GT GLOBAL FLOATING RATE FUND INC, N-30D, 1998-03-05

GT GLOBAL FLOATING RATE FUND INC
N-30D, 1998-03-05

Previous: MACROVISION CORP, 8-K, 1998-03-05

Next: SONUS CORP, POS AM, 1998-03-05

<PAGE>
WHERE
INCOME POTENTIAL
AND
REDUCED VOLATILITY
CONVERGE

/ /
GT GLOBAL
FLOATING RATE
FUND, INC.

/ /
ANNUAL REPORT
DECEMBER 31, 1997

[LOGO]
<PAGE>
TABLE
OF CONTENTS

<TABLE>
<S> <C>
Message from the
Chairman............. 1

Report from the Fund
Managers and Key
Portfolio Holdings... 2

Report of Independent
Accountants.......... F1

Financial
Statements........... F2

The views of the Fund's manage-
ment as described in this report
are as of the date it was
written. Portfolio holdings and
allocations are as of December
31, 1997, unless otherwise
noted. Views, portfolio holdings
and allocations may have changed
subsequent to these dates.
</TABLE>
<PAGE>

MESSAGE FROM THE CHAIRMAN

Dear Shareholder,

Nineteen ninety-seven has been a challenging and exciting year. The volatility
of the market--and the resulting record highs and lows--has made investing a
sometimes awe-inspiring endeavor for investors and investment professionals
alike.

Across the GT Global family, our Funds have remained true to their investment
goals and objectives regardless of world events. Whether it be the recent
turmoil in the Asian markets, the privatization and reform underway across
eastern Europe, deregulation occurring in Latin America or the ups and downs of
the U.S. market, our Funds have maintained their focus. In fact, we believe
these changes are yielding new investment opportunities in both established
economies and dynamic new markets around the world. Looking forward to 1998, our
commitment is to continue to monitor world markets and seek additional ways to
capitalize on events as they unfold for the benefit of our shareholders.

In an effort to provide our customers easier access to information about the GT
Global Funds, we launched our website, www.gtglobal.com, during the latter part
of 1997. We hope to continually enhance the information it contains, from our
worldwide economic outlook, to fund price and performance reporting, to the
Millennium Minute message of the day. Used in conjunction with annual and
semiannual reports and your quarterly statement on our Funds, we hope it helps
you monitor your investments and achieve your financial goals.

Be assured that we will continue to strive to offer you the quality investment
products you need to build a well-diversified portfolio. As always, we
appreciate your continued confidence in our Funds. Should you or your adviser
have any questions regarding GT Global Funds, please call us at 800-824-1580.
One of our representatives will be happy to assist you.

Sincerely,

/s/ William J. Guilfoyle

William J. Guilfoyle

Chairman of the Board and President

GT Global Funds

1
<PAGE>

GT GLOBAL FLOATING RATE FUND

PERFORMANCE SUMMARY

[CHART]

/ / GT GLOBAL FLOATING RATE FUND(1)

/ / LIBOR(2)

<TABLE>
<CAPTION>
<S> <C> <C>
5/1/97 7.53% 6.00%

7.41% 5.87%

7.54% 5.81%

7.49% 5.84%

7.37% 5.81%

7.28% 5.79%

7.19% 5.93%

12/31/97 7.29% 5.91%

</TABLE>

The chart above shows the yield of GT Global Floating Rate Fund since the Fund's
inception, versus LIBOR.

AVERAGE ANNUAL TOTAL RETURNS%(3)
DECEMBER 31, 1997

WITHOUT SALES CHARGE(4) WITH SALES CHARGE
---------------------- ----------------------
<S> <C> <C> <C> <C>
1-YEAR LIFE OF FUND 1-YEAR LIFE OF FUND
FLOATING RATE N/A 5.04 N/A 2.04

</TABLE>

(1) The Fund began operations on May 1, 1997.

(2) LIBOR - The London Interbank Offered Rate (LIBOR) is the interest rate the
world's most creditworthy banks charge one another for large loans. Used
worldwide as a base interest rate for loans made to major commercial and
industrial corporations.

(3) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.

(4) Performance data do not reflect the maximum 3% early withdrawal charge,
which, if included, would have reduced performance quoted.

The above data represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Please note that
the performance quoted is for a limited period of time.

INVESTMENT OBJECTIVE

The investment objective of the Fund is to provide as high a level of current
income and preservation of capital as is consistent with investment in senior
secured corporate loans and senior secured debt securities that meet the credit
standards established by Chancellor LGT Senior Secured Management, Inc.

2
<PAGE>

INTERVIEW WITH THE
PORTFOLIO MANAGEMENT TEAM

Q HOW DID THE FUND PERFORM?

A We have been very pleased with the Fund's performance and yield. Since the
Fund's commencement of operations on May 1, 1997, total return to December 31,
1997, was 5.04%. Total return including the maximum 3% early withdrawal charge
(applied to shares tendered within the first four years of purchase) was 2.04%.
For the one-month period ended December 31, 1997, the Fund's yield was 7.29%.
Please note that the performance quoted is for a limited period of time.

[GRAPH]

NEW ISSUE VOLUME

<TABLE>
<CAPTION>
<S> <C>
1992 $ 39.50

1993 $ 38.18

1994 $ 81.10

1995 $101.30

1996 $134.80

1997 $145.00

</TABLE>

ISSUANCE OF NEW SENIOR FLOATING RATE LOANS HAS ACCELERATED DRAMATICALLY OVER THE
PAST SIX YEARS, CREATING AN EXPANDING RANGE OF INVESTMENT OPPORTUNITIES FOR
INVESTORS SEEKING HIGH INCOME AND RELATIVE PRICE STABILITY. THIS INCREASE IN NEW
LOAN VOLUME UNDERSCORES THE NEED FOR SUPERIOR CREDIT ANALYSIS TO IDENTIFY THE
BEST AVAILABLE LOANS FROM THE UNIVERSE OF CHOICES AVAILABLE.

