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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21654
Pioneer Floating Rate Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: November 30
Date of reporting period: December 1, 2006 through November 30, 2007
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
-------
FLOATING
RATE
TRUST
PHD
Ticker Symbol
Annual
Report
11/30/07
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Summary 4
Prices and Distributions 5
Performance Update 6
Portfolio Management Discussion 7
Schedule of Investments 12
Financial Statements 30
Notes to Financial Statements 34
Report of Independent Registered Public Accounting Firm 46
Approval of Investment Advisory Agreement 47
Trustees, Officers and Service Providers 51
President's
Dear Shareowner,
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Staying diversified and keeping your portfolio invested in the markets are two
general investment principles that have served investors well over time. They
were particularly useful guides in recent months, when an otherwise healthy
long-term bull market was buffeted by problems in the mortgage and banking
industries.
Since mid-year 2007, issues tied to poor underwriting practices in the subprime
sector of the mortgage industry and to problems with risk management by banks
and hedge funds have resulted in increased market volatility and rising concern
about risks to U.S. economic growth.
U.S. economic growth had slowed over the past two years, but this has been due
as much to the natural maturation of the cyclical expansion, as U.S. factories
approached full utilization and the labor market approached full employment, as
to rising commodity prices or short-term interest rates. This slowdown was,
therefore, not entirely unwelcome, as it reduced the threat of higher
inflation. More recently, however, there has been increasing concern that
falling home prices, and/or disruptions in financial markets pose a larger
threat to continuing economic growth, and we have seen two cuts in short-term
interest rates from the Federal Reserve despite strong economic growth in the
second and third quarters of 2007. A weaker U.S. dollar has put upward pressure
on some prices, but it has also significantly benefited exporters and companies
competing in the global marketplace, stimulating U.S. economic growth.
Economic growth in the rest of the world remains relatively positive. In
Europe, solid GDP growth has driven unemployment lower and supported growing
consumption, although concerns about the impact of the strong Euro are a
persistent source of worry. Japanese economic growth continues, albeit at a
muted rate, and the country's deflationary problems are gradually receding.
Economic growth in emerging market countries remains faster than in the
developed world, led by China, which continues its rise as a world economic
power.
Looking forward, we believe the economic outlook remains generally positive,
although real estate prices, subprime mortgage defaults, and the possibility of
a liquidity/credit crunch represent growing sources of risk. Central banks have
responded to the stresses in the inter-bank and commercial paper markets by
acting as "lenders of last resort" and, in the case of the Federal Reserve, by
cutting rates.
The U.S. Federal Reserve and the world's other central banks are still pursuing
policies aimed at producing low and stable inflation, believed to be the best
backdrop for steady economic growth and low average unemployment over the long
term. Keeping inflation low is also an important support for stock and bond
valuations, and so central bank policies have also been "investor friendly." We
view the Fed's recent rate cuts as temporarily "buying
2
Letter
insurance" against a credit crunch, which would threaten economic growth,
rather than as an abandonment of its commitment to keeping inflation low.
Even against this wall-of-worry backdrop, and factoring in recent market
weakness, the long-term performance of major asset classes has remained
positive. Equity investors were generally rewarded as, despite several interim
corrections and poor performance in November 2007, the Standard & Poor's 500
Index returned 8%, the Dow Jones Industrial Average returned 12%, and the
NASDAQ Composite Index returned 9% in the 12 months ending November 30, 2007.
International developed and emerging markets equities performed even better,
reflecting both a weakening dollar (which boosts returns for U.S. dollar-based
investors) and strong local currency returns, with the MSCI EAFE Developed
Market Index returning 18% and the MSCI Emerging Markets Index returning 46%
over the same period. The U.S. bond market, as measured by the Lehman Aggregate
Bond Index, returned 6% during the period. The U.S. high-yield bond market, as
measured by the Merrill Lynch High Yield Bond Master II Index, returned -3% for
the same period, however, as higher-coupon yields could not compensate for
falling bond prices as credit spreads (differences between yields of higher-
and lower-quality bonds) widened.
Sudden swings in the markets are always to be expected. Just as staying
diversified and invested are important investment principles, it is also
important to pay attention to asset allocation. As always, we encourage you to
work closely with your financial advisor to find the mix of stocks, bonds and
money market assets that is best aligned to your particular risk tolerance and
investment objective.
Respectfully,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
Please consider the Trust's investment objectives, risks, charges and expenses.
Contact your advisor or Pioneer Investments for a prospectus containing this
information. Please read the information carefully.
3
Pioneer Floating Rate Trust
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PORTFOLIO SUMMARY 11/30/07
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material.]
Senior Secured Loans 93.4%
Corporate Bonds 2.9%
Common Stock 1.9%
Temporary Cash Investment 1.1%
Convertible Corporate Bonds 0.5%
Claims 0.1%
Warrants 0.1%
Portfolio Quality
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(As a percentage of total investment portfolio; based on S&P ratings)
[The following data was represented as a pie chart in the printed material.]
BB 5.4%
B 68.8%
CCC 9.8%
D 1.1%
Not-rated* 13.8%
Cash Equivalents 1.1%
* These securities are judged to be similar but slightly lower in quality
than the rest of the portfolio.
10 Largest Holdings
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(As a percentage of long-term holdings)*
1. HCA, Inc., Tranche B Term Loan, 7.448%, 11/18/13 3.03%
2. Univision Communications, Inc., Initial Term Loan, 7.003% - 7.61%, 9/29/14 2.96
3. SMG H5 Pty, Ltd., Facility Term Loan A, 8.835% - 9.368%, 12/24/12 2.53
4. Charter Communications Operating, LLC, Replacement Term Loan,
7.13 - 7.36%, 3/6/14 2.50
5. Millennium Digital Media Systems, LLC, First Lien Term Loan, 8.98%, 6/30/11 1.88
6. Sabre, Inc., Initial Term Loan, 6.96%, 9/30/14 1.71
7. Delphi Corp., Tranche C Term Loan, 8.938%, 12/31/07 1.66
8. Cequel Communications, LLC, Term Loan, 6.66% - 8.5%, 11/5/13 1.63
9. Tribune Co., Initial Tranche B Advance Term Loan, 8.244%, 5/19/14 1.58
10. Cricket Communications, Inc., Term Loan B, 8.198%, 6/16/13 1.47
* This list excludes temporary cash and derivative investments. The portfolio
is actively managed, and current holdings may be different. The holdings
listed should not be considered recommendations to buy or sell any security
listed.
4
Pioneer Floating Rate Trust
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PRICES AND DISTRIBUTIONS
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Share Prices and Distributions
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11/30/07 11/30/06
Market Value
per Common Share $16.79 $18.95
Net Asset Value
per Common Share $18.07 $19.66
Market Discount 7.1% 3.6%
Net
Distributions Investment Short-Term Long-Term
per Common Share Income Capital Gains Capital Gains
(12/1/06 - 11/30/07) $1.9050 $ - $0.0038
Yields
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11/30/07 11/30/06
Distribution Yield at
Market Price 11.35% 8.56%
Distribution Yield at
Net Asset Value 10.54% 8.27%
30-day SEC Yield 15.14% 13.44%
Past performance data quoted represents past performance, which is no guarantee
of future results.
5
Pioneer Floating Rate Trust
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PERFORMANCE UPDATE 11/30/07
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Investment Returns
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The mountain chart on the right shows the change in market value, including
reinvestment of dividends and distributions, of a $10,000 investment made
in common shares of Pioneer Floating Rate Trust, compared to that of the
Credit Suisse First Boston (CSFB) Leveraged Loan Index, an index of senior
secured U.S. dollar denominated loans.
[The following data was represented as a moutain chart in the printed material.]
Value of $10,000 Investment
12/04 10,000 10,000
11/05 9,023 10,033
11/06 10,913 10,054
11/07 10,693 9,880
Pioneer Floating Rate Trust
CSFB Leveraged Loan Index
Cumulative Total Returns
(As of November 30, 2007)
Net
Asset Market
Period Value Price
Life-of-Trust
(12/23/04) 20.76% 6.93%
1 Year 1.65 -2.02
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Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below Net Asset Value "NAV", due to such factors as
interest rate changes, and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered. There is
a one-time public offering and, once issued, shares of closed-end funds are sold
in the open market through a stock exchange and frequently trade at prices lower
than their NAV. NAV is total assets less total liabilities, which includes
preferred shares, divided by the number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends are
assumed to be reinvested at prices obtained under the Trust's dividend
reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares.
Index comparison begins on 12/31/04. The CSFB Leveraged Loan Index is a
representative index of tradeable, senior, secured U.S. dollar-denominated
loans. The index began in January 1992. Index returns are calculated monthly,
assume reinvestment of dividends and, unlike Trust returns, do not reflect any
fees, expenses or sales charges. You cannot invest directly in an index.
6
Pioneer Floating Rate Trust
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/07
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This annual report for Pioneer Floating Rate Trust covers the 12-month period
from December 1, 2006, through November 30, 2007. In the report, portfolio
managers Mark Okada and Joseph Dougherty of Highland Capital Management, the
Trust's sub-adviser, discuss the Trust's investment process, strategy and
outlook.
Q: How did the Trust perform over the 12 months ended November 30, 2007?
A: For the 12-month period ended November 30, 2007, Pioneer Floating Rate
Trust returned 1.65% at net asset value, including reinvestment of
dividends. The market price return over that same period was -2.02%, and
the Trust was selling at a discount of market price to net asset value of
7.1% on November 30, 2007. The Trust's benchmark, the Credit Suisse
Leveraged Loan Index, returned 2.35% for the 12-month period ended November
30, 2007. Unlike open-ended funds, a closed-end fund's price goes up and
down based on market supply and demand, independent of a fund's net asset
value per share. During the 12 months, the Federal funds target rate (the
rate banks charge each other for overnight loans) declined to 4.50%; and
the yield on the 3-month London Interbank Offering Rate (LIBOR) declined to
4.67%. LIBOR is the rate of interest at which banks in the London interbank
market borrow funds from each other.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: What have been the major contributors to the change in net asset value over
the period reported?
A: The change in net asset value for the year ended November 30, 2007, is
detailed in the Statement of Changes in Net Assets. As can be seen, there
was a net decrease in net assets of $36.8 million. The major contributors
to this decrease were net unrealized losses on investments of $45.9 million
and distributions to shareowners of $59.1 million, offset by Investment
Income of
7
Pioneer Floating Rate Trust
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/07 (continued)
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$56.2 million and net realized gains on investments and foreign currency
transactions of $10.1 million and reinvestment of distributions of $1.9
million.
Q: What was the investment environment like for floating-rate securities?
A: The investment environment over the 12 months ended November 30, 2007 can
be separated into two distinct periods. During the first half of the fiscal
year, the environment was stable for floating-rate securities, with new
issue bank loan volume reaching new highs. Until mid-summer, the leveraged
loan market appeared to have been unaffected by the negative sentiment in
the subprime mortgage market. In July, however, the environment changed
dramatically, as some of the leveraged entities holding subprime assets
were forced into liquidation to meet margin calls. This resulted in a
general repricing of other structured products and took enough demand out
of the market to shut down the new issuance of collateralized loan
obligations (CLOs), which are a major source of liquidity in the loan
market. That lack of loan demand, coupled with the large new issue supply,
contributed to a repricing of corporate loans. We believe the repricing was
technical in nature not driven by company's fundamentals as illustrated by
the low default rate. For example, during the summer's repricing, Standard
& Poor's Leveraged Commentary and Data (LCD) reported that the lagging
12-month default rate on loans remained near an all-time low of 0.42% by
principal amount and ended November at 0.25%, which is well below the
Index's historical average of 3.33%. We believe the low default rates
indicated that the fundamentals in the corporate credit markets were quite
strong. We viewed the situation as an attractive buying opportunity, as the
yields rose while prices declined. We feel the market remains oversold as
spreads (the amount in addition to the reference rate the Trust is paid as
interest on a position) are wide by historical norms and believe that the
market is attractive given the fundamental credit environment.
Q: What were the main strategies used in managing the Trust over the 12-month
period ended November 30, 2007?
A: Our strategies were driven by our belief that the economy was healthy and
that the leveraged loan market represented an attractive long-term
investment opportunity. We kept the portfolio
8
Pioneer Floating Rate Trust
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fully invested by using available cash to add newly issued loans that we
felt would trade higher in the secondary markets. As of November 30, 2007,
the Trust was well diversified with positions in 178 issuers across 26
industries. As a percentage of the total invested portfolio, approximately
93.40% was in loans, 2.10% in equities, 3.40% in bonds and 1.1% in
temporary cash investments. Approximately 4.71% of the Trust was in second
lien loans. The largest sector positions in the portfolio were in media and
telecommunications, health care and retail. Some of the Trust's core
positions included HCA, a corporate operator of hospitals, and media
concerns Univision Communications, Tribune and Charter Communications.
On November 30, 2007, 33.79% of the Trust was leveraged, which means that
we borrowed funds at low rates and invested those funds in high-yielding
securities. Over the first half of the fiscal year, short-term rates showed
little volatility. Later in the fiscal year, however, rates declined which
lowered the cost of borrowing, providing the Trust with a modest amount of
additional income. A rise in short-term interest rates in the future would
add to the Trust's borrowing costs, and the ability to sustain present
distribution levels could be affected. Due to the floating-rate nature of
the loan asset class, the coupon payments reset to current LIBOR rates,
resulting in a correlation between the cost of leverage and the yield
provided by the Trust's investments. As long as the cost of borrowing
remains below the coupon rates available to the Trust, we do not anticipate
that the Trust's investment approach will change.
