SEC Form N-CSRS filed by Eaton Vance Senior Floating-Rate Fund
$EFR
Trusts Except Educational Religious and Charitable
Finance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811‑21411
(Exact Name of Registrant as Specified in Charter)
One Post Office Square, Boston, Massachusetts 02109
(Address of Principal Executive Offices)
Deidre E. Walsh
One Post Office Square, Boston, Massachusetts 02109
(Name and Address of Agent for Services)
(617) 482‑8260
(Registrant’s Telephone Number)
October 31
Date of Fiscal Year End
April 30, 2025
Date of Reporting Period
Item 1. Reports to Stockholders
(a)
Eaton Vance
Senior Floating-Rate Trust (EFR)
Semi-Annual Report
April 30, 2025
Commodity Futures Trading Commission Registration. The Commodity Futures Trading Commission (“CFTC”) has adopted regulations that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund's adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Performance
Portfolio Manager(s) Catherine C. McDermott, Daniel P. McElaney, CFA and Sarah A. Choi
| % Average Annual Total Returns1,2 | Inception Date | Six Months | One Year | Five Years | Ten Years |
| Fund at NAV | 11/28/2003 | (0.00)%3 | 4.62% | 9.25% | 5.68% |
| Fund at Market Price | — | (2.19) | 0.69 | 11.97 | 5.76 |
| Morningstar® LSTA® US Leveraged Loan IndexSM | — | 1.83% | 6.16% | 7.99% | 4.87% |
| % Premium/Discount to NAV4 | |
| As of period end | ( |
| Distributions5 | |
| Total Distributions per share for the period | $0.58 |
| Distribution Rate at NAV | 8.86% |
| Distribution Rate at Market Price | 9.15 |
| % Total Leverage6 | |
| Auction Preferred Shares (APS) | 13.23% |
| Borrowings | 23.35 |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated net of management fees and other expenses by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested in accordance with the Fund’s Dividend Reinvestment Plan. Furthermore, returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Performance at market price will differ from performance at NAV due to variations in the Fund’s market price versus NAV, which may reflect factors such as fluctuations in supply and demand for Fund shares, changes in Fund distributions, shifting market expectations for the Fund’s future returns and distribution rates, and other considerations affecting the trading prices of closed-end funds. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
2
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Fund Profile
| Credit Quality (% of bonds, loans and asset-backed securities)2 |
Footnotes:
| 1 | Excludes cash and cash equivalents. |
| 2 | Credit ratings are categorized using S&P Global Ratings (“S&P”). Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer’s creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P’s measures. Ratings of BBB or higher by S&P are considered to be investment-grade quality. Credit ratings are based largely on the ratings agency’s analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition and does not necessarily reflect its assessment of the volatility of a security’s market value or of the liquidity of an investment in the security. Holdings designated as “Not Rated” (if any) are not rated by S&P. |
3
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited)
5
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
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See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
7
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
8
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
9
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
10
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
11
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
12
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
13
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
14
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
15
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
16
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
17
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
18
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
19
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
| Forward Foreign Currency Exchange Contracts (OTC) | |||||||
| Currency Purchased | Currency Sold | Counterparty | Settlement Date |
Unrealized Appreciation |
Unrealized (Depreciation) | ||
| USD | 9,320,649 | EUR | 8,613,275 | Standard Chartered Bank | 5/5/25 | $ — | $ (436,903) |
| GBP | 43,671 | USD | 55,880 | State Street Bank and Trust Company | 5/30/25 | 2,326 | — |
| USD | 2,300,823 | EUR | 2,188,717 | Australia and New Zealand Banking Group Limited | 5/30/25 | — | (182,410) |
| USD | 2,253,334 | EUR | 2,140,700 | Citibank, N.A. | 5/30/25 | — | (175,421) |
| USD | 2,253,052 | EUR | 2,140,700 | State Street Bank and Trust Company | 5/30/25 | — | (175,703) |
| USD | 2,250,608 | EUR | 2,140,700 | State Street Bank and Trust Company | 5/30/25 | — | (178,146) |
| USD | 43,176 | GBP | 33,427 | Deutsche Bank AG | 5/30/25 | — | (1,377) |
| USD | 1,624,071 | GBP | 1,282,035 | Standard Chartered Bank | 5/30/25 | — | (84,658) |
| USD | 9,808,099 | EUR | 8,613,275 | Standard Chartered Bank | 6/3/25 | 33,458 | — |
| USD | 2,955,184 | EUR | 2,724,208 | Bank of America, N.A. | 6/30/25 | — | (141,637) |
| USD | 2,692,270 | EUR | 2,480,880 | State Street Bank and Trust Company | 6/30/25 | — | (127,941) |
20
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Portfolio of Investments (Unaudited) — continued
| Forward Foreign Currency Exchange Contracts (OTC) (continued) | |||||||
| Currency Purchased | Currency Sold | Counterparty | Settlement Date |
Unrealized Appreciation |
Unrealized (Depreciation) | ||
| USD | 2,691,699 | EUR | 2,480,880 | State Street Bank and Trust Company | 6/30/25 | $ — | $ (128,512) |
| $35,784 | $(1,632,708) | ||||||
| Abbreviations: | |
| EURIBOR | – Euro Interbank Offered Rate |
| OTC | – Over-the-counter |
| PCL | – Public Company Limited |
| PIK | – Payment In Kind |
| SOFR | – Secured Overnight Financing Rate |
| SONIA | – Sterling Overnight Interbank Average |
| Currency Abbreviations: | |
| EUR | – Euro |
| GBP | – British Pound Sterling |
| USD | – United States Dollar |
21
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Statement of Assets and Liabilities (Unaudited)
| April 30, 2025 | |
| Assets | |
| Unaffiliated investments, at value (identified cost $592,034,734) | $568,028,906 |
| Affiliated investments, at value (identified cost $1,987,237) | 1,987,237 |
| Cash | 982,767 |
| Deposits for derivatives collateral — forward foreign currency exchange contracts | 1,220,000 |
| Foreign currency, at value (identified cost $1,466,949) | 1,522,409 |
| Interest receivable | 3,021,181 |
| Dividends receivable from affiliated investments | 9,603 |
| Receivable for investments sold | 1,260,780 |
| Receivable for open forward foreign currency exchange contracts | 35,784 |
| Trustees' deferred compensation plan | 164,106 |
| Prepaid upfront fees on notes payable | 73,063 |
| Prepaid expenses | 8,735 |
