-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JbOVxq2g7ZHvrcMsxaWAGw5IWtI9v/ODRxDFCXRc3sMKknzkAipZ6x+MV3GCsOph ZckXmAhNE69mssRGctH22g== 0001387131-08-000022.txt : 20080117 0001387131-08-000022.hdr.sgml : 20080117 20080117171334 ACCESSION NUMBER: 0001387131-08-000022 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071130 FILED AS OF DATE: 20080117 DATE AS OF CHANGE: 20080117 EFFECTIVENESS DATE: 20080117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGHLAND FLOATING RATE LTD LIABILITY CO CENTRAL INDEX KEY: 0001068201 IRS NUMBER: 364251184 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-08957 FILM NUMBER: 08536750 BUSINESS ADDRESS: STREET 1: TWO GALLERIA TOWER STREET 2: 13455 NOEL ROAD, SUITE 1300 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9726284100 MAIL ADDRESS: STREET 1: TWO GALLERIA TOWER STREET 2: 13455 NOEL ROAD, SUITE 1300 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA FLOATING RATE LIMITED LIABILITY CO DATE OF NAME CHANGE: 20031107 FORMER COMPANY: FORMER CONFORMED NAME: STEIN ROE FLOATING RATE LIMITED LIABILITY CO DATE OF NAME CHANGE: 19980929 N-Q 1 q45367_limitedliability.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-08957

Highland Floating Rate Limited Liability Company

(Exact name of registrant as specified in charter)

Two Galleria Tower

13455 Noel Road, Suite 800

Dallas, Texas 75240

(Address of principal executive offices) (Zip code)

James D. Dondero

Highland Capital Management, L.P.

Two Galleria Tower

13455 Noel Road, Suite 800

Dallas, Texas 75240

(Name and address of agent for service)

Registrant's telephone number, including area code: (877) 665-1287

Date of fiscal year end: August 31

Date of reporting period: November 30, 2007

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Schedule of Investments.

The Schedule of Investments is attached herewith.

INVESTMENT PORTFOLIO (unaudited)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (a) - 66.7%

AEROSPACE - AEROSPACE/DEFENSE - 2.2%
		AWAS Capital, Inc.
	8,196,820	First Lien Term Loan, 7.00%, 03/15/13		7,745,995
	6,410,419	Second Lien Term Loan, 11.25%, 03/15/13		6,218,107
		DeCrane Aircraft Holdings, Inc.
	2,985,000	First Lien Term Loan, 8.11%, 02/21/13		2,925,300
		Forgings International Holdings
	1,903,900	Term D, 9.36%, 03/22/15		1,901,520
		Forgings International Ltd.
	2,139,306	Term B2, 7.61%, 09/22/14		2,107,217
	2,259,619	Term C2, 7.86%, 09/22/15		2,225,725
		IAP Worldwide Services, Inc.
	1,965,000	First Lien Term Loan, 11.50%, 12/30/12		1,778,325
		Travelport LLC
	3,291,750	Delayed Draw Term Loan, 7.45%, 08/23/13		3,134,009
	10,000,000	Letter of Credit, 7.45%, 05/23/14		9,550,000
	772,763	Synthetic Letter of Credit, 7.86%, 08/23/13		737,988
	4,340,731	Tranche B Dollar Term Loan, 7.45%, 08/23/13		4,130,900
		Vought Aircraft Industries, Inc.
	2,922,353	Term Loan, 7.34%, 12/22/11		2,859,026
		Wesco Aircraft Hardware Corp.
	981,497	First Lien Term Loan, 7.45%, 09/30/13		959,413

				46,273,525

AEROSPACE - AIRLINES - 1.3%
		Continental Airlines, Inc.
	285,714	Tranche A-1 Term Loan, 8.74%, 06/01/11		278,571
	714,286	Tranche A-2 Term Loan, 8.74%, 06/01/11		696,429
		Delta Air Lines, Inc.
	4,500,000	Credit-Linked Deposit Loan, 7.24%, 04/30/12 (b)		4,308,750
	1,997,500	Second Lien Term Loan, 04/30/14 (b)		1,926,589
		US Airways, Inc.
	23,250,000	Term Loan, 7.37%, 03/23/14		21,748,515

				28,958,854

BROADCASTING - 3.0%
		All3Media Intermediate Ltd.
	2,883,246	UK Term Loan B, 7.74%, 08/31/14		2,724,668
		Comcorp Broadcasting, Inc.
	125,700	Revolving Loan, 6.19%, 10/02/12 (c) (d)		125,700
	2,285,452	Term Loan, 10.44%, 04/02/13 (c)		2,285,452
		Millennium Digital Media Systems, LLC
	1,911,195	Revolver Loan, 06/30/11 (d)		1,881,227
	28,014,553	Term Facility, 8.99%, 06/30/11		27,664,371

Principal Amount ($)			Value ($)

BROADCASTING (continued)

		NextMedia Operating, Inc
	1,035,049	Delay Draw Term Loan, 7.82%, 11/15/12		988,472
	2,328,860	Initial First Lien Term Loan, 7.75%, 11/15/12		2,189,128
		Paxson Communications Corp.
	7,000,000	First Lien Term Loan, 8.94%, 01/15/12		6,755,000
		Young Broadcasting, Inc.
	19,773,092	Term Loan, 7.87%, 11/03/12		18,784,437

				63,398,455

CABLE - INTERNATIONAL CABLE - 0.1%
		Virgin Media, Inc.
	3,000,000	B4 Facility, 7.22%, 07/03/12		2,897,520

CABLE - US CABLE - 4.6%
		CCO Holdings, LLC
	3,000,000	Incremental Loan, 7.86%, 09/06/14		2,795,640
		Cequel Communications LLC
	250,000	Second Lien Tranche A Term Loan, 9.41%, 05/04/14		239,063
	13,691,250	Term Loan, 11/05/13 (b)		12,832,261
		Charter Communications Operating, LLC
	52,666,667	Replacement Term Loan, 6.99%, 03/06/14		49,288,627
		Knology, Inc.
	7,980,000	Term Loan, 7.61%, 06/30/12		7,660,800
		Northland Cable Television, Inc.
	4,912,500	First Lien Term Loan B, 9.35%, 12/22/12		4,900,219
	4,000,000	Second Lien Term Loan, 13.36%, 06/22/13		4,000,000
		RCN Corp.
	4,987,500	Initial Term Loan, 7.63%, 04/25/14		4,738,125
		WideOpenWest Finance, LLC
	11,000,000	First Lien Term Loan, 7.75%, 06/30/14		10,560,000
	1,000,000	Second Lien Term Loan, 10.32%, 06/29/15		920,000

				97,934,735

CHEMICALS - COMMODITY & FERTILIZER - 0.3%
		Cognis GMBH
	5,000,000	Facility C, 7.36%, 09/15/13		4,676,050
		Ferro Corp.
	500,472	Term Loan, 7.20%, 06/06/12		487,960
	1,250,000	Term Loan, 7.03%, 06/06/12		1,218,750
	262,528	Term Loan, 6.82%, 06/06/12		255,965

				6,638,725

CHEMICALS - SPECIALTY CHEMICALS - 0.1%
		Berry Plastics Holding Corp.
	246,875	Term C Loan, 7.36%, 04/03/15 (e)		231,240
		Ineos U S Finance LLC
	135,798	Term Loan A4 Facility, 7.45%, 12/14/12		130,271
		Kraton Polymers Group of Cos.
	866,001	Term Loan, 7.38%, 05/13/13		827,031

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

CHEMICALS - SPECIALTY CHEMICALS (continued)

