Statement of Assets and Liabilities
|
|
|
|
|
Assets
|
|
June 30, 2020
|
|
|
|
Unaffiliated investments, at value (identified cost, $390,863,287)
|
|
$
|
361,719,556
|
|
|
|
Affiliated investment, at value (identified cost, $14,529,910)
|
|
|
14,529,910
|
|
|
|
Cash
|
|
|
7,742,241
|
|
|
|
Deposits for derivatives collateral forward foreign currency exchange contracts
|
|
|
440,000
|
|
|
|
Foreign currency, at value (identified cost, $2,820,340)
|
|
|
2,821,922
|
|
|
|
Interest and dividends receivable
|
|
|
1,541,296
|
|
|
|
Dividends receivable from affiliated investment
|
|
|
1,121
|
|
|
|
Receivable for investments sold
|
|
|
79,956,270
|
|
|
|
Receivable for open forward foreign currency exchange contracts
|
|
|
9,388
|
|
|
|
Tax reclaims receivable
|
|
|
211
|
|
|
|
Prepaid upfront fees and other fees on notes payable
|
|
|
197,548
|
|
|
|
Prepaid expenses
|
|
|
28,713
|
|
|
|
Total assets
|
|
$
|
468,988,176
|
|
|
Liabilities
|
|
|
|
Notes payable
|
|
$
|
95,000,000
|
|
|
|
Payable for investments purchased
|
|
|
100,621,334
|
|
|
|
Payable for open forward foreign currency exchange contracts
|
|
|
490,481
|
|
|
|
Payable to affiliates:
|
|
|
|
|
|
|
Investment adviser fee
|
|
|
220,121
|
|
|
|
Administration fee
|
|
|
74,366
|
|
|
|
Accrued expenses
|
|
|
324,440
|
|
|
|
Total liabilities
|
|
$
|
196,730,742
|
|
|
|
Auction preferred shares (1,504 shares outstanding) at liquidation value plus cumulative unpaid
dividends
|
|
$
|
37,600,000
|
|
|
|
Net assets applicable to common shares
|
|
$
|
234,657,434
|
|
|
Sources of Net Assets
|
|
|
|
Common shares, $0.01 par value, unlimited number of shares authorized, 37,866,607 shares issued and outstanding
|
|
$
|
378,666
|
|
|
|
Additional paid-in capital
|
|
|
277,541,221
|
|
|
|
Accumulated loss
|
|
|
(43,262,453
|
)
|
|
|
Net assets applicable to common shares
|
|
$
|
234,657,434
|
|
|
|
Net Asset Value Per Common Share
|
|
|
|
|
|
|
($234,657,434 ÷ 37,866,607 common shares issued and outstanding)
|
|
$
|
6.20
|
|
|
|
|
|
|
|
|
27
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Statement of Operations
|
|
|
|
|
Investment Income
|
|
Year Ended
June 30, 2020
|
|
|
|
Interest and other income
|
|
$
|
21,213,206
|
|
|
|
Dividends
|
|
|
911,281
|
|
|
|
Dividends from affiliated investment
|
|
|
105,338
|
|
|
|
Total investment income
|
|
$
|
22,229,825
|
|
|
|
Expenses
|
|
|
|
|
|
|
Investment adviser fee
|
|
$
|
2,930,938
|
|
|
|
Administration fee
|
|
|
978,945
|
|
|
|
Trustees fees and expenses
|
|
|
14,828
|
|
|
|
Custodian fee
|
|
|
136,746
|
|
|
|
Transfer and dividend disbursing agent fees
|
|
|
20,036
|
|
|
|
Legal and accounting services
|
|
|
128,709
|
|
|
|
Printing and postage
|
|
|
46,770
|
|
|
|
Interest expense and fees
|
|
|
2,977,430
|
|
|
|
Preferred shares service fee
|
|
|
32,431
|
|
|
|
Miscellaneous
|
|
|
61,059
|
|
|
|
Total expenses
|
|
$
|
7,327,892
|
|
|
|
Net investment income
|
|
$
|
14,901,933
|
|
|
|
Realized and Unrealized Gain (Loss)
|
|
|
|
|
|
|
Net realized gain (loss)
|
|
|
|
|
|
|
Investment transactions
|
|
$
|
(13,870,556
|
)
|
|
|
Investment transactions affiliated investment
|
|
|
2,335
|
|
|
|
Foreign currency transactions
|
|
|
(68,380
|
)
|
|
|
Forward foreign currency exchange contracts
|
|
|
1,328,203
|
|
|
|
Net realized loss
|
|
$
|
(12,608,398
|
)
|
|
|
Change in unrealized appreciation (depreciation)
|
|
|
|
|
|
|
Investments
|
|
$
|
(18,119,238
|
)
|
|
|
Foreign currency
|
|
|
24,892
|
|
|
|
Forward foreign currency exchange contracts
|
|
|
(303,138
|
)
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
$
|
(18,397,484
|
)
|
|
|
Net realized and unrealized loss
|
|
$
|
(31,005,882
|
)
|
|
|
Distributions to preferred shareholders
|
|
$
|
(639,137
|
)
|
|
|
Net decrease in net assets from operations
|
|
$
|
(16,743,086
|
)
|
|
|
|
|
|
|
|
28
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
Increase (Decrease) in Net Assets
|
|
2020
|
|
|
2019
|
|
|
|
|
From operations
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
14,901,933
|
|
|
$
|
15,520,463
|
|
|
|
|
Net realized gain (loss)
|
|
|
(12,608,398
|
)
|
|
|
2,658,192
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
|
(18,397,484
|
)
|
|
|
(9,320,374
|
)
|
|
|
|
Distributions to preferred shareholders
|
|
|
(639,137
|
)
|
|
|
(1,175,940
|
)
|
|
|
|
Discount on redemption and repurchase of auction preferred shares
|
|
|
|
|
|
|
1,920,000
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
(16,743,086
|
)
|
|
$
|
9,602,341
|
|
|
|
|
Distributions to common shareholders
|
|
$
|
(15,525,309
|
)
|
|
$
|
(14,692,244
|
)
|
|
|
|
Net decrease in net assets
|
|
$
|
(32,268,395
|
)
|
|
$
|
(5,089,903
|
)
|
|
Net Assets Applicable to Common Shares
|
|
|
|
|
At beginning of year
|
|
$
|
266,925,829
|
|
|
$
|
272,015,732
|
|
|
|
|
At end of year
|
|
$
|
234,657,434
|
|
|
$
|
266,925,829
|
|
|
|
|
|
|
|
|
29
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Statement of Cash Flows
|
|
|
|
|
Cash Flows From Operating Activities
|
|
Year Ended
June 30, 2020
|
|
|
|
Net decrease in net assets from operations
|
|
$
|
(16,743,086
|
)
|
|
|
Distributions to preferred shareholders
|
|
|
639,137
|
|
|
|
Net decrease in net assets from operations excluding distributions to preferred shareholders
|
|
$
|
(16,103,949
|
)
|
|
|
Adjustments to reconcile net decrease in net assets from operations to net cash provided by operating activities:
|
|
|
|
|
|
|
Investments purchased
|
|
|
(135,120,915
|
)
|
|
|
Investments sold and principal repayments
|
|
|
160,638,401
|
|
|
|
Increase in short-term investments, net
|
|
|
(11,333,139
|
)
|
|
|
Net amortization/accretion of premium (discount)
|
|
|
35,193
|
|
|
|
Amortization of prepaid upfront fees and other fees on notes payable
|
|
|
170,518
|
|
|
|
Decrease in interest and dividends receivable
|
|
|
73,668
|
|
|
|
Decrease in dividends receivable from affiliated investment
|
|
|
7,565
|
|
|
|
