<PAGE> 1
SEMIANNUAL REPORT / JUNE 30, 1999
AIM FLOATING RATE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
--------------------------------------------------------------
SAILBOATS AROUND THE PENINSULA BY PETER SICKLES
SAILBOATS GLIDE MAJESTICALLY ON A PLACID OCEAN ON THEIR WAY TO
A FRIENDLY PORT. WHETHER THE ECONOMIC WATERS ARE CALM OR
TURBULENT, AIM FLOATING RATE FUND ENDEAVORS TO BE A STABLE
INVESTMENT VEHICLE FOR SHAREHOLDERS WHILE TRANSPORTING THEM
TO THEIR FINANCIAL DESTINATION.
--------------------------------------------------------------
For shareholders who seek a high level of current income and preservation of
capital consistent with investing in senior secured floating rate corporate
loans and senior secured debt securities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Floating Rate Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Had the
manager not absorbed fund expenses in the past, total returns would be
lower.
o When sales charges are included in performance figures, performance reflects
the maximum applicable early withdrawal charge. The early withdrawal charge
declines from 3% beginning at the time of purchase to 0% at the beginning of
the fifth year.
o The 30-day distribution rate is calculated by dividing the annualized sum of
the previous 30 days' dividends declared by the offering price per share on
the last day of the period.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o The fund invests primarily in higher-yielding, lower-rated senior secured
floating rate corporate loans and other debt obligations that are subject to
the risk of nonpayment of scheduled interest or principal payments, which
may cause the fund to experience a decline in net asset value per share.
Prepayment of principal by borrowers may require the fund to replace its
investment with a lower-yielding security that may adversely affect the net
asset value of the fund.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The London InterBank Offered Rate (LIBOR) is the interest rate the world's
most creditworthy banks charge one another for large loans. It is used
worldwide as a base interest rate for loans made to major commercial and
industrial corporations.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THERE IS A RISK
THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM FLOATING RATE FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable. We are pleased to be able to report to you
Chairman of that as of June 1999 we achieved a major milestone toward
the Board of year 2000 compliance status: we have successfully completed
THE FUND the testing of all of our mission-critical systems.
APPEARS HERE] Earlier this year, AIM participated in an industrywide
test that gave us a chance to see how our technology systems
might be affected by the changeover to the year 2000 (Y2K).
Everything went as well as we had hoped; in general, the
industry sailed through the testing process with flying
colors. The financial industry has been seen as a leader in
planning for year 2000 concerns. Thus, it was no surprise to
most participants that the test was an overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in the United States and
to follow transactions through a typical trading cycle--from order entry to the
settlement process. Investment banks, broker-dealers, custodian banks and mutual
fund companies all worked together to make this possible. Approximately 400
firms were involved in the testing; AIM was one of 70 asset managers.
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. Now that we have finished adjusting our
applications and systems, our focus for the rest of 1999 is to continue
monitoring the year 2000 readiness status of outside sources we're linked to
electronically. On the investment side, our portfolio management staff is
continually evaluating the Y2K preparedness of the domestic and foreign
companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if necessary. Our
plans will give AIM employees guidelines to follow for a wide variety of
situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
automated AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
----------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
----------------------
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
AIM FLOATING RATE FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND PROVIDES SOLID INCOME WHILE MAINTAINING PRICE STABILITY
DURING THE REPORTING PERIOD, BONDS WERE IN THE DOLDRUMS WHILE STOCKS WERE
VOLATILE. HOW DID AIM FLOATING RATE FUND PERFORM?
The fund, which invests primarily in senior secured floating rate loans,
provided solid income while maintaining relatively stable net asset value per
share. As of June 30, 1999, the fund's 30-day effective yield was 6.76%. By
comparison, the six-month London InterBank Offered Rate (LIBOR) was 5.65%.
During the reporting period, net asset value per share was confined to a
relatively narrow range of $9.82 to $9.85, extending the fund's record of
share-price stability as shown on the accompanying chart. While the fund
attempts to maintain a relatively stable net asset value, floating-rate
investments should not be confused with money-market funds, and the fund's net
asset value will most likely not be as stable as that of a money-market fund.
Excluding sales charges, cumulative total return for the reporting period
was 3.14%. During the six months since our last report, the fund's net assets
increased from $288 million to $357 million.
WHAT WERE SOME OF THE MAJOR TRENDS IN FINANCIAL MARKETS?
Stocks sizzled while bonds fizzled. Bonds generally performed poorly because of
heightened concerns that the Federal Reserve Board (the Fed) would raise
interest rates to slow economic growth and combat inflation, which rose
dramatically in April. As bond prices fell, the yield of the benchmark 30-year
U.S. Treasury bond soared from 5.09% at the beginning of the reporting period to
6.16% on June 24, its highest level since 1997.
Speculation regarding the extent of a possible Fed tightening did not end
until June 30, when the central bank raised the federal funds rate from 4.75% to
5%. At the same time, the Fed announced that it had shifted from a tightening to
a neutral bias, indicating that it planned no further rate hikes in the near
future. That started a "relief rally" in the bond market, dropping the yield on
the 30-year Treasury to 5.97% at the close of the reporting period.
Only a few bond classes, such as high-yield corporate bonds and emerging-
market debt, posted gains for the reporting period. Lower-rated bonds outpaced
higher-rated bonds, and shorter-term securities outperformed longer-term
securities.
The weakness in the bond market periodically created volatility in the stock
market. However, stocks posted solid gains for the period. There was a
significant shift in market leadership from large-cap growth stocks to mid- and
small-cap stocks and to value stocks.
