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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, 2007 through November 30, 2008
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.
Pioneer Floating
Rate Trust
--------------------------------------------------------------------------------
Annual Report | November 30, 2008
--------------------------------------------------------------------------------
Ticker Symbol: PHD
[LOGO]Pioneer
Investments(R)
visit us: pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Schedule of Investments 11
Financial Statements 24
Notes to Financial Statements 29
Report of Independent Registered Public Accounting Firm 39
Approval of Investment Advisory Agreement 42
Trustees, Officers and Service Providers 46
Pioneer Floating Rate Trust | Annual Report | 11/30/08 1
President's Letter
Dear Shareowner,
Stock and bond markets around the globe this year have experienced one of their
most tumultuous periods in history. Investors have witnessed volatility of a
magnitude that many have never before seen. Distance often provides the best
vantage point for perspective. Still, we believe that the benefits of basic
investment principles that have stood the test of time -- even in the midst of
market turmoil -- cannot be underestimated.
First, invest for the long term. The founder of Pioneer Investments, Philip L.
Carret, began his investment career during the 1920s. One lesson he learned is
that while great prosperity affords an advantageous time for selling stocks,
extreme economic slumps can create opportunities for purchase. Indeed, many of
our portfolio managers, who follow the value-conscious investing approach of our
founder, are looking at recent market conditions as an opportunity to buy
companies whose shares we believe have been unjustifiably beaten down by
indiscriminate selling, but that we have identified as having strong prospects
over time. While investors may be facing a sustained market downturn, we
continue to believe that patience, along with staying invested in the market,
are important considerations for long-term investors.
A second principle is to stay diversified across different types of investments.
The global scope of the current market weakness poses challenges for this basic
investment axiom. But the turbulence makes now a good time to reassess your
portfolio and make sure that your investments continue to meet your needs. We
believe you should work closely with your financial advisor to find the mix of
stocks, bonds and money market assets that is best aligned to your particular
risk tolerance and investment objective.
As the investment markets sort through the continuing crisis in the financial
industry, we are staying focused on the fundamentals and risk management. With
more than 80 years of experience behind us, we have learned how to navigate
turbulent markets. At Pioneer Investments, risk management has always been a
critical part of our culture -- not just during periods of extraordinary
volatility. Our investment process is based on fundamental research,
quantitative analysis and active portfolio management. This three-pillared
process, which we apply to each of our portfolios, is supported by an integrated
team approach and is designed to carefully balance risk and reward. While we
2 Pioneer Floating Rate Trust | Annual Report | 11/30/08
see potential chances for making money in many corners of the market, it takes
research and experience to separate solid investment opportunities from
speculation.
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
www.pioneerinvestments.com. Thank you for investing with Pioneer.
Respectfully,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
Please consider the Trust's investment objectives, risks, charges and expenses.
Contact your advisor or Pioneer Investments for a prospectus containing this
information. Please read the information carefully.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 3
Portfolio Management Discussion | 11/30/08
Senior Secured bank loans traded down during the 12 months ended November 30,
2008. Bank loan prices fell to historic lows during the final two months of the
period. This was driven by the continued negative influence from the credit
turmoil and the financial system as a whole. In the following interview,
portfolio managers Mark Okada and Joseph Dougherty of Highland Capital
Management discuss the factors that affected the performance of Pioneer Floating
Rate Trust during the 12 months ended November 30, 2008.
Q How did the Trust perform during the 12 months ended November 30, 2008?
A For the one-year period ended November 30, 2008, Pioneer Floating Rate
Trust returned -44.40% at net asset value. The market price return over
that same one-year period was -52.10%. The Trust's benchmark, the Credit
Suisse ("CS") Leveraged Loan Index, returned -25.73% and the Barclays
Capital (formerly Lehman Brothers) High Yield Loans Performing Index
returned -27.09% for the same period. Neither index employed leverage as
the Trust does. At the end of November 2008, the Trust was selling at a
discount of market price to net asset value of -19.95%. Unlike open-ended
funds, a closed-end fund's market price per share 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 to the trust's
net asset value. At the end of the period, closed-end funds on average were
trading at a discount to their actual underlying value.
The Credit Suisse Leveraged Loan Index is designed to mirror the investable
universe of the $U.S.-denominated leveraged loan market. The index
inception is January 1992. The index frequency is monthly. New loans are
added to the index on their issuance date if they qualify according to the
following criteria: Loans must be rated "5B" or lower; only funded term
loans are included; the original maturity must be at least one year; and
the Issuers must be domiciled in developed countries (Issuers from
developing countries are excluded). (Source: Credit Suisse, Description and
Inclusion Rules of the Credit Suisse Leveraged Loan Index, January 18,
2006). The Barclays Capital High Yield Bank Loan Performing Index provides
broad and comprehensive total return metrics of the universe of syndicated
term loans. To be included in the index, a bank loan must be dollar
denominated, have at least $150 million funded loan, a minimum term of one
year, and a minimum initial spread of LIBOR+125. 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.
4 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Index returns assume reinvestment of all dividends and distributions, if
any. Indices are unmanaged, have no fees or costs and are not available for
investment. The performance of the indices may be materially different from
the individual performance attained by a specific investor. In addition,
the investors' holdings may differ significantly from the securities that
comprise the indices. The indices have not been selected to represent an
appropriate benchmark to compare an investor's performance, but rather are
disclosed to allow for comparison of the investor's performance to that of
certain well-known and widely recognized indices.
Q Can you explain the Trust's underperformance compared to the bank loan
indices during the 12-month period ended November 30, 2008?
A Underperformance during the period was driven in part by the Trust's use of
leverage, a slightly lower average credit quality than the broad loan
universe, a lack of liquidity in the marketplace, and the relatively poor
performance of some of the Trust's media, real estate and automotive
positions. The Pioneer Floating Rate Trust utilizes leverage, which tends
to magnify returns, both positive and negative. The Trust's decline in net
asset value resulted in a greater proportion of leveraged assets during the
reporting period. We believe the use of leverage for investment purposes
can increase investment opportunity and, as we saw over the last 12 months,
can also increase investment risk. The Trust utilizes financial leverage
primarily to increase the dividend yield to shareowners.
The Trust invests in companies where management feels the underlying value
is good relative to the interest received and the price offered. We do this
in an effort to maximize total return over the long term, regardless of the
impact on the Trust's weighted average ratings, which over the period were
slightly lower than the Credit Suisse Index. In the prevailing credit and
financial turmoil seen over the period, lower-rated positions have tended
to trade down more than the overall market. As a point of reference, the BB
(or higher) -rated subset of the Credit Suisse Index traded down from 95 to
73, versus the B (or lower)-rated subset of the Credit Suisse Index, which
traded down from 94 to 59 from November 2007 to November 2008. Finally, the
Trust's performance was impacted by challenges presented in the media, real
estate and automotive sectors, which dramatically impacted a few of the
Trust's larger positions.
Q What types of investments had the greatest influence on the Trust's
performance during the 12-month period ended November 30, 2008?
A As noted above, the Trust's performance was hurt in part by the troubles
felt in the media, real estate and automotive markets. The troubles in
these sectors have been well documented by the popular press since the
credit crunch began in the summer of 2007. Media concerns have seen falling
advertising revenues as companies dependent on consumers have been hurt
Pioneer Floating Rate Trust | Annual Report | 11/30/08 5
by a decrease in discretionary spending, which has led them to cut their
advertising budgets. Media positions in the Trust that detracted from
performance include Seven Media Group (SMG H5 P&Y, Ltd.), Tribune Co. and
Univision Communication, Inc. Real estate and real estate-intensive
holdings, including many of those in the Gaming and Leisure sector, have
been impacted by the serious downturn in the domestic real estate market.
Positions detracting from the Trust's performance include Metroflag BP LLC,
Ginn LA Conduit Lender, Inc., Realogy Corp. and Lake at Las Vegas Joint
Venture. Automotive companies have experienced an unprecedented drop in
demand that has impacted the industry deeply enough to spur federal
government bailout proposal talks during the fourth quarter of 2008.
Automotive-related positions held in the Trust that detracted from
performance during the period included Ford Motor Co. and Delphi Corp.
Q What is your investment outlook?
A The broader market is going through considerable turmoil, with
consolidation and government intervention in major segments of the economy,
including the financial and automotive sectors. Once the broader-market
volatility subsides, we believe loan market performance will be driven more
by fundamentals and less by technical supply/demand factors. While we do
expect defaults to rise, we believe the fundamental strength of corporate
borrowers remains greater than current price levels indicate, and that
recent collateral and interest coverage levels suggest the corporate bank
loan market is fundamentally solid. At these current depressed prices, we
anticipate several long-term buying opportunities. We believe some degree
of pricing support will come to the corporate bank loan market once
confidence is restored in the global credit markets and as buyers re-enter.
Please refer to the Schedule of Investments on pages 11-23 for a full listing of
Trust securities.
Information regarding the Trust's principal investment risks is contained in the
Trust's original offering prospectus. Please refer to this document when
considering the Trust's risks.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
When interest rates rise, the prices of fixed-income securities in the Trust
will generally fall. Conversely, when interest rates fall the prices of
fixed-income securities in the Trust will generally rise. The floating-rate
feature of the Trust means that the Trust will not experience capital
appreciation in a declining interest-rate environment. Investments in the Trust
are subject to possible loss due to the financial failure of issuers of
underlying securities and their inability to meet their debt obligations.
6 Pioneer Floating Rate Trust | Annual Report | 11/30/08
The Trust may invest in derivative securities, which may include futures and
options. These types of instruments can increase price fluctuation.
The Trust is not limited in the percentage of its assets that may be invested in
floating-rate senior loans and other securities deemed to be illiquid. Illiquid
securities may be difficult to dispose of at a fair price at the times when the
Trust believes it is desirable to do so and their market price is generally more
volatile than that of more liquid securities. Illiquid securities are also more
difficult to value, and investment of the Trust's assets in illiquid securities
may restrict the Trust's ability to take advantage of market opportunities.
The Trust currently uses leverage through the issuance of preferred shares. The
Trust also is authorized to borrow from banks and to issue debt securities,
which are other forms of leverage. Leverage creates significant risks, including
the risk that the Trust's income or capital appreciation will not be sufficient
to cover the cost of leverage, which may adversely affect the return for the
holders of common shares.
The Trust is not diversified, which means that it can invest a higher percentage
of its assets in any one issuer than a diversified fund. Being non-diversified
may magnify the Trust's losses from adverse events affecting a particular
issuer.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of the opinion of the Trust's sub-adviser as of the date of this
report. These statements should not be relied upon for any other purposes.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 7
Portfolio Summary | 11/30/08
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material]
Senior Secured Loans 86.7%
Corporate Bonds 9.8%
Temporary Cash Investment 3.0%
Collateralized Loan Obligations 0.4%
Common Stock 0.1%
Claims* 0.0%
Warrants* 0.0%
*Amount is less than 0.1%
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on S&P ratings.)
[The following data was represented as a pie chart in the printed material]
A 0.9%
BBB 0.3%
BB 9.1%
B 52.6%
CCC 14.3%
CC 1.1%
D 0.3%
Not Rated* 18.4%
Cash Equivalents 3.0%
The portfolio is actively managed and current holdings may be different.
* These securities are judged to be similar but slightly lower in quality
than the rest of the portfolio.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)*
1. Broadstripe LLC, First Lien Term Loan, 9.2%, 6/30/11 5.01%
2. Mylan, Inc., U.S. Tranche B Term Loan, 6.625%--7.063%, 10/2/14 4.09
3. Azithromycin Royalty Sub LLC, 16.0%, 5/15/19 (144A) 3.44
4. HCA, Inc., Tranche B Term Loan, 6.012%, 11/18/13 2.96
5. Solutia, Inc., Term Loan, 8.5%, 2/28/14 2.89
6. Wm. Wrigley Jr. Co., Tranche B Term Loan, 7.75%, 9/30/14 2.31
7. Talecris Biotherapeutics Holdings Corp., First Lien Term Loan, 4.91%--6.31%, 12/6/13 2.27
8. Charter Communications Operating LLC, Replacement Term Loan, 3.63%--5.47%, 3/6/14 2.18
9. Cricket Communications, Inc., Term Loan B, 7.262%, 6/16/13 2.10
10. SMG H5 Pty, Ltd., Facility Term Loan A, 9.485%--10.51%, 12/24/12 2.07
* This list excludes temporary cash, derivative investments and short
positions. The portfolio is actively managed, and current holdings may be
different. The holdings listed should not be considered recommendations to
buy or sell any security listed.