Q: Is the Trust invested solely in domestic assets? If not, is anything being
done to address foreign currency exposure?
A: No. As of November 30, 2007, the Trust holds 4.6% in international
investments. However, in an effort to reduce, or offset the effects of
currency fluctuations, the Trust does participate in currency hedging. The
effects of this hedging strategy is displayed on the Statement of Assets
and Liabilities, Statement of Operations, Statements of Changes in Net
Assets and in Footnote 3 of this annual report.
9
Pioneer Floating Rate Trust
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/07 (continued)
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Q: What is your outlook for floating-rate securities and the Trust?
A: As we move into 2008, we expect the current environment for loans, which
features larger spreads and low prices relative to historic norms, to
continue. The widening of spreads on new-issue loans has effectively
increased the cost of borrowing and is likely to temper the volume of new
issuance. This situation could lead to a better supply/demand balance later
in 2008.
We believe default rates will increase from the historic lows of 2007, but
given the continued strong EBITDA (earnings before interest, taxes,
depreciation and amortization) growth rates and relatively benign default
environment, it is difficult to predict the magnitude of the increase.
Market consensus is for defaults to approach their historical averages by
2008 year-end.
Information regarding the Trust's principal investment risks is contained
in the Trust's original offering prospectus. Please refer to this document
when considering the Trust's risks.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers
that are in default or that are in bankruptcy.
When interest rates rise, the prices of fixed-income securities in the
Trust will generally fall. Conversely, when interest rates fall the prices
of fixed-income securities in the Trust will generally rise. The floating
rate feature of the Trust means that the Trust will not experience capital
appreciation in a declining interest-rate environment. Investments in the
Trust are subject to possible loss due to the financial failure of issuers
of underlying securities and their inability to meet their debt
obligations.
The Trust may invest in derivative securities, which may include futures
and options. These types of instruments can increase price fluctuation.
The Trust is not limited in the percentage of its assets that may be
invested in floating rate senior loans and other securities deemed to be
illiquid. Illiquid securities may be difficult to dispose of at a fair
price at the times when the Trust believes it is desirable to do so and
their market price is generally more volatile than that of more liquid
securities. Illiquid securities are
10
Pioneer Floating Rate Trust
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also more difficult to value, and investment of the Trust's assets in
illiquid securities may restrict the Trust's ability to take advantage of
market opportunities.
The Trust currently uses leverage through the issuance of preferred shares.
The Trust also is authorized to borrow from banks and to issue debt
securities, which are other forms of leverage. Leverage creates significant
risks, including the risk that the Trust's income or capital appreciation
will not be sufficient to cover the cost of leverage, which may adversely
affect the return for the holders of common shares.
The Trust is not diversified, which means that it can invest a higher
percentage of its assets in any one issuer than a diversified fund. Being
non-diversified may magnify the Trust's losses from adverse events
affecting a particular issuer.
Any information in this shareowner report regarding market or economic
trends or the factors influencing the Trust's historical or future
performance are statements of the opinion of the Trust's sub-adviser as of
the date of this report. These statements should not be relied upon for any
other purposes. Past performance is no guarantee of future results, and
there is no guarantee that market forecasts discussed will be realized.
11
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
SENIOR SECURED FLOATING RATE LOAN
INTERESTS - 141.2% of Net Assets*
Aerospace - 6.4%
3,449,268 B+/Ba3 AWAS Capital, Inc., First Lien Term
Loan, 7.0%, 3/15/13 $ 3,255,247
2,985,000 B-/B1 DeCrane Aircraft Holdings, Inc., First
Lien Term Loan, 7.994% - 9.5%,
2/21/13 2,925,300
1,000,000 B/Ba2 Delta Airlines, Inc., Credit-Linked
Deposit Loan, 6.84%, 4/30/12 952,500
1,995,000 B/B2 Delta Airlines, Inc., Second Lien Term
Loan, 8.082%, 4/30/14 1,917,337
4,375,429 BB-/Ba2 DynCorp International, LLC (Di Finance),
New Term Loan, 7.25%, 2/11/11 4,145,719
982,500 CCC/B3 IAP Worldwide Services, Inc., First Lien
Term Loan, 11.5%, 12/30/12 894,075
6,940,000 B+/Ba3 Northwest Airlines, Inc., Term Loan,
6.686%, 8/21/08 6,593,000
5,000,000 B-/B2 US Airways Group, Inc., Term Loan,
7.283%, 3/23/14 4,685,415
3,000,000 B-/Ba2 Vought Aircraft Industries, Inc., Tranche
B LC Deposit Loan, 7.82%,
12/22/10 2,937,501
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$ 28,306,094
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Broadcasting - 20.8%
11,446,241 B+/B1 Cequel Communications, LLC, Term
Loan, 6.66% - 8.5%, 11/5/13 $ 10,738,657
17,666,337 B-/B1 Charter Communications Operating,
LLC, Replacement Term Loan,
7.13% - 7.36%, 3/6/14 16,501,030
1,000,000 B/Caa1 Hargray Acquisition Co., Second Lien
Term Loan, 10.698%, 1/29/15 975,000
3,000,000 BB-/Ba3 Insight Midwest Holdings, LLC, Term
Loan B, 7.0%, 4/7/14 2,908,125
9,142,884 B/Ba3 Metro-Goldwyn-Mayer Inc., Tranche B
Term Loan, 8.448%, 4/8/12 8,528,857
997,494 CCC+/NR Metro-Goldwyn-Mayer Inc., Tranche B-1
Term Loan, 8.448%, 4/8/12 930,503
994,997 B/B1 NEP II, Inc., Term Loan B, 7.448%,
2/16/14 950,222
12 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Broadcasting - (continued)
7,000,000 CCC+/B2 Paxson Communications Corp., Term
Loan, 8.493%, 1/15/12 $6,755,000
AUD 19,523,810 B-/NR SMG H5 Pty, Ltd., Facility Term Loan A,
8.835% - 9.368%, 12/24/12 16,732,673
3,974,719 B/Ba3 Sunshine Acquisition, Ltd., Facility Term
Loan, 6.83%, 3/20/12 3,795,857
21,261,745 B/Ba3 Univision Communications, Inc., Initial
Term Loan, 7.003% - 7.61%,
9/29/14 19,554,172
3,818,728 CCC+/Ba3 Young Broadcasting, Inc., Term Loan,
7.438% - 7.75%, 11/3/12 3,637,338
------------
$ 92,007,434
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Cable/Wireless Video - 3.0%
12,602,100(a)(b) CCC+/B3 Millennium Digital Media Systems, LLC,
First Lien Term Loan, 8.98%,
6/30/11 $ 12,444,574
859,303(b) CCC+/B3 Millennium Digital Media Systems, LLC,
Revolver Credit Loan, 8.45% -
8.57%, 6/30/11 817,403
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$ 13,261,977
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Chemicals - 0.2%
1,000,000(b) B/B2 Panda Hereford Ethanol, L.P., Tranche A
Term Loan, 8.402%, 7/28/13 $ 960,000
------------
Consumer - Durables - 0.4%
1,870,491 B/B1 Rexair, LLC, First Lien Term Loan,
9.448%, 6/30/10 $ 1,842,434
------------
Consumer - Non-Durables - 1.8%
1,000,000(b) B/B3 Appleseed's Intermediate Holdings,
Inc., First Lien Term Loan, 4.0%,
4/30/13 $ 945,000
2,177,835 B-/B2 Camelbak Products, LLC, First Lien
Term Loan, 8.409% - 10.25%,
8/4/11 2,083,463
4,018,337 CCC+/B2 Spectrum Brands, Inc., Dollar Term
Loan B, 8.896% - 9.754%, 3/30/13 3,895,778
201,369 CCC+/B2 Spectrum Brands, Inc., LC Loan,
4.566%, 3/30/13 195,228
The accompanying notes are an integral part of these financial statements. 13
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07 (continued)
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Consumer - Non-Durables - (continued)
992,500 B/B2 Totes Isotoner Corp., First Lien Term
Loan, 7.698% - 9.0%, 1/31/13 $ 952,800
------------
$ 8,072,269
------------
Consumer - Products - 0.1%
630,651 CCC+/B1 Solo Cup Co., Term Loan B-1, 8.28% -
8.54%, 2/27/11 $ 626,413
------------
Diversified Media - 7.0%
990,001 B/Ba3 Nielsen Finance, LLC, Dollar Term Loan,
7.36%, 8/9/13 $ 940,570
1,990,000 B/B1 Penton Media Holdings, Inc., First Lien
Term Loan, 7.234% - 7.448%,
2/1/13 1,842,617
3,500,000 B/Caa1 Penton Media Holdings, Inc., Second
Lien Term Loan, 9.984%, 2/1/14 3,141,250
4,967,423 B-/B1 Riverdeep Interactive Learning USA,
Inc., Term Loan, 7.948%, 12/20/13 4,943,619
11,970,000 B+/Ba3 Tribune Co., Initial Tranche B Advance
Term Loan, 8.244%, 5/19/14 10,448,314
7,466,667 B+/Ba3 Tribune Co., Tranche X Advance Term
Loan, 7.744%, 5/18/09 7,308,000
682,733 B+/Ba2 Valassis Communications, Inc., Tranche
B Term Loan, 6.95%, 3/2/14 639,636
1,451,250 B/B2 Wallace Theater Corp. (Hollywood
Theaters), First Lien Term Loan,
9.75%, 7/31/09 1,436,737
------------
$ 30,700,743
------------
Energy - 7.2%
3,684,983 B-/B3 ATP Oil & Gas Corp., New Facility Term
Loan, 8.291% - 8.888%, 3/23/20 $ 3,647,558
1,790,000 B+/B1 Big West Oil, LLC, Initial Advance Term
Loan, 7.448%, 5/15/14 1,727,350
486,486 CCC+/Caa1 Coffeyville Resources, LLC, Funded LC
Loan, 5.131%, 12/28/10 475,236
1,586,601 CCC+/Caa1 Coffeyville Resources, LLC, Tranche D
Term Loan, 8.481% - 9.75%,
12/30/13 1,549,911
1,500,000 B+/B1 Connacher Finance Corp., Term Loan,
9.75%, 10/20/13 1,500,000
14 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Energy - (continued)
466,276 NR/NR Delphi Acquisition Holding I B.V., Facility
Term Loan B-1, 7.573%, 1/11/15 $ 452,055
466,276 NR/NR Delphi Acquisition Holding I B.V., Facility
Term Loan C-1, 8.073%, 1/11/16 454,386
3,000,000 NR/NR Endeavour International Holding B.V.,
Second Lien Term Loan, 11.911%,
11/1/11 2,925,000
3,979,727 BB-/B1 Helix Energy Solutions Group, Inc.,
Term Loan, 6.652% - 7.229%,
7/1/13 3,879,128
2,000,000 NR/NR III Exploration II, L.P., Second Lien Term
Loan, 11.14% - 11.81%, 4/29/14 1,910,000
2,986,125 NR/NR III Exploration II, L.P., Term Loan,
8.22% - 10.25%, 10/29/13 2,851,749
3,054,835(b) NR/NR Monitor U.S. Finco, Inc., First Lien Term
Loan, 14.698%, 1/11/14 3,024,286
2,000,000(b) NR/NR Monitor U.S. Finco, Inc., Second Lien
Term Loan, 17.198%, 1/11/15 950,000
1,250,000 NR/NR TARH E&P Holdings, L.P., First Lien
Term Loan, 9.827%, 6/29/12 1,231,250
4,395,064 CCC+/NR Value Creation, Inc., Term Loan,
12.438% - 12.846%, 7/7/12 4,263,212
892,500 BB-/Ba2 Volnay Acquisition Co. I, Facility Term
Loan B-1, 7.225%, 1/12/14 874,650
------------
$ 31,715,771
------------
Financial - 1.2%
1,000,000(b) NR/Ba2 Concord Re, Ltd., Term Loan, 9.234%,
2/29/12 $ 995,000
215,147 B/B2 HUB International Holdings, Inc., Delay
Draw Term Loan, 7.322%, 6/13/14 204,928
3,056,066 B/B2 HUB International Holdings, Inc., Initial