		Panda Hereford Ethanol, L.P.
	1,000,000	Tranche A Term Loan, 8.84%, 07/28/13		977,500

				2,166,042

CONSUMER DURABLES - 0.1%
		Rexair LLC
	2,611,474	First Lien Term Loan, 9.61%, 06/30/10		2,585,359

CONSUMER NON-DURABLES - 1.2%
		Amscan Holdings, Inc.
	3,980,000	Term Loan, 7.49%, 05/27/13		3,751,150
		BioTech Research Labs/Philosophy Merger Sub, Inc.
	993,067	First Lien Term Loan, 7.36%, 03/16/14		878,864
		Camelbak Products, Inc.
	1,555,556	Second Lien Term Loan, 12.91%, 02/04/12		1,446,667
		DS Waters of America, Inc.
	2,977,500	Term Loan, 7.05%, 10/27/12		2,873,288
		Eastman Kodak Co.
	72	Term B-1 Advance, 10/18/12		72
		Hillman Group, Inc.
	1,689,242	Term Loan B, 8.55%, 07/22/13		1,621,673
		Solo Cup Co.
	530,378	Term B1 Loan, 9.01%, 02/27/11		526,400
	5,228,871	Term B1 Loan, 8.47%, 02/27/11		5,189,655
		Spectrum Brands, Inc.
	9,644,010	Dollar Term B Loan, 9.40%, 03/30/13		9,369,734
	483,286	Letter of Credit, 4.57%, 03/30/13		469,542

				26,127,045

DIVERSIFIED MEDIA - 5.3%
		Endurance Business Media, Inc.
	2,733,971	First Lien Term Loan, 7.58%, 07/26/13		2,645,117
	2,000,000	Second Lien Term Loan, 12.08%, 01/26/14		1,980,000
		HIT Entertainment PLC
	994,936	Term Facility, 7.17%, 03/20/12		950,164
		Knowledgepoint360 Group LLC
	1,000,000	Second Lien Term Loan, 12.53%, 04/26/15		997,500
		Metro-Goldwyn-Mayer Holdings II, Inc.
	9,229,290	Tranche B Term Loan, 8.61%, 04/08/12		8,617,850
	6,247,475	Tranche B Term Loan, 8.45%, 04/08/12		5,833,580
		Penton Media, Inc.
	6,467,500	First Lien Term Loan, 7.61%, 02/01/13		5,958,184

Principal Amount ($)			Value ($)

DIVERSIFIED MEDIA (continued)

		Penton Media, Inc. (continued)
	7,000,000	Second Lien Term Loan, 9.98%, 02/01/14		6,125,000
		Readers Digest Association, Inc.
	1,199,500	Revolver, 8.20%, 02/17/13 (d)		1,091,545
	4,975,031	U.S. Term Loan, 7.35%, 03/02/14		4,549,666
		Riverdeep Interactive Learning USA, Inc.
	1,927,099	Bridge Facility, 12.06%, 12/21/14		1,917,464
	14,406,027	Term Loan, 7.95%, 12/20/13		14,337,022
		Springer Science+Business Media S.A.
	562,496	Tranche B-2, 7.75%, 09/16/11		549,840
	562,496	Tranche C-2, 8.12%, 09/17/12		549,840
	366,301	Tranche E-2, 8.12%, 09/17/12		358,060
	338,124	USD Tranche B-2 Add On, 07/05/13		330,516
	338,124	USD Tranche C-2 Add On, 07/05/14		330,516
		Tribune Co.
	37,905,000	Initial Tranche B Advance, 8.24%, 05/19/14		33,053,160
	21,066,667	Tranche X Advance, 7.74%, 05/18/09		20,652,917
		Valassis Communications, Inc.
	682,733	Tranche B Term Loan, 6.95%, 03/02/14		634,089
		Wallace Theaters
	1,935,000	First Lien Term Loan, 8.07%, 07/31/09		1,901,138

				113,363,168

ENERGY - EXPLORATION & PRODUCTION - 0.2%
		III Exploration II LP
	4,976,875	Initial Draw Term Loan, 8.81%, 10/29/13		4,752,916
		Targa Resources, Inc.
	182,865	Synthetic Letter of Credit, 5.73%, 10/31/12		176,580
	327,807	Term Loan, 7.53%, 10/31/12		322,615

				5,252,111

ENERGY - OTHER ENERGY - 1.4%
		Coffeyville Resources, LLC
	486,146	Funded Letter of Credit, 5.13%, 12/28/10		459,408
	1,585,491	Tranche D Term Loan, 8.61%, 12/30/13		1,539,908
		Endeavour International Holding B.V.
	4,500,000	Second Lien Term Loan, 11.91%, 11/01/11		4,387,500
		Helix Energy Solutions Group, Inc.
	5,410,770	Term Loan, 7.19%, 07/01/13		5,275,500
		Monitor US Finco, Inc.
	3,970,000	First Lien Term Loan, 10.70%, 01/11/14		3,930,300
	3,000,000	Second Lien Term Loan, 17.36%, 01/11/15		1,425,000

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

ENERGY - OTHER ENERGY (continued)

		Value Creation, Inc.
	8,596,862	Term Loan, 12.85%, 07/01/12		8,338,956
		Willbros USA, Inc.
	4,000,000	Syndicate Term Loan, 10.26%, 10/27/09		4,020,000

				29,376,572

ENERGY - REFINING - 0.2%
		Connacher Finance Corp.
	3,000,000	Term Loan, 8.45%, 10/20/13		3,000,000
		Port Barre Investments, LLC
	2,000,000	Term B Loan, 7.33%, 09/08/14		1,940,000

				4,940,000

FINANCIAL - 1.4%
		Checksmart Financial Co.
	1,908,198	First Lien Tranche B Term Loan, 7.98%, 05/01/12		1,793,706
	2,500,000	Second Lien Term Loan, 10.88%, 05/01/13		2,425,000
		Dollar Financial Corp.
	1,141,017	Canadian Borrower Term Loan, 7.95%, 10/30/12		1,101,081
	838,983	Delayed Draw Term Loan, 8.11%, 10/30/12		809,619
		Emerson Reinsurance Ltd.
	3,250,000	Series A Loan, 7.11%, 12/15/11		3,233,750
	1,250,000	Series B Loan, 8.36%, 12/15/11		1,243,750
		First American Payment Systems, L.P.
	958,000	Term Loan, 8.50%, 10/06/13		934,050
		Flatiron Re Ltd.
	1,619,945	Closing Date Term Loan, 9.49%, 12/29/10		1,611,845
	784,661	Delayed Draw Term Loan, 9.49%, 12/29/10		784,661
		FleetCor Technologies Operating Co., LLC
	2,072,917	Tranche 1 Term Loan, 7.38%, 04/30/13		2,000,365
		Kepler Holdings, Ltd.
	4,000,000	Term Loan, 10.86%, 06/30/09		3,980,000
		Online Resources Corp.
	1,000,000	Term Loan A, 7.57%, 02/09/12		960,000
		Wind Acquisition Holdings Finance S.A.
	9,368,492	PIK Term Loan, 12.45%, 12/21/11		9,345,071

				30,222,898

FOOD/TOBACCO - BEVERAGES & BOTTLING - 0.1%
		Best Brands Corp.
	1,500,000	Term Loan B, 12/12/12 (b)		1,376,250

FOOD/TOBACCO - FOOD/TOBACCO PRODUCERS - 0.5%
		Chiquita Brands LLC
	2,296,961	Term Loan C, 7.88%, 06/28/12		2,242,890

Principal Amount ($)			Value ($)

