SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.20S49
June 20, 2011
DIVISION OF
INVESTMENT MANAGEMENT
Colleen B. Meyer, Esq.
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111
Re: Babson Capital Global Floating Rate & Income Fund
File Numbers: 333-174430 and 811-22562
Dear Ms. Meyer:
We have reviewed the registration statement filed on Form N-2
by Babson Capital Global Floating Rate & Income Fund (the "Fund")
on May 23, 2011 under the Securities Act of 1933 (the "_1933 Act")
and the Investment Company Act of 1940 (the "1940 Act").
The Fund's primary investment objective is to seek as high a level
of current income as Babson Capital Management LLC (the "Manager")
determines is consistent with capital preservation. The Fund seeks
capital appreciation as a secondary investment objective when
consistent with its primary investment objective. The Fund will invest
at ~east 80% of its managed assets in secured loans, secured bonds or
other income-producing instruments, including floating rate
instruments. The Fund expects to invest primarily in first and second
lien secured loans and secured bonds of North American and Western
European corporate issuers that are of below investment grade quality
("junk bonds").
The captions we use below correspond to the captions the Fund
uses in its registration statement. You should consider a comment
made with respect to one section, however, to apply to similar
disclosure elsewhere in the registration statement. We have the
following comments.
General
1. We note that material portions of the filing are incomplete. We
may have additional comments on such portions when you complete
them in a pre-effective amendment, on disclosures made in response
to this letter, on information supplied to the staff, or on exhibits added
in any pre-effective amendments.

Cover Paae
2. In light of the Fund's name, please revise the 80% policy in the
"Principal Investments" section to apply to floating rate obligations.
This comment also applies to the disclosure on page 1 in the "Portfolio
Management Strategies" section.
3. Note (2) to the pricing table states "(t)he Manager (and not the
Fund) has agreed to pay from its own assets a (.) fee to (.).... That
fee is not reflected in the table above." Please disclose whether this
payment is made to all underwriters or only certain qualifying
underwriters. Please inform the staff whether FINRA has specifically
approved the terms of the underwriting arrangement (including the
discounting methodology discussed on page 47 of the prospectus), and
whether it has taken a position as to whether this fee should be
included in the disclosed underwriting fees. Please disclose the
aggregate dollar amount of the contracts and the value as a
percentage of the offering price.
4. Footnote (3) to the pricing table generally states that the
Manager will pay some unknown portion of the Fund's organizational
cost and offering costs (other than the sales load). Please include in
the footnote an estimate of the offering and organizational costs
expected to be paid by the Adviser, both in dollars and per share
amounts.
5. The last two sentences the section captioned "Portfolio
Contents" states that the Fund is not limited in the types of derivatives
it may use and that its "derivatives use will consist primarily of credit
default swaps and foreign currency forward contracts and futures."
Pages 10 and 20 of the prospectus have some derivatives disclosure,
and pages 18-30 of the Fund's Statement of Additional Information
("SAI") provides additional disclosure about derivatives, and also
identifies other derivatives. The Division of Investment Management
has recently made a number of observations about derivative related
disclosure by investment companies in a letter from Barry D. Miler,
Associate Director, Office of Legal and Disclosure, to Karrie McMillan,
General Counsel, Investment Company Institute dated July 30, 20101.
Please review the observations set forth in that letter and revise your
disclosure of use and risks of derivatives accordingly.
1 See htto:/ /www .sec.gov/divisions/investment/ouidance/ici0730io. pdf.
2

