The data shown above represents past performance, which is no guarantee of future results.
* The amount of distributions made to shareowners during the year was in excess of the net investment income earned by the Fund during the year.
The mountain chart on the right shows the change in market value, including reinvestment of dividends and distributions, of a $10,000 investment made in shares of Pioneer Floating Rate Fund, Inc. during the periods
shown, compared with the value of the S&P/LSTA Leveraged Loan Index, which provides broad and comprehensive total return metrics of the U.S. universe of syndicated term loans.
Call 1-800-710-0935 or visit www.amundi.com/us for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted.
Performance data shown represents past performance. Past performance is no guarantee of future results. Investment return and market price will fluctuate, and your shares may trade below NAV, due to
such factors as interest rate changes, and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions. All performance is for shares of the Fund.
Shares of closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and, once issued, shares of closed-end funds are bought and sold in the open market through a stock
exchange and frequently trade at prices lower than their NAV. NAV per share is total assets less total liabilities, which include preferred shares, or borrowings, as applicable, divided by the number of shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at the greater of NAV or 95% of the market price. When NAV is higher, dividends are assumed to be reinvested at prices obtained through
open-market purchases under the Fund’s dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the sale of Fund shares. Had these fees and taxes been reflected, performance would
have been lower.
Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. The index does not use leverage. You
cannot invest directly in an index.
Purchases and sales of securities (excluding temporary cash investments) for the six months ended May 31, 2021, aggregated $65,922,754 and $201,720,118, respectively.
The Fund is permitted to engage in purchase and sale transactions (“cross trades”) with certain funds and accounts for which Amundi Asset Management US, Inc. (the “Adviser”) serves as the Fund’s investment adviser, as
set forth in Rule 17a-7 under the Investment Company Act of 1940, pursuant to procedures adopted by the Board of Directors. Under these procedures, cross trades are effected at
current market prices. During the six months ended May 31, 2021, the Fund engaged in sales of $7,555,861 which resulted in a net realized gain/(loss) of $(171,939). During the six months ended May 31, 2021, the Fund
did not engage in purchases pursuant to these procedures.
At May 31, 2021, the net unrealized appreciation on investments based on cost for federal tax purposes of $210,469,812 was as follows:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels below.
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 risks, etc.). See Notes to Financial
Statements — Note 1A.
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments). See Notes to Financial Statements — Note 1A.
The following is a summary of the inputs used as of May 31, 2021, in valuing the Fund’s investments:
Statement of Assets and Liabilities |
5/31/21
(unaudited)
ASSETS:
|
|
Investments in unaffiliated issuers, at value (cost $209,803,792)
|
$ 216,345,339
|
Cash
|
5,739,953
|
Receivables —
|
|
Investment securities sold
|
3,888,193
|
Dividends
|
33,525
|
Interest
|
964,101
|
Other assets
|
108
|
Total assets
|
$ 226,971,219
|
LIABILITIES:
|
|
Payables —
|
|
Credit agreement
|
$ 69,450,000
|
Investment securities purchased
|
12,173,705
|
Interest expense
|
5,161
|
Directors’ fees
|
3,558
|
Unrealized depreciation on unfunded loan commitments
|
105
|
Due to affiliates
|
15,548
|
Accrued expenses
|
516,754
|
Total liabilities
|
$ 82,164,831
|
NET ASSETS:
|
|
Paid-in capital
|
$ 208,118,096
|
Distributable earnings (loss)
|
(63,311,708)
|
Net assets
|
$ 144,806,388
|
NET ASSET VALUE PER SHARE:
|
|
No par value
|
|
Based on $144,806,388/12,369,087 shares
|
$ 11.71
|
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 33
Statement of Operations (unaudited)
FOR THE SIX MONTHS ENDED 5/31/21
|
|
|
INVESTMENT INCOME:
|
|
|
Interest from unaffiliated issuers
|
$ 5,367,790
|
|
Dividends from unaffiliated issuers
|
112,515
|
|
Total investment income
|
|
$ 5,480,305
|
EXPENSES:
|
|
|
Management fees
|
$ 808,213
|
|
Administrative expense
|
65,873
|
|
Transfer agent fees
|
42,817
|
|
Shareowner communications expense
|
52,391
|
|
Custodian fees
|
14,377
|
|
Professional fees
|
157,234
|
|
Printing expense
|
100,000
|
|
Pricing fees
|
10,812
|
|
Directors’ fees
|
3,232
|
|
Interest expense
|
361,400
|
|
Miscellaneous
|
26,259
|
|
Total expenses
|
|
$ 1,642,608
|
Net investment income
|
|
$ 3,837,697
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
|
|
Net realized gain (loss) on:
|
|
|
Investments in unaffiliated issuers
|
$ (1,952,349)
|
|
Swap contracts
|
(1,979)
|
$ (1,954,328)
|
Change in net unrealized appreciation (depreciation) on:
|
|
|
Investments in unaffiliated issuers
|
$ 8,920,729
|
|
Unfunded loan commitments
|
1,807
|
$ 8,922,536
|
Net realized and unrealized gain (loss) on investments
|
|
$ 6,968,208
|
Net increase in net assets resulting from operations
|
|
$ 10,805,905
|
The accompanying notes are an integral part of these financial statements.
