Travelers Corporate Loan Fund Inc.
Semi-Annual Report March 31, 2001 Ticker Symbol: TLI
[GRAPHIC]
[PHOTO]
Heath B. McLendon
Chairman
[PHOTO]
Glenn N. Marchak
Vice President and Investment Officer
Travelers
Corporate
Loan Fund Inc.
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the period ended
March 31, 2001 for the Travelers Corporate Loan Fund Inc. ("Fund"). We hope you
find this report useful and informative. During the reporting period, the Fund
distributed income dividends totaling $0.71 per share.
The table below shows the annualized distribution rate and six-month total
return based on the Fund's net asset value per share ("NAV") at March 31, 2001
and the New York Stock Exchange ("NYSE") closing price at March 31, 2001./1/
Price Annualized Six-Month
Per Share Distribution Rate/2/ Total Return/2/
--------- -------------------- ---------------
$14.52 (NAV) 8.55% 1.00%
$14.10 (NYSE) 8.81% 1.10%
The Fund's investment objective is to maximize current income consistent with
prudent efforts to preserve capital. The Fund seeks to achieve this objective
by investing primarily in a professionally managed portfolio of interests in
floating or variable rate collateralized senior loans.
---------
1 The NAV is calculated by subtracting total liabilities from the closing value
of all securities held by the Fund (plus all other assets) and dividing the
result (total net assets) by the total number of shares outstanding. The NAV
fluctuates with the changes in the market price of the securities in which
the Fund has invested. However, the price at which the investor may buy or
sell shares of the Fund is at their market (NYSE) price as determined by
supply and demand of the Fund's shares.
2 Total returns are based on changes in NAV and the market value, respectively.
Total returns assume the reinvestment of all dividends and/or capital gains
distributions in additional shares. Annualized distribution rate is the
Fund's current monthly income dividend rate, annualized, and then divided by
the NAV or the market value noted in the report. This annualized distribution
rate assumes a current monthly income dividend rate of $0.1035 for 12 months.
This rate is as of April 30, 2001 and is subject to change. The important
difference between a total return and an annualized distribution rate is that
the total return takes into consideration a number of factors including the
fluctuation of the NAV or the market value during the period reported. The
NAV fluctuation includes the effects of unrealized appreciation or
depreciation in the Fund. Accordingly, since an annualized distribution rate
only reflects the current monthly income dividend rate annualized, it should
not be used as the sole indicator to judge the return you receive from your
Fund investment. Past performance is not indicative of future results.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
1
We are pleased to report that, based on data provided by Lipper Inc.
("Lipper")/3/, the Fund had the highest cumulative total return for the quarter
ended March 31, 2001, when compared to all of the other funds in the "Loan
Participation" category. Cumulative total return is based on distributed
earnings plus any change in NAV.
On April 12, 2001, the Fund declared a regular monthly dividend for April of
$0.1035 per share. The April 2001 monthly dividend payout was reduced by
one-half cent per share from the rate paid in March 2001 and is the fourth in a
series of dividend reductions beginning in January 2001. The dividend
reductions were largely in response to the series of five 50-basis-point
easings of short-term interest rates by the Federal Reserve Board ("Fed") that
began on January 3, 2001. The Fed has reduced short-term interest rates from
6.5% to 4.0% since January 2001.
Unlike fixed-rate investments, interest rates of collateralized loans will
periodically adjust in response to changes in short-term interest rates. These
rate adjustments provide investors with higher income during periods of rising
interest rates and lower income during periods of declining interest rates. Our
dividend strategy during this period is to adjust the dividend to match as
closely as possible, the decline in interest earned on the investments in the
Fund's portfolio resulting from the reduction in short-term interest rates.
Portfolio Review
Consistent with our original investment mandate, the Fund's portfolio is made
up entirely of floating or variable rate collateralized senior loans. As of
March 31, 2001, the Fund had total investments of approximately $208 million
and was invested in 28 industry sectors, with the largest industry
concentration of 12.4% in the telecommunications industry. The Fund had
interests in loans made to 75 issuers.
During the quarter, the Fund's NAV declined approximately $0.19, or 1.3% to
$14.52 primarily as a result a continuing general softness of prices in the
corporate loan market. Since the end of the quarter, the Fund's NAV has
remained relatively stable. One key aspect of the Fund's management policy is
that its NAV is calculated to date on a "mark-to-market" basis using current
market prices for each loan in the Fund as determined weekly by a third party
pricing service.
---------
3 Lipper is an independent mutual fund-tracking organization.
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
2
For the first time since the inception of the Fund, we are in a period of
declining short-term interest rates. From June 1999 to May 2000, the Fed
increased short-term interest rates six times by an aggregate 175 basis points
from 4.75% to 6.50% and then held rates steady at 6.50% through December 2000.
In a surprise move on January 3, 2001, the Fed reduced short-term interest
rates by 50 basis points. On January 31/st/ and March 20/th/, the Fed moved
again at its regularly scheduled Federal Open Market Committee ("FOMC")
meetings, lowering rates by an additional 50 basis points at each meeting. In
another surprise move on April 18, 2001, the Fed moved between FOMC meetings
lowering the federal funds rate ("fed funds rate")/4/ by a further 50 basis
points to 4.50%. On May 15, 2001 at the scheduled FOMC meeting, the Fed lowered
interest rates again by an additional 50 basis points bringing interest rates
to 4.00%. As interest payable on the loans in the portfolio are based on the
London Inter Bank Offered Rate ("LIBOR"),/5/ a short-term interest benchmark,
changes in the Fed's rate policy have had a direct effect on the return the
Fund's portfolio generates, all things being equal.
