Pioneer Floating Rate Trust
|
Annual Report | November 30, 2020 |
|
Ticker Symbol: PHD |
Beginning in or after February 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Trust’s shareholder reports like this one will no longer be sent by mail,
unless you specifically request paper copies of the reports from the Trust or from your financial intermediary, such as a broker-dealer, bank or insurance company. Instead, the reports will be made available on the Trust’s website, and you
will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by
this change and you need not take any action. You may elect to receive shareholder reports and other communications electronically by contacting your financial intermediary or, if you invest directly with the Trust, by calling 1-800-710-0935.
You may elect to receive all future reports in paper free of charge. If you invest directly with the Trust, you can inform the Trust that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-710-0935. If you
invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your
account if you invest through your financial intermediary or all funds held within the Pioneer Fund complex if you invest directly.
visit us: www.amundi.com/us
Pioneer Floating Rate Trust | Annual Report | 11/30/20 1
President’s Letter Dear Shareholders,
With a very turbulent 2020 calendar year finally behind us, the U.S. and global economies still face numerous challenges as the
new calendar year dawns. The COVID-19 pandemic has continued to spread, with high numbers of new cases reported in many U.S. states and in other countries. In response, some governments have retightened restrictions on both business and personal
activities. However, as 2021 arrived, deployment of the first approved COVID-19 vaccines had already begun, and expectations are for widespread vaccine distribution by the middle of the year.
While there may
finally be a light visible at the end of the pandemic tunnel, the long-term impact on the global economy from COVID-19, while currently unknown, is likely to be considerable. It is clear that several industries have already felt greater effects than
others, and the markets, which do not thrive on uncertainty, have been volatile, delivering significantly negative performance in the first quarter of 2020, and then recovering most of those losses throughout the following quarters. In fact, the
U.S. stock market, as measured by the Standard & Poor’s 500 Index, returned more than 18% for the full 2020 calendar year, an impressive performance given all of the obstacles market participants faced during those 12 months.
However, despite the market rebound since its March 2020 low point, volatility has remained elevated, with momentum rising and falling on seemingly every bit of positive or negative news about the virus, from
vaccines to spikes in the number of cases as well as rising hospitalization rates in some areas. In addition, the recent U.S. Presidential and Congressional elections have resulted in a power shift in Washington, D.C., and that most likely portends
some changes in fiscal policy. That, too, could lead to increased market volatility as investors analyze the various tax and spending plans, and wait to see what proposed policy alterations actually become law.
With the advent of COVID-19 last winter, we implemented our business continuity plan according to the new COVID-19 guidelines, and most of our employees have been working remotely since March. To date, our operating
environment has faced no interruption. I am proud of the careful planning that has taken place and confident we can maintain this environment for as long as is prudent. History in the making for a company that first opened its doors way back in
1928.
2 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Since 1928, Amundi US’s investment process has been built on a foundation of
fundamental research and active management, principles which have guided our investment decisions for more than 90 years. We believe active management – that is, making active investment decisions – can help mitigate the risks during
periods of market volatility. As 2020 has reminded us, investment risk can arise from a number of factors in today’s global economy, including slower or stagnating growth, changing U.S. Federal Reserve policy, oil price shocks, political and
geopolitical factors and, unfortunately, major public health concerns such as a viral pandemic.
At Amundi US, active management begins with our own fundamental, bottom-up research process. Our team of dedicated
research analysts and portfolio managers analyzes each security under consideration, communicating directly with the management teams of the companies issuing the securities and working together to identify those securities that best meet our
investment criteria for our family of funds. Our risk management approach begins with each and every security, as we strive to carefully understand the potential opportunity, while considering any and all risk factors.
Today, as investors, we have many options. It is our view that active management can serve shareholders well, not only when markets are thriving, but also during periods of market stress.
As you consider your long-term investment goals, we encourage you to work with your financial professional to develop an investment plan that paves the way for you to pursue both your short-term and long-term
goals.
We remain confident that the current crisis, like others in human history, will pass, and we greatly appreciate the trust you have placed in us and look forward to continuing to serve you in the
future.
Sincerely,
Lisa M. Jones
Head of the Americas, President and CEO of US.
Amundi Asset Management US, Inc.
January 2021
Any information in this
shareowner report regarding market or economic trends or the factors influencing the Trust’s historical or future performance are statements of opinion as of the date of this report. Past performance is no guarantee of future results.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 3
Portfolio Management Discussion |
11/30/20 In the following interview, Jonathan Sharkey discusses the factors that influenced
the performance of Pioneer Floating Rate Trust during the 12-month period ended November 30, 2020. Mr. Sharkey, a senior vice president and a portfolio manager at Amundi Asset Management US, Inc. (Amundi US), is responsible for the day-to-day
management of the Trust.
Q How did the Trust perform during the 12-month period ended November 30, 2020?
A Pioneer Floating Rate Trust returned 1.89% at net asset value (NAV) and 9.96% at market price during the 12-month period ended November
30, 2020. Please note that, during the period, the Trust announced a tender offer that commenced on November 23, 2020 (see note 11). The Trust’s benchmark, the Standard & Poor’s/Loan Syndications & Trading Association Leveraged
Loan Index (the S&P/LSTA Index), returned 3.38% at NAV. Unlike the Trust, the S&P/LSTA Index does not use leverage. While the use of leverage increases investment opportunity, it also increases investment risk.
During the same 12-month period, the average return at NAV of the 52 closed end funds in Morningstar’s Bank Loan Closed End Funds category (which may or may not be leveraged), was 0.65%, and
the average return at market price of the closed end funds in the same Morningstar category was -2.35%.
The shares of the Trust were selling at a 3.9% discount to NAV on November 30, 2020.
Comparatively, the shares of the Trust were selling at a 12.1% discount to NAV on May 31, 2020.
The Trust’s standardized, 30-day SEC yield was 3.76% on November 30, 2020*.
Q How would you describe the investment environment for investing in bank loans during the 12-month period ended November 30, 2020?
A As the period opened in December 2019, the loan market experienced muted demand in an environment of heightened investor risk-aversion
driven by ongoing geopolitical uncertainties, trade war tensions, and concerns about the pace of global economic growth. Mutual funds investing in bank loans continued to experience significant outflows as retail investors responded to the limited
near-term prospect of rising short-term
* The 30-day SEC yield is a standardized formula that is based on the hypothetical annualized earning power (investment
income only) of the Trust’s portfolio securities during the period indicated.
4 Pioneer Floating Rate Trust | Annual Report |
11/30/20
interest rates, given accommodative monetary policy from the
Federal Reserve System (Fed). Lower-quality loans, in particular, experienced a headwind from a technical-demand perspective. Specifically, managers of collateralized loan obligations (CLOs), which have typically absorbed the bulk of new issuance,
had become increasingly wary of deals in the “B-” rating category, due to the risk of downgrades; CLOs are subject to risk guidelines and typically have had quite limited ability to accommodate loans in the “CCC” rating
category. In the early part of the 12-month period, we did see significant refinancing to lower yields among higher-quality loans, given their ratings attractiveness for CLOs.
Beginning in
mid-February 2020, the impact of the COVID-19 virus, which first emerged in China but quickly became a pandemic, began to drive performance in the financial markets. Global economies ground to a near halt during March as public health concerns led
to the rapid implementation by governments and businesses of extreme measures focused on virus containment. Oil prices also plummeted in response to slumping global demand resulting from the spread of COVID-19 as well as a supply shock spurred by a
price war launched on March 8 between Saudi Arabia and Russia.
In the financial markets, uncertainty over the scope and duration of the pandemic crisis as well as investors’ need for
cash drove sell-offs across most asset classes and a flight-to-safety trade that drove U.S. Treasury yields to historic lows. Bank loan and high-yield corporate bond prices declined sharply in price as the outlook shifted from growth to recession
and investors anticipated a spike in defaults. The Trust’s benchmark, the S&P/LSTA Leveraged Loan Index, declined by 12.37% in March, the second-steepest monthly loss in the history of that index. Volatility in the secondary loan market
spiked to all-time highs, with March seeing both the worst and best single-day returns in the history of the loan market. March also saw a record volume of loan ratings downgrades, largely concentrated within lower-quality loans.
The unprecedented shutting down of much of the economy due to COVID-19 spurred extraordinary monetary and fiscal policy responses. First, the Fed jumped into action by dusting off its 2008/2009
policy “playbook” and rapidly rolling out a raft of programs aimed at restoring market liquidity, facilitating credit availability, and boosting investors’ confidence. The measures included reducing the benchmark federal funds
rate’s target range to near zero and committing to making purchases of a broad range of fixed-income assets. On the fiscal side, as March drew to a close, the U.S. government passed a $2.2 trillion stimulus bill, followed
Pioneer Floating Rate Trust | Annual Report | 11/30/20 5
weeks later by another aid package worth nearly $500 billion,
highlighted by support for small businesses. After volatility in the markets subsided, the three-month London Interbank Offered Rate (LIBOR), which is used to reset loan rates, eventually fell more in line with the federal funds rate, declining from
190 basis points (bps) in November 2019 to 22 bps at the end of the 12-month period, thus putting pressure on the dividend yields of loan funds. (A basis point is equal to 1/100th of a percentage point.)
The unprecedented scope and rapidity of the response from policy makers allowed the markets for riskier assets to regain the ground lost in the immediate aftermath of the COVID-19 shutdowns. The
leveraged loan secondary market rebounded in April, with the S&P/LSTA Index gaining 4.50%, its best one-month return in more than 10 years. Loans continued to post positive returns through November, although the pace of gains eased as the
12-month period progressed.
Loans finished the 12-month period in comfortably positive territory. Within the loan market, the oil & gas, gaming & leisure, consumer products, and air
transportation segments lagged, while telecommunications, technology, pharmaceuticals, and food products held up relatively well, as those sectors felt fewer negative effects from the COVID-19-related lockdowns and other virus-containment
measures.
Q What factors had the biggest effects on the Trust’s performance relative to the benchmark during the 12-month period ended November
30, 2020?
A The Trust’s allocations across various sectors of the loan market contributed positively overall to relative
performance during the 12-month period; however, negative security selection results more than offset the benefits of sector allocations. In that vein, as conditions deteriorated during the first quarter of 2020, we further emphasized higher-quality
loans within the below-investment-grade loan universe when selecting the portfolio’s positions. The bias towards better quality acted as a constraint on the Trust’s benchmark-relative performance as investors’ appetites for riskier
assets returned in the second quarter of 2020.
In industry terms, selection results within telecommunication services detracted from the Trust’s benchmark-relative performance. Within
the sector, a position in wireline company Windstream was a notable underperformer for the Trust, as Windstream filed for bankruptcy protection. Despite the Trust’s underweight to leisure versus the benchmark, allocations to the sector proved
to be the second-largest
6 Pioneer Floating Rate Trust | Annual Report | 11/30/20
detractor from relative returns for the 12-month period given
the impact of COVID-19 on gym attendance, with portfolio holdings such as 24 Hour Fitness filing for bankruptcy, and large chain LA Fitness requiring additional equity and government support to remain in business. Within energy, the
portfolio’s exposure to oilfield services firms, specifically a bond position in FTS International, which filed for bankruptcy, and midstream holdings such as Summit Midstream, weighed on the Trust’s benchmark-relative results due to the
significant sell-off in the oil market, which began prior to the COVID-19 outbreak. A slight overweight to aerospace/air transport, historically a fundamentally sound industry, also hurt the Trust’s performance as the economic outlook turned
recessionary. Portfolio positions within the segment that were notable laggards during the 12-month period included the bonds of WESCO (aircraft supply chain and components) and Wencor (commercial airline parts manufacturer). Although
technology/electronics exposure was a strong contributor to the Trust’s absolute performance, a modest underweight to the industry detracted from benchmark-relative returns as market sentiment with respect to technology-oriented companies held
up relatively well, supported in part by the work-from-home trend driven by COVID-19.
On the positive side, security selection results within, and an overweight to the health care sector
aided the Trust’s performance, as the portfolio’s holdings were generally able to navigate the pandemic environment successfully and benefited from governmental support. Positive contributions to relative returns within the health care
sector were led by a position in Team Health, a physician outsourcing/staffing company. Selection results within mining & metals also aided the Trust’s performance during the 12-month period. A bond position in iron ore producer Cleveland
Cliffs was a specific positive performance contributor in that sector. A significant portfolio overweight to autos was another positive for the Trust’s performance, as a shutdown in manufacturing coupled with fiscal stimulus provided to
consumers led to a strong rebound in demand. Auto parts restocking also benefited companies such as portfolio holding IXS, while investor sentiment with respect to truck and marine chassis manufacturer Drive Chassis improved along with the recovery
in inter-modal freight shipping during the 12-month period, and aided the Trust’s performance. Other individual portfolio names that made notable positive contributions to the Trust’s performance during the period included West Corp., an
operator of call centers, pharmaceutical company Endo Pharmaceutical, cloud computing company Rackspace, truck and engine manufacturer Navistar International, and outdoor sporting goods company Bass Pro Shops.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 7
With regard to non-benchmark holdings, the Trust’s modest
exposure to high-yield corporate bonds constituted a drag on performance relative to the S&P/LSTA Index during the 12-month period. Within finance, a portfolio position in aircraft lessor Aviation Capital had a negative impact on relative
returns as the pandemic weighed on sentiment with respect to the company’s bonds. Another detractor from performance was Diamond Sports, a regional sports network spun out into Sinclair Broadcasting Group in order to facilitate Disney’s
acquisition of 21st Century Fox. Diamond Sports saw the outlook for its debt deteriorate with the absence of sports-related content for several months, due to COVID-19 containment measures. (The Trust had no exposure to Sinclair, Disney, or 21st
Century Fox as of November 30, 2020.)
With respect to the remainder of the Trust’s off-benchmark exposures, allocations to private label collateralized mortgage obligations and
commercial mortgage-backed securities detracted from relative returns during the 12-month period, while holdings of insurance-linked securities, which are sponsored by property-and-casualty insurers to help mitigate the impact of claims payouts in
the wake of natural disasters, benefited the Trust’s performance.
Finally, the Trust’s exposure to index-based credit-default-swap contracts, which we have utilized to maintain
the portfolio’s exposure to credit, and also to provide liquidity as a buffer to help manage leverage, positively affected the Trust’s performance during the 12-month period.
Q How did the level of leverage in the Trust change over the 12-month period ended November 30, 2020?
A The Trust employs leverage through a revolving credit facility.
As of
November 30, 2020, 27.6% of the Trust’s total managed assets were financed by leverage (or borrowed funds), compared with 32.3% of the Trust’s total managed assets financed by leverage at the start of the period on November 30, 2019.
During the 12-month period, the Trust decreased the absolute amount of funds borrowed by a total of $34 million, to $105 million as of November 30, 2020. The Trust decreased the amount of funds borrowed in connection with a tender offer which
commenced on November 23, 2020 (see Note 11). The percentage of the Trust’s managed assets financed by leverage decreased during the 12-month period due to the decrease in the amount of funds borrowed by the Trust.
8 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Q Did the Trust have any
investments in any derivative securities during the 12-month period ended November 30, 2020? If so, did the derivatives have any material effect on results?
A The Trust had some exposure to high-yield corporate bonds and investment-grade corporate bonds through index-based credit-default-swap securities during the 12-month period, which we employed principally to help
maintain liquidity in the portfolio. The use of these derivatives aided performance by allowing the Trust to gain tactical credit exposure, while maintaining liquidity.
Q Did the Trust’s distributions** to shareholders change during the 12-month period ended November 30, 2020?
A The Trust’s distributions began the 12-month period at $0.0625 per share/per month, declined slightly in the middle of the
period, but had recovered back up to $0.0625 per share/per month by the end of the period on November 30, 2020.
Q What is your investment
outlook?
A The default rate in the loan market for the 12-month period ended November 30, 2020, was 3.89% by loan volume, above the
historical average of slightly over 3%, but below the six-year high of 4.17% that we saw in September. The default rate by number of issuers in the market was 4.27%, also above the long-term average, but representing a decline versus the 10-year
high of 4.64%, also in September. The default rate on loans held in the Trust’s portfolio has remained below that of the market by loan volume and by number of issuers, given our bias toward higher-quality holdings.
Expectations for loan defaults going forward have become less extreme compared with estimates during the pandemic-induced sell-off period. Many companies within the industries that have experienced
the biggest negative effects of the pandemic, such as movie theaters, fitness centers, and cruise lines, have been able to maintain liquidity by issuing bonds. The gaming sector has rebounded strongly, while the airline industry has benefited from a
$25 billion Congressional rescue package.
Our base scenario is that continued support from policymakers in conjunction with the approval and distribution of one or more COVID-19 vaccines
could promote a continued, gradual economic recovery in 2021, which in turn may lead to a decline in loan-default rates back to their long-term averages. Despite the rebound in loan valuations that we saw
**
Distributions are not guaranteed.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 9
over the second quarter of 2020, our view is that loan spreads,
at current levels, more than account for default risk, and that loan prices have the potential to support capital appreciation going forward. (Loan spreads are the interest rates over and above the LIBOR rate charged to borrowers by banks.)
The Fed’s zero-interest-rate policy has put downward pressure on the LIBOR reference rate as well as the Trust’s income generation. While LIBOR troughed during the most recent 12-month
period, we have seen the new-issue loan calendar come with LIBOR floors to help offset the low reference rates.
In this challenging environment, we have continued to maintain a focus on
quality, and on the careful evaluation of the individual loans held in the Trust’s portfolio.
Please refer to the Schedule of Investments on pages 15–35 for a full listing of
Trust securities.
All investments are subject to risk, including the possible loss of principal. In the past several years, financial markets have experienced increased volatility and
heightened uncertainty. The market prices of securities 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, inflation,
changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues or adverse investor sentiment. These conditions may continue, recur, worsen or spread.
The Trust may invest in derivative securities, which may include futures and options, for a variety of purposes, including: in an attempt to hedge against adverse changes in the marketplace of
securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; to attempt to increase the Trust’s return as a non-hedging strategy that may be considered speculative; and to manage portfolio
characteristics. Using derivatives can increase fund losses and reduce opportunities for gains when the market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the Trust. These types of instruments
can increase price fluctuation.
10 Pioneer Floating Rate Trust | Annual Report | 11/30/20
The Trust is not limited in the percentage of its assets that
may be invested in illiquid securities. Illiquid securities may be difficult to sell at a price reflective of their value at times when the Trust believes it is desirable to do so and the market price of illiquid securities is generally more
volatile than that of more liquid securities. Illiquid securities may be difficult to value, and investment of the Trust’s assets in illiquid securities may restrict the Trust’s ability to take advantage of market opportunities.
The Trust employs leverage through a revolving credit facility. Leverage creates significant risks, including the risk that the Trust’s income or capital appreciation from investments
purchased with the proceeds of leverage will not be sufficient to cover the cost of leverage, which may adversely affect the return for shareowners.
The Trust is required to maintain certain
regulatory and other asset coverage requirements in connection with the Trust’s use of leverage. In order to maintain required asset coverage levels, the Trust may be required to reduce the amount of leverage employed by the Trust, alter the
composition of the Trust’s investment portfolio or take other actions at what might be inopportune times in the market. Such actions could reduce the net earnings or returns to shareowners over time, which is likely to result in a decrease in
the market value of the Trust’s shares.
Investments in high-yield or lower-rated securities are subject to greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating to interest rates, currency exchange rates and economic and political
conditions.
The Trust may invest in insurance-linked securities (ILS). The return of principal and the payment of interest on ILS are contingent on the non-occurrence of a pre-defined
“trigger” event, such as a hurricane or an earthquake of a specific magnitude.
These risks may increase share price volatility.
Any information in this shareowner report regarding market or economic trends or the factors influencing the Trust’s historical or future performance are statements of opinion as of the date
of this report. Past performance is no guarantee of future results.
Pioneer Floating Rate Trust | Annual Report |
11/30/20 11
Portfolio Summary | 11/30/20 Portfolio Diversification
(As a percentage of total investments)*
10 Largest Holdings
(As a percentage of total investments)*
|
|
|
1. |
SPDR Blackstone/GSO Senior Loan ETF |
3.99% |
2. |
Invesco Senior Loan ETF (formerly, PowerShares Senior Loan Portfolio) |
2.87 |
3. |
Bass Pro Group LLC, Initial Term Loan, 5.75% (LIBOR + 500 bps), 9/25/24 |
1.29 |
4. |
Prime Security Services Borrower LLC (aka Protection 1 Security Solutions), |
|
|
First Lien 2019 Refinancing Term B-1 Loan, 4.25% (LIBOR + 325 bps), 9/23/26 |
1.22 |
5. |
Rackspace Technology Global, Inc., First Lien Term B Loan, 4.0% |
|
|
(LIBOR + 300 bps), 11/3/23 |
1.16 |
6. |
U.S. Renal Care, Inc., Initial Term Loan, 5.146% (LIBOR + 500 bps), 6/26/26 |
1.14 |
7. |
Endo Luxembourg Finance Co. I S.a.r.l., Initial Term Loan, 5.0% |
|
|
(LIBOR + 425 bps), 4/29/24 |
1.14 |
8. |
Garda World Security Corp., Initial Term Loan, 4.91% (LIBOR + 475 bps), |
|
|
10/30/26 |
1.11 |
9. |
Allied Universal Holdco LLC (f/k/a USAGM Holdco LLC), Initial Term Loan, |
|
|
4.396% (LIBOR + 425 bps), 7/10/26 |
1.05 |
10. |
Team Health Holdings, Inc., Initial Term Loan, 3.75% (LIBOR + 275 bps), 2/6/24 |
1.01 |
* Excludes temporary cash investments and all derivative contracts except for options purchased. The Trust is actively managed, and current holdings may be different. The
holdings listed should not be considered recommendations to buy or sell any securities.
** Investment companies that invest at least 80% of their assets in Senior Loans
(as defined in the Trust’s prospectus).
12 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Prices and Distributions |
11/30/20 Market Value per Share^
|
|
|
|
11/30/20 |
11/30/19 |
Market Value |
$10.73 |
$10.53 |
Premium/(Discount) |
(3.94)% |
(10.99)% |
Net Asset Value per Share^
|
|
|
|
11/30/20 |
11/30/19 |
Net Asset Value |
$11.17 |
$11.83 |
Distributions per Share*:
|
|
|
|
|
Net |
|
|
|
Investment |
Short-Term |
Long-Term |
|
Income |
Capital Gains |
Capital Gains |
12/1/19–11/30/20 |
$0.7425 |
$ — |
$ — |
Yields
|
|
|
|
11/30/20 |
11/30/19 |
30-day SEC Yield |
3.76% |
5.25% |
The data
shown above represents past performance, which is no guarantee of future results.
^ Net asset value and market value are published in
Barron’s on Saturday, The Wall Street Journal on Monday and The New York Times on Monday and Saturday. Net asset value
and market value are published daily on the Trust’s website at www.amundi.com/us.
* The amount of distributions made to shareowners during the year was in
excess of the net investment income earned by the Trust during the year.
Pioneer Floating Rate Trust | Annual Report |
11/30/20 13
Performance Update |
11/30/20 Investment Returns
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 Trust 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.
|
|
|
|
Average Annual Total Returns |
(As of November 30, 2020) |
|
|
Net |
|
|
|
Asset |
|
S&P/LSTA |
|
Value |
Market |
Leveraged |
Period |
(NAV) |
Price |
Loan Index |
10 Years |
5.84% |
4.89% |
4.31% |
5 Years |
4.87 |
6.71 |
4.73 |
1 Year |
1.89 |
9.96 |
3.38 |
Call 1-800-225-6292 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 Trust.
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 Trust’s dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Trust
distributions or the sale of Trust shares. Had these fees and taxes been reflected, performance would have been lower.
Index returns are calculated monthly, assume reinvestment of dividends and, unlike Trust
returns, do not reflect any fees, expenses or sales charges. The index does not use leverage. You cannot invest directly in an index.