| Total assets | $578,314,571 |
| Liabilities | |
| Notes payable | $134,000,000 |
| Payable for investments purchased | 1,412,922 |
| Payable for open forward foreign currency exchange contracts | 1,632,708 |
| Payable to affiliates: | |
| Investment adviser fee | 348,578 |
| Trustees' fees | 3,229 |
| Trustees' deferred compensation plan | 164,106 |
| Accrued expenses | 917,432 |
| Total liabilities | $138,478,975 |
| Auction preferred shares (3,032 shares outstanding) at liquidation value plus cumulative unpaid dividends | $75,909,560 |
| Commitments and contingencies (see Note 12) | |
| Net assets applicable to common shares | $363,926,036 |
| Sources of Net Assets | |
| Common shares, $0.01 par value, unlimited number of shares authorized | $295,236 |
| Additional paid-in capital | 456,972,162 |
| Accumulated loss | (93,341,362) |
| Net assets applicable to common shares | $363,926,036 |
| Net Asset Value Per Common Share | |
| Net assets ÷ common shares issued and outstanding | $12.33 |
22
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Statement of Operations (Unaudited)
| Six Months Ended | |
| April 30, 2025 | |
| Investment Income | |
| Dividend income from affiliated investments | $158,611 |
| Interest income | 24,617,082 |
| Other income | 198,310 |
| Total investment income | $24,974,003 |
| Expenses | |
| Investment adviser fee | $2,156,842 |
| Trustees’ fees and expenses | 19,204 |
| Custodian fee | 83,498 |
| Transfer and dividend disbursing agent fees | 10,269 |
| Legal and accounting services | 69,271 |
| Printing and postage | 99,099 |
| Interest expense and fees | 3,832,922 |
| Preferred shares service fee | 38,044 |
| Miscellaneous | 59,912 |
| Total expenses | $6,369,061 |
| Deduct: | |
| Waiver and/or reimbursement of expenses by affiliates | $5,330 |
| Total expense reductions | $5,330 |
| Net expenses | $6,363,731 |
| Net investment income | $18,610,272 |
| Realized and Unrealized Gain (Loss) | |
| Net realized gain (loss): | |
| Investment transactions | $(496,196) |
| Foreign currency transactions | 88,153 |
| Forward foreign currency exchange contracts | 1,299,153 |
| Net realized gain | $891,110 |
| Change in unrealized appreciation (depreciation): | |
| Investments | $(14,649,077) |
| Foreign currency | (6,789) |
| Forward foreign currency exchange contracts | (2,274,761) |
| Net change in unrealized appreciation (depreciation) | $(16,930,627) |
| Net realized and unrealized loss | $(16,039,517) |
| Distributions to preferred shareholders | $(2,713,055) |
| Net decrease in net assets from operations | $(142,300) |
23
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Statements of Changes in Net Assets
| Six Months Ended April 30, 2025 (Unaudited) |
Year Ended October 31, 2024 | |
| Increase (Decrease) in Net Assets | ||
| From operations: | ||
| Net investment income | $18,610,272 | $43,991,586 |
| Net realized gain (loss) | 891,110 | (13,543,013) |
| Net change in unrealized appreciation (depreciation) | (16,930,627) | 21,222,302 |
| Distributions to preferred shareholders | (2,713,055) | (6,536,238) |
| Net increase (decrease) in net assets from operations | $(142,300) | $45,134,637 |
| Distributions to common shareholders | $(16,980,249)* | $(40,255,963) |
| Tax return of capital to common shareholders | $— | $(870,621) |
| Capital share transactions: | ||
| Proceeds from shelf offering, net of offering costs (see Note 6) | $2,099,587 | $1,478,790 |
| Reinvestment of distributions to common shareholders | 318,207 | 663,299 |
| Net increase in net assets from capital share transactions | $2,417,794 | $2,142,089 |
| Net increase (decrease) in net assets | $(14,704,755) | $6,150,142 |
| Net Assets Applicable to Common Shares | ||
| At beginning of period | $378,630,791 | $372,480,649 |
| At end of period | $363,926,036 | $378,630,791 |
| * | A portion of the distributions may be deemed a tax return of capital at year-end. See Note 3. |
24
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Statement of Cash Flows (Unaudited)
| Six Months Ended | |
| April 30, 2025 | |
| Cash Flows From Operating Activities | |
| Net decrease in net assets from operations | $(142,300) |
| Distributions to preferred shareholders | 2,713,055 |
| Net increase in net assets from operations excluding distributions to preferred shareholders | $2,570,755 |
| Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: | |
| Investments purchased | (71,314,905) |
| Investments sold and principal repayments | 57,080,500 |
| Decrease in short-term investments, net | 5,268,682 |
| Net amortization/accretion of premium (discount) | (1,125,915) |
| Amortization of prepaid upfront fees on notes payable | 45,979 |
| Increase in interest receivable | (242,348) |
| Decrease in dividends receivable from affiliated investments | 30,060 |
| Decrease in Trustees’ deferred compensation plan | 10,017 |
| Increase in prepaid expenses | (8,735) |
| Decrease in cash collateral due to broker | (410,000) |
| Decrease in payable to affiliates for investment adviser fee | (21,363) |
| Increase in payable to affiliates for Trustees' fees | 211 |
| Decrease in payable to affiliates for Trustees' deferred compensation plan | (10,017) |
| Decrease in accrued expenses | (89,050) |
| Increase in unfunded loan commitments | 587,289 |
| Net change in unrealized (appreciation) depreciation from investments | 14,649,077 |
| Net change in unrealized (appreciation) depreciation from forward foreign currency exchange contracts | 2,274,761 |
| Net realized loss from investments | 496,196 |
| Net cash provided by operating activities | $9,791,194 |
| Cash Flows From Financing Activities | |
| Cash distributions paid to common shareholders | $(16,662,042) |
| Cash distributions paid to preferred shareholders | (2,738,591) |
| Proceeds from Fund shares sold | 2,099,587 |
| Proceeds from notes payable | 11,000,000 |
| Repayments of notes payable | (10,000,000) |
| Payment of prepaid upfront fees on notes payable | (85,000) |
| Net cash used in financing activities | $(16,386,046) |
| Net decrease in cash and restricted cash* | $(6,594,852) |
| Cash and restricted cash at beginning of period (including foreign currency) | $10,320,028 |
| Cash and restricted cash at end of period (including foreign currency) | $3,725,176 |
| Supplemental disclosure of cash flow information: | |
| Noncash financing activities not included herein consist of: | |
| Reinvestment of dividends and distributions | $318,207 |
| Cash paid for interest and fees on borrowings | 3,784,714 |
| * | Includes net change in unrealized (appreciation) depreciation on foreign currency of $(47,333). |
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See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Statement of Cash Flows (Unaudited) — continued
The following table provides a reconciliation of cash and restricted cash reported within the Statement of Assets and Liabilities that sum to the total of such amounts shown on the Statement of Cash Flows.
