PILGRIM PRIME RATE TRUST

                        Supplement dated January 10, 2001
                                       to
                         Prospectus dated June 30, 2000

On January 10, 2001,  ING Pilgrim  Investments  named Curtis F. Lee Chief Credit
Officer for Pilgrim  Prime Rate Trust (the  "Trust").  The biography for Mr. Lee
below  is  inserted   under  the  heading   "Investment   Management  and  Other
Services--Portfolio  Management".  James R. Reis is no longer  the Chief  Credit
Officer for the Trust and his biography is deleted in its entirety.

     CURTIS F. LEE is a Vice President of ING Pilgrim  Investments (since August
     1999) and Chief Credit Officer of the Trust (since January 2001). He served
     as Senior  Credit  Officer of the Trust from August  1999 to January  2001.
     Prior to  joining  ING  Pilgrim  Investments,  Mr.  Lee  held a  series  of
     positions with Standard  Chartered Bank in the credit  approval and problem
     loan management functions (1992-1999).  His last position was Regional Head
     of Risk approving workout  strategies and  restructuring  proposals for the
     bank's troubled  assets in the Americas,  Europe,  Africa,  Middle East and
     South Asia. In addition, Mr. Lee lived and worked in Guayaquil,  Ecuador as
     a Credit Officer with Citibank  (1984-1990)  and as a consultant to various
     Ecuadorian banks focusing on credit analysis  techniques in an inflationary
     environment  (1990-1992),  and was a  management  trainee  with  United New
     Mexico Financial  Corporation in Albuquerque,  New Mexico (1982-1984).  Mr.
     Lee received a B.A. in Journalism, an M.A. in Latin American Studies and an
     M.B.A.  in  International  Management  from the  University  of New Mexico,
     graduating with honors.

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