Term Loan, 8.203%, 6/13/14 2,910,903
1,000,000 NR/Ba2 Kepler Holdings, Ltd., Term Loan,
10.698%, 6/30/09 980,000
------------
$ 5,090,831
------------
Food & Drug - 0.4%
1,985,000 B+/Ba3 Roundy's Supermarkets, Inc., Tranche
B Term Loan, 8.46%, 11/3/11 $ 1,950,262
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Food & Tobacco - 1.9%
992,500(b) B+/Ba3 Aramark Canada, Ltd., Canadian Term
Loan, 7.198%, 1/26/14 $ 934,191
879,630 B-/B1 Chiquita Brands, LLC, Term Loan C,
7.813%, 6/28/12 856,906
1,853,019 B/B1 OSI Restaurant Partners, LLC,
Incremental Term Loan, 7.0%,
6/14/14 1,701,998
142,337 B/B1 OSI Restaurant Partners, LLC, Pre-
Funded Revolver Credit Loan,
5.523%, 6/14/13 130,737
4,987,500 B-/B2 Pinnacle Foods Finance, LLC, Term
Loan, 7.948%, 4/2/14 4,750,594
------------
$ 8,374,426
------------
Forest Products & Containers - 0.2%
833,333 B+/Ba3 Newark Group, Inc., Synthetic LC Loan,
7.06%, 3/9/13 $ 808,333
166,667 B+/Ba3 Newark Group, Inc., Term Loan, 7.06%,
3/9/13 161,667
------------
$ 970,000
------------
Gaming & Leisure - 6.1%
5,000,000(b)(c) NR/NR Fontainebleau Florida Hotel, LLC,
Tranche C Term Loan, 11.703%,
6/6/12 $ 4,737,500
1,333,333(b) B/B1 Fontainebleau Las Vegas, LLC, Initial
Term Loan, 8.4%, 6/6/14 1,260,000
2,369,368 B-/B3 Ginn LA Conduit Lender, Inc., First Lien
Tranche A Credit-Linked Deposit
Loan, 5.098%, 6/8/11 1,912,080
5,103,074 B-/B3 Ginn LA Conduit Lender, Inc., First Lien
Tranche B Term Loan, 8.698% -
8.86%, 6/8/11 4,118,180
750,000(b) CCC/NR Lake at Las Vegas Joint Venture/LLV-1,
LLC, New Term Loan, 11.2%,
1/24/08 750,000
361,111(b) CCC/NR Lake at Las Vegas Joint Venture/LLV-1,
LLC, Revolving Credit-Linked Deposit
Account Loan, 11.96%, 6/20/12 186,574
16 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Gaming & Leisure - (continued)
2,684,362(a)(b) CCC/NR Lake at Las Vegas Joint Venture /
LLV-1, LLC, Term Loan, 15.31%,
6/20/12 $ 1,386,921
2,000,000 B/B1 Orbitz Worldwide, Inc., Term Loan,
8.198%, 7/25/14 1,920,000
2,963,059 B/B1 Pivotal Promontory, LLC, First Lien Term
Loan, 11.25%, 8/31/10 2,666,753
469,943 B/Ba3 Trump Entertainment Resorts Holdings,
L.P., Facility Term Loan C-1, 7.9%,
5/21/12 459,957
469,943 B/Ba3 Trump Entertainment Resorts Holdings,
L.P., Facility Term Loan C-2, 7.86%,
5/21/12 459,957
1,000,000(b) B/B1 WAICCS Las Vegas 3, LLC, First Lien
Term Loan, 8.188%, 8/1/08 980,000
4,500,000(b) B/Caa2 WAICCS Las Vegas 3, LLC, Second Lien
Term Loan, 13.688%, 8/1/08 4,455,000
1,650,133 B+/B1 Yellowstone Mountain Club, LLC, First
Lien Term Loan, 7.184%, 9/30/10 1,522,248
------------
$ 26,815,170
------------
Healthcare - 15.4%
5,356,978 B-/B1 CCS Medical, Inc. (Chronic Care), First
Lien Term Loan, 8.45%, 9/30/12 $ 5,236,446
794,000 B/Ba3 CHG Companies, Inc./CHG Medical
Staffing, Inc., First Lien Term Loan B,
7.165% - 7.743%, 12/20/12 760,255
200,000 B/Ba3 CHG Companies, Inc./CHG Medical
Staffing, Inc., Synthetic LC First Lien
Term Loan, 7.13%, 12/20/12 191,500
4,690,642 BB-/Ba3 CHS/Community Health Systems, Inc.,
Funded Term Loan, 7.072% -
7.331%, 7/25/14 4,499,550
1,443,976(b) B/NR DSI Renal, Inc. (National Renal
Institutes, Inc.), Facility Term Loan,
7.5% - 7.625%, 3/31/13 1,404,267
3,411,429 B+/B1 Fenwal, Inc., Initial First Lien Term
Loan, 7.07% - 7.331%, 2/28/14 3,198,214
5,000,000 B/Caa1 FHC Health Systems, Inc., Third Lien
Term Loan, 14.88%, 2/9/11 5,050,000
The accompanying notes are an integral part of these financial statements. 17
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Healthcare - (continued)
2,732,143 B/Ba3 Golden Gate National Senior Care, LLC,
First Lien Term Loan, 7.569%,
3/14/11 $ 2,691,161
2,000,000 B/B3 Golden Gate National Senior Care, LLC,
Second Lien Term Loan, 12.569%,
9/14/11 1,980,000
2,000,000 B+/NR Graceway Pharmaceuticals, LLC, Mez-
zanine Loan, 13.448%, 11/1/13 1,700,000
20,842,500 B+/Ba3 HCA, Inc., Tranche B Term Loan,
7.448%, 11/18/13 20,005,549
1,265,843 B/B2 HealthSouth Corp., Term Loan, 7.17% -
7.32%, 3/11/13 1,216,360
2,992,366 CCC+/B1 LifeCare Holdings (Rainier Acquisition
Corp.), Term Loan, 8.2%, 8/11/12 2,714,076
1,000,000 B-/Caa1 Medical Staffing Network, Inc., Second
Lien Term Loan, 12.198%, 7/2/14 995,000
3,500,000 B+/Ba2 Onex Carestream Finance, L.P., First
Lien Term Loan, 6.753% - 7.327%,
4/30/13 3,308,595
208,256 B+/B2 Reliant Pharmaceuticals, Inc., Delayed
Draw Term Loan, 8.974%, 3/31/12 206,173
786,744 B+/B2 Reliant Pharmaceuticals, Inc., Initial
Term Loan, 8.974%, 3/31/12 778,877
1,915,102 B+/B1 Skilled Healthcare Group, Inc., First
Lien Term Loan, 6.803% - 6.96%,
6/15/12 1,874,406
4,962,500 B+/B2 Talecris Biotherapeutics Holdings Corp.,
First Lien Term Loan, 9.08%,
12/6/13 4,929,415
2,970,019 B/B2 Triumph HealthCare Second Holdings,
LLC, First Lien Term Loan, 7.82% -
8.725%, 7/28/13 2,873,493
1,950,284 B+/Ba3 Warner Chilcott Co., Inc., Tranche B
Acquisition Date Term Loan, 6.878%
- 7.198%, 1/18/12 1,890,151
589,039 B+/Ba3 Warner Chilcott Corp., Tranche C
Acquisition Date Term Loan, 7.198%,
1/18/12 570,877
------------
$ 68,074,365
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
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--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Housing - 7.0%
1,622,857 B-/B3 Associated Materials, Inc., Term Loan,
7.9%, 8/29/10 $ 1,549,828
6,095,632 B/B1 Atrium Companies, Inc., Closing Date
Term Loan, 8.45% - 8.84%,
5/31/12 5,701,957
1,582,218 B+/B1 Champion Home Builders Co.,
Synthetic LC Loan, 5.098%,
10/31/12 1,550,574
680,353 B+/B1 Champion Home Builders Co., U.S.
Term Loan, 8.059%, 10/31/12 666,745
2,455,523 B/B1 Custom Building Products, Inc., First
Lien Term Loan, 7.072% - 7.758%,
10/20/11 2,320,469
458,326(b) B+/B1 Desa, LLC, Term Loan, 14.25% -
14.5%, 11/26/11 417,076
3,000,000 B+/B2 LNR Property Corp., Initial Tranche B
Term Loan, 7.63%, 7/12/11 2,879,064
932,633 B/B1 Playpower, Inc., Tranche B Dollar Term
Loan, 7.95%, 6/30/12 897,660
8,066,428 B/Ba3 Realogy Corp., Initial Term Loan B,
8.24%, 10/10/13 7,086,357
2,426,184 B/Ba3 Realogy Corp., Synthetic LC Loan,
8.32%, 10/10/13 2,131,403
2,129,868 B/B2 Rhodes Companies, LLC , First Lien
Term Loan, 8.698%, 11/21/10 1,916,881
3,957,333(b) BB-/Ba3 Woodlands Commercial Properties Co.,
L.P., Bridge Loan, 7.98%, 2/28/08 3,917,760
------------
$ 31,035,774
------------
Information Technology - 9.3%
2,654,158 B/B1 Applied Systems, Inc., Term Loan, 7.4%
- 7.698%, 9/26/13 $ 2,574,533
2,962,613 B+/NR DTN, Inc., Tranche C Term Loan,
8.395% - 8.725%, 3/10/13 2,958,909
4,987,437 B+/Baa3 Freescale Semiconductor, Inc., Term
Loan, 6.975%, 11/29/13 4,669,488
2,378,565 B-/B1 Infor Enterprise Solutions Holdings,
Inc., Delayed Draw Term Loan,
8.95%, 7/28/12 2,295,315
The accompanying notes are an integral part of these financial statements. 19
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Information Technology - (continued)
2,992,500 B-/B1 Infor Enterprise Solutions Holdings,
Inc., Dollar Tranche B-1 First Lien
Term Commitment, 7.95%, 3/2/14 $ 2,827,912
4,558,916 B-/B1 Infor Enterprise Solutions Holdings,
Inc., Initial U.S. Term Loan, 8.95%,
7/28/12 4,399,354
738,670 B/B2 Inovis International, Inc., Term Loan,
7.5% - 8.545%, 11/15/09 738,670
4,639,535 BB-/B1 Keane International, Inc., Closing Date
Term Loan, 7.06%, 6/4/13 4,204,578
348,837 BB-/B1 Keane International, Inc., Synthetic LC
Loan, 7.06%, 6/4/13 316,134
995,000 B+/B2 Metrologic Instruments, Inc., First Lien
Add-on Term Loan, 8.2%, 4/23/14 928,177
1,000,000 B+/Caa2 Metrologic Instruments, Inc., Second
Lien Term Loan, 11.45%, 4/24/15 955,000
1,425,000 B/B2 Quantum Corp., Term Loan, 8.698%,
7/14/14 1,389,375
3,587,500 B/B1 Serena Software, Inc., Term Loan,
7.175%, 3/10/13 3,464,926
1,946,921 B+/B2 Sitel, LLC (ClientLogic), U.S. Term Loan,
7.253% - 7.698%, 1/30/14 1,771,698
6,843,287 B+/Ba3 SunGard Data Systems, Inc. (Solar
Capital Corp.), New U.S. Term Loan,
6.898%, 2/28/14 6,617,315
938,462 B/NR Verint Systems, Inc., Term Loan,
7.975%, 5/27/14 910,308
------------
$ 41,021,692
------------
Manufacturing - 1.2%
1,000,000 B/B1 FCI USA, Inc., Facility Term Loan B-1,
7.755%, 3/10/14 $ 967,500
1,000,000 B/B1 FCI USA, Inc., Tranche Term Loan B-5-B,
7.755%, 11/3/13 960,000
2,960,000 B/B1 Generac Acquisition Corp., First Lien
Term Loan, 7.73%, 11/10/13 2,574,670
1,000,000 B+/B1 Hunter Defense Technologies, Inc., First
Lien Term Loan B, 8.45%, 8/13/14 960,000
------------
$ 5,462,170
------------
20 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Metals & Minerals - 1.4%
1,995,000 B/B3 Algoma Steel, Inc., Term Loan, 8.09%,
6/20/13 $ 1,865,325
4,378,687 B/B3 Murray Energy Corp., First Lien Tranche
B Term Loan, 7.906%, 1/28/10 4,203,540
------------
$ 6,068,865
------------
Retail - 10.0%
9,049,684 B-/B3 Blockbuster, Inc., Tranche B Term Loan,
9.11% - 9.65%, 8/20/11 $ 8,755,570
4,856,232 B/B2 Burlington Coat Factory Warehouse
Corp., Term Loan, 7.32%, 5/28/13 4,415,126
3,000,000 B/NR Dollar General Corp., Tranche B-1 Term
Loan, 7.734% - 8.07%, 7/7/14 2,675,001
15,765,928(b) CCC/Caa2 Home Interiors & Gifts, Inc., Initial Term
Loan, 10.32% - 12.25%, 3/31/11 9,223,068
1,989,949 B-/B2 Michaels Stores, Inc., Replacement
Term Loan, 6.938% - 7.625%,
10/31/13 1,834,371
360,192(b) D/NR Movie Gallery, Inc., First Lien Synthetic
LC Loan, 11.0% - 12.25%, 3/8/12 288,454
8,610,780(b) D/NR Movie Gallery, Inc., First Lien Term
Loan, 12.25% - 12.75%, 3/8/12 6,895,797
1,982,481 B/B2 Sally Holdings, LLC, Term Loan B,
8.006%, 11/16/13 1,909,201
5,000,000 BB-/B2 Spirit Finance Corp., Term Loan,
7.911%, 8/1/13 4,441,665
3,980,099 B/B2 Toys R Us - Delaware, Inc., Tranche B
Term Loan, 9.155%, 7/19/12 3,937,457
------------
$ 44,375,710
------------
Service - 5.2%
3,980,000(b) B/B1 Inmar, Inc., Term Loan, 7.7%, 4/29/13 $ 3,860,600
795,841 B+/B3 Rental Service Corp., Second Lien
Initial Term Loan, 8.75%, 11/30/13 754,059
12,203,980 B+/B1 Sabre, Inc., Initial Term Loan, 6.96%,
9/30/14 11,265,103
992,500 B-/Ba3 Total Safety U.S., Inc., First Lien
Tranche B Term Loan, 8.198%,
12/8/12 977,612
The accompanying notes are an integral part of these financial statements. 21
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Service - (continued)
5,790,500 B/Ba3 Travelport, LLC, Delayed Draw Term
Loan, 7.448%, 8/23/13 $ 5,521,653
67,223 B/Ba3 Travelport, LLC, Synthetic LC Loan,
7.448%, 8/23/13 64,102
335,023 B/Ba3 Travelport, LLC, Tranche B Dollar Term
Loan, 7.448%, 8/23/13 319,468
------------
$ 22,762,597
------------
Telecommunications - 10.6%
500,000 B/Ba3 Aeroflex, Inc., Tranche B-1 Term Loan,
8.119%, 8/15/14 $ 479,375
500,000 B/B3 Aeroflex, Inc., Tranche B-2 Term Loan,
8.619%, 8/15/14 479,375
EURO 752,152 B/NR Amsterdamse Beheer-EN
Consultingmaatschappij B.V.
