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: 811-22821
Eaton Vance Floating-Rate Income Plus Fund
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number)
May 31
Date of Fiscal Year End
November 30, 2017
Date of Reporting Period
Item 1. Reports to Stockholders
Eaton Vance
Floating-Rate Income Plus
Fund (EFF)
Semiannual Report
November 30, 2017
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator and a commodity trading advisor.
Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.
Semiannual Report November 30, 2017
Eaton Vance
Floating-Rate Income Plus Fund
Table of Contents
| Performance |
2 | |||
| Fund Profile |
2 | |||
| Endnotes and Additional Disclosures |
3 | |||
| Financial Statements |
4 | |||
| Officers and Trustees |
37 | |||
| Important Notices |
38 | |||
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Performance1,2
Portfolio Managers Scott H. Page, CFA, Craig P. Russ and Kathleen C. Gaffney, CFA
| % Average Annual Total Returns | Inception Date | Six Months | One Year | Five Years | Since Inception |
|||||||||||||||
| Fund at NAV |
06/28/2013 | 2.73 | % | 7.87 | % | — | 5.48 | % | ||||||||||||
| Fund at Market Price |
— | –4.27 | 4.34 | — | 3.04 | |||||||||||||||
| S&P/LSTA Leveraged Loan Index |
— | 1.72 | % | 4.91 | % | 4.11 | % | 3.94 | % | |||||||||||
| % Premium/Discount to NAV3 | ||||||||||||||||||||
| –9.83 | % | |||||||||||||||||||
| Distributions4 | ||||||||||||||||||||
| Total Distributions per share for the period |
$0.468 | |||||||||||||||||||
| Distribution Rate at NAV |
5.03 | % | ||||||||||||||||||
| Distribution Rate at Market Price |
5.57 | % | ||||||||||||||||||
| % Total Leverage5 | ||||||||||||||||||||
| Borrowings |
25.80 | % | ||||||||||||||||||
| Variable Rate Term Preferred Shares (VRTP Shares) |
9.08 | |||||||||||||||||||
Fund Profile
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
| 2 |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Endnotes and Additional Disclosures
| 3 |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited)
| 4 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 5 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 6 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 7 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 8 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 9 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 10 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 11 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 12 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 13 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 14 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 15 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 16 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 17 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 18 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 19 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 20 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| 21 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Portfolio of Investments (Unaudited) — continued
| Forward Foreign Currency Exchange Contracts | ||||||||||||||||||||||||
| Currency Purchased | Currency Sold | Counterparty | Settlement Date |
Unrealized Appreciation |
Unrealized (Depreciation) |
|||||||||||||||||||
| JPY | 7,844,000 | USD | 69,346 | Bank of America, N.A. | 1/31/18 | $ | 580 | $ | — | |||||||||||||||
| USD | 433,707 | JPY | 49,136,000 | Bank of America, N.A. | 1/31/18 | — | (4,319 | ) | ||||||||||||||||
| $ | 580 | $ | (4,319 | ) | ||||||||||||||||||||
Abbreviations:
| ADR | – | American Depositary Receipt | ||
| LIBOR | – | London Interbank Offered Rate | ||
| PIK | – | Payment In Kind |
Currency Abbreviations:
| 22 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Statement of Assets and Liabilities (Unaudited)
| Assets | November 30, 2017 | |||
| Unaffiliated investments, at value (identified cost, $207,241,762) |
$ | 204,913,730 | ||
| Affiliated investment, at value (identified cost, $4,682,277) |
4,682,276 | |||
| Cash |
1,115,634 | |||
| Interest and dividends receivable |
1,007,144 | |||
| Dividends receivable from affiliated investment |
4,079 | |||
| Receivable for investments sold |
1,748,616 | |||
| Receivable for open forward foreign currency exchange contracts |
580 | |||
| Tax reclaims receivable |
907 | |||
| Prepaid upfront fees on variable rate term preferred shares |
58,456 | |||
| Prepaid upfront fees on notes payable |
18,144 | |||
| Prepaid expenses |
6,518 | |||
| Total assets |
$ | 213,556,084 | ||
| Liabilities | ||||
| Notes payable |
$ | 54,000,000 | ||
| Variable rate term preferred shares, at liquidation value (net of unamortized deferred debt issuance costs of $65,919) |
18,934,081 | |||
| Payable for investments purchased |
3,714,063 | |||
| Payable for open forward foreign currency exchange contracts |
4,319 | |||
| Due to custodian — foreign currency, at value (identified cost, $770) |
860 | |||
| Payable to affiliates: |
||||
| Investment adviser fee |
129,100 | |||
| Trustees’ fees |
1,964 | |||
| Interest expense and fees payable |
360,795 | |||
| Accrued foreign capital gains taxes |
512 | |||
| Accrued expenses |
147,921 | |||
| Total liabilities |
$ | 77,293,615 | ||
| Net assets applicable to common shares |
$ | 136,262,469 | ||
| Sources of Net Assets | ||||
| Common shares, $0.01 par value, unlimited number of shares authorized, 7,606,422 shares issued and outstanding |
$ | 76,064 | ||
| Additional paid-in capital |
144,209,718 | |||
| Accumulated net realized loss |
(5,478,517 | ) | ||
| Accumulated distributions in excess of net investment income |
(210,402 | ) | ||
| Net unrealized depreciation |
(2,334,394 | ) | ||
| Net assets applicable to common shares |
$ | 136,262,469 | ||
| Net Asset Value Per Common Share | ||||
| ($136,262,469 ÷ 7,606,422 common shares issued and outstanding) |
$ | 17.91 | ||
| 23 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Statement of Operations (Unaudited)
| Investment Income | Six Months Ended November 30, 2017 |