8 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Prices and Distributions | 11/30/08
Market Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
11/30/08 11/30/07
--------------------------------------------------------------------------------
$ 6.90 $ 16.79
--------------------------------------------------------------------------------
Market Discount 19.95% 7.1%
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
11/30/08 11/30/07
--------------------------------------------------------------------------------
$ 8.62 $ 18.07
--------------------------------------------------------------------------------
Distributions per Common Share: 12/1/07-11/30/08
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net
Investment Short-Term Long-Term
Income Capital Gains Capital Gains
--------------------------------------------------------------------------------
$ 1.7036 $ 0.2213 $ 0.1267
--------------------------------------------------------------------------------
Yields
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
11/30/08 11/30/07
--------------------------------------------------------------------------------
Distribution Yield at Market Price 24.69% 11.35%
--------------------------------------------------------------------------------
Distribution Yield at Net Asset Value 19.76% 10.54%
--------------------------------------------------------------------------------
30-day SEC Yield 25.60% 15.14%
--------------------------------------------------------------------------------
Past performance data quoted represents past performance, which is no guarantee
of future results.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 9
Performance Update | 11/30/08
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in market value, including
reinvestment of dividends and distributions, of a $10,000 investment made in
common shares of Pioneer Floating Rate Trust, compared to that of the Credit
Suisse ("CS") Leveraged Loan Index, an index of senior secured U.S. dollar
denominated loans.
--------------------------------------------------------------------------------
Cumulative Total Returns
(As of November 30, 2008)
--------------------------------------------------------------------------------
Net Asset Market
Period Value ("NAV") Value
--------------------------------------------------------------------------------
Life-of-Trust
(12/23/04) -32.86% -48.78%
--------------------------------------------------------------------------------
1 Year -44.40 -52.10
--------------------------------------------------------------------------------
[The following data was represented as a mountain chart in the printed material]
Value of $10,000 Investment
Pioneer
Floating Rate CS Leveraged
Trust Loan Index
12/04 10,000 10,000
11/05 9,023 10,033
11/06 10,913 10,054
11/07 10,693 9,880
11/08 5,122 9,211
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 per common share 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 than market
price, dividends are assumed to be reinvested at prices obtained under the
Trust's dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions.
Index comparison begins on 12/31/04. The CS Leveraged Loan Index is a
representative index of tradeable, senior, secured U.S. dollar-denominated
loans. The index began in January 1992. Index returns are calculated monthly,
assume reinvestment of dividends and, unlike Trust returns, do not reflect any
fees, expenses or sales charges. You cannot invest directly in an index.
10 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Schedule of Investments | 11/30/08
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
COLLATERALIZED LOAN
OBLIGATIONS -- 0.7% of Net Assets
Financial -- 0.7%
1,000,000(a)(b) BBB/Baa2 ACA, Ltd. 2007-1A D, 7.103%, 6/15/22 (144A) $ 150,000
1,000,000(a)(b) BBB/Baa2 Goldman Sachs Asset Management, Plc, 2007-
1A D, 5.943%, 8/1/22 (144A) 200,000
1,000,000(a)(b) BBB/Baa2 Gulf Stream Sextant, Ltd., 2007-1A D, 5.216%,
6/17/21 (144A) 204,890
1,000,000(a)(b) BB/Ba2 Landmark CDO, Ltd., 2007-9A E, 8.253%,
4/15/21 (144A) 151,700
1,000,000(a)(b) BBB/Baa2 Primus, Ltd., 2007-2A D, 7.153%,
7/15/21 (144A) 173,600
1,000,000(a)(b) BB/Ba2 Rampart, Ltd., 2006-1A, 8.053%,
4/18/21 (144A) 137,900
1,000,000(a)(b) BB/Ba2 Stanfield McLaren, Ltd., 2007-1A B2L, 6.681%,
2/27/21 (144A) 156,800
2,000,000(a)(b) BBB/Baa2 Stone Tower, Ltd., 2007-6A C, 5.9%,
4/17/21 (144A) 340,000
----------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED LOAN OBLIGATIONS
(Cost $6,078,475) $ 1,514,890
----------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE LOAN
INTERESTS -- 163.2% of Net Assets*
Aerospace -- 4.4%
2,390,253 B+/Ba3 AWAS Capital, Inc., First Lien Term Loan,
5.0%, 3/24/13 $ 1,597,485
990,000 B/Ba2 Delta Airlines, Inc., Credit-Linked Deposit Loan,
1.259% -- 3.899%, 4/30/12 674,438
478,788 B/B2 Delta Airlines, Inc., Second Lien Term Loan,
5.831%, 4/30/14 245,618
2,602,093(a) B+/B1 DTN, Inc., Tranche C Term Loan,
7.815%-7.819%, 3/10/13 2,166,242
902,972(c) CCC+/Caa2 IAP Worldwide Services, Inc., First Lien Term Loan,
8.063%, 12/30/12 568,872
2,905,638 B/Ba3 Northwest Airlines, Inc., Term Loan,
3.54%, 8/21/13 2,174,391
3,700,000 B-/B3 US Airways Group, Inc., Term Loan,
3.936%, 3/21/14 1,750,100
------------
$ 9,177,146
----------------------------------------------------------------------------------------------------
Broadcasting -- 3.4%
11,115,966 B-/B1 Univision Communications, Inc., Initial Term Loan,
3.686%, 9/29/14 $ 5,052,207
3,779,661 CCC/B2 Young Broadcasting, Inc., Term Loan,
5.25%-6.313%, 11/3/12 2,120,390
------------
$ 7,172,597
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 11
Schedule of Investments | 11/30/08 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Cable/Wireless Video -- 23.4%
EURO 752,152 B/NR Amsterdamse Beheer-EN Consultingmaatschappij
B.V., Casema Facility Term Loan B-1,
5.892%, 9/13/14 $ 827,553
EURO 390,705(a) B/NR Amsterdamse Beheer-EN Consultingmaatschappij
B.V., Casema Facility Term Loan B-2,
5.892%, 9/13/14 429,873
EURO 1,142,857 B/NR Amsterdamse Beheer-EN Consultingmaatschappij
B.V., Casema Facility Term Loan C,
6.392%, 9/13/15 1,257,426
EURO 857,143 B/NR Amsterdamse Beheer-EN Consultingmaatschappij
B.V., Kabelcom Facility Term Loan B,
5.892%, 9/13/14 943,069
EURO 857,143 B/NR Amsterdamse Beheer-EN Consultingmaatschappij
B.V., Kabelcom Facility Term Loan C,
6.392%, 9/13/15 943,069
19,591,675(a)(c) CCC+/Caa2 Broadstripe LLC, First Lien Term Loan,
9.2%, 6/30/11 19,235,498
1,428,203(a) NR/NR Broadstripe LLC, Revolver Credit Loan,
9.2%-11.42%, 6/30/11 1,406,780
11,331,203 B+/B1 Cequel Communications LLC, Term Loan,
4.235%--6.334%, 11/5/13 7,658,001
12,345,823 B-/B1 Charter Communications Operating LLC,
Replacement Term Loan, 3.63%-5.47%, 3/6/14 8,382,295
6,912,500(a) B/B2 Knology, Inc., Term Loan, 6.4%, 6/30/12 4,320,313
4,900,000 B-/B2 WideOpenWest Finance LLC, First Lien Term Loan,
5.149%-6.269%, 6/28/14 2,927,750
1,966,109(a)(c) B-/Caa1 WideOpenWest Finance LLC, Second Lien Term
Loan, 9.85%, 6/29/15 884,749
------------
$ 49,216,376
----------------------------------------------------------------------------------------------------
Chemicals -- 5.3%
14,899,937 B+/B1 Solutia, Inc., Term Loan, 8.5%, 2/28/14 $ 11,100,453
----------------------------------------------------------------------------------------------------
Consumer-Durables -- 0.6%
1,523,966(a) B/B1 Rexair LLC, First Lien Term Loan,
8.012%, 6/30/10 $ 1,219,173
----------------------------------------------------------------------------------------------------
Consumer-Non-Durables -- 1.7%
989,975(a) B/B3 Appleseed's Intermediate Holdings, Inc., First Lien
Term Loan, 5.44%, 4/30/13 $ 470,238
616,029 B-/B2 Solo Cup Co., Term Loan B-1,
4.92%-6.72%, 2/27/11 510,021
3,977,797 CCC+/B1 Spectrum Brands, Inc., Dollar Term Loan B,
5.768%-8.32%, 3/30/13 2,410,545
201,369(a) CCC+/B1 Spectrum Brands, Inc., LC Loan, 2.7%, 3/30/13 122,030
------------
$ 3,512,834
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
12 Pioneer Floating Rate Trust | Annual Report | 11/30/08
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Diversified Media -- 13.0%
8,609,375(a) B/Ba3 Cydcor, Inc., First Lien Tranche B Term Loan,
9.0%, 2/5/13 $ 7,533,203
EURO 968,816 B/NR Mediannuaire Holding, Term Loan B-2,
6.204%, 10/10/14 504,028
EURO 968,816 B/NR Mediannuaire Holding, Term Loan C,
6.704%, 10/9/15 504,028
7,834,487(a) CCC+/Ba3 Metro-Goldwyn-Mayer, Inc., Tranche B Term Loan,
7.012%, 4/9/12 3,629,044
3,500,000 CCC/Caa2 Penton Media Holdings, Inc., Second Lien Term
Loan, 8.42%, 2/1/14 1,531,250
AUD 19,523,810 B-/NR SMG H5 Pty, Ltd., Facility Term Loan A,
9.485%--10.51%, 12/28/12 7,967,367
11,850,000 CCC/Caa1 Tribune Co., Initial Tranche B Advance Term Loan,
6.0%, 6/4/14 3,446,371
2,730,667 CCC/Caa1 Tribune Co., Tranche X Advance Term Loan,
7.084%, 6/4/09 1,143,467
1,395,209(a) B-/B2 Wallace Theater Corp., First Lien Term Loan,
6.56%--7.02%, 8/9/09 1,046,406
------------
$ 27,305,164
----------------------------------------------------------------------------------------------------
Energy -- 7.2%
2,200,000(a) B+/B1 Big West Oil LLC, Delayed Advance Term Loan,
5.25%, 5/15/14 $ 1,320,000
1,750,000 B+/B1 Big West Oil LLC, Initial Advance Term Loan,
5.25%, 5/15/14 1,050,000
582,918(a) B/B2 Coffeyville Resources LLC, Funded LC Loan,
3.783%, 12/28/10 436,217
1,882,159 B/B2 Coffeyville Resources LLC, Tranche D Term Loan,
5.75%-6.633%, 12/30/13 1,408,482
4,995,000(a) NR/NR Crusader Energy Group, Inc., Second Lien Term
Loan, 11.25%, 7/17/13 3,621,375
2,000,000(a) B-/Caa2 III Exploration II, L.P., Second Lien Term Loan,
9.5%, 4/29/14 600,000
2,956,125(a) B-/B2 III Exploration II, L.P., Term Loan, 6.5%, 10/29/13 1,758,894
645,369(a)(d) NR/NR Monitor U.S. Finco, Inc., Second Lien Term Loan,
17.198%, 1/11/15 306,550
1,000,000(a) B/B2 Panda Hereford Ethanol, L.P., Tranche A Term
Loan, 7.186%, 7/28/13 650,000
1,250,000 NR/NR TARH E&P Holdings, L.P., First Lien Term Loan,
7.92%, 6/29/12 781,250
4,923,205(a)(c) CCC+/NR Value Creation, Inc., Term Loan,
11.789%, 7/7/12 1,969,282
2,000,000 B/Caa1 Venoco, Inc., Second Lien Term Loan,
6.25%, 5/7/14 1,335,000
------------
$ 15,237,050
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 13
Schedule of Investments | 11/30/08 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Financial -- 1.5%
680,012(a) B/B2 HUB International Holdings, Inc., Delayed Draw
Term Loan, 6.262%, 6/13/14 $ 423,308
3,025,429 B/B2 HUB International Holdings, Inc., Initial Term Loan,
6.262%, 6/13/14 1,883,330
1,000,000(a) NR/Ba2 Kepler Holdings, Ltd., Term Loan,
9.313%, 6/30/09 850,000
------------
$ 3,156,638
----------------------------------------------------------------------------------------------------
Food & Tobacco -- 6.7%
982,500(a) B+/Ba3 Aramark Canada, Ltd., Canadian Term Loan,
5.637%, 1/27/14 $ 737,797
4,937,500 B-/B2 Pinnacle Foods Finance LLC, Term Loan,
5.6%-6.803%, 4/2/14 3,390,418
1,969,998 B-/B1 Sturm Foods, Inc., Initial First Lien Term Loan,
5.875%--6.0%, 1/31/14 1,186,924
9,500,000 BB+/NR Wm. Wrigley Jr. Co., Tranche B Term Loan,
7.75%, 9/30/14 8,874,948
------------
$ 14,190,087
----------------------------------------------------------------------------------------------------
Forest Products & Containers -- 0.3%
756,135(a) B/Ba3 Newark Group, Inc., Credit-Link LC Loan,
7.94%, 3/9/13 $ 529,295
170,304(a) B/Ba3 Newark Group, Inc., Term Loan, 8.86%, 3/9/13 119,213
------------
$ 648,508
----------------------------------------------------------------------------------------------------
Gaming & Leisure -- 9.1%
2,428,571 B+/B3 Alpha Topco, Ltd., Facility Term Loan B-1,
3.681%, 12/31/13 $ 1,629,571
1,669,643(a) B+/B3 Alpha Topco, Ltd., Facility Term Loan B-2,
3.681%, 12/31/13 1,120,330
5,000,000(a) NR/NR Fontainebleau Florida Hotel LLC, Tranche C Term
Loan, 8.819%, 6/6/12 4,550,000
1,333,333 B-/B3 Fontainebleau Las Vegas LLC, Initial Term Loan,
6.065%, 6/6/14 473,333
2,369,368(a)(d) NR/Caa3 Ginn LA Conduit Lender, Inc., First Lien Tranche A
Credit-Linked Deposit Loan, 8.5%, 6/8/11 296,171
5,077,235(d) NR/Caa3 Ginn LA Conduit Lender, Inc., First Lien Tranche B
Term Loan, 9.5%, 6/8/11 634,654
587,649(a)(d) NR/Caa3 Lake at Las Vegas Joint Venture, Revolving Credit-
Linked Deposit Account Loan, 15.1%, 6/20/12 50,930
1,765,105(a) NR/Caa3 Lake at Las Vegas Joint Venture, Term Loan,
10.936%, 7/16/09 1,765,105
5,228,589(c)(d) NR/Caa3 Lake at Las Vegas Joint Venture, Term Loan,
15.1%, 6/20/12 453,146
3,500,000(a) CCC+/B2 MetroFlag BP LLC, Second Lien Term Loan,
12.0%, 1/6/09 525,000
The accompanying notes are an integral part of these financial statements.
