Funds

Annual Report

February 28, 2007

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, 2007

Table of Contents

Portfolio Managers' Report					2
Report of Independent Registered Public Accounting Firm					7
Statement of Assets and Liabilities					8
Statement of Operations					9
Statements of Changes in Net Assets					10
Statement of Cash Flows					11
Financial Highlights					12
Notes to Financial Statements					13
Portfolio of Investments					25
Shareholder Meeting Information					59
Additional Information					60
Tax Information					62
Trustee and Officer Information					63
Advisory Contract Approval Discussion					68

 

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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, 2007
Net Assets					$1,109,538,952
Total Assets					$1,878,156,056
Assets Invested in Senior Loans					$1,829,047,888
Senior Loans Represented					563
Average Amount Outstanding per Loan					$3,248,753
Industries Represented					39
Average Loan Amount per Industry					$46,898,664
Portfolio Turnover Rate (YTD)					60	%
Weighted Average Days to Interest Rate Reset					40
Average Loan Final Maturity					64 months
Total Leverage as a Percentage of Total Assets (including Preferred Shares)					38.92	%

 

PERFORMANCE SUMMARY

The Trust declared $0.14 of dividends during the fourth fiscal quarter and $0.55 for the year ended February 28, 2007. Based on the average month-end net asset value ("NAV") per share of $7.56, this resulted in an annualized distribution rate of 7.50%^₍₁₎ for the quarter and 7.39%^₍₁₎ for the year. The Trust's total net return for the fourth fiscal quarter, based on NAV, was 3.30%, versus a total gross return on the S&P/LSTA Leveraged Loan Index ("LLI")^₍₂₎ of   2.29% for the same quarter. For the year, the Trust's total net return, based on NAV was 8.85% versus 7.02% gross return for the LLI. The total market value return (based on full reinvestment of dividends) for the Trust's common shares during the fourth fiscal quarter was 4.92% and 13.84% for the year ended February 28, 2007.

PORTFOLIO REVIEW

The Trust's performance during the fiscal quarter and year ended February 28, 2007 was attributable to a combination of factors, including the avoidance of material downside credit volatility (the Trust was not impaired by those defaults that did occur in the LLI during the period), a continued emphasis on the better performing issuers and sectors, and generally buoyant conditions across the global leveraged loan market.

^₍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 LLI 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 and Trading Association ("LSTA")conceived the LLI 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)

Although risk levels have become elevated somewhat across the high yield markets (discussed below), the overall loan market environment remained healthy during the period. Indeed, loans exhibited remarkable resiliency in the face of the turmoil that roiled other capital markets late in the fiscal quarter. Importantly, the loan market also recently regained its relative balance as new institutional loan supply rose to a record $137 billion during the first quarter (a 79% increase over the year-earlier period). Due to a continually robust level of investor demand, a consistent supply of new loans is crucial to maintaining equilibrium and fostering a stable credit spread environment. A constructive fundamental credit backdrop also proved positive investor sentiment as the trailing twelve-month default rate (by number of issuers) declined to a new recorded low of 0.46% (2.09% at February 28, 2006).

Individual credit selection and sector positioning also added to returns during the period. The Trust held meaningful positions in the top five contributing loans to LLI returns during the fiscal year, and did not hold — or took no losses on — any of the five greatest detractors. A general underweight of the auto supplier and real estate/construction sectors also positively impacted results as these sectors continue to exhibit much higher volatility profiles than the LLI at large.

USE OF LEVERAGE

The Trust utilizes financial leverage to seek to increase the yield to the holders of common shares. As of February 28, 2007, the Trust had $450 million of "Aaa/AAA⁽³⁾" rated cumulative auction rate preferred shares outstanding, and $281 million of borrowings outstanding under $625 million in available credit facilities. Total leverage, as a percentage of total assets (including preferred shares), was 38.92% at period end. The use of leverage for investment purposes increases both investment opportunity and investment risk.

TOP TEN INDUSTRY SECTORS AS OF FEBRUARY 28, 2007 AS A PERCENTAGE OF:
				TOTAL ASSETS				NET ASSETS
Healthcare, Education and Childcare					8.3	%			14.0	%
North American Cable					7.6	%			12.9	%
Chemicals, Plastics & Rubber					5.9	%			10.0	%
Utilities					5.4	%			9.2	%
Printing & Publishing					5.4	%			9.1	%
Leisure, Amusement, Entertainment					5.1	%			8.6	%
Oil & Gas					4.8	%			8.2	%
Retail Stores					4.5	%			7.7	%
Data and Internet Services					3.7	%			6.2	%
Beverage, Food & Tobacco					3.2	%			5.4	%

 

Portfolio holdings are subject to change daily.

TOP TEN SENIOR LOAN ISSUERS AS OF FEBRUARY 28, 2007 AS A PERCENTAGE OF:
				TOTAL ASSETS				NET ASSETS
Charter Communications Operating, LLC					2.9	%			4.9	%
Metro-Goldwyn-Mayer, Inc.					2.2	%			3.7	%
Georgia Pacific Corporation					1.7	%			2.9	%
Sungard Data Systems, Inc.					1.5	%			2.6	%
NRG Energy, Inc.					1.5	%			2.5	%
West Corp.					1.3	%			2.2	%
CSC Holdings, Inc. (Cablevision)					1.2	%			2.1	%
ARAMARK					1.1	%			1.9	%
Idearc, Inc.					1.1	%			1.9	%
Advance Micro Devices					1.0	%			1.6	%

 

Portfolio holdings are subject to change daily.

^₍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.

3

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

CURRENT STRATEGY AND OUTLOOK

As with all active capital markets, we believe that the leveraged loan markets are heading into a period of increased uncertainty as the U.S. economy looks to extend its ongoing expansion, albeit at what most agree to be a slower pace. While several headwinds are present (energy price volatility and the yet unknown final impact of the residential housing slowdown as the two headliners), we still believe issuing corporations will post respectable earnings growth during the coming quarters, and thus be in a position to comfortably leverage and de-leverage their balance sheets. Further, Mergers and Acquisition activity (a primary driver of new loan issuance) is expected to remain strong into the foreseeable future, as is overall liquidity. Combined, we believe these factors provide a good backdrop for favorable performance on the part of a well diversified loan portfolio.

We do remain concerned, however, with the ongoing trend toward structure erosion, specifically looser protective covenants, the proliferation of second lien loan tranches, and inferior collateral packages. Our strategy seeks to provide high risk adjusted returns over a full credit cycle by investing primarily in traditional secured, floating rate senior loans, and as stated previously, we are content to forgo excess returns during period of elevated risk in exchange for maintaining discipline in terms of credit selection.

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 18, 2007

4

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

				Average Annual Total Returns for the Years Ended February 28, 2007
				1 Year				3 Years				5 Years				10 Years
Based on Net Asset Value (NAV)					8.85	%			8.36	%			8.14	%			5.87	%
Based on Market Value					13.84	%			4.83	%			8.75	%			4.92	%
S&P/LSTA Leveraged Loan Index					7.02	%			5.80	%			6.03	%			5.44	%
Credit-Suisse Leveraged Loan Index					7.57	%			6.29	%			6.40	%			5.65	%

 

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 LLI 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 LLI 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.

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ING Prime Rate Trust

PORTFOLIO MANAGERS' REPORT (continued)

YIELDS AND DISTRIBUTIONS RATES

Quarter Ended				Prime Rate				Net Asset Value ("NAV") 30-Day SEC Yield(A)				Market 30-Day SEC Yield(A)				Average Annualized Distribution Rate at NAV(B)				Average Annualized Distribution Rate at Market(B)
February 28, 2007					8.25	%			9.69	%			10.02	%			7.50	%			7.68	%
November 30, 2006					8.25	%			9.76	%			10.25	%			7.55	%			7.95	%
August 31, 2006					8.25	%			9.42	%			9.95	%			7.47	%			7.86	%
May 31, 2006					8.00	%			9.63	%			10.31	%			7.10	%			7.57	%

 

^_(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.

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ING Prime Rate Trust

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and Board of Trustees
of ING Prime Rate Trust

We have audited the accompanying statement of assets and liabilities of ING Prime Rate Trust, including the portfolio of investments, as of February 28, 2007, 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 audits 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, 2007, by correspondence with the custodian and brokers, or by other appropriate auditing procedures when 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, 2007, and the results of its operations, 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 27, 2007

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ING Prime Rate Trust

STATEMENT OF ASSETS AND LIABILITIES as of February 28, 2007

ASSETS:
Investments in securities at value (Cost $1,820,026,454)				$	1,854,050,204
Cash					5,421,648
Foreign currencies at value (Cost $532,304)					534,285
Receivables:
Investment securities sold					5,843,674
Interest					12,146,845
Other					46,057
Unrealized appreciation on foreign currency contracts					15,357
Prepaid expenses					41,058
Prepaid arrangement fees on notes payable					56,928
Total assets					1,878,156,056
LIABILITIES:
Notes payable					281,000,000
Payable for investments purchased					32,426,397
Accrued interest payable					1,611,635
Deferred arrangement fees on senior loans					534,655
Dividends payable — preferred shares					236,411
Payable to affilates					1,529,400
Payable to custodian					178,545
Accrued trustees fees					30,987
Unrealized depreciation on foreign currency contracts					489,652
Other accrued expenses					579,422
Total liabilities					318,617,104
Preferred shares, $25,000 stated value per share at liquidation value (18,000 shares outstanding)					450,000,000
NET ASSETS				$	1,109,538,952
Net asset value per common share outstanding (net assets less preferred shares at liquidation value, divided by 145,033,235 shares of beneficial  interest authorized and outstanding, no par value)				$	7.65
NET ASSETS WERE COMPRISED OF:
Paid-in capital					1,331,413,656
Undistributed net investment income					4,124,094
Accumulated net realized loss on investments					(259,551,650	)
Net unrealized appreciation on investments and foreign currency related transactions					33,552,852
NET ASSETS				$	1,109,538,952

 

See Accompanying Notes to Financial Statements
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ING Prime Rate Trust

STATEMENT OF OPERATIONS for the Year Ended February 28, 2007

INVESTMENT INCOME:
Interest				$	150,681,482
Arrangement fees earned					1,232,811
Other					1,689,851
Total investment income					153,604,144
EXPENSES:
Investment Management fees					16,030,822
Administration fees					5,009,632
Transfer agent fees					120,905
Interest expense					26,339,161
Shareholder reporting expense					132,190
Custody and accounting expense					819,400
Professional fees					240,402
Preferred Shares — Dividend disbursing agent fees					1,230,973
Pricing expense					54,725
ICI fees					3,243
Postage expense					247,250
Trustees fees					73,365
Miscellaneous expense					218,858
Total expenses					50,520,926
Net investment income					103,083,218
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED TRANSACTIONS:
Net realized gain (loss) on:
Investments					16,459,812
Foreign currency related transactions					(1,860,785	)
Net realized gain on investments and foreign currency related transactions					14,599,027
Net change in unrealized appreciation or depreciation on:
Investments					(5,971,942	)
Foreign currency related transactions					(470,898	)
Net change in unrealized appreciation or depreciation on investments and foreign currency related transactions					(6,442,840	)
Net realized and unrealized gain on investments and foreign currency related transactions					8,156,187
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
From net investment income					(22,313,381	)
Net increase in net assets resulting from operations				$	88,926,024

 

See Accompanying Notes to Financial Statements
9

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ING Prime Rate Trust

STATEMENTS OF CHANGES IN NET ASSETS

				Year Ended February 28, 2007				Year Ended February 28, 2006
FROM OPERATIONS:
Net investment income				$	103,083,218			$	83,109,460
Net realized gain on investments and foreign currency related transactions					14,599,027				422,159
Net change in unrealized appreciation or depreciation on investments and foreign currency   related transactions					(6,442,840	)			16,658,806
Distributions to preferred shareholders from net investment income					(22,313,381	)			(15,839,470	)
Net increase in net assets resulting from operations					88,926,024				84,350,955
FROM DISTRIBUTIONS TO COMMON SHAREHOLDERS:
From net investment income					(80,058,346	)			(66,428,156	)
Decrease in net assets from distributions to common shareholders					(80,058,346	)			(66,428,156	)
Net increase in net assets					8,867,678				17,922,799
NET ASSETS:
Beginning of year					1,100,671,274				1,082,748,475
End of year (including undistributed net investment income of $4,124,094 and $5,062,694, respectively)				$	1,109,538,952			$	1,100,671,274

 

See Accompanying Notes to Financial Statements
10

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ING Prime Rate Trust

STATEMENT OF CASH FLOWS for the year ended February 28, 2007

INCREASE (DECREASE) IN CASH Cash Flows From Operating Activities:
Interest received				$	153,443,673
Facility fees paid					(27,052	)
Dividends paid to preferred shareholders					(22,304,952	)
Arrangement fees received					855,295
Other income received					1,679,765
Interest paid					(26,714,578	)
Other operating expenses paid					(24,349,911	)
Purchases of securities					(1,248,116,897	)
Proceeds from sale of securities					1,430,719,366
Net cash provided by operating activities					265,184,709
Cash Flows From Financing Activities:
Dividends paid to common shareholders					(80,058,346	)
Net paydown of notes payable					(184,000,000	)
Net cash flows used in financing activities					(264,058,346	)
Net increase					1,126,363
Cash at beginning of period					4,295,285
Cash at end of period				$	5,421,648
Reconciliation Of Net Increase In Net Assets Resulting From Operations To Net Cash Provided By Operating Activities:
Net increase in net assets resulting from operations				$	88,926,024
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Change in unrealized appreciation on investments					5,971,942
Change in unrealized appreciation on foreign currencies					(1,981	)
Change in unrealized depreciation on forward currency contracts					474,295
Net accretion of discounts on investments					(1,748,612	)
Net amortization of premiums on investments					678,625
Realized gain on investments and foreign currency related transactions					(14,599,027	)
Purchases of securities					(1,248,116,897	)
Proceeds on sale of securities					1,430,719,366
Increase in other assets					(11,502	)
Decrease in interest receivable					3,832,178
Increase in prepaid arrangement fees on notes payable					(27,052	)
Decrease in prepaid expenses					20,086
Decrease in deferred arrangement fees on senior loans					(377,516	)
Decrease in accrued interest payable					(375,417	)
Increase in dividends payable - preferred shares					8,429
Decrease in payable to affiliates					(136,963	)
Increase in accrued trustees fees					14,756
Decrease in other accrued expenses					(66,025	)
Total adjustments					176,258,685
Net cash provided by operating activities				$	265,184,709

 

See Accompanying Notes to Financial Statements
11

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ING PRIME RATE TRUST  FINANCIAL HIGHLIGHTS

For a common share outstanding throughout the period

				Years Ended February 28 or February 29,
				2007				2006				2005				2004				2003
Per Share Operating Performance
Net asset value, beginning of year				$	7.59				7.47				7.34				6.73				7.20
Income (loss) from investment operations:
Net investment income				$	0.71				0.57				0.45				0.46				0.50
Net realized and unrealized gain (loss) on investments				$	0.06				0.12				0.16				0.61				(0.47	)
Total from investment operations				$	0.77				0.69				0.61				1.07				0.03
Distributions to Common Shareholders from net investment income				$	(0.55	)			(0.46	)			(0.43	)			(0.42	)			(0.45	)
Distribution to Preferred Shareholders				$	(0.16	)			(0.11	)			(0.05	)			(0.04	)			(0.05	)
Net asset value, end of year				$	7.65				7.59				7.47				7.34				6.73
Closing market price at end of year				$	7.40				7.02				7.56				7.84				6.46
Total Investment Return(1)
Total investment return at closing market price(2)				%	13.84				(0.82	)			2.04				28.77				2.53
Total investment return at net asset value(3)				%	8.85				8.53				7.70				15.72				0.44
Ratios/Supplemental Data
Net assets end of year (000's)				$	1,109,539				1,100,671				1,082,748				1,010,325				922,383
Preferred Shares-Aggregate amount outstanding (000's)				$	450,000				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
Borrowings at end of year (000's)				$	281,000				465,000				496,000				225,000				167,000
Asset coverage per $1,000 of debt(4)				$	2,517				2,203				2,140				2,500				2,500
Average borrowings (000's)				$	459,982				509,178				414,889				143,194				190,671
Ratios to average net assets including Preferred Shares(5)
Expenses (before interest and other fees related to revolving credit facility)				%	1.57				1.64				1.60				1.45				1.49
Net expenses after expense reimbursement				%	3.27				3.02				2.21				1.65				1.81
Gross expenses prior to expense reimbursement				%	3.27				3.02				2.22				1.65				1.81
Net investment income				%	6.68				5.44				4.21				4.57				4.97
Ratios to average net assets plus borrowings
Expenses (before interest and other fees related to revolving credit facility)				%	1.56				1.58				1.63				1.84				1.82
Net expenses after expense reimbursement				%	3.25				2.90				2.26				2.09				2.23
Gross expenses prior to expense reimbursement				%	3.25				2.90				2.27				2.09				2.23
Net investment income				%	6.63				5.24				4.32				5.82				6.10
Ratios to average net assets
Expenses (before interest and other fees related to revolving credit facility)				%	2.21				2.33				2.29				2.11				2.19
Net expenses after expense reimbursement				%	4.62				4.27				3.17				2.40				2.68
Gross expenses prior to expense reimbursement				%	4.62				4.27				3.18				2.40				2.68
Net investment income				%	9.42				7.71				6.04				6.68				7.33
Portfolio turnover rate				%	60				81				93				87				48
Common shares outstanding at end of year (000's)					145,033				145,033				145,033				137,638				136,973

 

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

^₍₂₎  Total investment return measures the change in the market value of your investment assuming reinvestment of dividends and capital gain distributions, if any, in accordance with the provisions of the Trust's dividend reinvestment plan.