Decrease in receivable for open forward foreign currency exchange contracts
|
|
|
6,027
|
|
|
|
Increase in tax reclaims receivable
|
|
|
(211
|
)
|
|
|
Decrease in prepaid expenses
|
|
|
4,700
|
|
|
|
Increase in payable for open forward foreign currency exchange contracts
|
|
|
297,111
|
|
|
|
Decrease in payable to affiliate for investment adviser fee
|
|
|
(35,012
|
)
|
|
|
Decrease in payable to affiliate for administration fee
|
|
|
(10,678
|
)
|
|
|
Decrease in payable to affiliate for Trustees fees
|
|
|
(5,755
|
)
|
|
|
Decrease in accrued expenses
|
|
|
(207,563
|
)
|
|
|
Increase in unfunded loan commitments
|
|
|
272,361
|
|
|
|
Net change in unrealized (appreciation) depreciation from investments
|
|
|
18,119,238
|
|
|
|
Net realized loss from investments
|
|
|
13,868,221
|
|
|
|
Net cash provided by operating activities
|
|
$
|
30,675,781
|
|
|
Cash Flows From Financing Activities
|
|
|
|
Cash distributions paid to common shareholders
|
|
$
|
(15,525,309
|
)
|
|
|
Cash distributions paid to preferred shareholders
|
|
|
(648,346
|
)
|
|
|
Proceeds from notes payable
|
|
|
27,000,000
|
|
|
|
Repayments of notes payable
|
|
|
(35,000,000
|
)
|
|
|
Payment of upfront fees and other fees on notes payable
|
|
|
(281,250
|
)
|
|
|
Net cash used in financing activities
|
|
$
|
(24,454,905
|
)
|
|
|
Net increase in cash and restricted cash*
|
|
$
|
6,220,876
|
|
|
|
Cash and restricted cash at beginning of year (including foreign currency)
|
|
$
|
4,783,287
|
|
|
|
Cash and restricted cash at end of year (including foreign currency)
|
|
$
|
11,004,163
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
Cash paid for interest and fees on borrowings
|
|
$
|
3,300,647
|
|
*
|
Includes net change in unrealized appreciation (depreciation) on foreign currency of $1,571.
|
|
|
|
|
|
|
|
30
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Statement of Cash Flows continued
The following table provides a reconciliation of cash and restricted cash reported within the Statement of Assets and Liabilities that sum to the total of such amounts shown on the Statement of Cash Flows.
|
|
|
|
|
|
|
June 30, 2020
|
|
|
|
Cash
|
|
$
|
7,742,241
|
|
|
|
Deposits for derivatives collateral forward foreign currency exchange contracts
|
|
|
440,000
|
|
|
|
Foreign currency
|
|
|
2,821,922
|
|
|
|
Total cash and restricted cash as shown on the Statement of Cash Flows
|
|
$
|
11,004,163
|
|
|
|
|
|
|
|
|
31
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Financial Highlights
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
Net asset value Beginning of year (Common shares)
|
|
$
|
7.050
|
|
|
$
|
7.180
|
|
|
$
|
7.150
|
|
|
$
|
6.650
|
|
|
$
|
7.020
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income(1)
|
|
$
|
0.394
|
|
|
$
|
0.410
|
|
|
$
|
0.385
|
|
|
$
|
0.404
|
|
|
$
|
0.422
|
|
|
|
|
|
|
|
Net realized and unrealized gain (loss)
|
|
|
(0.817
|
)
|
|
|
(0.172
|
)
|
|
|
0.038
|
|
|
|
0.436
|
|
|
|
(0.371
|
)
|
|
|
|
|
|
|
Distributions to preferred shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income(1)
|
|
|
(0.017
|
)
|
|
|
(0.031
|
)
|
|
|
(0.028
|
)
|
|
|
(0.014
|
)
|
|
|
(0.009
|
)
|
|
|
|
|
|
|
Discount on redemption and repurchase of auction preferred shares(1)
|
|
|
|
|
|
|
0.051
|
|
|
|
|
|
|
|
0.064
|
|
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
(0.440
|
)
|
|
$
|
0.258
|
|
|
$
|
0.395
|
|
|
$
|
0.890
|
|
|
$
|
0.042
|
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.410
|
)
|
|
$
|
(0.388
|
)
|
|
$
|
(0.365
|
)
|
|
$
|
(0.390
|
)
|
|
$
|
(0.412
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.410
|
)
|
|
$
|
(0.388
|
)
|
|
$
|
(0.365
|
)
|
|
$
|
(0.390
|
)
|
|
$
|
(0.412
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
6.200
|
|
|
$
|
7.050
|
|
|
$
|
7.180
|
|
|
$
|
7.150
|
|
|
$
|
6.650
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
5.330
|
|
|
$
|
6.230
|
|
|
$
|
6.380
|
|
|
$
|
6.650
|
|
|
$
|
6.010
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value(2)
|
|
|
(5.64
|
)%
|
|
|
4.46
|
%(3)
|
|
|
6.12
|
%
|
|
|
14.02
|
%(4)
|
|
|
1.57
|
%
|
|
|
|
|
|
|
Total Investment Return on Market Value(2)
|
|
|
(8.20
|
)%
|
|
|
3.88
|
%
|
|
|
1.39
|
%
|
|
|
17.34
|
%
|
|
|
3.77
|
%
|
|
|
|
|
|
|
|
32
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
Ratios/Supplemental Data
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year
(000s omitted)
|
|
$
|
234,657
|
|
|
$
|
266,926
|
|
|
$
|
272,016
|
|
|
$
|
270,810
|
|
|
$
|
251,789
|
|
|
|
|
|
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees(6)
|
|
|
1.73
|
%
|
|
|
1.73
|
%
|
|
|
1.82
|
%
|
|
|
1.87
|
%
|
|
|
1.96
|
%
|
|
|
|
|
|
|
Interest and fee expense(7)
|
|
|
1.19
|
%
|
|
|
1.40
|
%
|
|
|
0.83
|
%
|
|
|
0.52
|
%
|
|
|
0.28
|
%
|
|
|
|
|
|
|
Total expenses(6)
|
|
|
2.92
|
%
|
|
|
3.13
|
%
|
|
|
2.65
|
%
|
|
|
2.39
|
%
|
|
|
2.24
|
%
|
|
|
|
|
|
|
Net investment income
|
|
|
5.93
|
%
|
|
|
5.74
|
%
|
|
|
5.36
|
%
|
|
|
5.75
|
%
|
|
|
6.38
|
%
|
|
|
|
|
|
|
Portfolio Turnover
|
|
|
57
|
%
|
|
|
26
|
%
|
|
|
34
|
%
|
|
|
42
|
%
|
|
|
31
|
%
|
|
|
|
|
|
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total notes payable outstanding (in 000s)
|
|
$
|
95,000
|
|
|
$
|
103,000
|
|
|
$
|
93,000
|
|
|
$
|
92,000
|
|
|
$
|
25,000
|
|
|
|
|
|
|
|
Asset coverage per $1,000 of notes payable(8)
|
|
$
|
3,866
|
|
|
$
|
3,957
|
|
|
$
|
4,587
|
|
|
$
|
4,613
|
|
|
$
|
15,472
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
1,504
|
|
|
|
1,504
|
|
|
|
2,464
|
|
|
|
2,464
|
|
|
|
4,400
|
|
|
|
|
|
|
|
Asset coverage per preferred share(9)
|
|
$
|
69,242
|
|
|
$
|
72,464
|
|
|
$
|
68,989
|
|
|
$
|
69,078
|
|
|
$
|
71,629
|
|
|
|
|
|
|
|
Involuntary liquidation preference per preferred
share(10)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
|
|
|
|
|
Approximate market value per preferred share(10)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
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 Trusts dividend reinvestment plan.