34 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
Statements of Changes in Net Assets
|
|
|
|
Six Months
|
|
|
Ended
|
Year
|
|
5/31/21
|
Ended
|
|
(unaudited)
|
11/30/20
|
FROM OPERATIONS:
|
|
|
Net investment income (loss)
|
$ 3,837,697
|
$ 16,823,696
|
Net realized gain (loss) on investments
|
(1,954,328)
|
(17,863,156)
|
Change in net unrealized appreciation (depreciation)
|
|
|
on investments
|
8,922,536
|
2,911,121
|
Net increase in net assets resulting from operations
|
$ 10,805,905
|
$ 1,871,661
|
DISTRIBUTIONS TO SHAREOWNERS:
|
|
|
($0.38 and $0.74 per share, respectively)
|
$ (5,411,475)
|
$ (18,368,094)
|
Total distributions to shareowners
|
$ (5,411,475)
|
$ (18,368,094)
|
FROM FUND SHARE TRANSACTIONS:
|
|
|
Cost of shares repurchased through tender offer (Note 8)
|
$ (136,821,893)
|
$ —
|
Net decrease in net assets resulting from Fund
|
|
|
share transactions
|
$ (136,821,893)
|
$ —
|
Net decrease in net assets
|
$(131,427,463)
|
$ (16,496,433)
|
NET ASSETS:
|
|
|
Beginning of period
|
$ 276,233,851
|
$ 292,730,284
|
End of period
|
$ 144,806,388
|
$ 276,233,851
|
|
|
|
|
|
|
Six Months
|
Six Months
|
|
|
|
Ended
|
Ended
|
|
|
|
05/31/21
|
05/31/21
|
Year Ended
|
Year Ended
|
|
Shares
|
Amount
|
11/30/20
|
11/30/20
|
|
(unaudited)
|
(unaudited)
|
Shares
|
Amount
|
FUND SHARE TRANSACTION
|
|
|
|
Shares sold
|
—
|
$ —
|
—
|
$ —
|
Reinvestment of
|
|
|
|
|
distributions
|
—
|
—
|
—
|
—
|
Less shares
|
|
|
|
|
repurchased through
|
|
|
|
|
tender offer (Note 8)
|
(12,369,087)
|
(136,821,893)
|
—
|
—
|
Net decrease
|
(12,369,087)
|
$ (136,821,893)
|
—
|
$ —
|
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 35
Statement of Cash Flows (unaudited)
FOR THE SIX MONTHS ENDED 5/31/21
|
|
Cash Flows From Operating Activities:
|
|
Net increase in net assets resulting from operations
|
$ 10,805,905
|
Adjustments to reconcile net decrease in net assets resulting from operations
|
|
to net cash, restricted cash and foreign currencies from operating activities:
|
|
Purchases of investment securities
|
$ (58,381,048)
|
Proceeds from disposition and maturity of investment securities
|
231,449,009
|
Net accretion and amortization of discount/premium on investment securities
|
(896,528)
|
Change in unrealized appreciation on investments in unaffiliated issuers
|
(8,920,729)
|
Change in unrealized appreciation on unfunded loan commitments
|
(1,807)
|
Net realized loss on investments in unaffiliated issuers
|
1,952,349
|
Decrease in interest receivable
|
1,046,788
|
Increase in other assets
|
(100)
|
Decrease in due to affiliates
|
(19,567)
|
Decrease in directors’ fees payable
|
(1,471)
|
Increase in accrued expenses payable
|
91,582
|
Net cash, restricted cash and foreign currencies from operating activities
|
$ 177,124,383
|
Cash Flows Used in Financing Activities:
|
|
Borrowings received
|
$ 21,500,000
|
Borrowings repaid
|
(57,500,000)
|
Increase in interest expense payable
|
1,692
|
Distributions to shareowners
|
(5,411,475)
|
Payment for shares repurchased through tender offer (Note 8)
|
(136,821,893)
|
Net cash, restricted cash and foreign currencies used in
|
|
financing activities
|
$ (178,231,676)
|
Effect of Foreign Exchange Fluctuations on Cash:
|
|
Effect of foreign exchange fluctuations on cash
|
$ —
|
Cash, Restricted Cash and Foreign Currencies:
|
|
Beginning of period*
|
$ 6,847,246
|
End of period*
|
$ 5,739,953
|
Cash Flow Information:
|
|
Cash paid for interest
|
$ 359,708
|
* The following table provides a reconciliation of cash, restricted cash and foreign currencies reported within Statement of Assets and Liabilities that sum to the total of the same such
amounts shown in the Statement of Cash Flows:
|
|
|
|
|
Six Months
|
|
|
Ended
|
|
|
5/31/21
|
Year Ended
|
|
(unaudited)
|
11/30/20
|
Cash
|
$5,739,953
|
$ 6,847,246
|
Foreign currencies, at value
|
—
|
—
|
Swaps collateral
|
—
|
—
|
Total cash, restricted cash and foreign currencies
|
|
|
shown in the Statement of Cash Flows
|
$5,739,953
|
$ 6,847,246
|
The accompanying notes are an integral part of these financial statements.
