MERRILL LYNCH
SENIOR FLOATING
RATE FUND, INC.
FUND LOGO
Semi-Annual Report
February 28, 1999
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
Last summer, the high-yield market was pressured by disruptions in
equity and emerging markets that resulted in a marked decrease in
liquidity and a decrease in prices virtually across the board. This
scenario negatively impacted the leveraged bank loan market as well.
The bid side of the dealer market experienced downward pressure
primarily as a result of many hedge fund managers and crossover
mutual fund investors selling their bonds and loan positions to
provide needed liquidity. While the credit environment had not
significantly changed, the problems of other fixed-income and equity
markets impacted the high-yield bond and leveraged loan markets.
Beginning in November 1998, the high-yield bond environment
stabilized significantly. This market has experienced some
improvement from its lows of September. The bank loan market has
also stabilized, and the bid levels on a select number of issues
have begun to improve. A steady, albeit slow, rise in the Fund's net
asset value will coincide with prepayments of loans held by the Fund
at par. Yields on bank loans have narrowed some from an average of
approximately 350 basis points (3.50%) in December to approximately
300 basis points.
Current consensus expectations are for the US economy to grow at a
rate of about 2.5% through 1999. Accordingly, we expect the Federal
Reserve Board to remain neutral with regard to short-term interest
rates. This trend, combined with the improved technicals described
above, should continue to improve the secondary market bid levels.
As of February 28, 1999, more than 97% of the Fund's investments in
corporate loans were accruing interest at a yield spread above the
London Interbank Offered Rate (LIBOR), the rate that major
international banks charge each other for US dollar-denominated
deposits outside of the United States. LIBOR has tracked other short-
term interest rates in the United States very closely, particularly
the Federal Funds rate. Since the average reset on the Fund's
floating rate investments is 51.5 days, the yield on the bank loan
portion of the Fund is likely to move up or down within a two-month
period after any Federal Funds rate change.
Fund Performance
Merrill Lynch Senior Floating Rate Fund, Inc. ended the February
quarter with approximately $3.0 billion out of $3.4 billion, or
88.9%, of its net assets committed for investment in corporate loan
interests. Assets not invested in loan interests were invested in
high-quality, short-term securities.
The Fund's effective net annualized yield for the quarter ended
February 28, 1999 was 6.49%, compared to a yield of 7.07% for the
same period a year earlier. During the three-month period ended
February 28, 1999, the Fund earned $0.158 per share income
dividends, representing a net annualized yield of 6.49%, based on a
month-end per share net asset value of $9.84. For the quarter ended
February 28, 1999, the Fund's total investment return was +1.61%,
based on an unchanged net asset value of $9.84, and assuming
reinvestment of $0.159 per share income dividends. Since inception
(November 3, 1989) through February 28, 1999, the Fund's total
investment return was +86.69%, based on a change in per share net
asset value from $10.00 to $9.84, and assuming reinvestment of
$6.408 per share income dividends.
Investment Activities
Since November 1998, we have focused on the better-priced new-issue
market where transactions have been available at yields relative to
LIBOR that were 100 basis points -150 basis points greater than was
the case in July. The transactions were also much more conservatively
structured with lower leverage and higher interest coverage as
investors became more demanding in the face of a potentially slowing
US economy. Some of the leveraged loans brought to market since
November are now trading above par.
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
During the three-month period ended February 28, 1999, the Fund's
investment strategy remained unchanged: to invest in leveraged
transactions in which borrowers have strong market shares,
experienced managements, consistent cash flows and appropriate
risk/reward characteristics in the form of its floating rate spread
over the prime rate or LIBOR. In addition, we look for companies
with significant underlying asset and franchise value, strong
capital structures, and equity sponsors that support their
investments. Additionally, we have intensified our analysis of out-
of-favor sectors such as healthcare, energy, steel and paper. We see
value in certain secondary issues within those sectors. In some
cases, we see opportunity to purchase bank loans that have been bid
down to levels well below our estimation of their true economic
value.
We continue to maintain significant diversification across the
Fund's investments. At February 28, 1999, the portfolio was invested
in 252 borrowers across 50 industries. See the "Portfolio
Information" section on page 4 of this report to shareholders, which
provides listings of the Fund's ten largest holdings and five
largest industries as of February 28, 1999.
As difficult as the second half of 1998 was for the loan market and
the Fund, their respective performances illustrate the leveraged
loan market's ability to weather market fluctuations with less
volatility than the high-yield bond market. This attribute continues
to draw many new institutional buyers to the loan market. When there
was almost no liquidity in the high-yield bond market during that
turmoil and many markets lost their ability to price transactions,
the loan market maintained bids for most generally syndicated
transactions, albeit at lower levels. We believe that both the
technical and fundamental aspects are improving in the bank loan
sector. We also believe we have positioned the Fund positively to
benefit from further expected improvements in the market over the
next six to twelve months.
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 next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Joseph T. Monagle Jr.)
Joseph T. Monagle Jr.
Senior Vice President
April 20, 1999
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
We are pleased to announce that Richard C. Kilbride, Paul Travers
and Gilles Marchand have each been appointed Vice President and
Portfolio Manager of Merrill Lynch Senior Floating Rate Fund, Inc.
Mr. Kilbride has almost 20 years experience in the fixed-income
markets and has previously served as a Managing Director of Fixed
Income for Merrill Lynch Asset Management, L.P. (MLAM) and its
affiliated asset management companies in London and in Los Angeles.
Mr. Travers joined MLAM's Bank Loan Portfolio Group last year,
bringing with him 15 years of diversified professional experience in
the bank loan industry. He was previously Head of U.S. Corporate
Banking in the New York Branch of BHF-BANK. Mr. Marchand has been a
Bank Loan Credit Analyst for MLAM for the last three years and has
almost 10 years buy side experience in a wide range of fixed-income
securities.
These appointments follow the resignation of R. Douglas Henderson as
Senior Portfolio Manager. Mr. Henderson has left MLAM to pursue
opportunities on the sell side of the loan participation market. We
appreciate the contribution Mr. Henderson made to the growth of the
Fund and we wish him well for the future. We continue to have an
excellent team of portfolio managers and analysts in place, and we
look forward to building upon the successful performance of the Fund
to date. You will be hearing directly from Messrs. Kilbride, Travers
and Marchand in subsequent reports.
