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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, 2005 through May 31, 2006
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
Semiannual
Report
5/31/06
[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 11
Financial Statements 28
Notes to Financial Statements 32
Trustees, Officers and Service Providers 43
President's
Dear Shareowners,
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We believe a desirable, moderate slowing of U.S. economic growth appears
likely, with beneficial impacts on inflation and interest rates, while global
growth prospects remain strong. We base this on the events of the six and 12
month periods ending May 31, 2006 that have been characterized by strong global
growth, rising commodity and stock prices, and rising interest rates. While
markets reversed in May (U.S. Treasury bond yields, stock markets, and
commodity prices all turned down), we believe the basic fundamental pattern of
steady global economic growth remains intact.
According to the International Monetary Fund, global economic growth in 2004-5
was the fastest of any two-year period in more than 30 years, and 2006 growth
is projected to match the healthy growth of 2005. This growth has been
broad-based, with Europe, Japan, and emerging market economies all showing
strength. The result has been rising prices across a broad range of
commodities, rising corporate profits, and rising interest rates. These basic
ingredients are fueling the equity bull market and the relatively weak bond
market over the six months ending May 31, 2006.
The bond markets' concern has been that strong economic growth would spark
inflation - we have already seen commodity prices rise, and U.S. labor costs
are threatening to increase since we are close to full employment. An
environment of strong economic growth, rising commodity prices and labor
demands may lead to inflation and higher interest rates; therefore a slower
growing economy would be welcomed by the markets.
While first quarter economic growth was strong, it looks as if the slowdown in
the U.S. economy for the second half of the year may be starting to unfold. The
positive unemployment figures, which reached a five-year low of 4.6 percent in
April, may have peaked as the number of new jobs fell in this period, the
smallest increase since the Katrina-distorted result of October 2005. The
cooling of housing market sales so far this year is another indicator of a
slowing economy.
The U.S. Federal Reserve ("Fed") has continued its measured short-term interest
rate increases. With global commodity prices continuing to rise, the Fed warned
in May that it remains vigilant in wanting to keep inflation low. This
determination puts short-term pressure on
2
Letter
markets, but such action has a positive effect for consumers over the
intermediate-to-longer term. By restraining inflation, the Fed may also limit
upward pressure on longer-maturity bond yields and downward pressure on stocks'
price/earnings ratios.
In summary, we think security market valuations remain reasonable. However,
there are no guarantees in investing. We know from a long view of history that
sudden shifts in investor sentiment can occur with little warning. This
unpredictability reinforces the importance of Pioneer's message that investors
should remain diversified, take a long-term view, and base investment decisions
on economic and market fundamentals, rather than on emotion. Our investment
philosophy and approach continue to be based on the use of fundamental research
to identify a range of opportunities that offer an attractive balance of risk
and reward to help Trust shareowners work toward their long-term goals.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, 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 5/31/06
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Portfolio Diversification
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(As a percentage of total investment portfolio)
Senior Secured Loans 93.1%
Corporate Bonds 3.1%
Temporary Cash Investment 1.5%
Fixed Rate Loans 1.4%
Common Stock 0.8%
Warrants 0.1%
Portfolio Quality
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(As a percentage of total investment portfolio; based on S&P ratings)
B 60.4%
BB 10.3%
BBB 0.8%
CCC 14.7%
D 1.8%
NR 10.5%
Cash Equivalents 1.5%
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
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(As a percentage of long-term holdings)
1. Home Interiors & Gifts, Inc., Initial Term Loan, 9.81%, 3/31/11 1.98%
2. Blockbuster, Inc., Tranche B Term Loan, 8.34% - 8.69%, 8/20/11 1.94
3. Charter Communications Operating, LLC, Term Loan, 7.92%, 4/28/13 1.86
4. Movie Gallery, Inc., Term Loan B, 8.73% - 10.23%, 4/27/11 1.68
5. Cricket Communications, Inc., Term B Facility, 7.027%, 5/31/13 1.46
6. Persona Cable, Tranche A Term Loan, 3.779%, 4/27/09 1.32
7. Resorts International Holdings, LLC, Term Loan B, 7.98%, 4/26/12 1.30
8. CSC Holdings, Inc. (Cablevision), Incremental Term Loan,
6.67% - 6.88%, 2/24/12 1.16
9. Georgia-Pacific Corp., First Lien Term B, 6.726% - 6.88%, 2/14/12 1.16
10. Merisant Co., Tranche B Term Loan, 9.376%, 1/11/10 1.13
This list excludes temporary cash. The portfolio is actively managed, and
current holdings may be different.
4
Pioneer Floating Rate Trust
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PRICES AND DISTRIBUTIONS
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Share Prices and Distributions
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Market Value
per Common Share 5/31/06 11/30/05
$18.46 $17.14
Net Asset Value
per Common Share 5/31/06 11/30/05
$19.46 $19.08
Distributions
per Common Share Short-Term Long-Term
(12/1/05 - 5/31/06) Dividends Capital Gains Capital Gains
$0.77 $0.0485 $ -
5
Pioneer Floating Rate Trust
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PERFORMANCE UPDATE 5/31/06
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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
CSFB Leveraged Loan Index.
Cumulative Total Returns
(As of May 31, 2006)
Net Asset Market
Period Value (NAV) Price
Life-of-Trust
(12/23/04) 12.46% 1.67%
1 Year 11.76 13.66
12/04 10,000 10,000
5/05 8,938 10,180
5/06 10,167 10,886
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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 market price.
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
designed to mirror the investable universe of the $US-denominated leveraged
loan market. As of March 30, 2001, the Index included $148 billion in
tradable term loans. 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 5/31/06
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This semiannual report for Pioneer Floating Rate Trust covers the six-month
period from December 1, 2005 through May 31, 2006. In the report, portfolio
managers Mark Okada and Joseph Dougherty of Highland Capital Management discuss
the Trust's investment process, strategy and outlook.
Q: How did the Trust perform over the last six months?
A: For the six-month period ended May 31, 2006, Pioneer Floating Rate Trust
returned 6.70% at net asset value. The market price return over that same
six-month period was 12.67%. The Trust's benchmark, the Credit Suisse
Leveraged Loan Index, returned 3.52% for the same period. At the end of
May, the Trust was selling at a discount of market price to net asset value
of -5.14%. Unlike open-ended funds, a closed-end fund's price goes up and
down based on supply and demand, irrespective of a fund's net asset value
per share. It isn't unusual to find closed-end funds trading at a discount.
At the end of the period, closed-end funds on average were trading at a
discount to their actual underlying value.
During the six-month period, the federal funds target rate rose to 5.0%
from 4.0%. During this same period, the yield on the 3-month London
Interbank Offering Rate (LIBOR) rose from 4.42% to 5.24%. LIBOR is the rate
of interest at which banks borrow funds from other banks, in marketable
size, in the London Interbank market.
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 was the investment environment like during the six months?
A: The investment environment during the six months ended May 31, 2006, was
generally favorable for the leveraged loan markets, as demand for leveraged
loans was strong. There was a healthy supply of new bank loan issuance, and
default rates on current loans declined slightly. Yields on loans, as
tracked by the Credit Suisse
7
Pioneer Floating Rate Trust
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PORTFOLIO MANAGEMENT DISCUSSION 5/31/06 (continued)
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Leveraged Loan Index, narrowed from 2.58% at the end of November 2005 to
2.49% at the end of May 2006. However, the tightening in yields was more
than offset by the increase in LIBOR. From December 1, 2005 through May 31,
2006, the three-month LIBOR rose approximately 0.82%. As a result, the
average coupon rate for leveraged loans, as tracked by the Credit Suisse
Leveraged Loan Index, rose from 6.81% to 7.60% during the same period.
Q: What were the principal investment strategies used in managing the Trust?
A: Our strategies for managing the Trust were driven by our beliefs that the
economy is healthy and that the leveraged loan markets will perform well
during the first half of 2006. We continued to keep the portfolio fully
invested by using available cash to add newly issued loans that we felt
would trade higher in the secondary markets. The Trust was highly
diversified, with positions in 194 issuers. About 94.5% of total
investments were in loans, 3.1% in bonds and 0.9% in equities.
Approximately 11.2% of the Trust was in second lien loans. We understand
the risk inherent in second liens and closely monitor these investments.
From a risk/reward perspective, we believe second lien loans can increase
the Trust's yield without taking on too much added risk.
