Notes to Financial Statements
1. Significant Accounting Policies:
Merrill Lynch Senior Floating Rate Fund, Inc. (the "Fund") is registered under the Investment Company Act of
1940 as a continuously offered non-diversified, closed-end management investment company.
(a) Loan participation interests -- The Fund invests in senior secured floating rate loan interests ("Loan Interests")
with collateral having a market value, at time of acquisition by the Fund, which Fund management believes equals
or exceeds the principal amount of the corporate loan. The Fund may invest up to 20% of its total assets in loans
made on an unsecured basis. Depending on how the loan was acquired, the Fund will regard the issuer as
including the corporate borrower along with an agent bank for the syndicate of lenders and any intermediary for
the Fund's investment. Because agents and intermediaries are primarily commercial banks, the Fund's investment
in corporate loans at August 31, 1994 could be considered to be concentrated in commercial banking.
(b) Valuation of investments -- Loan Interests and common stocks are valued at fair value. Fair value is
determined in good faith by or under the direction of the Board of Directors of the Fund. Since Loan Interests are
purchased and sold primarily at par value, the Fund values the Loan Interests at par, unless Merrill Lynch Asset
Management, L.P. ("MLAM") determines par does not represent fair value. In the event such a determination is
made, fair value will be determined in accordance with guidelines approved by the Fund's Board of Directors.
Short-term securities with remaining maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market quotations are not readily available are valued
at fair value as determined in good faith by or under the direction of the Board of Directors of the Fund.
(c) lncome taxes -- It is the Fund's policy to comply with the requirements of the Internal Revenue Code