IN A RISING-INTEREST-RATE ENVIRONMENT, WHY WERE SENIOR SECURED FLOATING RATE
LOANS RELATIVELY MORE STABLE IN PRICE THAN OTHER ASSET CLASSES?
The interest rates on these loans, made by banks and financial institutions to
corporations, are adjusted periodically, usually every 30 to 60 days, to
correspond with the underlying LIBOR contract.
-----------------------------------
A TOTAL OF 76 COMPANIES, REPRESENT-
ING A BROAD RANGE OF INDUSTRIES,
WERE REPRESENTED IN THE PORTFOLIO.
-----------------------------------
================================================================================
FUND VS. LIBOR
As of 6/30/99
30-Day 6.76%
Distribution
Rate
LIBOR 5.65%
================================================================================
- --------------------------------------------------------------------------------
RELATIVE PRICE STABILITY
5/1/97-6/30/99
- --------------------------------------------------------------------------------
5/1/97 10 4/98 10.01
6/97 10 5/98 10
7/97 10 6/98 10
8/97 10.01 7/98 10
9/97 10.01 8/98 10
10/97 10.02 9/98 9.89
11/97 10.02 10/98 9.85
12/97 10.02 11/98 9.82
1/98 10.02 12/98 9.84
2/98 10.02 3/99 9.83
3/98 10.01 6/99 9.82
================================================================================
Source: Towers Data Systems HYPO(C). There is no guarantee that the fund will
maintain a constant net asset value. Investment return will vary, so you may
have a gain or a loss when you sell shares. Past performance cannot guarantee
comparable future results.
================================================================================
See important fund and index disclosures inside front cover.
AIM FLOATING RATE FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
Consequently, the value of these loans, in comparison to investments with
fixed interest rates, is less susceptible to fluctuations in the prevailing
interest-rate environment. The senior status of these loans also helps to
maintain their market price.
HOW ARE LOANS SELECTED FOR THE PORTFOLIO?
In evaluating a loan, we conduct an extensive credit analysis of the company.
This analysis includes an assessment of the company's management, the
corporation's position within its particular industry, the company's prospects,
its dependence on various markets worldwide, its financial sponsor and its
overall financial flexibility.
Once this process is completed, we analyze the loan to assess its value
relative to similar types of investments and to determine how well it might
trade in the market. If our overall assessment is favorable, we will then decide
to buy the loan.
WHAT IS THE PRIMARY RISK ASSOCIATED WITH SENIOR SECURED FLOATING RATE LOANS, AND
WHAT STEPS DO YOU TAKE TO REDUCE IT?
The main risk is credit risk. Most of these loans are below investment-grade
quality as measured by Standard & Poor's Corporation (S&P) and Moody's Investors
Service (Moody's), two widely known credit-rating agencies. In addition to
thoroughly analyzing loans before including them in the portfolio, we monitor
them closely as long as they form part of the fund's holdings.
Senior secured floating rate loans typically are not publicly traded, but
instead are placed privately with institutional investors. Consequently, we sign
confidentiality agreements for each financing. We get information, such as
financial reports, directly from the companies represented in the portfolio,
usually on a monthly basis.
Additionally, the borrower is generally bound by an agreement with rigorous
stipulations. As a result, if a company develops a problem in meeting its debt
obligation, we can react quickly to resolve the problem, usually well before it
reaches the default stage.
While past performance cannot guarantee comparable future results, the
default rate on these loans has historically been relatively low. In most
instances, these loans carry the highest priority claim on the company's assets
and earnings and are backed by collateral such as stock, property or equipment,
which can be sold to meet debt obligations.
HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
A total of 76 companies, representing a broad range of industries, were
represented in the portfolio. The top holding was Starwood Hotels & Resorts, one
of the world's largest hotel operators. Other holdings included Wyndam
International, another major hotel chain; Capstar Radio Broadcasting Partners,
one of the nation's largest radio broadcasting companies; and 20th Century
Plastics, a direct marketer of office and photography products.
WHAT IS YOUR OUTLOOK?
In the United States, economic fundamentals are sound. Economic growth is
strong, corporate earnings are solid and the country enjoys nearly full
employment. Although there is still some question about the Fed's future
actions, inflation remains low. If such an environment prevails, it could bode
well for all types of investments, including senior secured floating rate loans.
Bond and stock markets remain fairly volatile, a trend that is likely to
continue. We believe that stock- and bond-market volatility could make senior
secured floating rate loans even more attractive to investors seeking a steady
source of income and share-price stability.
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
<TABLE>
<CAPTION>
===========================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Starwood Hotels & Resorts Worldwide, Inc. 2.80% 1. Telephone Systems 7.02%
2. Wyndam International, Inc. 2.80 2. Media Broadcasting 6.99
3. Capstar Radio Broadcasting Partners, Inc. 2.78 3. Lodging 5.36
4. Lyondell Petrochemical Co. 2.21 4. Household Products 5.09
5. 20th Century Plastics, Inc. 2.04 5. Real Estate Investment Trust 4.21
6. Ferrellgas, L.P. 1.96 6. Chemicals-Commodity 4.18
7. Coinmach Corp. 1.93 7. Health Care Providers 3.99
8. Formax, Inc. 1.93 8. Industrial & Commercial Services 3.96
9. United Industries Co. 1.68 9. Media Publishing 3.89
10. RSP Manufacturing 1.66 10. Containers & Packaging 3.52
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
===========================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM FLOATING RATE FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
SENIOR SECURED FLOATING
RATE INTERESTS-92.96%(a)(b)
AEROSPACE & DEFENSE-2.80%
Fairchild Corp.