6. In light of the Fund's apparent extensive use of derivatives,
disclose in the SAI that the Fund will at all times appropriately
segregate assets for such derivative exposure in accordance with the
principles contained in Investment Company Act Release No. 10666
(April 18, 1979), related SEC staff positions, and applicable SEC no-
action letters.
7. The Fund should comply with Item 2.1 of Form N-2 regarding
the trading information. Please keep the staff current on the status of
the Fund's exchange listing on the NYSE.
Page 1
8. The section captioned "Portfolio Management Strategies"
discusses "inefficiencies between geographies". Please explain in the
prospectus specifically what is meant by this phrase and. how it ties to
the Fund's investment objective. In addition, since the fund uses the
term "Global" in its name, the prospectus must also disclose a policy
that states the Fund will have at least 40% of its assets invested
globally (i.e., outside of the United States).
9. The last paragraph on this page discusses credit default swaps
(CDS). This discussion only identifies the Fund as a buyer of
protection or insurance with respect to CDS, and describes the Fund's
obligation only in terms of a series of periodic payments. We note that
page 20 of the prospectus identifies the Fund as the seller or writer of
a CDS. We also note that the first full paragraph on page 28 of the
SAI states, "(t)he Fund may have exposure to credit default swaps
through investments in credit-linked trust certificates. In connection
with such investments, the Fund would be in the position of a seller of
a credit default swap contract because the trust that issues the
certificates would be selling one or more credit default swap contracts.
The seller of a credit default swap contract is required to pay the par
(or other agreed-upon) value of a referenced debt obligation to the
counterparty in the event of a default or similar triggering event by a
third party, such as a U.S. or foreign corporate issuer, on the debt
obligation." There is further disclosure on page 29 in the SAI that the
Fund would be a seller or writer of conventional CDS protection or
insurance, and as such the Fund would effectively add leverage to its
portfolio because the Fund would be subject to investment exposure
on the notional amount of the swap
Thus, the prospectus is ambiguous as to what the Fund's
position and risk exposure will be with respect to sellng/writing CDS
3

protection or insurance. Please clarify the prospectus disclosure in this
regard. We note that the Fund's use of credit-linked trust certificates
may require prospectus disclosure and explanation as it appears these
may pose additional risks. If the Fund will write or sell CDS protection
or insurance or obtain similar exposure through credit-linked trust
certificates, please disclose that the Fund will segregate liquid assets
based on the notional amount.
Paae 2
10. Please explain to the staff the first sentence of the second
paragraph. Are there companies with strong management teams and
solid business positions in stable industries that have junk bond
ratings (e.g., speculative characteristic with respect to capacity to pay
interest and to repay principal)?
Paae 3
11. Since the Fund's primary investment objective is to seek as high
a level of current income as the "Manager determines is consistent
with capital preservation", why would the Fund purchase non-
performing securities (e.g., default securities)? This practice appears
to cause the Fund to prioritize capital appreciation over income in
seeking its investment objective.
Paae 4
12. Disclose the fee paid by the Manager to Babson Capital U.K. (the
"Subadviser") .
Paae 5
13. In the "Distributions" section, disclose that the Fund does not
expect a significant portion of its distributions to be derived from
qualified dividend income. Thus, disclose that much of the Fund's
income distributions will likely be taxed at ordinary income rates.
14. The second last paragraph of the "Distributions" section states
that "the amount by which the Fund's total distributions exceed net
investment income and net realized capital gains would generally be
treated as a tax-free return of capital up to the amount of the
Common Shareholder's basis in his or her shares, with any amounts
exceeding such basis treated as reducing the Common Shareholder's
basis in his or her shares". This statement is confusing. If
4

distributions exceed the shareholder's basis in their shares, might such
excess be a taxable event or deemed sale? Please explain and or
revise the disclosure accordingly.
15. In the last paragraph of the "Distributions" section, please
disclose that reinvestment has no effect on the tax treatment of
shareholder distributions.
16. The last paragraph states that net asset value ("NAV") will be
reduced immediately following the offering by the sales load and the
amount of organizational and offering expenses paid by the Fund. The
disclosure makes it appear as if the Fund actually pays the sales load.
We suggest the Fund more clearly communicate the impact of the
sales load as it applies to a shareholder's investment.
1 7. Confirm to the staff that all organizational costs are expensed as
incurred. See FASB ASC 720-15-25-12.
Paae 7
18. Please explain to the staff the fifth sentence of the last
paragraph. Disclose the impact, if any, of loan terms that restrict their
transferability without borrower consent when the loan is non-
performing. Please explain to the staff the details of how such
securities are fair valued, and expand the Fund's fair value discussion
accordingly.
19. Please disclose the estimated frequency of interest rate
adjustments on the securities in which the Fund intends to invest.
Please disclose the risks to shareholders, if any, of interest rate
adjustments on portfolio securities that lag general interest rate
movements.
Paae 8
20. Disclose that the Manager intends to manage the Fund so as to
avoid the liabilities and legal difficulties outlined in the first paragraph
regarding companies in workout modes or under statutory bankruptcy
protection.
2 FASB ASC 720-15-25-1 provides that "(c)osts of start-up activities, including organization
costs, shall be expensed as incurred".
5