|||
| Interest and other income |
$ | 5,020,522 | ||
| Dividends (net of foreign taxes, $4,060) |
284,789 | |||
| Dividends from affiliated investment |
28,959 | |||
| Total investment income |
$ | 5,334,270 | ||
| Expenses | ||||
| Investment adviser fee |
$ | 790,697 | ||
| Trustees’ fees and expenses |
5,825 | |||
| Custodian fee |
80,843 | |||
| Transfer and dividend disbursing agent fees |
9,772 | |||
| Legal and accounting services |
54,930 | |||
| Printing and postage |
20,009 | |||
| Interest expense and fees |
961,015 | |||
| Miscellaneous |
26,457 | |||
| Total expenses |
$ | 1,949,548 | ||
| Net investment income |
$ | 3,384,722 | ||
| Realized and Unrealized Gain (Loss) | ||||
| Net realized gain (loss) — |
||||
| Investment transactions |
$ | (683,346 | ) | |
| Investment transactions — affiliated investment |
(1,254 | ) | ||
| Foreign currency transactions |
2,987 | |||
| Forward foreign currency exchange contracts |
15,465 | |||
| Net realized loss |
$ | (666,148 | ) | |
| Change in unrealized appreciation (depreciation) — |
||||
| Investments (including net increase of $236 in accrued foreign capital gains taxes) |
$ | 758,906 | ||
| Investments — affiliated investment |
(351 | ) | ||
| Foreign currency |
(3,777 | ) | ||
| Forward foreign currency exchange contracts |
(2,040 | ) | ||
| Net change in unrealized appreciation (depreciation) |
$ | 752,738 | ||
| Net realized and unrealized gain |
$ | 86,590 | ||
| Net increase in net assets from operations |
$ | 3,471,312 | ||
| 24 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Statements of Changes in Net Assets
| Increase (Decrease) in Net Assets | Six Months Ended November 30, 2017 |
Year Ended May 31, 2017 |
||||||
| From operations — |
||||||||
| Net investment income |
$ | 3,384,722 | $ | 7,209,735 | ||||
| Net realized loss |
(666,148 | ) | (139,379 | ) | ||||
| Net change in unrealized appreciation (depreciation) |
752,738 | 10,502,864 | ||||||
| Net increase in net assets from operations |
$ | 3,471,312 | $ | 17,573,220 | ||||
| Distributions to common shareholders — |
||||||||
| From net investment income |
$ | (3,559,806 | ) | $ | (7,475,035 | ) | ||
| Tax return of capital |
— | (78,142 | ) | |||||
| Total distributions to common shareholders |
$ | (3,559,806 | ) | $ | (7,553,177 | ) | ||
| Net increase (decrease) in net assets |
$ | (88,494 | ) | $ | 10,020,043 | |||
| Net Assets Applicable to Common Shares | ||||||||
| At beginning of period |
$ | 136,350,963 | $ | 126,330,920 | ||||
| At end of period |
$ | 136,262,469 | $ | 136,350,963 | ||||
| Accumulated distributions in excess of net investment income included in net assets applicable to common shares |
||||||||
| At end of period |
$ | (210,402 | ) | $ | (35,318 | ) | ||
| 25 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Statement of Cash Flows (Unaudited)
| Cash Flows From Operating Activities | Six Months Ended November 30, 2017 |
|||
| Net increase in net assets from operations |
$ | 3,471,312 | ||
| Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: |
||||
| Investments purchased |
(34,949,289 | ) | ||
| Investments sold and principal repayments |
34,689,089 | |||
| Decrease in short-term investments, net |
681,244 | |||
| Net amortization/accretion of premium (discount) |
(138,925 | ) | ||
| Amortization of prepaid upfront fees on variable rate term preferred shares |
15,850 | |||
| Amortization of deferred debt issuance costs on variable rate term preferred shares |
18,005 | |||
| Amortization of prepaid upfront fees on notes payable |
32,208 | |||
| Decrease in interest and dividends receivable |
24,206 | |||
| Increase in dividends receivable from affiliated investment |
(36 | ) | ||
| Increase in receivable for open forward foreign currency exchange contracts |
(580 | ) | ||
| Increase in tax reclaims receivable |
(51 | ) | ||
| Increase in prepaid expenses |
(467 | ) | ||
| Increase in payable for open forward foreign currency exchange contracts |
2,620 | |||
| Decrease in payable to affiliate for investment adviser fee |
(4,085 | ) | ||
| Decrease in payable to affiliate for Trustees’ fees |
(135 | ) | ||
| Increase in interest expense and fees payable |
172,780 | |||
| Increase in accrued expenses |
42,173 | |||
| Decrease in unfunded loan commitments |
(44,976 | ) | ||
| Net change in unrealized (appreciation) depreciation from investments |
(758,555 | ) | ||
| Net realized loss from investments |
684,600 | |||
| Net cash provided by operating activities |
$ | 3,936,988 | ||
| Cash Flows From Financing Activities | ||||
| Distributions paid to common shareholders, net of reinvestments |
$ | (3,559,806 | ) | |
| Proceeds from notes payable |
2,000,000 | |||
| Repayments of notes payable |
(2,000,000 | ) | ||
| Increase in due to custodian — foreign currency |
48 | |||
| Net cash used in financing activities |
$ | (3,559,758 | ) | |
| Net increase in cash |
$ | 377,230 | ||
| Cash at beginning of period |
$ | 738,404 | ||
| Cash at end of period |
$ | 1,115,634 | ||
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for interest and fees on borrowings and variable rate term preferred shares |
$ | 722,172 | ||
| 26 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Financial Highlights
Selected data for a common share outstanding during the periods stated
| Six Months Ended November 30, 2017 (Unaudited) |
Year Ended May 31, | Period Ended May 31, 2014(1) |
||||||||||||||||||
| 2017 | 2016 | 2015 | ||||||||||||||||||
| Net asset value — Beginning of period (Common shares) |
$ | 17.930 | $ | 16.610 | $ | 18.390 | $ | 19.560 | $ | 19.100 | (2) | |||||||||
| Income (Loss) From Operations | ||||||||||||||||||||
| Net investment income(3) |
$ | 0.445 | $ | 0.948 | $ | 1.058 | $ | 1.114 | $ | 0.989 | ||||||||||
| Net realized and unrealized gain (loss) |
0.003 | 1.365 | (1.724 | ) | (0.867 | ) | 0.511 | |||||||||||||
| Total income (loss) from operations |
$ | 0.448 | $ | 2.313 | $ | (0.666 | ) | $ | 0.247 | $ | 1.500 | |||||||||
| Less Distributions to Common Shareholders | ||||||||||||||||||||