| April 30, 2025 | |
| Cash | $982,767 |
| Deposits for derivatives collateral — forward foreign currency exchange contracts | 1,220,000 |
| Foreign currency | 1,522,409 |
| Total cash and restricted cash as shown on the Statement of Cash Flows | $3,725,176 |
26
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Financial Highlights
Selected data for a common share outstanding during the periods stated
| Six Months Ended April 30, 2025 (Unaudited) |
Year Ended October 31, | |||||
| 2024 | 2023 | 2022 | 2021 | 2020 | ||
| Net asset value — Beginning of period (Common shares) | $12.91 | $12.77 | $12.28 | $14.30 | $13.50 | $14.51 |
| Income (Loss) From Operations | ||||||
| Net investment income(1) | $0.63 | $1.50 | $1.45 | $0.92 | $0.72 | $0.81 |
| Net realized and unrealized gain (loss) | (0.54) | 0.27 | 0.44 | (1.93) | 0.91 | (0.87) |
| Distributions to preferred shareholders: From net investment income(1) |
(0.09) | (0.22) | (0.20) | (0.05) | — | (0.03) |
| Total income (loss) from operations | $(0.00)(2) | $1.55 | $1.69 | $(1.06) | $1.63 | $(0.09) |
| Less Distributions to Common Shareholders | ||||||
| From net investment income | $(0.58)* | $(1.38) | $(1.20) | $(0.88) | $(0.81) | $(0.92) |
| Tax return of capital | — | (0.03) | — | (0.10) | (0.05) | — |
| Total distributions to common shareholders | $(0.58) | $(1.41) | $(1.20) | $(0.98) | $(0.86) | $(0.92) |
| Premium from common shares sold through shelf offering (see Note 6)(1) | $0.00(2) | $0.00(2) | $— | $0.02 | $0.00(2) | $— |
| Discount on tender offer (see Note 6)(1) | $— | $— | $— | $— | $0.03 | $— |
| Net asset value — End of period (Common shares) | $12.33 | $12.91 | $12.77 | $12.28 | $14.30 | $13.50 |
| Market value — End of period (Common shares) | $11.93 | $12.77 | $11.64 | $11.17 | $14.90 | $11.90 |
| Total Investment Return on Net Asset Value(3) | (0.00)%(4)(5) | 12.62% | 15.09% | (7.26)% | 12.69% | 0.42% |
| Total Investment Return on Market Value(3) | (2.19)%(4) | 22.31% | 15.34% | (19.10)% | 33.21% | (0.52)% |
27
See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Financial Highlights — continued
Selected data for a common share outstanding during the periods stated
| Six Months Ended April 30, 2025 (Unaudited) |
Year Ended October 31, | |||||
| 2024 | 2023 | 2022 | 2021 | 2020 | ||
| Ratios/Supplemental Data | ||||||
| Net assets applicable to common shares, end of period (000’s omitted) | $363,926 | $378,631 | $372,481 | $358,405 | $403,589 | $497,341 |
| Ratios (as a percentage of average daily net assets applicable to common shares):(6)(7)† | ||||||
| Expenses excluding interest and fees | 1.36%(8) | 1.29% | 1.34% | 1.37% | 1.33% | 1.32% |
| Interest and fee expense(9) | 2.06%(8) | 2.10% | 1.95% | 0.81% | 0.46% | 0.78% |
| Total expenses | 3.42%(8) | 3.39% | 3.29% | 2.18% | 1.79% | 2.10% |
| Net expenses | 3.42%(8)(10) | 3.39%(10) | 3.29%(10) | 2.18%(10) | 1.79% | 2.10% |
| Net investment income | 10.01%(8) | 11.59% | 11.37% | 6.83% | 5.05% | 6.03% |
| Portfolio Turnover | 8%(4) | 28% | 24% | 12% | 66% | 30% |
| Senior Securities: | ||||||
| Total notes payable outstanding (in 000’s) | $ |
$ |
$ |
$ |
$ |
$ |
| Asset coverage per $1,000 of notes payable(11) | $ |
$ |
$ |
$ |
$ |
$ |
| Total preferred shares outstanding | ||||||
| Asset coverage per preferred share(12) | $ |
$ |
$ |
$ |
$ |
$ |
| Involuntary liquidation preference per preferred share(13) | $ |
$ |
$ |
$ |
$ |
$ |
| Approximate market value per preferred share(13) | $ |
$ |
$ |
$ |
$ |
$ |
| (1) | Computed using average shares outstanding. |
| (2) | Amount is less than $0.005 or $(0.005), as applicable. |
| (3) | Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Trust’s dividend reinvestment plan. |
| (4) | Not annualized. |
| (5) | Amount is less than (0.005)%. |
| (6) | Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Trust. |
| (7) | Ratios do not reflect the effect of dividend payments to preferred shareholders. |
| (8) | Annualized. |
| (9) | Interest and fee expense relates to the notes payable incurred to partially redeem the Trust’s APS (see Note 8). |
| (10) | Includes a reduction by the investment adviser of a portion of its adviser fee due to the Trust’s investment in the Liquidity Fund (equal to less than 0.005% of average daily net assets for the six months ended April 30, 2025 and the years ended October 31, 2024, 2023 and 2022). |
| (11) | |
| (12) | |
| (13) | |
| * | A portion of the distributions may be deemed a tax return of capital at year-end. See Note 3. |
| † | Ratios based on net assets applicable to common shares plus preferred shares and borrowings are presented below. Ratios do not reflect the effect of dividend payments to preferred shareholders. Ratios for periods less than one year are annualized. |
| Six Months Ended April 30, 2025 (Unaudited) |
Year Ended October 31, | |||||
| 2024 | 2023 | 2022 | 2021 | 2020 | ||
| Expenses excluding interest and fees | 0.88% | 0.86% | 0.89% | 0.88% | 0.87% | 0.84% |
| Interest and fee expense | 1.33% | 1.39% | 1.28% | 0.52% | 0.31% | 0.50% |
| Total expenses | 2.21% | 2.25% | 2.17% | 1.40% | 1.18% | 1.34% |
| Net investment income | 6.47% | 7.66% | 7.47% | 4.39% | 3.34% | 3.86% |
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See Notes to Financial Statements.
