<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 3, 1999
SECURITIES ACT FILE NO. 333-72419
INVESTMENT COMPANY ACT FILE NO. 811-08485
------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934)
GT GLOBAL FLOATING RATE FUND, INC.
(d/b/a AIM FLOATING RATE FUND)
(Name of Issuer)
GT GLOBAL FLOATING RATE FUND, INC.
(d/b/a AIM FLOATING RATE FUND)
(Name of Person(s) Filing Statement)
SHARES OF COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of Securities)
00141K-10-5
(CUSIP Number of Class of Securities)
ROBERT H. GRAHAM
GT GLOBAL FLOATING RATE FUND, INC.
(d/b/a AIM FLOATING RATE FUND)
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
1-800-347-4246
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
COPIES TO:
ARTHUR J. BROWN, ESQ. OFELIA M. MAYO, ESQ.
R. CHARLES MILLER, ESQ. A I M ADVISORS, INC.
KIRKPATRICK & LOCKHART LLP 11 GREENWAY PLAZA
1800 MASSACHUSETTS AVE. N.W. SUITE 100
WASHINGTON, D.C. 20036 HOUSTON, TEXAS 77046-1173
(713) 626-1919
NOVEMBER 3, 1999
(Date Tender Offer First Published,
Sent or Given to Security Holders)
<PAGE> 2
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Transaction Valuation: $42,812,000 (a) Amount of Filing Fee: $8,562.40 (b)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(a) Calculated as the aggregate maximum purchase price to be paid for
4,400,000 shares in the offer, based upon the net asset value per
share of $9.73 on October 29, 1999.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
-----------------------------------------------------
Form or Registration
No.:
-----------------------------------------------------
Filing Party:
-----------------------------------------------------
Date of Filing:
-----------------------------------------------------
- -------------------------------------------------------------------------------
2
<PAGE> 3
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is GT Global Floating Rate Fund, Inc., doing
business as AIM Floating Rate Fund, a closed-end investment company organized as
a Maryland corporation (the "Fund"). The principal executive offices of the Fund
are located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
(b) The title of the securities being sought is shares of common stock, par
value $0.001 per share (the "Shares"). As of October 29, 1999 there were
approximately 43,651,416 Shares issued and outstanding.
The Fund is seeking tenders for up to 4,400,000 Shares (the "Offer"), at
net asset value per Share (the "NAV") calculated on the day the tender offer
terminates, less any "Early Withdrawal Charge," upon the terms and subject to
the conditions set forth in the Offer to Purchase dated November 3, 1999 (the
"Offer to Purchase"). A copy of each of the Offer to Purchase and the related
Letter of Transmittal is attached hereto as Exhibit (a)(1)(ii) and Exhibit
(a)(2), respectively. Reference is hereby made to the Cover Page and Section 1
("Price; Number of Shares") of the Offer to Purchase, which are incorporated
herein by reference. The Fund has been informed that no other Director, officer
or affiliate of the Fund intends to tender Shares pursuant to the Offer.
(c) The Shares are not currently traded on an established trading market.
(d) Not Applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to Section 10 "Source and Amount of Funds"
of the Offer to Purchase, which is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is hereby made to Section 8 ("Purpose of the Offer"), Section 9
("Certain Effects of the Offer") and Section 10 ("Source and Amount of Funds")
of the Offer to Purchase, which are incorporated herein by reference. The Fund
is currently engaged in a public offering, from time to time, of its Shares. On
September 28, 1999, the Fund's Board of Directors approved a restructuring
proposal (the "Restructuring Proposal") for the Fund. The Restructuring Proposal
would reorganize the Fund as a Delaware business trust and would convert the
Fund to "interval" status under Rule 23c-3 of the Investment Company Act of
1940, as amended (the "1940 Act"), which would require the Fund to conduct
quarterly repurchase offers for a portion of its outstanding shares. In
addition, the Restructuring Proposal would eliminate the Fund's current
master-feeder structure and would permit the fund to issue multiple classes of
shares. The Restructuring Proposal will require the approval of Fund
shareholders pursuant to a proxy statement and special meeting. It is currently
anticipated that the Restructuring Proposal will be submitted to shareholders
during the first quarter of the year 2000 and that, if approved by shareholders,
the Restructuring Proposal would be implemented by the end of the first quarter
of 2000.
Except as discussed above, the Fund otherwise has no plans or proposals
which relate to or would result in (a) the acquisition by any person of
additional securities of the Fund or the disposition of securities of the Fund;
(b) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Fund; (c) a sale or transfer of a material amount of
assets of the Fund; (d) any change in the present Board of Directors or
management of the Fund, including, but not limited to, any plans or proposals to
change the number or the term of Directors, or to fill any existing vacancy on
the Board or to change any material term of the employment contract of any
executive officer; (e) any material change in the present dividend rate or
policy, or indebtedness or capitalization of the Fund; (f) any other material
change in the Fund's corporate structure or business, including any plans or
proposals to make any changes in its investment policy for which a vote would be
required by Section 13 of the 1940 Act; or (g) changes in the Fund's articles of
incorporation, bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Fund by any person.
Paragraphs (h) through (j) of this Item 3 are not applicable.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Except for the issuance by the Fund of approximately 3,373,009 Shares during
the past 40 business days, all at prices equal to NAV on the date of sale, and
the Fund's purchase of approximately 1,341,741 Shares in its last offer to
purchases which expired on September 10, 1999 there have not been any
transactions involving the Shares of the Fund that were effected during the past
40 business days by the Fund, any executive officer or Director of the Fund, any
person controlling the Fund, any executive officer or director of any
corporation ultimately in control of the Fund or by any associate or subsidiary
of any of the foregoing including any executive officer or director of any such
subsidiary.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The Fund does not know of any contract, arrangement, understanding or
relationship relating directly or indirectly, to the Offer (whether or not
legally enforceable) between the Fund, any of the Fund's executive officers or
Directors, any person controlling the Fund or any executive officer or director
of any corporation ultimately in control of the Fund and any person with respect
to any securities of the Fund (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss, or the giving or
withholding of proxies, consents or authorizations).
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
No persons have been employed, retained or are to be compensated by the Fund
to make solicitations or recommendations in connection with the Offer.
ITEM 7. FINANCIAL INFORMATION.
(a) Reference is hereby made to the financial statements included as Exhibit
(g)(1) hereto, which are incorporated herein by reference.
(b) None.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
(b) None.
(c) Not applicable.
(d) None.
(e) None.
The Offer to Purchase, attached hereto as Exhibit (a)(1)(ii), is
incorporated herein by reference in its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1)(i) Advertisement to be printed in THE NEW YORK TIMES.
(a)(1)(ii) Offer to Purchase.
(a)(2) Form of Letter of Transmittal.
(a)(3) Letter to Shareholders.
(b)(1) Amended and Restated Credit Agreement by and among The Chase
Manhattan Bank, State Street Bank and Trust Company and certain AIM
Funds*.
(b)(2) First Amendment Agreement to the Amended and Restated Credit
Agreement by and among The Chase Manhattan Bank, State Street Bank
and Trust Company and certain AIM Funds*.
(c)-(f) Not Applicable.
(g)(1) Audited Financial Statements of the Fund for the year ended December
31, 1998.
(g)(2) Unaudited Financial Statements of the Fund for the six
months ended June 30, 1999.
-------------------
* Previously filed in the Fund's Issuer Tender Offer Statement as
filed with the Securities and Exchange Commission on August 12,
1999.
3
<PAGE> 4
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
GT GLOBAL FLOATING RATE FUND, INC.
(d/b/a AIM FLOATING RATE FUND)
By: /s/ OFELIA M. MAYO
-----------------------------
Ofelia M. Mayo, Assistant
Secretary
November 3, 1999
4
<PAGE> 5
EXHIBIT INDEX
EXHIBIT
- ----------
(a)(1)(i) Advertisement to be printed in THE NEW YORK TIMES.
(a)(1)(ii) Offer to Purchase.
(a)(2) Form of Letter of Transmittal.
(a)(3) Letter to Shareholders.
(g)(1) Audited Financial Statements of the Fund for the year ended
December 31, 1998.
(g)(2) Unaudited Financial Statements of the Fund for the six months ended
June 30, 1999.
<PAGE> 1
EXHIBIT (a)(1)(i)
THIS ANNOUNCEMENT IS NOT AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS MADE ONLY BY THE OFFER TO PURCHASE
DATED NOVEMBER 3, 1999, AND THE RELATED LETTER OF TRANSMITTAL.
NOTICE OF OFFER TO PURCHASE FOR CASH
4,400,000 OF THE ISSUED AND OUTSTANDING SHARES OF
AIM FLOATING RATE FUND
AT NET ASSET VALUE PER SHARE
AIM Floating Rate Fund (the "Fund") is offering to purchase 4,400,000 of its
issued and outstanding shares ("Shares") at a price equal to its net asset value
("NAV"), less any applicable early withdrawal charge, as of the close of the New
York Stock Exchange on the Expiration Date, December 3, 1999. The Offer will
expire at 5:00 p.m., New York City time on that date, unless extended, upon the
terms and conditions set forth in the Offer to Purchase dated November 3, 1999
and the related Letter of Transmittal, which together constitute the "Offer."
The Fund's NAV was $9.73 per Share as of October 29, 1999. The applicable early
withdrawal charge will be deducted from the proceeds of Shares tendered. The
purpose of the Offer is to provide liquidity to shareholders since the Fund is
unaware of any secondary market which exists for the Shares. The Offer is not
conditioned upon the tender of any minimum number of Shares.
If more than the number of Shares contemplated by this Offer are duly tendered
prior to the expiration of the Offer, assuming no changes in the factors
originally considered when the decision to make the Offer was made, the Fund
will either (1) extend the Offer period, if necessary, and increase the number
of Shares that the Fund is offering to purchase to an amount which it believes
will be sufficient to accommodate the excess Shares tendered as well as any
additional Shares that may be tendered during the extended Offer period or (2)
purchase the number of Shares sought on a pro rata basis.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to 5:00
p.m., New York City time, on December 3, 1999, and, if not yet accepted for
payment by the Fund, Shares may also be withdrawn after January 5, 2000.
The information required to be disclosed by paragraph (d)(1) of Rule 13e-4 under
the Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Requests for free copies of the Offer to Purchase, Letter of Transmittal and any
other tender offer documents may be directed to the address and telephone number
below. Shareholders who do not own Shares directly should effect a tender
through their broker, dealer or nominee.