Source: Loan Pricing Corp/Gold Sheets December, 1997

Q WHAT DRIVES THE MARKETPLACE FOR THIS ASSET CLASS?

A The floating rate market is driven by merger and acquisition activity. Many
acquisitive companies rely on non-investment grade loans as a primary source of
capital. Typically, these loans represent the least expensive type of financing
because of their senior position in the firm's capital structure and the
security they offer in the form of collateral. Factors that spur such activity
include the amount of private capital available to investment funds and the
amount of private capital available for corporate restructuring and industry
consolidation. Specifically, corporate spinoffs (the sale of a subsidiary or
division) can generate opportunities for either investment funds or established
industry players to purchase businesses.

Q WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST YEAR?

A Market conditions throughout 1997 continued to be favorable for both bank
loans and high-yield debt securities (the leveraged credit market). While the
supply of new issues grew in 1997, particularly in the high-yield market it has
been easily supported by strong demand from mutual funds, structured products,
insurance companies, institutional and international investors and hedge funds.
This growth has fueled several market changes, including increased financing
available for new technologies and construction projects, narrowing loan spreads
and fees, longer loan maturities and hybrid products with looser structures.

3
<PAGE>

Q WHAT TYPES OF RISKS ARE THE FUND SUBJECT TO?

A The Fund does not take any significant interest rate risk since loans pay
interest based on a short-term floating rate index, primarily LIBOR, that
reflects current interest rate levels. From an investor viewpoint, this is a
positive in an environment where interest rates are uncertain, especially
since it acts as a hedge against any potential interest rate increases.

One of the more significant risks the Fund is exposed to is credit risk
because the loans purchased are non-investment grade quality. The Fund's
management team employs a rigorous, methodical and disciplined credit review
process, analyzing each available loan based on its merits and risks. Before
a loan is included in the portfolio, it must meet the investment team's
credit criteria.

Q WHAT IS THE TEAM'S INVESTMENT PROCESS?

A In terms of overall investment strategy, we seek to provide the best
risk/return opportunities in the portfolio, predicated on a sufficient number
of investments to minimize exposure to any single issuer or industry.

The process begins by determining our outlook on macroeconomic trends, such
as interest rate movements, debt supply and demand, and earnings momentum for
various industries. Input from multiple sources in equity and high-yield
markets provides more insight into specific industry trends and contributes
to our ability to evaluate total transaction and security valuations. We
conduct a thorough review of both public and private information in our
financial analyses and valuations of collateral packages. Constant credit
monitoring of loans in the portfolio and ongoing evaluation of other
opportunities in the loan marketplace complete the investment process.

Q WHAT IS YOUR OUTLOOK FOR THE FUTURE?

A We believe heavy new-issue volume in the bank loan market may further
adjust the supply/demand equation, which has long been in the issuers' favor.
Longer term, however, we feel the leveraged credit market remains an
underinvested asset class and should continue to attract more capital. We
also expect the structural composition of the investments to change, which
will allow more flexible portfolio management. Past and current volatility in
equity and emerging markets, fueled by concerns over Asia, has accelerated
investor interest in the relatively more stable returns currently available
in the U.S. leveraged credit markets.

In our opinion, the current macroeconomic environment in the U.S. of low
inflation, moderate economic growth, favorable treasury and equity markets,
and an equilibrium of technical factors remains favorable for the leveraged
credit market. Investors continue to seek high returns and reduced volatility
in portfolios, and the leveraged credit market generally continues to be an
attractive candidate for this relative to other asset classes. However, we
maintain that given some of the recent troubling developments of several
Asian economies, our sensitivity is heightened to these markets with regard
to exports and other critical issues that may directly impact the credit
quality of some U.S. companies.

<PAGE>

SECTOR ALLOCATION OF NET ASSETS %
DECEMBER 31, 1997

<TABLE>
<CAPTION>
<S> <C>
Services 35.1

Materials/Basic Industry 15.0

Capital Goods 14.2

Health Care 12.2

Consumer Durables 11.2

Consumer Non-Durables 5.5

Finance 2.2

Energy 1.7

Short Term or Other 2.9

</TABLE>

Allocations will change based on current market conditions.
A complete listing of holdings and allocations may be found in the Financial
Statements section of this report.

% of
GT GLOBAL FLOATING RATE FUND Net Assets

KEY PORTFOLIO HOLDINGS(5)
<S> <C>
DEL MONTE CORP. Among the largest U.S. canned fruit and vegetable companies, Del Monte 4.0
was sold by a financial group led by Merrill Lynch & Co. Other joint owners of Del
Monte were Citicorp's venture capital unit, Charterhouse International and a Japanese
foods company.

STAR MARKETS, INC. A regional food retailer operating 48 stores in eastern 3.7
Massachusetts, with 31 in the metropolitan Boston area. The company also operates a
wholesale food business serving New England and New York locations.

KSL RECREATION GROUP, INC. The third-largest owner and operator of golf courses in 3.3
the country.

HUNTSMAN CORP. One of the largest privately owned chemical companies in North America. 3.1
Huntsman is a producer of styrene, polypropylene and plastic film products.

AMERICAN AXLE & MANUFACTURING OF MICHIGAN, INC. The former axle and driveline parts 3.1
division of General Motors. AAM is a Tier 1 supplier of driveline systems, forged
products, chassis components, and related service parts to original equipment
manufacturer in the automotive industry.

GOODMAN MANUFACTURING A manufacturer of residential and commercial heating and air 3.1
conditioning equipment.

PRICE COMMUNICATIONS CELLULAR HOLDINGS, INC. One of the premier cellular telephone 3.1
companies in the rapidly growing markets of the Southeastern United States

BRIDGE INFORMATION SYSTEMS, INC. A market data company, that supplies over 6,500 3.1
institutions with information and news on equities, fixed-income, foreign exchange,
derivatives and commodities.

