<PAGE>
[LOGO] Investing
EATON VANCE for the [Graphic Omitted]
- ------------ 21st
Mutual Funds Century(R)
SEMIANNUAL REPORT DECEMBER 31, 1998
EATON VANCE
SENIOR
INCOME
TRUST
FUND
Eaton Vance
Global Management-Global Distribution
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
Letter to Shareholders
- --------------------------------------------------------------------------------
[Photo of James B. Hawkes]
James B. Hawkes
President
We welcome shareholders of Eaton Vance Senior Income Trust with this initial
shareholder report. The Fund began operations in October, in the midst of global
market turbulence. However, this climate was beneficial to the Fund as it
provided attractive buying opportunities and resulted in the Fund being fully
invested sooner than had been anticipated. As such, the Fund paid a special
dividend of $0.058 per share in addition to the regular monthly dividend for
December. Based on the December monthly dividend of $0.068 per share and a
closing share price of $9.4375, the Fund's current yield was 8.64% at December
31. That yield exceeded the Fund's initial yield target range.
Despite these positive events, the Fund traded at a discount to its net asset
value at December 31. The Fund had a total return of -4.4% during the two-month
period from inception on October 30, 1998 through December 31, 1998. That return
was the result of a decline in share price from $10.00 on October 30, 1998 to
$9.44 on December 31, 1998, and the reinvestment of $0.068 in regular monthly
dividends and $0.058 in special dividends.
Amid fears of a global credit crisis,
the Federal Reserve restored investor confidence to the market...
Despite economic crisis in Asia, a near meltdown in Russia, and concerns over
emerging markets, the U.S. economy grew 3.9% in 1998, matching its performance
of the previous year. Though inflation remained in check, U.S. markets feared
the onset of a global credit crunch.
To avert a possible global liquidity crisis, the Federal Reserve lowered
short-term rates on three occasions in the fall. The rate reductions proved
effective, restoring confidence to the market.
Eaton Vance Senior Income Trust
sees good income opportunities
in the year ahead...
The past few months have provided a challenging market environment for
fixed-income investors. Crises and interest rate fluctuations have made the
markets unusually volatile, while some fixed-income investors have seen their
investment returns diminished. By investing at least 80% of its assets in
senior, secured, floating-rate loans, Eaton Vance Senior Income Trust is
designed to address those issues: to provide a high level of current yield while
limiting share price volatility caused by interest rate fluctuations. Fund
shares are traded on the New York Stock Exchange, thereby providing daily
liquidity. The Fund will continue its strategy while seeking more promising
opportunities in the coming year. In the following pages, co-portfolio managers
Scott Page and Payson Swaffield review the Fund's first two months and look
ahead to 1999.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes
President
February 9, 1999
- --------------------------------------------------------------------------------
Fund Information
as of December 31, 1998
Performance(1)
- --------------------------------------------------------------------------------
Cumulative Total Return (by market value, NYSE)
Life of Fund (10/30/98) -4.4%
Cumulative Total Return (at net asset value)
- --------------------------------------------------------------------------------
Life of Fund (10/30/98) 1.4%
Ten Largest Holdings(2) By total net assets
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp. 2.0%
Federal-Mogul Corp. 2.0
Capstar Radio Broadcasting Company 1.9
K&F Industries 1.5
Six Flags Theme Parks, Inc. 1.5
Patriot American Hospitality, Inc. 1.4
Intermedia Partners Group VI 1.4
Del Monte Corp. 1.4
Sealy Mattress Company 1.4
The Scotts Company 1.4
(1) Returns are calculated by determining the percentage change in net asset
value and share price with all distributions reinvested. (2) Ten largest
holdings account for 15.9% of the Fund's investments, determined by dividing
the total market value of the holdings by the total net assets of the Fund.
Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
Management Discussion
- --------------------------------------------------------------------------------
[Photo of Scott H. Page]
Scott H. Page
[Photo of Payson F. Swaffield]
Payson F. Swaffield
An interview with Scott H. Page and Payson F. Swaffield, co-portfolio managers
of Eaton Vance Senior Income Trust.
Q: Scott, the Fund made its debut in a period of extra- ordinary volatility in
the world's financial markets. How would you evaluate the Fund's performance
during those initial turbulent months?
A: MR. PAGE: While the Fund experienced some share price fluctuation in its
first two months of operations, that performance should be viewed in light
of the volatili- ty of other fixed-income markets, which gyrated
significantly in the final months of 1998. Of those markets, only the
Treasury market was able to sustain a rally throughout the year, and that
was largely due to concerns about weakness in the emerging markets. With
100% of its holdings dollar-denominated and no exposure to emerging market
borrowers, the Fund's portfolio of primarily senior, floating-rate loans
performed in line with expectations.
Q: What kind of growth did the loan market generate in 1998?
A: MR. SWAFFIELD: The loan market continued to develop in 1998 in terms of
size, depth and quality. The supply of new loans into the market was more
than $250 billion in 1998, exceeding the pace set in the previous year. In
addition, the number of participants in the loan market continued to expand.
At the end of 1998, there were more than 70 mutual funds and other
institutional investment vehicles purchasing senior loans, up from 14 just
five years ago.
Finally, even in this uncertain economic climate, loan quality has held
steady. That's an important consideration. In part, that reflects the
improved structure of new loans, as borrowers have tended to have better
interest coverage than in past cycles. For example, in 1988, companies with
highly leveraged loans had an average debt multiple of 7.1 times cash flow.
By 1998, that multiple had fallen to 4.6.
- --------------------------------------------------------------------------------
Five Largest Sector Weightings(1)
- --------------------------------------------------------------------------------
Cable Television 11.5%
Manufacturing - Diversified 7.6%
Health Care - Diversified 6.1%
Chemicals 5.4%
Textile Manufacturing 5.3%
Fund Overview(1)
- --------------------------------------------------------------------------------
Total net assets $356 million
Number of borrowers 115
Industries represented 46
Collateral coverage ratio 1.5 to 1
Weighted days-to-interest rate reset 64 days
Average maturity 7.5 Yrs.
Average size per borrowing $3.9 million
(1) Five largest sector weightings account for 35.9% of the Fund's investments,
determined by dividing the total market value of the holdings by the total
net assets of the Fund. Sector weightings and Fund Overview are as of
12/31/98 and are subject to change. Fund Overview information refers only to
senior, secured floating-rate loan portion of the Fund.
- ------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
- ------------------------------------------------------------------------------
Q: Why are those factors good for the loan market?
A: MR. PAGE: Together, they represent the increasing maturation of the market.
In the 1980s, deals done with little or no equity component put enormous
pressure on the balance sheets of borrowers, leaving them with very little
margin for error in the event of a downturn in business.
In sharp contrast, equity plays a larger role in today's transactions.
According to a study by Donaldson, Lufkin and Jenrette, equity components
comprised 37.1% of leveraged buyouts in 1998, up from just 9.7% in 1988.
That means that borrowers typically have improved interest-coverage ratios.
In addition, the fact that loans are both senior and secured means that, 1)
the loans are backed by collateral such as the borrower's assets and/or
common stocks, and 2) lenders have a first call on the collateral in the
event of a default. These features contribute to the comfort level of
lenders and, thus, to a relatively stable senior loan market.
Q: How have you initially positioned the Fund?
A: MR. SWAFFIELD: The Fund is very well-diversified, with exposure to most
sectors of the economy. Frankly, the economy has given many mixed signals in
recent months. However, while the weakness in the Asian economies has
contributed to weaker demand for some cyclical sectors, the broader economy
generally remains on track.
As a measure of its broad diversification, the Fund was composed of 115
borrowers at December 31. The ten largest holdings represented only 15.9% of
the Fund. We had investments in 46 different industries, with our largest
weightings in cable television, manufacturing and health care. The cable and
health industries have tended to be fairly recession-resistant.
Among the Fund's high-yield bond holdings, we found some especially
interesting opportunities among communications, broadcasting and cable
companies. These sectors have experienced rapid growth and are continuing to
expand their infrastructures to meet the demands of that growth.
Q: Could you discuss briefly some of the investments in the Fund?
A: MR. PAGE: Certainly. Broadcast, cable, and media loans are playing
significant roles. The broadcasting and communications sectors have
witnessed increasing merger activity in the past few years. Charter
Communications is one of the nation's fastest growing cable television
operators. The company, which has 2 million subscribers, was recently
purchased by Paul Allen, a founder of Microsoft, for $4.5 billion. It will
combine with Allen's other cable interest, Marcus Cable. Charter is
pioneering the use of advanced set-top boxes that provide cable viewers
Internet access without the need of a computer.