As previously noted, the regular monthly dividend was decreased by one-half
cent to $0.1035 on April 12, 2001 and this reduction followed three earlier
decreases during the first quarter of 2001. We continue to believe that the
odds are in favor of further rate reductions by the Fed and should that occur,
we anticipate that our dividend would be directly affected, all things being
equal. While the nominal rate of our dividends has decreased as the Fed reduced
short-term interest rates, the real rate of return on our portfolio should
remain strong as the expected rate of inflation subsides.
Since the end of 2000, the Fund's share price has recovered from a drop-off
that began in November 2000 and is currently trading at over $14.00 per share.
The market price of the Fund's shares at the time of our last report was
generally trading around $14.25 per share and trending downward. Since that
time, the shares have generally traded in a range of $14.00 to $14.20 with the
exception of a period beginning in mid April when the shares traded below that
level, possibly as a result of tax selling. The Fund's shares continue to trade
at a discount to their NAV, however this discount has been narrower than
historical levels. (Of course, past performance is not indicative of future
results.)
---------
4 The fed funds rate is the interest rate that banks with excess reserves at a
Federal Reserve district bank charge other banks that need overnight loans.
The fed funds rate often points to the direction of U.S. interest rates.
5 LIBOR is the rate that most creditworthy international banks dealing in euro
charge each other for large loans.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
3
Corporate Loan Market Outlook
Little has changed in the quarter since our last report. There continues to be
a shortage of new issue supply, a high level of distressed and defaulted
credits and the secondary market remains tight. On the positive side, credit
structures remain strong and pricing on new transactions continues to be
generous by historical standards.
The economy has continued to be weak and the capital markets, in general, have
not provided easy access to credit while the cost of the credit that is
available remains high. While we have seen periods of improvement, the general
trend remains leaning toward weakness. These conditions coupled with
difficulties in certain industry sectors have led to an increasing level of
distressed and defaulted credits over the last several quarters. We expect that
the level of distressed and defaulted credits will remain high in the near
future. These same conditions have led to the continuation of a low level of
merger and acquisition and leveraged buyout activity. As a result, the supply
of new loans available in the market to invest in has been low and competition
for well-structured and priced loans remains high. The shortage of new loans
available has led to a tight secondary market where the availability of
desirable loans continues to be low.
In spite of the difficult market conditions, we think the long-term investment
horizon is attractive. The difficult conditions that have existed for the past
several quarters have resulted in better discipline in the market that should
drive stronger market dynamics as the economy recovers. Credit structures have
remained strong and pricing has continued to be high by historical norms as a
result of the stricter credit and pricing standards imposed by investors. We
expect that we will see favorable structuring and pricing trends for the
foreseeable future.
Investment Strategy
As noted earlier, this continues to be a challenging period in the corporate
loan market. Our strategies for managing the portfolio during this period
remain the same as those outlined in our earlier reports to you: maintain high
credit standards when selecting loans to add to the portfolio (at the time of
investment); seek out loans that are priced appropriately for the credit risk
of the loan; continue to improve the Fund's diversification at the margin;
attempt to identify negative industry trends in advance of credit problems,
and; monitor all loans to spot weakness and plan appropriate courses of action.
Additionally, we seek to identify changing economic and financial market
factors that could result in an unacceptably high level of vulnerability for
any of the corporate loans held in the portfolio. While the majority of the
portfolio
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
4
continues to perform well, there is a higher level of risk in the portfolio
than we had experienced prior to the downturn in the economy. We monitor the
portfolio carefully and seek to be vigilant in staying with the credit
discipline that we have followed in the past.
Loan runoff from early repayments has been relatively low during the last
quarter. As a result, we have been able to maintain satisfactory asset levels
in the face of a market that is experiencing a shortage of new loan investment
opportunities. We believe that loan runoff will remain manageable for the
foreseeable future and, correspondingly, asset levels should remain at
acceptable levels, all things being equal.
While we have continued to be decidedly conservative in investing in the
telecommunications industry, it remains our largest industry concentration.
Since the beginning of 2001, we have added one small position in the industry.
We have not sold any of our existing positions. However, on a net basis, our
dollar exposure to and concentration in the telecommunications industry has
been reduced as a result of loan repayments.
We continue to be comfortable with the investments we have made in this
industry. We have steered away from early or developmental stage
telecommunications companies in the "build out" mode that are not producing
positive cash flow and are potentially dependent on the capital markets to fund
significant future capital expenditure needs. Rather, we have invested in more
established companies with less aggressive growth projections that have more
normalized capital expenditure needs and are producing positive cash flow
results sufficient to satisfy their operating cash flow needs.
Our goal in the Fund remains constant: work hard to optimize the Fund's
diversification and target select opportunities while operating within the
parameters of our high credit standards. And while no guarantees can be given,
we seek to bring our shareholders the best combination of quality and price in
the assets we purchase to achieve the best risk-adjusted returns available in
the corporate loan assets class.
Economic Outlook
The U.S. economy has continued to show weakness since the beginning of 2001.
Although there have been some signs of a stronger economic activity in the last
several weeks -- (2% Gross Domestic Product ("GDP")/6/ growth in the
---------
6 GDP is the market value of the goods and services produced by labor and
property in the U.S. GDP comprises consumer and government purchases, private
domestic investments and net exports of goods and services.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
5
first quarter, stronger than expected consumer spending evidenced by strength
in the housing and auto sectors, a significant drop in inventories and a
stronger stock market) -- there remains a considerable list of negatives
including:
. slowing employment;
. declining consumer and business confidence;
. high consumer debt levels and negative savings rate;
. continuing weakness in capital spending and low capacity utilization
rates;
. declining corporate earnings;
. the technology sector is in meltdown mode;
. expectations for increasing energy costs;
. significant downside risks to California's economy; and
. slowing foreign economies in Europe, Japan, Pacific Rim, Latin America
and North America indicating a global slowdown and the strength of the
U.S. dollar is a drag on both US exports and earnings.