PARAGON HEALTH NETWORK, INC. The company provides long-term and specialty healthcare 3.1
services in the United States. Paragon's subsidiaries provide institutional
pharmacies and contract therapy, operate outpatient clinics, manage geriatric programs
in acute care hospitals, and provide home health and ancillary services to the elderly.

DICTAPHONE CORP. Designs, manufactures, markets and services dictation and voice 3.1
management products and communications recording systems. The company's multi-channel
archiving recorders and emergency message repeaters are used primarily by police and
fire departments, air traffic controllers and financial services firms.

21ST CENTURY NEWSPAPERS, INC. A publisher of local community newspapers in Michigan. 3.1

</TABLE>

(5) Holdings represent senior secured corporate loans and/or senior secured
debt securities made to or issued by these companies.

Source: Bloomberg, December, 1997

There can be no assurance the Fund will continue to hold these securities.

5
<PAGE>
GT GLOBAL
FLOATING RATE
FUND, INC.

FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC.

REPORT OF INDEPENDENT ACCOUNTANTS

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

To the Shareholders and Board of Directors of
GT Global Floating Rate Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of GT
Global Floating Rate Fund, Inc., (the "Fund") including the portfolio of
investments, as of December 31, 1997, the related statement of operations, the
statements of changes in net assets and the financial highlights for the period
from May 1, 1997 (commencement of operations) to December 31, 1997. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and financial
intermediaries. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Floating Rate Fund, Inc. as of December 31, 1997, the results of its
operations, the changes in its net assets and the financial highlights for the
period from May 1, 1997 (commencement of operations) to December 31, 1997, in
conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998

F1
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

PORTFOLIO OF INVESTMENTS

December 31, 1997

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

<TABLE>
<CAPTION>
MOODY'S PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} RATING{*} AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (35.1%)
Star Markets, Inc.: ....................................... Ba3 -- -- 3.7
RETAILERS-FOOD
Term loan C due 12/31/02 ................................ -- 6,000,000 $ 6,000,000 --
KSL Recreation Group, Inc.: ............................... B2 -- -- 3.3
LEISURE & TOURISM
Term loan B due 4/30/06 ................................. -- 1,964,286 1,971,652 --
Term loan A due 4/30/05 ................................. -- 1,964,286 1,969,196 --
Revolving credit due 4/30/03 ............................ -- 1,432,654 1,432,654 --
Bridge Information Systems, Inc.: ......................... B1 -- -- 3.1
BUSINESS & PUBLIC SERVICES
Term loan B due 12/31/04 ................................ -- 5,000,000 5,000,000 --
Price Communications Cellular Holdings, Inc.: ............. Ba3 -- -- 3.1
WIRELESS COMMUNICATIONS
Term loan B due 9/30/06 ................................. -- 2,790,000 2,791,757 --
Term loan A due 9/30/05 ................................. -- 2,210,000 2,207,238 --
21st Century Newspapers, Inc.: ............................ B1 -- -- 3.1
BROADCASTING & PUBLISHING
Term loan due 9/15/05 ................................... -- 5,000,000 4,993,750 --
Omni Services, Inc.: ...................................... NR -- -- 3.1
BUSINESS & PUBLIC SERVICES
Axel loan due 10/30/05 .................................. -- 4,975,000 4,975,000 --
Hard Rock Hotels, Inc.: ................................... B1 -- -- 2.4
LEISURE & TOURISM
Term loan B due 9/30/04 ................................. -- 1,500,000 1,501,875 --
Term loan C due 9/30/05 ................................. -- 1,500,000 1,501,875 --
Term loan A due 9/30/03 ................................. -- 1,000,000 1,001,250 --
ASC-West, Inc.: ........................................... B1 -- -- 2.2
LEISURE & TOURISM
Term loan due 5/31/06 ................................... -- 3,571,429 3,569,643 --
Comcorp Broadcasting, Inc.: ............................... B1 -- -- 1.9
BROADCASTING & PUBLISHING
Term loan B due 9/30/05 ................................. -- 3,048,780 3,044,970 --
Outdoor Systems, Inc.: .................................... Ba2 -- -- 1.9
BUSINESS & PUBLIC SERVICES
Term loan due 6/30/04 ................................... -- 3,000,000 3,003,750 --
Atlas Freighter Leasing, Inc.: ............................ Ba3 -- -- 1.9
TRANSPORTATION - SHIPPING
Term loan due 5/29/04 ................................... -- 3,000,000 3,000,000 --
Decision One Corp.: ....................................... B1 -- -- 1.8
BUSINESS & PUBLIC SERVICES
Term loan B due 8/6/05 .................................. -- 2,992,500 2,996,241 --
White Knight Broadcasting, Inc.: .......................... B1 -- -- 1.2
BROADCASTING & PUBLISHING
Term loan B due 9/30/05 ................................. -- 1,951,220 1,948,780 --
Coinmach Laundry Corp.: ................................... Ba3 -- -- 0.8
CONSUMER SERVICES
Term loan B due 12/31/03 ................................ -- 1,436,170 1,436,170 --
ASC East, Inc.: ........................................... B1 -- -- 0.8
LEISURE & TOURISM
Term loan due 5/31/06 ................................... -- 1,428,571 1,427,857 --
</TABLE>

The accompanying notes are an integral part of the financial statements.