With regard to diversification, the Trust was invested in approximately 26
industries. Some core positions included: Millennium Digital Media, a
broadband services company; Resorts International Holdings, a gaming
company; and Cricket Communications, a wireless communications service. The
cable/wireless video, retail, and telecommunications industries were among
the largest industries in the portfolio.
Q: In February the monthly dividend rose to $0.13 per share, and in April the
dividend increased to $0.14 per share. What accounted for these increases?
A: We were able to keep the Trust's yield relatively stable. The Trust's
average yield on floating-rate loans increased from 3.64% on November 30,
2005 to approximately 3.65% on May 31, 2006. A low default rate and an
increase in LIBOR, as noted above, also contributed to our ability to
increase the dividend.
8
Pioneer Floating Rate Trust
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Q: What is your outlook?
A: We think the leveraged loan market will continue to perform well during the
remainder of 2006. While we believe defaults should move up slightly during
the remainder of the year, we think they should continue to be below the
historical average. We expect demand for loans to remain strong. Overall,
our view is that the economy is healthy, and we do not expect any material
decreases in the credit quality of the portfolio.
Information regarding the Trust's principal investment risks is contained
in the Trust's original 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 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.
The Trust may use leverage through the issuance of preferred shares with an
aggregate liquidation preference of up to 331/3% of the Trust's total
assets after such issuance. Leverage creates significant risks, including
the risk that the Trust's income or capital appreciation will not be
sufficient to cover the cost of
9
Pioneer Floating Rate Trust
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PORTFOLIO MANAGEMENT DISCUSSION 5/31/06 (continued)
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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-advisors 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.
10
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited)
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
SENIOR SECURED FLOATING RATE LOAN
INTERESTS - 138.3% of Net Assets*
Aerospace & Defense - 7.2%
3,456,250 B-/B2 American Airlines, Inc., Term Loan,
10.17% - 10.29%, 12/17/10 $ 3,518,463
4,000,000 B+/Ba3 AWAS Capital, Inc., First Priority Term Loan,
6.75%, 3/15/13 3,962,500
200,000 B-/B3 DeCrane Aircraft Holdings, Inc., First Lien
Revolver, 11.25% - 11.5%, 3/31/08 196,000
3,980,000 B-/B3 DeCrane Aircraft Holdings, Inc., First Lien Term
Loan, 11.25%, 3/31/08 4,009,850
5,000,000 NR/Baa3 Delta Airlines, Inc., DIP, Term Loan A,
8.023%, 3/16/08 5,079,020
4,950,000 B+/B2 DynCorp International, LLC (Di Finance), Term
Loan, 7.813%, 2/11/11 5,001,564
1,405,224 B+/B1 Hunter Defense Holdings, Inc., Term Loan B,
8.125% - 10.0%, 3/10/11 1,415,763
997,500 B+/B2 IAP Worldwide Services, Inc., First Lien Term
Loan, 8.0%, 12/30/12 1,012,463
1,000,000 D/Caa1 Northwest Airlines Corp., Tranche A Term
Loan, 10.34%, 11/23/09 1,020,000
2,970,000 D/Caa1 Northwest Airlines Corp., Tranche B Term
Loan, 11.84%, 11/23/10 3,056,005
3,000,000 B-/B2 US Airways, Inc., Term Loan,
8.593%, 3/31/11 3,035,250
3,000,000 B+/B1 Vought Aircraft Industries, Inc., Tranche B
Letter of Credit Deposit Loan, 6.89%,
12/22/10 3,031,875
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$ 34,338,753
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Broadcasting - 3.4%
2,493,750 B/B2 Enterprise NewsMedia, LLC, Term Loan,
7.99%, 6/30/12 $ 2,502,790
748,125 B/B1 Montecito Broadcast Group, LLC, First Lien
Term Loan, 7.723%, 1/27/13 757,243
958,024 NR/B1 NEP Supershooters, L.P., First Lien Term Loan A,
8.98% - 9.13%, 2/3/11 971,497
1,451,673 NR/B1 NEP Supershooters, L.P., First Lien Term Loan B,
8.48%, 1/31/11 1,472,087
7,000,000 CCC+/B2 Paxson Communications Corp., First Lien Term
Loan, 8.318%, 1/15/12 7,183,750
The accompanying notes are an integral part of these financial statements. 11
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Broadcasting - (continued)
EURO 500,000 BB/NR TDF SA, Facility Term Loan B, 4.85%,
3/11/13 $ 649,236
EURO 500,000 BB/NR TDF SA, Facility Term Loan D, 6.475%,
3/11/15 653,467
1,985,000 CCC+/B2 Young Broadcasting, Inc., Term Loan,
7.25% - 7.438%, 11/3/12 1,982,519
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$ 16,172,589
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Cable - 12.1%
4,000,000 NR/Ba2 Adelphia Communications, Tranche B DIP Term
Loan, 7.125%, 8/7/06 $ 4,016,252
6,500,000 NR/Ba2 Century Cable Holdings, LLC, Discretionary
Term Loan, 10.0%, 12/31/09 6,326,970
2,000,000 NR/Ba2 Century Cable Holdings, LLC, Term Loan,
10.0%, 6/30/09 1,949,166
2,000,000 B+/NR Cequel Communications, LLC, Bridge Loan,
10.069%, 10/30/07 1,990,000
2,000,000 B+/B1 Cequel Communications, LLC, First Lien Term
Loan B, 7.319%, 11/5/13 1,991,964
12,770,258 CCC+/B2 Charter Communications Operating, LLC, Term
Loan, 7.92%, 4/28/13 12,844,913
8,000,000 BB/Ba3 CSC Holdings, Inc. (Cablevision), Incremental
Term Loan, 6.67% - 6.88%, 3/29/13 8,006,920
6,000,000 NR/NR Olympus Cable Holdings, LLC, Term Loan A,
9.25%, 6/30/10 5,829,846
CAD 10,000,000 B/B2 Persona Cable, Tranche A Term Loan,
3.779%, 4/27/09 9,151,188
1,000,000 B/B1 UPC Financing Partnership, Facility Term Loan
J2, 7.554%, 3/31/13 1,004,330
1,000,000 B/B1 UPC Financing Partnership, Facility Term Loan
K2, 7.554%, 12/31/13 1,004,330
3,000,000 B/B2 WideOpenWest Finance, LLC, First Lien Term
Loan, 2.25%, 5/1/13 3,006,696
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$ 57,122,575
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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
Chemicals - 0.8%
83,333 B+/NR Basell BV, Facility USD Term Loan B4,
6.906%, 8/1/13 $ 84,528
83,333 B+/NR Basell BV, Facility USD Term Loan C4,
7.668%, 8/1/14 84,887
416,667 B+/Ba3 Basell USA, Inc., Facility Term Loan B2,
6.906%, 8/1/13 423,785
416,667 B+/Ba3 Basell USA, Inc., Facility Term Loan C2,
7.668%, 8/1/14 423,785
2,972,513 B+/B1 CII Carbon, LLC, Term Loan B, 7.125%,
8/23/12 3,007,811
