EV CLASSIC SENIOR FLOATING RATE FUND /MA/, POS AMI, 1996-04-01

EV CLASSIC SENIOR FLOATING RATE FUND /MA/
POS AMI, 1996-04-01

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1996.
1933 ACT FILE NO. 33-64321
1940 ACT FILE NO. 811-07946
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------

FORM N-2

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 1 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 6 [X]
(CHECK APPROPRIATE BOX OR BOXES)

EV CLASSIC SENIOR FLOATING-RATE FUND
------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 482-8260
------------------------------------------------------------------

THOMAS OTIS, SECRETARY
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)

If any of the securities being registered on this Form will be offered on
a delayed or continuous basis in reliance on Rule 415 under the Securities Act
of 1933, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [X]

It is proposed that this filing will become effective when declared
effective pursuant to Section 8(c) of the Securities Act of 1933.

Senior Debt Portfolio has also executed this Registration Statement.
================================================================================

<PAGE>

EV CLASSIC SENIOR FLOATING-RATE FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-2
--------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ ------------------
1. ........... Outside Front Cover Cover Page
2. ........... Inside Front and Outside Back Cover Pages
Cover Page
3. ........... Fee Table and Synopsis Shareholder and Fund Expenses
4. ........... Financial Highlights The Fund's Financial Highlights
5. ........... Plan of Distribution How to Buy Fund Shares; The
Lifetime Investing Account/
Distribution Options; Service
Plan
6. ........... Selling Shareholders Not Applicable
7. ........... Use of Proceeds Valuing Fund Shares;
Investment Policies and Risks
8. ........... General Description of the Organization of the Fund and
Registrant the Portfolio
9. ........... Management Management of the Fund and
the Portfolio
10. ........... Capital Stock, Long-Term Debt, Organization of the Fund and
and Other Securities the Portfolio; Valuing Fund
Shares; Management of the
Fund and the Portfolio
11. ........... Defaults and Arrears on Senior Not Applicable
Securities
12. ........... Legal Proceedings How the Fund and the
Portfolio Invest their Assets
13. ........... Table of Contents of the Table of Contents of the
Statement of Additional Statement of Additional
Information Information

PART B STATEMENT OF
ITEM NO. ITEM CAPTION ADDITIONAL INFORMATION
- -------- ------------ CAPTION
----------------------
14. ........... Cover Page Cover Page
15. ........... Table of Contents Table of Contents
16. ........... General Information and General Information and
History History; Other Information
17. ........... Investment Objective and Additional Information about
Policies Investment Policies;
Investment Restrictions
18. ........... Management Trustees and Officers;
Investment Advisory and
Other Services
19. ........... Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Shares
20. ........... Investment Advisory and Other Investment Advisory and Other
Services Services
21. ........... Brokerage Allocation and Other Portfolio Trading
Practices
22. ........... Tax Status Taxes
23. ........... Financial Statements Financial Statements
<PAGE>

EV CLASSIC
SENIOR FLOATING-RATE FUND
- ------------------------------------------------------------------------------

THE INVESTMENT OBJECTIVE OF EV CLASSIC SENIOR FLOATING-RATE FUND (THE "FUND")
IS TO PROVIDE AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT WITH THE
PRESERVATION OF CAPITAL, BY INVESTING IN A PORTFOLIO PRIMARILY OF SENIOR
SECURED FLOATING RATE LOANS. THE FUND CURRENTLY SEEKS TO ACHIEVE ITS OBJECTIVE
BY INVESTING ITS ASSETS IN SENIOR DEBT PORTFOLIO (THE "PORTFOLIO"). THE
PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AS THE FUND. THE FUND, A
CONTINUOUSLY OFFERED, CLOSED-END, NON-DIVERSIFIED MANAGEMENT INVESTMENT
COMPANY, INVESTS DIRECTLY IN THE PORTFOLIO, A SEPARATE, CLOSED-END, NON-
DIVERSIFIED MANAGEMENT INVESTMENT COMPANY, RATHER THAN, AS WITH AN
HISTORICALLY STRUCTURED INVESTMENT COMPANY, INVESTING DIRECTLY IN AND
MANAGING ITS OWN PORTFOLIO OF LOANS AND SECURITIES. THE PORTFOLIO AND THE FUND
MAY BORROW, PRIMARILY IN CONNECTION WITH THE FUND'S TENDER OFFERS FOR ITS
SHARES. SEE "USE OF LEVERAGE" ON PAGE 8.

Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of
some or all of the principal investment.

This Prospectus sets forth information about the Fund that an investor should
know before investing. It should be read and retained for future reference. A
Statement of Additional Information for the Fund dated May 1, 1996, as
supplemented from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The Table of
Contents of the Statement of Additional Information appears at the end of this
Prospectus. The Statement of Additional Information is available without
charge from the Fund's principal underwriter, Eaton Vance Distributors, Inc.
(the "Principal Underwriter"), 24 Federal Street, Boston, MA 02110 (telephone
(800) 225-6265).

- ------------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------

PRICE TO PUBLIC SALES LOAD(2) PROCEEDS TO FUND
--------------- ------------- ----------------
Per Share(1).. $9.99 None $9.99
Total ........ $1,499,000,000 None to be paid by the Fund $1,499,000,000
- ----------

(1) The shares are offered on a best efforts basis at a price equal to the net
asset value, which, as of April , 1996, was $ per share. See "How to
Buy Fund Shares."

(2) Because Eaton Vance Distributors, Inc. and its affiliates will pay all sales
commissions to authorized firms from their own assets, the net proceeds of
the offering will be available to the Fund for investment in the Portfolio.
See "How to Buy Fund Shares."
- ------------------------------------------------------------------------------

EATON VANCE DISTRIBUTORS, INC.
PROSPECTUS DATED MAY 1, 1996

<PAGE>

The Fund is engaged in a continuous public offering of its shares at net asset
value without an initial sales charge. An early withdrawal charge of up to 1%
will be imposed on most shares held for less than one year which are accepted
for repurchase pursuant to a tender offer, as set forth below. See "How to Buy
Fund Shares" and "Early Withdrawal." The address of the Fund is 24 Federal
Street, Boston, MA 02110 (telephone (800) 225-6265).

The Portfolio's investment adviser is Boston Management and Research (the
"Investment Adviser" or "BMR"), a wholly-owned subsidiary of Eaton Vance
Management ("Eaton Vance"), and Eaton Vance is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.

NO MARKET PRESENTLY EXISTS FOR THE FUND'S SHARES AND IT IS NOT CURRENTLY
ANTICIPATED THAT A SECONDARY MARKET WILL DEVELOP FOR THE FUND'S SHARES. Fund
shares are not readily marketable. To provide investor liquidity, the Trustees
of the Fund presently intend each quarter to consider the making of a tender
offer to purchase all or a portion of the Fund's shares at net asset value.
See "Tender Offers to Purchase Shares."

TABLE OF CONTENTS
- ------------------------------------------------------------------------------
PAGE
Shareholder and Fund Expenses ........................................ 3
The Fund's Financial Highlights ...................................... 4
The Fund's Investment Objective ...................................... 5
Investment Policies and Risks ........................................ 5
Yield and Performance Information .................................... 11
Organization of the Fund and the Portfolio ........................... 12
Management of the Fund and the Portfolio ............................. 15
Service Plan ......................................................... 16
Valuing Fund Shares .................................................. 16
How to Buy Fund Shares ............................................... 17
Tender Offers to Purchase Shares ..................................... 18
Early Withdrawal ..................................................... 20
Reports to Shareholders .............................................. 21
The Lifetime Investing Account/Distribution Options .................. 21
Eaton Vance Shareholder Services ..................................... 21
Distributions and Taxes .............................................. 22
Table of Contents of the Statement of Additional Information ......... 24
- ------------------------------------------------------------------------------

<PAGE>

- ------------------------------------------------------------------------------
SHAREHOLDER AND FUND EXPENSES
- ------------------------------------------------------------------------------

SHAREHOLDER TRANSACTION EXPENSES
-------------------------------------------------------------------------
Sales Load (as a percentage of offering price) None
Dividend Reinvestment Fees None
Early Withdrawal Charge Imposed on Tender of Entire Account
During the First Year (as a percentage of tender proceeds
exclusive of all reinvestments and capital appreciation in
the account) 1%

ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets attributable to shares
of beneficial interest)
- ----------------------------------------------------------------------
Investment Advisory Fee 0.94%
Interest Payments on Borrowed Funds 0.13%
Other Expenses (including administration fees of .25% and service
fees of .15%) 0.59%
-----
Total Annual Expenses 1.66%
=====

EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following early withdrawal charge and
expenses on a $1,000 investment, assuming (a) 5% annual return
and (b) tender at the end of each period: $27 $52 $90 $197

An investor would pay the following expenses on the same
investment, assuming (a) 5% annual return and (b) no tenders: $17 $52 $90 $197
</TABLE>

NOTES:

The table and Example summarize the aggregate expenses of the Fund and the
Portfolio and are designed to help investors understand the costs and expenses
they will bear directly or indirectly by investing in the Fund. Information
for the Fund is based on its expenses for the most recent fiscal year.
The Fund invests exclusively in the Portfolio. The Trustees believe the
aggregate per share expenses of the Fund and the Portfolio should approximate,
and over time may be less than, the per share expenses the Fund would incur if
the Fund retained the services of an investment adviser and the assets of the
Fund were invested directly in the type of securities being held by the
Portfolio.

The Example should not be considered a representation of past or future
expenses since future expenses may be greater or less than those shown.
Federal regulations require the Example to assume a 5% annual return, but
actual return will vary. For further information regarding the expenses of the
Fund and the Portfolio see "The Fund's Financial Highlights", "Organization
of the Fund and the Portfolio", "Management of the Fund and the Portfolio",
"How to Buy Fund Shares", "Service Plan" and "Tender Offers to Purchase
Shares".

No early withdrawal charge is imposed on (a) shares purchased more than one
year prior to the acceptance for tender, (b) shares acquired through the
reinvestment of dividends and distributions and (c) any appreciation in value
of other shares in the account (see "Tender Offers to Purchase Shares").

The Investment Advisory and Administration Fees are based upon a percentage of
the Portfolio's average daily gross assets, which were approximately the same
as its average daily net assets for the fiscal year ended December 31, 1995.
Other investment companies with different distribution arrangements are
investing in the Portfolio and others may do so in the future. See
"Organization of the Fund and the Portfolio".

<PAGE>

THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Fund's annual report to shareholders
which is incorporated by reference into the Statement of Additional
Information in reliance upon the report of Deloitte & Touche LLP, independent
certified public accountants, as experts in accounting and auditing. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by
contacting the Principal Underwriter, Eaton Vance Distributors, Inc.
- ------------------------------------------------------------------------------
FOR THE PERIOD FROM THE START OF BUSINESS, FEBRUARY 24, 1995, TO DECEMBER 31,
1995:

Net asset value, beginning of period $ 10.000
--------

Income from operations:
Net investment income(1) $ 0.634
Net realized and unrealized gain (loss) on investments (0.008)++
--------
Total income from operations $ 0.626
--------

Less distributions:
From net investment income $ (0.633)
From net realized gain on investment transactions (0.003)
=========
Total distributions $ (0.636)
---------

Net asset value, end of period $ 9.990
========

TOTAL RETURN(2) 6.42%

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $501,301
Ratio of net expenses to average daily net assets(1) 1.66%+
Ratio of net investment income to average daily net assets 7.04%+

(1) Includes the Fund's share of the Portfolio's allocated expenses.

(2) Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of the period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the payable date.

+ Computed on an annualized basis.

++ The per share amount is not in accord with the net realized and unrealized
gain for the period because of the timing of sales of Fund shares and the
amount of the per share realized and unrealized gains and losses at such
time.

<PAGE>

THE FUND'S INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
EV Classic Senior Floating-Rate Fund (the "Fund") is a closed-end, non-
diversified management investment company which continuously offers its shares
of beneficial interest ("shares") to the public. The Fund's investment
objective is to provide as high a level of current income as is consistent
with the preservation of capital, by investing in a portfolio primarily of
senior secured floating rate loans. The Fund currently seeks to achieve its
objective by investing its assets in the Senior Debt Portfolio (the
"Portfolio"), a separate closed-end, non-diversified management investment
company with the same investment objective as the Fund. This investment
structure is commonly referred to as a "master/feeder" structure. There is no
assurance that the Fund's objective, or any specific yield on Fund shares,
will be achieved. See "Yield and Performance Information." An investment in
shares of the Fund is not a complete investment program.

INVESTMENT POLICIES AND RISKS
- ------------------------------------------------------------------------------
The Portfolio will invest primarily in senior secured floating rate loans, and
also in other institutionally traded senior secured floating rate debt
obligations (collectively, "Loans"). Under normal market conditions, the
Portfolio will invest at least 80% of its total assets in interests in Loans
("Loan Interests"). These Loans are made primarily to U.S. companies or their
affiliates or issuers of asset-backed interests (collectively, "Borrowers")
and have floating interest rates. Up to 20% of the Portfolio's total assets
may be held in cash, invested in investment grade short-term debt obligations,
and invested in interests in Loans that are unsecured ("Unsecured Loans"). See
"Other Investment Policies" below.

The Loans in which the Portfolio acquires Loan Interests will, in the judgment
of Boston Management and Research (the "Investment Adviser" or "BMR"), be in
the category of senior debt of the Borrower and will generally hold the most
senior position in the capitalization structure of the Borrower. Loans will
consist primarily of direct obligations of U.S. companies or their affiliates
undertaken to finance a capital restructuring or in connection with
recapitalizations, acquisitions, leveraged buy-outs, refinancings or other
financially leveraged transactions. Such Loans may include those made to a
Borrower for the purpose of acquiring ownership or control of a company,
whether as a purchase of equity or of assets, or for a leveraged
recapitalization with no change in ownership. Except for Unsecured Loans, each
Loan will be secured by collateral which BMR believes to have a market value,
at the time of acquiring the Loan Interest, which equals or exceeds the
principal amount of the Loan. Subsequent to purchase, the value of the
collateral may decline, and the Loan may no longer be as secured. The Loans
will typically have a stated term of five to eight years. However, since the
Loans typically amortize principal over their stated life and are frequently
prepaid, their effective maturity is expected to be two to three years. The
Portfolio will maintain a segregated account with its custodian of liquid,
high grade debt obligations with a value equal to the amount, if any, of the
Loan which the Portfolio has obligated itself to make to the Borrower, but
which has not yet been requested from the Portfolio. The Portfolio will
attempt to maintain a portfolio of Loan Interests that will have a dollar
weighted average period to next interest rate adjustment of approximately 90
days or less. As of April , 1996, the Portfolio had a dollar weighted
average period to adjustment of approximately days.

The Portfolio will purchase Loan Interests only if, in BMR's judgment, the
Borrower can meet debt service on the Loan. In addition, a Borrower must meet
other criteria established by BMR and deemed by it to be appropriate to the
analysis of the Borrower, the Loan and the Loan Interest. The Loan Interests
in which the Portfolio invests are not currently rated by any nationally
recognized rating service. The primary consideration in selecting such Loan
Interests for investment by the Portfolio is the creditworthiness of the
Borrower. The quality ratings assigned to other debt obligations of a Borrower
are generally not a material factor in evaluating Loans in which the Portfolio
may acquire a Loan Interest, since such obligations will typically be
subordinated to the Loans and be unsecured. Instead, BMR will perform its own
independent credit analysis of the Borrower in addition to utilizing
information prepared and supplied by the Agent (as defined below) or other
participants in the Loans. Such analysis will include an evaluation of the
industry and business of the Borrower, the management and financial statements
of the Borrower, and the particular terms of the Loan and the Loan Interest
which the Portfolio may acquire. BMR's analysis will continue on an ongoing
basis for any Loan Interest purchased and held by the Portfolio. No assurance
can be given regarding the availability at acceptable prices of Loan Interests
that satisfy the Portfolio's investment criteria.

A Loan in which the Portfolio may acquire a Loan Interest is typically
originated, negotiated and structured by a U.S. or foreign commercial bank,
insurance company, finance company or other financial institution (the
"Agent") for a lending syndicate of financial institutions. The Agent
typically administers and enforces the loan on behalf of the other lenders in
the syndicate. In addition, an institution, typically but not always the Agent
(the "Collateral Bank"), holds any collateral on behalf of the lenders. The
Collateral Bank must be a qualified custodian under the Investment Company Act
of 1940, as amended (the "1940 Act"). These Loan Interests generally take the
form of direct interests acquired during a primary distribution and may also
take the form of participation interests in, assignments of, or novations of a
Loan acquired in secondary markets. Such Loan Interests may be acquired from
U.S. or foreign commercial banks, insurance companies, finance companies or
other financial institutions who have made loans or are members of a lending
syndicate or from other holders of Loan Interests. The Portfolio may also
acquire Loan Interests under which the Portfolio derives its rights directly
from the Borrower. Such Loan Interests are separately enforceable by the
Portfolio against the Borrower and all payments of interest and principal are
typically made directly to the Portfolio from the Borrower. In the event that
the Portfolio and other lenders become entitled to take possession of shared
collateral, it is anticipated that such collateral would be held in the
custody of a Collateral Bank for their mutual benefit. The Portfolio may not
act as an Agent, a Collateral Bank, a guarantor or sole negotiator or
structurer with respect to a Loan.

BMR also analyzes and evaluates the financial condition of the Agent and, in
the case of Loan Interests in which the Portfolio does not have privity with
the Borrower, those institutions from or through whom the Portfolio derives
its rights in a Loan (the "Intermediate Participants"). The Portfolio will
invest in Loan Interests only if the outstanding debt obligations of the Agent
and Intermediate Participants, if any, are, at the time of investment,
investment grade, i.e., (a) rated BBB or better by Standard and Poor's Ratings
Group ("S&P") or Baa or better by Moody's Investors Service, Inc. ("Moody's");
or (b) rated A-2 by S&P or P-2 by Moody's; or (c) determined to be of
comparable quality by BMR.

The Portfolio may from time to time acquire Loan Interests in transactions in
which the current yield to the Portfolio exceeds the stated interest rate on
the Loan. These Loan Interests are referred to herein as "Discount Loan
Interests" because they are usually acquired at a discount from their nominal
value or with a facility fee that exceeds the fee traditionally received in
connection with the acquisition of Loan Interests. The Borrowers with respect
to such Loans may have experienced, or may be perceived to be likely to
experience, credit problems, including involvement in or recent emergence from
bankruptcy reorganization proceedings or other forms of credit restructuring.
In addition, Discount Loan Interests may become available as a result of an
imbalance in the supply of and demand for certain Loan Interests. The
Portfolio may acquire Discount Loan Interests in order to realize an enhanced
yield or potential capital appreciation when BMR believes that such Loan
Interests are undervalued by the market due to an excessively negative
assessment of a Borrower's creditworthiness or an imbalance between supply and
demand. The Portfolio may benefit from any appreciation in value of a Discount
Loan Interest, even if the Portfolio does not obtain 100% of the Loan
Interest's face value or the Borrower is not wholly successful in resolving
its credit problems.

From time to time BMR and its affiliates may borrow money from various banks
in connection with their business activities. Such banks may also sell
interests in Loans to or acquire such interests from the Portfolio or may be
Intermediate Participants with respect to Loans in which the Portfolio owns
interests. Such banks may also act as Agents for Loans in which the Portfolio
owns interests.

RISK FACTORS
BMR expects the Fund's net asset value to be relatively stable during normal
market conditions because the Portfolio's assets will consist primarily of
interests in floating rate Loans and of short-term instruments. Accordingly,
the value of the Portfolio's assets may fluctuate significantly less as a
result of interest rate changes than would a portfolio of fixed-rate
obligations. Nevertheless, a default in a Loan in which the Portfolio owns a
Loan Interest, a material deterioration of a Borrower's perceived or actual
creditworthiness or a sudden and extreme increase in prevailing interest rates
may cause a decline in the Fund's net asset value. Conversely, a sudden and
extreme decline in interest rates could result in an increase in the Fund's
net asset value. The Fund is not a money market fund and its net asset value
will fluctuate, reflecting any fluctuations in the Portfolio's net asset
value.

