<PAGE>
Travelers
Corporate
Loan Fund Inc.
Annual Report
September 30, 2000
<PAGE>
Travelers
Corporate
Loan Fund Inc.
Dear Shareholder:
We are pleased to provide you with the annual report for the year ended
September 30, 2000 for the Travelers Corporate Loan Fund Inc. ("Fund"). We hope
you find this report useful and informative. During the 12-months covered by
this report, the Fund distributed income dividends totaling $1.44 per share. The
table below shows the annualized distribution rate and the 12-month total return
based on the Fund's September 30, 2000 net asset value ("NAV") and the New York
Stock Exchange ("NYSE") closing price./1/
[PHOTO]
HEATH B.
MCLENDON
Chairman
[PHOTO]
GLENN N.
MARCHAK
Vice President and
Investment Officer
Price Annualized 12-Month
Per Share Distribution Rate/2/ Total Return/2/
--------- -------------------- ---------------
$15.14 (NAV) 9.51% 10.55%
$14.688 (NYSE) 9.80% 13.35%
We are pleased to report that, based on data provided by Lipper Inc.
("Lipper"),3 the Fund had the highest cumulative total return for the year ended
September 30, 2000, when compared to the 24 other funds in the loan
participation category. Cumulative total return is based on distributed earnings
plus any change in NAV. Of course, past performance is not indicative of future
results.
----------
1 The NAV is calculated by subtracting total liabilities from the closing
value of all securities held by the Fund (plus all other assets) and
dividing the result (total net assets) by the total number of shares
outstanding. The NAV fluctuates with the changes in the value of the
securities in which the Fund has invested. However, the price at which an
investor may buy or sell shares of the Fund is at their market (NYSE) price
as determined by supply and demand.
2 Total returns are based on changes in NAV or the market value,
respectively. Total returns assume the reinvestment of all dividends and/or
capital gains distributions in additional shares. Annualized distribution
rate is the Fund's current monthly income dividend rate, annualized, and
then divided by the NAV or the market value noted in this report. The
annualized distribution rate assumes a current monthly income dividend rate
of $0.12 for 12 months. This rate is as of October 31, 2000 and is subject
to change. The important difference between a total return and an
annualized distribution rate is that the total return takes into
consideration a number of factors including the fluctuation of the NAV or
the market value during the period reported. The NAV fluctuation includes
the effects of unrealized appreciation or depreciation in the Fund.
Accordingly, since an annualized distribution rate only reflects the
current monthly income dividend rate annualized, it should not be used as
the sole indicator to judge the return you receive from your Fund
investment. Past performance is not indicative of future results.
3 Lipper is an independent mutual fund-tracking organization.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 1
<PAGE>
The Fund's investment objective is to maximize current income as is consistent
with prudent efforts to preserve capital. The Fund seeks to achieve this
objective by investing primarily in a professionally managed portfolio of
interests in floating or variable rate collateralized senior loans. Unlike
fixed-rate investments, the interest rates from these collateralized loans may
periodically adjust in response to changes in short-term interest rates. These
rate adjustments provide investors with higher income during periods of rising
interest rates and lower income during periods of declining interest rates.
On October 17, 2000, the Fund declared a regular monthly dividend for October
2000 of $0.1235 per share. The dividend payout was unchanged from the rate paid
in September 2000. Prior to that, the Fund had seven consecutive months of
increases to dividends paid from ordinary income (not including the distribution
of excess accumulated income in the month of April 2000).
Portfolio Review
Consistent with our original investment mandate, the Fund's portfolio is
primarily made up of floating or variable rate collateralized senior loans. As
of September 30, 2000, the Fund had total net assets of approximately $148.1
million that had an average equivalent rating of Ba3. At September 30, 2000, the
Fund's portfolio was invested in 28 industry sectors with the largest industry
concentration of 14.3% in the telecommunications industry. The Fund was invested
in interests in loans made to 67 issuers.
While the portfolio continues to perform well, when compared to our peer group,
our NAV has declined more recently as market prices of corporate loans have
generally softened. One key aspect of the Fund's management policy is that its
NAV is calculated to date on a "mark-to-market" basis using current market
prices for each loan in the Fund as determined weekly by a third party pricing
service.
The Federal Reserve Board ("Fed") last increased short-term interest rates by
50-basis points4 on May 16, 2000. This was the sixth rate increase in a series
of rate increases by the Fed since June 30, 1999 totaling 175-basis points. As
interest payable on the loans in the portfolio are based on the London Inter
Bank Offered Rate ("LIBOR"),5 a short-term interest benchmark, changes in the
Fed's rate policy have had a direct effect on the return the Fund's portfolio
generates. As the loans in the Fund have varying interest rate reset dates, the
effects of these rate increases have worked their way into the portfolio over a
period of time.
---------
4 A basis point is 0.01% or one one-hundredth of a percent.
5 LIBOR is the rate that most creditworthy international banks dealing in
euro charge each other for large loans.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
In addition to the performance of the Fund's portfolio, these Fed rate increases
were a key factor contributing to our ability to increase the monthly dividend
paid on the Fund for seven consecutive months, ending in September. Most, if not
all of these rate increases have now worked their way into the portfolio and, as
a result, we have held the dividend steady in October 2000 at $0.1235 per share.
The market price of the Fund's shares has improved since our last report. On the
date our last shareholder report was written, July 17, 2000, the share price
closed at $13.938 and had consistently been at or below $14.00 per share since
the beginning of the year. Since the end of July, shares of the Fund have
regularly traded at $14.50 or higher.6 The Fund's shares continue to trade at a
discount to the NAV of the Fund, however this discount has narrowed appreciably.