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Senior Floating-Rate Trust (the Trust) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, closed-end management investment company. The Trust’s primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek preservation of capital to the extent consistent with its primary objective.
The following is a summary of significant accounting policies of the Trust. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Trust is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation—The following methodologies are used to determine the market value or fair value of investments.
Senior Floating-Rate Loans. Interests in senior floating-rate loans (Senior Loans) are valued generally at the average mean of bid and ask quotations obtained from a third party pricing service. Senior Loans, for which a valuation is not available or deemed unreliable, are fair valued by the investment adviser utilizing one or more of the valuation techniques described below to assess the likelihood that the borrower will make a full repayment of the loan underlying such Senior Loan. If the investment adviser believes that there is a reasonable likelihood of full repayment, the investment adviser will determine fair value using a matrix pricing approach that considers the yield on the Senior Loan relative to yields on other Senior Loans issued by companies of comparable credit quality. If the investment adviser believes there is not a reasonable likelihood of full repayment, the investment adviser will determine fair value using analyses that include, but are not limited to: (i) a comparison of the value of the borrower’s outstanding equity and debt to that of comparable public companies; (ii) a discounted cash flow analysis; or (iii) when the investment adviser believes it is likely that a borrower will be liquidated or sold, an analysis of the terms of such liquidation or sale. In certain cases, the investment adviser will use a combination of analytical methods to determine fair value, such as when only a portion of a borrower’s assets are likely to be sold. In conducting its assessment and analyses for purposes of determining fair value of a Senior Loan, the investment adviser will use its discretion and judgment in considering and appraising relevant factors. Junior Loans (i.e., subordinated loans and second lien loans) are valued in the same manner as Senior Loans.
Debt Obligations. Debt obligations are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term debt obligations purchased with a remaining maturity of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ National Market System are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices or, in the case of preferred equity securities that are not listed or traded in the over-the-counter market, by a third party pricing service that uses various techniques that consider factors including, but not limited to, prices or yields of securities with similar characteristics, benchmark yields, broker/dealer quotes, quotes of underlying common stock, issuer spreads, as well as industry and economic events.
Derivatives. Forward foreign currency exchange contracts are generally valued at the mean of the average bid and average ask prices that are reported by currency dealers to a third party pricing service at the valuation time. Such third party pricing service valuations are supplied for specific settlement periods and the Trust’s forward foreign currency exchange contracts are valued at an interpolated rate between the closest preceding and subsequent settlement period reported by the third party pricing service.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads.
Other. Investments in management investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value as of the close of each business day.
Fair Valuation. In connection with Rule 2a-5 of the 1940 Act, the Trustees have designated the Trust’s investment adviser as its valuation designee. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued by the investment adviser, as valuation designee, at fair value using methods that most fairly reflect the security’s “fair value”, which is the amount that the Trust might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
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B Investment Transactions—Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income—Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount. Fees in connection with investments in senior floating-rate loans may include amendment fees, consent fees and prepayment fees, which are recorded to income as earned and included in Other income on the Statement of Operations. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Distributions from investment companies are recorded as dividend income, capital gains or return of capital based on the nature of the distribution.
D Federal Taxes—The Trust's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of April 30, 2025, the Trust had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Trust files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Foreign Currency Translation—Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
F Unfunded Loan Commitments—The Trust may enter into certain loan agreements all or a portion of which may be unfunded. The Trust is obligated to fund these commitments at the borrower's discretion. These commitments, if any, are disclosed in the accompanying Portfolio of Investments. At April 30, 2025, the Trust had sufficient cash and/or securities to cover these commitments.
G Use of Estimates—The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
H Indemnifications—Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Trust. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Trust shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Trust shareholders. Moreover, the By-laws also provide for indemnification out of Trust property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Trust enters into agreements with service providers that may contain indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred.
I Forward Foreign Currency Exchange Contracts—The Trust may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded as unrealized until such time as the contracts have been closed. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from movements in the value of a foreign currency relative to the U.S. dollar.
J Segment Reporting—During this reporting period, the Trust adopted FASB Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires incremental disclosures related to a public entity’s reportable segments. The Trust operates as a single reportable segment, an investment company whose investment objective(s) is included in Note 1. In connection with the adoption of ASU 2023-07, the Trust’s President acts as the Trust's Chief Operating Decision Maker (CODM), who is responsible for assessing the performance of the Trust's single segment and deciding how to allocate the segment’s resources. To perform this function, the CODM reviews the information in the Trust’s financial statements.
K Interim Financial Statements—The interim financial statements relating to April 30, 2025 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Trust’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
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2 Auction Preferred Shares
The Trust issued Auction Preferred Shares (APS) on January 26, 2004 in a public offering. Dividends on the APS, which accrue daily, are cumulative at rates which are reset weekly for Series A and Series B, and approximately monthly for Series C and Series D by an auction, unless a special dividend period has been set. Series of APS are identical in all respects except for the reset dates of the dividend rates. If the APS auctions do not successfully clear, the dividend payment rate over the next period for the APS holders is set at a specified maximum applicable rate until such time as the APS auctions are successful. Auctions have not cleared since February 13, 2008 and the rate since that date has been the maximum applicable rate (see Note 3). The maximum applicable rate on the APS is 160% of the “AA” Financial Composite Commercial Paper Rate at the date of the auction. The stated spread over the reference benchmark rate is determined based on the credit rating of the APS.
