MERRILL LYNCH
SENIOR FLOATING
RATE FUND, INC.
FUND LOGO
Quarterly Report
May 31, 1998
This report, including the financial information herein, is
transmitted to the shareholders of Merrill Lynch Senior Floating
Rate Fund, Inc. for their information. It is not a prospectus,
circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in this report. Past
performance results shown in this report should not be considered a
representation of future performance. The Fund has the ability to
leverage its Common Stock to provide Common Stock shareholders with
a potentially higher rate of return. Leverage creates risk for
Common Stock shareholders, including the likelihood of greater
volatility of net asset value and market price of Common Stock
shares, and the risk that fluctuations in short-term interest rates
may reduce the Common Stock's yield. Statements and other
information herein are as dated and are subject to change.
Merrill Lynch
Senior Floating
Rate Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
Merrill Lynch Senior Floating Rate Fund, Inc.
DEAR SHAREHOLDER
The three-month period ended May 31, 1998 was a challenging one in
which to invest the Fund's assets. During the majority of the
period, investors continued to focus on the impact that the
financial crisis in Asia would have on economic growth worldwide. In
the United States, sentiment was influenced by a number of
conflicting economic signals. At times, US investors appeared to
expect that positive trends of a continued expanding economy, a
tight labor market, productivity growth and corporate earnings
growth would continue unimpeded by the developments in Asia.
However, subsequent to May quarter-end, the exacerbation of
political unrest in Indonesia, a worsening Japanese economy and
growing concerns about a full-fledged recession in selected Asian
countries created new volatility in US equity and fixed-income
markets. The Asian currency crisis resulted in an investor flight to
quality that kept the US Treasury market rallying even as US
economic indicators reflected continued strong gross domestic
product growth.
During this period of instability, the Federal Reserve Board did not
take any further action and left the target Federal Funds rate
unchanged. By the end of May, the three-month London Interbank
Offered Rate (LIBOR) moved to 5.68% compared to 5.61% at the
beginning of the three-month period. Although concern arose
regarding a possible tightening of monetary policy in the face of
continued strong economic indicators, the Federal Reserve Board
indicated that monetary policy would remain unchanged as long as
inflation remained benign and until the effects of the Asian crisis
on the US economy became more evident.
Senior secured bank loans continue to be attractive from a risk
return standpoint because short-term interest rates, such as LIBOR,
remain higher than ten-year Treasury securities. As volatility
increased in global capital markets subsequent to May quarter-end,
the relative stability of the floating rate loan market continued to
be attractive for institutional investors looking to diversify their
risk. Because the returns on senior secured floating rate bank loans
have historically had a low correlation to emerging markets, US
equities and Treasury securities as measured against the respective
indexes, the senior secured floating rate bank loan sector has
continued to attract investors looking for a relatively safe harbor
in the non-investment grade area of the fixed-income markets.
During the three-month period ended May 31, 1998, the Fund invested
$532.5 million in new purchases, over $444.0 million of which were
new primary transactions. Although new issuance remained strong
during the May quarter, attractive high-yield bond spreads and low
Treasury levels resulted in record high-yield bond issuances
aggregating over $87.0 billion during the first five months of the
year. The proceeds of many of these issues were used to prepay
outstanding senior secured bank loans. In the six weeks subsequent
to quarter-end that trend has changed, since the high-yield bond
market cooled off coincident with the economic crisis in Asia and US
investors became overwhelmed by the new-issue supply. As a result,
leveraged issuers have been much more willing to choose bank loans
and floating rate notes over Rule 144A-bond transactions.
The Fund's industry holdings were reflected in 210 investments
across 45 different industries. The average loan size equaled $14.9
million, or 0.5% of net assets. We will continue to reduce average
exposure to any one issuer, if feasible, and focus on achieving
greater diversification across the portfolio. As can be seen by the
number of investments in the portfolio, the Fund has become more
varied by sector and by actual number of issuers. This has been
partly by design in order to lessen our exposure to any one issuer.
However, it is also the result of the proliferation of new investors
into the market.
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
As of May 31, 1998, Merrill Lynch Senior Floating Rate Fund, Inc.
had approximately $3.3 billion in net assets. With the strong
liquidity in today's market, we can more closely manage the Fund's
cash position to remain more fully invested given the transaction
flow. The average number of days to reset interest rates on the
Fund's investments was 44 days.
The Fund completed its latest quarterly tendered offer on April 17,
1998 with 13.3 million shares tendered and accepted for repurchase.
The next tender began on June 23, 1998 and concludes on July 24,
1998. The Fund remains open for new shareholder purchases.
Fund Performance
The Fund's net asset value continued to remain relatively stable
throughout the May quarter. During the three-month period ended May
31, 1998, the Fund earned $0.165 per share income dividends,
representing a net annualized yield of 6.63% (compared to a yield of
6.81% for the same period in 1997), based on a month-end per share
net asset value of $9.99. For the May quarter, the Fund's total
investment return was +1.66%, based on an unchanged per share net
asset value of $9.99, and assuming reinvestment of $0.167 per share
income dividends. Since inception (November 3, 1989) through May 31,
1998, the Fund's total investment return was +80.42%, based on a
change in per share net asset value from $10.00 to $9.99, and
assuming reinvestment of $5.921 per share income dividends.
In Conclusion
We thank you for your investment in Merrill Lynch Senior Floating
Rate Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our upcoming semi-annual report to
shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(R. Douglas Henderson)
R. Douglas Henderson
Senior Vice President and Portfolio Manager
July 17, 1998
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
THE BENEFITS AND RISKS OF LEVERAGING
Merrill Lynch Senior Floating Rate Fund, Inc. has the ability to
utilize leverage through the borrowings or issuance of short-term
debt securities or shares of Preferred Stock. The concept of
leveraging is based on the premise that the cost of assets to be
obtained from leverage will be based on short-term interest rates,
which normally will be lower than the return earned by the Fund on
its longer-term portfolio investments. Since the total assets of the
Fund (including the assets obtained from leverage) are invested in
higher-yielding portfolio investments, the Fund's Common Stock
shareholders are the beneficiaries of the incremental yield. Should
the differential between the underlying interest rates narrow, the
incremental yield "pick up" will be reduced. Furthermore, if
long-term interest rates rise, the Common Stock's net asset value
will reflect the full decline in the entire portfolio holdings
resulting therefrom since the assets obtained from leverage do not
fluctuate.