(Casema), Casema Term Loan Facil-
ity B-1, 6.669%, 9/12/14 1,088,487
EURO 390,705 B/NR Amsterdamse Beheer-EN
Consultingmaatschappij B.V.
(Casema), Casema Term Loan Facil-
ity B-2 , 6.669%, 9/12/14 565,414
EURO 1,142,857 B/NR Amsterdamse Beheer-EN
Consultingmaatschappij B.V.
(Casema), Casema Term Loan Facil-
ity C, 7.169%, 9/12/15 1,662,289
EURO 857,143 B/NR Amsterdamse Beheer-EN
Consultingmaatschappij B.V.
(Casema), Kabelcom Term Loan
Facility B, 6.669%, 9/12/14 1,240,226
EURO 857,143 B/NR Amsterdamse Beheer-EN
Consultingmaatschappij B.V.
(Casema), Kabelcom Term Loan
Facility C, 7.169%, 9/12/15 1,246,516
1,000,000(b) B-/B2 Cellnet Group, Inc., Second Lien Term
Loan, 9.45%, 10/22/11 970,625
159,222 B/Ba2 Centennial Commercial Corp., New
Term Loan, 7.081% - 7.198%,
2/9/11 155,241
22 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Telecommunications - (continued)
1,250,000 BB-/B1 Fairpoint Communications, Inc.,
Replacement Term Loan B, 7.0%,
2/8/12 $1,240,625
173,913 B+/B2 Global Tel Link Corp., Acquisition
Synthetic Deposit Loan, 5.098%,
2/13/08 170,870
258,913 B+/B2 Global Tel Link Corp., Acquisition Term
Loan, 8.698%, 2/14/08 254,382
43,478 B+/B2 Global Tel Link Corp., Synthetic Deposit
Loan, 5.098%, 2/13/08 42,717
510,000 B+/B2 Global Tel Link Corp., Facility Term
Loan, 8.698%, 2/14/08 501,075
2,414,732 B-/Ba3 Hawaiian Telcom Communications, Inc.,
Tranche C Term Loan, 7.45%, 6/2/14 2,295,253
4,000,000 B-/Ba3 Integra Telecom Holdings, Inc., Term
Loan, 9.003% - 9.21%, 8/31/13 3,965,000
2,970,000 B+/Ba2 Intelsat Corp., Tranche B-2 Term Loan,
7.225%, 12/3/13 2,912,827
6,500,000 B-/B1 Level 3 Financing, Inc., Term Loan,
7.493%, 3/13/14 6,172,289
EURO 1,000,000 B/NR Mediannuaire Holding (Pages Jaunes
Holdco), Euro Term Loan B-2,
6.762%, 10/10/14 1,416,676
EURO 1,000,000 B/NR Mediannuaire Holding (Pages Jaunes
Holdco), Euro Term Loan C, 7.262%,
10/10/15 1,424,015
EURO 364,788 BB-/NR Nordic Telephone Company Holdings
APS, Euro Facility Term Loan B-2,
6.675%, 11/30/13 525,748
EURO 439,781 BB-/NR Nordic Telephone Company Holdings
APS, Euro Facility Term Loan C-2,
6.925%, 11/30/14 637,059
644,293 B/Ba3 PAETEC Holding Corp., Replacement
Term Loan, 7.322%, 2/28/13 630,871
2,000,000 B+/Caa1 Pine Tree Holdings, Inc., (Country Road
Communications), Second Lien Term
Loan, 12.59%, 7/15/13 1,990,000
1,485,000 B+/Ba2 Stratos Global Corp./Stratos Funding,
L.P., Facility Term Loan B, 7.948%,
2/13/12 1,446,019
The accompanying notes are an integral part of these financial statements. 23
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Telecommunications - (continued)
6,500,000 B-/B2 WideOpenWest Finance, LLC, First Lien
Term Loan, 7.484% - 7.698%,
6/30/14 $ 6,110,000
3,000,000 B-/Caa1 WideOpenWest Finance, LLC, Second
Lien Term Loan, 11.448%, 6/29/15 2,760,000
EURO 1,500,000 B+/Ba2 Wind Telecomunicazione S.p.A., Facility
Term Loan B-1, 6.514%, 5/27/13 2,177,804
EURO 1,500,000 B+/Ba2 Wind Telecomunicazione S.p.A., Facility
Term Loan C-1, 7.264%, 5/26/14 2,187,895
------------
$ 46,748,673
------------
Transportation - 11.1%
4,162,595 B/Ba3 Affinia Group, Inc., Tranche B Term
Loan, 7.96%, 11/30/11 $ 4,037,717
2,428,571 B+/B3 Alpha Topco Limited (Formula One),
Facility Term Loan B-1, 7.915%,
12/31/13 2,353,286
1,821,429 B+/B3 Alpha Topco Limited (Formula One),
Facility Term Loan B-2, 7.915%,
12/31/13 1,764,964
9,250,000 NR/B2 Dana Corp., Term Loan, 7.98%,
3/31/08 9,202,927
1,000,000 NR/Ba1 Delphi Corp., Tranche B Term Loan,
8.438%, 12/31/07 998,875
11,000,000 NR/Ba3 Delphi Corp., Tranche C Term Loan,
8.938%, 12/31/07 10,986,250
1,000,000 NR/NR Federal-Mogul Corp., DIP Term Loan,
6.65%, 12/31/07 996,275
7,928,806 B/Ba3 Ford Motor Co., Term Loan, 8.7%,
12/15/13 7,425,145
1,654,845 B-/B3 Gainey Corp., Term Loan, 7.92% -
10.75%, 4/20/12 1,119,779
496,250 B/Ba3 General Motors Corp., Secured Term
Loan, 7.615%, 11/29/13 470,383
3,980,000 B+/B1 Key Safety Systems, Inc., First Lien
Term Loan, 7.27% - 7.45%, 3/8/14 3,631,750
979,009 B+/B2 Lear Corp., First Lien Term Loan B,
7.387% - 7.698%, 4/25/12 954,126
875,000 B-/B2 Quality Distribution, Inc., PF Letter of
Credit Loan, 5.098%, 11/13/09 853,125
24 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Transportation - (continued)
1,876,012 B+/B2 Quality Distribution, Inc., Term Loan,
7.819%, 11/13/09 $ 1,829,111
3,772,549(a) NR/B2 SIRVA Worldwide, Inc., Tranche B Term
Loan, 12.5%, 12/1/10 2,395,727
------------
$ 49,019,440
------------
Utility - 6.4%
4,400,000 B/NR ANP Funding I, LLC, Tranche A Term
Loan, 8.73%, 7/29/10 $ 4,370,300
217,194 NR/B1 Boston Generating, LLC, First
Lien Revolving Credit Loan,
5.073%, 12/20/13 209,803
775,691 NR/B1 Boston Generating, LLC, First
Lien Synthetic LC Loan,
5.073%, 12/20/13 749,296
3,479,828 NR/B1 Boston Generating, LLC, First Lien Term
Loan, 7.448%, 12/20/13 3,361,416
1,754,777 NR/B1 Coleto Creek Power, L.P., First
Lien Synthetic LC Term Loan,
5.098%, 6/28/13 1,693,360
3,653,192 NR/B1 Coleto Creek Power, L.P., First Lien
Term Loan, 7.948%, 6/28/13 3,525,330
4,937,500 NR/B1 Coleto Creek Power, L.P., Second Lien
Term Loan, 9.198%, 6/28/13 4,764,687
1,980,000 NR/NR GBGH, LLC (U.S. Energy), First
Lien Advance Term Loan,
14.25%, 8/7/13 1,984,950
281,250 NR/B2 Mach Gen, LLC, First Lien Synthetic LC
Loan, 7.2%, 2/22/13 267,750
2,698,359 NR/B2 Mach Gen, LLC, First Lien Term Loan B,
7.0%, 2/22/14 2,568,838
747,290 NR/Ba3 TPF Generation Holdings, LLC,
First Lien Synthetic LC Loan,
5.098%, 12/15/13 720,201
3,821,989 NR/Ba3 TPF Generation Holdings, LLC, First
Lien Term Loan, 7.198%, 12/15/13 3,683,442
234,260 NR/Ba3 TPF Generation Holdings,
LLC, Synthetic Revolver,
5.098%, 12/15/11 225,768
------------
$ 28,125,141
------------
The accompanying notes are an integral part of these financial statements. 25
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Wireless Communication - 6.9%
1,148,295 NR/NR Clearwire Corp., Delayed Draw Term
Loan, 10.69% - 10.95%, 7/3/12 $ 1,125,329
5,701,705 NR/NR Clearwire Corp., Term Loan,
11.12% - 11.15%, 7/3/12 5,587,671
9,875,000 B-/Ba2 Cricket Communications, Inc., Term
Loan B, 8.198%, 6/16/13 9,682,793
6,982,500 B/B2 Knology, Inc., Term Loan,
7.48%, 6/30/12 6,703,200
7,450,012 B-/Ba3 Metro PCS Wireless, Inc., New
Tranche B Term Loan,
7.188% - 7.5%, 11/4/13 7,159,462
------------
$ 30,258,455
------------
TOTAL SENIOR SECURED FLOATING
RATE LOAN INTERESTS
(Cost $655,420,450) $623,646,706
------------
CLAIMS - 0.1% of Net Assets
Aerospace - 0.1%
1,200,000 B+/NR Northwest Airlines, Inc., ALPA Claim-
Escrow, 2.5% $ 42,000
2,500,000 B+/NR Northwest Airlines, Inc., Bell Atlantic
Claim-Escrow, 2.5% 87,500
2,500,000 B+/NR Northwest Airlines, Inc., EDC Claim-
Escrow, 5.32% 87,500
2,130,600 B+/NR Northwest Airlines, Inc., Flight At-
tendant Claim-Escrow, 2.5% 74,571
1,500,000 B+/NR Northwest Airlines, Inc., GE Pre-petition
Claim, 2.5% 52,500
1,264,500 B+/NR Northwest Airlines, Inc., IAM Claim-
Escrow, 2.5% 44,257
1,404,900 B+/NR Northwest Airlines, Inc., Retiree Claim-
Escrow, 2.5% 49,172
------------
TOTAL CLAIMS
(Cost $9,066,125) $ 437,500
------------
CONVERTIBLE BONDS & NOTES - 0.7% of Net Assets
Broadcasting - 0.6%
3,951,000 CCC/Caa3 Charter Communications, Inc., 6.5%,
10/1/27 $ 2,612,599
------------
26 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Gaming & Leisure - 0.1%
907,000 CCC/Caa2 Six Flags Theme Parks, Inc., 4.5%,
5/15/15 $ 646,237
------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $5,142,803) $ 3,258,836
------------
CORPORATE NOTES - 4.4% of Net Assets
Cable/Wireless Video - 0.3%
875,000 CCC/Caa3 CCH I Holdings LLC, 10.0%, 5/15/14 $ 557,812
1,000,000 CCC/Caa2 CCH I Holdings LLC, 11.0%, 10/1/15 870,000
------------
$ 1,427,812
------------
Food & Tobacco - 0.2%
1,000,000 CCC/Caa2 Pinnacle Foods Group, Inc., 9.25%,
4/1/15 (144A) $ 905,000
------------
Healthcare - 0.7%
2,000,000(b) NR/NR Pharma V (Duloxetine), 13.0%,
10/15/13 (144A) $ 2,070,000
1,019,739(a)(b)(d) NR/NR Pharma VI (Rotavax), 10.381%,
10/15/14 (144A) 978,950
------------
$ 3,048,950
------------
Information Technology - 1.1%
400,000(d) B/Ba3 Freescale Semiconductor, Inc., 9.569%,
12/15/14 $ 357,000
5,000,000(d) BB/Ba3 NXP BV/NXP Funding, LLC, 7.993%,
10/15/13 4,725,000
------------
$ 5,082,000
------------
Retail - 1.4%
4,500,000 CCC/Caa2 Blockbuster, Inc., 9.0%, 9/1/12 $ 3,825,000
2,500,000 CCC+/Caa1 Dollar General Corp., 10.625%,
7/15/15 (144A) 2,275,000
------------
$ 6,100,000
------------
Transportation - 0.7%
3,000,000(d) CCC+/Caa1 American Tire Distributors, Inc.,
11.481%, 4/1/12 $ 2,910,000
------------
TOTAL CORPORATE NOTES
(Cost $20,571,879) $ 19,473,762
------------
The accompanying notes are an integral part of these financial statements. 27
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
Shares Value
COMMON STOCK - 2.9% of Net Assets
Aerospace - 1.2%
281,538(e) Northwest Airlines Corp. $ 5,118,368
------------
Utility - 1.7%
196,325(e) Mirant Corp. (144A) $ 7,576,182
------------
TOTAL COMMON STOCK
(Cost $4,987,781) $ 12,694,550
------------
WARRANTS - 0.2% of Net Assets
Wireless Communication - 0.2%
400,000(e) Clearwire Corp., Exp. 8/15/10 (144A) $ 780,000
------------
TOTAL WARRANTS
(Cost $956,752) $ 780,000
------------
Principal
Amount
USD ($)
TEMPORARY CASH INVESTMENT - 1.6% of Net Assets
Repurchase Agreement - 1.6%
7,000,000 UBS Warburg, Inc., 3.10%, dated
11/30/07, repurchase price of
$7,000,000 plus accrued interest on
12/3/07 collateralized by $7,000,000
U.S. Treasury Notes 4.5%, 11/30/11 $ 7,000,000
-------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $7,000,000) $ 7,000,000
-------------
TOTAL INVESTMENTS IN SECURITIES - 151.1%
(Cost $703,145,790)(f) $ 667,291,354
-------------
OTHER ASSETS AND LIABILITIES - 2.0% $ 8,782,643
-------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE - (53.1)% $(234,581,448)
-------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 441,492,549
=============
28 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NR Security not rated by S&P or Moody's.