While stronger than expected GDP growth and recent strength in some areas has
generated a more positive tone in the financial markets and may suggest a lower
probability of recession, we remain cautious about the second half of 2001 and
believe the markets may be overestimating the extent and probability of a
rebound. If unemployment moves over 5%, we expect slower growth due to the
effect on consumer spending.
Revised fourth quarter 2000 GDP growth at 1.0% was less than initially
estimated. While first quarter GDP growth was better than expected at 2%, the
U.S. economy continued to be weak through the first quarter of 2001. First
quarter U.S. corporate profits had their largest quarterly decline in a decade
as businesses cut spending. After several years of heavy capital spending,
businesses slowed spending on capital equipment significantly as a result of
low capacity utilization, high inventory levels and an increasingly pessimistic
outlook in the business community. Indeed, business confidence is at a 20-year
low. In February and March, retail sales declined by 0.2%. In March, the US
unemployment rate rose to 4.3%, its highest level in two years and non-farm
payrolls fell by 86,000, the biggest one-month loss since November 1991.
Unemployment claims are at their highest levels since the last recession in the
early 1990s.
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
6
Given the economic slowdown and heightened risks of recession, the Fed has
aggressively lowered short-term interest rates since the beginning of 2001. We
think the combination of Fed short-term interest rate reductions, increases in
the money supply, proposed tax reductions and proposed increases in government
spending should provide the needed stimulus to pull the economy out of its
downturn. However, the combined benefits of these monetary and fiscal measures
will take time to become fully evident in the economy. Therefore, we believe a
higher probability lies in continued weakness in 2001 driven by continuing
softness in employment, higher energy costs, weak corporate earnings, continued
slowing of global economies and lingering weakness in business and consumer
confidence. Correspondingly, we believe the Fed may continue to lower the fed
funds rate.
In the event that the economy has bottomed as could be suggested by certain
more recent developments including the surprising 2% GDP growth in the first
quarter, we believe it will be some time before we see signs of a resumption of
sustained expansion as the fiscal and monetary actions taken and those proposed
will take time to have a meaningful affect on growth.
Thank you for investing in the Travelers Corporate Loan Fund Inc. We look
forward to seeking to achieve our objectives of maximizing current income
consistent with prudent efforts to preserve capital. Moreover, we promise to
seek the best risk-adjusted returns available from corporate loans and to work
hard to provide you with a stable, long-term investment with competitive rates
of return.
Sincerely,
/s/ Heath B. McLendon /s/ Glenn N. Marchak
Heath B. McLendon Glenn N. Marchak
Chairman Vice President and
Investment Officer
May 17, 2001
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
7
Take Advantage of the Fund's Dividend Reinvestment Plan!
Did you know that Fund investors who reinvest their dividends are taking
advantage of one of the most effective wealth-building tools available today?
Systematic investments put time to work for you through the strength of
compounding.
As an investor in the Fund, you can participate in its Dividend Reinvestment
Plan ("Plan") which is a convenient, simple and efficient way to reinvest
your dividends and capital gains, if any, in additional shares of the Fund.
Below is a summary of how the Plan works.
Plan Summary
If you participate in the Dividend Reinvestment Plan, your dividends and
capital gains distributions will be reinvested automatically in additional
shares of the Fund.
The number of common stock shares in the Fund you will receive in lieu of a
cash dividend is determined in the following manner. If the market price of
the common stock is equal to or higher than the net asset value ("NAV") per
share as of the determination date (defined as the fourth New York Stock
Exchange trading day preceding the payment for the dividend or distribution),
plan participants will be issued new shares of common stock at a price per
share equal to the greater of: (a) the NAV per share on the valuation date or
(b) 95% of the market price per share on the valuation date.
If the market price is less than the NAV per share as of the determination
date, PFPC Global Fund Services ("Plan Agent") will buy common stock for your
account in the open market. If the Plan Agent begins to purchase additional
shares in the open market and the market price of the shares subsequently
exceeds the NAV per share, before the purchases are completed, the Plan Agent
will cease making open-market purchases and have the Fund issue the remaining
dividend or distribution in shares at a price per share equal to the greater
of either the NAV per share on the valuation date or 95% of the market price
at which the Fund issues the remaining shares.
A more complete description of the current Plan appears in the section of
this report beginning on page 21. To find out more detailed information about
the Plan and about how you can participate, please call PFPC Global Fund
Services at (800) 331-1710.