Term Loan due 04/30/06 Ba3 $ 5,000,000 $ 5,010,415
- -------------------------------------------------------------------
Transtar Metals
Term Loan B due
01/20/06 NR 4,991,071 4,966,116
- -------------------------------------------------------------------
9,976,531
- -------------------------------------------------------------------
AIR FREIGHT-COURIERS-0.71%
Atlas Freighter Leasing,
Inc. A137
Term Loan due 05/29/04 Ba3 2,551,622 2,546,837
- -------------------------------------------------------------------
APPAREL & TEXTILE
MANUFACTURING-1.40%
Glenoit Corp.
Term Loan B due
06/30/04 NR 5,000,000 4,984,375
- -------------------------------------------------------------------
AUTOMOBILE PARTS &
EQUIPMENT-2.21%
Avis Rent A Car, Inc.
Term Loan B due
06/30/06 Ba3 2,500,000 2,493,750
- -------------------------------------------------------------------
Term Loan C due
06/30/07 Ba3 2,500,000 2,493,750
- -------------------------------------------------------------------
Joan Fabrics Corp.
Term Loan B due
06/30/05 B1 1,899,486 1,899,460
- -------------------------------------------------------------------
Term Loan C due
06/30/06 B1 985,610 985,610
- -------------------------------------------------------------------
7,872,570
- -------------------------------------------------------------------
BUILDING MATERIALS-0.93%
Atrium Co.
Term Loan B due
06/30/05 Ba3 1,360,556 1,360,556
- -------------------------------------------------------------------
Term Loan C due
06/30/06 Ba3 1,949,444 1,949,444
- -------------------------------------------------------------------
3,310,000
- -------------------------------------------------------------------
CASINOS-1.77%
Aladdin Gaming, L.L.C.
Term Loan B due
08/26/06 B2 277,778 258,333
- -------------------------------------------------------------------
Term Loan C due
02/26/08 B2 2,222,222 2,066,667
- -------------------------------------------------------------------
Resort at Summerlin, Inc.
(The)
Term Loan due 03/31/04 B1 4,000,000 3,980,000
- -------------------------------------------------------------------
6,305,000
- -------------------------------------------------------------------
CHEMICALS-COMMODITY-4.18%
Huntsman Corp.
Term Loan B due
06/30/04 Ba2 3,442,437 3,425,225
- -------------------------------------------------------------------
Lyondell Petrochemical
Co.
Term Loan A due
07/31/03 Ba1 2,958,187 2,936,343
- -------------------------------------------------------------------
Term Loan B due
07/30/05 Ba1 4,946,593 4,952,777
- -------------------------------------------------------------------
Sterling Pulp Chemicals (SASK) Ltd.
Term Loan B due
06/27/05 NR 3,608,598 3,590,555
- -------------------------------------------------------------------
14,904,900
- -------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
CHEMICALS-SPECIALTY-0.68%
Ethyl Corp.
Term Loan due 12/15/99 Ba1 $ 2,442,307 $ 2,442,307
- -------------------------------------------------------------------
COAL-0.89%
Centennial Resources(c)
Term Loan A due
03/07/02 NR 850,000 127,500
- -------------------------------------------------------------------
Term Loan B due
03/07/04 NR 1,966,666 295,000
- -------------------------------------------------------------------
P&L Coal Holdings
Corp./Peabody
Term Loan B due
06/09/06 Ba2 2,769,231 2,770,386
- -------------------------------------------------------------------
3,192,886
- -------------------------------------------------------------------
COMMUNICATIONS
TECHNOLOGY-2.08%
Intesys Technologies Inc.
Term Loan B due
09/30/06 NR 7,470,000 7,413,975
- -------------------------------------------------------------------
COMPUTERS-1.38%
GENICOM Corp.
Term Loan due 09/30/99 B2 360,124 356,523
- -------------------------------------------------------------------
Term Loan B due
09/05/04 NR 4,812,500 4,571,875
- -------------------------------------------------------------------
4,928,398
- -------------------------------------------------------------------
CONGLOMERATE-0.70%
Western Industries, Inc.
Term Loan B due
06/23/06 NR 2,500,000 2,487,500
- -------------------------------------------------------------------
CONSUMER SERVICES-3.09%
Coinmach Corp.
Term Loan B due
06/30/06 BB 6,897,613 6,897,613
- -------------------------------------------------------------------
Renters Choice, Inc.
Term Loan B due
02/05/06 NR 1,865,625 1,862,515
- -------------------------------------------------------------------
Term Loan C due
02/05/07 NR 2,280,208 2,276,407
- -------------------------------------------------------------------
11,036,535
- -------------------------------------------------------------------
CONTAINERS &
PACKAGING-3.52%
Graham Packaging Co. L.P.
Term Loan B due
01/30/06 B1 1,346,680 1,347,801
- -------------------------------------------------------------------
Term Loan C due
01/30/07 B1 1,412,679 1,413,855
- -------------------------------------------------------------------
Term Loan D due
01/30/07 B1 3,061,267 3,064,733
- -------------------------------------------------------------------
Kerr Group, Inc.