Elsewhere, the auto sector has been characterized by a growing global
consolidation, as evidenced by last year's Daimler-Chrysler merger. There
are now signs of a similar trend among auto parts suppliers. One of the
nation's largest is Federal-Mogul Corp. The company enjoyed excellent
results in the past year due to sharply higher revenues, aggressive cost
cuts, and the successful integration of its Cooper Automotive acquisition.
The Fund has found interesting opportunities among food packaging companies
and food retailers. These companies have historically been considered
relatively recession-resistant. The Fund's food-related holdings include Del
Monte Corp., which produces popular fruit and vegetable products, and
International Home Foods, which makes Gulden's Mustard and Chef Boyardee
products. Star Markets Co. is a major supermarket chain in New England. The
company has benefited from a major reorganization and has been very
successful in targeting new store locations. Star was recently purchased by
Sainsbury's, a U.K.-based, international food retailer.
Q: What are some of the Fund's other features?
A: MR. PAGE: The Fund may invest a portion of its assets in high-yield bonds.
That percentage was around 8.7% at December 31, 1998. The high-yield market
has historically provided financing for a wide range of industries. While
high-yield bonds typically involve higher risk, they have historically
provided a significant yield advantage over other fixed-income investments,
including bank loans.
The Fund also intends to utilize leverage through borrowings in an amount up
to 33 1/3% of the Fund's total assets. We believe that the prudent use of
leverage may create additional income opportunities and increase yield. At
December 31, the Fund had $145 million in leverage. That figure repre-sented
28.4% of the Fund's total assets.
Q: The Federal Reserve lowered short-term interest rates three times in 1998.
Did that have any effect on the loan market?
A: MR. SWAFFIELD: Yes. Interest income on loans is based on the London
Interbank Rate (LIBOR) and the fixed spread of the loans over LIBOR. Because
LIBOR moves with other short-term interest rates, the Federal Reserve's
lowering of rates caused a decline in loan yields.
Going forward, the interest rate scenario bears watching. Some long-term
bond investors reaped excellent returns in 1998 as long-term interest rates
reached 24-year lows. However, it is now apparent that the economy was not
weakened as much as anticipated by the Asian slowdown. As the Federal
Reserve has demonstrated in recent years, it will not hesitate to raise
rates if it detects the return of inflation. Therefore, the risk profile of
bonds has been raised significantly. A price decline in such a scenario
could more than offset interest income.
On the other hand, returns for senior, secured, floating-rate loans would
actually increase in a rising rate scenario. Their reset feature means that
their underlying interest rates are adjusted to reflect changes in
prevailing interest rates. That feature makes floating-rate loans unique
among income-producing asset classes, being one of the very few investments
that may benefit from rising interest rates.
Q: What is your outlook for the loan market in the coming year?
A: MR. PAGE: Naturally, it's impossible to pinpoint with any certainty the
direction of the economy. But, at present, the economy continues to generate
fairly good growth, which is certainly positive for loan quality. Moreover,
the loan market continues to expand as more companies utilize the senior,
floating-rate market. That is likely to result in more varied opportunities
for investors.
Many investors are looking for higher returns and daily liquidity, but want
to minimize the market fluctuations of their investment. We believe that the
floating-rate loan universe provides excellent opportunities for those
investors. Eaton Vance Senior Income Trust will continue to pursue
opportunities in this growing market in the coming year.
<PAGE>
EATON VANCE SENIOR INCOME TRUST as of December 31, 1998
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
Senior, Secured, Floating-Rate
Interests -- 88.2%}a{
Principal
Amount Borrower Value
- ------------------------------------------------------------------------------
Aerospace/Defense -- 2.7%
- ------------------------------------------------------------------------------
Aerostructures Corporation
$4,561,301 Term loan, maturing December 31, 2003 $ 4,561,301
Fairchild Holdings Corporation
263,333 Revolving loan, maturing June 18, 2004 263,333
3,750,000 Term loan, maturing June 18, 2004 3,750,000
K&F Industries, Inc.
5,399,038 Term loan, maturing September 30, 2005 5,399,038
- ------------------------------------------------------------------------------
$ 13,973,672
- ------------------------------------------------------------------------------
Auto parts - Aftermarket -- 2.0%
- ------------------------------------------------------------------------------
Exide Corporation
$2,989,431 Term loan, maturing March 18, 2005 $ 2,989,431
Federal-Mogul Corporation
7,000,000 Term loan, maturing December 31, 2006 7,000,000
- ------------------------------------------------------------------------------
$ 9,989,431
- ------------------------------------------------------------------------------
Automobile -- 2.0%
- ------------------------------------------------------------------------------
Accuride Corporation
$5,000,000 Term loan, maturing January 21, 2006 $ 5,000,000
Cambridge Industries, Inc.
4,987,406 Term loan, maturing June 30, 2005 4,987,406
- ------------------------------------------------------------------------------
$ 9,987,406
- ------------------------------------------------------------------------------
Beverages - Soft Drink -- 0.8%
- ------------------------------------------------------------------------------
Mistic Brands, Inc.
$1,994,937 Term loan, maturing June 1, 2004 $ 1,994,937
1,994,937 Term loan, maturing June 1, 2005 1,994,937
- ------------------------------------------------------------------------------
$ 3,989,874
- ------------------------------------------------------------------------------
Broadcast Media -- 3.8%
- ------------------------------------------------------------------------------
Benedek Broadcasting Corporation
$3,099,959 Term loan, maturing December 31, 2004 $ 3,099,959
1,844,865 Term loan, maturing December 31, 2005 1,844,865
Black Entertainment Television
5,000,000 Term loan, maturing June 30, 2006 5,000,000
Capstar Radio Broadcasting Corp.
6,975,000 Term loan, maturing May 31, 2005 6,975,000
TLMD Aquisition Co.
2,000,000 Term loan, maturing March 31, 2007 $ 2,000,000
- ------------------------------------------------------------------------------
$ 18,919,824
- ------------------------------------------------------------------------------
Building Materials -- 1.0%
- ------------------------------------------------------------------------------
Falcon Building Products, Inc.
$4,985,632 Term loan, maturing June 29, 2007 $ 4,985,632
- ------------------------------------------------------------------------------
$ 4,985,632
- ------------------------------------------------------------------------------
Cable Television -- 6.8%
- ------------------------------------------------------------------------------
Avalon Cable Holdings Finance, Inc.
$1,000,000 Term loan, maturing October 31, 2006 $ 1,000,000
Charter Comm. Properties LLC
5,000,000 Term loan, maturing June 30, 2007 5,000,000
Chelsea Communications, Inc.
4,962,500 Term loan, maturing December 31, 2004 4,962,500
Classic Cable, Inc.
5,000,000 Term loan, maturing October 31, 2007 5,000,000
Frontiervision Operating Partners, L.P.
5,000,000 Term loan, maturing March 31, 2006 5,000,000
HPI Acquisition Co., LLC
1,000,000 Term loan, maturing December 31, 2005 1,000,000
2,000,000 Term loan, maturing December 31, 2006 2,000,000
Intermedia Partners Group VI (Holdco)
5,000,000 Term loan, maturing April 30, 2008 5,000,000
Renaissance Media LLC
5,000,000 Term loan, maturing September 30, 2006 5,000,000
- ------------------------------------------------------------------------------
$ 33,962,500
- ------------------------------------------------------------------------------
Chemicals -- 3.8%
- ------------------------------------------------------------------------------
Huntsman Corporation
$3,407,655 Term loan, maturing September 30, 2003 $ 3,407,655
2,415,671 Term loan, maturing March 15, 2004 2,415,671
2,415,671 Term loan, maturing March 15, 2005 2,415,671
Lyondell Petrochemical Company
1,923,077 Term loan, maturing June 30, 1999 1,923,077
3,076,923 Term loan, maturing June 30, 2000 3,076,923
Metokote Corporation
1,000,000 Term loan, maturing November 2, 2005 1,000,000
Polymer Group, Inc.
4,972,000 Term loan, maturing December 20, 2005 4,972,000
- ------------------------------------------------------------------------------
$ 19,210,997
- ------------------------------------------------------------------------------
Chemicals - Specialty -- 1.0%
- ------------------------------------------------------------------------------
Huntsman Packaging Corp.