|
(3)
|
The total return based on net asset value reflects the impact of the tender and repurchase by the Trust of a portion of its Auction Preferred Shares at 92% of
the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 3.71%.
|
(4)
|
The total return based on net asset value reflects the impact of the tender and repurchase by the Trust of a portion of its Auction Preferred Shares at 95% of
the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 13.00%.
|
(5)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(6)
|
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.
|
(7)
|
Interest and fee expense relates to the notes payable to partially redeem the Trusts Auction Preferred Shares (see Note 2) and/or to fund investments (see
Note 9).
|
(8)
|
Calculated by subtracting the Trusts total liabilities (not including the notes payable and preferred shares) from the Trusts total assets, and
dividing the result by the notes payable balance in thousands.
|
(9)
|
Calculated by subtracting the Trusts total liabilities (not including the notes payable and preferred shares) from the Trusts 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 277%, 290%, 276%, 276% and 287% at
June 30, 2020, 2019, 2018, 2017 and 2016, respectively.
|
(10)
|
Plus accumulated and unpaid dividends.
|
|
Ratios based on net assets applicable to common shares plus preferred shares and borrowings are presented below. Ratios do not reflect the effect of
dividend payments to preferred shareholders and exclude the effect of custody fee credits, if any.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.11
|
%
|
|
|
1.12
|
%
|
|
|
1.17
|
%
|
|
|
1.21
|
%
|
|
|
1.21
|
%
|
|
|
|
|
|
|
Interest and fee expense
|
|
|
0.76
|
%
|
|
|
0.91
|
%
|
|
|
0.54
|
%
|
|
|
0.34
|
%
|
|
|
0.17
|
%
|
|
|
|
|
|
|
Total expenses
|
|
|
1.87
|
%
|
|
|
2.03
|
%
|
|
|
1.71
|
%
|
|
|
1.55
|
%
|
|
|
1.38
|
%
|
|
|
|
|
|
|
Net investment income
|
|
|
3.81
|
%
|
|
|
3.73
|
%
|
|
|
3.46
|
%
|
|
|
3.72
|
%
|
|
|
3.93
|
%
|
|
|
|
|
|
|
|
33
|
|
See Notes to Financial Statements.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements
1 Significant Accounting Policies
Eaton Vance Senior Income Trust (the Trust) 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 Trusts investment objective is
to provide a high level of current income, consistent with the preservation of capital, by investing primarily in senior, secured floating-rate loans.
The following is a summary of significant accounting policies of the Trust. The policies are in conformity with accounting principles generally accepted in the
United States of America (U.S. GAAP). The Trust 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 borrowers 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 borrowers 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 Trust 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 Trust. 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 Trust. The fair value of each Senior Loan is periodically reviewed and approved by the investment advisers 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 ask 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 debt 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 ask prices 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 ask 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 ask 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 Trusts 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.
Affiliated Fund. The Trust 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.
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 Trust in a manner that most fairly reflects the securitys
fair value, which is the amount that the Trust might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
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 securitys 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 companys or entitys financial statements, 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. Distributions from investment companies are recorded as dividend income, capital gains or return of capital based on the nature of the distribution.
D Federal Taxes The Trusts 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.
As of June 30, 2020, the Trust had no uncertain tax positions that would require financial statement recognition,
de-recognition, or disclosure. The Trust 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 Trust may enter into certain loan agreements all or a portion of which may be unfunded. The Trust is obligated to fund these commitments at the borrowers discretion. These commitments are
disclosed in the accompanying Portfolio of Investments. At June 30, 2020, the Trust 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 Trusts organizational documents,
its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Trust. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust
(such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trusts Declaration of Trust contains an express disclaimer of liability on the part of Trust shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Trust shareholders. Moreover, the By-laws also provide for
indemnification out of Trust 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 Trust
enters into agreements with service providers that may contain indemnification clauses. The Trusts maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet
occurred.
I Forward Foreign Currency Exchange Contracts The Trust 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.
2 Auction Preferred Shares
The Trust issued Auction Preferred Shares (APS) on July 27, 2001 in a public offering. Dividends on the APS, which accrue daily, are cumulative at
rates which are reset every seven days by an auction, unless a special dividend period has been set. Series of APS are identical in all respects except for the reset dates of the dividend rates. If the APS auctions do not successfully clear, the
dividend payment rate over the next period for the APS holders is set at a specified maximum applicable rate until such time as the APS auctions are successful. Auctions have not cleared since February 13, 2008 and the rate since that date has
been the maximum applicable rate (see Note 3). The maximum applicable rate on the APS is 125% of the AA Financial Composite Commercial Paper Rate at the date of the auction. The stated spread over the reference benchmark rate is
determined based on the credit rating of the APS.
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
The number of APS issued and outstanding as of June 30, 2020 is as follows:
|
|
|
|
|
|
|
APS Issued and
Outstanding
|
|
|
|
Series A
|
|
|
752
|
|
|
|
Series B
|
|
|
752
|
|
The APS are redeemable at the option of the Trust at a redemption price equal to $25,000 per share, plus accumulated and unpaid
dividends, on any dividend payment date. The APS are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, if the Trust is in default for an extended period on its asset
maintenance requirements with respect to the APS. If the dividends on the APS remain unpaid in an amount equal to two full years dividends, the holders of the APS as a class have the right to elect a majority of the Board of Trustees. In
general, the holders of the APS and the common shares have equal voting rights of one vote per share, except that the holders of the APS, as a separate class, have the right to elect at least two members of the Board of Trustees. The APS have a
liquidation preference of $25,000 per share, plus accumulated and unpaid dividends. The Trust is required to maintain certain asset coverage with respect to the APS as defined in the Trusts By-Laws and
the 1940 Act. The Trust pays an annual fee up to 0.15% of the liquidation value of the APS to broker/dealers as a service fee if the auctions are unsuccessful; otherwise, the annual fee is 0.25%.