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
PORTFOLIO INFORMATION
AS OF FEBRUARY 28, 1999
Quality Rating Percent of
S&P/Moody's Long-Term Investments
BB/Ba 34.1%
B/B 18.1
NR (Not Rated) 47.8
Percent of
Five Largest Industries Total Assets
Paper 8.7%
Wireless Telecommunications 8.5
Chemicals 6.7
Health Services 6.7
Cable TV Services 5.5
Percent of
Ten Largest Holdings Total Assets
Riverwood International Corp. 3.2%
Starwood Hotels & Resorts Trust 2.7
Stone Container Corp. 2.2
Lyondell Petrochemical Co. 2.1
AMF Group, Inc. 2.0
Marcus Cable Operating Co. 1.8
Ziff-Davis Inc. 1.7
Chancellor Media Corp. 1.7
Jefferson Smurfit Company/
Container Corp. of America 1.6
Nextel Communications Inc. 1.5
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Advertising BB- Ba2 $ 11,566,667 Outdoor Systems, Inc., Term, due
- --0.3% 6/30/2004 $ 11,546,481 $ 11,508,833
Aerospace--0.3% BB NR++ 6,357,160 Hexcel Corp., Term B, due 6/30/2005 6,349,635 6,317,428
B+ Ba3 4,113,051 K & F Industries, Term B, due 10/15/2005 4,113,051 4,105,339
-------------- --------------
10,462,686 10,422,767
Agriculture-- NR++ NR++ 9,960,000 Seminis Inc., Term B, due 12/31/2003 9,960,000 9,960,000
0.3%
Air Continental Airlines, Inc.:
Transportation BB Ba1 7,753,177 Term A, due 7/31/2002 7,753,177 7,753,177
- --0.4% BB Ba1 6,272,000 Term B, due 7/31/2003 6,272,000 6,272,000
-------------- --------------
14,025,177 14,025,177
Aircraft & NR++ Ba3 7,255,501 Evergreen International Aviation, Inc.,
Parts--1.0% Term B, due 5/31/2003 7,228,260 7,219,223
NR++ NR++ 19,062,500 Gulfstream Aerospace Corp., Term,
due 9/30/2002 19,037,710 18,967,188
NR++ NR++ 2,143,349 Technetics Corp., Term A, due 6/20/2002 2,143,349 2,143,349
NR++ NR++ 5,281,690 WesternSky Industries, Term, due 7/31/2003 5,281,690 5,281,690
-------------- --------------
33,691,009 33,611,450
Amusement & AMF Group, Inc.:
Recreational NR++ B+ 39,408,063 Axel A, due 5/03/2003 39,562,127 36,846,539
Services--5.0% NR++ B+ 25,334,578 Axel B, due 5/01/2004 25,415,267 23,687,831
NR++ B+ 2,599,835 Term, due 3/31/2002 2,595,055 2,417,846
NR++ B+ 2,198,676 Term A, due 3/31/2002 2,194,466 2,044,769
NR++ B1 3,428,571 ASC East Inc., Term, due 5/31/2006 3,418,025 3,411,429
NR++ B1 8,571,429 ASC West Inc., Term, due 5/31/2006 8,566,978 8,528,572
Amfac Resorts, Inc.:
NR++ NR++ 2,475,000 Term B, due 9/30/2004 2,475,000 2,475,000
NR++ NR++ 2,475,000 Term C, due 9/30/2005 2,475,000 2,475,000
KSL Recreation Group, Inc.:
NR++ B2 12,454,545 Revolving Credit, due 4/30/2004 12,454,545 12,306,648
BB- NR++ 10,890,000 Term A, due 4/30/2005 10,930,046 10,767,488
B+ B1 10,890,000 Term B, due 4/30/2006 10,930,625 10,842,356
B+ NR++ 4,962,500 Kerastotes, Term B, due 12/31/2004 4,962,500 4,962,500
Metro Goldwyn Mayer Co.:
NR++ Ba2 2,650,000 Revolving Credit, due 6/01/2002 2,650,000 2,562,219
NR++ Ba2 4,000,000 Term A, due 3/31/2005 3,982,549 3,927,500
BB+ Ba2 17,500,000 Term B, due 3/31/2006 17,477,700 17,259,375
NR++ Ba3 4,527,163 Premier Parks Inc., Term C, due 3/21/2006 4,525,098 4,493,209
NR++ Ba3 13,454,728 Six Flags Entertainment Corp., Term B,
due 11/03/2004 13,448,729 13,425,296
NR++ NR++ 4,200,000 Video Update Inc., Term B, due 4/30/2003 4,200,000 4,200,000
-------------- --------------
172,263,710 166,633,577
Apparel--1.4% Arena Brands, Inc.:
NR++ NR++ 972,222 Revolving Credit, due 6/01/2002 972,222 972,222
NR++ NR++ 3,578,903 Term A, due 6/01/2002 3,578,903 3,578,903
NR++ NR++ 7,142,641 Term B, due 6/01/2002 7,142,641 7,142,641
NR++ NR++ 3,250,000 CS Brooks Canada, Inc., Term, due
6/25/2006 3,234,196 3,225,625
NR++ NR++ 4,975,000 Cluett American Corp., Term B, due
5/18/2005 4,975,000 4,975,000
NR++ NR++ 9,500,000 Humphreys Inc., Term B, due 1/15/2003 9,500,000 9,500,000
NR++ NR++ 4,987,500 Norcross Safety Products, Term, due
12/31/2005 4,987,500 4,987,500
NR++ NR++ 4,600,000 Renfro Corp., Term B, due 11/15/2003 4,600,000 4,600,000
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Apparel Walls Industries:
(concluded) NR++ NR++ $ 1,212,766 Term B, due 2/28/2005 $ 1,212,766 $ 1,212,766
NR++ NR++ 1,691,490 Term C, due 2/28/2006 1,691,490 1,691,490
BB- Ba3 6,048,000 The William Carter Co., Term, due
10/31/2003 6,026,136 6,040,440
-------------- --------------
47,920,854 47,926,587
Automotive NR++ NR++ 21,000,000 American Axel, Term B, due 3/31/2007 21,000,000 21,000,000
Equipment--3.1% Breed Technologies, Inc.:
NR++ NR++ 5,000,000 Term A, due 4/27/2004 4,815,051 4,175,000
NR++ NR++ 9,625,247 Term B, due 4/27/2006 9,625,247 9,625,247
NR++ Ba3 14,291,390 CSK Automotive, Inc., Term, due
10/31/2003 14,241,239 14,224,399
BB- B1 11,000,000 Collins & Aikman Corp., Term B, due
6/30/2005 10,994,961 10,924,375
NR++ Ba2 11,880,000 Exide Corporation, Term B, due
3/19/2005 11,880,000 11,686,950
NR++ NR++ 10,000,000 Federal-Mogul Corp., Term B, due
2/24/2005 9,987,520 10,012,500
NR++ B1 9,560,995 Johnstown America Industrial, Inc.,
Term B, due 3/31/2003 9,535,694 9,513,190
Safelite Glass Corp.:
BB- B2 3,092,143 Term B, due 12/31/2004 3,088,150 3,031,266
BB- B2 3,092,143 Term C, due 12/31/2005 3,088,046 3,031,266
NR++ NR++ 5,000,000 Stone Ridge, Term B, due 12/31/2005 4,981,427 5,031,250
-------------- --------------
103,237,335 102,255,443
Broadcast-- Benedek Broadcasting:
Radio & TV-- NR++ NR++ 4,791,589 Term A, due 12/31/2004 4,785,744 4,791,589
3.2% NR++ NR++ 2,128,552 Term B, due 12/31/2004 2,125,954 2,128,551
NR++ NR++ 5,000,000 Capstar Radio Broadcasting, Term A, due
11/30/2004 4,975,052 4,985,938
Chancellor Media Corp.:
BB- Ba2 4,750,602 Revolving Credit, due 6/26/2004 4,750,602 4,673,405
BB- Ba2 51,891,429 Term, due 6/30/2005 51,742,068 51,404,946
NR++ NR++ 9,685,714 Channel Master, Term, due 10/10/2005 9,685,714 9,685,714
NR++ NR++ 10,000,000 Emmis Communications, Term, due 2/28/2007 10,000,000 10,012,500
NR++ NR++ 5,228,261 Latin Communications, Term, due 3/31/2004 5,228,261 5,228,261
NR++ NR++ 4,601,875 Retlaw Broadcasting, Term, due 3/31/2006 4,591,248 4,597,273
NR++ Ba3 5,000,000 Sinclair Broadcasting, Term, due
12/31/2004 4,990,865 4,925,000
NR++ NR++ 3,740,625 Spartan Communications, Term B, due
6/30/2005 3,740,625 3,740,625
-------------- --------------
106,616,133 106,173,802
Building & NR++ NR++ 2,192,395 Fenway Holdings, Inc., Term B, due