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$ 4,024,796
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Consumer - Durables - 0.2%
1,000,000 B/B3 Rexair, LLC, Second Lien Term Loan,
12.758%, 6/30/11 $ 995,000
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Consumer - Non-Durables - 4.1%
1,856,111 B/B2 American Safety Razor Co., Tranche B Term
Loan, 7.97%, 2/28/12 $ 1,870,032
2,268,000 B-/B2 Camelbak Products, LLC, First Lien Term Loan,
8.67%, 8/4/11 2,177,280
1,000,000 B-/Caa1 Camelbak Products, LLC, Second Lien Term
Loan, 11.42%, 2/4/12 825,000
3,814,770 B/B3 CEI Holdings, Inc. (Cosmetic Essence), First
Lien Term Loan, 7.438% - 10.25%,
12/3/10 3,843,381
2,809,429 B+/Ba3 Eastman Kodak Co., Term Loan B-1 Advance,
7.18% - 7.439%, 10/18/12 2,822,999
2,000,000 B-/B3 MD Beauty, Inc., Second Lien Term Loan,
12.0%, 2/18/13 2,010,000
1,965,800 B+/B1 Polaroid Corp., Term Loan, 12.125%,
4/27/11 1,970,715
1,750,000 B-/B3 Revlon Consumer Products Corp., Term Loan,
10.69% - 11.12%, 7/9/10 1,783,542
2,000,000 B-/B1 Spectrum Brands, U.S. Term Loan B,
7.53% - 8.17%, 2/7/12 2,020,938
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$ 19,323,887
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The accompanying notes are an integral part of these financial statements. 13
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
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Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Consumer - Products - 0.2%
1,111,111 B/B1 Playpower, Inc., Dollar Term Loan,
7.98%, 12/18/09 $ 1,120,833
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Diversified Media - 3.9%
7,613,861 B-/B3 ALM Media Holdings, Inc., First Lien Term
Loan, 7.479% - 9.5%, 3/5/10 $ 7,626,553
5,000,000 B/Ba3 MGM Holdings II, Inc./LOC Acquisition Co.,
Tranche B Term Loan, 7.229%, 4/8/12 5,036,875
990,000 B/B2 North American Membership Group, Inc., First
Lien Tranche B Term Loan, 7.270%,
5/18/11 985,050
3,182,297 B-/B1 Six Flags Theme Parks, Inc., Tranche B Term
Loan, 7.26% - 7.41%, 6/30/09 3,206,164
1,473,750 B/B2 Wallace Theater Corp. (Hollywood Theaters),
First Lien Term Loan, 8.23%, 7/31/09 1,490,330
------------
$ 18,344,972
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Energy - 7.7%
4,950,000 B-/B3 ATP Oil & Gas Corp., Term Loan,
10.41% - 10.61%, 4/14/10 $ 5,086,125
2,985,000 NR/B2 Cheniere LNG Holdings, LLC, Term Loan,
7.729%, 8/30/12 3,013,919
2,000,000 B+/B3 Coffeyville Resources, LLC, Second Lien Term
Loan, 11.75%, 7/8/13 2,061,876
3,606,710 B+/NR Ferrell Companies, Inc., Term Loan,
8.423% - 8.43%, 12/17/11 3,660,810
3,000,000 NR/B2 Hawkeye Renewables, LLC, Term Loan,
7.835%, 1/31/12 2,997,189
5,633,333 BBB+/Ba3 Mainline, L.P., Term Loan, 7.310%, 12/17/11 5,696,708
2,643,608 NR/B1 NSG Holdings II, LLC, Initial Term Loan,
7.979%, 12/13/11 2,680,785
1,377,778 BB/Ba3 OPTI Canada Inc., Term Loan, 6.83%, 5/17/13 1,378,963
4,463,500 B+/B1 Regency Gas Services, LLC, New Term Loan,
7.23%, 6/1/10 4,474,659
366,906 B/Ba3 SemCrude, L.P., U.S. Term Loan,
7.331% - 7.41%, 3/16/11 367,594
2,000,000 B/NR TARH E&P Holdings, LP, Second Lien Term
Loan, 10.625%, 11/15/10 2,005,000
3,000,000 B-/Caa1 Venoco, Inc., Second Lien Term Loan,
9.625% - 9.75%, 4/28/11 3,026,250
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$ 36,449,878
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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
Financial - 1.5%
1,000,000 B/B3 ARG Holdings, Inc. (Alliant Resources Group),
Second Lien Term Loan, 12.125%,
11/30/12 $ 1,015,000
1,918,269 B-/B2 FleetCor Technologies Operating Co., LLC,
Term Loan, 7.881% - 8.524%, 6/30/11 1,918,269
1,000,000 B+/B1 HMSC Corp., First Lien Term Loan, 7.827%,
11/16/11 1,010,000
1,899,121 BB+/Ba3 The Nasdaq Stock Market, Inc., Tranche B
Term Loan, 1.75%, 4/18/12 1,899,417
1,100,879 BB+/Ba3 The Nasdaq Stock Market, Inc., Tranche C
Term Loan, 1.75%, 4/18/12 1,101,051
------------
$ 6,943,737
------------
Food & Drug - 2.1%
4,532,126 B+/B2 Jean Coutu Group (PJC), Inc., Term Loan B,
7.625%, 7/30/11 $ 4,562,655
992,500 B/B2 Sturm Foods, Inc., First Lien Term Loan,
9.75%, 5/26/11 1,008,008
4,500,000 B/B3 Sturm Foods, Inc., Second Lien Term Loan,
14.0%, 5/26/12 4,578,750
------------
$ 10,149,413
------------
Food & Tobacco - 8.7%
845,449 B+/B1 AFC Enterprises, Inc., Tranche B Term Loan,
7.5%, 5/11/11 $ 852,847
3,595,455 B+/B1 Carrols Corp., Term Loan B, 7.375%,
12/31/10 3,636,464
1,906,667 B+/B1 Commonwealth Brands, Inc., Term Loan,
7.438%, 12/22/12 1,920,728
500,000 B-/B1 Dave & Buster's, Inc., Tranche B Term Loan,
7.625%, 3/8/13 501,563
186,046 B+/Ba3 Dole Food Company, Inc., Credit Linked
Deposit, 4.92%, 4/12/13 185,102
418,605 B+/Ba3 Dole Food Company, Inc., Tranche B Term
Loan, 6.688% - 8.75%, 4/12/13 416,479
1,395,349 B+/Ba3 Dole Food Company, Inc., Tranche C Term
Loan, 6.688% - 8.75%, 4/12/13 1,388,263
7,685,729 CCC+/Caa3 DS Water Enterprises, L.P., Term Loan,
9.49%, 11/7/09 7,685,729
The accompanying notes are an integral part of these financial statements. 15
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Food & Tobacco - (continued)
600,000 NR/B3 Krispy Kreme Doughnut Corp., Second Lien
Tranche A Credit-Linked Deposit Loan,
5.026%, 4/1/10 $ 621,000
2,376,000 NR/Caa1 Krispy Kreme Doughnut Corp., Second Lien
Tranche B Loan, 12.376%, 4/1/10 2,459,160
7,884,161 CCC+/Caa1 Merisant Co., Tranche B Term Loan, 9.376%,
1/11/10 7,792,177
2,000,000 BB-/B3 National Distributing Co., Inc., Second Lien
Term Loan, 11.6%, 6/1/10 2,005,000
1,000,000 B-/B2 New World Restaurant Group, Inc., First Lien
Term Loan, 7.81% - 7.98%, 3/31/11 1,007,500
2,844,835 B/B1 PBM Products, LLC, Term Loan B, 8.10%,
7/18/11 2,876,839
3,939,540 B+/B1 Pinnacle Foods Group, Inc., Term Loan,
8.2% - 8.24%, 11/25/10 3,967,609
2,000,000 B/NR Real Mex Restaurants, Inc, Term Loan,
14.17%, 12/31/08 2,040,000
2,000,000 BB/Ba3 Trustreet Properties, Inc., Term Loan, 7.023%,
4/8/10 2,015,000
------------
$ 41,371,460
------------
Forest Products/Containers - 2.8%
5,000,000 BB-/Ba3 Georgia-Pacific Corp., Second Lien Term Loan,
7.92% - 8.081%, 12/23/13 $ 5,071,395
7,975,000 BB-/Ba2 Georgia-Pacific Corp., Term B,
6.726% - 6.88%, 12/20/12 7,998,056
------------
$ 13,069,451
------------
Gaming & Leisure - 9.7%
1,085,000(a) B/NR BRE/ESA Mezz5, LLC, Mezzanine D Term
Loan, 8.152%, 7/11/08 $ 1,087,713