On June 29, 2018, the Trust announced a tender offer to purchase up to 39% of its outstanding APS at a price per share equal to 92% of the APS liquidation
preference of $25,000 per share (or $23,000 per share), plus any accrued but unpaid APS dividends. The tender offer expired on September 14, 2018. The number of APS redeemed during the year ended June 30, 2019 pursuant to the tender offer and
the redemption amount (excluding the final dividend payment) were as follows:
|
|
|
|
|
|
|
|
|
|
|
APS Redeemed
During the Year
|
|
|
Redemption
Amount
|
|
|
|
|
Series A
|
|
|
480
|
|
|
$
|
11,040,000
|
|
|
|
|
Series B
|
|
|
480
|
|
|
|
11,040,000
|
|
3 Distributions to Shareholders and Income Tax Information
The Trust intends to make monthly distributions of net investment income to common shareholders, after payment of any dividends on any outstanding APS. In addition,
at least annually, the Trust intends to distribute all or substantially all of its net realized capital gains. Distributions to common shareholders are recorded on the ex-dividend date. Distributions to
preferred shareholders are recorded daily and are payable at the end of each dividend period. The dividend rates for the APS at June 30, 2020, and the amount of dividends accrued (including capital gains, if any) to APS shareholders, average
APS dividend rates, and dividend rate ranges for the year then ended were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APS Dividend
Rates at
June 30, 2020
|
|
|
Dividends
Accrued to APS
Shareholders
|
|
|
Average APS
Dividend
Rates
|
|
|
Dividend
Rate
Ranges (%)
|
|
|
|
|
|
|
Series A
|
|
|
0.10
|
%
|
|
$
|
325,337
|
|
|
|
1.73
|
%
|
|
|
0.062.99
|
|
|
|
|
|
|
Series B
|
|
|
0.13
|
|
|
|
313,800
|
|
|
|
1.67
|
|
|
|
0.052.99
|
|
Beginning February 13, 2008 and consistent with the patterns in the broader market for auction-rate securities, the
Trusts APS auctions were unsuccessful in clearing due to an imbalance of sell orders over bids to buy the APS. As a result, the dividend rates of the APS were reset to the maximum applicable rates. The table above reflects such maximum
dividend rate for each series as of June 30, 2020.
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.
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
The tax character of distributions declared for the years ended June 30, 2020 and June 30, 2019 was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
Ordinary income
|
|
$
|
16,164,446
|
|
|
$
|
15,868,184
|
|
During the year ended June 30, 2020, accumulated loss was decreased by $27,221 and
paid-in capital was decreased by $27,221 due to differences between book and tax accounting. These reclassifications had no effect on the net assets or net asset value per share of the Trust.
As of June 30, 2020, the components of distributable earnings (accumulated loss) on a tax basis were as follows:
|
|
|
|
|
|
|
Deferred capital losses
|
|
$
|
(14,226,696
|
)
|
|
|
Net unrealized depreciation
|
|
|
(29,035,757
|
)
|
At June 30, 2020, the Trust, for federal income tax purposes, had deferred capital losses of $14,226,696 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 Trust of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Trusts next taxable year and retain the same short-term or long-term character as when originally
deferred. Of the deferred capital losses at June 30, 2020, $3,995,102 are short-term and $10,231,594 are long-term.
The cost and unrealized
appreciation (depreciation) of investments, including open derivative contracts, of the Trust at June 30, 2020, as determined on a federal income tax basis, were as follows:
|
|
|
|
|
|
|
Aggregate cost
|
|
$
|
405,260,454
|
|
|
|
Gross unrealized appreciation
|
|
$
|
2,051,603
|
|
|
|
Gross unrealized depreciation
|
|
|
(31,062,591
|
)
|
|
|
Net unrealized depreciation
|
|
$
|
(29,010,988
|
)
|
4 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by EVM as compensation for management and investment advisory services rendered to the Trust. Pursuant to the investment
advisory agreement between the Trust and EVM, the investment advisory fee payable by the Trust is 0.85% of the Trusts average weekly gross assets and is payable monthly. Pursuant to a fee reduction agreement between the Trust and EVM that
commenced on May 1, 2010, the annual investment adviser fee is reduced by 0.01% every May 1 thereafter for the next twenty-nine years. The Trusts advisory fee is currently computed at an annual rate of 0.74% (0.75% prior to
May 1, 2020) of its average weekly gross assets and is payable monthly. The fee reduction cannot be terminated without the consent of the Trustees and shareholders. For the year ended June 30, 2020, the Trusts investment adviser fee
totaled $2,930,938. The Trust invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. The administration fee is earned by EVM for administering the business affairs of the
Trust and is computed at an annual rate of 0.25% of the Trusts average weekly gross assets. For the year ended June 30, 2020, the administration fee amounted to $978,945.
Trustees and officers of the Trust who are members of EVMs organization receive remuneration for their services to the Trust out of the investment adviser fee. Trustees of the Trust 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 year ended June 30, 2020, no significant amounts have been deferred. Certain
officers and Trustees of the Trust 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
$219,486,069 and $235,607,971, respectively, for the year ended June 30, 2020.
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
6 Common Shares of Beneficial Interest and Shelf Offering
The Trust may issue common
shares pursuant to its dividend reinvestment plan. There were no common shares issued by the Trust for the years ended June 30, 2020 and June 30, 2019.
In November 2013, the Board of Trustees initially approved a share repurchase program for the Trust. Pursuant to the reauthorization of the share repurchase program by the Board of Trustees in March 2019, the Trust
is authorized to repurchase up to 10% of its common shares outstanding as of the last day of the prior calendar year at market prices when shares are trading at a discount to net asset value. The share repurchase program does not obligate the Trust
to purchase a specific amount of shares. There were no repurchases of common shares by the Trust for the years ended June 30, 2020 and June 30, 2019.
Pursuant to a registration statement filed with the SEC, the Trust is authorized to issue up to an additional 4,551,438 common shares through an equity shelf offering program (the shelf offering). Under
the shelf offering, the Trust, subject to market conditions, may raise additional capital from time to time and in varying amounts and offering methods at a net price at or above the Trusts net asset value per common share. During the years
ended June 30, 2020 and June 30, 2019, there were no shares sold by the Trust pursuant to its shelf offering.
According to filings made on
Schedule 13D and 13G pursuant to Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, two affiliated entities and one individual affiliated with such entities together owned 15.9% of the Trusts common shares.