Construction-- 9/15/2002 2,192,395 2,192,395
0.1%
Building NR++ Ba3 3,044,433 Amerimax, Term C, due 6/30/2004 3,044,433 3,044,433
Materials--2.1% Behr Process Corp.:
NR++ NR++ 4,077,996 Term B, due 3/31/2004 4,073,612 4,067,801
NR++ NR++ 2,718,664 Term C, due 3/31/2005 2,715,617 2,711,867
NR++ NR++ 11,874,060 Dal-Tile International Inc., Term B,
due 12/31/2003 11,827,285 11,488,153
NR++ NR++ 5,000,000 Dayton Superior Corp., Term, due
9/30/2005 5,000,000 4,987,500
NR++ Ba3 2,052,281 Euramax Holdings Ltd., Term B, due
6/30/2004 2,052,281 2,052,281
NR++ B1 13,307,143 Falcon Building Products, Inc., Term,
due 6/30/2005 13,290,483 13,290,509
NR++ Ba3 24,728,749 National Gypsum Co., Term B, due
9/20/2003 24,695,321 24,481,461
NR++ NR++ 4,000,000 Panolam Industries, Term B, due
12/31/2005 3,985,024 4,015,000
-------------- --------------
70,684,056 70,139,005
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Cable TV NR++ NR++ $ 5,000,000 Avalon Cable, Term B, due 10/31/2006 $ 4,963,540 $ 5,037,500
Services--5.5% NR++ NR++ 4,900,000 Bresnan Telecommunications, Term B,
due 1/29/2008 4,881,735 4,922,969
NR++ NR++ 24,192,187 Chelsea Communications, Term B, due
9/30/2004 24,112,153 24,071,227
NR++ B1 5,000,000 Classic Cable, Inc., Term, due 10/31/2007 4,995,194 4,996,875
NR++ B1 5,000,000 Falcon Holdings, Term C, due 12/31/2007 4,982,695 4,993,750
B+ Ba3 9,478,409 Intermedia Partners IV, Inc., Term,
due 1/01/2005 9,460,568 9,442,865
B+ Ba3 7,500,000 Intermedia Partners VI, Inc., Term B,
due 12/31/2007 7,492,951 7,490,625
Marcus Cable Operating Co.:
NR++ NR++ 24,250,000 Term A, due 12/31/2002 24,188,543 24,204,531
NR++ NR++ 12,463,125 Term B1, due 4/30/2004 12,303,085 12,470,914
NR++ NR++ 22,482,500 Term B2, due 4/30/2004 22,428,513 22,496,552
NR++ NR++ 7,000,000 TW Fanch-One Co., Term B, due 12/31/2007 6,991,258 7,024,063
NR++ NR++ 17,000,000 Triax Midwest, Term B, due 6/30/2007 17,000,000 17,000,000
NR++ Ba2 38,958,818 Viacom, Inc., Term, due 7/01/2002 38,958,818 38,958,818
-------------- --------------
182,759,053 183,110,689
Casino--0.7% Alliance Gaming Corp.:
NR++ B1 10,385,027 Term B, due 1/31/2005 10,385,027 10,385,027
NR++ B1 4,147,445 Term C, due 7/31/2005 4,147,445 4,147,445
NR++ NR++ 10,000,000 Palace Station, Term, due 12/31/2005 10,000,000 10,000,000
-------------- --------------
24,532,472 24,532,472
Chemicals--6.7% NR++ NR++ 12,205,013 AOC LLC, Term B, due 9/30/2006 12,205,013 12,205,013
NR++ NR++ 4,477,500 CII Carbon LLC, Term, due 6/25/2008 4,473,212 4,480,298
NR++ NR++ 11,226,596 Cedar Chemical, Term B, due 10/31/2003 11,167,262 11,198,529
NR++ NR++ 10,000,000 Epsillon, Term B, due 12/31/2005 10,000,000 10,000,000
NR++ Ba3 3,777,778 Foamex International PLC, Revolving
Credit, due 6/12/2003 3,777,778 3,740,000
NR++ NR++ 5,970,000 General Chemical Group, Term B, due
6/15/2006 5,970,000 5,970,000
NR++ NR++ 10,000,000 HSC Holdings, Term B, due 3/31/2006 9,986,101 9,950,000
Huntsman Corp.:
NR++ Ba2 14,422,479 Term, due 12/31/2002 14,412,729 14,206,142
NR++ Ba2 3,407,665 Term A, due 12/31/2002 3,405,418 3,373,589
NR++ Ba2 5,227,409 Term B, due 6/30/2004 5,223,902 5,175,135
NR++ Ba2 9,063,925 Term C, due 9/30/2005 9,039,344 8,973,286
Huntsman Specialty Chemicals:
NR++ Ba2 4,787,566 Term B, due 3/15/2002 4,784,466 4,775,597
NR++ Ba2 4,787,566 Term C, due 3/15/2002 4,776,271 4,778,590
Lyondell Petrochemical Co.:
NR++ NR++ 13,878,646 Term A, due 6/30/2003 13,872,317 13,158,691
NR++ NR++ 60,022,521 Term B, due 6/30/2005 60,096,667 58,296,873
NR++ B1 7,880,000 Pioneer Americas Acquisition Corp.,
Term, due 12/05/2006 7,880,000 7,880,000
BB- Ba3 4,960,000 Polymer Group, Inc., Term B, due
12/20/2005 4,960,000 4,956,900
NR++ Ba3 23,900,468 Sterling Chemicals, Inc., Term B, due
9/30/2004 23,809,088 23,809,088
NR++ NR++ 9,875,000 Sybron Chemical, Term B, due 7/31/2004 9,875,000 9,875,000
NR++ Ba3 6,304,712 Texas Petrochemicals Corp., Term B,
due 6/30/2004 6,286,800 6,288,950
-------------- --------------
226,001,368 223,091,681
Computer-Related NR++ Ba3 16,795,833 Fairchild Semiconductors Corp., Term C,
Services & due 12/31/2003 16,795,833 16,795,833
Products--0.6% NR++ NR++ 3,750,000 Stratus Computer, Inc., Term B, due
2/26/2005 3,731,264 3,731,250
-------------- --------------
20,527,097 20,527,083
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Consumer NR++ B1 $ 8,370,000 Amscan Holdings, Inc., Axel, due
12/31/2004 $ 8,370,000 $ 8,338,612
Products--2.2% B Ba3 7,922,222 Boyds Collection Ltd., Term B, due
4/21/2006 7,913,305 7,907,368
Hedstrom Corp.:
NR++ B1 2,089,655 Revolving Credit, due 6/30/2003 2,089,655 2,089,655
B Ba3 4,586,207 Term A, due 6/30/2003 4,586,207 4,586,207
NR++ NR++ 4,250,000 Holmes Products, Term B, due 2/05/2007 4,228,877 4,259,297
BB- Ba2 14,775,301 Playtex Family Products Inc., Term B,
due 9/15/2003 14,717,161 14,516,733
NR++ NR++ 7,209,568 RTI Funding Corp. (Ritvik Toys), Term B,
due 2/07/2003 7,163,586 5,947,894
NR++ NR++ 14,925,000 Revlon Consumer Products Corp., Term,
due 5/30/2002 14,925,000 14,925,000
NR++ NR++ 4,500,000 Samsonite Corp., Term, due 6/24/2005 4,494,748 4,342,500
Scotts Company:
NR++ NR++ 2,546,012 Term B, due 6/04/2006 2,536,660 2,565,107
NR++ NR++ 2,453,988 Term C, due 6/04/2007 2,444,942 2,472,393
-------------- --------------
73,470,141 71,950,766
Defense--0.0% United Defense Industries, Inc.:
NR++ B1 725,867 Term B, due 10/06/2005 725,867 720,423
NR++ B1 650,602 Term C, due 10/06/2006 650,603 645,723
-------------- --------------
1,376,470 1,366,146
Diversified NR++ NR++ 25,000,000 Bridge Information, Term B, due
- --1.4% 5/29/2003 24,942,670 24,953,125
NR++ NR++ 6,000,000 Handy & Harman, Term B, due 7/30/2006 6,000,000 6,000,000
Superior Telecom:
NR++ NR++ 10,000,000 Term A, due 5/27/2004 10,000,000 10,012,500
NR++ NR++ 5,000,000 Term B, due 11/27/2005 5,000,000 5,015,625
-------------- --------------
45,942,670 45,981,250
Drilling--0.3% NR++ NR++ 5,000,000 Key Energy Services Inc., Term B, due
9/14/2004 5,000,000 5,000,000
BB+ Ba3 3,695,862 Rigco North America, Term, due 3/30/1999 3,695,862 3,695,862
-------------- --------------
8,695,862 8,695,862
Drug/Proprietary NR++ NR++ 4,950,000 Duane Reade Co., Term B, due 2/15/2005 4,936,321 4,931,438
Stores--0.1%
