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First Trust Senior Floating Rate Income Fund II (FCT)
Investment Objective/Strategy - The First Trust Senior Floating Rate Income Fund II is a diversified, closed-end management investment company. The Fund's primary investment objective is to seek a high level of current income. As a secondary objective, the Fund will attempt to preserve capital. The Fund will pursue these objectives through investment in a portfolio of senior secured floating rate corporate loans. It is anticipated that at least 80% of the Fund's managed assets will be invested in lower grade debt instruments.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerFCT
Fund TypeLoan Participation
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBNY Mellon Investment Servicing (US) Inc.
CUSIP33733U108
Fiscal Year-End05/31
ExchangeNYSE
Inception5/25/2004
Inception Price$20.00
Inception NAV$19.10
Current Fund Data (as of 7/28/2014)
Closing NAV1$14.94
Closing Share Price2$13.91
Discount to NAV6.89%
Total Managed Assets$573,858,126
Common Shares Outstanding26,696,982
Dividend FrequencyMonthly
Dividend Per Share Amt3$0.0680
Distribution Rate45.87%
Daily Volume74,275
Average 30-Day Daily Volume82,612
Closing Share Price 52-Week High/Low$16.12 / $13.80
Closing NAV 52-Week High/Low$15.07 / $14.83
Cumulative Total Returns (as of 6/30/2014)5
Period Share Price NAV
3 Months 0.41% 1.61%
1 Year 0.56% 7.04%
3 Years 20.84% 24.34%
5 Years 93.14% 60.22%
Year to Date 1.64% 2.93%
Inception to Date 38.66% 52.22%
Calendar Year Returns (as of 12/31/2013)5
Period Share Price NAV
2005 -5.44% 6.25%
2006 16.19% 7.39%
2007 -9.04% -0.11%
2008 -49.44% -47.61%
2009 79.47% 74.18%
2010 22.20% 11.01%
2011 0.81% 2.89%
2012 22.94% 13.04%
2013 1.66% 7.14%
Average Annual Returns (as of 6/30/2014)5
Period Share Price NAV
3 Years 6.51% 7.53%
5 Years 14.07% 9.89%
Inception to Date 3.29% 4.25%
Expense Ratios (as of 11/30/2013)
Annual ExpensesPercent of
Net Assets
Percent of
Managed
Assets
Management Fees1.08%0.75%
Other Expenses
0.33%
0.23%
Total Operating Expenses1.41%0.98%
 