7 Restricted Securities
At
June 30, 2020, the Trust owned the following securities which were restricted as to public resale and not registered under the Securities Act of 1933 (excluding Rule 144A securities). The Trust has various registration rights (exercisable under
a variety of circumstances) with respect to these securities. The value of these securities is determined based on valuations provided by brokers when available, or if not available, they are valued at fair value using methods determined in good
faith by or at the direction of the Trustees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Date of
Acquisition
|
|
|
Shares
|
|
|
Cost
|
|
|
Value
|
|
|
|
|
|
|
Common Stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Point Energy Holdings, Inc.
|
|
|
7/15/14
|
|
|
|
325
|
|
|
$
|
15,070
|
|
|
$
|
0
|
|
|
|
|
|
|
Convertible Preferred Stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Point Energy Holdings, Inc., Series A, 12.00%
|
|
|
5/26/17
|
|
|
|
5
|
|
|
|
5,000
|
|
|
|
0
|
|
|
|
|
|
|
Total Restricted Securities
|
|
|
|
|
|
|
|
|
|
$
|
20,070
|
|
|
$
|
0
|
|
8 Financial Instruments
The Trust 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
Trust has in particular classes of 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 June 30, 2020 is included in the Portfolio of Investments. At June 30, 2020, the Trust had sufficient cash and/or securities to cover commitments
under these contracts.
The Trust is subject to foreign exchange risk in the normal course of pursuing its investment objective. Because the Trust 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 Trust enters into forward foreign
currency exchange contracts.
The Trust 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 Trusts net assets below a certain level over a certain period of time, which would trigger a payment by the Trust for those derivatives in a
liability position. At June 30, 2020, the fair value of derivatives with credit-related contingent features in a net liability position was $490,481. The aggregate fair value of assets pledged as collateral by the Trust for such liability was
$440,000 at June 30, 2020.
The over-the-counter (OTC)
derivatives in which the Trust 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 Trust 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
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
the Trust 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 Trust 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 Trusts net assets decline by a stated percentage or the Trust fails to meet the terms of its ISDA Master Agreements, which would cause the counterparty to accelerate payment by the Trust
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 Trust and/or
counterparty is held in segregated accounts by the Trusts 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 Trust, a corresponding liability on the Statement of Assets and Liabilities. Securities pledged by the Trust 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 June 30, 2020 was as follows:
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
Derivative
|
|
Asset Derivative(1)
|
|
|
Liability Derivative(2)
|
|
|
|
|
Forward foreign currency exchange contracts
|
|
$
|
9,388
|
|
|
$
|
(490,481
|
)
|
(1)
|
Statement of Assets and Liabilities location: Receivable for open forward foreign currency exchange contracts.
|
(2)
|
Statement of Assets and Liabilities location: Payable for open forward foreign currency exchange contracts.
|
The Trusts 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 Trusts 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 Trust for such
assets and pledged by the Trust for such liabilities as of June 30, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
JPMorgan Chase Bank, N.A.
|
|
$
|
4,699
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,699
|
|
|
|
|
|
|
|
State Street Bank and Trust Company
|
|
|
4,689
|
|
|
|
(4,689
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,388
|
|
|
$
|
(4,689
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,699
|
|
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
Total Cash
Collateral
Pledged
|
|
|
|
|
|
|
|
|
Goldman Sachs International
|
|
$
|
(229,408
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
229,408
|
|
|
$
|
|
|
|
$
|
300,000
|
|
|
|
|
|
|
|
|
HSBC Bank USA, N.A.
|
|
|
(170,948
|
)
|
|
|
|
|
|
|
|
|
|
|
140,000
|
|
|
|
(30,948
|
)
|
|
|
140,000
|
|
|
|
|
|
|
|
|
Standard Chartered Bank
|
|
|
(82,019
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(82,019
|
)
|
|
|
|
|
|
|
|
|
|
|
|
State Street Bank and Trust Company
|
|
|
(8,106
|
)
|
|
|
4,689
|
|
|
|
|
|
|
|
|
|
|
|
(3,417
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(490,481
|
)
|
|
$
|
4,689
|
|
|
$
|
|
|
|
$
|
369,408
|
|
|
$
|
(116,384
|
)
|
|
$
|
440,000
|
|
(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 year ended June 30, 2020 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
|
|
$
|
1,328,203
|
|
|
$
|
(303,138
|
)
|
(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 year ended June 30, 2020, which is indicative of the volume of this derivative type, was approximately $29,048,000.
9 Revolving Credit and Security Agreement
The Trust has entered into a Revolving Credit
and Security Agreement, as amended (the Agreement) with conduit lenders and a bank to borrow up to $125 million. Borrowings under the Agreement are secured by the assets of the Trust. 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 8, 2021, the Trust also pays a program fee of 0.85% 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 unused portion of the total commitment under the Agreement. Program and liquidity fees for the year ended
June 30, 2020 totaled $918,353 and are included in interest expense and fees on the Statement of Operations. In connection with the renewal of the Agreement on March 9, 2020, the Trust paid upfront fees of $125,000 and, shortly thereafter
on March 20, 2020, the Trust paid waiver fees of $156,250 in connection with a reduction of Trust net asset value during the month of March 2020 due to market volatility; these aggregate upfront and waiver fees are being amortized to interest
expense through March 8, 2021. The unamortized balance as of June 30, 2020 is approximately $198,000 and is included in prepaid upfront fees and other fees on notes payable on the Statement of Assets and Liabilities. At June 30, 2020,
the Trust had borrowings outstanding under the Agreement of $95,000,000 at an annual interest rate of 0.35%. Based on the short-term nature of the borrowings under the Agreement and the variable interest rate, the carrying amount of the borrowings
at June 30, 2020 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 June 30, 2020. For the year ended June 30,
2020, the average borrowings under the Agreement and the average interest rate (excluding fees) were $102,256,831 and 1.83%, respectively.
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
10 Investments in Affiliated Funds
At June 30, 2020, the value of the Trusts
investment in affiliated funds was $14,529,910, which represents 6.2% of the Trusts net assets applicable to common shares. Transactions in affiliated funds by the Trust for the year ended June 30, 2020 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of affiliated fund
|
|
Value,
beginning of
period
|
|
|
Purchases
|
|
|
Sales proceeds
|
|
|
Net realized
gain (loss)
|
|
|
Change in
unrealized
appreciation
(depreciation)
|
|
|
Value, end
of period
|
|
|
Dividend
income
|
|
|
Units, end of
period
|
|
|
Short-Term Investments
|
|
|
|
|
|
|
|
|
|
|
Eaton Vance Cash Reserves Fund, LLC
|
|
$
|
3,194,436
|
|
|
$
|
126,881,923
|
|
|
$
|
(115,548,784
|
)
|
|
$
|
2,335
|
|
|
$
|
|
|
|
$
|
14,529,910
|
|
|
$
|
105,338
|
|
|
|
14,529,910
|
|
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 funds 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.