In addition to the performance of the Fund, we believe that the improvement in
share price is related to investor concerns about the increased volatility in
the capital markets7 and specifically, the stock market. During more volatile
periods in the capital markets, the appeal of what may be considered to be
"conservative" corporate loans may improve.
Corporate Loan Market Outlook
This has been a difficult period for the corporate loan market and we have seen
an increase in distressed and defaulted credits in the market. More moderate
growth in the economy, unreceptive capital markets, higher financing costs and
difficulties particular to certain industry segments have helped create this
condition. In addition, the short supply of new issues has continued since our
last report. The shortage of new issue supply has continued to drive a high
level of competition for well-structured and priced loans. We expect that these
conditions may continue for the remainder of the year as economic growth remains
more modest and uncertainty continues in the capital markets.
On the bright side, the short-term difficulties the market is currently
experiencing have resulted in attractive long-term investment opportunities.
Loan investors have continued to maintain credit discipline in reaction to the
high level of defaults in the market. In the struggle between credit discipline
and the demand for new assets, credit discipline has been winning. As a result,
credit spreads on new issues are at historically high levels and are generally
on the rise and structures for newly issued loans are favorable for investors.
As default levels have remained high and may possibly push even higher,
investors may likely continue to be credit sensitive and the investing
environment for new issues should remain appealing.
---------
6 At end of the Fund's third quarter reporting period on June 30, 2000, the
Fund's share price closed at $13.813.
7 Capital markets are where capital funds--debt and equity--are traded.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 3
<PAGE>
Investment Strategy
Our investment strategy has remained consistent with previous reporting periods:
identify what we believe are the highest quality assets at what we think are
reasonable prices. And while we are comfortable with the current level of
diversification in the portfolio, we continue to look to improve the Fund's
diversification at the margin.
As previously noted, this has been a challenging period in the corporate loan
market. In response to these market conditions, we have remained extremely
selective about the assets we have purchased for the Fund and we remain vigilant
in monitoring any softness observed in the portfolio. We work to identify
negative trends in advance of credit problems in the industries we are invested
in and in each of the loans held in the Fund. Additionally, we seek to identify
changing economic and financial market factors that could result in an
unacceptably high level of vulnerability for any of the corporate loans held in
the portfolio. The existing loan portfolio has continued to perform well
compared to the Fund's peer group and we are pleased to report that there have
been no defaults to date.
Loan runoff from early repayments has been acceptable. As a result, we have been
able to maintain satisfactory asset levels in the face of a market that is
experiencing a slowing of new loan investment opportunities. While we expect
that loan runoff may continue to be manageable, should it increase, our asset
levels could decrease. If this condition were to occur, we would seek to
maintain our credit discipline rather than stretch for assets that do not meet
our normal investment criteria.
As noted in past reports, the telecommunications industry has been the most
active industry in the corporate loan market in terms of new issue supply. While
we have been decidedly conservative in making investments in this developing
industry, it remains our largest industry concentration.
We continue to be comfortable with the investments we have made in this
industry. We have steered away from early stage telecommunication companies in
the "build out" mode that are not producing positive cash flow and are
potentially dependent on the capital markets to finance significant future
capital expenditure needs. Rather, we have invested in established companies
with less aggressive growth projections that have more normalized capital
expenditure needs and are producing positive cash flow results sufficient to
satisfy their operating cash flow needs.
Our goal in the Fund remains constant: work hard to optimize the Fund's
diversification and target select opportunities while operating within the
parameters of our high credit standards. And while the future is always
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
uncertain, we seek to bring our shareholders the best combination of quality and
price in the assets we purchase so as to achieve the best risk-adjusted returns
available in the corporate loan assets class.
Economic Outlook
The economy continued to show the more moderate growth path that it started in
the middle of the second quarter. Third quarter gross domestic product ("GDP")8
is expected to have slowed to 3% to 4% from an annual pace above 5%. An increase
in corporate earnings problems is causing poor performance in many of the
capital markets including large segments of the stock market. The number of
problems seem to have increased more than would be warranted given the small
reduction in the pace of economic growth, which is causing concern as to what
would happen if there were a recession. The list of problems includes continued
poor pricing power, the rapid pace of technological change, problems in
digesting acquisitions, the sharp increase in the price of oil and the weak
euro.9
Combining these problems during the period with a significant reduction in
liquidity in the corporate debt markets has resulted in corporate debt
securities acting like stocks when there are negative surprises: shoot first and
ask questions later. This has caused investor apprehension to spread quickly,
with the end result being a developing "market-driven" credit crunch.
The Fed left short-term interest rates unchanged in the third quarter of 2000 as
GDP, consumer spending and employment growth moderated. Expectations for future
short term interest rate increases continued to decline as weak stock
performance, more financial problems and continued low core inflation led to the
growing perception that the Fed's next move may be to cut interest rates.
The performance of the U.S. corporate sector is playing a greater role in our
outlook for the overall economy. The consumer sector remains healthy, albeit at
a slightly slower pace than in the past few years. A greater incidence of
earnings and credit problems is causing funding costs to increase and in some
cases capital availability to dry up for a number of companies around the world.
That market driven credit crunch along with the crash of the Internet mania is
causing increased concern about the outlook for capital spending including
technology spending. Reduced technology spending is unlikely to drive the total
economy into a recession by itself, but it could start to cause employment to
weaken. Also, a weak stock market could start to drag on consumer spending.