Term Loan B due
03/31/06 NR 2,000,000 2,005,000
- -------------------------------------------------------------------
Packaging Corp. America
Term Loan B due
04/05/07 NR 2,345,041 2,360,432
- -------------------------------------------------------------------
Term Loan C due
04/05/08 NR 2,345,041 2,360,432
- -------------------------------------------------------------------
12,552,253
- -------------------------------------------------------------------
COSMETICS-PERSONAL
CARE-0.32%
American Safety Razor Co.
Term Loan B due
02/05/05 NR 5,000,000 1,151,917
- -------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
ELECTRICAL COMPONENTS &
EQUIPMENT-1.66%
RSP Manufacturing
Term Loan B due
06/30/04 NR $ 2,875,461 $ 2,859,287
- -------------------------------------------------------------------
Term Loan C due
11/30/04 NR 3,092,172 3,076,711
- -------------------------------------------------------------------
5,935,998
- -------------------------------------------------------------------
FACTORY EQUIPMENT-1.93%
Formax, Inc.
Term Loan B due
09/30/05 NR 6,882,043 6,873,466
- -------------------------------------------------------------------
FINANCIAL
INSTITUTION-1.33%
Amresco Inc.
Term Loan B due
08/12/03 B1 5,000,000 4,750,000
- -------------------------------------------------------------------
FINANCIAL SERVICES-1.40%
Bridge Information Systems, Inc.
Term Loan B due
05/14/05 NR 5,000,000 5,003,125
- -------------------------------------------------------------------
FOOD-0.53%
New World Pasta Co.
Term Loan B due
01/31/06 NR 1,866,667 1,877,555
- -------------------------------------------------------------------
HEALTH CARE
PROVIDERS-3.99%
Community Health Systems,
Inc.
Term Loan D due
12/31/05 NR 4,948,452 4,940,203
- -------------------------------------------------------------------
Genesis Health Ventures,
Inc.
Term Loan B due
09/30/04 Ba3 1,197,505 1,135,633
- -------------------------------------------------------------------
Term Loan C due
06/30/05 Ba3 1,194,710 1,132,982
- -------------------------------------------------------------------
Mariner Post-Acute
Network, Inc.
Term Loan B due
03/31/05 B1 2,480,000 1,922,000
- -------------------------------------------------------------------
Term Loan C due
03/31/06 B1 2,480,000 1,922,000
- -------------------------------------------------------------------
MedPartners, Inc.
Term Loan B due
06/08/01 NR 1,705,839 1,637,606
- -------------------------------------------------------------------
Multicare Companies, Inc.
Term Loan B due
09/30/04 B1 1,228,125 1,166,719
- -------------------------------------------------------------------
Term Loan C due
06/30/05 B1 408,333 387,577
- -------------------------------------------------------------------
14,244,720
- -------------------------------------------------------------------
HOUSEHOLD FURNISHINGS-
APPLIANCES-2.79%
Imperial Home Decor
Group, Inc. (The)
Term Loan B due
03/13/05 B1 3,300,000 3,260,813
- -------------------------------------------------------------------
Term Loan C due
03/13/06 B1 1,700,000 1,679,813
- -------------------------------------------------------------------
Simmons Co., Inc.
Term Loan B due
10/29/05 Ba2 1,424,490 1,429,832
- -------------------------------------------------------------------
Term Loan C due
10/29/06 Ba3 3,562,500 3,575,859
- -------------------------------------------------------------------
9,946,317
- -------------------------------------------------------------------
HOUSEHOLD PRODUCTS-5.09%
Boyds Collection, Ltd.
(The)
Term Loan B due
04/01/06 Ba3 1,638,889 1,636,157
- -------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
HOUSEHOLD PRODUCTS-(CONTINUED)
Paint Sundry Brands Corp.
Term Loan B due
08/11/05 NR $ 1,698,153 $ 1,691,785
- -------------------------------------------------------------------
Term Loan C due
08/11/06 NR 1,570,750 1,564,860
- -------------------------------------------------------------------
20th Century Plastics,
Inc.
Term Loan B due
10/05/05 NR 3,966,667 3,877,417
- -------------------------------------------------------------------
Term Loan C due
10/06/05 NR 3,473,750 3,395,591
- -------------------------------------------------------------------
United Industries Co.
A252
Loan B due 03/24/06 B1 5,985,000 6,009,939
- -------------------------------------------------------------------
18,175,749
- -------------------------------------------------------------------
INDUSTRIAL & COMMERCIAL
SERVICES-3.96%
Century Maintenance
Supply, Inc.
Term Loan B due
06/30/05 NR 4,950,000 4,900,500
- -------------------------------------------------------------------
Decision One Corp.
Term Loan B due
08/06/05 B1 2,947,500 2,210,625
- -------------------------------------------------------------------
Ferrellgas, L.P.
Term Loan Series C due
06/17/06 NR 7,000,000 7,008,750
- -------------------------------------------------------------------
14,119,875
- -------------------------------------------------------------------
INDUSTRIAL
TECHNOLOGY-1.12%
Thermadyne Holdings Corp.
Term Loan B due
05/22/05 B1 1,985,000 1,989,963
- -------------------------------------------------------------------
Term Loan C due
05/22/06 B1 1,985,000 1,989,963
- -------------------------------------------------------------------
3,979,926
- -------------------------------------------------------------------
INSURANCE COMPANY-0.55%
Willis Corroon Corp.
Term Loan C due
02/19/08 Ba2 970,000 973,031
- -------------------------------------------------------------------
Term Loan D due
08/19/08 Ba2 970,000 973,031
- -------------------------------------------------------------------
1,946,062
- -------------------------------------------------------------------
LEISURE & TOURISM-0.36%
Patriot American
Hospitality, Inc.