14
Pioneer Floating Rate Trust | Annual Report | 11/30/20
Schedule of Investments |
11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
UNAFFILIATED ISSUERS — 125.1% |
|
|
|
SENIOR SECURED FLOATING RATE LOAN |
|
|
|
INTERESTS — 96.6% of Net Assets*(a) |
|
|
|
Aerospace & Defense — 4.7% |
|
1,217,289 |
|
American Airlines, Inc., 2017 Class B Term Loan, |
|
|
|
2.141% (LIBOR + 200 bps), 12/15/23 |
$ 1,081,431 |
1,246,875 |
|
Delta Air Lines, Inc., Term Loan, 5.75% (LIBOR + |
|
|
|
475 bps), 4/29/23 |
1,260,902 |
1,657,065 |
|
Jazz Acquisition, Inc., First Lien Initial Term Loan, |
|
|
|
4.4% (LIBOR + 425 bps), 6/19/26 |
1,532,786 |
493,750 |
|
JetBlue Airways Corp., Term Loan, 6.25% (LIBOR + |
|
|
|
525 bps), 6/17/24 |
503,111 |
775,000 |
|
MAG DS Corp., Initial Term Loan, 6.5% (LIBOR + |
|
|
|
550 bps), 4/1/27 |
742,062 |
1,250,000 |
|
Mileage Plus Holdings LLC (Mileage Plus Intellectual |
|
|
|
Property Assets, Ltd.), Initial Term Loan, 6.25% |
|
|
|
(LIBOR + 525 bps), 6/21/27 |
1,291,812 |
1,223,712 |
|
MRO Holdings, Inc., Initial Term Loan, 5.22% (LIBOR + |
|
|
|
500 bps), 6/4/26 |
1,036,077 |
1,943,584 |
|
Peraton Corp. (fka MHVC Acquisition Corp.), First Lien |
|
|
|
Initial Term Loan, 6.25% (LIBOR + |
|
|
|
525 bps), 4/29/24 |
1,943,584 |
700,000 |
|
Spirit Aerosystems, Inc. (fka Mid-Western Aircraft |
|
|
|
Systems, Inc & Onex Wind Finance LP.), Initial Term |
|
|
|
Loan, 6.0% (LIBOR + 525 bps), 1/15/25 |
708,313 |
2,960,361 |
|
WP CPP Holdings LLC, First Lien Initial Term Loan, |
|
|
|
4.75% (LIBOR + 375 bps), 4/30/25 |
2,782,739 |
|
|
Total Aerospace & Defense |
$ 12,882,817 |
|
|
Airlines — 1.8% |
|
2,456,250 |
|
Allegiant Travel Co., Replacement Term Loan, 3.214% |
|
|
|
(LIBOR + 300 bps), 2/5/24 |
$ 2,389,727 |
1,170,000 |
|
Grupo Aeromexico, Sociedad Anonima Bursatil De |
|
|
|
Capital Variable, Senior Secured Tranche 1, |
|
|
|
9.0% (LIBOR + 800 bps), 8/19/22 |
1,191,937 |
950,000 |
|
Highline Aftermarket Acquisition LLC, First Lien Initial |
|
|
|
Term Loan, 5.25% (LIBOR + 450 bps), 11/9/27 |
945,250 |
340,000 |
|
SkyMiles IP, Ltd. (Delta Air Lines, Inc.), Initial Term |
|
|
|
Loan, 4.75% (LIBOR + 375 bps), 10/20/27 |
348,394 |
|
|
Total Airlines |
$ 4,875,308 |
|
|
Automobile — 4.1% |
|
2,135,537 |
|
American Axle & Manufacturing, Inc., Tranche B Term |
|
|
|
Loan, 3.0% (LIBOR + 225 bps), 4/6/24 |
$ 2,100,072 |
1,547,426 |
|
Commercial Vehicle Group, Inc., Initial Term Loan, |
|
|
|
11.5% (LIBOR + 1,050 bps), 4/12/23 |
1,501,003 |
1,000,000 |
|
Drive Chassis Holdco LLC, Second Lien Term B Loan, |
|
|
|
9.561% (LIBOR + 825 bps), 4/10/26 |
989,375 |
1,500,249 |
|
IXS Holdings, Inc., Initial Term Loan, 6.0% (LIBOR + |
|
|
|
500 bps), 3/5/27 |
1,491,498 |
2,361,599 |
|
Navistar, Inc., Tranche B Term Loan, 3.65% (LIBOR + |
|
|
|
350 bps), 11/6/24 |
2,355,695 |
The
accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report |
11/30/20 15
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Automobile — (continued) |
|
1,706,111 |
|
Thor Industries, Inc., Initial USD Term Loan, 3.938% |
|
|
|
(LIBOR + 375 bps), 2/1/26 |
$ 1,701,846 |
898,483 |
|
TI Group Automotive Systems LLC, Initial US Term |
|
|
|
Loan, 4.5% (LIBOR + 375 bps), 12/16/24 |
896,236 |
227,868 |
|
Wabash National Corp., Term B Loan, 4.0% (LIBOR + |
|
|
|
325 bps), 9/28/27 |
227,156 |
|
|
Total Automobile |
$ 11,262,881 |
|
|
Banking — 0.6% |
|
500,000 |
|
Azalea TopCo, Inc., First Lien 2020 Incremental Term |
|
|
|
Loan, 4.75% (LIBOR + 400 bps), 7/24/26 |
$ 496,250 |
1,190,694 |
|
Nouryon Finance BV (aka AkzoNobel), Initial Dollar |
|
|
|
Term Loan, 3.141% (LIBOR + 300 bps), 10/1/25 |
1,170,974 |
|
|
Total Banking |
$ 1,667,224 |
|
|
Broadcasting & Entertainment — 0.5% |
|
1,488,750 |
|
Creative Artists Agency LLC, Closing Date Term Loan, |
|
|
|
3.896% (LIBOR + 375 bps), 11/27/26 |
$ 1,466,419 |
|
|
Total Broadcasting & Entertainment |
$ 1,466,419 |
|
|
Building Materials — 1.0% |
|
1,451,748 |
|
CPG International LLC (fka CPG International, Inc.), New |
|
|
|
Term Loan, 4.75% (LIBOR + 375 bps), 5/5/24 |
$ 1,453,336 |
1,451,250 |
|
WKI Holding Co., Inc. (aka World Kitchen), Initial Term |
|
|
|
Loan, 5.0% (LIBOR + 400 bps), 5/1/24 |
1,443,994 |
|
|
Total Building Materials |
$ 2,897,330 |
|
|
Buildings & Real Estate — 1.5% |
|
1,488,579 |
|
Ply Gem Midco, Inc., Initial Term Loan, 3.88% (LIBOR + |
|
|
|
375 bps), 4/12/25 |
$ 1,481,136 |
2,841,420 |
|
WireCo WorldGroup, Inc. (WireCo WorldGroup |
|
|
|
Finance LP), First Lien Initial Term Loan, 6.0% (LIBOR + |
|
|
|
500 bps), 9/29/23 |
2,600,342 |
|
|
Total Buildings & Real Estate |
$ 4,081,478 |
|
|
Chemicals — 0.4% |
|
1,000,000 |
|
Plaze, Inc., 2020-1 Additional Term Loan, 5.25% (LIBOR + |
|
|
|
425 bps), 8/3/26 |
$ 988,125 |
|
|
Total Chemicals |
$ 988,125 |
|
|
Chemicals, Plastics & Rubber — 1.7% |
|
423,981 |
|
Core & Main LP, Initial Term Loan, 3.75% (LIBOR + |
|
|
|
275 bps), 8/1/24 |
$ 419,741 |
265,000 |
|
Emerald Performance Materials LLC, Initial Term Loan, |
|
|
|
5.0% (LIBOR + 400 bps), 8/12/25 |
265,332 |
1,037,935 |
|
Hexion, Inc., USD Term Loan, 3.73% (LIBOR + |
|
|
|
350 bps), 7/1/26 |
1,032,745 |
The
accompanying notes are an integral part of these financial statements.
16 Pioneer Floating Rate Trust | Annual Report |
11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Chemicals, Plastics & Rubber — (continued) |
|
2,610,951 |
|
Tronox Finance LLC, First Lien Initial Dollar Term Loan, |
|
|
|
3.176% (LIBOR + 300 bps), 9/23/24 |
$ 2,583,209 |
436,693 |
|
Twist Beauty International Holdings SA, Facility B2, 4.0% |
|
|
|
(LIBOR + 300 bps), 4/22/24 |
417,042 |
|
|
Total Chemicals, Plastics & Rubber |
$ 4,718,069 |
|
|
Computers & Electronics — 6.1% |
|
1,135,000 |
|
Ahead DB Holdings LLC, First Lien Initial Term Loan, |
|
|
|
6.0% (LIBOR + 500 bps), 10/18/27 |
$ 1,098,112 |
234,715 |
|
Applied Systems, Inc., First Lien Closing Date Term |
|
|
|
Loan, 4.0% (LIBOR + 300 bps), 9/19/24 |
234,379 |
2,750,000 |
|
Applied Systems, Inc., Second Lien Initial Term Loan, |
|
|
|
8.0% (LIBOR + 700 bps), 9/19/25 |
2,766,041 |
2,211,116 |
|
Chloe OX Parent LLC, Initial Term Loan, 5.5% (LIBOR + |
|
|
|
450 bps), 12/23/24 |
2,150,311 |
1,708,822 |
|
CornerStone OnDemand, Inc., Term Loan, 4.396% |
|
|
|
(LIBOR + 425 bps), 4/22/27 |
1,710,157 |
325,000 |
|
ECi Macola/MAX Holding LLC (ECI Software |
|
|
|
Solution, Inc.), First Lien Initial Term Loan, 4.5% (LIBOR + |
|
|
|
375 bps), 11/9/27 |
322,816 |
1,755,648 |
|
Energy Acquisition LP (aka Electrical Components |
|
|
|
International), First Lien Initial Term Loan, |
|
|
|
4.396% (LIBOR + 425 bps), 6/26/25 |
1,684,690 |
1,250,000 |
|
LogMeIn, Inc., First Lien Initial Term Loan, 4.888% |
|
|
|
(LIBOR + 475 bps), 8/31/27 |
1,237,695 |
3,120,000 |
|
Pitney Bowes, Inc., Incremental Tranche B Term Loan, |
|
|
|
5.65% (LIBOR + 550 bps), 1/7/25 |
3,092,700 |
2,651,376 |
|
Ultra Clean Holdings, Inc., Term B Loan, 4.646% (LIBOR + |
|
|
|
450 bps), 8/27/25 |
2,651,376 |
|
|
Total Computers & Electronics |
$ 16,948,277 |
|
|
Construction & Building — 0.8% |
|
750,000(b) |
|
CP Atlas Buyer, Inc., Initial Tranche B-1 Term |
|
|
|
Loan, 11/23/27 |
$ 750,187 |
250,000(b) |
|
CP Atlas Buyer, Inc., Initial Tranche B-2 Term |
|
|
|
Loan, 11/23/27 |
250,063 |
1,255,836 |
|
Quikrete Holdings, Inc., First Lien Initial Term Loan, |
|
|
|
2.646% (LIBOR + 250 bps), 2/1/27 |
1,239,963 |
|
|
Total Construction & Building |
$ 2,240,213 |
|
|
Consumer Nondurables — 0.5% |
|
1,488,750 |
|
Sunshine Luxembourg VII S.a.r.l., Facility B1, 5.25% |
|
|
|
(LIBOR + 425 bps), 10/1/26 |
$ 1,488,628 |
|
|
Total Consumer Nondurables |
$ 1,488,628 |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 17
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Consumer Services — 1.5% |
|
4,236,389 |
|
Prime Security Services Borrower LLC (aka Protection 1 |
|
|
|
Security Solutions), First Lien 2019 Refinancing |
|
|
|
Term B-1 Loan, 4.25% (LIBOR + 325 bps), 9/23/26 |
$ 4,220,020 |
|
|
Total Consumer Services |
$ 4,220,020 |
|
|
Containers, Packaging & Glass — 1.6% |
|
725,000 |
|
Graham Packaging Co., Inc., Initial Term Loan, 4.5% |
|
|
|
(LIBOR + 375 bps), 8/4/27 |
$ 725,050 |
1,575,000 |
|
Pactiv Evergreen, Inc., Tranche B-1 US Term Loan, 2.896% |
|
|
|
(LIBOR + 275 bps/PRIME + 175 bps), 2/5/23 |
739,436 |
747,494 |
|
Pactiv Evergreen, Inc., Tranche B-2 US Term Loan, 3.396% |
|
|
|
(LIBOR + 325 bps), 2/5/26 |
1,551,572 |
1,488,750 |
|
Pregis TopCo LLC, First Lien Initial Term Loan, 3.896% |
|
|
|
(LIBOR + 375 bps), 7/31/26 |
1,471,692 |
|
|
Total Containers, Packaging & Glass |
$ 4,487,750 |
|
|
Diversified & Conglomerate Manufacturing — 2.1% |
|
864,112 |
|
ExamWorks Group, Inc. (fka Gold Merger Co., Inc.), |
|
|
|
Term B-1 Loan, 4.25% (LIBOR + 325 bps), 7/27/23 |
$ 860,440 |
3,854,092 |
|
Garda World Security Corp., Initial Term Loan, 4.91% |
|
|
|
(LIBOR + 475 bps), 10/30/26 |
3,852,485 |
1,002,613 |
|
Pelican Products, Inc., First Lien Term Loan, 4.5% |
|
|
|
(LIBOR + 350 bps), 5/1/25 |
975,668 |
|
|
Total Diversified & Conglomerate Manufacturing |
$ 5,688,593 |
|
|
Diversified & Conglomerate Service — 9.6% |
|
1,955,623 |
|
Albany Molecular Research, Inc., First Lien Initial Term |
|
|
|
Loan, 4.25% (LIBOR + 325 bps), 8/30/24 |
$ 1,952,690 |
2,168,709 |
|
Alion Science & Technology Corp., First Line |
|
|
|
Replacement Term Loan, 4.75% (LIBOR + |
|
|
|
375 bps), 7/23/24 |
2,182,264 |
3,640,006 |
|
Allied Universal Holdco LLC (f/k/a USAGM Holdco LLC), |
|
|
|
Initial Term Loan, 4.396% (LIBOR + 425 bps), 7/10/26 |
3,621,581 |
1,000,000 |
|
Camelot U.S. Acquisition 1 Co. (aka Thomson Reuters |
|
|
|
Intellectual Property & Science), Amendment No. 2 |
|
|
|
Incremental Term Loan, 4.0% (LIBOR + |
|
|
|
300 bps), 10/30/26 |
997,812 |
1,996,467 |
|
CB Poly Investments LLC, First Lien Closing Date Term |
|
|
|
Loan, 5.5% (LIBOR + 450 bps), 8/16/23 |
1,846,732 |
999,792 |
|
DG Investment Intermediate Holdings 2, Inc. (aka |
|
|
|
Convergint Technologies Holdings LLC), First Lien Initial |
|
|
|
Term Loan, 3.75% (LIBOR + 300 bps), 2/3/25 |
979,484 |
2,422,427 |
|
DTI Holdco, Inc., Replacement B-1 Term Loan, 5.75% |
|
|
|
(LIBOR + 475 bps), 9/29/23 |
2,194,026 |
1,532,082 |
|
First Brands Group LLC, First Lien Tranche B-3 Term |
|
|
|
Loan, 8.5% (LIBOR + 750 bps), 2/2/24 |
1,532,082 |
1,407,892 |
|
Gates Global LLC, Initial B-2 Dollar Term Loan, 3.75% |
|
|
|
(LIBOR + 275 bps), 4/1/24 |
1,398,017 |
1,324,237 |
|
Intrado Corp., Incremental Term B-1 Loan, 4.5% (LIBOR + |
|
|
|
350 bps), 10/10/24 |
1,257,198 |
2,391,521 |
|
Intrado Corp., Initial Term B Loan, 5.0% (LIBOR + |
|
|
|
400 bps), 10/10/24 |
2,281,767 |
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial statements.
18 Pioneer Floating Rate Trust | Annual Report |
11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Diversified & Conglomerate Service — (continued) |
|
1,974,797 |
|
Mitchell International, Inc., First Lien Initial Term Loan, |
|
|
|
3.396% (LIBOR + 325 bps), 11/29/24 |
$ 1,913,496 |
807,655 |
|
Sound Inpatient Physicians, Inc., Second Lien Initial |
|
|
|
Term Loan, 6.896% (LIBOR + 675 bps), 6/26/26 |
799,578 |
3,955,508 |
|
Team Health Holdings, Inc., Initial Term Loan, 3.75% |
|
|
|
(LIBOR + 275 bps), 2/6/24 |
3,480,847 |
|
|
Total Diversified & Conglomerate Service |
$ 26,437,574 |
|
|
Electric & Electrical — 1.4% |
|
4,020,625 |
|
Rackspace Technology Global, Inc., First Lien Term B |
|
|
|
Loan, 4.0% (LIBOR + 300 bps), 11/3/23 |
$ 3,998,287 |
|
|
Total Electric & Electrical |
$ 3,998,287 |
|
|
Electronics — 1.9% |
|
2,351,820 |
|
Natel Engineering Co., Inc., Initial Term Loan, 6.0% |
|
|
|
(LIBOR + 500 bps), 4/30/26 |
$ 2,075,481 |
3,260,417 |
|
Scientific Games International, Inc., Initial Term B-5 |
|
|
|
Loan, 2.896% (LIBOR + 275 bps), 8/14/24 |
3,149,019 |
|
|
Total Electronics |
$ 5,224,500 |
|
|
Financial Services — 1.8% |
|
2,372,116 |
|
Blackhawk Network Holdings, Inc., First Lien Term |
|
|
|
Loan, 3.146% (LIBOR + 300 bps), 6/15/25 |
$ 2,269,523 |
656,721 |
|
Cardtronics USA, Inc., Initial Term Loan, 5.0% (LIBOR + |
|
|
|
400 bps), 6/29/27 |
658,691 |
1,905,288 |
|
Everi Payments, Inc., Term B loan, 3.75% (LIBOR + |
|
|
|
275 bps), 5/9/24 |
1,866,189 |
99,750 |
|
Everi Payments, Inc., Term Loan, 11.5% (LIBOR + |
|
|
|
1,050 bps), 5/9/24 |
103,989 |
|
|
Total Financial Services |
$ 4,898,392 |
|
|
Forest Products — 1.1% |
|
1,750,000 |
|
Chobani LLC, 2020 New Term Loan, 4.5% (LIBOR + |
|
|
|
350 bps), 10/25/27 |
$ 1,745,312 |
1,310,814 |
|
ProAmpac PG Borrower LLC, First Lien 2020-1 Term |
|
|
|
Loan, 5.0% (LIBOR + 400 bps), 11/3/25 |
1,297,706 |
|
|
Total Forest Products |
$ 3,043,018 |
|
|
Gaming and Hotels — 0.2% |
|
439,135 |
|
PCI Gaming Authority, Term B Facility Loan, 2.646% |
|
|
|
(LIBOR + 250 bps), 5/29/26 |
$ 431,274 |
|
|
Total Gaming and Hotels |
$ 431,274 |
|
|
Healthcare — 2.1% |
|
525,000 |
|
CNT Holdings I Corp, First Lien Initial Term Loan, 4.5% |
|
|
|
(LIBOR + 375 bps), 11/8/27 |
$ 521,842 |
629,118 |
|
Milano Acquisition Corp., First Lien Term B Loan, 4.75% |
|
|
|
(LIBOR + 400 bps), 10/1/27 |
624,923 |
3,225,625 |
|
Option Care Health, Inc., Term B Loan, 4.396% (LIBOR + |
|
|
|
425 bps), 8/6/26 |
3,217,561 |
The
accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report |
11/30/20 19
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Healthcare — (continued) |
|
1,382,553 |
|
Phoenix Guarantor, Inc. (aka Brightspring), First Lien |
|
|
|
Tranche B-1 Term Loan, 3.4% (LIBOR + |
|
|
|
325 bps), 3/5/26 |
$ 1,366,135 |
|
|
Total Healthcare |
$ 5,730,461 |
|
|
Healthcare & Pharmaceuticals — 6.2% |
|
3,212,002 |
|
Alphabet Holding Co., Inc. (aka Nature’s Bounty), First |
|
|
|
Lien Initial Term Loan, 3.646% (LIBOR + |
|
|
|
350 bps), 9/26/24 |
$ 3,150,916 |
1,500,000 |
|
Alphabet Holding Co., Inc. (aka Nature’s Bounty), |
|
|
|
Second Lien Initial Term Loan, 7.896% (LIBOR + |
|
|
|
775 bps), 9/26/25 |
1,461,875 |
4,037,182 |
|
Endo Luxembourg Finance Co. I S.a.r.l., Initial Term |
|
|
|
Loan, 5.0% (LIBOR + 425 bps), 4/29/24 |
3,931,206 |
1,488,750 |
|
FC Compassus LLC, Initial Term Loan, 6.0% (LIBOR + |
|
|
|
500 bps), 12/31/26 |
1,477,584 |
1,571,038 |
|
Kindred Healthcare LLC, Closing Date Term Loan, |
|
|
|
5.188% (LIBOR + 500 bps), 7/2/25 |
1,573,002 |
1,265,427 |
|
NMN Holdings III Corp., First Lien Closing Date Term |
|
|
|
Loan, 3.679% (LIBOR + 350 bps), 11/13/25 |
1,230,627 |
218,576 |
|
NMN Holdings III Corp., First Lien Delayed Draw Term |
|
|
|
Loan, 4.011% (LIBOR + 375 bps/PRIME + |
|
|
|
275 bps), 11/13/25 |
212,565 |
750,000 |
|
Parexel International Corp., Initial Term Loan, 2.896% |
|
|
|
(LIBOR + 275 bps), 9/27/24 |
735,234 |
1,872,669 |
|
Sotera Health Holdings LLC, First Lien Initial Term Loan, |
|
|
|
5.5% (LIBOR + 450 bps), 12/11/26 |
1,875,478 |
1,485,000 |
|
Upstream Newco, Inc., First Lien Initial Term Loan, |
|
|
|
4.646% (LIBOR + 450 bps), 11/20/26 |
1,447,875 |
|
|
Total Healthcare & Pharmaceuticals |
$ 17,096,362 |
|
|
Healthcare, Education & Childcare — 5.0% |
|
1,512,917 |
|
Alliance HealthCare Services, Inc., Second Lien Initial |
|
|
|
Term Loan, 12.0% (LIBOR + 1,100 bps), 4/24/24 |
$ 707,289 |
2,887,237 |
|
ATI Holdings Acquisition, Inc., First Lien Initial Term |
|
|
|
Loan, 4.5% (LIBOR + 350 bps), 5/10/23 |
2,778,965 |
2,704,225 |
|
KUEHG Corp. (fka KC MergerSub, Inc.) (aka KinderCare), |
|
|
|
Term B-3 Loan, 4.75% (LIBOR + 375 bps), 2/21/25 |
2,585,240 |
1,413,103 |
|
LifePoint Health, Inc. (fka Regionalcare Hospital |
|
|
|
Partners Holdings, Inc.), First Lien Term B Loan, 3.896% |
|
|
|
(LIBOR + 375 bps), 11/16/25 |
1,395,665 |
1,809,736 |
|
Quorum Health Corp., Exit Term Loan, 9.25% (LIBOR + |
|
|
|
825 bps), 4/29/25 |
1,757,706 |
537,300 |
|
Surgery Center Holdings, Inc., 2020 Incremental Term |
|
|
|
Loan, 9.0% (LIBOR + 800 bps), 9/3/24 |
550,665 |
3,967,456 |
|
U.S. Renal Care, Inc., Initial Term Loan, 5.146% (LIBOR + |
|
|
|
500 bps), 6/26/26 |
3,941,005 |
|
|
Total Healthcare, Education & Childcare |
$ 13,716,535 |
The accompanying notes are an integral part of these financial statements.
