Funds

Annual Report

February 28, 2009

ING Prime Rate Trust

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This report is submitted for general information to shareholders of the ING Funds. It is not authorized for distribution to prospective shareholders unless accompanied or preceded by a prospectus which includes details regarding the funds' investment objectives, risks, charges, expenses and other information. This information should be read carefully.

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ING Prime Rate Trust

ANNUAL REPORT

February 28, 2009

Table of Contents

Portfolio Managers' Report					2
Report of Independent Registered Public Accounting Firm					8
Statement of Assets and Liabilities					9
Statement of Operations					10
Statements of Changes in Net Assets					11
Statement of Cash Flows					12
Financial Highlights					13
Notes to Financial Statements					14
Portfolio of Investments					25
Shareholder Meeting Information					52
Additional Information					54
Tax Information					56
Trustee and Officer Information					57
Advisory Contract Approval Discussion					62

 

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT

Dear Shareholders:

ING Prime Rate Trust (the "Trust") is a diversified, closed-end management investment company that seeks to provide investors with as high a level of current income as is consistent with the preservation of capital. The Trust seeks to achieve this objective by investing, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in U.S. dollar denominated floating rate secured senior loans.

PORTFOLIO CHARACTERISTICS AS OF FEBRUARY 28, 2009
Net Assets				$	552,839,703
Total Assets				$	864,223,680
Assets Invested in Senior Loans				$	831,717,911
Senior Loans Represented					476
Average Amount Outstanding per Loan				$	1,747,307
Industries Represented					36
Average Loan Amount per Industry				$	23,103,275
Portfolio Turnover Rate (YTD)					10	%
Weighted Average Days to Interest Rate Reset					37
Average Loan Final Maturity					54 months
Total Leverage as a Percentage of Total Assets (including preferred shares)					35.41	%

 

PERFORMANCE SUMMARY

The Trust declared $0.10 of dividends during the fourth fiscal quarter and $0.41 during the year ended February 28, 2009. Based on the average month-end net asset value ("NAV") per share of $3.57 for the quarter and $5.40 for the year, this resulted in an annualized distribution rate^₍₁₎ of 10.72% for the quarter and 8.00% for the year. The Trust's total net return for the fourth fiscal quarter, based on NAV, was 8.24% versus a total gross return on the S&P/LSTA Leveraged Loan Index (the "Index")^₍₂₎ of 5.03% for the same quarter. For the year ended February 28, 2009, the Trust's total return, based on NAV, was (31.93)%, versus (18.67)% gross return for the Index. The total market value return (based on full reinvestment of dividends) for the Trust's common shares during the fourth fiscal quarter was 10.07% and for the year ended February 28, 2009 was (32.03)%.

MANAGER'S COMMENTARY

The use of leverage by the Trust for investment purposes (discussed below) had an amplifying effect on the Trust's negative returns during the fiscal year ended February 28, 2009, and was the primary factor contributing to the Trust's underperformance relative to the Index. Core investment performance (as defined by the unprecedented decline in senior bank loan prices and the Trust's NAV) during this period was also significantly impacted by issues (detailed in the Trust's most recent quarterly report dated November 30, 2008) affecting global credit markets generally, and the loan market specifically. The Trust also had an investment of approximately 8% in loans issued by foreign obligors, primarily companies domiciled in western Europe. The European loan market experienced a price correction similar to that in the U.S. during the latter part of 2008. As a result,

^₍₁₎  The distribution rate is calculated by annualizing dividends declared during the period and dividing the resulting annualized dividend by the Trust's average net asset value (in the case of NAV) or the average month-end NYSE Composite closing price (in the case of market). The distribution rate is based solely on the actual dividends and distributions, which are made at the discretion of management. The distribution rate may or may not include all investment income and ordinarily will not include capital gains or losses, if any.

^₍₂₎  The S&P/LSTA Leveraged Loan Index is an unmanaged total return index that captures accrued interest, repayments, and market value changes. It represents a broad cross section of leveraged loans syndicated in the United States, including dollar-denominated loans to overseas issuers. Standard & Poor's ("S&P") and the Loan Syndications and Trading Association ("LSTA") conceived the Index to establish a performance benchmark for the syndicated leveraged loan industry. An investor cannot invest directly in an index.

2

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

that portion of the Trust's portfolio underperformed relative to the Index during the Trust's fiscal year.

The fourth fiscal quarter ended February 28, 2009 marked a significant turnaround for the senior loan asset class, as loan prices moved materially off the recorded lows reached in mid-December of last year. During this period, the Trust materially outperformed the Index (8.24%, versus 5.03%) due to a lower overall default experience and the positive impact of leverage in a rising loan price environment. As of February 28, 2009, 1.92% of the Trust's investments had experienced a default, as compared to 5.25% for the Index. The Trust's non-performing ratio at that time was 0.65%.

The much-improved tone of the market thus far in 2009 continues to stem from a significantly better technical position, as the supply of new loans remains historically low and forced selling, while still largely unpredictable, continues to moderate. Additionally, financial market participants have greeted, generally warmly, the new government economic stimulus packages aimed at reviving the financial system and rekindling demand for financial assets. While neither the TARP nor TALF programs are expected to have a material influence on loan prices directly, we believe these proposals, properly executed, are likely to stimulate demand in credit markets overall, potentially attracting capital and driving investors to seek out various relative value opportunities. Under this scenario, we also believe the total return opportunity implied by current loan prices is likely to further increase interest from both new and traditional loan investors.

While the loan market's technical position has been improving over the last several months, the fundamentals (i.e., default and recovery rates, and the broader economic outlook) have been deteriorating. The Commerce Department has announced that the U.S. Gross Domestic Product contracted by 6.2% in the last quarter of 2008, the steepest slide since the second quarter of 1982 when GDP fell 6.4%. Further, employment losses are clearly escalating. Leading indicators do not point to a near-term reversal or a substantially different set of outcomes for a good portion, if not all, of this year. Consequently, we fully expect the loan market's default rate to rise further, likely exceeding the recorded highs. While the market will see its share of default related losses as this credit cycle unfolds, do recall that default does not necessarily translate into realized loss in the senior bank loan category, given the secured nature of the asset class. We believe that our strategy, one that emphasizes senior first-lien secured bank loans with generally better credit quality and liquidity than the benchmark, combined with rigorous ongoing monitoring, has the potential to continue the Trust's favorable experience in terms of non-performing assets.

TOP TEN SENIOR LOAN ISSUERS AS OF FEBRUARY 28, 2009 AS A PERCENTAGE OF:
				TOTAL ASSETS				NET ASSETS
CHS/Community Health Systems, Inc.					4.2	%			6.5	%
Cequel Communications, LLC					3.5	%			5.5	%
HCA, Inc.					2.3	%			3.6	%
CSC Holdings, Inc.					2.1	%			3.3	%
Metro-Goldwyn-Mayer, Inc.					1.9	%			3.0	%
Norwood Promotional Products					1.7	%			2.6	%
ARAMARK Corporation					1.5	%			2.4	%
Georgia Pacific Corporation					1.4	%			2.2	%
NRG Energy, Inc.					1.3	%			2.1	%
Univision Communications, Inc.					1.3	%			2.1	%

 

TOP TEN INDUSTRY SECTORS AS OF FEBRUARY 28, 2009 AS A PERCENTAGE OF:
				TOTAL ASSETS				NET ASSETS
Healthcare, Education and Childcare					13.7	%			21.4	%
North American Cable					10.0	%			15.7	%
Utilities					5.6	%			8.7	%
Retail Stores					5.5	%			8.6	%
Printing & Publishing					5.2	%			8.1	%
Leisure, Amusement, Entertainment					4.8	%			7.5	%
Data and Internet Services					4.3	%			6.7	%
Chemicals, Plastics & Rubber					4.1	%			6.4	%
Personal & Nondurable Consumer Products					3.7	%			5.8	%
Radio and TV Broadcasting					3.6	%			5.6	%

 

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

USE OF LEVERAGE

During periods of highly volatile loan prices, the Trust's use of leverage for investment purposes will typically have a magnifying impact on NAV performance. This was the case in the Trust's fiscal year and fiscal quarter ended February 28, 2009. As of February 28, 2009, the Trust's leverage consisted of $81 million outstanding under $325 million of revolving credit facilities, and $225 million of "Aaa/AAA^₍₃₎" rated cumulative auction rate preferred shares.

Using leverage for investment purposes involves borrowing at a floating short-term rate, and seeking to invest those proceeds at a higher floating rate. Unlike traditional fixed income asset classes, using leverage in the floating rate senior loan asset class should not expose investors to the same degree of risk from rising short-term interest rates, as the income produced from the Trust's loan investments will adjust in a fashion consistent with the Trust's borrowing costs. The use of leverage can, however, magnify the erosion of the Trust's net asset value in declining markets.

As a part of its use of leverage, in 2000 the Trust issued $450 million of "Aaa/AAA^₍₃₎" rated cumulative auction rate preferred shares. Beginning in early February 2008, and continuing to date, for the first time in the history of its auction rate preferred shares program, the Trust did not receive hold orders and purchase requests for its preferred shares during their weekly auctions that equaled the full amount of such shares. As a result, the amount sold by each selling shareholder was reduced pro rata or to zero. In addition, the dividend rate on such preferred shares, which is normally set by means of a Dutch auction procedure, automatically reset to the maximum rate permitted under the preferred shares program. That maximum rate is 150% of the applicable commercial paper base rate on the day of the auction.

As we have stated in the past, it is important for investors in the Trust's common and preferred shares to understand that this is a market liquidity issue and not a credit issue. The preferred shares of ING Prime Rate Trust have the highest rating issued by the rating agencies and are backed by the assets of the Trust. Further, even under current conditions, we believe that the Trust will be able to continue to pay the dividends required under its preferred shares program, whether those dividend rates are set by the Dutch auction procedure or at the maximum rate.

In response to the above described problems with the liquidity of the Trust's auction rate preferred shares, the Trust redeemed $225 million of the $450 million auction rate preferred shares outstanding, approximately 50% by series, in July 2008. The Board of Trustees ("Board") and the management of the Trust continue to evaluate options to address the on-going liquidity concerns with respect to the remaining auction rate preferred securities. There can be no assurance that any means for liquidity will be identified, and if they are, it is possible that the Trust's leverage or its benefits from leverage will diminish.

^₍₃₎  Obligations rated Aaa by Moody's Investors Service are judged to be of the highest quality, with minimal credit risk. An obligator rated 'AAA' has extremely strong capacity to meet its financial commitments. 'AAA' is the highest Issuer Credit Rating assigned by Standard & Poor's. Credit quality refers to the Trust's underlying investments, not to the stability or safety of this Trust.

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

				`
Jeffrey A. Bakalar Senior Vice President Senior Portfolio Manager ING Investment Management Co.				Daniel A. Norman Senior Vice President Senior Portfolio Manager ING Investment Management Co.

 

ING Prime Rate Trust
April 2, 2009

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

				Average Annual Total Returns for the Years Ended February 28, 2009
				1 Year				3 Years				5 Years				10 Years
Based on Net Asset Value (NAV)					(31.93	)%			(13.60	)%			(5.50	)%			(1.06	)%
Based on Market Value					(32.03	)%			(13.80	)%			(8.31	)%			(2.23	)%
S&P/LSTA Leveraged Loan Index					(18.67	)%			(6.19	)%			(1.80	)%			1.59	%
Credit-Suisse Leveraged Loan Index					(20.05	)%			(6.56	)%			(1.85	)%			1.59	%

 

The table above illustrates the total return of the Trust against the Indices indicated. An index has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index.

Total returns based on NAV reflect that ING Investments, LLC (the Trust's "Investment Adviser") may have waived or recouped fees and expenses otherwise payable by the Trust.

Performance data represents past performance and is no guarantee of future results. Investment return and principal value of an investment in the Trust will fluctuate. Shares, when sold, may be worth more or less than their original cost. The Trust's future performance may be lower or higher than the performance data shown. Please log on to www.ingfunds.com or call (800) 992-0180 to get performance through the most recent month end.

Calculation of total return assumes a hypothetical initial investment at the net asset value (in the case of NAV) or the New York Stock Exchange ("NYSE") Composite closing price (in the case of Market Value) on the last business day before the first day of the stated period, with all dividends and distributions reinvested at the actual reinvestment price.

Senior loans are subject to credit risks and the potential for non-payment of scheduled principal or interest payments, which may result in a reduction of the Trust's NAV.

This report contains statements that may be "forward-looking" statements. Actual results could differ materially from those projected in the "forward-looking" statements.

The views expressed in this report reflect those of the portfolio managers only through the end of the period of the report as stated on the cover. The portfolio managers' views are subject to change at any time based on market and other conditions.

INDEX DESCRIPTIONS

The S&P/LSTA Leveraged Loan Index is an unmanaged total return index that captures accrued interest, repayments, and market value changes. It represents a broad cross section of leveraged loans syndicated in the United States, including dollar-denominated loans to overseas issuers. Standard & Poor's and the Loan Syndications & Trading Association ("LSTA") conceived the Index to establish a performance benchmark for the syndicated leveraged loan industry. An investor cannot invest directly in an index.

The Credit-Suisse Leveraged Loan Index is an unmanaged index of below investment grade loans designed to mirror the investable universe of the U.S. dollar-denominated leveraged loan market. An investor cannot invest directly in an index.

6

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

YIELDS AND DISTRIBUTION RATES

				Prime Rate				NAV 30-day SEC Yield(A)				Mkt. 30-Day SEC Yield(A)				Annualized Dist. Rate @ NAV(B)				Annualized Dist. Rate @ Mkt.(B)
February 28, 2009					3.25	%			8.22	%			8.96	%			8.82	%			9.60	%
November 30, 2008					4.00	%			13.88	%			15.41	%			7.72	%			11.79	%
August 31, 2008					5.00	%			7.38	%			8.56	%			6.12	%			7.21	%
May 31, 2008					5.00	%			8.18	%			8.89	%			7.58	%			7.95	%

 

^_(A)  Yield is calculated by dividing the Trust's net investment income per share for the most recent thirty days by the net asset value (in the case of NAV) or the NYSE Composite closing price (in the case of Market) at quarter-end. Yield calculations do not include any commissions or sales charges, and are compounded for six months and annualized for a twelve-month period to derive the Trust's yield consistent with the U.S. Securities and Exchange Commission ("SEC") standardized yield formula.

^_(B)  The distribution rate is calculated by annualizing each monthly dividend, then averaging the annualized dividends declared for each month during the quarter and dividing the resulting average annualized dividend amount by the Trust's average net asset value (in the case of NAV) or the NYSE Composite closing price (in the case of Market) at the end of the period.

Risk is inherent in all investing. The following are the principal risks associated with investing in the Trust. This is not, and is not intended to be, a description of all risks of investing in the Trust. A more detailed description of the risks of investing in the Trust is contained in the Trust's current prospectus.

Credit Risk: The Trust invests a substantial portion of its assets in below investment grade senior loans and other below investment grade assets. Below investment grade loans involve a greater risk that borrowers may not make timely payment of the interest and principal due on their loans. They also involve a greater risk that the value of such loans could decline significantly. If borrowers do not make timely payments of the interest due on their loans, the yield on the Trust's common shares will decrease. If borrowers do not make timely payment of the principal due on their loans, or if the value of such loans decreases, the value of the Trust's NAV will decrease.

Interest Rate Risk: Changes in short-term market interest rates will directly affect the yield on the Trust's common shares. If short-term market interest rates fall, the yield on the Trust's common shares will also fall. To the extent that the interest rate spreads on loans in the Trust experience a general decline, the yield on the Trust will fall and the value of the Trust's assets may decrease, which will cause the Trust's value to decrease. Conversely, when short-term market interest rates rise, because of the lag between changes in such short-term rates and the resetting of the floating rates on assets in the Trust's portfolio, the impact of rising rates will be delayed to the extent of such lag.

Leverage Risk: The Trust borrows money for investment purposes. Borrowing increases both investment opportunity and investment risk. In the event of a general market decline in the value of assets such as those in which the Trust invests, the effect of that decline will be magnified in the Trust because of the additional assets purchased with the proceeds of the borrowings. The Trust also faces the risk that it might have to sell assets at relatively less advantageous times if it were forced to de-leverage if a source of leverage becomes unavailable.

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ING Prime Rate Trust

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and Board of Trustees
ING Prime Rate Trust

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of ING Prime Rate Trust, as of February 28, 2009, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of February 28, 2009, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of ING Prime Rate Trust as of February 28, 2009, the results of its operations and its cash flows, the changes in its net assets, and the financial highlights for the periods specified in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
April 29, 2009

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ING Prime Rate Trust

STATEMENT OF ASSETS AND LIABILITIES as of February 28, 2009

ASSETS:
Investments in securities at value (Cost $1,271,339,464)				$	837,844,895
Cash					2,272,468
Foreign currencies at value (Cost $1,111,225)					1,108,305
Receivables:
Investment securities sold					15,615,810
Interest					5,677,745
Other					30,002
Unrealized appreciation on forward foreign currency contracts					1,560,139
Prepaid expenses					114,316
Total assets					864,223,680
LIABILITIES:
Notes payable					81,000,000
Payable for investment securities purchased					959,695
Deferred arrangement fees on senior loans					442,992
Dividends payable — preferred shares					7,745
Payable to affilates					693,526
Payable to custodian					113,317
Accrued trustees fees					35,673
Unrealized depreciation on forward foreign currency contracts					61,195
Unrealized depreciation on unfunded commitments					2,468,935
Other accrued expenses					600,899
Total liabilities					86,383,977
Preferred shares, $25,000 stated value per share at liquidation value (9,000 shares outstanding)					225,000,000
NET ASSETS				$	552,839,703
Net assets value per common share outstanding (net assets divided by 145,177,757 shares of beneficial interest authorized and outstanding,   no par value)				$	3.81
NET ASSETS WERE COMPRISED OF:
Paid-in capital				$	1,311,573,950
Undistributed net investment income					21,095,219
Accumulated net realized loss on investments					(344,782,564	)
Net unrealized depreciation on investments, foreign currency related transactions, and unfunded commitments					(435,046,902	)
NET ASSETS				$	552,839,703

 

See Accompanying Notes to Financial Statements
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ING Prime Rate Trust

STATEMENT OF OPERATIONS for the Year Ended February 28, 2009

INVESTMENT INCOME:
Interest				$	91,093,115
Arrangement fees earned					384,312
Other					1,389,617
Total investment income					92,867,044
EXPENSES:
Investment management fees					10,457,618
Administration fees					3,268,006
Transfer agent fees					69,121
Interest expense					8,215,637
Shareholder reporting expense					107,490
Custody and accounting expense					616,914
Revolving credit facility fees					807,671
Professional fees					548,083
Preferred shares — dividend disbursing agent fees					1,145,056
Pricing expense					24,898
ICI fees					2,750
Postage expense					350,940
Trustees fees					31,625
Miscellaneous expense					50,959
Total expenses					25,696,768
Net investment income					67,170,276
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, PAYMENTS BY AFFILIATES, AND UNFUNDED COMMITMENTS:
Net realized gain (loss) on:
Investments					(118,269,679	)
Forward foreign currency contracts					19,953,007
Foreign currency related transactions					1,833,289
Payments by affiliates					298,074
Net realized loss on investments, foreign currency related transactions, and payments by affiliates					(96,185,309	)
Net change in unrealized appreciation or depreciation on:
Investments					(241,053,624	)
Foreign currency related transactions					3,711,693
Unfunded commitments					(258,856	)
Net change in unrealized appreciation or depreciation on investments, foreign currency related transactions, and unfunded commitments					(237,600,787	)
Net realized and unrealized loss on investments, foreign currency related transactions, payments by affiliates and unfunded commitments					(333,786,096	)
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
From net investment income					(8,394,943	)
Decrease in net assets resulting from operations				$	(275,010,763	)

 

See Accompanying Notes to Financial Statements
10

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ING Prime Rate Trust

STATEMENTS OF CHANGES IN NET ASSETS

				Year Ended February 28, 2009				Year Ended February 29, 2008
FROM OPERATIONS:
Net investment income				$	67,170,276			$	108,192,188
Net realized gain (loss) on investments, foreign currency related transactions, and payments by affiliates					(96,185,309	)			5,073,469
Net change in unrealized appreciation or depreciation on investments, foreign currency related transactions, and unfunded commitments					(237,600,787	)			(230,998,967	)
Distributions to preferred shareholders from net investment income					(8,394,943	)			(23,475,824	)
Decrease in net assets resulting from operations					(275,010,763	)			(141,209,134	)
FROM DISTRIBUTIONS TO COMMON SHAREHOLDERS:
From net investment income					(59,418,526	)			(81,821,838	)
Decrease in net assets from distributions to common shareholders					(59,418,526	)			(81,821,838	)
CAPITAL SHARE TRANSACTIONS:
Reinvestment of distributions from common shares					279,285				450,139
Proceeds from shares sold					13,803				17,785
Net increase from capital share transactions					293,088				467,924
Net decrease in net assets					(334,136,201	)			(222,563,048	)
NET ASSETS:
Beginning of year					886,975,904				1,109,538,952
End of year (including undistributed net investment income of $21,095,219 and $390,926 respectively)				$	552,839,703			$	886,975,904

 

See Accompanying Notes to Financial Statements
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ING Prime Rate Trust