^₍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 in accordance with the provisions of the dividend reinvestment plan.

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

^₍₄₎  Asset coverage represents the total assets available for settlement of Preferred Stockholder's interest and notes payables in relation to the Preferred Shareholder interest and notes payable balance outstanding. The Preferred Shares were first offered November 2, 2000.

^₍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.

See Accompanying Notes to Financial Statements
12

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007

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 of Trustees ("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 an independent pricing service 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, 2007, 99.57% 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 ING Investments, LLC (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 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,

13

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (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 valuation are valued at amortized cost, which, when combined with accrued interest approximates market value.

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. 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 (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.

14

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

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. When entering into a currency forward contract, the Trust agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. These contracts are valued daily and the Trust's net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statement of Assets and Liabilities. Realized and unrealized gains and losses are included in the Statement of Operations. These instruments involve market and/or credit risk in excess of the amount recognized in the Statement of Assets and Liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in currency and securities values and interest rates. Open forward foreign currency contracts are presented following the respective 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.

15

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

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, 2007, the cost of purchases and the proceeds from principal repayment and sales of investments, excluding short-term notes, totaled $1,211,750,596 and $1,429,252,901, respectively. At February 28, 2007, the Trust held senior loans valued at $1,829,047,888 representing 98.7% 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.

16

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 3 — INVESTMENTS (continued)

Dates of acquisition and cost of 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				$	107,510
AM Cosmetics Corporation (Liquidation Interest)				03/07/03					—
Block Vision Holdings Corporation (571 Common Shares)				09/17/02					—
Boston Chicken, Inc. (Residual Interest in Boston Chicken Plan Trust)				12/26/00					9,893
Cedar Chemical (Liquidation Interest)				12/31/02					—
Covenant Care, Inc. (Warrants for 19,000 Common Shares, Expires January 13, 2005)				12/22/95					—
Covenant Care, Inc. (Warrants for 26,901 Common Shares, Expires March 31, 2013)				01/18/02					—
Decision One Corporation (1,402,038 Common Shares)				05/17/05					1,116,773
Electro Mechanical Solutions (Residual Interest in Bankruptcy Estate)				10/02/02					15
Enterprise Profit Solutions (Liquidation Interest)				10/21/02					—
EquityCo, LLC (Warrants for 28,752 Common Shares)				02/25/05					—
Euro United Corporation (Residual Interest in Bankruptcy Estate)				06/21/02					305,999
Gemini Leasing, Inc. (143,079 Common Shares)				01/08/04					—
Grand Union Company (Residual Interest in Bankruptcy Estate)				07/01/02					2,576
Humphrey's, Inc. (Residual Interest in Bankruptcy Estate)				05/15/02					50
Imperial Home Décor Group, Inc. (Liquidation Interest)				01/22/04					—
Insilco Technologies (Residual Interest in Bankruptcy Estate)				05/02/03					1
IT Group, Inc. (Residual Interest in Bankruptcy Estate)				09/12/03					50
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 Easten Fine (Residual Interest in Bankruptcy Estate)				06/08/04					—
IAP Acquisition Corporation (17,348 Common Shares)				08/29/03					—
IAP Acquisition Corporation (1,084 Common Shares)				08/29/03					428,603
IAP Acquisition Corporation (1,814 Common Shares)				08/29/03					—
IAP Acquisition Corporation (3,524 Common Shares)				08/29/03					3,524,300
New Piper Aircraft, Inc. (Residual Interest in Bankruptcy Estate)				07/02/03					—
Norwood Promotional Products, Inc. (104,148 Common Shares)				08/23/04					32,939
Safelite Glass Corporation (856,340 Common Shares)				10/12/00					173,588
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 Aggregates (Residual Interest in Bankruptcy Estate)				04/07/03					—
US Office Products Company (Residual Interest in Bankruptcy Estate)				02/11/04					—
Total Restricted Securities excluding senior loans (market value of $18,820,902 was 1.7% of net assets at February 28, 2007)								$	5,742,552

 

17

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

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% plus the proceeds of any outstanding borrowings of the Trust's Managed Assets.

The Investment Adviser, ING IM and the Administrator are indirect, wholly-owned subsidiaries of ING Groep N.V. ("ING Groep"). ING Groep is one of the largest financial services organizations in the world, and offers an array of banking, insurance and asset management services to both individual and institutional investors.

NOTE 5 — TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

At February 28, 2007, 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
$	1,165,257			$	364,143			$	1,529,400

 

The Trust has adopted a Retirement Policy ("Policy") covering all independent trustees of the Trust who will have served as an independent trustee for at least five years at the time of retirement. Benefits under this Policy are based on an annual rate as defined in the Policy agreement.

NOTE 6 — COMMITMENTS

The Trust has entered into both a $90 million 364-day revolving credit agreement which matured on August 23, 2006 and has been extended to August 22, 2007 and a $535 million 364-day revolving securitization facility which matured on July 9, 2006, and has been extended to June 14, 2007, collateralized by assets of the Trust. Borrowing rates under these agreements are based on a fixed spread over LIBOR, the federal funds rate, 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, 2007, was $281 million. Weighted average interest rate on outstanding borrowings was 5.69%, excluding fees related to the unused portion of the facilities, and other fees. The amount of borrowings represented 15.0% of total assets at February 28, 2007. Average borrowings for the year ended February 28, 2007 were $459,982,192 and the average annualized interest rate was 5.73% excluding other fees related to the unused portion of the facilities, and other fees.

18

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 6 — COMMITMENTS (continued)

As of February 28, 2007, the Trust had unfunded loan commitments pursuant to the terms of the following loan agreements:

Builders Firstsource, Inc.				$	1,500,000
Coleto Creek Power					5,000,000
Federal-Mogul Corp.					4,120,000
Hearthstone Housing Partners II, LLC					1,108,824
Herbst Gaming, Inc.					750,000
Infrastrux Group, Inc.					350,000
Kerasotes Theatres, Inc.					900,000
Lucite International US Finco Limited					1,038,168
MEG Energy Corp.					2,800,000
Neoplan USA Corp.					382,500
Norwood Promotional Products Holdings, Inc.					2,135,662
Oglebay Norton Co.				$	400,000
PLY Gem Industries, Inc.					892,857
Primedia, Inc.					1,133,250
Sturm Foods, Inc.					500,000
Syniverse Holding, LLC					1,500,000
Trump Entertainment Resorts Holdings, L.P.					1,723,750
United States Shipping, LLC					503,226
Venetian Macau Ltd.					1,600,000
Wastequip, Inc.					3,000,000
				$	31,363,237

 

NOTE 7 — RIGHTS AND OTHER OFFERINGS

As of February 28, 2007, outstanding share offerings pursuant to shelf registrations were as follows:

Registration Date				Shares Registered				Shares Remaining
	9/15/98				25,000,000				12,374,909
	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.

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, 2007.

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, 2007, the Trust held 0.5% of its total assets in subordinated loans and unsecured loans.

19

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 10 — 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 distributions of paid-in capital.

The following permanent tax differences have been reclassified as of February 28, 2007:

Undistributed Net Investment Income				Accumulated Net Realized Gains
$	(1,650,091	)		$	1,650,091

 

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, 2007				Year Ended February 28, 2006
Ordinary Income				Ordinary Income
$	102,371,727			$	82,267,626

 

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, 2007 were:

Undistributed Ordinary Income				Unrealized Appreciation				Post-October Currency Losses Deferred				Capital Loss Carryforwards				Expiration Dates
$	5,656,916			$	33,968,276			$	(1,770,705	)		$	(33,536,215	)			2008
													(847,193	)			2009
													(47,376,376	)			2010
													(97,064,717	)			2011
													(57,686,392	)			2012
													(22,421,058	)			2013
													(560,828	)			2014
												$	(259,492,779	)

 

NOTE 11 — OTHER ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as "more-likely-than-not" to be sustained upon challenge by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to be realized. FIN 48 is effective for fiscal years beginning after December 15, 2006, with early application permitted if no interim financial statements have been issued. However, acknowledging the unique issues that FIN 48 presents for investment companies that calculate NAVs, the Securities and Exchange Commission (the "SEC") has indicated that they would not object if a fund implements FIN 48 in its NAV calculation as late as its last NAV calculation in the first required financial statement reporting period for its fiscal year beginning after December 15, 2006. For the February year-end closed-end funds, this would be no later than their August 31, 2007 NAV and the

20

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 11 — OTHER ACCOUNTING PRONOUNCEMENTS (continued)

effects of FIN 48 would be reflected in the funds' semi-annual financial statements contained in their Form N-CSR filing. At adoption, companies must adjust their financial statements to reflect only those tax positions that are more likely-than-not to be sustained as of the adoption date. Management of the Trust has assessed the impact of adopting FIN 48 and currently does not believe that there will be a material impact to the Trust.

On September 15, 2006, the FASB issued Statement of Financial Accounting Standards No. 157 ("SFAS No. 157"), "Fair Value Measurements." The new accounting statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles ("GAAP"), and expands disclosures about fair value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). SFAS No. 157 also stipulates that, as a market-based measurement, fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability, and establishes a fair value hierarchy that distinguishes between (a) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (b) the reporting entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. As of February 28, 2007, management of the Trust is currently assessing the impact, if any, that will result from adopting SFAS No. 157.

NOTE 12 — INFORMATION REGARDING TRADING OF ING'S US MUTUAL FUNDS

In 2004, ING Investments 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 had received informal and formal requests for information since September 2003 from various governmental and self-regulatory agencies in connection with investigations related to 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, 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. The goal of this review was to identify any instances of inappropriate trading in those products by third parties or by ING investment professionals and other ING personnel. ING's internal review related to mutual fund trading is now substantially 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.

21

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ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 12 — INFORMATION REGARDING TRADING OF ING'S US MUTUAL FUNDS (continued)

In September 2005, ING Funds Distributor, LLC ("IFD"), the distributor of certain ING Funds, settled an administrative proceeding with the NASD regarding three arrangements, dating from 1995, 1996 and 1998, under which the administrator to the then-Pilgrim Funds, which subsequently became part of the ING Funds, entered into formal and informal arrangements that permitted frequent trading. Under the terms of the Letter of Acceptance, Waiver and Consent ("AWC") with the NASD, under which IFD neither admitted nor denied the allegations or findings, IFD consented to the following sanctions: (i) a censure; (ii) a fine of $1.5 million; (iii) restitution of approximately $1.44 million to certain ING Funds for losses attributable to excessive trading described in the AWC; and (iv) agreement to make certification to NASD regarding the review and establishment of certain procedures.

In addition to the arrangements discussed above, in 2004 ING Investments reported to the Boards that, at that time, these instances include the following, in addition to the arrangements subject to the AWC discussed above:

•  Aeltus Investment Management, Inc. (a predecessor entity to ING Investment Management Co.) identified two investment professionals who engaged in extensive frequent trading in certain ING Funds. One was subsequently terminated for cause and incurred substantial financial penalties in connection with this conduct and the second has been disciplined.

•  ReliaStar Life Insurance Company ("ReliaStar") entered into agreements seven years ago permitting the owner of policies issued by the insurer to engage in frequent trading and to submit orders until 4pm Central Time. In 2001 ReliaStar also entered into a selling agreement with a broker-dealer that engaged in frequent trading. Employees of ING affiliates were terminated and/or disciplined in connection with these matters.

•  In 1998, Golden American Life Insurance Company entered into arrangements permitting a broker-dealer to frequently trade up to certain specific limits in a fund available in an ING variable annuity product. No employee responsible for this arrangement remains at the company.

For additional information regarding these matters, you may consult the Form 8-K and Form 8-K/A for each of four life insurance companies, ING USA Annuity and Life Insurance Company, ING Life Insurance and Annuity Company, ING Insurance Company of America, and ReliaStar Life Insurance Company of New York, each filed with the SEC on October 29, 2004 and September 8, 2004. These Forms 8-K and Forms 8-K/A can be accessed through the SEC's Web site at http://www.sec.gov. 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

22

---

ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 12 — INFORMATION REGARDING TRADING OF ING'S US MUTUAL FUNDS (continued)

agencies, litigation or other formal proceedings, including any proceedings by the SEC. ING Investments reported to the Boards that ING management believes that the total amount of any indemnification obligations will not be material to ING or its U.S. business.

•  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.

•  The ING Funds, upon a recommendation from ING, updated their respective Codes of Ethics applicable to investment professionals with ING entities and certain other fund personnel, requiring such personnel to pre-clear any purchases or sales of ING Funds that are not systematic in nature (i.e., dividend reinvestment), and imposing minimum holding periods for shares of ING Funds.

•  ING instituted excessive trading policies for all customers in its variable insurance and retirement products and for shareholders of the ING Funds sold to the public through financial intermediaries. ING does not make exceptions to these policies.

•  ING reorganized and expanded its U.S. Compliance Department, and created an Enterprise Compliance team to enhance controls and consistency in regulatory compliance.

Other Regulatory Matters

The New York Attorney General (the "NYAG") 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 anti-competitive 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. In connection with one such investigation, affiliates of ING Investments were named in a petition for relief and cease and desist order filed by the New Hampshire Bureau of Securities Regulation (the "NH Bureau") concerning their administration of the New Hampshire state employees deferred compensation plan.

On October 10, 2006, an affiliate of ING Investments entered into an assurance of discontinuance with the NYAG (the "NYAG Agreement") regarding the endorsement of its products by the New York State United Teachers Union Member Benefits Trust ("NYSUT") and the sale of their products to NYSUT members. Under the terms of the NYAG Agreement, the affiliate of ING Investments, without admitting or denying the NYAG's findings, will distribute $30 million to NYSUT members, and/or former NYSUT members, who participated in the NYSUT-endorsed products at any point between January 1, 2001 and June 30, 2006. The affiliate also agreed with the NYAG's office to develop a one-page disclosure that will further improve transparency and disclosure regarding retirement product fees (the "One-Page Disclosure"). Pursuant to the terms of the NYAG Agreement, the affiliate has agreed for a five year period to provide its retirement product customers with the One-Page Disclosure.

In addition, on the same date, these affiliates of ING Investments entered into a consent agreement with the NH Bureau (the "NH Agreement") to resolve this petition for relief and cease and desist order. Under the terms of the NH Agreement, these affiliates of ING Investments, without admitting or denying the NH Bureau's claims, have agreed to pay $3 million to resolve the matter, and for a five year period to provide their retirement product customers with the One-Page Disclosure described above.

23

---

ING Prime Rate Trust

NOTES TO FINANCIAL STATEMENTS as of February 28, 2007 (continued)

NOTE 12 — INFORMATION REGARDING TRADING OF ING'S US MUTUAL FUNDS (continued)

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 13 — SUBSEQUENT EVENTS

Subsequent to February 28, 2007, the Trust paid to Common Shareholders the following dividends from net investment income:

Per Share Amount

Declaration Date

Record Date

Payable Date

$

0.0450

2/28/07

3/12/07

3/22/07

0.0475

3/30/07

4/10/07

4/23/07

 

Subsequent to February 28, 2007, 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

Series M

$

173.87

03/05/07-04/16/07

03/12/07-04/23/07

03/13/07-04/24/07

Series T

$

173.30

03/06/07-04/17/07

03/13/07-04/24/07

03/14/07-04/25/07

Series W

$

172.83

03/07/07-04/18/07

03/14/07-04/25/07

03/15/07-04/26/07

Series Th

$

197.98

03/01/07-04/19/07

03/08/07-04/26/07

03/09/07-04/27/07

Series F

$

196.59

03/02/07-04/20/07

03/09/07-04/27/07

03/12/07-04/30/07

 

24

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007

Senior Loans*: 164.9%

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Aerospace & Defense: 2.8%

Avio Group

NR

NR

EUR

708,333

Term Loan, 6.032%, maturing December 13, 2014

$

951,516

$

590,346

Term Loan, 7.725%, maturing December 13, 2014

598,279

EUR

708,333

Term Loan, 6.407%, maturing December 13, 2015

955,721

$

590,346

Term Loan, 8.100%, maturing December 13, 2015

601,230

DeCrane Aircraft Holdings, Inc.