5,915,000(a) B/NR BRE/Homestead Mezz4, LLC, Mezzanine D
Term Loan, 8.152%, 7/11/08 5,915,000
1,985,750 B+/B1 CCM Merger, Inc. (Motor City Casino), Term
Loan B, 6.85% - 7.214%, 7/21/12 1,991,211
600,000 B-/NR Fontainebleu Florida Hotel, LLC, Tranche A
Term Loan, 7.92%, 5/11/08 600,000
400,000 B-/NR Fontainebleu Florida Hotel, LLC, Tranche B
Term Loan, 7.92%, 5/11/08 400,000
4,522,675 B/B2 Lake at Las Vegas Joint Venture, First Lien
Term Loan, 7.86% - 7.91%, 2/1/10 4,546,903
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)
6,871,044 B-/B3 OpBiz, LLC, New Term Loan A, 7.99%,
8/31/10 $ 6,700,986
17,950 B-/B3 OpBiz, LLC, New Term Loan B,
8.055% - 8.99%, 8/31/10 17,695
995,000 B/B1 Pivotal Promontory, LLC, First Lien Term Loan,
7.841%, 8/31/10 992,098
5,310,574 CCC+/Caa2 Resorts International Holdings, LLC, Second
Lien Term Loan, 12.479% - 15.979%,
4/26/13 5,493,125
8,921,741 CCC+/Caa1 Resorts International Holdings, LLC, Term
Loan B, 7.98%, 4/26/12 9,033,263
992,500 B/B2 Trump Entertainment Resorts Holdings, L.P.,
Term Loan B-1, 7.17%, 5/20/12 1,003,045
6,000,000 B+/B2 Wynn Las Vegas, LLC, Term Loan, 7.235%,
12/14/11 6,041,250
1,910,400 B+/B1 Yellowstone Mountain Club, LLC, First Lien
Term Loan, 7.466%, 9/30/10 1,916,072
------------
$ 45,738,361
------------
Healthcare - 10.0%
5,390,000 B+/B1 Alliance Imaging, Inc., Tranche C1 Term Loan,
7.063% - 7.688%, 12/29/11 $ 5,419,478
2,031,640 B+/B2 AMR HoldCo, Inc. EmCare HoldCo, Inc., Term
Loan, 7.08% - 7.27%, 2/10/12 2,043,704
997,500 B/B3 Capella Healthcare, Inc., First Lien Term Loan,
7.82%, 11/30/12 1,008,098
2,817,398 BB-/B1 DaVita, Inc., Tranche B Term Loan,
6.69% --7.21%, 10/5/12 2,820,187
5,000,000 B/Caa1 FHC Health Systems, Inc., Third Lien Term
Loan, 13.82%, 2/9/11 5,087,500
3,000,000 B/B1 Golden Gate National Senior Care, LLC
(Beverly), First Lien Term Loan,
7.818% - 7.959%, 3/14/11 3,035,625
2,000,000 B/Caa1 Golden Gate National Senior Care, LLC
(Beverly), Second Lien Term Loan,
12.959%, 9/14/11 2,040,000
3,000,000 B/B2 HealthSouth Corp., Term Loan B, 8.15%,
3/10/13 3,005,088
677,788 B+/B1 Matria Healthcare, Inc., First Lien Tranche B
Term Loan, 9.25%, 1/19/12 682,237
The accompanying notes are an integral part of these financial statements. 17
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Healthcare - (continued)
320,513 B+/B1 Matria Healthcare, Inc., First Lien Tranche C
Term Loan, 9.25%, 1/19/07 $ 321,114
184,569 B/B1 MMM Holding, Inc./NAMM Holdings, Inc., New
Term Loan, 7.23%, 8/22/11 185,491
1,815,431 B/B1 MMM Holding, Inc./NAMM Holdings, Inc.,
Term Loan, 7.23% - 7.3%, 8/22/11 1,824,509
2,000,000 B/NR National Renal Institutes, Inc., Facility Term
Loan, 7.416% - 7.531%, 3/31/13 2,013,126
1,995,000 B/B2 QTC Acquisition, Inc., First Lien Term Loan,
7.84%, 11/10/12 2,002,481
4,000,000 BB-/B1 Quintiles Transnational Corp., First Lien Term
Loan B, 7.08%, 3/31/13 4,006,252
2,475,000 NR/NR Reliant Pharmaceuticals, Inc., First Lien Term
Loan, 14.479% - 14.55%, 6/30/08 2,499,750
1,990,000 B/NR Renal Advantage, Inc., Tranche B Term Loan,
7.42%, 10/6/12 2,007,413
1,985,000 B/B1 Skilled Healthcare Group, Inc., First Lien Term
Loan, 7.68% - 7.78%, 6/15/12 2,009,193
1,000,000 B/Caa1 Triumph HealthCare Second Holdings, LLC,
Second Lien Term Loan, 13.6%, 8/31/12 1,007,500
66,246 B/B2 Warner Chilcott Co., Inc., Dovobet Delayed
Draw Term Loan, 7.63%, 1/18/12 66,629
331,230 B/B2 Warner Chilcott Co., Inc., Dovonex Delayed
Draw Term Loan, 7.03% - 7.19%, 1/18/12 333,145
2,448,751 B/B2 Warner Chilcott Co., Inc., Tranche B Acquisition
Date Term Loan, 6.761% - 7.19%, 1/18/12 2,461,213
995,770 B/B2 Warner Chilcott Corp., Tranche C Acquisition
Date Term Loan, 7.027%, 1/18/12 1,000,838
460,051 B/B2 Warner Chilcott Holdings Co. III, Ltd.,
Tranche D Acquisition Date Term Loan,
7.027%, 1/18/12 462,392
------------
$ 47,342,963
------------
18 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
Housing - 7.4%
3,474,286 B-/B3 Associated Materials, Inc., Term Loan,
7.16% - 7.82%, 8/29/10 $ 3,491,657
6,775,297 B/B2 Atrium Companies, Inc., Term Loan,
8.23% - 8.33%, 12/28/11 6,785,175
2,500,000 BB/Ba3 BioMed Realty, L.P., Senior Secured Term
Loan, 7.273%, 5/31/10 2,506,250
1,000,000 B+/B1 Contech Construction Products, Inc., New
Term Loan, 6.8% - 7.22%, 1/31/13 1,006,563
2,839,597 B/B1 Custom Building Products, Inc., First Lien Term
Loan, 7.25% - 7.341%, 10/20/11 2,870,358
1,481,250 B+/B1 Desa, LLC, Term Loan, 9.96% - 12.75%,
11/26/11 1,485,879
1,000,000 B/B2 Edge Star Partners, LLC (Harmon Koval), First
Lien Term Loan, 8.439%, 11/18/06 1,003,750
3,500,000 B/B3 Edge Star Partners, LLC (Harmon Koval),
Second Lien Term Loan, 14.689%,
11/18/06 3,535,000
1,492,500 B-/B1 Kuilima Resort Co. (Turtle Bay), First Lien
Term Loan, 7.843%, 9/30/10 1,492,500
127,800 B+/B2 LNR Property Corp., Tranche A Term Loan,
8.08%, 2/3/08 128,545
1,931,823 B+/B2 LNR Property Corp., Tranche B Term Loan,
8.01% - 8.08%, 2/3/08 1,936,049
4,906,250(a) BB-/Ba3 TWLDC Holdings, L.P., Mezzanine Loan,
9.24%, 11/30/07 4,979,844
4,000,000(a) BB-/Ba3 Woodlands Commercial Properties Co., L.P.,
Bridge Loan, 7.74%, 2/28/08 4,030,000
------------
$ 35,251,570
------------
Information Technology - 9.5%
2,000,000 B/Caa2 ClientLogic Corp., Second Lien Term Loan,
13.875% - 14.063%, 9/1/12 $ 2,010,000
3,000,000 B+/B2 Data Transmission Network Corp., First Lien
Tranche B Term Loan, 8.023% - 8.08%,
3/10/13 3,015,000
4,000,000 B/B2 GXS Worldwide, Inc., First Lien Term Loan,
9.778% - 10.258%, 7/29/11 3,950,000
2,000,000 B/Caa1 GXS Worldwide, Inc., Second Lien Term Loan,
14.508%, 12/20/11 2,010,000
The accompanying notes are an integral part of these financial statements. 19
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Information Technology - (continued)
2,380,166 B/B2 Infor Global Solutions European Finance,
S.a.r.l., First Lien Lux Term Loan,
7.8%, 4/18/11 $ 2,377,685
1,125,000 B/Caa2 Infor Global Solutions European Finance,
S.a.r.l., Second Lien Lux Term Loan,
12.3%, 4/18/12 1,136,250
528,926 B/B2 Infor Global Solutions U.S. (Magellan Holdings,
Inc.), First Lien Delayed Draw Term Loan,
7.8%, 4/18/11 528,374
1,090,909 B/B2 Infor Global Solutions U.S. (Magellan Holdings,
Inc.), First Lien U.S. Term Loan, 7.8%,
4/18/11 1,089,772
1,875,000 B/Caa2 Infor Global Solutions U.S. (Magellan Holdings,
Inc.), Second Lien U.S. Term Loan,
12.3%, 4/18/12 1,893,750