* Senior secured floating rate loan interests in which the Trust invests
generally pay interest at rates that are periodically redetermined by
reference to a base lending rate plus a premium. These base lending
rates are generally (i) the lending rate offered by one or more major
European banks, such as LIBOR (London InterBank Offered Rate), (ii)
the prime rate offered by one or more major United States banks, (iii)
the certificate of depositor (iv) other base lending rates used by
commercial lenders. The interest rate shown is the rate accruing at
November 30, 2007.
(144A) Security is exempt from registration under Rule 144A of the
Securities Act of 1933. Such securities may be resold normally to
qualified institutional buyers in a transaction exempt from
registration. At November 30, 2007 the value of these securities
amounted to $14,585,132 or 3.3% of total net assets applicable to
common shareowners.
(a) Payment-in-Kind (PIK) security which may pay interest in additional
principal amount.
(b) Indicates a security that has been deemed illiquid. The aggregate cost
of illiquid securities is $74,756,452. The aggregate value of such
securities is $64,853,046, represents 14.7% of the total net assets.
(c) Security is fair valued (See Note A).
(d) Floating Rate Note. The rate shown is the coupon rate at November 30,
2007.
(e) Non-income producing security.
(f) At November 30, 2007, the net unrealized loss on investments based on
cost for federal income tax purposes of $703,207,382 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 11,042,280
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (46,958,308)
------------
Net unrealized loss $(35,916,028)
============
For financial reporting purposes net unrealized loss on investments
was $35,854,436 and cost of investments aggregated $703,145,790.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended November 30, 2007, aggregated $559,229,366 and $555,160,470,
respectively.
Glossary of Terms:
DIP - Debtor-In-Possession
LC - Letter of Credit
Principal amounts are denominated in U.S. dollars unless otherwise noted.
AUD - Australian Dollar
EURO - Euro
The accompanying notes are an integral part of these financial statements. 29
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 11/30/07
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $703,145,790) $667,291,354
Cash 3,297,702
Foreign currencies, at value (cost $36,464) 36,484
Receivables -
Investment securities sold 12,993,247
Paydown 449,086
Interest and foreign tax reclaim 7,762,550
Commitment fees 23,826
Other 2,420,625
Prepaid expenses 22,856
------------
Total assets $694,297,730
------------
LIABILITIES:
Payables -
Investment securities purchased $ 15,380,462
Forward foreign currency portfolio hedge contracts - net 609,836
Dividends payable to common shareowners 806,129
Unfunded depreciation on unfunded corporate loans 343,499
Unamortized facility fee 36,364
Due to affiliates 437,124
Accrued expenses and other liabilities 610,319
------------
Total liabilities $ 18,223,733
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 9,380
shares, including dividends payable of $81,448 $234,581,448
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $462,925,899
Undistributed net investment income 8,353,089
Accumulated net realized gain on investments and foreign
currency transactions 6,840,442
Net unrealized loss on investments (36,197,935)
Net unrealized loss on foreign currency assets and liabilities
denominated in foreign currencies (428,946)
------------
Net assets applicable to common shareowners $441,492,549
============
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $441,492,549/24,428,148 common shares $ 18.07
============
30 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended 11/30/07
INVESTMENT INCOME:
Interest (net of foreign taxes withheld $79,545) $ 61,370,166
Facility and other fees 1,420,274
-------------
Total investment income $ 62,790,440
-------------
EXPENSES:
Management fees $ 4,941,817
Administrative fees 535,337
Transfer agent fees and expenses 46,196
Auction agent fees 619,140
Custodian fees 157,249
Registration fees 23,750
Professional fees 118,264
Printing expenses 55,819
Trustees' fees 15,622
Pricing fees 53,649
Insurance fees 15,767
Miscellaneous 21,641
-------------
Total expenses $ 6,604,251
-------------
Net investment income $ 56,186,189
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Investments $ 9,406,948
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 649,913 $ 10,056,861
------------- -------------
Change in net unrealized gain (loss) on:
Investments $ (45,130,193)
Unfunded corporate loans (370,268)
Foreign currency contracts and other assets and
liabilities denominated in foreign currencies (373,644) $ (45,874,105)
------------- -------------
Net loss on investments and foreign currency
transactions $ (35,817,244)
-------------
DIVIDENDS AND DISTRIBUTIONS TO PREFERRED
SHAREOWNERS FROM:
Net investment income $ (12,518,844)
Net realized gains (24,294)
-------------
Total distributions $ (12,543,138)
-------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 7,825,807
=============
The accompanying notes are an integral part of these financial statements. 31
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Years Ended 11/30/07 and 11/30/06, respectively
Year Year
Ended Ended
11/30/07 11/30/06
FROM OPERATIONS:
Net investment income $ 56,186,189 $ 53,438,462
Net realized gain on investments and foreign
currency transactions 10,056,861 2,711,969
Change in net unrealized gain (loss) on investments
and foreign currency transactions (45,874,105) 9,747,577
Dividends and distributions to preferred
shareowners from:
Net investment income (12,518,844) (11,248,699)
Net realized gains (24,294) -
------------- -------------
Net increase in net assets applicable
to common shareowners resulting
from operations $ 7,825,807 $ 54,649,309
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON
SHAREOWNERS:
Net investment income
($1.905 and $1.625 per share, respectively) $ (46,436,882) $ (39,536,640)
Net realized gains
($0.004 and $0.05 per share, respectively) (91,944) (1,178,873)
------------- -------------
Total distributions to common shareowners $ (46,528,826) $ (40,715,513)
------------- -------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 1,940,809 $ -
Preferred share offering expenses charged to
paid-in capital - (2,587)
------------- -------------
Net increase (decrease) in net assets applicable
to common shareowners resulting from Trust
share transactions $ 1,940,809 $ (2,587)
------------- -------------
Net increase (decrease) in net assets applicable
to common shareowners $ (36,762,210) $ 13,931,209
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of year $ 478,254,759 $ 464,323,550
------------- -------------
End of year $ 441,492,549 $ 478,254,759
============= =============
Undistributed net investment income $ 8,353,089 $ 5,907,203
============= =============
32 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 11/30/07
--------------------------------------------------------------------------------
Year Year 12/28/04(b)
Ended Ended to
11/30/07 11/30/06 11/30/05
Per Common Share Operating Performance
Net asset value, beginning of period $ 19.66 $ 19.08 $ 19.10(c)
------- ------- -------
Increase (decrease) from investment operations:(a)
Net investment income $ 2.30 $ 2.20 $ 1.33
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (1.47) 0.52 (0.05)
Dividends and distributions to preferred shareowners from:
Net investment income (0.51) (0.46) (0.23)
Net realized gains -(d) - -
------- ------- -------
Net increase from investment operations $ 0.32 $ 2.26 $ 1.05
Dividends and distributions to common shareowners from:
Net investment income (1.91) (1.63) (0.92)
Net realized gains -(d) (0.05) -
Capital charge with respect to issuance of:
Common shares - - (0.04)
Preferred shares - -(d) (0.11)
------- ------- -------
Net increase (decrease) in net asset value $ (1.59) $ 0.58 $ (0.02)
------- ------- -------
Net asset value, end of period(e) $ 18.07 $ 19.66 $ 19.08
------- ------- -------
Market value, end of period(e) $ 16.79 $ 18.95 $ 17.14
======= ======= =======
Total return(f) (2.02)% 20.94% (9.76)%
Ratios to average net assets of common shareowners
Net expenses(g) 1.40% 1.38% 1.23%(h)
Net investment income before preferred share dividends 11.92% 11.37% 7.52%(h)
Preferred share dividends 2.66% 2.39% 1.29%(h)
Net investment income available to common shareowners 9.26% 8.98% 6.23%(h)
Portfolio turnover 80% 75% 61%
Net assets of common shareowners, end of period (in thousands) $441,493 $478,255 $464,324
Preferred shares outstanding (in thousands) $234,500 $234,500 $234,500
Asset coverage per preferred share, end of period $ 72,067 $ 76,000 $ 74,520
Average market value per preferred share $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable, per preferred share $ 25,009 $ 25,013 $ 25,018
Ratios to average net assets of common shareowners before
reimbursement of expenses, excise tax and expense reductions
Net expenses(g) 1.40% 1.40% 1.24%(h)
Net investment income before preferred share dividends 11.92% 11.35% 7.51%(h)
Preferred share dividends 2.66% 2.39% 1.29%(h)
Net investment income available to common shareowners 9.26% 8.96% 6.22%(h)
(a) The per share data presented above is based upon the average common shares
outstanding for the periods presented.
(b) The Trust common shares were first publicly offered on December 23, 2004.
(c) Net asset value immediately after the closing of the first public offering
was $19.06.
(d) Amount is less than $0.01 per share.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return less than a full period is not annualized. Past
performance is not a guarantee of future results.
(g) Expense ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
The information above represents the audited operating performance data for
a common share outstanding, total investment return, ratios to average net
assets and other supplemental data for the period indicated. This
information has been determined based upon financial information provided
in the financial statements and market value data for the Trust's common
shares.
The accompanying notes are an integral part of these financial statements. 33
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/07
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Floating Rate Trust (the "Trust") is organized as a Delaware statutory
trust on October 6, 2004. Prior to commencing operations on December 28, 2004,
the Trust had no operations other than matters relating to its organization and
registration as a non-diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended. The investment objective
of the Trust is to provide a high level of current income. The Trust will, as a
secondary objective, also seek preservation of capital to the extent consistent
with its primary goal of high current income.
The Trust's investments in certain foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than in a
developed market. These risks include disruptive political or economic
conditions and the possible imposition of adverse governmental laws or currency
exchange restrictions.
The Trust invests primarily in senior floating rate loans ("Senior Loans"). The
Trust may also invest in other floating and variable rate instruments,
including second lien loans, and high yield, high risk corporate bonds. The
Trust may invest in Senior Loans and other securities of any credit quality,
including Senior Loans and other investments that are rated below investment
grade, or are unrated but are determined by the investment subadviser to be of
equivalent credit quality. Below investment grade securities are commonly
referred to as "junk bonds" and are considered speculative with respect to the
issuer's capacity to pay interest and repay principal. These securities involve
greater risk of loss, are subject to greater price volatility, and are less
liquid, especially during periods of economic uncertainty or change, than
higher rated debt securities. The Trust may invest in securities of issuers
that are in default or that are in bankruptcy.
The Trust is not limited in the percentage of its assets that may be invested
in Senior Loans and other securities deemed to be illiquid. Illiquid securities
may be difficult to dispose of at a fair price at the times when the Trust
believes it is desirable to do so and their market price is generally more
volatile than that of more liquid securities. Illiquid securities are also more
difficult to value and investment of the Trust's assets in illiquid securities
may restrict the Trust's ability to take advantage of market opportunities.
34
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Information regarding the Trust's principal risks is contained in the Trust's
original offering prospectus, with additional information included in the
Trust's shareowner reports. Please refer to those documents when considering
the Trust's risks. At times, the Trust's investments may represent industries
or industry sectors that are interrelated or have common risks, making it more
susceptible to any economic, political, or regulatory developments or other
risks affecting those industries and sectors.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains and losses on investments during the
reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in preparation of its financial statements, which are consistent with
those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Investments in Senior
Loans are valued in accordance with guidelines established by the Board of
Trustees at the mean between the last available bid and asked prices from
one or more brokers or dealers as obtained from Loan Pricing Corporation.
For the limited number of Senior Loans for which no reliable price quotes
are available, such investments will be valued by Loan Pricing Corporation
through the use of pricing matrices to determine valuations.
Fixed-income securities are valued at prices supplied by independent
pricing services, which consider such factors as Treasury spreads, yields,
maturities and ratings. Valuations may be supplemented by values obtained
from dealers and other sources, as required. Equity securities are valued
at the last sale price on the principal exchange where they are traded.