B1

B

500,000

(5

)

Term Loan, maturing February 28, 2014

502,500

(2

)

Delta

Ba3

B+

2,000,000

Debtor in Possession Term Loan, 10.110%, maturing March 16, 2008

2,017,500

Dyncorp International LLC

Ba2

BB-

2,435,449

Term Loan, 7.656%, maturing February 11, 2011

2,457,774

Forgings International Ltd.

NR

NR

GBP

239,337

Term Loan, 7.769%, maturing August 11, 2014

475,703

$

1,362,698

Term Loan, 7.850%, maturing August 11, 2014

1,379,449

GBP

241,073

Term Loan, 8.019%, maturing August 11, 2015

481,322

$

1,369,696

Term Loan, 8.100%, maturing August 11, 2015

1,392,810

Hexcel Corporation

Ba2

BB-

1,078,657

Term Loan, 7.125%, maturing March 01, 2012

1,081,803

IAP Worldwide Services, Inc.

B2

B

990,000

Term Loan, 9.688%, maturing December 30, 2012

995,260

K&F Industries, Inc.

Ba3

B+

3,979,167

Term Loan, 7.320%, maturing November 18, 2012

4,005,282

Onex Wind Finance LP (Mid-Western Aircraft Systems, Inc).

Ba3

BB+

982,953

Term Loan, 7.110%, maturing December 31, 2011

989,402

Transdigm, Inc.

Ba3

B+

3,500,000

Term Loan, 7.366%, maturing June 23, 2013

3,530,625

United Airlines, Inc.

B1

B+

2,500,000

Term Loan, 7.375%, maturing February 01, 2014

2,514,648

US Airways

B2

B

3,000,000

Term Loan, 8.864%, maturing March 31, 2011

3,024,108

Wesco Aircraft Hardware Corporation

B1

B+

1,500,000

Term Loan, 7.600%, maturing September 29, 2013

1,512,891

 

See Accompanying Notes to Financial Statements
25

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Aerospace & Defense: (continued)
								Wyle Holdings Inc.				NR				B+
$	1,788,109							Term Loan, 8.110%, maturing January 28, 2011												$	1,797,609
																					31,265,432
Automobile: 4.9%
					(2	)		Federal-Mogul Corporation				NR				BBB+
	880,000							Revolver, 1.641%, maturing July 01, 2007													880,000
	1,500,000							Debtor in Possession Term Loan, 7.320%, maturing July 01, 2007													1,503,563
								Ford Motor Company				Ba3				B
	2,500,000							Term Loan, 8.360%, maturing December 15, 2013													2,531,770
								Goodyear Tire & Rubber Co.				Ba1				BB
	5,500,000							Term Loan, 7.572%, maturing April 30, 2010													5,549,110
								Goodyear Tire & Rubber Co.				Ba3				B+
	9,400,000							Term Loan, 8.140%, maturing April 30, 2010													9,521,420
								Hertz				Ba1				BB
	4,878,857							Term Loan, 7.086%, maturing December 21, 2012													4,928,026
	1,027,778							Term Loan, 7.365%, maturing December 21, 2012													1,038,136
								Navistar International Corporation				NR				NR
	1,800,000							Revolver, 7.168%, maturing January 19, 2012													1,833,975
								Oshkosh Truck Corporation				Ba3				BB
	17,000,000							Term Loan, 7.350%, maturing December 06, 2013													17,165,444
								SAF-Holland Group GmbH				NR				NR
	768,615				(5	)		Term Loan, maturing January 07, 2015													778,223
	703,366				(5	)		Term Loan, maturing February 07, 2016													712,158
								Tower (R.J.) Corporation				B1				BBB
	3,500,000							Term Loan, 9.938%, maturing August 02, 2007													3,495,989
								Vanguard Car Rental USA Holdings Inc.				Ba3				B+
	4,097,500							Term Loan, 8.352%, maturing June 14, 2013													4,146,158
																					54,083,972
Beverage, Food & Tobacco: 5.4%
								ARAMARK				Ba3				B+
	1,600,000							Term Loan, 7.445%, maturing January 26, 2014													1,618,301
	19,000,000							Term Loan, 7.470%, maturing January 26, 2014													19,217,322
								B&G Foods, Inc.				Ba2				B+
	750,000				(5	)		Term Loan, maturing February 23, 2013													760,313

 

See Accompanying Notes to Financial Statements
26

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Beverage, Food & Tobacco: (continued)

Bolthouse Farms, Inc

B1

B+

$

1,975,000

Term Loan, 7.625%, maturing December 16, 2012

$

1,987,962

Bumble Bee Foods, LLC

Ba3

B+

1,200,000

Term Loan, 7.110%, maturing May 02, 2012

1,200,000

Commonwealth Brands, Inc.

B1

B+

8,293,720

Term Loan, 7.625%, maturing December 22, 2012

8,342,446

Gate Gourmet Borrower LLC

B2

B

169,681

Revolver, 8.114%, maturing March 09, 2012

167,135

425,614

Term Loan, 8.095%, maturing March 09, 2012

430,934

Golden State Foods

B1

B+

3,890,000

Term Loan, 7.110%, maturing February 28, 2011

3,899,725

Iglo Birds Eye

NR

NR

EUR

51,247

Term Loan, 5.982%, maturing November 30, 2014

68,817

EUR

948,754

Term Loan, 6.085%, maturing November 30, 2014

1,274,048

EUR

51,247

Term Loan, 6.357%, maturing November 30, 2015

69,110

EUR

380,330

Term Loan, 6.460%, maturing November 30, 2015

510,731

EUR

568,424

Term Loan, 6.460%, maturing November 30, 2015

766,563

Michael Foods

Ba3

B+

$

3,227,084

Term Loan, 7.360%, maturing November 21, 2010

3,243,891

Nutro Products, Inc.

Ba3

B

2,115,758

Term Loan, 7.364%, maturing April 26, 2013

2,126,999

Pierre Foods

Ba3

B+

3,535,786

Term Loan, 7.610%, maturing June 30, 2010

3,560,095

Reynolds American

Baa2

BBB-

4,975,000

Term Loan, 7.265%, maturing May 31, 2012

5,020,865

Sturm Foods, Inc.

B1

B

3,000,000

Term Loan, 7.875%, maturing January 31, 2014

3,015,939

United Biscuits

NR

NR

GBP

1,476,692

Term Loan, 8.228%, maturing December 31, 2014

2,947,611

60,228,807

Buildings & Real Estate: 3.8%

Armstrong World Industries, Inc.

Ba2

BB

$

1,745,625

Term Loan, 7.070%, maturing October 02, 2013

1,753,262

Atrium Companies, Inc.

B1

B

754,468

Term Loan, 8.104%, maturing May 31, 2012

749,596

 

See Accompanying Notes to Financial Statements
27

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Buildings & Real Estate: (continued)

Capital Automotive L.P.

Ba1

BB+

$

11,163,155

Term Loan, 7.070%, maturing December 16, 2010

$

11,285,257

CB Richard Ellis

Ba1

BB+

1,400,000

Term Loan, 6.847%, maturing December 20, 2013

1,406,875

Champion Home Builders Co.

B1

B+

875,000

Revolver, 5.264%, maturing October 31, 2012

871,719

710,000

Term Loan, 7.820%, maturing October 31, 2012

708,225

Contech Construction Products Inc.

Ba3

B+

1,733,472

Term Loan, 7.330%, maturing January 31, 2013

1,749,183

Custom Building Products, Inc.

B1

B+

4,939,522

Term Loan, 7.614%, maturing October 29, 2011

4,954,958

Headwaters Incorporated

Ba3

BB-

2,287,820

Term Loan, 7.320%, maturing April 30, 2011

2,299,259

Hearthstone Housing Partners II, LLC

NR

NR

4,626,471

Revolver, 5.953%, maturing December 01, 2007

4,614,905

John Maneely Company

B3

B+

4,713,035

Term Loan, 8.619%, maturing December 08, 2013

4,774,894

Nortek, Inc.

Ba2

B

3,754,207

Term Loan, 7.350%, maturing August 27, 2011

3,780,017

Ply Gem Industries, Inc.

Ba3

BB-

357,143

Revolver, 3.377%, maturing February 12, 2009

342,857

Shea Capital I, LLC

Ba3

BB-

997,500

Term Loan, 7.370%, maturing October 27, 2011

997,500

Tishman Speyer

Ba2

BB-

1,500,000

Term Loan, 7.070%, maturing February 01, 2012

1,513,751

41,802,258

Cargo Transport: 2.0%

Baker Tanks, Inc.

B2

B

1,975,000

Term Loan, 7.570%, maturing November 22, 2012

1,991,047

Gainey Corporation

B2

BB-

796,000

Term Loan, 8.156%, maturing April 20, 2012

798,488

Greatwide Logistics Services, Inc.

B1

B-

3,000,000

Term Loan, 8.614%, maturing December 19, 2013

3,023,751

Helm Holding Corporation

B2

B+

979,000

Term Loan, 7.866%, maturing July 08, 2011

982,060

 

See Accompanying Notes to Financial Statements
28

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Cargo Transport: (continued)
								Horizon Lines, LLC				Ba2				B
$	2,188,139							Term Loan, 7.620%, maturing July 07, 2011												$	2,203,868
								Kenan Advantage Group, Inc.				B3				B+
	990,003							Term Loan, 8.364%, maturing December 16, 2011													997,428
					(2	)		Neoplan USA Corporation				NR				NR
	1,867,500				(3	)		Revolver, 7.213%, maturing June 30, 2006													1,867,500
	5,306,058				(3	)		Term Loan, 11.008%, maturing June 30, 2006													4,457,089
								Pacer International, Inc.				Ba3				BB
	694,118							Term Loan, 6.916%, maturing June 10, 2010													692,383
								TNT Logistics				B1				B
	1,927,881							Term Loan, 7.820%, maturing November 04, 2013													1,942,340
	723,070							Term Loan, 7.860%, maturing November 04, 2013													732,259
								US Shipping Partners L.P.				B1				B+
	335,274							Term Loan, 4.584%, maturing March 31, 2012													340,093
	1,990,000							Term Loan, 8.864%, maturing March 31, 2012													2,018,606
																					22,046,912
Cellular: 2.3%
								Centennial Communications Corp				Ba2				B
	10,085,631							Term Loan, 7.363%, maturing February 09, 2011													10,190,693
								Cricket Communications, Inc.				B1				B
	5,970,000							Term Loan, 8.114%, maturing June 16, 2013													6,052,088
								NTELOS Inc.				B2				B
	4,410,157							Term Loan, 7.570%, maturing August 24, 2011													4,442,131
								Rogers Wireless				Ba1				BB+
	2,500,000							Floating Rate Note, 8.485%, maturing December 15, 2010													2,550,000
								Telepak, Inc. / Cellular South				Ba3				B+
	1,950,000							Term Loan, 7.113%, maturing May 04, 2011													1,959,750
																					25,194,662
Chemicals, Plastics & Rubber: 10.0%
								Basell				Ba3				B+
	1,000,000							Term Loan, 7.595%, maturing September 07, 2013													1,012,231
	1,000,000							Term Loan, 8.345%, maturing September 07, 2014													1,012,231
								Brenntag Holding GmbH & Co. KG				B2				B
	4,800,000							Term Loan, 7.887%, maturing January 17, 2014													4,853,252
								Celanese				Ba3				BB-
	5,625,000							Term Loan, 5.320%, maturing April 06, 2009													5,696,483
	5,303,498							Term Loan, 7.114%, maturing April 06, 2011													5,351,378

 

See Accompanying Notes to Financial Statements
29

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Chemicals, Plastics & Rubber: (continued)

Flint Group

NR

NR

$

936,821

Term Loan, 7.864%, maturing December 31, 2012

$

945,101

353,279

Term Loan, 7.864%, maturing December 31, 2013

356,402

1,290,100

Term Loan, 8.364%, maturing December 31, 2013

1,307,263

Georgia Gulf Co

Ba2

BB

1,620,938

Term Loan, 7.320%, maturing October 03, 2013

1,638,594

Hawkeye Renewables, LLC

B3

NR

3,731,250

Term Loan, 9.364%, maturing June 30, 2012

3,626,309

Hexion Specialty Chemicals, Inc.

Ba3

B

1,188,000

Term Loan, 7.222%, maturing May 05, 2013

1,199,583

9,060,750

Term Loan, 7.875%, maturing May 05, 2013

9,149,092

Huntsman International LLC

Ba3

BB-

15,198,139

Term Loan, 7.070%, maturing August 16, 2012

15,309,283

Ineos US Finance LLC

Ba3

B+

2,520,000

Term Loan, 7.611%, maturing December 16, 2012

2,538,270

2,970,000

Term Loan, 7.611%, maturing December 16, 2013

3,011,146

2,970,000

Term Loan, 8.111%, maturing December 23, 2014

3,011,146

Innophos, Inc.

Ba1

B+

1,015,909

Term Loan, 7.570%, maturing August 13, 2010

1,022,893

ISP Chemco Inc.

Ba3

BB-

3,473,750

Term Loan, 7.375%, maturing February 16, 2013

3,513,761

JohnsonDiversey, Inc.

Ba2

B+

508,666

Term Loan, 7.860%, maturing December 16, 2010

513,912

2,672,031

Term Loan, 7.860%, maturing December 16, 2011

2,703,345

Kraton Polymers LLC

Ba3

B+

1,786,500

Term Loan, 7.375%, maturing May 12, 2013

1,803,808

Lucite International Us Finco Limited

B1

B+

708,273

Term Loan, 8.070%, maturing July 07, 2013

716,684

Lyondell Chemical Company

Ba2

BB

3,482,500

Term Loan, 7.110%, maturing August 16, 2013

3,511,279

Nalco Company

Ba2

BB-

12,626,135

Term Loan, 7.106%, maturing November 04, 2010

12,731,538

Northeast Biofuels, LLC

B1

B+

1,268,293

Term Loan, 8.614%, maturing June 30, 2013

1,266,707

 

See Accompanying Notes to Financial Statements
30

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Chemicals, Plastics & Rubber: (continued)

Polypore Incorporated

Ba3

B

$

6,953,993

Term Loan, 8.320%, maturing November 12, 2011

$

6,988,763

PQ Corporation

Ba2

B+

2,456,250

Term Loan, 7.370%, maturing February 10, 2012

2,473,648

Ripplewood Phosphorus LLC

Ba3

B

1,925,113

Term Loan, 8.620%, maturing July 20, 2011

1,927,519

Rockwood Specialties Group, Inc.

Ba2

B+

9,825,495

Term Loan, 7.360%, maturing December 13, 2013

9,921,293

Vertellus Specialties Inc.

B3

B+

2,363,125

Term Loan, 8.611%, maturing March 31, 2013

2,383,802

111,496,316

Containers, Packaging & Glass: 4.1%

Bluegrass Container Company

Ba3

BB-

1,197,769

Term Loan, 7.601%, maturing June 30, 2013

1,214,862

Boise Cascade, L.L.C.

Ba2

BB

4,094,702

Term Loan, 7.108%, maturing October 29, 2011

4,129,254

Graham Packaging Company

B1

B

13,244,522

Term Loan, 7.625%, maturing October 07, 2011

13,407,708

Graphic Packaging International, Inc.

Ba2

B+

9,183,118

Term Loan, 7.858%, maturing August 08, 2010

9,310,818

Owens-Illinois

Ba2

BB-

EUR

2,199,375

Term Loan, 5.114%, maturing April 01, 2008

2,898,548

Pro Mach, Inc

B1

B

$

2,481,250

Term Loan, 7.620%, maturing December 01, 2011

2,499,859

Smurfit-Stone Container Corporation

Ba1

B+

8,334,672

Term Loan, 7.625%, maturing November 01, 2011

8,425,119

Xerium Technologies, Inc.

B2

B+

3,296,167

Term Loan, 7.864%, maturing May 18, 2012

3,300,287

45,186,455

Data and Internet Services: 6.2%

Activant Solutions, Inc.

B1

B

930,897

Term Loan, 7.375%, maturing May 02, 2013

933,225

Acxiom Corporation

Ba2

BB

1,995,000

Term Loan, 7.083%, maturing September 15, 2012

2,013,081

 

See Accompanying Notes to Financial Statements
31

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Data and Internet Services: (continued)

Carlson Wagonlit Holdings B.V.

Ba3

B+

$

2,750,000

Term Loan, 7.860%, maturing August 03, 2012

$

2,759,023

IPayment, Inc.