8 GDP is the market value of the goods and services produced by labor and
property in the U.S. GDP is comprised on consumer and government purchases,
private domestic investments and net exports of goods and services.
9 The euro is the single currency of the European Monetary Union that was
adopted by Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the
Netherlands, Austria, Portugal and Finland on January 1, 1999.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 5
<PAGE>
To date, the consumer sector has been robust. The consumer sector could be hurt
by, but has yet to show much impact from, the rise in oil prices. Auto sales
look like they are finally slowing but lower mortgage rates are bolstering the
housing market. Employment growth has slowed, but there is still great debate as
to whether the decline in employment growth is due to slower demand or lack of
people to hire (e.g., the unemployment rate for college educated people is at a
record low).
If the economy does weaken in response to corporate problems and inflation
remains under control, the Fed may ease aggressively. However, we think this
point is several quarters off.
If the economy remains strong and corporate problems dissipate, stocks are
likely to take off and spreads in the corporate debt markets should tighten. In
that environment, we may have to be mindful of inflation trends that could put
the Fed back on a tightening path.
Either of the two above scenarios are realistic to us. The behavior of investor
and corporate confidence from here on may play a key role in the outcome, with
the continuation of strength in consumer confidence a key to preventing problems
from spreading.
Thank you for investing in the Travelers Corporate Loan Fund Inc. We look
forward to seeking to achieve our objectives of maximizing current income
consistent with prudent efforts to preserve capital. We promise to seek the best
risk-adjusted returns available from corporate loans and to work hard to provide
you with a stable, long-term investment with competitive rates of return.
Sincerely,
/s/ Heath B. McLendon /s/ Glenn N. Marchak
Heath B. McLendon Glenn N. Marchak
Chairman Vice President and
Investment Officer
October 25, 2000
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
Take Advantage of the Fund's Dividend Reinvestment Plan!
Did you know that Fund investors who reinvest their dividends are taking
advantage of one of the most effective wealth-building tools available today?
Systematic investments put time to work for you through the strength of
compounding.
As an investor in the Fund, you can participate in its Dividend Reinvestment
Plan ("Plan") which is a convenient, simple and efficient way to reinvest your
dividends and capital gains, if any, in additional shares of the Fund. Below is
a summary of how the Plan works.
Plan Summary
If you participate in the Dividend Reinvestment Plan, your dividends and capital
gains distributions will be reinvested automatically in additional shares of the
Fund.
The number of common stock shares in the Fund you will receive in lieu of a cash
dividend is determined in the following manner. If the market price of the
common stock is equal to or higher than the net asset value ("NAV") per share as
of the determination date (defined as the fourth New York Stock Exchange trading
day preceding the payment for the dividend or distribution), plan participants
will be issued new shares of common stock at a price per share equal to the
greater of: (a) the NAV per share on the valuation date or (b) 95% of the market
price per share on the valuation date.
If the market price is less than the NAV per share as of the determination date,
PFPC Global Fund Services ("Plan Agent") will buy common stock for your account
in the open market. If the Plan Agent begins to purchase additional shares in
the open market and the market price of the shares subsequently exceeds the NAV
per share, before the purchases are completed, the Plan Agent will cease making
open-market purchases and have the Fund issue the remaining dividend or
distribution in shares at a price per share equal to the greater of either the
NAV per share on the valuation date or 95% of the market price at which the Fund
issues the remaining shares.
A more complete description of the current Plan appears in the section of this
report beginning on page 21. To find out more detailed information about the
Plan and about how you can participate, please call PFPC Global Fund Services at
(800) 331-1710.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 7
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments September 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
================================================================================
SENIOR COLLATERALIZED LOANS -- 99.0%
Aerospace/Defense -- 4.6%
<S> <C> <C> <C>
$ 7,337,732 DeCrane Aircraft Holdings, Inc. Term B 9/30/05 $ 7,356,076
2,481,268 DeCrane Aircraft Holdings, Inc. Term D 12/24/06 2,487,471
--------------------------------------------------------------------------------
9,843,547
--------------------------------------------------------------------------------
Automotive -- 4.9%
3,731,250 Dura Automotive Systems, Inc. Term B 3/31/06 3,729,011
1,958,102 J.L. French Automotive Casting, Term B 10/21/06 1,962,998
Inc.
4,822,184 Stoneridge, Inc. Term B 12/31/05 4,822,184
--------------------------------------------------------------------------------
10,514,193
--------------------------------------------------------------------------------
Building Materials -- 5.0%
1,484,211 Better Materials and Aggregates Term B 9/30/07 1,483,320
2,000,000 Hanley-Wood, Inc. Term B 9/21/07 1,998,800
1,390,287 Onex ABCO LP (Magnatrax) Term B 11/15/05 1,392,929
2,933,389 Panolam Industries Term B 1/31/07 2,929,869
International, Inc.