Electronics/ NR++ Ba3 6,458,750 Amphenol Corp., Term B, due 5/19/2006 6,562,142 6,450,677
Electrical NR++ NR++ 5,450,000 Communications & Power II Acquisition
Components-- Corp., Term B, due 8/11/2002 5,419,110 5,402,312
2.2% B+ NR++ 5,500,000 Details Dynamic, Term B, due 4/22/2005 5,493,537 5,445,000
Dynatech Corporation:
NR++ NR++ 1,636,948 Term B, due 3/31/2005 1,636,948 1,638,994
NR++ NR++ 1,636,948 Term C, due 3/31/2006 1,636,948 1,638,994
NR++ NR++ 1,636,948 Term D, due 3/31/2007 1,636,948 1,638,994
BB- Ba3 19,813,084 International Wire Group, Inc., Term B,
due 9/30/2003 19,797,809 19,664,486
NR++ Ba3 6,838,301 Neopost, Term C, due 6/24/2006 6,838,301 6,838,301
NR++ NR++ 17,955,000 SPX Corporation, Term B, due 9/30/2006 17,868,406 18,089,663
NR++ Ba3 6,946,154 Telex Communications, Inc., Term B, due
11/30/2004 6,931,888 6,546,750
-------------- --------------
73,822,037 73,354,171
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Energy--0.6% NR++ Ba2 $11,000,000 Clark Refining & Marketing, Term, due
11/15/2004 $ 11,000,000 $ 10,120,000
Perf-O-Log Inc.:
NR++ NR++ 3,797,386 Term, due 8/11/2003 3,797,386 3,797,386
NR++ NR++ 1,884,659 Term B, due 8/11/2003 1,884,659 1,884,659
NR++ NR++ 1,240,625 Term C, due 8/11/2003 1,240,625 1,240,625
NR++ NR++ 1,781,250 Term D, due 12/31/2004 1,781,250 1,781,250
NR++ NR++ 712,500 Term E, due 12/31/2004 712,500 712,500
-------------- --------------
20,416,420 19,536,420
Financial Outsourcing Solutions, Inc.:
Services--2.0% NR++ B1 3,986,128 Term B, due 10/15/2003 3,983,146 3,926,336
NR++ B1 37,333,325 Term C, due 10/15/2004 37,333,325 36,773,325
Willis Corroon Group PLC:
NR++ NR++ 12,500,000 Term B, due 11/19/2006 12,453,244 12,535,156
NR++ NR++ 6,250,000 Term C, due 11/19/2007 6,226,613 6,273,438
NR++ NR++ 6,250,000 Term D, due 5/19/2008 6,226,608 6,281,250
-------------- --------------
66,222,936 65,789,505
Food & Kindred Del Monte Corp.:
Products--1.7% NR++ B2 490,909 Revolving Credit, due 3/31/2003 490,909 485,386
NR++ B2 2,547,416 Term A, due 3/31/2003 2,547,416 2,531,495
NR++ B2 10,582,319 Term B, due 3/31/2005 10,576,219 10,608,776
Imperial Holly Corp.:
BB- Ba3 6,471,624 Term A, due 12/31/2003 6,471,624 6,471,624
BB- Ba3 5,277,021 Term B, due 12/31/2005 5,277,021 5,277,021
International Homefoods, Inc.:
BB- Ba3 3,169,355 Term A, due 11/21/2001 3,167,694 3,158,460
BB- Ba3 6,941,333 Term B, due 10/31/2005 6,950,864 6,871,920
NR++ NR++ 3,000,000 New World Pasta, Term B, due 1/28/2006 2,985,144 3,017,813
NR++ NR++ 5,000,000 The Pantry Inc., Term B, due 1/31/2008 4,968,948 5,006,250
Specialty Foods, Inc.:
NR++ Ba3 4,286,613 Revolving Credit, due 1/31/2000 4,286,614 4,265,180
NR++ Ba3 7,391,713 Term, due 1/31/2000 7,338,466 7,350,134
-------------- --------------
55,060,919 55,044,059
Funeral Homes & NR++ Ba1 20,054,136 Loewen Group Capital, Term, due 7/15/2000 20,054,136 20,054,136
Parlors--1.2% BB- NR++ 14,583,333 Prime Succession Inc., Axel, due
8/01/2003 14,545,363 14,473,958
BB NR++ 6,767,295 Rose Hills Co., Axel A, due 12/01/2003 6,754,838 6,746,147
-------------- --------------
41,354,337 41,274,241
Furniture & NR++ NR++ 10,000,000 Furniture Brands, Term, due 6/27/2007 10,000,000 9,900,000
Fixtures--0.5% Simmons Co.:
NR++ NR++ 2,136,735 Term B, due 10/29/2005 2,126,425 2,142,077
NR++ NR++ 5,343,750 Term C, due 10/29/2006 5,317,800 5,357,109
-------------- --------------
17,444,225 17,399,186
Grocery--1.5% NR++ NR++ 33,927,830 Fred Meyer, Term, due 2/28/2003 33,724,061 33,546,141
NR++ NR++ 10,000,000 Grand Union Co., Term, due 8/17/2003 9,975,399 10,037,500
Star Acquisition Co., Inc.:
B Ba3 3,444,279 Term B, due 12/31/2001 3,436,283 3,442,126
B Ba3 2,582,218 Term C, due 12/31/2002 2,575,040 2,580,605
-------------- --------------
49,710,783 49,606,372
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Health Alaris Medical Systems, Inc.:
Services--6.7% NR++ B1 $ 3,460,800 Term A, due 8/01/2002 $ 3,474,261 $ 3,437,007
NR++ B1 1,675,494 Term B, due 11/01/2003 1,673,991 1,675,494
NR++ B1 1,675,494 Term C, due 11/01/2004 1,673,875 1,675,494
NR++ B1 594,624 Term D, due 5/01/2005 594,299 594,624
Community Health Systems, Inc.:
NR++ NR++ 15,965,753 Term B, due 12/31/2003 15,908,456 15,885,925
NR++ NR++ 15,965,753 Term C, due 12/31/2004 15,904,575 15,885,925
NR++ NR++ 11,958,904 Term D, due 12/31/2005 11,910,874 11,899,110
Dade International, Inc.:
NR++ B1 4,059,977 Term A, due 12/31/2001 4,070,127 4,047,290
NR++ B1 9,163,917 Term B, due 12/31/2002 9,138,187 9,158,190
NR++ B1 4,179,818 Term C, due 12/31/2003 4,170,997 4,177,206
NR++ B1 2,734,210 Term D, due 12/31/2004 2,721,381 2,732,501
NR++ NR++ 7,357,143 Endo Pharmaceuticals, Term B, due
6/30/2004 7,357,143 7,357,143
NR++ NR++ 5,566,632 Extendicare Health Services Inc., Term B,
due 12/31/2004 5,566,632 5,566,632
FHC Health Systems:
NR++ NR++ 2,729,375 Axel B, due 4/30/2005 2,723,891 2,715,728
NR++ NR++ 2,729,375 Axel C, due 4/30/2006 2,723,806 2,715,728
Genesis Health Ventures, Inc.:
NR++ Ba3 4,976,526 Term B, due 9/30/2004 4,968,143 4,541,080
NR++ Ba3 4,964,979 Term C, due 6/01/2005 4,956,411 4,530,543
Integrated Health Services, Inc.:
NR++ Ba3 17,500,000 Term, due 9/15/2003 17,596,250 15,793,750
NR++ Ba3 4,775,000 Term B, due 9/15/2004 4,765,061 4,213,938
NR++ Ba3 9,900,000 Term C, due 12/31/2005 9,900,000 8,860,500
NR++ NR++ 7,000,000 MEDIQ PRN Life Support Services, Term,
due 6/30/2006 6,993,482 6,991,250
Magellen Health Services:
NR++ Ba3 5,000,000 Term B, due 2/12/2005 4,993,384 4,612,500
NR++ Ba3 5,000,000 Term C, due 2/12/2006 4,993,235 4,612,500
Medical Specialties:
NR++ NR++ 12,845,455 Axel, due 6/30/2004 12,845,455 12,845,455
NR++ NR++ 4,418,182 Term, due 6/30/2001 4,418,182 4,418,182
Multicare Companies, Inc.:
NR++ B1 4,690,625 Term B, due 9/30/2004 4,682,577 4,198,109
NR++ B1 1,559,583 Term C, due 6/01/2005 1,556,877 1,395,827
Paracelsus HealthCare Corp.:
NR++ NR++ 1,344,000 Term A, due 3/31/2003 1,344,000 1,344,000
NR++ NR++ 2,000,000 Term B, due 3/31/2004 2,000,000 2,000,000
Paragon Health Network, Inc.:
NR++ Ba3 7,485,000 Term B, due 3/31/2005 7,478,548 5,913,150
NR++ Ba3 7,485,000 Term C, due 3/31/2006 7,478,378 5,913,150
Stryker Corporation:
NR++ NR++ 1,971,831 Term B, due 12/04/2004 1,959,868 1,981,690
NR++ NR++ 8,028,169 Term C, due 12/04/2005 7,979,175 8,083,363