$5,000,000 Term loan, maturing June 30, 2006 $ 5,000,000
- ------------------------------------------------------------------------------
$ 5,000,000
- ------------------------------------------------------------------------------
Coal -- 1.7%
- ------------------------------------------------------------------------------
Alliance Coal Corporation
$3,933,368 Term loan, maturing December 31, 2002 $ 3,933,368
P&L Coal Holdings Corporation
5,000,000 Term loan, maturing June 30, 2006 5,000,000
- ------------------------------------------------------------------------------
$ 8,933,368
- ------------------------------------------------------------------------------
Commercial Services -- 2.1%
- ------------------------------------------------------------------------------
Nebraska Book Company
2,500,000 Term loan, maturing March 31, 2006 $ 2,500,000
Safety-Kleen Services, Inc.
2,493,734 Term loan, maturing April 3, 2005 2,493,734
2,493,734 Term loan, maturing April 3, 2006 2,493,734
United Rentals, Inc.
3,000,000 Term loan, maturing June 30, 2006 3,000,000
- ------------------------------------------------------------------------------
$ 10,487,468
- ------------------------------------------------------------------------------
Communications - Equip/Mfrs -- 3.3%
- ------------------------------------------------------------------------------
Amphenol Corporation
$5,000,000 Term loan, maturing May 19, 2006 $ 5,000,000
Communications & Power Industries, Inc.
1,102,473 Term loan, maturing August 11, 2000 1,102,473
2,897,527 Term loan, maturing August 11, 2002 2,897,527
Dynatech Corporation
996,403 Term loan, maturing March 31, 2005 996,403
996,403 Term loan, maturing March 31, 2006 996,403
996,403 Term loan, maturing March 31, 2007 996,403
Superior Telecom, Inc.
5,000,000 Term loan, maturing November 27, 2005 5,000,000
- ------------------------------------------------------------------------------
$ 16,989,209
- ------------------------------------------------------------------------------
Computer Software & Services -- 0.6%
- ------------------------------------------------------------------------------
Bridge Information Systems America
$3,000,000 Term loan, maturing May 29, 2004 $ 3,000,000
- ------------------------------------------------------------------------------
$ 3,000,000
- ------------------------------------------------------------------------------
Conglomerates -- 1.4%
- ------------------------------------------------------------------------------
American Marketing Industries, Inc.
$1,364,867 Term loan, maturing November 30, 2002 $ 1,364,867
630,027 Term loan, maturing November 30, 2004 630,027
SPX Corporation
4,987,500 Term loan, maturing September 30, 2006 4,987,500
- ------------------------------------------------------------------------------
$ 6,982,394
- ------------------------------------------------------------------------------
Containers - Metal & Glass -- 1.4%
- ------------------------------------------------------------------------------
Graham Packaging Company
$4,037,344 Term loan, maturing January 31, 2007 $ 4,037,344
Tekni-Plex, Inc.
2,992,462 Term loan, maturing March 31, 2006 2,992,462
- ------------------------------------------------------------------------------
$ 7,029,806
- ------------------------------------------------------------------------------
Containers - Paper -- 2.4%
- ------------------------------------------------------------------------------
Jefferson Smurfit Corporation
$7,000,000 Term loan, maturing March 24, 2006 $ 7,000,000
RIC Holding, Inc.
5,000,000 Term loan, maturing February 28, 2004 $ 5,000,000
- ------------------------------------------------------------------------------
$ 12,000,000
- ------------------------------------------------------------------------------
Drugs -- 0.50%
- ------------------------------------------------------------------------------
King Pharmaceuticals, Inc.
$2,500,000 Term loan, maturing December 22, 2006 $ 2,500,000
- ------------------------------------------------------------------------------
$ 2,500,000
- ------------------------------------------------------------------------------
Electronics - Instrumentation -- 0.4%
- ------------------------------------------------------------------------------
Packard Bioscience Company
$1,994,937 Term loan, maturing March 31, 2002 $ 1,994,937
- ------------------------------------------------------------------------------
$ 1,994,937
- ------------------------------------------------------------------------------
Entertainment -- 1.7%
- ------------------------------------------------------------------------------
Regal Cinemas Inc.
$ 977,778 Term loan, maturing May 27, 2006 $ 977,778
2,700,000 Term loan, maturing May 27, 2007 2,700,000
SFX Entertainment, Inc.
5,000,000 Term loan, maturing March 31, 2006 5,000,000
- ------------------------------------------------------------------------------
$ 8,677,778
- ------------------------------------------------------------------------------
Equipment Leasing -- 0.3%
- ------------------------------------------------------------------------------
Rent-A-Center, Inc.
$ 793,112 Term loan, maturing January 31, 2006 $ 793,112
969,358 Term loan, maturing January 31, 2007 969,358
- ------------------------------------------------------------------------------
$ 1,762,470
- ------------------------------------------------------------------------------
Food Wholesalers -- 0.4%
- ------------------------------------------------------------------------------
Volume Services, Inc.
$2,000,000 Term loan, maturing December 31, 2002 $ 2,000,000
- ------------------------------------------------------------------------------
$ 2,000,000
- ------------------------------------------------------------------------------
Foods -- 2.9%
- ------------------------------------------------------------------------------
Del Monte Corporation
$4,987,426 Term loan, maturing March 31, 2005 $ 4,987,426
Domino's Inc.
1,000,000 Term loan, maturing December 21, 2006 1,000,000
1,000,000 Term loan, maturing December 21, 2007 1,000,000
International Home Foods, Inc.
5,000,000 Term loan, maturing September 30, 2006 5,000,000
Southern Foods Group, L.P.
3,000,000 Term loan, maturing February 28, 2006 3,000,000
- ------------------------------------------------------------------------------
$ 14,987,426
- ------------------------------------------------------------------------------
Hardware & Tools -- 0.4%
- ------------------------------------------------------------------------------
Werner Holding Co.
$1,994,962 Term loan, maturing November 30, 2004 $ 1,994,962
- ------------------------------------------------------------------------------
$ 1,994,962
- ------------------------------------------------------------------------------
Health Care - Diversified -- 1.3%
- ------------------------------------------------------------------------------
Conmed Corporation
$4,763,587 Term loan, maturing December 30, 2004 $ 4,763,587
FHC Health Systems, Inc.
997,494 Term loan, maturing April 30, 2005 997,494
997,494 Term loan, maturing April 30, 2006 997,494
- ------------------------------------------------------------------------------
$ 6,758,575
- ------------------------------------------------------------------------------
Health Care - Misc. -- 4.3%
- ------------------------------------------------------------------------------
Alliance Imaging, Inc.
$2,493,703 Term loan, maturing June 18, 2004 $ 2,493,703
Community Health Systems, Inc.
1,811,189 Term loan, maturing December 31, 2003 1,811,189
1,811,189 Term loan, maturing December 31, 2004 1,811,189
1,356,643 Term loan, maturing December 31, 2005 1,356,643
Imed Corporation
4,782,034 Term loan, maturing May 31, 2005 4,782,034
Leiner Health Products Inc.
2,493,687 Term loan, maturing December 30, 2004 2,493,687
Mariner Post-Acute Network
2,495,000 Term loan, maturing March 31, 2005 2,495,000
2,495,000 Term loan, maturing March 31, 2006 2,495,000
WGL Acquisition Corp.
1,994,987 Term loan, maturing July 10, 2004 1,994,987
- ------------------------------------------------------------------------------
$ 21,733,432
- ------------------------------------------------------------------------------
Heavy Duty Trucks & Parts -- 0.6%
- ------------------------------------------------------------------------------
Oshkosh Truck Corporation
$1,620,000 Term loan, maturing March 31, 2005 $ 1,620,000
1,620,000 Term loan, maturing March 31, 2006 1,620,000
- ------------------------------------------------------------------------------
$ 3,240,000
- ------------------------------------------------------------------------------
Hotels - Motels -- 1.6%
- ------------------------------------------------------------------------------
Palace Station Hotel & Casino, Inc.
$1,000,000 Term loan, maturing September 30, 2000 $ 1,000,000
Patriot American Hospitality, Inc.
784,750 Term loan, maturing March 31, 1999 784,750
882,849 Term loan, maturing March 31, 2000 882,849
3,338,407 Term loan, maturing March 31, 2003 3,338,407
Starwood Hotels & Resorts
2,000,000 Term loan, maturing February 23, 2003 2,000,000
- ------------------------------------------------------------------------------
$ 8,006,006
- ------------------------------------------------------------------------------
Household Furnish & Appliances -- 2.5%
- ------------------------------------------------------------------------------
Alliance Laundry Holdings LLC.