Securities or loans for which quotations are not readily available are
valued at their fair values as determined by, or under the direction of,
the Board of Trustees. Trading in foreign securities is substantially
completed each day at various times prior to the close of the NYSE. The
values of such securities used in
35
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
computing the net asset value of the Trust's shares are determined as of
such times. The Trust may also use the fair value of a security, including
a non-U.S. security, when the closing market price on the primary exchange
where the security is traded no longer accurately reflects the value of
the security as of the close of the exchange. Temporary cash investments
are valued at amortized cost which approximates market value.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Trust becomes aware of the ex-dividend
data in the exercise of reasonable diligence. Discount and premium on debt
securities are accreted or amortized, respectively, daily, on an effective
yield to maturity basis and are included in interest income. Interest
income, including income on interest bearing cash accounts, is recorded on
an accrual basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between
the amount of income accrued and the U.S. dollars actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the Statement of Operations from the
effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Trust enters into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio
hedges). All contracts are marked to market daily at the
36
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
applicable exchange rates, and any resulting unrealized gains or losses
are recorded in the Trust's financial statements. The Trust records
realized gains and losses at the time a portfolio hedge is offset by entry
into a closing transaction or extinguished by delivery of the currency.
Risks may arise upon entering into these contracts from the potential
inability of counterparties to meet the terms of the contract and from
unanticipated movements in the value of foreign currencies relative to the
U.S. dollar (see Note 3).
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareowners. Therefore, no federal income tax provision is
required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the source of the Trust's distributions may
be shown in the accompanying financial statements as either from or in
excess of net investment income or net realized gain on investment
transactions, or from paid-in capital, depending on the type of book/tax
differences that may exist.
At November 30, 2007, the Trust reclassified $5,215,423 to increase
undistributed net investment income and $5,215,423 to decrease net
realized gain on investments to reflect permanent book/tax differences.
The reclassification has no impact on the net asset value of the Trust and
presents the Trust's capital accounts on a tax basis.
The tax character of current year distributions paid to common and
preferred shareowners during the years ended November 30, 2007 and
November 30, 2006 were as follows:
-----------------------------------------------------------------------------
2007 2006
----------- -----------
Distributions paid from:
Ordinary income $58,955,726 $51,964,212
Net long term capital gain 116,238 -
----------- -----------
Total taxable distribution $59,071,964 $51,964,212
----------- -----------
37
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at November 30, 2007.
2007
-------------
Undistributed ordinary income $ 11,291,496
Distributions payable (81,448)
Long-term capital gain 3,873,918
Unrealized depreciation (36,517,316)
------------
Total $(21,433,350)
------------
The difference between book basis and tax basis unrealized depreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities, the
realization for tax purposes of unrealized losses on certain foreign
currency contracts and the deferral of post October capital losses for tax
purposes.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the repurchase agreement at the time of purchase. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Trust's custodian, or subcustodians. Pioneer Investment
Management, Inc., the Trust's investment adviser is responsible for
determining that the value of the collateral remains at least equal to the
repurchase price.
F. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash. Shareowners
may elect not to participate in the Plan. Shareowners not participating in
the Plan receive all dividends and capital gain distributions in cash.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by notifying American Stock Transfer &
Trust Company, the agent for shareowners in administering the Plan (the
"Plan Agent"), in writing prior to any dividend record date;
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Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
otherwise such termination or resumption will be effective with respect to
any subsequently declared dividend or other distribution.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees ("market premium"), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per common share is greater than the market value ("market discount"), the
Plan Agent will invest the dividend amount in common shares acquired in
open-market purchases. There are no brokerage charges with respect to newly
issued common shares. However, each participant will pay a pro rata share
of brokerage trading fees incurred with respect to the Plan Agent's
open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may not be able to transfer the shares to another broker
and continue to participate in the Plan.
2. Management Agreement
Pioneer Investment Management, Inc. ("PIM"), a wholly owned indirect subsidiary
of UniCredito Italiano S.p.A. ("UniCredito Italiano") manages the Trust's
portfolio. Management fees payable under the Trust's Advisory Agreement with
PIM are calculated daily at the annual rate of 0.70% of the Trust's average
daily managed assets. "Managed assets" is the average daily value of the
Trust's total assets minus the sum of the Trust's liabilities, which
liabilities exclude debt related to leverage, short-term debt and the aggregate
liquidation preference of any outstanding preferred shares. For the year ended
39
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
November 30, 2007, the net management fee was equivalent to 0.70% of the
Trust's average daily managed assets, which was equivalent to 1.05% of the
Trust's average daily net assets attributable to the common shareowners.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. Included
in "Due to Affiliates" reflected on the Statement of Assets and Liabilities is
$437,124 in management costs, administrative costs and certain other fees
payable to PIM at November 30, 2007.
PIM has appointed Princeton Administrators, LLC ("Princeton") to provide
certain administrative and accounting services to the Trust on its behalf. PIM
pays Princeton a monthly fee equal to 0.07% of the Trust's average daily
managed assets up to $500 million and 0.03% for average daily managed assets in
excess of $500 million, subject to a minimum monthly fee of $10,000. Princeton
receives no compensation directly from the Trust.
PIM has engaged Highland Capital Management, L.P. to act as the Trust's
investment sub-adviser ("Sub-adviser") and manage the Trust's investments. PIM
pays the Sub-adviser a monthly fee at an annual rate of 0.35% of the average
daily value of the Trust managed assets. The fee is paid monthly in arrears.
The Trust does not pay a fee to the Sub-adviser.
Also, PIM has agreed for the first three years of the Trust's investment
operations to limit the Trust's total annual expenses excluding offering costs
for common and preferred shares, interest expense, the cost of defending or
prosecuting any claim or litigation to which the Trust is a party (together
with any amount in judgment or settlement), indemnification expenses or taxes
incurred due to the failure of the Trust to qualify as a regulated investment
company under the Code or any other non-recurring or non-operating expenses; to
0.95% of the Trust's average daily managed assets. The dividend on any
preferred shares is not an expense for this purpose. For the year ended
November 30, 2007, the Trust's expenses were not reduced under such
arrangements.
3. Forward Foreign Currency Contracts
The Trust may enter into contracts that obligate the Trust to deliver
currencies at specified future dates. At the maturity of a contract, the Trust
must make delivery of the foreign currency. Alternatively, prior to
40
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the settlement date of a portfolio hedge, the Trust may close out such
contracts by entering into an offsetting hedge contract.
Open portfolio hedges at November 30, 2007 were as follows:
Net Net
Contracts In Exchange Settlement Unrealized
Currency to (Deliver) For US$ Date US$ Value Loss
------------------------------------------------------------------------------------------------
AUD (3,000,000) $ (2,456,400) 2/28/08 $ (2,640,717) $ (184,317)
AUD (1,500,000) (1,217,475) 2/29/08 (1,319,859) (102,384)
AUD (1,500,000) (1,218,975) 2/29/08 (1,319,859) (100,884)
AUD (1,500,000) (1,220,475) 2/29/08 (1,319,859) (99,384)
AUD (2,200,000) (1,811,150) 3/11/08 (1,934,017) (122,867)
----------
Total $ (609,836)
----------
4. Unfunded Loan Commitments
As of November 30, 2007, the Trust had unfunded loan commitments of
approximately $8,029,000 which could be extended at the option of the borrower,
pursuant to the following loan agreements:
Unfunded
Commitment
Borrower (in thousands)
-----------------------------------------------------------------------------------
Big West Oil, LLC, Delayed Advance Loan $ 2,200
CHS/Community Health Systems, Inc., Delayed Draw Term Loan $ 309
Cricket Communications, Inc., Revolver Loan $ 2,000
Fenwal, Inc., First Lien Delayed Draw Term Loan $ 572
Fontainebleau Las Vegas Holdings, LLC, Delayed Draw Term Loan $ 667
HUB International Holdings, Inc., Delay Draw Term Loan $ 471
Millennium Digital Media Systems, LLC, Revolver Credit Loan $ 859
Univision Communications, Inc., Delayed Draw Term Loan $ 738
Valassis Communications Inc., Delayed Draw Term Loan $ 213
5. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredito Italiano, through a sub-transfer agency
agreement with American Stock Transfer & Trust Company, provides substantially
all transfer agent and shareowner services related to the Trust's common shares
at negotiated rates. Deutsche Bank Trust Company Americas ("Deutsche Bank") is
the transfer agent, registrar, dividend paying agent and
41
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
redemption agent with respect to the Trust's Auction Market Preferred Shares
("AMPS"). The Trust pays Deutsche Bank an annual fee, as is agreed to from time
to time by the Trust and Deutsche Bank, for providing such services.
6. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 24,428,148 common shares of beneficial interest outstanding
at November 30, 2007, PIM owned 5,240 shares.
Transactions in common shares of beneficial interest for the years ended
November 30, 2007 and November 30, 2006 were as follows:
11/2007 11/2006
---------- ----------
Shares outstanding at beginning
of year 24,330,240 24,330,240
Reinvestment of distributions 97,908 -
---------- ----------
Shares outstanding at end of year 24,428,148 24,330,240
---------- ----------
The Trust may classify or reclassify any unissued common shares of beneficial
interest into one or more series of preferred shares of beneficial interest. As
of November 30, 2007, there were 9,380 AMPS as follows: Series M7-3,130, Series
W7-3,125 and Series TH7-3,125.
Dividends on Series M7, Series W7 and Series TH7 are cumulative at a rate which
is reset every seven days based on the results of an auction. Dividend rates
ranged from 4.95% to 6.45% during the year ended November 30, 2007.
The Trust may not declare dividends or make other distributions on its common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The AMPS are redeemable at the option of the Trust, in whole or in part, on any
dividend payment date at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared. The AMPS are also subject to mandatory
redemption at $25,000 per share plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composition of
the assets and
42
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
liabilities of the Trust as set forth in the Agreement and Declaration of Trust
are not satisfied.
The holders of AMPS have voting rights equal to the holders of the Trust's
common shares (one vote per share) and will vote together with holders of the
common shares as a single class. However, holders of AMPS are also entitled to
elect two of the Trust's Trustees. In addition, the Investment Company Act of
1940, as amended, requires that along with approval by shareowners that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class, would be required
to (a) adopt any plan of reorganization that would adversely affect the
preferred shares and (b) take any action requiring a vote of security holders,
including, among other things, changes in the Trust's subclassification as a
closed-end investment company or changes in its fundamental investment
restrictions.
7. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Trust's tax returns to determine whether the tax
positions have a "more-likely-than-not" probability of being sustained by the
applicable tax authority. Tax positions deemed to not meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the reporting period in which they are realized. Adoption of FIN 48 is required
for fiscal years beginning after December 15, 2006 and is to be applied to all
open tax years as of no later than May 31, 2008. At this time, management is
evaluating the implications of FIN 48 and any impact in the financial
statements has not yet been determined.
In September 2006, Statement of Financial Accounting Standards No. 157 Fair
Value Measurements ("SFAS 157") was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is currently evaluating the implications
of
43
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/07 (continued)
--------------------------------------------------------------------------------
SFAS 157 and its impact on the Trust's financial statement disclosures, if any,
has not yet been determined.
8. Subsequent Event
Subsequent to November 30, 2007, the Board of Trustees of the Trust distributed
$0.145 per common share from undistributed net investment income, $0.1736 per
common share additional net investment income, $0.2213 of realized net short
term capital gains and $0.1267 of realized net long term capital gains, all
payable December 20, 2007, to common shareowners of record on December 12,
2007.
Subsequent to November 30, 2007, dividends declared and paid on preferred stock
totaled $1,069,951 in aggregate for the three outstanding preferred share
series through January 8, 2008.
ADDITIONAL INFORMATION (unaudited)
During the period, there were no material changes in the Trust's investment
objective or fundamental policies that have not been approved by the
shareowners. There were no changes in the Trust's charter or By-Laws that would
delay or prevent a change in control of the Trust which have not been approved
by the shareowners. There were no changes in the principal risk factors
associated with investment in the Trust. There were no changes in the persons
who are primarily responsible for the day-to-day management of the Trust's
portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
CEO CERTIFICATION DISCLOSURE (unaudited)
The Trust's Chief Executive Officer has submitted to the New York Stock
Exchange the annual CEO certification as required by Section 303A.12 (a) of the
NYSE Listed Company Manual. In addition, the Trust has filed with the
Securities and Exchange Commission the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
IMPORTANT TAX INFORMATION (unaudited)
The Pioneer Floating Rate Trust paid a long-term capital gain distribution of
$.003779 per share to common shareholders of record on March 15, 2007.
44
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
Additionally, the following summarizes the per share long-term capital gain
distributions paid to preferred shareholders during the fiscal year:
Long-Term
Payable Date Capital Gain
-------------- -------------
Series M7 3/13/2007 $2.58
Series W7 3/15/2007 $2.66
Series TH7 3/16/2007 $2.53
RESULTS OF SHAREOWNER MEETING (unaudited)
On September 11, 2007, Pioneer Floating Rate Trust held its annual meeting of
shareowners to elect Class I Trustees. All Class I Trustees were elected. Here
are the detailed results of the votes.
Proposal 1 - To elect Class I Trustees.