The number of APS issued and outstanding at April 30, 2025 are as follows:
| APS Issued and Outstanding | |
The APS are redeemable at the option of the Trust at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, on any dividend payment date. The APS are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, if the Trust is in default for an extended period on its asset maintenance requirements with respect to the APS. If the dividends on the APS remain unpaid in an amount equal to two full years’ dividends, the holders of the APS as a class have the right to elect a majority of the Board of Trustees. In general, the holders of the APS and the common shares have equal voting rights of one vote per share, except that the holders of the APS, as a separate class, have the right to elect at least two members of the Board of Trustees. The APS have a liquidation preference of $25,000 per share, plus accumulated and unpaid dividends. The Trust is required to maintain certain asset coverage with respect to the APS as defined in the Trust's By-Laws and the 1940 Act. The Trust pays an annual fee up to 0.15% of the liquidation value of the APS to broker/dealers as a service fee if the auctions are unsuccessful; otherwise, the annual fee is 0.25%.
3 Distributions to Shareholders and Income Tax Information
The Trust intends to make monthly distributions of net investment income to common shareholders, after payment of any dividends on any outstanding APS. In addition, at least annually, the Trust intends to distribute all or substantially all of its net realized capital gains. Distributions to common shareholders are recorded on the ex-dividend date. Distributions to preferred shareholders are recorded daily and are payable at the end of each dividend period. The dividend rates for the APS at April 30, 2025, and the amount of dividends accrued (including capital gains, if any) to APS shareholders, average APS dividend rates (annualized), and dividend rate ranges for the six months then ended were as follows:
| APS Dividend Rates at April 30, 2025 |
Dividends Accrued to APS Shareholders |
Average APS Dividend Rates |
Dividend Rate Ranges (%) | |
| Series A | 6.87% | $660,129 | 7.11% | 6.87-7.74 |
| Series B | 6.87 | 681,565 | 7.11 | 6.87-7.74 |
| Series C | 6.87 | 661,701 | 7.13 | 6.87-7.74 |
| Series D | 6.97 | 709,660 | 7.14 | 6.92-7.74 |
Beginning February 13, 2008 and consistent with the patterns in the broader market for auction-rate securities, the Trust's APS auctions were unsuccessful in clearing due to an imbalance of sell orders over bids to buy the APS. As a result, the dividend rates of the APS were reset to the maximum applicable rates. The table above reflects such maximum dividend rate for each series as of April 30, 2025.
Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to
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Notes to Financial Statements (Unaudited) — continued
be from ordinary income. Distributions in any year may include a return of capital component. For the six months ended April 30, 2025, the amount of distributions estimated to be a tax return of capital was approximately $1,020,000. The final determination of tax characteristics of the Trust's distributions will occur at the end of the year, at which time it will be reported to the shareholders.
At October 31, 2024, the Trust, for federal income tax purposes, had deferred capital losses of $67,294,350 which would reduce its taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Trust of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Trust’s next taxable year and retain the same short-term or long-term character as when originally deferred. Of the deferred capital losses at October 31, 2024, $65,374,791 are long-term and $1,919,559 are short-term.
The cost and unrealized appreciation (depreciation) of investments, including open derivative contracts, of the Trust at April 30, 2025, as determined on a federal income tax basis, were as follows:
| Aggregate cost | $594,411,192 |
| Gross unrealized appreciation | $3,689,133 |
| Gross unrealized depreciation | (29,681,106) |
| Net unrealized depreciation | $(25,991,973) |
4 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Eaton Vance Management (EVM), an indirect, wholly-owned subsidiary of Morgan Stanley, as compensation for investment advisory services rendered to the Trust. The fee is computed at an annual rate of 0.75% of the Trust’s average daily gross assets and is payable monthly. Gross assets, as defined in the Trust's investment advisory agreement, means total assets of the Trust, including any form of investment leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to investment leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities), (ii) the issuance of preferred stock or other similar preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Trust’s investment objectives and policies, and/or (iv) any other means. Accrued expenses includes other liabilities other than indebtedness attributable to leverage. For the six months ended April 30, 2025, the Trust’s investment adviser fee amounted to $2,156,842. The Trust may invest in a money market fund, the Institutional Class of the Morgan Stanley Institutional Liquidity Funds - Government Portfolio (the “Liquidity Fund”), an open-end management investment company managed by Morgan Stanley Investment Management Inc., a wholly-owned subsidiary of Morgan Stanley. The investment adviser fee paid by the Trust is reduced by an amount equal to its pro rata share of the advisory and administration fees paid by the Trust due to its investment in the Liquidity Fund. For the six months ended April 30, 2025, the investment adviser fee paid was reduced by $5,330 relating to the Trust's investment in the Liquidity Fund. EVM also serves as administrator of the Trust, but receives no compensation.
Trustees and officers of the Trust who are members of EVM’s organization receive remuneration for their services to the Trust out of the investment adviser fee. Trustees of the Trust who are not affiliated with EVM may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. Certain officers and Trustees of the Fund are officers of EVM.
5 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations and including maturities and principal repayments on Senior Loans, aggregated $45,514,498 and $52,492,641, respectively, for the six months ended April 30, 2025.
6 Common Shares of Beneficial Interest and Shelf Offering
Common shares issued by the Trust pursuant to its dividend reinvestment plan were 24,729 and 51,033 for the six months ended April 30, 2025 and the year ended October 31, 2024, respectively.
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Notes to Financial Statements (Unaudited) — continued
Pursuant to a registration statement filed with the SEC, the Trust is authorized to issue up to an additional 3,085,835 common shares through an equity shelf offering program (the “shelf offering”). Under the shelf offering, the Trust, subject to market conditions, may raise additional capital from time to time and in varying amounts and offering methods at a net price at or above the Trust’s net asset value per common share. During the six months ended April 30, 2025 and the year ended October 31, 2024, the Trust sold 160,031 and 112,977 common shares, respectively, and received proceeds (net of offering costs) of $2,099,587 and $1,478,790, respectively, through its shelf offering. The net proceeds in excess of the net asset value of the shares sold were $38,646 for the six months ended April 30, 2025 and $17,992 for the year ended October 31, 2024. Offering costs (other than the applicable sales commissions) incurred in connection with the shelf offering were borne directly by EVM. Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM, is the distributor of the Trust’s shares and is entitled to receive a sales commission from the Trust of 1.00% of the gross sales price per share, a portion of which is re-allowed to sales agents. The Trust was informed that the sales commissions retained by EVD during the six months ended April 30, 2025 and the year ended October 31, 2024 were $4,242 and $2,988, respectively.
