -- 2.0%
AlixPartners LLP......................... 1,690,917
Fortress Investment Group LLC............ 643,319
NFP Corp................................. 715,106
Russell Investments U.S. Institutional
Holdco, Inc............................. 1,619,021
----------
4,668,363
----------
Chemicals -- 3.3%
Allnex (Lux) & Cy SCA.................... 332,106
Allnex USA, Inc.......................... 250,216
CTC AcquiCo GmbH......................... 472,556
Chemours Co.............................. 350,229
DuBois Chemicals, Inc.................... 984,810
Gates Global LLC......................... 506,306
H.B. Fuller Company...................... 1,612,601
MacDermid, Inc........................... 502,715
Minerals Technologies, Inc............... 671,482
Minerals Technologies, Inc............... 227,235
Tronox Blocked Borrower LLC.............. 288,157
Tronox Finance LLC....................... 664,977
U.S. Coating Acquisition, Inc............ 456,212
WR Grace & Co............................ 185,549
WR Grace & Co............................ 318,084
----------
7,823,235
----------
Commercial Services & Supplies -- 2.7%
ADS Waste Holdings, Inc.................. 1,005,454
Brickman Group, Ltd...................... 1,104,530
Brickman Group, Ltd...................... 270,517
Brickman Group, Ltd...................... 1,052,350
Clean Harbors, Inc....................... 744,647
KAR Auction Services, Inc................ 435,594
PSAV Holdings LLC........................ 858,062
PSAV Holdings LLC........................ 863,475
----------
6,334,629
----------
Construction & Engineering -- 2.1%
ATS Consolidated, Inc.................... 364,201
ATS Consolidated, Inc.................... 226,688
Brand Energy & Infrastructure Services,
Inc..................................... 2,228,765
Gopher Sub, Inc.(7)...................... 26,316
Gopher Sub, Inc.......................... 10,404
Gopher Sub, Inc.......................... 341,865
Gopher Sub, Inc.......................... 190,950
Ply Gem Industries, Inc.................. 833,173
Reece Ltd................................ 630,788
----------
4,853,150
----------
11
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount** (Note 2)
--------------------------------------------------------------------------------------------------------------------------------
Construction Materials -- 0.6%
Quikrete Holdings, Inc.............. 1st Lien B1 BB- 4.84% 1 ML+2.75% 11/15/2023 $ 1,403,846 $ 1,396,827
-----------
Consumer Finance -- 1.6%
Capital Automotive LP............... 2nd Lien B3 CCC+ 8.10 1 ML+6.00% 03/24/2025 447,501 449,599
GreenSky Holdings, Inc.............. BTL-B B1 B+ 5.38 1 ML+3.25% 03/29/2025 1,745,625 1,754,353
Vantiv LLC.......................... BTL-B4 Ba2 BBB- TBD 08/09/2024 1,072,313 1,068,459
Vantiv LLC.......................... BTL-B3 Ba2 BBB- 3.79 3 ML+1.75% 10/14/2023 609,808 607,807
-----------
3,880,218
-----------
Containers & Packaging -- 4.4%
Berry Plastics Holding Corp......... BTL-Q Ba2 BBB- 4.05-4.09 1 ML+2.00% 10/01/2022 2,373,202 2,368,752
Berlin Packaging LLC................ BTL-B B3 B 4.99-5.10 1 ML+3.00% 11/07/2025 317,975 315,931
Berlin Packaging LLC................ BTL-B B3 B 5.34 3 ML+3.00% 11/07/2025 37,025 36,787
Crown Holdings, Inc................. BTL-B Baa2 BB+ 4.31 3 ML+2.00% 04/03/2025 520,000 520,072
Crown Holdings, Inc................. BTL Baa2 BB+ 2.38 3 ME+2.38% 04/03/2025 EUR 390,000 453,355
Flex Acquisition Co., Inc........... 1st Lien B1 B 5.31 3 ML+3.00% 12/29/2023 1,534,500 1,527,923
Flex Acquisition Co., Inc........... BTL-B B1 B TBD 06/29/2025 500,000 500,000
Plastipak Holdings, Inc............. BTL-B Ba3 BB- 4.60 1 ML+2.50% 10/14/2024 630,238 625,707
ProAmpac PG Borrower LLC............ 1st Lien B3 B 5.50-5.58 1 ML+3.50% 11/18/2023 870,109 870,472
ProAmpac PG Borrower LLC............ 1st Lien B3 B 5.86 3 ML+3.50% 11/18/2023 169,702 169,773
ProAmpac PG Borrower LLC............ 1st Lien B3 B 7.50 USFRBPLR+2.50% 11/18/2023 2,646 2,647
ProAmpac PG Borrower LLC............ 2nd Lien Caa2 CCC+ 10.58 1 ML+8.50% 11/18/2024 385,000 389,331
Reynolds Group Holdings, Inc........ BTL B1 B+ 4.84 1 ML+2.75% 02/05/2023 2,588,986 2,583,234
-----------
10,363,984
-----------
Diversified Consumer Services -- 0.2%
Weight Watchers International, Inc.. BTL-B Ba2 BB- 6.76 1 ML+4.75% 11/29/2024 89,005 89,672
Weight Watchers International, Inc.. BTL-B Ba2 BB- 7.06 3 ML+4.75% 11/29/2024 442,370 445,688
-----------
535,360
-----------
Diversified Financial Services -- 1.0%
NAB Holdings LLC.................... BTL-B B2 B 5.33 3 ML+3.00% 07/01/2024 744,384 742,834
Nets Holding AS..................... BTL-B B1 B 3.25 3 ME+3.25% 02/06/2025 EUR 798,159 914,323
Trans Union LLC..................... BTL-B4 Ba2 BB+ TBD 06/19/2025 740,000 736,916
-----------
2,394,073
-----------
Diversified Telecommunication Services -- 1.7%
Lumos Networks Operating Company.... 1st Lien B2 B 5.09 1 ML+3.00% 11/15/2024 1,490,759 1,492,001
Numericable Group SA................ BTL-B12 B1 B 5.35 3 ML+3.00% 01/31/2026 1,501,744 1,473,117
Telenet Bidco NV.................... BTL-AN Ba3 BB- 4.32 1 ML+2.25% 08/15/2026 560,000 555,450
Zacapa SARL......................... BTL-B B2 B- TBD 07/03/2025 535,000 532,325
-----------
4,052,893
-----------
Electric Utilities -- 0.7%
Helix Gen Funding LLC............... BTL-B Ba2 BB 5.84 1 ML+3.75% 06/02/2024 1,211,720 1,212,098
Pike Corp........................... BTL-B B2 B 5.60 1 ML+3.50% 03/23/2025 477,455 478,307
-----------
1,690,405
-----------
Electronic Equipment, Instruments & Components -- 1.3%
Avantor, Inc........................ 1st Lien B2 B 6.09 1 ML+4.00% 11/21/2024 497,500 500,343
Immucor, Inc........................ BTL-B3 B1 B- 7.09 1 ML+5.00% 06/15/2021 986,461 997,251
Lifescan Global Corporation......... 1st Lien B2 B+ TBD 05/23/2025 1,000,000 968,750
Techem GmbH......................... BTL-B Ba3 BB- 3.00 3 ME+3.00% 10/02/2024 EUR 450,000 523,868
-----------
2,990,212
-----------
Energy Equipment & Services -- 0.4%
Paragon Offshore, Ltd.(5)(6)+....... Escrow Holding NR NR 6.00 07/18/2021 4,988 0
Seadrill Partners Finco LLC......... BTL-B Caa2 CCC+ 8.33 3 ML+6.00% 02/21/2021 932,675 834,161
-----------
834,161
-----------
12
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount** (Note 2)
----------------------------------------------------------------------------------------------------------------------------
Food & Staples Retailing -- 1.0%
Albertson's LLC.......................... BTL-B4 Ba2 BB- 4.84% 1 ML+2.75% 08/25/2021 $ 905,890 $ 895,699
SF CC Intermediate Holdings, Inc......... BTL-B Caa1 B 5.59 1 ML+3.50% 11/15/2022 575,000 560,625
U.S. Foods, Inc.......................... BTL-B Ba3 BBB- 4.59 1 ML+2.50% 06/27/2023 990,060 988,514
-----------
2,444,838
-----------
Food Products -- 3.2%
B&G Foods, Inc........................... BTL-B Ba2 BB+ 4.09 1 ML+2.00% 11/02/2022 384,959 384,478
CHG PPC Parent LLC....................... BTL-B B2 B 4.84 1 ML+2.75% 03/31/2025 430,000 426,775
Hearthside Food Solutions LLC............ 1st Lien NR B 5.09 1 ML+3.00% 05/23/2025 1,165,000 1,153,933
Hostess Brands LLC....................... BTL-B B1 BB- 4.34 1 ML+2.25% 08/03/2022 2,074,967 2,058,540
JBS USA LLC.............................. BTL-B Ba3 BB 4.83 3 ML+2.50% 10/30/2022 477,571 474,387
Pinnacle Operating Corp.(5).............. BTL-B2 Caa1 NR 9.34 1 ML+7.25% 11/15/2021 751,035 689,074
Post Holdings, Inc....................... BTL-B Ba2 BB- 4.10 1 ML+2.00% 05/24/2024 2,306,700 2,296,996
-----------
7,484,183
-----------
Health Care Equipment & Supplies -- 1.8%
Catalent Pharma Solutions, Inc........... BTL-B Ba3 BB 4.34 1 ML+2.25% 05/20/2024 1,140,696 1,138,557
Kinetic Concepts, Inc.................... BTL-B B1 B 5.58 3 ML+3.25% 02/02/2024 831,600 832,432
Ortho Clinical Diagnostics SA............ BTL-B B1 B- 5.34 3 ML+3.25% 06/30/2025 460,669 458,411
Sterigenics-Nordion Holdings LLC......... BTL-B B1 B 5.33 3 ML+3.00% 05/15/2022 1,853,089 1,858,495
-----------
4,287,895
-----------
Health Care Providers & Services -- 6.9%
Air Medical Group Holdings, Inc.......... BTL-B1 B1 B 5.28 1 ML+3.25% 04/28/2022 698,589 676,883
Air Medical Group Holdings, Inc.......... BTL-B2 B1 B 6.34 1 ML+4.25% 03/14/2025 296,131 291,985
Change Healthcare Holdings, Inc.......... BTL-B Ba3 B+ 4.84 1 ML+2.75% 03/01/2024 1,481,250 1,475,510
CHS/Community Health Systems, Inc........ BTL-H B3 B- 5.56 3 ML+3.25% 01/27/2021 489,494 477,154
Dental Corp. Perfect Smile ULC(7)........ Delayed Draw B2 B- TBD 06/06/2025 124,328 124,328
Dental Corp. Perfect Smile ULC........... 1st Lien B2 B- 5.76 1 ML+3.75% 06/06/2025 497,310 497,310
DuPage Medical Group, Ltd................ 1st Lien B1 B 4.84 1 ML+2.75% 08/15/2024 914,416 906,415
DuPage Medical Group, Ltd................ 2nd Lien Caa1 CCC+ 9.09 1 ML+7.00% 08/15/2025 748,968 748,968
Envision Healthcare Corp................. BTL-B Ba2 BB- 5.10 1 ML+3.00% 12/01/2023 568,902 567,836
Genoa, a QoL Healthcare Co. LLC.......... 1st Lien B1 B 5.35 1 ML+3.25% 10/28/2023 923,620 922,466
Genoa, a QoL Healthcare Co. LLC(5)....... 2nd Lien Caa1 CCC+ 10.09 1 ML+8.00% 10/25/2024 500,000 503,750
Gentiva Health Services, Inc............. 1st Lien B1 B TBD 07/02/2025 498,541 498,541
Gentiva Health Services, Inc.(7)......... Delayed Draw B1 B TBD 07/02/2025 311,589 311,589
Gentiva Health Services, Inc............. 2nd Lien Caa1 CCC+ TBD 07/02/2026 145,000 143,550
Healogics, Inc........................... 1st Lien B3 B- 6.57 3 ML+4.25% 07/01/2021 972,800 894,976
MPH Acquisition Holdings LLC............. BTL-B B1 B+ 5.08 3 ML+2.75% 06/07/2023 2,495,043 2,480,228
NVA Holdings, Inc........................ BTL-B3 B1 B 4.84 1 ML+2.75% 02/02/2025 99,750 99,168
Opal Acquisition, Inc.................... BTL-B B2 CCC+ 7.32 1 ML+5.25% 11/25/2022 469,770 449,805
Pharmaceutical Product Development, Inc.. BTL-B Ba3 B 4.59 3 ML+2.50% 08/18/2022 2,644,516 2,626,152
Surgery Center Holdings, Inc............. 1st Lien B1 B 5.35 2 ML+3.25% 09/02/2024 545,875 544,510
U.S. Renal Care, Inc..................... BTL-B B2 B 6.55 3 ML+4.25% 12/31/2022 998,525 986,543
-----------
16,227,667
-----------
13
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount** (Note 2)
---------------------------------------------------------------------------------------------------------------------------
Hotels, Restaurants & Leisure -- 7.8%
Aramark Services, Inc..................... BTL-B1 Ba1 BBB- 4.08% 3 ML+1.75% 03/11/2025 $ 638,400 $ 637,336
Boyd Gaming Corp.......................... BTL-B3 Ba3 BB 4.49 1 WL+2.50% 09/15/2023 944,066 945,920
Caesars Entertainment Operating Co., Inc.. BTL-B Ba3 BB 4.09 1 ML+2.00% 10/06/2024 2,134,275 2,116,490
Caesars Resort Collection LLC............. BTL-B Ba3 BB 4.84 1 ML+2.75% 12/22/2024 3,432,750 3,423,554
CityCenter Holdings LLC................... BTL-B B1 BB- 4.34 1 ML+2.25% 04/18/2024 1,899,572 1,887,699
Eldorado Resorts LLC...................... BTL-B Ba2 BB 4.38 2 ML+2.25% 04/17/2024 737,172 737,633
Eldorado Resorts LLC...................... BTL-B Ba2 BB 4.38 3 ML+2.25% 04/17/2024 648,466 648,871
Four Seasons Holdings, Inc................ 1st Lien B1 BB 4.09 1 ML+2.00% 11/30/2023 610,700 608,537
Golden Entertainment, Inc................. 1st Lien B1 B+ 5.10 1 ML+3.00% 10/20/2024 1,965,125 1,965,125
Golden Entertainment, Inc................. 2nd Lien Caa1 CCC+ 9.10 1 ML+7.00% 10/20/2025 1,075,000 1,096,500
Hilton Worldwide Finance LLC.............. BTL-B2 Baa3 BBB- 3.84 1 ML+1.75% 10/25/2023 648,048 647,265
Lindblad Expeditons, Inc.................. BTL B2 BB 5.95 6 ML+3.50% 03/27/2025 1,727,145 1,737,940
Lindblad Expeditons, Inc.................. CTL B2 BB 5.95 6 ML+3.50% 03/27/2025 222,855 224,248
Scientific Games International, Inc....... BTL-B5 Ba3 B+ 4.84 1 ML+2.75% 08/14/2024 111,901 111,369
Scientific Games International, Inc....... BTL-B5 Ba3 B+ 4.92 2 ML+2.75% 08/14/2024 470,564 468,329