Sun Healthcare Group, Inc.:
NR++ Ba3 5,490,905 Term B, due 11/12/2004 5,483,919 4,186,815
NR++ Ba3 5,490,905 Term C, due 11/12/2005 5,483,704 4,186,815
NR++ NR++ 22,275,000 Total Renal Care, Term, due 3/31/2008 22,248,825 21,801,656
-------------- --------------
233,737,969 221,948,270
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Hotels & Motels NR++ NR++ $ 7,089,375 Meristar Hospitality, Term B, due
- --3.9% 1/31/2004 $ 7,081,287 $ 7,018,481
Patriot American Hospitality:
NR++ NR++ 12,160,927 Revolving Credit, due 7/18/2000 11,963,083 12,027,917
NR++ NR++ 19,975,000 Term B, due 3/31/2003 19,892,453 19,900,094
NR++ NR++ 90,000,000 Starwood Hotels & Resorts Trust, Term,
due 2/23/2003 89,930,722 89,971,876
-------------- --------------
128,867,545 128,918,368
Industrial Elis/Omni Service, Inc.:
Services--0.7% NR++ NR++ 8,860,188 Axel, due 10/30/2005 8,851,001 8,782,662
NR++ NR++ 10,220,339 Term C, due 10/30/2005 10,391,390 10,130,911
NR++ NR++ 4,500,000 Volume Services America, Term B, due
12/03/2007 4,477,891 4,515,469
-------------- --------------
23,720,282 23,429,042
Insurance--0.2% BRW Acquisition:
NR++ NR++ 2,500,000 Term B, due 7/09/2006 2,500,000 2,500,000
NR++ NR++ 2,500,000 Term C, due 7/09/2007 2,500,000 2,500,000
-------------- --------------
5,000,000 5,000,000
Leasing & NR++ NR++ 7,250,000 Panavision, Term B, due 3/31/2005 7,250,000 7,250,000
Rental Renters Choice:
Services--1.2% NR++ NR++ 5,735,954 Term B, due 1/31/2006 5,722,031 5,735,954
NR++ NR++ 7,116,818 Term C, due 1/31/2007 7,099,097 7,116,818
NR++ NR++ 20,000,000 United Rentals Inc., Term, due 6/30/2005 20,000,000 20,000,000
-------------- --------------
40,071,128 40,102,772
Manufacturing B3 B+ 4,750,000 Alliance Laundry Systems, Term, due
- --2.2% 6/30/2005 4,750,000 4,750,000
NR++ NR++ 7,500,000 Environmental, Term B, due 9/30/2005 7,475,793 7,537,500
NR++ NR++ 9,452,500 Goodman Manufacturing, Term B, due
7/31/2005 9,443,686 9,387,514
BB- Ba2 6,900,000 Grove Worldwide, Term B, due 4/28/2006 6,900,000 6,900,000
NR++ NR++ 5,000,000 Metokote Corp., Term B, due 11/02/2005 4,963,619 5,031,250
NR++ NR++ 7,959,788 Polyfibron Technologies, Term B, due
12/28/2003 7,959,788 7,959,788
Sealy Mattress:
NR++ NR++ 3,015,758 Axel B, due 12/15/2004 3,012,494 3,017,642
NR++ NR++ 2,172,121 Axel C, due 12/15/2005 2,169,708 2,173,479
NR++ NR++ 2,775,758 Axel D, due 12/15/2006 2,772,612 2,777,492
NR++ NR++ 10,666,667 Term A, due 12/15/2003 10,710,080 10,626,667
NR++ NR++ 4,962,500 Terex Corp., Term B, due 3/06/2005 4,944,249 4,940,789
NR++ NR++ 3,500,000 Tokheim Corporation, Term, due 9/30/2004 3,482,942 3,508,750
WEC Company:
NR++ NR++ 2,909,375 Term B, due 9/30/2005 2,909,375 2,909,375
NR++ NR++ 2,078,125 Term C, due 9/30/2006 2,078,125 2,078,125
-------------- --------------
73,572,471 73,598,371
Measuring, NR++ NR++ 7,398,389 CHF/Ebel USA, Inc., Term B, due 9/30/2001 7,398,389 7,398,389
Analyzing &
Controlling
Instruments--0.2%
Metals & B+ Ba3 9,752,671 Acme Metals, Inc., Term, due 12/01/2005 9,752,671 7,338,885
Mining--3.6% B+ NR++ 4,982,679 Adience, Inc., Term B, due 4/15/2005 4,982,679 4,982,679
Centennial Resources:
NR++ NR++ 1,033,004 Revolving Credit, due 6/30/1999 1,033,004 1,027,839
NR++ NR++ 1,961,538 Term A, due 3/31/2002+++ 1,946,578 367,788
NR++ NR++ 5,105,770 Term B, due 12/31/2003+++ 5,062,590 957,332
Ispat Inland LP:
NR++ NR++ 19,402,500 Term B, due 7/15/2005 19,262,305 18,650,653
NR++ NR++ 19,402,500 Term C, due 7/15/2006 19,261,338 18,650,653
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Metals & NR++ Ba3 $14,769,231 Koppers Industries, Term B, due
Mining 12/01/2004 $ 14,752,964 $ 14,695,385
(concluded) NR++ Ba3 8,461,364 Neenah Foundry, Term B, due 9/30/2005 8,453,693 8,482,517
NR++ NR++ 31,000,000 Ormet Corporation, Term, due 8/15/2008 31,000,000 31,000,000
NR++ NR++ 5,000,000 P & L Coal Holdings, Term B, due
6/30/2006 5,000,000 5,000,000
NR++ Ba2 10,086,667 UCAR Global Enterprises, Term B, due
12/31/2002 10,079,439 10,061,450
-------------- --------------
130,587,261 121,215,181
Packaging--0.7% NR++ NR++ 15,000,000 Graham Packaging, Term D, due 1/31/2007 14,994,873 15,018,750
NR++ BB 3,712,500 Huntsman Packaging Corp., Term B,
due 6/30/2006 3,709,058 3,689,297
NR++ B1 4,862,878 Ivex Packaging Corp., Term B, due
10/02/2004 4,857,775 4,789,935
-------------- --------------
23,561,706 23,497,982
Paper--8.7% NR++ NR++ 6,500,000 Cellular Tissue, Term C, due 3/24/2005 6,500,000 6,500,000
BB Ba3 4,650,909 Crown Paper Co., Term B, due 8/22/2003 4,613,298 4,627,655
BB Ba3 52,000,000 Jefferson Smurfit Company/Container
Corp. of America, Term B, due 3/24/2006 51,915,732 52,195,000
NR++ NR++ 4,975,000 Le Groupe Forex, Term B, due 6/30/2005 4,969,246 4,900,375
NR++ NR++ 25,000,000 Paper Acquisition, Term, due 6/08/2001 24,913,622 24,875,000
NR++ NR++ 6,500,000 Rapap Brunswick, Term B, due 6/01/2004 6,515,000 6,223,750
Riverwood International Corp.:
B+ B1 14,381,313 Term A, due 2/28/2003 14,063,890 14,331,877
B+ B1 66,134,147 Term B, due 2/28/2004 65,474,174 66,382,150
B+ B1 25,472,987 Term C, due 8/31/2004 25,208,985 25,568,510
Stone Container Corp.:
NR++ Ba3 24,803,870 Term B, due 4/01/2000 24,860,837 24,865,880
NR++ Ba3 29,516,510 Term C, due 10/01/2003 29,491,395 29,590,301
NR++ Ba3 18,796,001 Term E, due 10/01/2003 18,950,033 18,842,992
Stronghaven:
NR++ NR++ 9,303,448 Term B, due 5/15/2004 9,267,799 8,373,103
NR++ NR++ 1,697,143 Term C, due 5/15/2004 1,697,143 1,527,429
-------------- --------------
288,441,154 288,804,022
Petroleum BB- Ba3 3,214,824 Petro Stopping Centers, Term B,
Refineries--0.1% due 12/31/2003 3,208,718 3,192,722
Printing & NR++ B3 5,404,286 21st Century, Term A, due 9/15/2003 5,404,286 5,404,286
Publishing--3.8% NR++ B1 14,970,000 Advanstar Communications, Term B,
due 4/30/2005 14,970,000 14,970,000
NR++ NR++ 8,375,000 Journal Register Co., Term B, due
9/30/2006 8,365,155 8,312,188
K-III Communications Corp.:
NR++ Ba3 10,880,000 Revolving Credit, due 12/31/2000 10,880,000 10,635,200
NR++ Ba3 4,000,000 Term, due 12/31/2000 4,000,000 3,910,000
NR++ Ba3 4,000,000 Term, due 6/30/2004 4,000,000 3,920,000
NR++ Ba3 9,900,000 Morris Communications, Term B, due
6/30/2005 9,883,989 9,838,125
NR++ NR++ 4,000,000 Penton Media, Term B, due 5/31/2006 3,980,436 3,990,000