14 Pioneer Floating Rate Trust | Annual Report | 11/30/08
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Gaming & Leisure -- (continued)
2,960,994(a)(d) D/B1 Pivotal Promontory LLC, First Lien Term Loan,
7.5%, 8/31/10 $ 1,036,348
1,000,000(a) B/B1 WAICCS Las Vegas 3 LLC, First Lien Term Loan,
4.936%, 2/1/09 825,000
4,500,000(a) B/Caa2 WAICCS Las Vegas 3 LLC, Second Lien Term Loan,
10.436%, 2/1/09 2,812,500
4,568,331 B+/B1 Yellowstone Mountain Club LLC, First Lien Term
Loan, 15.0%, 9/30/10 2,957,995
91,430(a) B+/B1 Yellowstone Mountain Club LLC, Term Loan,
15.0%, 12/3/08 90,973
------------
$ 19,221,056
----------------------------------------------------------------------------------------------------
Healthcare -- 25.7%
1,931,072 B/B3 Aveta, Inc., MMM Original Term Loan,
6.94%, 8/22/11 $ 1,303,473
286,870 B/B3 Aveta, Inc., NAMM New Term Loan,
6.94%, 8/22/11 193,637
516,926 B/B3 Aveta, Inc., NAMM Original Term Loan,
6.94%, 8/22/11 348,925
1,582,558 B/B3 Aveta, Inc., PHMC Acquisition Term Loan,
6.94%, 8/22/11 1,068,226
5,221,919 CCC/B1 CCS Medical, Inc., First Lien Term Loan,
7.02%, 9/30/12 2,845,946
714,286(a) B/B1 Fenwal, Inc., First Lien Delayed Draw Term Loan,
4.446%-5.25%, 2/28/14 467,857
4,221,429 B/B1 Fenwal, Inc., Initial First Lien Term Loan,
4.446%, 2/28/14 2,765,036
1,299,789 BB/Baa3 Fresenius SE, Tranche B-1 Term Loan,
6.75%, 9/10/14 1,189,307
700,211 BB/Baa3 Fresenius SE, Tranche B-2 Term Loan,
6.75%, 9/10/14 640,693
2,000,000(a) B+/NR Graceway Pharmaceuticals LLC, Mezzanine Loan,
12.012%, 11/1/13 500,000
15,146,459 B+/Ba3 HCA, Inc., Tranche B Term Loan,
6.012%, 11/18/13 11,392,985
4,000,000 A-/NR Life Technologies Corp., Facility Term Loan B ,
6.0%, 11/21/15 3,665,000
2,961,832 CCC+/B2 LifeCare Holdings, Term Loan, 7.67%, 8/11/12 1,703,053
1,000,000(a) B-/Caa1 Medical Staffing Network, Inc., Second Lien Term
Loan, 8.749%, 7/2/14 725,000
19,418,568 BB-/Ba3 Mylan, Inc., U.S. Tranche B Term Loan,
6.625%-7.063%, 10/2/14 15,720,942
9,825,000(a) B/Caa1 Talecris Biotherapeutics Holdings Corp., First Lien
Term Loan, 4.91%-6.31%, 12/6/13 8,719,688
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 15
Schedule of Investments | 11/30/08 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Healthcare -- (continued)
1,232,934(a) B/B1 Triumph Healthcare Second Holdings LLC, Term
Loan, 4.423%-6.42%, 7/28/13 $ 924,700
------------
$ 54,174,468
----------------------------------------------------------------------------------------------------
Housing -- 2.6%
5,457,251(c) B-/B3 Atrium Companies, Inc., Closing Date Term Loan,
12.5%-13.27%, 5/31/12 $ 3,274,350
2,084,621 B/B1 Custom Building Products, Inc., First Lien Term
Loan, 3.673%-4.485%, 10/29/11 1,375,850
1,898,382(c) CCC/Caa1 Rhodes Companies LLC, First Lien Term Loan,
7.262%, 11/21/10 806,812
------------
$ 5,457,012
----------------------------------------------------------------------------------------------------
Information Technology -- 11.5%
2,543,263(a) B/B1 Applied Systems, Inc., Term Loan,
6.016%-6.262%, 9/26/13 $ 2,098,192
2,330,913 B+/Ba1 Freescale Semiconductor, Inc., Term Loan,
4.6%, 11/29/13 1,361,400
2,354,539 B-/B1 Infor Enterprise Solutions Holdings, Inc., Delayed
Draw Term Loan, 7.52%, 7/28/12 1,312,656
2,962,500(a) B-/B1 Infor Enterprise Solutions Holdings, Inc., Dollar
Tranche B-1 First Lien Term Loan,
6.52%, 7/28/12 1,651,594
4,512,866 B-/B1 Infor Enterprise Solutions Holdings, Inc., Initial
U.S. Term Loan, 7.52%, 7/28/12 2,515,923
1,466,667 B-/Caa2 Infor Enterprise Solutions Holdings, Inc., Second
Lien Delayed Draw Term Loan, 10.012%, 3/2/14 291,500
2,533,333 B-/Caa2 Infor Enterprise Solutions Holdings, Inc., Second
Lien Initial Dollar Term Loan, 10.012%, 3/2/14 459,167
594,999(a) B/B2 Inovis International, Inc., Term Loan,
6.0%%, 11/15/09 580,124
4,593,023 B/B1 Keane International, Inc., Closing Date Term Loan,
6.02%, 6/4/13 2,227,616
348,837(a) B/B1 Keane International, Inc., Synthetic LC Loan,
6.02%, 6/4/13 169,186
3,327,536 B/B1 Serena Software, Inc., Term Loan, 5.0%, 3/10/13 2,246,087
5,000,000 B+/Ba3 SunGard Data Systems, Inc., Incremental Term
Loan, 6.75%, 2/28/14 4,037,500
6,769,300 B+/Ba3 SunGard Data Systems, Inc., New U.S. Term Loan,
3.518%-4.138%, 2/28/14 4,803,028
938,462(a) B/NR Verint Systems, Inc., Term Loan,
4.659%, 5/27/14 539,615
------------
$ 24,293,588
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer Floating Rate Trust | Annual Report | 11/30/08
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Manufacturing -- 2.8%
996,924 B/B1 FCI USA, Inc., Facility Term Loan B-1,
4.331%, 11/1/13 $ 780,093
996,924(a) B/B1 FCI USA, Inc., Tranche Term Loan B-5-B,
4.331%, 11/1/13 780,093
950,685 B+/B1 Hunter Defense Technologies, Inc., Term Loan,
6.25%-7.02%, 8/22/14 658,350
5,000,000 BB/Ba2 Manitowoc Company, Inc., Term Loan B,
6.5%, 8/25/14 3,610,000
------------
$ 5,828,536
----------------------------------------------------------------------------------------------------
Metals & Minerals -- 2.3%
1,413,643(a) B/B3 Essar Steel Algoma, Inc., Term Loan,
4.42%, 6/20/13 $ 1,060,233
4,333,662 B/B3 Murray Energy Corp., First Lien Tranche B Term
Loan, 6.938%, 1/28/10 3,770,286
------------
$ 4,830,519
----------------------------------------------------------------------------------------------------
Retail -- 11.9%
8,647,130 B-/B1 Blockbuster, Inc., Tranche B Term Loan,
6.3%-6.95%, 8/20/11 $ 5,548,578
3,000,000 B/B1 Dollar General Corp., Tranche B-1 Term Loan,
4.173%-6.17%, 7/7/14 2,328,000
5,000,000 B/B1 Dollar General Corp., Tranche B-2 Term Loan,
4.186%-6.512%, 7/7/14 3,706,250
2,666,667 B-/B3 Guitar Center, Inc., Term Loan, 4.94%, 10/9/14 1,273,333
15,765,928(a)(d) CCC/Caa2 Home Interiors & Gifts, Inc., Initial Term Loan,
7.86%-8.02%, 3/31/11 3,350,260
338,762 NR/NR Movie Gallery, Inc., First Lien Synthetic LC Loan,
9.512%, 3/8/12 145,668
8,760,215(c) NR/NR Movie Gallery, Inc., First Lien Term Loan,
9.279%, 3/8/12 3,766,892
5,000,000 BB-/B2 Spirit Finance Corp., Term Loan, 6.193%, 8/1/13 2,375,000
3,980,099 B/B2 Toys R Us-Delaware, Inc., Tranche B Term Loan,
5.724%, 7/19/12 2,486,141
------------
$ 24,980,122
----------------------------------------------------------------------------------------------------
Service -- 0.6%
3,303,980 B+/B1 Sabre, Inc., Initial Term Loan,
5.0%-5.42%, 9/30/14 $ 1,350,961
----------------------------------------------------------------------------------------------------
Telecommunications -- 5.1%
492,321(a) B/B3 Aeroflex, Inc., Tranche B-2 Term Loan,
5.938%, 8/15/14 $ 344,625
1,000,000 B/Caa1 Hargray Acquisition Co., Second Lien Term Loan,
9.262%, 1/29/15 712,500
3,960,000(a) B-/Ba3 Integra Telecom Holdings, Inc., First Lien Term
Loan, 6.446%-8.012%, 8/31/13 2,326,500
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 17
Schedule of Investments | 11/30/08 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Telecommunications -- (continued)
6,500,000 CC/B1 Level 3 Financing, Inc., Term Loan,
7.0%, 3/13/14 $ 4,246,665
EURO 1,500,000 BB-/Ba2 Wind Telecomunicazione S.p.A., Facility Term Loan
B-1, 7.723%, 5/27/13 1,594,064
EURO 1,500,000 BB-/Ba2 Wind Telecomunicazione S.p.A., Facility Term Loan
C-1, 6.774%-7.935%, 5/26/14 1,594,064
------------
$ 10,818,418
----------------------------------------------------------------------------------------------------
Transportation -- 4.9%
9,075,710 B-/Ba2 Delphi Corp., Initial Tranche C Term Loan,
8.5%, 12/31/08 $ 2,465,571
924,290(a) B-/Ba2 Delphi Corp., Subsequent Tranche C Term Loan,
8.5%, 12/31/08 251,099
9,848,919 CCC+/B1 Ford Motor Co., Term Loan, 4.43%, 12/15/13 4,025,746
1,611,960(c)(d) D/Ca Gainey Corp., Term Loan, 12.5%, 6/30/09 201,495
3,940,000(a) B+/B1 Key Safety Systems, Inc., First Lien Term Loan,
3.686%-6.753%, 3/8/14 2,068,500
669,135(a) NR/B2 SIRVA Worldwide, Inc., Revolving Credit Loan,
9.5%, 5/12/12 344,604
2,139,325(c) NR/B2 SIRVA Worldwide, Inc., Second Lien Term Loan,
12.0%, 5/12/15 427,865
1,028,947(a) NR/B2 SIRVA Worldwide, Inc., Term Loan, 9.5%, 5/14/12 581,355
------------
$ 10,366,235
----------------------------------------------------------------------------------------------------
Utility -- 10.0%
3,850,000 B/NR ANP Funding I LLC, Tranche A Term Loan,
7.65%, 7/29/10 $ 3,561,250
2,992,850 NR/NR Bosque Power Co. LLC, Term Loan,
5.25%, 1/16/15 2,080,030
1,754,777(a) NR/B1 Coleto Creek Power, L.P., First Lien Synthetic LC
Term Loan, 3.662%, 6/28/13 1,272,213
3,605,742 NR/B1 Coleto Creek Power, L.P., First Lien Term Loan,
6.512%, 6/28/13 2,614,163
4,887,500 NR/B1 Coleto Creek Power, L.P., Second Lien Term Loan,
7.762%, 6/28/13 3,176,875
2,009,794(c)(d) NR/NR GBGH LLC, First Lien Advance Term Loan,
2.0%, 2/7/14 1,798,766
281,250(a) NR/B2 Mach Gen LLC, First Lien Synthetic LC Loan,
3.512%, 2/22/13 259,031
2,667,138 NR/B2 Mach Gen LLC, First Lien Term Loan B,
4.196%, 2/22/14 2,456,434
747,290(a) NR/Ba3 TPF Generation Holdings LLC, First Lien Synthetic
LC Deposit Loan, 3.662%, 12/16/13 633,328
3,557,457 NR/Ba3 TPF Generation Holdings LLC, First Lien Term Loan,
5.762%, 12/16/13 3,014,945
The accompanying notes are an integral part of these financial statements.