Station Casinos, Inc...................... BTL-B Ba3 BB- 4.60 1 ML+2.50% 06/08/2023 691,620 690,371
Wyndham Hotels & Resorts, Inc............. BTL-B Baa3 BBB- 3.73 1 ML+1.75% 05/30/2025 475,000 474,307
-----------
18,421,494
-----------
Household Durables -- 0.3%
Installed Building Products, Inc.......... BTL-B B1 BB 4.59 1 ML+2.50% 04/15/2025 684,825 681,401
-----------
Household Products -- 0.7%
Diamond (BC) BV........................... BTL B1 B 3.25 2 ME+3.25% 09/06/2024 EUR 208,950 238,725
Diamond (BC) BV........................... BTL B1 B 5.10 2 ML+3.00% 09/06/2024 910,425 893,355
Energizer Holdings, Inc................... BTL-B Ba1 BB+ TBD 06/30/2025 305,000 303,475
Prestige Brands, Inc...................... BTL-B4 Ba3 BB 4.09 1 ML+2.00% 01/26/2024 317,401 315,946
-----------
1,751,501
-----------
Industrial Conglomerates -- 0.4%
Ameriforge Group, Inc.(5)(8).............. BTL NR NR 10.33 3 ML+7.00% 06/08/2022 107,206 107,206
UTEX Industries, Inc...................... 1st Lien B3 CCC+ 6.09 1 ML+4.00% 05/22/2021 810,230 802,128
-----------
909,334
-----------
Insurance -- 3.9%
Asurion LLC............................... BTL-B4 Ba3 B+ 4.84 1 ML+2.75% 08/04/2022 935,201 932,629
Asurion LLC............................... BTL-B6 Ba3 B+ 4.84 1 ML+2.75% 11/03/2023 848,966 846,843
Asurion LLC............................... 2nd Lien B3 B- 8.09 1 ML+6.00% 08/04/2025 1,480,000 1,490,175
Asurion LLC............................... BTL-B7 Ba3 B+ TBD 11/03/2023 1,020,000 1,014,900
Compass Investments, Inc.................. BTL-B B2 B 5.33 3 ML+3.00% 05/16/2024 2,154,523 2,139,980
Genworth Financial, Inc................... BTL Ba3 B+ 6.55 1 ML+4.50% 03/07/2023 370,000 376,475
Hub International, Ltd.................... BTL-B B2 B 5.36 2 ML+3.00% 04/25/2025 985,000 978,159
Sedgwick Claims Management Services, Inc.. 2nd Lien Caa2 CCC+ 7.84 1 ML+5.75% 02/28/2022 1,131,647 1,134,004
Sedgwick Claims Management Services, Inc.. 2nd Lien Caa2 CCC+ 8.06 3 ML+5.75% 02/28/2022 333,353 334,048
-----------
9,247,213
-----------
Internet & Direct Marketing Retail -- 1.3%
Acosta, Inc............................... BTL Caa1 CCC+ 5.34 1 ML+3.25% 09/26/2021 1,031,779 785,257
Lands' End, Inc........................... BTL-B B3 B- 5.34 1 ML+3.25% 04/04/2021 919,232 881,888
Rodan & Fields, LLC....................... BTL-B B1 BB TBD 06/06/2025 565,000 564,650
Shutterfly, Inc........................... BTL-B2 Ba3 BB- 4.85 1 ML+2.75% 08/17/2024 750,000 750,375
-----------
2,982,170
-----------
Internet Software & Services -- 0.8%
Go Daddy Operating Co. LLC................ BTL-B Ba3 BB- 4.34 1 ML+2.25% 02/15/2024 988,926 983,569
Zayo Group LLC............................ BTL-B Ba2 BB 4.34 1 ML+2.25% 01/19/2024 906,388 906,291
-----------
1,889,860
-----------
14
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount** (Note 2)
----------------------------------------------------------------------------------------------------------------------------
IT Services -- 5.6%
Blackhawk Network Holdings, Inc...... 1st Lien B1 B 5.07% 1 ML+3.00% 06/15/2025 $ 905,000 $ 901,889
CCC Information Services, Inc........ 1st Lien B2 B 5.10 1 ML+3.00% 04/27/2024 653,400 651,533
Evo Payments International........... 1st Lien B2 B 5.36 1 ML+3.25% 12/12/2023 1,807,603 1,800,824
First Data Corp...................... BTL Ba2 BB 4.09 1 ML+2.00% 04/26/2024 2,681,026 2,662,929
First Data Corp...................... BTL Ba2 BB 4.09 1 ML+2.00% 07/08/2022 1,508,481 1,498,299
Global Payments, Inc................. BTL-B3 Ba2 BBB- 3.84 1 ML+1.75% 04/21/2023 951,178 949,310
Tempo Acquisition LLC................ BTL B1 B 5.09 1 ML+3.00% 05/01/2024 1,007,195 1,003,104
WEX, Inc............................. BTL-B2 Ba3 BB- 4.35 1 ML+2.25% 06/30/2023 2,092,796 2,091,488
Xerox Business Services LLC.......... BTL-B Ba2 BB+ 4.59 1 ML+2.50% 12/07/2023 1,753,300 1,755,492
-----------
13,314,868
-----------
Leisure Equipment & Products -- 0.6%
Hayward Industries, Inc.............. 1st Lien B3 B 5.59 1 ML+3.50% 08/05/2024 302,713 302,864
SRAM LLC............................. BTL-B B1 B+ 4.86 3 ML+2.75% 03/15/2024 574,024 571,154
SRAM LLC............................. BTL-B B1 B+ 4.92 2 ML+2.75% 03/15/2024 591,269 588,313
SRAM LLC............................. BTL-B B1 B+ 6.75 USFRBPLR+1.75% 03/15/2024 21,571 21,463
-----------
1,483,794
-----------
Life Sciences Tools & Services -- 0.7%
PAREXEL International Corp........... BTL-B B1 B 4.84 1 ML+2.75% 09/27/2024 650,088 646,024
Syneos Health, Inc................... BTL-B Ba2 BB- 4.09 1 ML+2.00% 08/01/2024 1,017,695 1,012,788
-----------
1,658,812
-----------
Machinery -- 5.4%
CIRCOR International, Inc............ 1st Lien B1 B+ 5.56 1 ML+3.50% 12/11/2024 1,008,865 1,006,028
Clark Equipment Co................... BTL-B Ba3 BB- 4.33 3 ML+2.00% 05/18/2024 838,801 832,248
Columbus McKinnon Corp............... BTL-B Ba3 B+ 4.83 3 ML+2.50% 01/31/2024 997,836 989,105
Crosby US Acquisition Corp........... 1st Lien Caa1 B- 5.08 1 ML+3.00% 11/23/2020 1,008,403 989,810
Gardner Denver, Inc.................. BTL-B B1 BB 4.84 1 ML+2.75% 07/30/2024 1,197,808 1,198,317
Gardner Denver, Inc.................. BTL-B B1 BB 3.00 3 ME+3.00% 07/30/2024 EUR 1,043,117 1,206,479
Navistar International Corp.......... BTL-B Ba3 B+ 5.53 1 ML+3.50% 11/06/2024 932,663 934,605
NN, Inc.............................. BTL B2 B+ 5.34 1 ML+3.25% 04/02/2021 1,695,750 1,691,511
NN, Inc.............................. 2nd Lien Caa2 B- 10.03 1 ML+8.00% 04/14/2023 1,500,000 1,485,000
Pro Mach Group, Inc.................. BTL-B B2 B- 5.02 1 ML+3.00% 03/07/2025 748,125 738,586
Utility One Source LP................ BTL-B B2 B 7.59 1 ML+5.50% 04/18/2023 618,998 632,926
WireCo WorldGroup, Inc............... 1st Lien Caa1 B+ 7.09 1 ML+5.00% 09/30/2023 614,063 616,985
Zodiac Pool Solutions LLC............ BTL-B Ba3 BB TBD 03/31/2025 440,000 440,000
-----------
12,761,600
-----------
Media -- 8.0%
Advantage Sales & Marketing LLC...... 1st Lien B1 B 5.34 1 ML+3.25% 07/23/2021 1,190,788 1,127,775
Advantage Sales & Marketing LLC...... 2nd Lien Caa1 CCC+ 8.59 1 ML+6.50% 07/25/2022 1,000,000 905,500
Altice Financing SA.................. 1st Lien B1 B+ 5.10 3 ML+2.75% 01/31/2026 1,283,550 1,263,013
Charter Communications Operating LLC. BTL-B Ba1 BBB- 4.10 1 ML+2.00% 04/30/2025 810,988 809,605
Cineworld Limited.................... BTL B1 BB- 2.63 1 ME+2.63% 02/28/2025 EUR 418,950 483,746
Cineworld Finance US, Inc............ BTL B1 BB- 4.59 1 ML+2.50% 02/28/2025 1,022,438 1,015,025
CSC Holdings, Inc.................... BTL-B Ba2 BB- 4.32 1 ML+2.25% 07/17/2025 505,519 501,343
CSC Holdings, Inc.................... BTL-B Ba2 BB- 4.57 1 ML+2.50% 01/25/2026 700,000 697,025
Delta 2 (Lux) SARL................... BTL B2 B+ 4.59 1 ML+2.50% 02/01/2024 2,525,951 2,490,166
Getty Images, Inc.................... BTL-B B3 CCC 5.59 1 ML+3.50% 10/18/2019 653,644 630,183
ION Media Networks, Inc.............. BTL-B3 B1 B+ 4.85 1 ML+2.75% 12/18/2020 2,338,344 2,332,498
NAI Entertainment Holdings LLC....... BTL-B B1 BB 4.60 1 ML+2.50% 04/23/2025 480,000 477,900
Sinclair Television Group, Inc....... BTL-B Ba1 BB+ TBD 12/12/2024 1,825,000 1,819,525
Unitymedia Hessen GmbH & Co. KG...... BTL-D Ba3 BB- 4.32 1 ML+2.25% 01/15/2026 1,085,000 1,078,490
Unitymedia Hessen GmbH & Co. KG...... BTL-B Ba3 BB- 4.32 1 ML+2.25% 09/30/2025 1,000,000 992,083
Univision Communications, Inc........ BTL-C5 B2 BB- 4.84 1 ML+2.75% 03/15/2024 751,976 726,193
UPC Financing Partnership............ BTL-AR Ba3 BB 4.57 1 ML+2.50% 01/15/2026 500,000 494,000
Virgin Media Investments, Ltd........ BTL-K Ba3 BB- 4.57 1 ML+2.50% 01/15/2026 500,000 496,016
Ziggo Secured Finance Partners....... BTL-E B1 BB- 4.57 1 ML+2.50% 04/15/2025 500,000 494,375
-----------
18,834,461
-----------
15
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount** (Note 2)
-----------------------------------------------------------------------------------------------------------------------------
Metals & Mining -- 0.8%
American Rock Salt Co. LLC.............. 1st Lien B3 B 5.84% 1 ML+3.75% 03/21/2025 $ 1,998,277 $1,996,613
----------
Multiline Retail -- 0.2%
Neiman Marcus Group, Inc................ BTL Caa1 CCC 5.26 1 ML+3.25% 10/25/2020 666,834 589,815
----------
Oil, Gas & Consumable Fuels -- 4.2%
Ascent Resources Marcellus LLC.......... 1st Lien NR NR 8.50 1 ML+6.50% 03/30/2023 260,833 260,833
BCP Raptor LLC.......................... BTL-B B3 B 6.42 2 ML+4.25% 06/24/2024 821,700 803,725
BCP Renaissance Parent LLC.............. BTL-B B1 B+ 5.86 3 ML+3.50% 10/31/2024 1,005,000 1,003,744
California Resources Corp............... 1st Lien B2 B 6.84 1 ML+4.75% 12/31/2022 395,000 401,419
California Resources Corp............... 2nd Lien Caa1 B 12.47 1 ML+10.38% 12/31/2021 500,000 552,500
Chesapeake Energy Corp.................. BTL B1 BB- 9.59 1 ML+7.50% 08/23/2021 630,000 657,169
Foresight Energy LLC.................... 1st Lien B2 B 8.11 3 ML+5.75% 03/28/2022 1,883,085 1,867,394
Medallion Midland Acquisition LLC....... 1st Lien B2 B+ 5.34 1 ML+3.25% 10/30/2024 472,625 466,126
Peabody Energy Corp..................... BTL-B Ba3 BB 4.84 1 ML+2.75% 03/31/2025 494,063 490,778
Philadelphia Energy Solutions LLC....... BTL-B NR NR 9.00 USFRBPLR+4.00% 04/04/2019 909,638 845,963
Power Buyer LLC......................... 1st Lien B2 B 5.58 3 ML+3.25% 02/27/2025 1,289,800 1,274,216
Power Buyer LLC......................... 2nd Lien Caa2 CCC+ 9.58 3 ML+7.25% 02/27/2026 585,000 583,050
Traverse Midstream Partners LLC......... BTL-B B1 B+ 6.34 3 ML+4.00% 09/27/2024 750,000 749,531
----------
9,956,448
----------
Personal Products -- 1.4%
Coty, Inc............................... BTL-B Ba2 BB+ 2.50 1 ME+2.50% 04/05/2025 EUR 825,000 953,500
Coty, Inc............................... BTL-B Ba2 BB+ 4.28 1 ML+2.25% 04/07/2025 1,522,162 1,486,011
Revlon Consumer Products Corp........... BTL-B B3 CCC+ 5.59 1 ML+3.50% 09/07/2023 1,080,750 837,581
----------
3,277,092
----------
Pharmaceuticals -- 1.2%
Endo Luxembourg Finance Co.............. BTL-B Ba2 BB- 6.38 1 ML+4.25% 04/29/2024 1,602,559 1,587,535
Valeant Pharmaceuticals International,
Inc.................................... BTL-B Ba3 BB- 4.98 1 ML+3.00% 06/02/2025 1,282,555 1,277,655
----------
2,865,190
----------
Professional Services -- 0.4%
On Assignment, Inc...................... BTL-B Ba2 BB 4.09 1 ML+2.00% 04/02/2025 540,943 538,779
Team Health, Inc........................ 1st Lien B2 B 4.84 1 ML+2.75% 02/06/2024 493,119 475,449
----------
1,014,228
----------
Real Estate Investment Trusts -- 0.9%
MGM Growth Properties LLC............... BTL-B Ba3 BB+ 4.09 1 ML+2.00% 04/25/2023 779,204 777,418
VICI Properties 1 LLC................... BTL-B Ba3 BBB- 4.08 1 ML+2.00% 12/20/2024 1,453,864 1,443,364
----------
2,220,782
----------
Real Estate Management & Development -- 0.3%
DTZ US Borrower LLC..................... 1st Lien B1 B+ 5.56-5.61 3 ML+3.25% 11/04/2021 749,990 748,116
----------
Road & Rail -- 0.7%
Fly Funding II SARL..................... BTL-B Ba2 BB+ 4.37 3 ML+2.00% 02/09/2023 1,161,191 1,157,804
Kenan Advantage Group, Inc.............. BTL B1 B+ 5.09 1 ML+3.00% 07/31/2022 410,082 409,826
Kenan Advantage Group, Inc.............. BTL-B B1 B+ 5.09 1 ML+3.00% 07/31/2022 99,101 99,039
----------
1,666,669
----------
Semiconductors & Semiconductor Equipment -- 0.6%
Integrated Device Technology, Inc.(6)... BTL-B Baa3 BB 4.59 1 ML+2.50% 04/04/2024 533,264 533,930
Microchip Technology, Inc............... BTL-B Baa3 BB+ 4.10 1 ML+2.00% 05/29/2025 980,000 980,409
----------
1,514,339
----------
16
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount** (Note 2)
----------------------------------------------------------------------------------------------------------------------------
Software -- 5.4%
Almonde, Inc................. 1st Lien B2 B- 5.81% 3 ML+3.50% 06/13/2024 $ 1,245,587 $ 1,222,388