STATEMENT OF CASH FLOWS for the Year Ended February 28, 2009

INCREASE (DECREASE) IN CASH Cash Flows From Operating Activities:
Interest received				$	97,154,516
Facility fees received					24,898
Dividend paid to preferred shareholder					(8,550,312	)
Arrangement fee received					128,494
Other income received					583,149
Interest paid					(9,575,492	)
Other operating expenses paid					(17,530,483	)
Purchases of securities					(122,973,754	)
Proceeds on sale of securities					592,446,915
Net cash provided by operating activities					531,707,931
Cash Flows From Financing Activities:
Dividends paid to common shareholders					(59,139,241	)
Redemption of preferred shares					(225,000,000	)
Proceeds from shares sold					13,803
Net paydown of notes payable					(257,000,000	)
Net cash flows used in financing activities					(541,125,438	)
Net decrease					(9,417,507	)
Cash at beginning of year					11,689,975
Cash at end of year				$	2,272,468
Reconciliation of Decrease In Net Assets Resulting From Operations To Net Cash Provided by Operating Activities:
Decrease in net assets resulting from operations				$	(275,010,763	)
Adjustments to reconcile decrease in net assets resulting from operations to net cash provided by operating activities:
Change in unrealized appreciation or depreciation on investments					241,053,624
Change in unrealized appreciation or depreciation on foreign currencies					(22,581	)
Change in unrealized appreciation or depreciation on forward foreign currency contracts					(4,507,997	)
Change in unrealized depreciation on unfunded commitments					258,856
Change in unrealized appreciation or depreciation on other assets and liablilities					818,885
Net accretion of discounts on investments					(5,556,775	)
Net amortization of premiums on investments					259,070
Net realized loss on investments, foreign currency related transactions and payments by affiliates					96,185,309
Purchases of securities					(122,973,754	)
Proceeds on sale of securities					592,446,915
Decrease in other assets					12,417
Decrease in interest receivable					11,359,106
Decrease in prepaid facility fees on notes payable					24,898
Increase in prepaid expenses					(93,804	)
Decrease in deferred arrangement fees on revolving credit facilities					(255,818	)
Decrease in accrued interest payable					(1,359,855	)
Decrease in dividends payable — preferred shares					(155,369	)
Decrease in payable to affiliates					(693,129	)
Decrease in accrued trustees fees					(8,890	)
Decrease in other accrued expenses					(72,414	)
Total adjustments					806,718,694
Net cash provided by operating activities				$	531,707,931
Non Cash Financing Activities
Reinvestment of dividends				$	279,285

 

See Accompanying Notes to Financial Statements
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ING PRIME RATE TRUST  FINANCIAL HIGHLIGHTS

For a common share outstanding throughout the year

				Years Ended February 28 or February 29,
				2009				2008				2007				2006				2005
Per Share Operating Performance
Net asset value, beginning of year				$	6.11				7.65				7.59				7.47				7.34
Income (loss) from investment operations:
Net investment income				$	0.46				0.75				0.71				0.57				0.45
Net realized and unrealized gain (loss) on investments, foreign currency related transactions and unfunded commitments				$	(2.29	)			(1.57	)			0.06				0.12				0.16
Distribution to Preferred Shareholders				$	(0.06	)			(0.16	)			(0.16	)			(0.11	)			(0.05	)
Total from investment operations				$	(1.89	)			(0.98	)			0.61				0.58				0.56
Distributions to Common Shareholders from net investment income				$	(0.41	)			(0.56	)			(0.55	)			(0.46	)			(0.43	)
Net asset value, end of year				$	3.81				6.11				7.65				7.59				7.47
Closing market price at end of year				$	3.50				5.64				7.40				7.02				7.56
Total Investment Return(1)
Total investment return at closing market price(2)				%	(32.03	)(a)			(17.25	)			13.84				(0.82	)			2.04
Total investment return at net asset value(3)				%	(31.93	)(a)			(13.28	)			8.85				8.53				7.70
Ratios/Supplemental Data
Net assets end of year (000's)				$	552,840				886,976				1,109,539				1,100,671				1,082,748
Preferred Shares-Aggregate amount outstanding (000's)				$	225,000				450,000				450,000				450,000				450,000
Liquidation and market value per share of Preferred Shares				$	25,000				25,000				25,000				25,000				25,000
Asset coverage inclusive of Preferred Shares and debt per share(4)				$	70,175				53,125				62,925				55,050				53,600
Borrowings at end of period (000's)				$	81,000				338,000				281,000				465,000				496,000
Asset coverage per $1,000 of debt(4)				$	10,603				4,956				6,550				4,335				4,090
Average borrowings (000's)				$	227,891				391,475				459,982				509,178				414,889
Ratios to average net assets including Preferred Shares(5)
Expenses (before interest and other fees related to revolving  credit facility)				%	1.54				1.54				1.57				1.64				1.60
Net expenses after expense waiver				%	2.38				3.05				3.27				3.02				2.21
Gross expenses prior to expense waiver				%	2.38				3.05				3.27				3.02				2.22
Net investment income				%	6.22				7.23				6.68				5.44				4.21
Ratios to average net assets plus borrowings
Expenses (before interest and other fees related to revolving   credit facility)				%	1.54				1.60				1.56				1.58				1.63
Net expenses after expense waiver				%	2.37				3.17				3.25				2.90				2.26
Gross expenses prior to expense waiver				%	2.37				3.17				3.25				2.90				2.27
Net investment income				%	6.21				7.53				6.63				5.24				4.32
Ratios to average net assets
Expenses (before interest and other fees related to revolving   credit facility)				%	1.95				2.20				2.21				2.33				2.29
Net expenses after expense waiver				%	3.01				4.36				4.62				4.27				3.17
Gross expenses prior to expense waiver				%	3.01				4.36				4.62				4.27				3.18
Net investment income				%	7.86				10.35				9.42				7.71				6.04
Portfolio turnover rate				%	10				60				60				81				93
Common shares outstanding at end of year (000's)					145,178				145,094				145,033				145,033				145,033

 

^₍₁₎  Total investment return calculations are attributable to common shares.

^₍₂₎  Total investment return at market value has been calculated assuming a purchase at market value at the beginning of each period and a sale at market value at the end of each period and assumes reinvestment of dividends and capital gain distributions, if any, in accordance with the provisions of the dividend reinvestment plan. Total investment return at market value is not annualized for periods less than one year.

^₍₃₎  Total investment return at net asset value has been calculated assuming a purchase at net asset value at the beginning of each period and a sale at net asset value at the end of each period and assumes reinvestment of dividends and capital gain distributions, if any, in accordance with the provisions of the dividend reinvestment plan. Total investment return at net asset value is not annualized for periods less than one year.

This calculation differs from total investment return at market value because it excludes the effects of changes in the market values of the Trust's shares.

^₍₄₎  Asset coverage ratios, as presented in previous annual reports, represented the coverage available for both the borrowings and preferred shares expressed in relation to each $1,000 of borrowings and preferred shares liquidation value outstanding. The Asset coverage ratio per $1,000 of debt is now presented to represent the coverage available to each $1,000 of borrowings before consideration of any preferred shares liquidation, while the Asset coverage inclusive of Preferred Shares, presents the coverage available to both borrowings and preferred shares, expressed in relation to the per share liquidation price of the preferred shares.

Asset coverage, with respect to Preferred Shares, represents the total assets of the Trust, less all liabilities and indebtedness not represented by "senior securities" (i.e., the Trust's Preferred Shares and borrowings described above) in relation to the total amount of Preferred Shares and borrowings outstanding.

Asset coverage, with respect to borrowings, represents the total assets of the Trust, less all liabilities and indebtedness not represented by "senior securities" (i.e., the Trust's Preferred Shares and borrowings described above) in relation to the total amount of only borrowings outstanding (i.e., the denominator of the borrowings ratio includes only borrowings; in contrast, the denominator of the Preferred Share ratio includes both borrowings and Preferred Shares).

^₍₅₎  Ratios do not reflect the effect of dividend payments to Preferred Shareholders; income ratios reflect income earned on assets attributable to the Preferred Shares; ratios do not reflect any add-back for the borrowings.

^_(a)  There was no impact on total return due to payments by affiliates.

See Accompanying Notes to Financial Statements
13

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009

NOTE 1 — ORGANIZATION

ING Prime Rate Trust (the "Trust"), a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified, closed-end, management investment company. The Trust invests primarily in senior loans, which generally are not registered under the Securities Act of 1933, as amended (the "1933 Act"), and which contain certain restrictions on resale and cannot be sold publicly. These loans bear interest (unless otherwise noted) at rates that float periodically at a margin above the London Inter-Bank Offered Rate ("LIBOR") and other short-term rates.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with U.S. generally accepted accounting principles for investment companies.

A.  Senior Loan and Other Security Valuation. Senior loans held by the Trust are normally valued at the average of the means of one or more bid and ask quotations obtained from an independent pricing service or other sources determined by the Trust's Board to be independent and believed to be reliable. Loans for which reliable market value quotations are not readily available may be valued with reference to another loan or a group of loans for which reliable quotations are readily available and whose characteristics are comparable to the loan being valued. Under this approach, the comparable loan or loans serve as a proxy for changes in value of the loan being valued.

The Trust has engaged independent pricing services to provide market value quotations from dealers in loans and, when such quotations are not readily available, to calculate values under the proxy procedure described above. As of February 28, 2009, approximately 98% of total loans were valued based on these procedures. It is expected that most of the loans held by the Trust will continue to be valued with reference to quotations from the independent pricing service or with reference to the proxy procedure described above.

Prices from a pricing source may not be available for all loans and the Investment Adviser or ING Investment Management Co. ("ING IM" or the "Sub-Adviser"), may believe that the price for a loan derived from market quotations or the proxy procedure described above is not reliable or accurate. Among other reasons, this may be the result of information about a particular loan or borrower known to the Investment Adviser or the Sub-Adviser that the Investment Adviser or the Sub-Adviser believes may not be known to the pricing service or reflected in a price quote. In this event, the loan is valued at fair value, as defined by the 1940 Act, as determined in good faith under procedures established by the Board and in accordance with the provisions of the 1940 Act. Under these procedures, fair value is determined by the Investment Adviser or Sub-Adviser and monitored by the Board through its Valuation, Brokerage and Proxy Committee.

In fair valuing a loan, consideration is given to several factors, which may include, among others, the following: (i) the characteristics of and fundamental analytical data relating to the loan, including the cost, size, current interest rate, period until the next interest rate reset, maturity and base lending rate of the loan, the terms and conditions of the loan and any related agreements, and the position of the loan in the borrower's debt structure; (ii) the nature, adequacy and value of the collateral, including the Trust's rights, remedies and interests with respect to the collateral; (iii) the creditworthiness of the borrower and the cash flow coverage of outstanding principal and interest, based on an evaluation of its financial condition, financial statements and information about the borrower's business, cash flows, capital structure and future prospects; (iv) information relating to the market for the loan,

14

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

including price quotations for, and trading in, the loan and interests in similar loans; (v) the reputation and financial condition of the agent for the loan and any intermediate participants in the loan; (vi) the borrower's management; and (vii) the general economic and market conditions affecting the fair value of the loan. Securities for which the primary market is a national securities exchange are valued at the last reported sale price. Securities reported by NASDAQ will be valued at the NASDAQ Official Closing Price. Securities traded in the over-the-counter market and listed securities for which no sale was reported on a valuation date are valued at the mean between the last reported bid and ask price on such exchange. Securities, other than senior loans, for which reliable market value quotations are not readily available, and all other assets, will be valued at their respective fair values as determined in good faith by, and under procedures established by, the Board. Investments in securities maturing in 60 days or less from the date of acquistion are valued at amortized cost which approximates market value.

Effective for fiscal years beginning after November 15, 2007, Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157, "Fair Value Measurements," establishes a hierarchy for measuring fair value of assets and liabilities. As required by the standard, each investment asset or liability of the Trust is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical securities are classified as "Level 1," inputs other than quoted prices for an asset that are observable are classified as "Level 2" and unobservable inputs, including the sub-adviser's judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as "Level 3." The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. A table summarizing the Trust's investments under these levels of classification is included following the Portfolio of Investments.

Effective for fiscal years and interim periods ending after November 15, 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 133-1 and FASB Interpretation Number ("FIN") 45-4, "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161." The amendments to FAS 133 require enhanced disclosure regarding credit derivatives sold, including (1) the nature and terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative, (2) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (3) the fair value of the credit derivative, and (4) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. All changes to accounting policies have been made in accordance with the FSP and incorporated for the current period as part of the Notes to Financial Statements and Portfolio of Investments.

B.  Federal Income Taxes. It is the Trust's policy to comply with subchapter M of the Internal Revenue Code and related excise tax provisions applicable to regulated investment companies and to distribute substantially all of its net investment income and net realized capital gains to its shareholders. Therefore, no federal income tax provision is required. Management has considered the sustainability of the Trust's tax positions taken on federal income tax returns for all open tax years in making this determination. No capital gain distributions will be made by the Trust until any capital loss carryforwards have been fully utilized or expire.

C.  Security Transactions and Revenue Recognition. Revolver and delayed draw loans are booked on a settlement date basis. Security transactions and senior loans are accounted for on trade date

15

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

(date the order to buy or sell is executed). Realized gains or losses are reported on the basis of identified cost of securities sold. Dividend income is recognized on the ex-dividend date. Interest income is recorded on an accrual basis at the then-current interest rate of the loan. The accrual of interest on loans is partially or fully discontinued when, in the opinion of management, there is an indication that the borrower may be unable to meet payments as they become due. If determined to be uncollectable, accrued interest is also written off. Cash collections on non-accrual senior loans are generally applied as a reduction to the recorded investment of the loan. Senior loans are generally returned to accrual status only after all past due amounts have been received and the borrower has demonstrated sustained performance. For all loans, except revolving credit facilities, fees received are treated as discounts and are accreted whereas premiums are amortized. Fees associated with revolving credit facilities are deferred and recognized over the shorter of four years or the actual term of the loan.

D.  Foreign Currency Translation. The books and records of the Trust are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

(1)  Market value of investment securities, other assets and liabilities — at the exchange rates prevailing at the end of the day.

(2)  Purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets and the market values are presented at the foreign exchange rates at the end of the day, the Trust does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses from investments. For securities, which are subject to foreign withholding tax upon disposition, liabilities are recorded on the Statement of Assets and Liabilities for the estimated tax withholding based on the securities current market value. Upon disposition, realized gains or losses on such securities are recorded net of foreign withholding tax.

Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Trust's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies and the U.S. government. These risks include, but are not limited to, revaluation of currencies and future adverse political and economic developments which could cause securities and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and U.S. government securities.

E.  Forward Foreign Currency Contracts. The Trust may enter into forward foreign currency contracts primarily to hedge against foreign currency exchange rate risks on its non-U.S. dollar denominated investment securities. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of a foreign currency contract fluctuates with changes in foreign currency exchange rates. Forward foreign currency contracts are marked to market daily and the change in value is recorded by the Trust as an unrealized gain or loss and is reported in the Statement of Assets and Liabilities. Realized gains or losses equal to the difference between the value of the contract at

16

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

the time it was opened and the value at the time it was closed are recorded upon delivery or receipt of the currency and are included in the Statement of Operations. These instruments may involve market risk in excess of the amount recognized in the Statement of Assets and Liabilities. In addition, the Trust could be exposed to risk if the counterparties are unable to meet the terms of the contracts or if the value of the currency changes unfavorably to the U.S. dollar. Open forward foreign currency contracts are presented following the Portfolio of Investments.

F.  Distributions to Common Shareholders. The Trust declares and pays dividends monthly from net investment income. Distributions from capital gains, if any, are declared and paid annually. The Trust may make additional distributions to comply with the distribution requirements of the Internal Revenue Code. The character and amounts of income and gains to be distributed are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles for investment companies. The Trust records distributions to its shareholders on the ex-dividend date.

G.  Dividend Reinvestments. Pursuant to the Trust's Shareholder Investment Program (the "Program"), DST Systems, Inc. ("DST"), the Program administrator, purchases, from time to time, shares of beneficial interest of the Trust on the open market to satisfy dividend reinvestments. Such shares are purchased on the open market only when the closing sale or bid price plus commission is less than the NAV per share of the Trust's common shares on the valuation date. If the market price plus commissions is equal to or exceeds NAV, new shares are issued by the Trust at the greater of (i) NAV or (ii) the market price of the shares during the pricing period, minus a discount of 5%.

H.  Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

I.  Share Offerings. The Trust issues shares under various shelf registration statements, whereby the net proceeds received by the Trust from share sales may not be less than the greater of (i) the NAV per share or (ii) 94% of the average daily market price over the relevant pricing period.

NOTE 3 — INVESTMENTS

For the year ended February 28, 2009, the cost of purchases and the proceeds from principal repayment and sales of investments, excluding short-term notes, totaled $122,223,613 and $585,015,642, respectively. At February 28, 2009, the Trust held senior loans valued at $831,717,911 representing 99.3% of its total investments. The market value of these assets is established as set forth in Note 2.

The senior loans acquired by the Trust typically take the form of a direct lending relationship with the borrower, and are typically acquired through an assignment of another lender's interest in a loan. The lead lender in a typical corporate loan syndicate administers the loan and monitors the collateral securing the loan.

Common and preferred shares, and stock purchase warrants held in the portfolio were acquired in conjunction with loans held by the Trust. Certain of these stocks and warrants are restricted and may not be publicly sold without registration under the 1933 Act, or without an exemption under the 1933 Act. In some cases, these restrictions expire after a designated period of time after issuance of the shares or warrants.

17

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 3 — INVESTMENTS (continued)

Dates of acquisition and cost or assigned basis of restricted securities are as follows:

				Date of Acquisition				Cost or Assigned Basis
Allied Digital Technologies Corporation (Residual Interest in Bankruptcy Estate)				06/05/02				$	100
Block Vision Holdings Corporation (571 Common Shares)				09/17/02					—
Boston Chicken, Inc. (Residual Interest in Boston Chicken Plan Trust)				12/26/00					9,793
Cedar Chemical (Liquidation Interest)				12/31/02					—
Decision One Corporation (1,752,103 Common Shares)				05/17/05					1,116,773
Enterprise Profit Solutions (Liquidation Interest)				10/21/02					—
EquityCo, LLC (Warrants for 28,752 Common Shares)				02/25/02					—
Euro United Corporation (Residual Interest in Bankruptcy Estate)				06/21/02					100
Grand Union Company (Residual Interest in Bankruptcy Estate)				07/01/02					2,576
IT Group, Inc. (Residual Interest in Bankruptcy Estate)				09/12/03					25
Kevco Inc. (Residual Interest in Bankruptcy Estate)				06/05/02					25
Lincoln Paper & Tissue (Warrants for 291 Common Shares, Expires August 14, 2015)				08/25/05					—
Lincoln Pulp and Eastern Fine (Residual Interest in Bankruptcy Estate)				06/08/04					—
Norwood Promotional Products, Inc. (104,148 Common Shares)				08/23/04					32,939
Norwood Promotional Products, Inc. (Contingent Value Rights)				12/14/07					377,999
Safelite Realty Corporation (57,804 Common Shares)				10/12/00					—
Transtar Metals (Residual Interest in Bankruptcy Estate)				01/09/03					40,230
TSR Wireless, LLC (Residual Interest in Bankruptcy Estate)				10/15/02					—
US Office Products Company (Residual Interest in Bankruptcy Estate)				02/11/04					—
Total Restricted Securities excluding senior loans (market value $462,482 was 0.08% of net assets at February 28, 2009)								$	1,580,560

 

NOTE 4 — MANAGEMENT AND ADMINISTRATION AGREEMENTS

The Trust has entered into an investment management agreement ("Investment Advisory Agreement") with the Investment Adviser, an Arizona limited liability company, to provide advisory and management services. The Investment Advisory Agreement compensates the Investment Adviser with a fee, computed daily and payable monthly, at an annual rate of 0.80% of the Trust's Managed Assets. For purposes of the Investment Advisory Agreement, "Managed Assets" shall mean the Trust's average daily gross asset value, minus the sum of the Trust's accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Trust and the liquidation preference of any outstanding preferred shares).

The Investment Adviser entered into a Sub-Advisory agreement with ING IM, a Connecticut corporation. Subject to such policies as the Board or the Investment Adviser may determine, ING IM manages the Trust's assets in accordance with the Trust's investment objectives, policies, and limitations.

The Trust has also entered into an administration agreement with ING Funds Services, LLC (the "Administrator") to provide administrative services and also to furnish facilities. The Administrator is compensated with a fee, computed daily and payable monthly, at an annual rate of 0.25% of the Trust's Managed Assets.

18

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 4 — MANAGEMENT AND ADMINISTRATION AGREEMENTS (continued)

The Investment Adviser, ING IM and the Administrator are indirect, wholly-owned subsidiaries of ING Groep N.V. ("ING Groep"). ING Groep is a global financial institution of Dutch origin offering banking, investments, life insurance, and retirement services.

On October 19, 2008, ING Groep announced that it reached an agreement with the Dutch government to strengthen its capital position. ING Groep will issue non-voting core Tier-1 securities for a total consideration of EUR 10 billion to the Dutch State. The transaction boosts ING Bank's core Tier-1 ratio, strengthens the insurance balance sheet and reduces ING Groep's Debt/Equity ratio.