[LOGO] AIM FLOATING RATE FUND
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
(800) 959-4246
November 3, 1999
<PAGE> 1
EXHIBIT (a)(1)(ii)
AIM FLOATING RATE FUND
------------------------------
OFFER TO PURCHASE FOR CASH AT NET ASSET VALUE UP TO 4,400,000
OF ITS ISSUED AND OUTSTANDING COMMON SHARES
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M.,
NEW YORK CITY TIME, ON DECEMBER 3, 1999, UNLESS EXTENDED.
------------------------------
To the Holders of Shares of AIM FLOATING RATE FUND:
Commencing November 3, 1999, the Fund is offering to purchase up to
4,400,000 of its shares of common stock, par value $.001 per share (the
"Shares"), for cash at a price equal to their net asset value ("NAV"), less any
applicable Early Withdrawal Charge, as of the close of regular trading on the
New York Stock Exchange on December 3, 1999 (the "Initial Expiration Date"),
unless extended, upon the terms and conditions set forth in this Offer to
Purchase (the "Offer") and the related Letter of Transmittal.
The Shares are not traded on an established secondary market and, to
provide liquidity to Fund shareholders, the Fund's board of directors (the
"Board") presently intends each quarter to consider making a tender offer for
all or a portion of its Shares at a price per Share equal to its then current
NAV, less any applicable early withdrawal charge. The NAV on October 29, 1999
was $9.73 per Share. You may obtain current NAV quotations during the pendency
of the Offer by calling (800) 959-4246.
If more than the number of Shares contemplated by this Offer are duly
tendered prior to the expiration of the Offer, assuming no changes in the
factors originally considered by the Board when it determined to make the Offer,
the Fund will either (1) extend the Offer period, if necessary, and increase the
number of Shares that the Fund is offering to purchase to an amount which it
believes will be sufficient to accommodate the excess Shares tendered as well as
any additional Shares that may be tendered during the extended Offer period or
(2) purchase the number of Shares sought on a pro rata basis.
THIS OFFER IS BEING MADE TO ALL SHAREHOLDERS OF THE FUND AND IS NOT
CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
IMPORTANT: If you desire to tender all or any portion of your Shares, you
should do one of the following: (1) if you own your Shares through a broker,
dealer, commercial bank, trust company or other nominee (each a "Nominee"),
request your Nominee to effect the transaction for you or (2) if you own your
Shares directly, complete and sign the Letter of Transmittal and mail or deliver
it along with any Share certificate(s) and any other required documents to the
Fund's transfer agent, A I M Fund Services, Inc. (the "Transfer Agent"). If your
Shares are registered in the name of a Nominee, you must contact such Nominee if
you desire to tender your Shares.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
SHAREHOLDER MUST MAKE HIS OWN DECISION WHETHER TO TENDER SHARES, AND IF SO, HOW
MANY SHARES TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
FUND AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER. NO
PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH
<PAGE> 2
RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUND.
Questions, requests for assistance and requests for additional copies of
this Offer to Purchase and the Letter of Transmittal may be directed to the
Transfer Agent at (800) 959-4246 or at the address set forth below:
A I M Fund Services, Inc.
11 Greenway Plaza
Suite 100
Houston, Texas 77046-1173
AIM FLOATING RATE FUND
November 3, 1999
2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTIONS PAGE
-------- ----
<S> <C>
1. Price; Number of Shares................................ 4
2. Procedure for Tendering Shares......................... 4
3. Early Withdrawal Charge................................ 5
4. Exchanges.............................................. 6
5. Withdrawal Rights...................................... 6
6. Payment for Shares..................................... 6
7. Certain Conditions of the Offer........................ 7
8. Purpose of the Offer................................... 7
9. Certain Effects of the Offer........................... 7
10. Source and Amount of Funds............................. 7
11. Summary of Selected Financial Information.............. 8
12. Certain Information About the Fund..................... 9
13. Additional Information................................. 10
14. Certain Federal Income Tax Consequences................ 10
15. Extension of Tender Period; Termination; Amendments.... 11
16. Miscellaneous.......................................... 12
</TABLE>
3
<PAGE> 4
1. PRICE; NUMBER OF SHARES. The Fund will, upon the terms and subject to
the conditions of the Offer, purchase up to 4,400,000 of its issued and
outstanding Shares which are tendered and not withdrawn prior to 5:00 P.M., New
York City time, on December 3, 1999 (such time and date being hereinafter
called the "Initial Expiration Date"), unless it determines to accept none of
them. The Fund reserves the right to extend the Offer (see Section 15). The
later of the Initial Expiration Date or the latest time and date to which the
Offer is extended is hereinafter called the "Expiration Date." The purchase
price of the Shares will be their NAV as of the close of regular trading on the
New York Stock Exchange on the Expiration Date. An Early Withdrawal Charge
payable to A I M Distributors, Inc. ("AIM Distributors") to recover its
distribution expenses will be assessed on Shares accepted for purchase which
have been held for less than the applicable holding period (see Section 3).
The Offer is being made to all shareholders of the Fund and is not
conditioned upon any number of Shares being tendered. If more than the number of
Shares sought by the Fund are duly tendered prior to the expiration of the
Offer, assuming no changes in the factors originally considered by the Board
when it determined to make the Offer, the Fund will either (1) extend the Offer
period, if necessary, and increase the number of Shares that the Fund is
offering to purchase to an amount which it believes will be sufficient to
accommodate the excess Shares tendered as well as any additional Shares that may
be tendered during the extended Offer period or (2) purchase the number of
Shares sought on a pro rata basis.
The Fund reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Transfer Agent and making
a public announcement thereof (see Section 15). There is no assurance, however,
that the Fund will exercise its right to extend the Offer. If the Fund decides,
in its sole discretion, to increase (except for any increase not in excess of 2%
of the outstanding Shares) or decrease the number of Shares being sought and, at
the time that notice of such increase or decrease is first published, sent or
given to holders of Shares in the manner specified below, the Offer is scheduled
to expire at any time earlier than the tenth business day from the date that
such notice is first so published, sent or given, the Offer will be extended at
least until the end of such ten business day period.
As of October 29, 1999 there were approximately 43,651,416 Shares issued
and outstanding and there were 11,326 record holders of Shares. The Fund has
been informed that no other director, officer or affiliate of the Fund intends
to tender any Shares pursuant to the Offer. The Shares currently are not traded
on any established secondary market. Current NAV quotations for the Shares can
be obtained by calling the Transfer Agent at (800) 959-4246.
2. PROCEDURE FOR TENDERING SHARES. In order for you to tender any of your
Shares pursuant to the Offer, you may either: (a) request your Nominee to effect
the transaction for you, in which case a Letter of Transmittal is not required
or (b) if the Shares are registered in your name, send to the Transfer Agent, at
the address set forth below, any certificates for such Shares, a properly
completed and executed Letter of Transmittal and any other documents required
therein. Please contact the Transfer Agent at (800) 959-4246 as to any
additional documents which may be required.
A. Procedures for Beneficial Owners Holding Shares through Brokers,
Dealers, or other Nominees. If your Shares are registered in the name of a
Nominee, you must contact such Nominee if you desire to tender your Shares. You
should contact such Nominee in sufficient time to permit notification of your
desire to tender to reach the Transfer Agent by the Expiration Date. No
brokerage commission will be charged on the purchase of Shares by the Fund
pursuant to the Offer. However, a broker or dealer may charge a fee for
processing the transaction on your behalf.
B. Procedures for Registered Shareholders. If you will be mailing or
delivering the Letter of Transmittal and any other required documents to the
Transfer Agent to tender your Shares, they must be received on or prior to the
Expiration Date by the Transfer Agent at its address set forth below.
Signatures on the Letter of Transmittal are not required to be guaranteed
unless (1) the proceeds for the tendered Shares will amount to more than
$50,000, (2) the Letter of Transmittal is signed by someone other than the
registered holder of the Shares tendered therewith, or (3) payment for tendered
Shares is to be sent
4
<PAGE> 5
to a payee other than the registered owner of such Shares or to an address other
than the registered address of the registered owner of the Shares. In each of
those instances, all signatures on the Letter of Transmittal must be guaranteed
by an "eligible guarantor institution," as such term is defined in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
existence and validity of which may be verified by the Transfer Agent through
the use of industry publications; notarized signatures are not sufficient.
Please note that those shareholders holding Shares in an Individual
Retirement Account ("IRA") that mail or deliver a Letter of Transmittal to
tender Shares must also provide the Transfer Agent with a completed IRA
distribution form.
Payment for Shares tendered and purchased will be made only after receipt
by the Transfer Agent on or before the Expiration Date of a properly completed
and duly executed Letter of Transmittal and any other required documents. If
your Shares are evidenced by certificates, those certificates must also be
received by the Transfer Agent on or prior to the Expiration Date.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE ELECTION AND RISK OF THE PARTY TENDERING THE SHARES. IF DOCUMENTS ARE
SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED.
C. Determinations of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined by it not to be in appropriate form or the acceptance of or
payment for which would, in the opinion of counsel for the Fund, be unlawful.
The Fund also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender with respect to any particular Shares or any
particular shareholder, and the Fund's interpretations of the terms and
conditions of the Offer will be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such times as the
Fund shall determine. Tendered Shares will not be accepted for payment unless
the defects or irregularities have been cured within such time or waived.
Neither the Fund, the Transfer Agent nor any other person shall be obligated to
give notice of any defects or irregularities in tenders, nor shall any of them
incur any liability for failure to give such notice.
D. Tender Constitutes an Agreement. A tender of Shares made pursuant to any
one of the procedures set forth above will constitute an agreement between the
tendering shareholder and the Fund in accordance with the terms and subject to
the conditions of the Offer.
3. EARLY WITHDRAWAL CHARGE. The Fund will assess an Early Withdrawal Charge
on Shares accepted for purchase which have been held for less than four years.