$5,000,000 Term loan, maturing September 30, 2005 $ 5,000,000
Sealy Mattress Company
1,893,769 Term loan, maturing December 15, 2004 1,893,769
1,363,685 Term loan, maturing December 15, 2005 1,363,685
1,742,546 Term loan, maturing December 15, 2006 1,742,546
Simmons Company
714,286 Term loan, maturing October 30, 2005 714,286
1,785,714 Term loan, maturing October 30, 2006 1,785,714
- ------------------------------------------------------------------------------
$ 12,500,000
- ------------------------------------------------------------------------------
Household Products -- 1.8%
- ------------------------------------------------------------------------------
Diamond Brands Operating Corp.
$ 997,487 Term loan, maturing March 31, 2006 $ 997,487
The Imperial Decor Home Group, Inc.
2,000,000 Term loan, maturing March 12, 2005 2,000,000
1,000,000 Term loan, maturing March 12, 2006 1,000,000
The Scotts Company
2,546,012 Term loan, maturing June 30, 2006 2,546,012
2,453,988 Term loan, maturing June 30, 2007 2,453,988
- ------------------------------------------------------------------------------
$ 8,997,487
- ------------------------------------------------------------------------------
Insurance Brokers -- 1.0%
- ------------------------------------------------------------------------------
Acordia, Inc.
$4,974,874 Term loan, maturing September 30, 2004 $ 4,974,874
- ------------------------------------------------------------------------------
$ 4,974,874
- ------------------------------------------------------------------------------
Leisure Time -- 3.4%
- ------------------------------------------------------------------------------
Alliance Gaming Corporation
$3,574,001 Term loan, maturing January 31, 2005 $ 3,574,001
1,425,999 Term loan, maturing July 31, 2005 1,425,999
Interval International Corp.
1,051,875 Term loan, maturing December 16, 2005 1,051,875
1,051,875 Term loan, maturing December 15, 2006 1,051,875
Panavision, Inc.
5,000,000 Term loan, maturing March 31, 2005 5,000,000
Six Flags Theme Parks Inc.
5,235,915 Term loan, maturing November 30, 2004 5,235,915
- ------------------------------------------------------------------------------
$ 17,339,665
- ------------------------------------------------------------------------------
Machinery - Diversified -- 1.6%
- ------------------------------------------------------------------------------
Numatics, Incorporated
$2,985,000 Term loan, maturing September 19, 2005 $ 2,985,000
Thermadyne MFG LLC
2,493,734 Term loan, maturing May 22, 2005 2,493,734
2,493,734 Term loan, maturing May 22, 2006 2,493,734
- ------------------------------------------------------------------------------
$ 7,972,468
- ------------------------------------------------------------------------------
Manufacturing - Diversified -- 5.3%
- ------------------------------------------------------------------------------
Advanced Glassfiber Yarns LLC
$2,000,000 Term loan, maturing September 30, 2005 $ 2,000,000
Arteva B.V. (Kosa)
5,000,000 Term loan, maturing December 31, 2006 5,000,000
Evironmental Systems Products Hldgs, Inc.
2,000,000 Term loan, maturing September 30, 2005 2,000,000
Foamex L.P.
1,508,821 Term loan, maturing June 30, 2005 1,508,821
1,371,656 Term loan, maturing June 30, 2006 1,371,656
2,106,892 Term loan, maturing June 30, 2007 2,106,892
Insilco Corporation
1,000,000 Term loan, maturing November 24, 2005 1,000,000
International Wire Group, Inc.
3,000,002 Term loan, maturing September 30, 2002 3,000,002
Neenah Foundry Company
4,991,276 Term loan, maturing September 30, 2005 4,991,276
Tokheim Corporation
4,000,000 Term loan, maturing September 30, 2004 4,000,000
- ------------------------------------------------------------------------------
$ 26,978,647
- ------------------------------------------------------------------------------
Medical Products & Supplies -- 1.0%
- ------------------------------------------------------------------------------
Stryker Corporation
$ 985,916 Term loan, maturing December 10, 2005 $ 985,916
4,014,085 Term loan, maturing December 10, 2006 4,014,085
- ------------------------------------------------------------------------------
$ 5,000,001
- ------------------------------------------------------------------------------
Metals - Miscellaneous -- 0.6%
- ------------------------------------------------------------------------------
C II Carbon, LLC
$2,992,481 Term loan, maturing June 30, 2008 $ 2,992,481
- ------------------------------------------------------------------------------
$ 2,992,481
- ------------------------------------------------------------------------------
Miscellaneous -- 2.0%
- ------------------------------------------------------------------------------
Coinmach Laundry Corporation
4,987,437 Term loan, maturing June 30, 2005 $ 4,987,437
Wesco International, Inc.
4,972,222 Term loan, maturing June 5, 2006 4,972,222
- ------------------------------------------------------------------------------
$ 9,959,659
- ------------------------------------------------------------------------------
Office Equipment & Supplies -- 1.8%
- ------------------------------------------------------------------------------
F.M.E. Corporation (Neopost)
$5,000,000 Term loan, maturing June 24, 2006 $ 5,000,000
U.S. Office Products
4,000,000 Term loan, maturing June 9, 2006 4,000,000
- ------------------------------------------------------------------------------
$ 9,000,000
- ------------------------------------------------------------------------------
Paper & Forest Products -- 1.0%
- ------------------------------------------------------------------------------
Bear Island Paper Company, LLC
$4,987,406 Term loan, maturing December 31, 2005 $ 4,987,406
- ------------------------------------------------------------------------------
$ 4,987,406
- ------------------------------------------------------------------------------
Publishing -- 1.4%
- ------------------------------------------------------------------------------
Penton Media, Inc.
$2,000,000 Term loan, maturing May 31, 2006 $ 2,000,000
Reiman Publications
2,000,000 Term loan, maturing November 30, 2005 2,000,000
Von Hoffman Press, Inc.
704,544 Term loan, maturing May 30, 2004 704,544
2,287,682 Term loan, maturing May 30, 2005 2,287,682
- ------------------------------------------------------------------------------
$ 6,992,226
- ------------------------------------------------------------------------------
Restaurants -- 0.6%
- ------------------------------------------------------------------------------
Applebee's International, Inc.
$3,000,000 Term loan, maturing March 31, 2006 $ 3,000,000
- ------------------------------------------------------------------------------
$ 3,000,000
- ------------------------------------------------------------------------------
Retail Stores - Food Chains -- 1.5%
- ------------------------------------------------------------------------------
Pathmark Stores, Inc.
$5,000,000 Term loan, maturing December 15, 2001 $ 5,000,000
Star Markets Company, Inc.
2,500,000 Term loan, maturing December 31, 2002 2,500,000
- ------------------------------------------------------------------------------
$ 7,500,000
- ------------------------------------------------------------------------------
Retail Stores - Specialty -- 1.6%
- ------------------------------------------------------------------------------
Advanced Stores Company, Inc.
$5,000,000 Term loan, maturing April 15, 2006 $ 5,000,000
Travelcenters of America, Inc.
2,995,268 Term loan, maturing March 27, 2005 2,995,268
- ------------------------------------------------------------------------------
$ 7,995,268
- ------------------------------------------------------------------------------
Steel -- 1.4%
- ------------------------------------------------------------------------------
Adience, Inc.
$1,383,928 Term loan, maturing April 30, 2005 $ 1,383,928
617,180 Term loan, maturing July 30, 2005 617,180
Ucar Global Enterprises, Inc.
5,000,000 Term loan, maturing December 31, 2003 5,000,000
- ------------------------------------------------------------------------------
$ 7,001,108
- ------------------------------------------------------------------------------
Telecommunications - Long Distance -- 3.3%
- ------------------------------------------------------------------------------
American Cellular Wireless LLC.
$2,250,000 Term loan, maturing June 25, 2007 $ 2,250,000
2,250,000 Term loan, maturing December 25, 2007 2,250,000
Cellular, Inc Financial Corporation
1,500,000 Term loan, maturing March 31, 2007 1,500,000
3,500,000 Term loan, maturing March 31, 2008 3,500,000
Davel Communications
2,500,000 Term loan, maturing June 23, 2005 2,500,000
Western PCS Holding Corporation
2,500,000 Term loan, maturing June 30, 2007 2,500,000
Western Wireless
2,500,000 Term loan, maturing March 31, 2004 2,500,000
- ------------------------------------------------------------------------------
$ 17,000,000
- ------------------------------------------------------------------------------
Textile - Apparel Mfg. -- 3.7%
- ------------------------------------------------------------------------------
Cluett American Corp.
$4,975,000 Term loan, maturing May 18, 2005 $ 4,975,000
Globe Manufacturing Corp.