B1

B

2,977,500

Term Loan, 7.352%, maturing May 10, 2013

2,996,109

Open Text Corporation

Ba3

BB-

1,745,625

Term Loan, 7.864%, maturing October 02, 2013

1,759,808

Reynolds & Reynolds Company

B3

B

2,375,000

Term Loan, 10.845%, maturing October 26, 2013

2,449,962

Reynolds & Reynolds Company

Ba2

BB-

10,972,500

Term Loan, 7.845%, maturing October 26, 2012

11,099,858

Sitel, LLC

B2

B+

4,000,000

Term Loan, 7.909%, maturing January 29, 2014

4,030,000

Sungard Data Systems Inc

Ba3

B+

28,535,227

Term Loan, 6.860%, maturing February 11, 2013

28,856,248

Transfirst Holdings, Inc.

B1

B+

870,625

Term Loan, 7.870%, maturing August 15, 2012

879,331

Travelport, Inc.

Ba3

B+

3,242,599

Term Loan, 7.864%, maturing August 23, 2013

3,278,472

Verifone, Inc.

B1

BB-

2,250,000

Term Loan, 7.110%, maturing October 31, 2013

2,258,438

Worldspan, L.P.

B3

CCC+

1,300,000

Term Loan, 12.360%, maturing December 21, 2013

1,316,250

Worldspan, L.P.

Ba3

B

4,000,000

Term Loan, 8.603%, maturing December 21, 2013

4,029,500

68,659,305

Diversified / Conglomerate Manufacturing: 4.4%

Aearo Technologies, Inc

B1

B

1,588,000

Term Loan, 7.864%, maturing March 24, 2013

1,603,218

Aearo Technologies, Inc

Caa1

CCC+

1,200,000

Term Loan, 11.864%, maturing September 24, 2013

1,222,876

Axia Incorporated

B2

B

1,485,000

Term Loan, 8.620%, maturing December 21, 2012

1,447,875

Baldor Electric Company

Ba3

BB

2,200,000

(5

)

Term Loan, maturing March 31, 2014

2,222,275

Brand Services, Inc.

B1

B

1,600,000

Term Loan, 7.625%, maturing February 07, 2014

1,613,333

 

See Accompanying Notes to Financial Statements
32

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (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, 11.375%, maturing February 07, 2014

$

1,622,000

Chart Industries, Inc.

Ba2

B+

2,000,001

Term Loan, 7.432%, maturing October 17, 2012

2,011,251

Cinram International, Inc

B1

BB-

3,980,000

Term Loan, 7.110%, maturing May 05, 2011

3,969,636

Dayco Products LLC

Ba3

BB-

497,500

Term Loan, 7.865%, maturing June 21, 2011

502,061

Dresser, Inc.

B1

B

1,923,567

Term Loan, 8.125%, maturing October 31, 2013

1,945,607

Dresser-Rand Group Inc.

Ba1

BB-

82,436

Term Loan, 7.345%, maturing October 29, 2011

83,106

Generac Power Systems, Inc.

B1

B

4,455,000

Term Loan, 7.860%, maturing November 09, 2013

4,474,491

Generac Power Systems, Inc.

Caa1

CCC+

500,000

Term Loan, 11.360%, maturing May 09, 2014

500,000

Gentek Holding Corporation

B1

B+

2,330,352

Term Loan, 7.354%, maturing February 28, 2011

2,337,998

Goodman Global Holdings, Inc

Ba2

B+

1,478,571

Term Loan, 7.125%, maturing December 23, 2011

1,484,733

Mueller Group, Inc.

Ba3

BB-

7,540,351

Term Loan, 7.360%, maturing October 03, 2012

7,623,611

Norcross Safety Products LLC

Ba1

BB-

984,799

Term Loan, 7.414%, maturing June 30, 2012

988,801

Prysmian S.R.L

NR

NR

EUR

1,200,000

Term Loan, 5.785%, maturing August 13, 2014

1,594,997

EUR

300,000

Term Loan, 6.285%, maturing August 31, 2015

400,733

Rexnord Corporation / RBS Global, Inc.

Ba2

B+

$

980,744

(5

)

Term Loan, maturing July 19, 2013

990,552

2,297,131

Term Loan, 7.875%, maturing July 19, 2013

2,320,102

Sensata Technologies

B1

BB-

4,179,000

Term Loan, 7.110%, maturing April 27, 2013

4,190,756

 

See Accompanying Notes to Financial Statements
33

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Diversified / Conglomerate Manufacturing: (continued)

Sensus Metering Systems Inc.

Ba3

B+

$

210,217

Term Loan, 7.353%, maturing December 17, 2010

$

211,400

1,582,609

Term Loan, 7.363%, maturing December 17, 2010

1,591,511

Springs Window Fashions

Ba3

B+

990,000

Term Loan, 8.125%, maturing December 31, 2012

999,900

Textron Fastening Systems

B2

B+

498,750

Term Loan, 8.921%, maturing August 11, 2013

502,491

Walter Industries, Inc.

Ba2

B+

981,124

Term Loan, 7.103%, maturing October 03, 2012

987,379

49,442,693

Diversified / Conglomerate Service: 3.9%

Affinion Group

Ba2

B+

3,511,628

Term Loan, 7.857%, maturing October 17, 2012

3,549,378

AlixPartners LLP

B1

BB-

2,675,000

Term Loan, 7.860%, maturing October 12, 2013

2,699,244

Brickman Group

Ba3

BB-

2,000,000

Term Loan, 7.399%, maturing January 23, 2014

2,011,250

Brock Holdings, Inc.

B1

B

500,000

(5)

Term Loan, maturing February 23, 2014

505,703

CCC Information Services Group, Inc.

B1

B

990,741

Term Loan, 7.870%, maturing February 10, 2013

995,694

Intergraph Corporation

B1

B

1,000,000

Term Loan, 7.860%, maturing May 28, 2014

1,008,438

Iron Mountain Incorporated

Ba2

BB-

4,518,672

Term Loan, 7.070%, maturing April 02, 2011

4,531,853

1,348,801

Term Loan, 7.125%, maturing April 02, 2011

1,354,139

Mitchell International, Inc.

B1

B+

640,695

Term Loan, 7.370%, maturing August 15, 2011

643,898

Valleycrest Companies, LLC

B1

B+

1,246,875

Term Loan, 7.870%, maturing October 04, 2013

1,260,123

Vertafore, Inc.

B1

B+

875,230

Term Loan, 7.822%, maturing January 31, 2012

880,974

West Corp

Ba3

B+

23,750,000

Term Loan, 7.752%, maturing October 24, 2013

23,980,898

43,421,592

 

See Accompanying Notes to Financial Statements
34

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Diversified Nat'l Rsrcs, Precious Metals & Minerals: 2.9%

Georgia Pacific Corporation

Ba2

BB-

$

32,076,000

Term Loan, 7.355%, maturing December 20, 2012

$

32,408,468

32,408,468

Ecological: 1.2%

Allied Waste North America, Inc.

Ba3

BB

3,158,897

Revolver, 7.063%, maturing January 15, 2012

3,185,220

6,473,994

Term Loan, 7.152%, maturing January 15, 2012

6,524,439

IESI Corporation

Ba3

BB

1,800,000

Term Loan, 7.110%, maturing January 21, 2012

1,806,750

Wastequip, Inc.

Ba3

B+

1,564,834

Term Loan, 7.570%, maturing February 05, 2013

1,580,482

13,096,891

Electronics: 3.9%

Advance Micro Devices

Ba3

BB-

17,951,503

Term Loan, 7.570%, maturing December 31, 2013

18,141,214

Decision One

NR

NR

1,592,598

Term Loan, 12.000%, maturing April 15, 2010

1,592,598

Eastman Kodak

Ba3

B+

3,152,965

Term Loan, 7.570%, maturing October 18, 2012

3,165,445

2,101,804

Term Loan, 7.570%, maturing October 18, 2012

2,108,700

Freescale Semiconductor, Inc.

Baa3

BB

6,000,000

Term Loan, 7.369%, maturing December 01, 2013

6,055,314

NXP (Philips Semiconductor)

Ba2

BB+

1,750,000

Floating Rate Note, 8.110%, maturing October 15, 2013

1,789,375

EUR

1,500,000

Floating Rate Note, 6.507%, maturing October 15, 2013

2,024,349

ON Semiconductor

Ba3

B+

$

1,844,117

Term Loan, 7.614%, maturing December 15, 2011

1,851,032

PGS, Inc.

Ba3

BB-

1,100,000

(5

)

Term Loan, maturing December 14, 2013

1,115,125

Sanmina

Ba3

B+

1,750,000

Term Loan, 7.875%, maturing January 31, 2008

1,759,406

Serena Software Inc.

B1

B

2,243,793

Term Loan, 7.610%, maturing March 11, 2013

2,269,036

SI International, Inc.

Ba3

B+

943,497

Term Loan, 7.353%, maturing February 09, 2011

944,677

42,816,271

 

See Accompanying Notes to Financial Statements
35

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Farming & Agriculture: 0.0%

The Mosaic Company

Ba1

BB

$

600,000

Term Loan, 7.113%, maturing February 12, 2012

$

606,375

606,375

Finance: 1.8%

LPL Holdings, Inc.

B1

B

4,962,501

Term Loan, 7.864%, maturing June 28, 2013

5,038,491

Nasdaq Stock Market, Inc., The

Ba3

BB+

4,016,691

Term Loan, 7.095%, maturing April 18, 2012

4,041,586

2,328,382

Term Loan, 7.096%, maturing April 18, 2012

2,342,813

Rent-A-Center, Inc.

Ba2

BB

2,618,421

Term Loan, 7.116%, maturing June 30, 2012

2,628,240

Riskmetrics

Ba3

B+

1,400,000

Term Loan, 7.595%, maturing January 11, 2014

1,415,750

TD Ameritrade Holding Corporation

Ba1

BB

4,439,819

Term Loan, 6.820%, maturing December 31, 2012

4,463,638

19,930,518

Foreign Cable, Foreign TV, Radio and Equipment: 3.7%

Casema Bidco (Serpering Investments B.V.)

NR

NR

EUR

548,444

Term Loan, 6.173%, maturing November 14, 2014

735,549

EUR

284,889

Term Loan, 6.173%, maturing November 14, 2014

380,447

EUR

583,333

Term Loan, 6.232%, maturing November 14, 2014

782,341

EUR

833,333

Term Loan, 6.673%, maturing November 14, 2015

1,117,673

EUR

583,333

Term Loan, 6.732%, maturing November 14, 2015

785,370

ENO France

NR

NR

EUR

2,015,451

Term Loan, 6.026%, maturing July 30, 2013

2,663,686

EUR

1,984,549

Term Loan, 6.106%, maturing July 30, 2013

2,622,845

NTL Investment Holdings Limited

Ba3

BB-

GBP

8,750,000

Term Loan, 7.447%, maturing September 03, 2012

17,231,938

P7S1 Holding II S.A.R.L. (German Media Partners)

NR

B+

EUR

5,000,000

Term Loan, 7.593%, maturing July 17, 2011

6,628,599

 

See Accompanying Notes to Financial Statements
36

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Foreign Cable, Foreign TV, Radio and Equipment: (continued)

TDF SA

NR

NR

EUR

1,000,000

Term Loan, 6.085%, maturing January 31, 2015

$

1,341,759

EUR

1,000,000

Term Loan, 6.585%, maturing January 31, 2016

1,347,832

UPC Financing Partnership

B1

B

EUR

1,943,333

Term Loan, 6.103%, maturing March 31, 2013

2,587,126

EUR

2,200,000

Term Loan, 6.103%, maturing December 31, 2013

2,928,982

41,154,147

Gaming: 4.8%

CCM Merger, Inc. (a.k.a. Motorcity Casino)

Ba3

B

3,418,743

Term Loan, 7.362%, maturing July 13, 2012

3,451,327

Green Valley Ranch Gaming, LLC

B1

B+

1,500,000

Term Loan, 7.360%, maturing August 08, 2014

1,519,062

Green Valley Ranch Gaming, LLC

Caa1

CCC+

750,000

Term Loan, 8.610%, maturing August 08, 2014

764,906

Greenwood Racing, Inc.

B2

B+

1,500,000

Term Loan, 7.570%, maturing November 28, 2011

1,515,000

Herbst Gaming, Inc.

Ba3

B+

1,500,000

Term Loan, 7.245%, maturing December 02, 2011

1,513,437

Isle Of Capri Casinos, Inc.

Ba1

BB-

985,000

Term Loan, 7.114%, maturing February 04, 2011

993,742

1,470,000

Term Loan, 7.118%, maturing February 04, 2011

1,483,046

Penn National Gaming, Inc.

Ba2

BB

13,331,250

Term Loan, 7.114%, maturing October 03, 2012

13,447,898

Ruffin Gaming, LLC

NR

NR

1,485,376

Term Loan, 7.625%, maturing June 28, 2008

1,494,660

Tropicana Entertainment - Landco

B2

B+

2,250,000

Term Loan, 7.860%, maturing July 03, 2008

2,268,515

Tropicana Entertainment - Opco

Ba3

B+

9,000,000

Term Loan, 7.860%, maturing January 03, 2012

9,113,121

Trump Entertainment Resorts Holdings, L.P.

Ba3

BB-

1,723,750

Term Loan, 7.870%, maturing May 20, 2012

1,740,988

Venetian Casino Resort, LLC

Ba2

BB-

11,000,000

Term Loan, 7.120%, maturing June 15, 2011

11,097,834

 

See Accompanying Notes to Financial Statements
37

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Gaming: (continued)

VML US FINANCE LLC

B1

BB-

$

1,200,000

Term Loan, 8.120%, maturing May 26, 2013

$

1,214,776

Yonkers Racing Corporation

B3

B

2,000,000

Term Loan, 8.875%, maturing August 12, 2011

2,023,750

53,642,062

Grocery: 0.6%

Roundys Supermarkets, Inc.

Ba3

B+

2,950,000

Term Loan, 8.091%, maturing November 03, 2011

2,978,025

Supervalu

Ba3

BB-

3,970,000

Term Loan, 7.100%, maturing June 02, 2012

3,996,234

6,974,259

Healthcare, Education and Childcare: 14.0%

Accellent, Inc.

B1

BB-

1,980,000

Term Loan, 7.360%, maturing November 22, 2012

1,979,588

AGA Medical Corporation

B1

B+

1,832,209

Term Loan, 7.360%, maturing April 28, 2013

1,837,935

Ameripath, Inc.

Ba2

BB-

496,250

Term Loan, 7.360%, maturing October 31, 2012

497,180

Amn Healthcare, Inc.

Ba2

BB-

730,978

Term Loan, 7.114%, maturing November 02, 2011

733,262

Capella Healthcare, Inc.

B2

B

2,970,000

Term Loan, 8.364%, maturing November 30, 2012

2,999,700

CCS Medical

B3

B

4,455,000

Term Loan, 8.620%, maturing September 30, 2012

4,429,544

CHG Medical Staffing, Inc.

Ba3

B+

1,600,000

Term Loan, 7.820%, maturing January 05, 2012

1,619,000

400,000

Term Loan, 7.845%, maturing January 05, 2012

404,750

CHS/Community Health Systems, Inc.

Ba3

BB-

14,554,078

Term Loan, 7.120%, maturing August 19, 2011

14,649,597

Compsych Investments Corp.

NR

NR

1,469,943

Term Loan, 8.111%, maturing April 20, 2012

1,480,968

Concentra Operating Corporation

Ba2

B+

4,428,313

Term Loan, 7.377%, maturing September 30, 2011

4,449,072

 

See Accompanying Notes to Financial Statements
38

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Healthcare, Education and Childcare: (continued)

CRC Health Corporation

Ba3

B

$

1,488,769

Term Loan, 7.614%, maturing February 06, 2013

$

1,505,983

1,468,032

Term Loan, 7.864%, maturing February 06, 2013

1,485,007

DJ Orthopedics, LLC

Ba3

BB-

629,524

Term Loan, 6.875%, maturing April 07, 2013

630,508

Education Management Corporation

B2

B

5,970,000

Term Loan, 7.375%, maturing June 03, 2013

6,027,461

Emdeon Business Services LLC

B1

B+

2,483,444

Term Loan, 7.870%, maturing November 16, 2013

2,496,377

EMSC L.P.

Ba2

B+

3,235,316

Term Loan, 7.380%, maturing February 10, 2012

3,251,493

Encore Medical Ihc, Inc.

Ba3

B

1,745,625

Term Loan, 7.880%, maturing November 03, 2013

1,753,262

Fresenius Medical Care Holdings, Inc.

Ba2

BB

2,069,250

Term Loan, 6.739%, maturing March 31, 2013

2,072,699

Gambro

NR

NR

SEK

5,000,000

Term Loan, 5.833%, maturing March 15, 2007

721,893

SEK

5,000,000

Term Loan, 6.333%, maturing March 15, 2007

725,017

$

750,000

Term Loan, 7.820%, maturing June 05, 2014

758,438

750,000

Term Loan, 8.320%, maturing June 05, 2015

761,719

Gentiva Health Services, Inc.

Ba3

B+

2,756,757

Term Loan, 7.602%, maturing March 31, 2013

2,767,957

Golden Gate National Senior Care Holdings, LLC (fka Beverley Enterprises)

Ba3

B+

1,191,000

Term Loan, 8.114%, maturing March 14, 2011

1,199,685

Harrington Holdings, Inc.