The charge will be paid to AIM Distributors to recover its distribution
expenses. The Early Withdrawal Charge will be imposed on those Shares accepted
for tender based on an amount equal to the lesser of the then current NAV of the
Shares or the shareholder's cost of the Shares being tendered. Accordingly, the
Early Withdrawal Charge will not be imposed on increases in the NAV above the
initial purchase price. In addition, the Early Withdrawal Charge will not be
imposed on Shares derived from reinvestments of dividends or capital gain
distributions. The Early Withdrawal Charge imposed will vary depending on the
length of time the Shares have been owned since purchase (separate purchases
shall not be aggregated for these purposes), as set forth in the following
table:
<TABLE>
<CAPTION>
EARLY WITHDRAWAL CHARGE
YEAR OF TENDER AFTER PURCHASE (AS A PERCENTAGE OF NAV)
- ----------------------------- ------------------------
<S> <C>
First....................................................... 3.0%
Second...................................................... 2.5%
Third....................................................... 2.0%
Fourth...................................................... 1.0%
Fifth and following......................................... 0.0%
</TABLE>
5
<PAGE> 6
In determining whether an Early Withdrawal Charge is applicable to a tender
of Shares, the calculation will be determined in the manner that results in the
lowest possible amount being charged. Therefore, it will be assumed that the
tender is first of Shares acquired through dividend reinvestment and of Shares
held for over four years and then of Shares held longest during the four-year
period. The Early Withdrawal Charge will not be applied to dollar amounts
representing an increase in the NAV since the time of purchase.
4. EXCHANGES. Tendering shareholders may, instead of receiving the proceeds
from the tender of Shares of the Fund in cash, elect to have those proceeds
invested in Class B shares that are subject to a contingent deferred sales
charge ("Class B shares") of certain open-end investment companies ("AIM Funds")
managed or advised by A I M Advisors, Inc. ("AIM Advisors") purchased at their
respective NAVs determined on the Expiration Date. The Early Withdrawal Charge
will be waived for Shares tendered in exchange for Class B shares in the AIM
Funds; however, such Class B shares will immediately become subject to a
contingent deferred sales charge equivalent to the Early Withdrawal Charge on
Shares of the Fund. Thus, such Class B shares may be subject to a contingent
deferred sales charge upon a subsequent redemption from the AIM Funds. The
purchase of such Class B shares will be deemed to have occurred at the time of
the Fund's purchase of the Shares pursuant to the Offer for purposes of
calculating the applicable contingent deferred sales charge.
The prospectus for each AIM Fund describes its investment objectives and
policies. Shareholders can obtain a prospectus without charge by calling (800)
347-4246 and should consider these objectives and policies carefully before
requesting an exchange. Each tender for an exchange must involve proceeds from
Shares that have a NAV of at least $500.
5. WITHDRAWAL RIGHTS. You may withdraw Shares tendered at any time prior to
the Expiration Date and, if the Shares have not yet been accepted for payment by
the Fund, at any time after January 5, 2000.
To be effective, any notice of withdrawal must be timely received by the
Transfer Agent at the address set forth below. Any notice of withdrawal must
specify the name of the person having deposited the Shares to be withdrawn, the
number of Shares to be withdrawn, and, if the certificates representing such
Shares have been delivered or otherwise identified to the Transfer Agent, the
name of the registered holder(s) of such Shares as set forth in such
certificates and the number of Shares to be withdrawn. If the certificates have
been delivered to the Transfer Agent, then, prior to the release of such
certificate, you must also submit the certificate numbers shown on the
particular certificates evidencing such Shares and the signature on the notice
of the withdrawal must be guaranteed by an eligible guarantor institution.
Shareholders whose accounts are maintained through a Nominee should notify such
nominee prior to the Expiration Date if they wish to withdraw Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Fund in its sole discretion,
which determination shall be final and binding. Shares properly withdrawn shall
not thereafter be deemed to be tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by following one of the procedures described
in Section 2 prior to the Expiration Date.
6. PAYMENT FOR SHARES. For purposes of the Offer, the Fund will be deemed
to have accepted for payment (and thereby purchased) Shares that are tendered as
of the time that it gives, if and when it gives, oral or written notice to the
Transfer Agent of its election to purchase such Shares. Upon the terms and
subject to the conditions of the Offer, the Fund will accept for payment (and
thereby purchase) promptly after the Expiration Date Shares properly tendered.
As directed by the Fund, the Transfer Agent will send payment for the
Shares directly to tendering shareholders, or in the case of tendering
shareholders electing an exchange in lieu of cash, directly to the Class B share
account of the designated AIM Funds. Certificates for Shares not purchased, or
for Shares not tendered included in certificates forwarded to the Transfer
Agent, will be returned promptly following the termination, expiration or
withdrawal of the Offer, without expense to the tendering shareholder.
The Fund will pay all transfer taxes, if any, payable on the transfer to it
of Shares purchased pursuant to the Offer. If tendered certificates are
registered in the name of any person other than the person signing the
6
<PAGE> 7
Letter of Transmittal, the amount of any such transfer taxes (whether imposed on
the registered holder or such other person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. The
Fund will not pay any interest on the purchase price under any circumstances.
7. CERTAIN CONDITIONS OF THE OFFER. The Fund shall not be required to
accept for payment or to pay for any Shares tendered, and may terminate or amend
the Offer or may postpone the acceptance for payment of or payment for Shares
tendered, if: (1) such purchases would impair the Fund's status as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code") (which would cause the Fund's income to be taxed at the corporate level
in addition to the taxation of shareholders who receive dividends from the
Fund); (2) in the judgment of the Board, the Portfolio would not be able to
liquidate portfolio securities in a manner that is orderly and consistent with
the Portfolio's investment objective and policies in order to purchase interests
in the Portfolio tendered by the Fund to effect the Offer; or (3) there is, in
the judgment of the Board, any (a) legal action or proceeding instituted or
threatened challenging the Offer or otherwise materially adversely affecting the
Fund, (b) declaration of a banking moratorium by federal or state authorities or
any suspension of payment by banks in the United States or New York State, that
is material to the Fund, (c) limitation imposed by federal or state authorities
on the extension of credit by lending institutions, (d) commencement of war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States that is material to the Fund, or (e)
other event or condition that would have a material adverse effect on the Fund
or its shareholders if Shares tendered pursuant to the Offer were purchased.
If the Fund determines to amend the Offer or to postpone the acceptance for
payment of or payment for Shares tendered, it will, to the extent necessary,
extend the period of time during which the Offer is open as provided in Section
15. Moreover, if any of the foregoing conditions is modified or waived in whole
or in part at any time, the Fund will promptly make a public announcement of
such modification or waiver and may, depending on the materiality of the
modification or waiver, extend the Offer period as provided in Section 15.
8. PURPOSE OF THE OFFER. Because there is not an active secondary market
in the Fund's Shares, the Board has determined that it would be in the best
interest of shareholders for the Fund to take action to attempt to provide
liquidity to shareholders. To that end, the Board presently intends each
quarter to consider the making of a tender offer to purchase all or a portion
of the Fund's Shares at NAV. The Fund will at no time be required to make any
such tender offer.
NEITHER THE FUND NOR THE BOARD MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER
AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
9. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the
Offer will have the effect of increasing the proportionate interest in the Fund
of shareholders who do not tender their Shares. If you retain your Shares,
however, you will be subject to any increased risks that may result from the
reduction in the Fund's aggregate assets resulting from payment for the Shares,
including, for example, the potential for greater volatility due to decreased
diversification of the Portfolio and higher expenses. However, the Fund believes
that those risks will be reduced to the extent new Shares of the Fund are sold.
All Shares purchased by the Fund pursuant to the Offer will be retired by the
Board.
10. SOURCE AND AMOUNT OF FUNDS. The aggregate purchase price if 4,400,000
Shares are tendered and accepted for payment pursuant to the Offer will be
approximately $42,812,000. The Fund expects to finance the Offer through cash on
hand and through borrowings under the line of credit established by the Fund and
certain other AIM Funds. Currently, the Fund and certain other AIM Funds have a
committed, unsecured line of credit with a syndicate of banks including The
Chase Manhattan Bank, as Administrative Agent, and State Street Bank and Trust
Company, as Operations Agent in the maximum aggregate principal amount of
7
<PAGE> 8
$1,000,000,000. The interest paid under the line of credit is based on one of
the following rates: (i) an adjusted Eurodollar rate based on the London
InterBank Offered Rate plus a reserve percentage established by the Federal
Reserve System plus 0.40%; (ii) ABR, which is, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the prime rate in effect on such day and (b) the federal funds rate in
effect on such day plus 1/2 of 1%; (iii) the federal funds rate plus 0.40%; or
(iv) a swing line rate, which is equal to the federal funds rate plus 0.40%. The
Fund expects to repay any amounts borrowed under the line of credit with the
proceeds of sales of additional Fund Shares or sales of the underlying
securities held by Floating Rate Portfolio (the "Portfolio").
The Fund invests its assets in the Portfolio. In the event that the number
of tendered Shares significantly exceeds 4,400,000 and the Fund determines to
increase the number of Shares sought in the Offer, it may be necessary to sell
underlying securities held by the Portfolio and to conduct a simultaneous tender
offer at the Portfolio level to provide the Fund with additional liquidity.
Under these circumstances, the Fund would tender a portion of its interest in
the Portfolio sufficient to provide the additional liquidity necessary to effect
the Offer.
Under the Investment Company Act of 1940, as amended (the "1940 Act"), the
Fund is not permitted to incur indebtedness unless immediately after such
incurrence the Fund has an asset coverage of 300% of the aggregate outstanding
principal balance of indebtedness. Additionally, under the 1940 Act the Fund may
not declare any dividend or other distribution upon any class of its capital
stock, or purchase any such capital stock, unless the aggregate indebtedness of
the Fund has, at the time of the declaration of any such distribution or at the
time of any such purchase, an asset coverage of at least 300% after deducting
the amount of such distribution or purchase price, as the case may be. If, in
the judgment of the Board, there is not sufficient liquidity of the assets of
the Fund, or availability of funds from borrowings, to pay for tendered Shares,
the Fund may terminate the Offer.
11. SUMMARY OF SELECTED FINANCIAL INFORMATION. Set forth below is a summary
of selected financial information for the Fund for the year ended December 31,
1998 and for the six months ended June 30, 1999 (unaudited). More comprehensive
financial information is included in the Fund's annual audited financial
statements, and semi-annual unaudited financial statements, which have been
filed as an exhibit to the Schedule 13E-4 filed with the Securities and Exchange
Commission (the "SEC") in connection with the Offer. The summary of selected
financial information set forth below is qualified in its entirety by reference
to such documents and the financial information, the notes thereto and related
matter contained therein.