3,900,000 Term loan, maturing July 31, 2006 3,900,000
Joan Fabrics Corporation
1,997,455 Term loan, maturing June 30, 2005 1,997,455
2,994,695 Term loan, maturing June 30, 2006 2,994,695
The William Carter Company
4,948,454 Term loan, maturing October 31, 2003 4,948,454
- ------------------------------------------------------------------------------
$ 18,815,604
- ------------------------------------------------------------------------------
Transportation - Misc. -- 1.5%
- ------------------------------------------------------------------------------
Evergreen International Aviation, Inc.
$ 858,201 Term loan, maturing April 30, 2002 $ 858,201
1,639,674 Term loan, maturing April 30, 2003 1,639,674
MTL
2,685,560 Term loan, maturing August 28, 2005 2,685,560
2,301,909 Term loan, maturing February 28, 2006 2,301,909
- ------------------------------------------------------------------------------
$ 7,485,344
- ------------------------------------------------------------------------------
Total Senior, Secured, Floating-Rate Interests
(identified cost, $445,589,405) $445,589,405
- ------------------------------------------------------------------------------
Corporate Bonds & Notes -- 8.7%
Apparel -- 0.5%
- ------------------------------------------------------------------------------
Glenoit Corp.
$ 500 Sr. Sub. Notes, 11.00%, 4/15/07 $ 472,500
Hosiery Corp. of America, Inc.
1,000 13.75%, 8/1/02 1,040,000
William Carter Co.
1,000 Sr. Sub. Notes, 10.375%, 12/1/06 1,087,500
- ------------------------------------------------------------------------------
$ 2,600,000
- ------------------------------------------------------------------------------
Broadcasting and Cable -- 0.7%
- ------------------------------------------------------------------------------
Golden Sky Systems
$ 1,000 Sr. Sub. Notes, 12.375%, 8/1/06(1) $ 1,040,000
Pegasus Commerce
1,250 9.75%, 12/1/06(1) 1,253,125
Telewest PLC
1,000 11.25%, 11/1/08(1) 1,105,000
- ------------------------------------------------------------------------------
$ 3,398,125
- ------------------------------------------------------------------------------
Business Services -- 0.3%
- ------------------------------------------------------------------------------
Federal Data Corp.
$ 750 Sr. Sub. Notes, 10.125%, 8/1/05 $ 742,500
ViaSystems, Inc.
600 Sr. Sub. Notes, 9.75%, 6/1/07 597,000
- ------------------------------------------------------------------------------
$ 1,339,500
- ------------------------------------------------------------------------------
Business Services - Miscellaneous -- 0.6%
- ------------------------------------------------------------------------------
Anthony Crane Rentals
$ 500 Sr. Notes, 10.375%, 8/1/08(1) $ 485,000
NationsRent, Inc.
1,000 Sr. Sub. Notes, 10.375%, 12/15/08(1) 992,500
Neff Corp.
1,000 Sr. Sub. Notes, 10.25%, 6/1/08(1) 985,000
Richmont Marketing Special
1,000 Sr. Sub. Notes, 10.125%, 12/15/07(1) 755,000
- ------------------------------------------------------------------------------
$ 3,217,500
- ------------------------------------------------------------------------------
Communications Equipment -- 0.2%
- ------------------------------------------------------------------------------
Metromedia Fiber Network, Inc.
$ 1,000 Sr. Notes, 10.00%, 11/15/08(1) $ 1,025,000
- ------------------------------------------------------------------------------
$ 1,025,000
- ------------------------------------------------------------------------------
Communications Services -- 0.1%
- ------------------------------------------------------------------------------
NTL, Inc.
$ 500 11.50%, 10/1/08(1) $ 545,000
- ------------------------------------------------------------------------------
$ 545,000
- ------------------------------------------------------------------------------
Containers and Packaging -- 0.4%
- ------------------------------------------------------------------------------
Consumers International, Inc.
$ 500 Sr. Notes, 10.25%, 4/1/05 $ 522,500
S.D. Warren Co.
500 Sr. Sub. Notes, 12.00%, 12/15/04 542,500
Stone Container Corp.
1,000 1st Mtg. Notes, 10.75%, 10/1/02 1,035,000
- ------------------------------------------------------------------------------
$ 2,100,000
- ------------------------------------------------------------------------------
Engineering and Construction -- 0.2%
- ------------------------------------------------------------------------------
Level 3 Communications, Inc.
$ 1,000 Sr. Notes, 9.125%, 5/1/08 $ 950,000
- ------------------------------------------------------------------------------
$ 950,000
- ------------------------------------------------------------------------------
Entertainment -- 0.5%
- ------------------------------------------------------------------------------
Regal Cinemas
$ 750 9.50%, 6/1/08(1) $ 776,250
SFX Entertainment, Inc.
500 Sr. Sub. Notes, 9.125%, 2/1/08 502,500
Six Flags Theme Parks
1,000 12.25%, 6/15/05 1,105,000
- ------------------------------------------------------------------------------
$ 2,383,750
- ------------------------------------------------------------------------------
Foods -- 0.1%
- ------------------------------------------------------------------------------
B & G Foods, Inc.
$ 500 Sub. Notes, 9.625%, 8/1/07 $ 492,500
- ------------------------------------------------------------------------------
$ 492,500
- ------------------------------------------------------------------------------
Health Services -- 0.1%
- ------------------------------------------------------------------------------
Dade International, Inc.
$ 500 Sr. Sub. Notes, 11.125%, 5/1/06 $ 557,500
- ------------------------------------------------------------------------------
$ 557,500
- ------------------------------------------------------------------------------
Information Services -- 0.5%
- ------------------------------------------------------------------------------
Psinet, Inc.
$ 1,250 11.50%, 11/1/08(1) $ 1,309,375
Verio, Inc.
1,300 11.25%, 12/1/08(1) 1,319,500
- ------------------------------------------------------------------------------
$ 2,628,875
- ------------------------------------------------------------------------------
Lodging and Gaming -- 0.3%
- ------------------------------------------------------------------------------
Horseshoe Gaming L.L.C.
$ 750 Sr. Sub. Notes, 9.375%, 6/15/07 $ 772,500
Lady Luck Gaming
750 11.875%, 3/1/01 757,500
- ------------------------------------------------------------------------------
$ 1,530,000
- ------------------------------------------------------------------------------
Manufacturing -- 0.6%
- ------------------------------------------------------------------------------
Diamond Brands
$ 1,000 10.125%, 4/15/08 $ 910,000
Fisher Scientific
1,000 9.00%, 2/1/08(1) 995,000
Transdigm, Inc.
1,000 10.375%, 12/1/08(1) 1,005,000
- ------------------------------------------------------------------------------
$ 2,910,000
- ------------------------------------------------------------------------------
Medical Products -- 0.3%
- ------------------------------------------------------------------------------
Alliance Imaging
$ 1,500 Variable Rate, 9.94%, 12/15/05 $ 1,290,000
- ------------------------------------------------------------------------------
$ 1,290,000
- ------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 0.1%
- ------------------------------------------------------------------------------
Coho Energy, Inc.
$ 520 Sr. Sub. Notes, 8.875%, 10/15/07 $ 439,400
- ------------------------------------------------------------------------------
$ 439,400
- ------------------------------------------------------------------------------
Paper and Forest Products -- 0.2%
- ------------------------------------------------------------------------------
Repap New Brunswick, Inc.
$ 1,250 Sr. Notes, 9.00%, 6/1/04 $ 1,125,000
- ------------------------------------------------------------------------------
$ 1,125,000
- ------------------------------------------------------------------------------
Printing and Business Products -- 0.5%
- ------------------------------------------------------------------------------
Mail-Well Corp.
$ 1,000 Sr. Sub. Notes, 8.75%, 12/15/08(1) $ 1,000,000
MDC Communications Corp.
500 Sr. Sub. Notes, 10.50%, 12/1/06 512,500
MDC Communications Corp.
750 Sr. Sub. Notes, 10.50%, 12/1/06(1) 768,750
- ------------------------------------------------------------------------------
$ 2,281,250
- ------------------------------------------------------------------------------
Publishing -- 0.3%
- ------------------------------------------------------------------------------
American Lawyer Media
$ 1,000 9.75%, 12/15/07 $ 996,250
Von Hoffman Press, Inc.
750 Sr. Sub. Notes, 10.875%, 5/15/07(1) 776,250
- ------------------------------------------------------------------------------
$ 1,772,500
- ------------------------------------------------------------------------------
Restaurants -- 0.2%
- ------------------------------------------------------------------------------
Dominos, Inc.