NOTE 5 — TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

At February 28, 2009, the Trust had the following amounts recorded in payables to affiliates on the accompanying Statement of Assets and Liabilities:

Accrued Investment Management Fees				Accrued Administrative Fees				Total
$	528,401			$	165,125			$	693,526

 

The ING Funds have adopted a retirement policy under which any Trustee, who as of May 9, 2007, had served for at least five (5) years as an Independent Trustee shall be entitled to a retirement payment ("Retirement Benefit") if such Trustee: (a) retires in accordance with the retirement policy; (b) dies; or (c) becomes disabled. The Retirement Benefit shall be made promptly to, as applicable, the Trustee or the Trustee's estate, after such retirement, death or disability in an amount equal to two times the annual compensation payable to such Trustee, as in effect at the time of his or her retirement, death or disability. The annual compensation determination shall be based upon the annual Board membership retainer fee (but not any separate annual retainer fees for chairpersons of committees and of the Board). This amount shall be paid by the Trust or ING Funds on whose Board the Trustee was serving at the time of his or her retirement. The retiring Trustee may elect to receive payment of his or her benefit in a lump sum or in three substantially equal payments.

The Trust's sub-adviser reimbursed the Trust for compensation received by an affiliate of the sub-adviser in connection with two loans the Trust purchased from that affiliate. Those purchases were conducted in a manner that was determined to be inconsistent with applicable regulations. The amount reimbursed to the Trust was $298,074.

NOTE 6 — COMMITMENTS

The Trust has entered into both a $185 million 364-day revolving credit agreement which matures August 19, 2009 and a $140 million 364-day revolving securitization facility which matures May 29, 2009, collateralized by assets of the Trust. Borrowing rates under these agreements are based on a fixed spread over LIBOR, or a commercial paper-based rate. Prepaid arrangement fees for these facilities are amortized over the term of the agreements. The amount of borrowings outstanding at February 28, 2009, was $81 million. Weighted average interest rate on outstanding borrowings was 2.93%, excluding fees related to the unused portion of the facilities, and other fees. The amount of borrowings represented 9.37% of total assets at February 28, 2009. Average borrowings for the year ended February 28, 2009 were $227,890,781 and the average annualized interest rate was 3.61% excluding other fees related to the unused portion of the facilities, and other fees.

19

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 6 — COMMITMENTS (continued)

As of February 28, 2009, the Trust had unfunded loan commitments pursuant to the terms of the following loan agreements:

Calpine Corporation				$	577,500
Cengage Learning, Inc.					3,333,333
Coleto Creek Power					4,458,334
Fontainebleau Resorts, LLC					633,333
Golden Nugget, Inc.				$	174,679
Kerasotes Theatres, Inc.					825,000
Sturm Foods, Inc.					500,000
				$	10,502,179

 

The unrealized depreciation on these commitments of $2,468,935 as of February 28, 2009 is reported as such on the Statement of Assets and Liabilities.

NOTE 7 — RIGHTS AND OTHER OFFERINGS

As of February 28, 2009, outstanding share offerings pursuant to shelf registrations were as follows:

Registration Date				Shares Registered				Shares Remaining
	9/15/98				25,000,000				12,368,668
	3/04/99				5,000,000				3,241,645

 

On November 2, 2000, the Trust issued 3,600 shares each of Series M, Series W and Series F Auction Rate Cumulative Preferred Shares, $0.01 Par Value, $25,000 liquidation preference, for a total issuance of $270 million. Also, on November 16, 2000, the Trust issued 3,600 shares of Series T and Series Th Auction Rate Cumulative Preferred Shares, $0.01 Par Value, $25,000, liquidation preference, for a total issuance of $180 million. The Trust used the net proceeds of the offering to partially pay down the then existing indebtedness and to purchase additional senior loans. Preferred Shares pay dividends based on a rate set at auctions, normally held every 7 days. In most instances dividends are also payable every 7 days, on the first business day following the end of the rate period. Preferred shares have no stated conversion, redemption or liquidation date, but may be redeemed at the election of the Trust. Such shares may only be redeemed by the Preferred Shareholders if the Trust fails to meet certain credit quality thresholds within its portfolio.

Since early February 2008, for the first time in the history of its auction rate preferred shares program, the Trust did not receive hold orders and purchase requests for its preferred shares during their weekly auctions that equaled the full amount of such shares. As a result the amount sold by each selling shareholder was reduced pro rata or to zero. In addition, the dividend rates on each series of preferred shares, which are normally set weekly by means of a Dutch Auction procedure, automatically reset to the maximum rate permitted under the preferred shares program. That maximum rate is 150% of the applicable commercial paper base rate on the days of each weekly auction.

On June 9, 2008, the Trust announced the approval by the Board of a partial redemption of its outstanding Preferred Shares. The Trust redeemed approximately $225 million of the $450 million of its outstanding Preferred Shares as itemized below. The Preferred Shares were redeemed using proceeds available through the Trust's existing bank loan facility. Redemption costs and the on-going costs of obtaining leverage through a bank loan facility may reduce returns to Common Shares and may be higher than the costs of leverage obtained through the Preferred Shares. The Trust and the Board will continue to closely monitor the situation and evaluate potential options to restore liquidity to and/or provide additional refinancing options for this market in the context of regulatory guidelines, as well as the economic and tax implications for both its Common and Preferred shareholders.

20

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 7 — RIGHTS AND OTHER OFFERINGS (continued)

Preferred Shares				Total Shares Redeemed				Total Liquidation Preference				Redemption Date
Series M					1,800			$	45,000,000			07/15/08
Series T					1,800			$	45,000,000			07/16/08
Series W					1,800			$	45,000,000			07/17/08
Series Th					1,800			$	45,000,000			07/18/08
Series F					1,800			$	45,000,000			07/21/08
Totals					9,000			$	225,000,000

 

NOTE 8 — CUSTODIAL AGREEMENT

State Street Bank and Trust Company ("SSB") serves as the Trust's custodian and recordkeeper. Custody fees paid to SSB are reduced by earnings credits based on the cash balances held by SSB for the Trust. There were no earnings credits for the year ended February 28, 2009.

NOTE 9 — SUBORDINATED LOANS AND UNSECURED LOANS

The Trust may invest in subordinated loans and in unsecured loans. The primary risk arising from investing in subordinated loans or in unsecured loans is the potential loss in the event of default by the issuer of the loans. The Trust may acquire a subordinated loan only if, at the time of acquisition, it acquires or holds a senior loan from the same borrower. The Trust will acquire unsecured loans only where the Investment Adviser believes, at the time of acquisition, that the Trust would have the right to payment upon default that is not subordinate to any other creditor. Subject to the aggregate 20% limit on other investments, the Trust may invest up to 20% of its total assets in unsecured floating rate loans, notes and other debt instruments and 5% of its total assets in floating rate subordinated loans. As of February 28, 2009, the Trust held 0.7% of its total assets in subordinated loans and unsecured loans.

NOTE 10 — CAPITAL SHARES

Transactions in capital shares and dollars were as follows:

				Prime Rate Trust
				Year Ended February 28, 2009				Year Ended February 29, 2008
Number of Shares
Reinvestment of distributions from common shares					79,343				58,938
Proceeds from shares sold					3,921				2,320
Net increase in shares outstanding					83,264				61,258
Dollar Amount ($)
Reinvestment of distributions from common shares				$	279,285			$	450,139
Proceeds from shares sold					13,803				17,785
Net increase				$	293,088			$	467,924

 

NOTE 11 — FEDERAL INCOME TAXES

The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles for investment companies. These book/tax differences may be either temporary or permanent. Permanent differences are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences are not reclassified. Key differences include the treatment of short-term capital gains, foreign currency transactions, and wash sale deferrals. Distributions in excess of net investment income and/or net realized capital gains for tax purposes are reported as return of capital.

21

---

ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 11 — FEDERAL INCOME TAXES (continued)

The following permanent tax differences have been reclassified as of February 28, 2009:

Paid-in Capital				Undistributed Net Investment Income				Accumulated Net Realized Gains/(Losses)
$	(847,192	)		$	21,347,486			$	(20,500,294	)

 

Dividends paid by the Trust from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders.

The tax composition of dividends and distributions to shareholders was as follows:

Year Ended February 28, 2009				Year Ended February 29, 2008
Ordinary Income				Ordinary Income
$	67,813,469			$	105,297,662

 

The tax-basis components of distributable earnings and the expiration dates of the capital loss carryforwards which may be used to offset future realized capital gains for federal income tax purposes as of February 28, 2009 were:

Undistributed Ordinary Income				Unrealized Appreciation/ (Depreciation)				Post-October Capital Losses Deferred				Capital Loss Carryforwards				Expiration Dates
$	22,601,908			$	(438,484,412	)		$	(76,149,326	)		$	(47,376,376	)			2010
													(97,064,717	)			2011
													(57,686,392	)			2012
													(22,421,058	)			2013
													(560,828	)			2014
													(41,585,301	)			2017
												$	(266,694,672	)

 

The Trust's major tax jurisdictions are federal and Arizona. The earliest tax year that remains subject to examination by these jurisdictions is 2004.

NOTE 12 — OTHER ACCOUNTING PRONOUNCEMENT

On March 19, 2008, the FASB issued Statement of Financial Accounting Standards No. 161 ("SFAS No. 161"), "Disclosure about Derivative Instruments and Hedging Activities." This new accounting statement requires enhanced disclosures about an entity's derivative and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity invests in derivatives, (b) how derivatives are accounted for under SFAS No. 133, and (c) how derivatives affect an entity's financial position, financial performance, and cash flows. SFAS No. 161 also requires enhanced disclosures regarding credit-risk-related contingent features of derivative instruments. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Upon adoption of SFAS No. 161 as of December 1, 2008, management of the Trust continues to assess the impact to the expanded financial statement disclosures.

NOTE 13 — INFORMATION REGARDING TRADING OF ING'S U.S. MUTUAL FUNDS

As discussed in earlier supplements that were previously filed with the SEC, ING Investments, the adviser to the ING Funds, has reported to the Boards of Directors/Trustees (the "Boards") of the ING Funds that, like many U.S. financial services companies, ING Investments and certain of its U.S. affiliates have received informal and formal requests for information since September 2003 from various governmental and self-regulatory agencies in connection with investigations related to

22

---

ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 13 — INFORMATION REGARDING TRADING OF ING'S U.S. MUTUAL FUNDS (continued)

mutual funds and variable insurance products. ING Investments has advised the Boards that it and its affiliates have cooperated fully with each request.

In addition to responding to regulatory and governmental requests, ING Investments reported that management of U.S. affiliates of ING Groep N.V., including ING Investments (collectively, "ING"), on their own initiative, have conducted, through independent special counsel and a national accounting firm, an extensive internal review of trading in ING insurance, retirement, and mutual fund products. ING's internal review related to mutual fund trading has been completed. ING has reported that, of the millions of customer relationships that ING maintains, the internal review identified several isolated arrangements allowing third parties to engage in frequent trading of mutual funds within ING's variable insurance and mutual fund products, and identified other circumstances where frequent trading occurred, despite measures taken by ING intended to combat market timing. ING further reported that each of these arrangements has been terminated and fully disclosed to regulators. The results of the internal review were also reported to the independent members of the Boards.

ING Investments has advised the Boards that most of the identified arrangements were initiated prior to ING's acquisition of the businesses in question in the U.S. ING Investments further reported that the companies in question did not receive special benefits in return for any of these arrangements, which have all been terminated.

Based on the internal review, ING Investments has advised the Boards that the identified arrangements do not represent a systemic problem in any of the companies that were involved.

Despite the extensive internal review conducted through independent special counsel and a national accounting firm, there can be no assurance that the instances of inappropriate trading reported to the Boards are the only instances of such trading respecting the ING Funds.

ING Investments reported to the Boards that ING is committed to conducting its business with the highest standards of ethical conduct with zero tolerance for noncompliance. Accordingly, ING Investments advised the Boards that ING management was disappointed that its voluntary internal review identified these situations. Viewed in the context of the breadth and magnitude of its U.S. business as a whole, ING management does not believe that ING's acquired companies had systemic ethical or compliance issues in these areas. Nonetheless, ING Investments reported that given ING's refusal to tolerate any lapses, it has taken the steps noted below, and will continue to seek opportunities to further strengthen the internal controls of its affiliates.

•  ING has agreed with the ING Funds to indemnify and hold harmless the ING Funds from all damages resulting from wrongful conduct by ING or its employees or from ING's internal investigation, any investigations conducted by any governmental or self-regulatory agencies, litigation or other formal proceedings, including any proceedings by the SEC. ING Investments reported to the Boards that the indemnification commitments made by ING Funds related to mutual fund trading have been settled and restitution amounts prepared by an independent consultant have been paid to the affected ING Funds.

•  ING updated its Code of Conduct for employees reinforcing its employees' obligation to conduct personal trading activity consistent with the law, disclosed limits, and other requirements.

23

---

ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2009 (continued)

NOTE 13 — INFORMATION REGARDING TRADING OF ING'S U.S. MUTUAL FUNDS (continued)

Other Regulatory Matters

The New York Attorney General and other federal and state regulators are also conducting broad inquiries and investigations involving the insurance industry. These initiatives currently focus on, among other things, compensation and other sales incentives; potential conflicts of interest; potential anticompetitive activity; reinsurance; marketing practices (including suitability); specific product types (including group annuities and indexed annuities); fund selection for investment products and brokerage sales; and disclosure. It is likely that the scope of these industry investigations will further broaden before they conclude. ING has received formal and informal requests in connection with such investigations, and is cooperating fully with each request.

Other federal and state regulators could initiate similar actions in this or other areas of ING's businesses. These regulatory initiatives may result in new legislation and regulation that could significantly affect the financial services industry, including businesses in which ING is engaged. In light of these and other developments, ING continuously reviews whether modifications to its business practices are appropriate. At this time, in light of the current regulatory factors, ING U.S. is actively engaged in reviewing whether any modifications in our practices are appropriate for the future.

There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares, or other adverse consequences to ING Funds.

NOTE 14 — SUBSEQUENT EVENTS

Effective April 20, 2009, PNC Global Investment Servicing (U.S.) Inc. assumed all account servicing and record-keeping responsibilities for the Trust, replacing the transfer agent, DST Systems, Inc.

Subsequent to February 28, 2009, the Trust paid to Common Shareholders the following dividends from net investment income:

Per Share Amount

Declaration Date

Record Date

Payable Date

$

0.024

2/27/09

3/10/09

3/23/09

$

0.024

3/31/09

4/13/09

4/17/09

 

Subsequent to February 28, 2009, the Trust paid to Preferred Shareholders the following dividends from net investment income:

Preferred Shares				Total Per Share Amount				Auction Dates				Record Dates				Payable Dates				Average Rate
Series M				$	11.55			03/02/09 — 04/20/09				03/09/09 — 04/27/09				03/10/09 — 04/28/09					0.30	%
Series T				$	10.60			03/03/09 — 04/21/09				03/10/09 — 04/28/09				03/11/09 — 04/29/09					0.27	%
Series W				$	12.87			03/04/09 — 04/22/09				03/11/09 — 04/29/09				03/12/09 — 04/30/09					0.33	%
Series Th				$	10.84			03/05/09 — 04/23/09				03/12/09 — 04/30/09				03/13/09 — 05/01/09					0.27	%
Series F				$	12.21			03/06/09 — 04/24/09				03/13/09 — 05/01/09				03/16/09 — 05/04/09					0.31	%

 

24

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009

Senior Loans*: 150.5%

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Aerospace & Defense: 2.2%

Avio Group

NR

NR

$

553,772

Term Loan, 3.764%, maturing December 13, 2014

$

295,230

EUR

705,000

Term Loan, 3.896%, maturing December 13, 2014

496,821

$

590,346

Term Loan, 4.314%, maturing December 13, 2015

314,728

EUR

705,000

Term Loan, 4.521%, maturing December 13, 2015

496,821

Delta Airlines, Inc.

Ba2

BB-

$

1,485,000

Term Loan, 2.435%, maturing April 30, 2012

1,144,687

Delta Airlines, Inc.

B2

B

5,442,336

Term Loan, 3.695%, maturing April 30, 2014

2,777,295

McKechnie Aerospace DE, Inc.

B1

B+

985,000

Term Loan, 2.480%, maturing May 11, 2014

665,696

Transdigm, Inc.

Ba3

BB-

3,000,000

Term Loan, 3.498%, maturing June 23, 2013

2,750,625

United Airlines, Inc.

B3

B+

4,104,572

Term Loan, 2.500%, maturing February 01, 2014

2,169,722

Wesco Aircraft Hardware Corporation

B1

BB-

1,458,750

Term Loan, 2.730%, maturing September 29, 2013

1,218,968

12,330,593

Automobile: 1.9%

Dollar Thrifty Automotive Group, Inc.

Caa3

CCC+

474,375

Term Loan, 4.250%, maturing June 15, 2014

136,383

Ford Motor Company

B2

CCC+

9,656,812

Term Loan, 5.000%, maturing December 16, 2013

3,146,508

KAR Holdings, Inc.

Ba3

B+

3,307,011

Term Loan, 3.253%, maturing October 18, 2013

2,259,790

Oshkosh Truck Corporation

B2

B+

6,931,636

Term Loan, 3.157%, maturing December 06, 2013

4,906,302

10,448,983

Beverage, Food & Tobacco: 4.2%

ARAMARK Corporation

Ba3

BB

11,180,905

Term Loan, 3.334%, maturing January 26, 2014

9,718,073

2,940,000

Term Loan, 3.334%, maturing January 26, 2014

2,555,351

1,089,534

Term Loan, 4.063%, maturing January 26, 2014

946,987

Pinnacle Foods Holding Corporation

B2

B

5,614,500

Term Loan, 3.163%, maturing April 02, 2014

4,588,102

Sturm Foods, Inc.

B2

B

2,947,500

Term Loan, 3.749%, maturing January 31, 2014

1,746,394

 

See Accompanying Notes to Financial Statements
25

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Beverage, Food & Tobacco: (continued)

United Biscuits

NR

NR

GBP

1,476,692

Term Loan, 4.473%, maturing December 14, 2014

$

1,403,202

Van Houtte, Inc.

Ba3

BB-

$

650,100

Term Loan, 3.959%, maturing July 19, 2014

511,954

88,650

Term Loan, 3.959%, maturing July 19, 2014

69,812

Wm. Wrigley Jr. Company

NR

BBB

1,500,000

Term Loan, 6.500%, maturing October 06, 2014

1,485,782

23,025,657

Buildings & Real Estate: 1.2%

Capital Automotive, L.P.

Ba1

BB

551,050

Term Loan, 2.170%, maturing December 16, 2010

270,015

Contech Construction Products, Inc.

B1

B

1,651,129

Term Loan, 2.45%, maturing January 31, 2013

821,437

Custom Building Products, Inc.

Ba3

BB-

2,960,975

Term Loan, 7.942%, maturing October 29, 2011

2,043,072

John Maneely Company

B2

B+

4,043,596

Term Loan, 4.436%, maturing December 09, 2013

2,371,824

KCPC Acquisition, Inc.

Ba2

B-

526,075

Term Loan, 2.723%, maturing May 22, 2014

362,991

189,655

Term Loan, 2.750%, maturing May 22, 2014

130,862

Shea Capital I, LLC

Caa2

BB-

105,110

Term Loan, 3.807%, maturing October 27, 2011

26,277

Tishman Speyer

NR

B+

1,500,000

Term Loan, 2.220%, maturing December 27, 2012

600,000

6,626,478

Cargo Transport: 1.7%

Baker Tanks, Inc.

B1

B

1,965,000

Term Loan, 2.716%, maturing May 08, 2014

1,287,075

Dockwise Transport, N.V.