8
<PAGE> 9
SUMMARY OF SELECTED FINANCIAL INFORMATION
(IN 000'S EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS PERIOD
ENDED FOR THE MAY 1, 1997
JUNE 30, YEAR ENDED TO
1999 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCOME STATEMENT
Investment Income......................................... $ 13,052 $ 19,045 $ 6,456
Net Expenses.............................................. 2,372 3,406 1,105
-------- -------- --------
Investment income -- net.................................. $ 10,680 $ 15,639 $ 5,351
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET
Realized gain (loss) on investments -- net................ (472) 10 151
Change in unrealized appreciation on investments -- net... (328) (4,634) 122
FINANCIAL HIGHLIGHTS (AT END OF PERIOD)
Total assets.............................................. $358,858 $289,785 $162,621
Total liabilities......................................... 1,550 1,712 924
-------- -------- --------
Net assets................................................ $356,808 $288,073 161,697
Net asset value per share................................. $ 9.82 $ 9.84 $ 10.02
Shares of common stock.................................... 36,346 29,274 16,134
PER SHARE
Investment income -- net.................................. $ 0.32 $ 0.68 $ 0.46
Realized and unrealized gain (loss) on
investments -- net..................................... (0.02) (0.18) 0.02
Dividends from net investment income to common
shareholders........................................... $ 0.32 $ 0.67 $ 0.46
Dividends from net realized gain on investments........... -- 0.01 --
RATIOS
Total expenses to average net assets:
With expense reimbursement............................. 1.48% 1.50% 1.50%*
Without expense reimbursement.......................... 1.48% 1.63% 2.52%*
Investment income -- net, to average net assets:
With expense reductions................................ 6.64% 6.88% 7.26%*
Without expense reductions............................. 6.64% 6.75% 6.24%*
Interest expense to average net assets.................... -- 0.01% 0.15%*
</TABLE>
- ---------------
*Annualized
12. CERTAIN INFORMATION ABOUT THE FUND. The Fund is a continuously offered,
non-diversified, closed-end management investment company registered under the
1940 Act. The Fund was incorporated under the name "GT Global Floating Rate
Fund, Inc." in the State of Maryland on December 4, 1996 and is authorized under
Maryland law to do business as "AIM Floating Rate Fund." The Fund's investment
objective is to provide as high a level of current income and preservation of
capital as is consistent with investment in senior secured corporate loans
("Corporate Loans") and senior secured debt securities ("Corporate Debt
Securities"). The Fund seeks to achieve its objective by investing all of its
investable assets in the Portfolio, a separate, non-diversified, closed-end
management investment company that has the same investment objective as the
Fund. The Portfolio's investments primarily take the form of assignments of, or
participations in, Corporate Loans made by banks and other financial
institutions and Corporate Debt Securities. It is anticipated that the Corporate
Loans and Corporate Debt Securities will pay interest at rates that float or
reset at a margin above a generally recognized base lending rate such as LIBOR
or the prime rate of a designated U.S. bank. The Portfolio is managed by AIM
Advisors and is sub-advised by INVESCO Senior Secured Management, Inc. ("INVESCO
SSM"), a subsidiary of INVESCO (NY).
On September 28, 1999, the Fund's Board of Directors approved a
restructuring proposal (the "Restructuring Proposal") for the Fund. The
Restructuring Proposal would reorganize the Fund as a Delaware business trust
and would convert the Fund to "interval" status under Rule 23c-3 of the 1940
Act, which would require the Fund to conduct quarterly repurchase offers for a
portion of its outstanding shares. In addition, the Restructuring Proposal would
eliminate the Fund's current master-feeder structure and would permit the fund
to issue multiple classes of shares. The Restructuring Proposal will require the
approval of Fund shareholders pursuant to a proxy statement and special meeting.
It is currently anticipated that the Restructuring Proposal will be submitted to
shareholders during the first quarter of the year 2000 and that, if approved by
shareholders, the Restructuring Proposal would be implemented by the end of the
first quarter of 2000.
9
<PAGE> 10
Except for the issuance by the Fund of approximately 3,373,009 Shares
during the past 40 business days, all at prices equal to NAV on the date of sale
and the Fund's purchase of approximately 1,341,741 Shares in its last offer to
purchase, which expired on September 10, 1999, there have not been any
transactions involving the Shares of the Fund that were effected during the past
40 business days by the Fund, any executive officer or director of the Fund, any
person controlling the Fund, any executive officer or director of any
corporation ultimately in control of the Fund or by any associate or subsidiary
of any of the foregoing including any executive officer or director of any such
subsidiary.
The principal executive offices of the Fund are located at 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1173.
13. ADDITIONAL INFORMATION. The Fund has filed a statement on Schedule
13E-4 with the SEC which includes certain additional information relating to the
Offer. Such material may be inspected and copied at prescribed rates at the
SEC's public reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549; Seven World Trade Center, New York, New York 10048; and Room 3190, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail at prescribed rates from the Public
Reference Branch of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a
general summary of the federal income tax consequences of a sale of Shares
pursuant to the Offer. You should consult your own tax adviser for a complete
description of those consequences to you.
A sale of Shares pursuant to the Offer (regardless whether any of the cash
proceeds thereof are invested in Class B shares of an AIM Fund (see Section 4))
will be a taxable transaction for federal income tax purposes, either an
"exchange" or, under certain circumstances, a "dividend." In general, the
transaction should be treated as an exchange of the tendered Shares under
section 302 of the Code if the payment for the Shares (1) is "substantially
disproportionate" with respect to the shareholder, (2) results in a "complete
redemption" of the shareholder's interest in the Fund, or (3) is "not
essentially equivalent to a dividend" with respect to the shareholder. A
"substantially disproportionate" distribution generally requires a reduction of
at least 20% in the shareholder's proportionate interest in the Fund after all
Shares are tendered. A "complete redemption" of a shareholder's interest
generally requires that all Shares directly owned by or attributed to the
shareholder under section 318 of the Code be disposed of. A distribution "not
essentially equivalent to a dividend" requires that there be a "meaningful
reduction" in the shareholder's interest, which should occur if the shareholder
has a minimal interest in the Fund, exercises no control over Fund affairs and
suffers a reduction in his proportionate interest in the Fund.
If any of these three tests for exchange treatment is met, you will
recognize gain or loss on the Fund's purchase of your Shares equal to the
difference between the amount of cash you receive for those Shares (including
any cash used to purchase Class B shares of AIM Funds) and your adjusted tax
basis for them. That gain or loss will be a capital gain or loss if you held the
Shares as capital assets.
If none of the tests for exchange treatment can be met, you will be treated
as having received a dividend, a return of capital and/or a capital gain,
depending on (1) whether the Fund has sufficient earnings and profits to support
a dividend and (2) your tax basis for the Shares. To the extent the sale of your
Shares is treated as a dividend, your tax basis for the tendered Shares will be
transferred to any remaining Shares you continue to hold. If the sale of Shares
pursuant to the Offer is treated as a dividend to any tendering shareholder, a
constructive dividend may result to a non-tendering shareholder whose
proportionate interest in the Fund's earnings and assets is increased as a
result of the tender.
Accordingly, the difference between dividend and exchange treatment is
important with respect to the amount and character of income that tendering
shareholders are deemed to receive. In addition, while the marginal federal tax
rates for dividends and capital gains remain the same for corporate
shareholders, the top federal tax rate on ordinary income of individuals (39.6%)
exceeds the maximum federal tax rates on their long-term capital gains -- 20%
for individuals' net capital gain recognized on securities held for more than
one year.
10
<PAGE> 11
The Transfer Agent generally will be required to withhold 31% of the gross
proceeds payable to an individual or certain other noncorporate shareholder
pursuant to the Offer unless the shareholder provides a taxpayer identification
number and certifies under penalties of perjury (1) that such number is correct
and (2) either that (a) the shareholder is exempt from backup withholding, (b)
the shareholder is not otherwise subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the Internal Revenue Service
has notified the shareholder that the shareholder is no longer subject to backup
withholding. Foreign shareholders may be required to provide the Transfer Agent
with a completed Form W-8, available from the Transfer Agent, in order to avoid
31% backup withholding.
Unless a reduced rate of withholding or a withholding exemption is
available under an applicable tax treaty, a shareholder who is a nonresident
alien or a foreign entity may be subject to a 30% U.S. withholding tax on the
gross proceeds received by the shareholder from the sale of Shares pursuant to
the Offer if the proceeds are treated as a dividend under the rules described
above. Foreign shareholders should consult their tax advisors regarding
application of these withholding rules.
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. The Fund reserves
the right, at any time and from time to time, to extend the period of time
during which the Offer is pending by making a public announcement thereof. If
the Fund so elects to extend the tender period, the NAV for the Shares tendered
will be determined as of the close of regular trading on the New York Stock
Exchange on the Expiration Date, as extended. During any such extension, all
Shares previously tendered and not purchased or withdrawn will remain subject to
the Offer. The Fund also reserves the right, at any time and from time to time
up to and including the Expiration Date, to (a) terminate the Offer and not to
purchase or pay for any Shares, and (b) amend the Offer in any respect, by
making a public announcement. Such public announcement will be issued no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date and will disclose the approximate number of
Shares tendered as of that date. Without limiting the manner in which the Fund
may choose to make a public announcement of extension, termination or amendment,
except as provided by applicable law or regulation (including Rule 13e-4(e)(2)
under the Exchange Act), the Fund shall have no obligation to publish, advertise
or otherwise communicate any such public announcement, other than by making a
release to the Dow Jones News Service.
If the Fund materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Fund will extend the Offer to the extent required by Rule 13e-4 under the
Exchange Act. These rules require that the minimum period during which an offer
must remain open following material changes in the terms of the Offer or
information concerning the Offer (other than a change in price or a change in
percentage of securities sought) will depend on the facts and circumstances,
including the relative materiality of such terms of information. If (i) the Fund
increases or decreases the consideration to be paid for Shares, or the Fund
increases the number of Shares being sought by an amount exceeding 2% of the
outstanding Shares, or the Fund decreases the number of Shares being sought and
(ii) the Offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date that
notice of such increase or decrease is first published, sent or given, the Offer
will be extended at least until the expiration of such period of ten business
days.