Leverage creates risks for holders of Common Stock including the
likelihood of greater net asset value and market price volatility.
In addition, there is the risk that fluctuations in interest rates
on borrowings (or in the dividend rates on any Preferred Stock, if
the Fund were to issue the Preferred Stock) may reduce the Common
Stock's yield and negatively impact its market price. If the income
derived from securities purchased with assets received from leverage
exceeds the cost of leverage, the Fund's net income will be greater
than if leverage had not been used. Conversely, if the income from
the securities purchased is not sufficient to cover the cost of
leverage, the Fund's net income will be less than if leverage had
not been used, and therefore the amount available for distribution
to Common Stock shareholders will be reduced. In this case, the Fund
may nevertheless decide to maintain its leveraged position in order
to avoid capital losses on securities purchased with leverage.
However, the Fund will not generally utilize leverage if it
anticipates that its leveraged capital structure would result in a
lower rate of return for its Common Stock than would be obtained if
the Common Stock were unleveraged for any significant amount of
time.
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
R. Douglas Henderson, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
PORTFOLIO INFORMATION
As of May 31, 1998
Quality Rating* Percent of
S&P/Moody's Market Value
BB/Ba 44.0%
B/B 26.4
CCC/Caa 0.5
NR (Not Rated) 29.1
[FN]
*In cases where bonds are rated differently by Standard & Poor's
Corp. and Moody's Investors Services, Inc., bonds are categorized
according to the higher of the two ratings.
Percent of
Five Largest Industries Net Assets
Telephone Communications 11.2%
Health Services 7.8
Paper 7.3
Amusement & Recreational Services 4.9
Automotive Equipment 4.8
Ten Largest Senior Secured Percent of
Floating Rate Loan Interests Net Assets
Riverwood International Corp. 3.0%
Stone Container Corp. 2.8
Starwood Hotels & Resorts Trust 2.3
Federal Mogul Corp. 2.2
AMF Group, Inc. 2.2
Marcus Cable Operating Co. 1.9
Outsourcing Solutions, Inc. 1.9
Nextel Communications, Inc. 1.8
Chancellor Media Corp. 1.8
Cellular, Inc. 1.6
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Advertising--0.4% NR++ Ba2 $12,266,667 Outdoor Systems, Inc., Term, due
6/30/2004 $ 12,242,897 $ 12,259,000
Aerospace--0.2% NR++ Ba3 4,990,809 K & F Industries, Term B, due 10/15/2005 4,990,809 5,028,240
Agriculture--0.5% NR++ NR++ 5,500,000 Purina Mills Inc., Term B, due 3/31/2007 5,493,240 5,520,625
NR++ NR++ 9,990,000 Seminis, Term B, due 12/31/2003 9,990,000 9,990,000
-------------- --------------
15,483,240 15,510,625
Air Transport Continental Airlines, Inc.:
- --0.3% BB- NR++ 3,403,636 Term A, due 7/31/2002 3,399,283 3,390,447
BB- NR++ 6,357,333 Term B, due 7/31/2003 6,357,333 6,353,360
-------------- --------------
9,756,616 9,743,807
Aircraft & NR++ Ba2 4,372,847 Alliant Techsystems, Inc., Term, due
Parts--1.3% 3/15/2001 4,369,892 4,372,848
NR++ Ba3 7,361,751 Evergreen International Aviation, Inc.,
Term B, due 5/31/2003 7,330,075 7,361,751
NR++ NR++ 22,578,125 Gulfstream Aerospace Corp., Term, due
9/30/2002 22,543,520 22,521,680
NR++ NR++ 2,631,629 Technetics, Term, due 6/20/2002 2,617,191 2,623,405
NR++ NR++ 6,250,000 Westernsky, Term, due 7/31/2003 6,243,812 6,250,000
-------------- --------------
43,104,490 43,129,684
Amusement & AMF Group, Inc.:
Recreational NR++ B+ 15,671,401 Axel A, due 3/31/2003 15,813,374 15,758,555
Services--4.9% NR++ B+ 23,510,624 Axel B, due 3/31/2004 23,560,317 23,621,812
NR++ B+ 3,203,421 Term, 7.687% due 3/31/2002 3,196,299 3,201,419
NR++ B+ 23,502,269 Term A, due 3/31/2002 23,459,937 23,591,139
NR++ B+ 2,850,597 Term C1, due 3/31/2003 2,893,356 2,862,177
NR++ B+ 2,088,407 Term C2, due 3/31/2004 2,119,733 2,096,891
B1 NR++ 2,000,000 ASC East Inc., Term, due 5/31/2006 1,998,089 2,003,750
B1 NR++ 5,000,000 ASC West Inc., Term, due 5/31/2006 4,995,223 5,009,375
Amfac Resorts, Inc.:
NR++ NR++ 2,500,000 Term B, due 9/30/2004 2,496,422 2,501,563
NR++ NR++ 2,500,000 Term C, due 9/30/2005 2,496,392 2,504,688
KSL Recreation Group, Inc.:
NR++ B2 7,659,091 Revolving Credit, due 4/30/2004 7,659,091 7,683,026
NR++ B2 7,672,500 Term A, due 4/30/2005 7,695,665 7,696,477
NR++ B1 7,672,500 Term B, due 4/30/2006 7,696,368 7,696,477
B+ NR++ 5,000,000 Kerastotes, Term B, due 12/31/2004 4,992,892 5,012,500
Metro Goldwyn Mayer Co.:
B1 Ba2 4,260,000 Revolving Credit, due 9/30/2003 4,260,000 4,185,450
B1 Ba2 4,000,000 Term A, due 12/31/2005 3,981,107 3,930,000
B1 Ba2 10,000,000 Term B, due 12/31/2006 9,976,168 10,025,000
B1 Ba2 4,527,163 Premier Parks Inc., Term C, due 3/31/2006 4,524,932 4,546,969
Regal Cinema:
NR++ Ba2 3,294,118 Term B, due 5/27/2006 3,290,826 3,298,235
NR++ Ba2 3,705,882 Term C, due 5/27/2007 3,702,179 3,712,831
NR++ Ba3 13,472,837 Six Flags Entertainment Corp., Term B,
due 11/03/2004 13,466,223 13,573,883
NR++ NR++ 4,200,000 Video Update Inc., Term B, due 4/30/2003 4,159,489 4,158,000
-------------- --------------
158,434,082 158,670,217
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Apparel--1.5% Arenabrands:
NR++ NR++ $ 1,180,555 Revolving Credit, due 6/01/2002 $ 1,180,555 $ 1,184,982
NR++ NR++ 3,973,189 Term A, due 6/01/2002 3,978,155 3,988,088
NR++ NR++ 7,233,630 Term B, due 6/01/2002 7,242,672 7,260,756
CS Brooks Canada:
NR++ NR++ 4,570,547 Axel A, due 6/30/2002 4,553,238 4,559,121
NR++ NR++ 10,156,772 Axel B, due 6/30/2004 10,121,544 10,131,380
NR++ NR++ 9,750,000 Humphreys Inc., Term B, due 1/15/2003 9,750,000 9,750,000
NR++ NR++ 4,800,000 Renfro Corp., Term B, due 11/15/2003 4,780,622 4,800,000
Walls Industries:
NR++ NR++ 1,244,681 Term B, due 2/28/2005 1,244,681 1,244,681
NR++ NR++ 1,707,447 Term C, due 2/28/2006 1,707,447 1,707,447
BB- Ba3 6,174,000 William Carter Co. (The), Term, due
10/31/2003 6,148,570 6,162,424
-------------- --------------
50,707,484 50,788,879
Automotive American Axel:
Equipment--4.8% NR++ NR++ 1,700,000 Revolving Credit, due 10/31/2005 1,700,000 1,692,875
NR++ NR++ 21,000,000 Term B, due 3/31/2007 21,033,380 21,065,625
NR++ NR++ 10,000,000 Breed Technologies, Inc., Term B, due
4/27/2006 9,975,199 10,056,250
NR++ Ba3 8,400,000 CSK Automotive, Term, due 10/31/2003 8,392,140 8,413,125
B+ B1 23,419,946 Collins & Aikman Corp., Term B, due
12/31/2002 23,335,891 23,475,568
Federal Mogul Corp.:
NR++ NR++ 226,829 Term, due 6/30/1999 226,309 227,113
NR++ NR++ 23,125,000 Term, due 9/30/1999 23,125,000 23,125,000
NR++ NR++ 6,564,102 Term A, due 12/31/2003 6,547,930 6,564,103
NR++ NR++ 37,500,000 Term B, due 12/31/2005 37,500,000 37,593,750
NR++ B1 16,501,500 Johnstown America Industrial, Inc.,
Term B, due 3/31/2003 16,440,206 16,449,933
Safelite Glass Corp.:
BB- B2 3,750,000 Term B, due 12/31/2004 3,744,645 3,761,719
BB- B2 3,750,000 Term C, due 12/31/2005 3,744,599 3,761,719
-------------- --------------
155,765,299 156,186,780
Broadcast-- Chancellor Media Corp.:
Radio & TV--4.0% BB- Ba2 71,330 Revolving Credit, due 1/31/2003 71,330 71,330
BB- Ba2 51,891,428 Term, due 6/26/2004 51,730,194 51,372,514
NR++ NR++ 10,000,000 Channel Master, Term, due 10/10/2005 9,981,143 10,000,000
NR++ NR++ 8,260,869 Latin Communications, Term, due 3/31/2004 8,215,420 8,178,261
NR++ NR++ 4,625,000 Retlaw Broad, Term, due 3/31/2006 4,613,521 4,620,375
NR++ Ba3 8,495,410 Sullivan Broadcasting Group, Inc.,
Term B, due 12/31/2003 8,471,234 8,466,207
NR++ NR++ 9,000,000 Usani, Term B, due 12/31/2003 8,987,051 9,000,000
NR++ Ba2 38,958,819 Viacom, Inc., Term, due 7/01/2002 38,912,169 38,654,452
-------------- --------------
130,982,062 130,363,139
Building & NR++ NR++ 2,509,281 Fenway Holdings, Inc., Term B, due
Construction--0.1% 9/15/2002 2,496,330 2,468,505
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Building Behr Process:
Materials--2.3% NR++ NR++ $ 4,158,000 Term B, due 3/31/2004 $ 4,152,994 $ 4,158,000
NR++ NR++ 2,772,000 Term C, due 3/31/2005 2,768,596 2,775,465
NR++ NR++ 16,966,000 Dal Tile International, Inc., Term B, due
12/31/2003 16,890,802 16,541,850
NR++ NR++ 5,000,000 Dayton Superior Corp., Term, due 9/29/2005 5,000,000 5,031,250
Euramax Holdings:
NR++ Ba3 2,521,031 Term B, due 6/30/2004 2,518,176 2,521,031
NR++ Ba3 3,702,967 Term C, due 6/30/2004 3,698,773 3,702,967
NR++ B1 4,985,714 Falcon Building Products, Inc., Term, due
6/30/2005 4,967,473 4,998,179
NR++ Ba3 29,799,665 National Gypsum Co., Term B, due 9/20/2003 29,753,056 29,846,227
Panolam Industries:
NR++ NR++ 478,688 Term A, due 1/31/2003 478,688 478,688
NR++ NR++ 2,838,238 Term B, due 11/01/2005 2,838,238 2,838,238
NR++ NR++ 1,621,850 Term C, due 11/01/2006 1,621,850 1,621,850
-------------- --------------
74,688,646 74,513,745
Cable TV NR++ NR++ 24,375,000 Chelsea Communications, Term B, due
Services--4.2% 9/30/2004 24,286,022 24,390,234
NR++ B1 12,080,597 Classic Cable, Inc., Term B, due
6/30/2005 11,968,758 11,838,985
NR++ Ba3 4,000,000 FrontierVision Operating Partners L.P.,
Term B, due 3/31/2006 3,994,233 4,012,500
Intermedia Communications, Inc.:
B+ Ba3 10,000,000 Term, due 1/01/2005 9,979,261 10,006,250
B+ Ba3 7,500,000 Term B, due 12/31/2007 7,492,544 7,514,063
Marcus Cable Operating Co.:
B+ Ba3 27,312,500 Term A, due 12/31/2002 27,229,322 27,278,359
B+ Ba3 12,558,750 Term B1, due 4/30/2004 12,378,712 12,562,675
B+ Ba3 22,655,000 Term B2, due 4/30/2004 22,594,224 22,683,319
B+ Ba3 7,500,000 Optel, Inc., Term, due 5/31/2004 7,464,276 7,481,250
