what is a floating loan investment?

"Floating-rate loans are debt securities issued by companies or other
entities with floating interest rates that reset periodically.  Most
floating-rate loans are secured by specific collateral of the borrower
and are senior to most other securities of the borrower (e.g., common
stock or debt instruments) in the event of bankruptcy.  Floating-rate
loans are often issued in connection with re-capitalizations,
acquisitions, leveraged buyouts, and refinancings.  Floating-rate
loans are typically structured and administered by a financial
institution that acts as the agent of the lenders participating in the
floating-rate loan."

"Many floating-rate loans are lower quality."

"Fidelity Floating Rate Hi Income Fund Prospectus" Fidelity
Investments, December 30, 2003, page 7 (available for download at
www.fidelity.com)

Sincerely,

Wonko