18 Pioneer Floating Rate Trust | Annual Report | 11/30/08
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Utility -- (continued)
234,260(a) NR/Ba3 TPF Generation Holdings LLC, Synthetic Revolver
Deposit Loan, 3.662%, 12/15/11 $ 198,536
-------------
$ 21,065,571
-----------------------------------------------------------------------------------------------------
Wireless Communication -- 9.2%
1,994,962 B+/Ba3 Alltel Communications, Inc., Initial Tranche B-1
Term Loan, 4.123%, 5/15/15 $ 1,900,202
1,136,812(a) NR/NR Clearwire Corp., Delayed Draw Term Loan,
7.48%-9.26%, 7/3/12 602,510
5,644,688 NR/NR Clearwire Corp., Term Loan,
7.72%-8.21%, 7/3/12 2,991,685
9,775,000 B-/Ba2 Cricket Communications, Inc., Term Loan B,
7.262%, 6/16/13 8,061,325
7,374,760 B/Ba3 MetroPCS Wireless, Inc., Tranche B Term Loan,
3.688%-5.5%, 11/3/13 5,778,124
-------------
$ 19,333,846
-----------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING RATE
LOAN INTERESTS
(Cost $535,887,285) $ 343,656,358
-----------------------------------------------------------------------------------------------------
CLAIMS -- 0.0% of Net Assets
Aerospace -- 0.0%
1,200,000(a)(e) B/Ba3 Northwest Airlines, Inc., ALPA Claim-Escrow, 2.5% $ 825
2,500,000(a)(e) NR/Ba3 Northwest Airlines, Inc., Bell Atlantic
Claim-Escrow, 2.5% 1,720
2,500,000(a)(e) B/Ba3 Northwest Airlines, Inc., EDC Claim-Escrow, 5.32% 1,720
2,130,600(a)(e) NR/Ba3 Northwest Airlines, Inc., Flight Attendant
Claim-Escrow, 2.5% 1,466
1,500,000(a)(e) NR/NR Northwest Airlines, Inc., GE Claim-Escrow, 2.5% 1,032
1,264,500(a)(e) NR/NR Northwest Airlines, Inc., IAM Claim-Escrow, 2.5% 870
1,404,900(a)(e) B/Ba3 Northwest Airlines, Inc., Retiree Claim-Escrow, 2.5% 967
-----------------------------------------------------------------------------------------------------
TOTAL CLAIMS
(Cost $0) $ 8,600
-----------------------------------------------------------------------------------------------------
CORPORATE NOTES -- 18.4% of Net Assets
Cable/Wireless Video -- 0.1%
1,000,000 CCC/Caa3 CCH I LLC, 11.0%, 10/1/15 (144A) $ 265,000
-----------------------------------------------------------------------------------------------------
Chemicals -- 0.5%
2,940,000 CCC/Caa1 Georgia Gulf Corp., 9.5%, 10/15/14 (144A) $ 970,200
-----------------------------------------------------------------------------------------------------
Healthcare -- 14.9%
15,000,000(a) NR/NR Azithromycin Royalty Sub LLC, 16.0%,
5/15/19 (144A) $ 13,200,000
9,000,000(a)(c) NR/NR Celtic Pharma Phinco B.V., 17.0%,
6/15/12 (144A) 6,750,000
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 19
Schedule of Investments | 11/30/08 (continued)
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Healthcare -- (continued)
4,849,949(a) NR/NR Fosamprenavir Pharma, 15.5%, 6/15/18 (144A) $ 4,267,955
2,569,004(a)(b)(c) NR/NR Molecular Insight Pharmaceuticals, Inc., 10.801%,
11/1/12 (144A) 2,055,203
2,640,000(a) NR/NR Pharma V, 13.0%, 10/15/13 (144A) 2,428,800
908,974(a)(b)(c) NR/NR Pharma VI, 7.47%, 10/15/14 (144A) 745,359
1,000,000(a)(c) NR/NR Pharma X, 15.5%, 3/30/17 (144A) 750,000
1,500,000(a) NR/NR TCD Pharma, 16.0%, 4/15/24 (144A) 1,320,000
-------------
$ 31,517,317
-----------------------------------------------------------------------------------------------------
Retail -- 1.8%
3,478,000 CCC/Caa2 Blockbuster, Inc., 9.0%, 9/1/12 (144A) $ 1,721,610
6,000,000 CCC/Caa3 Claire's Stores, Inc., 10.5%, 6/1/17 (144A) 810,000
1,420,000 CCC+/Caa1 Dollar General Corp., 10.625%, 7/15/15 (144A) 1,278,000
-------------
$ 3,809,610
-----------------------------------------------------------------------------------------------------
Transportation--1.1%
3,000,000(b) CCC+/Caa1 American Tire Distributors, Inc., 10.133%,
4/1/12 (144A) $ 2,280,000
-----------------------------------------------------------------------------------------------------
TOTAL CORPORATE NOTES
(Cost $50,880,912) $ 38,842,127
-----------------------------------------------------------------------------------------------------
Shares
-----------------------------------------------------------------------------------------------------
COMMON STOCK -- 0.1% of Net Assets
Aerospace -- 0.0%
3,275(e) Delta Airlines, Inc. $ 28,852
-----------------------------------------------------------------------------------------------------
Transportation -- 0.1%
12,887(e) SIRVA Worldwide, Inc. (144A) $ 193,305
-----------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $1,384,679) $ 222,157
-----------------------------------------------------------------------------------------------------
WARRANTS -- 0.0% of Net Assets
Wireless Communication -- 0.0%
400,000(a)(e) Clearwire Corp., Exp. 8/15/10 (144A) $ 8,000
-----------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $956,752) $ 8,000
-----------------------------------------------------------------------------------------------------
Principal
Amount
USD ($)
-----------------------------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS -- 5.7% of Net Assets
Repurchase Agreements -- 5.7%
4,000,000 Bank of America Corp., 0.29%, dated 11/28/08,
repurchase price of $4,000,000 plus accrued
interest on 12/1/08 collateralized by $3,997,308
Freddie Mac Giant, 5.5%, 11/1/38 $ 4,000,000
The accompanying notes are an integral part of these financial statements.
20 Pioneer Floating Rate Trust | Annual Report | 11/30/08
--------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
--------------------------------------------------------------------------------------------------------
Repurchase Agreements -- (continued)
4,000,000 Barclays Plc, 0.25%, dated 11/28/08, repurchase
price of $4,000,000 plus accrued interest on
12/1/08 collateralized by $5,075,206 Federal
National Mortgage Association, 6.0%, 3/1/37 $ 4,000,000
4,000,000 Deutsche Bank AG, 0.3%, dated 11/28/08,
repurchase price of $4,000,000 plus accrued
interest on 12/1/08 collateralized by
the following:
$3,957,681 Federal National Mortgage
Association (ARM), 4.782% - 6.196%,
8/1/15 - 11/1/37
$1,344,115 Freddie Mac Giant, 5.0%,
12/1/35 4,000,000
-----------------------------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $12,000,000) $ 12,000,000
-----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 188.1%
(Cost $607,188,103)(f) $ 396,252,132
-----------------------------------------------------------------------------------------------------
SHORT POSITIONS -- (1.9)% OF NET ASSETS
Short Positions -- (1.9)%
(5,699,416) CCC/B1 Realogy Corp., Initial Term Loan B,
3.15%, 10/10/13 $ (3,309,224)
(1,289,147) CCC/B1 Realogy Corp., Synthetic LC Loan,
3.15%, 10/10/13 (748,511)
-----------------------------------------------------------------------------------------------------
TOTAL SHORT POSITIONS
(Proceeds $(4,076,916) $ (4,057,735)
-----------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 10.9% $ 22,952,137
-----------------------------------------------------------------------------------------------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE -- (97.1)% $(204,529,091)
-----------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $ 210,617,443
=====================================================================================================
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 accruing at November 30, 2008.
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At November
30, 2008 the value of these securities amounted to $40,558,322 or 19.3% of
total net assets applicable to common shareowners.
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 21
Schedule of Investments | 11/30/08 (continued)
(a) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $196,168,725. The aggregate value $132,355,487
represents 62.8% of the total net assets applicable to common
shareowners.
(b) Floating Rate Note. The rate shown is the coupon rate at November 30, 2008.
(c) Payment-in-Kind (PIK) security which may pay interest in additional
principal amount.
(d) Security is in default and is non-income producing.
(e) Non-income producing.
(f) At November 30, 2008, the net unrealized loss on investments based on cost
for federal income tax purposes of $607,540,139 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 27,684
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (211,315,691)
-------------
Net unrealized loss $(211,288,007)
=============
For financial reporting purposes net unrealized loss on investments was
$210,935,971 and cost of investments aggregated $607,188,103.
Purchases and sales of securities (excluding temporary cash investments) for the
period ended November 30, 2008, aggregated $179,170,678 and $253,958,950,
respectively.
Glossary of Terms:
LC -- Letter of Credit
Principal amounts are denominated in U.S. dollars unless otherwise noted.
AUD -- Australian Dollar
EURO -- Euro
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels listed below.
Highest priority is given to Level 1 inputs and lowest priority is given to
Level 3.
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
etc.)
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments)
The following is a summary of the inputs used as of November 30, 2008, in
valuing the Trust's Investments:
-----------------------------------------------------------------------------------
Other
Investments Financial
Valuation Inputs in Securities Instruments*
-----------------------------------------------------------------------------------
Level 1 -- Quoted Prices $ 28,852 $ --
Level 2 -- Other Significant Observable Inputs 363,191,073 (4,057,735)
Level 3 -- Significant Unobservable Inputs 33,032,207 --
---------------------------------------------------------------------------------
Total $396,252,132 $(4,057,735)
=================================================================================
* Other financial instruments include short positions.
The accompanying notes are an integral part of these financial statements.
22 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Following is a reconciliation of assets valued using significant unobservable
inputs (Level 3):
-----------------------------------------------------------------------
Investments
in Securities
-----------------------------------------------------------------------
Balance as of 11/30/07 $ 3,048,950
Realized gain (loss)1 1,200
Change in unrealized appreciation (depreciation)2 (9,817,099)
Net purchases (sales) 39,799,156
Transfers in and out of Level 3 --
-----------------------------------------------------------------
Balance as of 11/30/08 $33,032,207
=================================================================
1 Realized gain (loss) on these securities is included in the net realized
loss from investments in the Statement of Operations.