F2
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

PORTFOLIO OF INVESTMENTS (cont'd)

December 31, 1997

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} RATING{*} AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Affinity Group: ........................................... Ba3 -- -- 0.8
LEISURE & TOURISM
Term loan due 3/31/02 ................................... -- 1,062,500 $ 1,057,188 --
Revolving Credit due 3/31/02 ............................ -- 205,000 203,975 --
------------
57,034,821
------------
Materials/Basic Industry (15.0%)
Huntsman Corp.: ........................................... Ba3 -- -- 3.1
CHEMICALS
Term loan B due 6/30/04 ................................. -- 5,000,000 5,006,250 --
Huntsman Specialty Chemicals Corp.: ....................... Ba2 -- -- 3.1
CHEMICALS
Term loan due 3/15/07 ................................... -- 2,727,273 2,727,273 --
Term loan C due 3/15/05 ................................. -- 2,250,000 2,254,230 --
Sterling Pulp Chemicals (SASK) Ltd.: ...................... B1 -- -- 2.5
CHEMICALS
Term loan B due 6/30/05 ................................. -- 3,967,996 3,963,036 --
Acme Metals, Inc.: ........................................ B1 -- -- 2.2
METALS - STEEL
Term loan due 12/1/05 ................................... -- 3,500,000 3,495,625 --
Stone Container International Services, Inc.: ............. Ba3 -- -- 2.2
PAPER/PACKAGING
Term loan E due 10/1/03 ................................. -- 3,482,500 3,491,206 --
Crown Paper Co.: .......................................... Ba3 -- -- 1.9
PAPER/PACKAGING
Term loan B due 8/23/03 ................................. -- 2,984,733 2,977,271 --
------------
23,914,891
------------
Capital Goods (14.2%)
Dictaphone Corp.: ......................................... B3 -- -- 3.1
OFFICE EQUIPMENT
Term loan C due 12/31/02 ................................ -- 2,500,000 2,500,000 --
Term loan B due 6/30/02 ................................. -- 2,500,000 2,496,875 --
Genicom Corp.: ............................................ B1 -- -- 3.0
OFFICE EQUIPMENT
Term loan B due 9/5/04 .................................. -- 4,968,750 4,971,880 --
United Defense Investors, Inc.: ........................... Ba3 -- -- 2.6
AEROSPACE/DEFENSE
Term loan B due 10/6/05 ................................. -- 2,033,043 2,043,208 --
Term loan C due 10/6/06 ................................. -- 1,972,782 1,982,646 --
Telex Communications, Inc.: ............................... Ba3 -- -- 2.2
ELECTRICAL PLANT/EQUIPMENT
Term loan B due 11/6/04 ................................. -- 3,500,000 3,500,000 --
Les, Inc.: ................................................ Ba3 -- -- 1.8
ENVIRONMENTAL
Term loan B due 5/15/04 ................................. -- 1,492,500 1,503,694 --
Term loan C due 5/15/05 ................................. -- 1,492,500 1,503,694 --
Amphenol Corp.: ........................................... Ba3 -- -- 1.5
ELECTRICAL PLANT/EQUIPMENT
Term loan B due 10/3/06 ................................. -- 2,390,625 2,410,061 --
------------
22,912,058
------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F3
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

PORTFOLIO OF INVESTMENTS (cont'd)

December 31, 1997

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} RATING{*} AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care (12.2%)
Paragon Health Network, Inc.: ............................. B1 -- -- 3.0
HEALTH CARE SERVICES
Term loan B due 3/31/05 ................................. -- 2,500,000 $ 2,496,875 --
Term loan C due 3/31/06 ................................. -- 2,500,000 2,496,875 --
Genesis Health Ventures, Inc.: ............................ Ba3 -- -- 2.1
HEALTH CARE SERVICES
Term loan B due 9/30/04 ................................. -- 1,662,500 1,668,735 --
Term loan C due 6/30/05 ................................. -- 1,661,111 1,667,340 --
Dade International, Inc.: ................................. B1 -- -- 1.8
MEDICAL TECHNOLOGY & SUPPLIES
Term loan C due 12/31/03 ................................ -- 1,705,311 1,707,443 --
Term loan B due 12/31/02 ................................ -- 1,034,854 1,036,146 --
Sterling Diagnostic Imaging, Inc.: ........................ B1 -- -- 1.5
MEDICAL TECHNOLOGY & SUPPLIES
Term loan B due 6/30/05 ................................. -- 2,500,000 2,501,574 --
Endo Pharmaceuticals, Inc.: ............................... B1 -- -- 1.5
PHARMACEUTICALS
Term loan B due 6/30/04 ................................. -- 2,500,000 2,500,625 --
Leiner Health Products Group: ............................. Ba3 -- -- 1.2
PHARMACEUTICALS
Term loan C due 12/30/05 ................................ -- 1,990,000 1,990,000 --
The Multicare Companies, Inc.: ............................ B1 -- -- 1.1
HEALTH CARE SERVICES
Term loan B due 9/30/04 ................................. -- 1,246,875 1,251,551 --
Term loan C due 6/1/05 .................................. -- 415,278 416,835 --
------------
19,733,999
------------
Consumer Durables (11.2%)
Goodman Manufacturing Company, L.P.: ...................... Ba3 -- -- 3.1
APPLIANCES & HOUSEHOLD DURABLES
Term loan B due 9/30/04 ................................. -- 2,500,000 2,503,125 --
Term loan C due 9/30/05 ................................. -- 2,500,000 2,503,125 --
American Axle & Manufacturing of Michigan, Inc.: .......... Ba3 -- -- 3.1
AUTO PARTS
Term loan due 4/30/06 ................................... -- 5,000,000 5,006,250 --
Cambridge Industries, Inc.: ............................... B1 -- -- 1.8
AUTO PARTS
Term loan B due 6/30/05 ................................. -- 3,000,000 3,003,750 --
Joan Fabric Corp.: ........................................ B1 -- -- 1.8
AUTO PARTS
Term loan B due 6/30/05 ................................. -- 1,973,684 1,976,151 --
Term loan C due 6/30/06 ................................. -- 1,026,316 1,027,599 --
Manchester Tank & Equipment Co.: .......................... Ba3 -- -- 1.4
APPLIANCES & HOUSEHOLD DURABLES
Term loan B1 due 8/23/04 ................................ -- 2,281,382 2,275,679 --
------------
18,295,679
------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F4
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