B+ NR++ 10,000,000 Triax Midwest, Term B, due 6/30/2005 9,946,457 9,990,625
-------------- --------------
137,333,809 137,758,260
Casino--0.4% Alliance Gaming Corp.:
NR++ B1 10,654,018 Term B, due 1/31/2005 10,654,018 10,693,970
NR++ B1 4,253,571 Term C, due 7/31/2005 4,253,571 4,269,522
-------------- --------------
14,907,589 14,963,492
Chemicals--4.8% NR++ NR++ 11,311,416 Cedar Chemical, Term B, due 10/31/2003 11,243,397 11,283,136
NR++ NR++ 10,000,000 Epsillon, Term B, due 12/31/2005 10,000,000 10,000,000
NR++ Ba2 11,982,000 Exide Corporation, Term B, due 3/19/2005 11,982,000 12,041,910
NR++ NR++ 3,666,667 Foamex International PLC, Revolving
Credit, due 6/30/2003 3,666,667 3,671,250
NR++ NR++ 10,000,000 HSC Holdings, Term B, due 3/31/2006 9,985,015 9,985,000
Huntsman Corp.:
NR++ Ba2 20,738,584 Term A, due 12/31/2002 20,722,272 20,770,988
NR++ Ba2 4,950,000 Term A, due 9/03/2003 4,950,000 4,957,734
NR++ Ba2 4,950,000 Term B, due 3/15/2004 4,946,053 4,974,750
NR++ Ba2 15,000,000 Term B, due 6/30/2004 15,000,000 15,037,500
NR++ Ba2 4,950,000 Term C, due 3/15/2005 4,946,048 4,974,750
NR++ Ba2 14,850,000 Term C, due 12/31/2005 14,804,523 15,035,625
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Chemicals NR++ B1 $ 7,940,000 Pioneer Americas Acquisition Corp.,
(concluded) Term, due 12/05/2006 $ 8,008,234 $ 7,944,963
BB- Ba3 5,000,000 Polymer Group, Inc., Term B, due
7/28/1998 4,997,957 5,018,750
NR++ Ba3 24,021,687 Sterling Chemicals, Inc., Term B, due
9/30/2004 23,920,443 23,916,593
NR++ Ba3 6,412,146 Texas Petrochemicals Corp., Term B, due
6/30/2004 6,392,143 6,396,115
-------------- --------------
155,564,752 156,009,064
Computer-Related NR++ B2 6,513,977 Anacomp, Inc., Term, due 3/31/2001 6,489,797 6,530,262
Services & NR++ B1 10,945,000 DecisionOne Corp., Term B, due 8/07/2005 10,929,222 10,726,100
Products--1.0% NR++ Ba3 17,259,167 Fairchild Semiconductors Corp., Term C,
due 3/11/2003 17,259,167 17,302,315
-------------- --------------
34,678,186 34,558,677
Consumer NR++ B1 8,433,409 Amscan Holdings, Inc., Axel, due 12/19/2004 8,433,409 8,496,659
Products--2.1% B+ Ba3 4,933,333 Boyds Collection Ltd., Term, due 4/21/2005 4,921,083 4,942,583
Hedstrom Corp.:
NR++ B1 3,455,173 Revolving Credit, due 6/30/2003 3,455,172 3,424,940
NR++ B1 4,896,552 Term A, due 6/30/2003 4,874,376 4,878,190
B+ Ba2 3,990,000 Pillowtex, Term B, due 12/31/2004 3,986,204 4,002,469
BB- Ba2 14,887,575 Playtex Family Products, Inc., Term B,
due 9/15/2003 14,821,655 14,962,013
RTI Funding Corp. (Ritvik Toys):
NR++ NR++ 7,214,061 Term B, due 2/07/2003 7,160,754 6,961,568
NR++ NR++ 7,214,061 Term C, due 2/07/2004 7,157,316 6,961,568
BB- Ba3 15,000,000 Revlon Consumer Products Corp., Term,
due 5/30/2002 14,989,244 14,934,375
-------------- --------------
69,799,213 69,564,365
Defense--0.3% United Defense Industries, Inc.:
NR++ B1 1,800,920 Term A, due 10/06/2003 1,815,895 1,798,668
NR++ B1 4,508,509 Term B, due 10/06/2005 4,508,509 4,514,144
NR++ B1 4,379,089 Term C, due 10/06/2006 4,379,089 4,384,563
-------------- --------------
10,703,493 10,697,375
Diversified NR++ NR++ 4,985,000 Sarah Michael, Term B, due 6/30/2004 4,985,000 4,985,000
Manufacturing-- Thermadyne Industries, Inc.:
0.4% NR++ NR++ 3,500,000 Term B, due 7/16/2004 3,496,504 3,496,500
NR++ NR++ 3,500,000 Term C, due 7/16/2005 3,496,503 3,496,500
-------------- --------------
11,978,007 11,978,000
Drilling--0.1% BB+ Ba3 3,775,820 Rigco North America, Term, due 9/30/1998 3,772,346 3,785,260
Drug/Proprietary NR++ NR++ 4,987,500 Duane Reade Co., Term B, due 2/15/2005 4,972,364 5,024,906
Stores--0.2%
Electronics/ NR++ Ba3 13,458,750 Amphenol Corp., Term B, due 5/19/2005 13,672,569 13,538,662
Electrical Circo Craft Co. (Viasystems):
Components-- NR++ B1 2,972,727 Term B, due 6/30/2004 2,963,237 2,991,307
2.5% NR++ B1 1,800,000 Term C, due 6/30/2005 1,794,077 1,811,250
NR++ NR++ 5,500,000 Communications & Power Industries, Inc.,
Term B, due 8/11/2002 5,462,972 5,513,750
Dictaphone Corp.:
B- B1 579,590 Revolving Credit, due 3/31/2001 579,590 567,999
B- B1 7,750,000 Term C, due 6/30/2003 7,678,149 7,720,938
Dynatech Corporation:
NR++ NR++ 1,666,667 Term B, due 3/31/2005 1,664,208 1,665,000
NR++ NR++ 1,666,667 Term C, due 3/31/2006 1,664,206 1,665,000
NR++ NR++ 1,666,667 Term D, due 3/31/2007 1,664,205 1,665,000
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Electronics/ BB- Ba3 $19,906,542 International Wire Group, Inc.,
Electrical Term B, due 9/30/2003 $ 19,889,069 $ 19,956,308
Components L-3 Communications Corp.:
(concluded) NR++ Ba3 951,500 Term A, due 3/31/2003 949,891 953,879
NR++ Ba3 550,000 Term B, due 3/31/2005 549,018 551,375
NR++ Ba3 544,500 Term C, due 3/31/2006 543,509 545,861
NR++ NR++ 4,500,000 Mitel Corporation, Axel B, due 2/26/2003 4,491,283 4,495,500