FOOD/TOBACCO - FOOD/TOBACCO PRODUCERS (continued)

		FSB Holdings, Inc.
	1,500,000	First Lien Tranche B Term Loan, 7.61%, 09/29/13		1,455,000
	1,000,000	Second Lien Term Loan, 11.13%, 03/29/14		970,000
		LJVH Holdings, Inc.
	2,000,000	Second Lien Loan, 10.86%, 01/19/15		1,860,000
	877,800	Tranche B Term Loan, 7.86%, 07/19/14		855,855
	119,700	Tranche C Term Loan, 7.86%, 07/19/14		116,708
		Michelina’s
	3,815,357	Term Loan, 8.06%, 04/02/11		3,729,512

				11,229,965

FOOD/TOBACCO - RESTAURANTS - 0.6%
		Aramark Canada Ltd.
	3,970,000	Canadian Term Loan, 7.36%, 01/26/14		3,751,650
		Aramark Corp.
	120,394	Letter of Credit Facility, 7.36%, 01/26/14		114,676
		Buffets Holdings, Inc.
	1,490,625	Revolver, 9.75%, 11/01/11 (d)		1,222,253
	6,761	Term Loan, 8.54%, 11/01/13		5,820
		Caribbean Restaurant LLC
	1,365,308	Tranche B Term Loan, 7.77%, 06/30/09		1,317,522
		El Pollo Loco, Inc.
	1,946,644	Term Loan, 7.86%, 11/18/11		1,878,511
		Pinnacle Foods Finance LLC
	4,987,500	Term Loan, 7.95%, 04/02/14		4,731,891

				13,022,323

FOREST PRODUCTS - PACKAGING - 0.4%
		Graham Packaging Co.
	5,970,000	Term Loan B, 7.66%, 10/07/11		5,749,826
		Smurfit Kappa Acquisitions
	1,000,000	B1 Term Loan Facility, 7.24%, 12/01/13		973,750
	1,000,000	C1 Term Loan Facility, 7.49%, 12/01/14		978,750

				7,702,326

FOREST PRODUCTS - PAPER - 0.1%
		NewPage Corp.
	1,344,865	Term Loan, 7.62%, 05/02/11		1,338,141

GAMING/LEISURE - GAMING - 0.4%
		Green Valley Ranch Gaming LLC
	989,623	Term Loan, 7.13%, 02/16/14		947,564
		Herbst Gaming, Inc.
	2,000,000	Delayed Draw Term B Loan, 8.29%, 12/02/11		1,951,880
		Riverside Casino & Golf Resort, LLC
	1,961,759	Term Loan, 9.58%, 11/30/11		1,951,950
		VML U S Finance LLC
	5,000,000	Term B Funded Project Loan, 7.45%, 05/25/13		4,792,700

				9,644,094

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

GAMING/LEISURE - OTHER LEISURE - 0.7%
		Alpha Topco Ltd.
	1,428,571	Facility B1, 8.13%, 12/31/13		1,385,000
	1,071,429	Facility B2, 8.13%, 12/31/13		1,038,750
		Fontainebleu Florida Hotel LLC
	5,000,000	Tranche C Term Loan, 11.70%, 06/06/12		4,737,500
		Fontainebleu Las Vegas LLC
	4,666,667	Term Loan, 8.95%, 05/17/14		4,410,000
		Kuilima Resort Co.
	3,660,201	First Lien Term Loan, 11.25%, 09/30/10		3,324,670
		Yellowstone Mountain Club, LLC
	875,495	First Lien Term Loan, 7.19%, 09/30/10		811,295

				15,707,215

HEALTHCARE - ACUTE CARE - 2.5%
		HCA, Inc.
	2,000,000	Term Loan B, 11/07/13 (b)		1,922,320
	969,318	Tranche A Term Loan, 7.36%, 11/19/12		920,629
	41,106,376	Tranche B Term Loan, 7.45%, 11/18/13		39,509,804
		IM US Holdings, LLC
	7,987,500	First Lien Term Loan, 7.20%, 06/26/14 (b)		7,687,969
	1,000,000	Second Lien Term Loan, 9.45%, 06/26/15		987,500
		Medical Staffing Network, Inc.
	2,992,500	First Lien Term Loan, 9.20%, 07/02/13		2,977,538
		Sunrise Medical Holdings, Inc.
	331,070	Term Loan B-1, 9.42%, 05/13/10		316,172

				54,321,932

HEALTHCARE - ALTERNATE SITE SERVICES - 1.2%
		American HomePatient, Inc.
	1,400,604	Secured Promissory Note, 6.79%, 08/01/09 (f)		1,400,604
		CHS/ Community Health Systems, Inc.
	1,876,257	Funded Term Loan, 7.76%, 07/25/14		1,802,220
		FHC Health Systems, Inc.
	513,978	Delayed Draw Term Loan, 14.33%, 12/18/09		521,687
	734,254	Initial Term Loan, 12.33%, 12/18/09		741,596
	1,500,000	Third Lien Additional Term Loan, 15.37%, 02/09/11		1,515,000
	5,000,000	Third Lien Term Loan, 15.33%, 02/09/11		5,050,000
		LifeCare Holdings
	16,293,794	Term Loan, 8.36%, 08/11/12		14,778,472

				25,809,579

HEALTHCARE - MEDICAL PRODUCTS - 4.8%
		American Medical Systems, Inc.
	1,720,649	Term Loan, 7.55%, 07/20/12		1,661,493

Principal Amount ($)			Value ($)

HEALTHCARE - MEDICAL PRODUCTS (continued)

		CB Diagnostics AB
	1,349,530	Facility B2, 7.48%, 01/19/15		1,295,549
	3,959,790	Facility C2, 7.73%, 01/18/16		3,821,197
		CCS Medical, Inc.
	29,374,978	First Lien Term Loan, 8.82%, 09/30/12		28,665,278
	4,750,000	Second Lien Term Loan, 13.20%, 03/30/13		4,666,875
		Fenwal, Inc.
	8,955,000	Initial First Lien Term Loan, 7.79%, 02/28/14		8,395,312
		Golden Gate National Senior Care LLC
	1,000,000	Second Lien Term Loan, 12.57%, 09/14/11		990,000
		Graceway Pharmaceuticals LLC
	4,916,667	First Lien Term B Loan, 8.11%, 05/03/12		4,689,271
	4,500,000	Mezzanine Loan, 13.61%, 11/03/13		3,825,000
		HealthSouth Corp.
	7,068,780	Term Loan, 7.63%, 03/10/13		6,835,228
		Nyco Holdings 3 ApS
	1,125,000	Facility B2, 7.86%, 12/29/14		1,019,329
	1,125,000	Facility C2, 8.36%, 12/29/15		1,024,954
		Patheon, Inc.
	1,194,000	Tranche PB Loan, 7.88%, 04/27/14		1,146,240
	796,000	Tranche USB Loan, 7.88%, 04/27/14		764,160
		Pharmaceutical Holdings Corp.
	3,900,000	Term Loan, 8.07%, 01/30/12		3,822,000
		Reliant Pharmaceuticals, Inc.
	624,767	Delayed Draw Term Loan, 8.61%, 03/31/12		618,520
	2,360,233	Initial Term Loan, 8.61%, 03/31/12		2,301,227
		Talecris Biotherapeutics Holdings Corp.
	16,376,250	First Lien Term Loan, 9.08%, 12/06/13		16,243,275
	7,500,000	Second Lien Term Loan, 12.08%, 12/08/14		7,462,500
		Triumph Healthcare Second Holdings LLC
	1,984,987	First Lien Term Loan, 8.05%, 07/28/13		1,920,475
	1,000,000	Second Lien Term Loan, 12.92%, 07/28/14		972,500