11
<PAGE> 12
16. MISCELLANEOUS. The Offer is not being made to, nor will tenders be
accepted from, shareholders in any jurisdiction in which the Offer or its
acceptance would not comply with the securities laws of such jurisdiction. The
Fund is not aware of any jurisdiction in which the Offer or tenders pursuant
thereto would not be in compliance with the laws of such jurisdiction. However,
the Fund reserves the right to exclude shareholders from the Offer in any
jurisdiction in which it is asserted that the Offer cannot lawfully be made. The
Fund believes such exclusion is permissible under applicable tender offer rules,
provided the Fund makes a good faith effort to comply with any state law deemed
applicable to the Offer. In any jurisdiction the securities laws of which
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on the Fund's behalf by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
AIM FLOATING RATE FUND
November 3, 1999
The Letter of Transmittal and certificates for Shares tendered by
registered shareholders should be sent or delivered to the Transfer Agent as set
forth below. Any questions or requests for assistance or additional copies of
the Offer, the Letter of Transmittal and other documents may be directed to the
Transfer Agent at its telephone number and location listed below. Shareholders
may also contact their Nominee for assistance concerning the Offer.
TRANSFER AGENT:
A I M FUND SERVICES, INC.
For Information Call:
(800) 959-4246
By Hand or Overnight Courier:
A I M Fund Services, Inc.
11 Greenway Plaza
Suite 100
Houston, Texas 77046-1173
By Mail:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, Texas 77210-4739
rev 11/99 FLR_MIS_1
12
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO BE USED TO TENDER SHARES
OF
AIM FLOATING RATE FUND
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 3, 1999
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M.
NEW YORK CITY TIME, ON DECEMBER 3, 1999, UNLESS EXTENDED
IMPORTANT: THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IF THE SHAREHOLDER IS A
RECORD OWNER OF SHARES WHO DESIRES TO EFFECT THE TENDER OFFER TRANSACTION
HIMSELF OR HERSELF BY TRANSMITTING THE NECESSARY DOCUMENTS TO THE FUND'S
TRANSFER AGENT. A SHAREHOLDER WHO HOLDS SHARES THROUGH A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE ("NOMINEE") IS NOT THE RECORD
OWNER AND SHOULD INSTRUCT HIS OR HER NOMINEE TO EFFECT THE TENDER ON HIS OR HER
BEHALF.
Transfer Agent:
A I M FUND SERVICES, INC.
For Information Call:
(800) 959-4246
By Hand, or Overnight Courier:
A I M Fund Services, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
By Mail:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, Texas 77210-4739
DELIVERY TO AN ADDRESS OTHER THAN THAT SHOWN ABOVE DOES
NOT CONSTITUTE VALID DELIVERY.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Pursuant to the Offer to Purchase dated November 3, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, the undersigned hereby
tenders to AIM Floating Rate Fund, a closed-end investment company incorporated
under the laws of the State of Maryland (the "Fund"), the shares described below
of its common stock, par value $.001 per share (the "Shares"), at a price equal
to the net asset value per Share ("NAV") calculated on the Expiration Date (as
defined in the Offer to Purchase), in cash, less any applicable Early Withdrawal
Charge, upon the terms and conditions set forth in the Offer to Purchase and
this Letter of Transmittal.
The undersigned hereby sells to the Fund all Shares tendered hereby that
are purchased pursuant to the Offer and hereby irrevocably constitutes and
appoints A I M Fund Services, Inc. (the "Transfer Agent") as attorney in fact of
the undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to present such
Shares and any Share certificates for cancellation of such Shares on the Fund's
books. The undersigned hereby warrants that the undersigned has full authority
to sell the Shares tendered hereby and that the Fund will acquire good title
thereto, free and clear of all liens, charges, encumbrances, conditional sales
agreements or other obligations relating to the sale thereof, and not subject to
any adverse claim, when and to the extent the same are purchased by it. Upon
request, the undersigned will execute and deliver any additional documents
necessary to complete the sale in accordance with the terms of the Offer.
<PAGE> 2
In section 1, the account numbers, names and addresses of the registered
owners should be printed in the box below as they appear on the registration of
the Shares. In section 2, the number of Shares that the undersigned wishes to
tender should be indicated. In section 3, the undersigned may elect to receive
proceeds from the Offer (less any applicable Early Withdrawal Charge) in cash by
checking Option A. The undersigned may elect to receive, in lieu of cash, Class
B shares of certain open-end investment companies managed or advised by A I M
Advisors, Inc. by checking Option B. Each shareholder should check either Option
A or Option B. If the Shares tendered hereby are in certificate form, the
certificates representing such Shares must be returned together with this Letter
of Transmittal.
The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase, the Fund may not be required to purchase any of the
Shares tendered hereby. In that event, the undersigned understands that, in the
case of Shares evidenced by certificates, certificate(s) for any Shares not
purchased will be returned to the undersigned at the address indicated above.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and the obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
- -1 DESCRIPTION OF SHARES TO BE TENDERED
Account Number __ __ __ __ __ __ __ __ __ __
<TABLE>
<S> <C>
Name(s) of Registered Holder Address as it Appears on Account:
_______________________________________________ ____________________________________________
_______________________________________________ ____________________________________________
_______________________________________________ ____________________________________________
</TABLE>
- -2 AMOUNT OF SHARES TO BE TENDERED
Please complete one of the below. If no choice is made, the shareholder tenders
all uncertificated Shares.
[ ] I would like to tender ______________ Shares from the above account.
(Enter the number of shares to be tendered*.)
[ ] I would like to tender ______________ dollars worth of shares from the
above account. (The Transfer Agent will process the appropriate number of
Shares to complete your request*.)
[ ] I would like to tender all Shares in the above account, including all
uncertificated Shares that may be held in the name of the registered
holder(s) by the Fund's Transfer Agent pursuant to the Fund's Dividend
Reinvestment Plan*.
I am including the Share certificates, if any, representing the above Shares to
be tendered. I understand that I must submit separate instructions to the
Transfer Agent if I choose to receive a separate certificate for the remaining
Shares should the certificate(s) presented represent more Shares than those I
present for tender.
* The Early Withdrawal Charge, if applied, will be deducted from the cash
payment.
Offer to Purchase with
Expiration Date of
December 3, 1999
<PAGE> 3
- -3 PAYMENT OF SHARES TO BE TENDERED
CHECK ONE OF THE FOLLOWING AND FILL IN AS REQUIRED
[ ] OPTION A I elect to have the proceeds of the Shares tendered hereby and
accepted for payment paid in cash, less any applicable Early
Withdrawal Charge.
[ ] OPTION B I elect to have the proceeds of the Shares tendered hereby and
accepted for payment invested in Class B shares of AIM
_______________________ Fund (See additional information below.)
Complete the items below when selecting OPTION A (If no option is selected, a
check will be sent to the address of record payable to the current
registration.)
[ ] Please make the check payable to the registration and address of record.
[ ] Please make check payable to:_____________________________________________
and send to the following address:________________________________________
__________________________________________________________________________
__________________________________________________________________________
<TABLE>
<S> <C>
[ ] Please mail the cash proceeds to the [ ] Please wire the cash proceeds to the
following Bank Account: following Bank Account:
Bank Name _______________________________ Bank Name _______________________________
Bank Address ____________________________ Bank ABA Number _________________________
____________________________
____________________________ Bank Account Number _____________________
Bank Account Number _____________________ Bank Account Name(s) ____________________
_________________________________________
Bank Account Name(s) ____________________ _________________________________________
</TABLE>
- -4 AUTHORIZATION
SIGNATURE FORM
(SEE INSTRUCTIONS 1, 2, 5 AND 8)
SOCIAL SECURITY NO.
OR TAXPAYER IDENTIFICATION NO. ________________________________________________
Under penalty of perjury, I certify that (1) the number set forth above is
my correct Social Security No. or other Taxpayer Identification No. and (2) I am
not subject to backup withholding either because (a) I am exempt from backup
withholding, (b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject thereto as a result of failure to report all interest
or dividends, or (c) the IRS has notified me that I am no longer subject
thereto.
INSTRUCTION: You must strike out the language in (2) above if you have been
notified that you are subject to backup withholding due to underreporting and
you have not received a notice from the IRS that backup withholding has been
terminated.
_________________________________________________
_________________________________________________ Date: ________________, 1999
(SIGNATURE(S) OF OWNER(S) EXACTLY AS REGISTERED)
Name(s) _______________________________________________________________________
_______________________________________________________________________________
(PLEASE PRINT)
Telephone Number ( ) ______________________________________________________
Signature(s) Guaranteed by:
_______________________________________________________________________________
_______________________________________________________________________________
Offer to Purchase with
Expiration Date of
December 3, 1999
<PAGE> 4
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Use of Letter of Transmittal. This Letter of Transmittal is to be used
only if you do not have a Nominee and intend to effect the tender offer
transaction yourself. If your shares are registered in the name of a Nominee, do
not use this form -- you must contact such Nominee if you desire to tender your
shares.
2. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be guaranteed by a member firm of a registered national securities exchange
or a commercial bank or trust company having an office, branch or agency in the
United States, unless all of the following conditions apply:
- This Letter of Transmittal is signed by the registered holder(s) of the
Shares, and
- There is no change of registration of any remaining shares, and
- The payment of the tender offer proceeds are to be sent to the registered
owner of the Shares at the address shown in the Share registration, and
- The tender offer proceeds will be less than $50,000.
3. Delivery of Letter of Transmittal and Certificates. Certificates for all
tendered Shares, together with a properly completed and duly executed Letter of
Transmittal, should be mailed or delivered to the Transfer Agent on or prior to
the Expiration Date at the appropriate address set forth herein and must be
received by the Transfer Agent prior to the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
4. Inadequate Space. If the space provided is inadequate, the additional
information should be listed on a separate signed schedule attached hereto.
5. Partial Tenders. If fewer than all of the Shares evidenced by any
certificate submitted are to be tendered, fill in the number of Shares that are
to be tendered in section 2 "Amount of Shares to be Tendered." All Shares
represented by certificate(s) listed are deemed to have been tendered unless
otherwise indicated.
6. Signatures on Letter of Transmittal, Authorization and Endorsements.
(a) If the Letter of Transmittal is signed by the registered holder of the
Shares tendered hereby, the signature(s) must correspond with the name(s) in
which the Shares are registered.
(b) If the Shares are held of record by two or more joint holders, all such
holders must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names, it will be
necessary to complete, sign and submit as many separate Letters of Transmittal
as there are different registrations of Shares.
(d) When this Letter of Transmittal is signed by the registered holder(s)
of the Shares listed and, if applicable, of the certificates transmitted hereby,
no endorsements of certificates or separate authorizations are required.
(e) If this Letter of Transmittal or any certificates or authorizations are
signed by trustees, executors, administrators, guardians, attorneys in fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and must submit proper
evidence satisfactory to the Fund of their authority so to act.