RH Donnolley Inc.:
NR++ NR++ 3,356,130 Term B, due 12/05/2005 3,353,034 3,346,691
NR++ NR++ 3,857,620 Term C, due 12/05/2006 3,854,014 3,846,770
Ziff-Davis Inc.:
NR++ Ba2 1,529,412 Revolving Credit, due 3/31/2005 1,518,749 1,507,427
NR++ Ba2 7,647,059 Term A, due 3/31/2005 7,619,437 7,650,460
NR++ Ba2 47,500,000 Term B, due 3/31/2006 47,331,378 47,485,156
-------------- --------------
125,160,478 124,816,303
Rental Services-- NR++ NR++ 8,000,000 Nationsrent Inc., Term, due 9/24/2004 7,960,265 7,990,000
0.2%
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Restaurants-- NR++ Ba3 $ 9,520,000 AFC Enterprises, Term, due 6/30/2002 $ 9,508,015 $ 9,414,475
0.8% Domino & Bluefence:
NR++ NR++ 6,712,500 Term B, due 12/21/2006 6,646,497 6,725,086
NR++ NR++ 6,712,500 Term C, due 12/21/2007 6,646,313 6,716,695
NR++ Ba3 3,976,097 Shoney's, Inc., Term B, due 4/30/2002 3,957,160 3,957,160
-------------- --------------
26,757,985 26,813,416
Retail NR++ NR++ 5,750,000 Advanced Store Company, Term B, due
Specialty--0.4% 4/15/2006 5,750,000 5,750,000
Travel Centers of America:
NR++ Ba2 3,525,670 Term A, due 3/27/2005 3,525,670 3,525,670
NR++ Ba2 3,962,500 Term B, due 3/27/2005 3,962,500 3,962,500
-------------- --------------
13,238,170 13,238,170
Textiles/Mill Joan Fabrics:
Products--0.5% NR++ NR++ 3,178,983 Term B, due 6/30/2005 3,174,922 3,175,009
NR++ NR++ 1,650,856 Term C, due 6/30/2006 1,648,686 1,657,047
NR++ NR++ 10,447,500 Tartan Textiles, Term B, due 5/01/2005 10,423,683 10,382,203
-------------- --------------
15,247,291 15,214,259
Transportation NR++ Ba3 13,216,216 Atlas Freighter Leasing I, Term, due
Services--1.0% 5/29/2004 13,210,998 13,203,826
NR++ Ba3 13,216,216 Atlas Freighter Leasing II, Term, due
5/29/2004 13,208,097 13,203,826
NR++ NR++ 7,425,000 North American Van Lines, Term B,
due 3/30/2006 7,416,509 7,425,484
-------------- --------------
33,835,604 33,833,136
Wireless Cellular Inc.:
Telecommun- NR++ B1 13,985,692 Term B, due 9/30/2006 13,976,346 14,020,656
ications--8.5% NR++ B1 8,130,081 Term C, due 3/31/2007 8,111,419 8,150,406
NR++ B1 22,764,227 Term D, due 9/30/2007 22,711,531 22,821,138
NR++ NR++ 25,000,000 Cox Communications, Inc., Term B, due
1/31/2007 25,000,000 25,000,000
NR++ Ba2 16,031,250 Flag Ltd., Term, due 1/30/2005 16,031,250 16,031,250
B2 B2 8,934,000 Iridium Operating LLC, Term, due
12/29/2000 8,831,679 8,732,985
Nextel Communications Inc.:
NR++ B1 3,138,750 Revolving Credit, due 6/30/2003 3,138,750 2,977,889
NR++ B1 3,375,000 Term A, due 3/31/2003 2,882,598 3,235,781
NR++ B1 40,000,000 Term B, due 9/30/2006 39,954,132 39,825,000
NR++ B1 5,000,000 Term C, due 3/31/2007 4,938,019 5,012,500
Omnipoint Communications Corp.:
BB- Ba2 775,797 Term A, due 2/17/2006 775,094 698,217
BB- Ba2 1,930,184 Term B, due 2/17/2006 1,928,435 1,737,166
BB- Ba2 43,421,875 Term C, due 2/17/2006 43,421,875 39,079,687
Pacific Coin:
NR++ NR++ 3,916,364 Acquisition Term, due 12/31/2003 3,916,364 3,916,364
BB- Ba2 2,139,344 Term A, due 12/31/2002 2,139,344 2,139,344
NR++ NR++ 2,715,625 Term B, due 12/31/2004 2,715,625 2,715,625
NR++ Ba3 8,716,000 PageNet Finance, Inc., Revolving Credit,
due 12/31/2004 8,716,000 8,443,625
NR++ NR++ 15,000,000 PowerTel PCS, Inc., Term, due 3/04/2001 15,000,000 14,925,000
NR++ NR++ 15,000,000 TeleCorp PCS, Term B, due 1/15/2008 14,971,315 14,850,000
NR++ NR++ 10,000,000 Triton PCS, Term B, due 4/30/2007 9,977,423 9,878,125
NR++ NR++ 20,000,000 Western PCS, Term B, due 6/30/2007 19,936,073 19,981,250
B+ B1 20,000,000 Western Wireless Corp., Term B, due
3/31/2005 20,000,000 20,062,500
-------------- --------------
289,073,272 284,234,508
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
S&P Moody's Face Senior Secured Value
Industries Rating Rating Amount Floating Rate Loan Interests* Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Wireless American Cellular Corp.:
Telecommunication NR++ NR++ $ 2,500,000 Term B, due 6/30/2007 $ 2,500,000 $ 2,500,000
Services--0.3% NR++ NR++ 2,500,000 Term C, due 9/30/2007 2,500,000 2,500,000
Dobson/Sygnet Operating Co.:
NR++ NR++ 2,500,000 Term B, due 3/23/2007 2,490,671 2,509,375
NR++ NR++ 2,500,000 Term C, due 12/23/2007 2,490,665 2,515,625
-------------- --------------
9,981,336 10,025,000
Total Senior Secured Floating Rate
Loan Interests--88.1% 2,974,293,971 2,934,310,288
Shares Held Warrants & Agreements
Cable TV Services--0.0% 707 Classic Cable, Inc. (a) 0 0
Drilling--0.0% 12,250 Rigco North America (a) 0 0
General Merchandise Stores--0.0% 2,288,402 Just For Feet, Inc. (b) 2,288,402 1,258,299
Total Investments in Warrants &
Agreements--0.0% 2,288,402 1,258,299
Face Amount Short-Term Securities
Commercial $50,000,000 AT&T Capital Corp., 4.82% due 3/31/1999 49,799,167 49,799,167
Paper**---8.2% 20,000,000 CSW Credit, Inc., 4.82% due 3/02/1999 19,997,322 19,997,322
20,000,000 Du Pont (E.I.) de Nemours &Co., 4.80%
due 4/12/1999 19,888,000 19,888,000
55,000,000 General Electric Capital Corp., 4.875%
due 3/01/1999 55,000,000 55,000,000
37,793,000 General Motors Acceptance Corp., 4.88%
due 3/01/1999 37,793,000 37,793,000
17,000,000 MetLife Funding Inc., 4.84% due 3/31/1999 16,931,433 16,931,433
50,000,000 Rank Xerox Capital (Europe)PLC, 4.80%
due 3/09/1999 49,946,667 49,946,667
25,000,000 USAA Capital Corp., 4.81% due 3/04/1999 24,989,979 24,989,979
-------------- --------------
274,345,568 274,345,568
Repurchase 25,000,000 Lucent Technologies, Inc., purchased on
Agreements***--0.8% 2/26/1999 to yield 4.83% to 3/30/1999 24,902,729 24,902,729
US Government Federal Home Loan Mortgage Corp.:
Agency Obligations** 46,233,000 4.75% due 3/15/1999 46,147,597 46,147,597
- --2.3% 30,000,000 4.75% due 3/25/1999 29,905,000 29,905,000
-------------- --------------
76,052,597 76,052,597
Total Investments in Short-Term
Securities--11.3% 375,300,894 375,300,894
Total Investments--99.4% $3,351,883,267 3,310,869,481
==============
Other Assets Less Liabilities--0.6% 21,384,849
--------------
Net Assets--100.0% $3,332,254,330
==============
<FN>
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of common stock and are non-income producing. The purchase
price and numbers of shares are subject to adjustment under certain
conditions until the expiration date.