36 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
|
|
|
|
|
|
|
|
Six Months
|
|
|
|
|
|
|
Ended
|
Year
|
Year
|
Year
|
Year
|
Year
|
|
5/31/21
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
|
(unaudited)
|
11/30/20
|
11/30/19
|
11/30/18
|
11/30/17
|
11/30/16*
|
Per Share Operating Performance
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$ 11.17
|
$ 11.83
|
$ 12.04
|
$ 12.42
|
$ 12.50
|
$ 12.30
|
Increase (decrease) from investment operations: (a)
|
|
|
|
|
|
|
Net investment income
|
$ 0.27
|
$ 0.68
|
$ 0.73
|
$ 0.74
|
$ 0.71
|
$ 0.77
|
Net realized and unrealized gain (loss) on investments
|
0.65
|
(0.60)
|
(0.20)
|
(0.40)
|
(0.06)
|
|
Net increase (decrease) from investment operations
|
$ 0.92
|
$ 0.08
|
$ 0.53
|
$ 0.34
|
$ 0.65
|
$ 0.92
|
Distributions to shareowners from:
|
|
|
|
|
|
|
Net investment income and previously undistributed net
|
|
|
|
|
|
|
investment income
|
$ (0.38)(b)
|
$ (0.74)(b)
|
$ (0.74)(b)
|
$ (0.72)
|
$ (0.73)(b)
|
$ (0.72)
|
Net increase (decrease) in net asset value
|
$ 0.54
|
$ (0.66)
|
$ (0.21)
|
$ (0.38)
|
$ (0.08)
|
$ 0.20
|
Net asset value, end of period
|
$ 11.71
|
$ 11.17
|
$ 11.83
|
$ 12.04
|
$ 12.42
|
$ 12.50
|
Market value, end of period
|
$ 11.30
|
$ 10.73
|
$ 10.53
|
$ 10.40
|
$ 11.47
|
$ 11.78
|
Total return at net asset value (c)
|
8.41%(d)
|
1.89%
|
5.38%
|
3.34%
|
5.55%
|
|
Total return at market value (c)
|
8.90%(d)
|
9.96%
|
8.59%
|
(3.34)%
|
3.43%
|
15.92%
|
Ratios to average net assets of shareowners:
|
|
|
|
|
|
|
Total expenses plus interest expense (e)(f)
|
2.04%(g)
|
2.58%
|
2.90%
|
2.56%
|
2.21%
|
|
Net investment income available to shareowners
|
4.76%(g)
|
6.26%
|
6.08%
|
5.98%
|
5.62%
|
|
Portfolio turnover rate
|
29%(d)
|
73%
|
48%
|
34%
|
75%
|
|
Net assets, end of period (in thousands)
|
$144,806
|
$276,234
|
$292,730
|
$297,903
|
$307,195
|
$309,308
|
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 37
|
|
|
|
|
|
|
Financial Highlights (continued)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
Year
|
Year
|
Year
|
Year
|
Year
|
|
5/31/21
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
|
(unaudited)
|
11/30/20
|
11/30/19
|
11/30/18
|
11/30/17
|
11/30/16*
|
Total amount of debt outstanding (in thousands)
|
$ 69,450
|
$105,450
|
$139,450
|
$143,450
|
$143,450
|
$143,450
|
Asset coverage per $1,000 of indebtedness
|
$ 3,085
|
$ 3,620
|
$ 3,099
|
$ 3,077
|
$ 3,141
|
$ 3,156
|
*
|
The Fund was audited by an independent registered public accounting firm other than Ernst & Young LLP.
|
(a)
|
The per common share data presented above is based upon the average common shares outstanding for the periods presented.
|
(b)
|
The amount of distributions made to shareowners during the period was in excess of the net investment income earned by the Fund during the period. The Fund has accumulated undistributed net
investment income which is the part of the Fund’s net asset value (“NAV”). A portion of this accumulated net investment income was distributed to shareowners during the period.
|
(c)
|
Total investment return is calculated assuming a purchase of common shares at the current net asset value or market value on the first day and a sale at the current net asset value or market value on the last
day of the periods reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect
brokerage commissions. Past performance is not a guarantee of future results.
|
(d)
|
Not annualized.
|
(e)
|
Expense ratios do not reflect the effect of distribution payments to preferred shareowners.
|
(f)
|
Includes interest expense of 0.45%, 0.70%, 1.60%, 1.35%, 0.95% and 0.63%, respectively.
|
(g)
|
Annualized.
|
The accompanying notes are an integral part of these financial statements.
38 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
Notes to Financial Statements |
5/31/21
1. Organization and Significant Accounting Policies
Pioneer Floating Rate Fund, Inc. (the “Fund”) is organized as a Maryland corporation. Prior to April 21, 2021, the Fund was organized as a Delaware statutory trust. On April 21, 2021, the Fund redomiciled to a
Maryland corporation through a statutory merger of the predecessor Delaware statutory trust with and into a newly-established Maryland corporation formed for the purpose of effecting the redomiciling. The Fund was originally organized on October 6,
2004. Prior to commencing operations on December 28, 2004, the Fund had no operations other than matters relating to its organization and registration as a diversified, closed-end management investment company under the Investment Company Act of
1940, as amended. The investment objective of the Fund is to seek a high level of current income and the Fund may, as a secondary objective, also seek capital appreciation to the extent that it is consistent with its investment objective.
Amundi Asset Management US, Inc., an indirect, wholly owned subsidiary of Amundi and Amundi’s wholly owned subsidiary, Amundi USA, Inc., serves as the Fund’s investment adviser (the “Adviser”). Prior to January 1,
2021, the Adviser was named Amundi Pioneer Asset Management, Inc.
In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2018-13 “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”)
which modifies disclosure requirements for fair value measurements, principally for Level 3 securities and transfers between levels of the fair value hierarchy. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and for
interim periods within those fiscal years. The Fund has adopted ASU 2018-13 for the six months ended May 31, 2021. The impact to the Fund’s adoption was limited to changes in the Fund’s disclosures regarding fair value, primarily those disclosures
related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value investments, when applicable.
In March 2020, FASB issued an Accounting Standard Update, ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides
optional, temporary relief with respect to the financial reporting of contracts subject to certain types of modifications due to the planned discontinuation of the London Interbank Offered Rate (“LIBOR”) and other LIBOR-based reference rates at the
end of 2021. The temporary relief
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 39
provided by ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period from March 12, 2020 through December 31, 2022. Management is evaluating the impact of ASU
2020-04 on the Fund’s investments, derivatives, debt and other contracts, if applicable, that will undergo reference rate-related modifications as a result of the reference rate reform.
The Fund is an investment company and follows investment company accounting and reporting guidance under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). U.S. GAAP requires the management of the Fund to
make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income, expenses and gain or loss on
investments during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:
A. Security Valuation
The net asset value of the Fund is computed once daily, on each day the New York Stock Exchange (“NYSE”) is open, as of the close of regular trading on the NYSE.