Term Loan B due
06/30/99 NR 1,293,529 1,293,529
- -------------------------------------------------------------------
LODGING-5.36%
Extended Stay America,
Inc.
Term Loan B due
12/31/03 NR 5,000,000 4,975,000
- -------------------------------------------------------------------
Interval International
Corp.
Term Loan B due
12/16/05 NR 2,098,438 2,093,191
- -------------------------------------------------------------------
Term Loan C due
12/15/06 NR 2,098,438 2,093,191
- -------------------------------------------------------------------
Wyndam International,
Inc.
Term Loan B due
06/30/06 NR 10,000,000 9,975,000
- -------------------------------------------------------------------
19,136,382
- -------------------------------------------------------------------
MARINE
TRANSPORTATION-1.40%
American Commercial Lines
L.L.C.
Term Loan B due
06/30/06 Ba2 2,105,981 2,106,859
- -------------------------------------------------------------------
Term Loan C due
06/30/07 Ba2 2,871,166 2,872,363
- -------------------------------------------------------------------
4,979,222
- -------------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
MEDIA-BROADCASTING-6.99%
Capstar Radio
Broadcasting Partners,
Inc.
Term Loan due 05/28/05 NR $ 9,900,000 $ 9,909,900
- -------------------------------------------------------------------
Charter Communications Operating
Term Loan B due
03/18/08 Ba3 5,000,000 5,008,595
- -------------------------------------------------------------------
ComCorp Broadcasting,
Inc.
Term Loan B due
06/30/07 NR 2,500,000 2,500,000
- -------------------------------------------------------------------
RCN Corp.
Term loan due 06/03/07 B1 5,000,000 5,017,190
- -------------------------------------------------------------------
White Knight
Broadcasting, Inc.
Term Loan B due
06/30/07 NR 2,500,000 2,500,000
- -------------------------------------------------------------------
24,935,685
- -------------------------------------------------------------------
MEDIA-PUBLISHING-3.89%
American Media, Inc.
Term Loan B due
05/06/07 NR 4,000,000 4,015,000
- -------------------------------------------------------------------
Enterprise Publishing Co.
Term Loan due 06/30/05 NR 4,936,061 4,936,061
- -------------------------------------------------------------------
21st Century Newspapers,
Inc.
Term Loan B due
09/15/05 Ba3 4,937,500 4,912,813
- -------------------------------------------------------------------
13,863,874
- -------------------------------------------------------------------
MEDICAL SUPPLIES-1.40%
Dade Behring, Inc.
Term Loan B due
06/30/06 Ba3 2,500,000 2,493,750
- -------------------------------------------------------------------
Term Loan C due
06/30/07 Ba3 2,500,000 2,493,750
- -------------------------------------------------------------------
4,987,500
- -------------------------------------------------------------------
OFFICE EQUIPMENT-2.52%
EMED Co., Inc.
Term Loan B due
03/31/06 NR 3,990,000 3,985,013
- -------------------------------------------------------------------
Identity Group
Term Loan B due
05/07/07 NR 5,000,000 4,993,750
- -------------------------------------------------------------------
8,978,763
- -------------------------------------------------------------------
PAPER PRODUCTS-0.70%
Pacifica Papers Inc.
Term Loan B due
03/12/06 NR 2,500,000 2,512,500
- -------------------------------------------------------------------
PHARMACEUTICALS-1.91%
Endo Pharmaceuticals,
Inc.
Term Loan B due
06/30/04 NR 2,452,381 2,440,119
- -------------------------------------------------------------------
Leiner Health Products Group, Inc.
Term Loan C due
04/30/05 Ba3 4,428,678 4,406,534
- -------------------------------------------------------------------
6,846,653
- -------------------------------------------------------------------
POLLUTION CONTROL-WASTE
MANAGEMENT-0.76%
Safety-Kleen Corp.
Term Loan B due
04/03/04 B1 1,350,000 1,356,329
- -------------------------------------------------------------------
Term Loan C due
04/03/05 B1 1,350,000 1,356,329
- -------------------------------------------------------------------
2,712,658
- -------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
REAL ESTATE INVESTMENT
TRUST-4.21%
Felcor Lodging Trust Inc.
Term Loan due 03/31/04 Ba1 $ 5,000,000 $ 5,009,375
- -------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc.
Term Loan due 02/23/03 NR 10,000,000 10,004,170
- -------------------------------------------------------------------
15,013,545
- -------------------------------------------------------------------
RECREATION-OTHER-2.37%
American Ski Co. East
Term Loan due 05/31/06 NR 1,414,286 1,386,000
- -------------------------------------------------------------------
American Ski Co. West
Term Loan due 05/31/06 NR 3,538,095 3,467,333
- -------------------------------------------------------------------
KSL Recreation Group Inc.
Revolving Credit due
04/30/03 B2 4,040,816 2,220,061
- -------------------------------------------------------------------
Term Loan A due
04/30/05 B2 700,000 695,187
- -------------------------------------------------------------------
Term Loan B due
04/30/06 B2 700,000 695,625
- -------------------------------------------------------------------
8,464,206
- -------------------------------------------------------------------
RESTAURANTS-1.39%
AFC Enterprises, Inc.
Term Loan B due
06/30/04 Ba3 4,962,500 4,967,155
- -------------------------------------------------------------------
RETAILERS-SPECIALTY-1.39%
General Nutrition Co.