PORTFOLIO OF INVESTMENTS (cont'd)

December 31, 1997

TOTAL SENIOR SECURED FLOATING RATE INTERESTS (cost
$156,936,118) .............................................. 157,057,699 97.1
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1997, with State Street Bank & Trust
Co., due January 2, 1998, for an effective yield of 5.80%,
collateralized by $1,670,000 Fannie Mae Collateralized
Mortgage Obligation, 7.00%, due 8/25/19 (market value of
collateral is $1,636,600, including accrued interest).
(cost $1,603,000) ....................................... 1,603,000 1.0
------------ -----

TOTAL INVESTMENTS (cost $158,539,118) * .................... 158,660,699 98.1
Other Assets and Liabilities ................................ 3,036,442 1.9
------------ -----

NET ASSETS .................................................. $161,697,141 100.0
------------ -----
------------ -----
</TABLE>

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

{.:} Senior secured corporate loans and senior secured debt securities
in the Fund's portfolio generally have variable rates which adjust
to a base, such as the London Inter-Bank Offered Rate ("LIBOR"), on
set dates, typically every 30 days but not greater than one year;
and/or have interest rates that float at a margin above a widely
recognized base lending rate such as the Prime Rate of a designated
U.S. bank. Senior secured floating rate interests are, at present,
not readily marketable and may be subject to restrictions on
resale.
{/\} Senior secured floating rate interests often require prepayments
from excess cash flow or permit the borrower to repay at its
election. The degree to which borrowers repay, whether as a
contractual requirement or at their election, cannot be predicted
with accuracy. As a result, the actual remaining maturity may be
substantially less than the stated maturities shown. However, it is
anticipated that the senior secured floating rate interests will
have an expected average life of three to five years.
{*} Ratings of issues shown have not been audited by Coopers & Lybrand
L.L.P.
* For Federal income tax purposes, cost is $158,539,118 and
appreciation (depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 214,071
Unrealized depreciation: (92,490)
-------------
Net unrealized appreciation: $ 121,581
-------------
-------------
</TABLE>

Abbreviation:
NR--Not rated

The accompanying notes are an integral part of the financial statements.

F5
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997

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

<TABLE>
<S> <C> <C>
Assets:
Investments at value (cost $158,539,118) (Note 1)................................................. $ 158,660,699
U.S. currency..................................................................................... 142
Receivable for Fund shares sold................................................................... 2,274,365
Interest receivable............................................................................... 1,326,686
Unamortized organizational costs (Note 1)......................................................... 183,844
Receivable for investments sold................................................................... 155,387
Miscellaneous receivable.......................................................................... 20,013
-------------
Total assets.................................................................................... 162,621,136
-------------
Liabilities:
Payable for distribution.......................................................................... 556,765
Deferred facility fees (Note 1)................................................................... 188,995
Payable for professional fees..................................................................... 87,099
Payable for printing and postage expenses......................................................... 36,921
Payable for investment management and administration fees (Note 2)................................ 12,686
Payable for transfer agent fees (Note 2).......................................................... 11,407
Payable for fund accounting fees (Note 2)......................................................... 3,888
Payable for custodian fees........................................................................ 3,097
Payable for Directors' and Trustees' fees and expenses (Note 2)................................... 2,170
Payable for registration and filing fees.......................................................... 300
Other accrued expenses............................................................................ 20,567
-------------
Total liabilities............................................................................... 923,895
-------------
Minority interest (Note 1)........................................................................ 100
-------------
Net assets.......................................................................................... $ 161,697,141
-------------
-------------
Net asset value per share ($161,697,141 DIVIDED BY 16,133,537 shares outstanding)................... $ 10.02
-------------
-------------
Net assets consist of:
Paid in capital (Note 4).......................................................................... $ 161,425,005
Accumulated net realized gain on investments (Note 1)............................................. 150,555
Net unrealized appreciation of investments........................................................ 121,581
-------------
Total -- representing net assets applicable to capital shares outstanding........................... $ 161,697,141
-------------
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F6
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

STATEMENT OF OPERATIONS

May 1, 1997 (commencement of operations) to December 31, 1997

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

<TABLE>
<S> <C> <C>
Investment income:
Interest income..................................................................................... $6,533,620
Interest expense.................................................................................... (110,001)
Facility fees earned (Note 1)....................................................................... 33,021
---------
Total investment income........................................................................... 6,456,640
---------
Expenses:
Investment management and administration fees (Note 2).............................................. 872,601
Professional fees................................................................................... 495,515
Registration and filing fees........................................................................ 216,417
Printing and postage expenses....................................................................... 115,125
Transfer agent fees (Note 2)........................................................................ 67,450
Directors' and Trustees' fees and expenses (Note 2)................................................. 30,459
Amortization of organization costs (Note 1)......................................................... 28,506
Fund accounting fees (Note 2)....................................................................... 21,982
Custodian fees...................................................................................... 4,490
Other expenses...................................................................................... 7,989
---------
Total expenses before reductions.................................................................. 1,860,534
Expenses reimbursed by Chancellor LGT Asset Management, Inc..................................... (755,344)
---------
Total net expenses................................................................................ 1,105,190
---------
Net investment income................................................................................. 5,351,450
---------
Net realized and unrealized gain on investments: (Note 1)
Net realized gain on investments.................................................................... 150,555
Net unrealized appreciation of investments.......................................................... 121,581
---------
Net realized and unrealized gain on investments....................................................... 272,136
---------
Net increase in net assets resulting from operations.................................................. $5,623,586
---------
---------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F7
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