At June 30, 2020, the hierarchy of inputs used in valuing the Trusts 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)
|
|
$
|
|
|
|
$
|
323,142,137
|
|
|
$
|
359,889
|
|
|
$
|
323,502,026
|
|
|
|
|
|
|
Corporate Bonds & Notes
|
|
|
|
|
|
|
12,252,185
|
|
|
|
|
|
|
|
12,252,185
|
|
|
|
|
|
|
Asset-Backed Securities
|
|
|
|
|
|
|
18,683,194
|
|
|
|
|
|
|
|
18,683,194
|
|
|
|
|
|
|
Common Stocks
|
|
|
643,706
|
|
|
|
216,514
|
|
|
|
2,239,580
|
|
|
|
3,099,800
|
|
|
|
|
|
|
Convertible Preferred Stocks
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
Preferred Stocks
|
|
|
|
|
|
|
|
|
|
|
176,058
|
|
|
|
176,058
|
|
|
|
|
|
|
Closed-End Funds
|
|
|
4,001,384
|
|
|
|
|
|
|
|
|
|
|
|
4,001,384
|
|
|
|
|
|
|
Warrants
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
Miscellaneous
|
|
|
|
|
|
|
4,909
|
|
|
|
0
|
|
|
|
4,909
|
|
|
|
|
|
|
Short-Term Investments
|
|
|
|
|
|
|
14,529,910
|
|
|
|
|
|
|
|
14,529,910
|
|
|
|
|
|
|
Total Investments
|
|
$
|
4,645,090
|
|
|
$
|
368,828,849
|
|
|
$
|
2,775,527
|
|
|
$
|
376,249,466
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts
|
|
$
|
|
|
|
$
|
9,388
|
|
|
$
|
|
|
|
$
|
9,388
|
|
|
|
|
|
|
Total
|
|
$
|
4,645,090
|
|
|
$
|
368,838,237
|
|
|
$
|
2,775,527
|
|
|
$
|
376,258,854
|
|
|
|
|
|
|
Liability Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts
|
|
$
|
|
|
|
$
|
(490,481
|
)
|
|
$
|
|
|
|
$
|
(490,481
|
)
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
(490,481
|
)
|
|
$
|
|
|
|
$
|
(490,481
|
)
|
*
|
None of the unobservable inputs for Level 3 assets, individually or collectively, had a material impact on the Trust.
|
Eaton Vance
Senior Income Trust
June 30, 2020
Notes to Financial Statements continued
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 year ended June 30, 2020 is
not presented.
12 Risks and Uncertainties
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 Trust,
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.
Credit Risk
The Trust 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 loans value.
Pandemic Risk
An outbreak of respiratory
disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and
delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual
countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other
pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market
volatility, which may have an adverse effect on the Trusts investments.
Eaton Vance
Senior Income Trust
June 30, 2020
Report of Independent Registered Public Accounting Firm
To the Trustees and Shareholders of Eaton Vance Senior Income Trust:
Opinion on the Financial
Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of Eaton Vance Senior Income Trust (the
Trust), including the portfolio of investments, as of June 30, 2020, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then
ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the
Trust as of June 30, 2020, and the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for
Opinion
These financial statements and financial highlights are the responsibility of the Trusts management. Our responsibility is to express an
opinion on the Trusts financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities
and senior loans owned as of June 30, 2020, by correspondence with the custodian, brokers and selling or agent banks; when replies were not received from brokers and selling or agent banks, we performed other auditing procedures. We believe
that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
August 19, 2020
We have served as the auditor of one or more Eaton Vance investment companies since 1959.
Eaton Vance
Senior Income Trust
June 30, 2020
Federal Tax Information (Unaudited)
The Form 1099-DIV you receive in February 2021 will show the tax status of all distributions paid to your account in calendar year 2020. Shareholders are advised to consult
their own tax adviser with respect to the tax consequences of their investment in the Trust. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified dividend income for individuals
and the dividends received deduction for
corporations.
Qualified Dividend Income. For the fiscal year ended June 30, 2020, the Trust designates approximately $448,636, or up to the maximum amount
of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Dividends
Received Deduction. Corporate shareholders are generally entitled to take the dividends received deduction on the portion of the Trusts dividend distribution that qualifies under tax law. For the Trusts fiscal 2020
ordinary income dividends, 2.87% qualifies for the corporate dividends received deduction.
Eaton Vance
Senior Income Trust
June 30, 2020
Dividend Reinvestment Plan
The Trust offers a dividend reinvestment plan (Plan) pursuant to which shareholders automatically have distributions reinvested in common shares (Shares) of the Trust unless they elect otherwise through their
investment dealer. On the distribution payment date, if the NAV per Share is equal to or less than the market price per Share plus estimated brokerage commissions, then new Shares will be issued. The number of Shares shall be determined by the
greater of the NAV per Share or 95% of the market price. Otherwise, Shares generally will be purchased on the open market by American Stock Transfer & Trust Company, LLC, the Plan agent (Agent). Distributions subject to income tax (if any)
are taxable whether or not Shares are reinvested.
If your Shares are in the name of a brokerage firm, bank, or other nominee, you can ask the firm or
nominee to participate in the Plan on your behalf. If the nominee does not offer the Plan, you will need to request that the Trusts transfer agent re-register your Shares in your name or you will not be
able to participate.
The Agents service fee for handling distributions will be paid by the Trust. Plan participants will be charged their pro rata
share of brokerage commissions on all open-market purchases.
Plan participants may withdraw from the Plan at any time by writing to the Agent at the
address noted on the following page. If you withdraw, you will receive Shares in your name for all Shares credited to your account under the Plan. If a participant elects by written notice to the Agent to sell part or all of his or her Shares and
remit the proceeds, the Agent is authorized to deduct a $5.00 fee plus brokerage commissions from the proceeds.
If you wish to participate in the Plan
and your Shares are held in your own name, you may complete the form on the following page and deliver it to the Agent. Any inquiries regarding the Plan can be directed to the Agent at
1-866-439-6787.
Eaton Vance
Senior Income Trust
June 30, 2020
Application for Participation in Dividend Reinvestment Plan
This form is for shareholders who hold their common shares in their own names. If your common shares are held in the
name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it will participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank, or nominee is unable to participate on
your behalf, you should request that your common shares be re-registered in your own name which will enable your participation in the Plan.
The following authorization and appointment is given with the understanding that I may terminate it at any time by terminating my
participation in the Plan as provided in the terms and conditions of the Plan.
Please print exact name
on account
Shareholder signature
Date
Shareholder signature
Date
Please sign exactly as your common
shares are registered. All persons whose names appear on the share certificate must sign.
YOU SHOULD NOT RETURN THIS
FORM IF YOU WISH TO RECEIVE YOUR DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
This authorization form, when
signed, should be mailed to the following address:
Eaton Vance Senior Income Trust
c/o American Stock Transfer & Trust Company, LLC
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
Eaton Vance
Senior Income Trust
June 30, 2020
Board of Trustees Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the
1940 Act), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the
funds board of trustees, including a majority of the trustees who are not interested persons of the fund (independent trustees), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the April 2020 Meeting), the Boards of Trustees/Directors comprised of the same individuals
(collectively, the Board) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the Eaton Vance Funds), including a majority of the
independent trustees (the Independent Trustees), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for
each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its
recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between
February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committees annual
evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements
and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to
the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under Results of the Contract Review Process). (For funds that invest through one or more underlying portfolios, references
to each fund in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance
and Expenses
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A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the
independent data provider (comparable funds);
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A report from an independent data provider comparing each funds total expense ratio (and its components) to those of comparable funds;
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A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe
ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods;
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In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in
consultation with the Portfolio Management Committee of the Board;
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Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may
include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any;
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Profitability analyses with respect to the adviser and sub-adviser to each of the funds;
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Information about Portfolio Management and Trading
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Descriptions of the investment management services provided to each fund, as well as each of the funds investment strategies and policies;
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The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such
procedures and processes;
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Information about the policies and practices of each funds adviser and sub-adviser (in the context of a sub-adviser, only those with trading
responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions;
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Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser,
only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to soft
dollars;
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Data relating to the portfolio turnover rate of each fund;
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Information about each Adviser and Sub-adviser
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Reports detailing the financial results and condition of the adviser and sub-adviser to each fund;
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Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for
portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable;
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(1)
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Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to sub-adviser or
sub-advisory agreement in this Overview section may not be applicable to the particular Eaton Vance Fund covered by this report.