Almonde, Inc................. 2nd Lien Caa2 CCC 9.56 3 ML+7.25% 06/13/2025 230,000 221,375
Ascend Learning LLC.......... BTL-B B2 B+ 5.09 1 ML+3.00% 07/12/2024 505,302 504,039
Ceridian Corp................ BTL-B B3 B 5.34 1 ML+3.25% 04/05/2025 1,090,215 1,087,035
Epicore Software Co.......... 1st Lien B2 B- 5.35 1 ML+3.25% 06/01/2022 1,110,996 1,107,941
Hyland Software, Inc......... 1st Lien B1 B 5.34 1 ML+3.25% 07/01/2022 841,732 844,098
Hyland Software, Inc......... 2nd Lien Caa1 CCC+ 9.09 1 ML+7.00% 07/07/2025 435,000 437,039
IQVIA, Inc................... BTL-B Ba1 BBB- 2.50 3 ME+2.00% 06/07/2025 EUR 1,185,000 1,368,704
Lawson Software, Inc......... BTL-B6 B1 B 4.84 1 ML+2.75% 02/01/2022 686,941 683,163
MA FinanceCo. LLC............ BTL-B3 B1 BB- 4.84 1 ML+2.75% 06/21/2024 128,655 127,409
Quest Software US Holdings,
Inc........................ BTL-B B2 B+ 6.58 3 ML+4.25% 05/18/2025 1,090,000 1,086,820
RP Crown Parent LLC.......... BTL-B B1 B 4.84 1 ML+2.75% 10/12/2023 876,650 870,075
Seattle Spinco, Inc.......... BTL-B3 B1 BB- 4.84 1 ML+2.75% 06/21/2024 868,845 865,586
Sound Inpatient Physicians... 1st Lien Ba3 B TBD 06/27/2025 475,000 475,000
Sound Inpatient Physicians... 2nd Lien NR CCC+ TBD 06/26/2026 205,000 206,025
SS&C Technologies, Inc....... BTL-B3 Ba3 BB 4.59 1 ML+2.50% 04/16/2025 1,252,654 1,252,810
SS&C Technologies, Inc....... BTL-B4 Ba3 BB 4.59 1 ML+2.50% 04/16/2025 473,895 473,955
------------
12,833,462
------------
Specialty Retail -- 2.7%
At Home Holding III, Inc..... BTL B2 BB- 5.86 3 ML+3.50% 06/03/2022 682,004 680,299
Bass Pro Group LLC........... BTL-B B1 BB- 7.09 1 ML+5.00% 09/25/2024 1,229,456 1,232,146
EG Group Limited............. BTL-B B2 B 3.63 1 ME+4.00% 02/06/2025 EUR 22,307 25,737
EG Group Limited............. BTL-B B2 B 4.00 3 ME+4.00% 02/06/2025 EUR 242,035 279,257
EG Group Limited(7).......... Delayed Draw B2 B TBD 02/06/2025 EUR 133,998 154,397
Foundation Building
Materials LLC.............. BTL-B B3 B+ TBD 05/10/2025 1,080,000 1,075,950
Harbor Freight Tools USA,
Inc........................ BTL-B Ba3 BB- 4.59 1 ML+2.50% 08/19/2023 497,600 494,757
J. Crew Operating Corp....... BTL-B Caa2 CCC 5.09 1 ML+3.00% 03/05/2021 335,247 279,680
J. Crew Operating Corp....... BTL-B Caa2 CCC 5.33 3 ML+3.00% 03/05/2021 388,913 324,451
PetSmart, Inc................ BTL-B2 B3 CCC 5.01 1 ML+3.00% 03/11/2022 1,059,785 875,913
Staples, Inc................. BTL-B B1 B+ 6.36 3 ML+4.00% 09/12/2024 865,650 852,184
------------
6,274,771
------------
Trading Companies & Distributors -- 2.0%
ABC Supply Co., Inc.......... BTL-B B1 BB+ 4.09 1 ML+2.00% 10/31/2023 997,843 989,112
Beacon Roofing Supply, Inc... BTL-B B1 BB+ 4.28 1 ML+2.25% 01/02/2025 448,875 446,070
Nexeo Solutions LLC.......... BTL-B B3 NR 5.56-5.61 3 ML+3.25% 06/09/2023 1,305,512 1,304,968
HD Supply, Inc............... BTL-B4 Ba3 BBB- 4.59 1 ML+2.50% 10/17/2023 1,329,826 1,333,565
Univar, Inc.................. BTL-B3 B1 BB 4.59 1 ML+2.50% 07/01/2024 571,423 569,757
------------
4,643,472
------------
Water Utilities -- 0.1%
HD Supply Waterworks, Inc.... BTL-B B2 B+ 5.21 6 ML+3.00% 08/01/2024 169,563 169,846
HD Supply Waterworks, Inc.... BTL-B B2 B+ 5.30 3 ML+3.00% 08/01/2024 148,837 149,085
------------
318,931
------------
Wireless Telecommunication Services -- 0.8%
Sprint Communications, Inc... BTL-B Ba2 BB- 4.63 1 ML+2.50% 02/02/2024 1,975,000 1,962,656
------------
Total Loans (cost
$224,302,364).............. 222,575,865
------------
U.S. CORPORATE BONDS & NOTES -- 4.0%
Construction & Engineering -- 0.4%
Brand Energy &
Infrastructure Services,
Inc.*...................... Senior Notes Caa2 CCC+ 8.50 07/15/2025 1,000,000 1,012,500
------------
Consumer Finance -- 0.3%
Navient Corp................. Senior Notes Ba3 B+ 6.50 06/15/2022 300,000 307,125
Springleaf Finance Corp...... Company Guar. Notes B1 B 6.13 05/15/2022 500,000 510,000
------------
817,125
------------
17
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
------------
Interest Reference Maturity Principal
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount**/Shares
-------------------------------------------------------------------------------------------------------------------------------
Containers & Packaging -- 0.5%
Reynolds Group Issuer, Inc. FRS*............ Senior Sec. Notes B1 B+ 5.85% 3 ML+3.50 07/15/2021 $1,245,000
Insurance -- 0.2%
USIS Merger Sub, Inc.*...................... Senior Notes Caa2 CCC+ 6.88 05/01/2025 500,000
IT Services -- 0.4%
First Data Corp.*........................... Company Guar. Notes B2 B 7.00 12/01/2023 1,000,000
Metals & Mining -- 0.2%
Warrior Met Coal, Inc.*..................... Senior Sec. Notes B3 BB- 8.00 11/01/2024 525,000
Multi Utilities -- 0.0%
Texas Competitive Electric Holdings Co.
LLC*(5).................................... Escrow Notes NR NR 6.25 10/01/2020 4,174,956
Oil, Gas & Consumable Fuels -- 1.0%
Foresight Energy/Finance*(5)................ Sec. Notes Caa2 CCC 11.50 04/01/2023 715,000
Jagged Peak Energy LLC*..................... Company Guar. Notes B3 B 5.88 05/01/2026 725,000
Vine Oil & Gas LP / Vine Oil & Gas Finance
Corp.*..................................... Company Guar. Notes Caa2 CCC+ 8.75 04/15/2023 1,000,000
Machinery -- 0.1%
BlueLine Rental*............................ Sec. Notes Caa1 B 9.25 03/15/2024 325,000
Personal Products -- 0.1%
Revlon Escrow Corp.......................... Company Guar. Notes Caa3 CCC 6.25 08/01/2024 505,000
Specialty Retail -- 0.3%
Arch Merger Sub, Inc.*...................... Company Guar. Notes B3 B- 8.50 09/15/2025 650,000
PetSmart, Inc.*............................. Senior Sec. Notes B3 CCC 5.88 06/01/2025 100,000
Trading Companies & Distributors -- 0.3%
Beacon Escrow Corp.*........................ Company Guar. Notes B3 B+ 4.88 11/01/2025 705,000
Total U.S. Corporate Bonds & Notes
(cost $9,807,966)..........................
FOREIGN CORPORATE BONDS & NOTES -- 1.6%
Containers & Packaging -- 0.3%
Ardagh Packaging Finance PLC*............... Company Guar. Notes B3 B 7.25 05/15/2024 685,000
Electrical Equipment -- 0.2%
Energizer Gamma Acquisition BV*............. Senior Sec. Notes B2 BB- 4.63 07/15/2026 490,000
Hotels, Restaurants & Leisure -- 0.2%
Cirsa Gaming Corp SA*(6).................... Senior Notes B2 B+ 4.96 07/01/2025 320,000
Metals & Mining -- 0.3%
Costellium NV*.............................. Senior Notes B3 B- 6.63 03/01/2025 655,000
Pharmaceuticals -- 0.6%
Endo, Ltd./Endo Finance LLC*................ Company Guar. Notes B3 CCC+ 6.00 07/15/2023 560,000
Valeant Pharmaceuticals*.................... Senior Sec. Notes Ba3 BB- 7.00 03/15/2024 630,000
Valeant Pharmaceuticals*.................... Company Guar. Notes Caa1 B- 9.00 12/15/2025 385,000
Total Foreign Corporate Bonds & Notes
(cost $3,843,563)..........................
COMMON STOCKS -- 0.7%
Energy Equipment & Services -- 0.0%
Paragon Offshore, Litigation Trust,
Class A+(5)(9)............................. 1,242
Paragon Offshore, Litigation Trust,
Class B+(5)(9)............................. 621
Value
Industry Description (Note 2)
---------------------------------------------------------
Containers & Packaging -- 0.5%
Reynolds Group Issuer, Inc. FRS*............ $1,256,579
----------
Insurance -- 0.2%
USIS Merger Sub, Inc.*...................... 497,500
----------
IT Services -- 0.4%
First Data Corp.*........................... 1,041,580
----------
Metals & Mining -- 0.2%
Warrior Met Coal, Inc.*..................... 542,062
----------
Multi Utilities -- 0.0%
Texas Competitive Electric Holdings Co.
LLC*(5).................................... 42
----------
Oil, Gas & Consumable Fuels -- 1.0%
Foresight Energy/Finance*(5)................ 632,775
Jagged Peak Energy LLC*..................... 710,500
Vine Oil & Gas LP / Vine Oil & Gas Finance
Corp.*..................................... 925,000
----------
2,268,275
----------
Machinery -- 0.1%
BlueLine Rental*............................ 345,767
----------
Personal Products -- 0.1%
Revlon Escrow Corp.......................... 282,800
----------
Specialty Retail -- 0.3%
Arch Merger Sub, Inc.*...................... 606,125
PetSmart, Inc.*............................. 77,010
----------
683,135
----------
Trading Companies & Distributors -- 0.3%
Beacon Escrow Corp.*........................ 648,177
----------
Total U.S. Corporate Bonds & Notes
(cost $9,807,966).......................... 9,395,542
----------
FOREIGN CORPORATE BONDS & NOTES -- 1.6%
Containers & Packaging -- 0.3%
Ardagh Packaging Finance PLC*............... 712,400
----------
Electrical Equipment -- 0.2%
Energizer Gamma Acquisition BV*............. 576,434
----------
Hotels, Restaurants & Leisure -- 0.2%
Cirsa Gaming Corp SA*(6).................... 365,094
----------
Metals & Mining -- 0.3%
Costellium NV*.............................. 659,912
----------
Pharmaceuticals -- 0.6%
Endo, Ltd./Endo Finance LLC*................ 460,600
Valeant Pharmaceuticals*.................... 660,523
Valeant Pharmaceuticals*.................... 398,937
----------
1,520,060
----------
Total Foreign Corporate Bonds & Notes
(cost $3,843,563).......................... 3,833,900
----------
COMMON STOCKS -- 0.7%
Energy Equipment & Services -- 0.0%
Paragon Offshore, Litigation Trust,
Class A+(5)(9)............................. 1,066
Paragon Offshore, Litigation Trust,
Class B+(5)(9)............................. 18,630
----------
19,696
----------
18
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Ratings /(1)/
-------------
Interest Reference Maturity Principal Value
Industry Description Type Moody's S&P Rate Rate Date /(2)/ Amount**/Shares (Note 2)
-------------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.4%
AFG Holdings, Inc.+(5)(9).... 14,309 $ 901,467
------------
Media -- 0.0%
Vivial+(5)(6)(9)............. 1,136 31,944
------------
Oil, Gas & Consumable Fuels -- 0.3%
Ascent Resources Marcellus
LLC, Class A+(5)(6)(9)..... 187,384 580,891
TE Holdcorp LLC,
Class A+(5)(6)(9).......... 44,278 46,492
------------
627,383
------------
Total Common Stocks (cost
$3,796,268)................ 1,580,490
------------
PREFERRED SECURITIES/CAPITAL
SECURITIES -- 0.7%
Banks -- 0.7%
Banco Bilbao Vizcaya
Argentaria SA(10).......... Ba2 NR 6.13 11/16/2027 800,000 706,000
Itau Unibanco Holding SA*(10) B2 NR 6.13 12/12/2022 500,000 467,500
Societe Generale SA(10)...... Ba2 BB+ 8.25 11/29/2018 400,000 404,500
------------
Total Preferred
Securities/Capital
Securities (cost
$1,722,368)................ 1,578,000
------------
WARRANTS -- 0.0%
Oil, Gas & Consumable Fuels -- 0.0%
Ascent Resources Marcellus
LLC+(5)(6)(9) Expires
03/30/2023 (strike price
$6.15) (cost $4,625)....... 48,515 1,455
------------
Total Long-Term Investment
Securities
(cost $243,477,154)........ 238,965,252
------------
SHORT-TERM INVESTMENT SECURITIES
-- 0.5%
Registered Investment Companies --
0.5%
State Street Institutional
Liquid Reserves Fund,
Administration Class
1.83%(11) (cost $1,255,315) 1,255,232 1,255,232
------------
REPURCHASE AGREEMENTS -- 0.5%
Bank of America Securities LLC Joint
Repurchase Agreement(12)................ $ 270,000 270,000
Barclays Capital, Inc. Joint Repurchase
Agreement(12)........................... 60,000 60,000
BNP Paribas SA Joint Repurchase
Agreement(12)........................... 355,000 355,000
Deutsche Bank AG Joint Repurchase
Agreement(12)........................... 190,000 190,000
RBS Securities, Inc. Joint Repurchase
Agreement(12)........................... 425,000 425,000
------------
Total Repurchase Agreements
(cost $1,300,000).......... 1,300,000
------------
TOTAL INVESTMENTS
(cost $246,032,469)(13)...... 102.1% 241,520,484
Liabilities in excess of
other assets................. (2.1)% (4,976,828)
---------- ------------
NET ASSETS.................... 100.0% $236,543,656
========== ============
--------
BTL Bank Term Loan
CTL Cayman Term Loan
EUR Euro Currency
NR Security is not rated.