Nominee Affirmative Withheld
---------------------------------------------------
David R. Bock 20,838,823 281,283
Stephen K. West 20,818,659 301,447
John F. Cogan, Jr.+ 7,954 178
+ Elected by Preferred Shares only
45
Pioneer Floating Rate Trust
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Board of Trustees and Shareowners of
Pioneer Floating Rate Trust:
We have audited the accompanying statement of assets and liabilities of Pioneer
Floating Rate Trust (the "Trust"), including the schedule of investments, as of
November 30, 2007, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Trust's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of November 30, 2007, by correspondence
with the custodian, selling or agent banks and brokers or by other appropriate
auditing procedures where replies from selling or agent banks or brokers were
not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Floating Rate Trust at November 30, 2007, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and financial highlights for each of the
periods indicated therein, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernest & Young LLP
Boston, Massachusetts
January 23, 2008
46
Pioneer Floating Rate Trust
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APPROVAL OF INVESTMENT ADVISORY AGREEMENT
--------------------------------------------------------------------------------
Pioneer Investment Management, Inc. ("PIM") serves as the Trust's investment
adviser pursuant to an investment advisory agreement between PIM and the Trust.
PIM has retained Highland Capital Management, L.P. to serve as the sub-adviser
to the Trust pursuant to a sub-advisory agreement between PIM and Highland
Capital Management, L.P. The Trustees of the Trust, as required by law,
determine annually whether to continue the investment advisory agreement and
the sub-advisory agreement for the Trust.
In connection with their most recent consideration of the investment advisory
and sub-advisory agreements for the Trust, the Trustees received and reviewed a
substantial amount of information provided by PIM and the sub-adviser in
response to requests of the independent Trustees and their independent legal
counsel. The independent Trustees met on a number of occasions with PIM and
also separately with their independent legal counsel to evaluate and discuss
the information provided to them by PIM and the sub-adviser. At a meeting held
on November 13, 2007, based on their evaluation of the information provided by
PIM and the sub-adviser, the Trustees, including the independent Trustees
voting separately, unanimously approved the continuation of the investment
advisory agreement and the sub-advisory agreement for another year.
In considering the continuation of the investment advisory agreement and the
sub-advisory agreement, the Trustees considered various factors that they
determined were relevant, including the factors described below. The Trustees
did not identify any single factor as the controlling factor in determining to
approve the continuation of the agreements.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services provided
by PIM and the sub-adviser to the Trust, taking into account the investment
objective and strategy of the Trust and the information related to the Trust
provided to the Trustees at each quarterly meeting. The Trustees reviewed the
terms of the investment advisory agreement and the sub-advisory agreement. The
Trustees also reviewed the sub-advisor's investment approach for the Trust and
its research process. The Trustees considered the resources of PIM and the
sub-adviser and the personnel of PIM and the sub-adviser who provide investment
management services to the Trust. They also considered PIM's compliance and
legal resources and personnel.
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Pioneer Floating Rate Trust
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APPROVAL OF INVESTMENT ADVISORY AGREEMENT (continued)
--------------------------------------------------------------------------------
In addition, the Trustees considered the other services that PIM provides to
the Trust under the investment advisory agreement and that, as administrator,
PIM is responsible for the administration of the Trust's business and other
affairs. It was noted that PIM supervises and monitors the performance of the
Trust's service providers and provides the Trust with personnel (including
officers) as are necessary for the Trust's operations. The Trustees considered
the fees paid to PIM for the provision of such services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services provided by PIM and the sub-adviser to the Trust were
satisfactory and consistent with the terms of the investment advisory agreement
and the sub-advisory agreement.
Performance of the Trust
The Trustees considered the performance results of the Trust over various time
periods. They reviewed information comparing the Trust's performance with the
average performance of its peer group of funds as classified by Morningstar,
Inc., ("Morningstar") an independent provider of investment company data, and
with the performance of the Trust's benchmark index. The Trustees considered
that the Trust commenced operations on December 28, 2004 and that the Trust's
annualized total return was in the first quintile of its Morningstar category
for the one year period ended June 30, 2007. The Trustees also considered that
the Trust's total return also was in the first quintile of its Morningstar
category for the period six months ending June 30, 2007. (In all quintile
rankings referred to throughout this disclosure, first quintile is most
favorable to the Trust's shareowners. Thus, highest relative performance would
be first quintile and lowest relative expenses would also be first quintile.)
The Trustees concluded that the investment performance of the Trust was
satisfactory over its short period of operation.
Management Fee and Expenses
The Trustees considered information on the fees and expenses of the Trust in
comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the independent Trustees
for this purposes using data provided by Strategic Insight Mutual Trust
Research and Consulting, LLC (Strategic Insight), an independent third party.
The Trustees also considered
48
Pioneer Floating Rate Trust
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--------------------------------------------------------------------------------
that PIM, not the Trust, paid the sub-adviser pursuant to the sub-advisory
agreement. The Trustees evaluated both the fee under the sub-advisory agreement
and the portion of the fee under the investment advisory agreement retained by
PIM.
The Trustees considered that the Trust's management fee for the twelve months
ended June 30, 2007 was in the first quintile relative to the management fees
paid by other funds in its Strategic Insight peer group for the comparable
period. The Trustees also considered that the Trust's expense ratio for the
twelve months ended June 30, 2007 was in the third quintile relative to its
Strategic Insight peer group for the comparable period.
The Trustees concluded that the management fee payable by the Trust to PIM, as
well as the fees payable by PIM to the sub-adviser of the Trust, were
reasonable in relation to the nature and quality of services provided, taking
into account the fees charged by other advisers for managing comparable funds
with similar strategies. The Trustees also concluded that the Trust's expense
ratio was reasonable, taking into account the size of the Trust, the quality of
services provided by PIM and the sub-adviser, the investment performance of the
Trust and the contractual expense limitation agreed to by PIM with respect to
the Trust.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
recognized that PIM should be entitled to earn a reasonable level of profit for
the services provided to the Trust. The Trustees concluded that PIM's
profitability with respect to the management of the Trust was not unreasonable.
49
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
APPROVAL OF INVESTMENT ADVISORY AGREEMENT (continued)
--------------------------------------------------------------------------------
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is
a closed-end fund and its size is relatively stable at an asset level that was
anticipated when the management fee was initially set, the majority of the
Trustees concluded that economies of scale were not a relevant consideration.
Other Benefits
The Trustees also considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services
provided by PIM and its affiliates. The Trustees further considered the
revenues and profitability of PIM's businesses other than the fund business.
The Trustees also considered the intangible benefits to each of PIM and the
sub-adviser by virtue of its relationship with the Trust and the other Pioneer
funds. The Trustees concluded that the receipt of these benefits was reasonable
in the context of the overall relationship between each of PIM and the
sub-adviser and the Trust.
Conclusion
After consideration of the factors described above as well as other factors,
the Trustees, including all of the independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust and the sub-advisory
agreement between PIM and the sub-adviser, including the fees payable
thereunder, were fair and reasonable and voted to approve the proposed
continuation of each of the investment advisory agreement and sub-advisory
agreement for the Trust.
50
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Bingham McCutchen LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Investment Sub-Adviser
Highland Capital Management, L.P.
Sub-Administrator
Princeton Administrators, LLC
Trustees and Officers
The Board of Trustees provides broad supervision over the Trust's affairs. The
officers of the Trust are responsible for the Trust's operations. The Trustees
and officers are listed below, together with their principal occupations during
the past five years. Trustees who are interested persons of the Trust within
the meaning of the 1940 Act are referred to as Interested Trustees. Trustees
who are not interested persons of the Trust are referred to as Independent
Trustees. Each of the Trustees (except Mr. Kingsbury, Mr. West and Mr. Bock)
serves as a Trustee of each of the 76 U.S. registered investment portfolios for
which Pioneer serves as investment adviser (the "Pioneer Funds"). Mr. Kingsbury
serves as Trustee of 33 of the 76 Pioneer Funds, Mr. West serves as Trustee of
32 of the 76 Pioneer Funds, and Mr. Bock serves as Trustee of 75 of the 76
Pioneer Funds. The address for all Trustees and all officers of the fund is 60
State Street, Boston, Massachusetts 02109.
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12 months ended June 30, is publicly available to shareowners
at pioneerinvestments.com. This information is also available on the Securities
and Exchange Commission's web site at http://www.sec.gov.
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Pioneer Floating Rate Trust
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INTERESTED TRUSTEES
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
John F. Cogan, Jr. (81)* Chairman of the Class I Trustee since
Board, Trustee 2004. Term expires in
and President 2010. Elected by
Preferred Shares only.
--------------------------------------------------------------------------------
Daniel K. Kingsbury (49)* Trustee and Executive Class II Trustee since
Vice President 2007. Term expires in
2008.
--------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Trustee
John F. Cogan, Jr. (81)* Deputy Chairman and a Director of Pioneer Global Asset None
Management S.p.A. ("PGAM"); Non-Executive Chairman
and a Director of Pioneer Investment Management USA
Inc. ("PIM-USA"); Chairman and a Director of Pioneer;
Chairman and Director of Pioneer Institutional Asset
Management, Inc. (since 2006); Director of Pioneer
Alternative Investment Management Limited (Dublin);
President and a Director of Pioneer Alternative Investment
Management (Bermuda) Limited and affiliated funds; Direc-
tor of PIOGLOBAL Real Estate Investment Fund (Russia)
(until June 2006); Director of Nano-C, Inc. (since 2003);
Director of Cole Management Inc. (since 2004); Director of
Fiduciary Counseling, Inc.; President and Director of
Pioneer Funds Distributor, Inc. ("PFD") (until May 2006);
President of all of the Pioneer Funds; and Of Counsel,
Wilmer Cutler Pickering Hale and Dorr LLP
-----------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (49)* Director, CEO and President of Pioneer Investment None
Management USA Inc., Pioneer Investment Management,
Inc. and Pioneer Institutional Asset Management, Inc.
(since March 2007); Executive Vice President of all of the
Pioneer Funds (since March 2007); Director of Pioneer
Global Asset Management S.p.A. (since March 2007);
Head of New Markets Division, Pioneer Global Asset
Management S.p.A. (2000 - 2007)
-----------------------------------------------------------------------------------------------------------------
52
Pioneer Floating Rate Trust
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INDEPENDENT TRUSTEES
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
David R. Bock (63) Trustee Class I Trustee since
2005. Term expires
in 2010.
--------------------------------------------------------------------------------
Mary K. Bush (59) Trustee Class III Trustee since
2004. Term expires
in 2009.
--------------------------------------------------------------------------------
Margaret B.W. Graham (60) Trustee Class II Trustee since
2004. Term expires
in 2008.
--------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Trustee
David R. Bock (63) Executive Vice President and Chief Financial Officer, I-trax, Director of The Enterprise
Inc. (publicly traded health care services company) (2004 Social Investment
- present); Partner, Federal City Capital Advisors (boutique Company (privately-held
merchant bank) (1997 to 2004); and Executive Vice affordable housing
President and Chief Financial Officer, Pedestal Inc. finance company); and
(internet-based mortgage trading company) (2000 - 2002) Director of New York
Mortgage Trust (publicly
traded mortgage REIT)
-------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (59) President, Bush International, LLC (international financial Director of Brady Corpora-
advisory firm) tion (industrial identifica-
tion and specialty coated
material products
manufacturer); Director of
Briggs & Stratton Co.
(engine manufacturer);
Director of UAL Corpora-
tion (airline holding
company); Director of
Mantech International
Corporation (national
security, defense, and
intelligence technology
firm): and Member, Board
of Governors, Investment
Company Institute
-------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (60) Founding Director, Vice-President and Corporate Secretary, None
The Winthrop Group, Inc. (consulting firm); and Desautels
Faculty of Management, McGill University
-------------------------------------------------------------------------------------------------------------------------
53
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
Thomas J. Perna (57) Trustee Class III Trustee since
2006. Term expires
in 2009.
--------------------------------------------------------------------------------
Marguerite A. Piret (59) Trustee Class III Trustee since
2004. Term expires
in 2009. Elected by
Preferred Shares only.
--------------------------------------------------------------------------------
Stephen K. West (79) Trustee Class I Trustee since
2004. Term expires
in 2010.
--------------------------------------------------------------------------------
John Winthrop (71) Trustee Class II Trustee since
2004. Term expires
in 2008.
--------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Trustee
Thomas J. Perna (57) Private investor (2004 - present); and Senior Executive Director of Quadriserv
Vice President, The Bank of New York (financial and securi- Inc. (technology products
ties services) (1986 - 2004) for securities lending
industry)
-------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (59) President and Chief Executive Officer, Newbury, Piret & Director of New America
Company, Inc. (investment banking firm) High Income Fund, Inc.
(closed-end investment
company)
-------------------------------------------------------------------------------------------------------------------
Stephen K. West (79) Senior Counsel, Sullivan & Cromwell (law firm) Director, The Swiss
Helvetia Fund, Inc.
(closed-end investment
company)
-------------------------------------------------------------------------------------------------------------------
John Winthrop (71) President, John Winthrop & Co., Inc. None
(private investment firm)
-------------------------------------------------------------------------------------------------------------------
54
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
TRUST OFFICERS
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
Dorothy E. Bourassa (59) Secretary Since 2004.
