SEC File No. 333-61831

                          Filed Pursuant to Rule 497(h)

                              Prospectus Supplement
                       (To Prospectus Dated June 30, 2000)

                            PILGRIM PRIME RATE TRUST

                    31,983.386 Shares of Beneficial Interest

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     During the period of July 18 ,2000  through  July 19, 2000,  Pilgrim  Prime
Rate Trust (the "Trust") sold  31,983.386  shares of beneficial  interest of the
Trust  through  the  Trust's  Shareholder   Investment  Program  pursuant  to  a
Distribution Agreement with Pilgrim Securities, Inc. ("PSI") at a sales price of
$8.7840 per share.

Gross Proceeds ...............................  $ 280,942.01
Commission to PSI ............................  $   1,976.00
Net Proceeds to Trust ........................  $ 278,966.01

     On July 17, 2000, the last day of the  corresponding  pricing  period,  the
last reported sales price of the Shares on the NYSE was 8 15/16.


THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION NOR HAS THE SECURITIES
AND  EXCHANGE  COMMISSION  OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE
ACCURACY OF THIS PROSPECTUS.  ANY  REPRESENTATION  TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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             The Date of this Prospectus Supplement is July 21, 2000