SEC File No. 333-61831
                          Filed Pursuant to Rule 497(h)

                              PROSPECTUS SUPPLEMENT
                       (To Prospectus Dated June 18, 1999)

                            PILGRIM PRIME RATE TRUST

                    37,961.155 Shares Of Beneficial Interest

                                -----------------

     During the period of September 16, 1999 through September 17, 1999, Pilgrim
Prime Rate Trust (the "Trust") sold 37,961.155 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
$9.3640 per share.

Gross Proceeds ..................................  $355,468.26
Commission to PSI ...............................  $  1,650.28
Net Proceeds to Trust ...........................  $353,817.98

     On September 15, 1999, the last day of the  corresponding  pricing  period,
the last reported sales price of the Shares on the NYSE was 9 1/2.

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 September 22, 1999.