(f) Shareholders holding shares in an Individual Retirement Account ("IRA")
that mail or deliver a Letter of Transmittal to tender Shares must also provide
the Transfer Agent with a completed IRA distribution form.
7. Transfer Taxes. The Fund will pay all transfer taxes, if any, payable on
the transfer to it of Shares purchased pursuant to the Offer. If tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any transfer taxes (whether
imposed on the registered holder or such other persons) payable on account of
the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted.
8. Irregularities. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any tender of Shares will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined by it not to be in appropriate form or the acceptance of or
payment for which would, in the opinion of counsel for the Fund, be unlawful.
The Fund also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender with respect to any particular Shares or any
particular shareholder, and the Fund's interpretations of the terms and
conditions of the Offer (including these instructions) will be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as the Fund shall determine. Tendered Shares will
not be accepted for payment unless the defects and irregularities have been
cured within such time or waived. Neither the Fund, A I M Advisors, Inc.,
INVESCO Senior Secured Management, Inc., nor the Transfer Agent, nor any other
person shall be obligated to give notice of defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give any such
notice.
9. Important Tax Information. A shareholder whose tendered Shares are
accepted for payment is required by law to provide the Transfer Agent (as payer)
with his or her correct taxpayer identification number, which is accomplished by
completing and signing the Signature Form.
rev 11/99 FLR-MIS-2
<PAGE> 1
EXHIBIT (a)(3)
AIM FLOATING RATE FUND
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
DEAR SHAREHOLDER:
As you know, AIM Floating Rate Fund (the "Fund") commenced operations on
May 1, 1997. The performance of the Fund has been positive: The yield since
inception calculated as a percentage of the net asset value as of September 30,
1999, is 7.17%. The net asset value (NAV) of the Fund over that time period has
fluctuated between $10.02 and $9.75. In spite of recent market conditions and
subsequent NAV decreases, we continue to be satisfied with the overall credit
quality of the assets we own in the Fund.
The Fund's Shares are not publicly traded. However, each quarter the Fund's
Board of Directors (the "Board") will consider whether to make a tender offer
for all or a portion of the Fund's issued and outstanding shares (the "Shares")
to provide liquidity for the Fund's shareholders. For the fourth quarter of
1999, the Board has determined to purchase up to 4,400,000 of the Fund's Shares.
Accordingly, we are enclosing a copy of the Fund's Offer to Purchase (the
"Offer to Purchase"), dated November 3, 1999. The Offer to Purchase is for cash
at net asset value ("NAV") per Share as of the expiration date of the offer,
less applicable "early withdrawal charges." Certain selected financial
information with respect to the Fund is also set forth in the Offer to Purchase.
We also enclose a Letter of Transmittal (the "Letter of Transmittal") for use by
record holders of Shares. You should read each of these documents carefully.
If, after reviewing the information set forth in the Offer to Purchase and
Letter of Transmittal, you wish to tender Shares for purchase by the Fund,
please contact your broker, dealer or other nominee to effect the tender for
you. If you are the record owner of the Shares and intend to tender your Shares
yourself directly to the Transfer Agent, you should follow the instructions
contained in the Offer to Purchase, and the enclosed Letter of Transmittal,
which must be completed by you.
Neither the Fund nor its Board of Directors is making any recommendation to
any holder of Shares as to whether to tender Shares. Each shareholder is urged
to consult his or her broker or tax adviser before deciding whether to tender
any Shares.
The Fund's NAV on October 29, 1999 was $9.73 per Share. The Fund publishes
its NAV each week in the Wall Street Journal. It appears under the sub-heading
"Loan Participation Funds" within the listings of mutual funds and closed-end
funds. You may also obtain current NAV quotations by calling A I M Fund
Services, Inc., the Fund's Transfer Agent, at (800) 959-4246.
Requests for additional copies of the Offer to Purchase, the Letter of
Transmittal and any other tender offer documents, as well as questions and
requests for assistance may be directed to A I M Fund Services, Inc. at (800)
959-4246.
Sincerely,
/s/ ROBERT H. GRAHAM
ROBERT H. GRAHAM
Chairman of the Board
and President
November 3, 1999
rev 11/99 FLR-LTR-2
<PAGE> 1
EXHIBIT (g)(1)
[LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of GT Global Floating Rate Fund, Inc.
(d/b/a AIM Floating Rate Fund):
We hereby consent to the inclusion of our report dated February 19, 1999 on
our audit of the financial statements and financial highlights of the GT Global
Floating Rate Fund, Inc. (d/b/a AIM Floating Rate Fund) as of December 31, 1998
in the Issuer Tender Offer Statement with respect to the Schedule 13E-4 filing,
dated November 3, 1999, under the Securities Exchange Act of 1934, as amended,
of the GT Global Floating Rate Fund, Inc. (d/b/a AIM Floating Rate Fund).
/s/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
November 3, 1999
<PAGE> 2
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of AIM Floating Rate Fund (formerly GT
Global Floating Rate Fund, Inc.):
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the AIM Floating Rate Fund at
December 31, 1998, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments owned at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
FEBRUARY 19, 1999
F-1
<PAGE> 3
PORTFOLIO OF INVESTMENTS
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Leisure & Tourism (13.0%)
Patriot American Hospitality, Inc.: ....................... NR 2.9
Term loan B due 3/31/03 ................................. 5,620,313 $ 5,402,526
Term loan due 3/31/00 ................................... 1,488,971 1,455,469
Term loan due 3/31/99 ................................... 1,323,529 1,293,750
Starwood Hotels & Resorts Worldwide, Inc.: ................ NR 1.7
Term loan due 2/23/03 ................................... 5,000,000 4,937,500
Extended Stay America, Inc.: .............................. NR 1.7
Term loan B due 12/31/03 ................................ 5,000,000 4,900,000
Interval International Corp.: ............................. NR 1.4
Term loan B due 12/16/05 ................................ 2,103,750 2,097,176
Term loan C due 12/15/06 ................................ 2,103,750 2,097,176
The Resort at Summerlin, Inc.: ............................ NR 1.4
Term loan A due 3/31/04 ................................. 4,000,000 3,970,000
KSL Recreation Group, Inc.: ............................... B2 1.3
Revolving Credit due 4/30/03 ............................ 4,011,429 2,516,362
Term loan A due 4/30/05 ................................. 707,143 699,336
Term loan B due 4/30/06 ................................. 707,143 699,336
ASC-West, Inc.: ........................................... B1 1.2
Term loan due 5/31/06 ................................... 3,571,429 3,571,429
Aladdin Gaming, LLC.: ..................................... B2 0.9
Term loan C due 2/26/08 ................................. 2,222,223 2,194,444
Term loan B due 8/26/06 ................................. 277,778 274,305
ASC East, Inc.: ........................................... B1 0.5
Term loan due 5/31/06 ................................... 1,428,570 1,428,570
------------
37,537,379
------------
Broadcasting & Publishing (7.9%)
Capstar Broadcasting Corp.: ............................... B3 3.4
Term loan B due 5/31/05 ................................. 9,950,000 9,894,031
White Knight Broadcasting, Inc.: .......................... NR 1.8
Term loan B due 9/30/05 ................................. 5,329,268 5,315,945
21st Century Newspapers, Inc.: ............................ Ba3 1.7
Term loan due 9/15/05 ................................... 4,962,500 4,894,266
Comcorp Broadcasting, Inc.: ............................... NR 1.0
Term loan B due 9/30/05 ................................. 2,926,829 2,897,561
------------
23,001,803
------------
Chemicals (7.7%)
Lyondell Petrochemical Co.: ............................... Ba2 3.6
Term loan B due 6/30/05 ................................. 10,479,000 10,217,025
Huntsman Specialty Chemicals Corp.: ....................... Ba2 1.6
Term loan due 3/15/07 ................................... 2,727,273 2,707,636
Term loan C due 3/15/05 ................................. 2,152,144 2,136,003
Sterling Pulp Chemicals (SASK) Ltd.: ...................... NR 1.3
Term loan B due 6/30/05 ................................. 3,640,598 3,604,192
Huntsman Corp.: ........................................... Ba2 1.2
Term loan B due 6/30/04 ................................. 3,442,437 3,412,316
------------
22,077,172
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE> 4
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Household Products (5.5%)
20th Century Plastics, Inc.: .............................. NR 2.6
Term loan B due 9/30/05 ................................. 3,988,889 $ 3,958,972
Term loan C due 9/30/06 ................................. 3,491,250 3,465,066
Century Maintenance Supply, Inc.: ......................... NR 1.7
Term loan B due 7/8/05 .................................. 4,975,000 4,912,813