B1

B

2,133,333

Term Loan, 7.820%, maturing December 31, 2013

2,152,000

HCA, Inc.

Ba3

BB

17,000,000

Term Loan, 7.614%, maturing November 17, 2013

17,222,411

Health Management Associates, Inc.

Ba2

B+

7,000,000

(5

)

Term Loan, maturing March 01, 2014

7,063,070

Healthsouth Corporation

B2

B+

2,623,182

Term Loan, 8.610%, maturing March 10, 2013

2,650,904

 

See Accompanying Notes to Financial Statements
39

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Healthcare, Education and Childcare: (continued)

Iasis Healthcare LLC

Ba2

B+

$

6,781,387

Term Loan, 7.570%, maturing June 22, 2011

$

6,857,678

Lifepoint Hospitals, Inc.

Ba3

BB-

9,869,781

Term Loan, 6.985%, maturing April 15, 2012

9,879,345

Multiplan, Inc.

B2

B+

1,441,882

Term Loan, 7.820%, maturing April 12, 2013

1,455,851

National Mentor, Inc.

B1

B

76,667

Revolver, 7.969%, maturing June 29, 2013

77,098

1,250,383

Term Loan, 7.867%, maturing June 29, 2013

1,257,417

Nycomed

NR

NR

EUR

2,444,238

Term Loan, 6.195%, maturing December 10, 2014

3,238,198

EUR

2,555,762

Term Loan, 6.695%, maturing December 10, 2014

3,385,950

Orthofix International/Colgate Medical

Ba3

BB-

$

1,910,152

Term Loan, 7.120%, maturing September 22, 2013

1,923,284

Quintiles Transnational Corp.

B1

BB-

2,630,125

Term Loan, 7.360%, maturing March 31, 2013

2,638,754

Radiation Therapy Services, Inc.

B1

BB-

1,921,001

Term Loan, 7.115%, maturing December 16, 2012

1,921,602

Radnet Management Inc.

B1

B

2,000,000

Term Loan, 8.850%, maturing November 15, 2012

2,010,000

Renal Advantage Inc.

NR

B+

4,033,555

Term Loan, 7.860%, maturing October 06, 2012

4,078,932

Rural/Metro Operating Company, LLC

Ba2

B

519,127

Revolver, 5.170%, maturing March 04, 2011

523,345

1,176,469

Term Loan, 7.778%, maturing March 04, 2011

1,186,028

Select Medical Corporation

Ba1

B+

2,456,250

Term Loan, 7.111%, maturing February 24, 2012

2,454,784

Sheridan Healthcare, Inc.

B2

B+

1,496,250

Term Loan, 8.360%, maturing November 09, 2011

1,512,148

Sterigenics International, Inc.

B2

B+

1,995,000

Term Loan, 7.860%, maturing November 21, 2013

2,001,859

Stiefel Laboratories, Inc.

Ba3

B+

1,191,814

Term Loan, 7.570%, maturing December 28, 2013

1,205,967

1,558,186

Term Loan, 7.610%, maturing December 28, 2013

1,576,690

 

See Accompanying Notes to Financial Statements
40

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Healthcare, Education and Childcare: (continued)

Team Health, Inc.

B1

B+

$

2,063,199

Term Loan, 7.860%, maturing November 23, 2012

$

2,080,392

Vanguard Health Holdings Company Ii, LLC

Ba3

B

9,907,125

Term Loan, 7.614%, maturing September 23, 2011

10,014,449

VWR International Inc.

Ba2

B+

3,260,959

Term Loan, 7.610%, maturing April 07, 2011

3,287,455

154,893,706

Home & Office Furnishings: 1.2%

Buhrmann US Inc.

Ba3

BB

3,885,375

Term Loan, 7.109%, maturing December 23, 2010

3,904,802

National Bedding Company

B1

BB-

2,216,250

Term Loan, 7.365%, maturing August 31, 2011

2,226,500

Simmons Company

Ba2

B+

7,166,516

Term Loan, 7.413%, maturing December 19, 2011

7,224,744

13,356,046

Insurance: 1.2%

Applied Systems Inc.

B1

B-

1,995,000

Term Loan, 8.175%, maturing September 26, 2013

2,006,846

Concord RE

Ba2

BB+

875,000

Term Loan, 9.610%, maturing February 29, 2012

884,844

Conseco, Inc.

Ba3

BB-

5,486,250

Term Loan, 7.320%, maturing October 10, 2013

5,522,256

Crawford & Company

B1

BB-

3,087,113

Term Loan, 7.860%, maturing October 30, 2013

3,104,478

Swett & Crawford

B1

B+

1,488,750

Term Loan, 7.860%, maturing November 16, 2011

1,511,081

13,029,505

Leisure, Amusement, Entertainment: 8.6%

24 Hour Fitness Worldwide, Inc

Ba3

B

3,225,625

Term Loan, 7.865%, maturing June 08, 2012

3,254,520

AMF Bowling Worldwide, Inc.

Ba2

B

875,794

Term Loan, 8.320%, maturing August 27, 2009

881,815

Cedar Fair, L.P.

Ba3

BB-

7,957,506

Term Loan, 7.320%, maturing August 30, 2012

8,050,012

 

See Accompanying Notes to Financial Statements
41

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Leisure, Amusement, Entertainment: (continued)

Cinemark USA, Inc.

Ba2

B

$

3,740,625

Term Loan, 7.385%, maturing October 05, 2013

$

3,778,031

Easton-Bell Sports, Inc

Ba3

B+

492,500

Term Loan, 7.071%, maturing March 16, 2012

495,065

Hallmark Entertainment, LLC

B1

B

1,750,000

Term Loan, 8.610%, maturing December 31, 2011

1,763,125

HIT Entertainment, Inc.

Ba3

B

3,365,417

Term Loan, 7.600%, maturing March 20, 2012

3,391,711

Kerasotes Showplace Theater LLC

B1

B-

225,000

Revolver, 1.935%, maturing October 31, 2010

223,875

Lodgenet Entertainment Corporation

Ba1

B+

2,291,506

Term Loan, 7.570%, maturing August 29, 2008

2,297,235

London Arena & Waterfront Finance LLC (a.k.a. "The O2")

Ba3

B

794,000

Term Loan, 7.853%, maturing March 08, 2012

801,444

Metro-Goldwyn-Mayer, Inc

Ba3

B+

7,892,857

Term Loan, 8.614%, maturing April 08, 2011

7,944,240

33,248,750

Term Loan, 8.614%, maturing April 08, 2012

33,581,238

National CineMedia, LLC

B1

B+

1,350,000

(5

)

Term Loan, maturing February 12, 2015

1,362,516

NEP II, INC

B1

B

3,500,000

Term Loan, 7.595%, maturing May 02, 2014

3,541,017

Panavision, Inc.

Ba3

B

992,502

Term Loan, 8.366%, maturing March 30, 2011

1,001,186

Six Flags Theme Parks, Inc.

Ba3

B-

2,366,321

Term Loan, 8.610%, maturing June 30, 2009

2,397,194

Universal City Development Partners

Ba1

BB-

4,627,273

Term Loan, 7.360%, maturing June 09, 2011

4,673,545

Warner Music Group

Ba2

BB-

16,113,198

Term Loan, 7.362%, maturing February 28, 2011

16,213,905

95,651,674

 

See Accompanying Notes to Financial Statements
42

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Lodging: 1.5%

Hotel Del Coronado

NR

NR

$

16,400,000

Term Loan, 7.070%, maturing January 09, 2008

$

16,400,000

16,400,000

Machinery: 1.3%

Alliance Laundry Systems LLC

Ba3

B

2,919,149

Term Loan, 7.600%, maturing January 27, 2012

2,946,516

Enersys Capital Inc.

Ba2

BB

4,169,707

Term Loan, 7.111%, maturing March 17, 2011

4,195,767

Maxim Crane Works, L.P.

B1

BB-

2,451,802

Term Loan, 7.321%, maturing January 25, 2010

2,456,399

United Rentals, Inc.

Ba1

BB-

4,552,187

Term Loan, 7.320%, maturing February 14, 2011

4,609,562

14,208,244

Mining, Steel, Iron & Nonprecious Metals: 1.5%

Alpha Natural Resources

B1

BB-

660,000

Term Loan, 7.114%, maturing October 26, 2012

663,300

Excel Mining Systems, Inc

B1

B-

2,000,000

Term Loan, 8.364%, maturing October 20, 2013

2,008,750

Longyear Holdings, Inc

B1

B-

4,619,422

Term Loan, 8.614%, maturing October 06, 2012

4,660,563

369,328

Term Loan, 8.614%, maturing October 06, 2012

372,502

Novelis

Ba2

BB-

5,446,154

Term Loan, 7.610%, maturing January 07, 2012

5,463,657

Oglebay Norton Company

B1

B+

1,534,286

Term Loan, 7.860%, maturing July 31, 2011

1,549,629

Tube City IMS Corporation

Ba3

BB-

162,162

Term Loan, 7.570%, maturing January 25, 2014

163,716

1,337,838

Term Loan, 9.500%, maturing January 25, 2014

1,350,658

16,232,775

North American Cable: 12.9%

Atlantic Broadband

B1

B

1,985,004

Term Loan, 8.100%, maturing August 10, 2012

2,012,298

Bragg Communications, Inc

B1

NR

2,437,500

Term Loan, 7.110%, maturing August 31, 2011

2,448,164

 

See Accompanying Notes to Financial Statements
43

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

North American Cable: (continued)

Bresnan Communications, LLC

B1

B+

$

2,750,000

Term Loan, 7.111%, maturing September 29, 2013

$

2,763,464

Cequel Communications II, LLC

NR

NR

3,850,000

Term Loan, 10.320%, maturing October 30, 2007

3,854,813

Cequel Communications, LLC

B1

B+

17,150,000

Term Loan, 7.610%, maturing November 05, 2013

17,341,600

Cequel Communications, LLC

Caa1

B-

525,000

Term Loan, 9.860%, maturing May 05, 2014

539,930

Charter Communications Operating, LLC

B1

B+

53,500,000

Term Loan, 7.985%, maturing April 28, 2013

53,944,746

CSC Holdings, Inc. (Cablevision)

Ba2

BB

23,224,500

Term Loan, 7.110%, maturing March 29, 2013

23,366,750

Insight Midwest Holdings, LLC

Ba3

BB-

9,500,000

Term Loan, 7.610%, maturing April 06, 2014

9,603,911

Knology Inc

Ba3

NR

2,132,778

Term Loan, 7.845%, maturing June 29, 2010

2,151,439

Mediacom Broadband LLC

Ba3

BB-

10,890,000

Term Loan, 7.116%, maturing January 31, 2015

10,918,074

Nextmedia Operating, Inc.

B1

B

2,456,942

Term Loan, 7.320%, maturing November 15, 2012

2,457,250

Patriot Media & Communications, LLC

B3

B-

1,000,000

Term Loan, 10.360%, maturing October 04, 2013

1,015,000

Patriot Media & Communications, LLC

Ba3

B+

2,539,683

Term Loan, 7.360%, maturing March 31, 2013

2,558,202

Quebecor Media Inc

B1

B

2,970,000

Term Loan, 7.360%, maturing January 17, 2013

2,994,131

San Juan Cable LLC

B1

B+

1,734,366

Term Loan, 7.366%, maturing October 31, 2012

1,742,497

Wideopenwest Finance, LLC

B1

B

3,000,000

Term Loan, 7.611%, maturing May 01, 2014

3,029,376

142,741,645

Oil & Gas: 8.2%

Alon USA

B1

BB-

1,990,000

Term Loan, 7.570%, maturing June 22, 2013

2,006,169

 

See Accompanying Notes to Financial Statements
44

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Oil & Gas: (continued)

Coffeyville Resources LLC

B2

B+

$

1,067,105

Term Loan, 8.360%, maturing December 28, 2010

$

1,083,111

2,019,703

Term Loan, 8.360%, maturing December 28, 2013

2,049,999

CR Gas Storage

Ba3

BB-

287,857

Term Loan, 7.103%, maturing May 12, 2011

288,846

410,247

Term Loan, 7.098%, maturing May 13, 2011

411,658

429,621

Term Loan, 7.140%, maturing May 12, 2013

430,829

2,303,729

Term Loan, 7.151%, maturing May 12, 2013

2,310,210

El Paso Corporation

Ba3

B+

6,250,000

Term Loan, 7.320%, maturing August 01, 2011

6,301,269

Energy Transfer Company, L.P.

Ba2

NR

10,000,000

Term Loan, 7.095%, maturing February 08, 2012

10,104,460

EPCO Holdings Inc.

Ba2

BB-

11,516,821

Term Loan, 7.360%, maturing August 18, 2010

11,670,041

Helix Energy Solutions Group, Inc.

B1

BB

5,173,844

Term Loan, 7.333%, maturing July 01, 2013

5,208,488

IFM Holdco

Ba3

BBB-

500,000

(5

)

Term Loan, maturing February 28, 2014

506,250

J. Ray Mcdermott, S.A.

Ba3

B+

3,000,000

Term Loan, 7.764%, maturing June 06, 2012

3,030,000

Key Energy

NR

NR

4,455,000

Term Loan, 7.861%, maturing June 30, 2012

4,491,197

Magellan Midstream Holdings LP

Ba3

BB-

1,746,723

Term Loan, 7.365%, maturing June 30, 2012

1,757,640

McJunkin Corporation

B2

B+

3,750,000

Term Loan, 7.595%, maturing January 31, 2013

3,793,361

MEG Energy

Ba3

BB

2,779,000

Term Loan, 7.370%, maturing April 03, 2013

2,803,099

Opti Canada Inc.

Ba3

BB+

3,000,000

Term Loan, 7.355%, maturing May 17, 2013

3,021,249

Semcrude, L.P.

Ba2

NR

5,184,577

Term Loan, 7.570%, maturing March 16, 2011

5,236,423

3,601,001

Term Loan, 7.593%, maturing March 16, 2011

3,630,259

 

See Accompanying Notes to Financial Statements
45

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Oil & Gas: (continued)

Targa Resources, Inc

B1

B+

$

7,677,016

Term Loan, 7.360%, maturing October 31, 2012

$

7,747,791

1,000,000

Term Loan, 7.614%, maturing October 31, 2012

1,009,219

Venoco, Inc.

Caa1

B-

2,000,000

Term Loan, 9.875%, maturing March 30, 2009

2,025,000

Volnay Acquisition Co. I

Ba2

BB-

2,400,000

Term Loan, 7.320%, maturing January 12, 2014

2,424,751

Vulcan Energy Corporation

Ba2

BB

4,340,471

Term Loan, 6.860%, maturing August 12, 2011

4,349,968

W&T Offshore, Inc.

B1

B+

2,900,000

Term Loan, 7.620%, maturing May 26, 2010

2,924,772

90,616,059

Other Broadcasting and Entertainment: 1.5%

Deluxe, Inc

B1

B

1,766,215

Term Loan, 8.364%, maturing January 28, 2011

1,780,198

DirecTV Holdings LLC

Baa3

BB

5,934,560

Term Loan, 6.820%, maturing April 13, 2013

5,965,752

VNU

B1

B+

8,977,500

Term Loan, 7.610%, maturing August 09, 2013

9,075,454

16,821,404

Other Telecommunications: 4.0%

Asurion Corporation

B1

B

5,561,678

Term Loan, 8.320%, maturing July 13, 2012

5,624,247

Asurion Corporation

B3

CCC+

500,000

Term Loan, 11.570%, maturing January 13, 2013

512,500

BCM Ireland Holdings Ltd

Ba3

B+

EUR

2,083,333

Term Loan, 5.933%, maturing September 30, 2014

2,762,655

EUR

2,083,333

Term Loan, 6.308%, maturing September 30, 2015

2,790,179

Cavalier Telephone

B2

B-

$

3,500,000

Term Loan, 10.120%, maturing December 31, 2012

3,554,688

Choice One Communications, Inc. (A.K.A. Trilogy)

Ba3

B

3,000,000

Term Loan, 9.375%, maturing June 30, 2012

3,043,125

 

See Accompanying Notes to Financial Statements
46

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Other Telecommunications: (continued)

Consolidated Communications

Ba3

BB-

$

2,452,170

Term Loan, 7.113%, maturing October 14, 2011

$

2,465,963

Fairpoint Communications, Inc.

B1

BB-

2,000,000

Term Loan, 7.125%, maturing February 08, 2012

2,010,312

Iowa Telecommunications Services, Inc

Ba3

BB-

4,250,000

Term Loan, 7.115%, maturing November 23, 2011

4,285,415

Kentucky Data Link, Inc.