Investments in Loan Interests by the Portfolio bear certain risks common to
investing in many secured debt instruments of nongovernmental issuers,
including the risk of nonpayment of principal and interest by the Borrower,
that Loan collateral may become impaired, that any losses will be
proportionate to the degree of Loan Interest diversification and Borrower
industry concentration, and that the Portfolio may obtain less than full value
for Loan Interests sold because they are illiquid.

CREDIT RISK. Loan Interests are primarily dependent upon the creditworthiness
of the Borrower for payment of interest and principal. The nonreceipt of
scheduled interest or principal on a Loan Interest may adversely affect the
income of the Portfolio or the value of its investments, which may in turn
reduce the amount of dividends or the net asset value of the shares of the
Fund. The Portfolio's ability to receive payment of principal of and interest
on a Loan Interest also depends upon the creditworthiness of any institution
interposed between the Portfolio and the Borrower. To reduce credit risk, BMR
actively manages the Portfolio as described above. For information regarding
the status of the holdings of the Portfolio, see the Fund's financial
statements.

Loan Interests in Loans made in connection with leveraged buy-outs,
recapitalizations and other highly leveraged transactions are subject to
greater credit risks than many of the other Loan Interests in which the
Portfolio may invest. As of the date of this Prospectus, such Loan Interests
constituted substantially all of the Portfolio's Loan Interests. These credit
risks include the possibility of a default on the Loan or bankruptcy of the
Borrower. The value of such Loan Interests are subject to a greater degree of
volatility in response to interest rate fluctuations and may be less liquid
than other Loan Interests.

The Portfolio may acquire interests in Loans which are designed to provide
temporary or "bridge" financing to a Borrower pending the sale of identified
assets or the arrangement of longer-term loans or the issuance and sale of
debt obligations. The Portfolio may also invest in Loan Interests of Borrowers
who have obtained bridge loans from other parties. A Borrower's use of bridge
loans involves a risk that the Borrower may be unable to locate permanent
financing to replace the bridge loan, which may impair the Borrower's
perceived creditworthiness.

Although Loans in which the Portfolio invests will generally hold the most
senior position in the capitalization structure of the Borrowers, the
capitalization of many Borrowers will include non-investment grade
subordinated debt. During periods of deteriorating economic conditions, a
Borrower may experience difficulty in meeting its payment obligations under
such bonds and other subordinated debt obligations. Such difficulties may
detract from the Borrower's perceived creditworthiness or its ability to
obtain financing to cover short-term cash flow needs and may force the
Borrower into bankruptcy or other forms of credit restructuring.

COLLATERAL IMPAIRMENT. Loans (excluding Unsecured Loans) will be secured
unless (i) the value of the collateral declines below the amount of the Loans,
(ii) the Portfolio's security interest in the collateral is invalidated for
any reason by a court or (iii) the collateral is partially or fully released
under the terms of the Loan Agreement as the creditworthiness of the Borrower
improves. There is no assurance that the liquidation of collateral would
satisfy the Borrower's obligation in the event of nonpayment of scheduled
interest or principal, or that collateral could be readily liquidated. The
value of collateral generally will be determined by reference to financial
statements of the Borrower, an independent appraisal performed at the request
of the Agent at the time the Loan was initially made, the market value of such
collateral (e.g., cash or securities) if it is readily ascertainable and/or by
other customary valuation techniques considered appropriate in the judgment of
BMR. Collateral is generally valued on the basis of the Borrower's status as a
going concern and such valuation may exceed the immediate liquidation value of
the collateral.

Collateral may include (i) working capital assets, such as accounts receivable
and inventory; (ii) tangible fixed assets, such as real property, buildings
and equipment; (iii) intangible assets, such as trademarks and patent rights
(but excluding goodwill); and (iv) security interests in shares of stock of
subsidiaries or affiliates. To the extent that collateral consists of the
stock of the Borrower's subsidiaries or other affiliates, the Portfolio will
be subject to the risk that this stock will decline in value. Such a decline,
whether as a result of bankruptcy proceedings or otherwise, could cause the
Loan to be undercollateralized or unsecured. In most credit agreements there
is no formal requirement to pledge additional collateral. In the case of Loans
made to non-public companies, the company's shareholders or owners may provide
collateral in the form of secured guarantees and/or security interests in
assets that they own. In addition, the Portfolio may invest in Loans
guaranteed by, or fully secured by assets of, such shareholders or owners,
even if the Loans are not otherwise collateralized by assets of the Borrower;
provided, however, that such guarantees are fully secured. There may be
temporary periods when the principal asset held by a Borrower is the stock of
a related company, which may not legally be pledged to secure a Loan. On
occasions when such stock cannot be pledged, the Loan will be temporarily
unsecured until the stock can be pledged or is exchanged for or replaced by
other assets, which will be pledged as security for the Loan. However, the
Borrower's ability to dispose of such securities, other than in connection
with such pledge or replacement, will be strictly limited for the protection
of the holders of Loans and, indirectly, Loan Interests.

If a Borrower becomes involved in bankruptcy proceedings, a court may
invalidate the Portfolio's security interest in the Loan collateral or
subordinate the Portfolio's rights under the Loan to the interests of the
Borrower's unsecured creditors. Such action by a court could be based, for
example, on a "fraudulent conveyance" claim to the effect that the Borrower
did not receive fair consideration for granting the security interest in the
Loan collateral to the Portfolio. For Loans made in connection with a highly
leveraged transaction, consideration for granting a security interest may be
deemed inadequate if the proceeds of the Loan were not received or retained by
the Borrower, but were instead paid to other persons (such as shareholders of
the Borrower) in an amount which left the Borrower insolvent or without
sufficient working capital. There are also other events, such as the failure
to perfect a security interest due to faulty documentation or faulty official
filings, which could lead to the invalidation of the Portfolio's security
interest in Loan collateral. If the Portfolio's security interest in Loan
collateral is invalidated or the Loan is subordinated to other debt of a
Borrower in bankruptcy or other proceedings, it is unlikely that the Portfolio
would be able to recover the full amount of the principal and interest due on
the Loan.

DIVERSIFICATION AND INDUSTRY CONCENTRATION. The Fund and the Portfolio have
each registered with the U.S. Securities and Exchange Commission as a "non-
diversified" investment company. As a result, the Fund and the Portfolio are
required to comply only with the diversification requirements of Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"). See "Taxes" in
the Statement of Additional Information for a description of these
requirements. Because the Portfolio may invest a relatively high percentage of
its assets in the obligations of a limited number of issuers, the value of the
Portfolio's investments will be more affected by any single adverse economic,
political or regulatory occurrence than will the value of the investments of a
diversified investment company. It is the Portfolio's current intention not to
invest more than 10% of its total assets in Loans of any single Borrower. The
Portfolio may invest more than 10% (but not more than 25%) of its total assets
in Loan Interests for which the same Intermediate Participant is interposed
between the Borrower and the Portfolio. The Portfolio may acquire Loan
Interests in Loans made to Borrowers in any industry. However, the Portfolio
will not concentrate in any one industry with respect to Borrowers in whose
Loans the Portfolio acquires Loan Interests or interpositioned persons that
the Portfolio determines to be issuers for the purpose of this policy. See
"Investment Restrictions" in the Statement of Additional Information.

ILLIQUID INSTRUMENTS. Loan Interests are, at present, not readily marketable
and may be subject to legal and contractual restrictions on resale. Although
Loan Interests are traded among certain financial institutions, some of the
Loan Interests acquired by the Portfolio will be considered illiquid. The
Portfolio's ability to dispose of a Loan Interest may be reduced to the extent
that there has been a perceived or actual deterioration in the
creditworthiness of an individual Borrower or the creditworthiness of
Borrowers in general, or by events that reduce the level of confidence in the
market for Loan Interests. As the market for Loan Interests becomes more
seasoned, liquidity is expected to improve. However, the Portfolio has no
limitation on the amount of its investments which can be not readily
marketable or subject to restrictions on resale. Such investments may affect
the Portfolio's ability to realize its net asset value in the event of a
voluntary or involuntary liquidation of its assets. To the extent that such
investments are illiquid, the Portfolio may have difficulty disposing of
portfolio securities in order to make its tender offer payment obligations, if
any. The Trustees of the Portfolio will consider the liquidity of the
Portfolio's investments in determining whether a tender offer should be
effected by the Portfolio. Tender offer decisions of the Portfolio directly
affect the ability of the Fund to make its tender offers.

USE OF LEVERAGE
The Portfolio may from time to time (i) borrow money on a secured or unsecured
basis at variable or fixed rates, and (ii) issue indebtedness such as
commercial paper, bonds, debentures, notes or similar obligations or
instruments and invest the capital raised in additional portfolio investments
and/or meet its obligations pursuant to tender offers, if any. BMR currently
expects that the Portfolio may incur borrowings and issue such debt in order
to remain fully invested by managing anticipated cash infusions from the
prepayment of Loans and the sale of Fund shares and cash outflows from the
repurchase of Fund shares in connection with tender offers. For example, the
Portfolio may use borrowed cash to purchase Loan Interests and repay such
borrowings from the proceeds of expected sales of Fund shares. The Portfolio
may also borrow and issue debt for the purpose of acquiring additional income-
producing investments when it believes that the interest payments and other
costs with respect to such borrowings or indebtedness will be exceeded by the
anticipated total return (a combination of income and appreciation) on such
investments. The amount of any such borrowing or issuance will depend upon
market or economic conditions existing at that time.

However, as prescribed by the 1940 Act, the Portfolio will be required to
maintain specified asset coverages of at least 300% with respect to any bank
borrowing or issuance of indebtedness immediately following any such borrowing
or issuance and on an ongoing basis as a condition of declaring dividends. The
Portfolio's inability to make distributions as a result of these requirements
could cause the Fund to fail to qualify as a regulated investment company and/
or subject the Fund to income or excise taxes. The Portfolio may be required
to dispose of portfolio investments on unfavorable terms if market
fluctuations or other factors reduce the required asset coverage to less than
the prescribed amount.

Capital raised through leverage will be subject to interest costs which may or
may not exceed the interest earned on the assets purchased. The Portfolio may
also be required to maintain minimum average balances in connection with
borrowings or to pay a commitment or other fee to maintain a line of credit;
either of these requirements will increase the cost of borrowing over the
stated interest rate. The issuance of additional classes of debt involves
offering expenses and other costs and may limit the Portfolio's freedom to pay
dividends or to engage in other activities. Borrowings and the issuance of
indebtedness create an opportunity to be more fully invested and to earn
greater income. However, any such borrowing or issuance is a speculative
technique in that it will increase the Portfolio's exposure to capital risk.
Such risks may be mitigated through the use of borrowings and issuances of
indebtedness that have floating rates of interest. Unless the income and
appreciation, if any, on assets acquired with borrowed funds or offering
proceeds exceeds the cost of borrowing or issuing debt, the use of leverage
will diminish the investment performance of the Fund compared with what it
would have been without leverage.

The Portfolio will not always borrow money or issue debt to finance additional
investments. The Portfolio may borrow money to finance its tender offer
payment obligations, if any, or for temporary, extraordinary or emergency
purposes. The Portfolio's willingness to borrow money and issue debt for
investment purposes, and the amount it will borrow, will depend on many
factors, the most important of which are the investment outlook, market
conditions and interest rates. To the extent that the Portfolio invests
borrowed money in short-term fixed-rate debt obligations, successful use of a
leveraging strategy depends on BMR's ability to correctly predict interest
rates and market movements over these short-term periods. There is no
assurance that a leveraging strategy will be successful during any period in
which it is employed.

The Portfolio has established a $245 million commercial paper program,
pursuant to which it may from time to time sell its unsecured notes
("commercial paper") with short-term maturities of up to 270 days from the
issuance thereof to accredited investors. The Portfolio did not have any
commercial paper outstanding during the fiscal year ended December 31, 1995.
The Portfolio may use the proceeds from the sale of its commercial paper to
finance on a short-term basis the cash payments made for tender offers and may
repay such borrowings from principal and interest payments made on the Loans.
The Portfolio expects to continue to use commercial paper borrowings to
finance such payments in the future as well as for investment purposes, and
for paying interest or principal in respect of its obligations. The
Portfolio's commercial paper will be issued pursuant to an Issuing and Paying
Agency Agreement between the Portfolio and Citibank, N.A., and will be
entitled to the benefits of a commercial paper surety bond made by Capital
Markets Assurance Corporation in favor of Citibank, N.A. as a limited
fiduciary for the holders of the commercial paper. The Portfolio has entered
into an Insurance and Indemnity Agreement with Capital Markets Assurance
Corporation, pursuant to which the Portfolio has agreed that, in the event of
default under said Agreement, it will not distribute dividends or other
distributions on, or repurchase or otherwise acquire, an interest of the
Portfolio or pay fees to BMR as compensation for the provision of managerial
or administrative services. In the event of such a default, the Portfolio's
inability to distribute dividends and distributions as a result of these
requirements could cause the Fund to fail to qualify as a regulated investment
company and/or subject it to income or excise taxes. Although the Fund has no
current intention to engage in borrowing, because the Portfolio will borrow
the Fund will be affected thereby.

OTHER INVESTMENT POLICIES
The Portfolio will, during normal market conditions, invest at least 80% of
its total assets in Loan Interests that conform to the requirements described
above. However, up to 20% of the Portfolio's total assets may be held in cash,
invested in short-term debt obligations, and invested in interests in Loans
that are unsecured. The Portfolio will invest in only those Unsecured Loans
that have been determined by BMR to have a credit quality at least equal to
that of the collateralized Loans in which the Portfolio primarily invests.
Should the Borrower of an Unsecured Loan default on its obligation there will
be no specific collateral on which the Portfolio can foreclose, although the
Borrower will typically have assets believed by BMR at the time of purchase of
the Unsecured Loans to exceed the amount of the Loan. The short-term debt
obligations in which the Portfolio may invest include, but are not limited to,
interests in senior Unsecured Loans with a remaining maturity of one year or
less ("Short-Term Loans"), certificates of deposit, commercial paper, short-
term and medium-term notes, bonds with remaining maturities of less than five
years, obligations issued by the U.S. Government or any of its agencies or
instrumentalities and repurchase agreements. The credit quality of Short-Term
Loans must be determined by BMR to be at least equal to that of the
Portfolio's investments in Loans. All of such other debt instruments will be
investment grade (i.e., rated Baa, P-3 or better by Moody's or BBB, A-3 or
better by S&P or, if unrated, determined by BMR to be of comparable quality).
Securities rated Baa, BBB, P-3 or A-3 are considered to have adequate capacity
for payment of principal and interest, but are more susceptible to adverse
economic conditions. Securities rated BBB or Baa (or comparable unrated
securities) have speculative characteristics. Also, the capacity of their
issuers to make principal and interest payments would be weakened by changes
in economic conditions or other circumstances to a greater extent than for
issuers of higher grade bonds. Pending investment of the proceeds of Fund
sales by the Portfolio or when BMR believes that investing for defensive
purposes is appropriate, more than 20% of the Portfolio's total assets may be
temporarily held in cash or in the short-term debt obligations described
above.

Although the Portfolio generally holds Loan Interests only in Loans for which
the Agent and Intermediate Participants, if any, are banks, it may acquire
Loan Interests from non-bank financial institutions and in Loans originated,
negotiated and structured by non-bank financial institutions, if such Loan
Interests conform to the credit requirements described above. As these other
types of Loan Interests are developed and offered to investors, BMR will,
consistent with the Portfolio's investment objective, policies and quality
standards, and in accordance with applicable custody and other requirements of
the 1940 Act, consider making investments in such Loan Interests. Also, the
Portfolio has acquired and may continue to acquire warrants and other equity
securities as part of a unit combining Loan Interests and equity securities of
the Borrower or its affiliates. The acquisition of such equity securities will
only be incidental to the Portfolio's purchase of a Loan Interest. The
Portfolio may also acquire equity securities issued in exchange for a Loan or
issued in connection with the debt restructuring or reorganization of a
Borrower, or if such acquisition, in the judgment of BMR, may enhance the
value of a Loan or would otherwise be consistent with the Portfolio's
investment policies.

The Portfolio will limit its investments to those which are eligible for
purchase by national banks for their own portfolios. The conditions and
restrictions governing the purchase of Fund shares by national banks are set
forth in the U.S. Comptroller of the Currency's Banking Circular 220. Subject
to such conditions and restrictions, national banks may acquire Fund shares
for their own investment portfolio.

FOREIGN INVESTMENTS. The Portfolio may also acquire U.S. dollar denominated
Loan Interests in Loans which are made to non-U.S. Borrowers in developed
countries; provided, however, that any such Borrower meets the credit
standards established by BMR for U.S. Borrowers, and no more than 35% of its
net assets are invested in Loan Interests of such Borrowers. Investing in Loan
Interests of non-U.S. Borrowers involves certain special considerations, which
are not typically associated with investing in U.S. Borrowers. Since foreign
companies are not subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those applicable
to U.S. Borrowers, there may be less publicly available information about a
foreign company than about a domestic company. There is generally less
government supervision and regulation of financial markets and listed
companies than in the United States. Mail service between the United States
and foreign countries may be slower or less reliable than within the United
States, thus increasing the risk of delayed settlements of portfolio
transactions. As of the date of this Prospectus, approximately 1% of the
Portfolio's assets were invested in Loan Interests of non-U.S. Borrowers. The
Portfolio has no current intention to invest more than 5% of its net assets in
such Loan Interests.

INTEREST RATE SWAPS. In order to attempt to protect the value of the
Portfolio's assets from interest rate fluctuations and to maintain a dollar
weighted average period to next interest rate adjustment of approximately 90
days or less, the Portfolio may enter into interest rate swaps. The Portfolio
intends to use interest rate swaps as a hedge and not as a speculative
investment and will typically use interest rate swaps to shorten the average
time to interest rate reset of the Portfolio. Interest rate swaps involve the
exchange by the Portfolio with another party of their respective commitments
to pay or receive interest, e.g., an exchange of fixed rate payments for
floating rate payments. The use of interest rate swaps is a highly specialized
activity which involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions. BMR has not been
involved in the use of interest rate swaps but has utilized other types of
hedging techniques. If BMR is incorrect in its forecasts of market values,
interest rates and other applicable factors, the investment performance of the
Fund would be less favorable than what it would have been if this investment
technique was never used. The Portfolio has not engaged in such transactions
and has no current intention to invest more than 5% of its net assets in such
transactions.

REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements with
respect to its permitted investments, but currently intends to do so only with
member banks of the Federal Reserve System or with primary dealers in U.S.
Government securities. Under a repurchase agreement the Portfolio buys a
security at one price and simultaneously promises to sell that same security
back to the seller at a higher price. The Portfolio's repurchase agreements
will provide that the value of the collateral underlying the repurchase
agreement will always be at least equal to the repurchase price, including any
accrued interest earned on the repurchase agreement, and will be marked to
market daily. The repurchase date is usually within seven days of the original
purchase date. Repurchase agreements are deemed to be loans under the 1940
Act. In all cases, BMR must be satisfied with the creditworthiness of the
other party to the agreement before entering into a repurchase agreement. In
the event of the bankruptcy of the other party to a repurchase agreement, the
Portfolio might experience delays in recovering its cash. To the extent that,
in the meantime, the value of the securities the Portfolio purchased may have
declined, the Portfolio could experience a loss. To date, the Portfolio has
not engaged in repurchase agreements.