(b)Agreement represents an obligation by Just For Feet, Inc. to pay
an amount to the Fund on April 30, 2002, contingent upon the
earnings before income taxes and depreciation of Just For Feet, Inc.
as of January 31, 2002.
++Not Rated.
+++Non-income producing security.
*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.
**Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown reflect the
discount rates paid at the time of purchase by the Fund.
***Repurchase Agreements are fully collateralized by US Government
Obligations.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of February 28, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$3,351,883,267)
(Note 1b) $ 3,310,869,481
Cash 2,553,018
Receivables:
Interest $ 22,527,861
Capital shares sold 4,608,684
Commitment fees 120,205 27,256,750
----------------
Prepaid registration fees and other assets (Note 1f) 735,227
----------------
Total assets 3,341,414,476
----------------
Liabilities: Payables:
Dividends to shareholders (Note 1g) 3,562,633
Investment adviser (Note 2) 2,406,574
Administrator (Note 2) 633,309 6,602,516
----------------
Deferred income (Note 1e) 1,077,956
Accrued expenses and other liabilities 1,479,674
----------------
Total liabilities 9,160,146
----------------
Net Assets: Net assets $ 3,332,254,330
================
Net Assets Common Stock, par value $0.10 per share; 1,000,000,000 shares
Consist of: authorized $ 33,856,968
Paid-in capital in excess of par 3,355,640,726
Accumulated realized capital losses on investments--net (Note 7) (16,229,578)
Unrealized depreciation on investments--net (41,013,786)
----------------
Net Assets--Equivalent to $9.84 per share based on shares of
338,569,675 capital stock outstanding $ 3,332,254,330
================
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
February 28, 1999
<S> <S> <C> <C>
Investment Income Interest and discount earned $ 128,996,687
(Note 1e): Facility and other fees 2,160,237
----------------
Total income 131,156,924
----------------
Expenses: Investment advisory fees (Note 2) $ 15,760,175
Administrative fees (Note 2) 4,147,415
Transfer agent fees (Note 2) 940,471
Professional fees 267,690
Accounting services (Note 2) 206,853
Tender offer costs (Note 8) 153,700
Custodian fees 125,927
Registration fees (Note 1f) 109,828
Printing and shareholder reports 66,970
Directors' fees and expenses 18,808
Borrowing costs (Note 6) 13,718
Other 35,939
----------------
Total expenses 21,847,494
----------------
Investment income--net 109,309,430
----------------
Realized & Realized loss on investments--net (6,189,851)
Unrealized Change in unrealized depreciation on
Loss on investments--net (38,545,296)
Investments--Net ----------------
(Notes 1c, Net Increase in Net Assets Resulting from Operations $ 64,574,283
1e & 3): ================
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
February 28, August 31,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 109,309,430 $ 212,360,687
Realized loss on investments--net (6,189,851) (3,676,079)
Change in unrealized depreciation on investments--net (38,545,296) (9,910,437)
---------------- ----------------
Net increase in net assets resulting from operations 64,574,283 198,774,171
---------------- ----------------
Dividends to Investment income--net (109,381,180) (212,288,937)
Shareholders ---------------- ----------------
(Note 1g): Net decrease in net assets resulting from dividends to
shareholders (109,381,180) (212,288,937)
---------------- ----------------
Capital Share Net increase in net assets resulting from capital
Transactions share transactions 12,029,035 386,757,317
(Note 4): ---------------- ----------------
Net Assets: Total increase (decrease) in net assets (32,777,862) 373,242,551
Beginning of period 3,365,032,192 2,991,789,641
---------------- ----------------
End of period* $ 3,332,254,330 $ 3,365,032,192
================ ================
<FN>
*Undistributed investment income--net $ -- $ 71,750
================ ================
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Cash Flows
<CAPTION>
For the Six Months Ended
February 28, 1999
<S> <S> <C>
Cash Provided Net increase in net assets resulting from operations $ 64,574,283
by Operating Adjustments to reconcile net increase in net assets resulting from
Activities: operations to net cash provided by operating activities:
Decrease in receivables 3,307,040
Decrease in other liabilities (1,941,445)
Realized and unrealized loss on investments--net 44,735,147
Amortization of discount (12,675,229)
----------------
Net cash provided by operating activities 97,999,796
----------------
Cash Used for Proceeds from principal payments and sales of loan interests 696,459,483
Investing Purchases of loan interests (603,049,865)
Activities: Purchases of short-term investments (11,778,796,515)
Proceeds from sales and maturities of short-term investments 11,676,824,721
----------------
Net cash used for investing activities (8,562,176)
----------------
Cash Used for Cash receipts on capital shares sold 323,843,147
Financing Cash payments on capital shares tendered (358,453,475)
Activities: Dividends paid to shareholders (57,314,999)
----------------
Net cash used for financing activities (91,925,327)
----------------
Cash: Net decrease in cash (2,487,707)
Cash at beginning of period 5,040,725
----------------
Cash at end of period $ 2,553,018
================
Cash Flow Cash paid for interest $ 90,461
Information: ================
Non-Cash Capital shares issued in reinvestment of dividends paid to shareholders $ 52,850,068
Financing ================
Activities:
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
February 28, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.97 $ 10.02 $ 9.99 $ 10.02 $ 10.02
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .32 .68 .68 .66 .75
Realized and unrealized gain (loss) on
investments--net (.13) (.05) .03 (.03) --++
-------- -------- -------- -------- --------
Total from investment operations .19 .63 .71 .63 .75
-------- -------- -------- -------- --------
Less dividends from investment income--net (.32) (.68) (.68) (.66) (.75)
-------- -------- -------- -------- --------
Net asset value, end of period $ 9.84 $ 9.97 $ 10.02 $ 9.99 $ 10.02
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 1.97%+++ 6.47% 7.23% 6.53% 7.68%
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense 1.32%* 1.35% 1.32% -- --
Net Assets: ======== ======== ======== ======== ========
Expenses 1.32%* 1.40% 1.33% 1.34% 1.34%
======== ======== ======== ======== ========
Investment income--net 6.59%* 6.79% 6.72% 6.54% 7.45%
======== ======== ======== ======== ========
Leverage: Average amount of borrowings outstanding
during the period (in thousands) -- $ 24,299 $ 4,409 -- --
======== ======== ======== ======== ========
Average amount of borrowings outstanding
per share during the period -- $ .08 $ .02 -- --
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in millions) $ 3,332 $ 3,365 $ 2,992 $ 2,946 $ 2,163
Data: ======== ======== ======== ======== ========
Portfolio turnover 21.22% 69.59% 74.00% 80.20% 55.23%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the early withdrawal charge, if
any. The Fund is a continuously offered closed-end fund, the shares
of which are offered at net asset value. Therefore, no separate
market exists.