20 Pioneer Floating
Rate Trust | Annual Report | 11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Hotel, Gaming & Leisure — 2.8% |
|
2,218,947 |
|
Caesars Resort Collection LLC, Term B Loan, 2.896% |
|
|
|
(LIBOR + 275 bps), 12/23/24 |
$ 2,151,129 |
1,100,000 |
|
Caesars Resort Collection LLC, Term B-1 Loan, 4.646% |
|
|
|
(LIBOR + 450 bps), 7/21/25 |
1,091,652 |
215,169 |
|
Flutter Entertainment plc, USD Term Loan, 3.72% |
|
|
|
(LIBOR + 350 bps), 7/10/25 |
215,853 |
231,125 |
|
Golden Nugget Online Gaming, Inc., 2020 Buyback Term |
|
|
|
Loan, 13.0% (LIBOR + 1,200 bps), 10/4/23 |
266,949 |
18,875 |
|
Golden Nugget Online Gaming, Inc., 2020 Initial Term |
|
|
|
Loan, 13.0% (LIBOR + 1,200 bps), 10/4/23 |
21,801 |
2,986,004 |
|
Golden Nugget, Inc. (aka Landry’s, Inc.), Initial Term B |
|
|
|
Loan, 3.25% (LIBOR + 250 bps), 10/4/23 |
2,847,901 |
1,290,306 |
|
Penn National Gaming, Inc., Term B-1 Facility Loan, 3.0% |
|
|
|
(LIBOR + 225 bps), 10/15/25 |
1,269,631 |
|
|
Total Hotel, Gaming & Leisure |
$ 7,864,916 |
|
|
Insurance — 3.7% |
|
992,462 |
|
Alliant Holdings Intermediate LLC, 2019 New Term Loan, |
|
|
|
3.393% (LIBOR + 325 bps), 5/9/25 |
$ 970,364 |
523,688 |
|
AqGen Ascensus, Inc., First Lien Seventh Amendment |
|
|
|
Replacement Term Loan, 5.0% (LIBOR + |
|
|
|
400 bps), 12/3/26 |
521,069 |
1,590,930 |
|
Confie Seguros Holding II Co., Term B Loan, 5.75% |
|
|
|
(LIBOR + 475 bps), 4/19/22 |
1,570,713 |
1,247,791 |
|
Integro Parent, Inc., First Lien Initial Term Loan, 6.75% |
|
|
|
(LIBOR + 575 bps), 10/31/22 |
1,210,357 |
1,196,605 |
|
MPH Acquisition Holdings LLC, Initial Term Loan, 3.75% |
|
|
|
(LIBOR + 275 bps), 6/7/23 |
1,182,097 |
1,250,000 |
|
Navicure, Inc., First Lien 2020 Incremental Term Loan, |
|
|
|
4.75% (LIBOR + 400 bps), 10/22/26 |
1,248,437 |
1,728,125 |
|
Sedgwick Claims Management Services, Inc. (Lightning |
|
|
|
Cayman Merger Sub, Ltd.), 2019 Term Loan, 4.146% |
|
|
|
(LIBOR + 400 bps), 9/3/26 |
1,711,805 |
249,375 |
|
Sedgwick Claims Management Services, Inc. (Lightning |
|
|
|
Cayman Merger Sub, Ltd.), 2020 Term Loan, 5.25% |
|
|
|
(LIBOR + 425 bps), 9/3/26 |
250,622 |
1,619,900 |
|
USI, Inc. (fka Compass Investors, Inc.), 2017 New Term |
|
|
|
Loan, 3.22% (LIBOR + 300 bps), 5/16/24 |
1,588,514 |
|
|
Total Insurance |
$ 10,253,978 |
|
|
Leasing — 0.5% |
|
1,550,000 |
|
Fly Funding II S.a.r.l., Term B Loan, 7.0% (LIBOR + |
|
|
|
600 bps), 10/15/25 |
$ 1,499,625 |
|
|
Total Leasing |
$ 1,499,625 |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 21
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Leisure & Entertainment — 1.5% |
|
1,082,266(b)(c) |
|
24 Hour Fitness Worldwide, Inc., Term Loan (LIBOR + |
|
|
|
350 bps), 5/30/25 |
$ 27,902 |
1,989,899 |
|
AMC Entertainment Holdings, Inc. (fka AMC |
|
|
|
Entertainment, Inc.), Term B-1 Loan, 3.23% (LIBOR + |
|
|
|
300 bps/PRIME + 200 bps), 4/22/26 |
1,518,169 |
1,645,875 |
|
Carnival Corp., Initial Advance, 8.5% (LIBOR + |
|
|
|
750 bps), 6/30/25 |
1,705,538 |
928,057 |
|
Fitness International LLC, Term B Loan, 4.25% (LIBOR + |
|
|
|
325 bps), 4/18/25 |
781,888 |
|
|
Total Leisure & Entertainment |
$ 4,033,497 |
|
|
Machinery — 1.8% |
|
1,421,164 |
|
Blount International, Inc., New Refinancing Term Loan, |
|
|
|
4.75% (LIBOR + 375 bps), 4/12/23 |
$ 1,424,717 |
851,429 |
|
CTC AcquiCo GmbH, Facility B2, 2.897% (LIBOR + |
|
|
|
275 bps), 3/7/25 |
808,857 |
1,240,625 |
|
MHI Holdings LLC, Initial Term Loan, 5.146% (LIBOR + |
|
|
|
500 bps), 9/21/26 |
1,234,422 |
97,196 |
|
NN, Inc., Tranche B Term Loan, 6.5% (LIBOR + |
|
|
|
575 bps), 10/19/22 |
96,791 |
384,755 |
|
Shape Technologies Group, Inc., Initial Term Loan, |
|
|
|
3.146% (LIBOR + 300 bps), 4/21/25 |
311,651 |
1,035,865 |
|
Welbilt, Inc. (fka Manitowoc Foodservice, Inc.), Term B |
|
|
|
Loan, 2.647% (LIBOR + 250 bps), 10/23/25 |
982,130 |
|
|
Total Machinery |
$ 4,858,568 |
|
|
Media — 0.7% |
|
1,977,196 |
|
Altice France SA, USD TLB-13 Incremental Term Loan, |
|
|
|
4.237% (LIBOR + 400 bps), 8/14/26 |
$ 1,962,367 |
|
|
Total Media |
$ 1,962,367 |
|
|
Metals & Mining — 2.1% |
|
930,511 |
|
Atkore International, Inc., First Lien Initial Incremental |
|
|
|
Term Loan, 3.75% (LIBOR + 275 bps), 12/22/23 |
$ 929,445 |
1,508,411 |
|
BWay Holding Co., Initial Term Loan, 3.48% (LIBOR + |
|
|
|
325 bps), 4/3/24 |
1,440,399 |
2,887,704 |
|
Phoenix Services International LLC, Term B Loan, 4.75% |
|
|
|
(LIBOR + 375 bps), 3/1/25 |
2,828,145 |
746,142 |
|
TMS International Corp. (aka Tube City IMS Corp.), |
|
|
|
Term B-2 Loan, 3.75% (LIBOR + 275 bps), 8/14/24 |
740,546 |
|
|
Total Metals & Mining |
$ 5,938,535 |
|
|
Oil & Gas — 1.8% |
|
540,375 |
|
Centurion Pipeline Co. LLC (fka Lotus Midstream LLC), |
|
|
|
Initial Term Loan, 3.396% (LIBOR + |
|
|
|
325 bps), 9/29/25 |
$ 534,634 |
612,500 |
|
NorthRiver Midstream Finance LP, Initial Term B Loan, |
|
|
|
3.475% (LIBOR + 325 bps), 10/1/25 |
591,971 |
1,609,222(b) |
|
Summit Midstream Partners Holdings LLC, Term Loan |
|
|
|
Credit Facility (LIBOR + 600 bps), 5/13/22 |
362,075 |
The
accompanying notes are an integral part of these financial statements.
22 Pioneer Floating Rate Trust | Annual Report |
11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Oil & Gas — (continued) |
|
3,562,000 |
|
Traverse Midstream Partners LLC, Advance, 6.5% |
|
|
|
(LIBOR + 550 bps), 9/27/24 |
$ 3,379,447 |
|
|
Total Oil & Gas |
$ 4,868,127 |
|
|
Personal, Food & Miscellaneous Services — 1.6% |
|
2,513,592 |
|
IRB Holding Corp. (aka Arby’s/Buffalo Wild Wings), |
|
|
|
2020 Replacement Term B Loan, 3.75% (LIBOR + |
|
|
|
275 bps), 2/5/25 |
$ 2,474,666 |
992,031 |
|
Knowlton Development Corp., Inc., Initial Term Loan, |
|
|
|
3.896% (LIBOR + 375 bps), 12/22/25 |
982,111 |
1,000,000 |
|
Parfums Holding Co., Inc., Second Lien Initial Term Loan, |
|
|
|
9.977% (LIBOR + 875 bps/PRIME + 775 bps), 6/30/25 |
957,500 |
|
|
Total Personal, Food & Miscellaneous Services |
$ 4,414,277 |
|
|
Printing & Publishing — 0.7% |
|
1,393,000 |
|
Nielsen Finance LLC, Dollar Term B-5 Loan, 4.75% |
|
|
|
(LIBOR + 375 bps), 6/4/25 |
$ 1,398,920 |
454,779 |
|
Trader Corp., First Lien 2017 Refinancing Term Loan, |
|
|
|
4.0% (LIBOR + 300 bps), 9/28/23 |
451,369 |
|
|
Total Printing & Publishing |
$ 1,850,289 |
|
|
Professional & Business Services — 7.2% |
|
995,000 |
|
AI Convoy (Luxembourg) S.a.r.l., Facility B, 4.5% |
|
|
|
(LIBOR + 350 bps), 1/18/27 |
$ 993,756 |
1,800,000(b) |
|
Amentum Government Services Holdings LLC, |
|
|
|
Incremental Term Loan, 1/29/27 |
1,789,875 |
1,492,500 |
|
APX Group, Inc., Initial Loan, 5.146% (LIBOR + 500 bps/ |
|
|
|
PRIME + 400 bps), 12/31/25 |
1,482,862 |
2,969,924 |
|
athenahealth, Inc., First Lien Term B Loan, 4.75% |
|
|
|
(LIBOR + 450 bps), 2/11/26 |
2,958,787 |
987,500 |
|
Blackstone CQP Holdco LP, Initial Term Loan, 3.725% |
|
|
|
(LIBOR + 350 bps), 9/30/24 |
978,242 |
2,107,462 |
|
Clear Channel Outdoor Holdings, Inc., Term B Loan, |
|
|
|
3.714% (LIBOR + 350 bps), 8/21/26 |
1,982,770 |
1,485,000 |
|
Ensemble RCM LLC, Closing Date Term Loan, 3.964% |
|
|
|
(LIBOR + 375 bps), 8/3/26 |
1,480,359 |
1,481,250 |
|
MYOB US Borrower LLC, First Lien Initial US Term Loan, |
|
|
|
4.146% (LIBOR + 400 bps), 5/6/26 |
1,451,625 |
1,050,000 |
|
PAE Incorporated, First Lien Initial Term Loan, 5.25% |
|
|
|
(LIBOR + 450 bps), 10/19/27 |
1,048,031 |
2,005,630 |
|
Pre-Paid Legal Services, Inc. (aka LegalShield), First Lien |
|
|
|
Initial Term Loan, 3.396% (LIBOR + |
|
|
|
325 bps), 5/1/25 |
1,956,743 |
1,136,822 |
|
SIWF Holdings, Inc. (aka Spring Window Fashions), |
|
|
|
First Lien Initial Term Loan, 4.396% (LIBOR + |
|
|
|
425 bps), 6/15/25 |
1,119,060 |
735,000 |
|
Tosca Services LLC, First Lien Term Loan, 5.25% |
|
|
|
(LIBOR + 425 bps), 8/18/27 |
738,675 |
The
accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report |
11/30/20 23
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Professional & Business Services — (continued) |
|
1,920,295 |
|
Verscend Holding Corp., Term B Loan, 4.646% |
|
|
|
(LIBOR + 450 bps), 8/27/25 |
$ 1,919,494 |
|
|
Total Professional & Business Services |
$ 19,900,279 |
|
|
Retail — 5.9% |
|
4,441,887 |
|
Bass Pro Group LLC, Initial Term Loan, 5.75% (LIBOR + |
|
|
|
500 bps), 9/25/24 |
$ 4,448,980 |
2,228,138 |
|
Dealer Tire LLC, Term B-1 Loan, 4.396% (LIBOR + |
|
|
|
425 bps), 12/12/25 |
2,204,464 |
975,000 |
|
Harbor Freight Tools USA, Inc., Initial Term Loan, 4.0% |
|
|
|
(LIBOR + 325 bps), 10/19/27 |
970,038 |
2,208,969 |
|
Michaels Stores, Inc., 2020 Refinancing Term B Loan, |
|
|
|
4.25% (LIBOR + 350 bps), 10/1/27 |
2,182,737 |
1,958,481 |
|
PetSmart, Inc., Amended Term Loan, 4.5% (LIBOR + |
|
|
|
350 bps), 3/11/22 |
1,951,343 |
3,193,745 |
|
Staples, Inc., 2019 Refinancing New Term B-2 Loan, |
|
|
|
4.714% (LIBOR + 450 bps), 9/12/24 |
3,111,241 |
650,000 |
|
TruGreen LP, First Lien Second Refinancing Term Loan, |
|
|
|
4.75% (LIBOR + 400 bps), 11/2/27 |
649,188 |
856,540 |
|
United Natural Foods, Inc., Initial Term Loan, 4.396% |
|
|
|
(LIBOR + 425 bps), 10/22/25 |
852,257 |
|
|
Total Retail |
$ 16,370,248 |
|
|
Securities & Trusts — 1.2% |
|
1,514,553 |
|
KSBR Holding Corp., Initial Term Loan, 3.393% (LIBOR + |
|
|
|
325 bps), 4/15/26 |
$ 1,507,609 |
1,861,776 |
|
Spectacle Gary Holdings LLC, Closing Date Term Loan, |
|
|
|
11.0% (LIBOR + 900 bps), 12/23/25 |
1,829,195 |
|
|
Total Securities & Trusts |
$ 3,336,804 |
|
|
Telecommunications — 2.3% |
|
1,765,001 |
|
Commscope, Inc., Initial Term Loan, 3.396% (LIBOR + |
|
|
|
325 bps), 4/6/26 |
$ 1,739,786 |
800,000 |
|
Consolidated Communications, Inc., Initial Term Loan, |
|
|
|
5.75% (LIBOR + 475 bps), 10/2/27 |
801,834 |
675,000 |
|
Frontier Communications Corp., Initial Term Loan, |
|
|
|
5.75% (LIBOR + 475 bps), 10/8/21 |
677,531 |
500,000(b) |
|
Virgin Media Bristol LLC, Term Q Loan, 1/31/29 |
497,125 |
798,000 |
|
Windstream Services II LLC, Initial Term Loan, 7.25% |
|
|
|
(LIBOR + 625 bps), 9/21/27 |
768,740 |
1,998,475 |
|
Xplornet Communications, Inc., Initial Term Loan, |
|
|
|
4.898% (LIBOR + 475 bps), 6/10/27 |
1,980,676 |
|
|
Total Telecommunications |
$ 6,465,692 |
|
|
Textile & Apparel — 1.0% |
|
2,476,212 |
|
Adient US LLC, Initial Term Loan, 4.413% (LIBOR + |
|
|
|
425 bps), 5/6/24 |
$ 2,408,116 |
350,000 |
|
Canada Goose, Inc., 2020 Refinancing Term Loan, 5.0% |
|
|
|
(LIBOR + 425 bps), 10/7/27 |
350,219 |
|
|
Total Textile & Apparel |
$ 2,758,335 |
The accompanying notes are an integral part of these financial statements.
24 Pioneer Floating
Rate Trust | Annual Report | 11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Transport — 0.4% |
|
1,117,994 |
|
Patriot Container Corp. (aka Wastequip), First Lien |
|
|
|
Closing Date Term Loan, 4.5% (LIBOR + |
|
|
|
350 bps), 3/20/25 |
$ 1,094,237 |
|
|
Total Transport |
$ 1,094,237 |
|
|
Transportation — 0.7% |
|
2,200,949 |
|
Envision Healthcare Corp., Initial Term Loan, 3.896% |
|
|
|
(LIBOR + 375 bps), 10/10/25 |
$ 1,810,967 |
257,522 |
|
Syncreon Group BV, Second Out Term Loan, 7.0% |
|
|
|
(LIBOR + 600 bps), 4/1/25 |
247,543 |
|
|
Total Transportation |
$ 2,058,510 |
|
|
Utilities — 2.5% |
|
671,522 |
|
Compass Power Generation LLC, Tranche B-1 Term |
|
|
|
Loan, 4.5% (LIBOR + 350 bps), 12/20/24 |
$ 667,325 |
1,929,719 |
|
Eastern Power LLC (Eastern Covert Midco LLC) |
|
|
|
(aka TPF II LC LLC), Term Loan, 4.75% (LIBOR + |
|
|
|
375 bps), 10/2/25 |
1,928,245 |
1,968,022 |
|
Edgewater Generation LLC, Term Loan, 3.896% |
|
|
|
(LIBOR + 375 bps), 12/13/25 |
1,930,968 |
997,500 |
|
Hamilton Projects Acquiror LLC, Term Loan, 5.75% |
|
|
|
(LIBOR + 475 bps), 6/17/27 |
998,539 |
1,451,363 |
|
PG&E Corp., Term Loan, 5.5% (LIBOR + 450 bps), 6/23/25 |
1,464,969 |
|
|
Total Utilities |
$ 6,990,046 |
|
|
TOTAL SENIOR SECURED FLOATING RATE LOAN INTERESTS |
|
|
|
(Cost $269,372,239) |
$267,007,865 |
|
Shares |
|
|
|
|
|
COMMON STOCKS — 0.5% of Net Assets |
|
|
|
Energy Equipment & Services — 0.5% |
|
72,091(d) |
|
FTS International, Inc. |
$ 1,347,381 |
|
|
Total Energy Equipment & Services |
$ 1,347,381 |
|
|
Specialty Retail — 0.0%† |
|
91,346+^(d) |
|
Targus Cayman SubCo., Ltd. |
$ 120,576 |
|
|
Total Specialty Retail |
$ 120,576 |
|
|
TOTAL COMMON STOCKS |
|
|
|
(Cost $2,065,469) |
$ 1,467,957 |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 25
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
ASSET BACKED SECURITIES — 1.4% of Net Assets |
|
1,000,000(a) |
|
522 Funding Clo, Ltd., Series 2019-4A, Class E, 7.218% |
|
|
|
(3 Month USD LIBOR + 700 bps), 4/20/30 (144A) |
$ 937,476 |
1,000,000(a) |
|
Goldentree Loan Management US CLO 2, Ltd., Series |
|
|
|
2017-2A, Class E, 4.918% (3 Month USD LIBOR + |
|
|
|
470 bps), 11/28/30 (144A) |
879,237 |
1,000,000(a) |
|
Madison Park Funding XXII, Ltd., Series 2016-22A, |
|
|
|
Class ER, 6.937% (3 Month USD LIBOR + |
|
|
|
670 bps), 1/15/33 (144A) |
959,585 |
1,000,000(a) |
|
Octagon Investment Partners XXI, Ltd., Series 2014-1A, |
|
|
|
Class DRR, 7.221% (3 Month USD LIBOR + |
|
|
|
700 bps), 2/14/31 (144A) |
967,133 |
|
|
TOTAL ASSET BACKED SECURITIES |
|
|
|
(Cost $3,935,369) |
$ 3,743,431 |
|
|
COLLATERALIZED MORTGAGE OBLIGATIONS — |
|
|
|
1.5% of Net Assets |
|
4,100,000(a) |
|
Connecticut Avenue Securities Trust, Series 2019-HRP1, |
|
|
|
Class B1, 9.4% (1 Month USD LIBOR + 925 bps), |
|
|
|
11/25/39 (144A) |
$ 3,363,731 |
760,000(a) |
|
Freddie Mac Stacr Trust, Series 2019-HQA1, Class B2, |
|
|
|
12.4% (1 Month USD LIBOR + 1,225 bps), |
|
|
|
2/25/49 (144A) |
802,950 |
|
|
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS |
|
|
|
(Cost $4,860,000) |
$ 4,166,681 |
|
|
COMMERCIAL MORTGAGE-BACKED |
|
|
|
SECURITIES — 0.5% of Net Assets |
|
235,938(a) |
|
FREMF Mortgage Trust, Series 2020-KF74, Class C, 6.37% |
|
|
|
(1 Month USD LIBOR + 623 bps), 1/25/27 (144A) |
$ 227,299 |
625,000(a) |
|
Morgan Stanley Capital I Trust, Series 2019-BPR, |
|
|
|
Class D, 4.141% (1 Month USD LIBOR + |
|
|
|
400 bps), 5/15/36 (144A) |
474,024 |
1,000,000 |
|
Wells Fargo Commercial Mortgage Trust, Series |
|
|
|
2015-C28, Class E, 3.0%, 5/15/48 (144A) |
574,741 |
|
|
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES |
|
|
|
(Cost $1,630,858) |
$ 1,276,064 |
|
|
CORPORATE BONDS — 15.2% of Net Assets |
|
|
|
Advertising — 0.5% |
|
1,250,000 |
|
MDC Partners, Inc., 6.5%, 5/1/24 (144A) |
$ 1,231,250 |
|
|
Total Advertising |
$ 1,231,250 |
|
|
Banks — 0.6% |
|
1,000,000(e)(f) |
|
Citigroup, Inc., 4.7% (SOFRRATE + 323 bps) |
$ 1,021,550 |
700,000(e)(f) |
|
Credit Suisse Group AG, 7.5% (5 Year USD Swap |
|
|
|
Rate + 460 bps) (144A) |
762,090 |
|
|
Total Banks |
$ 1,783,640 |
The accompanying notes are an integral part of these financial statements.
26 Pioneer Floating
Rate Trust | Annual Report | 11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Building Materials — 0.4% |
|
996,000 |
|
Patrick Industries, Inc., 7.5%, 10/15/27 (144A) |
$ 1,080,660 |
|
|
Total Building Materials |
$ 1,080,660 |
|
|
Chemicals — 0.6% |
|
1,000,000 |
|
Hexion, Inc., 7.875%, 7/15/27 (144A) |
$ 1,072,500 |
500,000 |
|
OCI NV, 4.625%, 10/15/25 (144A) |
521,250 |
|
|
Total Chemicals |
$ 1,593,750 |
|
|
Coal — 0.7% |
|
2,000,000 |
|
SunCoke Energy Partners LP/SunCoke Energy Partners |
|
|
|
Finance Corp., 7.5%, 6/15/25 (144A) |
$ 1,970,000 |
|
|
Total Coal |
$ 1,970,000 |
|
|
Commercial Services — 1.1% |
|
1,380,000 |
|
Allied Universal Holdco LLC/Allied Universal Finance |
|
|
|
Corp., 9.75%, 7/15/27 (144A) |
$ 1,530,448 |
1,000,000 |
|
APX Group, Inc., 6.75%, 2/15/27 (144A) |
1,080,000 |
495,000 |
|
Garda World Security Corp., 4.625%, 2/15/27 (144A) |
496,237 |
|
|
Total Commercial Services |
$ 3,106,685 |
|
|
Computers — 0.0%† |
|
100,000 |
|
Diebold Nixdorf, Inc., 9.375%, 7/15/25 (144A) |
$ 109,750 |
|
|
Total Computers |
$ 109,750 |
|
|
Diversified Financial Services — 1.0% |
|
1,700,000 |
|
Avation Capital SA, 6.5%, 5/15/21 (144A) |
$ 1,105,000 |
440,000 |
|
Nationstar Mortgage Holdings, Inc., 5.5%, |
|
|
|
8/15/28 (144A) |
453,200 |
1,000,000 |
|
Nationstar Mortgage Holdings, Inc., 9.125%, |
|
|
|
7/15/26 (144A) |
1,073,750 |
|
|
Total Diversified Financial Services |
$ 2,631,950 |
|
|
Engineering & Construction — 0.4% |
|
1,000,000 |
|
PowerTeam Services LLC, 9.033%, 12/4/25 (144A) |
$ 1,097,500 |
|
|
Total Engineering & Construction |
$ 1,097,500 |
|
|
Entertainment — 1.0% |
|
1,000,000 |
|
Caesars Entertainment, Inc., 8.125%, 7/1/27 (144A) |
$ 1,099,945 |
1,500,000 |
|
Enterprise Development Authority, 12.0%, |
|
|
|
7/15/24 (144A) |
1,680,000 |
|
|
Total Entertainment |
$ 2,779,945 |
|
|
Environmental Control — 0.4% |
|
940,000 |
|
Covanta Holding Corp., 5.0%, 9/1/30 |
$ 1,001,100 |
|
|
Total Environmental Control |
$ 1,001,100 |
|
|
Forest Products & Paper — 0.6% |
|
1,515,000 |
|
Schweitzer-Mauduit International, Inc., 6.875%, |
|
|
|
10/1/26 (144A) |
$ 1,604,582 |
|
|
Total Forest Products & Paper |
$ 1,604,582 |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 27
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Healthcare-Products — 0.1% |
|
380,000 |
|
Varex Imaging Corp., 7.875%, 10/15/27 (144A) |
$ 389,644 |
|
|
Total Healthcare-Products |
$ 389,644 |
|
|
Healthcare-Services — 0.5% |
|
1,000,000 |
|
RegionalCare Hospital Partners Holdings, Inc./LifePoint |
|
|
|
Health, Inc., 9.75%, 12/1/26 (144A) |
$ 1,099,080 |
395,000 |
|
West Street Merger Sub, Inc., 6.375%, 9/1/25 (144A) |
405,369 |
|
|
Total Healthcare-Services |
$ 1,504,449 |
|
|
Holding Companies-Diversified — 0.6% |
|
1,520,000 |
|
VistaJet Malta Finance plc/XO Management |
|
|
|
Holding, Inc., 10.5%, 6/1/24 (144A) |
$ 1,527,600 |
|
|
Total Holding Companies-Diversified |
$ 1,527,600 |
|
|
Home Builders — 0.4% |
|
1,000,000 |
|
Beazer Homes USA, Inc., 6.75%, 3/15/25 |
$ 1,038,750 |
85,000 |
|
Winnebago Industries, Inc., 6.25%, 7/15/28 (144A) |
92,013 |
|
|
Total Home Builders |
$ 1,130,763 |
|
|
Housewares — 0.0%† |
|
70,000 |
|
CD&R Smokey Buyer, Inc., 6.75%, 7/15/25 (144A) |
$ 75,075 |
|
|
Total Housewares |
$ 75,075 |
|
|
Iron & Steel — 0.9% |
|
625,000 |
|
Carpenter Technology Corp., 6.375%, 7/15/28 |
$ 680,919 |
1,645,000 |
|
Cleveland-Cliffs, Inc., 9.875%, 10/17/25 (144A) |
1,918,481 |
|
|
Total Iron & Steel |
$ 2,599,400 |
|
|
Leisure Time — 0.0%† |
|
105,000 |
|
Royal Caribbean Cruises, Ltd., 9.125%, 6/15/23 (144A) |
$ 113,663 |
|
|
Total Leisure Time |
$ 113,663 |
|
|
Lodging — 0.4% |
|
1,000,000 |
|
Station Casinos LLC, 4.5%, 2/15/28 (144A) |
$ 985,000 |
|
|
Total Lodging |
$ 985,000 |
|
|
Media — 0.6% |
|
1,111,000 |
|
Diamond Sports Group LLC/Diamond Sports |
|
|
|
Finance Co., 6.625%, 8/15/27 (144A) |
$ 637,103 |
1,000,000 |
|
Sinclair Television Group, Inc., 5.5%, 3/1/30 (144A) |
1,001,250 |
|
|
Total Media |
$ 1,638,353 |
|
|
Mining — 0.5% |
|
1,000,000 |
|
Hudbay Minerals, Inc., 7.625%, 1/15/25 (144A) |
$ 1,042,500 |
388,000 |
|
Joseph T Ryerson & Son, Inc., 8.5%, 8/1/28 (144A) |
422,920 |
|
|
Total Mining |
$ 1,465,420 |
|
|
Miscellaneous Manufacturers — 0.4% |
|
1,000,000 |
|
Koppers, Inc., 6.0%, 2/15/25 (144A) |
$ 1,031,250 |
|
|
Total Miscellaneous Manufacturers |
$ 1,031,250 |
The accompanying notes are an integral part of these financial statements.