In November 2013, the Board of Trustees initially approved a share repurchase program for the Trust. Pursuant to the reauthorization of the share repurchase program by the Board of Trustees in March 2019, the Trust is authorized to repurchase up to 10% of its common shares outstanding as of the last day of the prior calendar year at market prices when shares are trading at a discount to net asset value (NAV). The share repurchase program does not obligate the Trust to purchase a specific amount of shares. There were no repurchases of common shares by the Trust for the six months ended April 30, 2025 and the year ended October 31, 2024.
7 Financial Instruments
The Trust may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. These financial instruments may include forward foreign currency exchange contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Trust has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at April 30, 2025 is included in the Portfolio of Investments. At April 30, 2025, the Trust had sufficient cash and/or securities to cover commitments under these contracts.
The Trust is subject to foreign exchange risk in the normal course of pursuing its investment objectives. Because the Trust holds foreign currency denominated investments, the value of these investments and related receivables and payables may change due to future changes in foreign currency exchange rates. To hedge against this risk, the Trust enters into forward foreign currency exchange contracts.
The Trust enters into forward foreign currency exchange contracts that may contain provisions whereby the counterparty may terminate the contract under certain conditions, including but not limited to a decline in the Trust’s net assets below a certain level over a certain period of time, which would trigger a payment by the Trust for those derivatives in a net liability position. At April 30, 2025, the fair value of derivatives with credit-related contingent features in a net liability position was $1,632,708. The aggregate fair value of assets pledged as collateral by the Trust for such liability was $1,220,000 at April 30, 2025.
The over-the-counter (OTC) derivatives in which the Trust invests are subject to the risk that the counterparty to the contract fails to perform its obligations under the contract. To mitigate this risk, the Trust has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with substantially all its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Trust and a counterparty that governs certain OTC derivatives and typically contains, among other things, set-off provisions in the event of a default and/or termination event as defined under the relevant ISDA Master Agreement. Under an ISDA Master Agreement, the Trust may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy or insolvency. Certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event the Trust’s net assets decline by a stated percentage or the Trust fails to meet the terms of its ISDA Master Agreements, which would cause the counterparty to accelerate payment by the Trust of any net liability owed to it.
The collateral requirements for derivatives traded under an ISDA Master Agreement are governed by a Credit Support Annex to the ISDA Master Agreement. Collateral requirements are determined at the close of business each day and are typically based on changes in market values for each transaction under an ISDA Master Agreement and netted into one amount for such agreement. Generally, the amount of collateral due from or to a counterparty is subject to a minimum transfer threshold amount before a transfer is required, which may vary by counterparty. Collateral pledged for the benefit of the Trust and/or counterparty is held in segregated accounts by the Trust’s custodian and cannot be sold, re-pledged, assigned or otherwise used while pledged. The portion of such collateral representing cash, if any, is reflected as deposits for derivatives collateral and, in the case of cash pledged by a counterparty for the benefit of the Trust, a corresponding liability on the Statement of Assets and Liabilities. Securities pledged by the Trust as collateral, if any, are identified as such in the Portfolio of Investments.
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Notes to Financial Statements (Unaudited) — continued
The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying
risk exposure is foreign exchange risk at April 30, 2025 was as follows:
risk exposure is foreign exchange risk at April 30, 2025 was as follows:
| Fair Value | ||
| Derivative | Asset Derivative(1) | Liability Derivative(2) |
| Forward foreign currency exchange contracts | $35,784 | $(1,632,708) |
| (1) | Statement of Assets and Liabilities location: Receivable for open forward foreign currency exchange contracts. |
| (2) | Statement of Assets and Liabilities location: Payable for open forward foreign currency exchange contracts. |
The Trust's derivative assets and liabilities at fair value by type, which are reported gross in the Statement of Assets and Liabilities, are presented in the table above. The following tables present the Trust's derivative assets and liabilities by counterparty, net of amounts available for offset under a master netting agreement and net of the related collateral received by the Trust for such assets and pledged by the Trust for such liabilities as of April 30, 2025.
| Counterparty | Derivative Assets Subject to Master Netting Agreement |
Derivatives Available for Offset |
Non-cash Collateral Received(a) |
Cash Collateral Received(a) |
Net Amount of Derivative Assets(b) |
| Standard Chartered Bank | $33,458 | $(33,458) | $ — | $ — | $ — |
| State Street Bank and Trust Company | 2,326 | (2,326) | — | — | — |
| $35,784 | $(35,784) | $— | $— | $— |
| Counterparty | Derivative Liabilities Subject to Master Netting Agreement |
Derivatives Available for Offset |
Non-cash Collateral Pledged(a) |
Cash Collateral Pledged(a) |
Net Amount of Derivative Liabilities(c) |
| Australia and New Zealand Banking Group Limited | $(182,410) | $ — | $ — | $ — | $(182,410) |
| Bank of America, N.A. | (141,637) | — | — | 110,000 | (31,637) |
| Citibank, N.A. | (175,421) | — | — | — | (175,421) |
| Deutsche Bank AG | (1,377) | — | — | — | (1,377) |
| Standard Chartered Bank | (521,561) | 33,458 | — | 488,103 | — |
| State Street Bank and Trust Company | (610,302) | 2,326 | — | 607,976 | — |
| $(1,632,708) | $35,784 | $ — | $1,206,079 | $(390,845) |
| (a) | In some instances, the total collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (b) | Net amount represents the net amount due from the counterparty in the event of default. |
| (c) | Net amount represents the net amount payable to the counterparty in the event of default. |
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Notes to Financial Statements (Unaudited) — continued
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is foreign exchange risk for the six months ended April 30, 2025 was as follows:
| Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) |
| Forward foreign currency exchange contracts | $1,299,153 | $(2,274,761) |
| (1) | Statement of Operations location: Net realized gain (loss): Forward foreign currency exchange contracts. |
| (2) | Statement of Operations location: Change in unrealized appreciation (depreciation): Forward foreign currency exchange contracts. |
The average notional amount of forward foreign currency exchange contracts (based on the absolute value of notional amounts of currency purchased and currency sold) outstanding during the six months ended April 30, 2025, which is indicative of the volume of this derivative type, was approximately $36,869,000.