| From net investment income |
$ | (0.468 | ) | $ | (0.983 | ) | $ | (1.114 | ) | $ | (1.134 | ) | $ | (0.974 | ) | |||||
| From net realized gain |
— | — | — | (0.283 | ) | — | ||||||||||||||
| Tax return of capital |
— | (0.010 | ) | — | — | — | ||||||||||||||
| Total distributions to common shareholders |
$ | (0.468 | ) | $ | (0.993 | ) | $ | (1.114 | ) | $ | (1.417 | ) | $ | (0.974 | ) | |||||
| Common shares offering costs charged to paid-in capital(3) |
$ | — | $ | — | $ | — | $ | — | $ | (0.041 | ) | |||||||||
|
Discount related to exercise of underwriters’ over-allotment option(3) |
$ | — | $ | — | $ | — | $ | — | $ | (0.025 | ) | |||||||||
| Net asset value — End of period (Common shares) |
$ | 17.910 | $ | 17.930 | $ | 16.610 | $ | 18.390 | $ | 19.560 | ||||||||||
| Market value — End of period (Common shares) |
$ | 16.150 | $ | 17.350 | $ | 15.240 | $ | 16.970 | $ | 17.950 | ||||||||||
| Total Investment Return on Net Asset Value(4) |
2.73 | %(5) | 14.69 | % | (2.60 | )% | 2.15 | % | 8.00 | %(5)(6) | ||||||||||
| Total Investment Return on Market Value(4) |
(4.27 | )%(5) | 20.96 | % | (3.15 | )% | 2.71 | % | (0.89 | )%(5)(6) | ||||||||||
| 27 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Financial Highlights — continued
Selected data for a common share outstanding during the periods stated
| Six Months Ended November 30, 2017 (Unaudited) |
Year Ended May 31, | Period Ended May 31, 2014(1) |
||||||||||||||||||
| Ratios/Supplemental Data | 2017 | 2016 | 2015 | |||||||||||||||||
| Net assets applicable to common shares, end of period (000’s omitted) |
$ | 136,262 | $ | 136,351 | $ | 126,331 | $ | 139,902 | $ | 148,770 | ||||||||||
| Ratios (as a percentage of average daily net assets applicable to common shares):† |
||||||||||||||||||||
| Expenses excluding interest and fees(7) |
1.44 | %(8) | 1.48 | % | 1.63 | % | 1.55 | % | 1.54 | %(8) | ||||||||||
| Interest and fee expense(9) |
1.41 | %(8) | 1.17 | % | 0.99 | % | 0.84 | % | 0.76 | %(8) | ||||||||||
| Total expenses(7) |
2.85 | %(8) | 2.65 | % | 2.62 | % | 2.39 | % | 2.30 | %(8) | ||||||||||
| Net investment income |
4.95 | %(8) | 5.40 | % | 6.35 | % | 5.91 | % | 5.49 | %(8) | ||||||||||
| Portfolio Turnover |
16 | %(5) | 52 | % | 29 | % | 28 | % | 37 | %(5) | ||||||||||
| Senior Securities: |
||||||||||||||||||||
| Total notes payable outstanding (in 000’s) |
$ | 54,000 | $ | 54,000 | $ | 34,000 | $ | 54,000 | $ | 54,000 | ||||||||||
| Asset coverage per $1,000 of notes payable(10) |
$ | 3,875 | $ | 3,877 | $ | 5,774 | $ | 4,257 | $ | 4,422 | ||||||||||
| Total preferred shares outstanding(11) |
190 | 190 | 360 | 360 | 360 | |||||||||||||||
| Asset coverage per preferred share(11)(12) |
$ | 286,661 | $ | 286,782 | $ | 280,473 | $ | 255,447 | $ | 265,300 | ||||||||||
| Involuntary liquidation preference per preferred share(11) |
$ | 100,000 | $ | 100,000 | $ | 100,000 | $ | 100,000 | $ | 100,000 | ||||||||||
| Approximate market value per preferred share(11) |
$ | 100,000 | $ | 100,000 | $ | 100,000 | $ | 100,000 | $ | 100,000 | ||||||||||
| (1) | For the period from the start of business, June 28, 2013, to May 31, 2014. |
| (2) | Net asset value at beginning of period reflects the deduction of the sales load of $0.90 per share paid by the shareholders from the $20.00 offering price. |
| (3) | Computed using average common shares outstanding. |
| (4) | Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. |
| (5) | Not annualized. |
| (6) | Total investment return on net asset value is calculated assuming a purchase at the offering price of $20.00 less the sales load of $0.90 per share paid by the shareholders on the first day and a sale at the net asset value on the last day of the period reported with all distributions reinvested. Total investment return on market value is calculated assuming a purchase at the offering price of $20.00 less the sales load of $0.90 per share paid by the shareholders on the first day and a sale at the current market price on the last day of the period reported with all distributions reinvested. |
| (7) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
| (8) | Annualized. |
| (9) | Interest and fee expense relates to variable rate term preferred shares and borrowings (see Note 2 and Note 8). Effective June 1, 2016, the ratio includes amortization of deferred debt issuance costs. For periods prior to June 1, 2016, amortization of deferred debt issuance costs was included in the ratio of expenses excluding interest and fees. |
| (10) | Calculated by subtracting the Fund’s total liabilities (not including the notes payable and preferred shares) from the Fund’s total assets, and dividing the result by the notes payable balance in thousands. |
| (11) | Preferred shares represent variable rate term preferred shares. |
| (12) | Calculated by subtracting the Fund’s total liabilities (not including the notes payable and preferred shares) from the Fund’s total assets, dividing the result by the sum of the value of the notes payable and liquidation value of the preferred shares, and multiplying the result by the liquidation value of one preferred share. Such amount equates to 287%, 287%, 280%, 255% and 265% at November 30, 2017 and May 31, 2017, 2016, 2015 and 2014, respectively. |
| † | Ratios based on net assets applicable to common shares plus preferred shares and borrowings are presented below. Ratios exclude the effect of custody fee credits, if any. Ratios for periods less than one year are annualized. |
| Six Months Ended November 30, 2017 (Unaudited) |
Year Ended May 31, | Period Ended May 31, 2014 |
||||||||||||||||||
| 2017 | 2016 | 2015 | ||||||||||||||||||
| Expenses excluding interest and fees |
0.94 | % | 0.98 | % | 0.99 | % | 0.95 | % | 0.98 | % | ||||||||||
| Interest and fee expense |
0.91 | % | 0.77 | % | 0.60 | % | 0.52 | % | 0.49 | % | ||||||||||
| Total expenses |
1.85 | % | 1.75 | % | 1.59 | % | 1.47 | % | 1.47 | % | ||||||||||
| Net investment income |
3.21 | % | 3.56 | % | 3.87 | % | 3.63 | % | 3.52 | % | ||||||||||