				102,140,383

HOUSING - BUILDING MATERIALS - 3.5%
		Associated Materials Inc.
	1,420,000	Term Loan, 7.90%, 08/29/10		1,356,100
		Atrium Cos., Inc.
	5,273,835	Closing Date Term Facility, 8.61%, 05/31/12		4,898,075
		Custom Building Products, Inc.
	1,637,015	First Lien Term Loan, 7.07%, 10/20/11		1,546,979
		DESA LLC
	607,171	Term Loan, 14.25%, 11/26/11		540,382
		Nortek, Inc.
	1,461,696	Term Loan, 7.08%, 08/27/11		1,388,611

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

HOUSING - BUILDING MATERIALS (continued)

		PGT Industries, Inc.
	1,419,704	First Lien Tranche A-2 Term Loan, 8.56%, 02/14/12		1,277,734
		Realogy Corp.
	2,000,000	Delayed Draw Term B Loan, 10/10/13 (b)		1,765,000
	18,149,299	Initial Term B Loan, 10/10/13 (b) (e)		15,938,896
	4,898,596	Synthetic Letter of Credit, 10/10/13 (b) (e)		4,312,529
		Roofing Supply Group LLC
	1,989,950	First Lien Term Loan, 9.20%, 08/31/13		1,870,553
		Spirit Finance Corp.
	9,500,000	Term Loan, 7.91%, 08/01/13		8,439,230
		Standard Pacific Corp.
	900,000	Term Loan B, 7.27%, 05/05/13		663,750
		Stile Acquisition Corp.
	7,448,813	Canadian Term Loan, 7.36%, 04/06/13		6,857,601
		Stile U.S. Acquisition Corp.
	6,211,115	U.S. Term Loan, 7.36%, 04/06/13		5,718,885
		WAICCS Las Vegas 3 LLC
	11,000,000	First Lien Term Loan, 8.63%, 07/30/08		10,780,000
	5,000,000	Second Lien Term Loan, 14.13%, 07/30/08		4,900,000
		Withers Preserve MB-I
	2,000,000	B-Note, 10.32%, 12/14/07		1,990,000

				74,244,325

HOUSING - REAL ESTATE DEVELOPMENT - 6.6%
		Ginn LA Conduit Lender, Inc.
	7,792,138	First Lien Tranche A Credit-Linked Deposit, 8.70%, 06/08/11 (b) (e)		6,360,332
	16,781,015	First Lien Tranche B Term Loan, 06/08/11 (b) (e)		13,697,504
		Giraffe Intermediate, LLC
	2,143,382	Mezzanine Note A-1, 6.85%, 08/09/08		2,143,382
		Kyle Acquisition Group LLC
	1,142,857	Facility B, 8.38%, 07/20/09		1,040,000
	857,143	Facility C, 8.38%, 07/20/11		780,000
		Lake at Las Vegas Joint Venture
	2,000,000	New Term Loan, 11.21%, 01/24/08		1,280,000
	11,074,074	Synthetic Revolver, 15.46%, 06/20/12		7,087,407
	83,320,441	Term Loan, 15.31%, 06/20/12 (b)		53,325,082
		LBREP/L-Suncal Master I LLC
	4,912,500	First Lien Term Loan, 01/19/10 (b)		4,470,375
		LNR Property Corp.
	1,500,000	Initial Tranche B Term Loan, 8.11%, 07/12/11		1,440,000
	2,000,000	Tranche A1, Term Loan, 8.11%, 07/12/09		1,918,760


Principal Amount ($)			Value ($)

HOUSING - REAL ESTATE DEVELOPMENT (continued)

		Morningside Assisted Living
	3,283,813	Senior Mortgage Loan, 7.51%, 10/12/08		3,292,023
		MPH Mezzanine II, LLC
	4,500,000	Mezzanine 2B, 8.34%, 02/09/08		4,488,750
		MPH Mezzanine III, LLC
	2,850,000	Mezanine 3, 9.34%, 02/09/08		2,842,875
		MPO Intermediate LLC
	606,618	Mezzanine Note A-1, 6.85%, 08/09/08		606,618
		November 2005 Land Investors, LLC
	1,454,555	First Lien Term Loan, 7.57%, 05/09/11		1,236,372
		Shea Capital I, LLC
	1,980,000	Facility B, 7.20%, 10/27/11		1,692,900
		Tamarack Resort LLC
	2,697,248	Tranche A Credit-Linked Deposit, 5.26%, 05/19/11		2,441,009
	3,985,183	Tranche B Term Loan, 11.75%, 05/19/11		3,606,591
		The Rhodes Cos. LLC
	3,314,286	First Lien Term Loan, 8.70%, 11/21/10		3,027,037
		Westgate Investments, LLC
	17,304,775	Senior Secured Loan, 13.00%, 09/25/10 PIK (f)		17,996,965
		Weststate Land Partners LLC
	4,000,000	First Lien Term Loan, 8.61%, 05/01/08		3,920,000
		Woodlands Commercial Properties Co., LP
	3,957,333	Bridge Loan, 8.33%, 02/28/08		3,848,507

				142,542,489

INFORMATION TECHNOLOGY - 3.1%
		Aspect Software, Inc.
	1,000,000	Second Lien Term Loan, 12.31%, 07/11/12		955,000
		Ax Acquisition Corp.
	1,000,000	First Lien Term Loan B, 8.81%, 08/15/14		950,000
	1,000,000	Second Lien Term Loan B, 9.31%, 08/15/14		975,000
		Billing Services Group North America, Inc.
	1,850,000	U.S. Term Loan, 8.31%, 05/05/12		1,831,500
		Bridge Information Systems, Inc.
	480,286	Multidraw Term Loan, 11.00%, 07/07/13 (e) (g)		36,021
		Caritor, Inc.
	7,423,256	Closing Date Term Loan, 7.07%, 06/04/13		6,365,442
	558,140	Synthetic Letter of Credit Loan, 7.07%, 06/04/13		492,558
		Deltek Systems, Inc.
	902,749	Term Loan, 7.12%, 04/22/11		898,236
		DTN, Inc.
	1,972,600	Tranche C Term Loan, 8.44%, 03/10/13		1,970,134

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

INFORMATION TECHNOLOGY (continued)

		Freescale Semiconductor, Inc.
	22,850,000	Term Loan, 7.33%, 11/29/13		21,387,372
		Infor Enterprise Solutions Holdings, Inc.
	3,734,565	Delayed Draw Term Loan, 8.95%, 07/28/12		3,603,855
	7,157,916	Initial U.S. Term Facility, 8.95%, 07/28/12		6,800,020
		Intergraph Corp.
	5,906,375	First Lien Term Loan, 7.34%, 05/29/14		5,721,800
		IPC Systems, Inc.
	4,214,375	Tranche B-1 Term Loan, 7.45%, 06/02/14		3,729,722
		Ridgefield Midco Sarl
	2,683,282	Facility A2, 12.84%, 09/30/16 PIK		2,575,039
		Serena Software, Inc.
	1,000,000	Term Loan, 7.18%, 03/10/13		972,500
		Sitel, LLC
	1,946,921	U.S. Term Loan, 7.80%, 01/30/14		1,771,698
		SunGard Data Systems, Inc.
	23,972	Term Loan B, 7.36%, 02/28/14		23,170
		Verint Systems, Inc.
	4,692,308	Term Loan, 7.47%, 05/27/14		4,551,538