2,985,000 Trussway Holdings Inc. Term B 12/31/06 2,979,329
--------------------------------------------------------------------------------
10,784,247
--------------------------------------------------------------------------------
Chemicals -- 7.4%
2,977,480 Georgia Gulf Corp. Term B 11/10/06 3,001,598
1,485,000 Huntsman ICI Chemical LLC Term B 6/30/07 1,496,137
1,485,000 Huntsman ICI Chemical LLC Term C 6/30/08 1,496,137
1,541,566 Lyondell Petrochemical Co. Term B 6/30/05 1,565,152
7,917,217 Lyondell Petrochemical Co. Term E 5/17/06 8,233,905
--------------------------------------------------------------------------------
15,792,929
--------------------------------------------------------------------------------
Conglomerates -- 1.2%
1,500,000GenTek, Inc. Term C 8/9/07 1,505,700
1,000,000 Iron Mountain, Inc. Term B 2/28/06 1,007,500
--------------------------------------------------------------------------------
2,513,200
--------------------------------------------------------------------------------
Construction Machinery -- 1.4%
3,000,000 United Rentals, Inc. Term C 6/30/06 2,966,400
--------------------------------------------------------------------------------
Consumer Products -- 3.8%
942,875 American Safety Razor Co. Term B 4/30/07 945,798
2,833,491 Doane Pet Care Co. Term B 11/12/05 2,837,174
1,301,370 Doane Pet Care Co. Term C 11/12/06 1,303,061
1,975,000 Holmes Products Corp. Term B 2/5/07 1,977,568
1,000,000 Shop Vac Corp. Multi-Draw 7/7/07 1,000,000
--------------------------------------------------------------------------------
8,063,601
--------------------------------------------------------------------------------
Electric -- 1.9%
4,000,000 Western Resources, Inc. Term 3/17/03 4,040,000
--------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
------------------------------------------------------------------------------
Schedule of Investments (continued) September 30, 2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
==============================================================================
Entertainment -- 5.4%
<S> <C> <C> <C>
$ 2,970,000 Corus Entertainment Inc. Term B 9/30/07 $2,964,357
1,250,000 Entravision Communications Term B 12/31/08 1,254,750
1,700,000 Hoops, L.P. Term A 10/28/05 1,695,750
3,500,000 Six Flags Theme Parks Inc. Term B 11/5/05 3,513,300
80,000 Washington Football Group, Inc. Term A 10/29/04 80,048
1,920,000 Washington Football Inc. Term C 10/29/04 1,932,096
------------------------------------------------------------------------------
11,440,301
------------------------------------------------------------------------------
Environmental -- 3.7%
2,272,727 Allied Waste North America, Inc. Term B 7/30/06 2,207,500
2,727,273 Allied Waste North America, Inc. Term C 7/30/07 2,649,000
3,000,000 Casella Waste System, Inc. Term B 12/14/06 2,970,000
------------------------------------------------------------------------------
7,826,500
------------------------------------------------------------------------------
Food -- 1.8%
1,300,200 New World Pasta Co. Term B 1/28/06 1,301,890
2,000,000 NSC Operating Co. (Nutrasweet) Term B 6/1/07 2,010,000
500,000 NSC Operating Co. (Nutrasweet) 2nd Lien 6/1/10 498,750
------------------------------------------------------------------------------
3,810,640
------------------------------------------------------------------------------
Gaming -- 1.2%
1,330,000 Isle of Capri Casinos, Inc. Term B 3/2/06 1,336,650
1,163,750 Isle of Capri Casinos, Inc. Term C 3/2/07 1,169,569
------------------------------------------------------------------------------
2,506,219
------------------------------------------------------------------------------
Health Care -- 3.3%
936,375 Stericycle, Inc. Term B 11/10/06 944,615
6,098,978 Stryker Corp. Term B 12/4/05 6,129,473
------------------------------------------------------------------------------
7,074,088
------------------------------------------------------------------------------
Home Construction -- 0.9%
2,000,000 Lennar Corp. Term B 5/2/07 2,000,000
------------------------------------------------------------------------------
Independent Energy -- 4.7%
10,000,000 Heating Oil Partners LP Term 9/30/03 9,975,000
------------------------------------------------------------------------------
Industrial - Other -- 9.0%
2,441,860 Flowserve Corp. Term B 4/20/08 2,454,069
2,170,666 General Cable Corp. Term B 5/27/07 2,165,239
2,000,000 Hines Nurseries, Inc. Term B 3/28/05 2,002,600
2,250,000 Mark IV Industries, Inc. Term B 9/11/08 2,247,300
1,485,000 Mueller Group, Inc. Term B 8/16/06 1,492,425
1,485,000 Mueller Group, Inc. Term C 8/16/07 1,499,850
997,500 Mueller Group, Inc. Term D 8/16/07 1,007,475
3,980,000 SPX Corp. Term B 12/31/06 4,002,288
2,358,628 Western Industries Ltd. Term B 6/23/06 2,357,213
------------------------------------------------------------------------------
19,228,459
------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) September 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
====================================================================================================
Lodging -- 1.4%
<S> <C> <C> <C> <C>
$ 3,000,000 Starwood Hotels & Resorts Worldwide, Inc. IRN 2/23/03 $ 3,011,400
----------------------------------------------------------------------------------------------------
Media - Cable -- 4.5%
7,000,000 Charter Communications Operating LLC Term B 3/18/08 7,006,300
1,736,842 Classic Cable, Inc. Term B 1/31/08 1,736,842
868,421 Classic Cable, Inc. Term C 1/31/08 869,550
----------------------------------------------------------------------------------------------------
9,612,692
----------------------------------------------------------------------------------------------------
Media - Non-Cable -- 10.2%
4,825,757 21st Century Newspapers Term B 9/15/05 4,822,862
4,500,000 American Media Operation Inc. Term B 4/1/07 4,531,050
2,500,000 Century Cable Holdings (Adelphia) Term B 9/28/09 2,500,000
4,000,000 Susquehanna Media Co. Term B 6/30/08 4,010,000
1,792,112 Trader.com N.V. Term B 12/6/06 1,783,152
1,207,887 Trader.com N.V. Term C 12/6/07 1,201,848
3,000,000 Young Broadcasting, Inc. Term B 12/31/06 3,015,000
----------------------------------------------------------------------------------------------------
21,863,912
----------------------------------------------------------------------------------------------------
Metals -- 0.8%
1,688,667 Ucar International Inc. Term B 12/31/07 1,689,680
----------------------------------------------------------------------------------------------------
Other - Energy -- 0.7%
1,416,094 TransMontaigne Inc. Term B 7/1/06 1,410,856
----------------------------------------------------------------------------------------------------