21. The last sentence of the fifth paragraph states that the Manager
and the Subadviser may not perform independent credit analyses of
selling institutions. Please explain to the staff in your response letter
and disclose in the prospectus how the Manager will determine which
participations and associated credit risks are suitable for acquisition by
the Fund, absent some form of independent credit analyses.
Paae 9
22. Please revise the "Interest Rate Risk" section to add the
substance of the first sentence of the last paragraph on page 7.
23. Delete the phrase "may expose" and substitute the word
"exposes" in the third sentence of the first paragraph in the "Leverage
Risk" section.
24. In the "Leverage Risk" section disclose that the management fee
structure and the calculation of the fee using managed assets gives
the Manager an incentive to leverage the Fund when it may be unwise
to do so, or an incentive to not deleverage the Fund when it would
otherwise be appropriate to do so. Disclose how the Board will
monitor this conflict of interest.
25. Disclose in the "Leverage Risk" section that the Fund does not
have a current intention to issue preferred shares, consistent with the
disclosure on page 36 of the SA!.
Page 12
26. The Fund intends to leverage. Therefore, please delete footnote
5 and the reference to it in the first paragraph, as well as the second
line in the example.
27. We note that short sales are identified on page 24 as a potential
investment strategy. Please confirm that the Fund has estimated
dividends to be paid on short sales during the coming year and
included such expenses in the fee table. The Fund should revise the
disclosure accordingly. Will the value of the collateral deposited with
the lender always be greater than the value of the securities sold
short? If the Fund does not intend to engage in short sales, the
disclosure on page 24 should be removed.
6

28. Please provide a footnote explaining how the managed assets
calculation for the Manager's fee is applied to net assets attributable to
common shares, and why the calculation is made (e.g., only common
shareholders pay Fund expenses).
Paae 14
29. Since the Fund invests extensively in global junk bonds, and it
uses derivatives and leverage extensively, please state with specificity
the suitability requirements for prospective investors. Please caution
that investors seeking income should also be aware of the significant
risks of loss. The Fund's cover page should boldly disclose the risks of
investing in derivatives.
Paae 17
30. Insert the word "unaffiliated" before the word "entities" in the
first sentence of the first paragraph. If the entities may be brokers,
please expand the disclosure accordingly.
Paae 20
31. In the section captioned "Zero-Coupon Bonds, Step-Ups, and
Payment-in-Kind Securities" in the prospectus, disclose that to the
extent these instrument do not amortize principal, at maturity,
repayment may also be dependent on the ability of the borrower to
refinance the face amount of the debt. Disclose the conditions that
must be met for the Fund to accrue periodic income on these
securities.
Paae 24
32. If the accounting treatment for the securities lending by the
Fund will be as a secured borrowing, please note the disclosure
accordingly.
Paae 35
33. Disclose that Fund's fair value policies and procedures are in
writing. Please expand the Fund's fair value discussion commensurate
with its potential investment in Level 3 portfoliO securities.
Paae 46
7

34. Please specifically identify the shareholder support services and
the information, studies, or reports that will be provided, as discussed
in the second full paragraph.
Statement of Additional Information
35. If any derivative instrument identified in the SAI will place 5% or
more of the Fund's assets at risk, the derivative should be identified
and explained in the prospectus.
Paae 33
36. We note that the fee table does not contain an "Acquired Fund
Fees and Expenses" ("AFFE") line item. Confirm to the staff that the
Fund will not make such investments during the next year in an
amount that would trigger separate AFFE fee table disclosure. If this
amount would be less than one basis point, confirm thatJt is included
in "Other Expenses".
Paae 47
37. Revise the second sentence on fundamental policy 3 to remove
the typographical error.
Paae 66
38. Provide disclosure in the third paragraph that there is no
assurance that the Board or Trustees will decide to convert the Fund to
an open-end investment company.
Closina
39. If you intend to omit certain information from the form of
prospectus included with the registration statement that is declared
effective in reliance on Rule 430A under the 1933 Act, please identifY
the omitted information to us, preferably before filing the final pre-
effective amendment
40. Please advise us if you have submitted or expect to submit an
exemptive application or no-action request in connection with your
registration statement.
* * * * * *
8

Responses to this letter should be in the form ofa pre-effective
amendment filed pursuant to Rule 472 under the 1933 Act. Where no
change will be made in the filng in response to a comment, please
indicate this fact in a letter to us and briefly state the basis for your
position.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to be
certain that they have provided all information investors require for an
informed decision. Since the Fund and its management are in
pos