28 Pioneer Floating
Rate Trust | Annual Report | 11/30/20
|
|
|
|
Principal |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Oil & Gas — 0.9% |
|
1,000,000 |
|
Indigo Natural Resources LLC, 6.875%, 2/15/26 (144A) |
$ 1,010,000 |
1,500,000 |
|
MEG Energy Corp., 7.125%, 2/1/27 (144A) |
1,470,000 |
|
|
Total Oil & Gas |
$ 2,480,000 |
|
|
Pharmaceuticals — 0.4% |
|
1,000,000 |
|
Endo Dac/Endo Finance LLC/Endo Finco, Inc., 9.5%, |
|
|
|
7/31/27 (144A) |
$ 1,100,405 |
|
|
Total Pharmaceuticals |
$ 1,100,405 |
|
|
REITs — 0.8% |
|
1,000,000 |
|
iStar, Inc., 4.75%, 10/1/24 |
$ 1,000,000 |
1,065,000 |
|
Uniti Group LP/Uniti Fiber Holdings, Inc./CSL |
|
|
|
Capital LLC, 7.875%, 2/15/25 (144A) |
1,131,914 |
|
|
Total REITs |
$ 2,131,914 |
|
|
Retail — 0.9% |
|
1,000,000 |
|
Beacon Roofing Supply, Inc., 4.875%, 11/1/25 (144A) |
$ 1,013,500 |
95,000 |
|
L Brands, Inc., 6.625%, 10/1/30 (144A) |
104,034 |
1,250,000 |
|
Michaels Stores, Inc., 8.0%, 7/15/27 (144A) |
1,287,500 |
|
|
Total Retail |
$ 2,405,034 |
|
|
Transportation — 0.5% |
|
935,421(a) |
|
Golar LNG Partners LP, 6.463% (3 Month USD LIBOR + |
|
|
|
625 bps), 11/22/21 |
$ 757,691 |
767,959(a) |
|
Golar LNG Partners LP, 8.321% (3 Month USD LIBOR + |
|
|
|
810 bps), 11/15/22 (144A) |
599,008 |
|
|
Total Transportation |
$ 1,356,699 |
|
|
TOTAL CORPORATE BONDS |
|
|
|
(Cost $40,275,104) |
$ 41,925,481 |
|
|
INSURANCE-LINKED SECURITIES — 0.7% of |
|
|
|
Net Assets# |
|
|
|
Event Linked Bond — 0.1% |
|
|
|
Windstorm – U.S. Regional — 0.1% |
|
250,000(a) |
|
Matterhorn Re, 7.076% (3 Month U.S. Treasury Bill + |
|
|
|
700 bps), 12/7/21 (144A) |
$ 254,325 |
|
|
Total Event Linked Bond |
$ 254,325 |
|
Face |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
|
|
|
Collateralized Reinsurance — 0.0%† |
|
|
|
Multiperil – Worldwide — 0.0%† |
|
27,000+(d)(g) |
|
Limestone Re 2019-2, 3/1/23 (144A) |
$ 42,412 |
300,000+(d)(g) |
|
Resilience Re, 4/6/21 |
30 |
|
|
|
$ 42,442 |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report
| 11/30/20 29
Schedule of Investments | 11/30/20 (continued)
|
|
|
|
Face |
|
|
|
Amount |
|
|
|
USD ($) |
|
|
Value |
|
|
Windstorm – Florida — 0.0%† |
|
250,000+(d)(g) |
|
Formby Re 2018, 2/28/21 |
$ 44,229 |
|
|
Total Collateralized Reinsurance |
$ 86,671 |
|
|
Reinsurance Sidecars — 0.6% |
|
|
|
Multiperil – U.S. — 0.0%† |
|
250,000+(d)(g) |
|
Carnoustie Re 2017, 11/30/21 |
$ 32,950 |
250,000+(h) |
|
Harambee Re 2018, 12/31/21 |
4,662 |
250,000+(h) |
|
Harambee Re 2019, 12/31/22 |
4,050 |
|
|
|
$ 41,662 |
|
|
Multiperil – Worldwide — 0.6% |
|
3,037+(g)(h) |
|
Alturas Re 2019-2, 3/10/22 |
$ 16,206 |
246,000+(g)(h) |
|
Alturas Re 2020-2, 3/10/23 |
273,577 |
250,000+(d)(g) |
|
Bantry Re 2016, 3/31/21 |
20,150 |
1,270,809+(d)(g) |
|
Berwick Re 2018-1, 12/31/21 |
154,657 |
907,913+(d)(g) |
|
Berwick Re 2019-1, 12/31/22 |
108,496 |
20,000+(g) |
|
Eden Re II, 3/22/22 (144A) |
13,770 |
3,800+(g) |
|
Eden Re II, 3/22/23 (144A) |
14,782 |
250,000+(d)(g) |
|
Gleneagles Re 2016, 11/30/20 |
7,800 |
300,000+(h) |
|
Lorenz Re 2018, 7/1/21 |
15,060 |
199,590+(h) |
|
Lorenz Re 2019, 6/30/22 |
13,153 |
300,000+(d)(g) |
|
Merion Re 2018-2, 12/31/21 |
335,482 |
400,000+(d)(g) |
|
Pangaea Re 2018-1, 12/31/21 |
8,422 |
400,000+(d)(g) |
|
Pangaea Re 2018-3, 7/1/22 |
8,297 |
327,699+(d)(g) |
|
Pangaea Re 2019-1, 2/1/23 |
6,828 |
294,125+(d)(g) |
|
Pangaea Re 2019-3, 7/1/23 |
10,580 |
324,259+(d)(g) |
|
Pangaea Re 2020-1, 2/1/24 |
355,431 |
150,000+(d)(g) |
|
Sector Re V, 12/1/23 (144A) |
45,510 |
100,000+(d)(g) |
|
Sector Re V, 12/1/24 (144A) |
114,628 |
400,000+(d)(g) |
|
St. Andrews Re 2017-1, 2/1/21 |
27,120 |
347,597+(d)(g) |
|
St. Andrews Re 2017-4, 6/1/21 |
34,204 |
253,645+(d)(g) |
|
Woburn Re 2018, 12/31/21 |
23,370 |
244,914+(d)(g) |
|
Woburn Re 2019, 12/31/22 |
83,452 |
|
|
|
$ 1,690,975 |
|
|
Total Reinsurance Sidecars |
$ 1,732,637 |
|
|
TOTAL INSURANCE-LINKED SECURITIES |
|
|
|
(Cost $2,329,561) |
$ 2,073,633 |
The accompanying notes are an integral part of these financial statements.
30 Pioneer Floating
Rate Trust | Annual Report | 11/30/20
|
|
|
|
Shares |
|
|
Value |
|
|
INVESTMENT COMPANIES — 8.6% of Net |
|
|
|
Assets |
|
450,000 |
|
Invesco Senior Loan ETF (formerly, PowerShares |
|
|
|
Senior Loan Portfolio) |
$ 9,904,500 |
305,752 |
|
SPDR Blackstone/GSO Senior Loan ETF |
13,795,530 |
|
|
TOTAL INVESTMENT COMPANIES |
|
|
|
(Cost $23,271,722) |
$ 23,700,030 |
|
|
RIGHT/WARRANT — 0.1% of Net Assets |
|
|
|
Telecommunication Services — 0.1% |
|
17,944^(d)(i) |
|
Windstream Holding, Inc., 12/31/49 |
$ 170,295 |
|
|
Total Telecommunication Services |
$ 170,295 |
|
|
TOTAL RIGHT/WARRANT |
|
|
|
(Cost $170,297) |
$ 170,295 |
|
|
TOTAL INVESTMENTS IN UNAFFILIATED ISSUERS — 125.1% |
|
|
|
(Cost $347,910,619) |
$345,531,437 |
|
|
OTHER ASSETS AND LIABILITIES — (25.1)% |
$ (69,297,586) |
|
|
NET ASSETS — 100.0% |
$276,233,851 |
|
|
bps |
Basis Points. |
FREMF |
Freddie Mac Multifamily Fixed-Rate Mortgage Loans. |
LIBOR |
London Interbank Offered Rate. |
PRIME |
U.S. Federal Funds Rate. |
REIT |
Real Estate Investment Trust. |
SOFRRATE |
Secured Overnight Financing Rate. |
(144A) |
Security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers in a transaction exempt
from registration. At November 30, 2020, the value of these securities amounted to $46,097,074, or 16.7% of net assets. |
† |
Amount rounds to less than 0.1%. |
* |
Senior secured floating rate loan interests in which the Trust invests generally pay interest at rates that are periodically redetermined by reference to a base lending rate plus a
premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as LIBOR, (ii) the prime rate offered by one or more major United States banks, (iii) the rate of a certificate of deposit or (iv)
other base lending rates used by commercial lenders. The interest rate shown is the rate accruing at November 30, 2020. |
^ |
Security is valued using fair value methods (other than supplied by independent pricing services). |
+ |
Security that used significant unobservable inputs to determine its value. |
(a) |
Floating rate note. Coupon rate, reference index and spread shown at November 30, 2020. |
(b) |
This term loan will settle after November 30, 2020, at which time the interest rate will be determined. |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 31
Schedule of Investments | 11/30/20 (continued)
|
|
(c) |
Security is in default. |
(d) |
Non-income producing security. |
(e) |
The interest rate is subject to change periodically. The interest rate and/or reference index and spread shown at November 30, 2020. |
(f) |
Security is perpetual in nature and has no stated maturity date. |
(g) |
Issued as participation notes. |
(h) |
Issued as preference shares. |
(i) |
Windstream Holding, Inc. warrants are exercisable into 17,944 shares. |
# |
Securities are restricted as to resale. |
|
|
|
|
|
|
|
|
Restricted Securities |
Acquisition date |
|
Cost |
|
|
Value |
|
Alturas Re 2019-2 |
12/19/2018 |
|
$ |
3,037 |
|
|
$ |
16,206 |
|
Alturas Re 2020-2 |
1/1/2020 |
|
|
246,000 |
|
|
|
273,577 |
|
Bantry Re 2016 |
2/6/2019 |
|
|
20,150 |
|
|
|
20,150 |
|
Berwick Re 2018-1 |
1/10/2018 |
|
|
242,108 |
|
|
|
154,657 |
|
Berwick Re 2019-1 |
12/31/2018 |
|
|
108,488 |
|
|
|
108,496 |
|
Carnoustie Re 2017 |
1/5/2017 |
|
|
59,439 |
|
|
|
32,950 |
|
Eden Re II |
12/15/2017 |
|
|
1,195 |
|
|
|
13,770 |
|
Eden Re II |
1/22/2019 |
|
|
446 |
|
|
|
14,782 |
|
Formby Re 2018 |
7/9/2018 |
|
|
37,013 |
|
|
|
44,229 |
|
Gleneagles Re 2016 |
1/14/2016 |
|
|
— |
|
|
|
7,800 |
|
Harambee Re 2018 |
12/19/2017 |
|
|
19,513 |
|
|
|
4,662 |
|
Harambee Re 2019 |
12/20/2018 |
|
|
— |
|
|
|
4,050 |
|
Limestone Re 2019-2 |
6/20/2018 |
|
|
27,000 |
|
|
|
42,412 |
|
Lorenz Re 2018 |
6/26/2018 |
|
|
80,485 |
|
|
|
15,060 |
|
Lorenz Re 2019 |
6/26/2019 |
|
|
64,926 |
|
|
|
13,153 |
|
Matterhorn Re |
4/30/2020 |
|
|
250,000 |
|
|
|
254,325 |
|
Merion Re 2018-2 |
12/28/2017 |
|
|
300,000 |
|
|
|
335,482 |
|
Pangaea Re 2018-1 |
12/26/2017 |
|
|
57,203 |
|
|
|
8,422 |
|
Pangaea Re 2018-3 |
5/31/2018 |
|
|
96,345 |
|
|
|
8,297 |
|
Pangaea Re 2019-1 |
1/9/2019 |
|
|
3,440 |
|
|
|
6,828 |
|
Pangaea Re 2019-3 |
7/25/2019 |
|
|
8,824 |
|
|
|
10,580 |
|
Pangaea Re 2020-1 |
1/21/2020 |
|
|
324,259 |
|
|
|
355,431 |
|
Resilience Re |
4/13/2017 |
|
|
980 |
|
|
|
30 |
|
Sector Re V |
12/4/2018 |
|
|
82,093 |
|
|
|
45,510 |
|
Sector Re V |
1/1/2020 |
|
|
100,000 |
|
|
|
114,628 |
|
St. Andrews Re 2017-1 |
1/5/2017 |
|
|
27,099 |
|
|
|
27,120 |
|
St. Andrews Re 2017-4 |
3/31/2017 |
|
|
— |
|
|
|
34,204 |
|
Woburn Re 2018 |
3/20/2018 |
|
|
94,515 |
|
|
|
23,370 |
|
Woburn Re 2019 |
1/30/2019 |
|
|
75,003 |
|
|
|
83,452 |
|
Total Restricted Securities |
|
|
|
|
|
|
$ |
2,073,633 |
|
% of Net assets |
|
|
|
|
|
|
|
0.7 |
% |
The accompanying notes are an integral part of these financial statements.
32 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Principal amounts are denominated in U.S. dollars (“USD”) unless
otherwise noted.
Purchases and sales of securities (excluding temporary cash investments) for the year ended November 30, 2020 were as follows:
|
|
|
|
|
|
|
|
|
Purchases |
|
|
Sales |
|
Long-Term U.S. Government Securities |
|
$ |
5,005,331 |
|
|
$ |
4,997,093 |
|
Other Long-Term Securities |
|
$ |
266,865,635 |
|
|
$ |
325,867,280 |
|
The Trust 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 Trust’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 Trustees. Under these procedures, cross trades are effected at current market prices. During the year ended November 30, 2020, the Trust engaged in
purchases of $168,938. During the year ended November 30, 2020, the Trust did not engage in sales pursuant to these procedures.
At November 30, 2020, the net unrealized depreciation on investments based on cost
for federal tax purposes of $348,576,639 was as follows:
|
|
|
|
Aggregate gross unrealized appreciation for all investments in which |
|
|
|
there is an excess of value over tax cost |
|
$ |
6,991,486 |
|
Aggregate gross unrealized depreciation for all investments in which |
|
|
|
|
there is an excess of tax cost over value |
|
|
(10,036,688 |
) |
Net unrealized depreciation |
|
$ |
(3,045,202 |
) |
Various inputs are used in determining the value of the Trust’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 Trust’s own assumptions in determining fair value of investments). See Notes to Financial Statements —
Note 1A.
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust |
Annual Report | 11/30/20 33
Schedule of Investments | 11/30/20 (continued)
The following is a summary of the
inputs used as of November 30, 2020, in valuing the Trust’s investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Senior Secured Floating Rate |
|
|
|
|
|
|
|
|
|
|
|
|
Loan Interests |
|
$ |
— |
|
|
$ |
267,007,865 |
|
|
$ |
— |
|
|
$ |
267,007,865 |
|
Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Retail |
|
|
— |
|
|
|
— |
|
|
|
120,576 |
|
|
|
120,576 |
|
All Other Common Stock |
|
|
1,347,381 |
|
|
|
— |
|
|
|
— |
|
|
|
1,347,381 |
|
Asset Backed Securities |
|
|
— |
|
|
|
3,743,431 |
|
|
|
— |
|
|
|
3,743,431 |
|
Collateralized Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligations |
|
|
— |
|
|
|
4,166,681 |
|
|
|
— |
|
|
|
4,166,681 |
|
Commercial Mortgage-Backed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
|
— |
|
|
|
1,276,064 |
|
|
|
— |
|
|
|
1,276,064 |
|
Corporate Bonds |
|
|
— |
|
|
|
41,925,481 |
|
|
|
— |
|
|
|
41,925,481 |
|
Insurance-Linked Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized Reinsurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multiperil - Worldwide |
|
|
— |
|
|
|
— |
|
|
|
42,442 |
|
|
|
42,442 |
|
Windstorm - Florida |
|
|
— |
|
|
|
— |
|
|
|
44,229 |
|
|
|
44,229 |
|
Reinsurance Sidecars |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multiperil - U.S. |
|
|
— |
|
|
|
— |
|
|
|
41,662 |
|
|
|
41,662 |
|
Multiperil - Worldwide |
|
|
— |
|
|
|
— |
|
|
|
1,690,975 |
|
|
|
1,690,975 |
|
All Other Insurance-Linked |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security |
|
|
— |
|
|
|
254,325 |
|
|
|
— |
|
|
|
254,325 |
|
Investment Companies |
|
|
23,700,030 |
|
|
|
— |
|
|
|
— |
|
|
|
23,700,030 |
|
Right/Warrant |
|
|
— |
|
|
|
170,295 |
|
|
|
— |
|
|
|
170,295 |
|
Total Investments in Securities |
|
$ |
25,047,411 |
|
|
$ |
318,544,142 |
|
|
$ |
1,939,884 |
|
|
$ |
345,531,437 |
|
Other Financial Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit agreement(a) |
|
$ |
— |
|
|
$ |
(105,450,000 |
) |
|
$ |
— |
|
|
$ |
(105,450,000 |
) |
Total Other Financial Instruments |
|
$ |
— |
|
|
$ |
(105,450,000 |
) |
|
$ |
— |
|
|
$ |
(105,450,000 |
) |
(a) The Trust may hold liabilities in which the fair value approximates the
carrying amount for financial statement purposes.
The accompanying notes are an integral part of these financial statements.
34 Pioneer
Floating Rate Trust | Annual Report | 11/30/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance |
|
|
Realized |
|
|
unrealized |
|
|
|
|
|
|
|
|
Accrued |
|
|
Balance |
|
|
|
as of |
|
|
gain |
|
|
appreciation |
|
|
|
|
|
|
|
|
discounts/ |
|
|
as of |
|
|
|
11/30/19 |
|
|
(loss)(1) |
|
|
(depreciation)(2) |
|
|
Purchases |
|
|
Sales |
|
|
premiums |
|
|
11/30/20 |
|
Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Care |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology |
|
$ |
2,096 |
|
|
$ |
312,341 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(314,437 |
) |
|
$ |
— |
|
|
$ |
— |
|
Specialty Retail |
|
|
108,702 |
|
|
|
— |
|
|
|
11,874 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
120,576 |
|
Insurance-Linked |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multiperil - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Regional |
|
|
248,379 |
|
|
|
— |
|
|
|
(11,494 |
) |
|
|
— |
|
|
|
(236,885 |
) |
|
|
— |
|
|
|
— |
|
Multiperil - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide |
|
|
397,211 |
|
|
|
(32,920 |
) |
|
|
50,564 |
|
|
|
— |
|
|
|
(372,413 |
) |
|
|
— |
|
|
|
42,442 |
|
Windstorms – |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Florida |
|
|
79,929 |
|
|
|
— |
|
|
|
(1,912 |
) |
|
|
88,105 |
|
|
|
(121,893 |
) |
|
|
— |
|
|
|
44,229 |
|
Reinsurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sidecars |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multiperil - U.S. |
|
|
386,450 |
|
|
|
— |
|
|
|
(24,618 |
) |
|
|
— |
|
|
|
(320,170 |
) |
|
|
— |
|
|
|
41,662 |
|
Multiperil - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide |
|
|
3,710,611 |
|
|
|
(70,134 |
) |
|
|
81,671 |
|
|
|
670,259 |
|
|
|
(2,701,432 |
) |
|
|
— |
|
|
|
1,690,975 |
|
Total |
|
$ |
4,933,378 |
|
|
$ |
209,287 |
|
|
$ |
106,085 |
|
|
$ |
758,364 |
|
|
$ |
(4,067,230 |
) |
|
$ |
— |
|
|
$ |
1,939,884 |
|
|
|
|
(1) |
Realized gain (loss) on these securities is included in the realized gain (loss) from investments on the Statement of Operations. |
(2) |
Unrealized appreciation (depreciation) on these securities is included in the change in unrealized appreciation (depreciation) from investments on the Statement of
Operations. |
* |
Transfers are calculated on the beginning of period value. For the year ended November 30, 2020, there were no transfers between Levels 1, 2 and 3. |
|
Net change in unrealized appreciation (depreciation) of Level 3 investments |
|
|
still held and considered Level 3 at November 30, 2020: |
$41,150 |
The accompanying notes are an
integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 35
Statement of Assets and Liabilities |
11/30/20
|
|
|
|
ASSETS: |
|
|
|
Investments in unaffiliated issuers, at value (cost $347,910,619) |
|
$ |
345,531,437 |
|
Cash |
|
|
6,847,246 |
|
Receivables — |
|
|
|
|
Distribution paid in advance |
|
|
1,546,136 |
|
Investment securities sold |
|
|
32,604,401 |
|
Dividends |
|
|
33,525 |
|
Interest |
|
|
2,010,889 |
|
Other assets |
|
|
8 |
|
Total assets |
|
$ |
388,573,642 |
|
LIABILITIES: |
|
|
|
|
Payables — |
|
|
|
|
Credit agreement |
|
$ |
105,450,000 |
|
Investment securities purchased |
|
|
4,872,958 |
|
Interest expense |
|
|
3,469 |
|
Distributions |
|
|
1,546,136 |
|
Trustees’ fees |
|
|
5,029 |
|
Unrealized depreciation on unfunded loan commitments |
|
|
1,912 |
|
Due to affiliates |
|
|
35,115 |
|
Accrued expenses |
|
|
425,172 |
|
Total liabilities |
|
$ |
112,339,791 |
|
NET ASSETS: |
|
|
|
|
Paid-in capital |
|
$ |
344,939,989 |
|
Distributable earnings (loss) |
|
|
(68,706,138 |
) |
Net assets |
|
$ |
276,233,851 |
|
NET ASSET VALUE PER SHARE: |
|
|
|
|
No par value |
|
|
|
|
Based on $276,233,851/24,738,174 shares |
|
$ |
11.17 |
|
The accompanying notes are an integral part of these financial statements.