8 Credit Agreement
The Trust has entered into a Credit Agreement, as amended (the Agreement) with a bank to borrow up to a limit of $170 million ($185 million prior to March 11, 2025) pursuant to a revolving line of credit. Borrowings under the Agreement are secured by the assets of the Trust. Interest is generally charged at a rate above the Secured Overnight Financing Rate (SOFR) and is payable monthly. Under the terms of the Agreement, in effect through March 10, 2026, the Trust pays a facility fee of 0.15% on the borrowing limit. In connection with the extension of the Agreement on March 11, 2025, the Trust also paid upfront fees of $85,000, which are being amortized to interest expense to March 10, 2026. The unamortized balance at April 30, 2025 is approximately $73,000 and is included in prepaid upfront fees on notes payable on the Statement of Assets and Liabilities. The Trust is required to maintain certain net asset levels during the term of the Agreement. At April 30, 2025, the Trust had borrowings outstanding under the Agreement of $134,000,000 at an annual interest rate of 5.32%. Based on the short-term nature of the borrowings under the Agreement and the variable interest rate, the carrying amount of the borrowings at April 30, 2025 approximated its fair value. If measured at fair value, borrowings under the Agreement would have been considered as Level 2 in the fair value hierarchy (see Note 10) at April 30, 2025. For the six months ended April 30, 2025, the average borrowings under the Agreement and the average annual interest rate (excluding fees) were $129,049,723 and 5.63%, respectively.
9 Affiliated Investments
At April 30, 2025, the value of the Trust's investment in funds that may be deemed to be affiliated was $1,987,237, which represents 0.5% of the Trust's net assets applicable to common shares. Transactions in such investments by the Trust for the six months ended April 30, 2025 were as follows:
| Name | Value, beginning of period |
Purchases | Sales proceeds |
Net realized gain (loss) |
Change in unrealized appreciation (depreciation) |
Value, end of period |
Dividend income |
Shares, end of period |
| Short-Term Investments | ||||||||
| Liquidity Fund | $7,255,919 | $63,863,307 | $(69,131,989) | $ — | $ — | $1,987,237 | $158,611 | 1,987,237 |
10 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical investments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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Notes to Financial Statements (Unaudited) — continued
At April 30, 2025, the hierarchy of inputs used in valuing the Trust’s investments and open derivative instruments, which are carried at fair value, were as follows:
| Asset Description | Level 1 | Level 2 | Level 3* | Total |
| Asset-Backed Securities | $ — | $ 22,434,652 | $ — | $ 22,434,652 |
| Common Stocks | 50,695 | 5,021,706 | 1,077,448 | 6,149,849 |
| Corporate Bonds | — | 18,602,565 | — | 18,602,565 |
| Preferred Stocks | — | 340,743 | — | 340,743 |
| Senior Floating-Rate Loans (Less Unfunded Loan Commitments) | — | 519,384,432 | 1,116,665 | 520,501,097 |
| Warrants | — | — | 0 | 0 |
| Short-Term Investments | 1,987,237 | — | — | 1,987,237 |
| Total Investments | $2,037,932 | $565,784,098 | $2,194,113 | $570,016,143 |
| Forward Foreign Currency Exchange Contracts | $ — | $ 35,784 | $ — | $ 35,784 |
| Total | $2,037,932 | $565,819,882 | $2,194,113 | $570,051,927 |
| Liability Description | ||||
| Forward Foreign Currency Exchange Contracts | $ — | $ (1,632,708) | $ — | $ (1,632,708) |
| Total | $ — | $ (1,632,708) | $ — | $ (1,632,708) |
| * | None of the unobservable inputs for Level 3 assets, individually or collectively, had a material impact on the Trust. |
Level 3 investments at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the six months ended April 30, 2025 is not presented.
11 Risks and Uncertainties
Risks Associated with Foreign Investments
Foreign investments can be adversely affected by political, economic and market developments abroad, including the imposition of economic and other sanctions by the United States or another country, and by acts of terrorism and war. There may be less publicly available information about foreign issuers because they may not be subject to reporting practices, requirements or regulations comparable to those to which United States companies are subject. Foreign markets may be smaller, less liquid and more volatile than the major markets in the United States. Trading in foreign markets typically involves higher expense than trading in the United States. The Trust may have difficulties enforcing its legal or contractual rights in a foreign country. Securities that trade or are denominated in currencies other than the U.S. dollar may be adversely affected by fluctuations in currency exchange rates.
Credit Risk
The Trust invests primarily in below investment grade floating-rate loans, which are considered speculative because of the credit risk of their issuers. Changes in economic conditions or other circumstances are more likely to reduce the capacity of issuers of these securities to make principal and interest payments. Such companies are more likely to default on their payments of interest and principal owed than issuers of investment grade bonds. An economic downturn generally leads to a higher non-payment rate, and a loan or other debt obligation may lose significant value before a default occurs. Lower rated investments also may be subject to greater price volatility than higher rated investments. Moreover, the specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan’s value.
12 Commitments and Contingencies
In connection with the Serta Chapter 11 bankruptcy proceeding, on December 31, 2024, the U.S. Fifth Circuit Court of Appeals reversed a bankruptcy court’s ruling that held permissible an “uptier” agreement (the “2020 Agreement”) entered into by Serta with certain participating lenders, including the Trust. The 2020 Agreement had the effect of subordinating the existing debt of certain non-participating lenders to that of the participating lenders. The non-participating lenders brought claims for breach of contract, arguing that the participating lenders had breached an earlier agreement by entering into the 2020 Agreement. The appellate court found that the bankruptcy court had erred in determining that the 2020 Agreement was permitted by the terms of the earlier agreement and remanded the breach of contract claims for further consideration by the bankruptcy court. The appellate court further held that indemnification of the participating lenders in the 2020 Agreement was impermissible under the U.S. Bankruptcy Code.
36
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Notes to Financial Statements (Unaudited) — continued
A request by the Trust and the other participating lenders for a rehearing of this matter before the Fifth Circuit en banc was denied. The matter has been remanded to the bankruptcy court to determine whether the participating lenders are liable for the breach of contract claims. At this time, the Trust cannot reliably predict the outcome of these proceedings or the effect, if any, on the Trust's net asset value.