Other - Financial Institutions -- 3.0%
1,477,068 Bridge Information Systems, Inc. Multi-Draw 5/29/03 1,211,195
2,739,352 Bridge Information Systems, Inc. Term B 5/29/05 2,246,269
2,977,500 Outsourcing Solutions Inc. Term B 6/10/06 2,966,483
----------------------------------------------------------------------------------------------------
6,423,947
----------------------------------------------------------------------------------------------------
Paper -- 0.6%
1,277,778 Jefferson Smurfit Corp. Term B 3/31/06 1,284,167
----------------------------------------------------------------------------------------------------
Pharmaceuticals -- 0.2%
510,654 King Pharmaceuticals, Inc. Term B 12/22/06 512,237
----------------------------------------------------------------------------------------------------
Railroads -- 1.4%
2,000,000 Kansas City Southern Railway Co. Term B 12/29/06 2,008,800
987,072 RailAmerica, Inc. Term B 12/31/06 992,008
----------------------------------------------------------------------------------------------------
3,000,808
----------------------------------------------------------------------------------------------------
Technology -- 1.1%
2,288,500 Trend Technologies, Inc. Term B 3/9/07 2,287,127
----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) September 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
=================================================================================================
Telecommunications -- 14.3%
<S> <C> <C> <C>
$ 1,446,668 American Cellular Corp. Term B 3/31/08 $ 1,446,667
1,653,333 American Cellular Corp. Term C 3/31/09 1,653,333
4,912,597 Centennial Cellular Operating Co. Term B 5/1/07 4,940,108
4,912,500 Centennial Cellular Operating Co. Term C 11/30/07 4,940,010
1,000,000 Crown Castle Operating Co. Term B 3/31/08 1,001,900
1,985,000 Dobson Operating Co. Term B 1/7/08 1,992,543
3,750,000 Nextel Finance Co. Term B 6/30/08 3,794,625
3,750,000 Nextel Finance Co. Term C 12/31/08 3,794,625
2,500,000 Rural Cellular Corp. Term B 10/3/08 2,498,500
2,500,000 Rural Cellular Corp. Term C 4/3/09 2,498,500
2,000,000 Western Wireless Corp. Term B 9/30/08 2,000,000
-------------------------------------------------------------------------------------------------
30,560,811
-------------------------------------------------------------------------------------------------
Transportation Services -- 0.6%
1,180,722 Evergreen International Aviation, Inc. Term D 4/28/04 1,179,305
-------------------------------------------------------------------------------------------------
TOTAL SENIOR COLLATERALIZED LOANS
(Cost--$210,646,119) 211,216,266
=================================================================================================
SHORT-TERM INVESTMENTS -- 1.0%
Commercial Paper -- 1.0%
1,110,000 Household Financial Corp., 6.660% due 10/2/00 1,109,589
1,000,000 Transamerica Financial Corp., 6.700% due 10/2/00 999,628
-------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $2,109,217) 2,109,217
=================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $212,755,336**) $ 213,325,483
=================================================================================================
</TABLE>
* Market value is determined using current market prices which are supplied
weekly by an independent third party pricing service.
** Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviations used in this schedule:
-----------------------------------
IRN -- Increasing Rate Note
Multi Draw -- Multi Draw Term Loan
Term -- Term Loan
Term A -- Term Loan A
Term B -- Term Loan B
Term C -- Term Loan C
Term D -- Term Loan D
Term E -- Term Loan E
2nd Lien -- Subordinate Loan to 1st Lien
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities September 30, 2000
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $212,755,336) $ 213,325,483
Cash 137,735
Dividends and interest receivable 1,615,346
--------------------------------------------------------------------------------
Total Assets 215,078,564
--------------------------------------------------------------------------------
LIABILITIES:
Notes payable (Note 4) 66,200,000
Dividends payable 380,156
Management fees payable 161,238
Interest payable 82,331
Accrued expenses 119,336
--------------------------------------------------------------------------------
Total Liabilities 66,943,061
--------------------------------------------------------------------------------
Total Net Assets $ 148,135,503
================================================================================
NET ASSETS:
Par value of capital shares $ 9,782
Capital paid in excess of par value 146,269,339
Undistributed net investment income 1,067,638
Accumulated net realized gain from security transactions 218,597
Net unrealized appreciation of investments 570,147
--------------------------------------------------------------------------------
Total Net Assets $ 148,135,503
================================================================================
Shares Outstanding 9,781,667
--------------------------------------------------------------------------------
Net Asset Value $ 15.14
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations For the Year Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 20,700,443
Less: Interest expense (4,516,239)
--------------------------------------------------------------------------------
Total Investment Income 16,184,204
--------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 2,251,886
Audit and legal 82,720
Shareholder and system servicing fees 55,800
Shareholder communications 44,000
Directors' fees 38,000
Registration fees 16,873
Custody 6,000
Other 32,529
--------------------------------------------------------------------------------
Total Expenses 2,527,808
--------------------------------------------------------------------------------
Net Investment Income 13,656,396
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 126,909,722
Cost of securities sold 126,649,117
--------------------------------------------------------------------------------
Net Realized Gain 260,605
--------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of year 565,557
End of year 570,147
--------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 4,590
--------------------------------------------------------------------------------
Net Gain on Investments 265,195
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 13,921,591
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Year Ended September 30, 2000
and the Period Ended September 30, 1999
<TABLE>
<CAPTION>
2000 1999(a)
==================================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income $ 13,656,396 $ 9,436,402
Net realized gain 260,605 221,119