STATEMENT OF CHANGES IN NET ASSETS

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

<TABLE>
<CAPTION>
MAY 1, 1997
(COMMENCEMENT
OF
OPERATIONS)
TO
DECEMBER 31,
1997
-------------
<S> <C>
Increase in net assets
Operations:
Net investment income................. $ 5,351,450
Net realized gain on investments...... 150,555
Net change in unrealized appreciation
of investments....................... 121,581
-------------
Net increase in net assets resulting
from operations.................... 5,623,586
-------------
Distributions to shareholders: (Note 1)
From net investment income............ (5,351,450)
-------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 168,538,536
Decrease from capital shares
repurchased.......................... (7,213,531)
-------------
Net increase from capital share
transactions....................... 161,325,005
-------------
Total increase in net assets............ 161,597,141
Net assets:
Beginning of period................... 100,000
-------------
End of period *....................... $161,697,141
-------------
-------------
* Includes undistributed net investment
income of.............................. $ --
-------------
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F8
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

STATEMENT OF CASH FLOWS

May 1, 1997 (commencement of operations) to December 31, 1997

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

<TABLE>
<S> <C>
Cash Provided by Operating Activities:
Net increase in net assets resulting from operations...... $ 5,623,586
Adjustments to reconcile net increase in net assets
resulting from operations to net cash provided by
operating activities:
Increase in receivables................................. (1,346,699)
Decrease in unamortized organizational costs............ 28,506
Net realized and unrealized gain on investments......... (272,136)
Increase in payables.................................... 522,650
Deferred facility fees.................................. 188,995
-------------
Net cash provided by operating activities............. 4,744,902
-------------
Cash Used for Investing Activities:
Proceeds from principal payments and sales of senior
secured floating rate interests.......................... 88,648,228
Purchases senior secured floating rate interests.......... (245,589,178)
Purchases of short-term investments....................... (240,820,000)
Proceeds from sales and maturities of short-term
investments.............................................. 239,217,000
-------------
Net cash used for investing activities................ (158,543,950)
-------------
Cash Provided by Financing activities:
Proceeds from capital shares sold......................... 164,043,615
Redemptions from capital shares repurchased............... (7,213,531)
Proceeds from bank line of credit......................... 45,391,534
Repayment of bank line of credit.......................... (45,391,534)
Dividends paid to shareholders............................ (3,130,894)
-------------
Net cash provided by financing activities............. 153,699,190
-------------
Net decrease in cash...................................... (99,858)
Cash, beginning of the period............................. 100,000
-------------
Cash, end of the period................................... $ 142
-------------
-------------
Non-Cash Financing Activities:
Capital shares issued in reinvestment of dividends paid to
shareholders............................................. $ 2,220,556
-------------
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F9
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.

<TABLE>
<CAPTION>
MAY 1, 1997
(COMMENCEMENT
OF
OPERATIONS)
TO
DECEMBER 31,
1997
-------------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period............................................ $ 10.00
-------------
Income from investment operations:
Net investment income......................................................... 0.46
Net realized and unrealized gain on investments............................... 0.02
-------------
Net increase from investment operations..................................... 0.48
-------------
Distributions to shareholders:
From net investment income.................................................... (0.46)
-------------
Net asset value, end of period.................................................. $ 10.02
-------------
-------------
Total investment return (c).................................................... 5.04% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)............................................ $161,697
Ratio of net investment income to average net assets:
With expense reductions....................................................... 7.26% (a)
Without expense reductions.................................................... 6.24% (a)
Ratio of expenses to average net assets:
With expense reimbursement by Chancellor LGT Asset Management, Inc. (Note
2)........................................................................... 1.50% (a)
Without expense reimbursement by Chancellor LGT Asset Management, Inc......... 2.52% (a)
Ratio of interest expense to average net assets................................. 0.15%
Portfolio turnover rate......................................................... 118% (a)
</TABLE>

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

(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.

The accompanying notes are an integral part of the financial statements.

F10
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC.

NOTES TO
FINANCIAL STATEMENTS
December 31, 1997

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

1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Floating Rate Fund, Inc. ("Fund") is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act") as a continuously offered non-diversified, closed-end
management investment company.

The Fund invests all of its investable assets in the Floating Rate Portfolio
("Portfolio"). The Portfolio is organized as a Delaware business trust and is
registered under the 1940 Act as a non-diversified, closed-end management
investment company.

The Portfolio has investment objectives, policies, and limitations substantially
identical to those of the Fund. Therefore, the financial statements of the Fund
and the Portfolio have been presented on a consolidated basis, and represent all
activities of both the Fund and Portfolio. Through December 31, 1997, all of the
beneficial interest in the Portfolio was owned either by the Fund or Chancellor
LGT Asset Management, Inc., which has a nominal ($100) investment in the
Portfolio.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.

(A) PORTFOLIO VALUATION
The Portfolio invests primarily in senior secured corporate loans ("Corporate
Loans") and senior secured debt securities ("Corporate Debt Securities") that
meet credit standards established by Chancellor LGT Senior Secured Management,
Inc. (the "Manager").

When possible, the Manager will rely on quotations provided by banks, dealers or
pricing services with respect to Corporate Loans and Corporate Debt Securities.
Whenever it is not possible to obtain such quotes, the Manager, subject to
guidelines reviewed by the Portfolio's Board of Trustees, values the Corporate
Loans and Corporate Debt Securities at Fair Value, which approximates market
value. In valuing a Corporate Loan or Corporate Debt Security, the Manager
considers, among other factors, (i) the creditworthiness of the U.S. or non-U.S.
Company borrowing or issuing Corporate Debt Securities ("Borrower") and any
intermediate loan participants, (ii) the current interest rate, period until
next interest rate reset and maturity of the Corporate Loan or Corporate Debt
Security, (iii) recent prices in the market for instruments of similar quality,
rate, period until next interest rate reset and maturity.