$ 1,000 Sr. Sub. Notes, 10.375%, 1/15/09(1) $ 1,000,000
- ------------------------------------------------------------------------------
$ 1,000,000
- ------------------------------------------------------------------------------
Retail - Food and Drug -- 0.3%
- ------------------------------------------------------------------------------
AFC Enterprises, Inc.
$ 550 Sr. Sub Notes, 10.25%, 5/15/07 $ 576,125
Pantry, Inc.
1,000 Sr. Sub. Notes, 10.25%, 10/15/07 1,050,000
- ------------------------------------------------------------------------------
$ 1,626,125
- ------------------------------------------------------------------------------
Retail - General -- 0.6%
- ------------------------------------------------------------------------------
Advance Stores Co., Inc.
$ 1,250 Sr. Sub. Notes, 10.25%, 4/15/08 $ 1,268,750
Franks Nursery and Crafts
500 Sr. Sub. Notes, 10.25%, 3/1/08 497,500
Kindercare Learning Ctrs., Inc.
1,000 Sr. Sub. Notes, 9.50%, 2/15/09 $ 995,000
Tuesday Morning Corp.
500 Sr. Sub. Notes, 11.00%, 12/15/07 495,000
- ------------------------------------------------------------------------------
$ 3,256,250
- ------------------------------------------------------------------------------
Wireline Communication Services -- 1.1%
- ------------------------------------------------------------------------------
Dobson/Sygnet Communications Corp.
$ 1,250 Sr. Notes, 12.25%, 12/15/08(1) $ 1,268,750
Esprit Telecom Group PLC,
1,000 Sr. Notes, 11.50%, 12/15/07 1,025,000
Global Crossing Holding, Ltd.
500 Sr. Notes, 9.625%, 5/15/08 525,000
Hyperion Telecommunications, Inc.
1,000 Sr. Notes, 12.25%, 9/1/04 1,015,000
ITC Deltacom, Inc.
750 9.75%, 11/15/08(1) 776,250
Metronet Communications
750 10.625%, 11/1/08(1) 796,875
- ------------------------------------------------------------------------------
$ 5,406,875
- ------------------------------------------------------------------------------
Total Corporate Bonds & Notes (identified cost $43,004,440) $ 43,875,150
- ------------------------------------------------------------------------------
Commercial Paper -- 3.1%
- ------------------------------------------------------------------------------
General Electric Capital Corp.
- ------------------------------------------------------------------------------
$ 15,603 5.50%, 1/4/99 $ 15,595,849
- ------------------------------------------------------------------------------
Total Commercial Paper (amortized cost $15,595,849) $ 15,595,849
- ------------------------------------------------------------------------------
Total Investments -- 100.0%
(identified cost $504,189,694) $505,060,404
- ------------------------------------------------------------------------------
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. It is the
Portfolio's intention to hold this security until maturity.
(a) 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 approximately three years.
See notes to financial statements
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
As of December 31, 1998
Assets
- --------------------------------------------------------------------------------
Investments, at value
(identified cost, $504,189,694) $505,060,404
Cash 1,919,543
Receivable for investments sold 151,013
Interest receivable 3,620,711
- --------------------------------------------------------------------------------
Total assets $510,751,671
- --------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Amounts due under commercial paper program $145,000,000
Dividends payable 4,493,160
Deferred facility fee income 3,580,895
Payable to affiliate for Trustees' fees 2,900
Payable for organization fees 131,150
Accrued expenses:
Interest 566,250
Operating expense 170,799
- --------------------------------------------------------------------------------
Total liabilities $153,945,154
- --------------------------------------------------------------------------------
Net Assets for 35,660,000 shares of beneficial interest
outstanding $356,806,517
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital $355,887,000
Accumulated net realized loss (computed on the basis of
identified cost) (115,724)
Accumulated undistributed net investment income 164,531
Net unrealized appreciation
(computed on the basis of identified cost) 870,710
- --------------------------------------------------------------------------------
Total $356,806,517
- --------------------------------------------------------------------------------
Net Asset Value
- --------------------------------------------------------------------------------
($356,806,517 / 35,660,000 shares of
beneficial interest outstanding $ 10.01
- --------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
Statement of Operations
For the Period Ended
December 31, 1998(1)
Investment Income
- -------------------------------------------------------------------------------
Interest $5,888,244
Facility fees earned 166,095
- -------------------------------------------------------------------------------
Total investment income $6,054,339
- -------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------
Investment adviser fee $ 579,350
Administration fee 173,333
Trustees fees and expenses 2,900
Interest 829,399
Legal and accounting services 217,173
Organization expenses 141,150
Loan program structuring expense 85,521
Custodian fee 27,766
Transfer and dividend disbursing agent fees 25,395
Printing and postage 13,300
Registration fees 9,321
Miscellaneous 44,723
- -------------------------------------------------------------------------------
Total expenses $2,149,331
- -------------------------------------------------------------------------------
Deduct --
Reduction of investment adviser fee $ 579,350
Reduction of administration fee 173,333
- -------------------------------------------------------------------------------
Total expense reductions $ 752,683
- -------------------------------------------------------------------------------
Net expenses $1,396,648
- -------------------------------------------------------------------------------
Net investment income $4,657,691
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- -------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (115,724)
- -------------------------------------------------------------------------------
Net realized loss $ (115,724)
- -------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 870,710
- -------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 870,710
- -------------------------------------------------------------------------------
Net realized and unrealized gain $ 754,986
- -------------------------------------------------------------------------------
Net increase in net assets from operations $5,412,677
- -------------------------------------------------------------------------------
(1) For the period from the start of business, October 30, 1998, to
December 31, 1998.
See notes to financial statements
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Increase (Decrease) For the Period Ended
in Net Assets December 31, 1998(1)
- -------------------------------------------------------------------------------
From operations --
Net investment income $ 4,657,691
Net realized loss (115,724)
Net change in unrealized appreciation (depreciation) 870,710
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 5,412,677
- -------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income $ (4,493,160)
- -------------------------------------------------------------------------------
Total distributions to shareholders $ (4,493,160)
- -------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares $356,500,000
Offering costs (713,000)
- -------------------------------------------------------------------------------
Net increase in net assets from Fund share transactions $355,787,000
- -------------------------------------------------------------------------------
Net increase in net assets $356,706,517
- -------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------
At beginning of period $ 100,000
- -------------------------------------------------------------------------------
At end of period $356,806,517
- -------------------------------------------------------------------------------
Accumulated undistributed
net investment income
included in net assets
- -------------------------------------------------------------------------------
At end of period $ 164,531
- -------------------------------------------------------------------------------
(1) For the period from the start of business, October 30, 1998, to
December 31, 1998.
See notes to financial statements
<PAGE>
Statement of Cash Flows
For the Period Ended
Increase (Decrease) in Cash December 31, 1998(1)
- --------------------------------------------------------------------------------
Cash Flows From (Used For) Operating Activities --
Purchases of loan interests $(510,676,088)
Proceeds from sales and principal repayments 21,943,434
Interest received 2,255,329
Facility fees received 3,631,266
Interest paid (263,149)
Operating expenses paid (262,400)
Net increase in short-term investments (15,595,849)
- --------------------------------------------------------------------------------
Net cash used for operating activities $(498,967,457)
- --------------------------------------------------------------------------------
Cash Flows From (Used For) Financing Activities --
Proceeds from shares sold $ 356,500,000
Payments for offering costs (713,000)
Net increase in amounts due under commercial paper program 145,000,000
- --------------------------------------------------------------------------------
Net cash from financing activities $ 500,787,000
- --------------------------------------------------------------------------------
Net increase in cash $ 1,819,543
- --------------------------------------------------------------------------------
Cash at Beginning of Period $ 100,000
- --------------------------------------------------------------------------------
Cash at End of Period $ 1,919,543
- --------------------------------------------------------------------------------
Reconciliation of Net Increase in Net Assets
From Operations to Net Cash Used For
Operating Activities
- --------------------------------------------------------------------------------
Net Increase in net assets from operations $ 5,412,677
Increase in receivable for investments sold (151,013)
Increase in interest receivable (3,620,711)
Increase in deferred facility fee income 3,580,895
Increase in payable to affiliate 2,900
Increase in accrued expenses 868,199
Net increase in investments (505,060,404)
- --------------------------------------------------------------------------------
Net cash used for operating activities $(498,967,457)
- --------------------------------------------------------------------------------
(1) For the period from the start of business, October 30, 1998, to
December 31, 1998.