37
Eaton Vance
Senior Floating-Rate Trust
April 30, 2025
Officers and Trustees
| Officers | |
| Kenneth A. Topping President |
Nicholas S. Di Lorenzo Secretary |
| Deidre E. Walsh Vice President and Chief Legal Officer |
Laura T. Donovan Chief Compliance Officer |
| James F. Kirchner Treasurer |
|
| Trustees |
38
Eaton Vance Funds
| U.S. Customer Privacy Notice | March 2024 |
| FACTS | WHAT DOES EATON VANCE DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: ■ Social Security number and income ■ investment experience and risk tolerance ■ checking account information and wire transfer instructions |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Eaton Vance chooses to share; and whether you can limit this sharing. |
| Reasons we can share your personal information | Does Eaton Vance share? |
Can you limit this sharing? |
| For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| For our marketing purposes — to offer our products and services to you | Yes | No |
| For joint marketing with other financial companies | No | We don’t share |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No* |
| For our affiliates’ everyday business purposes — information about your creditworthiness | Yes | Yes* |
| For our affiliates to market to you | Yes | Yes* |
| For nonaffiliates to market to you | No | We don’t share |
| To limit our sharing |
Call toll-free 1-800-262-1122 or email: [email protected] Please note: If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing. |
| Questions? | Call toll-free 1-800-262-1122 or email: [email protected] |
39
Eaton Vance Funds
| U.S. Customer Privacy Notice — continued | March 2024 |
Page 2
| Who we are | |
| Who is providing this notice? | Eaton Vance Management and our investment management affiliates (“Eaton Vance”) (see Affiliates definition below.) |
| What we do | |
| How does Eaton Vance protect my personal information? |
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information. |
| How does Eaton Vance collect my personal information? |
We collect your personal information, for example, when you ■ open an account or make deposits or withdrawals from your account ■ buy securities from us or make a wire transfer ■ give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only ■ sharing for affiliates’ everyday business purposes — information about your creditworthiness ■ affiliates from using your information to market to you ■ sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. (See below for more on your rights under state law.) |
| What happens when I limit sharing for an account I hold jointly with someone else? |
Your choices will apply to everyone on your account. |
| Definitions | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. ■ Our affiliates include registered investment advisers such as Eaton Vance Management, Eaton Vance Advisers International Ltd., Boston Management and Research, Calvert Research and Management, Parametric Portfolio Associates LLC, Atlanta Capital Management Company LLC, Morgan Stanley Investment Management Inc., Morgan Stanley Investment Management Co.; registered broker-dealers such as Morgan Stanley Distributors Inc. and Eaton Vance Distributors, Inc. (together, the “Investment Management Affiliates”); and companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. (the “Morgan Stanley Affiliates”). |
| Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. ■ Eaton Vance does not share with nonaffiliates so they can market to you. |
| Joint marketing | A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ■ Eaton Vance does not jointly market. |
| Other important information | |
40
Eaton Vance Funds
| U.S. Customer Privacy Notice — continued | March 2024 |
Page 3
| *PLEASE NOTE: Eaton Vance does not share your creditworthiness information or your transactions and experiences information with the Morgan Stanley Affiliates, nor does Eaton Vance enable the Morgan Stanley Affiliates to market to you. Your opt outs will prevent Eaton Vance from sharing your creditworthiness information with the Investment Management Affiliates and will prevent the Investment Management Affiliates from marketing their products to you. Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Nonaffiliates unless you provide us with your written consent to share such information. California: Except as permitted by law, we will not share personal information we collect about California residents with Nonaffiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us. |
41
Eaton Vance Funds
IMPORTANT NOTICES
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Equiniti Trust Company, LLC (“EQ”), the closed-end funds transfer agent, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct EQ, or your financial intermediary, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact EQ or your financial intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by EQ or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov. You may also access proxy voting information for the Eaton Vance Funds or their underlying Portfolios at www.eatonvance.com/
proxyvoting.
proxyvoting.
Share Repurchase Program. The Fund’s Board of Trustees has approved a share repurchase program authorizing the Fund to repurchase up to 10% of its common shares outstanding as of the last day of the prior calendar year in open-market transactions at a discount to net asset value. The repurchase program does not obligate the Fund to purchase a specific amount of shares. The Fund’s repurchase activity, including the number of shares purchased, average price and average discount to net asset value, is disclosed in the Fund’s annual and semi-annual reports to shareholders.
Additional Notice to Shareholders. If applicable, a Fund may also redeem or purchase its outstanding preferred shares in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.
Closed-End Fund Information. Eaton Vance closed-end funds make fund performance data and certain information about portfolio characteristics available on the Eaton Vance website shortly after the end of each month. Other information about the funds is available on the website. The funds’ net asset value per share is readily accessible on the Eaton Vance website. Portfolio holdings for the most recent month-end are also posted to the website approximately 30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under “Closed-End Funds & Term Trusts.”
42
(b) Not applicable.
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed Registrants
Not required in this filing.
Item 6. Schedule of Investments
| (a) | Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR. |
| (b) | Not applicable. |
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies
Not applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract
Not applicable.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not required in this filing.
Item 13. Portfolio Managers of Closed-End Management Investment Companies
Not required in this filing.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
No such purchases this period.
Item 15. Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominee to the Trust’s Board of Trustees since the Trust last provided disclosure in response to this item.
Item 16. Controls and Procedures
| (a) | It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. |
| (b) | There have been no changes in the registrant’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
No activity to report for the registrant’s most recent fiscal year end.
Item 18. Recovery of Erroneously Awarded Compensation
Not applicable.
Item 19. Exhibits
| (a)(1) |
Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
| (a)(2)(i) |
Principal Financial Officer’s Section 302 certification. | |
| (a)(2)(ii) |
Principal Executive Officer’s Section 302 certification. | |
| (b) |
Combined Section 906 certification. | |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Eaton Vance Senior Floating-Rate Trust | ||
| By: | /s/ Kenneth A. Topping | |
| Kenneth A. Topping | ||
| Principal Executive Officer | ||
| Date: | June 24, 2025 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ James F. Kirchner | |
| James F. Kirchner | ||
| Principal Financial Officer | ||
| Date: | June 24, 2025 | |
| By: | /s/ Kenneth A. Topping | |
| Kenneth A. Topping | ||
| Principal Executive Officer | ||
| Date: | June 24, 2025 | |