				65,610,605

MANUFACTURING - 0.6%
		FCI International S.A.S.
	127,374	Term Loan B2A, 7.76%, 03/10/14		121,882
	127,374	Tranche B3C, 7.76%, 11/03/13		121,882
		FCI SA
	122,626	Term Loan B2B, 7.76%, 03/10/14		117,338
	122,626	Tranche B4B, 7.76%, 11/03/13		118,079
		FCI USA, Inc.
	250,000	Facility B1, 7.76%, 03/10/14		239,220
	250,000	Tranche B5B, 7.76%, 11/03/13		239,220
		FR Brand Acquisition Corp.
	2,985,000	First Lien Term Loan B, 7.64%, 02/07/14		2,850,675
		Generac Acquisition Corp.
	3,250,000	First Lien Term Loan, 7.73%, 11/10/13		2,828,150
		Global Petroleum Inc.
	1,975,000	Term Loan, 9.51%, 09/18/13		1,915,750
		Polypore, Inc.
	1,995,000	US Term Loan, 7.06%, 07/03/14		1,927,669
		Remy International, Inc.
	1,968,750	First Lien Tranche B Term Loan, 11.25%, 04/10/08 (d)		1,929,375

				12,409,240


Principal Amount ($)			Value ($)

METALS/MINERALS - OTHER METALS/MINERALS - 1.2%

		Euramax International Holdings B.V.
	2,155,263	Second Lien European Term Loan, 06/29/13 (b)		1,982,842
		Euramax International, Inc.
	2,046,778	Domestic Term Loan, 8.38%, 06/29/12		1,855,752
	4,344,737	Second Lien Domestic Term Loan, 06/29/13 (b)		3,678,515
		Kaiser Aluminum & Fabricated Products, LLC
	5,000,000	Term Loan, 9.38%, 07/06/11		4,975,000
		Murray Energy Corp.
	8,032,080	Tranche B Term Loan, 7.91%, 01/28/10		7,710,797
		Oglebay Norton Co.
	761,389	Tranche B Term Loan, 7.61%, 07/31/12		749,968
		Universal Buildings Products, Inc.
	4,376,944	Term Loan, 8.37%, 04/28/12		4,026,789

				24,979,663

RETAIL - 3.8%
		Blockbuster Entertainment Corp.
	15,253,960	Tranche B Term Loan, 9.62%, 08/20/11		14,720,071
		Burlington Coat Factory Corp.
	28,167,122	Term Loan, 7.32%, 05/28/13		25,891,782
		Dollar General Corp.
	5,000,000	Tranche B-1 Term Loan, 7.73%, 07/07/14		4,626,200
		Eddie Bauer, Inc.
	2,460,536	Term Loan, 8.08%, 04/01/14		2,349,811
		Home Interiors & Gifts, Inc.
	27,649,391	Initial Term Loan, 10.35%, 03/31/11		14,101,189
	2,407,902	Initial Term Loan, 10.36%, 03/31/11		1,228,030
		Mother’s Work, Inc.
	1,990,000	Term Loan, 7.66%, 03/13/13		1,850,700
		Movie Gallery, Inc.
	666,667	DIP Revolver, 10.00%, 09/30/08 (d)		656,667
	3,333,333	DIP Term Loan, 8.75%, 09/30/08		3,308,333
	140,000	First Lien Synthetic Letter of Credit, 12.25%, 03/08/12 (b)		107,800
	3,348,000	First Lien Term Loan, 12.25%, 03/08/12 (b)		2,735,316
		Sally Holdings, LLC
	40,000	Term B Loan, 8.01%, 11/18/13		38,738
		Sports Authority, Inc., The
	987,500	Term Loan B, 7.61%, 05/03/13		917,141
		Totes Isotoner Corp.
	3,473,750	First Lien Term Loan, 7.83%, 01/31/13		3,391,248
	1,000,000	Second Lien Term Loan, 11.20%, 01/31/14		940,000
		Toys “R” Us
	3,980,100	Tranche B Term Loan, 9.76%, 07/19/12		3,920,398

				80,783,424

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

SERVICE - ENVIRONMENTAL SERVICES - 0.3%
		Safety-Kleen Systems, Inc.
	1,220,339	Synthetic Letter of Credit, 8.19%, 08/02/13		1,171,525
	4,631,186	Term Loan B, 7.75%, 08/02/13		4,538,563

				5,710,088

SERVICE - OTHER SERVICES - 1.7%
		Audio Visual Services Group, Inc.
	2,000,000	Second Lien Loan, 10.33%, 08/28/14		1,917,500
		Cydcor, Inc.
	1,850,000	First Lien Tranche B Term Loan, 8.05%, 02/05/13		1,803,750
		NES Rentals Holdings, Inc.
	3,451,424	Second Lien Permanent Term Loan, 12.13%, 07/20/13		3,270,224
		Rental Service Corp.
	795,841	Second Lien Initial Term Loan, 8.75%, 11/30/13		743,116
		Sabre, Inc.
	30,266,998	Initial Term Loan, 7.36%, 09/30/14		27,883,472
		Survey Sampling International LLC
	742,348	Term Loan, 7.70%, 05/06/11		712,654

				36,330,716

TELECOMMUNICATIONS - 3.6%
		Gray Television, Inc.
	15,250,000	Term Loan B, 6.86%, 12/31/14		14,401,795
		Intelsat Corp.
	967,557	Tranche B-2 Term Loan, 6.71%, 01/03/14		946,996
		Level 3 Financing, Inc.
	18,500,000	Term Loan, 7.49%, 03/13/14		17,723,000
		MediMedia USA, Inc.
	4,975	Tranche B Term Loan, 7.63%, 10/05/13		4,801
		Stratos Global Corp./Stratos Funding LP
	742,500	Term B Facility, 8.10%, 02/13/12		724,873
		Telesat Canada
	1,842,520	U.S. Term I Loan, 10/31/14 (b)		1,807,401
	157,480	U.S. Term II Loan, 10/31/14 (b)		154,479
		Univision Communications, Inc.
	60,403	Delayed Draw Term Loan, 08/15/14 (b) (d)		55,560
	1,161,074	Initial Term Loan, 7.07%, 09/29/14		1,067,979
	41,577,181	Initial Term Loan, 7.61%, 09/29/14 (b)		38,325,014
	3,000,000	Second Lien Loan, 7.32%, 02/12/09		2,955,000

				78,166,898


Principal Amount ($)			Value ($)

TELECOMMUNICATIONS - CLEC - 0.2%
		Consolidated Communications, Inc.
	4,937,500	Term D Loan, 7.11%, 10/14/11		4,851,094

TELECOMMUNICATIONS - DATA/INTERNET - 0.0%
		Pine Tree Holdings/Country Road Communications, Inc.
	1,000,000	Second Lien Term Loan, 12.59%, 07/15/13		995,000

TRANSPORTATION - AUTO - 4.2%
		Dana Corp.
	18,500,000	Term Loan, 7.30%, 04/13/08 (b)		18,403,060
		Delphi Corp.
	5,000,000	Tranche B Term Loan, 6.94%, 12/31/07		4,994,500
	14,822,500	Tranche C Term Loan, 7.44%, 07/01/08		14,803,972
		Ford Motor Co.
	41,196,244	Term Loan, 8.70%, 12/15/13		38,476,468
		General Motors Corp.
	3,925,113	Secured Term Loan, 7.62%, 11/29/13		3,715,983
		Key Safety Systems, Inc.
	7,467,487	First Lien Term Loan, 7.53%, 03/08/14		6,991,435
	2,000,000	Second Lien Term Loan, 10.02%, 09/08/14		1,810,000
		Stanadyne Corp.
	1,304,615	Term Loan, 9.17%, 08/02/10		1,311,138