CERTAIN INVESTMENT RESTRICTIONS AND POLICIES. The Fund and the Portfolio have
adopted certain fundamental investment restrictions and policies which are
enumerated in detail in the Statement of Additional Information and which may
not be changed unless authorized by a shareholder or investor vote,
respectively. Among these fundamental restrictions, the Portfolio may not
purchase any security if, as a result of such purchase, 25% or more of the
Portfolio's total assets (taken at current value) would be invested in the
securities of Borrowers and other issuers having their principal business
activities in the same industry (the electric, gas, water and telephone
utility industries, commercial banks, thrift institutions and finance
companies being treated as separate industries for the purpose of this
restriction); provided that there is no limitation with respect to obligations
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities. Except for the fundamental restrictions and policies
enumerated in the Fund's Statement of Additional Information, the investment
objective and policies of the Fund and the Portfolio are not fundamental
policies and accordingly may be changed by the Trustees of the Fund and the
Portfolio without obtaining the approval of the Fund's shareholders or the
investors in the Portfolio, as the case may be. If any changes were made, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder
of the Fund.

YIELD AND PERFORMANCE INFORMATION
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The rate of interest payable on Loans is established as the sum of a base
lending rate plus a specified spread. These base lending rates are generally
the Prime Rate of a designated U.S. bank, the London InterBank Offered Rate
("LIBOR"), the Certificate of Deposit ("CD") rate of a designated U.S. bank or
another base lending rate used by commercial lenders. The Prime Rate is the
rate banks typically use as a base for a wide range of loans to individuals
and midsize and small businesses. LIBOR is the rate typically used by banks
worldwide as a base for loans to large commercial and industrial companies. A
Borrower usually has the right to select the base lending rate and to change
the base lending rate at specified intervals. The interest rate on Prime Rate-
based Loans floats daily as the Prime Rate changes, while the interest rate on
LIBOR-based and CD-based Loans is periodically reset with reset periods
typically ranging from 30 to 180 days. At the time of acquisition of a Loan
Interest, the Portfolio may also receive an upfront facility fee.

The yield on a Loan Interest held by the Portfolio will primarily depend on
the terms of the underlying Loan and the base lending rate chosen by the
Borrower initially and on subsequent dates specified in the applicable loan
agreement. The relationship between the Prime Rate, the CD rate and LIBOR will
vary as market conditions change. In the past, the relationship between the
Prime Rate and the other possible base lending rates was reasonably stable,
and Loans were structured with appropriate spreads over the base rates so that
the income earned by the Portfolio was approximately the same no matter which
alternative the Borrower selected. Since Borrowers tend to select the base
lending rate which results in the lowest interest cost, the distribution of
the Portfolio's investments among Prime Rate, CD rate and LIBOR based Loans is
likely to shift in favor of Loans with the base lending rate that generates
the lowest rate of return to the Portfolio. BMR anticipates that, during
normal market conditions, the effective yield of the Fund may approximate the
average Prime Rate of leading U.S. banks as published in The Wall Street
Journal. When the traditional spread between the Prime Rate and other base
lending rates widens, the Fund will be unable to achieve an effective yield
approximating the average published Prime Rate of leading U.S. banks. Such has
been the case since February 1991. Currently, the Borrowers with respect to
over 90% of the value of Loans held by the Portfolio have selected LIBOR as
the base lending rate for such Loans, which has lowered their interest cost
and will cause the level of the Fund's effective yield for this period to be
below the Prime Rate. Although BMR believes the present wide differential
between the Prime Rate and LIBOR is unusual, it has occurred before at low
points in the economic cycle. BMR hopes that, as the economy continues to
improve, the long-term relationship between the Prime Rate and LIBOR may be
restored and the Fund should be able to achieve an effective yield
approximating the Prime Rate. However, there is not yet evidence that this
will occur in 1996.

From time to time, the Fund may quote a current and/or effective yield based
on a specific one-month period. The Fund seeks to provide an effective yield
that is higher than short-term instrument alternatives. The current yield is
calculated by annualizing the most recent monthly distribution (i.e.,
multiplying by 365/31 for a 31 day month) and dividing the product by the
current maximum offering price. The effective yield is calculated by dividing
the current yield by 365/31 and adding 1. The resulting quotient is then
taken to the 365/31st power and reduced by 1. The result is the effective
yield. Yields will fluctuate from time to time and are not necessarily
representative of future results. Advertisements and communications to present
or prospective shareholders may also cite a total return for any period. Total
return will be calculated by subtracting the net asset value of a single
purchase of shares at a given date from the net asset value of those shares
(assuming reinvestment of distributions) on a subsequent date. The difference
divided by the original net asset value is the total return. The calculation
of the Fund's total return and effective yield reflects the effect of
compounding inasmuch as all dividends and distributions are assumed to be
reinvested in additional shares of the Fund at net asset value. In addition,
the calculation of total return, current yield and effective yield does not
reflect the imposition of any early withdrawal charges or the amount of any
shareholder income tax liability. If reflected, an early withdrawal charge
would reduce the performance quoted. The Fund may quote total return for the
period prior to commencement of operations which would reflect the Portfolio's
total return (or that of its predecessor) adjusted to reflect any applicable
Fund sales charge. If the fees or expenses of the Fund or the Portfolio are
waived or reimbursed, the Fund's performance will be higher. Information about
the performance of the Fund or other investments should not be considered a
representation of future performance the Fund may earn or what an investor's
yield or total return may be in the future.

ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
The Fund is organized as a business trust established under Massachusetts law
pursuant to a Declaration of Trust dated August 5, 1993, as amended, and is
registered under the 1940 Act. The Trustees of the Fund are responsible for
the overall management and supervision of its affairs. The Fund currently has
one class of shares of beneficial interest which may be issued in an unlimited
number by the Trustees. Each share represents an equal proportionate
beneficial interest in the Fund and, when issued and outstanding, the shares
are fully paid and nonassessable by the Fund and may be repurchased only as
described under "Tender Offers to Purchase Shares." Shareholders are entitled
to one vote for each full share held. Fractional shares may be voted in
proportion to the amount of the Fund's net asset value which they represent.
Shares have no preemptive or conversion rights and are freely transferable. In
the event of liquidation of the Fund, shareholders are entitled to share pro
rata in the net assets of the Fund available for distribution to shareholders.

The Fund's Declaration of Trust may not be amended without the affirmative
vote of a majority of the outstanding shares of the Fund (or such greater vote
as is described below under "Anti-Takeover Provisions"), except that the
Declaration of Trust may be amended by the Trustees to change the name of the
Fund, to make such other changes as do not have a materially adverse effect on
the rights or interests of shareholders and to conform the Declaration of
Trust to applicable federal laws or regulations. The Fund may be terminated
(i) upon the merger or consolidation with or sale of the Fund's assets to
another company, if approved by the holders of two-thirds of the outstanding
shares of the Fund, except that if the Trustees recommend such transaction,
the approval by vote of the holders of a majority of the outstanding shares
will be sufficient, or (ii) upon liquidation and distribution of the assets of
the Fund, if approved by the holders of two-thirds of the Fund's outstanding
shares, except that if the Trustees recommend such transaction, the approval
by vote of the holders of a majority of the outstanding shares will be
sufficient. If not so terminated, the Fund may continue indefinitely.

ANTI-TAKEOVER PROVISIONS. The Fund presently has certain anti-takeover
provisions in its Declaration of Trust which are intended to limit, and could
have the effect of limiting, the ability of other entities or persons to
acquire control of the Fund, to cause it to engage in certain transactions or
to modify its structure. As indicated above, a two-thirds vote is required for
certain transactions. The affirmative vote or consent of the holders of two-
thirds of the shares of the Fund (a greater vote than that required by the
1940 Act and, in some cases, greater than the required vote applicable to
business corporations under state law) is required to authorize the conversion
of the Fund from a closed-end to an open-end investment company (except that
if the Trustees recommend such conversion, the approval by vote of the holders
of a majority of the outstanding shares will be sufficient) and the
affirmative vote or consent of the holders of three-quarters of the shares of
the Fund is required to authorize any of the following transactions (the
"Transactions"): (i) merger or consolidation of the Fund with or into any
corporation; (ii) issuance of any securities of the Fund to any person or
entity for cash; (iii) sale, lease or exchange of all or any substantial part
of the assets of the Fund to any entity or person (except assets having an
aggregate fair market value of less than $1,000,000 or assets sold in the
ordinary course of business); or (iv) sale, lease or exchange to the Fund, in
exchange for securities of the Fund, of any assets of any entity or person
(except assets having an aggregate fair market value of less than $1,000,000)
if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of 5% or more of the outstanding shares of
the Fund. However, such vote or consent will not be required with respect to
the Transactions if the Board of Trustees under certain conditions approves
the Transaction. Further, the provisions of the Fund's Declaration of Trust
relating to conversion of the Fund to an open-end investment company, the
Transactions, the merger or consolidation with or sale of the Fund's assets,
and the liquidation and distribution of the Fund's assets may not be amended
without the affirmative vote or consent of two-thirds of the outstanding
shares of the Fund. Reference is made to the Declaration of Trust of the Fund,
on file with the Securities and Exchange Commission, for the full text of
these provisions. See "Other Information" in the Fund's Statement of
Additional Information.

The foregoing provisions will make more difficult the conversion of the Fund
to an open-end investment company and the consummation of the Transactions
without the Trustees' approval, and could have the effect of depriving
shareholders of an opportunity to sell their shares at a premium over
prevailing market prices, in the event that a secondary market for the Fund
shares does develop, by discouraging a third party from seeking to obtain
control of the Fund in a tender offer or similar transaction. However, the
Board of Trustees has considered these anti-takeover provisions and believes
that they are in the shareholders' best interests and benefit shareholders by
providing the advantage of potentially requiring persons seeking control of
the Fund to negotiate with its management regarding the price to be paid.

SENIOR DEBT PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF
NEW YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES.
The Portfolio, as well as the Fund, intends to comply with all applicable
federal and state securities laws. The Portfolio's Declaration of Trust, as
amended, provides that the Fund and other entities permitted to invest in the
Portfolio (e.g., other U.S. and foreign investment companies, and common and
commingled trust funds) will each be liable for all obligations of the
Portfolio. However, the risk of the Fund incurring financial loss on account
of such liability is limited to circumstances in which both inadequate
insurance exists and the Portfolio itself is unable to meet its obligations.
Accordingly, the Trustees of the Fund believe that neither the Fund nor its
shareholders will be adversely affected by reason of the Fund investing in the
Portfolio.

SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike other investment companies
which directly acquire and manage their own portfolios of securities, seeks to
achieve its investment objective by investing its assets in an interest in the
Portfolio, which is a separate investment company with an identical investment
objective (although the Fund may temporarily hold a de minimis amount of
cash). Therefore, the Fund's interest in the securities owned by the Portfolio
is indirect. In addition to selling an interest to the Fund, the Portfolio may
sell interests to other affiliated and non-affiliated investment companies or
institutional investors. Such investors will invest in the Portfolio on the
same terms and conditions and will pay a proportionate share of the
Portfolio's expenses. However, the other investors investing in the Portfolio
are not required to sell their shares at the same public offering price as the
Fund due to variations in sales commissions and other operating expenses.
Therefore, investors in the Fund should be aware that these differences may
result in differences in returns experienced by investors in the various funds
that invest in the Portfolio. Such differences in returns are also present in
other mutual fund structures, including funds that have multiple classes of
shares. For information regarding the investment objective, policies and
restrictions, see "The Fund's Investment Objective" and "Investment Policies
and Risks". Further information regarding investment practices may be found in
the Statement of Additional Information.

The Trustees of the Fund have considered the advantages and disadvantages of
investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $1 billion.

The Fund may withdraw (completely redeem) all or any part of its interest in
the Portfolio only pursuant to tender offers of the Portfolio. The Portfolio's
Board of Trustees presently intends each quarter to consider the making of
such tender offers. However, there can be no assurance that the Portfolio's
Board of Trustees will, in fact, decide to undertake the making of such a
tender offer. See "Tender Offers to Purchase Shares" below. The investment
objective and the nonfundamental investment policies of the Fund and the
Portfolio may be changed by the Trustees of the Fund and the Portfolio without
obtaining the approval of the shareholders of the Fund or the investors in the
Portfolio, as the case may be. Any such change of the investment objective
will be preceded by thirty days' advance written notice to the shareholders of
the Fund or the investors in the Portfolio, as the case may be. If a
shareholder tenders shares because of a change in the nonfundamental objective
or policies of a Fund, those shares may be subject to an early withdrawal
charge, as described in "Early Withdrawal." In the event the Fund withdraws
all of its assets from the Portfolio, or the Board of Trustees of the Fund
determines that the investment objective of the Portfolio is no longer
consistent with the investment objective of the Fund, such Trustees would
consider what action might be taken, including investing the assets of the
Fund in another pooled investment entity or retaining an investment adviser to
manage the Fund's assets in accordance with its investment objective. The
Fund's investment performance may be affected by a withdrawal of all of its
assets from the Portfolio. Of course, a complete withdrawal of Fund assets
could be accomplished only pursuant to a Portfolio tender offer.

Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected
by the actions of a larger investor in the Portfolio. For example, if a large
investor withdraws a significant amount of assets from the Portfolio, the
remaining investors may experience higher pro rata operating expenses, thereby
producing lower returns. Additionally, the Portfolio may hold fewer
securities, resulting in increased portfolio risk, and experience decreasing
economies of scale. However, this possibility exists as well for historically
structured mutual funds which have large or institutional investors.

Until 1992, the Administrator sponsored and advised historically structured
funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the investment company
industry and, therefore, the Fund may be subject to additional regulations
than historically structured funds.

The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for federal income tax purposes.
See "Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may
be determined by the Trustees of the Portfolio without investor approval), the
Fund will hold a meeting of Fund shareholders and will vote its interest in
the Portfolio for or against such matters proportionately to the instructions
to vote for or against such matters received from Fund shareholders. The Fund
shall vote shares for which it receives no voting instructions in the same
proportion as the shares for which it receives voting instructions. Other
investors in the Portfolio may alone or collectively acquire sufficient voting
interests in the Portfolio to control matters relating to the operation of the
Portfolio, which may require the Fund to withdraw its investment in the
Portfolio or take other appropriate action. Any such withdrawal could result
in a distribution "in kind" of portfolio Loans and noncash assets (as opposed
to a cash distribution from the Portfolio). If Loans and noncash assets are
distributed, the Fund could incur brokerage, tax or other charges in
converting them to cash. In addition, the distribution in kind may result in a
less diversified portfolio of investments and will adversely affect the
liquidity of the Fund. Notwithstanding the above, there are other means for
meeting shareholder redemption requests, such as borrowing.

The Trustees of the Fund, including a majority of the noninterested Trustees,
have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Fund and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the
Fund and the Portfolio, and it is possible that the creation of separate
Boards may be considered. For further information concerning the Trustees and
officers of the Fund and the Portfolio, see the Statement of Additional
Information.

MANAGEMENT OF THE FUND AND THE PORTFOLIO
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The Portfolio engages BMR, a wholly-owned subsidiary of Eaton Vance, to act as
its investment adviser under an Investment Advisory Agreement (the "Advisory
Agreement"). Under the general supervision of the Portfolio's Board of
Trustees, BMR will carry out the investment and reinvestment of the assets of
the Portfolio, will furnish continuously an investment program with respect to
the Portfolio, will determine which securities should be purchased, sold or
exchanged, and will implement such determinations. BMR will furnish to the
Portfolio investment advice and office facilities, equipment and personnel for
servicing the investments of the Portfolio. BMR will compensate all Trustees
and officers of the Portfolio who are members of the BMR organization and who
render investment services to the Portfolio, and will also compensate all
other BMR personnel who provide research and investment services to the
Portfolio. In return for these services, facilities and payments, the
Portfolio has agreed to pay BMR as compensation under the Advisory Agreement a
monthly fee in the amount of 19/240 of 1% (equivalent to 0.95% annually) of
the average daily gross assets of the Portfolio. Gross assets of the Portfolio
shall be calculated by deducting all liabilities of the Portfolio except the
principal amount of any indebtedness for money borrowed, including debt
securities issued by the Portfolio. While this advisory fee is greater than
that paid by most other funds, it is similar to fees paid by other closed-end
funds investing primarily in Loans and Loan Interests.

On October 24, 1994, the Trustees of the Portfolio voted to accept a waiver of
BMR's compensation so that the aggregate advisory fees paid by the Portfolio
under the Advisory Agreement during any fiscal year or portion thereof after
the Fund begins to invest its assets in the Portfolio will not exceed on an
annual basis: (a) 0.95% of average daily gross assets of the Portfolio up to
and including $1 billion; (b) 0.90% of average daily gross assets in excess of
$1 billion up to and including $2 billion; and (c) 0.85% of average daily
gross assets in excess of $2 billion. The Portfolio paid BMR advisory fees
equivalent to 0.94% of the Portfolio's average daily gross assets for the
period from the start of business, February 22, 1995, to the fiscal year ended
December 31, 1995.

Eaton Vance, its affiliates and predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. BMR or Eaton Vance currently serves as the investment
adviser to investment companies and various individual and institutional
clients with combined assets under management of over $16 billion, of which
approximately $14 billion is in investment companies, including approximately
$2 billion in the Portfolio. Eaton Vance, through its subsidiaries and
affiliates, engages primarily in investment management, administration and
marketing activities.

The Fund has engaged Eaton Vance to act as its administrator under an
Administration Agreement (the "Administration Agreement"). Under the
Administration Agreement, Eaton Vance is responsible for managing the business
affairs of the Fund, subject to the supervision of the Fund's Board of
Trustees. Eaton Vance will furnish to the Fund all office facilities,
equipment and personnel for administering the affairs of the Fund. Eaton Vance
will compensate all Trustees and officers of the Fund who are members of the
Eaton Vance organization and who render executive and administrative services
to the Fund, and will also compensate all other Eaton Vance personnel who
perform management and administrative services for the Fund. Eaton Vance's
administrative services include recordkeeping, preparation and filing of
documents required to comply with federal and state securities laws,
supervising the activities of the Fund's custodian and transfer agent,
providing assistance in connection with the Trustees' and shareholders'
meetings, providing services in connection with contemplated quarterly tender
offers and other administrative services necessary to conduct the Fund's
business. In return for these services, facilities and payments, the Fund pays
Eaton Vance as compensation under the Administration Agreement a monthly fee
in the amount of 1/48 of 1% (equivalent to 0.25% annually) of the average
daily gross assets of the Portfolio attributable to the Fund. In calculating
the gross assets of the Portfolio, all liabilities of the Portfolio shall be
deducted except the principal amount of any indebtedness for money borrowed,
including debt securities issued by the Portfolio. For the period from the
start of business, February 24, 1995, to the fiscal year ended December 31,
1995, the amount of administration fees paid by the Fund to Eaton Vance was
equal to 0.25% (annualized) of the Fund's average daily gross assets.

As indicated under "How to Buy Fund Shares", the payments of compensation to
Authorized Firms (as defined below) at the time Fund shares are sold and
quarterly thereafter on outstanding Fund shares will be made from the assets
of BMR, Eaton Vance and EVD, which may include amounts received by BMR under
its Advisory Agreement with the Portfolio, by Eaton Vance under its
Administration Agreement with the Fund and by EVD as early withdrawal charges
on the repurchase of shares held for less than one year.

The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the Advisory Agreement, by Eaton Vance under the Administration
Agreement or by EVD under its Distribution Agreement. See "Investment Advisory
and Other Services" in the Statement of Additional Information.

Jeffrey S. Garner, Vice President of Eaton Vance since January 1988 and Vice
President of the Portfolio and the Fund since their inception, is the
Portfolio Manager of the Portfolio.

SERVICE PLAN
- ------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the service fee
requirements of the sales charge rule of the National Association of
Securities Dealers, Inc., as if such rule were applicable. The Plan is further
described in the Statement of Additional Information, and the following is a
description of the salient features of the Plan.

THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE PAYMENTS FOR PERSONAL
SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE PRINCIPAL
UNDERWRITER AND AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT EXCEEDING
.25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR ANY FISCAL YEAR. The Trustees
of the Fund have initially implemented the Plan by authorizing the Fund to
make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .15% of the Fund's average
daily net assets for each fiscal year. The Principal Underwriter will retain
the service fee in the first year (as reimbursement for an initial service fee
payment of .15% to Authorized Firms at the time of sale) and each quarter
thereafter only with respect to shares that are tendered. However, the Plan
authorizes the Trustees of the Fund to increase payments without further
action by shareholders of the Fund, provided that the aggregate amount of
payments made to such persons under the Plan in any fiscal year of the Fund
does not exceed .25% of the Fund's average daily net assets. For the period
from the start of business, February 24, 1995, to the fiscal year ended
December 31, 1995, the Fund accrued service fees under the Plan equivalent to
0.15% (annualized) of the Fund's average daily net assets for such period.

VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by IBT Fund Services (Canada) Inc. (as agent for the Fund)
in the manner authorized by the Trustees of the Fund. IBT Fund Services
(Canada) Inc. is a subsidiary of Investors Bank & Trust Company ("IBT"), the
Fund's and the Portfolio's custodian. The Fund will be closed for business and
will not price its shares on the following business holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Net asset value is computed by dividing
the value of the Fund's total assets, less its liabilities by the number of
shares outstanding. Because the Fund invests its assets in an interest in the
Portfolio, the Fund's net asset value will reflect the value of its interest
in the Portfolio (which, in turn, reflects the underlying value of the
Portfolio's assets and liabilities).

The Portfolio's net asset value is also determined as of the close of regular
trading on the Exchange by IBT Fund Services (Canada) Inc. (as agent for the
Portfolio). The Portfolio's net asset value is computed by determining the
value of the Portfolio's total assets (the loans and securities it holds plus
any cash or other assets, including interest accrued but not yet received),
and subtracting all of the Portfolio's liabilities (including the outstanding
principal amount of any indebtedness issued and any unpaid interest thereon).
For further information regarding the valuation of each interest in the
Portfolio, see "Determination of Net Asset Value" in the Statement of
Additional Information.

Because Loan Interests are not actively traded in a public market, BMR,
following procedures established by the Portfolio's Trustees, will value the
Loan Interests held by the Portfolio at fair value. In valuing a Loan
Interest, BMR will consider relevant factors, data, and information,
including: (i) the characteristics of and fundamental analytical data relating
to the Loan Interest, including the cost, size, current interest rate, period
until next interest rate reset, maturity and base lending rate of the Loan
Interest, the terms and conditions of the Loan and any related agreements, and
the position of the Loan in the Borrower's debt structure; (ii) the nature,
adequacy and value of the collateral, including the Portfolio's rights,
remedies and interests with respect to the collateral; (iii) the
creditworthiness of the Borrower, based on an evaluation of its financial
condition, financial statements and information about the Borrower's business,
cash flows, capital structure and future prospects; (iv) information relating
to the market for the Loan Interest, including price quotations (if considered
reliable) for and trading in the Loan Interest and interests in similar Loans
and the market environment and investor attitudes towards the Loan Interest
and interests in similar Loans; (v) the reputation and financial condition of
the Agent and any Intermediate Participants in the Loan; and (vi) general
economic and market conditions affecting the fair value of the Loan Interest.

HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
The Fund is engaged in a continuous public offering of its shares at net asset
value without an initial sales charge. The Fund does not currently intend to
list its shares on any national securities exchange. The Principal
Underwriter, Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA
02110, will make payments from its own assets to certain financial service
firms who have sales agreements with the Principal Underwriter ("Authorized
Firms"). In addition, an early withdrawal charge, which is paid to EVD, will
be imposed on most shares held for less than one year which are accepted for
repurchase pursuant to a tender offer, as set forth under "Early Withdrawal."

From time to time the Fund may suspend the continuous offering of its shares.
During any such suspension, shareholders who reinvest their distributions in
additional shares will be permitted to continue such reinvestments, and the
Fund may permit tax sheltered retirement plans which own shares to purchase
additional shares of the Fund.

HOW TO BUY SHARES FOR CASH. Investors may purchase shares of the Fund through
Authorized Firms at the net asset value per share of the Fund next determined
after an order is effective, which, as of April , 1996, was $ . Pursuant
to its Distribution Agreement with EVD, the Fund has authorized EVD to
distribute its shares on a "best efforts" basis through Authorized Firms. EVD
will furnish the names of Authorized Firms to an investor upon request. An
Authorized Firm may charge its customers a fee in connection with transactions
executed by that Firm.

EVD compensates the Authorized Firms at the rate of 1.0% of the dollar amount
of the shares being purchased, consisting of .85% of sales commission and .15%
of service fee (for the first year's services).

If the shares remain outstanding for at least one year, EVD will compensate
the Authorized Firms at an annual rate, paid monthly, equal to .60% of the
value of Fund shares sold by such Authorized Firms and remaining outstanding.
Compensation paid to Authorized Firms at the time of purchase and the monthly
payments mentioned above do not represent an additional expense to
shareholders since such payments will be made from BMR's, EVD's and Eaton
Vance's own assets, which may include amounts received by EVD as early
withdrawal charges, amounts received by BMR under its Advisory Agreement with
the Portfolio and amounts received by Eaton Vance under its Administration
Agreement with the Fund. For the fiscal year ended December 31, 1995, EVD had
made compensation payments to Authorized Firms in the aggregate amount of
approximately $5,000,210 since inception of the Fund. The compensation paid to
Authorized Firms and EVD, including the compensation paid at the time of
purchase, the monthly payments mentioned above, any additional incentives
mentioned below, and the early withdrawal charge, if any, will not in the
aggregate exceed any applicable limit, unless the approval of the National
Association of Securities Dealers, Inc. ("NASD") has been received.

The Principal Underwriter may also, from time to time, at its own expense,
provide additional cash incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. Upon NASD
approval, the Principal Underwriter may provide non-cash incentives to
Authorized Firms.

An initial investment in the Fund must be at least $5,000 ($2,000 in the case
of Individual Retirement Accounts). Once an account has been established, the
investor may send investments of $500 or more at any time directly to the
Fund's Transfer Agent as follows: First Data Investor Services Group, BOS725,
P.O. Box 1559, Boston, MA 02104. See "Eaton Vance Shareholder Services".

The Fund may suspend the offering of shares at any time and may refuse any
order for the purchase of shares.

ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange
for Fund shares at the then current net asset value. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold on the day of their receipt or as soon thereafter as
possible. The number of Fund shares to be issued in exchange for securities
will be the aggregate proceeds from the sale of such securities divided by the
applicable net asset value per Fund share on the day such proceeds are
received. Eaton Vance will use reasonable efforts to obtain the then current
market price for such securities but does not guarantee the best available
price. Eaton Vance will absorb any transaction costs, such as commissions, on
the sale of the securities.

Securities determined to be acceptable should be transferred via book entry or
physically delivered, in proper form for transfer, through EVD or an
Authorized Firm, together with a completed and signed Letter of Transmittal in
approved form (available from EVD or Authorized Firms), as follows:

IN THE CASE OF BOOK ENTRY:

Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Classic Senior Floating-Rate Fund

IN THE CASE OF PHYSICAL DELIVERY:

Investors Bank & Trust Company
Attention: EV Classic Senior Floating-Rate Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111

Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities. Eaton Vance
reserves the right to reject any securities. Exchanging securities for Fund
shares may create a taxable gain or loss. Each investor should consult his or
her tax adviser with respect to the particular federal, state and local tax
consequences of exchanging securities for Fund shares.

USE OF PROCEEDS. As of the date of this Prospectus, the net proceeds from the
sale of the Fund's shares currently outstanding were approximately $
million, all of which is now invested in the Portfolio. The Portfolio invests
its assets in Loan Interests. The Fund may suspend sales of its shares to
allow the Portfolio to more fully invest in Loan Interests. Proceeds from the
continuous offering of Fund shares will be used to increase the Fund's
interest in the Portfolio. The investment in interests in Loans and Unsecured
Loans of any additional net proceeds that the Portfolio receives from the Fund
may take one to three months, up to a maximum of six months, from the date the
Portfolio receives such proceeds. Pending such investment, the proceeds will
be held by the Portfolio in cash or invested in investment grade short-term
debt obligations.

TENDER OFFERS TO PURCHASE SHARES
- ------------------------------------------------------------------------------
It is presently contemplated by the Board of Trustees, recognizing the
likelihood that a secondary market for the Fund's shares will not exist, that
the Fund may take actions which will provide liquidity to shareholders. The
Fund may from time to time make tender offers at net asset value for the
purchase of all or a portion of its shares. The price will be established at
the close of business on the last day the tender offer is open. The Fund's
Trustees presently intend each quarter to consider the making of such tender
offers. However, there are no assurances that the Fund's Board of Trustees
will, in fact, decide to undertake the making of such a tender offer. The
Fund's assets consist primarily of its interest in the Portfolio. Therefore,
in order to finance the repurchase of Fund shares pursuant to such tender
offers, the Fund will find it necessary to liquidate all or a portion of its
interest in the Portfolio. Because interests in the Portfolio may not be
transferred, the Fund may withdraw a portion of its interest only pursuant to
tender offers of the Portfolio. The Fund will not conduct a tender offer for
Fund shares unless the Portfolio simultaneously conducts a tender offer for
Portfolio interests. The Portfolio's Trustees presently intend each quarter to
consider the making of such tender offers. However, there are no assurances
that the Portfolio's Board of Trustees will, in fact, decide to undertake the
making of such a tender offer. The Fund cannot make a tender offer larger than
the Portfolio's. The Portfolio will make tender offers, if any, to all of its
investors, including the Fund, on the same terms, which practice may affect
the size of the Portfolio's offers. Subject to the Portfolio's investment
restriction with respect to borrowings, the Portfolio may borrow money or
issue debt obligations to finance its repurchase obligations pursuant to any
such tender offers.

The Fund expects that there will ordinarily be no secondary market for the
Fund's shares and that periodic tender offers will be the only source of
liquidity for Fund shareholders. Moreover, the Principal Underwriter is
prohibited under applicable law from making a market in Fund shares while the
Fund is making either a public offering of or a tender offer to purchase
shares. Similarly, the Principal Underwriter prohibits dealers that have
signed sales agreements to sell Fund shares from making a market in such
shares. Nevertheless, if a secondary market develops for shares of the Fund,
the market price of the shares may vary from net asset value from time to
time. The market price may be affected by, among other factors, relative
demand and supply of shares and the performance of the Fund, especially as it
affects the yield on and investment performance of the shares of the Fund.
Should there be a secondary market for Fund shares, it is expected that shares
of the Fund will not trade at a premium because the Fund intends to engage in
a continuous offering of its shares at net asset value. A tender offer for
shares of the Fund at net asset value, as contemplated and described above, is
expected to reduce any spread between net asset value and market price that
may otherwise develop. However, there are no assurances that tender offers
would result in the Fund's shares trading at a price which is equal to or
approximates their net asset value.

Although the Trustees believe that tender offers generally would be beneficial
to the Fund's shareholders, the acquisition of shares by the Fund will
decrease the total assets of the Fund and therefore have the possible effect
of increasing the Fund's expense ratio. Furthermore, if the Portfolio borrows
to finance the making of tender offers for the Portfolio's interests, interest
on such borrowing will reduce the Fund's net investment income.

There are circumstances under which the purchase of shares in a tender offer,
even if approved by the Board and made to shareholders, may not be effected by
the Fund. These circumstances would arise if, in the judgment of the Trustees,
(i) the Fund would not be able to liquidate the requisite portion of its
interest in the Portfolio and/or such liquidation would have an adverse effect
on the net asset value of the Fund to the detriment of the non-tendering Fund
shareholders; (ii) the Fund's income would be taxed at the Fund level in
addition to the taxation of shareholders who receive dividends and
distributions from the Fund (see "Distributions and Taxes") as a result of the
Fund being deemed a taxable entity occasioned by the impairment of the Fund's
status as a regulated investment company under the Code; or (iii) there exists
(a) a limitation imposed by federal or state authorities on the extension of
credit by lenders which affects the Fund, the Borrowers of Loans in which the
Portfolio holds Loan Interests or the Intermediate Participants, (b) a banking
moratorium declared by federal or state authorities or any suspension of
payments by banks in the United States, (c) a legal action or proceeding
instituted or threatened which materially adversely affects the Fund, (d) a
legal action or proceeding instituted or threatened which challenges such
purchase, (e) an international or national calamity, such as commencement of
war or armed hostilities, which directly or indirectly involves the United
States, or (f) an event or condition not listed herein which would materially
adversely affect the Fund if the tendered shares are purchased.

The Fund has obtained an exemption from the Securities and Exchange Commission
relating to tender offers which includes representations by the Fund that no
secondary market for Fund shares is expected to exist. This exemption is
conditioned on the absence of a secondary market. In the event that
circumstances arise under which the Fund does not conduct periodic tender
offers, the Board would consider alternative means of providing liquidity for
shareholders. Such action would include an evaluation of any secondary market
that then existed and a determination as to whether such market provided
liquidity for shareholders. If the Board determines that such market, if any,
fails to provide liquidity for Fund shareholders, the Board expects that it
will consider all then available alternatives to provide such liquidity. Among
the alternatives which the Board would consider is the listing of the Fund's
shares on a major domestic stock exchange or on the NASDAQ National Market
System in order to provide such liquidity. The Board may also consider causing
the Fund to repurchase its shares from time to time in open-market or private
transactions when it can do so on terms that represent a favorable investment
opportunity. In any event, the Board expects it will cause the Fund to take
whatever action it deems necessary or appropriate to provide liquidity for
Fund shareholders in light of the facts and circumstances existing at such
time.

If the Portfolio must liquidate portfolio securities in order to meet its
tender obligations, the Portfolio, and therefore the Fund, may realize gains
and losses. Such gains may be realized on securities held for less than three
months. Because less than 30% of the Fund's annual gross income must be
derived from the sale or disposition of securities held less than three months
(in order to retain the Fund's tax status as a regulated investment company),
such gains could reduce the ability of the Portfolio to sell other securities
held for less than three months that the Portfolio may wish to sell in the
ordinary course of its portfolio management, which may adversely affect the
Portfolio's yield.

Each tender offer will be made and shareholders notified in accordance with
the requirements of the Securities Exchange Act of 1934, as amended, and the
1940 Act, either by publication or mailing or both. Each offering document
will contain such information as is prescribed by such laws and the rules and
regulations promulgated thereunder. The repurchase of tendered shares by the
Fund is a taxable event. See "Distributions and Taxes." The Fund will pay all
costs and expenses associated with the making of any such tender offers by the
Fund. An early withdrawal charge will be imposed on most shares accepted for
tender which have been held for less than one year. See "Early Withdrawal".

EARLY WITHDRAWAL
- ------------------------------------------------------------------------------
An early withdrawal charge to recover distribution expenses will be charged in
connection with most shares held for less than one year which are accepted by
the Fund for repurchase pursuant to tender offers. The early withdrawal charge
will be imposed on those shares accepted for tender the amount of which
exceeds the aggregate value at the time the tender is accepted of (a) all
shares in the account purchased more than one year prior to such acceptance,
(b) all shares in the account acquired through reinvestment of distributions,
and (c) the increase, if any, of value of all other shares in the account
(namely those purchased within the one year preceding the acceptance) over the
purchase price of such shares. The early withdrawal charge will be paid to
EVD. In determining whether an early withdrawal charge is payable, it is
assumed that the acceptance of a repurchase offer would be made from the
earliest purchase of shares. The early withdrawal charge will be equal to 1%
of the value of shares accepted for repurchase pursuant to a tender offer.
During the period from the start of business, February 24, 1995, to the fiscal
year ended December 31, 1995, EVD received $93,300 in early withdrawal
charges.

EXCHANGES: The Fund may make available to tendering shareholders the privilege
of exchanging Fund shares at net asset value for shares of certain open-end
investment companies managed by Eaton Vance or BMR which are subject to a
contingent deferred sales charge identical to that of the early withdrawal
charge imposed on tendering Fund shareholders. The funds currently available
for such exchange privilege are the funds in the Eaton Vance Classic Group of
Funds. No early withdrawal charge will be imposed on shareholders choosing to
exchange their Fund shares for shares of any such fund; however, the
exchanging shareholder will be subject to the applicable contingent deferred
sales charge imposed by such fund. For the purpose of calculating the
applicable contingent deferred sales charge, the purchase of shares of such
fund will be deemed to have occurred at the time of the purchase of the Fund
shares. Any such exchange will be made on the basis of the relative net asset
value per share of each fund at the time of exchange, provided that such
exchange offers are available only in states where shares of the fund acquired
may legally be sold.

The prospectus for each fund describes its investment objectives and policies,
and shareholders should obtain a prospectus and consider these objectives and
policies carefully before requesting an exchange. Each exchange must involve
shares which have a net asset value of at least $1,000. The exchange privilege
may be changed or discontinued without penalty. Shareholders will be given
sixty (60) days' notice prior to any termination or material amendment of the
exchange privilege. An exchange may result in a taxable gain or loss.

Shares of other funds in the Eaton Vance Classic Group of Funds and Eaton
Vance Money Market Fund may be exchanged for Fund shares at net asset value
per share, but subject to any restrictions or qualifications set forth in the
current prospectus of any such fund.

REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual
reports are audited by the Fund's independent certified public accountants.
Shortly after the end of each calendar year, the Fund will furnish its
shareholders with information necessary for preparing federal and state tax
returns.

THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S
TRANSFER AGENT, FIRST DATA INVESTOR SERVICES GROUP, WILL SET UP A LIFETIME
INVESTING ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a
complete record of all transactions between the investor and the Fund which at
all times shows the balance of shares owned. Shares are held in non-
certificated form by the Fund's Transfer Agent for the account of the
shareholder. The Fund will not issue share certificates except upon request.

At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current balance in the account. THE
LIFETIME INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE TO First Data
Investor Services Group.

Any questions concerning a shareholder's account or services available may be
directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to First Data Investor Services Group, BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the
Fund and the account number).

THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the
Fund's dividend disbursing agent, First Data Investor Services Group, BOS725,
P.O. Box 1559, Boston, MA 02104. The currently effective option will appear on
each account statement.

Share Option -- Dividends and capital gains will be reinvested in additional
shares.

Income Option -- Dividends will be paid in cash and capital gains will be
reinvested in additional shares.

Cash Option -- Dividends and capital gains will be paid in cash.

The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under federal income tax laws.

If the Income Option or Cash Option has been selected, all dividend and/or
capital gains distribution checks which are returned by the United States
Postal Service as not deliverable or which remain uncashed for six months or
more will be reinvested in the account in shares at the then current net asset
value. Furthermore, the distribution option on the account will be
automatically changed to the Share Option until such time as the shareholder
selects a different option.

DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional
shares of another Eaton Vance fund. Before selecting this option, a
shareholder should obtain a prospectus of the other Eaton Vance fund and
consider its objectives and policies carefully.

EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter.
The cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.

INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $5,000 minimum
investment has been made, checks of $500 or more payable to the order of EV
Classic Senior Floating-Rate Fund may be mailed directly to First Data
Investor Services Group, BOS725, P.O. Box 1559, Boston, MA 02104 at any time
- -- whether or not distributions are reinvested. The name of the shareholder,
the Fund and the account number should accompany each investment.

BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Once the $5,000
minimum investment has been made, cash investments of $500 or more may be made
automatically each month or quarter from the shareholder's bank account.