NR++ Ba3 6,872,838 Neopost, Term A, due 6/24/2006 6,856,592 6,877,134
NR++ Ba3 6,986,539 Telex Communications, Inc., Term B,
due 11/30/2004 6,970,811 6,894,840
B+ B1 6,000,000 Viasystems, Inc., Term, due 3/31/2004 5,994,173 6,015,000
-------------- --------------
83,387,559 83,428,803
Energy--0.2% NR++ Ba2 5,000,000 Clark Refining, Term, due 11/15/2004 5,000,000 5,037,500
Financial Outsourcing Solutions, Inc.:
Services--1.9% NR++ B1 17,500,000 Revolving Credit, due 10/15/2001 17,500,000 17,538,281
NR++ B1 24,101,815 Term B, due 10/15/2001 24,037,624 24,154,538
NR++ B1 19,958,333 Term C, due 10/15/2001 19,958,333 20,001,992
-------------- --------------
61,495,957 61,694,811
Food & Kindred Del Monte Corp.:
Products--3.5% NR++ B2 3,272,727 Term A, due 3/31/2003 3,272,727 3,273,750
NR++ B2 7,635,032 Term B, due 3/31/2005 7,630,450 7,637,419
NR++ NR++ 5,000,000 Dr. Pepper, Term B, due 12/31/2005 4,992,798 5,009,375
Imperial Holdings Ltd.:
BB- Ba3 6,656,367 Term A, due 12/31/2003 6,650,083 6,631,406
BB- Ba3 5,280,794 Term B, due 12/31/2005 5,275,711 5,274,193
International Homefoods, Inc.:
BB- Ba3 1,266,129 Revolving Credit, due 11/21/2001 1,266,129 1,260,590
BB- Ba3 3,278,226 Term A, due 11/21/2001 3,276,049 3,280,275
BB- Ba3 21,970,667 Term B, due 10/31/2005 22,000,832 21,984,398
Mistic Beverage, Inc.:
BB- Ba3 2,458,066 Term B, due 6/01/2004 2,446,863 2,467,284
BB- Ba3 2,458,066 Term C, due 6/01/2005 2,446,670 2,467,284
Snapple Beverage Corp.:
BB- Ba3 7,374,199 Term B, due 6/01/2004 7,340,589 7,411,070
BB- Ba3 7,374,199 Term C, due 6/01/2005 7,340,011 7,411,070
NR Ba3 5,883,360 Southern Foods Group, Term B, due 2/28/2006 5,876,453 5,920,131
NR Ba3 9,520,548 Specialty Foods, Inc., Term, due 1/31/2000 9,434,831 9,472,945
Van De Kamps, Inc.:
NR++ Ba3 6,088,299 Term B, due 4/30/2003 6,064,650 6,118,740
NR++ Ba3 3,824,924 Term C, due 9/30/2003 3,809,713 3,844,049
Volume Services:
NR++ B2 6,602,467 Term B, due 12/31/2002 6,554,250 6,602,467
NR++ B2 3,301,083 Term C, due 12/31/2003 3,275,507 3,301,083
NR++ NR++ 4,750,000 Windsor Quality Food, Term B, due
12/31/2002 4,732,051 4,678,750
-------------- --------------
113,686,367 114,046,279
Funeral Homes & NR++ Ba1 21,671,764 Loewen Group Capital, Term, due 7/15/2000 21,671,764 21,644,674
Parlors--1.3% BB- NR++ 14,750,000 Prime Succession International Group,
Term, due 8/01/2003 14,705,737 14,952,813
BB NR++ 6,813,647 Rose Hills Acquisition Corp., Axel A,
due 12/01/2003 6,799,481 6,890,300
-------------- --------------
43,176,982 43,487,787
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Furniture & NR++ NR++ $10,000,000 Furniture Brands, Term, due 6/27/2007 $ 10,000,000 $ 10,018,750
Fixtures--0.3%
General BB- Ba3 5,000,000 Sneaker Stadium, Term 2, due 12/31/2002 5,000,000 5,000,000
Merchandise
Stores--0.2%
Grocery--0.8% NR++ NR++ 10,400,000 Big V Supermarkets, Inc., Term B, due
3/15/2000 10,346,251 10,348,000
NR++ B1 10,000,000 Carr Gottstein Foods Co., Term B, due
12/31/2002 9,997,111 10,012,500
Star Markets Co., Inc.:
B Ba3 3,455,179 Term B, due 12/31/2001 3,445,100 3,446,541
B Ba3 2,588,164 Term C, due 12/31/2002 2,579,637 2,578,458
-------------- --------------
26,368,099 26,385,499
Health Services-- Community Health Systems, Inc.:
7.8% NR++ NR++ 16,089,041 Term B, due 12/31/2003 16,024,069 16,139,319
NR++ NR++ 16,089,041 Term C, due 12/31/2004 16,021,347 16,139,319
NR++ NR++ 12,082,192 Term D, due 12/31/2005 12,029,817 12,135,051
NR++ NR++ 6,385,719 Conmed Corp., Term B, due 12/30/2004 6,385,719 6,401,684
BB+ Ba3 4,875,487 Corning/Quest, Term A, due 4/03/2003 4,865,262 4,848,063
Dade International, Inc.:
NR++ B1 2,971,360 Term B, due 12/31/2002 2,957,385 2,975,074
NR++ B1 2,971,360 Term C, due 12/31/2003 2,956,754 2,975,074
NR++ B1 3,135,688 Term D, due 12/31/2004 3,119,544 3,143,528
NR++ NR++ 7,500,000 Endo Pharmaceuticals, Term B, due
6/30/2004 7,486,276 7,532,813
NR++ NR++ 9,975,000 Extendicare Health, Inc., Term B, due
12/31/2004 9,965,508 9,993,703
Genesis Health Ventures, Inc.:
NR++ Ba3 6,301,667 Term B, due 9/30/2004 6,289,900 6,323,329
NR++ Ba3 6,291,111 Term C, due 6/01/2005 6,279,316 6,312,737
Imed Corp. (Alaris):
B+ Ba3 3,908,800 Term A, due 8/01/2002 3,924,004 3,918,572
B+ Ba3 3,174,485 Term B, due 11/01/2003 3,171,265 3,184,405
B+ Ba3 3,174,485 Term C, due 11/01/2004 3,171,099 3,184,405
B+ Ba3 2,987,750 Term D, due 5/01/2005 2,984,447 2,997,087
NR++ NR++ 7,933,333 Insight, Term B, due 9/30/2004 7,918,260 7,968,042
Integrated Health Services, Inc.:
NR++ Ba3 22,500,000 Term, due 9/15/2003 22,584,935 22,500,000
NR++ Ba3 10,000,000 Term C, due 9/15/2005 10,000,000 10,025,000
Kinetic Concepts, Inc.:
BB Ba2 5,985,000 Term B, due 12/31/2004 5,985,000 6,022,406
BB Ba2 5,985,000 Term C, due 12/31/2005 5,985,000 6,022,406
Magellen Health Services:
NR++ Ba3 7,500,000 Term B, due 2/12/2005 7,489,109 7,523,438
NR++ Ba3 7,500,000 Term C, due 2/12/2006 7,489,048 7,523,437
Medical Specialties:
NR++ NR++ 12,886,364 Axel A, due 6/30/2004 12,819,073 12,821,932
NR++ NR++ 4,540,909 Term, due 6/30/2001 4,521,516 4,518,205
BB Ba1 18,750,000 National Medical Care, Inc., Term, due
9/30/2003 18,674,562 18,703,125
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Health Services Paragon Health Network, Inc.:
(concluded) NR++ Ba3 $ 7,500,000 Term B, due 3/31/2005 $ 7,492,932 $ 7,518,750
NR++ Ba3 7,500,000 Term C, due 3/31/2006 7,492,860 7,518,750
NR++ NR++ 22,500,000 Total Renal, Term, due 3/31/2008 22,472,036 22,507,031
NR++ NR++ 4,925,000 Wilson Great Batch, Term B, due 7/10/2004 4,913,669 4,912,688
-------------- --------------
253,469,712 254,289,373
Healthcare--0.7% NR++ Ba3 4,981,250 FPA Medical Management, Inc., Term,
due 9/30/2001 4,975,110 4,483,125
Multicare Companies, Inc.:
NR++ B1 4,726,250 Term B, due 9/30/2004 4,717,304 4,739,543
NR++ B1 1,572,778 Term C, due 6/01/2005 1,569,820 1,577,201
Sun Healthcare Group, Inc.:
NR++ Ba3 5,592,526 Term B, due 11/12/2004 5,584,709 5,610,003
NR++ Ba3 5,592,526 Term C, due 11/12/2005 5,584,611 5,610,003
-------------- --------------
22,431,554 22,019,875
Hotels & NR++ Ba1 6,234,375 Capstar Hotel Company, Term B, due
Motels--2.5% 6/30/2004 6,234,375 6,242,168
NR++ NR++ 75,000,000 Starwood Hotels & Resorts Trust, Term,
due 2/23/2003 74,927,298 75,046,875
-------------- --------------
81,161,673 81,289,043
Industrial NR++ NR++ 18,772,688 Elis/Omni, Axel, due 10/30/2005 18,936,084 18,959,100
Services--
0.6%
Leasing & Perf-O-Log:
Rental NR++ NR++ 204,034 Term, due 8/11/2003 203,720 203,524
Services--0.2% NR++ NR++ 5,521,136 Term B, due 8/11/2003 5,508,719 5,507,333
NR++ NR++ 1,250,000 Term C, due 8/11/2003 1,248,073 1,251,562
-------------- --------------
6,960,512 6,962,419
Manufacturing-- B3 B+ 4,750,000 Alliance Laundry, Term, due 6/30/2005 4,745,284 4,776,719
2.0% Goodman Manufacturing:
NR++ NR++ 2,389,087 Term B, due 9/30/2004 2,409,991 2,395,060
NR++ NR++ 2,389,087 Term C, due 9/30/2005 2,409,991 2,395,060
BB- Ba2 7,500,000 Groveworld, Term B, due 4/28/2006 7,492,558 7,523,437
NR++ NR++ 8,986,141 Polyfibron Technologies, Term B, due
12/28/2003 8,986,141 8,986,141
NR++ NR++ 5,000,000 Russell Stanley, Term B, due 6/30/2005 4,982,555 5,012,500
Sealy Mattress:
B+ Ba3 3,026,667 Axel B, due 12/15/2004 3,023,066 3,060,717
B+ Ba3 2,179,394 Axel C, due 12/15/2005 2,176,779 2,203,912
B+ Ba3 2,784,849 Axel D, due 12/15/2006 2,781,484 2,816,178
B+ Ba3 10,000,000 Term A, due 12/15/2003 10,062,500 10,018,750
Trans Technology Corp.:
NR++ NR++ 914,703 Term A, due 3/31/2002 914,702 914,702
NR++ NR++ 14,400,000 Term B, due 6/30/2002 14,297,481 14,418,000
-------------- --------------
64,282,532 64,521,176
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Measuring, NR++ NR++ $ 9,330,624 CHF/Ebel USA, Inc., Term B, due
Analyzing & 9/30/2001 $ 9,330,624 $ 9,330,624
Controlling NR++ B1 10,760,290 Graphic Controls Corp., Term B, due
Instruments--0.8% 9/28/2003 10,718,668 10,787,191
NR++ Ba3 4,962,500 Packard Bioscience Co., Term, due
3/31/2003 4,946,807 4,968,703
-------------- --------------
24,996,099 25,086,518
Metals & B+ NR++ 5,020,714 Adience, Inc., Term B, due 4/15/2005 5,003,549 5,030,128
Mining--1.5% NR++ Caa 4,681,840 Alliance Coal, Term B, due 3/31/2002 4,663,574 4,683,303
Centennial Resources:
NR++ NR++ 1,961,538 Term A, due 3/31/2002 1,945,914 1,892,884
NR++ NR++ 5,105,769 Term B, due 3/31/2003 5,061,706 4,927,068
NR++ Ba3 15,000,000 Koppers Industries, Term B, due 11/30/2004 14,981,776 15,000,000
NR++ Ba3 8,500,000 Neenah Foundry, Term B, due 9/30/2005 8,491,631 8,489,375
NR++ Ba2 10,162,952 UCAR International, Inc., Term B, due
12/31/2002 10,154,564 10,010,508
-------------- --------------
50,302,714 50,033,266
Metals & Steel-- B+ Ba3 9,985,714 Acme Metals, Inc., Term, due 12/01/2005 9,985,714 9,985,714
0.6% Chatham Technologies:
NR++ NR++ 3,696,667 Term A, due 8/15/2003 3,696,667 3,696,667
NR++ NR++ 5,990,769 Term B, due 8/15/2005 5,979,538 5,992,267
-------------- --------------
19,661,919 19,674,648
Packaging--1.1% Calmar, Inc.:
NR++ B1 10,307,148 Axel A, due 9/15/2003 10,268,667 10,358,683
NR++ B1 7,730,358 Axel B, due 3/15/2004 7,700,670 7,797,998
NR++ BB 3,750,000 Huntsman Packaging Corp., Term B, due
6/30/2006 3,746,261 3,750,000
NR++ B1 14,925,000 Ivex Packaging Corp., Term B, due
10/02/2004 14,907,666 14,971,641
-------------- --------------
36,623,264 36,878,322
Paper--7.3% NR++ NR++ 4,987,500 Bear Island Paper Co., Term, due
12/31/2005 4,977,958 5,012,437
BB Ba3 4,727,273 Crown Paper Co., Term B, due 8/22/2003 4,683,833 4,753,864
BB Ba3 35,000,000 Jefferson Smurfit Company/Container Corp.