NR

NR

1,094,819

Term Loan, 3.459%, maturing January 11, 2015

571,131

875,000

Term Loan, 3.459%, maturing January 11, 2015

456,459

1,094,819

Term Loan, 4.334%, maturing January 11, 2016

571,131

875,000

Term Loan, 4.334%, maturing January 11, 2016

456,459

500,000

Term Loan, 5.959%, maturing July 11, 2016

100,000

560,000

Term Loan, 5.959%, maturing October 20, 2016

112,000

 

See Accompanying Notes to Financial Statements
26

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Cargo Transport: (continued)
					(2	)		Gainey Corporation				NR				NR
$	749,586				(3	)		Term Loan, 6.344%, maturing April 20, 2012												$	80,206
								Inmar, Inc.				B1				B
	540,922							Term Loan, 2.730%, maturing April 29, 2013													465,193
								Railamerica Transportation Corporation				NR				NR
	3,005,440							Term Loan, 5.440%, maturing August 14, 2009													2,749,978
	194,560							Term Loan, 5.440%, maturing August 14, 2009													178,022
								TNT Logistics				Ba2				BB-
	1,887,342							Term Loan, 3.409%, maturing November 04, 2013													1,170,152
	723,070							Term Loan, 4.459%, maturing November 04, 2013													480,842
					(2	)		US Shipping Partners, L.P.				Caa3				NR
	1,752,651							Term Loan, 9.000%, maturing March 31, 2012													759,481
																					9,438,129
Cellular: 1.0%
								Cricket Communications, Inc.				Ba2				B+
	5,850,000							Term Loan, 6.500%, maturing June 16, 2013													5,451,469
																					5,451,469
Chemicals, Plastics & Rubber: 6.4%
								AZ Chem US, Inc.				B1				BB-
EUR	708,898							Term Loan, 5.214%, maturing February 28, 2013													720,098
								Borsodchem Nyrt.				NR				NR
EUR	804,394							Term Loan, 4.555%, maturing March 26, 2015													364,632
EUR	804,394							Term Loan, 5.055%, maturing March 26, 2016													364,632
								Brenntag Holding GmbH & Co. KG				B1				B+
$	1,178,182							Term Loan, 2.527%, maturing January 17, 2014													948,436
	3,621,818							Term Loan, 3.182%, maturing January 17, 2014													2,915,564
								Celanese				Ba2				BB+
	3,200,000							Term Loan, 1.913%, maturing April 02, 2014													2,624,890
								Cristal Inorganic Chemicals, Inc.				Ba3				B
	2,608,028							Term Loan, 3.709%, maturing May 15, 2014													1,532,216
					(2	)		Hawkeye Renewables, LLC				B3				NR
	3,626,591				(3	)		Term Loan, 0.000%, maturing June 30, 2012													823,236
								Hexion Specialty Chemicals, Inc.				Ba3				B-
	1,164,000							Term Loan, 2.686%, maturing May 05, 2013													460,750
	2,443,750							Term Loan, 3.437%, maturing May 05, 2013													967,317
	985,000							Term Loan, 3.750%, maturing May 05, 2013													329,975
	6,136,653							Term Loan, 3.688%, maturing May 06, 2013													2,429,090
	1,331,698							Term Loan, 3.750%, maturing May 06, 2013													527,130

 

See Accompanying Notes to Financial Statements
27

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Chemicals, Plastics & Rubber: (continued)
								Ineos US Finance, LLC				Caa1				CCC+
$	1,723,353							Term Loan, 7.702%, maturing December 16, 2012												$	710,883
	2,714,710							Term Loan, 8.202%, maturing December 16, 2013													1,092,671
	2,713,966							Term Loan, 8.702%, maturing December 23, 2014													1,092,371
								ISP Chemco, Inc.				Ba3				BB-
	3,447,500							Term Loan, 2.379%, maturing June 04, 2014													2,918,884
								JohnsonDiversey, Inc.				Ba2				BB-
	498,493							Term Loan, 3.184%, maturing December 16, 2010													438,674
	2,552,761							Term Loan, 3.506%, maturing December 16, 2011													2,246,430
								Kraton Polymers, LLC				B1				B
	1,994,872							Term Loan, 3.438%, maturing May 12, 2013													1,034,008
								Lucite International US Finco, Ltd.				B3				B+
	694,036							Term Loan, 3.429%, maturing July 07, 2013													589,931
	1,022,595							Term Loan, 3.429%, maturing July 07, 2013													869,206
					(2	)		Lyondell Chemical Company				NR				NR
	202,204							Revolver, 5.750%, maturing December 20, 2013													66,727
	758,263							Revolver, 5.750%, maturing December 20, 2013													250,227
	481,710							Term Loan, 4.959%, maturing December 20, 2013													158,964
	580,507							Term Loan, 5.163%, maturing December 20, 2013													191,567
	580,507							Term Loan, 5.163%, maturing December 20, 2013													191,567
	580,507							Term Loan, 5.163%, maturing December 20, 2013													191,567
	1,444,706							Term Loan, 5.750%, maturing December 20, 2013													476,753
	2,518,983							Term Loan, 7.000%, maturing December 20, 2013													831,264
	2,518,983							Term Loan, 7.000%, maturing December 20, 2013													831,264
	2,518,983							Term Loan, 7.000%, maturing December 20, 2013													831,264
								MacDermid, Inc.				B1				BB-
	1,633,112							Term Loan, 2.479%, maturing April 12, 2014													1,024,778
EUR	799,130							Term Loan, 3.799%, maturing April 12, 2014													532,715
					(2	)		Northeast Biofuels, LLC				NR				D
$	115,095				(3	)		Term Loan, 10.750%, maturing June 28, 2013													28,774
								Polypore, Inc.				Ba2				BB-
	3,283,333							Term Loan, 2.480%, maturing July 03, 2014													2,347,583

 

See Accompanying Notes to Financial Statements
28

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Chemicals, Plastics & Rubber: (continued)
								Rockwood Specialties Group, Inc.				Ba2				BB+
$	1,838,287							Term Loan, 1.979%, maturing July 30, 2012												$	1,629,949
																					35,585,987
Containers, Packaging & Glass: 4.1%
								Berry Plastics Corporation				B1				B+
	4,853,696							Term Loan, 2.448%, maturing April 03, 2015													3,483,740
								Graham Packaging Company				B1				B+
	9,976,614							Term Loan, 3.506%, maturing October 07, 2011													8,420,542
								Graphic Packaging International, Inc.				Ba3				BB-
	3,790,864							Term Loan, 3.114%, maturing May 16, 2014													3,180,115
								Mauser AG				NR				NR
EUR	625,000							Term Loan, 3.929%, maturing June 13, 2013													379,338
EUR	625,000							Term Loan, 4.179%, maturing June 13, 2014													379,338
$	842,699							Term Loan, 2.855%, maturing June 13, 2015													402,810
	842,699							Term Loan, 3.105%, maturing June 13, 2016													402,810
								Owens-Illinois				Baa3				BBB-
EUR	654,375							Term Loan, 3.147%, maturing June 14, 2013													706,258
								Pro Mach, Inc.				B1				B
$	2,431,250							Term Loan, 3.710%, maturing December 01, 2011													2,273,219
								Smurfit-Stone Container Corporation				NR				D
	143,198				(5	)		Term Loan, 4.344%, maturing November 01, 2010													96,778
	302,559				(5	)		Term Loan, 3.481%, maturing November 01, 2011													204,353
	160,522				(5	)		Term Loan, 4.263%, maturing November 01, 2011													108,486
								Tegrant Holding Company				Caa3				CC
	500,000							Term Loan, 6.960%, maturing March 08, 2015													75,000
								Xerium Technologies, Inc.				Caa1				B-
	4,195,322							Term Loan, 6.959%, maturing May 18, 2012													2,527,681
																					22,640,468
Data and Internet Services: 6.7%
								Activant Solutions, Inc.				B1				B+
	891,915							Term Loan, 3.285%, maturing May 02, 2013													428,119
								Amadeus IT Group, S.A.				NR				NR
EUR	768,581							Term Loan, 3.747%, maturing May 04, 2015													596,522
EUR	768,581							Term Loan, 4.247%, maturing May 04, 2016													596,522
								Audatex				Ba3				BB-
$	1,079,771							Term Loan, 3.746%, maturing May 16, 2014													950,199
								Carlson Wagonlit Holdings, B.V.				B1				BB-
	2,734,600							Term Loan, 3.424%, maturing August 03, 2012													1,230,570
								First Data Corporation				Ba3				BB-
	1,680,086							Term Loan, 3.223%, maturing September 24, 2014													1,108,857

 

See Accompanying Notes to Financial Statements
29

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Data and Internet Services: (continued)

$

2,438,243

Term Loan, 3.223%, maturing September 24, 2014

$

1,615,641

2,246,875

Term Loan, 3.223%, maturing September 24, 2014

1,490,114

L-1 Identity Solutions Operating Company

Ba3

BB+

493,750

Term Loan, 6.750%, maturing August 05, 2013

459,188

Mitchell International, Inc.

Ba3

B+

442,125

Term Loan, 3.500%, maturing March 28, 2014

332,699

Mitchell International, Inc.

Caa1

B+

250,000

Term Loan, 6.750%, maturing March 30, 2015

147,500

Orbitz

B2

BB-

7,391,363

Term Loan, 4.106%, maturing July 25, 2014

3,141,329

Reynolds & Reynolds Company

Ba2

BB

8,236,646

(5

)

Term Loan, 2.479%, maturing October 26, 2012

5,436,187

Sabre, Inc.

B1

B+

11,958,689

Term Loan, 2.881%, maturing September 30, 2014

5,796,974

Sitel, LLC

B3

B+

2,261,385

Term Loan, 6.600%, maturing January 30, 2014

1,326,680

Sungard Data Systems, Inc.

Ba3

BB

9,065,879

Term Loan, 2.660%, maturing February 28, 2014

7,648,075

1,493,750

Term Loan, 6.750%, maturing February 28, 2014

1,389,187

Transaction Network Services, Inc.

B1

BB-

2,047,018

Term Loan, 2.445%, maturing March 28, 2014

1,791,141

Travelport, Inc.

Ba2

BB-

1,445,156

Term Loan, 3.085%, maturing August 23, 2013

865,890

985,000

Term Loan, 3.709%, maturing August 23, 2013

598,388

289,971

Term Loan, 3.709%, maturing August 23, 2013

173,741

37,123,523

Diversified / Conglomerate Manufacturing: 2.9%

BOC Edwards

B1

BB-

3,201,250

Term Loan, 2.479%, maturing May 31, 2014

1,952,763

Brand Services, Inc.

B1

B

2,821,998

Term Loan, 3.745%, maturing February 07, 2014

1,841,354

1,234,375

Term Loan, 4.739%, maturing February 07, 2014

722,109

 

See Accompanying Notes to Financial Statements
30

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Diversified / Conglomerate Manufacturing: (continued)

Brand Services, Inc.

Caa1

CCC+

$

1,600,000

Term Loan, 7.125%, maturing February 07, 2015

$

520,000

Dresser, Inc.

B2

B+

4,852,885

Term Loan, 3.454%, maturing May 04, 2014

3,525,621

EPD, Inc.

B2

B+

433,125

Term Loan, 2.950%, maturing July 31, 2014

178,303

3,024,219

Term Loan, 2.950%, maturing July 31, 2014

1,244,971

Ferretti, S.P.A

NR

NR

EUR

577,667

Term Loan, 6.456%, maturing January 22, 2015

107,273

EUR

577,667

Term Loan, 4.553%, maturing January 21, 2016

107,273

Mueller Group, Inc.

B1

BB+

$

1,734,697

Term Loan, 2.791%, maturing May 24, 2014

1,431,125

Rexnord Corporation / RBS Global, Inc.

Ba3

BB-

961,130

Term Loan, 2.938%, maturing July 19, 2013

800,941

Sensata Technologies

B3

B

4,095,000

Term Loan, 2.934%, maturing April 27, 2013

1,904,175

Sensus Metering Systems, Inc.

Ba2

BB

1,408,696

Term Loan, 2.808%, maturing December 17, 2010

1,288,957

Textron Fastening Systems

B2

B

488,750

Term Loan, 4.959%, maturing August 11, 2013

219,937

15,844,802

Diversified / Conglomerate Service: 4.2%

Affinion Group

Ba2

BB

3,937,668

Term Loan, 2.479%, maturing October 17, 2012

3,235,452

AlixPartners, LLP

B1

BB-

2,578,769

Term Loan, 3.049%, maturing October 12, 2013

2,237,083

Brickman Group

Ba3

BB-

1,965,000

Term Loan, 2.479%, maturing January 23, 2014

1,454,100

Brock Holdings, Inc.

B1

B+

1,473,750

Term Loan, 3.468%, maturing February 26, 2014

884,250

Catalina Marketing Corporation

Ba3

BB-

2,962,500

Term Loan, 4.459%, maturing October 01, 2014

2,373,703

Coach America Holdings, Inc.

B2

B

2,110,711

Term Loan, 3.227%, maturing April 20, 2014

1,343,820

442,989

Term Loan, 4.209%, maturing April 20, 2014

282,037

Fleetcor Technologies Operating Company, LLC

Ba3

B+

113,808

Term Loan, 2.663%, maturing April 30, 2013

79,666

563,442

Term Loan, 2.663%, maturing April 30, 2013

394,409

 

See Accompanying Notes to Financial Statements
31

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Diversified / Conglomerate Service: (continued)

Intergraph Corporation

Ba3

BB-

$

1,884,107

Term Loan, 3.256%, maturing May 29, 2014

$

1,625,042

Valley National Gases, Inc.

Ba3

BB-

1,946,121

Term Loan, 3.522%, maturing February 28, 2014

1,576,358

Valley National Gases, Inc.

B3

CCC+

250,000

Term Loan, 7.174%, maturing August 28, 2014

150,000

Valleycrest Companies, LLC

B1

BB-

1,844,460

Term Loan, 4.200%, maturing October 04, 2013

1,272,677

Vertafore, Inc.

B1

B

3,045,750

Term Loan, 3.749%, maturing January 31, 2012

2,588,887

West Corporation

B1

BB-

5,356,608

Term Loan, 2.837%, maturing October 24, 2013

3,967,238

23,464,722

Diversified Nat'l Rsrcs, Precious Metals & Minerals: 2.2%

Georgia Pacific Corporation

Ba2

BB+

14,037,322

Term Loan, 4.122%, maturing December 20, 2012

12,182,641

12,182,641

Ecological: 0.1%

Synagro Technologies, Inc.

B2

CCC+

886,500

Term Loan, 2.450%, maturing April 02, 2014

511,954

Synagro Technologies, Inc.

Caa2

CCC-

485,000

Term Loan, 5.200%, maturing October 02, 2014

133,375

645,329

Electronics: 2.4%

Brocade Communications Systems, Inc.

Ba2

BB+

3,209,375

Term Loan, 7.000%, maturing October 07, 2013

2,912,508

Decision One

NR

NR

1,743,927

Term Loan, 12.000%, maturing April 15, 2010

1,743,927

Freescale Semiconductor, Inc.

B1

B-

5,021,895

Term Loan, 3.931%, maturing November 29, 2013

2,218,603

Infor Global Solutions

B1

B+

492,500

Term Loan, 4.210%, maturing July 28, 2012

286,471

617,098

Term Loan, 5.210%, maturing July 28, 2012

376,430

1,182,772

Term Loan, 5.210%, maturing July 28, 2012

721,491

EUR

735,000

Term Loan, 5.964%, maturing July 28, 2012

519,129

Infor Global Solutions

Caa2

CCC+

EUR

500,000

Term Loan, 9.223%, maturing March 02, 2014

142,847

 

See Accompanying Notes to Financial Statements
32

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Electronics: (continued)
								Kronos, Inc.				Ba3				B+
$	3,204,875							Term Loan, 3.709%, maturing June 11, 2014												$	2,307,510
								NXP, B.V.				Caa1				CCC
	1,750,000							Floating Rate Note, 7.503%, maturing October 15, 2013													280,000
EUR	1,500,000							Floating Rate Note, 5.362%, maturing October 15, 2013													266,647
								ON Semiconductor				Baa3				BB
$	1,965,000							Term Loan, 2.229%, maturing September 03, 2013													1,444,275
																					13,219,838
Finance: 1.1%
								LPL Holdings, Inc.				Ba3				B+
	7,374,906							Term Loan, 2.821%, maturing June 28, 2013													6,047,423
																					6,047,423
Foreign Cable, Foreign TV, Radio and Equipment: 4.0%
								Levana Holding 4 GmbH				NR				NR
EUR	728,399							Term Loan, 4.589%, maturing March 02, 2015													96,246
EUR	728,398							Term Loan, 4.839%, maturing March 02, 2016													96,246
								Numericable/YPSO France SAS				NR				NR
EUR	765,871							Term Loan, 4.053%, maturing July 28, 2016													582,992
EUR	1,249,580							Term Loan, 4.053%, maturing July 28, 2016													951,199
EUR	1,984,549							Term Loan, 4.053%, maturing July 28, 2016													1,510,668
EUR	694,875							Term Loan, 4.303%, maturing July 28, 2016													528,445
EUR	1,305,125							Term Loan, 4.303%, maturing July 28, 2016													992,534
								ProSiebenSat.1 Media AG				NR				NR
SEK	2,269,914							Term Loan, 2.955%, maturing July 02, 2014													123,336
EUR	64,583							Term Loan, 3.625%, maturing July 02, 2014													40,046
EUR	1,190,021							Term Loan, 3.625%, maturing July 02, 2014													737,885
EUR	801,232							Term Loan, 3.750%, maturing May 09, 2015													514,786
EUR	36,050							Term Loan, 3.750%, maturing May 09, 2015													23,162
								UPC Financing Partnership				Ba3				B+
$	3,000,000							Term Loan, 2.163%, maturing December 31, 2014													2,568,750
EUR	7,346,871							Term Loan, 3.760%, maturing December 31, 2014													6,874,607
								Virgin Media Investment Holdings, Ltd.				Ba2				BB
GBP	730,970							Term Loan, 4.302%, maturing September 03, 2012													853,101
GBP	371,680							Term Loan, 4.302%, maturing September 03, 2012													433,780
GBP	2,048,281							Term Loan, 4.392%, maturing September 03, 2012													2,390,507
GBP	2,478,536							Term Loan, 4.392%, maturing September 03, 2012													2,892,650
																					22,210,940

 

See Accompanying Notes to Financial Statements
33

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Gaming: 3.9%

Cannery Casino Resorts, LLC

B1

BB

$

789,999

Term Loan, 2.680%, maturing May 18, 2013

$

734,041

955,622

Term Loan, 2.723%, maturing May 18, 2013

887,932

CCM Merger, Inc.

B3

B+

3,119,045

Term Loan, 7.298%, maturing July 13, 2012

1,879,225

Centaur, LLC

B3

CCC

1,116,817

Term Loan, 9.250%, maturing October 30, 2012

557,478

Fontainebleau Las Vegas, LLC

B3

CCC

1,266,667

Term Loan, 5.443%, maturing June 06, 2014

345,958

Golden Nugget, Inc.

B3

B-

873,394

Term Loan, 2.395%, maturing June 30, 2014

351,541

1,834,127

Term Loan, 2.480%, maturing June 30, 2014

738,236

Green Valley Ranch Gaming, LLC

B3

B

1,419,205

Term Loan, 3.016%, maturing February 16, 2014

588,970

Green Valley Ranch Gaming, LLC

Caa3

CCC

750,000

Term Loan, 3.697%, maturing August 16, 2014

65,625

Harrahs Operating Company, Inc.

B1

B-

1,985,000

Term Loan, 4.160%, maturing January 28, 2015

1,165,360

1,488,750

Term Loan, 4.163%, maturing January 28, 2015

866,965

Isle of Capri Casinos, Inc.

B1

B+

1,311,375

Term Loan, 3.209%, maturing July 26, 2014

867,557

1,739,670

Term Loan, 3.209%, maturing July 26, 2014

1,150,901

4,349,174

Term Loan, 3.209%, maturing July 26, 2014

2,877,253

Las Vegas Sands, LLC

B2

B+

1,592,000

Term Loan, 2.160%, maturing May 23, 2014

715,604

6,304,000

Term Loan, 2.160%, maturing May 23, 2014

2,833,648

New World Gaming Partners, Ltd.

B1

B+

708,333

Term Loan, 3.935%, maturing September 30, 2014

323,177

3,506,250

Term Loan, 3.935%, maturing September 30, 2014

1,599,727

Seminole Tribe of Florida

Baa3

BBB

16,617

Term Loan, 3.000%, maturing March 05, 2014

15,053

VML US Finance, LLC

B2

B

1,932,262

Term Loan, 2.730%, maturing May 24, 2013

1,130,373

867,738

Term Loan, 2.730%, maturing May 25, 2012

507,627

2,000,000

Term Loan, 2.730%, maturing May 26, 2013

1,170,000

21,372,251

Healthcare, Education and Childcare: 21.4%

Accellent, Inc.

B2

B+

1,940,000

Term Loan, 3.754%, maturing November 22, 2012

1,571,400

 

See Accompanying Notes to Financial Statements
34

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Healthcare, Education and Childcare: (continued)

AGA Medical Corporation

B1

BB-

$

1,632,209

Term Loan, 3.654%, maturing April 28, 2013

$

1,387,378

Catalent Pharma Solutions

Ba3

BB-

6,479,111

Term Loan, 3.709%, maturing April 10, 2014

3,952,258

CHG Medical Staffing, Inc.

Ba3

B+

1,523,000

Term Loan, 2.979%, maturing January 08, 2013

1,286,935

400,000

Term Loan, 3.945%, maturing January 08, 2013

338,000

CHS/Community Health Systems, Inc.

Ba3

BB

2,063,462

Term Loan, 2.729%, maturing July 25, 2014

1,754,881

40,347,567

Term Loan, 3.438%, maturing July 25, 2014

34,313,790

Concentra Operating Corporation

B1

B+

1,970,000

Term Loan, 3.710%, maturing June 25, 2014

1,157,375

CRC Health Corporation

Ba3

BB-

928,466

Term Loan, 3.709%, maturing February 06, 2013

619,751

971,601

Term Loan, 3.709%, maturing February 06, 2013

648,544

Education Management Corporation

B2

B+

5,157,758

Term Loan, 3.250%, maturing June 01, 2013

4,427,616

Emdeon Business Services, LLC

B1

BB-

2,350,662

Term Loan, 3.459%, maturing November 16, 2013

2,045,076

EMSC, L.P.

Ba1

BB+

2,883,743

Term Loan, 4.173%, maturing February 10, 2012

2,624,206

Gambro

NR

NR

SEK

2,111,070

Term Loan, 3.868%, maturing June 05, 2014

141,523

SEK

2,146,343

Term Loan, 3.868%, maturing June 05, 2014

143,887

$

646,459

Term Loan, 4.266%, maturing June 05, 2014

389,492

SEK

2,146,343

Term Loan, 4.368%, maturing June 05, 2015

143,887

SEK

2,111,070

Term Loan, 4.368%, maturing June 05, 2015

141,523

$

646,459

Term Loan, 4.766%, maturing June 05, 2015

389,492

Harlan Sprague Dawley, Inc.