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
8
Schedule of Investments (unaudited) March 31, 2001
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
---------------------------------------------------------------------------------
SENIOR COLLATERALIZED LOANS -- 98.6%
Aerospace/Defense -- 3.7%
$5,325,269 Decrane Aircraft Holdings, Inc. Term B 9/30/05 $ 5,298,643
2,468,827 Decrane Aircraft Holdings, Inc. Term D 12/24/06 2,444,139
---------------------------------------------------------------------------------
7,742,782
---------------------------------------------------------------------------------
Automotive -- 5.7%
3,712,500 Dura Automotive Systems, Inc. Term B 3/31/06 3,526,875
1,952,909 J.L. French Automotive Casting, Inc. Term B 10/21/06 1,669,737
2,000,000 Metaldyne Corp. Term B 11/28/08 1,997,600
4,797,414 Stoneridge, Inc. Term B 12/31/05 4,617,511
---------------------------------------------------------------------------------
11,811,723
---------------------------------------------------------------------------------
Building Materials -- 4.1%
2,000,000 Hanley-Wood, Inc. Term B 9/21/07 1,998,800
1,320,213 Onex ABCO LP (Magnatrax) Term B 11/15/05 1,188,192
2,918,611 Panolam Industries International, Inc. Term B 1/31/07 2,915,109
2,671,415 Trussway Holdings Inc. Term B 12/31/06 2,511,127
---------------------------------------------------------------------------------
8,613,228
---------------------------------------------------------------------------------
Chemicals -- 7.2%
2,962,500 Georgia Gulf Corp. Term B 11/10/06 2,984,719
1,470,000 Huntsman ICI Chemical LLC Term B 6/30/07 1,479,261
1,470,000 Huntsman ICI Chemical LLC Term C 6/30/08 1,479,261
864,947 Lyondell Petrochemical Co. Term B 6/30/05 871,434
7,877,016 Lyondell Petrochemical Co. Term E 5/17/06 8,172,404
---------------------------------------------------------------------------------
14,987,079
---------------------------------------------------------------------------------
Conglomerates -- 0.7%
1,492,500 Gentek, Inc. Term C 10/31/07 1,499,963
---------------------------------------------------------------------------------
Construction Machinery -- 1.4%
2,985,000 United Rentals, Inc. Term C 6/30/06 2,880,525
---------------------------------------------------------------------------------
Consumer Products -- 1.8%
938,125 American Safety Razor Co. Term B 4/30/07 931,089
1,965,000 Holmes Products Corp. Term B 2/5/07 1,729,200
1,000,000 Shop Vac Corp. Multi-Draw 7/7/07 997,500
---------------------------------------------------------------------------------
3,657,789
---------------------------------------------------------------------------------
Electric -- 1.9%
3,980,000 Western Resources, Inc. Term 3/17/03 3,999,900
---------------------------------------------------------------------------------
Entertainment -- 5.4%
2,970,000 Corus Entertainment Inc. Term B 9/30/07 2,964,357
1,250,000 Entravision Communications Term B 12/31/08 1,264,125
1,700,000 Hoops, L.P. Term A 9/30/05 1,695,750
3,500,000 Six Flags Theme Parks Inc. Term B 11/5/05 3,537,100
See Notes to Financial Statements.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
9
Schedule of Investments (unaudited) (continued) March 31, 2001
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
-------------------------------------------------------------------------
Entertainment -- 5.4% (continued)
$ 80,000 Washington Football Group, Inc. Term A 10/29/04 $ 80,048
1,720,000 Washington Football Group, Inc. Term C 10/29/04 1,730,836
-------------------------------------------------------------------------
11,272,216
-------------------------------------------------------------------------
Environmental -- 3.3%
1,969,954 Allied Waste North America, Inc. Term B 7/30/06 1,952,815
2,363,945 Allied Waste North America, Inc. Term C 7/30/07 2,343,378
2,750,000 Casella Waste System, Inc. Term B 12/14/06 2,598,750
-------------------------------------------------------------------------
6,894,943
-------------------------------------------------------------------------
Food -- 1.6%
996,667 Buffets, Inc. Term B 3/5/06 1,005,437
1,907,080 NSC Operating Co. (Nutrasweet) Term B 5/27/07 1,916,616
500,000 NSC Operating Co. (Nutrasweet) 2nd Lien 5/25/09 498,750
-------------------------------------------------------------------------
3,420,803
-------------------------------------------------------------------------
Gaming -- 3.1%
908,965 Ameristar Casinos, Inc. Term B 12/26/06 913,509
779,112 Ameristar Casinos, Inc. Term C 12/26/07 783,008
2,487,500 Autotote Corp. Term B 9/30/07 2,363,125
1,323,333 Isle of Capri Casinos, Inc. Term B 3/2/06 1,316,717
1,157,917 Isle of Capri Casinos, Inc. Term C 3/2/07 1,152,127
-------------------------------------------------------------------------
6,528,486
-------------------------------------------------------------------------
Healthcare -- 4.0%
1,250,000 Caremark Rx Inc. Term B 3/15/06 1,256,250
900,000 Stericycle, Inc. Term B 11/10/06 904,500
6,067,940 Stryker Corp. Term B 12/4/05 6,098,280
-------------------------------------------------------------------------
8,259,030
-------------------------------------------------------------------------
Home Construction -- 1.0%
1,990,000 Lennar Corp. Term B 5/2/07 2,004,925
-------------------------------------------------------------------------
Independent Energy -- 1.6%
3,372,505 Heating Oil Partners LP Term 9/30/03 3,364,074
-------------------------------------------------------------------------
Industrial - Other -- 9.3%
2,441,860 Flowserve Corp. Term B 6/30/08 2,429,651
2,079,072 General Cable Corp. Term B 5/27/07 2,019,402
2,000,000 Hines Nurseries, Inc. Term B 3/28/05 1,900,000
997,500 Iron Mountain, Inc. Term B 2/28/06 1,006,278
2,250,000 Mark IV Industries, Inc. Term B 9/11/08 2,126,250
1,477,500 Mueller Group, Inc. Term B 8/16/06 1,484,888
1,477,500 Mueller Group, Inc. Term C 8/16/07 1,484,888