See notes to financial statements
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- --------------------------------------------------------------------------------
Financial Highlights
Period Ended
December 31, 1998(1)(2)
- -------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.000
- -------------------------------------------------------------------------------
Income (loss) from operations(1)(2)
- -------------------------------------------------------------------------------
Net investment income $ 0.142
Net realized and unrealized gain 0.014
- -------------------------------------------------------------------------------
Total income from operations $ 0.156
- -------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------
From net investment income $ (0.126)
- -------------------------------------------------------------------------------
Total distributions $ (0.126)
- -------------------------------------------------------------------------------
Offering costs charged to paid-in capital $ (0.020)
- -------------------------------------------------------------------------------
Net asset value -- End of period $ 10.010
- -------------------------------------------------------------------------------
Market value -- End of period $ 9.44
- -------------------------------------------------------------------------------
Total Return(4) (4.4)%
- -------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $356,807
Ratios (As a percentage of average daily net assets):
Net operating expenses 1.00%(3)
Net interest expense 1.46%(3)
Net investment income 8.18%(3)
Portfolio Turnover 7%
- -------------------------------------------------------------------------------
+ The operating expenses of the Trust reflect a reduction of the investment
adviser fee and the administation fee. Had such actions not been taken, the
ratios and net investment income per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Operating expenses 2.32%(3)
Interest expense 1.46%(3)
Net investment income 6.86%(3)
Net investment income per share $ 0.119
- -------------------------------------------------------------------------------
(1) For the period from the start of business, October 30, 1998, to December 31,
1998.
(2) Net investment income per share was computed using average shares
outstanding.
(3) Annualized.
(4) Total return is calculated assuming a purchase at market value on the first
day and a sale at the market value on the last day of each period reported.
Dividends and distributions, if any, are assumed reinvested on the
reinvestment date. Total return is not computed on an annualized basis.
See notes to financial statements
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 Significant Accounting Policies
- ------------------------------------------------------------------------------
Eaton Vance Senior Income Trust (the Trust) is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company which was organized as a trust under the laws of the
State of Massachusetts on September 23, 1998. The following is a summary of
significant accounting policies consistently followed by the Trust in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuation -- The Trust's investments in interests in senior
secured floating rate loans (Senior Loans) are valued at fair value by the
Trust's investment adviser, Eaton Vance Management (EVM), under procedures
established by the Trustees as permitted by Section 2}a{(41) of the
Investment Company Act of 1940. Such procedures include the consideration of
relevant factors, data and information relating to fair value, including }i{
the characteristics of and fundamental analytical data relating to the
Senior Loan, including the cost, size, current interest rate, period until
next interest rate reset, maturity and base lending rate of the Senior Loan,
the terms and conditions of the loan and any related agreements and the
position of the loan in the borrower's debt structure; (ii) the nature,
adequacy and value of the collateral, including the Trust's rights, remedies
and interests with respect to the collateral; (iii) the creditworthiness of
the borrower, based on evaluations of its financial condition, financial
statements and information about the borrower's business, cash flows,
capital structure and future prospects; (iv) information relating to the
market for the Senior Loan including price quotations for and trading in the
Senior Loan and interests in similar loans and the market environment and
investor attitudes towards the Senior Loan and interests in similar loans;
}v{ the reputation and financial condition of the agent bank and any
intermediate participant in the loan; and (vi) general economic and market
conditions affecting the fair value of the Senior Loan. Other portfolio
securities (other than short-term obligations, but including listed issues)
may be valued on the basis of prices furnished by one or more pricing
services which determine prices for normal, institutional-size trading units
of such securities using market information, transactions for comparable
securities and various relationships between securities which are generally
recognized by institutional traders. In certain circumstances, portfolio
securities will be valued at the last sales price on the exchange that is
the primary market for such securities, or the last quoted bid price for
those securities for which the over-the-counter market is the primary market
or for listed securities in which there were no sales during the day. The
value of interest rate swaps will be determined in accordance with a
discounted present value formula and then confirmed by obtaining a bank
quotation. Short-term obligations which mature in sixty days or less are
valued at amortized cost, if their original term to maturity when acquired
by the Trust was 60 days or less or are valued at amortized cost using their
value on the 61st day prior to maturity, if their original term to maturity
when acquired by the Trust was more then 60 days, unless in each case this
is determined not to represent fair value. Repurchase agreements are valued
at cost plus accrued interest. Other portfolio securities for which there
are no quotations or valuations are valued at fair value as determined in
good faith by or on behalf of the Trustees.
B Income -- Interest income from Senior Loans is recorded on the accrual
basis at the then-current interest rate, while all other interest income is
determined on the basis of interest accrued, adjusted for amortization of
premium or discount when required for federal income tax purposes. Facility
fees received are recognized as income over the expected term of the loan.
C Federal Taxes -- The Trust's policy is to comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies and
to distribute to shareholders each year all of its taxable income, including
any net realized gain on investments. Accordingly, no provision for federal
income or excise tax is necessary.
D Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by the credits which are determined based on the
average daily cash balances the Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolio's custodian fees
are reported as a reduction of expenses on the Statement of Operations.
E Use of Estimates -- 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 at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Offering Costs -- Costs incurred by the Trust in connection with the
initial offering of Trust shares were recorded as a reduction of paid-in
capital.
G Other -- Investment transactions are accounted for on the date the
investments are purchased or sold. Gains and losses on securities sold are
determined on the basis of identified cost.
2 Distributions to Shareholders
- ------------------------------------------------------------------------------
Distributions to shareholders are recorded on the ex-dividend date. The
Trust distinguishes between distributions on a tax basis and a financial
reporting basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a tax return of capital. Differences in the
recognition or classification of income between the financial statements and
tax earnings and profits which result in temporary over-distributions for
financial statement purposes are classified as distributions in excess of
net investment income or accumulated net realized gains. Permanent
differences between book and tax accounting relating to distributions are
reclassified to paid-in capital.
3 Shares of Beneficial Interest
- ------------------------------------------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional $0.01 par value shares of beneficial interest.
Transactions in Trust shares were as follows:
Period Ended
December 31, 1998(1)
--------------------
Sales 35,650,000
------------------------------------------------------------------
Net increase 35,650,000
------------------------------------------------------------------
(1) For the period from the start of business, October 30, 1998, to December
31, 1998.
4 Investment Adviser Fee and Other Transactions with Affiliates
- ------------------------------------------------------------------------------
The investment adviser fee, computed at a monthly rate of 17/240 of 1%
(0.85% annually) of the Trust's average weekly gross assets, was earned by
EVM as compensation for management and investment advisory services rendered
to the Trust. Except for Trustees of the Trust who are not members of EVM's
organization, officers and Trustees receive remuneration for their services
to the Trust out of such investment adviser fee. EVM also serves as the
administrator of the Trust. An administration fee, computed at the monthly
rate of 1/48 of 1% (0.25% annually) of the average weekly gross assets of
the Trust, is paid to EVM for managing and administering business affairs of
the Trust. EVM waived its investment advisory and administration fees for
the period from the start of business, October 30, 1998, to December 31,
1998.
Certain of the officers and Trustees of the Trust are officers and
directors/trustees of the above organizations.
5 Investment Transactions
- ------------------------------------------------------------------------------
The Trust invests primarily in Senior Loans. The ability of the issuers of
the Senior Loans held by the Trust to meet their obligations may be affected
by economic developments in a specific industry. The cost of purchases and
the proceeds from principal repayments and sales of Senior Loans and
corporate bonds aggregated $510,676,088 and $22,094,447, respectively, for
the period from the start of business, October 30, 1998, to December 31,
1998.
6 Short-Term Debt and Credit Agreements
- ------------------------------------------------------------------------------
The Trust has entered into a revolving credit and security agreement that
will allow the Trust to borrow $178 million to support the issuance of
commercial paper and to permit the Trust to invest in accordance with its
investment practices. Interest is charged under the revolving credit
agreement at the bank's base rate or at an amount above either the bank's
adjusted certificate of deposit rate or federal funds effective rate.
Interest expense includes a commitment fee of approximately $35,000 which is
computed at the annual rate of 0.15% on the unused portion of the revolving
credit agreement. There were no borrowings under this agreement during the
period. As of December 31, 1998, the Trust had commercial paper outstanding
of $145,000,000, at an interest rate of 5.40%. Maximum and average
borrowings for the period from the start of business, October 30, 1998, to
December 31, 1998 were $145,000,000 and $83,809,524, respectively, and the
average interest rate was 5.40%.