2 Unrealized appreciation/(depreciation) on these securities is included in
the change in unrealized gain (loss) on investments in the Statement of
Operations.
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 23
Statement of Assets and Liabilities | 11/30/08
ASSETS:
Investments in securities, at value (cost $607,188,103) $396,252,132
Cash 1,768,592
Foreign currencies, at value (cost $4) 4
Receivables --
Investment securities sold 22,272,995
Paydown 34,881
Interest 6,550,513
Commitment fees 10,120
Prepaid expenses 12,529
Other assets 506,560
------------------------------------------------------------------------------------
Total assets $427,408,326
------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Investment securities purchased $ 3,526,286
Dividends payable to common shareowners 2,809,237
Short positions, at value (proceeds paid $4,076,916) 4,057,735
Depreciation on unfunded corporate loans - net 1,166,055
Unamortized facility fee 146,486
Due to affiliates 302,344
Accrued expenses and other liabilities 253,649
------------------------------------------------------------------------------------
Total liabilities $ 12,261,792
------------------------------------------------------------------------------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 8,179 shares,
including dividends payable of $54,091 $204,529,091
------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $462,925,899
Undistributed net investment income 675,232
Accumulated net realized loss on investments and foreign currency
transactions (41,003,438)
Net unrealized loss on investments (212,082,845)
Net unrealized gain on foreign currency assets and liabilities
denominated in foreign currencies 102,595
------------------------------------------------------------------------------------
Net assets applicable to common shareowners $210,617,443
------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $210,617,443/24,428,148 common shares $ 8.62
====================================================================================
The accompanying notes are an integral part of these financial statements.
24 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Statement of Operations
For the Year Ended 11/30/08
INVESTMENT INCOME:
Interest $ 50,175,374
Facility and other fees 1,593,873
-----------------------------------------------------------------------------------------------
Total investment income $ 51,769,247
-----------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 4,186,099
Administrative fee 482,974
Transfer agent fees and expenses 60,390
Auction agent fees 617,098
Custodian fees 110,562
Registration fees 24,093
Professional fees 193,827
Printing expenses 38,625
Trustees' fees 21,144
Pricing fees 48,286
Insurance fees 15,640
Miscellaneous 25,529
-----------------------------------------------------------------------------------------------
Total expenses $ 5,824,267
-----------------------------------------------------------------------------------------------
Net investment income $ 45,944,980
-----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss from:
Investments $(40,250,396)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies (1,319,844) $ (41,570,240)
-----------------------------------------------------------------------------------------------
Change in net unrealized gain (loss) on:
Investments (175,062,354)
Unfunded corporate loans (822,556)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies 531,541 $(175,353,369)
-----------------------------------------------------------------------------------------------
Net loss on investments and foreign currency
transactions $(216,923,609)
-----------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO PREFERRED
SHAREOWNERS FROM:
Net investment income $ (8,996,461)
Net realized gains (783,227)
-----------------------------------------------------------------------------------------------
Total distributions $ (9,779,688)
-----------------------------------------------------------------------------------------------
Net decrease in net assets applicable to common
shareowners resulting from operations $(180,758,317)
===============================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 25
Statement of Changes in Net Assets
For the Years Ended 11/30/08 and 11/30/07, respectively
------------------------------------------------------------------------------------------------
Year Year
Ended Ended
11/30/08 11/30/07
------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 45,944,980 $ 56,186,189
Net realized gain (loss) on investments and foreign currency
transactions (41,570,240) 10,056,861
Change in net unrealized loss on investments and foreign
currency transactions (175,353,369) (45,874,105)
Dividends and distributions to preferred shareowners from
Net investment income (8,996,461) (12,518,844)
Net realized gains (783,227) (24,294)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to
common shareowners resulting from operations $(180,758,317) $ 7,825,807
---------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income
($1.704 and $1.905 per share, respectively) $ (41,615,793) $ (46,436,882)
Net realized gains
($0.348 and $0.004 per share, respectively) (8,500,996) (91,944)
---------------------------------------------------------------------------------------------
Total dividends to common shareowners $ (50,116,789) $ (46,528,826)
---------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ -- $ 1,940,809
---------------------------------------------------------------------------------------------
Net increase in net assets applicable to common
shareowners resulting from Trust share transactions $ -- $ 1,940,809
---------------------------------------------------------------------------------------------
Net decrease in net assets applicable to common
shareowners $(230,875,106) $ (36,762,210)
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of year $ 441,492,549 $ 478,254,759
---------------------------------------------------------------------------------------------
End of year $ 210,617,443 $ 441,492,549
---------------------------------------------------------------------------------------------
Undistributed net investment income $ 675,232 $ 8,353,089
---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Financial Highlights
----------------------------------------------------------------------------------------------------------------
Year Year Year 12/28/04 (b)
Ended Ended Ended to
11/30/08 11/30/07 11/30/06 11/30/05
----------------------------------------------------------------------------------------------------------------
Per Common Share Operating Performance
Net asset value, beginning of period $ 18.07 $ 19.66 $ 19.08 $ 19.10(c)
-------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment
operations:(a)
Net investment income $ 1.88 $ 2.30 $ 2.20 $ 1.33
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (8.88) (1.47) 0.52 (0.05)
Dividends and distributions to preferred
shareowners from:
Net investment income (0.37) (0.51) (0.46) (0.23)
Net realized gains (0.03) 0.00(d) -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment
operations $ (7.40) $ 0.32 $ 2.26 $ 1.05
Distributions to common shareowners from:
Net investment income (1.70) (1.91) (1.63) (0.92)
Net realized gains (0.35) 0.00(d) (0.05) --
Capital charge with respect to issuance of:
Common shares -- -- -- (0.04)
Preferred shares -- -- 0.00 (d) (0.11)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (9.45) $ (1.59) $ 0.58 $ (0.02)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period(e) $ 8.62 $ 18.07 $ 19.66 $ 19.08
-------------------------------------------------------------------------------------------------------------
Market value, end of period(e) $ 6.90 $ 16.79 $ 18.95 $ 17.14
=============================================================================================================
Total return at market value(f) (52.10)% (2.02)% 20.94% (9.76)%
Ratios to average net assets of
common shareowners
Net expenses(g) 1.60% 1.40% 1.38% 1.23%(h)
Net investment income before preferred
share dividends 12.61% 11.92% 11.37% 7.52%(h)
Preferred share dividends 2.47% 2.66% 2.39% 1.29%(h)
Net investment income available to
common shareowners 10.14% 9.26% 8.98% 6.23%(h)
Portfolio turnover 31% 80% 75% 61%
Net assets of common shareowners, end
of period (in thousands) $ 210,617 $ 441,493 $ 478,255 $ 464,324
Preferred shares outstanding (in thousands) $ 204,475 $ 234,500 $ 234,500 $ 234,500
Asset coverage per preferred share, end
of period $ 50,758 $ 72,067 $ 76,000 $ 74,520
Average market value per preferred share(i) $ 25,000 $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable,
per preferred share $ 25,007 $ 25,009 $ 25,013 $ 25,018
The accompanying notes are an integral part of these financial statements.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 27
Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------
Year Year Year 12/28/04 (b)
Ended Ended Ended to
11/30/08 11/30/07 11/30/06 11/30/05
----------------------------------------------------------------------------------------------------------------
Ratios to average net assets of common
shareowners before waivers and
reimbursement of expenses
Net expenses(g) 1.60% 1.40% 1.40% 1.24%(h)
Net investment income before preferred
share dividends 12.61% 11.92% 11.35% 7.51%(h)
Preferred share dividends 2.47% 2.66% 2.39% 1.29%(h)
Net investment income available to common
shareowners 10.14% 9.26% 8.96% 6.22%(h)
-------------------------------------------------------------------------------------------------------------
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) The Trust common shares were first publicly offered on December 28, 2004.
(c) Net asset value immediately after the closing of the first public offering
was $19.06.
(d) Amount is less than $0.01 per share.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return less than a full period is not annualized. Past
performance is not a guarantee of future results.
(g) Expense ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
(i) Market value is redemption value without an active market.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods 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.
28 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Notes to Financial Statements | 11/30/08
1. Organization and Significant Accounting Policies
Pioneer Floating Rate Trust (the "Trust") was organized as a Delaware statutory
trust on October 6, 2004. Prior to commencing operations on December 28, 2004,
the Trust had no operations other than matters relating to its organization and
registration as a non-diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended. The investment objective
of the Trust is to provide a high level of current income. The Trust will, as a
secondary objective, also seek preservation of capital to the extent consistent
with its primary objective of high current income.
The Trust's investments in certain foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than in a
developed market. These risks include disruptive political or economic
conditions and the possible imposition of adverse governmental laws or currency
exchange restrictions.
The Trust invests primarily in senior floating rate loans ("Senior Loans"). The
Trust may also invest in other floating and variable rate instruments, including
second lien loans, investment grade fixed-income debt securities and high yield,
high risk corporate bonds. The Trust may also invest in below investment grade
securities. Below investment grade securities are commonly referred to as "junk
bonds" and are considered speculative with respect to the issuer's capacity to
pay interest and repay principal. These securities involve greater risk of loss,
are subject to greater price volatility, and are less liquid, especially during
periods of economic uncertainty or change, than higher rated debt securities.
The Trust may invest in securities of issuers that are in default or that are in
bankruptcy.
The Trust is not limited in the percentage of its assets that may be invested in
Senior Loans and other securities deemed to be illiquid. Illiquid securities may
be difficult to dispose of at a fair price at the times when the Trust believes
it is desirable to do so and their market price is generally more volatile than
that of more liquid securities. Illiquid securities are also more difficult to
value and investment of the Trust's assets in illiquid securities may restrict
the Trust's ability to take advantage of market opportunities.
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. Information regarding the Trust's principal risks is
contained in the Trust's original offering prospectus, with additional
information
Pioneer Floating Rate Trust | Annual Report | 11/30/08 29
included in the Trust's shareowner reports from time to time. The Trust's
prospectus contains unaudited information regarding the Trust's principal risks.
Please refer to those documents when considering the Trust's risks.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains and losses on investments during the
reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in preparation of its financial statements, which are consistent with
those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Investments in Senior
Loans are valued in accordance with guidelines established by the Board of
Trustees at the mean between the last available bid and asked prices from
one or more brokers or dealers as obtained from Loan Pricing Corporation.
For the limited number of Senior Loans for which no reliable price quotes
are available, such investments will be valued by Loan Pricing Corporation
through the use of pricing matrices to determine valuations.
Fixed-income securities are valued at prices supplied by independent
pricing services, which consider such factors as Treasury spreads, yields,
maturities ratings and liquidity. Valuations may be supplemented by values
obtained from dealers and other sources, as required. Equity securities are
valued at the last sale price on the principal exchange where they are
traded. Securities or loans for which market prices and/or quotations are
not readily available are valued using fair values methods pursuant to
procedures adopted by 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 methods to value a security, including a non-U.S.
security, when the closing market price on the principal exchange where the
security is traded no longer reflects the value of the security. At
November 30, 2008, there were no securities that were valued using fair
value methods (other than securities valued using prices supplied by
independent pricing services). Temporary cash investments are valued at
cost which approximates market value.
30 Pioneer Floating Rate Trust | Annual Report | 11/30/08
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. All discounts and premiums on
debt securities are accreted or amortized, respectively, daily, on an
effective yield to maturity basis and are included in interest income.
Interest income, including income on interest bearing cash accounts, is
recorded on an accrual basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollars actually received. Further,
the effects of changes in foreign currency exchange rates on investments
are not segregated in the Statement of Operations from the effects of
changes in market prices of those securities but are included with the net
realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Trust enters into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Trust's
financial statements. The Trust records realized gains and losses at the
time a portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to meet
the terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar (see Note 3).
Pioneer Floating Rate Trust | Annual Report | 11/30/08 31
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. All
tax returns filed thus far are subject to examination by tax authorities.
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 (loss) on investment
transactions, or from paid-in capital, depending on the type of book/tax
differences that may exist.
At November 30, 2008, the Trust reclassified $3,010,583 to decrease
undistributed net investment income and decrease net realized loss on
investments to reflect permanent book/tax differences. The reclassification
has no impact on the net asset value of the Trust and presents the Trust's
capital accounts on a tax basis.