of America, Term B, due 3/24/2006 35,000,000 35,065,625
Riverwood International Corp.:
B+ B1 5,620,011 Term A, due 2/28/2003 5,452,700 5,618,255
B+ B1 66,796,593 Term B, due 2/28/2004 66,052,053 67,130,576
B+ B1 25,731,573 Term C, due 8/31/2004 25,437,652 25,860,231
Stone Container Corp.:
NR++ Ba3 5,166,341 Revolving Credit, due 5/15/1999 5,166,341 5,127,593
NR++ Ba3 28,030,332 Term B, due 4/01/2000 28,059,691 28,074,130
NR++ Ba3 19,913,262 Term C, due 4/01/2000 19,893,990 19,944,376
NR++ Ba3 29,153,298 Term E, due 10/01/2003 29,382,401 29,226,181
Stronghaven:
NR++ NR++ 9,352,586 Term B, due 5/15/2004 9,312,978 9,375,968
NR++ NR++ 1,705,714 Term C, due 5/15/2004 1,705,714 1,709,979
-------------- --------------
235,125,311 236,899,215
Petroleum BB- Ba3 3,256,491 Petro Stopping Centers, Term B, due
Refineries--0.1% 12/31/2003 3,249,537 3,264,632
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Printing & NR++ B3 $ 5,571,429 21st Century, Term A, due 9/15/2003 $ 5,599,286 $ 5,564,464
Publishing--2.5% NR++ B1 15,000,000 Advanstar Communications, Term B, due
4/30/2005 14,985,133 15,011,250
BB- Ba2 20,924,512 American Media, Term B, due 9/30/2002 20,865,044 20,898,356
Garden State Newspapers, Inc.:
NR++ Ba1 842,105 Revolving Credit `A', due 6/30/2003 842,105 838,421
NR++ Ba1 631,579 Revolving Credit `C', due 3/31/2004 631,579 628,816
NR++ Ba1 789,473 Term A, due 3/31/2004 786,797 788,240
NR++ NR++ 7,986,368 Journal News Co., Term, due 12/31/2001 7,973,383 7,941,245
K-III Communications Corp.:
NR++ Ba3 480,000 Revolving Credit, due 12/31/2000 480,000 477,200
NR++ Ba3 5,280,000 Revolving Credit `A', due 12/31/2000 5,280,000 5,247,000
NR++ Ba3 3,680,000 Revolving Credit `C', due 12/31/2000 3,680,000 3,659,300
NR++ Ba3 4,000,000 Term, due 6/30/2004 4,000,000 3,982,500
NR++ Ba3 9,975,000 Morris Communications, Term B, due
6/30/2005 9,957,377 9,975,000
Von Hoffmann Press, Inc.:
NR++ B1 3,344,643 Term B, due 5/22/2005 3,337,057 3,369,728
NR++ B1 3,344,643 Term C, due 5/22/2006 3,336,940 3,369,728
-------------- --------------
81,754,701 81,751,248
Rendering--0.1% NR++ NR++ 4,870,122 CBP Resources, Inc., Term B, due
9/30/2003 4,842,026 4,857,947
Restaurants-- NR++ Ba3 9,180,000 AFC Enterprises, Term, due 6/30/2002 9,164,325 9,155,669
0.4% NR++ Ba3 4,768,118 Shoney's, Inc., Term B, due 4/30/2002 4,741,029 4,696,596
-------------- --------------
13,905,354 13,852,265
Retail--0.1% NR++ NR++ 2,471,154 Murray's Discount Auto Stores, Term,
due 6/30/2003 2,471,154 2,471,154
Retail NR++ NR++ 5,750,000 Advance Store, Term B, due 4/15/2006 5,741,471 5,760,781
Specialty--0.3% NR++ Ba2 3,975,000 Travel Centers, Term B, due 3/27/2005 3,961,691 3,997,359
-------------- --------------
9,703,162 9,758,140
Telephone NR++ B1 7,920,000 Arch Communications Group, Inc., Term B,
Communications-- due 12/31/2003 7,894,582 7,583,400
11.2% Cellular, Inc.:
NR++ B1 13,985,692 Term B, due 9/30/2006 13,975,676 14,029,397
NR++ B1 8,130,081 Term C, due 3/31/2007 8,110,204 8,160,569
NR++ B1 22,764,227 Term D, due 9/30/2007 22,708,448 22,849,593
NR++ NR++ 25,000,000 Cox Communications, Inc., Term B, due
12/31/2006 24,938,757 25,000,000
NR++ Ba2 18,680,000 Flag Ltd., Term, due 1/30/2005 18,590,054 18,703,350
B2 B2 5,219,949 Iridium LLC, Term B, due 12/31/1998 5,195,738 5,213,424
MobileMedia Corp.:
NR++ Caa 8,367,347 Term A, due 6/30/2002 8,343,714 7,342,347
NR++ Caa 1,759,829 Term B, due 6/30/2003 1,754,572 1,544,250
NR++ Caa 606,838 Term B2, due 6/30/2003 606,838 532,500
NR++ B1 40,000,000 Nextel Communications, Inc., Term B,
due 9/30/2006 39,950,866 40,250,000
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured
Industries Rating Rating Amount Floating Rate Loan Interests* Cost Value
<S> <S> <S> <C> <S> <C> <C>
Telephone Omnipoint Communications Corp.:
Communications BB- Ba2 $ 6,807,203 Term A, due 2/17/2006 $ 6,800,553 $ 6,820,818
(concluded) BB- Ba2 1,942,797 Term B, due 2/17/2006 1,940,899 1,937,940
BB- Ba2 43,750,000 Term C, due 2/17/2006 43,750,000 43,941,406
Pacific Coin Acquisition:
NR++ NR++ 4,432,727 Term, due 12/31/2003 4,414,237 4,432,727
NR++ NR++ 2,250,000 Term A, due 12/31/2002 2,241,711 2,250,000
NR++ NR++ 2,750,000 Term B, due 12/31/2004 2,739,803 2,750,000
NR++ Ba3 12,872,333 Paging Network, Inc., Revolving Credit,