958,333 B/B2 Inovis International, Inc, Term Loan,
8.36% - 9.0%, 11/15/08 958,333
958,871 B+/B2 IPC Acquisition Corp., First Lien Tranche B
Term Loan, 7.59% - 7.79%, 8/5/11 967,621
1,000,000 B+/B3 IPC Acquisition Corp., Second Lien Term Loan,
12.09%, 8/5/12 1,020,417
2,000,000 B/B1 Nuance Communications, Inc., Term Loan,
7.1%, 3/31/13 2,005,626
4,839,782 B+/B2 ON Semiconductor Corp., Term Loan H,
7.23%, 12/15/11 4,878,351
1,979,310 B+/B1 Open Solutions, Inc., First Lien Term Loan,
7.33%, 9/3/11 1,997,866
3,000,000 B/B1 Serena Software, Inc., Term Loan,
7.41%, 3/10/13 3,019,374
6,947,500 B+/B1 SunGard Data Systems, Inc. (Solar Capital
Corp.), U.S. Term Loan, 7.66%, 2/11/13 7,000,475
3,960,000 B+/B1 Telcordia Technologies, Inc., Term Loan,
7.31%, 9/15/12 3,955,874
1,296,667 B/B1 Vertafore, Inc., First Lien Initial Term Loan,
7.593% - 7.727%, 1/31/12 1,306,392
------------
$ 45,121,160
------------
20 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
Manufacturing - 1.5%
992,503 B/B2 Brand Services, Inc., Term Loan B,
7.527% - 8.227%, 1/15/12 $ 997,879
1,000,000 B/B1 FCI USA, Inc., Facility Term Loan B-1, 7.73%,
11/3/13 1,007,000
1,000,000 B/B1 FCI USA, Inc., Facility Term Loan C-1, 8.23%,
11/3/14 1,011,500
1,990,000 B+/B2 Mueller Group, LLC, Term Loan,
7.06% - 7.376%, 10/3/12 2,009,900
2,000,000(a) B/B2 Wire Rope Corporation of America, Inc.,
Secured Term Loan,
12.48% - 13.04%, 6/17/11 2,050,000
------------
$ 7,076,279
------------
Media - 0.9%
702,213 B-/B1 Knology, Inc., First Lien Term Loan,
10.479% - 10.626%, 6/29/10 $ 726,790
3,047,063 B/Caa1 Knology, Inc., Second Lien Term Loan,
15.126%, 6/29/11 3,435,564
------------
$ 4,162,354
------------
Metals & Minerals - 2.0%
1,496,250 BB/Ba1 Gibraltar Industries, Inc., Term Loan,
6.688%, 12/8/12 $ 1,509,342
4,446,225 B/B3 Murray Energy Corp., Tranche B Term Loan,
8.093%, 1/28/10 4,535,149
3,456,381 B+/B1 Tube City, LLC, First Lien Tranche C Term
Loan, 7.73%, 12/31/10 3,486,625
------------
$ 9,531,116
------------
Retail - 11.5%
13,408,725 B-/B3 Blockbuster, Inc., Tranche B Term Loan,
8.34% - 8.69%, 8/20/11 $ 13,445,290
2,992,500 B/B2 Burlington Coat Factory Warehouse Corp.,
Term Loan, 7.43% - 7.53%, 5/28/13 2,964,445
4,937,500 B+/B1 Dollarama Group, L.P., Replacement Term
Loan B, 6.918%, 11/18/11 4,968,359
1,000,000 B/B2 Eddie Bauer, Inc., Term Loan,
4.25%, 6/21/11 1,000,875
14,993,361 CCC/Caa2 Home Interiors & Gifts, Inc., Initial Term Loan,
9.81%, 3/31/11 13,693,931
1,000,000 B/B2 J. Crew Group, Inc., Initial Term Loan,
9.25%, 5/15/13 1,002,292
The accompanying notes are an integral part of these financial statements. 21
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Retail - (continued)
898,221 B+/B2 MAPCO Express, Inc./MAPCO Family Centers,
Inc., Term Loan, 7.69%, 4/28/11 $ 903,274
1,048,029 CCC+/Caa1 Movie Gallery, Inc., Term Loan A,
8.48%, 4/27/11 1,018,460
12,024,742 CCC+/Caa1 Movie Gallery, Inc., Term Loan B,
8.73% - 10.23%, 4/27/11 11,642,391
3,645,570 B+/B1 Neiman Marcus Group, Inc., Term Loan,
7.34%, 4/6/13 3,680,888
------------
$ 54,320,205
------------
Service - 2.8%
2,655,000 B/NR Alliance Laundry Systems, LLC, Term Loan,
7.32%, 1/27/12 $ 2,669,934
2,000,000 B/B2 Education Management Corp., Tranche B Term
Loan, 2.5%, 6/1/13 2,007,500
818,182 B/B2 Energy Solutions, LLC, New Term Loan,
7.85%, 4/13/10 829,091
2,815,721 B+/B1 Headwaters, Inc., First Lien Term Loan,
7.08%, 4/30/11 2,833,320
1,717,963 B-/B2 Outsourcing Solutions, Inc., Term Loan,
9.593%, 9/30/10 1,722,258
3,000,000 NR/NR Penhall International Corp., Second Lien Term
Loan, 11.83%, 11/1/10 3,037,500
------------
$ 13,099,603
------------
Telecommunications - 9.6%
2,000,000 B/B2 Cavtel Holdings, LLC (Cavalier Telephone
Corp.), Term Loan, 9.52%, 3/24/12 $ 2,035,000
1,847,187 B-/B1 Centennial Cellular Operating Co., Term Loan,
7.21% - 7.57%, 2/9/11 1,861,041
2,833,627(b) CCC/B3 Millennium Digital Media Systems, LLC,
Facility A Revolver, 10.08% - 10.31%,
10/31/08 2,847,795
5,765,810(b) CCC/B3 Millennium Digital Media Systems, LLC,
Facility Term Loan B, 10.21% - 10.31%,
10/31/08 5,833,080
5,982,335(b) CCC/B3 Millennium Digital Media Systems, LLC,
Facility Term Loan C, 10.08% - 10.31%,
10/31/08 6,012,247
22 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
Telecommunications - (continued)
EURO 2,500,000 BB-/NR Nordic Telephone Company Holdings APS
(TDC), Euro Facility Term Loan B-2,
5.207% - 5.707%, 4/10/14 $ 3,253,808
EURO 2,500,000 BB-/NR Nordic Telephone Company Holdings APS
(TDC), Euro Facility Term Loan C-2,
5.207% - 5.707%, 4/10/15 3,267,086
2,000,000 NR/B2 Nortel Communications, Tranche A Term Loan,
2.0%, 2/15/07 2,003,750
2,000,000 B+/Caa1 Pine Tree Holdings, Inc., Second Lien
Tranche B Term Loan, 12.55%, 7/15/13 2,035,000
2,000,000 BB-/B1 Qwest Corp., Tranche A Term Loan,
9.831%, 6/30/07 2,040,876
500,000 NR/Ba3 RCN Corp., Term Loan, 1.75%, 5/30/13 501,250
1,500,000 B+/B1 Stratos Global Corp./Stratos Funding LP,
Facility Term Loan B, 7.729%, 2/13/12 1,516,875
4,269,994 NR/NR WestCom Corp., Tranche B Term Loan,
7.499% - 7.541%, 12/17/10 4,294,012
EURO 3,000,000 B+/B1 Wind Telecomunicazione S.p.A., Euro Term
Loan A-1, 2.375%, 5/26/12 3,853,367
EURO 1,500,000 B+/B1 Wind Telecomunicazione S.p.A., Euro Term
Loan B-1, 2.875%, 5/26/13 1,934,891
EURO 1,500,000 B+/B1 Wind Telecomunicazione S.p.A., Euro Term
Loan C-1, 3.375%, 5/26/14 1,942,892
------------
$ 45,232,970
------------
Transportation - 7.7%
4,373,004 B/B2 Affinia Group, Inc., Tranche B Term Loan,
8.13%, 11/30/11 $ 4,389,403
2,594,598(b) B-/Caa2 Carey International, Inc., Second Lien Term
Loan, 5.143% - 13.569%, 5/10/12 2,296,219
3,000,000 D/B3 Dana Corp., DIP Term Loan,
7.22%, 4/13/08 3,011,250
5,735,625 NR/NR Delphi Corp., Term Loan, 13.5%, 6/14/11 5,956,447
3,000,000 NR/NR Federal-Mogul Corp., DIP Term Loan,
7.188%, 12/9/06 3,011,250
EURO 2,970,000 NR/B1 Goodyear Dunlop Tires Europe B.V., GDTG
Commitment, 5.199%, 4/30/10 3,829,139
2,479,909 BB-/B2 Key Plastics, LLC/Key Safety Systems, Inc.,
Term Loan C, 10.79% - 10.98%, 6/24/11 2,483,009
The accompanying notes are an integral part of these financial statements. 23
Pioneer Floating Rate Trust
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SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Transportation - (continued)
2,000,000 B+/B2 Lear Corp., First Lien Term Loan B, 7.57%,