992,500 Mueller Group, Inc. Term D 8/16/07 997,463
3,960,000 SPX Corp. Term B 12/31/06 3,975,048
2,352,657 Western Industries Ltd. Term B 6/23/06 1,976,232
-------------------------------------------------------------------------
19,400,100
-------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
10
Schedule of Investments (unaudited) (continued) March 31, 2001
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
------------------------------------------------------------------------------------
Insurance -- 0.7%
$1,453,125 Oxford Health Plans, Inc. Term B 12/27/06 $ 1,453,125
------------------------------------------------------------------------------------
Lodging -- 1.5%
3,000,000 Starwood Hotels & Resorts Worldwide, Inc. IRN 2/23/03 3,011,400
------------------------------------------------------------------------------------
Media/Cable -- 7.6%
2,500,000 Century Cable Holdings (Adelphia) Term B 9/28/09 2,487,500
9,000,000 Charter Communications Operating LLC Term B 3/18/08 8,932,500
1,736,842 Classic Cable, Inc. Term B 1/31/08 1,641,316
868,421 Classic Cable, Inc. Term C 1/31/08 820,658
2,000,000 Insight Midwest LLC Term B 12/31/09 2,005,000
------------------------------------------------------------------------------------
15,886,974
------------------------------------------------------------------------------------
Media/Non-Cable -- 11.4%
4,801,010 21st Century Newspapers Term B 9/15/05 4,765,003
1,782,857 Advanstar Communications Inc. Term B 10/12/08 1,769,486
4,500,000 American Media Operation Inc. Term B 4/1/07 4,536,450
1,846,435 Canwest Media Inc. Term B 5/15/08 1,848,835
1,153,565 Canwest Media Inc. Term C 5/15/09 1,155,065
1,000,000 Emmis Communications Corp. Term B 2/28/07 999,400
4,000,000 Susquehanna Media Co. Term B 6/30/08 4,000,000
1,792,112 Trader.com N.V. Term B 12/6/06 1,774,191
1,207,888 Trader.com N.V. Term C 12/6/07 1,195,809
1,733,023 Young Broadcasting, Inc. Term B 12/31/06 1,743,941
------------------------------------------------------------------------------------
23,788,180
------------------------------------------------------------------------------------
Metals -- 0.8%
1,678,750 Ucar International Inc. Term B 12/31/07 1,578,025
------------------------------------------------------------------------------------
Other - Energy -- 0.7%
1,398,282 TransMontaigne Inc. Term B 7/1/06 1,377,307
------------------------------------------------------------------------------------
Other - Financial Institutions -- 1.8%
1,477,068 Bridge Information Systems, Inc. Multi-Draw 5/29/03 324,955
2,739,352 Bridge Information Systems, Inc. Term B 5/29/05 602,658
2,962,500 Outsourcing Solutions Inc. Term B 6/10/06 2,784,750
------------------------------------------------------------------------------------
3,712,363
------------------------------------------------------------------------------------
Packaging -- 0 .5%
1,000,000 Greif Brothers Corp. Term B 2/28/08 1,007,500
------------------------------------------------------------------------------------
Railroads -- 1.4%
1,995,000 Kansas City Southern Railway Co. Term B 12/29/06 2,007,569
926,499 RailAmerica, Inc. Term B 12/31/06 931,131
------------------------------------------------------------------------------------
2,938,700
------------------------------------------------------------------------------------
Technology -- 2.3%
2,487,500 Suez Acquisition Co. Term B 11/22/06 2,478,296
2,277,019 Trend Technologies, Inc. Term B 3/9/07 2,254,249
------------------------------------------------------------------------------------
4,732,545
------------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
11
Schedule of Investments (unaudited) (continued) March 31, 2001
FACE LOAN STATED
AMOUNT SECURITY TYPE MATURITY VALUE*
------------------------------------------------------------------------------
Telecommunications -- 12.4%
$1,247,126 American Cellular Corp. Term B 3/31/08 $ 1,247,126
1,425,287 American Cellular Corp. Term C 3/31/09 1,425,287
2,892,776 Centennial Cellular Operating Co. Term B 5/1/07 2,900,008
2,892,602 Centennial Cellular Operating Co. Term C 11/30/07 2,899,834
1,000,000 Crown Castle Operating Co. Term B 3/31/08 1,005,000
1,980,000 Dobson Operating Co. Term B 1/7/08 1,983,762
3,750,000 Nextel Finance Co. Term B 6/30/08 3,703,125
3,750,000 Nextel Finance Co. Term C 12/31/08 3,703,125
2,500,000 Rural Cellular Corp. Term B 10/3/08 2,487,500
2,500,000 Rural Cellular Corp. Term C 4/3/09 2,487,500
2,000,000 Western Wireless Corp. Term B 9/30/08 2,005,000
------------------------------------------------------------------------------
25,847,267
------------------------------------------------------------------------------
Transportation Services -- 1.7%
1,079,441 Evergreen International Aviation, Inc. Term D 4/28/04 1,078,145
2,500,000 TravelCenters of America, Inc. Term B 11/14/08 2,506,250
------------------------------------------------------------------------------
3,584,395
------------------------------------------------------------------------------
TOTAL SENIOR COLLATERALIZED LOANS
(Cost -- $210,234,347) 205,255,347
------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.4%
Commercial Paper -- 1.4%
2,800,000 Household Financial Corp., 5.400% due 4/2/01
(Cost -- $2,798,740) 2,799,160
------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $213,033,087**) $208,054,507
------------------------------------------------------------------------------
* Market value is determined using current market prices which are supplied
weekly by an independent third party pricing service.
** Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviations used in this schedule:
------------------------------------
2nd Lien -- Subordinate Loan to 1st Lien
IRN -- Increasing Rate Note
Multi Draw -- Multi Draw Term Loan
Term -- Term Loan
Term A -- Term Loan A
Term B -- Term Loan B
Term C -- Term Loan C
Term D -- Term Loan D
Term E -- Term Loan E
See Notes to Financial Statements.