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Eaton Vance
Senior Income Trust
June 30, 2020
Board of Trustees Contract Approval continued
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The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the
administration of, such codes;
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Policies and procedures relating to proxy voting and the handling of corporate actions and class actions;
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Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any,
including descriptions of their various compliance programs and their record of compliance;
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Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any;
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A description of Eaton Vance Managements and Boston Management and Researchs oversight of sub-advisers, including with respect to regulatory and
compliance issues, investment management and other matters;
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Other Relevant Information
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Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its
affiliates;
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Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the
funds;
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For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where
relevant, the closed-end funds market prices, trading volume data, distribution rates and other relevant matters; and
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The terms of each investment advisory agreement and sub-advisory agreement.
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During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the
advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds investment objectives. The Trustees also received information regarding
risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with
respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board
and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The
members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the
weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor.
Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment
advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser
and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and
sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of
the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract
Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Senior Income Trust (the Fund) and Eaton Vance Management (the Adviser), including its fee structure, is in the
interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of
the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the
Fund by the Adviser.
The Board considered the Advisers management capabilities and investment processes in light of the types of investments held
by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund, including recent changes to such personnel. In
particular, the Board considered the abilities and experience of the Advisers investment professionals in analyzing special considerations relevant to investing in senior floating rate loans. Specifically, the Board noted the experience
Eaton Vance
Senior Income Trust
June 30, 2020
Board of Trustees Contract Approval continued
of the Advisers large group of bank loan investment professionals and other personnel who provide services to the Fund, including portfolio managers and analysts. The Board also took into account the
resources dedicated to portfolio management and other services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and
supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in
place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in
managing the Fund. The Board considered the deep experience of the Adviser and its affiliates with managing and operating funds organized as exchange-listed closed-end funds, such as the Fund. In this regard, the Board considered, among other
things, the Advisers and its affiliates experience with implementing leverage arrangements, monitoring and assessing trading price discounts and premiums and adhering to the requirements of securities exchanges.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among
other things, personal trading by investment professionals, disclosure of portfolio holdings, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its
affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to
shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a
whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Funds investment performance to that of comparable funds identified by an independent data provider (the peer group),
as well as an appropriate benchmark index and a custom peer group of similarly managed funds. The Boards review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended
September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Funds peer group and custom peer group for the three-year period. The Board also noted that the performance
of the Fund was higher than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund
for advisory and administrative services (referred to collectively as management fees). As part of its review, the Board considered the Funds management fees and total expense ratio for the one-year period ended September 30,
2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the
Adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the
nature and scope of services the Adviser provides to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser as between the Fund and other types of
accounts. The Board also considered certain Fund specific factors that had an impact on the Funds total expense ratio relative to comparable funds, as identified by management in response to inquiries from the Contract Review Committee.
Additionally, the Board took into account the financial resources committed by the Adviser in structuring the Fund at the time of its initial public offering and the waiver of fees provided by the Adviser for the first five years of the Funds
life. The Board also considered that, following discussions with the Contract Review Committee, the Adviser had implemented a series of permanent reductions in management fees beginning in May 2010, which included a further fee reduction effective
May 1, 2020.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser,
the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability
and Fall-Out Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing
investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third
parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of
the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
Eaton Vance
Senior Income Trust
June 30, 2020
Board of Trustees Contract Approval continued
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services
that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered
the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately
measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance
Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the
foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also considered the fact that the Fund is not continuously offered in the same manner as
an open-end fund and that, notwithstanding that the Fund is authorized to issue additional common shares through a shelf offering, the Funds assets are not expected to increase materially in the foreseeable future. The Board did not find that
the implementation of breakpoints in the advisory fee schedule is warranted at this time.
Eaton Vance
Senior Income Trust
June 30, 2020
Management and Organization
Fund Management. The Trustees of Eaton Vance Senior Income Trust (the Trust) are responsible for the overall management and supervision of the Trusts affairs. The Trustees and
officers of the Trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. The Noninterested Trustees consist of those Trustees who are not
interested persons of the Trust, as that term is defined under the 1940 Act. The business address of each Trustee and officer is Two International Place, Boston, Massachusetts 02110. As used below, EVC refers to Eaton Vance
Corp., EV refers to Eaton Vance, Inc., EVM refers to Eaton Vance Management, BMR refers to Boston Management and Research and EVD refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate
parent and trustee, respectively, of EVM and BMR. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below. Each Trustee oversees 157 portfolios
(with the exception of Messrs. Faust and Wennerholm and Ms. Frost who oversee 156 portfolios) in the Eaton Vance Complex (including all master and feeder funds in a master feeder structure). Each officer serves as an officer of certain other
Eaton Vance funds.
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Name and Year of Birth
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Position(s)
with the
Trust
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Term Expiring.
Trustee
Since(1)
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Principal Occupation(s) and Other Directorships
During Past Five Years and Other Relevant Experience
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Interested Trustee
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Thomas E. Faust Jr.
1958
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Class I
Trustee
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Until 2023.
Trustee since 2007.
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Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and
Director of EVD. Trustee and/or officer of 156 registered investment companies. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Trust.
Other Directorships in the Last Five Years. Director of EVC and Hexavest Inc. (investment management firm).
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Noninterested Trustees
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Mark R. Fetting
1954
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Class II
Trustee
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Until 2021.
Trustee since 2016.
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Private investor. Formerly held various positions at Legg Mason, Inc. (investment management firm) (2000-2012), including President, Chief
Executive Officer, Director and Chairman (2008-2012), Senior Executive Vice President (2004-2008) and Executive Vice President (2001-2004). Formerly, President of Legg Mason family of funds (2001-2008). Formerly, Division President and Senior
Officer of Prudential Financial Group, Inc. and related companies (investment management firm) (1991-2000).
Other Directorships in the Last Five
Years. None.
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Cynthia E. Frost
1961
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Class I
Trustee
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Until 2023.
Trustee since 2014.
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Private investor. Formerly, Chief Investment Officer of Brown University (university endowment) (2000-2012). Formerly, Portfolio Strategist for
Duke Management Company (university endowment manager) (1995-2000). Formerly, Managing Director, Cambridge Associates (investment consulting company) (1989-1995). Formerly, Consultant, Bain and Company (management consulting firm) (1987-1989). Formerly, Senior Equity Analyst, BA Investment Management Company (1983-1985).
Other Directorships in
the Last Five Years. None.
