SEC File No. 333-68239

                          Filed Pursuant to Rule 497(h)

                              PROSPECTUS SUPPLEMENT
                       (TO PROSPECTUS DATED JUNE 18, 1999)

                            PILGRIM PRIME RATE TRUST

                      13,326 SHARES OF BENEFICIAL INTEREST

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

     During the period of September 27, 1999 through September 28, 1999, Pilgrim
Prime Rate Trust (the "Trust") sold 13,326 shares of beneficial  interest of the
Trust through a broker-dealer  that has entered into a selected dealer agreement
with Pilgrim Securities, Inc. ("PSI"), which is the underwriter for the Trust in
connection with this offering. The executed sales price at which the shares were
sold during that period was $9.50

Gross Proceeds ................................................    $126,597.00
Broker-Dealer Commissions......................................    $  5,063.88
Net Proceeds to Trust..........................................    $121,533.12

     On September  28, 1999 the last  reported  sales price of the Shares on the
NYSE was 9 7/16.

     Note: S.E.C. fees were not used in arriving at any of the above figures.

NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE  SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS  IS TRUTHFUL OR  COMPLETE.  ANY  REPRESENTATION  TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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          The date of this Prospectus Supplement is September 29, 1999.