Increase in net unrealized appreciation 4,590 565,557
--------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 13,921,591 10,223,078
--------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (14,070,928) (8,175,111)
Net realized gains (263,127) --
--------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (14,334,055) (8,175,111)
--------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTES 5 AND 6):
Proceeds from sale of shares (net of $225,000 offering costs) -- 146,500,000
--------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions -- 146,500,000
--------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (412,464) 148,547,967
NET ASSETS:
Beginning of year 148,547,967 --
--------------------------------------------------------------------------------------------------
End of year* $ 148,135,503 $ 148,547,967
==================================================================================================
* Includes undistributed net investment income of: $ 1,067,638 $ 1,454,270
==================================================================================================
</TABLE>
(a) For the period from November 20, 1998 (commencement of operations) to
September 30, 1999.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Cash Flows
--------------------------------------------------------------------------------
For the Year Ended September 30, 2000
CASH FLOWS PROVIDED BY OPERATING AND INVESTING ACTIVITIES:
Interest and dividends received $ 20,286,310
Operating expenses paid (2,663,797)
Interest paid on bank loans (4,584,551)
Net short-term purchases (1,109,217)
Purchases of portfolio securities (123,151,117)
Proceeds from disposition of long-term securities 126,909,721
--------------------------------------------------------------------------------
Net Cash Flows Provided By Operating and Investing Activities 15,687,349
--------------------------------------------------------------------------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Net borrowings under line-of-credit agreement (800,000)
Cash dividends paid on Common Stock (14,381,907)
--------------------------------------------------------------------------------
Net Cash Flows Used By Financing Activities (15,181,907)
--------------------------------------------------------------------------------
NET INCREASE IN CASH 505,442
Payable to Bank, Beginning of Year (367,707)
--------------------------------------------------------------------------------
Cash, End of Year $ 137,735
================================================================================
RECONCILIATION OF INCREASE IN NET ASSETS
FROM OPERATIONS TO NET CASH FLOWS PROVIDED BY
OPERATING AND INVESTING ACTIVITIES:
Increase in Net Assets From Operations $ 13,921,591
--------------------------------------------------------------------------------
Amortization of discount on securities 242,097
Decrease in investments, at value 2,142,095
Decrease in other assets 7,930
Decrease in interest payable for money borrowed (68,312)
Increase in dividends and interest receivable (422,063)
Decrease in accrued expenses (135,989)
--------------------------------------------------------------------------------
Total Adjustments 1,765,758
--------------------------------------------------------------------------------
Net Cash Flows Provided By Operating and Investing ActiVities $ 15,687,349
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Travelers Corporate Loan Fund Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) U.S. government
agencies and obligations are valued at the mean between the bid and ask prices;
(c) securities, excluding senior collateralized loans, for which market
quotations are not available will be valued in good faith at fair value by or
under the direction of the Board of Trustees; (d) securities maturing within 60
days are valued at cost plus accreted discount, or minus amortized premium,
which approximates value; (e) gains or losses on the sale of securities are
calculated by using the specific identification method; (f) interest income,
adjusted for amortization of premium and accretion of discount, is recorded on
an accrual basis; (g) the Fund intends to comply with the applicable provisions
of the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes; (h) the
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. At September 30, 2000, reclassifications were made to the Fund's
capital accounts to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. Accordingly, a portion
of undistributed net investment loss amounting to $27,900 was reclassified to
paid-in capital. Net investment income, net realized gains and net assets were
not affected by this change; (i) estimates and assumptions are required to be
made regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ; and (j) collateralized
senior loans will be valued at readily ascertainable market values and in the
absence of these market values the loans are valued at fair value. Fair value is
determined in accordance with guidelines established by the Fund's Board of
Directors. In valuing a loan, SSB Citi Fund Management LLC ("SSBC"), the Fund's
investment adviser, with the assistance of the Travelers Asset Management
International Company LLC ("TAMIC"), the sub-adviser, will consider among other
factors: (1) the creditworthiness of the borrower and any party interpositioned
between the Fund and the borrower; (2) the current interest rate, period until
next interest rate reset and maturity date of the collateralized senior loan;
(3) recent market prices for similar loans, if any; and (4) recent prices in the
market for instruments with similar quality, rate, period until next interest
rate reset, maturity, terms and
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
conditions; SSBC may also consider prices or quotations, if any, provided by
banks, dealers or pricing services which may represent the prices at which
secondary market transactions in the collateralized senior loans held by the
Fund have or could have occurred. However, because the secondary market has not
yet fully developed, SSBC will not rely solely on such prices or quotations.
Facility fees and upfront fees, incurred by the Fund on loan agreements, are
amortized over the term of the loan.
2. Management Agreement and Transactions with Affiliated Persons
SSBC, a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), which, in
turn, is a wholly-owned subsidiary of Citigroup Inc. ("Citigroup") acts as
investment adviser for the Fund. The Fund pays SSBC a management fee for its
investment advisory and administration services calculated at an annual rate of
1.05% of the average weekly assets. This fee is calculated weekly and paid
monthly.