Term Loan due 03/31/02 NR 5,000,000 4,975,000
- -------------------------------------------------------------------
TELEPHONE SYSTEMS-7.02%
Centennial Cellular Corp.
Term Loan B due
05/31/07 NR 2,487,500 2,501,181
- -------------------------------------------------------------------
Term Loan C due
11/30/07 NR 2,487,500 2,501,181
- -------------------------------------------------------------------
CommNet Cellular Inc.
Term Loan B due
09/30/06 B1 586,527 587,260
- -------------------------------------------------------------------
Term Loan C due
03/31/07 B1 1,161,440 1,162,892
- -------------------------------------------------------------------
Term Loan D due
09/30/07 B1 3,252,033 3,256,098
- -------------------------------------------------------------------
Nextel Communications
Term Loan D due
03/31/07 NR 5,000,000 5,015,000
- -------------------------------------------------------------------
Tritel Holding Corp.
Term Loan B due
03/31/08 NR 5,000,000 5,014,585
- -------------------------------------------------------------------
Western PCS Holding Corp.
Term Loan B due
06/26/07 NR 5,000,000 5,012,500
- -------------------------------------------------------------------
25,050,697
- -------------------------------------------------------------------
TRANSPORTATION EQUIPMENT-0.28%
Johnstown America
Industries
Term Loan B due
04/29/05 B1 1,000,000 1,000,000
- -------------------------------------------------------------------
Total Senior Secured
Floating Rate
Interests (Cost
$336,516,629) 331,676,146
- -------------------------------------------------------------------
COMMERCIAL PAPER-3.19%
Safeway Inc., 6.10%,
07/01/99 (Cost
$11,378,072)(d) NR 11,380,000 11,380,000
- -------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MOODY'S PRINCIPAL MARKET
RATING AMOUNT VALUE
(UNAUDITED)
<S> <C> <C> <C>
REPURCHASE AGREEMENT-2.63%(e)
State Street Bank & Trust
Co., 4.70%, 07/01/99
(Cost $9,403,000)(f) $ 9,403,000 $ 9,403,000
- -------------------------------------------------------------------
TOTAL INVESTMENTS-98.78% 352,459,146
- -------------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.22% 4,349,053
- -------------------------------------------------------------------
NET ASSETS-100% $356,808,199
===================================================================
</TABLE>
Notes to Schedule of Investments.
(a) 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 InterBank 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.
(b) 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.
(c) Non-income producing security: Centennial Resources, Inc. filed for
bankruptcy under Chapter 11 on October 13, 1998.
(d) Commercial paper bought at a discount. In such case the interest rate shown
represents the rate of discount paid or received at the time of purchase by
the Fund.
(e) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value is at least 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(f) Repurchase agreement entered into 6/30/99 with a maturing value of
$9,404,228. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value
(cost $357,299,629) $352,459,146
- ---------------------------------------------------------
Receivables for:
Fund shares sold 3,143,589
- ---------------------------------------------------------
Interest 2,563,381
- ---------------------------------------------------------
Prepaid organizational 120,312
- ---------------------------------------------------------
Other assets 71,619
- ---------------------------------------------------------
Total assets 358,358,047
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 901,587
- ---------------------------------------------------------
Deferred facility fees 607,552
- ---------------------------------------------------------
Accrued administrative services fees 8,604
- ---------------------------------------------------------
Accrued transfer agent fees 20,500
- ---------------------------------------------------------
Accrued operating expenses 11,605
- ---------------------------------------------------------
Total liabilities 1,549,848
- ---------------------------------------------------------
Net assets applicable to shares outstanding $356,808,199
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: 36,346,276
=========================================================
Net asset value and redemption price per
share $ 9.82
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $12,890,372
- ---------------------------------------------------------
Facility fees earned 161,452
- ---------------------------------------------------------
Total investment income 13,051,824
- ---------------------------------------------------------
EXPENSES:
Management fees 1,928,942
- ---------------------------------------------------------
Administrative services fees 40,302
- ---------------------------------------------------------
Custodian fees 13,458
- ---------------------------------------------------------
Directors' fees 7,800
- ---------------------------------------------------------
Transfer agent fees 107,207
- ---------------------------------------------------------
Other 277,712
- ---------------------------------------------------------
Total expenses 2,375,421
- ---------------------------------------------------------
Less: Expenses paid indirectly (3,197)
- ---------------------------------------------------------
Net expenses 2,372,224
- ---------------------------------------------------------
Net investment income 10,679,600
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES:
Net realized gain (loss) from investment
securities (471,979)
- ---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (328,014)
- ---------------------------------------------------------
Net gain (loss) from investment
securities (799,993)
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 9,879,607
=========================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1999 and the year ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 10,679,600 $ 15,638,616
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (471,979) 10,508
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (328,014) (4,634,050)
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 9,879,607 11,015,074
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (10,670,415) (15,477,327)
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities -- (150,555)
- --------------------------------------------------------------------------------------------
Share transactions-net 69,525,441 130,989,233
- --------------------------------------------------------------------------------------------
Net increase in net assets 68,734,633 126,376,425
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 288,073,566 161,697,141
- --------------------------------------------------------------------------------------------
End of period $356,808,199 $288,073,566
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $361,939,678 $292,414,237
- --------------------------------------------------------------------------------------------
Undistributed net investment income 170,474 161,289
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (461,470) 10,509
- --------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (4,840,483) (4,512,469)
- --------------------------------------------------------------------------------------------
$356,808,199 $288,073,566
============================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Floating Rate Fund (the "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 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 the Portfolio. At June 30, 1999,
all of the shares of beneficial interest of the Portfolio were owned either by
the Fund or INVESCO (NY), 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 Fund and Portfolio 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
INVESCO Senior Secured Management, Inc., (the "Sub-Adviser").