Loan interests are valued in accordance with guidelines established by the Board of Directors at the mean between the last available bid and asked prices from one or more brokers or dealers as
obtained from Loan Pricing Corporation, an independent third party pricing service. If price information is not available from Loan Pricing Corporation, or if the price information is deemed to be unreliable, price information will be obtained from
an alternative loan interest pricing service. If no reliable price quotes are available from either the primary or alternative pricing service, broker quotes will be solicited.
Fixed-income securities are valued by using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers,
Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis
of current market prices for other debt securities, historical trading patterns in the market for fixed-income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an
independent third party pricing service.
40 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
When independent third party pricing services are unable to supply prices, or when prices or market quotations are considered to be unreliable, the value of that security may be determined using
quotations from one or more broker-dealers.
Event-linked bonds are valued at the bid price obtained from an independent third party pricing service. Other insurance-linked securities (including reinsurance sidecars, collateralized reinsurance
and industry loss warranties) may be valued at the bid price obtained from an independent pricing service, or through a third party using a pricing matrix, insurance industry valuation models, or other fair value methods or techniques to provide an
estimated value of the instrument.
Equity securities that have traded on an exchange are valued by using the last sale price on the principal exchange where they are traded. Equity securities that have not traded on the date of
valuation, or securities for which sale prices are not available, generally are valued using the mean between the last bid and asked prices or, if both last bid and asked prices are not available, at the last quoted bid price. Last sale and bid and
asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, prices are typically determined by independent third party pricing services using a variety of techniques and
methods.
Swap contracts, including interest rate swaps, caps and floors (other than centrally cleared swap contracts), are valued at the dealer quotations obtained from reputable International Swap Dealers
Association members. Centrally cleared swaps are valued at the daily settlement price provided by the central clearing counterparty.
Securities or loan interests for which independent pricing services or broker-dealers are unable to supply prices or for which market prices and/or quotations are not readily available or are
considered to be unreliable are valued by a fair valuation team comprised of certain personnel of the Adviser pursuant to procedures adopted by the Fund’s Board of Directors. The Adviser’s fair valuation team uses fair value methods approved by the
Valuation Committee of the Board of Directors. The Adviser’s fair valuation team is responsible for monitoring developments that may impact fair valued securities and for discussing and assessing fair values on an ongoing basis, and at least
quarterly, with the Valuation Committee of the Board of Directors.
Inputs used when applying fair value methods to value a security may include credit ratings, the financial condition of the company, current market conditions and comparable securities. The Fund may
use fair value
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 41
methods if it is determined that a significant event has occurred after the close of the exchange or market on which the security trades and prior to the determination of the Fund’s net asset value.
Examples of a significant event might include political or economic news, corporate restructurings, natural disasters, terrorist activity or trading halts. Thus, the valuation of the Fund’s securities may differ significantly from exchange prices,
and such differences could be material.
At May 31, 2021, one security was valued using fair value methods (in addition to securities valued using prices supplied by independent pricing services, broker-dealers or using a third party
insurance pricing model) representing 0.10% of net assets. The value of this fair valued security was $139,759.
B. Investment Income and Transactions
Dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund becomes aware
of the ex-dividend data in the exercise of reasonable diligence.
Interest income, including interest on income-bearing cash accounts, is recorded on the accrual basis. Dividend and interest income are reported net of unrecoverable foreign taxes withheld at the
applicable country rates and net of income accrued on defaulted securities.
Interest and dividend income payable by delivery of additional shares is reclassified as PIK (payment-in-kind) income upon receipt and is included in interest and dividend income, respectively.
Principal amounts of mortgage-backed securities are adjusted for monthly paydowns. Premiums and discounts related to certain mortgage-backed securities are amortized or accreted in proportion to the
monthly paydowns. All discounts/premiums on purchase prices of debt securities are accreted/amortized for financial reporting purposes over the life of the respective securities, and such accretion/amortization is included in interest income.
Security transactions are recorded as of trade date. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax
purposes.
C. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts denominated in foreign currencies are translated into U.S. dollars using current exchange rates.
42 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
Net realized gains and losses on foreign currency transactions, if any, represent, among other things, the net realized gains and losses on foreign currency exchange contracts, disposition of
foreign currencies and the difference between the amount of income accrued and the U.S. dollars actually received. Further, the effects of changes in foreign currency exchange rates on investments are not segregated on the Statement of Operations
from the effects of changes in the market prices of those securities, but are included with the net realized and unrealized gain or loss on investments.
D. Federal Income Taxes
It is the Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income and net realized
capital gains, if any, to its shareowners. Therefore, no provision for federal income taxes is required. As of November 30, 2020, the Fund did not accrue any interest or penalties with respect to uncertain tax positions, which, if applicable, would
be recorded as an income tax expense on the Statement of Operations. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities.
The amount and character of income and capital gain distributions to shareowners are determined in accordance with federal income tax rules, which may differ from U.S. GAAP. Distributions in excess
of net investment income or net realized gains are temporary over distributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Capital accounts within the financial statements are adjusted for permanent book/tax differences to reflect tax character, but are not adjusted for temporary differences.
The tax character of current year distributions payable will be determined at the end of the current taxable year. The tax character of distributions paid during the year ended November 30, 2020 was
as follows:
|
|
|
2020
|
Distributions paid from:
|
|
Ordinary income
|
$18,368,094
|
Total
|
$18,368,094
|
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 43
The following shows the components of distributable earnings (losses) on a federal income tax basis at November 30, 2020:
|
|
|
2020
|
Distributable earnings/(losses):
|
|
Undistributed ordinary income
|
$ 833,701
|
Capital loss carryforward
|
(64,946,589)
|
Other book/tax temporary differences
|
(1,546,136)
|
Unrealized depreciation
|
(3,047,114)
|
Total
|
$(68,706,138)
|
The difference between book basis and tax basis unrealized depreciation is attributable to the tax treatment of premium and amortization, adjustments relating to insurance linked securities, the tax
adjustments relating to credit default swaps and partnerships.