B1

B

2,583,333

(5

)

Term Loan, maturing February 16, 2014

2,605,938

PAETEC Holdings

B1

B

870,625

Term Loan, 8.875%, maturing June 12, 2012

883,902

Qwest Communications Intl Inc

Ba3

BB+

10,000,000

Floating Rate Note, 8.860%, maturing February 15, 2009

10,100,000

Time Warner Telecom Holdings, Inc

Ba2

B

3,220,000

Term Loan, 7.320%, maturing January 07, 2013

3,249,785

U.S. Telepacific Corp

B1

B-

997,500

Term Loan, 9.895%, maturing August 04, 2011

1,013,086

44,901,795

Personal & Nondurable Consumer Products: 5.2%

Advantage Sales And Marketing

B2

B-

3,076,750

Term Loan, 7.363%, maturing March 29, 2013

3,084,466

Bushnell Performance Optics

B1

B+

1,728,659

Term Loan, 8.364%, maturing August 19, 2011

1,740,903

Chattem, Inc.

Ba3

BB-

1,000,000

Term Loan, 7.107%, maturing January 02, 2013

1,007,188

Fender Musical Instruments Corp.

B1

B+

1,467,907

Term Loan, 8.110%, maturing March 30, 2012

1,489,925

Fender Musical Instruments Corp.

Caa1

B-

2,500,000

Term Loan, 11.360%, maturing September 30, 2012

2,562,500

Hunter Fan Company

Ba3

B

823,333

Term Loan, 7.900%, maturing March 24, 2012

810,983

Jarden Corporation

Ba2

B+

8,280,765

Term Loan, 7.114%, maturing January 24, 2012

8,328,636

1,196,428

Term Loan, 7.114%, maturing January 24, 2012

1,202,909

 

See Accompanying Notes to Financial Statements
47

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Personal & Nondurable Consumer Products: (continued)

Mega Bloks Inc.

Ba2

BB-

$

985,000

Term Loan, 7.149%, maturing July 26, 2012

$

986,231

Natural Products Group, LLC

B1

B

922,078

Term Loan, 8.310%, maturing June 19, 2013

928,994

1,896,104

Term Loan, 8.370%, maturing June 19, 2013

1,910,325

Norwood Promotional Products

NR

NR

1,564,338

Revolver, 3.850%, maturing December 31, 2008

1,572,160

4,126,296

Term Loan, 11.625%, maturing August 17, 2009

4,291,348

11,886,828

(3

)

Term Loan, 6.000%, maturing August 17, 2011

8,915,121

Norwood Promotional Products

NR

NR

948,750

Term Loan, 12.766%, maturing February 15, 2008

1,081,575

Rayovac Corporation

B1

CCC+

6,749,739

Term Loan, 8.600%, maturing February 06, 2012

6,827,482

Totes Isotoner Corporation

B2

B

416,667

Term Loan, 7.820%, maturing January 31, 2013

420,183

Tupperware

Ba1

BB

7,253,786

Term Loan, 6.860%, maturing December 05, 2012

7,267,386

Yankee Candle Company, Inc.

Ba3

B+

3,000,000

Term Loan, 7.320%, maturing February 06, 2014

3,033,750

57,462,065

Personal, Food & Miscellaneous: 3.1%

Acosta, Inc.

B1

B-

2,985,000

Term Loan, 8.070%, maturing July 28, 2013

3,014,850

AFC Enterprises

B1

B+

1,025,007

Term Loan, 7.375%, maturing May 11, 2011

1,032,695

Allied Security Holdings LLC

Ba3

B

495,455

Term Loan, 8.370%, maturing June 30, 2010

500,409

Arbys Restaurant Group, Inc.

Ba3

B+

5,416,452

Term Loan, 7.607%, maturing July 25, 2012

5,474,565

Carrols Corporation

Ba3

BB-

1,884,985

Term Loan, 7.820%, maturing December 31, 2010

1,896,178

CBRL (Cracker Barrel)

Ba2

BB

590,647

Term Loan, 6.860%, maturing April 27, 2013

593,084

 

See Accompanying Notes to Financial Statements
48

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Personal, Food & Miscellaneous: (continued)

Coinmach Corporation

B2

B

$

5,976,292

Term Loan, 7.875%, maturing December 19, 2012

$

6,035,123

Coinstar, Inc.

Ba2

BB-

2,430,381

Term Loan, 7.360%, maturing July 07, 2011

2,445,571

Culligan International Company

Ba2

BB-

1,989,582

Term Loan, 7.070%, maturing September 30, 2011

1,995,799

Dennys, Inc

Ba2

B+

600,000

Term Loan, 7.627%, maturing December 15, 2011

607,500

1,208,696

Term Loan, 7.617%, maturing March 31, 2012

1,223,804

Krispy Kreme Doughnut Corporation

NR

NR

500,000

(5

)

Term Loan, maturing February 15, 2014

506,094

MD Beauty, Inc.

B2

B

3,185,139

Term Loan, 7.820%, maturing February 18, 2012

3,203,055

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

B1

B+

1,756,098

Term Loan, 8.104%, maturing August 18, 2013

1,772,561

QCE, LLC (Quiznos)

B2

B

2,056,333

Term Loan, 7.625%, maturing May 05, 2013

2,068,186

Reddy Ice Group, Inc.

Ba3

B+

1,000,000

Term Loan, 7.110%, maturing August 09, 2012

1,003,125

Sbarro, Inc.

Ba3

B

500,000

Term Loan, 7.820%, maturing January 31, 2014

505,625

U.S. Security Holdings, Inc.

B1

B

620,313

Term Loan, 7.890%, maturing May 08, 2013

626,516

34,504,740

Printing & Publishing: 9.1%

American Achievement Corporation

Ba2

B+

610,085

Term Loan, 7.928%, maturing March 25, 2011

614,533

American Media Operations, Inc

B1

B-

3,350,000

Term Loan, 8.370%, maturing January 31, 2013

3,376,522

American Reprographics

Ba2

BB

2,053,377

Term Loan, 7.109%, maturing June 18, 2009

2,055,303

Ascend Media Holdings, LLC

B3

B

1,556,575

Term Loan, 8.863%, maturing January 31, 2012

1,515,715

Black Press, Ltd.

Ba3

B+

1,995,000

Term Loan, 7.360%, maturing August 02, 2013

2,014,950

 

See Accompanying Notes to Financial Statements
49

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Printing & Publishing: (continued)

Caribe Information Investments Inc.

B1

B

$

1,868,871

Term Loan, 7.611%, maturing March 31, 2013

$

1,878,215

Cenveo Corporation

Ba3

BB-

1,492,500

Term Loan, 7.365%, maturing June 21, 2013

1,496,231

Dex Media East, LLC

Ba1

BB

3,137,629

Term Loan, 6.859%, maturing May 08, 2009

3,144,224

Dex Media West, LLC

Ba1

BB

884,688

Term Loan, 6.606%, maturing September 09, 2009

882,969

9,722,507

Term Loan, 6.857%, maturing March 09, 2010

9,752,889

Gatehouse Media, Inc.

B1

B+

2,202,632

Term Loan, 7.570%, maturing December 06, 2013

2,209,057

Hanley Wood, LLC

B2

B

291,214

Term Loan, 7.610%, maturing August 01, 2012

292,063

2,438,121

Term Loan, 7.613%, maturing August 01, 2012

2,445,233

Idearc, Inc.

Ba2

BB+

20,400,000

Term Loan, 7.320%, maturing November 17, 2014

20,595,085

Intermedia Outdoor, Inc.

NR

NR

1,650,000

(5

)

Term Loan, maturing January 31, 2013

1,666,500

Jostens IH Corp

Ba2

B+

9,306,264

Term Loan, 7.372%, maturing December 21, 2011

9,362,493

Medianews Group

Ba2

BB-

995,000

Term Loan, 7.070%, maturing August 02, 2013

999,353

Medimedia USA, Inc.

Ba3

B+

1,246,875

Term Loan, 7.846%, maturing October 05, 2013

1,253,889

Merrill Communications, LLC

B1

B+

2,931,172

Term Loan, 7.589%, maturing May 15, 2011

2,947,203

PagesJaunes Groupe SA

NR

NR

EUR

800,000

(5

)

Term Loan, maturing February 28, 2014

1,066,859

PagesJaunes Groupe SA

NR

NR

EUR

600,000

(5

)

Term Loan, maturing February 28, 2014

805,742

EUR

600,000

(5

)

Term Loan, maturing February 28, 2014

809,710

Primedia Inc.

B2

B

$

6,101,667

Term Loan, 7.570%, maturing September 30, 2013

6,108,976

Prism Business Media Holdings/ Penton Media, Inc.

B1

B+

1,700,000

(5

)

Term Loan, maturing February 01, 2013

1,718,416

 

See Accompanying Notes to Financial Statements
50

---

ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Printing & Publishing: (continued)

R.H. Donnelley Corporation

Ba1

BB

$

268,383

Term Loan, 6.614%, maturing December 31, 2009

$

267,928

9,583,550

Term Loan, 6.864%, maturing June 30, 2011

9,600,858

Source Media Inc.

B1

B

3,017,140

Term Loan, 7.614%, maturing November 08, 2011

3,044,485

Thomas Nelson Publishers

B1

B

2,321,667

Term Loan, 7.594%, maturing June 12, 2012

2,330,373

Wenner Media LLC

Ba3

BB-

897,750

Term Loan, 7.114%, maturing October 02, 2013

903,922

Yell Group PLC

Ba3

BB-

2,000,000

Term Loan, 7.320%, maturing February 10, 2013

2,015,626

EUR

2,000,000

Term Loan, 5.732%, maturing February 27, 2013

2,677,885

Ziff Davis Media, Inc.

Caa1

CCC

$

1,500,000

Floating Rate Note, 11.360%, maturing May 01, 2012

1,488,750

101,341,957

Radio and TV Broadcasting: 3.3%

Block Communications, Inc.

Ba1

BB-

990,000

Term Loan, 7.364%, maturing December 22, 2011

991,856

CMP KC, LLC

Caa1

CCC+

1,377,163

Term Loan, 9.375%, maturing May 03, 2011

1,387,492

CMP Susquehanna Corporation

Ba3

B-

4,988,286

Term Loan, 7.405%, maturing May 05, 2013

5,028,192

Cumulus Media Inc

Ba3

B

2,985,000

Term Loan, 7.333%, maturing June 07, 2013

3,008,453

Emmis Communication

B1

B

1,250,000

Term Loan, 7.320%, maturing November 01, 2013

1,261,111

Entravision Communications Corporation

Ba3

B+

2,955,000

Term Loan, 6.860%, maturing March 29, 2013

2,968,853

Gray Television, Inc

Ba1

B

495,000

Term Loan, 6.850%, maturing June 15, 2011

495,442

990,000

Term Loan, 6.820%, maturing November 22, 2012

990,884

Montecito Broadcast Group, LLC

B1

B

1,980,000

Term Loan, 7.820%, maturing January 27, 2013

1,993,612

 

See Accompanying Notes to Financial Statements
51

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Radio and TV Broadcasting: (continued)

Nexstar Broadcasting Group

Ba3

B

$

4,678,081

Term Loan, 7.114%, maturing October 01, 2012

$

4,678,811

Paxson Communications

B1

CCC+

4,500,000

Term Loan, 8.610%, maturing January 15, 2012

4,609,688

Raycom TV Broadcasting, LLC

NR

NR

3,335,766

Term Loan, 6.875%, maturing July 31, 2013

3,339,936

Regent Communications

B1

B

1,500,000

Term Loan, 7.620%, maturing November 21, 2013

1,509,845

Spanish Broadcasting Systems

B1

B

3,930,000

Term Loan, 7.120%, maturing July 11, 2012

3,943,099

36,207,274

Retail Stores: 7.7%

Amscan Holdings, Inc.

Ba3

B+

1,488,750

Term Loan, 8.385%, maturing December 23, 2012

1,504,568

Burlington Coat Factory

B2

B

5,403,750

Term Loan, 7.610%, maturing May 28, 2013

5,417,632

Dollarama Group L.P

Ba1

B+

3,430,328

Term Loan, 7.360%, maturing November 18, 2011

3,458,200

Harbor Freight Tools USA, Inc.

B1

B+

7,196,359

Term Loan, 7.610%, maturing July 15, 2010

7,271,323

Jean Coutu Group (The) Inc.

B1

BB-

4,977,195

Term Loan, 7.875%, maturing July 30, 2011

4,990,354

Mapco Express, Inc.

B2

B+

2,228,584

Term Loan, 8.100%, maturing April 28, 2011

2,248,084

Mattress Firm

B1

B

500,000

(5

)

Term Loan, maturing February 09, 2014

506,250

Michaels Stores, Inc.

B2

B-

12,697,344

Term Loan, 8.125%, maturing October 31, 2013

12,834,894

Nebraska Book Company, Inc

Ba2

B-

2,410,275

Term Loan, 7.880%, maturing March 04, 2011

2,428,352

Neiman Marcus Group, Inc

Ba3

B+

16,354,430

Term Loan, 7.602%, maturing April 06, 2013

16,561,412

Oriental Trading Company, Inc.

B1

B

2,487,500

Term Loan, 8.110%, maturing July 31, 2013

2,503,825

 

See Accompanying Notes to Financial Statements
52

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Retail Stores: (continued)

Pep Boys

Ba3

B+

$

496,253

Term Loan, 7.360%, maturing January 27, 2011

$

502,146

Petco Animal Supplies, Inc.

Ba3

B

5,125,000

Term Loan, 8.103%, maturing October 26, 2013

5,189,596

Phones 4U Group Limited

NR

NR

GBP

2,500,000

Term Loan, 8.020%, maturing September 22, 2014

4,915,454

GBP

2,500,000

Term Loan, 8.520%, maturing September 22, 2015

4,936,046

Sally Holding LLC

B2

B+

$

2,493,750

Term Loan, 7.860%, maturing November 16, 2013

2,523,710

Samsonite Corporation

Ba3

BB-

1,750,000

Term Loan, 7.620%, maturing December 01, 2012

1,772,148

Sports Authority

B2

B

995,000

Term Loan, 7.614%, maturing May 03, 2013

999,198

The Pantry, Inc.

Ba2

BB

2,475,000

Term Loan, 7.070%, maturing January 02, 2012

2,485,828

Tire Rack, Inc. (The)

B1

BB-

851,604

Term Loan, 7.118%, maturing June 24, 2012

851,604

Toys "R" Us, Inc.

Ba3

B

1,375,000

Term Loan, 9.610%, maturing July 14, 2012

1,418,915

85,319,539

Satellite: 0.6%

Intelsat (Bermuda), Ltd.

B2

B+

2,550,000

Term Loan, 7.860%, maturing February 02, 2014

2,567,758

Panamsat Corporation

Ba2

BB

4,237,500

Term Loan, 7.860%, maturing January 03, 2012

4,285,464

6,853,222

Telecommunications Equipment: 0.6%

Sorenson Communications, Inc.

Ba3

B

5,212,418

Term Loan, 8.357%, maturing August 16, 2013

5,256,943

Syniverse Technologies, Inc.

Ba1

BB-

1,223,786

Term Loan, 7.120%, maturing February 15, 2012

1,229,140

6,486,083

Textiles & Leather: 1.5%

Hanesbrands Inc.

Ba2

BB-

2,315,179

Term Loan, 7.607%, maturing September 05, 2013

2,339,055

 

See Accompanying Notes to Financial Statements
53

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Textiles & Leather: (continued)

Hanesbrands Inc.

B1

B-

$

1,000,000

Term Loan, 9.110%, maturing March 05, 2014

$

1,030,078

Polymer Group, Inc.

B1

BB-

7,425,000

Term Loan, 7.613%, maturing November 22, 2012

7,489,969

Propex Fabrics Inc.

Ba3

B

146,296

Term Loan, 8.360%, maturing July 31, 2012

146,845

St. John Knits International, Inc.

B1

B+

722,091

Term Loan, 8.375%, maturing March 21, 2012

725,701

Targus Group, Inc.

Ba3

B

1,472,199

Term Loan, 8.870%, maturing November 22, 2012

1,482,320

Targus Group, Inc.

B3

CCC+

1,375,000

Term Loan, 13.870%, maturing May 22, 2013

1,290,208

William Carter

Ba3

BB

2,103,291

Term Loan, 6.856%, maturing July 14, 2012

2,108,877

16,613,053

Utilities: 9.2%

Astoria Generating Company Acquisitions, LLC

B1

BB-

2,134,665

Term Loan, 7.370%, maturing February 23, 2013

2,153,744

Babcock & Wilcox Company

Ba2

B+

2,500,000

Term Loan, 5.264%, maturing January 22, 2012

2,531,250

2,000,000

Term Loan, 8.320%, maturing February 22, 2012

2,025,000

Boston Generating, LLC

B1

B+

1,000,000

Term Loan, 5.241%, maturing December 20, 2013

1,011,071

3,000,000

Term Loan, 7.570%, maturing December 20, 2013

3,033,213

Boston Generating, LLC

B3

B-

750,000

Term Loan, 9.570%, maturing December 22, 2013

772,125

Coleto Creek WLE, LP

B1

B+

764,331

Term Loan, 8.014%, maturing June 28, 2013

767,834

5,333,865

Term Loan, 8.114%, maturing June 28, 2013

5,358,311

HCP Acquisition Inc.