When possible, A I M Advisors, Inc. ("AIM") or the Sub-Adviser 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 Sub-Adviser, 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
Sub-Adviser considers, among other factors, (i) the credit worthiness of
the U.S. or non-U.S. Company borrowing or issuing Corporate Debt Securities
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, and period until next interest rate reset and
maturity.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Such distributions are
declared daily and paid monthly.
C. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Intermediate Participants -- The Portfolio invests primarily in Corporate
Loans from U.S. or non-U.S. companies (the "Borrowers"). The investment of
the Portfolio in a Corporate Loan may take the form of participation
interests or assignments. If the Portfolio purchases a participation
interest from a syndicate of lenders ("Lenders") or one of the participants
in the syndicate ("Participant"), 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 Corporate Loans. As such, the Portfolio is subject to the credit risk
of the Borrower and a Participant. Lenders and Participants interposed
between the Portfolio and a Borrower, together with Agent Banks, are
referred to as "Intermediate Participants".
E. 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 Schedule of Investments. The Portfolio has set aside
sufficient cash or liquid high grade debt securities as collateral for
these purchase commitments.
F. Deferred Organizational Expenses -- Expenses incurred by the Fund or
Portfolio in connection with its organization aggregated $212,350. These
expenses are being amortized on a straightline basis over a five-year
period.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's and the Portfolio's investment
manager and administrator. The Fund pays AIM fees at an annual rate of 0.25% of
the Fund's average daily net assets. The Portfolio pays AIM fees at an annual
rate of 0.95% of the Portfolio's average daily net assets. AIM has contractually
agreed to
10
<PAGE> 13
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.
A I M Fund Services, Inc. ("AFS") is the transfer agent of the Fund. The Fund,
pursuant to a transfer agency and service agreement, has agreed to pay AFS a fee
for providing transfer agency and shareholder services to the Fund. During the
six months ended June 30, 1999, AFS was paid $107,207 for such services.
A I M Distributors, Inc. serves as the Fund's distributor. AIM Distributors
did not receive any commissions from sales of the Class A shares of the Fund
during the six months ended June 30, 1999. Such commissions are not an expense
of the Fund. They are deducted from, and are not included in, the proceeds from
sales of Class A shares. During the six months ended June 30, 1999, AIM
Distributors received $407,460 in contingent deferred sales charges imposed on
redemptions of Fund shares. Certain Directors of the Company are officers and
directors of AIM, AIM Distributors and AFS.
AIM is the pricing and accounting agent for the Fund. The monthly fee for
these services to AIM is a percentage, not to exceed 0.03% annually, of the
Fund's average daily net assets. The annual fee rate is derived based on the
aggregate net assets of the funds which comprise the following investment
companies: AIM Growth Series, AIM Investment Funds, AIM Series Trust, G.T.
Global Variable Investment Series and G.T. Global Variable Investment Trust. The
fee is calculated at the rate of 0.03% to the first $5 billion of assets and
0.02% to the assets in excess of $5 billion. An amount is allocated to and paid
by each such fund based on its relative average daily net assets. Effective July
1, 1999, the Company entered into a master administration services agreement
with AIM, replacing the above pricing and accounting agreement. The Fund has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund.
NOTE 3-INDIRECT EXPENSES
During the six months ended June 30, 1999, the Fund received reductions in
custodian fees of $3,197 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $3,197
during the six months ended June 30, 1999.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid to trustees who are not an
"interested person" of AIM.
NOTE 5-BANK BORROWINGS
The Fund, along with certain other funds advised and/or administered by AIM, has
lines of credit with BankBoston and State Street Bank & Trust Company. The
arrangements with the banks allow the Fund and certain other funds to borrow, on
a first come, first served basis, an aggregate maximum amount of $250,000,000.
The Fund is limited to borrowing up to 33 1/3% of the Fund's total assets.
Effective May 28, 1999, the above lines of credit were replaced by the Fund's
participation in a committed line of credit facility with a syndicate
administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser
of (i) $975,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. The funds which are party to the
line of credit are charged a commitment fee of 0.09% on the unused balance of
the committed line. The commitment fee is allocated among the funds based on
their respective average net assets for the period. During the six months ended
June 30, 1999 the Fund did not borrow under the line of credit.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the six months ended June 30, 1999
was $159,514,511 and $92,121,888, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $ 824,584
- ----------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (5,665,067)
- ----------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investment securities $ (4,840,483)
================================================================
</TABLE>
Investments have the same cost for tax and financial statement
purposes.
NOTE 7-SHARE INFORMATION
Changes in the Fund's shares outstanding during the six months ended June 30,
1999 and the year ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 8,478,817 $ 83,343,072 16,339,303 $162,694,934
- ----------------------------------------------------------------------------
Issued as
reinvestment of
dividends 583,017 5,731,369 741,971 7,380,819
- ----------------------------------------------------------------------------
Reacquired (1,989,819) (19,549,000) (3,940,550) (39,086,520)
============================================================================
7,072,015 $ 69,525,441 13,140,724 $130,989,233
============================================================================
</TABLE>
NOTE 8-UNFUNDED LOAN COMMITMENTS
As of June 30, 1999, the fund had unfunded loan commitments of $5,642,653, which
would be extended at the option of the borrower, pursuant to the following loan
agreements:
<TABLE>
<CAPTION>
UNFUNDED
BORROWER COMMITMENTS
- -------- -----------
<S> <C>
American Safety Razor Co. $3,850,000
- -------------------------------------------------------------
KSL Recreation Group Inc. 1,792,653
=============================================================
$5,642,653
=============================================================
</TABLE>
NOTE 9-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.