7 Federal Income Tax Basis of Investments
- ------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the
investments owned at December 31, 1998, as computed on a federal income tax
basis, were as follows:
Aggregate cost $504,189,694
---------------------------------------------------------------------------
Gross unrealized appreciation $ 1,056,534
Gross unrealized depreciation (185,824)
---------------------------------------------------------------------------
Net unrealized appreciation $ 870,710
---------------------------------------------------------------------------
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Trustees and Shareholders
of Eaton Vance Senior Income Trust
- ------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Eaton Vance Senior Income Trust
(the Trust) as of December 31, 1998, the related statements of operations,
changes in net assets, and cash flows and the financial highlights for the
period from the start of business, October 30, 1998, to December 31, 1998.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. Our procedures
included confirmation of securities and Senior Loans owned at December 31,
1998 by correspondence with the custodian and selling or agent banks; where
replies were not received from selling or agent banks, we performed other
auditing procedures. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights, referred
to above, present fairly, in all material respects, the financial position of
Eaton Vance Senior Income Trust at December 31, 1998, the results of its
operations, the changes in its net assets, its cash flows and its financial
highlights for the period from the start of business, October 30, 1998 to
December 31, 1998 in conformity with generally accepted accounting principles.
As discussed in Note 1A, the financial statements include Senior Loans held by
the Trust valued at $445,589,405 (125% of net assets of the Trust), which
values are fair values determined by the Trust's investment adviser in the
absence of actual market values. Determination of fair value involves
subjective judgment, as the actual market value of a particular Senior Loan or
security can be established only by negotiations between the parties in a sale
transaction. We have reviewed the procedures established by the Trustees and
used by the Trust's investment adviser in determining the fair values of such
Senior Loans and securities and have inspected underlying documentation, and
in the circumstances, we believe that the procedures are reasonable and the
documentation appropriate.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 12, 1999
<PAGE>
Eaton Vance Senior Income Trust
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
common shareholders may elect to have dividends and capital gains
distributions reinvested in common shares of the Trust. The Trust declares
dividends out of net investment income, and will distribute annually net
realized capital gains, if any. Common shareholders may join or withdraw from
the Plan at any time.
If you decide to participate in the Plan, Investors Bank & Trust Company, as
your Plan Agent, will automatically invest your dividends and capital gains
distributions in common shares of the Trust in your account.
How the Plan Works
Under the Plan, participants in the Plan will have their dividends reinvested
in common shares of the Trust on valuation date. If the market price per
common share on valuation date equals or exceeds net asset value per common
share on that date, the Trust will issue new common shares to participants at
the higher of net asset value or 95% of the market price. If net asset value
per common share on valuation date exceeds the market price per common share
on that date, or if the Board of Trustees should declare a dividend or capital
gains distribution payable to the common shareholders only in cash, the agent
will buy common shares in the open market on the New York Stock Exchange, or
elsewhere. If, before the Plan Agent has completed its purchases, the market
price exceeds the net asset value per common share, the average per share
purchase price paid by the Plan Agent may exceed the net asset value of the
Trust's common shares, resulting in the acquisition of fewer common shares
than if the dividend or distribution had been paid in common shares issued by
the Trust.
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 tax records. Common 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 received pursuant to the Plan. Holders of
common shares who do not elect to participate in the Plan will receive all
such amounts in cash paid by check mailed directly to the record shareholder
by Investors Bank & Trust Company, as dividend paying agent.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan.
Costs of the Plan
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. Each participant will pay a pro rata
share of brokerage commissions incurred with respect to the Plan Agent's open
market purchases in connection with the reinvestment of dividends or capital
gains distributions.
Tax Implications
Plan participants will receive tax information annually for personal records
and to help prepare federal income tax returns. The automatic reinvestment of
dividends and capital gains distributions does not relieve plan participants
of any income tax which may be payable on dividends or distributions.
Right to Withdraw
Plan participants may withdraw from the Plan at any time by writing to the
Plan Agent at the address noted on the following page. If you withdraw, you
will receive a share certificate in your name for all full common shares
credited to your account under the Plan and a cash payment for any fraction of
a share credited to your account. If you desire, the Plan Agent will sell your
shares in the Plan and send you the proceeds of the sale, less brokerage
commissions and a $2.50 service fee.
How to Participate
If you wish to participate in the Plan and your shares are held in your own
name, you may complete the form on the following page and deliver it to the
Plan Agent.
If your shares are held in the name of a brokerage firm, bank, or other
nominee, you should contact your nominee to see if it will participate in the
Plan on your behalf. If you wish to participate in the Plan, but your
brokerage firm, bank or nominee is unable to participate on your behalf, you
should request that your shares be
re-registered in your own name which will enable your participation in the
Plan.
Any inquiries regarding the Plan can be directed to Investors Bank & Trust
Company at 1-800-553-1916.
<PAGE>
Eaton Vance Senior Income Trust
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
From time to time in the future, the Trust may effect redemptions and/or
repurchases of its Auction Preferred Shares as provided in the applicable
constituent instruments or as agreed upon by the Trust and holders of Auction
Preferred Shares. The Trust would effect such redemptions and/or repurchases
to the extent necessary to maintain applicable asset coverage requirements.
<PAGE>
Eaton Vance Senior Income Trust
- --------------------------------------------------------------------------------
APPLICATION FOR PARTICIPATION IN DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This form is for shareholders who hold their common shares in their own names.
If your common shares are held in the name of a brokerage firm, bank, or other
nominee, you should contact your nominee to see if it will participate in the
Plan on your behalf. If you wish to participate in the Plan, but your brokerage
firm, bank or nominee is unable to participate on your behalf, you should
request that your common shares be re-registered in your own name which will
enable your participation in the Plan.
- --------------------------------------------------------------------------------
The following authorization and appointment is given with the understanding
that I may terminate it at any time by terminating my participation in the
Plan as provided in the terms and conditions of the Plan provided above.
--------------------------------------
Please print exact name on account:
--------------------------------------
Shareholder signature Date
--------------------------------------
Shareholder signature Date
Please sign exactly as your common
shares are registered. All persons
whose names appear on the share
certificate must sign.
YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS AND
DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
The authorization form, when signed, should be mailed to the following address:
Investors Bank & Trust Company
P.O. Box 1537, MFD23
Boston, MA 02205-1537
- --------------------------------------------------------------------------------
NUMBER OF EMPLOYEES
The Trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as a closed-end,
nondiversified, management investment company and has no employees.
NUMBER OF SHAREHOLDERS
As of December 31, 1998, our records indicate that there are 267 registered
shareholders and approximately 14,300 shareholders owning Trust shares in
"street" name, such as through brokers, banks, and other financial
intermediaries.
If you are a "street" name shareholder and wish to directly receive our
reports, which contain important information about the Trust, please write or
call:
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
1-800-225-6265
NEW YORK STOCK EXHANGE SYMBOL
The New York Stock Exchange symbol is EVF.
<PAGE>
Eaton Vance Senior Income Trust as of December 31, 1998
INVESTMENT MANAGEMENT
Eaton Vance Senior Income Trust
Officers Independent Trustees
JAMES B. HAWKES JESSICA M. BIBLIOWICZ
President, Chief Executive President and Chief Operating Officer,
Officer and Trustee John A. Levin & Co. Director,
Baker, Fentress & Co.
SCOTT H. PAGE
Vice President and DONALD R. DWIGHT
Co-Portfolio Manager President, Dwight Partners, Inc.
PAYSON F. SWAFFIELD SAMUEL L. HAYES, III
Vice President and Jacob H. Schiff Professor of Investment
Co-Portfolio Manager Banking, Emeritus, Harvard University
Graduate School of Business Administration
MICHAEL W. WEILHEIMER
Vice President NORTON H. REAMER
Chairman and Chief Executive Officer,
United Asset Management Corporation
JAMES L. O'CONNOR
Treasurer
LYNN A. STOUT
Professor of Law
ALAN R. DYNNER Georgetown University Law Center
Secretary
JOHN L. THORNDIKE
Formerly Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
<PAGE>
INVESTMENT ADVISER OF SENIOR INCOME TRUST
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF SENIOR INCOME TRUST
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
BANKING COUNSELS
Mayer, Brown & Platt
787 Seventh Avenue
New York, NY 10019
PEABODY & BROWN
101 Federal Street, 12th Floor
Boston, MA 02110
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EATON VANCE SENIOR INCOME TRUST
24 FEDERAL STREET
BOSTON, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus
which contains more complete information on the Fund, including its
sales charges and expenses. Please read the prospectus carefully
before you invest or send money.
- --------------------------------------------------------------------------------
2-2001-2/99 SITSRC-2/99