36 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Statement of Operations
FOR THE YEAR ENDED 11/30/20
|
|
|
|
|
|
|
INVESTMENT INCOME: |
|
|
|
|
|
|
Interest from unaffiliated issuers |
|
$ |
23,417,100 |
|
|
|
|
Dividends from unaffiliated issuers |
|
|
330,087 |
|
|
|
|
Total investment income
|
|
|
|
|
|
$ |
23,747,187 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
Management fees |
|
$ |
2,686,130 |
|
|
|
|
|
Administrative expense |
|
|
181,984 |
|
|
|
|
|
Transfer agent fees |
|
|
17,924 |
|
|
|
|
|
Shareowner communications expense |
|
|
78,317 |
|
|
|
|
|
Custodian fees |
|
|
94,608 |
|
|
|
|
|
Professional fees |
|
|
221,435 |
|
|
|
|
|
Proxy related expenses (Note 9) |
|
|
1,294,113 |
|
|
|
|
|
Printing expense |
|
|
184,140 |
|
|
|
|
|
Pricing fees |
|
|
38,282 |
|
|
|
|
|
Trustees’ fees |
|
|
13,550 |
|
|
|
|
|
Insurance expense |
|
|
813 |
|
|
|
|
|
Interest expense |
|
|
1,888,336 |
|
|
|
|
|
Miscellaneous |
|
|
223,859 |
|
|
|
|
|
Total expenses |
|
|
|
|
|
$ |
6,923,491 |
|
Net investment income |
|
|
|
|
|
$ |
16,823,696 |
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: |
|
|
|
|
|
Net realized gain (loss) on: |
|
|
|
|
|
|
|
|
Investments in unaffiliated issuers |
|
$ |
(15,531,740 |
) |
|
|
|
|
Swap contracts |
|
|
(2,327,585 |
) |
|
|
|
|
Other assets and liabilities denominated in |
|
|
|
|
|
|
|
|
foreign currencies |
|
|
(3,831 |
) |
|
$ |
(17,863,156 |
) |
Change in net unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
Investments in unaffiliated issuers |
|
$ |
3,167,001 |
|
|
|
|
|
Swap contracts |
|
|
(261,360 |
) |
|
|
|
|
Unfunded loan commitments |
|
|
2,491 |
|
|
|
|
|
Other assets and liabilities denominated in |
|
|
|
|
|
|
|
|
foreign currencies |
|
|
2,989 |
|
|
$ |
2,911,121 |
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
$ |
(14,952,035 |
) |
Net increase in net assets resulting from operations |
|
|
|
|
|
$ |
1,871,661 |
|
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report
| 11/30/20 37
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
Year |
|
|
Year |
|
|
|
Ended |
|
|
Ended |
|
|
|
11/30/20 |
|
|
11/30/19 |
|
FROM OPERATIONS: |
|
|
|
|
|
|
Net investment income (loss) |
|
$ |
16,823,696 |
|
|
$ |
17,994,475 |
|
Net realized gain (loss) on investments |
|
|
(17,863,156 |
) |
|
|
(9,886,339 |
) |
Change in net unrealized appreciation (depreciation) |
|
|
|
|
|
|
|
|
on investments |
|
|
2,911,121 |
|
|
|
4,901,588 |
|
Net increase in net assets resulting from operations |
|
$ |
1,871,661 |
|
|
$ |
13,009,724 |
|
DISTRIBUTIONS TO SHAREOWNERS: |
|
|
|
|
|
|
|
|
($0.74 and $0.74 per share, respectively) |
|
$ |
(18,368,094 |
) |
|
$ |
(18,182,558 |
) |
Total distributions to shareowners |
|
$ |
(18,368,094 |
) |
|
$ |
(18,182,558 |
) |
Net decrease in net assets |
|
$ |
(16,496,433 |
) |
|
$ |
(5,172,834 |
) |
NET ASSETS: |
|
|
|
|
|
|
|
|
Beginning of year |
|
$ |
292,730,284 |
|
|
$ |
297,903,118 |
|
End of year |
|
$ |
276,233,851 |
|
|
$ |
292,730,284 |
|
The accompanying notes are an integral part of these financial statements.
38 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Statement of Cash Flows
FOR THE YEAR ENDED 11/30/20
|
|
|
|
Cash Flows From Operating Activities: |
|
|
|
Net increase in net assets resulting from operations |
|
$ |
1,871,661 |
|
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 |
|
$ |
(343,394,059 |
) |
Proceeds from disposition and maturity of investment securities |
|
|
374,233,109 |
|
Net sales of temporary cash investments |
|
|
11,020,000 |
|
Net accretion and amortization of discount/premium on investment securities |
|
|
(1,967,495 |
) |
Change in unrealized appreciation on investments in unaffiliated issuers |
|
|
(3,167,001 |
) |
Change in unrealized appreciation on unfunded loan commitments |
|
|
(2,491 |
) |
Change in unrealized appreciation on swap contracts |
|
|
261,360 |
|
Change in unrealized appreciation on other assets and liabilities denominated |
|
|
|
|
in foreign currencies |
|
|
(2,989 |
) |
Net realized loss on investments in unaffiliated issuers |
|
|
15,531,740 |
|
Net premiums received on swap contracts |
|
|
877,234 |
|
Increase in interest receivable |
|
|
(678,100 |
) |
Decrease in other assets |
|
|
25 |
|
Decrease in due to affiliates |
|
|
(22,912 |
) |
Decrease in trustees’ fees payable |
|
|
(1,771 |
) |
Increase in accrued expenses payable |
|
|
200,538 |
|
Decrease in cash due to broker |
|
|
(1,133,779 |
) |
Decrease in variation margin for swap contracts |
|
|
(1,464 |
) |
Net cash, restricted cash and foreign currencies from operating
activities |
|
$ |
53,623,606 |
|
Cash Flows Used in Financing Activities: |
|
|
|
|
Borrowings received |
|
$ |
8,000,000 |
|
Borrowings repaid |
|
|
(42,000,000 |
) |
Decrease in interest expense payable |
|
|
(111,144 |
) |
Distributions to shareowners |
|
|
(18,368,094 |
) |
Net cash, restricted cash and foreign currencies used in financing
activities |
|
$ |
(52,479,238 |
) |
Effect of Foreign Exchange Fluctuations on Cash: |
|
|
|
|
Effect of foreign exchange fluctuations on cash |
|
$ |
2,989 |
|
Cash, Restricted Cash and Foreign Currencies: |
|
|
|
|
Beginning of year* |
|
$ |
5,699,889 |
|
End of year* |
|
$ |
6,847,246 |
|
Cash Flow Information: |
|
|
|
|
Cash paid for interest |
|
$ |
1,999,480 |
|
* 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:
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
11/30/20 |
|
|
11/30/19 |
|
Cash |
|
$ |
6,847,246 |
|
|
$ |
4,920,837 |
|
Foreign currencies, at value |
|
|
— |
|
|
|
31,145 |
|
Swaps collateral |
|
|
— |
|
|
|
747,907 |
|
Total cash, restricted cash and foreign currencies |
|
|
|
|
|
|
|
|
shown in the Statement of Cash
Flows |
|
$ |
6,847,246 |
|
|
$ |
5,699,889 |
|
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report
| 11/30/20 39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
Year |
|
|
Year |
|
|
Year |
|
|
Year |
|
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
|
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 |
|
$ |
11.83 |
|
|
$ |
12.04 |
|
|
$ |
12.42 |
|
|
$ |
12.50 |
|
|
$ |
12.30 |
|
Increase (decrease) from investment operations: (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
0.68 |
|
|
$ |
0.73 |
|
|
$ |
0.74 |
|
|
$ |
0.71 |
|
|
$ |
0.77 |
|
Net realized and unrealized gain (loss) on investments |
|
|
(0.60 |
) |
|
|
(0.20 |
) |
|
|
(0.40 |
) |
|
|
(0.06 |
) |
|
|
0.15 |
|
Net increase (decrease) from investment operations
|
|
$ |
0.08 |
|
|
$ |
0.53 |
|
|
$ |
0.34 |
|
|
$ |
0.65 |
|
|
$ |
0.92 |
|
Distributions to shareowners from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income and previously undistributed net investment
income |
|
$ |
(0.74) |
(b) |
|
$ |
(0.74) |
(b) |
|
$ |
(0.72 |
) |
|
$ |
(0.73) |
(b) |
|
$ |
(0.72 |
) |
Net increase (decrease) in net asset value |
|
$ |
(0.66 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.08 |
) |
|
$ |
0.20 |
|
Net asset value, end of period |
|
$ |
11.17 |
|
|
$ |
11.83 |
|
|
$ |
12.04 |
|
|
$ |
12.42 |
|
|
$ |
12.50 |
|
Market value, end of period |
|
$ |
10.73 |
|
|
$ |
10.53 |
|
|
$ |
10.40 |
|
|
$ |
11.47 |
|
|
$ |
11.78 |
|
Total return at net asset value (c) |
|
|
1.89 |
% |
|
|
5.38 |
% |
|
|
3.34 |
% |
|
|
5.55 |
% |
|
|
8.31 |
% |
Total return at market value (c) |
|
|
9.96 |
% |
|
|
8.59 |
% |
|
|
(3.34 |
)% |
|
|
3.43 |
% |
|
|
15.92 |
% |
Ratios to average net assets of shareowners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses plus interest expense (d) |
|
|
2.58 |
% |
|
|
2.90 |
% |
|
|
2.56 |
% |
|
|
2.21 |
% |
|
|
1.96 |
% |
Net investment income available to shareowners |
|
|
6.26 |
% |
|
|
6.08 |
% |
|
|
5.98 |
% |
|
|
5.62 |
% |
|
|
6.32 |
% |
Portfolio turnover rate |
|
|
73 |
% |
|
|
48 |
% |
|
|
34 |
% |
|
|
75 |
% |
|
|
52 |
% |
Net assets, end of period (in thousands) |
|
$ |
276,234 |
|
|
$ |
292,730 |
|
|
$ |
297,903 |
|
|
$ |
307,195 |
|
|
$ |
309,308 |
|
The accompanying notes
are an integral part of these financial statements.
40 Pioneer Floating Rate Trust | Annual Report | 11/30/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
Year |
|
|
Year |
|
|
Year |
|
|
Year |
|
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
|
11/30/20 |
|
|
11/30/19 |
|
|
11/30/18 |
|
|
11/30/17 |
|
|
11/30/16* |
|
Total amount of debt outstanding (in thousands) |
|
$ |
105,450 |
|
|
$ |
139,450 |
|
|
$ |
143,450 |
|
|
$ |
143,450 |
|
|
$ |
143,450 |
|
Asset coverage per $1,000 of indebtedness |
|
$ |
3,620 |
|
|
$ |
3,099 |
|
|
$ |
3,077 |
|
|
$ |
3,141 |
|
|
$ |
3,156 |
|
|
|
* |
The Trust 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 Trust during the period. The Trust has accumulated
undistributed net investment income which is the part of the Trust’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 Trust’s dividend reinvestment plan. Total investment
return does not reflect brokerage commissions. Past performance is not a guarantee of future results. |
(d) |
Includes interest expense of 0.70%, 1.60%, 1.35%, 0.95% and 0.63%, respectively. |
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust |
Annual Report | 11/30/20 41
Notes to Financial Statements |
11/30/20 1. Organization and Significant Accounting Policies
Pioneer Floating Rate Trust (the “Trust”) was organized as a Delaware statutory trust on October 6, 2004. Prior to commencing operations on December 28, 2004, the Trust had no operations other than
matters relating to its organization and registration as a closed-end management investment company under the Investment Company Act of 1940, as amended. The Trust is a diversified fund. The investment objective of the Trust is to provide a high
level of current income and the Trust may, as a secondary objective, also seek preservation of capital to the extent consistent with its investment objective of high current income.
Effective January 1, 2021,
Amundi Pioneer Asset Management, Inc. changed its name to Amundi Asset Management US, Inc. Amundi Asset Management US, Inc., an indirect, wholly owned subsidiary of Amundi and Amundi’s wholly owned subsidiary, Amundi USA, Inc., serves as the
Trust’s investment adviser (the “Adviser”).
During March 2017, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update, ASU 2017-08, Receivables-Nonrefundable
Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”), which shortens the amortization period for purchased non-contingently callable debt securities held at a premium. ASU
2017-08 specifies that the premium amortization period ends at the earliest call date, for certain purchased non-contingently callable debt securities. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2018. The Trust has adopted ASU 2017-08 as of January 1, 2019. The implementation of ASU 2017-08 did not have a material impact on the Trust’s financial statements.
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 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 Trust’s investments, derivatives, debt and other contracts that will undergo reference rate-related modifications as a result of the reference rate reform.
42
Pioneer Floating Rate Trust | Annual Report | 11/30/20
The Trust 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 Trust 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 Trust in the preparation of its financial statements:
A. Security Valuation
The net asset value of the Trust 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 Trustees 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. 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.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 43
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.
The value of foreign securities is translated into U.S. dollars based on foreign currency exchange rate quotations supplied by a third party pricing source. Trading in non-U.S. equity securities is
substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Trust’s shares are determined as of such times. The Trust may use a fair value model
developed by an independent pricing service to value non-U.S. equity securities.
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.
Shares of open-end registered investment companies (including money market mutual funds) are valued at such funds’ net asset value. Shares of exchange-listed closed-end funds are valued by
using the last sale price on the principal exchange where they are traded.
Repurchase agreements are valued at par. Cash may include overnight time deposits at approved financial
institutions.
44 Pioneer Floating Rate Trust | Annual Report | 11/30/20
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 Trust’s Board of Trustees. The Adviser’s fair valuation team uses fair value methods approved by the Valuation Committee of the Board of Trustees. 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 Trustees.
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 Trust
may use fair value 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 Trust’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 Trust’s securities may differ significantly from exchange prices, and such
differences could be material.
At November 30, 2020, two securities were 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 0.11% of net assets. The value of these fair valued securities were $290,871.
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 Trust 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.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 45
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 Trust are maintained in U.S. dollars. Amounts denominated in foreign currencies are translated into U.S. dollars using current exchange rates.
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 Trust’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 Trust 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
46 Pioneer Floating Rate Trust | Annual Report | 11/30/20
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.
At November 30, 2020, the Trust was permitted to carry forward
indefinitely $8,153,772 of short-term losses and $56,792,817 of long-term losses.
The tax character of distributions paid during the years ended November 30, 2020 and November 30, 2019,
were as follows:
|
|
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
Distributions paid from: |
|
|
|
|
|
|
Ordinary income |
|
$ |
18,368,094 |
|
|
$ |
18,182,558 |
|
Total |
|
$ |
18,368,094 |
|
|
$ |
18,182,558 |
|
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 Trust’s investments may represent industries or industry sectors that are interrelated or have common risks, making the Trust more susceptible to any economic, political, or
regulatory developments or other risks affecting those industries and sectors. The Trust’s investments in foreign markets and countries with limited developing markets may subject the Trust 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 Trust 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,
Pioneer Floating Rate Trust | Annual Report | 11/30/20
47
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 Trust.
The Trust invests in
below-investment-grade (high-yield) debt securities and preferred stocks. Some of these high-yield securities may be convertible into equity securities of the issuer. Debt securities rated below-investment-grade are commonly referred to as
“junk bonds” and are considered speculative. These securities involve greater risk of loss, are subject to greater price volatility, and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt
securities.
Certain instruments held by the Trust 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 Trust 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 Trust’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 Trust invests, including floating rate loans, once sold, may not settle for an extended period (for example, several weeks or even longer). The Trust
will not receive its sale proceeds until that time, which may constrain the Trust’s ability to meet its obligations. The Trust 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
48 Pioneer
Floating Rate Trust | Annual Report | 11/30/20
about most floating rate loans than is the case for many other
types of securities. Normally, the Adviser will seek to avoid receiving material, non-public information about the issuer of a loan either held by, or considered for investment by, the Trust, and this decision could adversely affect the
Trust’s investment performance. Loans may not be considered “securities,” and purchasers, such as the Trust, therefore may not be entitled to rely on the anti-fraud protections afforded by federal securities laws. The Trust’s
investments in certain foreign markets or countries with limited developing markets may subject the Trust 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.
The Trust’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 by the end of 2021. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Trust, issuers of
instruments in which the Trust invests, and financial markets generally.
The Trust is not limited in the percentage of its assets that may be invested in illiquid securities. Illiquid
securities are securities that the Trust 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 Trust is susceptible to operational, information security and related risks. While the Trust’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 Trust cannot control the cybersecurity plans and systems put in place by service providers to the Trust such as Brown Brothers Harriman & Co., the Trust’s custodian and accounting agent, and American Stock
Transfer & Trust Company (“AST”), the Trust’s transfer agent. In addition, many beneficial owners of Trust shares hold them through accounts at broker-dealers, retirement platforms and other financial market participants over
which neither the Trust nor Amundi 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 Amundi or the Trust’s service
providers or intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the
Pioneer Floating Rate Trust | Annual Report | 11/30/20 49
Trust’s ability to calculate its net asset value,
impediments to trading, the inability of Trust shareowners to effect share purchases or redemptions 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 Trust’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.
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 Trust at
November 30, 2020 are listed in the Schedule of Investments.
50 Pioneer Floating Rate Trust | Annual Report | 11/30/20
G. Insurance-Linked Securities
(“ILS”)
The Trust invests in ILS. The Trust 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 Trust 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 Trust to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences.
The
Trust’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 Trust has limited transparency into the individual underlying
contracts, and therefore must rely upon the risk assessment and sound underwriting practices of the issuer. Accordingly, it may be more difficult for the Adviser to fully evaluate the underlying risk profile of the Trust’s structured
reinsurance investments, and therefore the Trust’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 Trust.
These securities may be difficult to purchase, sell or unwind. Illiquid securities also may be difficult to value. If the Trust is forced to sell an illiquid asset, the Trust may be forced to sell at a loss.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 51
H. Repurchase Agreements
Repurchase agreements are arrangements under which the Trust purchases securities from a broker-dealer or a bank, called the counterparty, upon the agreement of the counterparty to repurchase the
securities from the Trust at a later date, and at a specific price, which is typically higher than the purchase price paid by the Trust. The securities purchased serve as the Trust’s collateral for the obligation of the counterparty to
repurchase the securities. The value of the collateral, including accrued interest, is required to be equal to or in excess of the repurchase price. The collateral for all repurchase agreements is held in safekeeping in the customer-only account of
the Trust’s custodian or a sub-custodian of the Trust. The Adviser is responsible for determining that the value of the collateral remains at least equal to the repurchase price. In the event of a default by the counterparty, the Trust is
entitled to sell the securities, but the Trust may not be able to sell them for the price at which they were purchased, thus causing a loss to the Trust. Additionally, if the counterparty becomes insolvent, there is some risk that the Trust will not
have a right to the securities, or the immediate right to sell the securities.
As of and for the year ended November 30, 2020, the Trust had no open repurchase agreements.
I. Credit Default Swap Contracts
A credit default swap is a contract between a buyer of protection and a seller of
protection against a pre-defined credit event or an underlying reference obligation, which may be a single security or a basket or index of securities. The Trust may buy or sell credit default swap contracts to seek to increase the Trust’s
income, or to attempt to hedge the risk of default on portfolio securities. A credit default swap index is used to hedge risk or take a position on a basket of credit entities or indices.
As
a seller of protection, the Trust would be required to pay the notional (or other agreed-upon) value of the referenced debt obligation to the counterparty in the event of a default by a U.S. or foreign corporate issuer of a debt obligation, which
would likely result in a loss to the Trust. In return, the Trust would receive from the counterparty a periodic stream of payments during the term of the contract, provided that no event of default occurred. The maximum exposure of loss to the
seller would be the notional value of the credit default swaps outstanding. If no default occurs, the Trust would keep the stream of payments and would have no payment obligation. The Trust may also buy credit default swap contracts in order to
hedge against the risk of default of debt securities, in which case the Trust would function as the counterparty referenced above.
52 Pioneer Floating Rate Trust | Annual
Report | 11/30/20
As a buyer of protection, the Trust makes an upfront or periodic
payment to the protection seller in exchange for the right to receive a contingent payment. An upfront payment made by the Trust, as the protection buyer, is recorded within the “Swap contracts, at value” line item on the Statement of
Assets and Liabilities. Periodic payments received or paid by the Trust are recorded as realized gains or losses on the Statement of Operations.
Credit default swap contracts are
marked-to-market daily using valuations supplied by independent sources, and the change in value, if any, is recorded within the “Swap contracts, at value” line item on the Statement of Assets and Liabilities. Payments received or made
as a result of a credit event or upon termination of the contract are recognized, net of the appropriate amount of the upfront payment, as realized gains or losses on the Statement of Operations.
Credit default swap contracts involving the sale of protection may involve greater risks than if the Trust had invested in the referenced debt instrument directly. Credit default swap contracts are
subject to general market risk, liquidity risk, counterparty risk and credit risk. If the Trust is a protection buyer and no credit event occurs, it will lose its investment. If the Trust is a protection seller and a credit event occurs, the value
of the referenced debt instrument received by the Trust, together with the periodic payments received, may be less than the amount the Trust pays to the protection buyer, resulting in a loss to the Trust. In addition, obligations under sell
protection credit default swaps may be partially offset by net amounts received from settlement of buy protection credit default swaps entered into by the Trust for the same reference obligation with the same counterparty.
Certain swap contracts that are cleared through a central clearinghouse are referred to as centrally cleared swaps. All payments made or received by the Trust are pursuant to a centrally cleared
swap contract with the central clearing party rather than the original counterparty. Upon entering into a centrally cleared swap contract, the Trust is required to make an initial margin deposit, either in cash or in securities. The daily change in
value on open centrally cleared contracts is recorded as “Variation margin for centrally cleared swap contracts” on the Statement of Assets and Liabilities. Cash received from or paid to the broker related to previous margin movement is
held in a segregated account at the broker and is recorded as either “Due from broker for swaps” or “Due to broker for swaps” on the Statement of Assets and Liabilities. The amount of cash deposited with a broker as
collateral at November 30, 2020, is recorded as “Swaps collateral” on the Statement of Assets and Liabilities.
Pioneer Floating Rate Trust |
Annual Report | 11/30/20 53
The average market value of credit default swap contracts open during the year ended November 30, 2020, was $325,827. There were no open credit default swap contracts at November 30, 2020.
J. 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 Trust 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 Trust on terms that differ from the terms of the Plan.
Whenever the Trust 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 Trust 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%. 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
54 Pioneer Floating Rate Trust | Annual Report | 11/30/20
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.
Distributions to shareowners are recorded as of the ex-dividend date and paid on the payable date. As of November 30, 2020, the Trust recorded a Distribution Paid in Advance on its Statement of
Assets and Liabilities of $1,546,136 to reflect the payment of its November 2020 distribution with a payable date of December 1, 2020.
K. 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
Trust’s Statement of Assets and Liabilities includes cash on hand at the Trust’s custodian bank and does not include any short-term investments. As of and for the year ended November 30, 2020, the Trust had no restricted cash presented
on the Statement of Assets and Liabilities.
2. Management Agreement
The Adviser manages the Trust’s portfolio. Management fees payable under the
Trust’s Advisory Agreement with the Adviser are calculated daily and paid monthly at the annual rate of 0.70% of the Trust’s average daily managed assets. “Managed assets” means (a) the total assets of the Trust, 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 year ended November 30,
2020 the net management fee was 0.70% of the Trust’s average daily managed assets, which was equivalent to 1.00% of the Trust’s average daily net assets.
In addition, under the management and
administration agreements, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Trust as administrative reimbursements. Included in “Due to affiliates” reflected on the
Statement of Assets and Liabilities is $35,115 in management fees, administrative costs and certain other reimbursements payable to the Adviser at November 30, 2020.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 55
3. Compensation of Trustees and Officers
The Trust pays an annual fee to its Trustees. The Adviser reimburses the Trust for fees paid to the Interested Trustees. The Trust does not pay any salary or other compensation to its officers. For the year ended
November 30, 2020, the Trust paid $13,550 in Trustees’ compensation, which is reflected on Statement of Operations as Trustees’ fees. At November 30, 2020, the Trust had a payable for Trustees’ fees on its Statement of Assets and
Liabilities of $5,029.
4. Transfer Agent
AST serves as the transfer agent with respect to the Trust’s common shares. The Trust pays AST an annual
fee, as is agreed to from time to time by the Trust and AST, for providing such services.
In addition, the Trust 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 Trust’s use of derivatives may enhance or mitigate the Trust’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 Trust.
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.