11
<PAGE> 14
NOTE 10-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Capital Stock
outstanding during the six months ended June 30, 1999, the year ended December
31, 1998 and the period May 1, 1997 (date operations commenced) through December
31, 1997.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, -------------------
1999 1998(a) 1997(a)
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.84 $ 10.02 $ 10.00
- ------------------------------------------------------------ -------- -------- --------
Income from investment operations:
Net investment income 0.32 0.68 0.46
- ------------------------------------------------------------ -------- -------- --------
Net realized and unrealized gain (loss) on investments (0.02) (0.18) 0.02
- ------------------------------------------------------------ -------- -------- --------
Net increase (decrease) from investment operations 0.30 0.50 0.48
- ------------------------------------------------------------ -------- -------- --------
Distributions to shareholders:
- ------------------------------------------------------------ -------- -------- --------
From net investment income (0.32) (0.67) (0.46)
- ------------------------------------------------------------ -------- -------- --------
From net realized gains -- (0.01) --
- ------------------------------------------------------------ -------- -------- --------
Total distributions (0.32) (0.68) (0.46)
- ------------------------------------------------------------ -------- -------- --------
Net asset value, end of period $ 9.82 $ 9.84 $ 10.02
============================================================ ======== ======== ========
Total return(b) 3.14% 5.25% 5.04%
============================================================ ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $356,808 $288,074 $161,697
============================================================ ======== ======== ========
Ratio of net investment income to average net assets:
With fee waivers 6.64% 6.88% 7.26%
============================================================ ======== ======== ========
Without fee waivers 6.64% 6.75% 6.24%
============================================================ ======== ======== ========
Ratio of expenses to average net assets excluding interest
expense:
With fee waivers 1.48% 1.50% 1.50%
============================================================ ======== ======== ========
Without fee waivers 1.48% 1.63% 2.52%
============================================================ ======== ======== ========
Ratio of interest expense to average net assets (Note 5) -- 0.01% 0.15%
============================================================ ======== ======== ========
Portfolio turnover rate 29% 75% 118%
============================================================ ======== ======== ========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not withdrawal charges and is not annualized for periods less than one
year.
(c) Ratios are annualized and based on average net assets of $324,154,620.
(d) Annualized.
12
<PAGE> 15
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham SUB-ADVISOR
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President INVESCO Senior Secured Management, Inc.
1166 Avenue of the Americas
Arthur C. Patterson Carol F. Relihan New York, NY 11036
Managing Partner, Accel Partners Vice President
(a venture capital firm) SUB-SUB-ADVISOR
Mary J. Benson
Ruth H. Quigley Assistant Vice President and INVESCO (NY), Inc.
Private Investor Assistant Treasurer 1166 Avenue of the Americas
New York, NY 10036
Sheri Morris
Assistant Vice President and TRANSFER AGENT
Assistant Treasurer
A I M Fund Services, Inc.
Nancy L. Martin P.O. Box 4739
Assistant Secretary Houston, TX 77210-4739
Ofelia M. Mayo CUSTODIAN
Assistant Secretary
State Street Bank and Trust Company
Kathleen J. Pflueger 225 Franklin Street
Assistant Secretary Boston, MA 02110
COUNSEL TO THE FUND
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL TO THE DIRECTORS
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Money Market Fund provided leadership in the
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund mutual-fund industry since 1976 and
AIM Capital Development Fund managed approximately $121 billion
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS in assets for more than 6.3 million
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund shareholders, including individual
AIM Large Cap Growth Fund AIM Asian Growth Fund investors, corporate clients and
AIM Mid Cap Equity Fund(A) AIM Developing Markets Fund financial institutions, as of June
AIM Select Growth Fund AIM Europe Growth Fund 30, 1999.
AIM Small Cap Growth Fund(B) AIM European Development Fund The AIM Family of
AIM Small Cap Opportunities Fund AIM International Equity Fund Funds--Registered Trademark-- is
AIM Value Fund AIM Japan Growth Fund distributed nationwide, and AIM
AIM Weingarten Fund AIM Latin American Growth Fund today is the 10th-largest
AIM New Pacific Growth Fund mutual-fund complex in the United
GROWTH & INCOME FUNDS States in assets under management,
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS according to Strategic Insight, an
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund independent mutual-fund monitor.
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Balanced Fund
AIM Basic Value Fund(C) GLOBAL GROWTH & INCOME FUNDS
AIM Charter Fund AIM Global Growth & Income Fund
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(D)
AIM High Yield Fund II AIM Global Government Income Fund
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund
AIM High Income Municipal Fund AIM Global Financial Services Fund
AIM Municipal Bond Fund AIM Global Health Care Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund
AIM Tax-Free Intermediate Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(E)
AIM Global Trends Fund(F)
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors November 16, 1998. (A)
On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap Equity
Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM Small
Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was renamed
AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income Fund was
renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F) On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends Fund. For more complete information about any AIM Fund(s), including
sales charges and expenses, ask your financial consultant or securities dealer
for a free prospectus(es). Please read the prospectus(es) carefully before you
invest or send money.
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