FRS--FloatingRate Security
The rates shown on FRS are the current interest rates as of June 30, 2018 and
unless noted otherwise, the dates shown are the original maturity dates.
19
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
TBD--Seniorloan purchased on a when-issued or delayed-delivery basis. Certain
details associated with this purchase are not known prior to the
settlement date of the transaction. In addition, senior loans
typically trade without accrued interest and therefore a coupon rate
is not available prior to the settlement.
+ Non-income producing security
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
rights to demand registration of these securities. At June 30, 2018, the
aggregate value of these securities was $12,597,017, representing 5.3% of
net assets. Unless otherwise indicated, these securities are not considered
to be illiquid.
** Denominated in United States Dollars unless otherwise noted.
(1) Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered below investment grade. Ratings
provided are as of June 30, 2018.
(2) Based on the stated maturity, the weighted average to maturity of the loans
held in the portfolio is approximately 71 months. Loans in the Fund's
portfolio are generally subject to mandatory and/or optional prepayment.
Because of these mandatory prepayment conditions and because there may be
significant economic incentives for a Borrower to prepay, prepayments may
occur. As a result, the actual remaining maturity may be substantially less
than the stated maturities shown.
(3) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior loans
are generally considered to be restrictive in that the Fund is ordinarily
contractually obligated to receive approval from the Agent Bank and/or
borrower prior to the disposition of a senior loan.
(4) All loans in the portfolio were purchased through assignment agreements
unless otherwise indicated.
(5) Illiquid security. At June 30, 2018, the aggregate value of these
securities was $3,514,792, representing 1.5% of net assets.
(6) Security classified as Level 3 (see Note 2).
(7) All or a portion of this holding is subject to unfunded loan commitments
(see Note 10).
(8) "Payment-in-Kind" (PIK) security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at 9.33%. The security is also currently
paying interest in the form of additional loans at 1.00%.
(9) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note 2.
Certain restricted securities held by the Fund may not be sold except in
exempt transactions or in a public offering registered under the 1933 Act.
The Fund has no right to demand registration of these securities. The risk
of investing in certain restricted securities is greater than the risk of
investing in the securities of widely held, publicly traded companies. To
the extent applicable, lack of a secondary market and resale restrictions
may result in the inability of a Fund to sell a security at a fair price
and may substantially delay the sale of the security. In addition, certain
restricted securities may exhibit greater price volatility than securities
for which secondary markets exist. As of June 30, 2018, the Fund held the
following restricted securities:
Acquisition Principal Acquisition Value Per % of Net
Description Date Amount/Shares Cost Value Share Assets
----------- ----------- ------------- ----------- ---------- --------- --------
Common Stocks
-------------
AFG Holdings, Inc.......................... 01/22/2013 14,309 $ 911,111 $ 901,467 $63.00 0.38%
Ascent Resources Marcellus LLC, Class A.... 03/30/2018 187,384 567,151 580,891 3.10 0.25
Paragon Offshore Litigation Trust, Class A. 07/11/2014 1,242 704 1,066 0.86 0.00
Paragon Offshore Litigation Trust, Class B. 10/21/2014 621 10,557 18,630 30.00 0.01
TE Holdcorp LLC, Class A................... 11/21/2013 44,278 1,638,216 46,492 1.05 0.02
Vivial..................................... 04/24/2008 1,136 668,529 31,944 28.12 0.01
Warrants
--------
Ascent Resources Marcellus LLC............. 03/30/2018 48,515 4,625 1,455 0.03 0.00
---------- ----
$1,581,945 0.67%
========== ====
(10)Perpetual maturity--maturity date reflects the next call date.
(11)The rate shown is the 7-day yield as of June 30, 2018.
(12)See Note 2 for details of the Joint Repurchase Agreement.
(13)See Note 6 for cost of investments on a tax basis.
Index Legend
1 ME--1 Month Euribor
1 ML--1 Month USD LIBOR
2 ME--2 Month Euribor
2 ML--2 Month USD LIBOR
3 ME--3 Month Euribor
3 ML--3 Month USD LIBOR
6 ML--6 Month LIBOR
USFRBPLR--US Federal Reserve Bank Prime Loan Rate
20
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Forward Foreign Currency Contracts
--------------------------------------------------------------------------------
Contract to In Exchange Delivery Unrealized Unrealized
Counterparty Deliver For Date Appreciation Depreciation
------------------------------------------------------------------------------------------------------------
BNP Paribas SA............................. EUR 490,000 USD 571,864 07/31/2018 $-- $ (1,516)
Credit Suisse International................ EUR 313,000 USD 366,170 07/31/2018 -- (92)
UBS AG..................................... EUR 6,273,647 USD 7,316,484 07/31/2018 -- (24,708)
--- --------
Net Unrealized Appreciation (Depreciation). $-- $(26,316)
=== ========
--------
EUR Euro Currency
USD United States Dollar
Centrally Cleared Credit Default Swaps on Credit Indices -- Sell Protection@(1)
--------------------------------------------------------------------------------
-
Fixed Deal Payment Implied Credit Spread at Notional Amount(3)
Reference Obligation Receive Rate Frequency Maturity Date June 30, 2018(2) (000's)
---------------------------------------------------------------------------------------------------------------------
CDX North America High Yield Index. 5.000% Quarterly 06/20/2023 3.5938% $2,000
Value(4)
- ------------------------
Upfront
Premiums Unrealized
Paid/ Appreciation
Reference Obligation (Received) (Depreciation)
-------------------------------------------------------------
CDX North America High Yield Index. $119,760 $(3,094)
======== =======
@ Illiquid security. At June 30, 2018, the aggregate value of these
securities was $116,666 representing 0.0% of net assets.
(1) If the Fund is a seller of protection and a credit event occurs, as defined
under the terms of that particular swap agreement, the Fund will either (i)
pay to the buyer of protection an amount equal to the notional amount of
the swap and take delivery of the referenced obligation or (ii) pay a net
settlement amount in the form of cash or securities equal to the notional
amount of the swap less the recovery value of the referenced obligation.
(2) Implied credit spreads, represented in absolute terms, utilized in
determining the market value of credit default swap agreements on corporate
issues or sovereign issues of an emerging country as of period end serve as
an indicator of the current status of the payment/performance risk and
represent the likelihood or risk of default for the credit derivative. The
implied credit spread of a particular referenced entity reflects the cost
of buying/selling protection and may include upfront payments required to
be made to enter into the agreement. Wider credit spreads represent a
deterioration of the referenced entity's credit soundness and a greater
likelihood or risk of default or other credit event occurring as defined
under the terms of the agreement. A credit spread identified as "Defaulted"
indicates a credit event has occurred for the referenced entity or
obligation.
(3) The maximum potential amount the Fund could be required to make as a seller
of credit protection or receive as a buyer of credit protection if a credit
event occurs as defined under the terms of that particular swap agreement.
(4) The quoted market prices and resulting values for credit default swap
agreements on asset-backed securities and credit indices serve as an
indicator of the current status of the payment/performance risk and
represent the likelihood of an expected liability (or profit) for the
credit derivative should the notional amount of the swap agreement have
been closed/sold as of the period end. Increasing market values, in
absolute terms when compared to the notional amount of the swap, represent
a deterioration of the referenced entity's credit soundness and a greater
likelihood or risk of default or other credit event occurring as defined
under the terms of the agreement.
The following is a summary of the inputs used to value the Fund's net assets as
of June 30, 2018 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Loans:
Energy Equipment & Services.............. $-- $ 834,161 $ 0 $ 834,161
Semiconductors & Semiconductor Equipment. -- 980,409 533,930 1,514,339
Other Industries......................... -- 220,227,365 -- 220,227,365
U.S. Corporate Bonds & Notes............... -- 9,395,542 -- 9,395,542
Foreign Corporate Bonds & Notes:
Hotels, Restaurants & Leisure............ -- -- 365,094 365,094
Other Industries......................... -- 3,468,806 -- 3,468,806
Common Stocks:
Media.................................... -- -- 31,944 31,944
Oil, Gas & Consumable Fuels.............. -- -- 627,383 627,383
Other Industries......................... -- 921,163 -- 921,163
21
AIG Senior Floating Rate Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2018 -- (unaudited) (continued)
Level 1 -- Unadjusted Level 2 -- Other
Quoted Prices Observable Inputs
--------------------- -----------------
Preferred Securities/Capital Securities..................................... $ -- $ 1,578,000
Warrants.................................................................... -- --
Short-Term Investment Securities............................................ 1,255,232 --
Repurchase Agreements....................................................... -- 1,300,000
---------- ------------
Total Investments at Value.................................................. $1,255,232 $238,705,446
========== ============
LIABILITIES:
Other Financial Instruments:@
Forward Foreign Currency Contracts.......................................... $ -- $ 26,316
Centrally Cleared Credit Default Swaps on Credit Indices -- Sell Protection. -- 3,094
---------- ------------
Total Other Financial Instruments........................................... $ -- $ 29,410
========== ============
Level 3 -- Significant
Unobservable Inputs Total
---------------------- ------------
Preferred Securities/Capital Securities..................................... $ -- $ 1,578,000
Warrants.................................................................... 1,455 1,455
Short-Term Investment Securities............................................ -- 1,255,232
Repurchase Agreements....................................................... -- 1,300,000
---------- ------------
Total Investments at Value.................................................. $1,559,806 $241,520,484
========== ============
LIABILITIES:
Other Financial Instruments:@
Forward Foreign Currency Contracts.......................................... $ -- $ 26,316
Centrally Cleared Credit Default Swaps on Credit Indices -- Sell Protection. -- 3,094
---------- ------------
Total Other Financial Instruments........................................... $ -- $ 29,410
========== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
@ Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation (depreciation) on
the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund.
See Notes to Financial Statements
22
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
Note 1. Organization of the Fund
SunAmerica Senior Floating Rate Fund, Inc. (the "Corporation") is an
open-end, diversified management investment company organized as a Maryland
corporation in 1998 and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Corporation consists of one series --
AIG Senior Floating Rate Fund (the "Fund"). The Fund is managed by
SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an
indirect wholly-owned subsidiary of American International Group, Inc.
("AIG"). The Fund's investment goal and principal investment techniques are
to provide as high a level of current income as is consistent with the
preservation of capital by investing, under normal market conditions, at
least 80% of its net assets, plus any borrowings for investment purposes, in
senior secured floating rate loans and other institutionally traded secured
floating rate debt obligations ("Loans"). The Fund may also purchase both
investment grade and high yield fixed income securities and money market
instruments, although the Fund may not invest more than 10% of its total
assets in high yield fixed income securities. The Fund may invest in foreign
securities, including up to 10% of its total assets in non-U.S. dollar
denominated Loans and high yield fixed income securities and up to 25% of
its total assets in U.S. dollar denominated Loans issued by non-U.S.
companies.
The Fund offers three classes of shares: Class A, Class C and Class W. These
classes within the Fund are presented in the Statement of Assets and
Liabilities. The cost structure for each class is as follows:
Class A shares-- Offered at net asset value per share plus an initial sales
charge. Additionally, purchases of Class A shares in excess
of $1,000,000 will be purchased at net asset value but will
be subject to a contingent deferred sales charge ("CDSC")
on redemptions made within two years of purchase.
Class C shares-- Offered for sale at net asset value without a front-end
sales charge, although a CDSC may be imposed on redemptions
made within 12 months of purchase.
Class W shares-- Offered at net asset value per share. The class is offered
exclusively through advisory fee-based programs sponsored
by certain financial intermediaries and other programs.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Fund's
registration statement. Class A and Class C shares each make distribution
and account maintenance fee payments under the distribution plans pursuant
to Rule 12b-1 under the 1940 Act, with Class C shares being subject to
higher distribution fee rates. Class W shares have not adopted a 12b-1 plan
and make no payments thereunder, however, Class W shares pay a service fee
to the Fund's distributor for providing administrative and shareholder
services.
Indemnifications: The Fund's organizational documents provide current and
former officers and directors with a limited indemnification against
liabilities arising out of the performance of their duties to the Fund. In
addition, pursuant to Indemnification Agreements between the Fund and each
of the current directors who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Fund (collectively, the
"Disinterested Directors"), the Fund provides the Disinterested Directors
with a limited indemnification against liabilities arising out of the
performance of their duties to the Fund, whether such liabilities are
asserted during or after their service as directors. In addition, in the
normal course of business, the Fund enters into contracts that contain the
obligation to indemnify others. The Fund's maximum exposure under these
arrangements is unknown. Currently, however, the Fund expects the risk of
loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from these
estimates and those differences could be significant. The Fund is considered
an investment company under GAAP and follows the accounting and reporting
guidance applicable to
23
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
investment companies. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements:
Security Valuation: In accordance with the authoritative guidance on fair
value measurements and disclosures under GAAP, the Fund discloses the fair
value of its investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Fund would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
establishes a three-tier hierarchy to provide more transparency around the
inputs used to measure fair value and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices on foreign equity
securities that were adjusted in accordance with pricing procedures approved
by the Board of Directors (the "Board"), etc.)
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Fund's own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments is not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
The summary of the Fund's assets and liabilities classified in the fair
value hierarchy as of June 30, 2018, is reported on a schedule following the
Portfolio of Investments.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than
24
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
one exchange, the Fund uses the exchange that is the primary market for the
security. Such securities are generally categorized as Level 1. However,
depending on the foreign market, closing prices may be up to 15 hours old
when they are used to price a Fund's shares, and the Fund may determine that
certain closing prices do not reflect the fair value of the security. This
determination will be based on the review of a number of factors, including
developments in foreign markets, the performance of U.S. securities markets,
and the performance of instruments trading in U.S. markets that represent
foreign securities and baskets of foreign securities. If the Fund determines
that closing prices do not reflect the fair value of the securities, the
Fund will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Fund may also fair value securities in other situations, for example, when a
particular foreign market is closed but the Fund is open. For foreign equity
securities and foreign equity futures contracts, the Fund uses an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices, and when so adjusted, such securities and
futures are generally categorized as Level 2.