4/25/12 $ 1,991,250
875,000 B-/Caa1 Quality Distribution, Inc., PF Letter of Credit
Loan, 4.427%, 11/13/09 879,375
1,937,186 B-/Caa1 Quality Distribution, Inc., Term Loan, 8.081% -
8.091%, 11/13/09 1,946,872
823,529 B/B1 Rural/Metro Operating Co., LLC, Letter of
Credit Term Loan, 4.708%, 3/4/11 832,794
2,517,647 B/B1 Rural/Metro Operating Co., LLC, Term Loan,
7.101% - 7.523%, 3/4/11 2,545,971
879,859 B/B2 SIRVA Worldwide, Inc., Tranche B Term Loan,
9.52% - 9.59%, 12/1/10 863,362
2,424,911 B+/B2 Transport Industries, L.P., Term Loan B,
7.563% - 7.813%, 9/30/11 2,452,191
------------
$ 36,488,532
------------
Utility - 6.1%
6,000,000 B/NR ANP Funding I, LLC, Tranche A Term Loan,
8.21%, 7/29/10 $ 6,076,878
5,700,000(c) D/NR Calpine Corp., Second Lien Term Loan,
10.35%, 7/16/07 5,547,998
1,560,976 B+/B1 Covanta Energy Corp., New Funded Letter of
Credit Loan, 3.85% - 3.89%, 5/26/13 1,564,227
1,118,598 B+/B1 Covanta Energy Corp., Term Loan,
7.818% - 7.96%, 6/24/12 1,120,928
1,558,233 B+/B3 El Paso Corp., Term Loan, 7.75%, 11/23/09 1,569,379
2,970,000 NR/B2 KGEN, LLC, Tranche A Term Loan,
7.152%, 8/5/11 2,994,131
AUD 5,893,077 B+/Ba3 Loy Yang Power Projects Pty, Ltd., Second Lien
Term Loan, 10.675%, 5/12/15 4,419,097
1,354,853 BB-/B1 Pike Electric, Inc., Tranche C Term Loan,
6.625%, 12/10/12 1,357,393
1,611,429 NR/B1 Plum Point Energy Associates, LLC, First Lien
Term Loan, 8.25%, 3/14/14 1,630,899
388,571 NR/B1 Plum Point Energy Associates, LLC,
Funded Letter of Credit Term Loan,
7.167%, 3/14/14 393,267
1,987,887 B/B2 Reliant Energy, Inc., Term Loan,
7.465% - 7.655%, 4/30/10 1,992,080
------------
$ 28,666,277
------------
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
Wireless Communication - 4.9%
10,000,000 B-/B2 Cricket Communications, Inc., Facility Term
Loan B, 2.75%, 6/16/13 $ 10,076,560
2,000,000 B-/B2 Cricket Communications, Inc., Revolver,
2.75%, 6/16/11 1,938,750
3,950,000 B-/B2 Cricket Communications, Inc., Term Loan B,
7.027%, 1/10/11 3,967,281
3,000,000 CCC+/B3 Metro PCS Wireless, Inc., First Lien Tranche B
Term Loan, 9.5%, 5/31/11 3,083,751
2,000,000 CCC+/Caa1 Metro PCS Wireless, Inc., Second Lien Term
Loan, 12.0%, 5/31/12 2,116,250
2,000,000 B/B2 Ntelos, Inc., Second Lien Term Loan,
12.0%, 2/24/12 2,025,000
------------
$ 23,207,592
------------
TOTAL SENIOR SECURED FLOATING RATE
LOAN INTERESTS
(Cost $649,957,226) $654,666,326
------------
SENIOR SECURED FIXED RATE LOAN
INTERESTS - 2.0% of Net Assets
Telecommunications - 0.8%
4,000,000 BB-/B1 Qwest Corp., Tranche B Term Loan,
6.95%, 6/30/10 $ 4,023,000
------------
Utility - 1.2%
GBP 926,286 BB+/NR Eggborough Power, Ltd., Term Loan,
7.0%, 3/31/22 $ 5,624,727
------------
TOTAL SENIOR SECURED FIXED RATE LOAN
INTERESTS
(Cost $8,068,333) $ 9,647,727
------------
CORPORATE NOTES - 4.6% of Net Assets
Consumer Non-Durables - 1.3%
6,000,000(d) B-/B2 Levi Strauss & Co., 9.74%, 4/1/12 $ 6,202,500
------------
Energy - 0.5%
2,000,000(d) B-/NR Secunda International, Ltd., 13.068%, 9/1/12 $ 2,100,000
------------
Gaming & Leisure - 0.6%
3,000,000 B/NR Trump Entertainment Resorts, Inc.,
8.5%, 6/1/15 $ 2,940,000
------------
Healthcare - 0.4%
2,000,000 B-/NR Pharma V (Duloxetine), 13.0%, 10/15/13 $ 2,020,000
------------
The accompanying notes are an integral part of these financial statements. 25
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Housing - 0.4%
2,000,000(d) B+/B3 Builders FirstSource, Inc., 9.42%,
2/15/12(144A) $ 2,060,000
------------
Retail - 0.4%
2,000,000 B/NR Finlay Fine Jewelry Corp., 8.375%, 6/1/12 $ 1,740,000
------------
Wireless Communication - 1.0%
5,000,000 CCC/NR Clearwire Corp., 11.0%, 8/15/10 $ 4,826,800
------------
TOTAL CORPORATE NOTES
(Cost $21,655,034) $ 21,889,300
------------
Shares
COMMON STOCK - 1.2% of Net Assets
Utility - 1.2%
223,206 Mirant Corp. $ 5,553,365
------------
TOTAL COMMON STOCK
(Cost $5,670,713) $ 5,553,365
------------
WARRANTS - 0.2% of Net Assets
Gaming & Leisure - 0.0%
13,873(e) OpBiz, LLC, Term A, Exp. 8/31/10 $ -
32(e) OpBiz, LLC, Term B, Exp. 8/31/10 -
------------
$ -
------------
Wireless Communication - 0.2%
400,000(e) Clearwire Corp., Exp. 8/15/10 $ 673,200
------------
TOTAL WARRANTS
(Cost $0) $ 673,200
------------
Principal
Amount
USD ($)
TEMPORARY CASH INVESTMENT - 2.3% of Net Assets
Repurchase Agreement - 2.3%
11,000,000 UBS Warburg, Inc., 4.80%, dated 5/31/06,
repurchase price of $11,000,000 plus
accrued interest on 6/1/06 collateralized
by $11,478,000 U.S. Treasury Notes,
3.375%, 12/15/08 $ 11,000,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $11,000,000) $ 11,000,000
------------
26 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Value
TOTAL INVESTMENTS IN SECURITIES - 148.6%
(Cost $696,351,306) (f) $ 703,429,918
--------------
OTHER ASSETS AND LIABILITIES - 1.0% $ 4,620,047
--------------
PREFERRED SHARES AT REDEMPTION
VALUE, INCLUDING DIVIDENDS
PAYABLE - (49.6)% $ (234,655,270)
--------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 473,394,695
==============
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
deposit or (iv) other base lending rates used by commercial lenders. The
rate shown is the coupon rate at period end.
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 May 31, 2006 the value
of these securities amounted to $2,060,000 or 0.4% of net assets applicable
to common shareowners.
(a) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $17,919,878. The aggregate value $18,062,557
represents 3.8% of the net assets.
(b) Payment-in-Kind (PIK) security which may pay interest in additional
principal amount.
(c) Security is in default and is non-income producing.
(d) Floating Rate Note. The rate shown is the coupon rate at period end.
(e) Non-income producing security.
(f) At May 31, 2006, the net unrealized gain on investments based on cost for
federal income tax purposes of $696,396,778 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 9,552,782
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (2,519,642)
------------
Net unrealized gain $ 7,033,140
============
For financial reporting purposes net unrealized gain on investments was
$7,078,612 and cost of investments aggregated $696,351,306.
Purchases and sales of securities (excluding temporary cash investments) for the
period ended May 31, 2006, aggregated $482,383,331 and $472,311,461,
respectively.