Leverage Costs0.43%0.30%
 
Total Annual Expenses1.84%1.28%
 
Leverage costs include interest, fees and any upfront/offering costs associated with borrowings by the Fund.
Leverage Information (as of 7/28/2014)6
Total Net Assets with Leverage$573,858,126
Amount Attributable to Common Shares$398,858,126
Amount Attributable to Preferred Shares$0
Amount Attributable to Other Borrowings$175,000,000
Leverage (% of Total Net Assets)30.50%
S&P Ratings Breakdown for Sr. Loans (as of 5/31/2014)7
  S&P Rating Percent
BBB- 1.93%
BB+ 4.84%
BB 9.25%
BB- 13.11%
B+ 31.80%
B 26.08%
B- 5.26%
CCC+ 3.34%
CCC 0.80%
CCC- 0.44%
Privately rated securities 1.51%
NR 1.64%
The ratings are by Standard & Poor's except where otherwise indicated. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations except for those debt obligations that are only privately rated. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Investment grade is defined as those issuers that have a long-term credit rating of BBB- or higher. "NR" indicates no rating. The credit ratings shown relate to the credit worthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
Portfolio Charateristics (as of 5/31/2014)7
Weighted Average Price99.76
Weighted Average Maturity (Years)5.21
Percentage of assets with LIBOR floors:91.48
Share Price and NAV History (Since Inception)
Past performance is not indicative of future results.
% Premium/Discount (Since Inception)
Top 10 Issuers (as of 5/31/2014)7
Holding Percent
Caesar's Growth Partners, LLC 2.10%
Dell, Inc. 1.93%
BMC Software Finance, Inc. 1.84%
Asurion, LLC 1.77%
BJ's Wholesale Club, Inc. 1.77%
Ortho-Clinical Diagnostics, Inc. 1.38%
Freescale Semiconductor, Inc. 1.20%
Kinetic Concepts, Inc. 1.20%
Tribune Co. 1.18%
Nuveen Investments, Inc. 1.17%
Industry Breakdown (as of 5/31/2014)7
Industry Percent
Media 8.67%
Hotels, Restaurants & Leisure 7.82%
Health Care Providers & Services 6.94%
Diversified Financial Services 5.41%
Software 5.26%
Chemicals 4.62%
Health Care Equipment & Supplies 4.62%
Diversified Telecommunication Services 4.50%
Food Products 3.99%
Life Sciences Tools & Services 3.74%
Auto Components 3.13%
Insurance 2.96%
Pharmaceuticals 2.81%
Professional Services 2.81%
Containers & Packaging 2.53%
Diversified Consumer Services 2.37%
Technology Hardware, Storage & Peripherals 1.93%
Food & Staples Retailing 1.90%
Health Care Technology 1.72%
Semiconductors & Semiconductor Equipment 1.72%
Capital Markets 1.68%
IT Services 1.68%
Consumer Finance 1.64%
Commercial Services & Supplies 1.52%
Aerospace & Defense 1.51%
Specialty Retail 1.47%
Real Estate Investment Trusts (REITs) 1.15%
Independent Power and Renewable Electricity Producers 1.07%
Machinery 1.04%
Road & Rail 1.02%
Real Estate Management & Development 0.92%
Industrial Conglomerates 0.91%
Wireless Telecommunication Services 0.85%
Metals & Mining 0.75%
Oil, Gas & Consumable Fuels 0.66%
Electric Utilities 0.59%
Building Products 0.53%
Communications Equipment 0.44%
Construction & Engineering 0.36%
Diversified Business Services 0.33%
Biotechnology 0.19%
Household Durables 0.10%
Distributors 0.05%
Movies & Entertainment 0.05%
Energy Equipment & Services 0.04%
Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's common shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 Distribution rates are calculated by annualizing the most recent distribution paid or declared through today's date and then dividing by the most recent market price. The distribution consists of the sum of net investment income, net realized short-term capital gains, net realized long-term capital gains, and return of capital. Distribution rates may vary. Any distribution adjustment will not be reflected until after the declaration date for the next distribution. See the fund's 19a-1 Notices, if any, located under the "News & Literature" section of the website for estimates of distribution sources. Final determination of the source and tax status of all distributions paid in the current year will be made after year-end.
5 Total return is the combination of reinvested dividend income and reinvested capital gains distributions, at prices obtained by the Dividend Reinvestment Plan, if any, and changes in the NAV and Share Price. The NAV total return takes into account the fund's total annual expenses and does not reflect sales load. Past performance is not indicative of future results.
6 Leverage is a technique where a closed-end fund's manager borrows assets at one rate and invests the proceeds from the borrowed assets at another rate, seeking to increase yield and total return. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.
7 Market value information used in calculating the percentages is based upon trade date plus one recording of transactions, which can differ from regulatory financial reports (Forms N-CSR and N-Q) that are based on trade date recording of security transactions. Holdings are subject to change.

Risk Considerations

The Fund is subject to various risks, including: Credit Risk, Senior Loan Risk, Lower Grade Debt Instruments Risk, Interest Rate Risk, Discount From or Premium to Net Asset Value Risk, Leverage Risk, Restrictive Covenants and 1940 Act Restrictions, Secondary Market for the Fund's Shares, Limited Secondary Market for Senior Loans, Lending Portfolio Securities, Demand for Senior Loans, Unsecured Loans and Subordinated Loans, Short-Term Debt Securities, Investments in Equity Securities Incidental to Investment in Senior Loans, Illiquid Securities, Non-U.S. Securities, Management Risk, Strategic Transactions, Reinvestment Risk, Inflation Risk, Regulatory Changes, Market Event risk, anti-Takeover Provisions.

Lower grade debt instruments are commonly referred to as "high yield" or "junk bonds" and are considered speculative with respect to the issuer's capacity to pay interest and repay principal. Investing in lower grade debt instruments involves additional risks than investment-grade debt instruments. Lower grade debt instruments are securities rated Ba1 or lower by Moody's or BB+ or lower by S&P, comparably rated by another NRSRO or, if unrated, of comparable credit quality. These lower grade debt instruments may be come the subject of bankruptcy proceedings or otherwise subsequently default as to the repayment of principal and/or payment of interest or be downgraded to ratings in the lower rating categories (Ca or lower by Moody's, CC or lower by S&P or comparably rated by another NRSRO). Issuers of lower grade debt instruments are not perceived to be as strong financially as those with higher credit ratings, so the securities are usually considered speculative investments. These issuers are generally more vulnerable to financial setbacks and recession than more creditworthy issuers which may impair their ability to make interest and principal payments. Lower grade debt instruments tend to be less liquid than higher grade debt instruments. The credit ratings shown relate to the credit worthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.

The risks of investing in the Fund are spelled out in the prospectus, shareholder report and other regulatory filings.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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