REINVESTMENT PRIVILEGE: A shareholder whose shares have been repurchased
pursuant to a tender offer may reinvest, with credit for any early withdrawal
charge paid on the value of the repurchased shares, any portion or all of his
or her tender proceeds (plus that amount necessary to acquire a fractional
share to round off the purchase to the nearest full share) in shares of the
Fund, provided that the reinvestment is effected within 60 days after such
repurchase. For purposes of determining any early withdrawal charge upon
acceptance of a subsequent tender offer, the shareholder's prior period of
ownership will be included in this calculation. Shares are sold to a
reinvesting shareholder at the next determined net asset value following
timely receipt of a written purchase order by the Principal Underwriter or by
the Fund (or by the Fund's Transfer Agent). The amount of any early withdrawal
charge related to the prior purchase will be credited to the shareholder's
account and also reinvested at the then current net asset value. A reinvesting
shareholder may realize a gain or loss for federal tax purposes as a result of
such prior sale in the tender offer, but to the extent that the shareholder
realizes a loss upon a repurchase of shares by the Fund and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are purchased
through reinvestment of dividends or otherwise) within the period beginning 30
days before and ending 30 days after the date of the repurchase by the Fund,
some or all of the loss generally will be disallowed under the "wash sale"
rules of federal income tax law, depending upon the relationship between the
number of shares repurchased and the number of shares sold by the Fund.

TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:

PENSION AND PROFIT SHARING PLANS for self-employed individuals,
corporations and non-profit organizations;

INDIVIDUAL RETIREMENT ACCOUNT PLANS for individuals and their non-employed
spouses; and

403(B) RETIREMENT PLANS for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Code.

Detailed information concerning these plans and copies of the plans are
available from the Principal Underwriter. This information should be read
carefully and consultation with an attorney or tax adviser may be advisable.
The information sets forth the service fee charged for retirement plans and
describes the federal income tax consequences of establishing a plan. Under
each tax-sheltered retirement plan, all distributions will be automatically
reinvested in additional shares.

DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
DISTRIBUTIONS
Distributions will be declared daily and paid monthly. Realized net capital
gains (the Fund's realized net capital gains generally consist of the realized
net capital gains from the sale of portfolio assets allocated to the Fund by
the Portfolio), if any, will be distributed at least annually. Substantially
all of the investment income allocated to the Fund by the Portfolio, less its
expenses, will be declared daily as a distribution to shareholders of record
at the time of declaration. Daily distribution crediting will commence on the
day after collected funds for the purchase of Fund shares are available at the
Transfer Agent, even if orders to purchase shares had been placed with
Authorized Firms. Such distributions, whether received in cash or reinvested
in additional shares, will ordinarily be paid at the end of each month.
Realized capital gains, if any, will usually be distributed in December after
offset by any capital loss carryovers.

TAXES
In order to qualify as a regulated investment company under the Code, the Fund
must satisfy certain requirements relating to the sources of its income, the
distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.

As a regulated investment company under the Code, the Fund does not pay
federal income or excise taxes to the extent that it distributes to
shareholders its net investment income and net realized capital gains in
accordance with the timing requirements imposed by the Code. As a partnership
under the Code, the Portfolio does not pay federal income or excise taxes.
Further, under current law, provided that the Fund qualifies as a regulated
investment company for federal tax purposes and the Portfolio is treated as a
partnership for Massachusetts and federal tax purposes, neither the Fund nor
the Portfolio is liable for any income, corporate excise or franchise tax in
the Commonwealth of Massachusetts.

Certain distributions of the Fund which are paid in January of a given year
but are declared in the prior October, November or December to shareholders of
record on a date in such a month will be taxable to shareholders as if
received on December 31.

Distributions of ordinary income and the excess of net short-term capital gain
over net long-term capital loss will be treated as ordinary income in the
hands of shareholders. Distributions of the excess of net long-term capital
gain over net short-term capital loss are taxable to shareholders as long-term
capital gain, regardless of the length of time the shares of the Fund have
been held by such shareholders. Distributions will be taxed as described
above, whether received in shares or in cash. It is not expected that any
portion of such distributions will be eligible for the corporate dividends-
received deduction. Distributions that are treated for federal income tax
purposes as a return of capital will reduce each shareholder's basis in his
shares and, to the extent the return of capital exceeds such basis, will be
treated as gain to the shareholder from a sale of shares.

In general, any gain or loss realized upon a taxable disposition of shares of
the Fund held by a shareholder as a capital asset will be treated as long-term
capital gain or loss if the shares have been held for more than one year and
otherwise as short-term capital gain or loss. Different tax consequences may
apply for tendering and nontendering shareholders in connection with a tender
offer, and these consequences will be disclosed in the related offering
documents. For example, it is possible that tenders not treated as an exchange
for federal income tax purposes might result in different tax
characterizations of the distributions to tendering shareholders and in deemed
distributions to non-tendering shareholders. Shareholders may wish to consult
their tax advisers prior to tendering.

The Fund will send written notices to shareholders regarding the federal
income tax status of all distributions made during each calendar year.

Shareholders should consult their tax advisers regarding the applicability of
state, local or other taxes with respect to an investment in the Fund.

<PAGE>

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
PAGE
General Information and History ........................................ 2
Additional Information about Investment Policies ....................... 2
Investment Restrictions ................................................ 4
Trustees and Officers .................................................. 5
Control Persons and Principal Holders of Shares ........................ 7
Investment Advisory and Other Services ................................. 8
Determination of Net Asset Value ....................................... 9
Portfolio Trading ...................................................... 10
Taxes .................................................................. 10
Service Plan ........................................................... 12
Custodian .............................................................. 12
Transfer and Dividend Paying Agent and Registrar ....................... 13
Performance Information ................................................ 13
Other Information ...................................................... 15
Auditors ............................................................... 16
Financial Statements ................................................... 16
- --------------------------------------------------------------------------------

<PAGE>

[Logo]
===========
EATON VANCE EV CLASSIC SENIOR
Mutual Funds FLOATING-RATE FUND
- --------------------------------------------------------------------------------
PROSPECTUS

MAY 1, 1996

EV CLASSIC SENIOR
FLOATING-RATE FUND
24 FEDERAL STREET
BOSTON, MA 02110

- --------------------------------------------------------------------------------
INVESTMENT ADVISER OF SENIOR DEBT PORTFOLIO
Boston Management and Research, 24 Federal Street, Boston, MA 02110

ADMINISTRATOR OF EV CLASSIC SENIOR FLOATING-RATE FUND
Eaton Vance Management, 24 Federal Street, Boston, MA 02110

PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc. 24 Federal Street, Boston, MA 02110
(800) 225-6265

CUSTODIAN
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111

TRANSFER AGENT
First Data Investor Services Group, BOS725, P.O. Box 1559, Boston, Ma 02104
(800) 262-1122

AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110

BANKING COUNSEL
Mayer, Brown & Platt, 787 Seventh Avenue, New York, NY 10019

C-SFRP
<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1996

EV CLASSIC SENIOR FLOATING-RATE FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265

- --------------------------------------------------------------------------------
TABLE OF CONTENTS Page
General Information and History ........................................... 2
Additional Information about Investment Policies .......................... 2
Investment Restrictions ................................................... 4
Trustees and Officers ..................................................... 5
Control Persons and Principal Holders of Shares ........................... 7
Investment Advisory and Other Services .................................... 8
Determination of Net Asset Value .......................................... 9
Portfolio Trading ......................................................... 10
Taxes ..................................................................... 10
Service Plan .............................................................. 12
Custodian ................................................................. 13
Transfer and Dividend Paying Agent and Registrar .......................... 13
Performance Information ................................................... 13
Other Information ......................................................... 15
Auditors .................................................................. 16
Financial Statements ...................................................... 16

- --------------------------------------------------------------------------------

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV CLASSIC SENIOR FLOATING-RATE FUND (THE
"FUND") DATED MAY 1, 1996, AS SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT
OF ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS,
A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING THE FUND'S
PRINCIPAL UNDERWRITER, EATON VANCE DISTRIBUTORS, INC. (SEE BACK COVER FOR
ADDRESS AND PHONE NUMBER).

<PAGE>

GENERAL INFORMATION AND HISTORY
EV Classic Senior Floating-Rate Fund (the "Fund") is a closed-end, non-
diversified management investment company which continuously offers its shares
of beneficial interest to the public. The Fund was organized as a business
trust under the laws of the Commonwealth of Massachusetts on August 5, 1993,
as amended, and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund was originally called Eaton Vance Senior
Short-Term Trust and changed its name to EV Classic Senior Floating-Rate Fund
on December 7, 1994. The Fund's principal office is located at 24 Federal
Street, Boston, Massachusetts 02110.

ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital, by investing in a
portfolio primarily of senior secured floating rate loans. The Fund currently
seeks to achieve its investment objective by investing its assets in Senior
Debt Portfolio (the "Portfolio"), which has the same investment objective as
the Fund. The Fund is subject to the same investment policies as those of the
Portfolio. Capitalized terms used in this Statement of Additional Information
and not otherwise defined have the meanings given them in the Fund's
Prospectus.

Lending Fees. In the process of buying, selling and holding Loan Interests the
Portfolio may receive and/or pay certain fees. These fees are in addition to
interest payments received and may include facility fees, commitment fees,
commissions and prepayment penalty fees. When the Portfolio buys a Loan
Interest it may receive a facility fee and when it sells a Loan Interest it
may pay a facility fee. On an ongoing basis, the Portfolio may receive a
commitment fee based on the undrawn portion of the underlying line of credit
portion of a Loan. In certain circumstances, the Portfolio may receive a
prepayment penalty fee upon the prepayment of a Loan by a Borrower. Other fees
received by the Portfolio may include covenant waiver fees and covenant
modification fees.

Borrower Covenants. A Borrower must comply with various restrictive covenants
contained in a loan agreement or note purchase agreement between the Borrower
and the lender or lending syndicate (the "Loan Agreement"). Such covenants,
in addition to requiring the scheduled payment of interest and principal, may
include restrictions on dividend payments and other distributions to
stockholders, provisions requiring the Borrower to maintain specific minimum
financial ratios, and limits on total debt. In addition, the Loan Agreement
may contain a covenant requiring the Borrower to prepay the Loan with any free
cash flow. Free cash flow is generally defined as net cash flow after
scheduled debt service payments and permitted capital expenditures, and
includes the proceeds from asset dispositions or sales of securities. A breach
of a covenant which is not waived by the Agent, or by the lenders directly, as
the case may be, is normally an event of acceleration; i.e., the Agent, or the
lenders directly, as the case may be, has the right to call the outstanding
Loan. The typical practice of an Agent or a lender in relying exclusively or
primarily on reports from the Borrower may involve a risk of fraud by the
Borrower. In the case of a Loan Interest in the form of a participation
interest, the agreement between the buyer and seller may limit the rights of
the holder of the Loan Interest to vote on certain changes which may be made
to the Loan Agreement, such as waiving a breach of a covenant. However, the
holder of a Loan Interest will, in almost all cases, have the right to vote on
certain fundamental issues such as changes in principal amount, payment dates
and interest rate.

Administration of Loans. In a typical Loan the Agent administers the terms of
the Loan Agreement. In such cases, the Agent is normally responsible for the
collection of principal and interest payments from the Borrower and the
apportionment of these payments to the credit of all institutions which are
parties to the Loan Agreement. The Portfolio will generally rely upon the
Agent or an Intermediate Participant to receive and forward to the Portfolio
its portion of the principal and interest payments on the Loan. Furthermore,
unless under the terms of a Participation Agreement the Portfolio has direct
recourse against the Borrower, the Portfolio will rely on the Agent and the
other members of the lending syndicate to use appropriate credit remedies
against the Borrower. The Agent is typically responsible for monitoring
compliance with covenants contained in the Loan Agreement based upon reports
prepared by the Borrower. The seller of the Loan Interest usually does, but is
often not obligated to, notify holders of Loan Interests of any failures of
compliance. The Agent may monitor the value of the collateral and, if the
value of the collateral declines, may accelerate the Loan, may give the
Borrower an opportunity to provide additional collateral or may seek other
protection for the benefit of the participants in the Loan. The Agent is
compensated by the Borrower for providing these services under a Loan
Agreement, and such compensation may include special fees paid upon
structuring and funding the Loan and other fees paid on a continuing basis.
With respect to Loan Interests for which the Agent does not perform such
administrative and enforcement functions, the Portfolio will perform such
tasks on its own behalf, although a Collateral Bank will typically hold any
collateral on behalf of the Portfolio and the other lenders pursuant to the
applicable Loan Agreement.

A financial institution's appointment as Agent may usually be terminated
in the event that it fails to observe the requisite standard of care or
becomes insolvent, enters Federal Deposit Insurance Corporation ("FDIC")
receivership, or, if not FDIC insured, enters into bankruptcy proceedings. A
successor Agent would generally be appointed to replace the terminated Agent,
and assets held by the Agent under the Loan Agreement should remain available
to holders of Loan Interests. However, if assets held by the Agent for the
benefit of the Portfolio were determined to be subject to the claims of the
Agent's general creditors, the Portfolio might incur certain costs and delays
in realizing payment on a Loan Interest, or suffer a loss of principal and/or
interest. In situations involving Intermediate Participants similar risks may
arise.

Prepayments. The Loans in which the Portfolio acquires Loan Interests will
usually require, in addition to scheduled payments of interest and principal,
the prepayment of the Loan from free cash flow, as defined above. The degree
to which Borrowers prepay Loans, whether as a contractual requirement or at
their election, may be affected by general business conditions, the financial
condition of the Borrower and competitive conditions among lenders, among
others. As such, prepayments cannot be predicted with accuracy. Upon a
prepayment, either in part or in full, the actual outstanding debt on which
the Portfolio derives interest income will be reduced. However, the Portfolio
may receive both a prepayment penalty fee from the prepaying Borrower and a
facility fee upon the purchase of a new Loan Interest with the proceeds from
the prepayment of the former. Prepayments generally will not materially affect
the Fund's performance because the Portfolio should be able to reinvest
prepayments in other Loan Interests in floating rate Loans that have similar
or identical yields and because receipt of such fees may mitigate any adverse
impact on the Fund's yield.

Interest Rate Swaps. The Portfolio may enter into interest rate swaps on
either an asset-based or liability-based basis, depending on whether it is
hedging its assets or its liabilities. For example, if the Portfolio holds a
Loan Interest with an interest rate that is reset only once each year, it may
swap the right to receive interest at this fixed rate for the right to receive
interest at a rate that is reset daily. Such a swap position would offset
changes in the value of the Loan Interest because of subsequent changes in
interest rates. This would protect the Portfolio from a decline in the value
of the Loan Interest due to rising interest rates, but would also limit its
ability to benefit from falling interest rates.

The Portfolio will enter into interest rate swaps only on a net basis,
i.e., the two payment streams are netted out, with the Portfolio receiving or
paying, as the case may be, only the net amount of the two payments. Inasmuch
as these transactions are entered into for good faith hedging purposes and
because a segregated account will be used, the Portfolio will not treat them
as being subject to the Portfolio's borrowing restrictions. The net amount of
the excess, if any, of the Portfolio's obligations over its entitlements with
respect to each interest rate swap will be accrued on a daily basis and an
amount of cash or liquid high grade debt securities having an aggregate net
asset value at least equal to the accrued excess will be maintained in a
segregated account by the Portfolio's custodian. The Portfolio will not enter
into any interest rate swap unless the credit quality of the unsecured senior
debt or the claims-paying ability of the other party thereto is considered to
be investment grade by BMR. If there is a default by the other party to such a
transaction, the Portfolio will have contractual remedies pursuant to the
agreements related to the transaction. The swap market has grown substantially
in recent years with a large number of banks and investment banking firms
acting both as principals and as agents utilizing standardized swap
documentation. As a result, the swap market has become relatively liquid in
comparison with the markets for other similar instruments which are traded in
the interbank market.

The Portfolio may enter into interest rate swaps only with respect to
positions held in its portfolio. Interest rate swaps do not involve the
delivery of securities or other underlying assets or principal. Accordingly,
the risk of loss with respect to interest rate swaps is limited to the net
amount of interest payments that the Portfolio is contractually obligated to
make or receive. Since interest rate swaps are individually negotiated, the
Portfolio expects to achieve an acceptable degree of correlation between its
rights to receive interest on Loan Interests and its rights and obligations to
receive and pay interest pursuant to interest rate swaps.

Credit Risks. As of March 19, 1996, the Portfolio had a Loan Interest in a
Term Loan to Camelot Music, Inc. and pursuant to the closing of a
recapitalization effective May 31, 1995, the Portfolio had Loan Interests in
London Fog Industries, Inc. (collectively referred to as the "Companies")
which were carried on the books at less than par, although the Companies have
not defaulted on these loans.

In the last decade, the federal agencies that regulate banking
institutions subjected certain loans made in connection with highly leveraged
transactions to increased scrutiny during bank examinations. Such regulatory
action resulted in certain banks disposing of Loan Interests at low prices. If
such regulatory action became likely again, banks might decide to reduce the
amount of Loans to highly leveraged Borrowers, which might reduce the
availability of Loans suitable for the Portfolio's ownership. As of the date
of this Statement of Additional Information, such Loan Interests constituted
substantially all of the Portfolio's Loan Interests.

INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as
used in this Statement of Additional Information means the lesser of (a) 67%
of the shares of the Fund present or represented by proxy at a meeting if the
holders of more than 50% of the shares are present or represented at the
meeting or (b) more than 50% of the shares of the Fund. As a matter of
fundamental policy the Fund may not:

(1) Borrow money, except as permitted by the Investment Company Act of
1940;

(2) Issue senior securities, as defined in the Investment Company Act of
1940, other than (i) preferred shares which immediately after issuance will
have asset coverage of at least 200%, (ii) indebtedness which immediately
after issuance will have asset coverage of at least 300%, or (iii) the
borrowings permitted by investment restriction (1) above;

(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The purchase of Loan Interests, securities or other investment
assets with the proceeds of a permitted borrowing or securities offering will
not be deemed to be the purchase of securities on margin;

(4) Underwrite securities issued by other persons, except insofar as it
may technically be deemed to be an underwriter under the Securities Act of
1933 in selling or disposing of a portfolio investment;

(5) Make loans to other persons, except by (a) the acquisition of Loan
Interests, debt securities and other obligations in which the Fund is
authorized to invest in accordance with its investment objective and policies,
(b) entering into repurchase agreements, and (c) lending its portfolio
securities;

(6) Purchase any security if, as a result of such purchase, more than 25%
of the Fund's total assets (taken at current value) would be invested in the
securities of Borrowers and other issuers having their principal business
activities in the same industry (the electric, gas, water and telephone
utility industries, commercial banks, thrift institutions and finance
companies being treated as separate industries for the purpose of this
restriction); provided that there is no limitation with respect to obligations
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities;

(7) Purchase or sell real estate, although it may purchase and sell
securities which are secured by interests in real estate and securities of
issuers which invest or deal in real estate. The Fund reserves the freedom of
action to hold and to sell real estate acquired as a result of the ownership
of securities; or

(8) Purchase or sell physical commodities or contracts for the purchase or
sale of physical commodities. Physical commodities do not include futures
contracts with respect to securities, securities indices or other financial
instruments.

For the purpose of investment restrictions (1), (2) and (3) above and
nonfundamental investment policy (a) below, the arrangements (including
escrow, margin and collateral arrangements) made by the Fund with respect to
transactions in all types of options and futures contract transactions shall
not be considered to be (i) a borrowing of money or the issuance of securities
(including senior securities) by the Fund, (ii) a pledge of its assets, (iii)
the purchase of a security on margin, or (iv) a short sale or position. The
Fund has no present intention of engaging in options or futures transactions.

Although permitted pursuant to investment restriction (2), the Fund has no
present intention of issuing preferred shares.

For the purpose of investment restriction (6), the Fund will consider all
relevant factors in determining who is the issuer of the Loan Interest,
including: the credit quality of the Borrower, the amount and quality of the
collateral, the terms of the Loan Agreement and other relevant agreements
(including inter-creditor agreements), the degree to which the credit of such
interpositioned person was deemed material to the decision to purchase the
Loan Interest, the interest rate environment, and general economic conditions
applicable to the Borrower and such interpositioned person. In addition, with
respect to restriction (6) above, the Fund will construe the phrase "more than
25%" to be "25% or more".

Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest all or part of its investable assets in a management
investment company with substantially the same investment objective, policies
and restrictions as the Fund.

The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing numbered investment restrictions adopted by the
Fund; such restrictions cannot be changed without the approval of a "majority
of the outstanding voting securities" of the Portfolio, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the
outstanding voting securities of the Portfolio present or represented by proxy
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented at the meeting or (b)
more than 50% of the outstanding voting securities of the Portfolio. The term
"voting securities" as used in this paragraph has the same meaning as in the
1940 Act. Whenever the Fund is requested to vote on a change in the investment
restrictions of the Portfolio, the Fund will hold a meeting of Fund
shareholders and will cast its vote as instructed by the shareholders.

The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Fund without approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio without
the approval of the Fund or the Portfolio's other investors. As a matter of
nonfundamental policy, neither the Fund nor the Portfolio may: (a) make short
sales of securities or maintain a short position, unless at all times when a
short position is open it either owns an equal amount of such securities or
owns securities convertible into or exchangeable, without payment of any
further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short; (b) purchase oil, gas or other mineral
leases or purchase partnership interests in oil, gas or other mineral
exploration or development programs; or (c) invest more than 10% of its total
assets (taken at current value) in the securities of issuers which together
with any predecessors have a record of less than three years continuous
operation, except U.S. Government securities, securities of issuers which are
rated by at least one nationally recognized statistical rating organization,
municipal obligations and obligations issued or guaranteed by any foreign
government or its agencies or instrumentalities.

In addition, neither the Fund nor the Portfolio currently intends to
invest more than 10% of its total assets in Loans of any single Borrower.

Whenever an investment policy or investment restriction set forth in this
Statement of Additional Information states a maximum percentage of the Fund's
or the Portfolio's assets that may be invested in any security or other asset
or describes a policy regarding quality standards, such percentage limitation
or standard shall be determined immediately after and as a result of its
acquisition of such security or other asset. Accordingly, any later increase
or decrease resulting from a change in values, assets or other circumstances
will not compel the Fund or the Portfolio to dispose of such security or other
asset.

TRUSTEES AND OFFICERS
The Trustees and officers of the Fund and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. Unless otherwise noted,
the business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Portfolio's investment
adviser, Boston Management and Research ("BMR"), a wholly-owned subsidiary of
Eaton Vance Management ("Eaton Vance"); of Eaton Vance's parent, Eaton Vance
Corp. ("EVC"); and of BMR's and Eaton Vance's trustee, Eaton Vance, Inc.
("EV"). Eaton Vance and EV are both wholly-owned subsidiaries of EVC. Those
Trustees who are "interested persons" of the Fund, the Portfolio, BMR, Eaton
Vance, EVC or EV, as defined in the 1940 Act, by virtue of their affiliation
with any one or more of the Fund, the Portfolio, BMR, Eaton Vance, EVC or EV,
are indicated by an asterisk(*).

TRUSTEES OF THE FUND AND THE PORTFOLIO
JAMES B. HAWKES (54), President and Trustee*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and Director of EVC
and EV. Director or Trustee and officer of various investment companies
managed by Eaton Vance or BMR.

DONALD R. DWIGHT (65), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New
England, Inc., since 1983. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768

M. DOZIER GARDNER (62), Vice President and Trustee*
President and Chief Executive Officer of BMR, Eaton Vance and EV, and Director
of EVC and EV. Director or Trustee and officer of various investment
companies managed by Eaton Vance or BMR.

SAMUEL L. HAYES, III (61), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University, Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University, Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02134

NORTON H. REAMER (60), Trustee
President and Director -- United Asset Management Corporation, a holding
company owning institutional investment management firms. Chairman,
President and Director of UAM Funds (mutual funds). Director or Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110

JOHN L. THORNDIKE (69), Trustee
Director, Fiduciary Company Incorporated. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110

JACK L. TREYNOR (66), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274

OFFICERS OF THE FUND AND THE PORTFOLIO
JEFFREY S. GARNER (39), Vice President and Portfolio Manager
Vice President of BMR, Eaton Vance and EV.

WILLIAM CHISHOLM (35), Vice President of the Portfolio
Senior Trust Officer of IBT Trust Company (Cayman), Ltd. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Chisholm was elected
Vice President of the Portfolio on June 19, 1995.
Address: IBT Trust Company (Cayman) Ltd., The Bank of Nova Scotia Building,
P.O. Box 501, George Town, Grand Cayman, Cayman Islands, British West Indies

MICHEL NORMANDEAU (44), Vice President of the Portfolio
Assistant Manager -- Trust Services, IBT Trust Company (Cayman), Ltd. Officer
of various investment companies managed by Eaton Vance or BMR. Mr.
Normandeau was elected Vice President of the Portfolio on June 19, 1995.
Address: IBT Trust Company (Cayman) Ltd., The Bank of Nova Scotia Building,
P.O. Box 501, George Town, Grand Cayman, Cayman Islands, British West Indies

RAYMOND O'NEILL (34), Vice President of the Portfolio
Managing Director of IBT Trust and Custodian Services (Ireland) Limited since
January, 1995. Vice President, Atlantic Corporate Management Limited,
Warwick, Bermuda (1991-1994). Officer, The Bank of Bermuda Limited,
Hamilton, Bermuda (1987-1991). Officer of various investment companies
managed by Eaton Vance or BMR.
Address: Earlsfort Terrace, Dublin 2, Ireland

JAMES L. O'CONNOR (51), Treasurer
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.

THOMAS OTIS (64), Secretary
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of
various investment companies managed by Eaton Vance or BMR.

BARBARA E. CAMPBELL (38), Assistant Treasurer
Vice President of BMR, Eaton Vance and EV since January 17, 1992; employee of
Eaton Vance since October 23, 1991. Audit Manager -- Financial Services
Industry Practice, Deloitte & Touche (1987-1991). Officer of various
investment companies managed by Eaton Vance or BMR.

JANET E. SANDERS (60), Assistant Treasurer and Assistant Secretary
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.

A. JOHN MURPHY (33), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993) and Registration Specialist, Fidelity Management
& Research Co. (1986-1991). Officer of various investment companies managed
by Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the
Fund on March 27, 1995 and of the Portfolio on June 19, 1995.

ERIC G. WOODBURY (38), Assistant Secretary
Vice President of BMR, Eaton Vance and EV since February 1993; formerly,
associate attorney at Dechert, Price & Rhoads and Gaston & Snow. Mr.
Woodbury was elected Assistant Secretary on June 19, 1995.

Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Fund and of the Portfolio. The
Special Committee's functions include a continuous review of the Fund's
contractual relationship with the Administrator and the Portfolio's
contractual relationship with the Investment Adviser, making recommendations
to the Trustees regarding the compensation of those Trustees who are not
members of the Eaton Vance organization, and making recommendations to the
Trustees regarding candidates to fill vacancies, as and when they occur, in
the ranks of those Trustees who are not "interested persons" of the Fund, the
Portfolio, or the Eaton Vance organization.

Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee
of the Board of Trustees of the Fund and of the Portfolio. The Audit
Committee's functions include making recommendations to the Trustees regarding
the selection of the independent certified public accountants, and reviewing
with such accountants and the Treasurer of the Fund and of the Portfolio
matters relative to accounting and auditing practices and procedures,
accounting records, internal accounting controls, and the functions performed
by the custodian and transfer agent of the Fund and of the Portfolio.

The fees and expenses of those Trustees of the Fund and of the Portfolio
who are not members of the Eaton Vance organization (the noninterested
Trustees) are paid by the Fund and the Portfolio, respectively. (The Trustees
of the Fund and the Portfolio who are members of the Eaton Vance organization
receive no compensation from the Fund or the Portfolio). During the period
from the start of business, February 22, 1995 for the Portfolio, and February
24, 1995 for the Fund, to the fiscal year ended December 31, 1995, the
noninterested Trustees of the Fund and the Portfolio earned the following
compensation in their capacities as Trustees from the Fund and the Portfolio,
and, for the year ended December 31, 1995, earned the following compensation
in their capacities as Trustees of the other funds in the Eaton Vance fund
complex(1):

AGGREGATE
AGGREGATE COMPENSATION TOTAL COMPENSATION
COMPENSATION FROM FROM FUND AND
NAME FROM FUND PORTFOLIO FUND COMPLEX
- ---- ------------ ------------ ------------------
Donald R. Dwight ............. $342 $3,263(2) $135,000(4)
Samuel L. Hayes, III ......... 321 4,222(3) 150,000(5)
Norton H. Reamer ............. 321 4,203 135,000
John L. Thorndike ............ 326 4,325 140,000
Jack L. Treynor .............. 349 4,452 140,000
- ----------
(1) The Eaton Vance fund complex consists of 219 registered investment companies
or series thereof.
(2) Includes $1,103 of deferred compensation.
(3) Includes $1,141 of deferred compensation.
(4) Includes $35,000 of deferred compensation.
(5) Includes $33,750 of deferred compensation.

Trustees of the Portfolio who are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual fees
in accordance with the terms of a Trustees Deferred Compensation Plan (the
"Plan"). Under the Plan, an eligible Trustee may elect to have his deferred
fees invested by the Portfolio in the shares of one or more funds in the Eaton
Vance Family of Funds, and the amount paid to the Trustees under the Plan will
be determined based upon the performance of such investments. Deferral of
Trustees' fees in accordance with the Plan will have a negligible effect on
the Portfolio's assets, liabilities, and net income per share, and will not
obligate the Portfolio to retain the services of any Trustee or obligate the
Portfolio to pay any particular level of compensation to the Trustee. Neither
the Portfolio nor the Fund has a retirement plan for its Trustees.

Each interested Trustee and officer holds comparable positions with
certain affiliates of BMR or with certain other funds of which BMR or Eaton
Vance is the investment adviser or distributor.

Messrs. Chisholm, Normandeau and O'Neill are not U.S. residents. It may be
difficult to effect service of process within the U.S. or to realize judgments
of U.S. courts upon them. It is uncertain whether courts in other countries
would entertain original actions against them.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of March 15, 1996, the Trustees and officers of the Fund, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. To
the knowledge of the Fund, no person owned of record or beneficially 5% or
more of the Fund's outstanding shares as of such date.

INVESTMENT ADVISORY AND OTHER SERVICES
For a description of the compensation that the Portfolio pays BMR under
the Investment Advisory Agreement, see the Fund's current Prospectus. For the
period from the start of business, February 22, 1995, to the fiscal year ended
December 31, 1995, the Portfolio paid BMR advisory fees aggregating
$8,544,646, which was equal to 0.94% (annualized) of the Portfolio's average
daily gross assets for such period. As at December 31, 1995, the gross assets
of the Portfolio were $1,621,338,852. BMR's fee waiver described in the
Prospectus is indefinite, but could be removed or changed upon agreement of
BMR and the Portfolio's Board of Trustees at any time.

The Fund has engaged Eaton Vance to act as its administrator under an
Administration Agreement. For a description of the compensation the Fund pays
Eaton Vance under its Administration Agreement, see the Fund's current
Prospectus. For the period from the start of business, February 24, 1995, to
the fiscal year ended December 31, 1995, the Fund paid Eaton Vance an
administration fee of $433,285, which was equal to 0.25% (annualized) of the
average daily gross assets of the Portfolio attributable to the Fund for such
period.

IBT Trust Company (Cayman), Ltd. maintains the Portfolio's principal
office and certain of its records and provides administrative assistance in
connection with meetings of the Portfolio's Trustees and interestholders.

The Portfolio and the Fund, as the case may be, will each be responsible
for all of its respective costs and expenses not expressly stated to be
payable by BMR under the Advisory Agreement with the Portfolio, by Eaton Vance
under the Administration Agreement with the Fund or by EVD under its
Distribution Agreement with the Fund. Such costs and expenses to be borne by
the Portfolio and the Fund, as the case may be, include, without limitation:
custody and transfer agency fees and expenses, including those incurred for
determining net asset value and keeping accounting books and records; expenses
of pricing and valuation services; the cost of share certificates; membership
dues in investment company organizations; expenses of acquiring, holding and
disposing of securities and other investments; fees and expenses of
registering under the securities laws and governmental fees; expenses of
reports to shareholders and investors, proxy statements and other expenses of
shareholders' or investors' meetings; insurance premiums; printing and mailing
expenses; interest, taxes and corporate fees; legal and accounting expenses;
compensation and expenses of Trustees not affiliated with BMR or Eaton Vance;
expenses of conducting tender offers for the purpose of repurchasing Portfolio
interests or Fund shares; and investment advisory and administration fees.
The Portfolio and the Fund will also each bear expenses incurred in connection
with litigation in which the Portfolio or the Fund, as the case may be, is a
party and any legal obligation to indemnify its respective officers and
Trustees with respect thereto.

Commitments have been made to certain state securities authorities that
Eaton Vance will reimburse the Fund for certain expenses paid or incurred by
the Fund in any fiscal year of the Fund that exceeds the expense limitation
requirements of such states. These commitments may be amended or rescinded by
Eaton Vance in response to changes in the requirements of the various states
or for other reasons.

The Advisory Agreement and Administration Agreement will remain in effect
until February 28, 1997. The Portfolio's Advisory Agreement may be continued
from year to year thereafter so long as such continuance after February 28,
1997 is approved at least annually (i) by the vote of a majority of the
Trustees of the Portfolio who are not "interested persons" of the Portfolio or
BMR cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the Trustees of the Portfolio or by vote of a
majority of the outstanding interests of the Portfolio. The Fund's
Administration Agreement may be continued from year to year after February 28,
1997 so long as such continuance is approved annually by the vote of a
majority of the Fund's Trustees. Each agreement may be terminated at any time
without penalty on sixty (60) days' written notice by the Trustees of the Fund
or the Portfolio, as the case may be, BMR or Eaton Vance, as applicable, or by
vote of the majority of the outstanding shares of the Fund or interests of the
Portfolio, as the case may be. Each agreement will terminate automatically in
the event of its assignment. Each agreement provides that, in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties to the Fund or the Portfolio under such agreements on
the part of Eaton Vance or BMR, as applicable, Eaton Vance or BMR will not be
liable to the Fund or the Portfolio, as applicable, for any loss incurred.

BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are
both wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both
Massachusetts business trusts, and EV is the trustee of BMR and Eaton Vance.
The Directors of EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier
Gardner, James B. Hawkes and Benjamin A. Rowland, Jr. The Directors of EVC
consist of the same persons and John G. L. Cabot and Ralph Z. Sorenson. Mr.
Clay is chairman and Mr. Gardner is president and chief executive officer of
EVC, BMR, Eaton Vance and EV. All of the issued and outstanding shares of
Eaton Vance and EV are owned by EVC. All of the issued and outstanding shares
of BMR are owned by Eaton Vance. All shares of the outstanding Voting Common
Stock of EVC are deposited in a Voting Trust which expires on December 31,
1996, the Voting Trustees of which are Messrs. Clay, Brigham, Gardner, Hawkes
and Rowland. The Voting Trustees have unrestricted voting rights for the
election of Directors of EVC. All of the outstanding voting trust receipts
issued under said Voting Trust are owned by certain of the officers of BMR and
Eaton Vance who are also officers and Directors of EV and EVC. As of March 31,
1996, Messrs. Clay, Gardner and Hawkes each owned 24% of such voting trust
receipts, and Messrs. Rowland and Brigham owned 15% and 13%, respectively, of
such voting trust receipts. Messrs. Gardner, Hawkes and Otis are officers or
Trustees of the Fund and the Portfolio and are members of the EVC, BMR, Eaton
Vance and EV organizations. Messrs. Garner, Murphy, O'Connor and Woodbury and
Ms. Campbell and Ms. Sanders are officers of the Fund and the Portfolio and
are members of the BMR, Eaton Vance and EV organizations. BMR will receive the
fees paid under the Advisory Agreement and Eaton Vance will receive the fees
paid under the Administration Agreement, and its wholly-owned subsidiary,
Eaton Vance Distributors, Inc., as Principal Underwriter, will receive the
early withdrawal charges payable upon the repurchase of shares of the Fund.

EVC owns all of the stock of Energex Energy Corporation, which engages in
oil and gas exploration and development. Eaton Vance owns all of the stock of
Northeast Properties, Inc., which is engaged in real estate investment. EVC
also owns 24% of the Class A shares of Lloyd George Management (B.V.I.)
Limited, a registered investment adviser. EVC owns all of the stock of Fulcrum
Management, Inc. and MinVen Inc., which are engaged in precious metal mining
venture investment and management. EVC, Eaton Vance, BMR and EV may also enter
into other businesses.

EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund and
the Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion
that the terms and conditions of such transactions were not and will not be
influenced by existing or potential custodial or other relationships between
the Fund or the Portfolio and such banks.

DETERMINATION OF NET ASSET VALUE
Each investor in the Portfolio, including the Fund, may add to its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying
the net asset value of the Portfolio by the percentage, determined on the
prior Portfolio Business Day, which represented that investor's share of the
aggregate interests in the Portfolio on such prior day. Any additions or
withdrawals (which would be made pursuant to Portfolio tender offers) for the
current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interest in the Portfolio will then be recomputed
as a percentage equal to the fraction (i) the numerator of which is the value
of such investor's investment in the Portfolio as of the Portfolio Valuation
Time on the prior Portfolio Business Day plus or minus, as the case may be,
the amount of any additions to or withdrawals from the investor's investment
in the Portfolio on the current Portfolio Business Day and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of
the Portfolio Valuation Time on the prior Portfolio Business Day plus or
minus, as the case may be, the amount of the net additions to or withdrawals
from the aggregate investment in the Portfolio on the current Portfolio
Business Day by all investors in the Portfolio. The percentage so determined
will then be applied to determine the value of the investor's interest in the
Portfolio for the current Portfolio Business Day.

Non-Loan Portfolio holdings (other than short term obligations, but
including listed issues) may be valued on the basis of prices furnished by one
or more pricing services which determine prices for normal, institutional-size
trading units of such securities using market information, transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders. In certain circumstances,
portfolio securities will be valued at the last sale price on the exchange
that is the primary market for such securities, or the average of the last
quoted bid price and asked price for those securities for which the over-the-
counter market is the primary market or for listed securities in which there
were no sales during the day. The value of interest rate swaps will be
determined in accordance with a discounted present value formula and then
confirmed by obtaining a bank quotation.

Short-term obligations which mature in 60 days or less are valued at
amortized cost, if their original term to maturity when acquired by the
Portfolio was 60 days or less, or are valued at amortized cost using their
value on the 61st day prior to maturity, if their original term to maturity
when acquired by the Portfolio was more than 60 days, unless in each case this
is determined not to represent fair value. Repurchase agreements will be
valued by the Portfolio at cost plus accrued interest. Securities for which
there exist no price quotations or valuations and all other assets are valued
at fair value as determined in good faith by or on behalf of the Trustees of
the Portfolio.

PORTFOLIO TRADING
Specific decisions to purchase or sell securities for the Portfolio are
made by employees of BMR who are appointed and supervised by its senior
officers. Such employees may serve other clients of BMR in a similar capacity.
Changes in the Portfolio's investments are reviewed by the Board.

The Portfolio will acquire Loan Interests from major international banks,
selected domestic regional banks, insurance companies, finance companies and
other financial institutions. In selecting financial institutions from which
Loan Interests may be acquired, BMR will consider, among other factors, the
financial strength, professional ability, level of service and research
capability of the institution. While these financial institutions are
generally not required to repurchase Loan Interests which they have sold, they
may act as principal or on an agency basis in connection with the Portfolio's
disposition of Loan Interests.