| 28 | See Notes to Financial Statements. |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Floating-Rate Income Plus Fund (the Fund) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, closed-end management investment company. The Fund’s investment objective is total return, with an emphasis on income.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Senior Floating-Rate Loans. Interests in senior floating-rate loans (Senior Loans) for which reliable market quotations are readily available are valued generally at the average mean of bid and ask quotations obtained from a third party pricing service. Other Senior Loans are valued at fair value by the investment adviser under procedures approved by the Trustees. In fair valuing a Senior Loan, the investment adviser utilizes one or more of the valuation techniques described in (i) through (iii) below to assess the likelihood that the borrower will make a full repayment of the loan underlying such Senior Loan relative to yields on other Senior Loans issued by companies of comparable credit quality. If the investment adviser believes that there is a reasonable likelihood of full repayment, the investment adviser will determine fair value using a matrix pricing approach that considers the yield on the Senior Loan. If the investment adviser believes there is not a reasonable likelihood of full repayment, the investment adviser will determine fair value using analyses that include, but are not limited to: (i) a comparison of the value of the borrower’s outstanding equity and debt to that of comparable public companies; (ii) a discounted cash flow analysis; or (iii) when the investment adviser believes it is likely that a borrower will be liquidated or sold, an analysis of the terms of such liquidation or sale. In certain cases, the investment adviser will use a combination of analytical methods to determine fair value, such as when only a portion of a borrower’s assets are likely to be sold. In conducting its assessment and analyses for purposes of determining fair value of a Senior Loan, the investment adviser will use its discretion and judgment in considering and appraising relevant factors. Fair value determinations are made by the portfolio managers of the Fund based on information available to such managers. The portfolio managers of other funds managed by the investment adviser that invest in Senior Loans may not possess the same information about a Senior Loan borrower as the portfolio managers of the Fund. At times, the fair value of a Senior Loan determined by the portfolio managers of other funds managed by the investment adviser that invest in Senior Loans may vary from the fair value of the same Senior Loan determined by the portfolio managers of the Fund. The fair value of each Senior Loan is periodically reviewed and approved by the investment adviser’s Valuation Committee and by the Trustees based upon procedures approved by the Trustees. Junior Loans (i.e., subordinated loans and second lien loans) are valued in the same manner as Senior Loans.
Debt Obligations. Debt obligations are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and asked prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term obligations purchased with a remaining maturity of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and asked prices therefore on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and asked prices or, in the case of preferred equity securities that are not listed or traded in the over-the-counter market, by a third party pricing service that uses various techniques that consider factors including, but not limited to, prices or yields of securities with similar characteristics, benchmark yields, broker/dealer quotes, quotes of underlying common stock, issuer spreads, as well as industry and economic events.
Derivatives. Forward foreign currency exchange contracts are generally valued at the mean of the average bid and average asked prices that are reported by currency dealers to a third party pricing service at the valuation time. Such third party pricing service valuations are supplied for specific settlement periods and the Fund’s forward foreign currency exchange contracts are valued at an interpolated rate between the closest preceding and subsequent settlement period reported by the third party pricing service.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Trustees have approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
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Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that fairly reflects the security’s value, or the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount. Fees associated with loan amendments are recognized immediately. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Withholding taxes on foreign interest, dividends and capital gains have been provided for in accordance with the Fund’s understanding of the applicable countries’ tax rules and rates.
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
In addition to the requirements of the Internal Revenue Code, the Fund may also be subject to local taxes on the recognition of capital gains in certain countries. In determining the daily net asset value, the Fund estimates the accrual for such taxes, if any, based on the unrealized appreciation on certain portfolio securities and the related tax rates. Taxes attributable to unrealized appreciation are included in the change in unrealized appreciation (depreciation) on investments. Capital gains taxes on securities sold are included in net realized gain (loss) on investments.
As of November 30, 2017, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
F Unfunded Loan Commitments — The Fund may enter into certain loan agreements all or a portion of which may be unfunded. The Fund is obligated to fund these commitments at the borrower’s discretion. These commitments are disclosed in the accompanying Portfolio of Investments. At November 30, 2017, the Fund had sufficient cash and/or securities to cover these commitments.
G Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
H Indemnifications — Under the Fund’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Fund) could be deemed to have personal liability for the obligations of the Fund. However, the Fund’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Fund shall assume the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I Forward Foreign Currency Exchange Contracts — The Fund may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded as unrealized until such time as the contracts have been closed. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from movements in the value of a foreign currency relative to the U.S. dollar.
J Statement of Cash Flows — The cash amount shown in the Statement of Cash Flows of the Fund is the amount included in the Fund’s Statement of Assets and Liabilities and represents the unrestricted cash on hand at its custodian and does not include any short-term investments.
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Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
K Interim Financial Statements — The interim financial statements relating to November 30, 2017 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Variable Rate Term Preferred Shares
On July 10, 2013, the Fund issued 360 shares of Series C-1 Variable Rate Term Preferred Shares (Series C-1 VRTP Shares) in a private offering to a commercial paper conduit sponsored by a large financial institution (the Conduit). Variable rate term preferred shares are a form of preferred shares that represent stock of the Fund. They have a par value of $0.01 per share and a liquidation preference of $100,000 per share. The Series C-1 VRTP Shares also had an original mandatory redemption date of July 8, 2016 that had been extended on December 22, 2015 to January 8, 2017 and further extended on June 24, 2016 to April 7, 2017 upon consent of the holders of the Series C-1 VRTP Shares and approval of the Fund’s Board of Trustees.
On September 30, 2016, the Fund made a partial redemption of its Series C-1 VRTP Shares at a liquidation price of $100,000 per share, the financing for which was provided by a committed financing arrangement (see Note 8). The number of Series C-1 VRTP Shares redeemed on September 30, 2016 and redemption amount (excluding the final dividend payment) were as follows:
| Series C-1 VRTP Shares Redeemed |
170 | |||
| Redemption Amount |
$ | 17,000,000 |
Upon completion of the partial redemption of the Series C-1 VRTP Shares, the remaining 190 Series C-1 VRTP Shares were transferred to another large financial institution (the Assignee) on September 30, 2016 as permitted by the Fund’s By-laws. The transferred Series C-1 VRTP Shares were then exchanged for an equal number of Series L-2 Variable Rate Term Preferred Shares (Series L-2 VRTP Shares), and the mandatory redemption date was extended to three years from the date of transfer. In addition, beginning one year after the date of the transfer, the Assignee is permitted to accelerate the redemption date of the Series L-2 VRTP Shares to 365 days following delivery of a redemption notice to the Fund. Dividends on the Series L-2 VRTP Shares are determined each day based on a spread of 1.85% to three-month LIBOR. Such spread is determined based on the current credit rating of the Series L-2 VRTP Shares, which is provided by Moody’s Investors Service.
The Series L-2 VRTP Shares are redeemable at the option of the Fund at a redemption price equal to $100,000 per share, plus accumulated and unpaid dividends, on any business day and solely for the purpose of reducing the leverage of the Fund. The Series L-2 VRTP Shares are also subject to mandatory redemption at a redemption price equal to $100,000 per share, plus accumulated and unpaid dividends, if the Fund is in default for an extended period on its asset maintenance or leverage ratio requirements with respect to the Series L-2 VRTP Shares. Six months prior to the mandatory redemption date, the Fund is required to segregate in a liquidity account with its custodian investments equal to 110% of the Series L-2 VRTP Shares’ redemption price, and over the six month period execute a series of liquidation transactions to assure sufficient liquidity to redeem the Series L-2 VRTP Shares. The holders of the Series L-2 VRTP Shares, voting as a class, are entitled to elect two Trustees of the Fund. If the dividends on the Series L-2 VRTP Shares remain unpaid in an amount equal to two full years’ dividends, the holders of the Series L-2 VRTP Shares as a class have the right to elect a majority of the Board of Trustees.
For financial reporting purposes, the liquidation value of the Series L-2 VRTP Shares (net of unamortized deferred debt issuance costs) is presented as a liability on the Statement of Assets and Liabilities and unpaid dividends are included in interest expense and fees payable. Dividends accrued on the Series L-2 VRTP Shares are treated as interest payments for financial reporting purposes and are included in interest expense and fees on the Statement of Operations.
In connection with the transfer of the Series C-1 VRTP Shares to the Assignee on September 30, 2016, the Fund paid an upfront fee of $95,000 and debt issuance costs of $107,733, both of which are being amortized to interest expense and fees over a period of three years to September 30, 2019. The unamortized amount of the debt issuance costs as of November 30, 2017 is presented as a deduction of the liability for variable rate term preferred shares on the Statement of Assets and Liabilities.
The carrying amount of the Series L-2 VRTP Shares at November 30, 2017 represents its liquidation value, which approximates fair value. If measured at fair value, the Series L-2 VRTP Shares would have been considered as Level 2 in the fair value hierarchy (see Note 11) at November 30, 2017. The average liquidation preference of the Series L-2 VRTP Shares during the six months ended November 30, 2017 was $19,000,000.
3 Distributions to Shareholders and Income Tax Information
The Fund intends to make monthly distributions of net investment income to common shareholders, after payment of any dividends on any outstanding variable rate term preferred shares. In addition, at least annually, the Fund intends to distribute all or substantially all of its net realized capital gains. Distributions to common shareholders are recorded on the ex-dividend date. Dividends to variable rate term preferred shareholders are accrued daily and payable quarterly. The dividend rate on the Series L-2 VRTP Shares at November 30, 2017 was 3.34%. The amount of dividends accrued and the average annual dividend rate of the Series L-2 VRTP Shares during the six months ended November 30, 2017 were $307,420 and 3.23%, respectively.