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
12
Statement of Assets and Liabilities (unaudited) March 31, 2001
ASSETS:
Investments, at value (Cost -- $213,033,087) $208,054,507
Cash 145,570
Dividends and interest receivable 1,644,630
-------------------------------------------------------------------------
Total Assets 209,844,707
-------------------------------------------------------------------------
LIABILITIES:
Notes payable 67,200,000
Dividends payable 341,700
Management fee payable 157,616
Interest payable 59,021
Accrued expenses 72,747
-------------------------------------------------------------------------
Total Liabilities 67,831,084
-------------------------------------------------------------------------
Total Net Assets $142,013,623
-------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 9,782
Capital paid in excess of par value 146,269,339
Undistributed net investment income 898,736
Accumulated net realized loss from security transactions (185,654)
Net unrealized depreciation of investments (4,978,580)
-------------------------------------------------------------------------
Total Net Assets $142,013,623
-------------------------------------------------------------------------
Shares Outstanding 9,781,667
-------------------------------------------------------------------------
Net Asset Value $14.52
-------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
13
Statement of Operations (unaudited)
For the Six Months Ended March 31, 2001
INVESTMENT INCOME:
Interest $10,448,327
Less: Interest expense (2,380,883)
-------------------------------------------------------------------------------------------
Total Investment Income 8,067,444
-------------------------------------------------------------------------------------------
EXPENSES:
Management fee (Note 2) 1,118,248
Audit and legal 41,020
Shareholder communications 37,192
Shareholder and system servicing fees 34,290
Directors' fees 18,844
Registration fees 8,679
Custody 3,472
Other 19,836
-------------------------------------------------------------------------------------------
Total Expenses 1,281,581
-------------------------------------------------------------------------------------------
Net Investment Income 6,785,863
-------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 3):
Realized Loss From Security Transactions (excluding short-term securities):
Proceeds from sales 29,597,928
Cost of securities sold 29,782,091
-------------------------------------------------------------------------------------------
Net Realized Loss (184,163)
-------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of Investments:
Beginning of period 570,147
End of period (4,978,580)
-------------------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (5,548,727)
-------------------------------------------------------------------------------------------
Net Loss on Investments (5,732,890)
-------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 1,052,973
-------------------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
14
Statements of Changes in Net Assets
For the Six Months Ended March 31, 2001 (unaudited)
and the Year Ended September 30, 2000
2001 2000
----------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 6,785,863 $ 13,656,396
Net realized gain (loss) (184,163) 260,605
(Increase) decrease in net unrealized depreciation (5,548,727) 4,590
----------------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,052,973 13,921,591
----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (6,954,765) (14,070,928)
Net realized gains (220,088) (263,127)
----------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (7,174,853) (14,334,055)
----------------------------------------------------------------------------------------
Decrease in Net Assets (6,121,880) (412,464)
NET ASSETS:
Beginning of period 148,135,503 148,547,967
----------------------------------------------------------------------------------------
End of period* $142,013,623 $148,135,503
----------------------------------------------------------------------------------------
* Includes undistributed net investment income of: $898,736 $1,067,638
----------------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
15
Statement of Cash Flows (unaudited)
For the Six Months Ended March 31, 2001
CASH FLOWS PROVIDED BY OPERATING AND INVESTING ACTIVITIES:
Interest and dividends received $ 10,419,047
Operating expenses paid (1,331,791)
Interest paid on bank loans (2,404,193)
Net short-term purchases (689,943)
Purchases of portfolio securities (29,369,904)
Proceeds from disposition of long-term securities 29,597,928
------------------------------------------------------------------------------
Net Cash Flows Provided By Operating and Investing Activities 6,221,144
------------------------------------------------------------------------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Net borrowings under line-of-credit agreement 1,000,000
Cash dividends paid on common stock (7,213,309)
------------------------------------------------------------------------------
Net Cash Flows Used By Financing Activities (6,213,309)
------------------------------------------------------------------------------
NET INCREASE IN CASH 7,835
Cash, Beginning of period 137,735
------------------------------------------------------------------------------
Cash, End of period $ 145,570
------------------------------------------------------------------------------
RECONCILIATION OF INCREASE IN NET ASSETS FROM
OPERATIONS TO NET CASH FLOWS PROVIDED BY
OPERATING AND INVESTING ACTIVITIES:
Increase in Net Assets From Operations $ 1,052,973
------------------------------------------------------------------------------
Amortization of discount on securities 68,333
Decrease in investments, at value 5,202,640
Decrease in interest payable for money borrowed (23,310)
Increase in dividends and interest receivable (29,281)
Decrease in accrued expenses (50,211)
------------------------------------------------------------------------------
Total Adjustments 5,168,171
------------------------------------------------------------------------------
Net Cash Flows Provided By Operating and Investing Activities $ 6,221,144
------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
16
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
The Travelers Corporate Loan Fund Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) U.S. government
agencies and obligations are valued at the mean between the bid and ask prices;
(c) securities, excluding senior collateralized loans, for which market
quotations are not available will be valued in good faith at fair value by or
under the direction of the Board of Trustees; (d) securities maturing within 60
days are valued at cost plus accreted discount, or minus amortized premium,
which approximates value; (e) gains or losses on the sale of securities are
calculated by using the specific identification method; (f) interest income,
adjusted for amortization of premium and accretion of discount, is recorded on
an accrual basis; (g) the Fund intends to comply with the applicable provisions
of the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes; (h) the
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. At September 30, 2000, reclassifications were made to the Fund's
capital accounts to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. Accordingly, a
portion of undistributed net investment loss amounting to $27,900 was
reclassified to paid-in capital. Net investment income, net realized gains and
net assets were not affected by this change; (i) estimates and assumptions are
required to be made regarding assets, liabilities and changes in net assets
resulting from operations when financial statements are prepared. Changes in
the economic environment, financial markets and any other parameters used in
determining these estimates could cause actual results to differ; and (j)
collateralized senior loans will be valued at readily ascertainable market
values and in the absence of these market values the loans are valued at fair
value. Fair value is determined in accordance with guidelines established by
the Fund's Board of Directors. In valuing a loan, Smith Barney Fund Management
LLC ("SBFM"), formerly known as SSB Citi Fund Management LLC, the Fund's
investment advisor, with the assistance of the Travelers Asset Management
International Company LLC ("TAMIC"), the sub-advisor, will consider among other
factors: (1) the creditworthiness of the borrower and any party interpositioned
between the Fund and the borrower; (2) the current interest rate, period until
next interest rate reset and maturity date of the collateralized senior loan;
(3) recent market prices for similar loans, if any; and
--------------------------------------------------------
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
17
Notes to Financial Statements (unaudited) (continued)
(4) recent prices in the market for instruments with similar quality, rate,
period until next interest rate reset, maturity, terms and conditions; SBFM may
also consider prices or quotations, if any, provided by banks, dealers or
pricing services which may represent the prices at which secondary market
transactions in the collateralized senior loans held by the Fund have or could
have occurred. However, because the secondary market has not yet fully
developed, SBFM will not rely solely on such prices or quotations.