B1

B-

750,000

(5

)

Term Loan, maturing February 12, 2014

759,375

HCP Acquisition Inc.

NR

CCC

1,750,000

(5

)

Term Loan, maturing February 12, 2015

1,793,750

 

See Accompanying Notes to Financial Statements
54

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

												Bank Loan Ratings† (Unaudited)								Market
Principal Amount								Borrower/Tranche Description				Moody's				S&P				Value
Utilities: (continued)
								Infrastrux Group, Inc.				B2				B+
$	5,137,125							Term Loan, 8.231%, maturing November 03, 2012												$	5,182,075
								KGEN LLC				Ba3				BB-
	937,500							Term Loan, 7.095%, maturing January 30, 2014													943,359
	1,562,500							Term Loan, 7.125%, maturing January 30, 2014													1,572,266
								La Paloma Generating Company, LLC				B1				BB-
	218,579							Term Loan, 7.070%, maturing August 16, 2012													219,126
	1,418,173							Term Loan, 7.114%, maturing August 16, 2012													1,421,718
								LSP - Kendall Energy, LLC				B1				B
	9,517,850							Term Loan, 7.364%, maturing October 07, 2013													9,505,952
								LSP Gen Finance Co, LLC				Ba3				BB-
	4,268,421							Term Loan, 7.114%, maturing May 04, 2013													4,291,099
								MACH Gen, LLC.				B2				B
	140,625				(5	)		Term Loan, maturing February 21, 2013													141,557
	1,359,375				(5	)		Term Loan, maturing February 21, 2014													1,367,871
								NE Energy, Inc.				B1				B+
	2,700,000							Term Loan, 7.870%, maturing November 01, 2013													2,738,475
								NE Energy, Inc.				B3				B-
	425,000							Term Loan, 9.875%, maturing May 01, 2014													432,260
								NRG Energy, Inc.				Ba1				BB-
	6,000,000							Term Loan, 7.364%, maturing February 01, 2013													6,063,174
	21,641,274							Term Loan, 7.364%, maturing February 01, 2013													21,875,086
								Plum Point Energy Associates				B1				B
	2,827,736							Term Loan, 8.614%, maturing March 14, 2014													2,861,315
	1,198,857							Term Loan, 8.989%, maturing Marsch 14, 2014													1,213,094
								Riverside Energy Center, LLC				B1				B
	244,856							Term Loan, 9.610%, maturing June 24, 2010													250,977
	4,980,833							Term Loan, 9.610%, maturing June 24, 2011													5,105,353
								Thermal North America, Inc.				B1				BB-
	4,000,000							Term Loan, 8.120%, maturing October 24, 2008													4,045,000
								TPF Generation Holdings, LLC				B3				B-
	1,500,000							Term Loan, 9.620%, maturing December 15, 2014													1,535,625

 

See Accompanying Notes to Financial Statements
55

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

Bank Loan Ratings† (Unaudited)

Market

Principal Amount

Borrower/Tranche Description

Moody's

S&P

Value

Utilities: (continued)

TPF Generation Holdings, LLC

Ba3

B+

$

6,600,000

Term Loan, 7.370%, maturing December 15, 2013

$

6,660,693

Wolf Hollow I, L.P.

B1

BB-

450,000

Revolver, 7.570%, maturing June 22, 2012

443,250

1,800,000

Term Loan, 7.570%, maturing June 22, 2012

1,773,000

2,133,718

Term Loan, 7.614%, maturing June 22, 2012

2,101,709

101,949,707

Total Senior Loans (Cost $1,807,780,578)

1,829,047,888

Other Corporate Debt: 0.5%

Automobile: 0.5%

Avis Budget Car Rental

Ba3

BB-

750,000

Floating Rate Note, 7.860%, maturing May 15, 2014

772,500

Navistar International Corporation

NR

NR

4,950,000

Unsecured Term Loan, 8.610%, maturing January 19, 2012

5,043,431

Total Other Corporate Debt (Cost $5,700,000)

5,815,931

Equities and Other Assets: 1.7%

 

				Description				Market Value
	(1), (@), (R)			Allied Digital Technologies Corporation (Residual Interest in Bankruptcy Estate)				$	107,510
	(2), (@), (R)			AM Cosmetics Corporation (Liquidation Interest)					—
	(@), (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)			Covenant Care, Inc. (Warrants for 19,000 Common Shares, Expires January 13, 2005)					—
	(@), (R)			Covenant Care, Inc. (Warrants for 26,901
				Common Shares, Expires March 31, 2013)					—
	(@), (R)			Decision One Corporation (1,402,038 Common Shares)					145,812
	(2), (@), (R)			Electro Mechanical Solutions (Residual Interest in Bankruptcy Estate)					1,112
	(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)					305,999
	(@), (R)			Gemini Leasing, Inc. (143,079 Common Shares)					—
	(2), (@), (R)			Grand Union Company (Residual Interest in Bankruptcy Estate)					54,523
	(@)			Hayes-Lemmerz International, Inc. (73,835 Common Shares)					365,483
	(@), (R)			Humphrey's, Inc. (Residual Interest in Bankruptcy Estate)					—
	(@), (R)			IAP Acquisition Corporation (3,524 Common Shares)					—

 

See Accompanying Notes to Financial Statements
56

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

				Description								Market Value
(@), (R)				IAP Acquisition Corporation (1,084 Common Shares)								$	—
(@), (R)				IAP Acquisition Corporation (1,814 Common Shares)									—
(@), (R)				IAP Acquisition Corporation (17,348 Common Shares)									—
(2), (@), (R)				Imperial Home Décor Group, Inc. (Liquidation Interest)									—
(2), (@), (R)				Insilco Technologies (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				IT Group, Inc. (Residual Interest in Bankruptcy Estate)									50
(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 Easten Fine (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				New Piper Aircraft, Inc. (Residual Interest in Bankruptcy Estate)									—
(@), (R)				Norwood Promotional Products, Inc. (104,148 Common Shares)									—
(@), (R)				Safelite Glass Corporation (856,340 Common Shares)									17,229,561
(@), (R)				Safelite Realty Corporation (57,804 Common Shares)									976,310
(1), (@), (R)				Transtar Metals (Residual Interest in Bankruptcy Estate)									—
(1), (@), (R)				TSR Wireless, LLC (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				US Aggregates (Residual Interest in Bankruptcy Estate)									—
(2), (@), (R)				US Office Products Company (Residual Interest in Bankruptcy Estate)									—
				Total for Equities and Other Assets (Cost $6,545,876)									19,186,385
				Total Investments (Cost $1,820,026,454)**					167.1	%		$	1,854,050,204
				Other Assets and Liabilities — Net					(67.1	)			(744,511,252	)
				Net Assets					100.0	%		$	1,109,538,952

 

  *  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, and is non-income producing.

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

  (5)  Trade pending settlement. Contract rates do not take effect until settlement date.

  (@)  Non-income producing security.

  (R)  Restricted security.

  GBP  British Pound Sterling

  EUR  Euro

  SEK  Swedish Kronor

  **  For Federal Income Tax purposes cost of investments is $1,820,085,325.

    Net unrealized appreciation consists of the following:

Gross Unrealized Appreciation				$	40,727,723
Gross Unrealized Depreciation					(6,762,844	)
Net Unrealized Appreciation				$	33,964,879

 

See Accompanying Notes to Financial Statements
57

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ING Prime Rate Trust

PORTFOLIO OF INVESTMENTS as of February 28, 2007 (continued)

At February 28, 2007 the following forward foreign currency contracts were outstanding for ING Prime Rate Trust :

Currency				Buy/Sell				In Settlement Date				Exchange For				Unrealized Value				Appreciation/ (Depreciation)
Euro EUR 15,260,000				Sell				04/13/07				$	20,126,674			$	20,220,963			$	(94,289	)
Euro EUR 11,445,000				Sell				05/15/07					14,877,748				15,185,367				(307,619	)
British Pound Sterling GBP 6,380,000				Sell				04/13/07					12,508,350				12,525,999				(17,649	)
British Pound Sterling GBP 4,785,000				Sell				05/15/07					9,323,238				9,393,333				(70,095	)
Sweden Kronor SEK 4,004,000				Sell				04/13/07					587,097				573,068				14,029
Sweden Kronor SEK 3,003,000				Sell				05/15/07					431,900				430,572				1,328
												$	57,855,007			$	58,329,302			$	(474,295	)

 

See Accompanying Notes to Financial Statements
58

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ING Prime Rate Trust

JUNE 14, 2006 ANNUAL SHAREHOLDER MEETING (Unaudited)

ING Prime Rate Trust, Common Shares

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

ING Prime Rate Trust, Preferred Shares

2.  To elect two members of the Board 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.

				Proposal				Shares voted for				Shares voted against or withheld				Shares abstained				Total Shares Voted
Common Shares Trustees				John V. Boyer Patricia W. Chadwick J. Michael Earley R. Barbara Gitenstein Patrick W. Kenny Shaun P. Mathews Walter H. May(1) Sheryl K. Pressler David W.C. Putnam John G. Turner				118,004,490.617 117,993,956.934 118,051,382.617 118,004,758.423 118,048,201.617 117,987,794.617 117,990,924.450 117,826,278.785 118,010,279.255 118,038,404.617				1,680,411.292 1,690,944.975 1,633,519.292 1,680,143.486 1,636,700.292 1,697,107.292 1,693,977.459 1,858,623.124 1,674,622.654 1,646,497.292				— — — — — — — — — —				119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909 119,684,901.909
Preferred Shares Trustees				Jock Patton Roger B. Vincent				16,781.000 16,783.000				55.000 53.000				— —				16,836.000 16,836.000

 

(1)  Effective Janaury 11, 2007, Mr. Walter H. May retired from the Board.

59

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ING Prime Rate Trust

ADDITIONAL INFORMATION

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 the 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 1-(800) 992-0180.

KEY FINANCIAL DATES — CALENDAR 2007 DIVIDENDS:

DECLARATION DATE				EX-DIVIDEND DATE				PAYABLE DATE
January 31				February 8				February 23
February 28				March 8				March 22
March 30				April 5				April 23
April 30				May 8				May 22
May 31				June 7				June 22
June 29				July 6				July 23
July 31				August 8				August 22
August 31				September 6				September 24
September 28				October 5				October 22
October 31				November 8				November 23
November 30				December 6				December 24
December 20				December 27				January 10

 

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

60

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ING Prime Rate Trust

ADDITIONAL INFORMATION (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, 2007 was 5,415 which does not include approximately 48,894 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 1-800-SEC-0330; and is available upon request from the Trust by calling Shareholder Services toll-free at 1-800-992-0180.

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 June 19, 2006 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.

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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, 2007) 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, 2007:

Type of Dividend				Per Share Amount				Ex-Dividend Date				Payable Date
Ordinary Income				$	0.0400			3/8/06				3/22/06
				$	0.0440			4/6/06				4/24/06
				$	0.0445			5/8/06				5/22/06
				$	0.0460			6/8/06				6/22/06
				$	0.0460			7/6/06				7/24/06
				$	0.0475			8/8/06				8/22/06
				$	0.0475			9/7/06				9/22/06
				$	0.0470			10/5/06				10/23/06
				$	0.0475			11/8/06				11/22/06
				$	0.0470			12/7/06				12/22/06
				$	0.0475			12/27/06				1/12/07
				$	0.0475			2/8/07				2/23/07
Total				$	0.5520

 

The Trust is hereby advising you that the following dividends were paid to Preferred Shareholders during the fiscal year ended February 28, 2007:

Preferred Shares

Type of Dividend

Total Per Share Amount

Auction Dates

Record Dates

Payable Dates

Series M

Ordinary Income

$

173.87

03/05/07-04/16/07

03/12/07-04/23/07

03/13/07-04/24/07

Series T

Ordinary Income

$

173.30

03/06/07-04/17/07

03/13/07-04/24/07

03/14/07-04/25/07

Series W

Ordinary Income

$

172.83

03/07/07-04/18/07

03/14/07-04/25/07

03/15/07-04/26/07

Series Th

Ordinary Income

$

197.98

03/01/07-04/19/07

03/08/07-04/26/07

03/09/07-04/27/07

Series F

Ordinary Income

$

196.59

03/02/07-04/20/07

03/09/07-04/27/07

03/12/07-04/30/07

 

Pursuant to Internal Revenue Code Section 871(k), the Trust designates 97.37% 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.

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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 Registrant and is available, without charge, upon request at 1-800-992-0180.

Name, Address and Age

Position(s) Held with Trust

Term of Office and Length of Time Served(1)

Principal Occupation(s) During the Past Five Years

Number of Funds in Fund Complex Overseen by Trustee

Other Directorships Held by Trustee

Independent Trustees:

John V. Boyer(2) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 53

Trustee

January 2005 - Present

President and Chief Executive Officer, Franklin and Eleanor Roosevelt Institute (March 2006 - Present). Formerly, Executive Director, The Mark Twain House & Museum(3) (September 1989 - November 2005).

174

None

Patricia W. Chadwick(2) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 58

Trustee

January 2006 - Present

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

174

Wisconsin Energy (June 2006 - Present).

J. Michael Earley(4) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 61

Trustee

February 2002 - Present

President, Chief Executive Officer and Director, Bankers Trust Company, N.A., Des Moines (June 1992 - Present).

174

Midamerica Financial Corporation (December 2002 - Present).

R. Barbara Gitenstein(2) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 59

Trustee

February 2002 - Present

President, College of New Jersey (January 1999 - Present).

174

None

Patrick W. Kenny(4) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 64

Trustee

January 2005 - Present

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

174

Assured Guaranty Ltd. (April 2004 - Present): and Odyssey Reinsurance Holdings (November 2006 - Present).

Jock Patton(2) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 61

Chairman and Trustee

August 1995 - Present

Private Investor (June 1997 - Present).

174

JDA Software Group, Inc. (January 1999 - Present); and Swift Transportation Co. (March 2004 - Present).

Sheryl K. Pressler(4) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 56

Trustee

January 2006 - Present

Consultant (May 2001 - Present).

174

Stillwater Mining Company (May 2002 - Present); California HealthCare Foundation (June 1999 - Present); and Romanian-American Enterprise Fund (February 2004 - Present).

David W.C. Putnam(4) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 67

Trustee

November 1999 - Present

Chair, Board of Directors and President, F.L. Putnam Securities Company, Inc. (June 1978 - Present).

174

Principled Equity Market Trust (December 1996 - Present); and Asian American Bank and Trust Company (June 1993 - Present).

Roger B. Vincent(4) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 61

Trustee

February 2002 - Present

President, Springwell Corporation (March 1989 - Present).

174

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

 

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) held with Trust

Term of Office and Length of Time Served(1)

Principal Occupation(s) during the Past Five Years

Number of Funds in Fund Complex Overseen by Trustee

Other Directorships held by Trustee

Trustees who are "Interested Persons":

Shaun P. Mathews(5) 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age : 51

Trustee

June 2006 - Present

President and Chief Executive Officer, ING Investments, LLC and ING Funds Services, LLC (December 2006 - Present); and Head of ING USFS Mutual Funds and Investment Products (October 2004 - Present). Formerly, CMO, ING USFS (April 2002 - October 2004); and Head of Rollover/Payout (October 2001 - December 2003).

4

Mark Twain House & Museum(3) (September 2002 - Present); Connecticut Forum (May 2002 - Present); Capital Community College Foundation (February 2002 - Present); 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. (March 2006 - Present).

John G. Turner(5) 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 67

Trustee

September 2000 - Present

Retired.

174

Hormel Foods Corporation (March 2000 - Present); and Conseco, Inc. (September 2003 - Present).

 

(1)  Trustees serve until their successors are duly elected and qualified, subject to the Board's retirement policy.

(2)  Valuation, Proxy and Brokerage Committee member.

(3)  Shaun Mathews, President and Chief Executive Officer, ING Investments, LLC and ING Funds Services, LLC and Head of ING USFS Mutual Funds and Investment Products, has held a seat on the Board of Directors of The Mark Twain House & Museum since September 19, 2002. ING Groep makes non-material, charitable contributions to The Mark Twain House & Museum.

(4)  Audit Committee member.

(5)  Mr. Mathews and Mr. Turner are "interested persons," as defined under the 1940 Act, because of their affiliation with ING Groep, the parent corporation of the Investment Adviser, ING Investments, LLC and the Distributor, ING Funds Distributor, LLC.