due 12/31/2004 12,872,333 12,626,954
NR++ NR++ 15,000,000 PowerTel, Inc., Term, due 3/04/2001 15,000,000 14,990,625
Price Communications Corp.:
NR++ Ba3 3,400,000 Revolving Credit, due 9/30/2005 3,400,000 3,383,000
NR++ Ba3 3,333,333 Term A, due 9/30/2005 3,313,748 3,316,667
NR++ Ba3 4,975,000 Term B, due 9/30/2006 4,965,552 5,012,312
NR++ NR++ 15,000,000 Sprint Spectrum L.P./Lucent Technologies,
Term, due 5/29/2004 14,832,868 15,009,375
Sprint Spectrum L.P./Northern Telecom:
NR++ B1 10,000,000 Term, due 5/29/2004 10,100,000 10,006,250
NR++ B1 27,500,000 Term A, due 3/31/2006 27,528,125 27,525,782
NR++ B1 20,662,500 Term 1, due 1/02/2006 20,484,024 20,739,984
NR++ B1 14,887,500 Term 2, due 1/02/2006 14,786,239 14,943,328
NR++ NR++ 5,000,000 Triton PCS, Term B, due 4/30/2007 5,000,000 4,981,250
B+ B2 20,000,000 Western Wireless Corp., Term B, due
3/31/2006 20,000,000 20,050,000
-------------- --------------
366,239,541 365,927,248
Textiles/Mill Joan Fabrics:
Products--0.5% NR++ NR++ 3,280,263 Term B, due 6/30/2005 3,275,686 3,292,564
NR++ NR++ 1,705,263 Term C, due 6/30/2006 1,702,853 1,711,658
NR++ NR++ 10,500,000 Tartan Textiles, Term B, due 5/01/2005 10,473,878 10,500,000
-------------- --------------
15,452,417 15,504,222
Transportation NR++ Ba3 14,590,541 Atlas I, Term, due 5/29/2004 14,583,028 14,627,017
Services--1.1% NR++ Ba3 14,590,540 Atlas II, Term, due 5/29/2004 14,583,027 14,627,017
NR++ NR++ 7,500,000 Naacquisition, Term B, due 3/30/2006 7,490,765 7,500,000
-------------- --------------
36,656,820 36,754,034
Total Senior Secured Floating Rate
Loan Interests--85.9% 2,798,702,764 2,802,855,294
Shares
Held Equity Investments
Cable TV Services--0.0% 707 Classic Cable, Inc. (Warrants)(a) 0 0
Drilling--0.0% 12,250 Rigco North America (Warrants)(a) 0 0
General Merchandise 184,080 Sneaker Stadium (Warrants)(a) 0 0
Stores--0.0%
Total Equity Investments--0.0% 0 0
Total Long-Term Investments--85.9% 2,798,702,764 2,802,855,294
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
May 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face
Amount Short-Term Securities Cost Value
<S> <C> <S> <C> <C>
Commercial $18,000,000 Bell Atlantic Financial Service, Inc.,
Paper**--11.5% 5.52% due 6/26/1998 $ 17,931,000 $ 17,931,000
50,000,000 CIT Group Holdings, Inc., 5.51% due
6/24/1998 49,823,986 49,823,986
15,000,000 Caterpillar Inc., 5.53% due 6/08/1998 14,983,871 14,983,871
20,000,000 Chase Manhattan Corp., 5.51% due
7/06/1998 19,892,861 19,892,861
20,000,000 Finova Capital Corp., 5.54% due
6/09/1998 19,975,378 19,975,378
94,368,000 General Motors Acceptance Corp., 5.69%
due 6/01/1998 94,368,000 94,368,000
20,000,000 Lehman Brothers Holdings Inc., 5.54% due
6/12/1998 19,966,144 19,966,144
20,000,000 Morgan (J.P.) & Company, Inc., 5.51% due
6/22/1998 19,935,717 19,935,717
24,000,000 Paccar Financial Corp., 5.49% due 6/05/1998 23,985,360 23,985,360
45,000,000 Republic Industries, Inc., 5.53% due
7/08/1998 44,744,237 44,744,237
Riverwoods Funding Corp.:
29,655,000 5.50% due 6/04/1998 29,641,408 29,641,408
19,000,000 5.50% due 6/17/1998 18,953,556 18,953,556
-------------- --------------
374,201,518 374,201,518
US Government 25,000,000 Federal Home Loan Mortgage Corporation,
Agency Obligations**--0.7% 5.44% due 6/18/1998 24,935,778 24,935,778
Total Investments in
Short-Term Securities--12.2% 399,137,296 399,137,296
Total Investments--98.1% $3,197,840,060 3,201,992,590
==============
Other Assets Less Liabilities--1.9% 61,511,270
--------------
Net Assets--Equivalent to $9.99 Per Share Based on 326,565,616 Shares Outstanding--100.0% $3,263,503,860
==============
<FN>
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of common stock. The purchase price and numbers of shares are
subject to adjustment under certain conditions until the expiration
date and are non-income producing.
++Not Rated.
*The interest rates on senior secured floating rate loan interests
are subject to change periodically based on the change in the prime
rate of a US Bank, LIBOR (London Interbank Offered Rate), or, in
some cases, another base lending rate. The interest rates shown are
those in effect at May 31, 1998.
**Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
</TABLE>