The value of interest rate swaps, caps and floors is determined in accordance
with a formula and then confirmed periodically by obtaining a bank quotation.
Obligations with remaining maturities of 60 days or less are valued at amortized
cost unless this method no longer produces fair valuations. Repurchase
agreements are valued at cost plus accrued interest. Rights or warrants to
acquire stock or stock acquired pursuant to the exercise of a right or warrant,
may be valued taking into account various factors such as original cost to the
Portfolio, earnings and net worth of the issuer, market prices for securities of
similar issuers, assessment of the issuer's future prosperity, liquidation value
or third party transactions involving the issuer's securities.

Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Portfolio's Board of Trustees.

(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.

(C) FOREIGN CURRENCY SWAPS
Foreign currency swaps are the exchange by the Portfolio with another party (the
"counterparty") of the right to receive the currency in which a loan is
denominated for the right to receive U.S. dollars.

The Portfolio may enter into a transaction subject to a foreign currency swap
only if, at the time of entering into such swap, the outstanding debt
obligations of the counterparty are investment grade or determined to be of
comparable quality in the judgement of the Manager. The amounts of U.S. dollar
payments to be received by the Portfolio and the foreign currency payments to be
received by the counterparty are fixed at the time the swap arrangement is
entered into. The swap protects the Portfolio from fluctuations in exchange
rates and locks in the right to receive payments under the loan in a
predetermined amount of U.S. dollars.

(D) SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. The Portfolio may trade securities
on other than normal settlement terms. This may increase the market risk if the
other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.

(E) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue

F11
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC.

Code of 1986, as amended ("Code"). It is also the intention of the Fund to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, and unrealized appreciation of securities held, or excise
tax on income and capital gains.

(F) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income are declared daily and
paid or reinvested monthly. Income and capital gain distributions are determined
in accordance with Federal income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Portfolio and timing differences.

(G) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund or Portfolio in connection with its organization,
its registration with the Securities and Exchange Commission and with various
states aggregated $212,350. These expenses are being amortized on a straightline
basis over a five-period period.

(H) RESTRICTED SECURITIES
The Portfolio may invest all or substantially all of its assets in Corporate
Loans, Corporate Debt Securities or other securities that are rated below
investment grade by a nationally recognized statistical rating organization, or
in comparable unrated securities. The Portfolio is permitted to invest in
privately placed restricted securities. These securities may be resold in
transactions exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.

(I) SECURITIES PURCHASED ON A WHEN-ISSUED AND DELAYED DELIVERY BASIS
The Portfolio may purchase and sell interests in Corporate Loans and Corporate
Debt Securities and other portfolio securities on a when-issued and delayed
delivery basis, with payment and delivery scheduled for a future date. No income
accrues to the Portfolio on such interests or securities in connection with such
transactions prior to the date the Portfolio actually takes delivery of such
interests or securities. These transactions are subject to market fluctuations
and are subject to the risk that the value at delivery may be more or less than
the trade date purchase price. Although the Portfolio will generally purchase
these securities with the intention of acquiring such securities, they may sell
such securities before the settlement date. These securities are identified on
the accompanying Portfolio of Investments. The Portfolio has set aside
sufficient cash or liquid high grade debt securities as collateral for these
purchase commitments.

(J) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
Chancellor LGT Asset Management, Inc., has a line of credit with BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund, along with the GT Funds, to borrow an aggregate maximum amount of
$250,000,000. The Fund is limited to borrowing up to 33 1/3% of the value of its
total assets.

During the period from May 1, 1997 (commencement of operations) to December 31,
1997, the weighted average outstanding daily balance of bank loans (based on the
number of days the loans were outstanding) was $1,674,967 with a weighted
average interest rate of 6.25%.

(K) INTEREST RATE SWAPS
Interest rate swaps involve the exchange by the Portfolio with another party of
their respective commitments to pay or receive interest, such as an exchange of
fixed rate payments for floating rate payments. The Portfolio will enter into
interest rate swaps in order to hedge all of its fixed rate Corporate Loans and
Corporate Debt Securities against fluctuations in interest rates. The Portfolio
usually will enter into interest rate swaps on a net basis, i.e., the two
payment streams are netted out with the Portfolio receiving or paying, as the
case may be, only the net amount of the two payments. The Portfolio will not
enter into any interest rate hedging transaction unless the Manager considers
the credit quality of the unsecured senior debt or the claims-paying ability of
the other party thereto to be investment grade. The risk of loss with respect to
interest rate swaps is limited to the net amount of interest payments that the
Portfolio is contractually obligated to make.

(L) INVESTMENT INCOME
Investment income is recorded on an accrual basis. Where a high level of
uncertainty exists as to collection of income on securities, income is recorded
net of all withholding tax with any rebate recorded when received. Facility fees
received are recognized as income ratable over the expected life of the loan.
Market discounts are accreted over the stated life of each applicable security.

2. RELATED PARTIES
Chancellor LGT Senior Secured Management, Inc. is the Portfolio's investment
manager and administrator. The Portfolio pays investment management and
administration fees to the Manager at the annualized rate of 0.95% of the
Portfolio's average daily net assets. Chancellor LGT Asset Management, Inc., an
affiliate of the Manager, ("Chancellor LGT") acts as administrator of the Fund.
The Fund pays Chancellor LGT administration fees, which are computed and paid
monthly, at an annualized rate of 0.25% of the Fund's average daily net assets.

GT Global, Inc., an affiliate of the Manager, acts as the distributor of the
shares of Common Stock of the Fund.

The Manager, Chancellor LGT and GT Global voluntarily have undertaken during the
first year of operations to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest, and extraordinary expenses) to the maximum annual
rate of 1.50% of the average daily net assets of the Fund.

GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager,
Chancellor LGT and GT Global, is the transfer agent of the

F12
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC.