SSBC has entered into a sub-investment advisory agreement with TAMIC, another
wholly-owned indirect subsidiary of Citigroup. Pursuant to a sub-advisory
agreement, TAMIC is responsible for certain investment decisions related to the
Fund. SSBC pays TAMIC a fee of 0.50% of the value of the Fund's average weekly
assets for the services TAMIC provides as sub-adviser. This fee is calculated
weekly and paid monthly.
All officers and one Director of the Fund are employees of either Salomon Smith
Barney Inc. ("SSB"), another subsidiary of Citigroup or its affiliates.
3. Investments
During the year ended September 30, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $ 123,086,202
--------------------------------------------------------------------------------
Sales 126,909,722
================================================================================
At September 30, 2000, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $ 1,458,574
Gross unrealized depreciation (888,427)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 570,147
================================================================================
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. Commitments
The Fund has entered into a 364 day revolving credit agreement and a three year
revolving credit agreement to borrow up to an aggregate of $73.5 million from a
syndicate of major financial institutions. The 364 day revolving credit
agreement matures on January 30, 2001 and the three year revolving credit
agreement matures on February 1, 2002. Borrowing rates under both of these
agreements are based on a fixed spread over LIBOR or the Prime Rate. The Fund
pays a facility fee quarterly at 0.10% and 0.15% per annum for the 364 day and
three year revolving credit agreements, respectively. The amount of aggregate
borrowings outstanding at September 30, 2000 was $66.2 million at a weighted
average interest rate of 6.65%, which represented 30.89% of net assets plus
borrowings. Average aggregate borrowings for the year ended September 30, 2000,
were $69,922,180 and the average annualized interest rate was 6.67%.
5. Offering Costs
Offering costs of $607,394 were incurred at the inception of the Fund. Of this
amount, $382,394 was paid by SSBC. The balance of $225,000 was paid by the Fund.
6. Capital Shares
At September 30, 2000, the Fund had 150,000,000 shares of capital stock
authorized, ("Common Stock") with a par value of $0.001 per share.
Transactions in shares of each class were as follows:
Year Ended Period Ended
September 30, 2000 September 30, 1999(a)
-------------------- -----------------------
Shares Amount Shares Amount
============================================================================
Shares sold (net of
$225,000 offering
costs) -- -- 9,781,667 $146,500,000
----------------------------------------------------------------------------
Net Increase -- -- 9,781,667 $146,500,000
============================================================================
(a)For the period from November 20, 1998 (commencement of operations) to
September 30, 1999.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended September
30, except where noted:
2000 1999(1)
================================================================================
Net Asset Value, Beginning of Year $ 15.19 $ 15.00
--------------------------------------------------------------------------------
Income From Operations:
Net investment income 1.40 0.97
Net realized and unrealized gain 0.02 0.09
--------------------------------------------------------------------------------
Total Income From Operations 1.42 1.06
--------------------------------------------------------------------------------
Offering Costs on Issuance of Common Stock -- (0.02)
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (1.44) (0.85)
Net realized gains (0.03) --
--------------------------------------------------------------------------------
Total Distributions (1.47) (0.85)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.14 $ 15.19
--------------------------------------------------------------------------------
Total Return, Based on Market Value 13.35% 1.68%++
--------------------------------------------------------------------------------
Total Return, Based on Net Asset Value 10.55% 7.45%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 148,136 $ 148,548
--------------------------------------------------------------------------------
Ratios to Average Net Assets:
Net investment income 9.20% 7.48%+
Interest expense 3.04 1.68+
Organization expense -- 0.24+
Other expenses 1.70 1.63+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 59% 53%
--------------------------------------------------------------------------------
Market Value, End of Year $ 14.688 $ 14.375
================================================================================
(1) For the period from November 20, 1998 (commencement of operations) to
September 30, 1999.
++ Total return is not annualized, as it may not be
representative of the total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Independent Auditors' Report
--------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Travelers Corporate Loan Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Travelers Corporate Loan Fund Inc. as of
September 30, 2000, the related statements of operations and cash flows for the
year then ended, and the statements of changes in net assets and financial
highlights for the year then ended and for the period from November 20, 1998
(commencement of operations) to September 30, 1999. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2000 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Travelers Corporate Loan Fund Inc. as of September 30, 2000, the results of its
operations and its cash flows for the year then ended, and the changes in its
net assets and financial highlights for the year then ended and for the period
from November 20, 1998 to September 30, 1999, in conformity with accounting
principles generally accepted in the United States of America.