Facility fees and upfront fees, incurred by the Fund on loan agreements, are
amortized over the term of the loan.
2. Management Agreement and Transactions with Affiliated Persons
SBFM, a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), which, in
turn, is a wholly-owned subsidiary of Citigroup Inc. ("Citigroup") acts as
investment advisor for the Fund. The Fund pays SBFM a management fee for its
investment advisory and administration services calculated at an annual rate of
1.05% of the average weekly assets. This fee is calculated weekly and paid
monthly.
SBFM has entered into a sub-investment advisory agreement with TAMIC, another
wholly-owned indirect subsidiary of Citigroup. Pursuant to a sub-advisory
agreement, TAMIC is responsible for certain investment decisions related to the
Fund. SBFM pays TAMIC a fee of 0.50% of the value of the Fund's average weekly
assets for the services TAMIC provides as sub-advisor. This fee is calculated
weekly and paid monthly.
All officers and one Director of the Fund are employees of either Salomon Smith
Barney Inc. ("SSB"), another subsidiary of Citigroup or its affiliates.
3. Investments
During the six months ended March 31, 2001, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
---------------------
Purchases $29,392,138
---------------------
Sales 29,597,928
---------------------
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
18
Notes to Financial Statements (unaudited) (continued)
At March 31, 2001, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
----------------------------------------------------
Gross unrealized appreciation $ 1,275,998
Gross unrealized depreciation (6,254,578)
----------------------------------------------------
Net unrealized depreciation $(4,978,580)
----------------------------------------------------
4. Commitments
The Fund has entered into a 364 day revolving credit agreement and a three year
revolving credit agreement to borrow up to an aggregate of $73.5 million from a
syndicate of major financial institutions. The 364 day revolving credit
agreement was renewed on January 30, 2001. The 364 day revolving credit
agreement matures on January 29, 2002 and the three year revolving credit
agreement matures on February 1, 2002. Borrowing rates under both of these
agreements are based on a fixed spread over LIBOR or the Prime Rate. The Fund
pays a facility fee quarterly at 0.10% and 0.15% per annum for the 364 day and
three year revolving credit agreements, respectively. The amount of aggregate
borrowings outstanding at March 31, 2001 was $67.2 million at a weighted
average interest rate of 6.48%, which represented 32.12% of net assets plus
borrowings. Average aggregate borrowings for the six months ended March 31,
2001, were $68,934,301 and the average annualized interest rate was 6.53%.
5. Offering Costs
Offering costs of $607,394 were incurred at the inception of the Fund. Of this
amount, $382,394 was paid by SBFM. The balance of $225,000 was paid by the
Fund.
6. Capital Shares
At March 31, 2001, the Fund had 150,000,000 shares of capital stock authorized,
("Common Stock") with a par value of $0.001 per share.
--------------------------------------------------------
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
19
Financial Highlights
For a share of capital stock outstanding throughout each year ended September
30, unless otherwise noted:
2001/(1)/ 2000 1999/(2)/
----------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.14 $15.19 $15.00
----------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.69 1.40 0.97
Net realized and unrealized gain (loss) (0.58) 0.02 0.09
----------------------------------------------------------------------------
Total Income From Operations 0.11 1.42 1.06
----------------------------------------------------------------------------
Offering Costs on Issuance of Common Stock -- -- (0.02)
----------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.71) (1.44) (0.85)
Net realized gains (0.02) (0.03) --
----------------------------------------------------------------------------
Total Distributions (0.73) (1.47) (0.85)
----------------------------------------------------------------------------
Net Asset Value, End of Period $14.52 $15.14 $15.19
----------------------------------------------------------------------------
Total Return, Based on Market Value 1.10%++ 13.35% 1.68%++
----------------------------------------------------------------------------
Total Return, Based on Net Asset Value 1.00%++ 10.55% 7.45%++
----------------------------------------------------------------------------
Net Assets, End of Period (000s) $142,014 $148,136 $148,548
----------------------------------------------------------------------------
Ratios to Average Net Assets:
Net investment income 9.45%+ 9.20% 7.48%+
Interest expense 3.31+ 3.04 1.68+
Organization expense -- -- 0.24+
Other expenses 1.78+ 1.70 1.63+
----------------------------------------------------------------------------
Portfolio Turnover Rate 14% 59% 53%
----------------------------------------------------------------------------
Market Value, End of Period $14.1000 $14.6875 $14.375
----------------------------------------------------------------------------
(1) For the six months ended March 31, 2001 (unaudited).