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Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
At May 31, 2017, the Fund, for federal income tax purposes, had deferred capital losses of $4,665,609 which would reduce its taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Fund of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Fund’s next taxable year and retain the same short-term or long-term character as when originally deferred. Of the deferred capital losses at May 31, 2017, $4,665,609 are long-term.
Additionally, at May 31, 2017, the Fund had a late year ordinary loss of $915 which it has elected to defer to the following taxable year pursuant to income tax regulations. Late year ordinary losses represent certain specified losses realized in that portion of a taxable year after October 31 that are treated as ordinary for tax purposes plus ordinary losses attributable to that portion of a taxable year after December 31.
The cost and unrealized appreciation (depreciation) of investments, including open derivative contracts, of the Fund at November 30, 2017, as determined on a federal income tax basis, were as follows:
| Aggregate cost |
$ | 212,006,078 | ||
| Gross unrealized appreciation |
$ | 3,648,717 | ||
| Gross unrealized depreciation |
(6,062,528 | ) | ||
| Net unrealized depreciation |
$ | (2,413,811 | ) | |
4 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by EVM as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.75% of the Fund’s average daily total managed assets and is payable monthly. Total managed assets as referred to herein represent total assets of the Fund (including assets attributable to borrowings, any outstanding preferred shares, or other forms of leverage) less accrued liabilities (other than liabilities representing borrowings or such other forms of leverage). For the six months ended November 30, 2017, the Fund’s investment adviser fee amounted to $790,697. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. EVM also serves as administrator of the Fund, but receives no compensation.
Trustees and officers of the Fund who are members of EVM’s organization receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with EVM may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended November 30, 2017, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of EVM.
5 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations and including maturities, paydowns and principal repayments on Senior Loans, aggregated $32,188,207 and $36,088,142, respectively, for the six months ended November 30, 2017.
6 Common Shares of Beneficial Interest
The Fund may issue common shares pursuant to its dividend reinvestment plan. There were no common shares issued by the Fund for the six months ended November 30, 2017 and the year ended May 31, 2017.
On November 11, 2013, the Board of Trustees of the Fund authorized the repurchase by the Fund of up to 10% of its then currently outstanding common shares in open-market transactions at a discount to net asset value. The repurchase program does not obligate the Fund to purchase a specific amount of shares. There were no repurchases of common shares by the Fund for the six months ended November 30, 2017 and the year ended May 31, 2017.
7 Financial Instruments
The Fund may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. These financial instruments may include forward foreign currency exchange contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Fund has in particular classes of
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Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at November 30, 2017 is included in the Portfolio of Investments. At November 30, 2017, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
The Fund is subject to foreign exchange risk in the normal course of pursuing its investment objective. Because the Fund holds foreign currency denominated investments, the value of these investments and related receivables and payables may change due to future changes in foreign currency exchange rates. To hedge against this risk, the Fund enters into forward foreign currency exchange contracts.
The Fund enters into forward foreign currency exchange contracts that may contain provisions whereby the counterparty may terminate the contract under certain conditions, including but not limited to a decline in the Fund’s net assets below a certain level over a certain period of time, which would trigger a payment by the Fund for those derivatives in a liability position. At November 30, 2017, the fair value of derivatives with credit-related contingent features in a net liability position was $4,319. At November 30, 2017, there were no assets pledged by the Fund for such liability.
The over-the-counter (OTC) derivatives in which the Fund invests are subject to the risk that the counterparty to the contract fails to perform its obligations under the contract. To mitigate this risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with substantially all its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, set-off provisions in the event of a default and/or termination event as defined under the relevant ISDA Master Agreement. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy or insolvency. Certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event the Fund’s net assets decline by a stated percentage or the Fund fails to meet the terms of its ISDA Master Agreements, which would cause the counterparty to accelerate payment by the Fund of any net liability owed to it.
The collateral requirements for derivatives traded under an ISDA Master Agreement are governed by a Credit Support Annex to the ISDA Master Agreement. Collateral requirements are determined at the close of business each day and are typically based on changes in market values for each transaction under an ISDA Master Agreement and netted into one amount for such agreement. Generally, the amount of collateral due from or to a counterparty is subject to a minimum transfer threshold amount before a transfer is required, which may vary by counterparty. Collateral pledged for the benefit of the Fund and/or counterparty is held in segregated accounts by the Fund’s custodian and cannot be sold, re-pledged, assigned or otherwise used while pledged. The portion of such collateral representing cash, if any, is reflected as deposits for derivatives collateral and, in the case of cash pledged by a counterparty for the benefit of the Fund, a corresponding liability on the Statement of Assets and Liabilities. Securities pledged by the Fund as collateral, if any, are identified as such in the Portfolio of Investments.
The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk exposure is foreign exchange risk at November 30, 2017 was as follows:
| Fair Value | ||||||||
| Derivative | Asset Derivative(1) | Liability Derivative(2) | ||||||
| Forward foreign currency exchange contracts |
$ | 580 | $ | (4,319 | ) | |||
| (1) | Statement of Assets and Liabilities location: Receivable for open forward foreign currency exchange contracts; Net unrealized depreciation. |
| (2) | Statement of Assets and Liabilities location: Payable for open forward foreign currency exchange contracts; Net unrealized depreciation. |
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Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
The Fund’s derivative assets and liabilities at fair value by type, which are reported gross in the Statement of Assets and Liabilities, are presented in the table above. The following tables present the Fund’s derivative assets and liabilities by counterparty, net of amounts available for offset under a master netting agreement and net of the related collateral received by the Fund for such assets and pledged by the Fund for such liabilities as of November 30, 2017.