B2

BB-

2,481,250

Term Loan, 2.977%, maturing July 11, 2014

1,848,531

Harrington Holdings, Inc.

B1

BB-

2,423,500

Term Loan, 2.729%, maturing January 11, 2014

2,035,740

HCA, Inc.

Ba3

BB

23,338,569

Term Loan, 3.709%, maturing November 18, 2013

19,766,461

Health Management Associates, Inc.

B1

BB-

1,676,246

Term Loan, 3.209%, maturing February 28, 2014

1,347,283

Iasis Healthcare, LLC

Ba2

B+

1,561,810

Term Loan, 2.409%, maturing March 14, 2014

1,371,464

 

See Accompanying Notes to Financial Statements
35

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Healthcare, Education and Childcare: (continued)
$	144,841							Term Loan, 4.763%, maturing March 14, 2014												$	127,188
	540,437							Term Loan, 2.409%, maturing March 15, 2014													474,571
								IM US Holdings, LLC				B1				BB
	1,932,595							Term Loan, 2.848%, maturing June 26, 2014													1,724,841
								Life Technologies Corporation				Baa3				BBB-
	1,745,625							Term Loan, 5.250%, maturing November 21, 2015													1,716,714
								Multiplan, Inc.				B1				B+
	1,187,388							Term Loan, 3.000%, maturing April 12, 2013													983,553
								National Mentor, Inc.				B1				B+
	1,969,636							Term Loan, 3.460%, maturing June 29, 2013													1,231,022
	117,736							Term Loan, 5.570%, maturing June 29, 2013													73,585
								Nycomed				NR				NR
EUR	86,211							Term Loan, 5.240%, maturing December 10, 2014													78,381
EUR	535,383							Term Loan, 5.240%, maturing December 10, 2014													486,754
EUR	54,917							Term Loan, 5.240%, maturing December 10, 2014													49,929
EUR	388,312							Term Loan, 5.240%, maturing December 10, 2014													353,042
EUR	1,397,300							Term Loan, 5.240%, maturing December 10, 2014													1,270,383
EUR	535,383							Term Loan, 5.990%, maturing December 10, 2014													486,754
EUR	1,397,300							Term Loan, 5.990%, maturing December 10, 2014													1,270,383
EUR	86,211							Term Loan, 5.990%, maturing December 10, 2014													78,381
EUR	54,917							Term Loan, 5.990%, maturing December 10, 2014													49,929
EUR	388,312							Term Loan, 5.990%, maturing December 10, 2014													353,042
								Orthofix International/Colgate Medical				B1				BB+
$	1,658,788							Term Loan, 6.317%, maturing September 22, 2013													1,434,852
								Quintiles Transnational Corporation				B1				BB
	2,945,798							Term Loan, 3.459%, maturing March 31, 2013													2,625,442
								Renal Advantage, Inc.				NR				B+
	3,348,922							Term Loan, 4.496%, maturing October 05, 2012													2,804,723
								Rural/Metro Operating Company, LLC				Ba2				BB-
	835,293							Term Loan, 6.101%, maturing March 04, 2011													728,793
	519,127							Term Loan, 4.010%, maturing March 04, 2011													452,938

 

See Accompanying Notes to Financial Statements
36

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Healthcare, Education and Childcare: (continued)

Sterigenics International, Inc.

B3

BB-

$

1,934,310

Term Loan, 4.191%, maturing November 21, 2013

$

1,547,448

Stiefel Laboratories, Inc.

B1

BB-

686,150

Term Loan, 3.410%, maturing December 28, 2013

576,366

897,078

Term Loan, 3.410%, maturing December 28, 2013

753,545

Sun Healthcare Group, Inc.

Ba2

B+

961,093

Term Loan, 3.231%, maturing April 19, 2014

783,291

217,241

Term Loan, 3.459%, maturing April 21, 2014

177,052

Surgical Care Affiliates, LLC

Ba3

B

2,955,000

Term Loan, 3.459%, maturing December 29, 2014

1,802,550

Team Health, Inc.

B1

BB-

2,021,518

Term Loan, 3.309%, maturing November 23, 2012

1,495,923

United Surgical Partners International, Inc.

Ba3

B

311,290

Term Loan, 2.470%, maturing April 19, 2014

256,814

1,648,065

Term Loan, 2.797%, maturing April 19, 2014

1,359,653

Vanguard Health Holdings Company II, LLC

Ba3

B+

3,384,583

Term Loan, 3.301%, maturing September 23, 2011

3,132,855

Viant Holdings, Inc.

Ba3

B+

738,750

Term Loan, 3.710%, maturing June 25, 2014

424,781

VWR International, Inc.

B1

B+

1,500,000

Term Loan, 2.979%, maturing June 29, 2014

1,213,125

EUR

2,500,000

Term Loan, 4.049%, maturing June 29, 2014

2,063,343

118,288,439

Home & Office Furnishings: 1.7%

Global Garden Products Italy, S.P.A.

NR

NR

EUR

1,250,000

Term Loan, 8.417%, maturing October 19, 2014

859,727

EUR

1,250,000

Term Loan, 8.917%, maturing October 19, 2015

859,727

Hilding Anders

NR

NR

EUR

324,872

Term Loan, 7.540%, maturing April 25, 2015

178,924

SEK

17,864,613

Term Loan, 7.733%, maturing April 25, 2015

795,096

National Bedding Company

B1

BB-

$

2,171,925

Term Loan, 3.045%, maturing February 28, 2013

1,066,958

Simmons Company

B2

CC

5,942,562

Term Loan, 8.535%, maturing December 19, 2011

4,632,227

Springs Window Fashions, LLC

B2

B+

1,337,522

Term Loan, 4.250%, maturing December 31, 2012

806,971

9,199,630

 

See Accompanying Notes to Financial Statements
37

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Insurance: 2.1%

AmWINS Group, Inc.

B2

B-

$

1,970,000

Term Loan, 3.410%, maturing June 08, 2013

$

1,167,225

Applied Systems, Inc.

B1

B-

1,262,784

Term Loan, 3.921%, maturing September 26, 2013

966,030

Conseco, Inc.

B2

CCC

6,115,077

Term Loan, 2.447%, maturing October 10, 2013

3,577,320

Crawford & Company

B1

BB-

1,831,525

Term Loan, 3.960%, maturing October 30, 2013

1,529,323

Hub International, Ltd.

B2

B+

453,285

Term Loan, 3.959%, maturing June 13, 2014

326,365

2,016,685

Term Loan, 3.959%, maturing June 13, 2014

1,452,013

Swett & Crawford

B3

B-

2,554,500

Term Loan, 2.729%, maturing April 03, 2014

1,387,944

USI Holdings Corporation

B2

B

2,271,734

Term Loan, 4.210%, maturing May 05, 2014

1,347,895

11,754,115

Leisure, Amusement, Entertainment: 7.5%

24 Hour Fitness Worldwide, Inc.

Ba3

B+

3,160,625

Term Loan, 3.468%, maturing June 08, 2012

1,801,556

Alpha D2, Ltd.

NR

NR

1,178,571

Term Loan, 2.854%, maturing December 31, 2013

614,598

1,714,286

Term Loan, 2.854%, maturing December 31, 2013

893,961

AMF Bowling Worldwide, Inc.

B1

B

3,078,125

Term Loan, 4.625%, maturing June 10, 2013

1,677,578

Cedar Fair, L.P.

Ba3

BB-

6,800,114

Term Loan, 2.479%, maturing August 30, 2012

5,662,156

HIT Entertainment, Inc.

B1

B-

1,940,892

Term Loan, 3.490%, maturing March 20, 2012

970,446

Kerasotes Showplace Theater, LLC

B1

B-

75,000

Revolver, 0.804%, maturing October 31, 2010

71,625

281,978

Term Loan, 5.063%, maturing October 28, 2011

176,236

Metro-Goldwyn-Mayer, Inc.

Ba3

B+

28,000,112

Term Loan, 4.249%, maturing April 08, 2012

12,780,063

7,754,732

Term Loan, 4.709%, maturing April 09, 2012

3,539,485

NEP II, Inc.

B1

B

4,418,745

Term Loan, 2.729%, maturing February 16, 2014

3,645,465

Warner Music Group

Ba3

BB

10,774,321

Term Loan, 2.954%, maturing February 28, 2011

9,341,336

41,174,505

 

See Accompanying Notes to Financial Statements
38

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Lodging: 1.5%

Audio Visual Services Corporation

Ba3

B+

$

987,500

Term Loan, 3.710%, maturing February 28, 2014

$

311,063

Hotel Del Coronado

B1

B+

16,400,000

Term Loan, 2.084%, maturing January 09, 2010

8,200,000

8,511,063

Machinery: 0.2%

Kion Group

NR

NR

EUR

1,238,909

Term Loan, 3.553%, maturing December 23, 2014

596,469

EUR

1,145,833

Term Loan, 4.053%, maturing December 23, 2015

551,658

1,148,127

Mining, Steel, Iron & Nonprecious Metals: 1.1%

Continental Alloys & Services, Inc.

B3

B-

$

490,469

Term Loan, 3.959%, maturing June 15, 2012

282,020

Noranda Aluminum Acquisition Corporation

Ba2

B

688,538

Term Loan, 2.466%, maturing May 18, 2014

378,696

Novelis

Ba3

BB

2,708,750

Term Loan, 3.460%, maturing July 06, 2014

1,638,794

1,231,250

Term Loan, 3.460%, maturing July 06, 2014

744,906

Oxbow Carbon and Minerals Holdings, LLC

B1

BB-

257,819

Term Loan, 2.479%, maturing May 08, 2014

178,647

2,879,838

Term Loan, 2.850%, maturing May 08, 2014

1,995,488

Tube City IMS Corporation

Ba3

B+

162,162

Term Loan, 3.459%, maturing January 25, 2014

72,973

1,314,426

Term Loan, 3.459%, maturing January 25, 2014

591,492

5,883,016

North American Cable: 15.7%

Atlantic Broadband

B1

B

1,950,266

Term Loan, 3.710%, maturing August 10, 2012

1,760,115

Block Communications, Inc.

Ba1

BB+

970,000

Term Loan, 3.459%, maturing December 22, 2012

814,800

Bresnan Communications, LLC

B2

BB-

2,250,000

Term Loan, 3.130%, maturing September 29, 2013

1,940,625

1,750,000

Term Loan, 3.483%, maturing September 29, 2013

1,509,375

Cequel Communications, LLC

B1

BB-

34,464,166

Term Loan, 2.450%, maturing November 05, 2013

29,326,869

Cequel Communications, LLC

Caa1

B-

1,525,000

Term Loan, 4.913%, maturing May 05, 2014

955,413

 

See Accompanying Notes to Financial Statements
39

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

North American Cable: (continued)

Charter Communications Operating, LLC

B1

C

$

11,039,266

(5

)

Term Loan, 3.211%, maturing March 06, 2014

$

8,817,613

CSC Holdings, Inc.

Ba1

BBB-

20,033,557

Term Loan, 2.206%, maturing March 29, 2013

18,305,663

Insight Midwest Holdings, LLC

B1

B+

9,002,500

Term Loan, 2.420%, maturing April 07, 2014

8,002,844

Knology, Inc.

B2

B

1,941,051

Term Loan, 2.663%, maturing June 30, 2012

1,591,662

Mediacom Broadband, LLC

Ba3

BB-

8,233,976

Term Loan, 2.120%, maturing January 31, 2015

7,091,511

Quebecor Media, Inc.

B1

B

1,699,392

Term Loan, 3.094%, maturing July 21, 2009

1,427,489

San Juan Cable, LLC

B1

BB-

1,699,368

Term Loan, 4.210%, maturing October 31, 2012

1,193,806

WideOpenWest Finance, LLC

B2

B-

5,833,333

Term Loan, 3.228%, maturing June 28, 2014

4,015,276

86,753,061

Oil & Gas: 3.8%

Alon USA

B1

BB

1,729,620

Term Loan, 2.897%, maturing June 22, 2013

726,440

216,202

Term Loan, 3.426%, maturing June 22, 2013

90,805

CR Gas Storage

Ba3

BB-

79,940

Term Loan, 2.205%, maturing May 13, 2011

63,753

150,982

Term Loan, 2.203%, maturing May 12, 2013

120,408

1,333,636

Term Loan, 4.847%, maturing May 12, 2013

1,063,574

224,058

Term Loan, 4.847%, maturing May 12, 2013

178,687

Hercules Offshore, LLC

Ba3

BB

2,000,000

Term Loan, 3.210%, maturing July 11, 2013

1,417,500

McJunkin Corporation

B1

B+

2,650,567

Term Loan, 4.709%, maturing January 31, 2013

1,974,672

MEG Energy

B1

BB+

2,723,000

Term Loan, 3.460%, maturing April 03, 2013

1,715,490

2,775,500

Term Loan, 3.460%, maturing April 03, 2013

1,748,565

Pine Prairie Energy Center

B1

B-

491,250

Term Loan, 2.910%, maturing December 31, 2013

402,825

SG Resources Mississippi, LLC

B1

BB

2,487,500

Term Loan, 2.284%, maturing April 02, 2014

2,114,375

Targa Resources, Inc.

Ba3

B+

1,039,832

Term Loan, 3.459%, maturing October 31, 2012

756,998

2,837,373

Term Loan, 5.930%, maturing October 31, 2012

2,065,607

 

See Accompanying Notes to Financial Statements
40

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Oil & Gas: (continued)

Venoco, Inc.

Caa1

B

$

1,483,457

Term Loan, 5.250%, maturing May 08, 2014

$

697,225

Western Refining, Inc.

B3

BB-

9,579,021

Term Loan, 8.250%, maturing May 30, 2014

6,044,362

21,181,286

Other Broadcasting and Entertainment: 1.1%

Deluxe Entertainment Services Group, Inc.

Ba3

B-

2,130,036

Term Loan, 3.583%, maturing May 11, 2013

1,384,523

208,547

Term Loan, 3.709%, maturing May 11, 2013

135,555

118,110

Term Loan, 3.709%, maturing May 11, 2013

76,772

Getty Images, Inc.

Ba2

BB

993,750

Term Loan, 7.244%, maturing July 02, 2015

950,688

VNU

Ba3

B+

4,651,804

Term Loan, 2.448%, maturing August 09, 2013

3,673,632

6,221,170

Other Telecommunications: 2.9%

Asurion Corporation

B1

B-

5,250,000

Term Loan, 3.762%, maturing July 03, 2014

3,945,706

BCM Ireland Holdings, Ltd.

Ba3

BB

EUR

1,683,863

Term Loan, 3.428%, maturing September 30, 2014

1,445,497

EUR

1,684,092

Term Loan, 3.678%, maturing September 30, 2015

1,445,693

Cavalier Telephone

Caa1

B-

$

2,441,642

Term Loan, 9.500%, maturing December 31, 2012

714,180

Consolidated Communications

B1

B+

1,000,000

Term Loan, 2.980%, maturing December 31, 2014

807,500

Gabriel Communications

B2

B-

492,500

Term Loan, 5.171%, maturing May 31, 2014

379,225

Hargray Communications Group, Inc.

B1

B

446,292

Term Loan, 3.486%, maturing June 29, 2014

357,033

(2

)

Hawaiian Telcom Communications, Inc.

NR

NR

2,818,023

Term Loan, 4.750%, maturing June 01, 2014

1,209,989

Kentucky Data Link, Inc.

B1

B

2,709,364

Term Loan, 2.729%, maturing February 26, 2014

2,343,600

One Communications

B2

CCC+

3,687,143

Term Loan, 5.885%, maturing June 30, 2012

2,212,286

PAETEC Holding Corporation

B1

B

432,690

Term Loan, 2.979%, maturing February 28, 2013

318,027

U.S. Telepacific Corporation

B1

CCC

977,506

Term Loan, 5.783%, maturing August 04, 2011

633,749

15,812,485

 

See Accompanying Notes to Financial Statements
41

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Personal & Nondurable Consumer Products: 5.8%

Advantage Sales and Marketing

B1

B-

$

3,007,479

Term Loan, 2.711%, maturing March 29, 2013

$

2,421,020

Bushnell Performance Optics

Ba3

BB-

1,690,355

Term Loan, 5.208%, maturing August 24, 2013

1,255,089

Fender Musical Instruments Corporation

B2

B+

1,160,833

Term Loan, 2.660%, maturing June 09, 2014

551,396

2,298,333

Term Loan, 3.710%, maturing June 09, 2014

1,091,708

Gibson Guitar Corporation

B2

B

441,433

Term Loan, 3.709%, maturing December 29, 2013

370,804

Huish Detergents, Inc.

Ba3

BB

1,662,032

Term Loan, 2.170%, maturing April 26, 2014

1,426,577

Information Resources, Inc.

B1

B+

378,639

Term Loan, 3.145%, maturing May 16, 2014

246,115

Jarden Corporation

Ba3

BB-

7,104,159

Term Loan, 3.209%, maturing January 24, 2012

6,373,020

1,172,135

Term Loan, 3.209%, maturing January 24, 2012

1,051,503

KIK Custom Products, Inc.

B3

CCC+

72,256

Term Loan, 2.730%, maturing May 31, 2014

32,489

421,494

Term Loan, 2.730%, maturing May 31, 2014

189,522

Mega Bloks, Inc.

Caa1

CCC

965,000

Term Loan, 8.750%, maturing July 26, 2012

265,375

Norwood Promotional Products

NR

NR

28,265,901

(3

)

Term Loan, 0.000%, maturing August 16, 2011

14,415,609

(2

)

Spectrum Brands, Inc.

NR

D

44,301

Term Loan, 4.413%, maturing March 30, 2013

29,837

872,911

Term Loan, 6.053%, maturing March 30, 2013

587,906

Totes Isotoner Corporation

B1

B

339,429

Term Loan, 5.311%, maturing January 31, 2013

175,655

Yankee Candle Company, Inc.

Ba3

BB-

2,693,077

Term Loan, 3.401%, maturing February 06, 2014

1,665,218

32,148,843

Personal, Food & Miscellaneous: 2.2%

Acosta, Inc.

B1

B

2,925,000

Term Loan, 2.730%, maturing July 29, 2013

2,420,437

Arbys Restaurant Group, Inc.

B1

BB-

3,799,341

Term Loan, 2.729%, maturing July 25, 2012

3,110,710

Culligan International Company

B2

B-

982,500

Term Loan, 3.300%, maturing November 24, 2012

571,692

 

See Accompanying Notes to Financial Statements
42

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Personal, Food & Miscellaneous: (continued)

Dennys, Inc.

Ba2

BB

$

555,000

Term Loan, 2.470%, maturing March 31, 2012

$

478,688

633,262

Term Loan, 3.980%, maturing March 31, 2012

546,188

N.E.W. Customer Services Companies, Inc.

B1

B

3,143,072

Term Loan, 3.861%, maturing May 22, 2014

1,959,180

OSI Restaurant Partners, Inc.

B3

B+

372,420

Term Loan, 4.074%, maturing June 14, 2013

178,452

4,140,901

Term Loan, 2.813%, maturing June 14, 2014

1,984,183

Reddy Ice Group, Inc.

B1

BB-

1,000,000

Term Loan, 2.205%, maturing August 09, 2012

545,000

Seminole Hard Rock Entertainment

B1

BB

750,000

Term Loan, 5.319%, maturing March 15, 2014

352,500

12,147,030

Printing & Publishing: 8.1%

American Achievement Corporation

B1

BB-

303,226

Term Loan, 4.500%, maturing March 25, 2011

251,677

(2

)

Ascend Media Holdings, LLC

B3

B

841,773

(3

)

Term Loan, 10.250%, maturing January 31, 2012

235,696

Black Press, Ltd.

Ba3

B

708,500

Term Loan, 3.256%, maturing August 02, 2013

283,400

1,166,942

Term Loan, 3.256%, maturing August 02, 2013

466,777

Canwest Media, Inc.

B3

CCC+

736,875

Term Loan, 3.256%, maturing July 10, 2014

335,278

Caribe Information Investments, Inc.

B1

B+

1,626,613

Term Loan, 2.716%, maturing March 31, 2013

1,016,633

Cengage Learning, Inc.

B1

B+

5,064,678

Term Loan, 2.980%, maturing July 03, 2014

3,336,357

Cenveo Corporation

Ba2

BB+

29,885

Term Loan, 3.275%, maturing June 21, 2013

19,425

1,849,118

Term Loan, 3.275%, maturing June 21, 2013

1,201,926

Dex Media West, LLC

B1

B

4,250,000

Term Loan, 7.000%, maturing October 24, 2014

2,087,813

Flint Group

NR

NR

936,821

Term Loan, 6.126%, maturing December 31, 2012

414,153

353,279

Term Loan, 6.126%, maturing December 31, 2014

156,179

1,277,104

Term Loan, 6.126%, maturing December 31, 2015

564,586

 

See Accompanying Notes to Financial Statements
43

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Printing & Publishing: (continued)

$

2,333,333

Term Loan, 6.126%, maturing May 29, 2015

$

1,031,527

EUR

666,667

Term Loan, 7.541%, maturing May 29, 2015

416,901

Hanley Wood, LLC

B2

B

$

2,695,218

Term Loan, 2.698%, maturing March 08, 2014

1,055,628

Idearc, Inc.

B3

CCC

24,916,623

Term Loan, 3.418%, maturing November 17, 2014

8,857,860

Intermedia Outdoor, Inc.