Funds. For performing shareholder servicing, reporting, and general transfer
agent services, GT Services receives an annual maintenance fee of $17.50 per
account, a new account fee of $4.00 per account, a per transaction fee of $1.75
for all transactions other than exchanges and a per exchange fee of $2.25. GT
Services also is reimbursed by the Funds for its out-of-pocket expenses for such
items as postage, forms, telephone charges, stationery and office supplies.

Chancellor LGT is the pricing and accounting agent for the Fund and Portfolio.
Each of the Fund and the Portfolio pays a monthly fee for these services to
Chancellor LGT at the annualized rate, respectively of .02% and .01% of their
average daily net assets.

The Fund pays each of its Directors who is not an employee, officer or director
of the Manager or any of its affiliated companies $5,000 per year plus $300 for
each meeting of the board attended by the Director and reimburses travel and
other expenses incurred in connection with attending board meetings. The
Portfolio pays each of its Trustees who is not an employee, officer, or director
of the Manager or any of its affiliated companies $500 per year plus $150 for
each meeting of the board or any committee thereof attended by the Trustee.

3. PURCHASES AND SALES OF SECURITIES
During the period from May 1, 1997 (commencement of operations) to December 31,
1997, purchases and sales of investments by the Portfolio, other than U.S.
government obligations and short-term investments, aggregated $245,594,061 and
$88,803,615, respectively. There were no purchases or sales of U.S. government
obligations by the Portfolio for the period ended December 31, 1997.

4. CAPITAL SHARES
At December 31, 1997, the Fund is authorized to issue 1 billion shares of
capital stock, $0.001 par value, all of which is classified as Common Stock.

<TABLE>
<CAPTION>
MAY 1, 1997
(COMMENCEMENT OF
OPERATIONS)
TO DECEMBER 31, 1997
------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C>
Shares sold......................................................................................... 16,621,817 $166,317,980
Shares issued in connection with reinvestment of distributions...................................... 221,712 2,220,556
---------- ------------
16,843,529 168,538,536
Shares repurchased.................................................................................. (719,992) (7,213,531)
---------- ------------
Net increase........................................................................................ 16,123,537 $161,325,005
---------- ------------
---------- ------------
</TABLE>

5. AFFILIATED SHAREHOLDER
As of year end December 31, 1997, LGT Asset Management, Inc. ("LGTAM"), GT
Global and their affiliates own approximately 12.5% of the Fund's outstanding
shares of Common Stock.

6. UNFUNDED LOAN INTEREST
As of December 31, 1997, the Fund had unfunded loan commitments of $5,247,604,
which could be extended at the option of the borrower, pursuant to the following
loan agreements:

<TABLE>
<CAPTION>
UNFUNDED
BORROWER COMMITMENTS
- --------------------------------------------- -----------
<S> <C>
KSL Recreation Group, Inc.................... $1,138,775
Affinity Group............................... 1,045,000
Coinmach Laundry Corp........................ 3,063,830
</TABLE>

7. TENDER OFFER
The Fund's Board of Directors considers each quarter the making of Tender Offers
which are offers to repurchase all or a portion of its shares of Common Stock
from stockholders at a price per share equal to the net asset value per share of
the Fund's Common Stock determined at the close of business on the day an offer
terminates. Shares of Common Stock held less than four years and which are
repurchased by the Fund pursuant to Tender Offers will be subject to an early
withdrawal charge of up to 3% of the lesser of the then current net asset value
or the original purchase price of the Common Stock being tendered.

8. INTERMEDIATE LOAN PARTICIPANTS
The portfolio invests primarily in senior secured corporate loans from US or
non-US companies ("Borrowers"). The investment of the Portfolio may take the
form of participation interests or assignments. When the Portfolio purchases a
participation interest from a syndicate of lenders ("Lenders"), one or more of
which administers the loan on behalf of all the Lenders (the "Agent Bank"), the
Portfolio would be required to rely on the Lender that sold the participation
interest not only for the enforcement of the Portfolio's rights against the
Borrower but also for the receipt and processing of payments due to the
Portfolio under the participation. As such, the Portfolio is subject to the
credit risk of the Borrower, the Agent Bank, and Lender who sold the
participation interest.

F13
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC.

9. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Senior Secured Management,
Inc. and Chancellor LGT Asset Management, Inc. AMVESCAP is the holding company
of the AIM and INVESCO asset management businesses.

F14
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC.

NOTES

- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL FLOATING RATE FUND, INC. -- CONSOLIDATED

GT GLOBAL FUNDS

GT GLOBAL OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
FUNDS, PLEASE CONTACT YOUR INVESTMENT ADVISOR OR CALL GT GLOBAL DIRECTLY AT
1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, INCLUDING
CHARGES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET INVESTING.
INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.

GROWTH FUNDS

/ / GLOBALLY DIVERSIFIED FUNDS

GT GLOBAL NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six GT Global
Theme Funds

GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.

GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside the U.S.

GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies

GT GLOBAL DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers

/ / GLOBAL THEME FUNDS

GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Focuses on worldwide opportunities from the demand for consumer products and
services

GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products

GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide

GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain infrastructure

GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources

GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment

/ / REGIONALLY DIVERSIFIED FUNDS

GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan

GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in Europe

GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America

/ / SINGLE COUNTRY FUNDS

GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies

GT GLOBAL AMERICA MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.

GT GLOBAL AMERICA VALUE FUND
Focuses on equity securities of U.S. companies believed to be undervalued

GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market

GROWTH AND INCOME FUND

GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government securities

INCOME FUNDS

GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities

GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets

GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets

GT GLOBAL FLOATING RATE FUND, INC.
Invests primarily in senior secured floating rate loans with the potential to
achieve a high level of current income

MONEY MARKET FUND

GT GLOBAL DOLLAR FUND
Invests in high-quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital

[LOGO]

THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
<PAGE>
[LOGO]

GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624

DATED MATERIAL
PLEASE EXPEDITE

GT GLOBAL FLOATING RATE FUND
FLOSR708007M