Glossary of Terms:
DIP - Debtor-In-Possession
The accompanying notes are an integral part of these financial statements. 27
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 5/31/06 (unaudited)
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $696,351,306) $703,429,918
Cash 12,737,598
Foreign currencies, at value (cost $8,785,272) 8,911,134
Receivables -
Investment securities sold 9,362,694
Paydown 3,075,769
Interest and foreign tax reclaim 6,502,654
Commitment fees 11,535
Unrealized appreciation on unfunded corporate loans 69,621
Prepaid expenses 170,891
------------
Total assets $744,271,814
------------
LIABILITIES:
Payables -
Investment securities purchased $ 35,228,130
Due to affiliate 455,574
Unamortized facility fee 99,083
Accrued expenses 439,062
------------
Total liabilities $ 36,221,849
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 9,380
shares, including dividends payable of $155,270 $234,655,270
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $460,985,090
Undistributed net investment income 4,600,038
Accumulated net realized gain on investments and foreign
currency transactions 659,839
Net unrealized gain on investments 7,148,233
Net unrealized gain on foreign currency assets and liabilities
denominated in foreign currencies 1,495
------------
Net assets applicable to common shareowners $473,394,695
============
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $473,394,695/24,330,240 common shares $ 19.46
============
28 The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended 5/31/06
INVESTMENT INCOME:
Interest (net of foreign taxes of $18,315) $28,452,443
Facility and other fees 557,668
-----------
Total investment income $29,010,111
------------
EXPENSES:
Management fees $2,449,017
Administrative fees and reimbursement 221,361
Transfer agent fees and expenses 24,537
Auction agent fees 308,254
Custodian fees 28,766
Registration fees 11,317
Professional fees 50,074
Printing expenses 12,040
Trustees' fees 7,455
Insurance fees 10,775
Pricing fees 33,710
Miscellaneous 7,544
-----------
Total expenses excluding excise tax $ 3,164,850
Excise tax 99,422
------------
Total expenses $ 3,264,272
Less reimbursement by PIM (99,422)
Less fees paid indirectly (143)
------------
Net expenses $ 3,164,707
------------
Net investment income $25,845,404
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ 919,866
Foreign currency contracts and other assets and liabilities
denominated in foreign currencies (215,546) $ 704,320
----------- ------------
Change in net unrealized gain (loss) on:
Investments $7,594,438
Unfunded corporate loans (9,374)
Foreign currency contracts and other assets liabilities
denominated in foreign currencies 65,017 $ 7,650,081
----------- ------------
Net gain on investments and foreign currency
transactions $ 8,354,401
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM NET
INVESTMENT INCOME $(5,212,915)
------------
Net increase in net assets applicable to common
shareowners resulting from operations $28,986,890
===========
The accompanying notes are an integral part of these financial statements. 29
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Six Months Ended 5/31/06 and the Period from 12/23/04
(Commencement of Operations) to 11/30/05
Six Months
Ended 12/23/04
5/31/06 to
(unaudited) 11/30/05
FROM OPERATIONS:
Net investment income $ 25,845,404 $ 32,124,250
Net realized gain (loss) on investments and
foreign currency transactions 704,320 (385,297)
Change in net unrealized gain (loss) on
investments and foreign currency transactions 7,650,081 (500,353)
Distributions to preferred shareowners from net
investment income (5,212,915) (5,523,772)
------------- -------------
Net increase in net assets applicable to
common shareowners $ 28,986,890 $ 25,714,828
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON
SHAREOWNERS:
Net investment income
($0.77 and $0.92 per share, respectively) $ (18,734,285) $ (22,378,955)
Net realized gains
($0.05 and $0.00 per share, respectively) (1,178,873) -
------------- -------------
Total dividends to common shareowners $ (19,913,158) $ (22,378,955)
------------- -------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from the issuance of common
shares $ - $ 430,705,000
Net proceeds from underwriters' over-allotment
option exercised - 33,902,500
Common share offering expenses charged to
paid-in capital - (973,000)
Preferred share offering expenses charged to
paid-in capital (2,587) (2,746,907)
------------- -------------
Net increase (decrease) in net assets applicable
to common shareowners resulting from Trust
share transactions $ (2,587) $ 460,887,593
------------- -------------
Net increase in net assets applicable to
common shareowners $ 9,071,145 $ 464,223,466
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of period 464,323,550 100,084
------------- -------------
End of period (including undistributed net
investment income of $4,600,038 and
$2,701,834, respectively) $ 473,394,695 $ 464,323,550
============= =============
30 The accompanying notes are an integral part of these financial
statements.
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 5/31/06
--------------------------------------------------------------------------------
Six Months
Ended 12/23/04(b)
5/31/06 to
(unaudited) 11/30/05
Per Common Share Operating Performance
Net asset value, beginning of period $ 19.08 $ 19.10(c)
-------- --------
Increase (decrease) from investment operations:(a)
Net investment income $ 1.06 $ 1.33
Net realized and unrealized gain (loss) on investments and foreign
currency transactions 0.35 (0.05)
Distributions to preferred shareowners from:
Net investment income (0.21) (0.23)
-------- --------
Net increase from investment operations $ 1.20 $ 1.05
Distributions to common shareowners from:
Net investment income (0.77) (0.92)
Net unrealized gain (0.05) -
Capital charge with respect to issuance of:
Common shares - (0.04)
Preferred shares - (0.11)
-------- --------
Net decrease in net asset value $ 0.38 $ (0.02)
-------- --------
Net asset value, end of period(d) $ 19.46 $ 19.08
======== ========
Market value, end of period(d) $ 18.46 $ 17.14
======== =======
Total return(e) 12.67% (9.76)%
Ratios to average net assets of common shareowners
Net expenses(f) 1.36%(g) 1.23%(g)
Net investment income before preferred share dividends(f) 11.09%(g) 7.52%(g)
Preferred share dividends 2.24%(g) 1.29%(g)
Net investment income available to common shareowners 8.85%(g) 6.23%(g)
Portfolio turnover 68% 61%
Net assets of common shareowners, end of period (in thousands) $473,395 $464,324
Preferred shares outstanding (in thousands) $234,500 $234,500
Asset coverage per preferred share, end of period $ 75,485 $74,520
Average market value per preferred share $ 25,000 $25,000
Liquidation value, including dividends payable, per preferred share $ 25,017 $25,018
Ratios to average net assets of common shareowners before reimbursement
of organization expenses and excise tax and expense reductions
Net expenses(f) 1.40%(g) 1.24%(g)
Net investment income before preferred share dividends(f) 11.05%(g) 7.51%(g)
Preferred share dividends 2.24%(g) 1.29%(g)
Net investment income available to common shareowners 8.81%(g) 6.22%(g)
(a) The per share data presented above is based upon the average common shares
outstanding for the period presented.
(b) Trust 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) 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.
(e) 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.
(f) Ratios do not reflect the effect of dividend payments to preferred
shareowners.
(g) Annualized.
The information above represents the operating performance data for a share
of common stock 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. 31
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/06 (unaudited)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Floating Rate Trust (the "Trust") was organized as a Delaware business
trust on October 6, 2004. Prior to commencing operations on December 23, 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, and the sale and issuance
to Pioneer Funds Distributor, Inc., an affiliate of Pioneer Investment
Management, Inc. ("PIM"), the Trust's investment adviser, a wholly owned
indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito Italiano), of
5,240 shares of beneficial interest at an aggregate purchase price of $100,084.
PIM has paid all the Trust's organizational expenses and has paid the amount by
which the aggregate offering costs (other than the sales load) exceeded $0.04
per share of the common share offering. 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 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.
Debt securities rated below investment grade are commonly referred to as "junk
bonds" and are considered speculative. 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.
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.
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 Senior Loans and other securities deemed to be illiquid.
32
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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.
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 Trust's investments in 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.
Information regarding the Trust's principal risks is contained in the Trust's
original offering prospectus. 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 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. 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 Senior Loans will be valued by Loan Pricing Corporation
through the use of pricing
33
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
matrices to determine valuations. If Loan Pricing Corporation does not
provide a value for the Senior Loans, the investment sub-adviser will value
the Senior Loans at fair value, which is intended to approximate market
value.
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 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 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. At May
31, 2006, the Trust held no fair valued securities. Temporary cash
investments are valued at amortized cost.
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.
34
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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. 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.
The tax character of current year distributions paid to common and
preferred shareowners will be determined at the end of the fiscal year.
Distributions during the period ended November 30, 2005 were as follows:
--------------------------------------------------------------------------------
2005
--------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $27,902,727
Long-term capital gain -
-----------
Total taxable distribution $27,902,727
===========
--------------------------------------------------------------------------------
35
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
The following shows the components of distributable earnings on a
federal income tax basis at November 30, 2005.