Paint Sundry Brands Corp.: ................................ NR 1.2
Term loan B due 8/11/05 ................................. 1,795,500 1,764,079
Term loan C due 8/11/06 ................................. 1,661,667 1,632,588
------------
15,733,518
------------
Business & Public Services (5.2%)
Bridge Information Systems, Inc.: ......................... B1 1.7
Term loan due 5/29/05 ................................... 5,000,000 4,940,000
Genicom Corp.: ............................................ NR 1.6
Term loan B due 9/5/04 .................................. 4,843,750 4,698,438
Safety-Kleen Services Inc.: ............................... Ba3 1.0
Term loan B due 4/3/04 .................................. 1,356,818 1,356,818
Term loan C due 4/3/05 .................................. 1,356,818 1,356,818
Decision One Corp.: ....................................... B1 0.9
Term loan B due 8/6/05 .................................. 2,962,500 2,562,562
------------
14,914,636
------------
Health Care Services (4.7%)
Mariner Post-Acute Network, Inc.: ......................... Ba3 1.8
Term loan B due 3/31/05 ................................. 2,495,000 2,457,575
Term loan C due 3/31/06 ................................. 2,495,000 2,457,575
MedPartners, Inc.: ........................................ B1 1.6
Term loan B due 6/9/01 .................................. 4,636,661 4,485,969
Genesis Health Ventures, Inc.: ............................ Ba3 0.8
Term loan B due 9/30/04 ................................. 1,203,598 1,182,535
Term loan C due 6/30/05 ................................. 1,200,806 1,179,791
The Multicare Companies, Inc.: ............................ B1 0.5
Term loan B due 9/30/04 ................................. 1,234,375 1,208,145
Term loan C due 6/1/05 .................................. 410,417 401,695
------------
13,373,285
------------
Auto Parts (4.3%)
American Axle & Manufacturing of Michigan, Inc.: .......... Ba3 1.7
Term loan due 4/30/06 ................................... 5,000,000 4,962,500
Federal-Mogul Corp.: ...................................... Ba2 1.6
Term loan B due 12/31/05 ................................ 4,500,000 4,454,999
Joan Fabrics Corp.: ....................................... B1 1.0
Term loan B due 6/30/05 ................................. 1,907,401 1,893,096
Term loan C due 6/30/06 ................................. 990,514 983,085
------------
12,293,680
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 5
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Services (3.9%)
Coinmach Laundry Corp.: ................................... Ba2 2.4
Term loan B due 6/30/05 ................................. 6,932,538 $ 6,897,875
Rent-A-Center, Inc.: ...................................... Ba3 1.5
Term loan C due 2/5/07 .................................. 2,408,924 2,366,767
Term loan B due 2/5/06 .................................. 1,970,938 1,936,446
------------
11,201,088
------------
Cable Television (3.4%)
Charter Communications Entertainment, L.P.: ............... Ba3 1.7
Term loan due 9/30/07 ................................... 5,000,000 4,987,500
Charter Communications Southeast, L.P.: ................... Ba3 1.7
Term loan C due 1/1/08 .................................. 5,000,000 4,953,125
------------
9,940,625
------------
Wireless Communications (3.4%)
Western PCS Holding Corp.: ................................ B1 1.7
Term loan B due 6/26/07 ................................. 5,000,000 4,968,750
Commnet Cellular, Inc.: ................................... B1 1.7
Term loan D due 9/30/07 ................................. 3,252,033 3,228,992
Term loan C due 3/31/07 ................................. 1,161,440 1,153,211
Term loan B due 9/30/06 ................................. 586,527 582,251
------------
9,933,204
------------
Appliances & Household (3.4%)
Simmons Co., Inc.: ........................................ Ba3 1.7
Term loan C due 10/29/06 ................................ 3,562,500 3,544,688
Term loan B due 10/29/05 ................................ 1,424,489 1,417,367
The Imperial Home Decor Group: ............................ B1 1.7
Term loan B due 3/13/05 ................................. 3,300,000 3,262,875
Term loan C due 3/13/06 ................................. 1,700,000 1,680,875
------------
9,905,805
------------
Transportation - Shipping (2.6%)
American Commercial Lines: ................................ Ba2 1.7
Term loan C due 6/30/07 ................................. 2,877,301 2,861,122
Term loan B due 6/30/06 ................................. 2,111,273 2,099,401
Atlas Freighter Leasing, Inc.: ............................ Ba3 0.9
Term loan due 5/29/04 ................................... 2,734,865 2,706,380
------------
7,666,903
------------
Plastics & Rubber (2.6%)
Intesys Technologies, Inc.: ............................... NR 2.6
Term loan due 6/30/06 ................................... 7,485,000 7,410,150
------------
Gas Production & Distribution (2.4%)
Ferrellgas, L.P.: ......................................... NR 2.4
Term loan C due 6/17/06 ................................. 7,000,000 7,000,000
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 6
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Machinery & Engineering (2.4%)
Formax, Inc.: ............................................. NR 2.4
Term loan B due 9/30/05 ................................. 6,965,000 $ 6,930,175
------------
Pharmaceuticals (2.4%)
Leiner Health Products Group: ............................. Ba3 1.5
Term loan C due 12/30/05 ................................ 4,451,207 4,417,822
Endo Pharmaceuticals, Inc.: ............................... B1 0.9
Term loan B due 6/30/04 ................................. 2,452,381 2,427,857
------------
6,845,679
------------
Paper/Packaging (2.3%)
Graham Packaging Co.: ..................................... B1 1.3
Term loan D due 1/31/07 ................................. 1,446,429 1,439,196
Term loan B due 1/31/06 ................................. 1,353,516 1,343,364
Term loan C due 1/31/07 ................................. 1,121,484 1,115,877
Stone Container Corp.: .................................... Ba3 1.0
Term loan E due 10/1/03 ................................. 2,895,738 2,877,640
------------
6,776,077
------------
Restaurants (1.7%)
AFC Enterprises, Inc.: .................................... Ba3 1.7
Term loan B due 6/30/04 ................................. 4,987,500 4,975,031
------------
Retailers-Food (1.7%)
Star Markets, Inc.: ....................................... Ba3 1.7
Term Loan C due 12/31/02 ................................ 4,954,088 4,941,703
------------
Beverages - Non-alcoholic (1.6%)
Mistic/Snapple Brands, Inc.: .............................. NR 1.6
Term loan B due 6/1/04 .................................. 2,439,492 2,421,196
Term loan C due 6/1/05 .................................. 2,439,492 2,421,196
------------
4,842,392
------------
Office Equipment (1.6%)
Dictaphone Corp.: ......................................... B2 1.6
Term loan C due 12/31/02 ................................ 2,475,000 2,351,250
Term loan B due 6/30/02 ................................. 2,436,828 2,290,618
------------
4,641,868
------------
Coal (1.6%)
P & L Coal Holdings Corp.: ................................ NR 1.0
Term loan B due 6/9/06 .................................. 2,769,231 2,751,924
Centennial Resoures, Inc.:-/- ............................. NR 0.6
Term loan B due 3/31/04 ................................. 1,966,666 983,334
Term loan A due 3/31/02 ................................. 850,000 425,000
Revolving Credit due 6/30/99 ............................ 355,789 176,704
------------
4,336,962
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 7
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Other Consumer Goods (1.5%)
The Boyds Collection, Ltd.: ............................... Ba3 1.5
Term loan B due 4/21/06 ................................. 4,216,667 $ 4,169,229
------------
Industrial Components (1.4%)
Thermadyne MFG. L.L.C.: ................................... B1 1.4
Term loan B due 5/22/05 ................................. 1,990,000 1,976,319
Term loan C due 5/22/06 ................................. 1,990,000 1,976,319
------------
3,952,638
------------
Building Materials & Components (1.3%)
Atrium Cos., Inc.: ........................................ B1 1.3
Term Loan C due 6/30/06 ................................. 1,963,333 1,951,554
Term Loan B due 6/30/05 ................................. 1,716,481 1,706,182
------------
3,657,736
------------
Medical Technology & Supplies (0.9%)
Sterling Diagnostic Imaging, Inc.: ........................ NR 0.9
Term loan due 6/30/05 ................................... 2,497,596 2,472,620
------------ -----
TOTAL SENIOR SECURED FLOATING RATE INTERESTS (cost
$265,043,827) .............................................. 260,531,358 90.4
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1998, with State Street Bank & Trust
Co., due January 4, 1999, for an effective yield of 4.50%,
collateralized by $325,000 U.S. Treasury Notes, 4.00% due
10/31/00 and $22,395,000 U.S. Treasury Notes, 6.875% due
5/15/06 (market value of collateral is $25,825,681
including accrued interest). (cost $25,314,000) .......... 25,314,000 8.8
------------ -----
TOTAL INVESTMENTS (cost $290,357,827) * .................... 285,845,358 99.2
Other Assets and Liabilities ................................ 2,228,208 0.8
------------ -----
NET ASSETS .................................................. $288,073,566 100.0
------------ -----
------------ -----
</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.
-/- Non-income producing security: Centennial Resources, Inc. filed for
bankruptcy under Chapter 11 on October 13, 1998.