The Trust has elected to defer $13,026,562 in capital losses and $152,883
in currency losses realized between November 1, 2008 and November 30, 2008
to its fiscal year ending November 30, 2009.
At November 30, 2008, the Trust had a capital loss carryforward of
$27,976,876 which will expire in 2016, if not utilized.
The tax character of current year distributions paid to common and
preferred shareowners during the years ended November 30, 2008 and November
30, 2007 were as follows:
---------------------------------------------------------------------
2008 2007
---------------------------------------------------------------------
Distributions paid from:
Ordinary income $56,018,203 $58,955,726
Net long term capital gain 3,878,274 116,238
--------------------------------------------------------------------
Total taxable distribution $59,896,477 $59,071,964
====================================================================
The following shows the components of distributable earnings on a federal
income tax basis at November 30, 2008.
------------------------------------------------------------------------
2008
------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 4,043,479
Capital loss carryforward (27,976,876)
Post-October loss deferred (13,179,445)
Distributions payable (2,863,328)
Unrealized depreciation (212,332,286)
-----------------------------------------------------------------------
Total $ (252,308,456)
=======================================================================
32 Pioneer Floating Rate Trust | Annual Report | 11/30/08
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed-income securities and book/ tax
differences in the accrual of income on securities in default.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the value 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 sub custodians. The
Trust's investment adviser, Pioneer Investment Management, Inc. ("PIM"), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
F. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash. Shareowners
may elect not to participate in the Plan. Shareowners not participating in
the Plan receive all dividends and capital gain distributions in cash.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by notifying American Stock Transfer &
Trust Company, the agent for shareowners in administering the Plan (the
"Plan Agent"), in writing prior to any dividend record date; otherwise such
termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees ("market premium"), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per
Pioneer Floating Rate Trust | Annual Report | 11/30/08 33
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
PIM, a wholly owned indirect subsidiary of UniCredit S.p.A. ("UniCredit")
manages the Trust's portfolio. Management fees payable under the Trust's
Advisory Agreement with PIM are calculated daily at the annual rate of 0.70% of
the Trust's average daily managed assets. "Managed assets" is the average daily
value of the Trust's total assets minus the sum of the Trust's liabilities,
which liabilities exclude debt related to leverage, short-term debt and the
aggregate liquidation preference of any outstanding preferred shares. For the
year ended November 30, 2008, the net management fee was equivalent to 0.70% of
the Trust's average daily managed assets, which was equivalent to 1.15% of the
Trust's average daily net assets attributable to the common shareowners.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. At November 30,
2008, $302,344 was payable to PIM related to management costs, administrative
cost and certain other services and is included in "Due to affiliates" on the
Statement of Assets and Liabilities.
PIM has retained Princeton Administrators, LLC ("Princeton") to provide certain
administrative and accounting services to the Trust on its behalf. PIM pays
Princeton a monthly fee at an annual rate of 0.07% of the average daily value of
the Trust's managed assets up to $500 million and 0.03% for average daily
managed assets in excess of $500 million, subject to a minimum monthly fee of
$10,000. Princeton receives no compensation directly from the Trust.
PIM has engaged Highland Capital Management, L.P. to act as the Trust's
investment sub-adviser ("Sub-adviser") and manage the Trust's investments
through December 31, 2008. PIM pays the Sub-adviser a monthly fee at an annual
rate of 0.35% of the average daily value of the Trust managed assets. The fee is
paid monthly in arrears. The Trust does not pay a fee to the Sub-adviser.
Also, PIM had agreed for the first three years of the Trust's investment
operations (December 23, 2004 - December 23, 2007) to limit the Trust's total
annual expenses excluding offering costs for common and preferred shares,
34 Pioneer Floating Rate Trust | Annual Report | 11/30/08
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 was not an expense
for this purpose. For the year ended November 30, 2008 the Trust's expenses were
not reduced under such arrangements. As of December 23, 2007, this expense
limitation is no longer in effect.
3. Forward Foreign Currency Contracts
The Trust may enter into contracts that obligate the Trust to deliver currencies
at specified future dates. At the maturity of a contract, the Trust must make or
take 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 November 30, 2008, the Trust had no
outstanding portfolio hedges or forward currency settlement contracts.
4. Unfunded Loan Commitments
As of November 30, 2008, the Trust had unfunded loan commitments of $3,579,123
which could be extended at the option of the borrower, pursuant to the following
loan agreements:
--------------------------------------------------------------------------------
Unfunded
Borrower Commitment
--------------------------------------------------------------------------------
Cricket Communications, Inc., Revolver Loan $ 2,000,000
Fontainebleau Las Vegas Holdings, LLC, Delayed Draw Term Loan $ 666,667
Sirva Worldwide, Inc., Revolving Credit Loan $ 912,456
5. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredit, through a sub-transfer agency agreement
with American Stock Transfer & Trust Company, provides substantially all
transfer agent and shareowner services related to the Trust's common shares at
negotiated rates. Deutsche Bank Trust Company Americas ("Deutsche Bank") is the
transfer agent, registrar, dividend paying agent and auction agent with respect
to the Trust's Auction Market Preferred Shares ("AMPS"). The Trust pays Deutsche
Bank an annual fee, as is agreed to from time to time by the Trust and Deutsche
Bank, for providing such services.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 35
6. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the years ended
November 30, 2008 and November 30, 2007 were as follows:
--------------------------------------------------------------------------------
11/30/2008 11/30/2007
--------------------------------------------------------------------------------
Shares outstanding at beginning of year 24,428,148 24,330,240
Reinvestment of distributions -- 97,908
--------------------------------------------------------------------------------
Shares outstanding at end of year 24,428,148 24,428,148
================================================================================
The Trust may classify or reclassify any unissued common shares of beneficial
interest into one or more series of preferred shares of beneficial interest. As
of November 30, 2008 there were 8,179 AMPS as follows: Series M7-2,729, Series
W7-2,725 and Series TH7-2,725.
On November 5, 2008, the Trust announced the following redemptions of AMPS at a
price of $25,000 per share plus any accrued and unpaid dividends through the
redemption date:
--------------------------------------------------------------------------------
Redemption Shares Aggregate
date Redeemed Principal
--------------------------------------------------------------------------------
Series M7 11/25/08 401 $10,025,000
--------------------------------------------------------------------------------
Series W7 11/20/08 400 $10,000,000
--------------------------------------------------------------------------------
Series TH7 11/21/08 400 $10,000,000
--------------------------------------------------------------------------------
The Trust financed the AMPS redemptions with cash.
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. An auction fails
if there are more AMPS offered for sale than there are buyers. When an auction
fails, the dividend rate for the period will be the maximum rate on the auction
dates described in the prospectus for the AMPS. Preferred shareowners will not
be able to sell their AMPS at an auction if the auction fails. Since February
2008, the Trust's auctions related to the AMPS have failed. The maximum rate for
each series is the greater of 125% of the one week LIBOR rate or the LIBOR rate
plus a spread of 1.25%. Dividend rates on AMPS ranged from 2.09% to 6.10% during
the year ended November 30, 2008.
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, the Trust does not comply with the asset coverage
ratios described in the prospectus for the AMPS.
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
36 Pioneer Floating Rate Trust | Annual Report | 11/30/08
unpaid dividends, whether or not declared. The AMPS are also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and 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 sub classification as a closed-end
investment company or changes in its fundamental investment restrictions.
7. Short Positions
At November 30, 2008, the Trust inadvertently held two short positions in
Realogy. A short position occurs when a fund sells securities that it does not
own. On December 30, 2008, the Trust closed out its short position and was
reimbursed $396,422 by the adviser for losses incurred to date.
8. New Pronouncement
In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures
about Derivative Instruments and Hedging Activities ("SFAS 161"), was issued and
is effective for fiscal years beginning after November 15, 2008. SFAS 161
requires enhanced disclosures about an entity's derivative and hedging
activities. Management is currently evaluating the impact the adoption of SFAS
161 will have on the Trust's financial statement disclosures.
9. Subsequent Events
Subsequent to November 30, 2008, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.115 per common share
payable December 19, 2008 to common shareowners of record on December 12, 2008.
Effective January 1, 2009, PIM assumed sole responsibility for management of the
Trust's investments.
Payment of the November 2008 distribution was postponed on November 26, 2008 due
to market volatility and declines in the market prices of securities in which
the Trust invests, causing the Trust's assets to fall below asset coverage
requirements relating the Trust's AMPS that are pre-conditions to the payment of
Pioneer Floating Rate Trust | Annual Report | 11/30/08 37
common share distributions. On December 4, 2008, the Trust announced it would
pay its previously declared November 2008 distribution of $0.115 per common
shareowner on December 9, 2008. The November 2008 distribution was paid to
common shareowners of record as of November 14, 2008.
Subsequent to November 30, 2008, dividends declared and paid on preferred shares
totaled $351,893 in aggregate for the three outstanding preferred share series
through January 9, 2009.
On December 8, 2008, the Trust announced the following redemptions of AMPS at a
price of $25,000 per share plus any accrued and unpaid dividends through the
redemption date:
--------------------------------------------------------------------------------
Redemption Shares Aggregate
date Redeemed Principal
--------------------------------------------------------------------------------
Series M7 12/23/08 134 $3,350,000
--------------------------------------------------------------------------------
Series W7 12/26/08 133 $3,325,000
--------------------------------------------------------------------------------
Series TH7 12/26/08 133 $3,325,000
--------------------------------------------------------------------------------
The Trust financed the AMPS redemption with cash.
On December 18, 2008, the Trust announced the following redemptions of AMPS at
a price of $25,000 per share plus any accrued and unpaid dividends through the
redemption date:
--------------------------------------------------------------------------------
Redemption Shares Aggregate
date Redeemed Principal
--------------------------------------------------------------------------------
Series M7 1/6/09 161 $4,025,000
--------------------------------------------------------------------------------
Series W7 1/8/09 160 $4,000,000
--------------------------------------------------------------------------------
Series TH7 1/9/09 160 $4,000,000
--------------------------------------------------------------------------------
The Trust financed the AMPS redemption with cash.
38 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and the Shareowners of
Pioneer Floating Rate Trust:
--------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Pioneer
Floating Rate Trust (the "Trust"), including the schedule of investments, as of
November 30, 2008, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Trust's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of November 30, 2008, by correspondence with the custodian,
selling or agent banks and brokers or by other appropriate auditing procedures
where replies from selling or agent banks or brokers were not received. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Floating Rate Trust at November 30, 2008, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and financial highlights for each of the periods
indicated therein, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
January 29, 2009
Pioneer Floating Rate Trust | Annual Report | 11/30/08 39
ADDITIONAL INFORMATION (unaudited)
During the period, there were no material changes in the Trust's investment
objective or fundamental policies that have not been approved by the
shareowners. There were no changes in the Trust's charter or By-Laws that would
delay or prevent a change in control of the Trust which has not been approved by
the shareowners. During the period, there were no changes in the principal risk
factors associated with investment in the Trust. There were no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
Effective January 1, 2009, Jonathan Sharkey of PIM became the portfolio manager
of Pioneer Floating Rate Trust.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
CEO CERTIFICATION DISCLOSURE (unaudited)
The Trust's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12 (a) of the NYSE
Listed Company Manual. In addition, the Trust has filed with the Securities and
Exchange Commission the certification of its Chief Executive Officer and Chief
Financial Officer required by Section 302 of the Sarbanes- Oxley Act.
RESULTS OF SHAREOWNER MEETING (unaudited)
On September 22, 2008, Pioneer Floating Rate Trust held its annual meeting of
shareowners to elect Class II Trustees. All Class II Trustees were elected.
Below are the detailed results of the votes.
Proposal 1 - To elect Class II Trustees.
------------------------------------------------------------------------------
Nominee For Withheld Abstained
------------------------------------------------------------------------------
Benjamin M. Friedman 21,003,327 0 506,316
------------------------------------------------------------------------------
Margaret B.W. Graham 21,020,151 0 489,492
------------------------------------------------------------------------------
Daniel K. Kingsbury 21,022,528 0 487,115
------------------------------------------------------------------------------
40 Pioneer Floating Rate Trust | Annual Report | 11/30/08
IMPORTANT TAX INFORMATION (unaudited)
The Pioneer Floating Rate Trust paid a long-term capital gain distribution of
$0.1267 per share to common shareowners of record on December 12, 2007.