(2) For the period from November 20, 1998 (commencement of operations) to
September 30, 1999.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
20
Dividend Reinvestment Plan (unaudited)
Pursuant to the Plan, shareholders whose Common Stock is registered in their
own names will be deemed to have elected to have all distributions reinvested
automatically in additional Common Stock of the Fund by PFPC Global Fund
Services ("Plan Agent"), as agent under the Plan, unless such shareholders
elect to receive distributions in cash. Shareholders who elect to receive
distributions in cash will receive all distributions in cash paid by check in
U.S. dollars mailed directly to the shareholder by PFPC Global Fund Services,
as dividend paying agent. In the case of shareholders such as banks, brokers or
nominees, which hold Common Stock for others who are the beneficial owners, the
Plan Agent will administer the Plan on the basis of the number of shares of
Common Stock certified from time to time by the record shareholders as
representing the total amount registered in the record shareholder's name and
held for the account of beneficial owners that have not elected to receive
distributions in cash. Investors that own shares of Common Stock registered in
the name of a bank, broker or other nominee should consult with such nominee as
to participation in the Plan through such nominee, and may be required to have
their shares registered in their own names in order to participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
Unless the Board of Directors of the Fund declares a dividend or capital gains
distribution payable only in cash, non-participants in the Plan will receive
cash and participants in the Plan will receive shares of Common Stock of the
Fund, to be issued by the Fund or purchased by the Plan Agent in the open
market as outlined below. Whenever the market price per share of Common Stock
is equal to or exceeds the net asset value per share as of the determination
date (defined as the fourth New York Stock Exchange trading day preceding the
payment date for the dividend or distribution), participants will be issued new
shares of Common Stock at a price per share equal to the greater of: (a) the
net asset value per share on the valuation date or (b) 95% of the market price
per share on the valuation date. Except as noted below, the valuation date
generally will be the dividend or distribution payment date. If net asset value
exceeds the market price of the Fund's shares of Common Stock as of the
determination date, the Plan Agent will, as agent for the participants, buy
shares in the open market, on the New York Stock Exchange or elsewhere, for the
participants' accounts as soon as practicable commencing on the trading day
following the determination date and generally terminating no later than 30
days after the dividend or distribution payment date. If, before the Plan Agent
has completed its purchases, the market price exceeds the net asset value of a
share of Common Stock, the average per share purchase price paid by the Plan
Agent may exceed the net asset value of the Fund's shares, resulting in the
acquisition of fewer shares than if the dividend or capital gains distribution
had been paid in shares of Common Stock issued by the Fund. Because of the
foregoing difficulty with respect to open-market purchases, the Plan provides
that if the
--------------------------------------------------------
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
21
Dividend Reinvestment Plan (unaudited) (continued)
Plan Agent is unable to invest the full dividend amount in open-market
purchases during the permissible purchase period or if the market discount
shifts to a market premium during such purchase period, the Plan Agent will
cease making open-market purchases and will receive the uninvested portion of
the dividend amount in newly issued shares of Common Stock (in which case the
valuation date will be the date such shares are issued) at a price per share
equal to the greater of (a) the net asset value per share on the valuation date
or (b) 95% of the market price per share on the valuation date.
A shareholder may elect to withdraw from the Plan at any time upon written
notice to the Plan Agent or by calling the Plan Agent at 1-800-331-1710. When a
participant withdraws from the Plan, or upon termination of the Plan as
provided below, certificates for whole shares of Common Stock credited to his
or her account under the Plan will be issued and a cash payment will be made
for any fractional shares credited to such account. An election to withdraw
from the Plan will, until such election is changed, be deemed to be an election
by a shareholder to take all subsequent dividends and distributions in cash.
Elections will be effective immediately if notice is received by the Plan Agent
not less than ten days prior to any dividend or distribution record date;
otherwise such termination will be effective after the investment of the then
current dividend or distribution. If a withdrawing shareholder requests the
Plan Agent to sell the shareholder's shares upon withdrawal from participation
in the Plan, the withdrawing shareholder will be required to pay a $5.00 fee
plus brokerage commissions.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmation of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in noncertificated form in
the name of the participant, and each shareholder's proxy will include those
shares of Common Stock purchased pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions. The Plan Agent's fee for the handling of reinvestment of
dividends and distributions will be paid by the Fund. There will be no
brokerage charges with respect to shares of Common Stock issued directly by the
Fund as a result of dividends or capital gains distributions payable either in
shares or in cash. However, each participant will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open market
purchases in connection with the reinvestment of dividends or capital gains
distributions.
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
2001 Semi-Annual Report to Shareholders
22
Dividend Reinvestment Plan (unaudited) (continued)
The automatic reinvestment of dividends and distributions will not relieve
participants of any U.S. federal income tax that may be payable on such
dividends or distributions.
Experience under the Plan may indicate that changes thereto may be desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid: (i) subsequent to notice of the
change sent to all participants at least 30 days before the record date for
such dividend or distribution or (ii) otherwise in accordance with the terms of
the Plan. The Plan also may be amended or terminated by the Plan Agent, with
the Board of Directors' prior written consent, on at least 30 days' prior
written notice to all participants. All correspondence concerning the Plan
should be directed by mail to PFPC Global Fund Services, P.O. Box 8030, Boston,
Massachusetts 02266-8030 or by telephone at (800) 331-1710.
--------------------------------------------------------
--------------------------------------------------------
Travelers Corporate Loan Fund Inc.
23
(This page intentionally left blank.)
Directors
Allan J. Bloostein
Martin Brody
Dwight Crane
Robert Frankel
William R. Hutchinson
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Glenn N. Marchak
Vice President and
Investment Officer
Irving P. David
Controller
Christina T. Sydor
Secretary
[LOGO] NYSE Logo
Investment Advisor
Smith Barney Fund Management LLC
Sub-Investment Advisor
Travelers Asset Management
International Company LLC
Custodian
PFPC Trust Company
Transfer Agent
PFPC Global Fund Services
P.O. Box 8030
Boston, Massachusetts 02266-8030
This report is intended only for shareholders of Travelers Corporate Loan Fund
Inc. It is not a Prospectus, circular or representation intended for use in the
purchase or sale of shares of the Fund or any securities mentioned in this
report.
Travelers Corporate
Loan Fund Inc.
7 World Trade Center
New York, New York 10048
FD01642 5/01