E. Risks
At times, the Fund’s investments may represent industries or industry sectors that are interrelated or have common risks, making the Fund more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors. The Fund’s investments in foreign markets and countries with limited developing markets may subject the Fund to a greater degree of risk than investments in a developed market.
These risks include disruptive political or economic conditions and the imposition of adverse governmental laws or currency exchange restrictions.
The value of securities held by the Fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political or regulatory
conditions, recessions, the spread of infectious illness or other public health issues, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. In the past several years, financial markets have
experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. These conditions may continue, recur, worsen or spread. A general rise in interest rates could adversely affect the price and liquidity of
fixed-income securities and could also result in increased redemptions from the Fund.
The Fund invests primarily in floating rate loans and other floating rate investments. Floating rate loans typically are rated below investment grade. Debt securities rated below-investment-grade
are commonly referred to as “junk bonds” and are considered speculative with respect to the issuer’s capacity to pay interest and repay principal. Below investment
44 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
grade securities, including floating rate loans, involve greater risk of loss, are subject to greater price volatility, and may be less liquid and more difficult to value, especially during periods
of economic uncertainty or change, than higher rated debt securities.
Certain instruments held by the Fund pay an interest rate based on the London Interbank Offered Rate (“LIBOR”), which is the average offered rate for various maturities of short-term loans between
certain major international banks. LIBOR is expected to be phased out by the end of 2021. While the effect of the phase out cannot yet be determined, it may result in, among other things, increased volatility or illiquidity in markets for
instruments based on LIBOR and changes in the value of such instruments.
Under normal market conditions, the Fund seeks to achieve its investment objectives by investing at least 80% of its assets (net assets plus borrowings for investment purposes) in senior floating
rate loans. For purposes of the Fund’s investment policies, senior floating rate loans include funds that invest primarily in senior floating rate loans. Floating rate loans and similar investments may be illiquid or less liquid than other
investments and difficult to value. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices.
Certain securities in which the Fund invests, including floating rate loans, once sold, may not settle for an extended period (for example, several weeks or even longer). The Fund will not receive
its sale proceeds until that time, which may constrain the Fund’s ability to meet its obligations. The Fund may invest in securities of issuers that are in default or that are in bankruptcy. The value of collateral, if any, securing a floating rate
loan can decline or may be insufficient to meet the issuer’s obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Any secondary market
may be subject to irregular trading activity and extended settlement periods. There is less readily available, reliable information about most floating rate loans than is the case for many other types of securities. Normally, the Adviser will seek
to avoid receiving material, nonpublic information about the issuer of a loan either held by, or considered for investment by, the Fund, and this decision could adversely affect the Fund’s investment performance. Loans may not be considered
“securities,” and purchasers, such as the Fund, therefore may not be entitled to rely on the anti-fraud protections afforded by federal securities laws. The Fund’s investments in certain foreign markets or countries with limited developing markets
may subject the Fund to a greater degree of risk than in a developed market. These risks include disruptive political or economic conditions and the possible imposition of adverse governmental laws or currency exchange restrictions.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 45
The Fund’s investments, payment obligations and financing terms may be based on floating rates, such as LIBOR (London Interbank Offered Rate). Plans are underway to phase out the use of LIBOR. The
UK Financial Conduct Authority (“FCA”) and LIBOR’s administrator, ICE Benchmark Administration (“IBA”), have announced that most LIBOR rates will no longer be published after the end of 2021 and a majority of U.S. dollar LIBOR rates will no longer
be published after June 30, 2023. It is possible that the FCA may compel the IBA to publish a subset of LIBOR settings after these dates on a “synthetic” basis, but any such publications would be considered non-representative of the underlying
markets. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. Based on the recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of
major derivative market participants and their regulators), the U.S. Federal Reserve began publishing a Secured Overnight Funding Rate (“SOFR”) that is intended to replace U.S. Dollar LIBOR. Proposals for alternative reference rates for other
currencies have also been announced or have already begun publication, such as SONIA in the United Kingdom. Markets are slowly developing in response to these new rates, and transition planning is at a relatively early stage. Neither the effect of
the transition process nor its ultimate success is known. The transition process may lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. The effect of any changes to — or discontinuation
of — LIBOR on the portfolio will vary depending on, among other things, provisions in individual contracts and whether, how, and when industry participants develop and adopt new reference rates and alternative reference rates for both legacy and
new products and instruments. Because the usefulness of LIBOR as a benchmark may deteriorate during the transition period, these effects could materialize prior to the end of 2021.
The Fund is not limited in the percentage of its assets that may be invested in illiquid securities. Illiquid securities are securities that the Fund reasonably expects cannot be sold or disposed of
in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the securities.
With the increased use of technologies such as the Internet to conduct business, the Fund is susceptible to operational, information security and related risks. While the Fund’s Adviser has
established business continuity plans in the event of, and risk management systems to prevent, limit or mitigate, such cyber-attacks, there are inherent limitations in such plans and systems, including the possibility that certain risks have not
been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by service providers to the Fund such as Brown
46 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
Brothers Harriman & Co., the Fund’s custodian and accounting agent, and American Stock Transfer & Trust Company (“AST”), the Fund’s transfer agent. In addition, many beneficial owners of
Fund shares hold them through accounts at broker-dealers, retirement platforms and other financial market participants over which neither the Fund nor the Adviser exercises control. Each of these may in turn rely on service providers to them, which
are also subject to the risk of cyber-attacks. Cybersecurity failures or breaches at the Adviser or the Fund’s service providers or intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in
financial losses, interference with the Fund’s ability to calculate its net asset value, impediments to trading, the inability of Fund shareowners to effect share purchases or sales or receive distributions, loss of or unauthorized access to
private shareowner information and violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, or additional compliance costs. Such costs and losses may not be covered under any insurance. In addition,
maintaining vigilance against cyber-attacks may involve substantial costs over time, and system enhancements may themselves be subject to cyber-attacks.