NR

NR

1,617,000

Term Loan, 4.459%, maturing January 31, 2013

970,200

Mediannuaire Holding

NR

NR

EUR

581,289

Term Loan, 3.909%, maturing April 10, 2016

236,189

EUR

581,289

Term Loan, 4.409%, maturing April 10, 2016

236,189

Merrill Communications, LLC

B1

B

$

2,871,255

Term Loan, 4.318%, maturing May 15, 2011

2,009,878

Nelson Canada

Ba3

B

3,950,000

Term Loan, 3.959%, maturing July 05, 2014

2,468,750

PagesJaunes Groupe, S.A.

NR

NR

EUR

800,000

Term Loan, 3.159%, maturing October 24, 2013

683,125

PBL Media

B1

NR

AUD

24,331,191

Term Loan, 5.495%, maturing February 05, 2013

7,563,489

Prism Business Media Holdings/ Penton Media, Inc.

Caa1

B-

$

1,670,250

Term Loan, 3.355%, maturing February 01, 2013

674,363

R.H. Donnelley Corporation

B1

B-

4,543,540

Term Loan, 3.334%, maturing June 30, 2011

2,573,593

Readers Digest

Caa2

CCC

4,298,438

Term Loan, 3.502%, maturing March 02, 2014

1,278,785

EUR

743,980

Term Loan, 3.849%, maturing March 02, 2014

307,017

Source Media, Inc.

B1

B

$

2,751,928

Term Loan, 6.460%, maturing November 08, 2011

1,499,801

Thomas Nelson Publishers

B1

B

1,855,110

Term Loan, 8.750%, maturing June 12, 2012

649,289

(2

)

Tribune Company

NR

D

1,491,225

(3

)

Term Loan, 5.250%, maturing May 19, 2014

398,670

Yell Group, PLC

NR

NR

2,000,000

Term Loan, 3.479%, maturing October 27, 2012

1,405,834

44,686,988

 

See Accompanying Notes to Financial Statements
44

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Radio and TV Broadcasting: 5.6%

Citadel Broadcasting Corporation

Caa2

B+

$

9,600,000

Term Loan, 2.213%, maturing June 12, 2014

$

3,780,000

CMP KC, LLC

NR

NR

1,349,163

Term Loan, 4.500%, maturing May 03, 2011

128,170

CMP Susquehanna Corporation

Caa1

CCC+

6,955,350

Term Loan, 2.498%, maturing May 05, 2013

2,646,511

Cumulus Media, Inc.

B3

B

4,016,490

(5

)

Term Loan, 2.197%, maturing June 11, 2014

1,676,884

CW Media Holdings, Inc.

B3

B+

2,715,625

Term Loan, 4.709%, maturing February 16, 2015

2,029,082

Emmis Communication

Caa1

B+

1,157,569

Term Loan, 3.100%, maturing November 01, 2013

524,764

FoxCo Acquisition, LLC

B1

BB-

1,246,875

Term Loan, 7.250%, maturing July 14, 2015

673,313

Local TV Finance, LLC

B2

B+

2,856,500

Term Loan, 2.480%, maturing May 07, 2013

1,271,142

Nexstar Broadcasting Group

B1

B+

2,353,342

Term Loan, 3.209%, maturing October 01, 2012

1,341,405

2,226,570

Term Loan, 3.209%, maturing October 01, 2012

1,269,145

Nextmedia Operating, Inc.

Caa1

B

408,622

Term Loan, 5.123%, maturing November 15, 2012

199,203

919,398

Term Loan, 5.174%, maturing November 15, 2012

448,207

Paxson Communications

B2

CCC

4,500,000

Term Loan, 4.344%, maturing January 15, 2012

1,125,000

Regent Communications

B3

B-

1,423,898

Term Loan, 3.709%, maturing November 21, 2013

964,691

Spanish Broadcasting Systems

Caa3

CCC+

2,998,271

(5

)

Term Loan, 3.210%, maturing June 11, 2012

1,089,371

Univision Communications, Inc.

B2

B-

21,999,786

Term Loan, 2.729%, maturing September 29, 2014

10,055,728

Univision Communications, Inc.

Caa2

CCC

1,733,625

Term Loan, 2.979%, maturing March 30, 2009

1,586,267

30,808,883

Retail Stores: 8.6%

Amscan Holdings, Inc.

B1

B

1,473,750

Term Loan, 3.787%, maturing May 25, 2013

1,068,469

Burlington Coat Factory

B3

CCC+

3,787,868

Term Loan, 2.730%, maturing May 28, 2013

1,405,568

 

See Accompanying Notes to Financial Statements
45

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Retail Stores: (continued)

CBR Fashion Holding

NR

NR

EUR

500,000

Term Loan, 3.678%, maturing July 20, 2015

$

373,465

EUR

460,000

Term Loan, 3.928%, maturing July 20, 2016

343,588

Dollar General Corporation

B1

B+

$

8,500,000

Term Loan, 3.580%, maturing July 07, 2014

7,390,172

Dollarama Group, L.P.

Ba1

BB-

2,221,940

Term Loan, 2.924%, maturing November 18, 2011

1,966,417

General Nutrition Centers, Inc.

B1

B-

3,537,000

Term Loan, 3.706%, maturing September 16, 2013

2,608,537

Guitar Center, Inc.

B3

B-

4,972,115

Term Loan, 3.985%, maturing October 09, 2014

3,095,142

Harbor Freight Tools USA, Inc.

B1

B+

6,093,476

Term Loan, 9.750%, maturing July 15, 2010

3,899,824

Michaels Stores, Inc.

B2

B

3,604,127

Term Loan, 2.770%, maturing October 31, 2013

2,046,344

Nebraska Book Company, Inc.

Ba3

B

2,363,654

Term Loan, 6.380%, maturing March 04, 2011

1,950,015

Neiman Marcus Group, Inc.

Ba3

BB

7,299,578

Term Loan, 4.193%, maturing April 06, 2013

4,744,726

Oriental Trading Company, Inc.

Caa1

CCC+

2,376,524

Term Loan, 7.267%, maturing July 31, 2013

1,277,382

Petco Animal Supplies, Inc.

B1

B+

5,022,500

Term Loan, 3.411%, maturing October 26, 2013

4,218,900

Phones 4U Group, Ltd.

NR

NR

GBP

1,615,726

Term Loan, 4.100%, maturing September 22, 2014

1,062,659

GBP

1,545,301

Term Loan, 4.600%, maturing September 22, 2015

1,016,341

Rite Aid

B3

B+

$

4,962,500

Term Loan, 2.217%, maturing June 04, 2014

3,240,101

399,000

Term Loan, 6.000%, maturing June 04, 2014

289,275

Sally Holding, LLC

B2

BB

2,414,120

Term Loan, 3.036%, maturing November 16, 2013

2,075,281

Sports Authority

B3

B-

975,000

Term Loan, 3.709%, maturing May 03, 2013

504,562

Toys "R" Us, Inc.

B2

BB-

1,368,159

Term Loan, 4.720%, maturing July 19, 2012

776,919

Vivarte

NR

NR

EUR

1,966,980

Term Loan, 3.692%, maturing June 28, 2015

1,172,610

EUR

1,966,980

Term Loan, 4.192%, maturing June 28, 2016

1,172,610

47,698,907

 

See Accompanying Notes to Financial Statements
46

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Satellite: 0.7%
								Intelsat Corporation				B1				BB-
$	1,384,459							Term Loan, 3.925%, maturing January 03, 2012												$	1,192,943
	1,384,039							Term Loan, 3.925%, maturing January 03, 2012													1,192,581
	1,384,039							Term Loan, 3.925%, maturing January 03, 2012													1,192,581
																					3,578,105
Telecommunications Equipment: 1.6%
								CommScope, Inc.				Ba3				BB-
	1,146,391							Term Loan, 3.850%, maturing December 27, 2014													983,985
								Macquarie UK Broadcast Ventures, Ltd.				NR				NR
GBP	4,383,255							Term Loan, 3.595%, maturing December 01, 2014													4,064,242
								Sorenson Communications, Inc.				Ba2				B
$	4,469,408							Term Loan, 2.980%, maturing August 16, 2013													3,873,489
																					8,921,716
Utilities: 8.7%
								Boston Generating, LLC				B3				CCC+
	256,593							Term Loan, 3.709%, maturing December 20, 2013													155,961
	6,999,302							Term Loan, 2.729%, maturing December 20, 2013													4,254,267
	1,916,404							Term Loan, 3.709%, maturing December 20, 2013													1,164,815
								Calpine Corporation				B2				B+
	1,522,500							Revolver, 3.201%, maturing March 29, 2014													993,431
	4,463,852							Term Loan, 4.335%, maturing March 29, 2014													3,263,393
								Coleto Creek WLE, L.P.				B1				BB-
	541,667							Revolver, 0.796%, maturing June 30, 2011													375,104
	570,227							Term Loan, 4.209%, maturing June 28, 2013													405,812
	4,341,930							Term Loan, 4.209%, maturing June 28, 2013													3,090,008
								FirstLight Power Resources, Inc.				B1				B+
	906,823							Term Loan, 3.850%, maturing November 01, 2013													766,265
	2,635,312							Term Loan, 4.125%, maturing November 01, 2013													2,226,839
								FirstLight Power Resources, Inc.				B3				CCC+
	610,514							Term Loan, 5.966%, maturing May 01, 2014													415,150
								Infrastrux Group, Inc.				B2				B
	4,188,106							Term Loan, 4.729%, maturing November 03, 2012													3,601,771
								MACH Gen, LLC				B2				B+
	444,571							Term Loan, 3.218%, maturing February 22, 2013													344,542
								NRG Energy, Inc.				Ba1				BB
	3,025,024							Term Loan, 2.673%, maturing February 01, 2013													2,799,659

 

See Accompanying Notes to Financial Statements
47

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Utilities: (continued)
$	9,557,512							Term Loan, 2.959%, maturing February 01, 2013												$	8,845,477
								Texas Competitive Electric Holdings Company, LLC				Ba3				B+
	5,469,975							Term Loan, 3.951%, maturing October 14, 2014													3,438,005
	2,976,124							Term Loan, 3.951%, maturing October 14, 2014													1,869,378
	5,925,000							Term Loan, 3.951%, maturing October 14, 2014													3,725,006
								TPF Generation Holdings, LLC				Ba3				BB-
	2,290,764							Term Loan, 2.479%, maturing December 15, 2013													2,096,049
	1,431,519							Term Loan, 5.762%, maturing December 15, 2013													1,309,840
								TPF Generation Holdings, LLC				B3				B-
	1,500,000							Term Loan, 5.709%, maturing December 15, 2014													997,500
								Viridian Group Plc				NR				NR
GBP	1,080,000							Term Loan, 5.928%, maturing December 19, 2012													1,065,193
EUR	1,072,386							Term Loan, 6.082%, maturing December 19, 2012													937,844
																					48,141,309
								Total Senior Loans (Cost $1,261,383,583)													831,717,911
Other Corporate Debt: 1.0%
Automobile: 1.0%
								Avis Budget Car Rental				Caa1				CCC-
$	750,000							Floating Rate Note, 4.649%, maturing May 15, 2014													135,000
								Navistar International Corporation				NR				NR
	1,800,000							Unsecured Term Loan, 5.133%, maturing January 19, 2012													1,303,500
	4,950,000							Unsecured Term Loan, 3.729%, maturing January 19, 2012													3,584,627
								Flextronics International, Ltd.				Ba1				BB+
	196,334							Unsecured Term Loan, 3.344%, maturing October 01, 2014													130,562
	684,889							Unsecured Term Loan, 3.681%, maturing October 01, 2014													510,813
								Total Other Corporate Debt (Cost $8,375,322)													5,664,502

 

See Accompanying Notes to Financial Statements
48

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

Equities and Other Assets: 0.1%
				DescriptionMarket								Value
(1), (@), (R)				Allied Digital Technologies Corporation (Residual Interest in Bankruptcy Estate)								$	—
(@), (R)				Block Vision Holdings Corporation (571 Common Shares)									—
(2), (@), (R)				Boston Chicken, Inc. (Residual Interest in Boston Chicken Plan Trust)									—
(2), (@), (R)				Cedar Chemical (Liquidation Interest)									—
(@), (R)				Decision One Corporation (1,752,103 Common Shares)									—
(2), (@), (R)				Enterprise Profit Solutions (Liquidation Interest)									—
(@), (R)				EquityCo, LLC (Warrants for 28,752 Common Shares)									—
(4), (@), (R)				Euro United Corporation (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				Grand Union Company (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				IT Group, Inc. (Residual Interest in Bankruptcy Estate)									25
(2), (@), (R)				Kevco Inc. (Residual Interest in Bankruptcy Estate)									25
(2), (@), (R)				Lincoln Paper & Tissue (Warrants for 291 Common Shares, Expires August 14, 2015)									—
(@), (R)				Lincoln Pulp and Eastern Fine (Residual Interest in Bankruptcy Estate)									—
(@), (R)				Norwood Promotional Products, Inc. (104,148 Common Shares)									—
(@), (R)				Norwood Promotional Products, Inc. (Contingent Value Rights)									—
(@), (R)				Safelite Realty Corporation (57,804 Common Shares)									462,432
(1), (@), (R)				Transtar Metals (Residual Interest in Bankruptcy Estate)									—
(1), (@), (R)				TSR Wireless, LLC (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				US Office Products Company (Residual Interest in Bankruptcy Estate)									—
				Total for Equities and Other Assets (Cost $1,580,560)									462,482
				Total Investments (Cost $1,271,339,464)**					151.6	%		$	837,844,895
				Other Assets and Liabilities — Net					(51.6	)			(285,005,192	)
				Net Assets					100.0	%		$	552,839,703

 

  *  Senior loans, while exempt from registration under the Securities Act of 1933, as amended, contain certain restrictions on resale and cannot be sold publicly. These senior loans bear interest (unless otherwise noted) at rates that float periodically at a margin above the London Inter-Bank Offered Rate ("LIBOR") and other short-term rates.

  †  Bank Loans rated below Baa are considered to be below investment grade.

  NR  Not Rated

  (1)  The borrower filed for protection under Chapter 7 of the U.S. Federal Bankruptcy code.

  (2)  The borrower filed for protection under Chapter 11 of the U.S. Federal Bankruptcy code.

  (3)  Loan is on non-accrual basis.

  (4)  The borrower filed for protection under the Canadian Bankruptcy and Insolvency Act.

See Accompanying Notes to Financial Statements
49

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

  (5)  Trade pending settlement.

  (@)  Non-income producing security.

  (R)  Restricted security.

  AUD  Australian Dollar

  GBP  British Pound Sterling

  EUR  Euro

  SEK  Swedish Kronor

  **  For Federal Income Tax purposes cost of investments is $1,273,278,030.

    Net unrealized depreciation consists of the following:

Gross Unrealized Appreciation				$	574,931
Gross Unrealized Depreciation					(436,008,066	)
Net Unrealized Depreciation				$	(435,433,135	)

 

The following table summarizes the inputs used as of February 28, 2009 in determining the Trust's investments at fair value for purposes of SFAS 157:

				Investments in Securities				Other Financial Instruments*
Level 1 — Quoted Prices				$	—			$	—
Level 2 — Other Significant Observable Inputs					812,787,181				(969,991	)
Level 3 — Significant Unobservable Inputs					25,057,714				—
Total				$	837,844,895			$	(969,991	)

 

"Fair value" for purposes of SFAS 157 is different from "fair value" as used in the 1940 Act. The former generally implies market value, and can include market quotations as a source of value, and the latter refers to determinations of value in absence of available market quotations.

  *  Other financial instruments may include forward foreign currency contracts, futures, swaps, written options and depreciation of unfunded loan commitments. Forward foreign currency contracts, futures, and depreciation of unfunded loan commitments are reported at their unrealized gain/loss at period end. Swaps and written options are reported at their market value at period end.

A roll forward of fair value measurements using significant unobservable inputs (Level 3) for the year ended February 28, 2009, was as follows:

				Investments in Securities				Other Financial Instruments*
Balance at 02/29/08				$	35,007,111			$	—
Net purchases/sales					6,571,567				—
Total realized and unrealized loss					(19,377,959	)			—
Accrued discounts/(premiums)					2,856,995				—
Transfers in and/or out of Level 3					—				—
Balance at 02/28/09				$	25,057,714			$	—

 

  *  Other financial instruments may include forward foreign currency contracts, futures, swaps, and written options. Forward foreign currency contracts and futures are reported at their

See Accompanying Notes to Financial Statements
50

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2009 (continued)

unrealized gain/loss at period end. Swaps and written options are reported at their market value at period end.

For the year ended February 28, 2009, total change in unrealized gain (loss) on Level 3 securities included in the change in net assets was $(15,498,083). Total unrealized gain (loss) for all securities (including Level 1 and Level 2) can be found on the accompanying Statement of Operations.

At February 28, 2009 the following forward foreign currency contracts were outstanding for ING Prime Rate Trust :

Currency				Buy/Sell				Settlement Date				In Exchange For				Value				Unrealized Appreciation/ (Depreciation)
Australian Dollar AUD 5,200,000				Sell				03/13/09					USD $3,456,804				$3,341,945				$114,859
Australian Dollar AUD 7,900,000				Sell				05/15/09					5,075,592				5,056,577				19,015
Euro EUR 18,260,000				Sell				03/13/09					24,241,350				23,183,974				1,057,376
Euro EUR 14,890,000				Sell				05/15/09					18,937,995				18,901,575				36,420
British Pound Sterling GBP 5,165,000				Sell				03/13/09					7,518,587				7,395,980				122,607
British Pound Sterling GBP 6,165,000				Sell				05/15/09					8,765,829				8,827,024				(61,195	)
Sweden Kronor SEK 13,020,000				Sell				03/13/09					1,581,786				1,448,601				133,185
Sweden Kronor SEK 11,900,000				Sell				05/15/09					1,401,055				1,324,378				76,677
												$	70,978,998			$	69,480,054			$	1,498,944	*

 

  *  Related realized gain/loss on forward foreign currency contracts can be found in the Statement of Operations.

See Accompanying Notes to Financial Statements
51

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ING Prime Rate Trust

SHAREHOLDER MEETING INFORMATION (UNAUDITED)

A special meeting of shareholders of ING Prime Rate Trust was held August 7, 2008, at the offices of ING Funds, 7337 East Doubletree Ranch Road, Scottsdale, AZ 85258.

A brief description of each matter voted upon as well as the results are outlined below:

Matters:
ING Prime Rate Trust, Common Shares

1  To elect eight members of the Board of Trustees to represent the intersets of the holders of Common Shares of the Trust until the election and qualification of their successors.

ING Prime Rate Trust, Auction Rate Cumulative Preferred Shares

2  To elect two members of the Board of Trustees to represent the interests of the holders of Auction Rate Cumulative Preferred Shares - Series M, T, W, Th and F of the Trust - until the election and qualification of their successors.

ING Prime Rate Trust, Auction Rate Cumulative Preferred Shares

3  To approve modifications to the Trust's fundamental investment restriction governing borrowing.

ING Prime Rate Trust, Common and Auction Rate Cumulative Preferred Shares

3  To approve modifications to the Trust's fundamental investment restriction governing borrowing.

Results:

				Proposal 1*				Shares voted for				Shares voted against or withheld				Shares abstained				Broker non-vote				Total Shares Voted
Common Shares				Colleen D. Baldwin					95,743,615.660				4,209,041.604				0.000				0.000				99,952,657.264
				Patricia W. Chadwick					95,825,636.326				4,127,020.938				0.000				0.000				99,952,657.264
				Robert W. Crispin					95,761,405.375				4,191,251.889				0.000				0.000				99,952,657.264
				Peter S. Drotch					95,685,906.648				4,266,750.616				0.000				0.000				99,952,657.264
				J. Michael Earley					95,836,618.289				4,116,038.975				0.000				0.000				99,952,657.264
				Patrick W. Kenny					95,777,282.652				4,175,374.612				0.000				0.000				99,952,657.264
				Shaun P. Mathews					95,756,133.375				4,196,523.889				0.000				0.000				99,952,657.264
				Sheryl K. Pressler					95,762,565.597				4,190,091.667				0.000				0.000				99,952,657.264
				Proposal 2*
Auction Rate Cumulative Preferred Shares				John V. Boyer					9,080.000				921.000				0.000				0.000				10,001.000
				Roger B. Vincent					9,079.000				922.000				0.000				0.000				10,001.000
Auction Rate Cumulative Preferred Shares				Proposal 3**					5,446.000				546.000				253.000				3,756.000				10,001.000
Common and Auction Rate Cumulative Preferred Shares				Proposal 3**					65,242,968.144				4,160,196.315				1,900,949.805				28,658,544.000				99,962,658.264

 

*  Proposals 1 & 2 passed.

**  The Shareholder Meeting for Proposal 3 was adjourned to September 16, 2008.

52

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ING Prime Rate Trust

SHAREHOLDER MEETING INFORMATION (UNAUDITED) (continued)

A special meeting of shareholders of ING Prime Rate Trust was held September 16, 2008, at the offices of ING Funds, 7337 East Doubletree Ranch Road, Scottsdale, AZ 85258.