Additionally, the following summarizes the per share long-term capital gain
distributions paid to preferred shareholders during the year:
------------------------------------------------------------------------------
Long-Term
Payable Date Capital Gain
------------------------------------------------------------------------------
Series M7 12/26/07 $ 31.11
1/2/08 $ 28.44
1/8/08 $ 23.10
1/15/08 $ 0.04
1/29/08 $ 0.24
Series W7 12/20/07 $ 26.01
12/27/07 $ 27.22
1/3/08 $ 29.57
1/17/08 $ 0.04
1/31/08 $ 0.25
Series TH7 12/21/07 $ 27.22
12/28/07 $ 27.22
1/4/08 $ 17.01
1/11/08 $ 12.78
2/1/08 $ 0.25
Pioneer Floating Rate Trust | Annual Report | 11/30/08 41
Approval of Investment Advisory Agreement
Pioneer Investment Management, Inc. ("PIM") serves as the Trusts's investment
adviser pursuant to an investment advisory agreement between PIM and the Trust.
The Trustees of the Trust, as required by law, determine annually whether to
continue the investment advisory agreement for the Trust.
At a meeting held on November 11, 2008, based on their evaluation of the
information provided by PIM, the Trustees of the Trust, including the
independent Trustees voting separately, unanimously approved the continuation of
the investment advisory agreement with PIM for another year. At that meeting,
the Trustees also determined not to renew the sub-advisory agreement with
Highland Capital Management, L.P. that had been in effect for the Trust. In
considering the continuation of the investment advisory agreement, the Trustees
considered various factors that they determined were relevant, including the
factors described below. The Trustees did not identify any single factor as the
controlling factor in determining to approve the continuation of the investment
advisory agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
provided by PIM to the Trust and that would be provided by PIM to the Trust upon
the termination of the sub-advisory agreement, taking into account the
investment objective and strategy of the Trust and the information related to
the Trust provided to the Trustees at each quarterly meeting. The Trustees
reviewed the terms of the investment advisory agreement. The Trustees also
reviewed PIM's investment approach for the Trust and its research process. The
Trustees considered the resources of PIM and the personnel of PIM who would
provide investment management services to the Trust. They also considered PIM's
compliance and legal resources and personnel.
The Trustees also considered that, as administrator, PIM is responsible for the
administration of the Trust's business and other affairs. It was noted that PIM
supervises and monitors the performance of the Trust's service providers and
provides the Trust with personnel (including officers) as are necessary for the
Trust's operations. The Trustees considered the fees paid to PIM for the
provision of such services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had provided by PIM to the Trust and that would be
provided by PIM to the Trust upon the termination of the sub-advisory agreement
were satisfactory and consistent with the terms of the investment advisory
agreement.
42 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Performance of the Trust
The Trustees considered the performance results of the Trust over various time
periods. They reviewed information comparing the Trust's performance with the
average performance of its peer group of funds as classified by Morningstar,
Inc. ("Morningstar"), an independent provider of investment company data, and
with the performance of the Trust's benchmark index. The Trustees considered
that the Trust's annualized total return was in the fourth quintile of its
Morningstar category for the one year period ended June 30, 2008 and in the
first quintile of its Morningstar category for the three year period ending June
30, 2008. (In all quintile rankings referred to throughout this disclosure,
first quintile is most favorable to the Trust's shareowners. Thus, highest
relative performance would be first quintile and lowest relative expenses would
also be first quintile.) The Trustees noted that the yield (gross of expenses)
to the Trust's common shareowners for the twelve months ended June 30, 2008
exceeded the yield of the Trust's benchmark index for the same period. Because
the Trustees determined not to renew the sub-advisory agreement that had been in
effect for the Trust, they also considered the performance of another fund
managed by PIM with similar investment objectives and strategies as the Trust.
The Trustees noted that the other fund managed by PIM with similar investment
objectives and strategies as the Trust did not employ leverage and the impact
that the Trust's leverage had on the Trust's performance results. Given that,
under the investment advisory agreement, PIM would be making the day-to-day
investment decisions for the Trust upon the termination of the sub-advisory
agreement, the Trustees concluded that the investment performance of the other
fund managed by PIM with similar investment objectives and strategies as the
Trust supported the renewal of the investment advisory agreement.
Management Fee and Expenses
The Trustees considered information on the fees and expenses of the Trust in
comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the independent Trustees
for this purpose using data provided by Strategic Insight Mutual Fund Research
and Consulting, LLC ("Strategic Insight"), an independent third party.
The Trustees considered that the Trust's management fee for the twelve months
ended June 30, 2008 was in the second quintile relative to the management fees
paid by other funds in its Strategic Insight peer group for the comparable
period. The Trustees also considered that the Trust's expense ratio for the
twelve months ended June 30, 2008 was in the fourth quintile relative to its
Strategic Insight peer group for the comparable period. It was noted that PIM
did not currently manage any separate accounts with an investment objective and
strategies that were similar to the Trust.
The Trustees concluded that the management fee payable by the Trust to PIM was
reasonable in relation to the nature and quality of the services that had
Pioneer Floating Rate Trust | Annual Report | 11/30/08 43
been provided by PIM and that would be provided by PIM upon the termination of
the sub-advisory agreement, taking into account the fees charged by other
advisers for managing comparable funds with similar strategies. The Trustees
also concluded that the Trust's expense ratio was reasonable, taking into
account the size of the Trust, the quality of services provided and to be
provided by PIM and the investment performance of the Trust.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They noted that PIM's profit
margin with respect to the Trust would change after giving effect to the
termination of the sub-advisory agreement. They further reviewed the financial
results realized by PIM and its affiliates from non-fund businesses. The
Trustees considered PIM's profit margins with respect to the Trust in comparison
to the limited industry data available and noted that the profitability of any
adviser was affected by numerous factors, including its organizational structure
and method for allocating expenses. The Trustees recognized that PIM should be
entitled to earn a reasonable level of profit for the services provided to the
Trust. The Trustees concluded that PIM's profitability with respect to the
management of the Trust was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is a
closed-end fund and its size is relatively stable at an asset level that was
anticipated when the management fee was initially set, the Trustees concluded
that economies of scale were not a relevant consideration.
Other Benefits
The Trustees also considered the character and amount of fees paid by the Trust,
other than under the investment advisory agreement, for services provided by PIM
and its affiliates. The Trustees further considered the revenues and
profitability of PIM's businesses other than the fund business. The Trustees
also considered the intangible benefits to PIM by virtue of its relationship
with the Trust and the other Pioneer funds. The Trustees concluded that the
receipt of these benefits was reasonable in the context of the overall
relationship between PIM and the Trust.
44 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
continuation of the investment advisory agreement for the Trust.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 45
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Bingham McCutchen LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Investment Sub-Adviser
Highland Capital Management, L.P. (through December 31, 2008)
Sub-Administrator
Princeton Administrators, LLC
Trustees and Officers
The Board of Trustees provides broad supervision over the Trust's affairs. The
officers of the Trust are responsible for the Trust's operations. The Trustees
and officers are listed below, together with their principal occupations during
the past five years. Trustees who are interested persons of the Trust within the
meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are
not interested persons of the Trust are referred to as Independent Trustees.
Each of the Trustees serves as a Trustee of each of the 76 U.S. registered
investment portfolios for which Pioneer serves as investment adviser (the
"Pioneer Funds"). The address for all Trustees and all officers of the Trust is
60 State Street, Boston, Massachusetts 02109.
46 Pioneer Floating Rate Trust | Annual Report | 11/30/08
Interested Trustees
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age with the Trust and Term of Office During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Jr. (82)* Chairman of Class I Trustee since Deputy Chairman and a Director of None
the Board, Trustee 2004. Term expires in Pioneer Global Asset Management
and President 2010. Serves until S.p.A. ("PGAM"); Non-Executive
elected by Preferred Chairman and a Director of Pioneer
Shares only. Investment Management USA Inc.
("PIM-USA"); Chairman and a
Director of Pioneer; Chairman and
Director of Pioneer Institutional
Asset Management, Inc. (since
2006); Director of Pioneer
Alternative Investment Management
Limited (Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda)
Limited and affiliated funds;
Director of PIOGLOBAL Real Estate
Investment Fund (Russia) (until
June 2006); Director of Nano-C,
Inc. (since 2003); Director of
Cole Management Inc. (since 2004);
Director of Fiduciary Counseling,
Inc.; President and Director of
Pioneer Funds Distributor, Inc.
("PFD") (until May 2006);
President of all of the Pioneer
Funds; and Of Counsel, Wilmer
Cutler Pickering Hale and Dorr LLP
------------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (50)* Trustee and Class II Trustee since Director, CEO and President of None
Executive March 2007. Term Pioneer Investment Management USA
Vice President expires in 2011. Inc. (since February 2007);
Director and President of Pioneer
Investment Management, Inc. and
Pioneer Institutional Asset
Management, Inc. (since February
2007); Executive Vice President of
all of the Pioneer Funds (since
March 2007); Director of Pioneer
Global Asset Management S.p.A.
(since April 2007); Head of New
Markets Division, Pioneer Global
Asset Management S.p.A. (2000 -
2007)
------------------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the Trust's investment adviser and
certain of its affiliates.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 47
Independent Trustees
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age with the Trust and Term of Office During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
David R. Bock (64) Trustee Class I Trustee since Executive Vice President and Chief Director of Enterprise
2005. Term expires Financial Officer, I-trax, Inc. Community Investment, Inc.
in 2010. (publicly traded health care (privately-held affordable
services company) (2004 - 2007); housing finance company);
Partner, Federal City Capital and Director of New York
Advisors (boutique merchant bank) Mortgage Trust (publicly
(1997 to 2004 and 2008 - present); traded mortgage REIT)
and Executive Vice President and
Chief Financial Officer, Pedestal
Inc. (internet-based mortgage
trading company) (2000 - 2002)
------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (60) Trustee Class III Trustee since President, Bush International, LLC Director of Marriott
2004. Term expires (international financial advisory International, Inc.,
in 2009. firm) Director of Discover
Financial Services (credit
card issuer and electronic
payment services); Director
of Briggs & Stratton Co.
(engine manufacturer);
Director of UAL Corporation
(airline holding company)
Director of Mantech
International Corporation
(national security,
defense, and intelligence
technology firm); and
Member, Board of Governors,
Investment Company
Institute
------------------------------------------------------------------------------------------------------------------------------------
48 Pioneer Floating Rate Trust | Annual Report | 11/30/08
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age with the Trust and Term of Office During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman Trustee Class II Trustee since Professor, Harvard University Trustee, Mellon
(64) September, 2008. Term Institutional Funds
expires in 2011. Investment Trust and Mellon
Institutional Funds Master
Portfolio (oversees 17
portfolios in fund complex)
------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham Trustee Class II Trustee since Founding Director, Vice-President None
(61) 2004. Term expires and Corporate Secretary, The
in 2011. Winthrop Group, Inc. (consulting
firm); and Desautels Faculty of
Management, McGill University
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (58) Trustee Class III Trustee since Chief Executive Officer of None
2006. Term expires Quadriserv, Inc. (technology
in 2009. products for securities lending
industry) Private investor (2004 -
2008); and Senior Executive Vice
President, The Bank of New York
(financial and securities services)
(1986 - 2004)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret Trustee Class III Trustee since President and Chief Executive Director of New America
(60) 2004. Term expires Officer, Newbury, Piret & Company, High Income Fund, Inc.
in 2009. Elected by Inc. (investment banking firm) (closed-end investment
Preferred Shares only. company)
------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (80) Trustee Class I Trustee since Senior Counsel, Sullivan & Cromwell Director, The Swiss
2004. Term expires LLP (law firm) Helvetia Fund, Inc.
in 2010. (closed-end investment
company)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Floating Rate Trust | Annual Report | 11/30/08 49
Trust Officers
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age with the Trust and Term of Office During Past Five Years Held by this Officer
------------------------------------------------------------------------------------------------------------------------------------
Dorothy E. Bourassa (60) Secretary Since 2004. Serves Secretary of PIM-USA; Senior Vice None
at the discretion of President - Legal of Pioneer;
the Board. Secretary/Clerk of most of
PIM-USA's subsidiaries; and
Secretary of all of the Pioneer
Funds since September 2003
(Assistant Secretary from November
2000 to September 2003)
------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley Assistant Secretary Since 2004. Serves Associate General Counsel of None
(43) at the discretion of Pioneer since January 2008 and
the Board. Assistant Secretary of all of the
Pioneer Funds since September
2003; Vice President and Senior
Counsel of Pioneer from July 2002
to December 2007
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (49) Treasurer Since 2008. Serves at Vice President - Fund Accounting, None
the discretion of the Administration and Controllership
Board. Services of Pioneer; and Treasurer
of all of the Pioneer Funds since
March 2008; Deputy Treasurer of
Pioneer from March 2004 to
February 2008; Assistant Treasurer
of all of the Pioneer Funds from
March 2004 to February 2008; and
Treasurer and Senior Vice
President, CDC IXIS Asset
Management Services from 2002 to
2003
------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (43) Assistant Treasurer Since 2004. Serves Assistant Vice President - Fund None
at the discretion of Accounting, Administration and
the Board. Controllership Services of
Pioneer; and Assistant Treasurer
of all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (50) Assistant Treasurer Since 2004. Serves Fund Accounting Manager - Fund None
at the discretion of Accounting, Administration and
the Board. Controllership Services of
Pioneer; and Assistant Treasurer
of all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
50 Pioneer Floating Rate Trust | Annual Report | 11/30/08
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age with the Trust and Term of Office During Past Five Years Held by this Officer
------------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan Assistant Treasurer Since 2004. Serves Fund Administration Manager - Fund None
(34) at the discretion of Accounting, Administration and
the Board. Controllership Services since June
2003 and Assistant Treasurer of
all of the Pioneer Funds since
September 2003; Assistant Vice
President - Mutual Fund Operations
of State Street Corporation from
June 2002 to June 2003 (formerly
Deutsche Bank Asset Management)
------------------------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (49) Chief Compliance Since January 2007. Chief Compliance Officer of None
Officer Serves at the Pioneer since December 2006 and of
discretion of the Board. all the Pioneer Funds since
January 2007; Vice President and
Compliance Officer, MFS Investment
Management (August 2005 to
December 2006); Consultant,
Fidelity Investments (February
2005 to July 2005); Independent
Consultant (July 1997 to February
2005)
------------------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the Trust's investment adviser and
certain of its affiliates.