COVID-19
The respiratory illness COVID-19 caused by a novel coronavirus has resulted in a global pandemic and major disruption to economies and markets around the world, including the United States. Global
financial markets have experienced extreme volatility and severe losses, and trading in many instruments has been disrupted. Liquidity for many instruments has been greatly reduced for periods of time. Some interest rates are very low and in some
cases yields are negative. Some sectors of the economy and individual issuers have experienced particularly large losses. These circumstances may continue for an extended period of time, and may continue to affect adversely the value and liquidity
of the Fund’s investments. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. Governments and central banks, including the Federal Reserve in the U.S.,
have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. These actions have resulted in significant expansion of public debt, including in the U.S. The impact of these measures, and whether
they will be effective to mitigate the economic and market disruption, will not be known for some time. The consequences of high public debt, including its future impact on the economy and securities markets, likewise may not be known for some
time.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 47
F. Restricted Securities
Restricted Securities are subject to legal or contractual restrictions on resale. Restricted securities generally are resold in transactions exempt from registration under the Securities Act of
1933. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933.
Disposal of restricted investments may involve negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted investments held by the Fund at May 31, 2021
are listed in the Schedule of Investments.
G. Insurance-Linked Securities (“ILS”)
The Fund invests in ILS. The Fund could lose a portion or all of the principal it has invested in an ILS, and the right to additional interest or dividend payments with respect to the security, upon
the occurrence of one or more trigger events, as defined within the terms of an insurance-linked security. Trigger events, generally, are hurricanes, earthquakes, or other natural events of a specific size or magnitude that occur in a designated
geographic region during a specified time period, and/or that involve losses or other metrics that exceed a specific amount. There is no way to accurately predict whether a trigger event will occur, and accordingly, ILS carry significant risk. The
Fund is entitled to receive principal, and interest and/or dividend payments so long as no trigger event occurs of the description and magnitude specified by the instrument. In addition to the specified trigger events, ILS may expose the Fund to
other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences.
The Fund’s investments in ILS may include event-linked bonds. ILS also may include special purpose vehicles (“SPVs”) or similar instruments structured to comprise a portion of a reinsurer’s
catastrophe-oriented business, known as quota share instruments (sometimes referred to as reinsurance sidecars), or to provide reinsurance relating to specific risks to insurance or reinsurance companies through a collateralized instrument, known
as collateralized reinsurance. Structured reinsurance investments also may include industry loss warranties (“ILWs”). A traditional ILW takes the form of a bilateral reinsurance contract, but there are also products that take the form of
derivatives, collateralized structures, or exchange-traded instruments.
Where the ILS are based on the performance of underlying reinsurance contracts, the Fund has limited transparency into the individual underlying contracts, and therefore must rely upon the risk
assessment and sound
48 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
underwriting practices of the issuer. Accordingly, it may be more difficult for the Adviser to fully evaluate the underlying risk profile of the Fund’s structured reinsurance investments, and
therefore the Fund’s assets are placed at greater risk of loss than if the Adviser had more complete information. Structured reinsurance instruments generally will be considered illiquid securities by the Fund. These securities may be difficult to
purchase, sell or unwind. Illiquid securities also may be difficult to value. If the Fund is forced to sell an illiquid asset, the Fund may be forced to sell at a loss.
H. Automatic Dividend Reinvestment Plan
All shareowners whose shares are registered in their own names automatically participate in the Automatic Dividend Reinvestment Plan (the “Plan”), under which participants receive all dividends and
capital gain distributions (collectively, dividends) in full and fractional shares of the Fund in lieu of cash. Shareowners may elect not to participate in the Plan. Shareowners not participating in the Plan receive all dividends and capital gain
distributions in cash. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notifying American Stock Transfer & Trust Company, the agent for shareowners in administering the Plan (the
“Plan Agent”), in writing prior to any dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.
If a shareowner’s shares are held in the name of a brokerage firm, bank or other nominee, the shareowner can ask the firm or nominee to participate in the Plan on the shareowner’s behalf. If the
firm or nominee does not offer the Plan, dividends will be paid in cash to the shareowner of record. A firm or nominee may reinvest a shareowner’s cash dividends in shares of the Fund on terms that differ from the terms of the Plan.
Whenever the Fund declares a dividend on shares payable in cash, participants in the Plan will receive the equivalent in shares acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized shares from the Fund or (ii) by purchase of outstanding shares on the NYSE or elsewhere. If, on the payment date for any dividend, the net asset value per share is equal to or less than the market price per share plus
estimated brokerage trading fees (market premium), the Plan Agent will invest the dividend amount in newly issued shares. The number of newly issued shares to be credited to each account will be determined by dividing the dollar amount of the
dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance does not exceed 5%.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 49
If, on the payment date for any dividend, the net asset value per share is greater than the market value (market discount), the Plan Agent will invest the dividend amount in shares acquired in
open-market purchases. There are no brokerage charges with respect to newly issued shares. However, each participant will pay a pro rata share of brokerage trading fees incurred with respect to the Plan Agent’s open-market purchases. Participating
in the Plan does not relieve shareowners from any federal, state or local taxes which may be due on dividends paid in any taxable year. Shareowners holding Plan shares in a brokerage account may be able to transfer the shares to another broker and
continue to participate in the Plan.