* For Federal income tax purposes, cost is $290,357,827 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 4,815
Unrealized depreciation: (4,517,284)
-------------
Net unrealized depreciation: $ (4,512,469)
-------------
-------------
</TABLE>
Abbreviation:
NR--Not rated
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 8
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments at value (cost $290,357,827) (Note 1).......................................... $285,845,358
U.S. currency.............................................................................. 756
Interest receivable........................................................................ 2,294,966
Receivable for Fund shares sold............................................................ 1,469,019
Unamortized organizational costs (Note 1).................................................. 141,376
Receivable for securities sold............................................................. 30,148
Miscellaneous receivable................................................................... 3,798
-----------
Total assets............................................................................. 289,785,421
-----------
Liabilities:
Payable for distribution................................................................... 785,474
Deferred facility fees (Note 1)............................................................ 582,302
Payable for investment management and administration fees (Note 2)......................... 241,073
Payable for professional fees.............................................................. 39,949
Payable for printing and postage expenses.................................................. 14,218
Payable for transfer agent fees (Note 2)................................................... 9,928
Payable for securities purchased........................................................... 8,989
Payable for fund accounting fees (Note 2).................................................. 7,258
Payable for registration and filing fees................................................... 3,139
Payable for Trustees' fees and expenses.................................................... 2,141
Payable for custodian fees................................................................. 1,886
Other accrued expenses..................................................................... 15,398
-----------
Total liabilities........................................................................ 1,711,755
-----------
Minority interest (Note 1)................................................................. 100
-----------
Net assets................................................................................... $288,073,566
-----------
-----------
Net asset value and offering price per share
($288,073,566 DIVIDED BY 29,274,261 shares outstanding).................................... $ 9.84
-----------
-----------
Net assets consist of:
Paid in capital (Note 4)................................................................... $292,414,237
Undistributed net investment income........................................................ 161,289
Accumulated net realized gain on investments............................................... 10,509
Net unrealized depreciation of investments................................................. (4,512,469)
-----------
Total -- representing net assets applicable to shares of common stock outstanding............ $288,073,566
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE> 9
STATEMENT OF OPERATIONS
Year ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income:
Interest income.................................................................................... $18,745,091
Facility fees earned............................................................................... 311,167
Interest expense (Note 1).......................................................................... (11,594)
----------
Total investment income.......................................................................... 19,044,664
----------
Expenses:
Investment management and administration fees (Note 2)............................................. 2,715,134
Printing and postage expenses...................................................................... 257,766
Professional fees.................................................................................. 230,750
Transfer agent fees (Note 2)....................................................................... 184,250
Registration and filing fees....................................................................... 93,150
Fund accounting fees (Note 2)...................................................................... 68,019
Amortization of organization costs (Note 1)........................................................ 42,468
Trustees' fees and expenses (Note 2)............................................................... 30,540
Custodian fees..................................................................................... 3,970
Other expenses..................................................................................... 79,382
----------
Total expenses before reductions................................................................. 3,705,429
Expenses reimbursed by A I M Advisors, Inc. (Note 2)........................................... (299,381)
----------
Total net expenses............................................................................... 3,406,048
----------
Net investment income................................................................................ 15,638,616
----------
Net realized and unrealized gain (loss) on investments: (Note 1)
Net realized gain on investments................................................................... 10,508
Net unrealized depreciation on investments......................................................... (4,634,050)
----------
Net realized and unrealized gain (loss) on investments............................................... (4,623,542)
----------
Net increase in net assets resulting from operations................................................. $11,015,074
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE> 10
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAY 1, 1997
(COMMENCEMENT
OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
1998 1997
------------- --------------
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income................. $15,638,616 $ 5,351,450
Net realized gain on investments...... 10,508 150,555
Net change in unrealized appreciation
(depreciation) of investments........ (4,634,050) 121,581
------------- --------------
Net increase in net assets resulting
from operations.................... 11,015,074 5,623,586
------------- --------------
Distributions to shareholders: (Note 1)
From net investment income............ (15,477,327) (5,351,450)
From net realized gain on
investments.......................... (150,555) --
------------- --------------
Total distributions................. (15,627,882) (5,351,450)
------------- --------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 170,075,753 168,538,536
Decrease from capital shares
repurchased.......................... (39,086,520) (7,213,531)
------------- --------------
Net increase from capital share
transactions....................... 130,989,233 161,325,005
------------- --------------
Total increase in net assets............ 126,376,425 161,597,141
Net assets:
Beginning of year..................... 161,697,141 100,000
------------- --------------
End of year *........................ $288,073,566 $161,697,141
------------- --------------
------------- --------------
* Includes undistributed net
investment income.................... $ 161,289 $ --
------------- --------------
------------- --------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE> 11
STATEMENT OF CASH FLOWS
Year ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Cash Provided by Operating Activities:
Net increase in net assets resulting from operations...... $ 11,015,074
Increase in receivables................................. (952,065)
Increase in payables.................................... 156,855
Net realized and unrealized gain on investments......... 4,623,542
Increase in deferred facility fees...................... 393,307
Decrease in unamortized organization costs.............. 42,468
---------------
Net cash provided by operating activities............. 15,279,181
---------------
Cash Used for Investing Activities:
Proceeds from principal payments and sales of senior
floating rate interests.................................. 155,074,585
Purchases of senior secured floating rate interests....... (263,037,556)
Purchases of short-term investments....................... (4,074,810,000)
Proceeds from sales and maturities of short-term
investments.............................................. 4,051,099,000
---------------
Net cash used in investing activities................. (131,673,971)
---------------
Cash Provided by Financing Activities:
Proceeds from capital shares sold and reinvested.......... 163,500,280
Disbursements from capital shares repurchased............. (39,086,520)
Dividends paid to shareholders............................ (8,018,356)
Proceeds from bank line of credit......................... 38,416,000
Repayment of proceeds from bank line of credit............ (38,416,000)
---------------
Net cash provided by financing activities............. 116,395,404
---------------
Net increase in cash...................................... 614
Cash at Beginning of Period............................... 142
---------------
Cash at End of Period..................................... $ 756
---------------
---------------
Non-Cash Financing Activities:
Value of capital shares issued in reinvestment of
dividends paid to shareholders........................... $ 7,380,819
---------------
---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE> 12
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
YEAR ENDED OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 10.02 $ 10.00
-------------- --------------
Income from investment operations:
Net investment income................. 0.68 0.46
Net realized and unrealized gain
(loss) on investments................ (0.18) 0.02
-------------- --------------
Net increase from investment
operations......................... 0.50 0.48
-------------- --------------
Distributions to shareholders:
From net investment income............ (0.67) (0.46)
From net realized gain on
investments.......................... (0.01) --
-------------- --------------
Total distributions................. (0.68) (0.46)
-------------- --------------
Net asset value, end of period.......... $ 9.84 $ 10.02
-------------- --------------
-------------- --------------
Total investment return (c)............. 5.25 % 5.04 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 288,074 $ 161,697
Ratio of net investment income to
average net assets:
With expense reimbursement (Note 2)... 6.88 % 7.26 %(a)
Without expense reimbursement......... 6.75 % 6.24 %(a)
Ratio of expenses to average net assets:
With expense reimbursement (Note 2)... 1.50 % 1.50 %(a)
Without expense reimbursement......... 1.63 % 2.52 %(a)
Ratio of interest expense to average net
assets................................. 0.01 % 0.15 %(a)
Portfolio turnover rate................. 75 % 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.
F-11
<PAGE> 13
NOTES TO
FINANCIAL STATEMENTS
December 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Floating Rate Fund, Inc., d/b/a 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 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 the Portfolio. Through December 31, 1998, all of
the beneficial interest in the Portfolio was owned either by the Fund or INVESCO
(NY), Inc., the Portfolio's investment sub-sub-advisor 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 year. 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 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 INVESCO Senior Secured Management, Inc.,
(the "Sub-Adviser"), formerly, Chancellor LGT Senior Secured Management, Inc.
When possible, A I M Advisors, Inc. (the "Manager") 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) 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. Repurchase agreements are valued at cost
plus accrued interest.
(C) 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".
(D) INVESTMENT TRANSACTIONS
Investment transactions are accounted for on the trade date (date the order to
buy or sell is executed). The cost of investments 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 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
F-12
<PAGE> 14
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
aggregated $212,350. These expenses are being amortized on a straightline basis
over a five-year 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) 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 over the expected life of the loan. Market
discounts are accreted over the stated life of each applicable security.
(K) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by A I M
Advisors, Inc. ("AIM" or the "Manager"), has a line of credit with BankBoston
and State Street Bank and 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 value of the Fund's total assets. On December 31, 1998, the
Fund had no outstanding loan balance.
For the year ended December 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $2,799,958 with a weighted average interest rate of 6.21%. Interest expense
for the year ended was $11,594.
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager") is the investment manager and administrator
for the Fund and Portfolio, INVESCO Senior Secured Management, Inc. (formerly,
Chancellor LGT Senior Secured Management, Inc.) is the Portfolio's investment
sub-adviser ("Sub-Adviser"), and INVESCO (NY), Inc. (formerly Chancellor LGT
Asset Management, Inc.) is the Portfolio's sub-sub-adviser. As of the close of
business on May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the former
indirect parent organization of Chancellor LGT Asset Management, Inc.
("Chancellor LGT") and Chancellor LGT Senior Secured Management, Inc. ("Senior
Secured"), consummated a purchase agreement with AMVESCAP PLC pursuant to which
AMVESCAP PLC acquired LGT's Asset Management Division, which included Chancellor
LGT, Senior Secured and certain other affiliates. As a result of this
transaction, Chancellor LGT was renamed INVESCO (NY), Inc., Senior Secured was
renamed INVESCO Senior Secured Management, Inc., and each of them is now an
indirect wholly-owned subsidiary of AMVESCAP PLC. A I M Distributors, Inc. ("AIM
Distributors"), a wholly-owned subsidiary of the Manager, became the Fund's
distributor as of the close of business on May 29, 1998. Finally, as of the
close of business on September 4, 1998, A I M Fund Services, Inc. ("AFS"), an
affiliate of the Manager and AIM Distributors, replaced GT Global Investor
Services, Inc. ("GT Services") as the transfer agent of the Fund.
The Fund pays the Manager administration fees at the annualized rate of 0.25% of
such Fund's average daily net assets. 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.
AIM Distributors serves as the Fund's distributor. For the year ended May 29,
1998, GT Global, Inc. ("GT Global") served as the Fund's distributor.
Certain redemptions of common shares made within four years of purchase are
subject to an early withdrawal charge, in accordance with the fund's current
prospectus. For the period ended December 31, 1998, AIM Distributors and GT
Global collected early withdrawal charges in the amount of $475,585 and $77,982,
respectively for the Fund.
The Manager and AIM Distributors have undertaken 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.
Effective as of the close of business September 4, 1998, the Fund, pursuant to a
transfer agency and service agreement, has agreed to pay AFS an annualized fee
of $24.85 per shareholder accounts that are open during any monthly period (this
fee includes all out-of-pocket expenses), and an annualized fee of $0.70 per
shareholder account that is closed during any monthly period. Both fees shall be
F-13
<PAGE> 15
billed by AFS monthly in arrears on a prorated basis of 1/12 of the annualized
fee for all such accounts.
For the period January 1, 1998 to September 4, 1998, GT Services, an affiliate
of the Manager and AIM Distributors, was the transfer agent of the Fund. For
performing shareholder servicing, reporting, and general transfer agent
services, GT Services received 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
was also reimbursed by the Fund for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager 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 Investment Portfolios,
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.
The Trust pays each of its Trustees who is not an employee, officer or director
of the Manager, AIM Distributors or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $263,046,545 and $154,949,346, respectively.
There were no purchases or sales of U.S. government obligations by the Portfolio
for the year ended December 31, 1998.
4. CAPITAL SHARES
At December 31, 1998, the Fund is authorized to issue 1 billion shares of
capital stock, $0.001 par value, all of which is classified as Common Stock.
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
MAY 1, 1997
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold................................................. 16,339,303 $ 162,694,934 16,621,817 $ 166,317,980
Shares issued in connection with reinvestment of
distributions............................................. 741,971 7,380,819 221,712 2,220,556
------------ -------------- ------------ --------------
17,081,274 170,075,753 16,843,529 168,538,536
Shares repurchased.......................................... (3,940,550) (39,086,520) (719,992) (7,213,531)
------------ -------------- ------------ --------------
Net increase................................................ 13,140,724 $ 130,989,233 16,123,537 $ 161,325,005
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>
5. UNFUNDED LOAN COMMITMENTS
As of December 31, 1998, the Fund had unfunded loan commitments of $1,634,762,
which would be extended at the option of the borrower, pursuant to the following
loan agreements:
<TABLE>
<CAPTION>
UNFUNDED
BORROWER COMMITMENTS
- ------------------------------------------------------------ -----------
<S> <C>
Centennial Resources, Inc................................... $ 176,395
KLS Recreation Group, Inc................................... 1,458,367
</TABLE>
6. 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.
F-14
<PAGE> 1
EXHIBIT(g)(2)
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>
F-1
<PAGE> 2
<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>
F-2
<PAGE> 3
<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>
F-3
<PAGE> 4
<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.
F-4
<PAGE> 5
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.
F-5
<PAGE> 6
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.
F-6
<PAGE> 7
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
F-7
<PAGE> 8
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.
F-8
<PAGE> 9
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.
F-9