Other fixed-income obligations which may be purchased and sold by the
Portfolio are generally traded in the over-the-counter market on a net basis
(i.e., without commission) through broker-dealers or banks acting for their
own account rather than as brokers, or otherwise involve transactions directly
with the issuers of such obligations. Such firms attempt to profit from such
transactions by buying at the bid price and selling at the higher asked price
of the market for such obligations, and the difference between the bid and
asked price is customarily referred to as the spread. The Portfolio may also
purchase fixed-income and other securities from underwriters, the cost of
which may include undisclosed fees and concessions to the underwriters. While
it is anticipated that the Portfolio will not pay significant brokerage
commissions, on occasion it may be necessary or desirable to purchase or sell
a security through a broker on an agency basis, in which case the Portfolio
will incur a brokerage commission. Although spreads or commissions on
portfolio transactions will, in the judgment of BMR, be reasonable in relation
to the value of the services provided, spreads or commissions exceeding those
which another firm might charge may be paid to firms who were selected to
execute transactions on behalf of the Portfolio and BMR's other clients for
providing brokerage and research services to BMR. The Portfolio will not
purchase securities from its affiliates in principal transactions. The
Portfolio paid no brokerage commissions during the period from the start of
business, February 22, 1995, to the fiscal year ended December 31, 1995.

The frequency of portfolio purchases and sales, known as the "turnover
rate," will vary from year to year. It is anticipated that the Portfolio's
turnover rate will be between 50% and 100%.

Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates.
Subject to applicable laws and regulations, BMR will attempt to allocate
equitably portfolio transactions among the Portfolio and the portfolios of its
other investment accounts whenever decisions are made to purchase or sell
securities by the Portfolio and one or more of such other accounts
simultaneously. In making such allocations, the main factors to be considered
are the respective investment objectives of the Portfolio and such other
accounts, the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment by the Portfolio and such
accounts, the size of investment commitments generally held by the Portfolio
and such accounts and the opinions of the persons responsible for recommending
investments to the Portfolio and such accounts. While this procedure could
have a detrimental effect on the price or amount of the securities available
to the Portfolio from time to time, it is the opinion of the Trustees of the
Fund and the Portfolio that the benefits available from the BMR organization
outweigh any disadvantage that may arise in simultaneous transactions.

TAXES
The Fund has elected to be treated, and intends to qualify each year, as a
regulated investment company ("RIC") under the Code. Accordingly, the Fund
intends to satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute its net investment income and
net realized capital gains in accordance with the timing requirements imposed
by the Code, so as to avoid any federal income or excise tax on the Fund. The
Fund so qualified for its taxable year ended December 31, 1995 (see the Notes
to the Financial Statements incorporated by reference in this Statement of
Additional Information). Because the Fund invests its assets in the Portfolio,
the Portfolio normally must satisfy the applicable source of income and
diversification requirements in order for the Fund to satisfy them. The
Portfolio will allocate at least annually among its investors, including the
Fund, each investor's distributive share of the Portfolio's net investment
income, net realized capital gains, and any other items of income, gain, loss,
deduction or credit. The Portfolio will make allocations to the Fund in
accordance with the Code and applicable regulations and will make monies
available for withdrawal at appropriate times (provided that any Portfolio
tender offers are consistent with any Fund tender offers) and in sufficient
amounts to enable the Fund to satisfy the tax distribution requirements that
apply to the Fund and that must be satisfied in order to avoid federal income
and/or excise tax on the Fund. For purposes of applying the requirements of
the Code regarding qualification as a RIC, the Fund will be deemed (i) to own
its proportionate share of each of the assets of the Portfolio and (ii) to be
entitled to the gross income of the Portfolio attributable to such share.

In order to qualify as a RIC for any taxable year, the Fund must, among
other things, (i) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of securities, and certain other related income; (ii) derive
less than 30% of its gross income from gains from the sale or other
disposition of securities held less than three months; and (iii) diversify its
investments so that at the close of each quarter of its taxable year (x) at
least 50% of the market value of the Fund's total assets is represented by
cash and cash items, U.S. Government securities, securities of other regulated
investment companies and other securities limited in respect of any one issuer
to not more than 5% of the value of the Fund's total assets and not more than
10% of the voting securities of such issuer, and (y) not more than 25% of the
value of the Fund's total assets is invested in the securities (other than
U.S. Government securities and securities of other regulated investment
companies) of any one issuer, or of two or more issuers controlled by the Fund
and engaged in the same, similar or related trades or businesses. For purposes
of these requirements, Loan Interests will be treated as securities, and the
issuer will be identified on the basis of market risk and credit risk
associated with any particular interest. Certain payments received by the
Portfolio, such as commitment fees, may not be treated as qualifying income
under the 90% requirement described above.

The federal income tax rules governing the taxation of interest rate swaps
are not entirely clear and may require the Fund to treat payments received by
the Portfolio under such arrangements as ordinary income and to amortize such
payments under certain circumstances. The Portfolio will limit its activity in
this regard in order to enable the Fund to maintain its qualification as a
RIC.

In order to avoid federal excise tax, the Code requires that the Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year
period ending on October 31 of such year or, by election, December 31 of such
year, after reduction by any available capital loss carryforwards, and 100% of
any income from the prior year (as previously computed) that was not paid out
during such year and on which the Fund paid no federal income tax.

Any loss realized upon a taxable disposition of shares with a tax holding
period of six months or less will be treated as a long-term capital loss to
the extent of any amounts treated by shareholders as long-term capital gains
with respect to such shares. All or a portion of any loss realized upon a
taxable disposition of Fund shares may be disallowed under "wash sale" rules
if other Fund shares are purchased within 30 days before or after such
disposition.

Certain investments of the Portfolio may bear original issue discount or
market discount for tax purposes. The Fund will be required to include in
income each year a portion of such original issue discount and may elect to
include in income each year a portion of such market discount. The Portfolio
may have to dispose of investments that it would otherwise have continued to
hold in order to provide cash to enable the Fund to satisfy its distribution
requirements with respect to such income.

Distributions by the Fund may result in a reduction in the fair market
value of the Fund's shares. Should a distribution reduce the fair market value
below a shareholder's cost basis, such distribution nevertheless would be
taxable to the shareholder as ordinary income or capital gain, even though,
from an investment standpoint, it may constitute a partial return of the
purchase price. In particular, investors should be careful to consider the tax
implications of buying shares just prior to a distribution. The price of
shares purchased at that time includes the amount of any forthcoming
distribution, and such investors will then receive a distribution representing
a return of a portion of their investment which will nevertheless be taxable
to them.

Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number
and certain required certifications, as well as shareholders with respect to
whom the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of federal income tax from the
Fund's dividends and other distributions (including the proceeds received upon
acceptance of any tender offer) at a rate of 31%. An individual's taxpayer
identification number is generally his or her social security number.

Nonresident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on distributions from ordinary income and the excess of net short-term
capital gain over net long-term capital loss unless the tax is reduced or
eliminated by an applicable tax treaty. Distributions from the excess of net
long-term capital gain over net short-term capital loss received by such
shareholders and any amount treated as gain from the sale or other disposition
of shares of the Fund generally will not be subject to U.S. taxation, provided
that nonresident alien status has been certified by the shareholder. Different
U.S. tax consequences may result if the shareholder is engaged in a trade or
business in the United States or is present in the United States for a
sufficient period of time during a taxable year to be treated as a U.S.
resident. Foreign shareholders should consult their tax advisers regarding the
U.S. and foreign tax consequences of an investment in the Fund.

The Portfolio may be subject to foreign withholding taxes with respect to
income on certain loans to foreign Borrowers. As not more than 50% of the
value of the Fund's total assets taking into account its allocable share of
the Portfolio's total assets at the close of any taxable year of the Fund will
consist of loans to foreign borrowers, the Fund will not be eligible to pass
through to shareholders their proportionate share of foreign taxes paid by the
Portfolio and allocated to the Fund, with the result that shareholders will
not include in income, and will not be entitled to take any foreign tax
credits or deductions for, foreign taxes paid by the Portfolio and allocated
to the Fund. However, the Fund may deduct such taxes in calculating its
distributable income earned by the Portfolio and allocated to the Fund. These
taxes may be reduced or eliminated under the terms of an applicable U.S.
income tax treaty.

The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as retirement plans, tax-exempt
entities, insurance companies and financial institutions. Shareholders should
consult their own tax advisers with respect to special tax rules that may
apply in their particular situations, as well as the state, local or foreign
tax consequences of investing in the Fund.

SERVICE PLAN
In addition to the fees and expenses described herein under "Investment
Advisory and Other Services," the Fund has adopted a Service Plan (the "Plan")
designed to meet the service fee requirements of the sales charge rule of the
National Association of Securities Dealers, Inc., as if such rule were
applicable. The Plan has been approved by the Independent Trustees of the
Fund, who have no direct or indirect financial interest in the Plan, and by
all of the Trustees of the Fund.

The Plan provides that the Fund may make payments of service fees for
personal services and/or the maintenance of shareholder accounts to the
Principal Underwriter and Authorized Firms and other persons in amounts not
exceeding .25% of the Fund's average daily net assets for any fiscal year. The
Trustees of the Fund have initially implemented the Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .15% of the Fund's average
daily net assets for each fiscal year. For the period from the start of
business, February 24, 1995, to the fiscal year ended December 31, 1995,
$267,727 in such fees were accrued, which was equal to .15% (annualized) of
the Fund's average daily net assets.

The Plan remains in effect through and including April 28, 1997, and shall
continue in effect indefinitely thereafter for so long as such continuance is
approved at least annually by the vote of both a majority of (i) the Trustees
of the Fund who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Plan Trustees") and (ii) all of the Trustees then in
office cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan. The Plan may not be amended to increase materially the
payments described herein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees
of the Fund in the manner described above. The Plan may be terminated any time
by vote of a majority of the Plan Trustees or by a vote of a majority of the
outstanding voting securities of the Fund. Under the Plan, the President or a
Vice President of the Fund shall provide to the Trustees for their review,
and the Trustees shall review at least quarterly, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.

So long as the Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not such interested persons. The Trustees
have determined that in their judgment there is a reasonable likelihood that
the Plan will benefit the Fund and its shareholders.

CUSTODIAN
IBT, 89 South Street, Boston, Massachusetts, acts as custodian for the
Fund and the Portfolio. IBT has the custody of all cash and securities
representing the Fund's interest in the Portfolio, has custody of all the
Portfolio's assets, and its subsidiary, IBT Fund Services (Canada) Inc., 1
First Canadian Place, King Street West, Toronto, Ontario, Canada, maintains
the general ledgers of the Portfolio and the Fund and computes the daily net
asset value of interests in the Portfolio and the net asset value of shares of
the Fund. In its capacity as custodian, IBT attends to details in connection
with the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges custody fees based on a percentage of Fund and
Portfolio assets which are competitive within the industry. These fees are
then reduced by a credit for cash balances of the particular investment
company at the custodian equal to 75% of the 91-day, U.S. Treasury Bill
auction rate applied to the particular investment company's average daily
collected balances for the week. Landon T. Clay, a Director of EVC and an
officer, Trustee or Director of other entities in the Eaton Vance
organization, owns approximately 13% of the voting stock of Investors
Financial Services Corp., the holding parent company of IBT. Management
believes that such ownership does not create an affiliated person relationship
between the Fund or the Portfolio and IBT under the 1940 Act.

TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR
First Data Investor Services Group serves with respect to the shares as
transfer and dividend paying agent and as registrar. The principal business
address of First Data Investor Services Group is One Exchange Place, Boston,
Massachusetts 02104.

PERFORMANCE INFORMATION
The Fund's current yield for the one-month period ended December 31, 1995
was 7.14%. The Fund's effective yield for the one-month period ended December
31, 1995 was 7.38%. Yields will fluctuate from time to time and are not
necessarily representative of future results.

The table below indicates the cumulative and average annual total return
on a hypothetical investment of $1,000 in the Fund covering the period from
August 4, 1989 through December 31, 1995 and for the one- and five-year
periods ended December 31, 1995. The total return for the period prior to the
Fund's commencement of operations, February 24, 1995, reflects the Portfolio's
total return (or that of its predecessor) adjusted to reflect any applicable
Fund sales charge. Total return for this time period has not been adjusted to
reflect the Fund's service fees and certain other expenses. If such
adjustments were made, the performance would have been lower.

<TABLE>
VALUE OF A $1,000 INVESTMENT

VALUE OF
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT TOTAL RETURN
PERIOD DATE INVESTMENT ON 12/31/95 CUMULATIVE ANNUALIZED
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Life of the Fund 8/4/89 $1,000 $1,558.30 55.83% 7.17%
5 Years Ended 12/31/95 12/31/90 $1,000 $1,372.62 37.26% 6.53%
1 Year Ended 12/31/95 12/31/94 $1,000 $1,073.63 7.36% 7.36%
</TABLE>

Past performance is not indicative of future results. Investment return
and principal value will fluctuate and shares, when redeemed, may be worth
more or less than their original cost.

The calculation of total return, current yield and effective yield does
not reflect the imposition of any early withdrawal charges or the amount of
any shareholder income tax liability. The total return for the period prior to
the Fund's commencement of operations reflects the Portfolio's total return
(or that of its predecessor). Such performance has not been adjusted to
reflect the Fund's service fees and certain other internal expenses. If such
an adjustment were made, the performance would be lower. Information about the
performance of the Fund or other investments should not be considered a
representation of future performance the Fund may earn or what an investor's
yield or total return may be in the future.

Total Return Performance...
A $100,000 investment in EV Classic Senior Floating-Rate Fund at the Portfolio's
inception, Aug. 4, 1989, would have grown to $155,828 on December 31, 1995.

prime rate
reserves
start $100000
8/89 100614
9/89 100614
10/89 102039
11/89 102786
12/89 103586
1/90 104406
2/90 105158
3/90 105997
4/90 106823
5/90 107691
6/90 108541
7/90 109425
8/90 110317
9/90 111185
10/90 112088
11/90 112858
12/90 113528
1/91 114292
2/91 115029
3/91 115852
4/91 116631
5/91 117396
6/91 118114
7/91 118851
8/91 119593
9/91 120293
10/91 120997
11/91 121663
12/91 122335
1/92 122823
2/92 123378
3/92 123973
4/92 124553
5/92 125134
6/92 125758
7/92 126319
8/92 127001
9/92 127899
10/92 128305
11/92 129077
12/92 129897
1/93 130463
2/93 130560
3/93 130840
4/93 131761
5/93 132572
6/93 133262
7/93 133693
8/93 134532
9/93 135234
10/93 135580
11/93 136178
12/93 136834
1/94 137407
2/94 137943
3/94 138124
4/94 138568
5/94 139227
6/94 140025
7/94 140719
8/94 140897
9/94 141645
10/94 142631
11/94 143481
12/94 145146
1/95 146135
2/95 146427
3/95 147588
4/95 148359
5/95 149314
6/95 150244
7/95 151194
8/95 152119
9/95 153020
10/95 153985
11/95 154889
12/95 155828

The chart reflects total return (change in net asset value with all
distributions reinvested) in a hypothetical investment of $100,000 at 8/4/89.
Total return prior to the Fund's commencement of operations reflects the
Portfolio's total return (or that of its predecessor). Such performance has not
been adjusted to reflect the fund's distribution fees and/or service fees and
certain other expenses. If such adjustments were made, the performance would
have been lower. Results do not include the Fund's early withdrawal charge. Past
performance is not indicative of future results. Investment return and principal
value will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. Sources: Eaton Vance Management, The Wall Street
Journal.

Comparative information about the Fund's yield and total return, about the
Prime Rate and about average rates of return on certificates of deposit, bank
money market deposit accounts, money market mutual funds and other short-term
investments may also be included in advertisements and communications of the
Fund. A bank certificate of deposit, unlike the Fund's shares, pays a fixed
rate of interest and entitles the depositor to receive the face amount of the
certificate of deposit at maturity. A bank money market deposit account is a
form of savings account which pays a variable rate of interest. Unlike the
Fund's shares, bank certificates of deposit and bank money market deposit
accounts are ordinarily insured by the Federal Deposit Insurance Corporation.
A money market mutual fund is designed to maintain a constant value of $1.00
per share and, thus, a money market fund's shares are ordinarily subject to
less price fluctuation than the Fund's shares.

For the period January 1, 1980 through December 31, 1995 the national
average prime rate exceeded the average yield of money market mutual funds and
the average yield of 3-month bank CDs. Such amounts for each year are as
follows:

<TABLE>
<CAPTION>
Average prime rate over money market funds: Average prime rate over 3-month bank CDs:

Sources: Federal Reserve Bank, Donoghue's Money Fund Averages, and Rate Gram
and The Wall Street Journal.

From time to time, advertisements and other material furnished to present and
prospective shareholders may include information on the history of the Fund's
net asset value per share. From inception through December 31, 1995, the high
was $10.00 (on August 30 through October 26, 1993 and February 1 through April
3, 1995) and the low was $9.91 (from February 3 through August 26, 1992). Such
materials may include illustrations such as the following chart:

Principal performance......
Month-end share value history
month end nav
start 9.96
August 89 9.96
September 9.96
October 9.96
November 9.96
December 89 9.96
January 9.96
February 9.96
March 9.96
April 9.96
May 9.96
June 9.96
July 9.96
August 9.96
September 9.96
October 9.96
November 9.95
December 90 9.94
January 9.92
February 9.92
March 9.92
April 9.92
May 9.92
June 9.92
July 9.92
August 9.92
September 9.92
October 9.92
November 9.92
December 91 9.92
January 9.92
February 9.91
March 9.91
April 9.91
May 9.91
June 9.91
July 9.91
August 9.91
September 9.93
October 9.96
November 9.96
December 92 9.97
January 9.98
February 9.96
March 9.95
April 9.96
May 9.97
June 9.99
July 9.98
August 9.98
September 10.00
October 10.00
November 9.99
December 93 9.99
January 9.98
February 9.99
March 9.97
April 9.96
May 9.95
June 9.95
July 9.95
August 9.93
September 9.93
October 9.92
November 9.93
December 94 9.95
January 9.98
February 10.00
March 10.00
April 9.99
May 9.99
June 9.99
July 9.99
August 9.99
September 9.99
October 9.99
November 9.99
December 95 9.99
Low $9.91
High $10.00

Chart shows the Fund's month-end net asset value per share for the Fund from the
Portfolio's inception (8/4/89) to 12/31/95. Net asset values prior to the Fund's
commencement of operations reflect the Portfolio's share values (or that of its
predecessor). Past performance is not indicative of future results.

Advertisements about the Fund may include a comparison of loan interests
and other corporate debt instruments. These may describe the credit agreements
used in connection with loan interests. Moreover, the markets for loan
interests may be described.

BMR was one of the first investment management firms to manage a portfolio
of loan interests. BMR has former commercial bank lending officers and
investment bank corporate finance officers dedicated to this investment
discipline. The services of leading law and accounting firms are used in the
research, analysis and management process.

The Fund may provide information about Eaton Vance, its affiliates and
other investment advisers to the funds in the Eaton Vance Family of Funds in
sales material or advertisements provided to investors or prospective
investors. Such material or advertisements may also provide information on the
use of investment professionals by such investors.

OTHER INFORMATION

The Fund is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Fund's Declaration of Trust, as amended,
contains an express disclaimer of shareholder liability in connection with the
Fund property or the acts, obligations or affairs of the Fund. The Declaration
of Trust also provides for indemnification out of the Fund property of any
shareholder held personally liable for the claims and liabilities to which a
shareholder may become subject by reason of being or having been a
shareholder. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Fund
itself is unable to meet its obligations. The Fund has been advised by its
counsel that the risk of any shareholder incurring any liability for the
obligations of the Fund is extremely remote.