Bonds, debentures, and other debt securities are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service, and are generally categorized as Level 2. The pricing service may
use valuation models or matrix pricing which considers information with
respect to comparable bond and note transactions, quotations from bond
dealers, or by reference to other securities that are considered comparable
in such characteristics as rating, interest rate, and maturity date, option
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Senior secured floating rate loans ("Loans") are valued at the average of
available bids in the market for such Loans, as provided by a Board-approved
loan pricing service, and are generally categorized as Level 2.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Investments in registered investment companies are generally
categorized as Level 1.
Swap contracts traded on national securities exchanges are valued at the
closing price of the exchange on which they are traded or if a closing price
of the exchange is not available, the swap will be valued using a mid
valuation provided by a Board-approved pricing service, and are generally
categorized as Level 2. Swap contracts traded in the over-the-counter
("OTC") market are valued at a mid valuation provided by a Board-approved
pricing service, and are generally categorized as Level 2. Forward foreign
currency contracts ("forward contracts") are valued at the 4:00 pm Eastern
time forward rate and are generally categorized as Level 2.
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Fund, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the Fund's
fair valuation procedures. Securities for which market quotations are not
readily available or the values of which may be significantly impacted by
the occurrence of developments or significant events are generally
categorized as Level 3. There is no single standard for making fair value
determinations, which may result in prices that vary from those of other
funds.
Derivative Instruments:
Forward Foreign Currency Contracts: During the period, the Fund used forward
contracts to protect against uncertainty in the level of future exchange
rates.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market
25
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
daily using the forward rate and the cumulative change in market value is
recorded by the Fund as unrealized appreciation or depreciation. On the
settlement date, the Fund records either realized gains or losses equal to
the difference between the value of the contract at the time it was opened
and the value at the time it was closed.
Risks to the Fund of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, the
Fund's loss will generally consist of the net amount of contractual payments
that the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statement of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy,
purchases and sales of currency and related instruments can be adversely
affected by government exchange controls, limitations or restrictions on
repatriation of currency, and manipulations or exchange restrictions imposed
by governments.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule following the Fund's Portfolio of
Investments.
Swap Contracts: The Fund may enter into credit default, interest rate,
equity and/or total return swap contracts. Swap contracts are privately
negotiated in the OTC market and may be entered into as a bilateral contract
or a centrally cleared contract ("centrally cleared swaps"). In a centrally
cleared swap, immediately following execution of the swap contract, the swap
contract is novated to a central counterparty (the "CCP") and a Fund faces
the CCP through a broker. Upon entering into a centrally cleared swap, the
Fund is required to deposit initial margin with the broker in the form of
cash or securities in an amount that varies depending on the size and risk
profile of the particular swap. Securities deposited as initial margin are
designated on the Portfolio of Investments and cash deposited is recorded on
the Statements of Assets and Liabilities as cash collateral for centrally
cleared swap contracts. Unlike a bilateral swap contract, for centrally
cleared swaps, the Fund has no credit exposure to the counterparty as the
CCP stands between the Fund and the counterparty. Swaps are marked-to-market
daily and the changes in value are recorded as an unrealized gain (loss).
The daily change in valuation of swap contracts, if any, is recorded as
unrealized appreciation (depreciation) on swap contracts. When the swap is
terminated, the Fund will record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction
and the Fund's basis in the contract, if any. Generally, the basis of the
contracts is the premium received or paid. The Fund amortizes upfront
payments and receipts on swap contracts on a daily basis. Net periodic
payments made or received by a Fund is included as part of realized gain
(loss).
Credit Default Swap Agreements: During the period, the Fund used credit
default swaps on credit indices primarily for liquidity management purposes.
Credit default swaps generally are contracts in which one party makes
periodic fixed-rate payments or a one time premium payment (referred to as
the buyer of protection) to another party (the seller of protection) in
exchange for the right to receive a specified payment in the event of a
default or other credit event for the referenced entity, obligation or
index. As a seller of protection on credit default swaps, a Fund will
generally receive from the buyer of protection a fixed rate of income
throughout the term of the swap provided that there is no credit event. As
the seller, a Fund would effectively add leverage to its portfolio because,
in addition to its total net assets, the Fund would be subject to investment
exposure on the notional amount of the swap. If a Fund is a seller of
protection and a credit event occurs, as defined under the terms of that
particular swap agreement, the Fund will either (i) pay to the buyer of
protection an amount equal to the notional amount of the swap and take
delivery of the referenced obligation, other deliverable obligations or
underlying securities comprising the referenced index or (ii) pay a net
settlement amount in the form of cash or securities equal to the notional
amount of the swap less the recovery value of the referenced obligation or
underlying securities comprising the referenced index. As a buyer of
protection on credit default swaps,
26
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
a Fund will make periodic payments, similar to an insurance premium and the
seller of protection agrees to compensate the Fund for future potential
losses as a result of a credit event on the reference bond or other asset. A
Fund effectively transfers the credit event risk of the reference bond or
asset from it to the seller of protection. If a Fund is a buyer of
protection and a credit event occurs, as defined under the terms of that
particular swap agreement, the Fund will either (i) receive from the seller
of protection an amount equal to the notional amount of the swap and deliver
the referenced obligation, other deliverable obligations or underlying
securities comprising the referenced index or (ii) receive a net settlement
amount in the form of cash or securities equal to the notional amount of the
swap less the recovery value of the referenced obligation or underlying
securities comprising the referenced index. Recovery values are assumed by
market makers considering either industry standard recovery rates or entity
specific factors and considerations until a credit event occurs. If a credit
event has occurred, the recovery value is determined by a facilitated
auction whereby a minimum number of allowable broker bids, together with a
specified valuation method, are used to calculate the settlement value.
Credit default swaps on corporate issues or sovereign issues of an emerging
market country are contracts in which the buyer of protection makes periodic
fixed payments or a one time premium payment to the seller of protection in
exchange for the right to receive a specified payment in the event of a
default or other credit event. If a credit event occurs and cash settlement
is not elected, a variety of other deliverable obligations may be delivered
in lieu of the specific referenced obligation. The ability to deliver other
obligations may result in a cheapest-to deliver option (the buyer of
protection's right to choose the deliverable obligation with the lowest
value following a credit event). A Fund may use credit default swaps on
corporate issues or sovereign issues of an emerging market country to
provide a measure of protection against defaults of the issuers (i.e., to
reduce credit risk where the Portfolio owns or has exposure to the
referenced obligation) or to take a speculative credit position with an
active long or short position with respect to the likelihood of a particular
issuer's default.
Credit default swaps on asset-backed securities are contracts in which the
buyer of protection makes periodic fixed-rate payments or a one time premium
payment to the seller of protection in exchange for the right to receive a
specified payment in the event of a default or other credit event. Unlike
credit default swaps on corporate issues or sovereign issues of an emerging
market country, deliverable obligations in most instances would be limited
to the specific referenced obligation as performance for asset-backed
securities can vary across deals. Prepayments, principal paydowns, and other
writedown or loss events on the underlying mortgage loans will reduce the
outstanding principal balance of the referenced obligation. These reductions
may be temporary or permanent as defined under the terms of the swap
agreement and the notional amount for the swap agreement will be adjusted by
corresponding amounts. A Fund may use credit default swaps on asset-backed
securities to provide a measure of protection against defaults of the
referenced obligation or to take a speculative credit position with an
active long or short position with respect to the likelihood of a particular
referenced obligation's default.
Credit default swaps on credit indices are generally contracts in which the
buyer of protection makes periodic fixed-rate payments or a one time premium
payment to the seller of protection in exchange for the right to receive a
specified payment in the event of a write-down, principal shortfall,
interest shortfall or default of all or part of the referenced entities
comprising the credit index. A credit index is a list of a basket of credit
instruments or exposures designed to be representative of some part of the
credit market as a whole. These indices are made up of reference credits
that are judged by a poll of dealers to be the most liquid entities in the
credit default swap market based on the sector of the index. Components of
the indices may include, but are not limited to, investment grade
securities, high yield securities, asset backed securities, emerging
markets, and/or various credit ratings within each sector. Credit indices
are traded using credit default swaps with standardized terms including a
fixed spread and standard maturity dates. An index credit default swap
references all the names in the index, and if there is a default, the credit
event is settled based on that name's weight in the index. The composition
of the indices changes periodically, usually every six months, and for most
indices, each name has an equal weight in the index. A Fund may use credit
default swaps on credit indices to hedge a portfolio of credit default swaps
or bonds which is less expensive than it would be to enter into many credit
default swaps to achieve a similar effect. Credit-default swaps on indices
are used for protecting investors owning bonds against default, and also to
speculate on changes in credit quality.
27
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
Implied credit spreads, represented in absolute terms, utilized in
determining the market value of credit default swaps on corporate issues or
sovereign issues of an emerging market country as of period end are reported
on a schedule following the Fund's Portfolio of Investments and serve as an
indicator of the current status of the payment/performance risk and
represent the likelihood or risk of default for the credit derivative. The
implied credit spread of a particular referenced entity reflects the cost of
buying/selling protection and may include upfront payments required to be
made to enter into the agreement. For credit default swaps on asset-based
securities and credit indices, the quoted market prices and resulting values
serve as the indicator of the current status of the payment/performance
risk. Wider credit spreads and increasing market values, in absolute terms
when compared to the notional amount of the swap, represent a deterioration
of the referenced entity's credit soundness and a greater likelihood or risk
of default or other credit event occurring as defined under the terms of the
agreement. The maximum potential amount of future payments (undiscounted)
that a Fund as a seller of protection could be required to make under a
credit default swap would be an amount equal to the notional amount of the
agreement. Notional amounts of all credit default swaps outstanding at the
end of the period for which a Fund is the seller of protection, if any, are
disclosed on a schedule following the Fund's Portfolio of Investments. These
potential amounts would be partially offset by any recovery values of the
respective referenced obligations, upfront payments received upon entering
into the agreement, or net amounts received from the settlement of buy
protection credit default swaps entered into by a Portfolio for the same
referenced entity or entities.
Credit default swap contracts outstanding at the end of the period, if any,
are reported on a schedule following the Fund's Portfolio of Investments
Risks of Entering into Swap Agreements: Risks to a Fund of entering into
credit default swaps, equity swaps and interest rate swaps, include credit
risk, market risk, counterparty risk, liquidity risk and documentation risk.
By entering into swap agreements, a Fund may be exposed to risk of potential
loss due to unfavorable changes in interest rates, the price of the
underlying security or index, or the underlying referenced asset's perceived
or actual credit, that the counterparty may default on its obligation to
perform or the possibility that there is no liquid market for these
agreements. There is also the risk that the parties may disagree as to the
meaning of contractual terms in the swap agreement. In addition, to the
extent that a subadviser does not accurately analyze and predict the
underlying economic factors influencing the value of the swap, a Fund may
suffer a loss.
Master Agreements: The Fund holds derivative instruments and other financial
instruments whereby the Fund may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern such
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on the Fund's net position with each counterparty. Master Agreements
may also include certain provisions that require the Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to the Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of the Fund's counterparties to elect early termination could
cause the Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to the Fund's financial statements. The Fund does
not offset derivative assets and derivative liabilities that are subject to
netting arrangements in the Statement of Assets and Liabilities.
28
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
The following tables represent the value of derivatives held as of June 30,
2018, by their primary underlying risk exposure and respective location on
the Statement of Assets and Liabilities and the effect of derivatives on the
Statement of Operations for the six-months ended June 30, 2018. The
derivative contracts held during the period are not accounted for as hedging
instruments under GAAP. For a detailed presentation of derivatives held as
of June 30, 2018, please refer to the Portfolio of Investments.
Asset Derivatives
--------------------------------------------------------
Credit Contracts Foreign Exchange Contracts
----------------- --------------------------
Forward Foreign
Swap Contracts(1) Currency Contracts(3) Total
----------------- -------------------------- -------
$ -- $ -- $ --
Liability Derivatives
--------------------------------------------------------
Credit Contracts Foreign Exchange Contracts
----------------- --------------------------
Forward Foreign
Swap Contracts(2) Currency Contracts(4) Total
----------------- -------------------------- -------
$3,094 $26,316 $29,410
Statement of Assets and Liabilities Location:
(1) Unrealized appreciation on swap contracts
(2) Unrealized depreciation on swap contracts
(3) Unrealized appreciation on forward foreign currency contracts
(4) Unrealized depreciation on forward foreign currency contracts
Realized Gain (Loss) on Derivatives Recognized in Statement of Operations
-------------------------------------------------------------------------------------
Credit Contracts Foreign Exchange Contracts
----------------------- --------------------------------
Forward Foreign
Swap Contracts(1) Currency Contracts(2) Total
----------------------- -------------------------------- -------------
$32,854 $280,657 $313,511
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Statement of Operations
-------------------------------------------------------------------------------------
Credit Contracts Foreign Exchange Contracts
----------------------- --------------------------------
Forward Foreign
Swap Contracts(3) Currency Contracts(4) Total
----------------------- -------------------------------- -------------
$(3,094) $23,905 $20,811
Statement of Operations Location:
(1) Net realized gain (loss) on swap contracts
(2) Net realized gain (loss) on forward contracts
(3) Change in unrealized appreciation (depreciation) on swap
contracts
(4) Change in unrealized appreciation (depreciation) on forward
contracts
Average Amount Outstanding During
the Period
----------------------------------------------------------------
Credit Contracts(1) Foreign Exchange Contracts(1)
---------------------------------- -----------------------------
$ 886,198 $6,170,242
--------
(1) Amounts represent notional amounts in US dollars.
The following table sets forth the Fund's derivative assets and liabilities
by counterparty, net of amounts available for offset under Master Agreements
and net of the related collateral pledged/(received) as of June 30, 2018.
The repurchase agreements held by the Fund as of June 30, 2018, are also
subject to Master Agreements but are not
29
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
included in the following tables. See the Portfolio of Investments and the
Notes to the Financial Statements for more information about the Fund's
holdings in repurchase agreements.