Serves at the discre-
tion of the Board
--------------------------------------------------------------------------------
Christopher J. Kelley (42) Assistant Secretary Since 2004. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Vincent Nave (62) Treasurer Since 2004. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Mark E. Bradley (48) Assistant Treasurer Since 2004. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Luis I. Presutti (42) Assistant Treasurer Since 2004. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Gary Sullivan (49) Assistant Treasurer Since 2004. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Officer
Dorothy E. Bourassa (59) Secretary of PIM-USA; Senior Vice President - Legal of None
Pioneer; Secretary/Clerk of most of PIM-USA's subsidiar-
ies; and Secretary of all of the Pioneer Funds since
September 2003 (Assistant Secretary from November
2000 to September 2003)
-------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (42) Vice President and Senior Counsel of Pioneer since July None
2002 and Assistant Secretary of all of the Pioneer Funds
since September 2003; Vice President and Senior Counsel
of BISYS Fund Services, Inc. (April 2001 to June 2002);
Senior Vice President and Deputy General Counsel of
Funds Distributor, Inc. (July 2000 to April 2001)
-------------------------------------------------------------------------------------------------------------------
Vincent Nave (62) Vice President - Fund Accounting, Administration and None
Controllership Services of Pioneer; and Treasurer of all of
the Pioneer Funds
-------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (48) Deputy Treasurer of Pioneer since 2004 and Assistant None
Treasurer of all of the Pioneer Funds since November
2004; Treasurer and Senior Vice President, CDC IXIS
Asset Management Services from 2002 to 2003
-------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (42) Assistant Vice President - Fund Accounting, Administration None
and Controllership Services of Pioneer; and Assistant
Treasurer of all of the Pioneer Funds
-------------------------------------------------------------------------------------------------------------------
Gary Sullivan (49) Fund Accounting Manager - Fund Accounting, Administra- None
tion and Controllership Services of Pioneer; and Assistant
Treasurer of all of the Pioneer Funds
-------------------------------------------------------------------------------------------------------------------
55
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
TRUST OFFICERS
--------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Other Directorships
Name and Age With the Trust and Term of Office Past Five Years Held by this Officer
----------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (33) Assistant Since 2004. Serves Fund Administration Manager - None
Treasurer at the discretion Fund Accounting, Administration
of the Board and Controllership Services
since June 2003 and Assistant
Treasurer of all of the Pioneer
Funds since September 2003;
Assistant Vice President -
Mutual Fund Operations of State
Street Corporation from June
2002 to June 2003 (formerly
Deutsche Bank Asset Management)
----------------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (48) Chief Compliance Since January Chief Compliance Officer of None
Officer 2007. Serves at Pioneer since December 2006 and
the discretion of all the Pioneer Funds since
of the Board January 2007; Vice President
and Compliance Officer, MFS
Investment Management (August
2005 to December 2006);
Consultant, Fidelity
Investments (February 2005 to
July 2005); Independent
Consultant (July 1997 to
February 2005)
----------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are
officers or directors of the Trust's investment adviser and certain of its
affiliates.
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly
owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest
banking groups in Italy. Pioneer, the Trust's investment adviser, provides
investment management and financial services to mutual funds, institutional and
other clients.
56
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57
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58
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59
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60
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HOW TO CONTACT PIONEER
--------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
Account Information 1-800-710-0935
Telecommunications Device for the Deaf (TDD) 1-800-231-5469
Or write to AST:
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Company
Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Company
Wall Street Station
P.O Box 922
New York, NY
10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
website www.pioneerinvestments.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
The Trust's Chief Executive Officer is required by the New York Stock Exchange's
Listing Standards to file annually with the Exchange a certification that he is
not aware of any violation by the Trust of the Exchange's Corporate Governance
Standards applicable to the Trust. The Trust has signed such certification.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund, including fees
associated with the annual filing of its Form N-1A, totaled
approximately $45,735 in 2007 and $38,110 in 2006.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees and Other Fees
Audit-related Fees for the Trust's audit related services
totaled approximately $9,285 in 2007 and $8,925 in 2006.
These services included issuance of agreed upon procedures
report to the rating agencies.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns,
totaled approximately $7,820 and $7,515 in 2007 and 2006,
respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on
or after May 6, 2003, the effective date of the new SEC pre-
approval rules, the Fund's audit committee is required to
pre-approve services to affiliates defined by SEC rules to the
extent that the services are determined to have a direct
impact on the operations or financial reporting of the Fund.
For the years ended November 30, 2007 and 2006, there
were no services provided to an affiliate that required the
Fund's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Fund and affiliates, as
previously defined, totaled approximately $17,105 in 2007
and $16,440 in 2006.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has
considered whether the provision of non-audit services that
were rendered to the Affiliates (as defined) that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence.
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
The registrant has a separately-designated standing audit
committe eestablished in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
(a)(1)
As of the date of this report, day-to-day management of the fund's portfolio is
the responsibility of Mark Okada and Joe Dougherty. Mr. Okada, Executive Vice
President and Chief Investment Officer, joined Highland in 1993. Mr. Dougherty,
Senior Vice President and Senior Portfolio Manager, joined Highland in 1998.
(a)(2)
Other Accounts Managed by the Portfolio Managers. The table below indicates, for
each portfolio manager of the fund, information about the accounts other than
the fund over which the portfolio manager has day-to-day investment
responsibility. All information on the number of accounts and total assets in
the table is as of November 30, 2007. For purposes of the table, "Other Pooled
Investment Vehicles" may include investment partnerships, undertakings for
collective investments in transferable securities ("UCITS") and other non-U.S.
investment funds and group trusts, and "Other Accounts" may include separate
accounts for institutions or individuals, insurance company general or
separate accounts, pension funds and other similar institutional accounts, but
generally do not include the portfolio manager's personal investment accounts
or those which the manager may be deemed to own beneficially under the code of
ethics. Certain funds and other accounts managed by the portfolio manager
may have substantially similar investment strategies.
-----------------------------------------------------------------------------------------------------------------------
Name of Portfolio Type of Account Number of Total Assets Number of Accounts
Assets Managed
Manager Accounts Managed Managed for which for which
Managed (millions) Advisory Fee is Advisory Fee is
Performance-Based Performance-Based
(millions)
-----------------------------------------------------------------------------------------------------------------------
Mark Okada Other Registered 14 $8,696 0 N/A
Investment
Companies
-------------------------------------------------------------------------------------------------
Other Pooled
Investment 28 $17,509 23 $15,924
Vehicles
-------------------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Name of Portfolio Type of Account Number of Total Assets Number of Accounts
Assets Managed
Manager Accounts Managed Managed for which for which
Managed (millions) Advisory Fee is Advisory Fee is
Performance-Based Performance-Based
(millions)
-----------------------------------------------------------------------------------------------------------------------
Joe Dougherty Other Registered 13 $7,820 0 N/A
Investment
Companies
-------------------------------------------------------------------------------------------------
Other Pooled 1 $57 0 N/A
Investment
Vehicles
-------------------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------------------------------------
Potential Conflicts of Interest. When a portfolio manager is responsible for the
management of more than one account, the potential arises for the portfolio
manager to favor one account over another. The principal types of potential
conflicts of interest that may arise are discussed below. For the reasons
outlined below, Pioneer does not believe that any material conflicts are likely
to arise out of a portfolio manager's responsibility for the management of the
fund as well as one or more other accounts. Although Pioneer has adopted
procedures that it believes are reasonably designed to detect and prevent
violations of the federal securities laws and to mitigate the potential for
conflicts of interest to affect its portfolio management decisions, there can be
no assurance that all conflicts will be identified or that all procedures will
be effective in mitigating the potential for such risks. Generally, the risks of
such conflicts of interests are increased to the extent that a portfolio manager
has a financial incentive to favor one account over another. Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interests. The fund's investment sub-adviser
also has adopted certain compliance procedures which are designed to address
these types of conflicts. However, there is no guarantee that such procedures
will detect each situation in which a conflict might arise.
o A portfolio manager could favor one account over another in allocating
new investment opportunities that have limited supply, such as initial
public offerings and private placements. If, for example, an initial
public offering that was expected to appreciate in value significantly
shortly after the offering was allocated to a single account, that
account may be expected to have better investment performance than
other accounts that did not receive an allocation of the initial
public offering. Generally, investments for which there is limited
availability are allocated based upon a range of factors including
available cash and consistency with the accounts' investment
objectives and policies. This allocation methodology necessarily
involves some subjective elements but is intended over time to treat
each client in an equitable and fair manner. Generally, the investment
opportunity is allocated among participating accounts on a pro rata
basis. Although Pioneer believes that its practices are reasonably
designed to treat each client in an equitable and fair manner, there
may be instances where a fund may not participate, or may participate
to a lesser degree than other clients, in the allocation of an
investment opportunity.
o A portfolio manager could favor one account over another in the order
in which trades for the accounts are placed. If a portfolio manager
determines to purchase a security for more than one account in an
aggregate amount that may influence the market price of the security,
accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions. The
less liquid the market for the security or the greater the percentage
that the proposed aggregate purchases or sales represent of average
daily trading volume, the greater the potential for accounts that make
subsequent purchases or sales to receive a less favorable price. When
a portfolio manager intends to trade the same security on the same day
for more than one account, the trades typically are "bunched," which
means that the trades for the individual accounts are aggregated and
each account receives the same price. There are some types of accounts
as to which bunching may not be possible for contractual reasons (such
as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in
the best possible price. Where those accounts or circumstances are
involved, Pioneer will place the order in a manner intended to result
in as favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater
degree than other accounts managed by the portfolio manager. If, for
example, the portfolio manager receives a bonus based upon the
performance of certain accounts relative to a benchmark while other
accounts are disregarded for this purpose, the portfolio manager will
have a financial incentive to seek to have the accounts that determine
the portfolio manager's bonus achieve the best possible performance to
the possible detriment of other accounts. Similarly, if Pioneer
receives a performance-based advisory fee, the portfolio manager may
favor that account, whether or not the performance of that account
directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager
has a beneficial interest in the account, in order to benefit a large
client or to compensate a client that had poor returns. For example,
if the portfolio manager held an interest in an investment partnership
that was one of the accounts managed by the portfolio manager, the
portfolio manager would have an economic incentive to favor the
account in which the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could
arise. For example, if a portfolio manager purchases a security for
one account and sells the same security for another account, such
trading pattern may disadvantage either the account that is long or
short. In making portfolio manager assignments, Pioneer seeks to avoid
such potentially conflicting situations. However, where a portfolio
manager is responsible for accounts with differing investment
objectives and policies, it is possible that the portfolio manager
will conclude that it is in the best interest of one account to sell a
portfolio security while another account continues to hold or increase
the holding in such security.
(a)(3)
Compensation. SIMC pays Highland Capital a fee based on the assets under
management of the Enhanced Income Fund as set forth in an investment
sub-advisory agreement between Highland Capital and SIMC. Highland Capital
pays its investment professionals out of its total revenues and other
resources, including the sub-advisory fees earned with respect to the
Enhanced Income Fund. The following information relates to the period ended
May 31, 2007.
Highland's financial arrangements with its portfolio managers, its
competitive compensation and its career path emphasis at all levels reflect
the value senior management places on key resources. Compensation may
include a variety of components and may vary from year to year based on a
number of factors including the relative performance of a portfolio managers
underlying account, the combined performance of the portfolio managers
underlying accounts, and the relative performance of the portfolio managers
underlying accounts measured against other employees. The principal
components of compensation include a base salary, a discretionary
bonus, various retirement benefits and one or more of the incentive
compensation programs established by Highland, such as its
"Option It Plan" and its "Long-Term Incentive Plan," described below.
Base Compensation. Generally, portfolio managers receive base compensation based
on their seniority and/or their position with the firm, which may include the
amount of assets supervised and other management roles within the firm.
Discretionary Compensation. In addition to base compensation, portfolio
managers may receive discretionary compensation, which can be a substantial
portion of total compensation. Discretionary compensation can include a
discretionary cash bonus as well as one or more of the following:
Option It Plan. The purpose of the Option It Plan is to attract
and retain the highest quality employees for positions of substantial
responsibility, and to provide additional incentives to a select
group of management or highly compensated employees of the Highland
Capital Management, L.P. so as to promote the success of the Highland
Capital Management, L.P.
Long-Term Incentive Plan. The purpose of the Long-Term Incentive
Plan is to create positive morale and teamwork, to attract and
retain key talent,and to encourage the achievement of common goals.
The Long-Term Incentive Plan seeks to reward participating employees
based on the increased value of Highland Capital through the use of
Long-Term Incentive Units.
Senior portfolio managers who perform additional management functions
may receive additional compensation in these other capacities.
Compensation is structured such that key professionals benefit from
remaining with the firm.
(a)(4)
Share Ownership by Portfolio Managers. The following table indicates as of
November 30, 2007 the value, within the indicated range, of shares beneficially
owned by the portfolio managers of the fund.
--------------------------------------------------------------------------------
Name of Portfolio Manager Beneficial Ownership of the Fund*
--------------------------------------------------------------------------------
Mark Okada C
--------------------------------------------------------------------------------
Joe Dougherty C
--------------------------------------------------------------------------------
*Key to Dollar Ranges
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
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.
(Registrant) Pioneer Floating Rate Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date January 29, 2008
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 (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date January 29, 2008
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date January 29, 2008
* Print the name and title of each signing officer under his or her signature.