The Fund's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; but nothing in the
Declaration of Trust protects a Trustee against any liability to the Fund or
its shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. Voting rights are not cumulative, which
means that the holders of more than 50% of the shares voting for the election
of Trustees can elect 100% of the Trustees and, in such event, the holders of
the remaining less than 50% of the shares voting on the matter will not be
able to elect any Trustees. As permitted by Massachusetts law, there will
normally be no meetings of Fund shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders. In such an event, the
Trustees of the Fund then in office will call a shareholders' meeting for the
election of Trustees. Except for the foregoing circumstances, the Trustees
shall continue to hold office and may appoint successor Trustees.

The Fund's by-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him
from that office either by a written declaration filed with the Fund's
custodian or by votes cast at a meeting called for that purpose. The by-laws
further provide that the Trustees of the Fund shall promptly call a meeting of
the shareholders for the purpose of voting upon a question of removal of any
such Trustee or Trustees when requested in writing so to do by the record
holders of not less than 10 per centum of the outstanding shares.

In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by investors. In such an event, the Trustees of the
Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action
of the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.

The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding
interests have removed him from that office either by a written declaration
filed with the Portfolio's custodian or by votes cast at a meeting called for
that purpose. The Declaration of Trust further provides that under certain
circumstances the investors may call a meeting to remove a Trustee and that
the Portfolio is required to provide assistance in communicating with
investors about such a meeting.

The Fund's Prospectus and Statement of Additional Information do not
contain all of the information set forth in the Registration Statement that
the Fund has filed with the Securities and Exchange Commission. The complete
Registration Statement may be obtained from the Securities and Exchange
Commission upon payment of the fee prescribed by its Rules and Regulations.

AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts, are the
independent accountants for the Fund, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation
of filings with the Securities and Exchange Commission. Deloitte & Touche,
Grand Cayman, Cayman Islands, British West Indies, are the independent
accountants for the Portfolio.

FINANCIAL STATEMENTS
The financial statements of the Fund and the Portfolio, which are included
in the Fund's Annual Report to Shareholders, are incorporated by reference
into this Statement of Additional Information and have been so incorporated in
reliance on the report of Deloitte & Touche LLP, independent certified public
accountants, as experts in accounting and auditing. A copy of the Fund's most
recent Annual Report accompanies this Statement of Additional Information.

Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio for the fiscal year ended December 31, 1995 as
previously filed electronically with the Securities and Exchange Commission
(Accession No. 0000950156-96-000302).

<PAGE>

[Logo]
EATON VANCE
=============== EV CLASSIC
Mutual Funds SENIOR FLOATING-RATE FUND
- --------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 1996

EV CLASSIC
SENIOR FLOATING-RATE FUND
24 FEDERAL STREET
BOSTON, MA 02110
- --------------------------------------------------------------------------------
INVESTMENT ADVISER OF SENIOR DEBT PORTFOLIO
Boston Management and Research, 24 Federal Street, Boston, MA 02110

ADMINISTRATOR OF EV CLASSIC SENIOR FLOATING-RATE FUND
Eaton Vance Management, 24 Federal Street, Boston, MA 02110

PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265

CUSTODIAN
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111

TRANSFER AGENT
First Data Investor Services Group, BOS725, P.O. Box 1559, Boston, MA 02104
(800) 262-1122

AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110

BANKING COUNSEL
Mayer, Brown & Platt, 787 Seventh Avenue, New York, NY 10019

C-SFRSAI
<PAGE>
PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(1) FINANCIAL STATEMENTS:

INCLUDED IN PART A:

Financial Highlights for the period from the start of
business, February 24, 1995, to December 31, 1995

INCLUDED IN PART B:

INCORPORATED BY REFERENCE TO THE ANNUAL REPORT DATED DECEMBER
31, 1995 (ACCESSION NO. 0000950156-96-000302), FILED
ELECTRONICALLY PURSUANT TO SECTION 30(B)(2) OF THE INVESTMENT
COMPANY ACT OF 1940.

Financial Statements for EV CLASSIC SENIOR FLOATING-RATE
FUND:

Statement of Assets and Liabilities as of December 31,
1995

Statement of Operations for the period from the start of
business, February 24, 1995, to December 31, 1995

Statement of Changes in Net Assets for the period from
the start of business, February 24, 1995, to December
31, 1995

Statement of Cash Flows for the period from the start of
business, February 24, 1995, to December 31, 1995

Financial Highlights for the period from the start of
business, February 24, 1995, to December 31, 1995

Notes to Financial Statements

Independent Auditors' Report

Financial Statements for SENIOR DEBT PORTFOLIO:

Portfolio of Investments as of December 31, 1995

Statement of Assets and Liabilities as of December 31,
1995

Statement of Operations for the period from the start of
business, February 22, 1995, to December 31, 1995

Statement of Cash Flows for the period from the start of
business, February 22, 1995, to December 31, 1995

Statement of Changes in Net Assets for the period from
the start of business, February 22, 1995, to December
31, 1995

Supplementary Data for the period from the start of
business, February 22, 1995, to December 31, 1995

Notes to Financial Statements

Independent Auditors' Report

<PAGE>

(2) EXHIBITS:

(a) Amended and Restated Agreement and Declaration of Trust dated December
7, 1994 filed as Exhibit (a) to the Registration Statement under the
Securities Act of 1933 (1933 Act File No. 33-64321) and Amendment No. 5
to the Registration Statement under the Investment Company Act of 1940
(1940 Act File No. 811-07946) filed with the Commission on November 16,
1995 (Amendment No. 5) and incorporated herein by reference.

(b) Amended and Restated By-Laws filed as Exhibit (b) to Amendment No. 5 and
incorporated herein by reference.

(d) Not applicable

(e) Not applicable

(f) Not applicable

(g) Not applicable

(h) (a) Distribution Agreement dated February 22, 1995 filed as Exhibit
(h)(a) to the Registration Statement under the Securities Act of
1933 (1933 Act File No. 33- 59143) and Amendment No. 3 to the
Registration Statement under the Investment Company Act of 1940
(1940 Act File No. 811-07946) filed with the Commission on May 5,
1995 (Amendment No. 3) and incorporated herein by reference.

(b) Selling Group Agreement between Eaton Vance Distributors, Inc. and
Authorized Dealers filed as Exhibit (6)(b) to Post-Effective
Amendment No. 61 to the Registration Statement of Eaton Vance Growth
Trust (File Nos. 2-22019 and 811-1241) and incorporated herein by
reference.

(c) Schedule of Dealer Discounts and Sales Charges filed as Exhibit
(6)(c) to Post- Effective Amendment No. 59 to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019 and
811-1241) and incorporated herein by reference.

(i) The Securities and Exchange Commission has granted the Registrant an
exemptive order that permits the Registrant to enter into deferred
compensation arrangements with its independent Trustees. See in the
Matter of Capital Exchange Fund, Inc., Release No. IC-20671 (November 1,
1994).

(j) (a) Custodian Agreement dated February 22, 1995 filed as Exhibit (j) to
Amendment No. 5 and incorporated herein by reference. (b) Amendment
to Custodian Agreement dated October 23, 1995 filed herewith.

(k) (a) Administration Agreement dated February 22, 1995 filed as Exhibit
(k)(a) to Amendment No. 3 and incorporated herein by reference.

(b) Service Plan dated February 22, 1995 filed as Exhibit (k)(b) to
Amendment No. 3 and incorporated herein by reference.

(l) Opinion and Consent of Counsel dated November 15, 1995, filed as Exhibit
(l) to Amendment No. 5 and incorporated herein by reference.

(m) (a) Consent of Independent Auditors for EV Classic Senior Floating-Rate
Fund filed herewith.

(m) (b) Consent of Independent Auditors for Senior Debt Portfolio filed
herewith.

(n) Not applicable

(o) Not applicable

(p) Letter Agreement with Eaton Vance Management dated December 7, 1994
filed as Exhibit (p) to Amendment No. 5 and incorporated herein by
reference.

(q) Not applicable

(r) Power of Attorney for EV Classic Senior Floating-Rate Fund dated October
23, 1995 filed as Exhibit (r) to Amendment No. 5 and incorporated herein
by reference.

(s) Power of Attorney for Senior Debt Portfolio filed with Pre-Effective
Amendment No. 2 to the Registration Statement under the Securities Act
of 1933 (1933 Act File No. 33-67118) and Amendment No. 2 to the
Registration Statement under the Investment Company Act of 1940 (1940
Act File No. 811-07946) filed with the Commission on December 16, 1994
(Amendment No. 2) and incorporated herein by reference.

ITEM 25. MARKETING ARRANGEMENTS
Not Applicable.

ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the approximate expenses incurred in
connection with the offerings of Registrant:

Registration fees ............................................ $369,983.69
National Association of Securities Dealers, Inc. Fees ........ $ 61,000.00
Printing (other than stock certificates) ..................... $ 36,000.00
Engraving and printing stock certificates .................... $ 0.00
Fees and expenses of qualification under state securities laws $ 59,000.00
(excluding fees of counsel) ................................
Accounting fees and expenses ................................. $ 1,000.00
Legal fees and expenses ...................................... $ 37,150.00
----------
Total ................................................ $564,133.69(1)
===========

(1) These amounts include expenses for the shares registered pursuant to the
Registration Statements declared effective on February 21, 1995 (File No.
33-67118), May 5, 1995 (File No. 33-59143) and December 15, 1995 (File No.
33-64321).

ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES

(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of beneficial interest 20,021
as of
March 15, 1996

ITEM 29. INDEMNIFICATION
The Registrant's By-Laws filed as Exhibit (b) to Amendment No. 5 contain
provisions limiting the liability, and providing for indemnification, of the
Trustees and officers under certain circumstances.

Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.

ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to the information set forth under the captions
"Management of the Fund and the Portfolio" in the Prospectus and "Investment
Advisory and Other Services" in the Statement of Additional Information
constituting Parts A and B, respectively, of this Registration Statement,
which summary is incorporated herein by reference.

ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 89 South Street,
Boston, MA 02111, and its transfer agent, First Data Investor Services Group,
53 State Street, Boston, MA 02104, with the exception of certain corporate
documents and portfolio trading documents which are in the possession and
custody of Eaton Vance Management, 24 Federal Street, Boston, MA 02110.
Certain corporate documents of Senior Debt Portfolio (the "Portfolio") are
also maintained by IBT Trust Company (Cayman), Ltd., The Bank of Nova Scotia
Building, P.O. Box 501, George Town, Grand Cayman, Cayman Islands, British
West Indies, and certain investor account, Portfolio and the Registrant's
accounting records are held by IBT Fund Services (Canada) Inc., 1 First
Canadian Place, King Street West, Suite 2800, P.O. Box 231, Toronto, Ontario,
Canada M5X 1C8. Registrant is informed that all applicable accounts, books and
documents required to be maintained by registered investment advisers are in
the custody and possession of Eaton Vance Management and Boston Management and
Research.

ITEM 32. MANAGEMENT SERVICES
None.

ITEM 33. UNDERTAKINGS
The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;

(iii) To include any material information with respect to the
service plan not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the continuous offering of the shares.

(4) To send by first class mail or other means designed to ensure
equally prompt delivery, within two business days of receipt of a written
or oral request, any Statement of Additional Information.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and
Commonwealth of Massachusetts, on the 29th day of March, 1996.
EV CLASSIC SENIOR FLOATING-RATE FUND

By /s/ JAMES B. HAWKES
-------------------------------
JAMES B. HAWKES, President

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Trustee, President and
/s/ JAMES B. HAWKES Principal Executive Officer March 29, 1996
- ------------------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 29, 1996
- ------------------------------------
JAMES L. O'CONNOR
Trustee and Vice
M. DOZIER GARDNER* President March 29, 1996
- ------------------------------------
M. DOZIER GARDNER

DONALD R. DWIGHT* Trustee March 29, 1996
- ------------------------------------
DONALD R. DWIGHT

SAMUEL L. HAYES, III* Trustee March 29, 1996
- ------------------------------------
SAMUEL L. HAYES, III

NORTON H. REAMER* Trustee March 29, 1996
- ------------------------------------
NORTON H. REAMER

JOHN L. THORNDIKE* Trustee March 29, 1996
- ------------------------------------
JOHN L. THORNDIKE

JACK L. TREYNOR* Trustee March 29, 1996
- ------------------------------------
JACK L. TREYNOR

*By: /s/ H. DAY BRIGHAM, JR.
---------------------------
H. DAY BRIGHAM, JR.
Attorney-in-fact
</TABLE>

<PAGE>

SIGNATURES

Senior Debt Portfolio has duly caused this Amendment to the Registration
Statement on Form N-2 of EV Classic Senior Floating-Rate Fund to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Tijuana, Mexico on the 26th day of March, 1996.

SENIOR DEBT PORTFOLIO

By /s/ JAMES B. HAWKES
-------------------------------
JAMES B. HAWKES, President

This Amendment to the Registration Statement on Form N-2 of EV Classic
Senior Floating-Rate Fund has been signed below by the following persons in
the capacities on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Trustee, President and
/s/ JAMES B. HAWKES Principal Executive Officer March 26, 1996
- ------------------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
JAMES L. O'CONNOR* Officer March 26, 1996
- ------------------------------------
JAMES L. O'CONNOR

DONALD R. DWIGHT* Trustee March 26, 1996
- ------------------------------------
DONALD R. DWIGHT

M. DOZIER GARDNER* Trustee March 26, 1996
- ------------------------------------
M. DOZIER GARDNER

SAMUEL L. HAYES, III* Trustee March 26, 1996
- ------------------------------------
SAMUEL L. HAYES, III

NORTON H. REAMER* Trustee March 26, 1996
- ------------------------------------
NORTON H. REAMER

JOHN L. THORNDIKE* Trustee March 26, 1996
- ------------------------------------
JOHN L. THORNDIKE

JACK L. TREYNOR* Trustee March 26, 1996
- ------------------------------------
JACK L. TREYNOR

*By: /s/ JAMES B. HAWKES
---------------------------
JAMES B. HAWKES
As attorney-in-fact
</TABLE>

<PAGE>

EXHIBIT INDEX

EXHIBITS DESCRIPTION PAGE
- -------- ----------- ----
(j)(b) Amendment to Custodian Agreement dated October 23, 1995
(m)(a) Consent of Independent Auditors for EV Classic Senior
Floating-Rate Fund
(m)(b) Consent of Independent Auditors for Senior Debt Portfolio

EXHIBIT (j)(b)

AMENDMENT TO
MASTER CUSTODIAN AGREEMENT
BETWEEN
EATON VANCE GROUP OF FUNDS
AND
INVESTORS BANK & TRUST COMPANY

This Amendment, dated as of October 23, 1995, is made to the MASTER
CUSTODIAN AGREEMENT (the "Agreement") between each investment company for which
Eaton Vance Management acts as investment adviser or administrator which has
adopted the Agreement (the "Funds") and Investors Bank & Trust Company (the
"Custodian") pursuant to Section 10 of the Agreement.

The Funds and the Custodian agree that Section 10 of the Agreement
shall, as of October 23, 1995, be amended to read as follows:

Unless otherwise defined herein, terms which are defined in the
Agreement and used herein are so used as so defined.

10. Effective Period, Termination and Amendment; Successor Custodian

This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated by either party after August
31, 2000 by an instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; provided, that the Fund may at any
time by action of its Board, (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian in the event
the Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).

This Agreement may be amended at any time by the written agreement of
the parties hereto. If a majority of the non-interested trustees of any of the
Funds determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of shareholders of any Fund or Funds or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.

The Board of the Fund shall, forthwith, upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian, a bank or
trust company having the qualifications required by the Investment Company Act
of 1940 and the Rules thereunder. The Bank, as Custodian, Agent or otherwise,
shall, upon termination of the Agreement, deliver to such successor custodian,
all securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.

Except as expressly provided herein, the Agreement shall remain
unchanged and in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.

CAPITAL EXCHANGE FUND, INC. EATON VANCE MUNICIPALS TRUST II
DEPOSITORS FUND OF BOSTON, INC. EATON VANCE MUTUAL FUNDS TRUST
DIVERSIFICATION FUND, INC. EATON VANCE PRIME RATE RESERVES
EATON VANCE EQUITY-INCOME TRUST EATON VANCE SPECIAL INVESTMENT TRUST
EATON VANCE GROWTH TRUST EV CLASSIC SENIOR FLOATING-RATE FUND
EATON VANCE INVESTMENT FUND, INC. FIDUCIARY EXCHANGE FUND, INC.
EATON VANCE INVESTMENT TRUST SECOND FIDUCIARY EXCHANGE FUND, INC.
EATON VANCE MUNICIPAL BOND FUND L.P. THE EXCHANGE FUND OF BOSTON, INC.
EATON VANCE MUNICIPALS TRUST VANCE, SANDERS EXCHANGE FUND

By: /s/ James L. O'Connor
-----------------------------
Treasurer

INVESTORS BANK & TRUST COMPANY

By: /s/ Michael Rogers
-----------------------------

-2- a:\custamend.fnd

<PAGE>

EXHIBIT 99.(M)(A)

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Amendment to the
Registration Statement of EV Classic Senior Floating-Rate Fund of our report
relating to EV Classic Senior Floating-Rate Fund dated February 20, 1996,
which report is included in the Annual Report to Shareholders for the year
ended December 31, 1995 which is incorporated by reference in the Statement of
Additional Information.

We also consent to the reference to our Firm under the heading "The Fund's
Financial Highlights" appearing in the Prospectus, and under the captions
"Auditors" and "Financial Statements" in the Statement of Additional
Information of the Registration Statement.

Deloitte & Touche LLP

Boston, Massachusetts
March 29, 1996

<PAGE>

EXHIBIT 99.(M)(B)

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in the Registration Statement of
EV Classic Senior Floating-Rate Fund of our report relating to Senior Debt
Portfolio dated February 20, 1996, in the Statement of Additional Information,
which is part of such Registration Statement.

Deloitte & Touche

Grand Cayman, Cayman Islands
British West Indies
March 29, 1996

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> FEB-24-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 494510
<INVESTMENTS-AT-VALUE> 494459
<RECEIVABLES> 6966
<ASSETS-OTHER> 249
<OTHER-ITEMS-ASSETS> 368
<TOTAL-ASSETS> 502042
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1011
<TOTAL-LIABILITIES> 1011
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 501051
<SHARES-COMMON-STOCK> 50152
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 30
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (51)
<NET-ASSETS> 501031
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 13722
<EXPENSES-NET> 1018
<NET-INVESTMENT-INCOME> 12704
<REALIZED-GAINS-CURRENT> 67
<APPREC-INCREASE-CURRENT> (51)
<NET-CHANGE-FROM-OPS> 12720
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12674
<DISTRIBUTIONS-OF-GAINS> 67
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 50241
<NUMBER-OF-SHARES-REDEEMED> 1023
<SHARES-REINVESTED> 925
<NET-CHANGE-IN-ASSETS> 500931
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1018
<AVERAGE-NET-ASSETS> 211669
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0.634
<PER-SHARE-GAIN-APPREC> (0.008)
<PER-SHARE-DIVIDEND> 0.633
<PER-SHARE-DISTRIBUTIONS> 0.003
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.99
<EXPENSE-RATIO> 1.66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> FEB-22-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1614038
<INVESTMENTS-AT-VALUE> 1609553
<RECEIVABLES> 11390
<ASSETS-OTHER> 7059
<OTHER-ITEMS-ASSETS> 699
<TOTAL-ASSETS> 1628701
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7362
<TOTAL-LIABILITIES> 7362
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1625824
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4485)
<NET-ASSETS> 1621339
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 79410
<OTHER-INCOME> 3167
<EXPENSES-NET> 10457
<NET-INVESTMENT-INCOME> 72120
<REALIZED-GAINS-CURRENT> 1214
<APPREC-INCREASE-CURRENT> (1760)
<NET-CHANGE-FROM-OPS> 71574
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1621239
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8545
<INTEREST-EXPENSE> 1287
<GROSS-EXPENSE> 10457
<AVERAGE-NET-ASSETS> 1058138
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 1.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>