56 Pioneer Floating Rate
Trust | Annual Report | 11/30/20
The effect of derivative instruments (not considered to be hedging instruments for
accounting disclosure purposes) on the Statement of Operations by risk exposure at November 30, 2020, was as follows:
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
|
|
|
|
|
|
|
|
|
Interest |
|
|
Credit |
|
|
Exchange |
|
|
Equity |
|
|
Commodity |
|
|
|
Rate Risk |
|
|
Risk |
|
|
Rate Risk |
|
|
Risk |
|
|
Risk |
|
Net realized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain (loss) on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swap contracts |
|
$ |
— |
|
|
$ |
(2,327,585 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Total Value |
|
$ |
— |
|
|
$ |
(2,327,585 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Change in net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
unrealized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
appreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(depreciation) on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swap contracts |
|
$ |
— |
|
|
$ |
(261,360 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Total Value |
|
$ |
— |
|
|
$ |
(261,360 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
6. Unfunded Loan Commitments
The Trust may enter into unfunded loan commitments. Unfunded loan commitments may be partially or wholly unfunded. During the
contractual period, the Trust is obliged to provide funding to the borrower upon demand. A fee is earned by the Trust 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 November 30, 2020,
the Trust had the following unfunded loan commitments outstanding:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation |
|
Loan |
|
Principal |
|
|
Cost |
|
|
Value |
|
|
(Depreciation) |
|
Spectacle Gary |
|
|
|
|
|
|
|
|
|
|
|
|
Holdings LLC |
|
$ |
138,224 |
|
|
$ |
137,199 |
|
|
$ |
135,287 |
|
|
$ |
(1,912 |
) |
Total Value |
|
$ |
138,224 |
|
|
$ |
137,199 |
|
|
$ |
135,287 |
|
|
$ |
(1,912 |
) |
7. Trust Shares
There are an unlimited number of shares of beneficial interest authorized.
Transactions in shares of beneficial interest for the year ended November 30, 2020 and the year ended November 30, 2019, were as follows:
|
|
|
|
|
|
|
|
|
11/30/20 |
|
|
11/30/19 |
|
Shares outstanding at beginning of year |
|
|
24,738,174 |
|
|
|
24,738,174 |
|
Shares outstanding at end of year |
|
|
24,738,174 |
|
|
|
24,738,174 |
|
Pioneer Floating Rate Trust | Annual Report | 11/30/20 57
8. Credit Agreement
Effective November 26, 2013, the Trust 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 Trust’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 November
30, 2020, the Trust had a borrowing outstanding under the Credit Agreement totaling $105,450,000. The interest rate charged at November 30, 2020 was 1.04%. During the year ended November 30, 2020, the average daily balance was $114,967,241 at an
average interest rate of 1.51%. Interest expense of $1,888,336 in connection with the Credit Agreement is included on the Statement of Operations. During the 12-month period, the Trust decreased the absolute amount of funds borrowed by a total of
$34 million, to $105 million as of November 30, 2020. The Trust decreased the amount of funds borrowed in connection with a tender offer which commenced on November 23, 2020 (see Note 11).
The Trust is required
to maintain 300% asset coverage with respect to amounts outstanding under the Credit Agreement. Asset coverage is calculated by subtracting the Trust’s total liabilities not including any bank loans and senior securities, from the
Trust’s total assets and dividing such amount by the principal amount of the borrowing outstanding.
9. Proxy Related Expenses
During the year
ended November 30, 2020, the Trust incurred $1,294,113 of costs related to the annual shareholder meeting, including the cost of services provided by legal counsel to the Trust and to the independent trustees.
10. Certain Affiliated Persons
At November 30, 2020 Saba Capital Management, L.P. and certain associated parties beneficially owned approximately 24.8% of the
Trust’s outstanding Common Shares (based on a Form 13D filed by Saba Capital Management, L.P., Saba Capital Management GP, LLC and Mr. Boaz R. Weinstein on August 31, 2020). Under the 1940 Act, the direct or indirect beneficial owner of more
than 25% of the voting securities of a company (including the Trust) is presumed to control such company. Companies under common control (e.g., companies with a common owner of greater than 25% of their respective voting securities) are affiliates
under the 1940 Act. Shareholders who beneficially own 25% or more of the outstanding shares of the Trust or
58 Pioneer Floating Rate Trust | Annual Report | 11/30/20
who are otherwise deemed to control the Trust may be able to determine or significantly influence the outcome of matters
submitted to a vote of the Trust’s shareholders.
11. Subsequent Events
A monthly dividend was declared on December 1, 2020 from undistributed and
accumulated net investment income of $0.0625 per share payable December 18, 2020 to shareowners of record on December 11, 2020.
TENDER OFFER
The Trust
announced a tender offer on August 31, 2020, and commenced the tender offer on November 23, 2020, pursuant to which the Trust offered to purchase up to 50% of the Trust’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 Trust 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 has approximately 12,369,087 Shares outstanding.
At December 29, 2020, following the completion of the Trust’s tender
offer, Saba Capital Management, L.P. and certain associated parties beneficially owned approximately 6.3% of the Trust’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 Trust | Annual Report | 11/30/20 59
Report of Independent Registered Public Accounting Firm To the Board of Trustees and the Shareholders of
Pioneer Floating Rate Trust:
Opinion on the Financial
Statements
We have audited the accompanying statement of assets and liabilities of Pioneer Floating Rate Trust (the “Trust”), including the schedule of investments, as of November 30, 2020, and the
related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the four years in the period then ended and the
related notes (collectively referred to as the “financial statements”). The financial highlights for the period ended November 30, 2016 were audited by another independent registered public accounting firm whose report, dated January 25,
2017, expressed an unqualified opinion on those financial highlights. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust at November 30, 2020, the results of its operations and its
cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the four years in the period then ended in conformity with U.S. generally accepted
accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to
express an opinion on the Trust’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent
with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in
accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust
is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not
for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
60 Pioneer
Floating Rate Trust | Annual Report | 11/30/20
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Amundi Pioneer investment companies since 2017.
Boston, Massachusetts
January 27, 2021
Pioneer Floating Rate Trust | Annual Report | 11/30/20 61
Additional Information (unaudited)
During the period, there have been no material changes in the Trust’s investment objective or fundamental policies that have not been approved by
the shareowners. There have been no changes in the Trust’s charter or By-Laws that would delay or prevent a change in control of the Trust which has not been approved by the shareowners. During the period, there have been no changes in the
principal risk factors associated with investment in the Trust. There were no changes in the persons who are primarily responsible for the day-to-day management of the Trust’s portfolio.
Notice is hereby
given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Trust may purchase, from time to time, its shares in the open market.
Results of Shareholder
Meeting
At an annual meeting held on September 16, 2020, shareholders of the Trust were asked to consider the proposal described below.
A report of the total votes cast by
the Trust’s shareholders follows:
Proposal 1 – To elect three Class II Trustees
|
|
|
|
|
|
|
Nominee |
|
For |
|
|
Withhold |
|
Diane P. Durnin |
|
|
15,041,926 |
|
|
|
385,052 |
|
Benjamin M. Friedman |
|
|
14,941,015 |
|
|
|
485,963 |
|
Kenneth J. Taubes |
|
|
15,044,382 |
|
|
|
382,596 |
|
62 Pioneer Floating Rate Trust | Annual Report | 11/30/20
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND PRINCIPAL RISKS
CHANGES OCCURRING DURING THE MOST RECENT FISCAL YEAR
The
following information in this annual report is a summary of certain changes during the most recent fiscal year. This information may not reflect all of the changes that have occurred since you purchased shares of the Trust. The following principal
risk disclosure has been added with respect to the Trust:
Recent events. 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 Trust’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, may 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.
LIBOR risk. LIBOR (London Interbank Offered Rate) is
used extensively in the U.S. and globally as a “benchmark” or “reference rate” for various commercial and financial contracts, including corporate and municipal bonds, bank loans, asset-backed and mortgage-related securities,
and interest rate swaps and other derivatives. In July 2017, the United Kingdom Financial Conduct Authority announced the intention to phase out the use of LIBOR by the end of 2021. The expected discontinuation of LIBOR could have a significant
impact on financial markets and may present risks for certain market participants, including the Trust. Discontinuation of or changes to LIBOR could have adverse impacts on newly issued financial
Pioneer Floating Rate Trust | Annual Report | 11/30/20 63
instruments and existing financial instruments that reference LIBOR. For example,
debt securities in which the Trust invests may pay interest at floating rates based on LIBOR or may be subject to interest caps or floors based on LIBOR. Derivative investments also may reference LIBOR. In addition, issuers of instruments in which a
fund invests may obtain financing at floating rates based on LIBOR, and a fund may use leverage or borrowings based on LIBOR. There is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement
reference rate. Discontinuation of or changes to LIBOR could lead to significant short- and long-term uncertainty and market instability and could affect the value and liquidity of securities in which the Trust invests. The risks associated with
this discontinuation and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. It remains uncertain how such changes would be implemented and the
effects such changes would have on the Trust, issuers of instruments in which the Trust invests, and financial markets generally.
INVESTMENT OBJECTIVES
The Trust’s primary investment objective is to provide a high level of current income. As a secondary investment objective, the Trust seeks preservation of capital to the extent consistent with its primary
investment objective. The Trust’s investment objectives are fundamental policies and may not be changed without the approval of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust. There can be no
assurance that the Trust will achieve its investment objectives.
PRINCIPAL INVESTMENT STRATEGIES
As a fundamental policy, under normal market
conditions, the Trust 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 (“Senior Loans”). Senior Loans typically are made
to corporations, partnerships and other business entities that operate in various industries and geographical regions, including non-U.S. borrowers. The Trust also may invest in other floating and variable rate instruments, including second lien
loans, and in high yield corporate bonds, investment grade fixed-income debt securities, preferred stocks (many of which have fixed maturities), convertible securities, securities that make “in-kind” interest payments, bonds not paying
current income, bonds that do not make regular interest payments and money market instruments. Senior Loans and other floating rate instruments pay interest at rates that adjust or “float” periodically based on a specified interest rate
or other reference. The Trust does not
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have a policy of maintaining a specific average credit quality of its portfolio or
a minimum portion of its portfolio that must be rated investment grade. The Trust may invest up to 35% of its assets (net assets plus borrowings for investment purposes) in floating rate loans and other securities of non-U.S. issuers, including
emerging markets securities. The Trust does not expect that investments in second lien loans generally will exceed 15% of its assets.
The Trust may invest in Senior Loans and other securities of any credit
quality, including Senior Loans and other investments that are rated below investment grade, or are unrated but are determined by the Adviser to be of equivalent credit quality. Non-investment grade securities, commonly referred to as junk bonds,
are obligations that are rated below investment grade by the national rating agencies that cover the obligations (i.e., Ba and below by Moody’s Investors Service, Inc. (“Moody’s”) or BB and below by Standard &
Poor’s Ratings Group (“S&P”)), or if unrated, are determined by the Adviser to be of comparable quality. Investment in securities of below investment grade quality involves substantial risk of loss. “Junk bonds” are
considered predominantly speculative with respect to the issuer’s ability to pay interest and repay principal and are susceptible to default or decline in market value due to adverse economic and business developments. Floating rate loans
typically are rated below investment grade. Accordingly, a substantial portion of the Trust’s assets may be invested in securities that are rated below investment grade or are unrated. The Trust may invest all or any portion of its assets in
securities of issuers that are in default or that are in bankruptcy.
The Trust may consider another fund, such as an exchange-traded fund (ETF), as Senior Loans for purposes of satisfying the Trust’s 80%
policy, if the fund invests at least 80% of its assets in Senior Loans.
The Adviser considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the Trust’s
investment objectives. The Adviser selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues, or rates such as LIBOR), liquidity and rating, sector and exposure to
particular issuers and sectors. The Adviser also employs fundamental research to assess an issuer’s credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating agency
recommendations, industry outlook, the competitive environment and management ability. In making these portfolio decisions, the Adviser relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to
a wide variety of research.
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The Trust may, but is not required to, use various hedging and interest rate
transactions to earn income, facilitate portfolio management and mitigate risks. The Trust may purchase and sell derivative instruments such as exchange-listed and over-the-counter put and call options on securities, fixed income and interest rate
indices and other financial instruments; purchase and sell financial futures contracts and options thereon; and enter into various interest rate transactions such as swaps, caps, floors or collars or credit transactions and credit default swaps. The
Trust also may purchase derivative instruments that combine features of these instruments. The Trust generally seeks to use these instruments and transactions as a portfolio management or hedging technique that seeks to protect against possible
adverse changes in the market value of loans or other securities held in or to be purchased for the Trust’s portfolio, to facilitate the sale of certain securities for investment purposes, manage the effective interest rate exposure of the
Trust, manage the effective maturity or duration of the Trust’s portfolio or establish positions in the derivatives markets as a temporary substitute for purchasing or selling particular securities.
The
Trust may use financial leverage on an ongoing basis for investment purposes by borrowing from banks through a revolving credit facility. Leverage creates special risks not associated with unleveraged funds having a similar investment objectives and
policies. These include the possibility of higher volatility of both the net asset value of the Trust and the value of assets serving as asset coverage for the borrowing. The fees and expenses attributed to leverage, including any increase in the
management fees, will be borne by holders of common shares. The Adviser intends only to leverage the Trust when it believes that the potential total return on additional investments purchased with the proceeds of leverage is likely to exceed the
costs incurred in connection with the leverage. The Trust may not be leveraged at all times, and the amount of leverage, if any, may vary depending on a variety of factors, including the Adviser’s outlook for interest rates and credit markets
and the costs that the Trust would incur as a result of such leverage. The Trust’s leveraging strategy may not be successful.
Interest rates on Senior Loans and other securities in which the Trust invests
adjust periodically. The interest rates are adjusted based on a base rate plus a premium or spread over the base rate. The Adviser expects that the average effective duration of the Trust’s portfolio of Senior Loans will normally be between
zero and two years, reflecting the Trust’s focus on floating rate instruments. Unlike maturity, duration takes into account interest payments that occur throughout the course of holding the instrument. The longer a portfolio’s duration,
the more sensitive it will be to changes in interest rates. For example, if the Trust has a two year
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duration, then all other things being equal, the Trust will decrease in value by
two percent if interest rates rise one percent. The assumptions that are made about an instrument’s features and options when calculating duration may prove to be incorrect. Duration is calculated by the Adviser, is not an exact measurement
and may not reliably predict the Trust’s or a particular security’s price sensitivity to changes in yield or interest rates. Because the interest rate on Senior Loans held by the Trust will reset at short-term intervals, the duration of
Senior Loans will be shorter than that of a fixed income security with a comparable term to maturity.
The Adviser’s staff monitors the credit quality and price of Senior Loans and other securities held by
the Trust. The Trust may invest in Senior Loans and other securities of any credit quality, including Senior Loans and other investments that are rated below investment grade or are unrated but are determined by the Adviser to be of equivalent
credit quality. The Trust does not have a policy of maintaining a specific average credit quality of its portfolio nor a minimum portion of its portfolio that must be rated investment grade. Although the Adviser considers ratings when making
investment decisions, it performs its own credit and investment analysis and does not rely primarily on ratings assigned by rating services.
Except for the Trust’s investment objectives and the
Trust’s policy to invest at least 80% of its assets in Senior Loans, the Trust’s investment strategies and policies may be changed from time to time without shareholder approval, unless specifically stated otherwise.
Other Investments. Normally, the Trust will invest substantially all of its assets to meet its investment objectives. The Trust may invest the remainder of its assets in
securities with remaining maturities of less than one year or cash equivalents, or it may hold cash. For temporary defensive purposes, the Trust may depart from its principal investment strategies and invest part or all of its assets in securities
with remaining maturities of less than one year or cash equivalents, or it may hold cash. During such periods, the Trust may not be able to achieve its investment objectives.
PORTFOLIO
CONTENTS
Floating rate instruments. Floating rate instruments pay interest rates that adjust or “float” periodically based on a specified interest rate or
other reference and include floating rate loans, repurchase agreements, money market securities and shares of money market and short-term bond funds.
Floating rate loans.
Floating rate loans are provided by banks and other financial institutions to large corporate customers in connection with recapitalizations, acquisitions, and refinancings. These loans are generally acquired as a participation interest in,
or assignment of, loans originated by
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a lender or other financial institution. These loans are rated below investment
grade. The rates of interest on the loans typically adjust periodically by reference to a base lending rate, such as the London Interbank Offered Rate (LIBOR), a designated U.S. bank’s prime or base rate or the overnight federal funds rate,
plus a premium. Some loans reset on set dates, typically every 30 to 90 days, but not to exceed one year. Other loans reset periodically when the underlying rate resets.
Senior loans hold a senior position in
the capital structure of the borrower. Having a senior position means that, if the borrower becomes insolvent, senior debtholders, like the Trust, will be paid before subordinated debtholders and stockholders of the borrower. Senior loans typically
are secured by specific collateral.
Floating rate loans typically are structured and administered by a financial institution that acts as an agent for the holders of the loan. Loans can be acquired directly
through the agent, by assignment from another holder of the loan, or as a participation interest in the loan. When the Trust is a direct investor in a loan, the Trust may have the ability to influence the terms of the loan, although the Trust does
not act as the sole negotiator or originator of the loan. Participation interests are fractional interests in a loan issued by a lender or other financial institution. When the Trust invests in a loan participation, the Trust does not have a direct
claim against the borrower and must rely upon an intermediate participant to enforce any rights against the borrower.
The Trust may invest up to 35% of its total assets in floating rate loans and other
securities of non-U.S. issuers, including emerging market issuers, and may engage in certain hedging transactions.
Borrowers may have outstanding debt obligations that are rated below investment grade by a
rating agency. A high percentage of loans held by the Trust may be rated below investment grade by independent rating agencies. In the event loans are not rated, they are likely to be the equivalent of below investment grade quality. Debt securities
which are unsecured and rated below investment grade (i.e., Ba and below by Moody’s or BB and below by S&P) and comparable unrated bonds, are viewed by the rating agencies as having speculative characteristics and are commonly known as
“junk bonds.”
The Trust may hold securities that are unrated or in the lowest ratings categories (rated C by Moody’s or D by S&P). Debt securities rated C by Moody’s are regarded as
having extremely poor prospects of ever attaining any real investment standing. Debt securities rated D by S&P are in payment default or a bankruptcy petition has been filed and debt service payments are jeopardized. In order to enforce its
rights with defaulted
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securities, the Trust may be required to retain legal counsel and/or a financial
adviser. The Trust may have to pursue legal remedies, the results of which are uncertain and expensive. This may increase operating expenses and adversely affect net asset value.
Second lien loans and other subordinated securities. The Trust may invest in second lien loans and other securities that are subordinated or “junior” to more senior
securities of the issuer. The investor in a subordinated security of an issuer is entitled to payment after other holders of debt in that issuer.
Other Fixed Income Securities.
The Trust also may purchase unsecured loans, other floating rate debt securities such as notes, bonds and asset-backed securities (such as securities issued by special purpose funds investing in bank loans), investment grade and below
investment grade fixed income debt obligations and money market instruments, such as commercial paper.
The Trust may invest in zero coupon bonds, deferred interest bonds and bonds or preferred stocks on which
the interest is payable in-kind (PIK bonds).
Non-U.S. Investments. The Trust may invest in securities of non-U.S. issuers, including securities of emerging markets
issuers. Non-U.S. issuers are issuers that are organized and have their principal offices outside of the United States. Non-U.S. securities may be issued by non-U.S. governments, banks or corporations, or private issuers, and certain supranational
organizations, such as the World Bank and the European Union. The Trust considers emerging market issuers to include issuers organized under the laws of an emerging market country, issuers with a principal office in an emerging market country,
issuers that derive at least 50% of their gross revenues or profits from goods or services produced in emerging market countries or sales made in emerging market countries, or issuers that have at least 50% of their assets in emerging market
countries and emerging market governmental issuers. Emerging markets generally will include, but not be limited to, countries included in the Morgan Stanley Capital International (MSCI) Emerging + Frontier Markets Index.
Mortgage-Backed Securities. The Trust may invest in mortgage-backed securities. Mortgage-backed securities may be issued by private issuers, by government-sponsored entities
such as FNMA or FHLMC or by agencies of the U.S. government, such as GNMA. Mortgage-backed securities represent direct or indirect participation in, or are collateralized by and payable from, mortgage loans secured by real property. The
Trust’s investments in mortgage-related securities may include mortgage derivatives and structured securities.
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The Trust may
invest in collateralized mortgage obligations (CMOs). A CMO is a mortgage-backed bond that is issued in multiple classes, each with a specified fixed or floating interest rate and a final scheduled distribution date. The holder of an interest in a
CMO is entitled to receive specified cash flows from a pool of underlying mortgages or other mortgage-backed securities. Depending upon the class of CMO purchased, the holder may be entitled to payment before the cash flow from the pool is used to
pay holders of other classes of the CMO or, alternatively, the holder may be paid only to the extent that there is cash remaining after the cash flow has been used to pay other classes. A subordinated interest may serve as a credit support for the
senior securities purchased by other investors.
Asset-Backed Securities. The Trust may invest in asset-backed securities. Asset-backed securities represent participations
in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. The Trust’s investments in asset-backed securities may include derivative and
structured securities. The Trust may invest in asset-backed securities issued by special entities, such as trusts, that are backed by a pool of financial assets. The Trust may invest in collateralized debt obligations (CDOs), which include
collateralized bond obligations (CBOs), collateralized loan obligations (CLOs) and other similarly structured securities. A CDO is a trust backed by a pool of fixed income securities. The trust typically is split into two or more portions, called
tranches, which vary in credit quality, yield, credit support and right to repayment of principal and interest. Lower tranches pay higher interest rates but represent lower degrees of credit quality and are more sensitive to the rate of defaults in
the pool of obligations. Certain CDOs may use derivatives, such as credit default swaps, to create synthetic exposure to assets rather than holding such assets directly.
Insurance-Linked Securities. The Trust may invest in insurance-linked securities (ILS). The Trust 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 Trust 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
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events, ILS may expose the Trust to other risks, including but not limited to
issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences.
The Trust’s investments in ILS may include event-linked bonds. ILS also may include securities
issued by 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. The Trust may invest in interests
in pooled entities that invest primarily in ILS.
Where the ILS are based on the performance of underlying reinsurance contracts, the Trust has limited transparency into the individual underlying contracts, and
therefore must rely upon the risk assessment and sound underwriting practices of the issuer. Accordingly, it may be more difficult for the Adviser to fully evaluate the underlying risk profile of the Trust’s structured reinsurance investments,
and therefore the Trust’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 Trust.
Zero Coupon Securities. The Trust may invest in zero coupon securities. Zero coupon securities are debt instruments that do not pay interest during the life of the security but
are issued at a discount from the amount the investor will receive when the issuer repays the amount borrowed (the face value). The discount approximates the total amount of interest that would be paid at an assumed interest rate.
Derivatives. The Trust may, but is not required to, use futures and options on securities, indices and currencies, forward foreign currency exchange contracts, swaps,
credit-linked notes and other derivatives. The Trust also may enter into credit default swaps, which can be used to acquire or to transfer the credit risk of a security or index of securities without buying or selling the security or securities
comprising the relevant index. A derivative is a security or instrument whose value is determined by reference to the
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value or the
change in value of one or more securities, currencies, indices or other financial instruments. The Trust may use derivatives for a variety of purposes, including:
• |
In an attempt to hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates |
• |
As a substitute for purchasing or selling securities |
• |
To attempt to increase the Trust’s return as a non-hedging strategy that may be considered speculative |
• |
To manage portfolio characteristics (for example, the duration or credit quality of the Trust’s portfolio) |
• |
As a cash flow management technique |
The Trust may choose not to make use of derivatives for a variety
of reasons, and any use may be limited by applicable law and regulations.
Common Stocks. The Trust may acquire an interest in common stocks upon the default of a loan or
other security secured by such common stock. The Trust may also acquire warrants or other rights to purchase a borrower’s common stock in connection with the making of a loan. Common stocks are shares of a corporation or other entity that
entitle the holder to a pro rata share of the profits, if any, of the corporation without preference over any other shareholder or class of shareholders, including holders of such entity’s preferred stock and other senior equity securities.
Common stock usually carries with it the right to vote and frequently an exclusive right to do so. In selecting common stocks for investment, the Trust generally expects to focus primarily on the security’s dividend paying capacity rather than
on its potential for capital appreciation.
Preferred Stocks. The Trust may invest in preferred securities. Preferred securities are equity securities, but they have many
characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer’s common shares. However, because preferred shares are equity securities, they may be more susceptible to risks
traditionally associated with equity investments than the Trust’s fixed income securities.
Convertible Securities. The Trust’s investment in fixed income
securities may include bonds and preferred stocks that are convertible into the equity securities of the issuer or a related company. Depending on the relationship of the conversion price to the market value of the underlying securities, convertible
securities may trade more like equity securities than debt instruments.
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Other Debt Securities. The Trust may invest
in other debt securities. Other debt securities in which the Trust may invest include: securities issued or guaranteed by the U.S. government, its agencies or instrumentalities and custodial receipts therefor; securities issued or guaranteed by a
foreign government or any of its political subdivisions, authorities, agencies or instrumentalities or by international or supranational entities; corporate debt securities, including notes, bonds and debentures; certificates of deposit and
bankers’ acceptances issued or guaranteed by, or time deposits maintained at, banks (including U.S. or foreign branches of U.S. banks or U.S. or foreign branches of foreign banks) having total assets of more than $1 billion; commercial paper;
and mortgage related securities. These securities may be of any maturity. The value of debt securities can be expected to vary inversely with interest rates.