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George J. Gorman
1952
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Class III
Trustee
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Until 2022.
Trustee since 2014.
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Principal at George J. Gorman LLC (consulting firm). Formerly, Senior Partner at Ernst & Young LLP (a registered public accounting firm)
(1974-2009).
Other Directorships in the Last Five Years. Formerly, Trustee of the BofA Funds Series Trust (11 funds) (2011-2014) and of the
Ashmore Funds (9 funds) (2010-2014).
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Valerie A. Mosley
1960
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Class I
Trustee(2)
|
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Until 2023.
Trustee since 2014.
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Chairwoman and Chief Executive Officer of Valmo Ventures (a consulting and investment firm). Former Partner and Senior Vice President, Portfolio
Manager and Investment Strategist at Wellington Management Company, LLP (investment management firm) (1992-2012). Former Chief Investment Officer, PG Corbin Asset Management (1990-1992). Formerly worked in institutional corporate bond sales at
Kidder Peabody (1986-1990).
Other Directorships in the Last Five Years. Director of Groupon, Inc.
(e-commerce provider) (since April 2020). Director of Envestnet, Inc. (provider of intelligent systems for wealth management and financial wellness) (since 2018). Director of Dynex Capital, Inc. (mortgage
REIT) (since 2013).
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Eaton Vance
Senior Income Trust
June 30, 2020
Management and Organization continued
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Name and Year of Birth
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Position(s)
with the
Trust
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Term Expiring.
Trustee
Since(1)
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Principal Occupation(s) and Other Directorships
During Past Five Years and Other Relevant Experience
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Noninterested Trustees (continued)
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William H. Park
1947
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Chairperson of the Board and Class III
Trustee(2)
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Until 2022.
Chairperson of the Board since 2016 and Trustee since 2003.
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Private investor. Formerly, Consultant (management and transactional) (2012-2014). Formerly, Chief Financial Officer, Aveon Group L.P. (investment
management firm) (2010-2011). Formerly, Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm)
(2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (a registered public
accounting firm) (1972-1981).
Other Directorships in the Last Five Years. None.
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Helen Frame Peters
1948
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Class II
Trustee
|
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Until 2021.
Trustee since 2008.
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Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002).
Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm)
(1991-1998).
Other Directorships in the Last Five Years. None.
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Keith Quinton
1958
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Class II
Trustee
|
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Until 2021.
Trustee since 2018.
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Independent Investment Committee Member at New Hampshire Retirement System (since 2017). Formerly, Portfolio Manager and Senior Quantitative
Analyst at Fidelity Investments (investment management firm) (2001-2014).
Other Directorships in the Last Five Years. Director (since 2016)
and
Chairman (since 2019) of New Hampshire Municipal Bond Bank.
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Marcus L. Smith
1966
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Class III
Trustee
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Until 2022.
Trustee since 2018.
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Private investor. Member of Posse Boston Advisory Board (foundation) (since 2015). Formerly, Portfolio Manager at MFS Investment Management
(investment management firm) (1994-2017).
Other Directorships in the Last Five Years. Director of MSCI Inc. (global provider of investment
decision support tools) (since 2017). Formerly, Director of DCT Industrial Trust Inc. (logistics real estate company) (2017-2018).
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Susan J. Sutherland
1957
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Class I
Trustee
|
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Until 2023.
Trustee since 2015.
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Private investor. Formerly, Associate, Counsel and Partner at Skadden, Arps, Slate, Meagher & Flom LLP (law firm) (1982-2013).
Other Directorships in the Last Five Years. Formerly, Director of Montpelier Re Holdings Ltd. (global provider of customized insurance and reinsurance
products) (2013-2015).
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Scott E. Wennerholm
1959
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Class II
Trustee
|
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Until 2021.
Trustee since 2016.
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Formerly, Trustee at Wheelock College (postsecondary institution) (2012-2018). Formerly, Consultant at GF Parish Group (executive recruiting firm)
(2016-2017). Formerly, Chief Operating Officer and Executive Vice President at BNY Mellon Asset Management (investment management firm) (2005-2011). Formerly, Chief Operating Officer and Chief Financial Officer at Natixis Global Asset Management
(investment management firm) (1997-2004). Formerly, Vice President at Fidelity Investments Institutional Services (investment management firm) (1994-1997).
Other Directorships in the Last Five Years. None.
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Name and Year of Birth
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Position(s)
with the
Trust
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Officer
Since(3)
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Principal Occupation(s)
During Past Five Years
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Principal Officers who are not Trustees
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Payson F. Swaffield
1956
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President
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2003
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Vice President and Chief Income Investment Officer of EVM and BMR. Also Vice President of Calvert Research and Management (CRM).
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Maureen A. Gemma
1960
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Vice President, Secretary and Chief Legal Officer
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2005
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Vice President of EVM and BMR. Also Vice President of CRM.
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Eaton Vance
Senior Income Trust
June 30, 2020
Management and Organization continued
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Name and Year of Birth
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Position(s)
with the
Trust
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Officer
Since(3)
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Principal Occupation(s)
During Past Five Years
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Principal Officers who are not Trustees (continued)
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James F. Kirchner
1967
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Treasurer
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2007
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Vice President of EVM and BMR. Also Vice President of CRM.
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|
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Richard F. Froio
1968
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Chief Compliance Officer
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2017
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Vice President of EVM and BMR since 2017. Formerly, Deputy Chief Compliance Officer (Adviser/Funds) and Chief Compliance Officer (Distribution) at PIMCO (2012-2017) and Managing Director at
BlackRock/Barclays Global Investors (2009-2012).
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(1)
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Year first appointed to serve as Trustee for a fund in the Eaton Vance family of funds. Each Trustee has served continuously since appointment unless indicated
otherwise.
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(3)
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Year first elected to serve as officer of a fund in the Eaton Vance family of funds when the officer has served continuously. Otherwise, year of most recent
election as an officer of a fund in the Eaton Vance family of funds. Titles may have changed since initial election. Each officer serves until his or her successor is elected.
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Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has
adopted a privacy policy and procedures (Privacy Program) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
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At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax
status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer
requirements.
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On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various
services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your
personal information with our affiliates.
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We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that
information.
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We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for
changes by accessing the link on our homepage: www.eatonvance.com.
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Our pledge of protecting your personal information 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 Limited, Eaton Vance Global Advisors Limited, Eaton Vance Managements Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy
Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, 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 intermediary, may household the mailing of your documents indefinitely unless you instruct AST, or your financial
intermediary, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact AST or your financial intermediary. 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 intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain
information filed on Form N-PORT may be viewed 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 SECs website at www.sec.gov.
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 SECs website at www.sec.gov.
Share Repurchase Program. The Funds Board of Trustees has approved a share
repurchase program authorizing the Fund to repurchase up to 10% of its common shares outstanding as of the last day of the prior calendar year 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 Funds repurchase activity, including the number of shares purchased, average price and average discount to net asset value, is disclosed in the Funds 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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Investment Adviser and Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
American Stock
Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley
Street
Boston, MA 02116-5022
Fund Offices
Two International Place
Boston, MA 02110
171 6.30.20