				90,506,556

TRANSPORTATION - LAND - 0.5%
		Quality Distribution, Inc.
	1,427,481	Synthetic Letters of Credit, 5.10%, 11/13/09		1,391,794
	4,203,220	Term Loan, 7.98%, 11/13/09 (e)		4,098,139
	2,664,105	Term Loan, 7.82%, 11/13/09		2,597,502
		SIRVA Worldwide, Inc.
	3,000,000	Tranche B Term Loan, 12/01/10 (b)		2,036,250

				10,123,685

UTILITIES - 1.5%
		Coleto Creek Power, LP
	5,552,295	First Lien Term Loan, 7.95%, 06/28/13		5,337,143
	4,937,500	Second Lien Term Loan, 9.36%, 06/28/13		4,542,500
	319,857	Synthetic Letter of Credit, 5.10%, 06/28/13		308,662
		Covanta Energy Corp.
	3,750	Delayed Draw Term Loan, 8.75%, 06/30/12		3,595
		Entegra TC, LLC
	3,891,020	Third Lien Term Loan, 11.36%, 04/19/14		3,715,924
		GBGH LLC
	3,960,000	First Lien Term Loan, 10.76%, 08/07/13		3,969,900

INVESTMENT PORTFOLIO (unaudited) (continued)


As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount ($)			Value ($)

Senior Loans (continued)

UTILITIES (continued)

		Mach Gen, LLC
	2,690,171	First Lien Term B Loan, 7.50%, 02/22/14		2,556,335
	280,397	Synthetic Letter of Credit, 7.20%, 02/22/13		267,779
		NATG Holdings LLC
	65,796	Credit-Linked Certificate of Deposit, 4.00%, 01/23/09 (g)		57,242
	1,001,749	Term Loan A, 10.75%, 01/23/09 (g)		177,810
	733,455	Term Loan B-1, 11.50%, 01/23/10 (g)		130,188
		NRG Energy, Inc.
	485,019	Credit-Linked Deposit, 6.95%, 02/01/13		464,405
	1,514,981	Term Loan, 6.95%, 02/01/13		1,443,505
		Primary Energy Operations LLC
	2,000,000	Term Loan, 8.29%, 08/24/09		1,920,000
		Riverside Energy Center LLC
	4,426,190	Term Loan, 9.21%, 06/24/11		4,420,658
		Rocky Mountain Energy Center LLC
	361,073	Credit-Linked Certificate of Deposit, 5.03%, 06/24/11		360,622
	2,718,298	Term Loan, 9.21%, 06/24/11		2,714,900

				32,391,168

WIRELESS - CELLULAR/PCS - 3.1%
		Cricket Communications, Inc.
	38,018,750	Term B Loan, 8.20%, 06/16/13		37,364,067
		MetroPCS Wireless, Inc.
	28,192,331	Tranche B Term Loan, 7.58%, 11/04/13		27,103,825
	2,500,000	Tranche B Term Loan, 02/20/14		2,403,475

				66,871,367

WIRELESS - WIRELESS INFRASTRUCTURE - 0.1%
		Maritime Telecommunications Network, Inc.
	1,461,154	First Lien Term Loan, 8.35%, 05/11/12		1,428,278

		Total Senior Loans (Cost $1,543,911,757)		1,430,371,813

Foreign Denominated Senior Loans (a) - 13.3%

Principal Amount


AUSTRALIA - 1.6% AUD
		PBL Media Finance Pty., Ltd.
	5,500,000	Term Loan A, 8.78%, 02/07/13		4,503,811
	15,000,000	Term Loan B, 9.03%, 02/07/13		12,519,788
		Seven Media Group
	19,670,238	Facility A Term Loan, 8.87%, 12/22/12		16,801,925

				33,825,524


Principal Amount			Value ($)

AUSTRIA - 1.0% EUR
		Sacher Funding Ltd.
	15,000,000	Euro Term Loan, 9.96%, 05/14/14		21,577,348

DENMARK - 0.1% EUR
		Nyco Holdings 3 ApS
	2,000,000	Facility D Second Lien, 9.16%, 06/29/16		2,686,160

FRANCE - 2.1% EUR
		Ypso Holding SA
	335,010	Capex Term Loan, 6.03%, 12/15/12 (d) (e)		472,073
	3,452,754	Eur B Acq 1 Facility, 6.78%, 06/06/14		4,845,573
	5,633,441	Eur B Acq 2 Facility, 6.78%, 06/06/14 (e)		7,905,935
	8,946,874	Eur B Recap 1 Facility, 6.78%, 06/06/14 (e)		12,483,100
	73,323	Eur B Recap 2 Facility, 6.11%, 06/06/14 (e)		102,901
	4,690,407	Eur C Acq, 6.78%, 12/31/15		6,620,699
	8,809,593	Eur C Recap, 7.03%, 12/31/15		12,435,094

				44,865,375

GERMANY - 0.7% EUR
		Iesy Hessen/ISH NRW GMBH/Arena Sport
	2,500,000	Euro Senior Secured Term Loan, 7.78%, 10/15/11		3,573,290
		Kabel Baden Wurttemburg GMBH & Co. KG
	2,500,000	Second Lien Facility, 9.76%, 12/09/15		3,533,548
	1,826,284	Term B Facility, 7.26%, 06/09/14		2,563,076
	1,826,284	Term C Facility, 7.76%, 06/09/14		2,578,516
		Lavena Holding 3 GMBH
	864,827	Facility B1, 7.08%, 03/02/15 (d)		1,146,121
	864,827	Facility C1, 7.33%, 03/02/16 (d)		1,156,099
		Schieder Mobel Holding, GMBH
	879,378	Delayed Draw Term Loan, 8.57%, 07/20/08 (d)		1,129,443

				15,680,093

ITALY - 0.2% EUR
		Pirelli Cables
	3	Euro Term Loan C2, 08/04/12		4
		Wind Telecommunicatione S.p.A.
	1,750,000	B1 Term Loan Facility, 6.51%, 05/26/13		2,543,045
	1,750,000	C1 Term Loan Facility, 7.26%, 05/26/14		2,555,888

				5,098,937


INVESTMENT PORTFOLIO (unaudited) (continued)

As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount			Value ($)

Foreign Denominated Senior Loans (continued)

NETHERLANDS - 1.4%
EUR
		Amsterdamse Beheer- En Consultingmaatschappij B.V.
	3,548,987	Casema B1 Term Loan, 6.66%, 09/12/14		5,144,253
	1,843,522	Casema B2 Term Loan, 6.66%, 09/12/14		2,687,390
	5,392,509	Casema C Term Loan, 7.16%, 09/12/15		7,856,012
	1,193,878	Casema D Term Loan Second Lien, 8.41%, 03/12/16		1,731,856
	4,180,775	Kabelcom B Term Loan, 6.66%, 09/12/14		6,094,516
	4,180,775	Kabelcom C Term Loan, 7.16%, 09/12/15		6,106,053
	795,918	Kabelcom D Term Loan, 8.41%, 03/12/16		1,154,571

				30,774,651

SPAIN - 0.6%
EUR
		Gasmedi 2000 S.A. / Nattai, S.L.U.
	1,666,667	Tranche B Term Loan, 6.65%, 08/11/14		2,397,483
	1,666,667	Tranche C Term Loan, 7.15%, 08/11/15		2,397,483
	3,166,667	Tranche E Second Lien Term Loan, 8.90%, 02/11/16 (b)		4,531,977
		Maxi PIX SARL
	2,221,958	PIK Loan, 12.72%, 05/31/16		3,137,166