I. Statement of Cash Flows
Information on financial transactions which have been settled through the receipt or disbursement of cash or restricted cash is presented in the Statement of Cash Flows. Cash as presented in the
Fund’s Statement of Assets and Liabilities includes cash on hand at the Fund’s custodian bank and does not include any short-term investments. As of and for the six months ended May 31, 2021, the Fund had no restricted cash presented on the
Statement of Assets and Liabilities.
2. Management Agreement
The Adviser manages the Fund’s portfolio. Management fees payable under the Fund’s Advisory Agreement with the Adviser are calculated daily at the annual rate of 0.70% of the Fund’s average daily managed assets.
“Managed assets” means (a) the total assets of the Fund, including any form of investment leverage, minus (b) all accrued liabilities incurred in the normal course of operations, which shall not include any liabilities or obligations attributable
to investment leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities), (ii) the issuance of preferred stock or other similar preference
securities, and/or (iii) any other means. For the six months ended May 31, 2021, the net management fee was 0.70% (annualized) of the Fund’s average daily managed assets, which was equivalent to 1.00% (annualized) of the Fund’s average daily net
assets. Effective December 28, 2020 the Adviser has contractually agreed to limit ordinary operating expenses to the extent required to reduce fund expenses to 1.94% (excluding interest expense) of the average daily net assets. These expense
limitations are in effect through December 28, 2021. There can be no assurance that the Adviser will extend the expense limitation agreement beyond the date referred to above.
In addition, under the management and administration agreements, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Fund as administrative
50 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
reimbursements. Included in “Due to affiliates” reflected on the Statement of Assets and Liabilities is $15,548 in management fees, administrative costs and certain other reimbursements payable to the Adviser at May
31, 2021.
3. Compensation of Directors and Officers
The Fund pays an annual fee to its Directors. The Adviser reimburses the Fund for fees paid to the Interested Directors. The Fund does not pay any salary or other compensation to its officers. For the six months ended
May 31, 2021, the Fund paid $3,232 in Directors’ compensation, which is reflected on the Statement of Operations as Directors’ fees. At May 31, 2021, the Fund had a payable for Directors’ fees on its Statement of Assets and Liabilities of $3,558.
4. Transfer Agent
AST serves as the transfer agent with respect to the Fund’s common shares. The Fund pays AST an annual fee, as is agreed to from time to time by the Fund and AST, for providing such services.
In addition, the Fund reimbursed the transfer agent for out-of-pocket expenses incurred by the transfer agent related to shareowner communications activities such as proxy and statement mailings and outgoing phone
calls.
5. Additional Disclosures about Derivative Instruments and Hedging Activities
The Fund’s use of derivatives may enhance or mitigate the Fund’s exposure to the following risks:
Interest rate risk relates to the fluctuations in the value of interest-bearing securities due to changes in the prevailing levels of market interest rates.
Credit risk relates to the ability of the issuer of a financial instrument to make further principal or interest payments on an obligation or commitment that it has to the Fund.
Foreign exchange rate risk relates to fluctuations in the value of an asset or liability due to changes in currency exchange rates.
Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange rate risk), whether caused by
factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment.
Commodity risk relates to the risk that the value of a commodity or commodity index will fluctuate based on increases or decreases in the commodities market and factors specific to a particular industry or commodity.
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 51
The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) by risk exposure at May 31, 2021, was as follows:
|
|
|
|
|
|
Statement of Operations
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
Interest
|
Credit
|
Exchange
|
Equity
|
Commodity
|
|
Rate Risk
|
Risk
|
Rate Risk
|
Risk
|
Risk
|
Net realized
|
|
|
|
|
|
gain (loss) on:
|
|
|
|
|
|
Swap contracts
|
$ —
|
$(1,979)
|
$ —
|
$ —
|
$ —
|
Total Value
|
$ —
|
$(1,979)
|
$ —
|
$ —
|
$ —
|
6. Unfunded Loan Commitments
The Fund may enter into unfunded loan commitments. Unfunded loan commitments may be partially or wholly unfunded. During the contractual period, the Fund is obliged to provide funding to the borrower upon demand. A
fee is earned by the Fund on the unfunded loan commitment and is recorded as interest income on the Statement of Operations. Unfunded loan commitments are fair valued in accordance with the valuation policy described in Footnote 1A and unrealized
appreciation or depreciation, if any, is recorded on the Statement of Assets and Liabilities.
As of May 31, 2021, the Fund had the following unfunded loan commitments outstanding:
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
Appreciation
|
Loan
|
Principal
|
Cost
|
Value
|
(Depreciation)
|
DG Investment
|
|
|
|
|
Intermediate
|
|
|
|
|
Holdings 2, Inc., (aka
|
|
|
|
|
Convergint Technologies
|
|
|
|
|
Holdings LLC) First Lien
|
|
|
|
|
Initial Term Loan
|
$ 18,701
|
$ 18,701
|
$ 18,719
|
$ 18
|
Service Logic
|
|
|
|
|
Acquisition, Inc., First
|
|
|
|
|
Lien Delayed Draw
|
|
|
|
|
Term Loan
|
197,015
|
198,493
|
198,370
|
(123)
|
Total Value
|
$215,716
|
$217,194
|
$217,089
|
$(105)
|
52 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
7. Fund Shares
There are 1,000,000,000 shares of common stock of the Fund (“common shares”), $0.001 par value per share authorized.
Transactions in common shares for the six months ended May 31, 2021 and the year ended November 30, 2020, were as follows:
|
|
|
|
5/31/21
|
11/30/20
|
Shares outstanding at beginning of period
|
24,738,174
|
24,738,174
|
Shares outstanding at end of period
|
12,369,087
|
24,738,174
|
8. Tender Offer
The Fund announced a tender offer on August 31, 2020, and commenced the tender offer on November 23, 2020, pursuant to which the Fund offered to purchase up to 50% of the Fund’s outstanding common shares (the
“Shares”) at a price per Share equal to 98.5% of the net asset value per Share as of the close of regular trading on the New York Stock Exchange (“NYSE”) on the business day immediately following the expiration date of the tender offer. The tender
offer expired on December 22, 2020. The tender offer was commenced pursuant to a settlement agreement made by the Board with Saba Capital Management, L.P. and certain associated parties.