Money Market
Instruments. Money market instruments include short-term U.S. government securities, U.S. dollar-denominated, high quality commercial paper (unsecured promissory notes issued by corporations to finance their short-term credit needs),
certificates of deposit, bankers’ acceptances and repurchase agreements relating to any of the foregoing. U.S. government securities include Treasury notes, bonds and bills, which are direct obligations of the U.S. government backed by the
full faith and credit of the United States and securities issued by agencies and instrumentalities of the U.S. government, which may be guaranteed by the U.S. Treasury, may be supported by the issuer’s right to borrow from the U.S. Treasury or
may be backed only by the credit of the federal agency or instrumentality itself.
Other Investment Companies. The Trust may invest in the securities of other investment
companies to the extent that such investments are consistent with the Trust’s investment objectives and principal investment strategies and permissible under the 1940 Act. Subject to the limitations on investment in other investment companies,
the Trust may invest in “ETFs.”
Repurchase Agreements. In a repurchase agreement, the Trust purchases securities from a broker/dealer or a bank, called the
counterparty, upon the agreement of the counterparty to repurchase the securities from the Trust at a later date, and at a specified price, which is typically higher than the purchase price paid by the Trust. The securities purchased serve as the
Trust’s collateral for the obligation of the counterparty to repurchase the securities. If the counterparty does not repurchase the securities, the Trust is entitled to sell the securities, but the Trust may not be able to sell them for the
price at which they were purchased, thus causing a loss. Additionally, if the counterparty becomes insolvent, there is some risk that the Trust will not have a right to the securities, or the immediate right to sell the securities.
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PRINCIPAL RISKS
General. The Trust is a closed-end management investment company designed primarily as a long-term investment and not as a trading tool. The Trust is not a complete investment program and should be considered only
as an addition to an investor’s existing portfolio of investments. Because the Trust may invest substantially in high yield debt securities, an investment in the Trust’s shares is speculative in that it involves a high degree of risk.
Due to uncertainty inherent in all investments, there can be no assurance that the Trust will achieve its investment objective. Instruments in which the Trust invests may only have limited liquidity, or may be illiquid.
Market risk. The market prices of securities held by the Trust 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, inflation, changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues, or adverse investor
sentiment. In the past decade, financial markets throughout the world have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. Governmental and non-governmental issuers have defaulted on, or been
forced to restructure, their debts. These conditions may continue, recur, worsen or spread. Events that have contributed to these market conditions include, but are not limited to, major cybersecurity events; geopolitical events (including wars and
terror attacks); measures to address budget deficits; downgrading of sovereign debt; changes in oil and commodity prices; dramatic changes in currency exchange rates; global pandemics; and public sentiment. U.S. and non-U.S. governments and central
banks have provided significant support to financial markets, including by keeping interest rates at historically low levels. U.S. Federal Reserve or other U.S. or non-U.S. governmental or central bank actions, including interest rate increases or
decreases, or contrary actions by different governments, could negatively affect financial markets generally, increase market volatility and reduce the value and liquidity of securities in which the Trust invests. Policy and legislative changes in
the U.S. and in other countries are affecting many aspects of financial regulation, and these and other events affecting global markets, such as the United Kingdom’s exit from the European Union (or Brexit), may in some instances contribute to
decreased liquidity and increased volatility in the financial markets. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Economies and financial markets
throughout the world are increasingly interconnected. Economic, financial or political events, trading and tariff arrangements,
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terrorism, natural disasters, infectious illness or public health issues, and other
circumstances in one country or region could have profound impacts on global economies or markets. As a result, whether or not the Trust invests in securities of issuers located in or with significant exposure to the countries directly affected, the
value and liquidity of the Trust’s investments may be negatively affected. The Trust may experience a substantial or complete loss on any individual security or derivative position.
Recent events. 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 Trust’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, may 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.
LIBOR risk. LIBOR (London Interbank Offered Rate) is used extensively in the U.S. and globally as a “benchmark” or “reference rate” for
various commercial and financial contracts, including corporate and municipal bonds, bank loans, asset-backed and mortgage-related securities, and interest rate swaps and other derivatives. In July 2017, the United Kingdom Financial Conduct
Authority announced the intention to phase out the use of LIBOR by the end of 2021. The expected discontinuation of LIBOR could have a significant impact on financial markets and may present risks for certain market participants, including the
Trust. Discontinuation of or changes to LIBOR could have adverse impacts on newly issued financial instruments and existing financial instruments that reference LIBOR. For example, debt securities in which the Trust invests may pay interest at
floating rates based on LIBOR or may be subject to interest caps or floors
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based on LIBOR. Derivative investments also may reference LIBOR. In addition,
issuers of instruments in which the Trust invests may obtain financing at floating rates based on LIBOR, and the Trust may use leverage or borrowings based on LIBOR. There is currently no definitive information regarding the future utilization of
LIBOR or of any particular replacement reference rate. Discontinuation of or changes to LIBOR could lead to significant short- and long-term uncertainty and market instability and could affect the value and liquidity of securities in which the Trust
invests. The risks associated with this discontinuation and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. It remains uncertain how such
changes would be implemented and the effects such changes would have on the Trust, issuers of instruments in which the Trust invests, and financial markets generally.
High yield
or “junk” bond risk. Debt securities that are below investment grade, called “junk bonds,” are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to
value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default.
Interest rate risk. Interest rates may go up, causing the value of the Trust’s investments to decline (this risk generally will be greater for securities with longer maturities or durations). For example, if
interest rates increase by 1%, the value of a Trust’s portfolio with a portfolio duration of ten years would be expected to decrease by 10%, all other things being equal. The maturity of a security may be significantly longer than its
effective duration. A security’s maturity and other features may be more relevant than its effective duration in determining the security’s sensitivity to other factors affecting the issuer or markets generally, such as changes in credit
quality or in the yield premium that the market may establish for certain types of securities.
Rising interest rates can lead to increased default rates, as issuers of floating rate securities find themselves
faced with higher payments. Unlike fixed rate securities, floating rate securities generally will not increase in value if interest rates decline. Changes in interest rates also will affect the amount of interest income the Trust earns on its
floating rate investments
Credit risk. If an issuer or guarantor of a security held by the Trust or a counterparty to a financial contract with the Trust defaults on its
obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will typically decline.
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Prepayment or call risk. Many issuers have
a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the Trust will not benefit from the rise in market price that normally accompanies a decline in interest rates, and will be forced to
reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. The Trust also may lose any premium it paid on the security.
Extension risk. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest
rate, increase the security’s duration and reduce the value of the security.
Risk of illiquid investments. Certain securities and derivatives held by the Trust may
be impossible or difficult to purchase, sell or unwind. Illiquid securities and derivatives also may be difficult to value. Liquidity risk may be magnified in a rising interest rate environment. If the Trust is forced to sell an illiquid asset or
unwind a derivatives position, the Trust may suffer a substantial loss or may not be able to sell at all.
Portfolio selection risk. The adviser’s judgment about the
quality, relative yield, relative value or market trends affecting a particular sector or region, market segment, security or about interest rates generally may prove to be incorrect, or there may be imperfections, errors or limitations in the
models, tools and information used by the adviser.
Reinvestment risk. Income from the Trust’s portfolio will decline if the Trust invests the proceeds, repayment or
sale of loans or other obligations into lower yielding instruments with a lower spread over the base lending rate. A decline in income could affect the common shares’ distribution rate and their overall return.
Risks of investing in 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. 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 trade settlement periods. An economic downturn generally leads to a higher non-payment rate, and a loan may lose significant value before a default occurs.
When the Trust invests in a loan participation, the Trust does not have a direct claim against the borrower and must rely upon an intermediate participant to enforce any rights against the borrower. As a result, the
Trust is subject to the risk that an intermediate participant between the Trust and the borrower will fail to meet its obligations to the Trust, in addition to the
Pioneer Floating Rate Trust | Annual Report | 11/30/20 77
risk that the issuer of the loan will default on its obligations. Also the Trust
may be regarded as the creditor of the agent lender (rather than the borrower), subjecting the Trust to the creditworthiness of the lender as well as the borrower.
There is less readily available, reliable
information about most senior loans than is the case for many other types of securities. Although the features of senior loans, including being secured by collateral and having priority over other obligations of the issuer, reduce some of the risks
of investment in below investment grade securities, the loans are subject to significant risks. the Adviser believes, based on its experience, that senior floating rate loans generally have more favorable loss recovery rates than most other types of
below investment grade obligations. However, there can be no assurance that the Trust’s actual loss recovery experience will be consistent with the Adviser’s prior experience or that the senior loans in which the Trust invests will
achieve any specific loss recovery rate.
Some of the loans in which the Trust may invest may be “covenant lite.” Covenant lite loans contain fewer maintenance covenants, or no maintenance covenants
at all, than traditional loans and may not include terms that allow the lender to monitor the financial performance of the borrower and declare a default if certain criteria are breached. This may expose the Trust to greater credit risk associated
with the borrower and reduce the Trust’s ability to restructure a problematic loan and mitigate potential loss. As a result the Trust’s exposure to losses on such investments may be increased, especially during a downturn in the credit
cycle.
Second lien loans generally are subject to similar risks as those associated with senior loans. Because second lien loans are subordinated or unsecured and thus lower in priority on payment to senior
loans, they are subject to the additional risk that the cash flow of the borrower and property securing the loan or debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior secured obligations of the borrower.
This risk is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. Second lien loans generally have greater price volatility than senior loans and may be less liquid.
Certain floating rate loans and other corporate debt securities involve refinancings, recapitalizations, mergers and acquisitions, and other financings for general corporate purposes. Other loans are incurred in
restructuring or “work-out” scenarios, including debtor-in-possession facilities in bankruptcy. Loans in restructuring or similar scenarios may be especially vulnerable to the inherent uncertainties in restructuring processes. In
addition, the highly leveraged capital structure of the
78 Pioneer Floating Rate Trust | Annual Report | 11/30/20
borrowers in any of these transactions, whether acquisition financing or
restructuring, may make the loans especially vulnerable to adverse economic or market conditions and the risk of default.
Because affiliates of the Adviser may participate in the primary and secondary market
for senior loans, limitations under applicable law may restrict the Trust’s ability to participate in a restructuring of a senior loan or to acquire some senior loans, or affect the timing or price of such acquisition. Loans may not be
considered “securities,” and purchasers, such as the Trust, therefore may not be entitled to rely on the anti-fraud protections afforded by federal securities laws.
Collateral risk. The value of collateral, if any, securing a floating rate loan can decline, and may be insufficient to meet the issuer’s obligations or may be difficult
to liquidate. In addition, the Trust’s access to collateral may be limited by bankruptcy or other insolvency laws. These laws may be less developed and more cumbersome with respect to the Trust’s non-U.S. floating rate investments.
Floating rate loans may not be fully collateralized or may be uncollateralized. Uncollateralized loans involve a greater risk of loss. In the event of a default, the Trust may have difficulty collecting on any collateral and would not have the
ability to collect on any collateral for an uncollateralized loan. In addition, the lender’s security interest or their enforcement of their security interest under the loan agreement may be found by a court to be invalid or the collateral may
be used to pay other outstanding obligations of the borrower. Further, the Trust’s access to collateral, if any, may be limited by bankruptcy law. To the extent that a loan is collateralized by stock of the borrower or its affiliates, this
stock may lose all or substantially all of its value in the event of bankruptcy of the borrower. Loans that are obligations of a holding company are subject to the risk that, in a bankruptcy of a subsidiary operating company, creditors of the
subsidiary may recover from the subsidiary’s assets before the lenders to the holding company would receive any amount on account of the holding company’s interest in the subsidiary.
Risk of disadvantaged access to confidential information. The issuer of a floating rate loan may offer to provide material, non-public information about the issuer to investors, such as the Trust. Normally, the
Adviser will seek to avoid receiving this type of information about the issuer of a loan either held by, or considered for investment by, the Trust. the Adviser’s decision not to receive the information may place it at a disadvantage, relative
to other loan investors, in assessing a loan or the loan’s issuer. For example, in instances where holders of floating rate loans are asked to grant amendments, waivers or consents, the Adviser’s inability to assess the impact of these
actions may adversely affect the value of the portfolio. For
Pioneer Floating Rate Trust | Annual Report |
11/30/20 79
this and other reasons, it is possible that the Adviser’s decision not to
receive material, non-public information under normal circumstances could adversely affect the Trust’s investment performance.
Risks of subordinated securities. A
holder of securities that are subordinated or “junior” to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss
than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in
creditworthiness of the issuer is likely to have a greater impact on subordinated securities than more senior securities.
Issuer risk. The value of corporate
income-producing securities may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods and services.
U.S. Treasury obligations risk. The market value of direct obligations of the U.S. Treasury may vary due to changes in interest rates. In addition, changes to the financial
condition or credit rating of the U.S. government may cause the value of the Trust’s investments in obligations issued by the U.S. Treasury to decline.
U.S. government
agency obligations risk. The Trust invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as FNMA, FHLMC and the FHLBs, although chartered or sponsored by Congress, are not
funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. The maximum potential liability of the issuers of some U.S. government obligations may
greatly exceed their current resources, including any legal right to support from the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of
private issuers. Although the U.S. government has provided financial support to FNMA and FHLMC in the past, there can be no assurance that it will support these or other government-sponsored entities in the future.
Mortgage-related and asset-backed securities risk. The value of mortgage-related and asset-backed securities will be influenced by factors affecting the assets underlying such
securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation
difficulties, become
80 Pioneer Floating Rate Trust | Annual Report | 11/30/20
more volatile and/or become illiquid. Mortgage-backed securities tend to be more
sensitive to changes in interest rate than other types of debt securities. These securities are also subject to prepayment and extension risks. Some of these securities may receive little or no collateral protection from the underlying assets and
are thus subject to the risk of default. The risk of such defaults is generally higher in the case of mortgage-backed investments offered by non-governmental issuers and those that include so-called “sub-prime” mortgages. The structure
of some of these securities may be complex and there may be less available information than for other types of debt securities. Upon the occurrence of certain triggering events or defaults, the Trust may become the holder of underlying assets at a
time when those assets may be difficult to sell or may be sold only at a loss.
Risks of investing in collateralized debt obligations. Investment in a collateralized debt
obligation (CDO) is subject to the credit, subordination, interest rate, valuation, prepayment, extension and other risks of the obligations underlying the CDO and the tranche of the CDO in which the Trust invests. CDOs are subject to liquidity
risk. Synthetic CDOs are also subject to the risks of investing in derivatives, such as credit default swaps, and leverage risk.
Risks of instruments that allow for balloon
payments or negative amortization payments. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the
instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of
the loan.
Risks of investing in insurance-linked securities. The Trust could lose a portion or all of the principal it has invested in an insurance-linked security, and
the right to additional interest and/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 may include natural or other
perils 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, insurance-linked securities carry significant risk. In addition to the specified trigger events, insurance-linked securities may expose the Trust to other risks, including but not limited to issuer (credit)
default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. Certain insurance-linked securities may have limited
Pioneer
Floating Rate Trust | Annual Report | 11/30/20 81
liquidity, or may
be illiquid. The Trust has limited transparency into the individual contracts underlying certain insurance-linked securities, which may make the risk assessment of such securities more difficult. Certain insurance-linked securities may be difficult
to value.
Risks of zero coupon bonds, payment in kind, deferred and contingent payment securities. These securities may be more speculative and may fluctuate more in
value than securities which pay income periodically and in cash. In addition, although the Trust receives no periodic cash payments on such securities, the Trust is deemed for tax purposes to receive income from such securities, which applicable tax
rules require the Trust to distribute to shareholders. Such distributions may be taxable when distributed to shareholders
Risks of non-U.S. investments. Investing in
non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets, may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent
that the Trust invests significantly in one region or country. These risks may include different financial reporting practices and regulatory standards, less liquid trading markets, extreme price volatility, currency risks, changes in economic,
political, regulatory and social conditions, terrorism, sustained economic downturns, financial instability, tax burdens, and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these
securities. Withholding and other non-U.S. taxes may decrease the Trust’s return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many
of the same risks as investing directly in non-U.S. issuers. Depositary receipts may involve higher expenses and may trade at a discount (or premium) to the underlying security. A number of countries in the European Union (EU) have experienced, and
may continue to experience, severe economic and financial difficulties. In addition, the United Kingdom has withdrawn from the EU (commonly known as “Brexit”). Other countries may seek to withdraw from the EU and/or abandon the euro, the
common currency of the EU. The exit by the United Kingdom or other member states will likely result in increased volatility, illiquidity and potentially lower economic growth in the affected markets, which will adversely affect the Trust’s
investments. If one or more stockholders of a supranational entity such as the World Bank fail to make necessary additional capital contributions, the entity may be unable to pay interest or repay principal on its debt securities.
82 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Currency risk. The Trust could experience
losses based on changes in the exchange rate between non-U.S. currencies and the U.S. dollar or as a result of currency conversion costs. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the
actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation.
Risks of convertible securities. The market values of
convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. A downturn in equity markets may cause the price of convertible securities to decrease relative to other fixed income
securities.
Preferred stocks risk. Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks are subject to issuer-specific and market risks
applicable generally to equity securities. In addition, a company’s preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will
usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of
smaller companies may be more vulnerable to adverse developments than preferred stocks of larger companies.
Risks of investment in other funds. Investing in other
investment companies, including exchange-traded funds (ETFs) and closed-end funds, subjects the Trust to the risks of investing in the underlying securities or assets held by those funds. When investing in another fund, the Trust will bear a pro
rata portion of the underlying fund’s expenses, including management fees, in addition to its own expenses. ETFs and closed-end funds are bought and sold based on market prices and can trade at a premium or a discount to the ETF’s or
closed-end fund’s net asset value.
Derivatives risk. Using swaps, forward foreign currency exchange contracts, bond and interest rate futures and other derivatives
can increase Trust losses and reduce opportunities for gains when market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the Trust. Using derivatives may increase the volatility of the Trust’s
net asset value and may not provide the result intended. Derivatives may have a leveraging effect on the Trust. Some derivatives have the potential for unlimited loss, regardless of the size of the Trust’s initial investment. Derivatives are
generally subject to the risks applicable to the assets, rates, indices or other indicators underlying the derivative. Changes in a derivative’s value may not correlate well with the referenced asset or metric. The Trust also may have to sell
assets at inopportune times to
Pioneer Floating Rate Trust | Annual Report | 11/30/20 83
satisfy its obligations. Derivatives may be difficult to sell, unwind or value, and
the counterparty may default on its obligations to the Trust. Use of derivatives may have different tax consequences for the Trust than an investment in the underlying security, and such differences may affect the amount, timing and character of
income distributed to shareholders. The U.S. government and foreign governments are in the process of adopting and implementing regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting
requirements. The ultimate impact of the regulations remains unclear. Additional regulation of derivatives may make them more costly, limit their availability or utility, otherwise adversely affect their performance or disrupt markets.
Credit default swap risk. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the Trust. Credit default swaps may
in some cases be illiquid, and they increase credit risk since the Trust has exposure to the issuer of the referenced obligation and either the counterparty to the credit default swap or, if it is a cleared transaction, the brokerage firm through
which the trade was cleared and the clearing organization that is the counterparty to that trade.
Structured securities risk. Structured securities may behave in ways not
anticipated by the Trust, or they may not receive the tax, accounting or regulatory treatment anticipated by the Trust.
Forward foreign currency transactions risk. The
Trust may not fully benefit from or may lose money on forward foreign currency transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the Trust’s holdings, or if the
counterparty defaults. Such transactions may also prevent the Trust from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets.
Leveraging risk. The value of your investment may be more volatile and other risks tend to be compounded if the Trust borrows or uses derivatives or other investments, such as
ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of the Trust’s underlying assets and creates a risk of loss of value on a larger pool of assets than the Trust would otherwise
have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the Trust to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements.
84 Pioneer Floating Rate Trust | Annual Report | 11/30/20
The Trust may use financial leverage on an ongoing basis for investment purposes by
borrowing from banks through a revolving credit facility. The fees and expenses attributed to leverage, including any increase in the management fees, will be borne by holders of common shares. Since the Adviser’s fee is based on a percentage
of the Trust’s managed assets, its fee will be higher if the Trust is leveraged, and the Adviser will thus have an incentive to leverage the Trust.
Repurchase agreement
risk. In the event that the other party to a repurchase agreement defaults on its obligations, the Trust may encounter delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in
price of the security. In addition, if the Trust is characterized by a court as an unsecured creditor, it would be at risk of losing some or all of the principal and interest involved in the transaction.
Market segment risk. To the extent the Trust emphasizes, from time to time, investments in a market segment, the Trust will be subject to a greater degree to the risks particular to that segment, and may experience
greater market fluctuation than a fund without the same focus.
Industries in the financial segment, such as banks, insurance companies and broker-dealers, may be sensitive to changes in interest rates and
general economic activity and are generally subject to extensive government regulation.
Valuation risk. The sales price the Trust could receive for any particular
portfolio investment may differ from the Trust’s valuation of the investment, particularly for illiquid securities and securities that trade in thin or volatile markets or that are valued using a fair value methodology. The Trust’s
ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.
Cybersecurity risk.
Cybersecurity failures by and breaches of the Trust’s adviser, transfer agent, custodian, Trust accounting agent or other service providers may disrupt Trust operations, interfere with the Trust’s ability to calculate its NAV,
prevent Trust shareholders from purchasing or redeeming shares or receiving distributions, cause loss of or unauthorized access to private shareholder information, and result in financial losses, regulatory fines, penalties, reputational damage, or
additional compliance costs.
Cash management risk. The value of the investments held by the Trust for cash management or temporary defensive purposes may be affected by
market risks, changing interest rates and by changes in credit ratings of the investments. To the extent that the Trust has any uninvested cash, the Trust
Pioneer Floating Rate Trust | Annual Report | 11/30/20 85
would be subject to credit risk with respect to the depository institution holding
the cash. If the Trust holds cash uninvested, the Trust will not earn income on the cash and the Trust’s yield will go down. During such periods, it may be more difficult for the Trust to achieve its investment objective.
Expense risk. Your actual costs of investing in the Trust may be higher than the expenses shown in “Annual Trust operating expenses” for a variety of reasons. For
example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and Trust expense ratios are more likely to increase when markets are volatile.
Shareholder Activism Risk. Shareholder activism can take many forms, including making public demands that the Trust consider certain alternatives, engaging in public campaigns to attempt to influence the
Trust’s governance and/or management, commencing proxy contests in an effort to elect the activists’ representatives or others to the Trust’s Board of Trustees or to seek other actions such as a tender offer by the Trust or its
liquidation, and commencing litigation. Shareholder activism arises in a variety of situations, and has been increasing in the closed-end fund market recently. Due to the potential volatility of the Trust’s market price and for a variety of
other reasons, the Trust may become the target of shareholder activism. Shareholder activism could result in substantial costs and divert management’s and the Board’s attention and resources from other matters. Also, the Trust may be
required to incur significant legal and other expenses related to any activist shareholder matters. Further, the Trust’s market price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and
uncertainties of any shareholder activism. In general, shareholder activists seek short-term actions that can increase Trust costs per share and be detrimental to long-term stockholders.
Anti-takeover provisions. The Trust’s Agreement and Declaration of Trust and by-laws include provisions that could limit the ability of other entities or persons to acquire control of the Trust or convert the
Trust to open-end status.
Please note that there are many other factors that could adversely affect your investment and that could prevent the fund from achieving its goals. An investment in the Trust is not a
bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
INVESTMENT RESTRICTIONS
The
following are the Trust’s fundamental investment restrictions. These restrictions, along with the Trust’s investment objectives, may not be changed without the approval of the holders of a majority of the Trust’s outstanding voting
securities (which for this purpose and under the 1940
86 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Act means the lesser of (i) 67% of the common shares represented at a meeting at
which more than 50% of the outstanding common shares are represented or (ii) more than 50% of the outstanding common shares).