A brief description of each matter voted upon as well as the results are outlined below:

Matters:
ING Prime Rate Trust, Common Shares

ING Prime Rate Trust, Auction Rate Cumulative Preferred Shares

3  To approve modifications to the Trust's fundamental investment restriction governing borrowing.

ING Prime Rate Trust, Common and Auction Rate Cumulative Preferred Shares

3  To approve modifications to the Trust's fundamental investment restriction governing borrowing.

Results:

								Shares voted for				Shares voted against or withheld				Shares abstained				Broker non-vote				Total Shares Voted
Auction Rate Cumulative Preferred Shares				Proposal 3*					8,937.912				921.892				408.164				0.000				10,267.968
Common and Auction Rate Cumulative Preferred Shares				Proposal 3*					65,903,394.019				4,185,004.343				1,938,773.193				25,219,642.032				97,246,813.587

 

*  Proposal 3 passed.

53

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ING Prime Rate Trust

ADDITIONAL INFORMATION (Unaudited)

SHAREHOLDER INVESTMENT PROGRAM

The Trust offers a Shareholder Investment Program (the "Program") which allows holders of the Trust's common shares a simple way to reinvest dividends and capital gains distributions, if any, in additional common shares of the Trust. The Program also offers holders of the Trust's common shares the ability to make optional cash investments in any amount from $100 to $100,000 on a monthly basis.

For dividend and capital gains distribution reinvestment purposes, DST will purchase shares of the Trust on the open market when the market price plus estimated fees is less than the NAV on the valuation date. The Trust will issue new shares for dividend and capital gains distribution reinvestment purchases when the market price plus estimated fees is equal to or exceeds the net asset value on the valuation date. New shares may be issued at the greater of (i) NAV or (ii) the market price of the shares during the pricing period, minus a discount of 5%.

For optional cash investments, shares will be purchased on the open market by DST when the market price plus estimated fees is less than the NAV on the valuation date. New shares will be issued by the Trust for optional cash investments when the market price plus estimated fees is equal to or exceeds the net asset value on the valuation date. Such shares will be issued at a discount to market, determined by the Trust, between 0% and 5%.

There is no charge to participate in the Program. Participants may elect to discontinue participation in the Program at any time. Participants will share, on a pro rata basis, in the fees or expenses of any shares acquired in the open market.

Participation in the Program is not automatic. If you would like to receive more information about the Program or if you desire to participate, please contact your broker or the Trust's Shareholder Services Department at (800) 992-0180.

KEY FINANCIAL DATES — CALENDAR 2009 DIVIDENDS:

DECLARATION DATE				EX-DIVIDEND DATE				PAYABLE DATE
January 30, 2009				February 6, 2009				February 24, 2009
February 27, 2009				March 6, 2009				March 23, 2009
March 31, 2009				April 8, 2009				April 22, 2009
April 30, 2009				May 7, 2009				May 22, 2009
May 29, 2009				June 8, 2009				June 22, 2009
June 30, 2009				July 8, 2009				July 22, 2009
July 31, 2009				August 6, 2009				August 24, 2009
August 31, 2009				September 8, 2009				September 22, 2009
September 30, 2009				October 8, 2009				October 22, 2009
October 30, 2009				November 6, 2009				November 23, 2009
November 30, 2009				December 8, 2009				December 22, 2009
December 21, 2009				December 29, 2009				January 13, 2010

 

Record date will be two business days after each Ex-Dividend Date. These dates are subject to change.

54

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ING Prime Rate Trust

ADDITIONAL INFORMATION (Unaudited) (continued)

STOCK DATA

The Trust's common shares are traded on the New York Stock Exchange (Symbol: PPR). Effective March 1, 2002, the Trust's name changed to ING Prime Rate Trust and its CUSIP number changed to 44977W106. The Trust's NAV and market price are published daily under the "Closed-End Funds" feature in Barron's, The New York Times, The Wall Street Journal and many other regional and national publications.

REPURCHASE OF SECURITIES BY CLOSED-END COMPANIES

In accordance with Section 23(c) of the 1940 Act, and Rule 23c-1 under the 1940 Act the Trust may from time to time purchase shares of beneficial interest of the Trust in the open market, in privately negotiated transactions and/or purchase shares to correct erroneous transactions.

NUMBER OF SHAREHOLDERS

The approximate number of record holders of Common Stock as of February 28, 2009 was 4,517 which does not include approximately 48,628 beneficial owners of shares held in the name of brokers of other nominees.

PROXY VOTING INFORMATION

A description of the policies and procedures that the Trust uses to determine how to vote proxies related to portfolio securities is available (1) without charge, upon request, by calling Shareholder Services toll-free at 1-800-992-0180; (2) on the Trust's website at www.ingfunds.com and (3) on the SEC's website at www.sec.gov. Information regarding how the Trust voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Trust's website at www.ingfunds.com and on the SEC's website at www.sec.gov.

QUARTERLY PORTFOLIO HOLDINGS

The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the SEC's website at www.sec.gov. The Trust's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330; and is available upon request from the Trust by calling Shareholder Services toll-free at (800) 992-0180.

CERTIFICATIONS

In accordance with Section 303A.12 (a) of the New York Stock Exchange Listed Company Manual, the Trust submitted the Annual CEO Certification on May 21, 2008 certifying that he was not aware, as of that date, of any violation by the Trust of the NYSE's Corporate governance listing standards. In addition, as required by Section 203 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Trust's principal executive and financial officers have made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the Trust's disclosure controls and procedures and internal controls over financial reporting.

55

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ING Prime Rate Trust

TAX INFORMATION (Unaudited)

The Trust is required by Subchapter M of the Internal Revenue Code of 1986, as amended, to advise within 60 days of the Trust's fiscal year end (February 28, 2009) as to the federal tax status of distributions received by the Trust's shareholders. Accordingly, the Trust is hereby advising you that the following dividends were paid to Common Shareholders during the fiscal year ended February 28, 2009:

Type of Dividend				Per Share Amount				Ex-Dividend Date				Payable Date
Ordinary Income				$	0.0435			3/6/08				3/25/08
				$	0.0420			4/8/08				4/22/08
				$	0.0340			5/8/08				5/22/08
				$	0.0340			6/6/08				6/23/08
				$	0.0320			7/8/08				7/22/08
				$	0.0320			8/7/08				8/22/08
				$	0.0320			9/8/08				9/22/08
				$	0.0300			10/8/08				10/22/08
				$	0.0340			11/6/08				11/24/08
				$	0.0340			12/8/08				12/22/08
				$	0.0340			12/29/08				1/13/09
				$	0.0280			2/6/09				2/24/09
Total				$	0.4095

 

The Trust is hereby advising you that the following dividends were paid to Preferred Shareholders during the fiscal year ended February 28, 2009:

Preferred Shares

Type of Dividend

Total Per Share Amount

Auction Dates

Record Dates

Payable Dates

Series M

Ordinary Income

$

590.79

03/03/08 — 02/23/09

03/10/08 — 03/02/09

03/11/08 — 03/03/09

Series T

Ordinary Income

$

597.84

03/04/08 — 02/24/09

03/11/08 — 03/03/09

03/12/08 — 03/04/09

Series W

Ordinary Income

$

585.78

03/05/08 — 02/25/09

03/12/08 — 03/04/09

03/13/08 — 03/05/09

Series Th

Ordinary Income

$

594.95

03/06/08 — 02/26/09

03/13/08 — 03/05/09

03/14/08 — 03/06/09

Series F

Ordinary Income

$

587.29

03/07/08 — 02/27/09

03/14/08 — 03/06/09

03/17/08 — 03/09/09

 

Pursuant to Internal Revenue Code Section 871(k)(1), the Trust designates 67.69% of net investment income distributions as interest-related dividends.

Above figures may differ from those cited elsewhere in this report due to differences in the calculation of income and gains under U.S. generally accepted accounting principles (book) purposes and Internal Revenue Service (tax) purposes.

Shareholders are strongly advised to consult their own tax advisers with respect to the tax consequences of their investments in the Trust. In January, shareholders, excluding corporate shareholders, receive an IRS 1099-DIV regarding the federal tax status of the dividends and distributions they received in the calendar year.

56

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited)

The business and affairs of the Trust are managed under the direction of the Trust's Board. A Trustee who is not an interested person of the Trust, as defined in the 1940 Act, is an independent trustee ("Independent Trustee"). The Trustees and Officers of the Trust are listed below. The Statement of Additional Information includes additional information about trustees of the Trust and is available, without charge, upon request at (800) 992-0180.

Name, Address and Age

Position(s) held with Fund/Portfolio

Term of Office and Length of Time Served(1)

Principal Occupation(s) – during the Past 5 Years

Number of Funds in Fund Complex Overseen by Trustee(2)

Other Directorships/ Trusteeships held by Director/Trustee

Colleen D. Baldwin 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 48

Trustee

August 2007 - Present

Consultant, Glantuam Partners, LLC (January 2009 - Present); President, National Charity League/Canaan Parish Board (June 2008 - Present) and Consultant (January 2005 - Present). Formerly, Chief Operating Officer, Ivy Asset Management Group (April 2002 - October 2004)

None.

John V. Boyer(4) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 55

Trustee

January 2005 - Present

President, Bechtler Arts Foundation (January 2008 - Present). Formerly, Consultant (July 2007 - February 2008); President and Chief Executive Officer, Franklin and Eleanor Roosevelt Institute (March 2006 - July 2007); and Executive Director, The Mark Twain House & Museum (September 1989 - March 2006).

None.

Patricia W. Chadwick 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 60

Trustee

January 2006 - Present

Consultant and President of self-owned company, Ravengate Partners LLC (January 2000 - Present).

Wisconsin Energy Corporation (June 2006 - Present).

Peter S. Drotch 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 67

Trustee

August 2007 - Present

Retired partner, PricewaterhouseCoopers, LLP.

First Marblehead Corporation (September 2003 - Present).

J. Michael Earley 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 63

Trustee

February 2002 - Present

Retired. Formerly, President and Chief Executive Officer, Bankers Trust Company, N.A., Des Moines (June 1992 - December 2008).

Bankers Trust Company, N.A. (June 1992 - Present) and Midamerica Financial Corporation (December 2002 - Present).

Patrick W. Kenny 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 66

Trustee

January 2005 - Present

President and Chief Executive Officer, International Insurance Society (June 2001 - Present).

Assured Guaranty Ltd. (April 2004 - Present) and Odyssey Re Holdings Corporation (November 2006 - Present).

Sheryl K. Pressler 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 58

Trustee

January 2006 - Present

Consultant (May 2001 - Present).

Stillwater Mining Company (May 2002 - Present).

Roger B. Vincent 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 63

Chairman and Trustee

February 2002 - Present

President, Springwell Corporation (March 1989 - Present).

UGI Corporation (February 2006 - Present) and UGI Utilities, Inc. (February 2006 - Present).

 

57

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) held with Fund/Portfolio

Term of Office and Length of Time Served(1)

Principal Occupation(s) – during the Past 5 Years

Number of Funds in Fund Complex Overseen by Trustee(2)

Other Directorships/ Trusteeships held by Director/Trustee

Trustees who are "Interested Persons":

Robert W. Crispin(5) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 61

Trustee

August 2007 - Present

Retired. Chairman and Chief Investment Officer, ING Investment Management Co. (June 2001 - December 2007).

ING Canada Inc. (December 2004 - Present) and ING Bank, fsb (June 2001- Present).

Shaun P. Mathews(3)(5) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 53

Trustee

June 2006 - Present

President and Chief Executive Officer, ING Investments, LLC (November 2006 - Present). Formerly, President, ING Mutual Funds and Investment Products (November 2004 - November 2006); and Chief Marketing Officer, ING USFS (April 2002 - October 2004)

ING Services Holding Company, Inc. (May 2000 - Present); Southland Life Insurance Company (June 2002 - Present); and ING Capital Corporation, LLC, ING Funds Distributor, LLC, ING Funds Services, LLC, ING Investments, LLC and ING Pilgrim Funding, Inc. (December 2005 - Present).

 

(1)  The Board is divided into three classes, with the term of one class expiring at each annual meeting of the Fund. At each annual meeting, one class of Trustees is elected to a three-year term and serves until their successors are duly elected and qualified. The tenure of each Trustee is subject to the Board's retirement policy, which states that each duly elected or appointed Trustee who is not an "interested person" of the Fund, as defined in the Investment Company Act of 1940, as amended ("1940 Act") ("Independent Trustees"), shall retire from service as a Trustee at the conclusion of the first regularly scheduled meeting of the Board that is held after (a) the Trustee reaches the age of 70, if that Trustee qualifies for a retirement benefit as discussed in the board's retirement policy; or (b) the Trustee reaches the age of 72 or has served as a Trustee for 15 years, if that Trustee does not qualify for the retirement benefit. A unanimous vote of the Board may extend the retirement date of a Trustee for up to one year. An extension may be permitted if the retirement would trigger a requirement to hold a meeting of shareholders of the Fund under applicable law, whether for purposes of appointing a successor to the Trustee or if otherwise necessary under applicable law, in which case the extension would apply until such time as the shareholder meeting can be held or is no longer needed.

(2)  For the purposes of this table (except for Mr. Mathews),"Fund Complex" means the following investment companies: ING Asia Pacific High Dividend Equity Income Fund, ING Equity Trust; ING Funds Trust; ING Global Equity Dividend and Premium Opportunity Fund; ING Global Advantage and Premium Opportunity Fund; ING International High Dividend Equity Income Fund; ING Infrastructure Development Equity Fund; ING Investors Trust; ING Mayflower Trust; ING Mutual Funds; ING Prime Rate Trust; ING Risk Managed Natural Resources Fund; ING Senior Income Fund; ING Separate Portfolios Trust; ING Variable Insurance Trust; ING Variable Products Trust; and ING Partners, Inc.

(3)  For Mr. Mathews, the Fund Complex also includes the following investment companies: ING Series Fund, Inc.; ING Strategic Allocation Portfolios, Inc.; ING Variable Funds; ING Variable Portfolios, Inc.; ING VP Balanced Portfolio, Inc.; ING VP Intermediate Bond Portfolio; and ING VP Money Market Portfolio.

(4)  Mr. Boyer held a seat on the Board of Directors of The Mark Twain House & Museum from September 1989 to November 2005. ING Groep N.V. makes non-material, charitable contributions to The Mark Twain House & Museum.

(5)  Messrs. Mathews* and Crispin are deemed to be "interested persons" of the Fund as defined in the 1940 Act because of their relationship with ING Groep, N.V., the parent corporation of the Manager, ING Investment Manager.

(6)  ING Investments, LLC was previously named ING Pilgrim Investments, LLC. ING Pilgrim Investments, LLC is the successor in interest to ING Pilgrim Investments, Inc., which was previously known as Pilgrim Investments, Inc. and before that was known as Pilgrim America Investments, Inc.

(7)  ING Funds Distributor, LLC is the successor in interest to ING Funds Distributor, Inc., which was previously known as ING Pilgrim Securities, Inc., and before that was known as Pilgrim Securities, Inc., and before that was known as Pilgrim America Securities, Inc.

(8)  ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING Pilgrim Group, LLC is the successor in interest to ING Pilgrim Group, Inc., which was previously known as Pilgrim Group, Inc. and before that was known as Pilgrim America Group, Inc.

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) Held with Fund

Term of Office and Length of Time Served(1)

Principal Occupation(s) – during the Past 5 Years

Shaun P. Mathews(5) 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 53

President and Chief Executive Officer

November 2006 - Present

President and Chief Executive Officer, ING Investments, LLC (November 2006 - Present). Formerly, President, ING Mutual Funds and Investment Products (November 2004 - November 2006); and Chief Marketing Officer, ING USFS (April 2002 - October 2004).

Michael J. Roland 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 50

Executive Vice President

February 2002 - Present

Head of Mutual Fund Platform (February 2007 - Present) and Executive Vice President, ING Investments, LLC(2) and ING Funds Services, LLC(3) (December 2001 - Present). Formerly, Executive Vice President, Head of Product Management (January 2005 - January 2007); Chief Compliance Officer, ING Investments, LLC(2) and Directed Services LLC(6) (October 2004 - December 2005); and Chief Financial Officer and Treasurer, ING Investments, LLC(2) (December 2001 - March 2005).

Stanley D. Vyner 230 Park Avenue New York, New York 10169 Age: 58

Executive Vice President

August 2003 - Present

Executive Vice President, ING Investments, LLC(2) (July 2000 - Present) and Chief Investment Risk Officer, ING Investments, LLC(2) (January 2003 - Present).

Joseph M. O'Donnell 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 54

Executive Vice President and Chief Compliance Officer

March 2006 - Present November 2004 - Present

Chief Compliance Officer of the ING Funds (November 2004 - Present) and Executive Vice President of the ING Funds (March 2006 - Present). Formerly, Chief Compliance Officer of ING Investments, LLC(2) (March 2006 - July 2008); Investment Advisor Chief Compliance Officer, Directed Services LLC(6) (March 2006 - July 2008) ING Life Insurance and Annuity Company (March 2006 - December 2006); and Vice President, Chief Legal Counsel, Chief Compliance Officer and Secretary of Atlas Securities, Inc., Atlas Advisers, Inc. and Atlas Funds (October 2001 - October 2004).

Todd Modic 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 41

Senior Vice President, Chief/Principal Financial Officer and Assistant Secretary

March 2005 - Present

Senior Vice President, ING Funds Services, LLC(3) (March 2005 - Present). Formerly, Vice President, ING Funds Services, LLC(3) (September 2002 - March 2005).

Kimberly A. Anderson 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 44

Senior Vice President

November 2003 - Present

Senior Vice President, ING Investments, LLC(2) (October 2003 - Present).

Robert Terris 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 38

Senior Vice President

May 2006 - Present

Senior Vice President, Head of Division Operations, ING Funds Services, LLC(3) (May 2006 - Present). Formerly, Vice President of Administration, ING Funds Services, LLC(3) (October 2001 - May 2006).

 

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) Held with Fund

Term of Office and Length of Time Served(1)

Principal Occupation(s) – during the Past 5 Years

Ernest J. C'DeBaca 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 39

Senior Vice President

May 2006 - Present

Chief Compliance Officer, ING Investments, LLC(2)(July 2008 - Present); Investment Advisor Chief Compliance Officer, Directed Services LLC(6) (July 2008 - Present); Head of Retail Compliance, ING Funds Distributor, LLC(4) and ING Funds Services, LLC(3), (July 2008 - Present); and Senior Vice President, ING Investments, LLC(2) (December 2006 - Present), ING Funds Services, LLC(3) (April 2006 - Present), ING Funds Distributor, LLC(4) (July 2008 - Present), and Directed Services LLC(6) (July 2008 - Present). Formerly, Counsel, ING Americas, U.S. Legal Services (January 2004 - March 2006).

Daniel A. Norman 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 51

Senior Vice President and Treasurer

April 1995 - Present June 1997 - Present

Senior Vice President and Senior Portfolio Manager in the ING Investment Management Co. Senior Debt Group (November 1999 - Present).

Jeffrey A. Bakalar 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 49

Senior Vice President

November 1999 - Present

Senior Vice President in the ING Investment Management Co. Senior Debt Group (January 2000 - Present).

Elliot A. Rosen 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 55

Senior Vice President

May 2002 - Present

Senior Vice President in the Senior Floating Rate Loan Group, ING Investment Management Co. (February 1999 - Present).

William H. Rivoir III 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 58

Senior Vice President and Assistant Secretary

February 2001 - Present

Senior Vice President in the ING Investment Management Co. Senior Debt Group (January 2004 - Present).

Curtis F. Lee 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 54

Senior Vice President and Chief Credit Officer

February 2001 - Present

Senior Vice President and Chief Credit Officer in the Senior Floating Rate Loan Group, ING Investment Management Co. (January 2001 - Present).

Robyn L. Ichilov 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 41

Vice President

November 1997 - Present

Vice President and Treasurer, ING Funds Services, LLC(3) (November 1995 - Present) and ING Investments, LLC(2) (August 1997 - Present).

Lauren D. Bensinger 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 55

Vice President

August 2003 - Present

Vice President and Chief Compliance Officer, ING Funds Distributor, LLC(4) (August 1995 - Present); Vice President, ING Investments, LLC(2) and ING Funds Services, LLC(3) (February 1996 - Present); and Director of Compliance, ING Investments, LLC(2) (October 2004 - Present). Formerly, Chief Compliance Officer, ING Investments, LLC(2) (October 2001 - October 2004).

William Evans 10 State House Square Hartford, Connecticut 06103 Age: 36

Vice President

September 2007 - Present

Vice President, Head of Mutual Fund Advisory Group (April 2007 - Present). Formerly, Vice President, U.S. Mutual Funds and Investment Products (May 2005 - April 2007) and Senior Fund Analyst, U.S. Mutual Funds and Investment Products (May 2002 - May 2005).

Maria M. Anderson 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 50

Vice President

September 2004 - Present

Vice President, ING Funds Services, LLC(3) (September 2004 - Present). Formerly, Assistant Vice President, ING Funds Services, LLC(3) (October 2001 - September 2004).

 

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) Held with Fund

Term of Office and Length of Time Served(1)

Principal Occupation(s) – during the Past 5 Years

 

Denise Lewis 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 45

Vice President

January 2007 - Present

Vice President, ING Funds Services, LLC (December 2006 - Present). Formerly, Senior Vice President, UMB Investment Services Group, LLC (November 2003 - December 2006).