AIG Senior Floating Rate Fund
----------------------------------------------
Derivative Assets(1) Derivative Liabilities(1)
-------------------- -------------------------
Forward Forward Net
Foreign Foreign Derivative Collateral
Currency Currency Assets Pledged/
Counterparty Contracts Total Contracts Total (Liabilities) (Received)(2) Net Amount(3)
------------ --------- ----- --------- ------- ------------- ------------- -------------
BNP Paribas SA..................... $ -- $ -- $ 1,516 $ 1,516 $ (1,516) $ -- $ (1,516)
Credit Suisse International........ -- -- 92 92 (92) -- (92)
UBS AG............................. -- -- 24,708 24,708 (24,708) -- (24,708)
---- ---- ------- ------- -------- ---- --------
Total.............................. $ -- $ -- $26,316 $26,316 $(26,316) $ -- $(26,316)
==== ==== ======= ======= ======== ==== ========
-
(1)Gross amounts of recognized assets and liabilities not offset in the
Statement of Assets and Liabilities.
(2)For each respective counterparty, collateral pledged or (received) is
limited to an amount not to exceed 100% of the derivative
asset/liability in the table above.
(3)Net amount represents the net amount due (to)/from counterparty in
the event of a default based on the contractual set-off rights under
the agreement.
Repurchase Agreements: The Fund, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Fund's custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). The underlying collateral is
valued daily on a mark to market basis, plus accrued interest, to ensure
that the value, at the time the agreement is entered into, is equal to at
least 102% of the repurchase price, including accrued interest. In the event
of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
As of June 30, 2018, the Fund held an undivided interest in a joint
repurchase agreement with Bank of America Securities LLC:
Percentage Principal
Ownership Amount
---------- ---------
Senior Floating Rate Fund......................... 0.42% $270,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Bank of America Securities LLC, dated June 29, 2018, bearing interest at a
rate of 2.07% per annum, with a principal amount of $65,000,000, a
repurchase price of $65,011,213, and a maturity date of July 2, 2018. The
repurchase agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes................ 2.38% 08/15/2024 $67,310,000 $66,312,813
As of June 30, 2018, the Fund held an undivided interest in a joint
repurchase agreement with Barclays Capital, Inc.:
Percentage Principal
Ownership Amount
---------- ---------
Senior Floating Rate Fund......................... 0.40% $60,000
30
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Barclays Capital, Inc., dated June 29, 2018, bearing interest at a rate of
2.05% per annum, with a principal amount of $15,000,000, a repurchase price
of $15,002,563, and a maturity date of July 2, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Bonds................ 4.25% 05/15/2039 $12,606,000 $15,272,957
As of June 30, 2018, the Fund held an undivided interest in a joint
repurchase agreement with BNP Paribas SA:
Percentage Principal
Ownership Amount
---------- ---------
Senior Floating Rate Fund......................... 0.42% $355,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated June 29, 2018, bearing interest at a rate of 2.10% per
annum, with a principal amount of $85,000,000, a repurchase price of
$85,014,875, and a maturity date of July 2, 2018. The repurchase agreement
is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes................ 2.38% 08/15/2024 $88,055,600 $86,751,312
As of June 30, 2018, the Fund held an undivided interest in a joint
repurchase agreement with Deutsche Bank AG:
Percentage Principal
Ownership Amount
---------- ---------
Senior Floating Rate Fund......................... 0.41% $190,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated June 29, 2018, bearing interest at a rate of 2.09%
per annum, with a principal amount of $46,025,000, a repurchase price of
$46,033,016, and a maturity date of July 2, 2018. The repurchase agreement
is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- -----------
U.S. Treasury Notes................ 1.75% 05/31/2022 $48,665,000 $47,039,135
As of June 30, 2018, the Fund held an undivided interest in a joint
repurchase agreement with RBS Securities, Inc.:
Percentage Principal
Ownership Amount
---------- ---------
Senior Floating Rate Fund......................... 0.43% $425,000
31
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
RBS Securities, Inc., dated June 29, 2018, bearing interest at a rate of
2.08% per annum, with a principal amount of $100,000,000, a repurchase price
of $100,017,333, and a maturity date of July 2, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Value
------------------ -------- ---------- ---------------- ------------
U.S. Treasury Notes................ 1.38% 02/28/2019 $102,170,000 $102,045,063
When-Issued Securities and Forward Commitments: The Fund may purchase or
sell when-issued securities that have been authorized, but not yet issued in
the market. In addition, the Fund may purchase or sell securities on a
forward commitment basis. A forward commitment involves entering into a
contract to purchase or sell securities, typically on an extended settlement
basis, for a fixed price at a future date. The Fund may engage in
when-issued or forward commitment transactions in order to secure what is
considered to be an advantageous price and yield at the time of entering
into the obligation. The purchase of securities on a when-issued or forward
commitment basis involves a risk of loss if the value of the security to be
purchased declines before the settlement date. Conversely, the sale of
securities on a when-issued or forward commitment basis involves the risk
that the value of the securities sold may increase before the settlement
date. Securities purchased or sold on a when-issued or forward commitment
basis outstanding at the end of the period, if any, are included in
investments purchased/sold on an extended settlement basis in the Statement
of Assets and Liabilities.
Loans: The Fund invests in senior loans which generally consist of direct
debt obligations of companies (collectively, "Borrowers"), primarily U.S.
companies and their affiliates, undertaken to finance the growth of the
Borrower's business internally and externally, or to finance a capital
restructuring. Transactions in senior loans may settle on a delayed basis.
Unsettled loans at the end of the period, if any, are included in
investments purchased/sold on an extended settlement basis in the Statement
of Assets and Liabilities.
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is accrued daily from
settlement date except when collection is not expected. Dividend income is
recorded on the ex-dividend date. For financial statement purposes, the Fund
amortizes all premiums and accretes all discounts. Facility fees received,
which were $144,333 for the six months ended June 30, 2018, are accreted to
income over the life of the Loans. Other income, including amendment fees,
commitment fees, letter of credit fees, etc., which were $52,745 for the six
months ended June 30, 2018, are recorded as income when received or
contractually due to the Fund.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital share activity
of the respective class).
Dividends from net investment income are normally declared daily and paid
monthly. Capital gain distributions, if any, are paid annually. The Fund
records dividends and distributions to the shareholders on the ex-dividend
date. The amount of dividends and distributions from net investment income
and net realized capital gains are determined in accordance with federal
income tax regulations, which may differ from GAAP. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts at fiscal year end based on their
federal tax-basis treatment; temporary differences do not require
reclassification. Net assets are not affected by the reclassifications.
The Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income,
32
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
including any net capital gains on investments, to its shareholders. The
Fund also intends to distribute sufficient net investment income and net
capital gains, if any, so that the Fund will not be subject to excise tax on
undistributed income and gains. Therefore, no federal income tax or excise
tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed the Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2014-2016 or expected to be taken in the Fund's 2017 tax return. The Fund is
not aware of any tax provisions for which it is reasonably possible that the
total amounts of unrecognized tax benefits will change materially in the
next twelve months. The Fund files U.S. federal and certain state income tax
returns. With few exceptions, the Fund is no longer subject to U.S. federal
and state tax examinations by tax authorities for tax returns ending before
2014.
Foreign Currency Translation: The books and records of the Fund is
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Fund does not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates.
Note 3. Capital Share Transactions
For the
six months ended For the
June 30, 2018 year ended
(unaudited) December 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
Class A ---------- ------------ ---------- ------------
Shares sold............................................................... 3,481,735 $ 28,250,465 3,434,101 $ 27,824,751
Reinvested dividends...................................................... 208,855 1,693,118 421,399 3,408,788
Shares redeemed........................................................... (2,460,136) (19,964,594) (8,657,492) (70,030,581)
---------- ------------ ---------- ------------
Net increase (decrease) in shares outstanding before automatic conversion. 1,230,454 9,978,989 (4,801,992) (38,797,042)
Shares issued/(reacquired) upon automatic conversion...................... 1,321,179 10,727,966 -- --
---------- ------------ ---------- ------------
Net increase (decrease)................................................ 2,551,633 $ 20,706,955 (4,801,992) $(38,797,042)
========== ============ ========== ============
For the
six months ended For the
June 30, 2018 year ended
(unaudited) December 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
Class C ---------- ------------ ---------- ------------
Shares sold............................................................... 554,927 $ 4,498,671 1,459,830 $ 11,815,111
Reinvested dividends...................................................... 201,078 1,629,576 487,601 3,943,236
Shares redeemed........................................................... (3,631,716) (29,435,604) (4,475,181) (36,188,359)
---------- ------------ ---------- ------------
Net increase (decrease) in shares outstanding before automatic conversion. (2,875,711) (23,307,357) (2,527,750) (20,430,012)
Shares issued/(reacquired) upon automatic conversion...................... (1,322,808) (10,727,966) -- --
---------- ------------ ---------- ------------
Net increase (decrease)................................................ (4,198,519) $(34,035,323) (2,527,750) $(20,430,012)
========== ============ ========== ============
33
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
For the For the
six months ended period April 20, 2017@
June 30, 2018 through December 31,
(unaudited) 2017
----------------------- ----------------------
Shares Amount Shares Amount
Class W ---------- ----------- --------- -----------
Shares sold............................................................... 1,162,268 $ 9,442,927 3,180,792 $25,734,259
Reinvested dividends...................................................... 35,746 290,075 24,217 196,167
Shares redeemed........................................................... (1,028,077) (8,356,538) (763,311) (6,184,018)
---------- ----------- --------- -----------
Net increase (decrease) in shares outstanding before automatic conversion. 169,937 1,376,464 2,441,698 19,746,408
Shares issued/(reacquired) upon automatic conversion...................... -- -- -- --
---------- ----------- --------- -----------
Net increase (decrease)................................................ 169,937 $ 1,376,464 2,441,698 $19,746,408
========== =========== ========= ===========
Note 4. Purchases and Sales of Securities
During the six months ended June 30, 2018, the Fund's cost of purchases and
proceeds from sale of long-term investments, including loan principal
paydowns, were $60,565,050 and $63,781,075, respectively.
Note 5. Investment Advisory Agreement and Other Transactions with Affiliates
The Fund has entered into an Investment Advisory and Management Agreement
(the "Advisory Agreement") with SunAmerica. Pursuant to the Advisory
Agreement, SunAmerica provides continuous supervision of the Fund and
administers its corporate affairs, subject to the general review and
oversight of the Board. In connection therewith, SunAmerica furnishes the
Fund with office facilities, maintains certain of the Fund's books and
records and pays the salaries and expenses of all personnel, including
officers of the Fund who are employees of SunAmerica and its affiliates.
SunAmerica also selects, contracts with and compensates the subadviser to
manage the Fund's assets. The Fund will pay SunAmerica a monthly management
fee at the following annual rates, based on the average daily net assets of
the Fund: 0.85% on the first $1 billion; 0.80% on the next $1 billion; and
0.75% in excess of $2 billion.
Pursuant to an Advisory Fee Waiver Agreement, effective through April 30,
2019, SunAmerica is contractually obligated to waive its advisory fee with
respect to the Fund so that the advisory fee payable by the Fund to
SunAmerica equals 0.69% on the first $2 billion of average daily net assets
and 0.64% above $2 billion of average daily net assets. For the period ended
June 30, 2018, SunAmerica waived $63,373 of investment advisory fees.
Wellington Management Company LLP ("Wellington") acts as subadviser to the
Fund pursuant to a Subadvisory Agreement with SunAmerica. Under the
Subadvisory Agreement, Wellington manages the investment and reinvestment of
the Fund's assets. For compensation for its services as subadviser,
Wellington is entitled to receive from SunAmerica a monthly fee payable at
the following annual rates: 0.30% of average daily net assets on the first
$500 million and 0.25% thereafter. Pursuant to a Subadvisory Fee Waiver
Agreement, effective through April 30, 2019, Wellington is contractually
obligated to waive a portion of its subadvisory fee with respect to the Fund
so that the subadvisory fee payable by SunAmerica to Wellington Management
is equal to 0.14% of the Fund's average daily net assets. The fee paid to
the subadviser is paid by SunAmerica and not the Fund.
Pursuant to the Administrative Services Agreement (the "Administrative
Agreement"), SunAmerica acts as the Fund's administrator and is responsible
for providing and supervising the performance by others, of administrative
services in connection with the operations of the Fund, subject to
supervision by the Fund's Board. For its services, SunAmerica receives an
annual fee equal to 0.20% of average daily net assets of the Fund. For the
six months ended June 30, 2018, SunAmerica earned fees as reflected in the
Statement of Operations based upon the aforementioned rate.
The Fund has entered into a Distribution Agreement with AIG Capital
Services, Inc. ("ACS" or the "Distributor"), an affiliate of the Adviser.
The Fund has adopted a Distribution Plan on behalf of each class of shares
(other than Class W shares) (each a "Plan" and collectively, the "Plans") in
accordance with the provisions of Rule 12b-1 under the 1940 Act, hereinafter
referred to as the "Class A Plan" and "Class C Plan". In adopting the Plans,
the Board determined that there was a reasonable likelihood that each such
Plan would benefit the Fund and the shareholders of the respective class.
The sales charge and distribution fees of a particular class will not be
used to subsidize the sale of shares of any other class.
34
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
Under the Class A Plan and Class C Plan, the Distributor receives payments
from the Fund at an annual rate of 0.10% and 0.50%, respectively, of the
average daily net assets of the Fund's Class A and Class C shares to
compensate the Distributor and certain securities firms for providing sales
and promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated include fees
paid to broker-dealers that have sold Fund shares, commissions and other
expenses such as those incurred for sales literature, prospectus printing
and distribution and compensation to wholesalers. It is possible that in any
given year, the amount paid to the Distributor under each Class' Plan may
exceed the Distributor's distribution costs as described above. The Plans
provide that the Class A and Class C shares of the Fund will pay the
Distributor an account maintenance fee up to an annual rate of 0.25% of the
aggregate average daily net assets of such class of shares for payments to
compensate the Distributor and certain securities firms for account
maintenance activities. The Distributor does not receive or retain any
distribution and/or account maintenance fees for any shares when the
shareholder does not have a broker of record. For the six months ended June
30, 2018, ACS received fees (see Statement of Operations) based upon the
aforementioned rates. The Fund has entered into an Administrative and
Shareholder Services Agreement with ACS, pursuant to which ACS is paid an
annual fee of 0.15% of average daily net assets of Class W shares as
compensation for providing additional shareholder services to Class W
shareholders. For the six months ended June 30, 2018, ACS earned fees as
reflected in the Statement of Operations based on the aforementioned rate.
For the six months ended June 30, 2018, ACS received sales charges on
Class A shares of $62,314, of which $34,354 was reallowed to affiliated
broker-dealers and $16,471 to non-affiliated broker-dealers. In addition,
ACS receives the proceeds of contingent deferred sales charges paid by
investors in connection with certain redemptions of Class A and Class C
shares. For the six months ended June 30, 2018, ACS received contingent
deferred sales charges of $1,648.
The Fund has entered into a Service Agreement with AIG Fund Services, Inc.
