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First Trust Senior Floating Rate Income Fund II (FCT)
Investment Objective/Strategy - First Trust Senior Floating Rate Income Fund II (the "Fund") is a diversified, closed-end management investment company. The primary investment objective of the Fund is to seek a high level of current income. As a secondary objective, the Fund attempts to preserve capital. The Fund pursues its objectives by investing primarily in a portfolio of senior secured floating-rate corporate loans ("Senior Loans"). Under normal market conditions, at least 80% of the Fund's Managed Assets are generally invested in lower grade debt instruments. "Managed Assets" means the total asset value of the Fund minus the sum of its liabilities, other than the principal amount of borrowings. There can be no assurance that the Fund will achieve its investment objectives. Investing in Senior Loans involves credit risk and, during periods of generally declining credit quality, it may be particularly difficult for the Fund to achieve its secondary investment objective.
There can be no assurance that the Fund's investment objectives will be achieved. The Fund may not be appropriate for all investors.
Fund Overview
Fund TypeLoan Participation
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBNY Mellon Investment Servicing (US) Inc.
Fiscal Year-End05/31
Inception Price$20.00
Inception NAV$19.10
Current Fund Data (as of 3/4/2021)
Closing NAV1$12.77
Closing Market Price2$11.86
Discount to Net Asset Value (NAV)7.13%
Total Managed Assets$461,523,618
Common Shares Outstanding25,953,421
Dividend FrequencyMonthly
Dividend Per Share Amt3$0.1050
Distribution Rate410.62%
Daily Volume158,538
Average 30-Day Daily Volume173,482
Closing Market Price 52-Week High/Low$12.23 / $7.58
Closing NAV 52-Week High/Low$13.34 / $9.61
Expense Ratios (as of 11/30/2020)
Annual ExpensesPercent of
Net Assets
Percent of
Management Fees1.06%0.75%
Other Expenses
Total Operating Expenses1.41%1.01%
Leverage Costs0.40%0.29%
Total Annual Expenses1.81%1.30%
Leverage costs include interest, fees and any upfront/offering costs associated with borrowings by the Fund.
Portfolio Characteristics (as of 3/4/2021)7
Weighted Average Maturity4.58 Years
Weighted Average Price$99.04
Weighted Average Yield-To-Maturity55.49%
Weighted Average Yield-to-Worst5.50%
Percent of Assets with LIBOR Floors52.36%
Please note: Weighted average maturity excludes defaulted assets.
S&P Ratings (as of 1/31/2021)7
  S&P Rating Percent
BBB- 1.06%
BB 5.38%
BB- 7.35%
B+ 25.47%
B 37.09%
B- 17.09%
CCC+ 2.23%
CCC 2.99%
CC 0.04%
D 1.16%
NR 0.14%
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 creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
Market Price and NAV History (Since Inception)
Past performance is not indicative of future results.
% Premium/Discount (Since Inception)
Leverage Information (as of 3/4/2021)6
Total Net Assets with Leverage$461,523,618
Amount Attributable to Common Shares$331,523,618
Amount Attributable to Preferred Shares$0
Amount Attributable to Other Borrowings$130,000,000
Leverage (% of Total Adjusted Net Assets)28.17%
Top 10 Issuers (as of 1/31/2021)7
Holding Percent
Multiplan Inc (MPH) 3.29%
Bausch Health Companies Inc. (Valeant) 3.16%
HUB International Limited 3.10%
Alliant Holdings I, LLC 3.06%
Internet Brands, Inc. (Web MD/MH Sub I. LLC) 2.82%
Asurion, LLC 2.45%
iHeartCommunications, Inc. 2.45%
Amwins Group, Inc. 2.44%
CHG Healthcare Services, Inc 2.40%
Graham Packaging Company, L.P. 2.27%
Industry Breakdown (as of 1/31/2021)7
Industry Percent
Software 18.34%
Health Care Providers & Services 16.71%
Insurance 11.51%
Hotels, Restaurants & Leisure 9.38%
Pharmaceuticals 8.38%
Media 5.78%
Diversified Telecommunication Services 4.68%
Health Care Technology 4.44%
Containers & Packaging 2.92%
Entertainment 2.49%
Diversified Consumer Services 2.45%
Food Products 1.93%
Electric Utilities 1.73%
Commercial Services & Supplies 1.66%
Auto Components 1.62%
Diversified Financial Services 1.50%
Professional Services 1.17%
Machinery 0.85%
Communications Equipment 0.50%
Electrical Equipment 0.50%
Household Durables 0.31%
Oil, Gas & Consumable Fuels 0.25%
Specialty Retail 0.21%
Aerospace & Defense 0.20%
Chemicals 0.20%
Airlines 0.14%
Textiles, Apparel & Luxury Goods 0.10%
Construction & Engineering 0.05%
Performance (as of 2/28/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 4.24% 2.66% 7.80% 5.09% 6.77% 5.58% 4.50%
Market Price 8.66% 7.05% 15.56% 5.88% 7.80% 5.02% 3.88%

*Total return is the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in the NAV and Market Price. The NAV total return takes into account the fund's total annual expenses and does not reflect sales load. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. Past performance is not indicative of future results.

1 The fund's NAV is calculated by dividing the value of all the fund's assets, less all liabilities, by the total number of common shares outstanding.
2 Fund shares are purchased and sold on an exchange at their market 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 to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
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 The annualized return that would be earned on a debt security if held to maturity, weighted by the value of each debt security in the fund's portfolio. The calculation does not include the effect of fund fees and expenses.
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-PORT Part F) that are based on trade date recording of security transactions. Holdings are subject to change.
8 Inception Date is 5/25/2004

Risk Considerations

Investment return and market value of an investment in the fund will fluctuate. Shares, when sold, may be worth more or less than their original cost.

The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time, and will continue to impact the economy for the foreseeable future.

The Senior Loans in which the fund invests are generally considered to be "high-yield securities", subject to greater market fluctuations and risk of loss than securities with higher ratings. Lower-quality debt tends to be less liquid than higher-quality debt. The senior loan market has seen an increase in loans with weaker lender protections which may impact recovery values and/or trading levels in the future.

The fund's portfolio is also subject to credit risk, interest rate risk, liquidity risk and prepayment risk. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Credit risk may be heightened for the fund because it invests in below investment grade securities. Liquidity risk is the risk that the fund may have difficulty disposing of senior loans if it seeks to repay debt, pay dividends or expenses, or take advantage of a new investment opportunity. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the fund derives interest income will be reduced. The fund may not be able to reinvest the proceeds received on terms as favorable as the prepaid loan.

Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.

A second lien loan may have a claim on the same collateral pool as the first lien or it may be secured by a separate set of assets. Second lien loans are typically secured by a second priority security interest or lien on specified collateral securing the Borrower's obligation under the interest and present a greater degree of investment risk. These loans are also subject to the risk that Borrower cash flow and property securing the loan may be insufficient to meet scheduled payments after giving effect to those loans with a higher priority. These loans also have greater price volatility than those loans with a higher priority and may be less liquid. However, second lien loans often pay interest at higher rates than first lien loans reflecting such additional risks.

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
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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