The Fund accepted 12,369,087 duly tendered and not withdrawn Shares, representing approximately 50% of the Fund’s outstanding Shares. The Shares accepted for tender were repurchased at a price of $11.0616, equal to
98.5% of the net asset value per Share of $11.23 as of the close of regular trading on the New York Stock Exchange on December 23, 2020, the pricing date stated in the Offer to Purchase. Because the total number of Shares tendered exceeded the
number of Shares offered to purchase, all tendered Shares were subject to pro-ration in accordance with the terms of the Offer to Purchase. Under final pro-ration, 86.4% of the Shares tendered were accepted for payment, subject to adjustment for
fractional shares. Payment for the accepted Shares was made on December 28, 2020. Following the purchase of the tendered Shares, the Fund had approximately 12,369,087 Shares outstanding.
At December 29, 2020, following the completion of the Fund’s tender offer, Saba Capital Management, L.P. and certain associated parties beneficially owned approximately 6.3% of the Fund’s outstanding Common Shares
(based on a Form 13G filed by Saba Capital Management, L.P., Saba Capital Management GP, LLC and Mr. Boaz R. Weinstein on December 29, 2020).
Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21 53
9. Credit Agreement
Effective November 26, 2013, the Fund entered into a Revolving Credit Facility (the “Credit Agreement”) with the Bank of Nova Scotia in the amount of $160,000,000. The Credit Agreement was established in conjunction
with the redemption of all the Fund’s auction market preferred shares. Effective November 22, 2019, the amount of the credit agreement was reduced to $150,000,000 and was also amended to make it an “evergreen” facility. More specifically the credit
agreement renews on a daily basis in perpetuity. Either party may elect to terminate its commitment under the credit agreement upon 179-days written notice.
At May 31, 2021, the Fund had a borrowing outstanding under the Credit Agreement totaling $69,450,000. The interest rate charged at May 31, 2021 was 1.97%. During the six months ended May 31, 2021, the average daily
balance was $33,739,617 at an average interest rate of 2.15%. Interest expense of $361,400 in connection with the Credit Agreement is included on the Statement of Operations.
The Fund is required to maintain 300% asset coverage with respect to amounts outstanding under the Credit Agreement. Asset coverage is calculated by subtracting the Fund’s total liabilities not including any bank
loans and senior securities, from the Fund’s total assets and dividing such amount by the principal amount of the borrowing outstanding.
10. Redomiciling
On April 21, 2021, the Fund, previously organized as a Delaware statutory trust, redomiciled to a Maryland corporation (the “redomiciling”). The redomiciling was effected through a statutory merger of the predecessor
Delaware statutory trust (the “Predecessor Entity”) with and into a newly established Maryland corporation formed for the purpose of effecting the redomiciling (the “Successor Entity”) pursuant to the terms of an Agreement and Plan of Merger
entered into by and between the Predecessor Entity and the Successor Entity (the “Merger”). Upon effectiveness of the Merger, (i) the Successor Entity became the successor in interest to the Fund (ii) each outstanding share of common stock of the
Predecessor Entity was automatically converted into one share of common stock of the Successor Entity, and (iii) the shareholders of the Predecessor Entity became stockholders of the Successor Entity. Neither the Fund nor its stockholders realized
gain (loss) as a direct result of the Merger. Accordingly, the Merger had no effect on the Fund’s operations.
54 Pioneer Floating Rate Fund, Inc. | Semiannual Report | 5/31/21
In connection with the redomiciling, the Fund’s name changed from Pioneer Floating Rate Trust to Pioneer Floating Rate Fund, Inc. The Fund’s ticker symbol on the New York Stock Exchange did not change.
The redomiciling did not result in any change to the investment adviser, investment objective and strategies, portfolio management team, policies and procedures or the members of the Board overseeing the Fund.
Following the Fund’s redomiciling, the rights of shareholders are governed by Maryland General Corporation Law and the Articles of Incorporation and Bylaws of the Successor Entity. In addition, the Fund is subject to
the Maryland Control Share Acquisition Act (the “Control Share Act”) following the redomiciling.
The Control Share Act generally provides that any holder of “control shares” acquired in a “control share acquisition” may not exercise voting rights with respect to the “control shares,” except to the extent approved
by a vote of two-thirds of all the votes entitled to be cast on the matter. Generally, “control shares” are shares that, when aggregated with shares already owned by an acquiring person, would entitle the acquiring person to exercise 10% or more,
33 1/3% or more, or a majority of the total voting power of shares entitled to vote in the election of directors. The Control Share Act provides that a “control share acquisition” does not include the acquisition of shares in a merger,
consolidation or share exchange. Therefore, a shareholder of the Fund that acquired shares of the Successor Entity as a result of the Merger will be able to exercise voting rights as to those shares even if the number of such shares acquired by the
shareholder in the Merger exceeds one or more of the thresholds of the Control Share Act.
The above description of the Control Share Act is only a high-level summary and does not purport to be complete. Investors should refer to the actual provisions of the Control Share Act and the Fund’s Bylaws for more
information, including definitions of key terms, various exclusions and exemptions from the statute’s scope, and the procedures by which stockholders may approve the reinstatement of voting rights to holders of “control shares.”
11. Subsequent Events
A monthly dividend was declared on June 4, 2021 from undistributed and accumulated net investment income of $0.0625 per share payable June 30, 2021 to shareowners of record on June 17, 2021.
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