("AFS") an affiliate of the Adviser. Under the Service Agreement, AFS
performs certain shareholder account functions by assisting the Fund's
transfer agent in connection with the services that it offers to the
shareholders of the Fund. The Service Agreement, which permits the Fund to
compensate AFS for services rendered based upon an annual rate of 0.22% of
average daily net assets, is approved annually by the Board. For the six
months ended June 30, 2018, the Fund incurred the following expenses, which
are included in the transfer agent fees and expenses payable in the
Statement of Assets and Liabilities and in transfer agent fees and expenses
in the Statement of Operations to compensate AFS pursuant to the terms of
the Service Agreement.
Payable at
Expense June 30, 2018
- -------- -------------
Class A............................ $112,313 $20,305
Class C............................ 128,809 18,606
Class W............................ 21,298 3,824
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Fund's annual operating expenses at 1.15%
for Class A, 1.55% for Class C and 0.95% for Class W of average daily net
assets. Prior to May 1, 2018, SunAmerica contractually agreed to waive fees
and/or reimburse expenses to the extent necessary to cap the Fund's annual
operating expenses at 1.45% for Class A, 1.75% for Class C and 1.25% for
Class W of average daily net assets. For purposes of waived fees and/or
reimbursed expense calculations, annual Fund operating expenses shall not
include extraordinary expenses, (i.e., expenses that are unusual in nature
and/or infrequent in occurrence, such as litigation), or acquired fund fees
and expenses, brokerage commissions and other transactional expenses
relating to the purchase and sale of portfolio securities, interest, taxes
and governmental fees and other expenses not incurred in the ordinary course
of the Fund's business. The expense reimbursements and fee waivers will
continue indefinitely, unless terminated by the Board, including a majority
of the Disinterested Directors. For the six months ended June 30, 2018,
SunAmerica waived fees and/or reimbursed expenses as follows: Class A
$246,399, Class C $311,170 and Class W $56,231.
35
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable and wash sales.
Distributable Earnings Tax Distributions
---------------------------------------- -------------------------------------
For the year ended December 31, 2017 For the year ended December 31, 2017
---------------------------------------- -------------------------------------
Long-term Gains/ Unrealized Long-term
Ordinary Capital and Appreciation/ Ordinary Capital
Income Other Losses (Depreciation) Income Gains
-------- ---------------- -------------- ----------- ---------
$6,252 $(22,880,388) $(5,072,933) $9,629,365 $--
Capital Loss Carryforwards: At December 31, 2017 for Federal income tax
purposes, the Fund has $22,880,388 of unlimited long-term capital losses.
For the year ended December 31, 2017, the fund utilized short-term capital
losses of $307,778 and expired capital loss carryforwards of $27,303,177.+
-----
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changed various technical rules
governing the tax treatment of regulated investment companies. The changes
are generally effective for taxable years beginning after the date of
enactment. Under the Act, a fund will be permitted to carry forward capital
losses incurred in taxable years beginning after the date of enactment for
an unlimited period. However, any losses incurred during those future
taxable years will be required to be utilized prior to the losses incurred
in pre-enactment taxable years, which carry an expiration date. As a result
of this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
Under the current law, capital losses realized after October 31 and
specified ordinary losses may be deferred and treated as occurring on the
first day of the following year. For the year ended December 31, 2017, the
fund deferred $38,019 of late year ordinary losses, $214,499 of post-October
short-term capital gains and $565,264 of post-October long-term capital
losses.
At June 30, 2018, the amounts of aggregate unrealized gain (loss) and the
cost of investment securities for federal tax purposes, including short-term
securities, repurchase agreements and derivatives, were as follows:
Cost (tax basis)............................................ $246,156,904
============
Gross unrealized appreciation............................... 817,693
Gross unrealized depreciation............................... (5,363,763)
------------
Net unrealized depreciation................................. $ (4,546,070)
============
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into
law. Certain provisions of the Act were effective upon enactment with the
remainder becoming effective for tax years beginning after December 31,
2017. Management is currently evaluating the impact, if any, on the
financial statements and the accompanying notes to financial statements.
Note 7. Line of Credit
The Fund, along with certain other funds managed by the Adviser has access
to a $75 million committed unsecured line of credit and a $50 million
uncommitted unsecured line of credit. The committed and uncommitted lines of
credit are renewable on an annual basis with State Street Bank and Trust
Company ("State Street"), the Fund's custodian. Interest is currently
payable on the committed line of credit at the higher of the Federal Funds
Rate (but not less than zero) plus 125 basis points or the One-Month London
Interbank Offered Rate (but not less than zero) plus 125 basis points and
State Street's discretionary bid rate on the uncommitted line of credit.
There is also a commitment fee of 25 basis points per annum on the daily
unused portion of the committed line of credit and an upfront fee of $25,000
on the uncommitted line of credit. Borrowings under the line of credit will
commence when the respective Fund's cash shortfall exceeds $100,000.
36
SunAmerica Senior Floating Rate Fund, Inc.
NOTES TO FINANCIAL STATEMENTS -- June 30, 2018 -- (unaudited)
(continued)
For the six months ended June 30, 2018, the Fund did not utilize the line of
credit.
Note 8. Interfund Lending
Pursuant to the exemptive relief granted by the SEC, the Fund is permitted
to participate in an interfund lending program among investment companies
advised by SunAmerica or an affiliate. The interfund lending program allows
the participating funds to borrow money from and lend money to each other
for temporary or emergency purposes. An interfund loan will be made under
this facility only if the participating funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction. For the six months ended June 30, 2018, the Fund did
not participate in this program.
Note 9. Investment Concentration
The Fund invests primarily in participations and assignments, or acts as a
party to the primary lending syndicate of a variable rate senior loan
interest to United States corporations, partnerships, and other entities. If
the lead lender in a typical lending syndicate becomes insolvent, enters
receivership or, if not FDIC insured, enters into bankruptcy, the Fund may
incur certain costs and delays in receiving payment, or may suffer a loss of
principal and/or interest. When the Fund purchases a participation of a
senior loan interest, the Fund typically enters into a contractual agreement
with the lender or other third party selling the participation but not with
the borrower directly. As such, the Fund is subject to the credit risk of
the borrower, selling participant, lender or other persons positioned
between the Fund and the borrower.
Note 10. Unfunded Loan Commitments
At June 30, 2018, the Fund had the following unfunded loan commitments which
could be extended at the option of the Borrower:
Maturity Principal
Borrower Type Date Amount Value
-------- ------------ ---------- --------- --------
Dental Corp. Perfect Smile ULC..... Delayed Draw 06/06/2025 $124,328 $124,328
EG Group Limited................... Delayed Draw 02/06/2025 EUR 133,998 154,397
Gentiva Health Services, Inc....... Delayed Draw 07/02/2025 311,589 311,589
Gopher Sub, Inc.................... Delayed Draw 02/03/2025 26,582 26,316
37
SunAmerica Senior Floating Rate Fund, Inc.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- June
30, 2018 -- (unaudited)
The Board of Directors (the "Board" the members of which are referred to as
"Directors") of AIG Senior Floating Rate Fund, Inc (the "Fund"), including the
Directors who are not "interested persons," as defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended (the "1940 Act") (the
"Independent Directors"), of the Fund, SunAmerica Asset Management, LLC
("SunAmerica") or Wellington Management Company LLP ("Wellington"), approved
the continuation of the Investment Advisory and Management Agreement between
the Fund and SunAmerica (the "Advisory Agreement") for a one-year period ending
June 30, 2019 at an in-person meeting held on June 5-6, 2018 (the "Meeting").
At the Meeting, the Board, including the Independent Directors, also approved
the continuation of the Subadvisory Agreement between SunAmerica and Wellington
with respect to the Fund for a one-year period ending June 30, 2019 (the
"Subadvisory Agreement," and together with the Advisory Agreement, the
"Agreements").
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and Wellington provided materials relating to the Board's
consideration of whether to approve the continuation of the Agreements. These
materials included: (a) a summary of the services provided to the Fund by
SunAmerica and its affiliates, and by Wellington; (b) information independently
compiled and prepared by Broadridge Financial Solutions, Inc. ("Broadridge"),
an independent third-party provider of mutual fund data on fees and expenses of
the Fund, and the investment performance of the Fund as compared with a peer
group of funds, along with fee and performance data with respect to the Fund
and any other mutual funds or accounts advised or subadvised by SunAmerica or
Wellington with similar investment objectives and/or strategies, as applicable;
(c) information on the profitability of SunAmerica and its affiliates, and a
discussion relating to indirect benefits; (d) information relating to economies
of scale; (e) information about SunAmerica's general compliance policies and
procedures and the services it provides in connection with its oversight of
subadvisers; (f) information about SunAmerica's and Wellington's risk
management processes; (g) information regarding brokerage and soft dollar
practices; and (h) information about the key personnel of SunAmerica and its
affiliates, and Wellington, that are involved in the investment management,
administration, compliance and risk management activities with respect to the
Fund, as well as current and projected staffing levels and compensation
practices.
In determining whether to approve the continuation of the Agreements, the
Board, including Independent Directors, considered at the Meeting, and from
time to time as appropriate, factors it deemed relevant, including the
following information:
Nature, Extent and Quality of Services Provided by SunAmerica and Wellington
The Board, including the Independent Directors, considered the nature, extent
and quality of services provided by SunAmerica. The Board noted that the
services include acting as investment manager and adviser to the Fund, managing
the daily business affairs of the Fund, and obtaining and evaluating economic,
statistical and financial information to formulate and implement the Fund's
investment policies. Additionally, the Board observed that SunAmerica provides
office space, bookkeeping, accounting, legal and compliance, clerical and
administrative services and has authorized its officers and employees, if
elected, to serve as officers or directors of the Fund without compensation.
The Board also noted that SunAmerica is responsible for monitoring and
reviewing the activities of affiliated and unaffiliated third-party service
providers, including Wellington. In addition to the quality of the advisory
services provided by SunAmerica, the Board considered the quality of the
administrative and other services provided by SunAmerica to the Fund pursuant
to the Advisory Agreement. Additionally, the Board observed that SunAmerica
performs or supervises the performance by others of other administrative
services in connection with the operation of the Fund pursuant to the
Administrative Services Agreement between SunAmerica and the Fund (the
"Administrative Services Agreement").
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Fund. The Board also reviewed the personnel
responsible for providing advisory services to the Fund and other key personnel
of SunAmerica in addition to current and projected staffing levels and
compensation practices. The Board concluded, based on its experience and
interaction with SunAmerica, that: (i) SunAmerica would continue to be able to
retain quality investment and other personnel; (ii) SunAmerica has exhibited a
high level of diligence and attention to detail in carrying out its advisory
and other responsibilities under the Advisory Agreement; (iii) SunAmerica has
been responsive to requests of the Board; and (iv) SunAmerica has kept the
Board apprised of
38
SunAmerica Senior Floating Rate Fund, Inc.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- June
30, 2018 -- (unaudited) (continued)
developments relating to the Fund and the industry in general. The Board
concluded that the nature and extent of services provided under the Advisory
Agreement were reasonable and appropriate in relation to the management fees
and that the quality of services continues to be high. The Board also noted the
high quality of services under the Administrative Services Agreement.
The Board also considered SunAmerica's reputation and relationship with the
Fund and considered the benefit to shareholders of investing in funds that are
part of a family of funds offering a variety of types of mutual funds and
shareholder services. The Board considered SunAmerica's experience in providing
management and investment advisory and administrative services to advisory
clients and noted that as of March 31, 2018, SunAmerica managed, advised and/or
administered approximately $89.5 billion in assets. In addition, the Board
considered SunAmerica's code of ethics and its commitment to compliance
generally and with respect to its management and administration of the Fund.
The Board also considered SunAmerica's risk management processes. The Board
further observed that SunAmerica has developed internal procedures for
monitoring compliance with the investment objectives, policies and restrictions
of the Fund as set forth in the Fund's prospectus. The Board also reviewed
SunAmerica's compliance and regulatory history and noted that there were no
material legal, regulatory or compliance issues that would potentially impact
SunAmerica in effectively serving as the investment adviser to the Fund.
The Board also considered the nature, extent and quality of services provided
by Wellington. The Board observed that Wellington is responsible for providing
day-to-day investment management services, including investment research,
advice and supervision, and determining which securities will be purchased or
sold by the Fund, or portion thereof, that Wellington manages, subject to the
oversight and review of SunAmerica. The Board reviewed Wellington's history,
structure, size, visibility and resources, which are needed to attract and
retain highly qualified investment professionals. The Board reviewed the
personnel that are responsible for providing subadvisory services to the Fund,
and other key personnel of Wellington, in addition to current and projected
staffing levels and compensation practices, and concluded, based on its
experience with Wellington, that Wellington: (i) has been able to retain high
quality portfolio managers and other investment personnel; (ii) has exhibited a
high level of diligence and attention to detail in carrying out its
responsibilities under the Subadvisory Agreement; and (iii) has been responsive
to requests of the Board and of SunAmerica. In addition, the Board considered
Wellington's code of ethics and risk management process. The Board further
observed that Wellington has developed internal policies and procedures for
monitoring compliance with the investment objectives, policies and restrictions
of the Fund as set forth in the Fund's prospectus. The Board also reviewed
Wellington's compliance and regulatory history and noted that there were no
material legal, regulatory or compliance issues that would potentially impact
Wellington from effectively serving as a subadviser to the Fund. The Board
concluded that the nature and extent of services provided by Wellington under
the Subadvisory Agreement were reasonable and appropriate in relation to the
subadvisory fees and that the quality of services continues to be high.
Investment Performance
The Board, including the Independent Directors, also considered the investment
performance of SunAmerica and Wellington with respect to the Fund. In
connection with its review, the Board received and reviewed information
regarding the investment performance of the Fund as compared to the Fund's peer
group ("Peer Group") and peer universe ("Peer Universe") as independently
determined by Broadridge and to an appropriate index or combination of indices,
including the Fund's benchmarks. The Board was provided with a description of
the methodology used by Broadridge to select the funds in the Peer Group and
Peer Universe.
The Board noted that performance information was for the periods ended
March 31, 2018. The Board also noted that it regularly reviews the performance
of the Fund throughout the year. The Board further noted that, while it
monitors performance of the Fund closely, it generally attaches more importance
to performance over relatively long periods of time, typically three to five
years.
The Board considered that the Fund's performance was above the median of its
Peer Group for the one- and five-year periods and equal to the median of its
Peer Group for the three-year period. The Board also considered that the Fund's
performance was below the median of its Peer Universe for the one-year period
and above the median of its Peer Universe for the three- and five-year periods.
The Board further noted that the Fund underperformed its Broadridge Index
39
SunAmerica Senior Floating Rate Fund, Inc.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- June
30, 2018 -- (unaudited) (continued)
for the one-year period, outperformed its Broadridge Index for the three-year
period and equaled the performance of its Broadridge Index for the five-year
period. The Board noted management's discussion of the Fund's performance and
concluded that the Portfolio's overall performance was satisfactory.