The Trust may not:
(1) |
Issue senior securities, other than as permitted by the 1940 Act. |
(2) |
Borrow money, other than as permitted by the 1940 Act. |
(3) |
Invest in real estate, except the Trust may invest in securities of issuers that invest in real estate or interests therein, securities that are secured by real estate
or interests therein, securities of real estate investment trusts, mortgage-backed securities and other securities that represent a similar indirect interest in real estate, and the Trust may acquire real estate or interests therein through
exercising rights or remedies with regard to an instrument. |
(4) |
Make loans, except that the Trust may (i) make loans or lend portfolio securities in accordance with the Trust’s investment policies, (ii) enter into repurchase
agreements, (iii) purchase all or a portion of an issue of publicly distributed debt securities, bank loan participation interests, bank certificates of deposit, acceptances, debentures or other securities, whether or not the purchase is made upon
the original issuance of the securities, (iv) participate in a credit facility whereby the Trust may directly lend to and borrow money from other affiliated funds to the extent permitted under the 1940 Act or an exemption therefrom and (v) make
loans in any other manner consistent with applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction. |
(5) |
Invest in commodities or commodity contracts, except that the Trust may invest in currency instruments and contracts and financial instruments and contracts that might
be deemed to be commodities and commodity contracts. |
(6) |
Act as an underwriter, except insofar as the Trust technically may be deemed to be an underwriter in connection with the purchase or sale of its portfolio
securities. |
(7) |
Invest 25% or more of the value of its total assets in any one industry, provided that this limitation does not apply to the purchase of obligations issued or
guaranteed by the U.S government, its agencies or instrumentalities. |
(8) |
Amend its policy to invest at least 80% of its assets in Senior Loans. |
All other investment policies of the Trust are considered non-fundamental and may be changed by the Board of Trustees without prior approval of the Trust’s outstanding voting shares.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 87
The following table is furnished in response to requirements of the Securities and Exchange Commission. It is designed to illustrate the effects of leverage on common share
total return, assuming investment portfolio total returns (consisting of income and changes in the value of investments held in the Trust’s portfolio) of -10%, -5%, 0%, 5% and 10%. The table below reflects the Trust’s borrowings under a
credit agreement as a percentage of the Trust’s total assets (which includes the amounts of leverage obtained through such borrowings), the annual rate of interest on the borrowings as of November 30, 2020, and the annual return that the
Trust’s portfolio must experience (net of expenses) in order to cover such costs. The information below does not reflect the Trust’s use of certain other forms of economic leverage achieved through the use of other instruments or
transactions not considered to be senior securities under the 1940 Act, such as covered credit default swaps or other derivative instruments.
The assumed investment portfolio returns in the table below are
hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected to be experienced by the Trust. Your actual returns may be greater or less than those appearing below. In addition, actual borrowing
expenses associated with borrowings by the Trust may vary frequently and may be significantly higher or lower than the rate used for the example below.
|
|
Borrowings under Credit Agreement as a percentage of total managed assets |
|
(including assets attributable to borrowings) |
27.63% |
Annual effective interest rate payable by Trust on borrowings |
1.04% |
Annual return Trust portfolio must experience (net of expenses) to cover interest |
|
rate on borrowings |
0.29% |
Common share total return for (10.00)% assumed portfolio total return |
(14.21)% |
Common share total return for (5.00)% assumed portfolio total return |
(7.31)% |
Common share total return for 0.00% assumed portfolio total return |
(0.40)% |
Common share total return for 5.00% assumed portfolio total return |
6.51% |
Common share total return for 10.00% assumed portfolio total return |
13.42% |
Common share total return is composed of two elements - investment income net of the Trust’s expenses, including any interest/dividends on assets resulting from leverage, and gains or losses on the value of the
securities the Trust owns. As required by Securities and Exchange Commission rules, the table assumes that the Trust is more likely to suffer capital losses than to enjoy capital appreciation. For example, to assume a total return of 0%, the Trust
must assume that the income it receives on its investments is entirely offset by losses in the value of those investments.
88 Pioneer Floating Rate Trust | Annual Report | 11/30/20
This table reflects hypothetical performance of the Trust’s portfolio and not
the performance of the Trust’s common shares, the value of which will be determined by market forces and other factors.
Should the Trust elect to add additional leverage to its portfolio, the potential
benefits of leveraging the Trust’s shares cannot be fully achieved until the proceeds resulting from the use of leverage have been received by the Trust and invested in accordance with the Trust’s investment objective and principal
investment strategies. The Trust’s willingness to use additional leverage, and the extent to which leverage is used at any time, will depend on many factors, including, among other things, the Adviser’s assessment of the yield curve
environment, interest rate trends, market conditions and other factors.
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11/30/20 89
Approval of Investment Management Agreement
Amundi Pioneer Asset Management, Inc. (“APAM”) serves as the investment adviser to Pioneer Floating Rate Trust (the “Trust”)
pursuant to an investment management agreement between APAM and the Trust. In order for APAM to remain the investment adviser of the Trust, the Trustees of the Trust must determine annually whether to renew the investment management agreement for
the Trust.
The contract review process began in January 2020 as the Trustees of the Trust agreed on, among other things, an overall approach and timeline for the process. Contract review materials were provided
to the Trustees in March 2020, July 2020 and September 2020. In addition, the Trustees reviewed and discussed the Trust’s performance at regularly scheduled meetings throughout the year, and took into account other information related to the
Trust provided to the Trustees at regularly scheduled meetings, in connection with the review of the Trust’s investment management agreement.
In March 2020, the Trustees, among other things, discussed the
memorandum provided by Fund counsel that summarized the legal standards and other considerations that are relevant to the Trustees in their deliberations regarding the renewal of the investment management agreement, and reviewed and discussed the
qualifications of the investment management teams for the Trust, as well as the level of investment by the Trust’s portfolio managers in the Trust. In July 2020, the Trustees, among other things, reviewed the Trust’s management fees and
total expense ratios, the financial statements of APAM and its parent companies, profitability analyses provided by APAM, and analyses from APAM as to possible economies of scale. The Trustees also reviewed the profitability of the institutional
business of APAM and APAM’s affiliate, Amundi Pioneer Institutional Asset Management, Inc. (“APIAM” and, together with APAM, “Amundi Pioneer”), as compared to that of APAM’s fund management business, and
considered the differences between the fees and expenses of the Trust and the fees and expenses of APAM’s and APIAM’s institutional accounts, as well as the different services provided by APAM to the Trust and by APAM and APIAM to the
institutional accounts. The Trustees further considered contract review materials, including additional materials received in response to the Trustees’ request, in September 2020.
At a meeting held on
September 15, 2020, based on their evaluation of the information provided by APAM and third parties, the Trustees of the Trust, including the Independent Trustees voting separately, unanimously
90 Pioneer Floating Rate Trust | Annual Report | 11/30/20
approved the
renewal of the investment management agreement for another year. In approving the renewal of the investment management agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The
Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had been provided by APAM to the Trust, taking into account the investment objective and strategy of the Trust. The Trustees also reviewed
APAM’s investment approach for the Trust and its research process. The Trustees considered the resources of APAM and the personnel of APAM who provide investment management services to the Trust. They also reviewed the amount of non-Trust
assets managed by the portfolio managers of the Trust. They considered the non-investment resources and personnel of APAM that are involved in APAM’s services to the Trust, including APAM’s compliance, risk management, and legal
resources and personnel. The Trustees noted the substantial attention and high priority given by APAM’s senior management to the Pioneer Fund complex. The Trustees considered the implementation and effectiveness of APAM’s business
continuity plan in response to the COVID-19 pandemic.
The Trustees considered that APAM supervises and monitors the performance of the Trust’s service providers and provides the Trust with personnel
(including Trust officers) and other resources that are necessary for the Trust’s business management and operations. The Trustees also considered that, as administrator, APAM is responsible for the administration of the Trust’s business
and other affairs. The Trustees considered the fees paid to APAM for the provision of administration services.
Based on these considerations, the Trustees concluded that the nature, extent and quality of
services that had been provided by APAM to the Trust were satisfactory and consistent with the terms of the investment management agreement.
Performance of the Trust
In considering the Trust’s performance, the Trustees regularly review and discuss throughout the year data prepared by APAM and information comparing the Trust’s performance with the performance of its
peer group of funds, as classified by Morningstar, Inc. (Morningstar), and with the performance of the Trust’s benchmark index. The Trustees also regularly
Pioneer Floating Rate Trust | Annual Report | 11/30/20 91
consider the Trust’s returns at market value relative to its peers, as well
as the discount at which the Trust’s shares trade on the New York Stock Exchange compared to its net asset value per share. They also discuss the Trust’s performance with APAM on a regular basis. The Trustees’ regular reviews and
discussions were factored into the Trustees’ deliberations concerning the renewal of the investment management agreement.
Management Fee and Expenses
The Trustees considered information showing the fees and expenses of the Trust in comparison to the management fees and expense ratios of a peer group of funds selected on the basis of criteria determined by the
Independent Trustees for this purpose using data provided by Strategic Insight Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent third party. The peer group comparisons referred to below are organized in quintiles. Each
quintile represents one-fifth of the peer group. In all peer group comparisons referred to below, first quintile is most favorable to the Trust’s shareowners.
The Trustees considered that the
Trust’s management fee (based on managed assets) for the most recent fiscal year was in the first quintile relative to the management fees paid by other funds in its Strategic Insight peer group for the comparable period. The Trustees
considered that the expense ratio (based on managed assets) of the Trust’s common shares for the most recent fiscal year was in the second quintile relative to its Strategic Insight peer group for the comparable period.
The Trustees reviewed management fees charged by APAM and APIAM to institutional and other clients, including publicly offered European funds sponsored by APAM’s affiliates, unaffiliated U.S. registered
investment companies (in a sub-advisory capacity), and unaffiliated foreign and domestic separate accounts. The Trustees also considered APAM’s costs in providing services to the Trust and APAM’s and APIAM’s costs in providing
services to the other clients and considered the differences in management fees and profit margins for fund and non-fund services. In evaluating the fees associated with APAM’s and APIAM’s client accounts, the Trustees took into account
the respective demands, resources and complexity associated with the Trust and other client accounts. The Trustees noted that, in some instances, the fee rates for those clients were lower than the management fee for the Trust and considered that,
under the investment management agreement with the Trust, APAM performs additional services for the Trust that it does not provide to those other clients or services that are broader in scope, including oversight of the Trust’s other
service
92 Pioneer Floating Rate Trust | Annual Report | 11/30/20
providers and activities related to compliance and the extensive regulatory and tax
regimes to which the Trust is subject. The Trustees also considered the entrepreneurial risks associated with APAM’s management of the Trust.
The Trustees concluded that the management fee payable by the
Trust to APAM was reasonable in relation to the nature and quality of the services provided by APAM.
Profitability
The Trustees considered information
provided by APAM regarding the profitability of APAM with respect to the advisory services provided by APAM to the Trust, including the methodology used by APAM in allocating certain of its costs to the management of the Trust. The Trustees also
considered APAM’s profit margin in connection with the overall operation of the Trust. They further reviewed the financial results, including the profit margins, realized by APAM and APIAM from non-fund businesses. The Trustees considered
APAM’s profit margins in comparison to the limited industry data available and noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating expenses. The
Trustees concluded that APAM’s profitability with respect to the management of the Trust was not unreasonable.
Economies of Scale
The Trustees
considered the extent to which APAM may realize economies of scale or other efficiencies in managing and supporting the Trust. Since the Trust is a closed-end fund that has not raised additional capital, the Trustees concluded that economies of
scale were not a relevant consideration in the renewal of the investment advisory agreement.
Other Benefits
The Trustees considered the other benefits
that APAM enjoys from its relationship with the Trust. The Trustees considered the character and amount of fees paid or to be paid by the Trust, other than under the investment management agreement, for services provided by APAM and its affiliates.
The Trustees further considered the revenues and profitability of APAM’s businesses other than the Fund business. To the extent applicable, the Trustees also considered the benefits to the Trust and to APAM and its affiliates from the use of
“soft” commission dollars generated by the Trust to pay for research and brokerage services.
Pioneer Floating Rate Trust | Annual Report | 11/30/20 93
The Trustees considered that Amundi Pioneer is the principal U.S. asset management
business of Amundi, which is one of the largest asset managers globally. Amundi’s worldwide asset management business manages over $1.7 trillion in assets (including the Pioneer Funds). The Trustees considered that APAM’s relationship
with Amundi creates potential opportunities for APAM, APIAM and Amundi that derive from APAM’s relationships with the Trust, including Amundi’s ability to market the services of APAM globally. The Trustees noted that APAM has access to
additional research and portfolio management capabilities as a result of its relationship with Amundi and Amundi’s enhanced global presence that may contribute to an increase in the resources available to APAM. The Trustees considered that
APAM and the Trust receive reciprocal intangible benefits from the relationship, including mutual brand recognition and, for the Trust, direct and indirect access to the resources of a large global asset manager. The Trustees concluded that any such
benefits received by APAM as a result of its relationship with the Trust were reasonable.
Conclusion
After consideration of the factors described above
as well as other factors, the Trustees, including the Independent Trustees, concluded that the investment management agreement for the Trust, including the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of
the investment management agreement.
94 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Trustees, Officers and Service Providers Investment Adviser and Administrator Amundi Asset Management US, Inc.
Custodian and
Sub-Administrator Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm Ernst & Young LLP
Legal
Counsel Morgan, Lewis, Bockius LLP
Transfer Agent American Stock Transfer & Trust Company
Proxy Voting
Policies and Procedures of the Trust are available without charge, upon request, by calling our toll free number (1-800-225-6292). Information regarding how the Trust voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is publicly available to shareowners at www.amundi.com/us. This information is also available on the Securities and Exchange Commission’s web site at www.sec.gov.
Trustees and Officers
The Trust’s Trustees and officers are listed below, together with their principal occupations and other directorships they have
held during at least the past five years. Trustees who are interested persons of the Trust within the meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are not interested persons of the Trust are referred to as Independent
Trustees. Each of the Trustees serves as a Trustee of each of the 45 U.S. registered investment portfolios for which Amundi US serves as investment adviser (the “Pioneer Funds”). The address for all Trustees and all officers of the Trust
is 60 State Street, Boston, Massachusetts 02109.
The Statement of Additional Information of the Trust includes additional information about the Trustees and is available, without charge, upon request, by
calling 1-800-225-6292.
Pioneer Floating Rate Trust | Annual Report | 11/30/20
95
Independent Trustees
|
|
|
|
Name, Age and Position |
Term of Office and |
|
Other Directorships |
Held With the Trust |
Length of Service |
Principal Occupation |
Held by Trustee |
Thomas J. Perna (70) Chairman of the Board and Trustee
|
Class III Trustee since 2006. Term expires in 2021. |
Private investor (2004 – 2008 and 2013 – present); Chairman (2008 – 2013) and Chief Executive Officer (2008 – 2012),
Quadriserv, Inc. (technology products for securities lending industry); and Senior Executive Vice President, The Bank of New York (financial and securities services) (1986 – 2004) |
Director, Broadridge Financial Solutions, Inc. (investor communications and securities processing provider for financial services industry)
(2009 – present); Director, Quadriserv, Inc. (2005 – 2013); and Commissioner, New Jersey State Civil Service Commission (2011 – 2015) |
John E. Baumgardner, Jr. (69)
Trustee |
Class I Trustee since 2019. Term expires in 2021. |
Of Counsel (2019 – present), Partner (1983-2018), Sullivan & Cromwell LLP (law firm). |
Chairman, The Lakeville Journal Company, LLC, (privately-held community newspaper group) (2015-present) |
Diane Durnin (63) Trustee |
Class II Trustee since 2020. Term expires in 2023. |
Managing Director - Head of Product Strategy and Development, BNY Mellon Investment Management (investment management firm) (2012-2018); Vice
Chairman – The Dreyfus Corporation (2005 – 2018): Executive Vice President Head of Product, BNY Mellon Investment Management (2007-2012); Executive Director- Product Strategy, Mellon Asset Management (2005-2007); Executive Vice President
Head of Products, Marketing and Client Service, Dreyfus Corporation (investment management firm) (2000-2005); and Senior Vice President Strategic Product and Business Development, Dreyfus Corporation (1994-2000) |
None |
Benjamin M. Friedman (76)
Trustee |
Class II Trustee since 2008. Term expires in 2023. |
William Joseph Maier Professor of Political Economy, Harvard University (1972 – present) |
Trustee, Mellon Institutional Funds Investment Trust and Mellon Institutional Funds Master Portfolio (oversaw 17 portfolios in fund complex)
(1989 - 2008) |
96 Pioneer Floating Rate Trust | Annual Report | 11/30/20
|
|
|
|
Name, Age and Position |
Term of Office and |
|
Other Directorships |
Held With the Trust |
Length of Service |
Principal Occupation |
Held by Trustee |
Lorraine H. Monchak (64) Trustee |
Class I Trustee since 2015 (Advisory Trustee from 2014 - 2015). Term expires in 2022. |
Chief Investment Officer, 1199 SEIU Funds (healthcare workers union pension funds) (2001 – present); Vice President – International
Investments Group, American International Group, Inc. (insurance company) (1993 – 2001); Vice President – Corporate Finance and Treasury Group, Citibank, N.A. (1980 – 1986 and 1990 – 1993); Vice President –
Asset/Liability Management Group, Federal Farm Funding Corporation (government-sponsored issuer of debt securities) (1988 – 1990); Mortgage Strategies Group, Shearson Lehman Hutton, Inc. (investment bank) (1987 – 1988); and Mortgage
Strategies Group, Drexel Burnham Lambert, Ltd. (investment bank) (1986 – 1987) |
None |
Marguerite A. Piret (72) Trustee |
Class III Trustee since 2003. Term expires in 2021. |
Chief Financial Officer, American Ag Energy, Inc. (controlled environment and agriculture company) (2016 – present); and President and
Chief Executive Officer, Metric Financial Inc. (formerly known as Newbury Piret Company) (investment banking firm) (1981 – 2019) |
Director of New America High Income Fund, Inc. (closed-end investment company) (2004 – present); and
Member, Board of Governors, Investment Company Institute (2000 – 2006) |
Fred J. Ricciardi (73) Trustee |
Class III Trustee since 2014. Term expires in 2021. |
Private investor (2020 – present); Consultant (investment company services) (2012 – 2020); Executive Vice
President, BNY Mellon (financial and investment company services) (1969 – 2012); Director, BNY International Financing Corp. (financial services) (2002 – 2012); Director, Mellon Overseas Investment Corp. (financial services) (2009
– 2012); Director, Financial Models (technology) (2005-2007); Director, BNY Hamilton Funds, Ireland (offshore investment companies) (2004-2007); Chairman/Director, AIB/BNY Securities Services, Ltd., Ireland (financial services) (1999-2006);
and Chairman, BNY Alternative Investment Services, Inc. (financial services) (2005-2007) |
None |
Pioneer Floating Rate Trust | Annual Report | 11/30/20 97
Interested Trustees
|
|
|
|
Name, Age and Position |
Term of Office and |
|
Other Directorships |
Held With the Trust |
Length of Service |
Principal Occupation |
Held by Trustee |
Lisa M. Jones (58)* Trustee, President and Chief Executive
Officer |
Class I Trustee since 2014. Term expires in 2022. |
Director, CEO and President of Amundi US, Inc. (investment management firm) (since September 2014); Director, CEO and President of Amundi Asset
Management US, Inc. (since September 2014); Director, CEO and President of Amundi Distributor US, Inc. (since September 2014); Director, CEO and President of Amundi Asset Management US, Inc. (since September 2014); Chair, Amundi US, Inc., Amundi
Distributor US, Inc. and Amundi Asset Management US, Inc. (September 2014 – 2018); Managing Director, Morgan Stanley Investment Management (investment management firm) (2010 – 2013); Director of Institutional Business, CEO of
International, Eaton Vance Management (investment management firm) (2005 – 2010); and Director of Amundi Holdings US, Inc. (since 2017) |
None |
Kenneth J. Taubes (62)* Trustee |
Class II Trustee since 2014. Term expires in 2023. |
Director and Executive Vice President (since 2008) and Chief Investment Officer, U.S. (since 2010) of Amundi US, Inc. (investment management
firm); Director and Executive Vice President and Chief Investment Officer, U.S. of Amundi US (since 2008); Executive Vice President and Chief Investment Officer, U.S. of Amundi Asset Management US, Inc. (since 2009); Portfolio Manager of Amundi US
(since 1999); and Director of Amundi Holdings US, Inc. (since 2017) |
None |
* Ms. Jones and Mr. Taubes are Interested Trustees because they are officers or directors of the Trust’s investment adviser and certain of its affiliates.
98 Pioneer Floating Rate Trust | Annual Report | 11/30/20
Fund Officers
|
|
|
|
Name, Age and Position |
Term of Office and |
|
Other Directorships |
Held With the Trust |
Length of Service |
Principal Occupation |
Held by Officer |
Christopher J. Kelley (55) Secretary and Chief Legal Officer
|
Since 2004. Serves at the discretion of the Board |
Vice President and Associate General Counsel of Amundi US since January 2008; Secretary and Chief Legal Officer of all of the Pioneer Funds
since June 2010; Assistant Secretary of all of the Pioneer Funds from September 2003 to May 2010; and Vice President and Senior Counsel of Amundi US from July 2002 to December 2007 |
None |
Carol B. Hannigan (59) Assistant Secretary |
Since 2010. Serves at the discretion of the Board |
Fund Governance Director of Amundi US since December 2006 and Assistant Secretary of all the Pioneer Funds since June 2010;
Manager – Fund Governance of Amundi US from December 2003 to November 2006; and Senior Paralegal of Amundi US from January 2000 to November 2003 |
None |
Thomas Reyes (58) Assistant Secretary |
Since 2010. Serves at the discretion of the Board |
Assistant General Counsel of Amundi US since May 2013 and Assistant Secretary of all the Pioneer Funds since June 2010; and Counsel of Amundi US
from June 2007 to May 2013 |
None |
Mark E. Bradley (61) Treasurer and Chief Financial and Accounting Officer
|
Since 2008. Serves at the discretion of the Board |
Vice President – Fund Treasury of Amundi US; Treasurer of all of the Pioneer Funds since March 2008; Deputy Treasurer of Amundi US from
March 2004 to February 2008; and Assistant Treasurer of all of the Pioneer Funds from March 2004 to February 2008 |
None |
Luis I. Presutti (55) Assistant Treasurer |
Since 2004. Serves at the discretion of the Board |
Director – Fund Treasury of Amundi US since 1999; and Assistant Treasurer of all of the Pioneer Funds since 1999 |
None |
Gary Sullivan (62) Assistant Treasurer |
Since 2004. Serves at the discretion of the Board |
Senior Manager – Fund Treasury of Amundi US since 2012; and Assistant Treasurer of all of the Pioneer Funds since 2002 |
None |
Pioneer Floating Rate Trust | Annual Report | 11/30/20 99
Fund Officers
(continued)
|
|
|
|
Name, Age and Position |
Term of Office and |
|
Other Directorships |
Held With the Trust |
Length of Service |
Principal Occupation |
Held by Officer |
Antonio Furtado (38) Assistant Treasurer |
Since 2020. Serves at the discretion of the Board |
Fund Oversight Manager – Fund Treasury of Amundi US since 2020; Assistant Treasurer of all of the Pioneer Funds since 2020; and Senior
Fund Treasury Analyst from 2012 - 2020 |
None |
John Malone (50) Chief Compliance Officer |
Since 2018. Serves at the discretion of the Board |
Managing Director, Chief Compliance Officer of Amundi US Asset Management; Amundi Asset Management US, Inc.; and the Pioneer Funds since
September 2018; and Chief Compliance Officer of Amundi Distributor US, Inc. since January 2014. |
None |
Kelly O’Donnell (49) Anti-Money Laundering Officer
|
Since 2006. Serves at the discretion of the Board |
Vice President – Amundi Asset Management; and Anti-Money Laundering Officer of all the Pioneer Funds since 2006
|
None |
100 Pioneer Floating Rate Trust | Annual Report | 11/30/20
How to Contact Amundi
We are pleased to offer a variety of convenient ways for you to contact us for assistance or information.
You can call American Stock
Transfer & Trust Company (AST) for:
Account Information |
1-800-710-0935 |
|
Or write to AST: |
|
For |
Write to |
|
General inquiries, lost dividend checks, |
American Stock |
change of address, lost stock certificates, |
Transfer & Trust |
stock transfer |
Operations Center |
|
6201 15th Ave. |
|
Brooklyn, NY 11219 |
|
Dividend reinvestment plan (DRIP) |
American Stock |
|
Transfer & Trust |
|
Wall Street Station |
|
P.O. Box 922 |
|
New York, NY 10269-0560 |
|
Website |
www.amstock.com |
For
additional information, please contact your investment advisor or visit our web site www.amundi.com/us.
The Trust files a complete schedule of portfolio holdings with the Securities and
Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareowners may view the filed Form N-PORT by visiting the Commission’s web site at https://www.sec.gov.
Amundi Asset Management US, Inc.
60 State Street
Boston, MA 02109
www.amundi.com/us
Securities offered through Amundi Distributor US, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
© 2021 Amundi
Asset Management US, Inc. 19447-14-0121