Kimberly K. Springer 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 51

Vice President

March 2006 - Present

Vice President, ING Funds Services, LLC(3) (March 2006 - Present). Formerly, Assistant Vice President, ING Funds Services, LLC(3) (August 2004 - March 2006) and Manager, Registration Statements, ING Funds Services, LLC(3) (May 2003 - August 2004).

Susan P. Kinens 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 32

Assistant Vice President

February 2003 - Present

Assistant Vice President, ING Funds Services, LLC(3) (December 2002 - Present).

Craig Wheeler 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 39

Assistant Vice President

May 2008 - Present

Assistant Vice President - Director of Tax, ING Funds Services (March 2008 - Present). Formerly, Tax Manager, ING Funds Services (March 2005 - March 2008); and Tax Senior , ING Funds Services (January 2004 - March 2005).

Huey P. Falgout, Jr. 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 45

Secretary

August 2003 - Present

Chief Counsel, ING Americas, U.S. Legal Services (September 2003 - Present).

Theresa K. Kelety 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 46

Assistant Secretary

August 2003 - Present

Senior Counsel, ING Americas, U.S. Legal Services (April 2008 - Present). Formerly, Counsel, ING Americas, U.S. Legal Services (April 2003 - April 2008).

Kathleen Nichols 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 33

Assistant Secretary

May 2008 - Present

Counsel, ING Americas, U.S. Legal Services (February 2008 - Present). Formerly, Associate, Ropes & Gray LLP (September 2005 - February 2008)

 

(1)  The officers hold office until the next annual meeting of the Trustees and until their successors shall have been elected and qualified.

(2)  ING Investments, LLC was previously named ING Pilgrim Investments, LLC. ING Pilgrim Investments, LLC is the successor in interest to ING Pilgrim Investments, Inc., which was previously known as Pilgrim Investments, Inc. and before that was known as Pilgrim America Investments, Inc.

(3)  ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING Pilgrim Group, LLC is the successor in interest to ING Pilgrim Group, Inc., which was previously known as Pilgrim Group, Inc. and before that was known as Pilgrim America Group, Inc.

(4)  ING Funds Distributor, LLC is the successor in interest to ING Funds Distributor, Inc., which was previously known as ING Pilgrim Securities, Inc., and before that was known as Pilgrim Securities, Inc., and before that was known as Pilgrim America Securities, Inc.

(5)  Mr. Mathews commenced services as CEO and President of the ING Funds on November 11, 2006.

(6)  Directed Services, LLC is the successor in interest to Directed Services, Inc.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited)

Board Consideration and Re-Approval of Investment Advisory and Sub-Advisory Contracts

Section 15(c) of the Investment Company Act of 1940, as amended (the "1940 Act") provides that, after an initial period, ING Prime Rate Trust's (the "Trust") existing investment advisory and sub-advisory contracts will remain in effect only if the Board of Trustees (the "Board") of the Trust, including a majority of Board members who have no direct or indirect interest in the advisory and sub-advisory contracts, and who are not "interested persons" of the Trust, as such term is defined under the 1940 Act (the "Independent Trustees"), annually review and approve them. Thus, at a meeting held on November 14, 2008, the Board, including a majority of the Independent Trustees, considered whether to renew the investment advisory contract (the "Advisory Contract") between ING Investments, LLC (the "Adviser") and the sub-advisory contract ("Sub-Advisory Contract") with ING Investment Management Co., the sub-adviser to the Trust (the "Sub-Adviser").

The Independent Trustees also held separate meetings on October 24 and November 12, 2008 to consider the renewal of the Advisory Contract and Sub-Advisory Contract. As a result, subsequent references herein to factors considered and determinations made by the Independent Trustees include, as applicable, factors considered and determinations made on those earlier dates by the Independent Trustees.

At its November 14, 2008 meeting, the Board voted to renew the Advisory and Sub-Advisory Contracts for the Trust. In reaching these decisions, the Board took into account information furnished to it throughout the year at regular meetings of the Board and the Board's committees, as well as information prepared specifically in connection with the annual renewal process. Determinations by the Independent Trustees also took into account various factors that they believed, in light of the legal advice furnished to them by K&L Gates LLP ("K&L Gates"), their independent legal counsel, and their own business judgment, to be relevant. Further, while the Advisory Contract and Sub-Advisory Contract were considered at the same Board meeting, the Trustees considered the Trust's advisory and sub-advisory relationships separately.

Provided below is an overview of the Board's contract approval process in general, as well as a discussion of certain specific factors that the Board considered at its renewal meeting. While the Board gave its attention to the information furnished, at its request, that was most relevant to its considerations, discussed below are a number of the primary factors relevant to the Board's consideration as to whether to renew the Advisory and Sub-Advisory Contracts for the one-year period ending November 30, 2009. Each Board member may have accorded different weight to the various factors in reaching his or her conclusions with respect to the Trust's advisory and sub-advisory arrangements.

Overview of the Contract Renewal and Approval Process

Several years ago, the Independent Trustees instituted a revised process by which they seek and consider relevant information when they decide whether to approve new or existing advisory and sub-advisory arrangements for the investment companies in the ING Funds complex under their jurisdiction, including the Trust's existing Advisory and Sub-Advisory Contracts. Among other actions, the Independent Trustees: retained the services of independent consultants with experience in the mutual fund industry to assist the Independent Trustees in working with the personnel employed by the Adviser or its affiliates who administer the Trust ("Management") to identify the types of information presented to the Board to inform its deliberations with respect to advisory and sub-advisory relationships and to help evaluate that information; established a specific format in which certain requested information is provided to the Board; and determined the process for reviewing such information in connection with advisory and sub-advisory contract renewals and approvals. The end result was an enhanced process which is currently employed by

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

Board Consideration and Re-Approval of Investment Advisory and Sub-Advisory Contracts (continued)

the Independent Trustees to review and analyze information in connection with their annual renewal of the ING Funds' advisory and sub-advisory contracts, as well as their review and approval of new advisory relationships.

Since the current renewal and approval process was first implemented, the Board's membership has changed substantially through periodic retirements of some Trustees and the appointment and election of new Trustees. In addition, throughout this period the Independent Trustees have reviewed and refined the renewal and approval process at least annually. The Board also established a Contracts Committee and two Investment Review Committees, including the International/Balanced/Fixed Income Funds Investment Review Committee (the "I/B/F IRC"). Among other matters, the Contracts Committee provides oversight with respect to the contracts renewal process, and the Trust is assigned to the I/B/F IRC, which provides oversight regarding, among other matters, investment performance.

The type and format of the information provided to the Board or to legal counsel for the Independent Trustees in connection with the contract approval and renewal process has been codified in the ING Funds 15(c) Methodology Guide. This Guide was developed under the direction of the Independent Trustees and sets out a blueprint pursuant to which the Independent Trustees request certain information that they deem important to facilitate an informed review in connection with initial and annual approvals of advisory and sub-advisory contracts.

Management provides certain of the information requested by the 15(c) Methodology Guide in Fund Analysis and Comparison Tables ("FACT sheets") prior to the Independent Trustees' review of advisory and sub-advisory arrangements (including the Trust's Advisory and Sub-Advisory Contracts). The Independent Trustees previously retained an independent firm to verify and test the accuracy of certain FACT sheet data for a representative sample of funds in the ING Funds complex. In addition, in 2007 and 2008, the Contracts Committee employed the services of an independent consultant to assist in its review and analysis of, among other matters, the 15(c) Methodology Guide, the content and format of the FACT sheets, and the proposed Selected Peer Group of investment companies ("SPG") to be used by the Trust for certain comparison purposes during the renewal process.

As part of an ongoing process, the Contracts Committee recommends or considers recommendations from Management for refinements to the 15(c) Methodology Guide and other aspects of the review process, and the Board's Investment Review Committees, including the I/B/F IRC, review benchmarks used to assess the performance of the funds in the ING Funds complex. The Investment Review Committees may apply a heightened level of scrutiny in cases where performance has lagged an ING Fund's relevant benchmark and/or SPG.

The Board employed its process for reviewing contracts when considering the renewals of the Trust's Advisory and Sub-Advisory Contracts that would be effective through November 30, 2009. Set forth below is a discussion of many of the Board's primary considerations and conclusions resulting from this process.

Nature, Extent and Quality of Service

In determining whether to approve the Advisory and Sub-Advisory Contracts for the Trust for the year ending November 30, 2009, the Independent Trustees received and evaluated such information as they deemed necessary regarding the nature, extent and quality of services provided to the Trust by the Adviser and Sub-Adviser. This included information regarding the Adviser and Sub-Adviser provided throughout the year at regular meetings of the Board and its committees, as well as information furnished in connection with the contract renewal meetings.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

Board Consideration and Re-Approval of Investment Advisory and Sub-Advisory Contracts (continued)

The materials requested by and provided to the Board and/or to K&L Gates prior to the November 14, 2008 Board meeting included, among other information, the following items for the Trust: (1) FACT sheets that provided information regarding the performance and expenses of the Trust and other similarly managed funds in its SPG, as well as information regarding the Trust's investment portfolio, objective and strategies; (2) reports providing risk and attribution analyses of the Trust; (3) the 15(c) Methodology Guide, which describes how the FACT sheets were prepared, including the manner in which the Trust's benchmark and SPG was selected and how profitability was determined; (4) responses from the Adviser and Sub-Adviser to a series of questions posed by K&L Gates on behalf of the Trustees; (5) copies of the forms of Advisory Contract and Sub-Advisory Contract; (6) copies of the Forms ADV for the Adviser and Sub-Adviser; (7) financial statements for the Adviser and Sub-Adviser; (8) a draft of a narrative summary addressing key factors the Board customarily considers in evaluating the renewals of the ING Funds' (including the Trust's) advisory contracts and sub-advisory contracts, including a written analysis for the Trust of how performance, fees and expenses compare to its SPG and/or designated benchmark; (9) independent analyses of Trust performance by the Trust's Chief Investment Risk Officer; (10) information regarding net asset flows into and out of the Trust; and (11) other information relevant to the Board's evaluations.

The Trust's common shares were used for purposes of certain comparisons to the funds in its SPG. While the Trust has a preferred class of shares, common shares were selected for comparison purposes because they are publicly traded and are the largest class. The common shares were compared to the analogous class of shares for each fund in the SPG. The mutual funds included in the Trust's SPG were selected based upon criteria designed to mirror the Trust class being compared to the SPG.

In arriving at its conclusions with respect to the Advisory Contract, the Board was mindful of the "manager-of-managers" platform of the ING Funds that has been developed by Management. The Board also considered the techniques that the Adviser has developed, at the Board's direction, to screen and perform due diligence on the sub-advisers that are recommended to the Board to manage the investment portfolios of the funds in the ING Funds complex. The Board noted the resources that the Adviser has committed to the Board and the I/B/F IRC to assist the Board and the I/B/F IRC with their assessment of the investment performance of the Trust on an ongoing basis throughout the year. This includes the appointment of a Chief Investment Risk Officer and his staff, who report directly to the Board and who have developed attribution analyses and other metrics used by the Board's Investment Review Committees to analyze the key factors underlying investment performance for the funds in the ING Funds complex.

The Board also noted the techniques used by the Adviser to monitor the performance of the Sub-Adviser and the proactive approach that the Adviser, working in cooperation with the I/B/F IRC, has taken to advocate or recommend, when it believed appropriate, changes designed to assist in improving the Trust's performance.

In considering the Trust's Advisory Contract, the Board also considered the extent of benefits provided to the Trust's shareholders, beyond advisory services, from being part of the ING family of funds. The Board also took into account the Adviser's efforts in recent years to reduce the expenses of the ING Funds through renegotiated arrangements with the ING Funds' service providers.

Further, the Board received periodic reports showing that the investment policies and restrictions for the Trust were consistently complied with and other periodic reports covering matters such as compliance by Adviser and Sub-Adviser personnel with codes of ethics. The Board considered

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

Board Consideration and Re-Approval of Investment Advisory and Sub-Advisory Contracts (continued)

reports from the Trust's Chief Compliance Officer ("CCO") evaluating whether the regulatory compliance systems and procedures of the Adviser and Sub-Adviser are reasonably designed to assure compliance with the federal securities laws, including those related to, among others, late trading and market timing, best execution, fair value pricing, proxy voting and trade allocation practices. The Board also took into account the CCO's annual and periodic reports and recommendations with respect to service provider compliance programs. In this regard, the Board also considered the policies and procedures developed by the CCO in consultation with the Board's Compliance Committee that guide the CCO's compliance oversight function.

The Board reviewed the level of staffing, quality and experience of the Trust's portfolio management team. The Board took into account the respective resources and reputations of the Adviser and Sub-Adviser, and evaluated the ability of the Adviser and Sub-Adviser to attract and retain qualified investment advisory personnel. The Board also considered the adequacy of the resources committed to the Trust (and other relevant funds in the ING Funds complex) by the Adviser and Sub-Adviser, and whether those resources are commensurate with the needs of the Trust and are sufficient to sustain appropriate levels of performance and compliance needs.

Based on their deliberations and the materials presented to them, the Board concluded that the advisory and related services provided by the Adviser and Sub-Adviser are appropriate in light of the Trust's operations, the competitive landscape of the investment company business, and investor needs, and that the nature and quality of the overall services provided by the Adviser and Sub-Adviser were appropriate.

Trust Performance

In assessing the Trust's advisory and sub-advisory relationships, the Board placed emphasis on the net investment returns of the Trust. While the Board considered the performance reports and discussions with portfolio managers at Board and committee meetings during the year, particular attention in assessing performance was given to the FACT sheets furnished in connection with the renewal process. The FACT sheet prepared for the Trust included its investment performance compared to the Trust's Morningstar category median, Lipper category median, SPG and primary benchmark. The FACT sheet performance data was as of June 30, 2008. In addition, the Board also considered at its November 14, 2008 meeting certain additional data regarding performance and the Trust's asset level as of October 31, 2008.

The Trust's performance was compared to its Morningstar category median and its primary benchmark, a broad-based securities market index that appears in the Trust's prospectus. With respect to Morningstar quintile rankings, the first quintile represents the highest (best) performance and the fifth quintile represents the lowest performance.

In considering whether to approve the renewal of the Advisory and Sub-Advisory Contracts for the Trust, the Board considered that, based on performance data for the periods ended June 30, 2008: (1) the Trust outperformed its Morningstar category median for all periods presented, with the exception of the year-to-date and one-year periods, during which it underperformed; (2) the Trust underperformed its primary benchmark for all periods presented, with the exception of the most recent calendar quarter and five-year periods, during which it outperformed; and (3) the Trust is ranked in the first (highest) quintile of its Morningstar category for the ten-year period, the second quintile for the most recent calendar quarter and five-year periods, the third quintile for the three-year period, and the fourth quintile for the year-to-date and one-year periods.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

Board Consideration and Re-Approval of Investment Advisory and Sub-Advisory Contracts (continued)

In analyzing this performance data, the Board took into account the negative effect of the volatility in the bank loan market on the Trust's more recent performance.

Economies of Scale

When evaluating the reasonableness of advisory fee rates, the Board also considered whether economies of scale will be realized by the Adviser as the Trust grows larger and the extent to which any such economies are reflected in contractual fee rates. In this regard, the Board considered the compensation under an Advisory Contract with level fees that does not include breakpoints, taking into account that the Trust is a closed-end fund. The Board also considered the extent to which economies of scale could be realized through waivers, reimbursements or expense reductions.

In evaluating economies of scale, the Independent Trustees also considered prior periodic management reports and industry information on this topic, and the Independent Trustees who were Board members at that time also considered a November 2006 evaluation and analysis presented to them by an independent consultant regarding fee breakpoint arrangements and economies of scale.

The Board also considered that the Trust had experienced material declines in assets, especially during October 2008, due to general market declines precipitated by the credit crises and other generally adverse market developments. As a result of this asset decline, the Board considered that there were fewer opportunities to realize economies of scale.

Information Regarding Services to Other Clients

The Board requested and, if received, considered, information regarding the nature of services and fee rates offered by the Adviser and Sub-Adviser to other clients, including other registered investment companies and institutional accounts. The Board also noted that the fee rates charged to the Trust and other institutional clients of the Adviser or the Sub-Adviser (including other investment companies) may differ materially due to, among other reasons: differences in services; different regulatory requirements associated with registered investment companies, such as the Trust, as compared to non-registered investment company clients; market differences in fee rates that existed when the Trust first was organized; differences in the original sponsors of the Trust that now are managed by the Adviser; investment capacity constraints that existed when certain contracts were first agreed upon or that might exist at present; and different pricing structures that are necessary to be competitive in different marketing channels.

Fee Rates and Profitability

The Board reviewed and considered the contractual investment advisory fee rate payable by the Trust to the Adviser. The Board also considered the contractual sub-advisory fee rate payable by the Adviser to the Sub-Adviser for sub-advisory services for the Trust. In addition, the Board considered fee waivers and expense limitations applicable to the fees payable by the Trust.

The Board considered the fee structure of the Trust as it relates to the services provided under the contracts and the potential fall-out benefits to the Adviser and Sub-Adviser and their respective affiliates from their association with the Trust. For the Trust, the Board determined that the fees payable to the Adviser and Sub-Adviser are reasonable for the services that each performs, which were considered in light of the nature and quality of the services that each has performed and is expected to perform.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

Board Consideration and Re-Approval of Investment Advisory and Sub-Advisory Contracts (continued)

In considering the fees payable under the Advisory and Sub-Advisory Contracts for the Trust, the Board took into account the factors described above and also considered: (1) the fairness of the compensation under an Advisory Contract with level fees that does not include breakpoints; and (2) the pricing structure (including the expense ratio to be borne by shareholders) of the Trust, as compared to its SPG, including that: (a) the management fee (inclusive of a 0.25% administration fee) for the Trust is above the median and the average management fees of the funds in its SPG; and (b) the expense ratio for the Trust is above the median and the average expense ratios of the funds in its SPG. In analyzing the fee data, the Board took into account that closed-end funds have unique distribution characteristics and their pricing structures are highly driven by the market and competitive environment at the time of their initial offering when their fee structures was established.

The Board considered information on revenues, costs and profits realized by the Adviser, which was prepared by Management in accordance with the allocation methodology (including related assumptions) specified in the 15(c) Methodology Guide. In analyzing the profitability of the Adviser in connection with its services to the Trust, the Board took into account the sub-advisory fee rate payable by the Adviser to the Sub-Adviser. The Board also considered information that it requested and was provided by Management with respect to the profitability of service providers affiliated with the Adviser, as well as information provided by the Sub-Adviser with respect to its profitability. Further, the Board considered that the decline in the asset level of the Trust caused by recent adverse economic conditions was likely to cause a similar decline in any profits realized by the Adviser and Sub-Adviser.

The Board determined that it had requested and received sufficient information to gain a reasonable understanding regarding the Adviser's profitability. The Board also recognized that profitability analysis is not an exact science and there is no uniform methodology for determining profitability for this purpose. In this context, the Board realized that Management's calculations regarding its costs incurred in establishing the infrastructure necessary for the Trust's operations may not be fully reflected in the expenses allocated to the Trust in determining profitability, and that the information presented may not portray all of the costs borne by Management or capture Management's entrepreneurial risk associated with offering and managing a mutual fund complex in the current regulatory and market environment.

Based on the information on revenues, costs, and profitability considered by the Board, and after considering the factors described in this section, the Board concluded that the profits, if any, realized by the Adviser and Sub-Adviser were not excessive. In making its determinations, the Board based its conclusions on the reasonableness of the advisory and sub-advisory fees of the Advisers and Sub-Adviser.

Conclusion

After its deliberation, the Board reached the following conclusions: (1) the Trust's management fee rate is reasonable in the context of all factors considered by the Board; (2) the Trust's expense ratio is reasonable in the context of all factors considered by the Board; (3) the Trust's performance is reasonable in the context of all factors considered by the Board; and (4) the sub-advisory fee rate payable by the Adviser to the Sub-Adviser is reasonable in the context of all factors considered by the Board. Based on these conclusions and other factors, the Board voted to renew the Advisory and Sub-Advisory Contracts for the Trust for the year ending November 30, 2009. During this renewal process, different Board members may have given different weight to different individual factors and related conclusions.

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Investment Adviser

ING Investments, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

Sub-Adviser

ING Investment Management Co.

230 Park Avenue

New York, NY 10169

Independent Registered
Public Accounting Firm

KPMG LLP

99 High Street

Boston, Massachusetts 02110

Institutional Investors and Analysts

Call ING Prime Rate Trust

1-800-336-3436, Extension 2217

Administrator

ING Funds Services, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

1-800-992-0180

Written Requests

Please mail all account inquiries and other comments to:

ING Prime Rate Trust Account

c/o ING Fund Services, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

Distributor

ING Funds Distributor, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

1-800-334-3444

Transfer Agent

PNC Global Investment Servicing (U.S.) Inc.

4400 Computer Drive

Westboro, Massachusetts 01851

Custodian

State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, Missouri 64105

Legal Counsel

Dechert LLP

1775 I Street, N.W.

Washington, D.C. 20006

Toll-Free Shareholder Information

Call us from 9:00 a.m. to 7:00 p.m. Eastern time on any business day for account or other information, at (800)-992-0180

For more complete information, or to obtain a prospectus on any ING fund, please call your Investment Professional or ING Funds Distributor, LLC at (800) 992-0180 or log on to www.ingfunds.com. The prospectus should be read carefully before investing. Consider the Trust's investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this information and other information about the Trust.

PRAR-UPRT

(0209-042909)

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