Consideration of the Management Fees and the Cost of the Services and Profits
to be Realized by SunAmerica, Wellington and their Affiliates from the
Relationship with the Fund
The Board, including the Independent Directors, received and reviewed
information regarding the fees paid by the Fund to SunAmerica pursuant to the
Advisory Agreement and the fees paid by SunAmerica to Wellington pursuant to
the Subadvisory Agreement. The Board examined this information in order to
determine the reasonableness of the fees in light of the nature and quality of
services to be provided and any potential additional benefits to be received by
SunAmerica, Wellington or their affiliates in connection with providing such
services to the Fund.
To assist in analyzing the reasonableness of the management fees for the Fund,
the Board received reports independently prepared by Broadridge. The reports
showed comparative fee information for the Fund's Peer Group and Peer Universe
as determined by Broadridge, including rankings within each category. In
considering the reasonableness of the management fees to be paid by the Fund to
SunAmerica, the Board reviewed a number of expense comparisons, including:
(i) contractual and actual management fees; and (ii) actual total operating
expenses. In considering the Fund's total operating expenses, the Board
analyzed the level of fee waivers and expense reimbursements and the net
expense caps contractually agreed upon by SunAmerica. The Board further
considered that, unlike the funds in the Peer Group and Peer Universe, the fee
waivers and/or reimbursements being made by SunAmerica with respect to the
Funds are only reflected in the total expenses category of the Broadridge
reports, rather than also being reflected as specific management fee waivers in
the actual management fees category of the Broadridge reports. As a result, the
Board took into account that the actual management fees presented by Broadridge
for the funds in the Peer Group and Peer Universe may appear lower on a
relative basis. The Board also considered the various expense components of the
Fund and compared the Fund's net expense ratio to those of other funds within
its Peer Group and Peer Universe as a guide to help assess the reasonableness
of the management fee for the Fund. The Board acknowledged that it was
difficult to make precise comparisons with other funds in the Peer Group and
Peer Universe since the exact nature of services provided under the various
fund agreements is often not apparent. The Board noted, however, that the
comparative fee information provided by Broadridge as a whole was useful in
assessing whether SunAmerica was providing services at a cost that was
competitive with other, similar funds.
The Board further considered services and management fees received by
SunAmerica with respect to other mutual funds with similar investment
strategies to the Fund. The Board then noted the management fee paid by the
Fund was reasonable as compared to the fees SunAmerica was receiving from other
mutual funds for which it serves as adviser.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to Wellington pursuant to the Subadvisory Agreement. To assist in
analyzing the reasonableness of the subadvisory fee, the Board received a
report independently prepared by Broadridge. The report showed comparative fee
information of the Fund's Peer Group and/or Peer Universe that the Directors
used as a guide to help assess the reasonableness of the subadvisory fee. The
Directors noted that the Peer Group/Universe information as a whole was useful
in assessing whether Wellington was providing services at a cost that was
competitive with other, similar funds. The Directors also considered that the
subadvisory fee is paid by SunAmerica out of its management fees and not by the
Fund, and that subadvisory fees may vary widely within a Peer Group for various
reasons, including market pricing demands, existing relationships, experience
and success, and individual client needs. The Board further considered the
amount of subadvisory fee paid out by SunAmerica and the amount of the
management fees which it retained and determined that these amounts were
reasonable in light of the services performed by SunAmerica and Wellington,
respectively.
The Board also considered fees received by Wellington with respect to other
mutual funds and accounts with similar investment strategies to the Fund for
which Wellington serves as adviser or subadviser, to the extent applicable. The
Board noted in particular that the similar accounts identified by Wellington
were institutional separate accounts, and Wellington highlighted certain
differences between these separate accounts and the Fund, including that these
separate accounts are subject to different investment limitations and
restrictions and do not experience daily cash flows in a
40
SunAmerica Senior Floating Rate Fund, Inc.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- June
30, 2018 -- (unaudited) (continued)
manner similar to the Fund. The Board then noted that the subadvisory fee paid
by SunAmerica to Wellington was reasonable as compared to fees Wellington
receives for other comparable accounts for which they serve as adviser or
subadviser.
The Board considered that the Fund's actual management fees were above the
medians of its Peer Group and Peer Universe. The Board also considered that the
Fund's total expenses were above the medians of its Peer Group and Peer
Universe. The Board noted that the Fund's advisory fee contains breakpoints and
further noted management's discussions regarding the Fund's expenses. The Board
also took into account recent actions to reduce Fund expenses through
management fee waivers and expense limitations.
Profitability
The Board also considered SunAmerica's profitability and the benefits
SunAmerica and its affiliates received from their relationship with the Fund.
The Board received and reviewed financial statements relating to SunAmerica's
financial condition and profitability with respect to the services it provided
the Fund and considered how profit margins could affect SunAmerica's ability to
attract and retain high quality investment professionals and other key
personnel. The Board was also provided with a profitability analysis that
detailed the revenues earned and the expenses incurred by SunAmerica and its
affiliates that provide services to the Fund. In particular, the Board
considered the contractual fee waivers and/or expense reimbursements agreed to
by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, including the amount of management fees retained after payment to
Wellington, as well as the profitability of SunAmerica under the Administrative
Services Agreement, and considered the profitability of SunAmerica's affiliates
under the Rule 12b-1 Plans, Service Agreement and Administrative and
Shareholder Services Agreement. Additionally, the Board considered whether
SunAmerica, Wellington and their affiliates received any indirect benefits from
the relationship with the Fund. Specifically, the Board observed that AIG
Federal Savings Bank, an affiliate of SunAmerica, serves as custodian with
respect to certain shareholder retirement accounts that are administered by
SunAmerica and receives a fee payable by the qualifying shareholders. The Board
further considered whether there were any collateral or "fall-out" benefits
that SunAmerica and its affiliates may derive as a result of their relationship
with the Fund. The Board noted that SunAmerica believes that any such benefits
are de minimis and do not impact the reasonableness of the management fees.
The Board also reviewed financial statements and/or other information from
Wellington and considered whether Wellington had the financial resources
necessary to attract and retain high quality investment management personnel
and to provide a high quality of services.
The Board concluded that SunAmerica and Wellington had the financial resources
necessary to perform its obligations under the Agreements and to continue to
provide the Fund with the high quality services that they had provided in the
past. The Board further concluded that the management fees were reasonable in
light of the factors discussed above.
Economies of Scale
The Board, including the Independent Directors, considered whether the
shareholders would benefit from economies of scale and whether there was
potential for future realization of economies with respect to the Fund. The
Board considered that as a result of being part of the AIG fund complex, the
Fund shares common resources and may share certain expenses, and if the size of
the complex increases, the Fund could incur lower expenses than it otherwise
would achieve as a stand-alone entity. The Board also took into account that
the Fund had a management fee arrangement that included breakpoints that will
adjust the fee downward as the size of the Fund increases, thereby allowing the
shareholders to potentially participate in any economies of scale. The Board
further noted that SunAmerica has agreed to contractually cap the total annual
operating expenses of the Fund at certain levels. The Board observed that those
expense caps benefited shareholders by limiting total fees even in the absence
of breakpoints or economies of scale. The Board concluded that the Fund's
management fee structure was reasonable and that it would continue to review
fees in connection with the renewal of the Advisory Agreement, including
whether the implementation of additional breakpoints would be appropriate in
the future due to an increase in asset size or otherwise.
41
SunAmerica Senior Floating Rate Fund, Inc.
APPROVAL OF THE INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS -- June
30, 2018 -- (unaudited) (continued)
The Board noted that the Subadvisory Agreement included breakpoints, but did
not review specific information regarding whether there have been economies of
scale with respect to Wellington's management of the Fund because it regards
that information as less relevant at the subadviser level. Rather, the Board
considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement and concluded that the management fee
structure, including the amount of management fee retained by SunAmerica, was
reasonable in light of the factors described above.
Other Factors
In consideration of the Agreements, the Board also received information
regarding SunAmerica's and Wellington's brokerage and soft dollar practices.
The Board considered that Wellington is responsible for decisions to buy and
sell securities for the Fund, selection of broker-dealers and negotiation of
commission rates, as applicable. The Board also considered that the Fund
invests primarily in senior secured floating rate loans and, therefore, the
Fund generally does not incur significant brokerage commissions.
Conclusion
After a full and complete discussion, the Board approved the Agreements, each
for a one-year period ending June 30, 2019. Based upon its evaluation of all
these factors in their totality, the Board, including the Independent
Directors, was satisfied that the terms of the Agreements were fair and
reasonable and in the best interests of the Fund and the Fund's shareholders.
In arriving at a decision to approve the Agreements, the Board did not identify
any single factor or group of factors as all-important or controlling, but
considered all factors together, and each Independent Director may have
attributed different weights to different factors. The Independent Directors
were also assisted by the advice of independent legal counsel in making this
determination.
42
[LOGO]
AIG Funds
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Directors VOTING PROXIES ON FUND DISCLOSURE OF QUARTERLY
Dr. Judith L. Craven PORTFOLIO SECURITIES PORTFOLIO HOLDINGS
William F. Devin A description of the The Fund is required to
Richard W. Grant policies and proce-dures file its com-plete
Stephen J. Gutman that the Fund uses to schedule of portfolio
Peter A. Harbeck determine how to vote holdings with the U.S.
Eileen A. Kamerick proxies related to Securities and Exchange
Officers securities held in the Commission for its first
John T. Genoy, President Fund's portfolio, which and third fiscal quarters
and Chief Executive is available in the on Form N-Q. The Fund's
Officer Fund's Statement of Forms N-Q are available
James Nichols, Vice Additional Information on the U.S. Securities
President may be ob-tained without and Exchange Commission's
Tim Pettee, Vice charge upon request, by website at
President calling (800) 858-8850. http://www.sec.gov. You
Christopher C. Joe, This in-formation is also can also review and
Chief Compliance available from the EDGAR obtain copies of the
Officer database on the U.S. Forms N-Q at the U.S.
Gregory N. Bressler, Secu-rities and Exchange Securities and Exchange
Secretary Commission's website at Commission's Public
Gregory R. Kingston, http://www.sec.gov. Refer-ence Room in
Treasurer DELIVERY OF SHAREHOLDER Washington, DC
Kathleen Fuentes, Chief DOCUMENTS (information on the
Legal Officer and The Fund has adopted a operation of the Public
Assistant Secretary policy that allows it to Reference Room may be
Matthew J. Hackethal, send only one copy of the ob-tained by calling
Anti-Money Laundering Fund's prospectus, proxy 1-800-SEC-0330).
Compliance Officer material, annual report PROXY VOTING RECORD ON
Donna McManus, Vice and semi-annual report FUND PORTFOLIO SECURITIES
President and (the "shareholder Information regarding how
Assistant Treasurer documents") to the Fund voted proxies
Shawn Parry, Vice shareholders with relating to securities
President and multiple accounts held in the Fund's
Assistant Treasurer residing at the same portfolio during the most
Investment Adviser "household." This recent twelve month
SunAmerica Asset practice is called period ended June 30 is
Management, LLC householding and reduces available, once filed
Harborside 5 Fund expenses, which with the U.S. Securities
185 Hudson Street, Suite benefits you and other and Exchange Commis-sion,
3300 shareholders. Unless the without charge, upon
Jersey City, NJ 07311 Fund receives request, by calling
Distributor instructions to the (800) 858-8850 or on the
AIG Capital Services, con-trary, you will only U.S. Securities and
Inc. receive one copy of the Exchange Commission's
Harborside 5 shareholder documents. website at
185 Hudson Street, Suite The Fund will continue to http://www.sec.gov.
3300 household the This report is submitted
Jersey City, NJ 07311 share-holder documents solely for the general
Shareholder Servicing indefinitely, until we information of
Agent are instructed otherwise. shareholders of the Fund.
AIG Fund Services, Inc. If you do not wish to Distribution of this
Harborside 5 participate in report to persons other
185 Hudson Street, Suite house-holding, please than shareholders of the
3300 contact Shareholder Fund is authorized only
Jersey City, NJ 07311 Services at (800) in connection with a
Transfer Agent 858-8850 ext. 6010 or currently effective
DST Asset Manager send a written request prospectus, setting forth
Solutions, Inc. with your name, the name details of the Fund,
303 W 11th Street of your fund(s) and your which must precede or
Kansas City, MO 64105 account number(s) to AIG accompany this report.
Custodian Funds, P.O. Box 219186, The accompanying report
State Street Bank and Kansas City MO, has not been audited by
Trust Company 64121-9186. We will independent accountants
One Lincoln St. resume individual and accordingly no
Boston, MA 02111 mailings for your account opinion has been
within thirty (30) days expressed thereon.
of receipt of your
request.
[GRAPHIC]
Go Paperless!!
Did you know that you have the option to
receive your shareholder reports online?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
It's Quick -- Fund documents will be received faster than via traditional mail.
It's Convenient -- Elimination of bulky documents from personal files.
It's Cost Effective -- Reduction of your Fund's printing and mailing costs.
To sign up for electronic delivery, follow
these simple steps:
1 Go to www.aig.com/funds
2 Click on the link to "Go Paperless!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.aig.com/funds at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
For information on receiving this report online, see inside back cover.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and
distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside
5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo
and ACS are members of American International Group, Inc. (AIG).
This fund report must be preceded by or accompanied by a prospectus.
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the
prospectus carefully before investing.
[LOGO]
aig.com/funds
SFSAN - 6/18
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors that were
implemented after the registrant last provided disclosure in response to
the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407)
(as required by 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this
Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the
registrant's last fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the registrant's internal contro1 over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Senior Floating Rate Fund, Inc.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: September 7, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
------------------------------------
John T. Genoy
President
Date: September 7, 2018
By: /s/ Gregory R. Kingston
------------------------------------
Gregory R. Kingston
Treasurer
Date: September 7, 2018
EXHIBIT 99.CERT
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT
I, John T. Genoy, certify that:
1. I have reviewed this report on Form N-CSR of SunAmerica Senior Floating Rate
Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: September 6, 2018
/s/ John T. Genoy
----------------------------------------
John T. Genoy
President
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT
I, Gregory R. Kingston, certify that:
1. I have reviewed this report on Form N-CSR of SunAmerica Senior Floating Rate
Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: September 6, 2018
/s/ Gregory R. Kingston
----------------------------------------
Gregory R. Kingston
Treasurer
EXHIBIT 99.906.CERT
CERTIFICATIONS PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT
John T. Genoy, President, and Gregory R. Kingston, Treasurer of SunAmerica
Senior Floating Rate Fund, Inc. (the "registrant"), each certify to the
best of his knowledge that:
1. The attached Form N-CSR report of the registrant fully complies with the
requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of
1934; and
2. The information contained in such N-CSR report fairly represents, in all
material respects, the financial conditions and results of operations of
the registrant as of, and for, the periods presented in the report.
Dated: September 6, 2018
/s/ John T. Genoy
------------------------------------
John T. Genoy
President
/s/ Gregory R. Kingston
------------------------------------
Gregory R. Kingston
Treasurer
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