| Counterparty | Derivative Assets Subject to Master Netting Agreement |
Derivatives Available for Offset |
Non-cash Collateral Received(a) |
Cash Collateral Received(a) |
Net Amount of Derivative Assets(b) |
|||||||||||||||
| Bank of America, N.A. |
$ | 580 | $ | (580 | ) | $ | — | $ | — | $ | — | |||||||||
| Counterparty | Derivative Liabilities Subject to Master Netting Agreement |
Derivatives Available for Offset |
Non-cash Collateral Pledged(a) |
Cash Collateral Pledged(a) |
Net Amount of Derivative Liabilities(c) |
|||||||||||||||
| Bank of America, N.A. |
$ | (4,319 | ) | $ | 580 | $ | — | $ | — | $ | (3,739 | ) | ||||||||
| (a) | In some instances, the total collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (b) | Net amount represents the net amount due from the counterparty in the event of default. |
| (c) | Net amount represents the net amount payable to the counterparty in the event of default. |
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is foreign exchange risk for the six months ended November 30, 2017 was as follows:
| Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) |
||||||
| Forward foreign currency exchange contracts |
$ | 15,465 | $ | (2,040 | ) | |||
| (1) | Statement of Operations location: Net realized gain (loss) – Forward foreign currency exchange contracts. |
| (2) | Statement of Operations location: Change in unrealized appreciation (depreciation) – Forward foreign currency exchange contracts. |
The average notional amount of forward foreign currency exchange contracts (based on the absolute value of notional amounts of currency purchased and currency sold) outstanding during the six months ended November 30, 2017, which is indicative of the volume of this derivative type, was approximately $458,000.
8 Revolving Credit and Security Agreement
The Fund has entered into a Revolving Credit and Security Agreement, as amended (the Agreement) with conduit lenders and a bank to borrow up to $64 million. Borrowings under the Agreement are secured by the assets of the Fund. Interest is charged at a rate above the conduits’ commercial paper issuance rate and is payable monthly. Under the terms of the Agreement, in effect through March 12, 2018, the Fund also pays a program fee of 0.67% per annum on its outstanding borrowings to administer the facility and a liquidity fee of 0.15% (0.25% if the outstanding loan amount is less than or equal to 60% of the total facility size) per annum on the borrowing limit under the Agreement. Program and liquidity fees for the six months ended November 30, 2017 totaled $235,805 and are included in interest expense and fees on the Statement of Operations. The Fund also paid an upfront fee of $64,000, which is being amortized to interest expense over a period of one year through March 12, 2018. The unamortized balance at November 30, 2017 is approximately $18,000 and is included in prepaid upfront fees on notes payable on the Statement of Assets and Liabilities. The Fund is required to maintain certain net asset levels during the term of the Agreement. At November 30, 2017, the Fund had borrowings outstanding under the Agreement of $54,000,000 at an interest rate of 1.39%. Based on the short-term nature of the borrowings under the Agreement and the variable interest rate, the carrying amount of the borrowings at November 30, 2017 approximated its fair value. If measured at fair value, borrowings under the Agreement would have been considered as Level 2 in the fair value hierarchy (see Note 11) at November 30, 2017. For the six months ended November 30, 2017, the average borrowings under the Agreement and the average annual interest rate (excluding fees) were $54,907,104 and 1.28%, respectively.
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Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
9 Risks Associated with Foreign Investments
Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Certain foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Fund, political or financial instability or diplomatic and other developments which could affect such investments. Foreign securities markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker/dealers and issuers than in the United States.
10 Credit Risk
The Fund invests primarily in below investment grade floating-rate loans, which are considered speculative because of the credit risk of their issuers. Changes in economic conditions or other circumstances are more likely to reduce the capacity of issuers of these securities to make principal and interest payments. Such companies are more likely to default on their payments of interest and principal owed than issuers of investment grade bonds. An economic downturn generally leads to a higher non-payment rate, and a loan or other debt obligation may lose significant value before a default occurs. Lower rated investments also may be subject to greater price volatility than higher rated investments. Moreover, the specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan’s value.
11 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical investments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| 35 |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Notes to Financial Statements (Unaudited) — continued
At November 30, 2017, the hierarchy of inputs used in valuing the Fund’s investments and open derivative instruments, which are carried at value, were as follows:
| Asset Description | Level 1 | Level 2 | Level 3* | Total | ||||||||||||
| Senior Floating-Rate Loans (Less Unfunded Loan Commitments) |
$ | — | $ | 176,612,785 | $ | 512,761 | $ | 177,125,546 | ||||||||
| Corporate Bonds & Notes |
— | 13,001,114 | — | 13,001,114 | ||||||||||||
| Foreign Government Bonds |
— | 4,712,355 | — | 4,712,355 | ||||||||||||
| Commercial Mortgage-Backed Securities |
— | 86,226 | — | 86,226 | ||||||||||||
| Convertible Bonds |
— | 806,488 | — | 806,488 | ||||||||||||
| Common Stocks |
5,266,736 | 1,773,568 | ** | 0 | 7,040,304 | |||||||||||
| Convertible Preferred Stocks |
606,610 | 1,295,000 | 0 | 1,901,610 | ||||||||||||
| Preferred Stocks |
240,087 | — | — | 240,087 | ||||||||||||
| Short-Term Investments |
— | 4,682,276 | — | 4,682,276 | ||||||||||||
| Total Investments |
$ | 6,113,433 | $ | 202,969,812 | $ | 512,761 | $ | 209,596,006 | ||||||||
| Forward Foreign Currency Exchange Contracts |
$ | — | $ | 580 | $ | — | $ | 580 | ||||||||
| Total |
$ | 6,113,433 | $ | 202,970,392 | $ | 512,761 | $ | 209,596,586 | ||||||||
| Liability Description |
||||||||||||||||
| Forward Foreign Currency Exchange Contracts |
$ | — | $ | (4,319 | ) | $ | — | $ | (4,319 | ) | ||||||
| Total |
$ | — | $ | (4,319 | ) | $ | — | $ | (4,319 | ) | ||||||
| * | None of the unobservable inputs for Level 3 assets, individually or collectively, had a material impact on the Fund. |
| ** | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
Level 3 investments at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the six months ended November 30, 2017 is not presented.