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly owned by UniCredit S.p.A. ("UniCredit"), one of the
largest banking groups in Italy. Pioneer, the Trust's investment adviser, provides investment management and financial services to
mutual funds, institutional and other clients.
Pioneer Floating Rate Trust | Annual Report | 11/30/08 51
This page for your notes.
52 Pioneer Floating Rate Trust | Annual Report | 11/30/08
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 1-800-231-5469
(TDD)
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
This report must be preceded or accompanied by a prospectus.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
The Trust's Chief Executive Officer is required by the New York Stock Exchange's
Listing Standards to file annually with the Exchange a certification that he is
not aware of any violation by the Trust of the Exchange's Corporate Governance
Standards applicable to the Trust. The Trust has signed such certification.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Fund, including fees associated
with the filings of its Form N-1A, totaled approximately $48,700 in
2008 and approximately $45,735 in 2007.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit related fees for the Fund's audit related services totaled
approximately $9,650 and $9,285 in 2008 and 2007,
respectively.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns, totaled
$8,290 in 2008 and $7,820 in 2007.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after
May 6, 2003, the effective date of the new SEC pre-approval rules, the
Fund's audit committee is required to pre-approve services to affiliates
defined by SEC rules to the extent that the services are determined to
have a direct impact on the operations or financial reporting of the
Fund. For the years ended November 30, 2008 and 2007, there were
no services provided to an affiliate that required the Fund's audit
committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Fund and affiliates, as previously
defined, totaled approximately $17,940 in 2008 and $17,105 in 2007.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has considered
whether the provision of non-audit services that were rendered to the
Affiliates (as defined) that were not pre- approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
The registrant has a separately-designated standing audit
committe eestablished in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managers. The table below indicates, for
each portfolio manager of the fund, information about the accounts other than
the fund over which the portfolio manager has day-to-day investment
responsibility. All information on the number of accounts and total assets in
the table is as of November 30, 2008. For purposes of the table, "Other Pooled
Investment Vehicles" may include investment partnerships, undertakings for
collective investments in transferable securities ("UCITS") and other non-U.S.
investment funds and group trusts, and "Other Accounts" may include separate
accounts for institutions or individuals, insurance company general or separate
accounts, pension funds and other similar institutional accounts but generally
do not include the portfolio manager's personal investment accounts or those
which the manager may be deemed to own beneficially under the code of ethics.
Certain funds and other accounts managed by the portfolio manager may have
substantially similar investment strategies.
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
(in millions) Advisory Fee is Performance-Based
Performance-Based
(in millions)
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Mark Okada Other Registered 6 $2,913 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 33 $20,422 29 $19,463
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 0 $0 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
(in millions) Advisory Fee is Performance-Based
Performance-Based
(in millions)
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Joseph Dougherty Other Registered 11 $3,548 2 $143
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 $0 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 0 $0 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
(in millions) Advisory Fee is Performance-Based
Performance-Based
(in millions)
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Brad Borud Other Registered 14 $4,140 2 $143
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 $0 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 0 $0 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Potential Conflicts of Interest. When a portfolio manager is responsible for the
management of more than one account, the potential arises for the portfolio
manager to favor one account over another. The principal types of potential
conflicts of interest that may arise are discussed below. For the reasons
outlined below, Pioneer does not believe that any material conflicts are likely
to arise out of a portfolio manager's responsibility for the management of the
fund as well as one or more other accounts. Although Pioneer has adopted
procedures that it believes are reasonably designed to detect and prevent
violations of the federal securities laws and to mitigate the potential for
conflicts of interest to affect its portfolio management decisions, there can be
no assurance that all conflicts will be identified or that all procedures will
be effective in mitigating the potential for such risks. Generally, the risks of
such conflicts of interest are increased to the extent that a portfolio manager
has a financial incentive to favor one account over another. Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interest. The fund's investment subadviser also
has adopted certain compliance procedures which are designed to address these
types of conflicts. However, there is no guarantee that such procedures will
detect each situation in which a conflict might arise. See "Compensation of
Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating
new investment opportunities that have limited supply, such as initial
public offerings and private placements. If, for example, an initial
public offering that was expected to appreciate in value significantly
shortly after the offering was allocated to a single account, that
account may be expected to have better investment performance than other
accounts that did not receive an allocation of the initial public
offering. Generally, investments for which there is limited availability
are allocated based upon a range of factors including available cash and
consistency with the accounts' investment objectives and policies. This
allocation methodology necessarily involves some ubjective elements but
is intended over time to treat each client in an equitable and fair
manner. Generally, the investment opportunity is allocated among
participating accounts on a pro rata basis. Although Pioneer believes
that its practices are reasonably designed to treat each client in an
equitable and fair manner, there may be instances where a fund may not
participate, or may participate to a lesser degree than other clients,
in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager
determines to purchase a security for more than one account in an
aggregate amount that may influence the market price of the security,
accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions. The
less liquid the market for the security or the greater the percentage
that the proposed aggregate purchases or sales represent of average
daily trading volume, the greater the potential for accounts that
make subsequent purchases or sales to receive a less favorable price.
When a portfolio manager intends to trade the same security on the same
day for more than one account, the trades typically are "bunched," which
means that the trades for the individual accounts are aggregated and
each account receives the same price. There are some types of accounts
as to which bunching may not be possible for contractual reasons (such
as directed brokerage arrangements). Circumstances may also arise where
the trader believes that bunching the orders may not result in the best
possible price. Where those accounts or circumstances are involved,
Pioneer will place the order in a manner intended to result in as
favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater
degree than other accounts managed by the portfolio manager. If, for
example, the portfolio manager receives a bonus based upon the
performance of certain accounts relative to a benchmark while other
accounts are disregarded for this purpose, the portfolio manager will
have a financial incentive to seek to have the accounts that determine
the portfolio manager's bonus achieve the best possible performance to
the possible detriment of other accounts. Similarly, if Pioneer receives
a performance-based advisory fee, the portfolio manager may favor that
account, whether or not the performance of that account directly
determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has
a beneficial interest in the account, in order to benefit a large client
or to compensate a client that had poor returns. For example, if the
portfolio manager held an interest in an investment partnership that was
one of the accounts managed by the portfolio manager, the portfolio
manager would have an economic incentive to favor the account in which
the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise.
For example, if a portfolio manager purchases a security for one account
and sells the same security for another account, such trading pattern
may disadvantage either the account that is long or short. In making
portfolio manager assignments, Pioneer seeks to avoid such potentially
conflicting situations. However, where a portfolio manager is
responsible for accounts with differing investment objectives and
policies, it is possible that the portfolio manager will conclude that
it is in the best interest of one account to sell a portfolio security
while another account continues to hold or increase the holding in such
security.
Compensation of Portfolio Managers. Pioneer has adopted a system of compensation
for portfolio managers that seeks to align the financial interests of the
portfolio managers with those of shareholders of the accounts (including Pioneer
funds) the portfolio managers manage, as well as with the financial performance
of Pioneer. The compensation program for all Pioneer portfolio managers includes
a base salary (determined by the rank and tenure of the employee) and an annual
bonus program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Pioneer seeks to set base compensation at market rates, taking
into account the experience and responsibilities of the portfolio manager. The
bonus plan is intended to provide a competitive level of annual bonus
compensation that is tied to the portfolio manager achieving superior investment
performance and align the interests of the investment professional with those of
shareholders, as well as with the financial performance of Pioneer. Any bonus
under the plan is completely discretionary, with a maximum annual bonus that may
be in excess of base salary. The annual bonus is based upon a combination of the
following factors:
o Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax investment performance of
all of the accounts managed by the portfolio manager (which includes
the fund and any other accounts managed by the portfolio manager) over
a one-year period (20% weighting) and four-year period (80% weighting),
measured for periods ending on December 31. The accounts, which include
the fund, are ranked against a group of mutual funds with similar
investment objectives and investment focus (60%) and a broad-based
securities market index measuring the performance of the same type of
securities in which the accounts invest (40%), which, in the case of
the fund, is the CSFB Leveraged Loan Index. As a result of these two
benchmarks, the performance of the portfolio manager for compensation
purposes is measured against the criteria that are relevant to the
portfolio manager's competitive universe.
o Qualitative Performance. The qualitative performance component with
respect to all of the accounts managed by the portfolio manager
includes objectives, such as effectiveness in the areas of teamwork,
leadership, communications and marketing, that are mutually established
and evaluated by each portfolio manager and management.
o Pioneer Results and Business Line Results. Pioneer's financial
performance, as well as the investment performance of its investment
management group, affect a portfolio manager's actual bonus by a
leverage factor of plus or minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers may participate in other programs designed to reward
and retain key contributors. Senior executives or other key employees may be
granted performance units based on the stock price performance of UniCredit and
the financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
Share Ownership by Portfolio Manager. The following table indicates as of
November 30, 2008 the value, within the indicated range, of shares beneficially
owned by the portfolio manager of the fund.
---------------------------------------- ----------------------------------------------------------------
Name of Portfolio Manager Beneficial Ownership of the Fund*
---------------------------------------- ----------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------
Mark Okada C
---------------------------------------- ----------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------
Joseph Dougherty C
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Brad Borud A
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*Key to Ranges
A. None B. $1 - $10,000 C. $10,001 - $50,000 D. $50,001 - $100,000
E. $100,001 - $500,000 F. $500,001 - $1,000,000 G. Over $1,000,000
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The Principal Executive and Financial Officers concluded
that the Registrant's Disclosure Controls and Procedures are
effective based on the evaluation of the Disclosure Controls
and Procedures as of a date within 90 days of the filing date
of this report.
During the filing period of the report, fund management
identified a significant deficiency relating to the execution
of an existing control relating to the sub-adviser's review of
portfolio holdings. This deficiency did not materially
impact the accuracy of the fund's financial statements
attached in Item 1. There was no material impact to the
shareholders and fund management discussed this matter
with the Registrant's Audit Committee and auditors. The
control structure has been altered as disclosed in Item 11(b)
below.
(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 have been no significant changes in the Registrant's
internal control over financial reporting that occurred during the
Registrant's second fiscal quarter covered by this report that
have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over
financial reporting.
As referenced above, on November 11, 2008, the Board of
Trustees determined not to continue the investment sub-
advisory agreement with the sub-adviser. The sub-advisory
agreement terminated in accordance with its terms on
December 31, 2008. On January 1, 2009, the Registrant's
investment adviser assumed full responsibility for the day-
to-day investment management of the Registrant and
therefore the former sub-adviser's controls no longer affect
the Registrant's internal controls over financial reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Floating Rate Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date January 28, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date January 28, 2009
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date January 28, 2009
* Print the name and title of each signing officer under his or her signature.