				12,464,109

SWEDEN - 0.5%
SEK
		Nordic Cable Acquisition
	14,115,068	Facility A Com Hem, 5.61%, 01/31/13		2,121,105
	24,442,922	Facility B2 Com Hem Comm, 6.11%, 01/31/14		3,697,009
	20,180,366	Facility C2 Com Hem, 6.24%, 01/31/15		3,075,986
	11,750,000	Facility D Com Hem, 7.99%, 07/31/15		1,793,290

				10,687,390

UNITED KINGDOM 3.6%
EUR
		Dollar Financial UK Limited
	2,727,917	UK Borrower Euro Term Loan, 7.73%, 10/31/12		3,864,018

GBP
		Airport Development & Investment Ltd.
	3,944,280	Second Lien Facility, 10.28%, 04/07/11		7,701,381


Principal Amount			Value ($)

UNITED KINGDOM (continued)
GBP
		All3Media Intermediate Ltd. (continued)
	714,753	Facility B1, 8.20%, 08/31/14		1,388,797
	2,585,073	Facility C1, 8.70%, 08/31/15		5,022,913
	3,000,000	Facility D1, 10.57%, 02/29/16		5,829,134
	3,619,829	Mezzanine Loan, 14.54%, 08/31/16		7,382,411
		Forgings International Ltd.
	429,366	Term B1, 9.14%, 09/11/14		874,375
	459,734	Term C1, 9.39%, 09/11/15		940,945
		Highland Acquisitions Ltd.
	1,000,000	Facility B, 9.41%, 12/31/14		1,939,632
	1,000,000	Facility C, 9.91%, 12/31/15		1,992,721
	1,053,830	Mezzanine Facility, 16.50%, 12/31/16		2,017,846
		Peacock Group
	2,088,620	Facility B, 8.81%, 10/30/13		4,090,491
	2,088,620	Facility C, 8.81%, 10/30/14		4,111,964
		SunGard UK Holdings, Ltd.
	1,374,905	U.K. Term Loan B, 8.30%, 02/12/14		2,706,839
		Towergate Partnership Ltd.
	3,125,000	Facility A, 8.54%, 10/31/12		6,248,714
	3,125,000	Facility B, 9.04%, 10/31/13		6,296,904
		Trinitybrook PLC
	2,500,000	Term Loan B1, 8.66%, 07/31/13 (b)		5,029,813
	2,500,000	Term Loan C1, 9.16%, 07/31/14 (b)		5,049,140
		Virgin Media Investment Holdings Ltd.
	235,915	A Facility, 7.99%, 01/30/11		458,534
	1,750,000	C Facility, 8.48%, 01/30/13		3,435,555

				72,518,109

UNITED STATES – 1.5%
EUR
		Infor Enterprise Solutions Holdings, Inc.
	3,960,000	Euro Term Loan, 07/28/12 (b)		5,463,913
		RD German Holdings GMBH
	2,511,485	Euro Term Loan, 6.72%, 03/02/14		3,371,281

				8,835,194

GBP
		Aramark Corp.
	1,240,625	U.K. Term Loan, 8.44%, 01/26/14		2,410,590
		Champion Home Builders Co.
	1,354,375	Term Loan, 8.79%, 10/31/12		2,673,383
		IPC Systems, Inc.
	2,244,375	Tranche B-2 Term Loan, 8.57%, 06/02/14		4,107,111
		PlayPower, Inc.
	2,000,000	Add-On Term Loan, 12/20/09 (b)		3,958,054
	2,895,408	Tranche B Sterling Term Loan, 8.71%, 12/18/09 (b)		5,730,091


INVESTMENT PORTFOLIO (unaudited) (continued)

As of November 30, 2007	Highland Floating Rate Limited Liability Company


Principal Amount			Value ($)

Foreign Denominated Senior Loans (continued)

UNITED STATES (continued)
GBP
		TME UK Acquisition Co. Ltd.
	1,685,251	U.K. Term Loan, 9.62%, 04/26/14		3,456,436

				22,335,665

		Total Foreign Denominated Senior Loans (Cost $268,715,151)		285,212,573


Principal Amount ($)

Asset-Backed Securities (h) (i) - 0.2%
		ACA CLO, Ltd.
	4,800,000	Series 2006-2A, Class B, 5.90%, 01/20/21	4,167,000

		Total Asset-Backed Securities (Cost $4,310,203)	4,167,000

Corporate Notes and Bonds (f) - 0.1%

HOUSING - REAL ESTATE DEVELOPMENT - 0.0%
		TOUSA, Inc.
	596,593	14.75%, 07/31/15 (c) (f)	64,879

TELECOMMUNICATIONS - 0.1%
		American Messaging Services, Inc.
	1,342,466	Senior Secured Note, 11.38%, 09/03/08	1,349,178

		Total Corporate Notes and Bonds (Cost $1,949,286)	1,414,057

Claims - 0.1%

AEROSPACE - AIRLINES - 0.1%
		Delta Air Lines, Inc.
	310,290	Comair ALPA Claim, 12/31/10	19,005
	879,660	Delta ALPA Claim, 12/31/10	413,440
		Northwest Airlines, Inc.
	5,400,000	ALPA Trade Claim, 08/21/13	195,750
	2,914,735	Bell Atlantic Trade Claim, 08/21/13	105,659
	3,000,000	Citibank/Airbus Trade Claims, 08/21/13	108,750
	5,000,000	EDC Trade Claims, 08/21/13	181,250
	9,587,700	Flight Attendant Claim-Escrow, 08/21/13	347,554
	3,250,000	GE Trade Claim, 08/21/13	117,813
	5,690,250	IAM Trade Claim, 08/21/13	206,272
	6,250,000	Mesaba Trade Claim, 08/15/08	226,563
	6,322,050	Retiree Claim, 08/21/13	229,174

			2,151,230

UTILITIES - 0.0%
	17,500,000	Mirant Corp.	218,750

		Total Claims (Cost $11,632,780)	2,369,980


Shares			Value ($)

Common Stocks (j) - 2.6%

AEROSPACE - AIRLINES - 1.1%
	65,959	Delta Air Lines, Inc.		1,303,350
	1,202,484	Northwest Airlines, Inc.		21,861,165

				23,164,515

TELECOMMUNICATIONS - 0.0%
	152,363	Communications Corp. of America (c)		971,314

UTILITIES - 1.4%
	160,504	Entegra TC LLC		5,408,985
	643,517	Mirant Corp.		24,833,321

				30,242,306

WIRELESS - CELLULAR/PCS - 0.1%
	73,363	Leap Wireless International, Inc.		2,546,430

		Total Common Stocks (Cost $44,046,586)		56,924,565

Preferred Stocks - 0.0%

HOUSING - REAL ESTATE DEVELOPMENT - 0.0%
	4,903	TOUSA, Inc., Series A PIK (c)		365,441

MANUFACTURING - 0.0%
	14,382	Superior Telecom, Inc., Series A		16,899

		Total Preferred Stocks (Cost $4,917,632)		382,340


Units

Warrants - 0.0%

ENERGY - 0.0%
	141,093	Monitor Oil (c)	0

		Total Warrants (Cost $0)	0

Total Investments - 83.0%			1,780,842,328

(cost of $1,879,483,395) (k)
Other Assets & Liabilities, Net - 17.0%			364,594,354

Net Assets - 100.0%			2,145,436,682

Forward foreign currency contracts outstanding as of November 30, 2007 were as follows:


Contracts to Buy or to Sell	Currency		Principal Amount Covered by Contracts		Expiration		Net Unrealized Appreciation (Depreciation)

Sell		AUD		15,300,000		02/29/2008			(1,026,418	)
Sell		AUD		4,700,000		03/11/2008			(287,405	)
Sell		EUR		34,000,000		02/01/2008			(3,088,959	)
Sell		EUR		21,000,000		02/04/2008			(1,898,119	)
Sell		EUR		23,600,000		05/29/2008			402,456
Sell		EUR		24,300,000		05/30/2008			135,672
Sell		GBP		8,000,000		01/22/2008			(140,416	)
Sell		GBP		18,000,000		02/07/2008			(458,396	)
Sell		GBP		11,800,000		05/29/2008			(18,550	)
Sell		GBP		11,200,000		05/30/2008			(87,718	)

								$	(6,467,853	)


INVESTMENT PORTFOLIO (unaudited) (continued)

As of November 30, 2007	Highland Floating Rate Limited Liability Company


(a)	Senior loans in which the Portfolio invests generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. (Unless otherwise identified by footnote (f), all senior loans carry a variable rate interest.) These base lending rates are generally (i) the Prime Rate offered by one or more major U.S. banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate (“LIBOR”) or (iii) the certificate of deposit rate. Rate shown represents the weighted average rate at November 30, 2007. Senior loans, while exempt from registration under the Security Act of 1933, as amended (the “1933 Act”), contain certain restrictions on resale and cannot be sold publicly. Senior secured floating rate loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual maturity mat be substantially less than the stated maturities shown.

(b)	All or a portion of this position has not settled. Contract rates do not take effect until settlement date.

(c)	Represents fair value as determined in good faith under the direction of the Board of Trustees.

(d)	Senior Loan Notes have additional unfunded loan commitments. As of November 30, 2007, the Fund had unfunded loan commitments of $33,432,475 which could be extended at the option of the borrower, pursuant to the following loan agreements:


Borrower	Unfunded Loan Commitment

American Building Co.	$	239,463
Bausch & Lomb Inc.		2,000,000
Buffets Holdings, Inc.		759,375
Centennial Cellular Operating Co.		2,250,000
CHS/Community Health Systems, Inc.		123,743
Comcorp Broadcasting, Inc		102,845
Cricket Communications, Inc.		6,500,000
Federal-Mogul Corp.		102,746
Fenwal, Inc.		1,500,000
FleetCor Technologies Operating Co., LLC		416,667
Fontainebleu Las Vegas LLC		2,333,333
Interstate Bakeries Corp.		7,500,000
Lavena Holding, GMBH		270,346
Millennium Digital Media Systems, LLC		1,911,195
Movies Gallery, Inc.		1,000,000
Nordic Cable Acquistion		3,068,493
Readers Digest Association, Inc. (The)		300,500
Remy International, Inc.		1,031,250
Schieder Mobel Holding, GMBH		24,742
Univision Communications, Inc.		1,451,342
Valassis Communications, Inc.		213,334
Ypso Holding SA		333,101

	$	33,432,475


(e)	Loans held on participation.

(f)	Fixed rate senior loan or corporate note.

(g)	The issuer is in default of certain debt covenants. Income is not being accrued.

(h)	Variable rate security. The interest rate shown reflects the rate in effect at November 30, 2007.


(i)	Securities exempt from registration under Rule 144A of the 1933 Act. These securities may only be resold, in transactions exempt from registration, to qualified institutional buyers. At November 30, 2007, these securities amounted to $4,167,000 or 0.2% of net assets. These securities have been determined by the Fund's investment adviser to be liquid securities.

(j)	Non-income producing security.

(k)	Cost for U.S. Federal income tax purposes is $1,879,895,834.

Unrealized appreciation (depreciation) is as follows:


Gross appreciation	$	18,840,173
Gross depreciation		(117,893,679	)

Net depreciation	$	(99,053,506	)


AUD		Australia Dollar
CLEC		Competitive Local Exchange Carrier
DIP		Debtor in Possession
EUR		Euro Currency
GBP		Great Britian Pound
PIK		Payment in Kind
SEK		Swedish Krona

Foreign Denominated Senior Loans
Industry Concentration Table:
(% of Total Net Assets)


Cable - International Cable	4.8	%
Broadcasting	1.8	%
Financial	1.8	%
Diversified Media	1.1	%
Retail	1.1	%
Information Technology	0.6	%
Aerospace - Aerospace/Defense	0.5	%
Healthcare - Medical Products	0.5	%
Food/Tobacco - Food/Tobacco Producers	0.3	%
Telecommunications	0.3	%
Consumer Non-Durables	0.2	%
Consumer Durables	0.1	%
Healthcare - Alternate Site Services	0.1	%
Housing - Real Estate Development	0.1	%

Total	13.3	%

Security Valuation:

The value of the Fund’s assets is based on the current market value of its investments. For securities with readily available market quotations, the Fund uses those quotations for pricing. Securities without a sale price or bid and ask quotations on the valuation day will be priced by an independent pricing service. When portfolio securities are traded on the relevant day of valuation, the valuation will be the last reported sale price on that day. If there are no such sales on that day, the security will be valued at the mean between the most recently quoted bid and asked prices from principal market makers. If securities do not have readily available market quotations or pricing service prices, including circumstances under which such are determined not to be accurate or current (including when events materially affect the value of securities occurring between the time when market price is determined and calculation of the Fund’s net asset value), such securities are valued at their fair value, as determined in good faith by the Fund’s investment adviser, Highland Capital Management, L.P. (“Highland” or the “Investment Adviser”) in accordance with procedures established by the Fund’s Board of Trustees. In these cases, the Fund’s net asset value will reflect the affected portfolio securities’ value as determined in the judgment of the Board of Trustees or its designee instead of being determined by the market. Using a fair value pricing methodology to price securities may result in a value that is different from a security’s


INVESTMENT PORTFOLIO (unaudited) (continued)

As of November 30, 2007	Highland Floating Rate Limited Liability Company

most recent sale price and from the prices used by other investment companies to calculate their net asset values. There can be no assurance that the Fund’s valuation of a security will not differ from the amount that it realizes upon the sale of such security.

For more information with regard to significant accounting policies, see the most recent semi-annual report filed with the Securities and Exchange Commission.

Item 2. Controls and Procedures.

(a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)		Highland Floating Rate Limited Liability Company

By (Signature and Title)*		/s/ James D. Dondero
		James D. Dondero, Chief Executive Officer
		(principal executive officer)

Date		January 16, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By (Signature and Title)*		/s/ James D. Dondero
		James D. Dondero, Chief Executive Officer
		(principal executive officer)

Date		January 16, 2008


By (Signature and Title)*		/s/ M. Jason Blackburn
		M. Jason Blackburn, Chief Financial Officer
		(principal financial officer)

Date		January 16, 2008

^* Print the name and title of each signing officer under his or her signature.

EX-99.CERT 2 q45367_ex99.htm

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act

I, James D. Dondero, certify that:

1.	I have reviewed this report on Form N-Q of Highland Floating Rate Limited Liability Company;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	January 16, 2008	/s/ James D. Dondero
		James D. Dondero, Chief Executive Officer
		(principal executive officer)

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act

I, M. Jason Blackburn, certify that:

1.	I have reviewed this report on Form N-Q of Highland Floating Rate Limited Liability Company;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

(a)

(b)

(c)

(d)

5.	The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	January 16, 2008	/s/ M. Jason Blackburn
		M. Jason Blackburn, Chief Financial Officer
		(principal financial officer)

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