At November 30, 2017, there were no investments transferred between Level 1 and Level 2 during the six months then ended.
| 36 |
Eaton Vance
Floating-Rate Income Plus Fund
November 30, 2017
Officers and Trustees
Officers of Eaton Vance Floating-Rate Income Plus Fund
Trustees of Eaton Vance Floating-Rate Income Plus Fund
| * | Interested Trustee |
Number of Employees
The Fund is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company, and has no employees.
Number of Shareholders
As of November 30, 2017, Fund records indicate that there are 3 registered shareholders and approximately 3,657 shareholders owning the Fund shares in street name, such as through brokers, banks and financial intermediaries.
If you are a street name shareholder and wish to receive Fund reports directly, which contain important information about the Fund, please write or call:
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
1-800-262-1122
New York Stock Exchange symbol
The New York Stock Exchange symbol is EFF.
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Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
| • | Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
| • | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
| • | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
| • | We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Ltd., Eaton Vance Management’s Real Estate Investment Group and Boston Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vance’s Privacy Policy, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. American Stock Transfer & Trust Company, LLC (“AST”), the closed-end funds transfer agent, or your financial advisor, may household the mailing of your documents indefinitely unless you instruct AST, or your financial advisor, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact AST or your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by AST or your financial advisor.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC’s public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
Share Repurchase Program. The Fund’s Board of Trustees has approved a share repurchase program authorizing the Fund to repurchase up to 10% of its outstanding common shares as of the approved date in open-market transactions at a discount to net asset value. The repurchase program does not obligate the Fund to purchase a specific amount of shares. The Fund’s repurchase activity, including the number of shares purchased, average price and average discount to net asset value, is disclosed in the Fund’s annual and semi-annual reports to shareholders.
Additional Notice to Shareholders. If applicable, a Fund may also redeem or purchase its outstanding preferred shares in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.
Closed-End Fund Information. Eaton Vance closed-end funds make fund performance data and certain information about portfolio characteristics available on the Eaton Vance website shortly after the end of each month. Other information about the funds is available on the website. The funds’ net asset value per share is readily accessible on the Eaton Vance website. Portfolio holdings for the most recent month-end are also posted to the website approximately 30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under “Individual Investors — Closed-End Funds”.
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13724 11.30.17
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Rule 2-01(c)(1)(ii)(A) of Regulation S-X (the “Loan Rule”) prohibits an accounting firm, such as the Fund’s principal accountant, Deloitte & Touche LLP (“D&T”), from having certain financial relationships with their audit clients and affiliated entities. Specifically, the Loan Rule provides, in relevant part, that an accounting firm generally would not be independent if it or a “covered person” of the accounting firm (within the meaning of applicable SEC rules relating to auditor independence) receives a loan from a lender that is a “record or beneficial owner of more than ten percent of the audit client’s equity securities.” Based on information provided to the Audit Committee of the Board of Trustees (the “Audit Committee”) of the Eaton Vance family of funds by D&T, certain relationships between D&T and its affiliates (“Deloitte Entities”) and one or more lenders who are record owners of shares of one or more funds within the Eaton Vance family of funds (the “Funds”) implicate the Loan Rule, calling into question D&T’s independence with respect to the Funds. The Funds are providing this disclosure to explain the facts and circumstances as well as D&T’s conclusions concerning D&T’s objectivity and impartiality with respect to the audits of the Funds notwithstanding the existence of one or more breaches of the Loan Rule.
On June 20, 2016, the U.S. Securities and Exchange Commission (the “SEC”) issued no-action relief to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter (June 20, 2016) (the “No-Action Letter”)) related to an auditor independence issue arising under the Loan Rule. In the No-Action Letter, the SEC indicated that it would not recommend enforcement action against the fund group if the auditor is not in compliance with the Loan Rule provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the auditor’s non-compliance under the Loan Rule is with respect to certain lending relationships; and (3) notwithstanding such non-compliance, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds.
Based on information provided by D&T to the Audit Committee, the requirements of the No-Action Letter appear to be met with respect to D&T’s lending relationships described above. Among other things, D&T has advised the Audit Committee of its conclusion that the consequences of the breach of the Loan Rule have been satisfactorily addressed, that D&T’s objectivity and impartiality in the planning and conduct of the audits of the Fund’s financial statements has not been compromised and that, notwithstanding the breach, D&T is in a position to continue as the auditor for the Funds and D&T does not believe any actions need to be taken with respect to previously issued reports by D&T. D&T has advised the Audit Committee that these conclusions were based in part on its consideration of the No-Action Letter and other relevant information communicated to the Audit Committee.
Item 5. Audit Committee of Listed Registrants
Not required in this filing.
Item 6. Schedule of Investments
Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not required in this filing.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not required in this filing.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
No such purchases this period.
Item 10. Submission of Matters to a Vote of Security Holders
No material changes.
Item 11. Controls and Procedures
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant’s internal controls over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
| (a)(1) | Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
| (a)(2)(i) | Treasurer’s Section 302 certification. | |
| (a)(2)(ii) | President’s Section 302 certification. | |
| (b) | Combined Section 906 certification. | |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Eaton Vance Floating-Rate Income Plus Fund
| By: | /s/ Payson F. Swaffield | |
| Payson F. Swaffield | ||
| President | ||
| Date: | January 25, 2018 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ James F. Kirchner | |
| James F. Kirchner | ||
| Treasurer | ||
| Date: | January 25, 2018 | |
| By: | /s/ Payson F. Swaffield | |
| Payson F. Swaffield | ||
| President | ||
| Date: | January 25, 2018 | |