++Amount is less than $.01 per share.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Senior Floating Rate Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a
continuously offered, non-diversified, closed-end management
investment company. The Fund's financial statements are prepared in
accordance with generally accepted accounting principles which may
require the use of management accruals and estimates. These
unaudited financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal recurring nature.
(a) Loan participation interests--The Fund invests in senior secured
floating rate loan interests ("Loan Interests") with collateral
having a market value, at time of acquisition by the Fund, which
Fund management believes equals or exceeds the principal amount of
the corporate loan. The Fund may invest up to 20% of its total
assets in loans made on an unsecured basis. Depending on how the
loan was acquired, the Fund will regard the issuer as including the
corporate borrower along with an agent bank for the syndicate of
lenders and any intermediary of the Fund's investment. Because
agents and intermediaries are primarily commercial banks, the Fund's
investment in corporate loans at February 28, 1999 could be
considered to be concentrated in commercial banking.
(b) Valuation of investments--Loan Interests will be valued in
accordance with guidelines established by the Board of Directors.
Under the Fund's current guidelines, Loan Interests for which an
active secondary market exists and for which the Investment Adviser
can obtain at least two quotations from banks or dealers in Loan
Interests will be valued by calculating the mean of the last
available bid and asked prices in the markets for such Loan
Interests, and then using the mean of those two means. If only one
quote for a particular Loan Interest is available, such Loan
Interest will be valued on the basis of the mean of the last
available bid and asked price in the market. For Loan Interests for
which an active secondary market does not exist to a reliable degree
in the opinion of the Investment Adviser, such Loan Interests will
be valued by the Investment Adviser at fair value, which is intended
to approximate market value.
Other portfolio securities 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 are valued at the last sale 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. Short-term securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund.
(c) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Interest rate transactions--The Fund is authorized to enter into
interest rate swaps and purchase or sell interest rate caps and
floors. In an interest rate swap, the Fund exchanges with another
party their respective commitments to pay or receive interest on a
specified notional principal amount. The purchase of an interest
rate cap (or floor) entitles the purchaser, to the extent that a
specified index exceeds (or falls below) a predetermined interest
rate, to receive payments of interest equal to the difference
between the index and the predetermined rate on a notional principal
amount from the party selling such interest rate cap (or floor).
(d) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest is recognized on the accrual basis.
Realized gains and losses on security transactions are determined on
the identified cost basis. Facility fees are accreted into income
over the term of the related loan.
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
2. Investment Advisory and Administrative
Services Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner.
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to perform this investment advisory
function.
For such services, the Fund pays a monthly fee at an annual rate of
0.95% of the Fund's average daily net assets. The Fund also has an
Administrative Services Agreement with MLAM whereby MLAM will
receive a fee equal to an annual rate of 0.25% of the Fund's average
daily net assets on a monthly basis, in return for the performance
of administrative services (other than investment advice and related
portfolio activities) necessary for the operation of the Fund.
For the six months ended February 28, 1999, Merrill Lynch Funds
Distributor, Inc. ("MLFD"), a division of Princeton Funds
Distributor, Inc. ("PFD"), a wholly-owned subsidiary of Merrill
Lynch Group, Inc., earned early withdrawal charges of $1,348,575
relating to the tender of the Fund's shares.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
The Fund's credit facility is currently provided by Merrill Lynch
International Bank Limited, an affiliate of MLAM (See Note 6).
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended February 28, 1999 were $603,049,865 and
$696,459,483, respectively.
Net realized gains (losses) for the six months ended February 28,
1999 and net unrealized losses as of February 28, 1999 were as
follows:
Realized
Gains Unrealized
(Losses) Losses
Long-term investments $ (6,198,594) $(41,013,786)
Short-term investments 8,743 --
------------ ------------
Total $ (6,189,851) $(41,013,786)
============ ============
As of February 28, 1999, net unrealized depreciation for financial
reporting and Federal income tax purposes aggregated $41,013,786, of
which $5,347,670 is related to appreciated securities and
$46,361,456 is related to depreciated securities. The aggregate cost
of investments at February 28, 1999 for Federal income tax purposes
was $3,351,883,267.
4. Capital Share Transactions:
Transactions in capital shares were as follows:
For the Six
Months Ended Dollar
February 28, 1999 Shares Amount
Shares sold 32,182,558 $317,632,442
Shares issued to share-
holders in reinvestment
of dividends 5,365,719 52,850,068
------------ ------------
Total issued 37,548,277 370,482,510
Shares tendered (36,396,140) (358,453,475)
------------ ------------
Net increase 1,152,137 $ 12,029,035
============ ============
For the
Year Ended Dollar
August 31, 1998 Shares Amount
Shares sold 88,083,898 $880,414,085
Shares issued to share-
holders in reinvestment
of dividends 10,206,064 102,041,674
------------ ------------
Total issued 98,289,962 982,455,759
Shares tendered (59,583,594) (595,698,442)
------------ ------------
Net increase 38,706,368 $386,757,317
============ ============
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
5. Unfunded Loan Interests:
As of February 28, 1999, the Fund had unfunded loan commitments of
$115,857,729, which would be extended at the option of the borrower,
pursuant to the following loan agreements:
Unfunded
Commitment
Borrower (in thousands)
21st Century $ 3,386
AFC Enterprises 3,920
American Axel 8,500
Arena Brands, Inc. 2,370
Centenial Resources Inc. 368
Chancellor Media Corp. 8,358
Continental Airlines, Inc. 4,639
Del Monte Corp. 5,233
Exide Corporation 42
FHC Health Systems 59
Foamex International PLC 4,692
Hedstrom Corp. 2,738
International Homefoods, Inc. 1,613
Iridium Operating LLC 7,780
K-III Communications Corp. 800
KSL Recreation Group, Inc. 7,473
Loewen Group Capital 2,146
Metro Goldwyn Mayer Co. 3,350
Nextel Communications Inc. 6,986
Northwestern Steel & Mining 15,000
Omnipoint 127
Pacific Coin Acquisition 1,084
PageNet Finance, Inc. 5,617
Patriot American Hospitality 339
Specialty Foods II 80
Teligent Delayed Draw 18,334
Ziff-Davis Inc. 824
6. Short-Term Borrowings:
On June 22, 1998, the Fund entered into a one-year credit agreement
with Bank of New York. The agreement is a $100,000,000 credit
facility bearing interest at the Federal Funds rate plus 0.25%--
0.40% and/or the Eurodollar rate plus 0.25% - 0.40%. The Fund had no
borrowings under commitment during the six months ended February 28,
1999. For the six months ended February 28, 1999, facility and
commitment fees aggregated approximately $13,718.
7. Capital Loss Carryforward:
At August 31, 1998, the Fund had a net capital loss carryforward of
approximately $9,218,000, of which $1,471,000 expires in 2004,
$3,279,000 expires in 2005 and $4,468,000 expires in 2006. This
amount will be available to offset like amounts of any future
taxable gains.
8. Subsequent Event:
The Fund began a quarterly tender offer on March 24, 1999 which
concludes on April 23, 1999.
Merrill Lynch Senior Floating Rate Fund, Inc.
February 28, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Arthur Zeikel, Director
Joseph T. Monagle Jr., Senior Vice President
Richard C. Kilbride, Vice President
Gilles Marchand, Vice President
Paul Travers, Vice President
Donald C. Burke, Vice President and Treasurer
Patrick D. Sweeney, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch Senior Floating
Rate Fund, Inc.'s Board of Directors. We are pleased to announce
that Terry K. Glenn has been elected President and Director of the
Fund. Mr. Glenn has held the position of Executive Vice President of
MLAM since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors
in wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
Gerald M. Richard, Treasurer of Merrill Lynch Senior Floating Rate
Fund, Inc. has also recently retired. His colleagues at Merrill
Lynch Asset Management, L.P. join the Fund's Board of Directors in
wishing Mr. Richard well in his retirement.