KPMG LLP
New York, New York
November 13, 2000
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Dividend Reinvestment Plan (unaudited)
--------------------------------------------------------------------------------
Pursuant to the Plan, shareholders whose Common Stock is registered in their own
names will be deemed to have elected to have all distributions reinvested
automatically in additional Common Stock of the Fund by PFPC Global Fund
Services ("Plan Agent"), as agent under the Plan, unless such shareholders elect
to receive distributions in cash. Shareholders who elect to receive
distributions in cash will receive all distributions in cash paid by check in
U.S. dollars mailed directly to the shareholder by PFPC Global Fund Services, as
dividend paying agent. In the case of shareholders such as banks, brokers or
nominees, which hold Common Stock for others who are the beneficial owners, the
Plan Agent will administer the Plan on the basis of the number of shares of
Common Stock certified from time to time by the record shareholders as
representing the total amount registered in the record shareholder's name and
held for the account of beneficial owners that have not elected to receive
distributions in cash. Investors that own shares of Common Stock registered in
the name of a bank, broker or other nominee should consult with such nominee as
to participation in the Plan through such nominee, and may be required to have
their shares registered in their own names in order to participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
Unless the Board of Directors of the Fund declares a dividend or capital gains
distribution payable only in cash, non-participants in the Plan will receive
cash and participants in the Plan will receive shares of Common Stock of the
Fund, to be issued by the Fund or purchased by the Plan Agent in the open market
as outlined below. Whenever the market price per share of Common Stock is equal
to or exceeds the net asset value per share as of the determination date
(defined as the fourth New York Stock Exchange trading day preceding the payment
date for the dividend or distribution), participants will be issued new shares
of Common Stock at a price per share equal to the greater of: (a) the net asset
value per share on the valuation date or (b) 95% of the market price per share
on the valuation date. Except as noted below, the valuation date generally will
be the dividend or distribution payment date. If net asset value exceeds the
market price of the Fund's shares of Common Stock as of the determination date,
the Plan Agent will, as agent for the participants, buy shares in the open
market, on the New York Stock Exchange or elsewhere, for the participants'
accounts as soon as practicable commencing on the trading day following the
determination date and generally terminating no later than 30 days after the
dividend or distribution payment date. If, before the Plan Agent has completed
its purchases, the market price exceeds the net asset value of a share of Common
Stock, the average per share purchase price paid by the Plan Agent may exceed
the net asset value of the Fund's shares, resulting in the acquisition
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Dividend Reinvestment Plan (unaudited) (continued)
--------------------------------------------------------------------------------
of fewer shares than if the dividend or capital gains distribution had been paid
in shares of Common Stock issued by the Fund. Because of the foregoing
difficulty with respect to open-market purchases, the Plan provides that if the
Plan Agent is unable to invest the full dividend amount in open-market purchases
during the permissible purchase period or if the market discount shifts to a
market premium during such purchase period, the Plan Agent will cease making
open-market purchases and will receive the uninvested portion of the dividend
amount in newly issued shares of Common Stock (in which case the valuation date
will be the date such shares are issued) at a price per share equal to the
greater of (a) the net asset value per share on the valuation date or (b) 95% of
the market price per share on the valuation date.
A shareholder may elect to withdraw from the Plan at any time upon written
notice to the Plan Agent or by calling the Plan Agent at 1-800-331-1710. When a
participant withdraws from the Plan, or upon termination of the Plan as provided
below, certificates for whole shares of Common Stock credited to his or her
account under the Plan will be issued and a cash payment will be made for any
fractional shares credited to such account. An election to withdraw from the
Plan will, until such election is changed, be deemed to be an election by a
shareholder to take all subsequent dividends and distributions in cash.
Elections will be effective immediately if notice is received by the Plan Agent
not less than ten days prior to any dividend or distribution record date;
otherwise such termination will be effective after the investment of the then
current dividend or distribution. If a withdrawing shareholder requests the Plan
Agent to sell the shareholder's shares upon withdrawal from participation in the
Plan, the withdrawing shareholder will be required to pay a $5.00 fee plus
brokerage commissions.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmation of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in noncertificated form in
the name of the participant, and each shareholder's proxy will include those
shares of Common Stock purchased pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions. The Plan Agent's fee for the handling of reinvestment of
dividends and distributions will be paid by the Fund. There will be no brokerage
charges with respect to shares of Common Stock issued directly by the Fund as a
result of dividends or capital gains distributions payable either in shares or
in cash. However, each participant will pay a pro rata share of brokerage
commissions incurred with respect to the Plan Agent's
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Dividend Reinvestment Plan (unaudited) (continued)
--------------------------------------------------------------------------------
open market purchases in connection with the reinvestment of dividends or
capital gains distributions.
The automatic reinvestment of dividends and distributions will not relieve
participants of any U.S. federal income tax that may be payable on such
dividends or distributions.
Experience under the Plan may indicate that changes thereto may be desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid: (i) subsequent to notice of the
change sent to all participants at least 30 days before the record date for such
dividend or distribution or (ii) otherwise in accordance with the terms of the
Plan. The Plan also may be amended or terminated by the Plan Agent, with the
Board of Directors' prior written consent, on at least 30 days' prior written
notice to all participants. All correspondence concerning the Plan should be
directed by mail to PFPC Global Fund Services, P.O. Box 8030, Boston,
Massachusetts 02266-8030 or by telephone at (800) 331-1710.
--------------------------------------------------------------------------------
Travelers Corporate Loan Fund Inc. 23
<PAGE>
(This page intentionally left blank.)
24
<PAGE>
Directors
Allan J. Bloostein
Martin Brody
Dwight Crane
Robert Frankel
William R. Hutchinson
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Glenn N. Marchak
Vice President and
Investment Officer
Irving P. David
Controller
Christina T. Sydor
Secretary
Investment Adviser
SSB Citi Fund Management LLC
Sub-Investment Adviser
Travelers Asset Management
International Company LLC
Custodian
PFPC Trust Company
Transfer Agent
PFPC Global Fund Services
P.O. Box 8030
Boston, Massachusetts 02266-8030
This report is intended only for shareholders of Travelers Corporate Loan Fund
Inc. It is not a Prospectus, circular or representation intended for use in the
purchase or sale of shares of the Fund or any securities mentioned in this
report.
Travelers Corporate
Loan Fund Inc.
7 World Trade Center
New York, New York 10048
FD01737 11/00