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TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) Held with the Trust

Term of Office and Length of Time Served(1)

Principal Occupation(s) during the Past Five Years

Officers:

Shaun P. Mathews 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 51

President and Chief Executive Officer

November 2006 - Present

President and Chief Executive Officer, ING Investments, LLC and ING Funds Services, LLC (December 2006 - Present); and Head of ING USFS Mutual Funds and Investment Products (October 2004 - Present). Formerly, CMO, ING USFS (April 2002 - October 2004); and Head of Rollover/Payout (October 2001 - December 2003).

Michael J. Roland 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 48

Executive Vice President

February 2002 - Present

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

Stanley D. Vyner 230 Park Avenue New York, New York 10169 Age: 56

Executive Vice President

August 2003 - Present

Executive Vice President, ING Investments, LLC (July 2000 - Present) and Chief Investment Risk Officer (January 2003 - Present). Formerly, Chief Investment Officer of the International Investments, (August 2000 - January 2003).

Joseph M. O'Donnell 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 52

Executive Vice President Chief Compliance Officer

March 2006 - Present November 2004 - Present

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

Robert S. Naka 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 43

Executive Vice President and Chief Operating Officer Assistant Secretary

March 2006 - Present July 1996 - Present

Executive Vice President and Chief Operating Officer, ING Funds Services, LLC and ING Investments, LLC (March 2006 - Present); and Assistant Secretary, ING Funds Services, LLC (October 2001 - Present). Formerly, Senior Vice President, ING Investments, LLC (August 1999 - March 2006).

Todd Modic 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 39

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

March 2005 - Present

Senior Vice President, ING Funds Services, LLC (April 2005 - Present). Formerly, Vice President, ING Funds Services, LLC (September 2002 - March 2005); and Director, Financial Reporting, ING Investments, LLC (March 2001 - September 2002).

Daniel A. Norman 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 49

Senior Vice President Treasurer

April 1995 - Present June 1997 - Present

Senior Vice President and Group Head, ING Senior Debt Group, ING Investment Management Co. (January 2000 - Present).

Jeffrey A. Bakalar 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 47

Senior Vice President

November 1999 - Present

Senior Vice President and Group Head, ING Senior Debt Group, ING Investment Management Co. (January 2000 - Present).

 

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ING Prime Rate Trust

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) Held with the Trust

Term of Office and Length of Time Served(1)

Principal Occupation(s) during the Past Five Years

Elliot Rosen 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 53

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 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 56

Senior Vice President and Assistant Secretary

February 2001 - Present

Senior Vice President, ING Investment Management Co. (January 2004 - Present). Formerly, Counsel, ING USFS Law Department (January 2003 - December 2003); and Senior Vice President, ING Investments, LLC (June 1998 - December 2002).

Curtis F. Lee 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 52

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).

Kimberly A. Anderson 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 42

Senior Vice President

November 2003 - Present

Senior Vice President, ING Investments, LLC (October 2003 - Present). Formerly, Vice President and Assistant Secretary, ING Investments, LLC (January 2001 - October 2003).

Ernest J. C'DeBaca 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 37

Senior Vice President

May 2006 - Present

Senior Vice President, ING Investments, LLC (December 2006 - Present); and ING Funds Services, LLC (April 2006 - Present). Formerly, Counsel, ING Americas, U.S. Legal Services (January 2004 - March 2006); and Attorney-Adviser, U.S. Securities and Exchange Commission (May 2001 - December 2003).

Robert Terris 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 36

Senior Vice President

May 2006 - Present

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

Robyn L. Ichilov 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 39

Vice President and Treasurer

November 1997 - Present

Vice President and Treasurer, ING Funds Services, LLC (October 2001 - Present) and ING Investments, LLC (August 1997 - Present).

Lauren D. Bensinger 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 53

Vice President

August 2003 - Present

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

Maria M. Anderson 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 48

Vice President

September 2004 - Present

Vice President, ING Funds Services, LLC (September 2004 - Present). Formerly, Assistant Vice President, ING Funds Services, LLC (October 2001 - September 2004); and Manager of Fund Accounting and Fund Compliance, ING Investments, LLC (September 1999 - October 2001).

 

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TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)

Name, Address and Age

Position(s) Held with the Trust

Term of Office and Length of Time Served(1)

Principal Occupation(s) during the Past Five Years

Denise Lewis 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 43

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); and Vice President, Wells Fargo Funds Management, LLC (December 2000 - August 2003).

Kimberly K. Palmer 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 49

Vice President

March 2006 - Present

Vice President, ING Funds Services, LLC (March 2006 - present). Formerly, Assistant Vice President, ING Funds Services, LLC (August 2004 - Present); Manager, Registration Statements, ING Funds Services, LLC (May 2003 - August 2004); Associate Partner, AMVESCAP PLC (October 2000 - May 2003); and Director of Federal Filings and Blue Sky Filings, INVESCO Funds Group, Inc. (March 1994 - May 2003).

Susan P. Kinens 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 30

Assistant Vice President

February 2003 - Present

Assistant Vice President, ING Funds Services, LLC (December 2002 - Present); and has held various other positions with ING Funds Services, LLC for more than the last five years.

Huey P. Falgout, Jr. 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 43

Secretary

August 2003 - Present

Chief Counsel, ING Americas, U.S. Legal Services (September 2003 - Present). Formerly, Counsel, ING Americas, U.S. Legal Services (November 2002 - September 2003); and Associate General Counsel of AIG American General (January 1999 - November 2002).

Theresa K. Kelety 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 44

Assistant Secretary

August 2003 - Present

Counsel, ING Americas, U.S. Legal Services (April 2003 - Present). Formerly, Senior Associate with Shearman & Sterling (February 2000 - April 2003).

 

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

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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 1940 Act provides that, after an initial period, the existing investment advisory and sub-advisory contracts of the Trust remain in effect only if the Board of the Trust, including a majority of the Trustees 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 renew them. In this regard, at a meeting held on November 9, 2006 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 Trust and the sub-advisory contract ("Sub-Advisory Contract") with ING Investment Management Co. ("ING IM" or the "Sub-Adviser").

The Independent Trustees also held separate meetings on October 12, 2006 and November 7, 2006 to consider renewals of the Advisory Contract and Sub-Advisory Contract. Thus, references herein to factors considered and determinations made by the Independent Trustees include, as applicable, factors considered and determinations made on those earlier dates.

At the November 9, 2006 meeting, the Board voted to renew the Advisory and Sub-Advisory Contracts for the Trust. In reaching this decision, the Board took into account information furnished throughout the year at regular Board meetings, as well as information prepared specifically in connection with the annual review process. The Board's determination took into account a number of factors that its members believed, in light of the legal advice furnished to them by Kirkpatrick & Lockhart Nicholson Graham LLP ("K&LNG"), their independent legal counsel, and their own business judgment, to be relevant. Further, while the Advisory Contract and Sub-Advisory Contract for the Trust 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 of the specific factors the Board considered at the November 9, 2006 meeting. While the Board gave its attention to the information furnished, at its request, that was most relevant to its consideration, 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, 2007. Each Trustee 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

In 2003, the Independent Trustees determined to undertake steps to further enhance the process under which the Board determines whether to renew existing advisory and sub-advisory arrangements for the Funds in the ING Funds complex, including the Trust's existing Advisory and Sub-Advisory Contracts, and to approve new advisory and sub-advisory arrangements. Among these measures, the Board: retained the services of an independent consultant 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; established the format in which the information requested by the Board is provided to the Board; and determined the process for reviewing such information in connection with the Advisory and Sub-Advisory Contract renewal process. The end result was the implementation of the current process relied upon by the Board to review and analyze information in connection with the annual renewal of the Trust's Advisory and Sub-Advisory Contracts, as well as its review and approval of new advisory relationships.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

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

Since the foregoing approval and renewal process was implemented, the Board regularly has reviewed and refined the process. In addition, the Board established a Contracts Committee and two Investment Review Committees, including the International/Balanced/Fixed Income Funds Investment Review Committee (the "I/B/F IRC"). The type and format of the information provided to the Board or its counsel to inform its approval and annual review and renewal process has been codified in the "15(c) Methodology Guide" (the "Methodology Guide") for the Funds in the ING Funds complex. The Methodology Guide was developed under the direction of the Independent Trustees, and sets out a written blueprint under which the Independent Trustees request certain information necessary to facilitate a thorough and informed review in connection with the annual Advisory and Sub-Advisory Contract renewal process. Management provides Fund-specific information to the Independent Trustees based on the Methodology Guide through "Fund Analysis and Comparison Tables" or "FACT" sheets prior to the Independent Trustees' review of Advisory and Sub-Advisory Contracts. In 2005, the Independent Trustees retained an independent firm to verify and test the accuracy of certain of this information for a representative sample of Funds in the ING Funds complex, including the Trust. The Independent Trustees have determined to conduct such testing periodically.

As part of a regular on-going process, the Board's Contracts Committee recommends or considers recommendations from Management for refinements and other changes to the Methodology Guide and other aspects of the review process, and the I/B/F IRC reviews benchmarks used to assess the performance of the Trust. The I/B/F IRC also meets regularly with the Adviser and periodically with ING IM.

The Board employed its process for reviewing contracts when considering the renewals of the Advisory and Sub-Advisory Contracts that would be effective through November 30, 2007. A number of the Board's primary considerations and conclusions resulting from this process are discussed below.

Nature, Extent and Quality of Service

In determining whether to approve the Advisory Contract and Sub-Advisory Contract for the Trust for the year ending November 30, 2007, 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 ING IM. This included information regarding the Adviser and ING IM provided throughout the year at regular Board meetings, as well as information furnished for the November 9, 2006 Board meeting, which was held specifically to consider contracts renewals for the period ending November 30, 2007. In addition, the Board's Independent Trustees also held meetings on October 12 and November 7, prior to the November 9, 2006 meeting of the full Board, to consider the annual renewal of the Advisory and Sub-Advisory Contracts.

The materials requested by and provided to the Board and/or to K&LNG prior to the November 2006 Board meeting included the following items: (1) FACT sheets for the Trust that provided information about the performance and expenses of the Trust and other similarly managed funds in a selected peer group ("Selected Peer Group"), as well as information about the Trust's investment portfolio, objectives and strategies; (2) the Methodology Guide, which describes how the FACT sheets were prepared, including the manner in which benchmarks and Selected Peer Groups were selected and how profitability was determined; (3) responses from the Adviser and ING IM to a detailed series of questions posed by K&LNG; (4) copies of the forms of Advisory Contract and Sub-Advisory Contract; (5) copies of the Forms ADV for the Adviser and the Sub-Adviser; (6) financial statements for the Adviser and the Sub-Adviser; (7) drafts of a narrative summary addressing key factors the Board customarily considers in evaluating the renewals of Advisory Contract and Sub-Advisory Contract, including a written analysis of how the Trust's performance and fees compare to its Selected Peer Group and/or designated benchmarks; and (8) other information relevant to the Board's evaluations.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

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

The Trust's common shares were used for purposes of certain comparisons to the funds in its Selected Peer Group. 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 Selected Peer Group. The mutual funds chosen for inclusion in the Trust's Selected Peer Group were selected based upon criteria designed to mirror the class being compared to the Selected Peer Group.

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. The Board also considered the techniques that the Adviser developed, at the Board's direction, to screen and perform due diligence on sub-advisers that are recommended to the Board to manage the Funds in the ING Funds complex. The Board noted the resources that the Adviser has committed to the Board and its Investment Review Committees, including the I/B/F IRC, to assist the Board and members of the Committees 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 I/B/F IRC to analyze the key factors underlying investment performance for the Trust. The Board also noted the techniques used by the Adviser to monitor the performance of ING IM.

In considering the 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 extensive efforts in recent years to reduce the expenses of the ING Funds through re-negotiated arrangements with the ING Funds' service providers.

Further, the Board received periodic reports showing that the Trust's investment policies and restrictions 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 reports from the Trust's Chief Compliance Officer ("CCO") evaluating the regulatory compliance systems of the Adviser and the Sub-Adviser and procedures reasonably designed by them to assure compliance with the federal securities laws, including those related to late trading and market timing, best execution, fair value pricing, proxy voting procedures, and trade allocation, among others. The Board considered the implementation by the Adviser and ING IM of enhanced compliance policies and procedures in response to SEC rule changes and other regulatory initiatives. The Board also took into account the CCO's annual and periodic reports with respect to service provider compliance and his recommendations regarding service providers' 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 ING IM, and evaluated the ability of the Adviser and ING IM 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 ING IM, and whether those resources are commensurate with the needs of the Funds and are appropriate to attempt to sustain expected levels of performance, compliance, and other needs.

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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)

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

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 ING IM were appropriate.

Performance

In assessing advisory and sub-advisory relationships, the Board placed emphasis on the investment performance of the Trust, taking into account the importance of such performance to the Trust's shareholders. 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 Fund FACT sheets furnished in advance of the November meeting of the Independent Trustees. The FACT sheet prepared for the Trust included its investment performance compared to the Morningstar category median, Selected Peer Group and Trust's primary benchmark. The Board's findings specific to the Trust's performance are discussed under "Specific Factors Considered," below.

Economies of Scale

In considering the reasonableness of advisory fees, the Board also considered whether economies of scale will be realized by the Adviser as the Trust grows larger and the extent to which this is reflected in the level of management fee rates charged. In this regard, the Board considered the fairness of 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.

In evaluating economies of scale, the Independent Trustees also considered a management report presented to them and considered an evaluation and analysis presented to them on November 8, 2006 by an independent consultant.

Information about Services to Other Clients

The Board requested, and if received considered, information about the nature of services and fee rates offered by the Adviser and ING IM to other clients, including other registered investment companies and institutional accounts. The Board also noted that the fee rates charged to the Trust and similar institutional clients may differ materially due to the different services and additional regulatory overlay associated with registered investment companies, such as the Trust.

Fee Rates and Profitability

The Board reviewed and considered the contractual investment advisory fee rate, combined with the administrative fee rate, payable by the Trust to the Adviser. The Board also considered the contractual sub-advisory fee rates payable by the Adviser to the Sub-Adviser for sub-advisory services.

The Board considered the Trust's fee structure as it relates to the services provided under the Contracts, and the potential fall-out benefits to the Adviser and ING IM, and their respective affiliates, from their association with the Trust. For the Trust, the Board determined that the fees payable to the Adviser and ING IM 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 through the year ending November 30, 2007.

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 assumptions)

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specified in the 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 ING IM with respect to the Trust. 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 ING IM with respect to its profitability.

The Board determined that it had requested and received sufficient information to gain a reasonable understanding regarding the Adviser's and ING IM'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 nor capture Management's entrepreneurial risk associated with offering and managing a mutual fund complex in today's regulatory environment.

Based on the information on revenues, costs, and profitability considered by the Board, after considering the factors described in this section, the Board concluded that the profits, if any, realized by the Adviser and ING IM were not excessive.

Specific Factors Considered

The following paragraphs outline certain of the specific factors that the Board considered, and the conclusions reached, at its November 2006 meeting in relation to renewing the Trust's Advisory Contract and its Sub-Advisory Contract for the year ending November 30, 2007. These specific factors are in addition to those considerations discussed above. 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. The Trust's management fee and expense ratio were compared to the fees and expense ratios of the funds in its Selected Peer Group.

In considering whether to approve the renewal of the Advisory and Sub-Advisory Contracts for ING Prime Rate Trust, the Board considered that, based on performance data for the periods ended June 30, 2006: (1) the Trust outperformed its Morningstar category median for all periods presented, except it underperformed for the most recent calendar quarter; (2) the Trust outperformed its benchmark for all periods presented, except it underperformed for the most recent calendar quarter; and (3) the Trust is ranked in the first (highest) quintile of its Morningstar category for the ten-year period, in the second quintile of its Morningstar category for the year-to-date, one- and three-year periods, in the third quintile of its Morningstar category for the five-year period, and in the fifth (lowest) quintile of its Morningstar category for the most recent calendar quarter.

In analyzing this performance data, the Board took into account: (1) in March 2006, the Trust's strategy was changed to allow for an increase in investments in foreign securities; and (2) Management's analysis regarding the Sub-Adviser's rationale for underperformance during the most recent calendar quarter, including its discussion of the negative effect of a transitional period in the US leveraged loan market on the Trust's more recent performance.

In considering the fees payable under the Advisory and Sub-Advisory Contracts for ING Prime Rate 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; (2) the pricing structure (including the expense ratio to be borne by shareholders) of ING Prime Rate Trust, as compared to its Selected Peer Group, including that: (a) the management fee (inclusive of

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the advisory fee and a 0.25% administration fee) for the Trust is above the median and the average management fees of the funds in its Selected Peer Group; and (b) the expense ratio for the Trust is above the median and the average expense ratios of the funds in its Selected Peer Group.

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, 2007. 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

Institutional Investors and Analysts

Call ING Prime Rate Trust

1-800-336-3436, Extension 2217

Independent Registered Public
Accounting Firm

KPMG LLP

99 High Street

Boston, Massachusetts 02110

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

DST Systems, Inc.

P.O. Box 219368

Kansas City, Missouri 64141

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     (0207-042707)

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