--------------------------------------------------------------------------------
2005
--------------------------------------------------------------------------------
Undistributed ordinary income $4,044,075
Distributions payable (171,224)
Unrealized depreciation (536,978)
----------
Total $3,335,873
==========
--------------------------------------------------------------------------------
The difference between book basis and tax basis unrealized appreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities.
D. 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. PIM is responsible for
determining that the value of the collateral remains at least equal to the
repurchase price.
E. 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 Mellon Investor Services
LLC, the agent for shareowners in administering the Plan (the "Plan
Agent"), in writing prior to any dividend record date; otherwise such
termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution.
36
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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
The Trust has entered into an advisory agreement with PIM. Management fees 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. At May 31, 2006, $420,564 was payable to PIM
related to management fees.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. For the six
months ended May 31, 2006, the Trust
37
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
recorded $16,677 in reimbursement, which is included in "Administration fees and
reimbursement" on the Statement of Operations.
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. Under
the terms of the sub-advisory agreement, for its services, the Sub-adviser is
entitled to a sub-advisory fee from PIM at an annual rate of 0.35% of the
Trust's average daily managed assets. The fee is paid monthly in arrears. The
Trust does not pay a fee to the Sub-adviser.
The Trust has entered into an administration agreement with PIM pursuant to
which PIM will provide certain administrative and accounting services to the
Trust. PIM has appointed Princeton Administrators, L.P. ("Princeton") as the
sub-administrator to the Trust to perform certain of PIM's administration and
accounting obligations to the Trust. Under the administration agreement, the
Trust pays PIM 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. PIM and not the Trust, is responsible for paying the
fees of Princeton.
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 six months ended
May 31, 2006, the Trust's expenses were not reduced under such arrangements.
PIM has reimbursed the Trust $99,422 for an excise tax expense.
3. Expense Offset Arrangements
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion
of the Trusts custodian expenses. For the six months ended May 31, 2006, the
Trust expenses were reduced by $143 under such arrangement.
38
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4. 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 the settlement date of
a portfolio hedge, the Trust may close out such contracts by entering into an
offsetting hedge contract. At May 31, 2006, the Trust had no outstanding
portfolio hedges or forward currency settlement contracts.
5. Unfunded Loan Commitments:
As of May 31, 2006, the Trust had unfunded loan commitments of approximately
$6,091,193 which could be extended at the option of the borrower, pursuant to
the following loan agreements:
--------------------------------------------------------------------------------
Unfunded
Commitment
Borrower (in thousands)
--------------------------------------------------------------------------------
Covanta Energy Corp., Revolver $1,000
Cricket Communications, Inc., Revolver $1,000
Dave & Buster's, Inc., Delayed Draw $ 500
DeCrane Aircraft Holdings, Inc., Revolver $ 800
Eastman Kodak Co., Delayed Draw $1,176
OPTI Canada, Inc., Delayed Draw $ 622
Trump Entertainment Resorts Holdings, L.P.,
Delayed Draw $ 993
--------------------------------------------------------------------------------
6. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredito Italiano, through a sub-transfer agency
agreement with Mellon Investor Services LLC, provides substantially all transfer
agent and shareowner services related to the Trust's common shares at negotiated
rates. Deutsche Bank Trust Company Americas is the transfer agent, registrar,
dividend paying agent and redemption agent with respect to the Trust's Auction
Market Preferred Shares ("AMPS"). The Trust pays Deutsche Bank Trust Company
Americas an annual fee, as is agreed to from time to time by the Trust and
Deutsche Bank Trust Company Americas, for providing such services.
39
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
7. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 24,330,240 common shares of beneficial interest outstanding
at May 31, 2006, PIM owned 5,240 shares.
Transactions in common shares of beneficial interest for six months ended May
31, 2006 and the period December 23, 2004 (commencement of investment
operations) to November 30, 2005 were as follows:
--------------------------------------------------------------------------------
5/2006 11/2005
Shares issued in connection with
initial public offering - 22,550,000
Shares issued from underwriters'
over-allotment option exercised - 1,775,000
Shares outstanding at
beginning of period 24,330,240 5,240
---------- ----------
Shares outstanding at
end of period 24,330,240 24,330,240
========== ==========
--------------------------------------------------------------------------------
Offering costs of $973,000 incurred in connection with the Trust's
offering of common shares have been charged to paid-in capital.
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 May 31, 2006, there were 9,380 AMPS as follows: Series M7-3,130, Series
W7-3,125 and Series TH7-3,125. Offering costs of $404,494 and underwriting
discounts of $2,345,000 have been charged to paid-in capital.
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 3.95% to 4.85% during the six months ended May 31, 2006.
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
40
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 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.
8. Subsequent Event
Subsequent to May 31, 2006 the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.14 per common share
payable June 30, 2006, to common shareowners of record on June 15, 2006.
For the period June 1, 2006 to June 30, 2006, dividends declared on preferred
stock totaled $957,252 in aggregate for the three outstanding preferred share
series.
Effective on or about July 17, 2006, American Stock Transfer & Trust Company,
6201 15th Avenue, Brooklyn, NY 11219 will become the Trust's sub-transfer agent
with respect to its common shares.
ADDITIONAL INFORMATION (unaudited)
During the period, there were no material changes in the Trust's investment
objective or fundamental policies that were not 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
41
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
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.
42
Pioneer Floating Rate Trust
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Trustees
John F. Cogan, Jr., Chairman
David R. Bock
Mary K. Bush
Margaret B.W. Graham
Osbert M. Hood
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
John Winthrop
Officers
John F. Cogan, Jr., President
Osbert M. Hood, Executive
Vice President
Vincent Nave, Treasurer
Dorothy E. Bourassa, Secretary
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
Mellon Investor Services LLC
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Investment Sub-Advisor
Highland Capital Management, L.P.
Sub-Administrator
Princeton Administrators, L.P.
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 our web site at
pioneerinvestments.com and on the Securities and Exchange Commission's web site
at http://www.sec.gov.
43
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--------------------------------------------------------------------------------
This page for your notes.
44
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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 Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O Box 922
New York, NY
10269-0560
Website www.amstock.com
*Effective on or about July 17, 2006, AST will become the Trust's sub-transfer
agent with respect to its common shares.
For additional information, please contact your investment advisor or visit our
website 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.
N/A
(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.
N/A
(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.
N/A
(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 TrustS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Trusts 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 Trusts recognize that a Trust's independent auditors: 1) possess knowledge
of the Trusts, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Trust personnel
and processes, and 3) have expertise that has value to the Trusts. As a result,
there are situations where it is desirable to use the Trust'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 Trusts 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 Trust shall also
constitute approval for any other Trust 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 Trust'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 Trusts 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 Trust shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the Trust 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 Trust'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 Trust o Tax compliance, tax returns, excise
determines that using the tax returns and support
Trust'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 Trust 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 Trust'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 Trust compliance projects
UNIQUE QUALIFICATIONS determines that using the
Trust'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 Trust's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Trust.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the Trust 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 Trust'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 Trusts and the Trust'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.
N/A
(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.
N/A
(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 Trust's independent auditor, Ernst &
Young LLP ("E&Y"), has advised the Audit
Committee of the Trust's Board of Trustees that
E&Ys Spanish affiliate (E&Y Spain) performed
certain non-audit work for Pioneer Global
Investments Limited ("PGIL"), an affiliate of the
Trusts investment adviser. The services involved
the receipt and disbursement of monies transferred
to E&Y Spain by PGIL in payment of individual
payroll and related income tax withholdings due on
returns prepared by E&Y Spain for certain PGIL
employees located in Spain from February 2001 to
October 2005. E&Y became auditors of the Trust in
May 2002. These payroll and tax services were
discontinued in November 2005. The annual fee
received by E&Y Spain for all such services totaled
approximately 9,000 Euro per year. E&Y has informed
the Audit Committee that based on its internal
reviews and the de minimus nature of the services
provided and fees received, E&Y does not believe
its independence with respect to the Trust has been
impaired or that it is disqualified from acting as
independent auditors to the Trust.
N/A
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.
Not applicable, the Fund does not invest in voting securities.
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.
Information not required in semi annual reports on form NCSR.
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 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.
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 July 31, 2006
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 July 31, 2006
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date July 31, 2006
* Print the name and title of each signing officer under his or her signature.