SEMIANNUAL REPORT
FOR YIELD, PRICE, LAST TRANSACTION,
AND CURRENT BALANCE, 24 HOURS,
7 DAYS A WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. ROWE PRICE
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distri-bution only to shareholders and to
others who have received a copy of the prospectus of the T. Rowe Price
International Bond Fund and/or the T. Rowe Price Emerging Markets Bond Fund.
FOREIGN BOND
FUNDS
JUNE 30, 1995
FBF
Fellow Shareholders
Throughout the first half of 1995, the prospect of a slowdown in global
economies and benign inflation led to higher bond prices and lower yields.
The bull market in fixed income securities produced excellent returns for the
first six months of the year.
Bond markets experienced two distinct periods during the first half. The
first quarter was characterized by currency turbulence following the
devaluation of the Mexican peso. Strong international currencies versus the
U.S. dollar were responsible for most of the positive returns for U.S.
investors. In the second quarter, currency markets stabilized, enabling
emerging markets to recover. Investors became more comfortable with the risks
associated with them, allowing investors to reverse their first-quarter
losses and enjoy substantial returns over the past three months.
MARKET ENVIRONMENT
Early in the year, investors anticipated further rises in short-term interest
rates in the U.S. and in Europe. However, following strong U.S. GDP growth in
the fourth quarter of 1994, economic data came in weaker than expected.
Interest rate-sensitive areas were sluggish, indicating that the Federal
Reserve's series of rate hikes had begun to slow growth.
Slowing growth led to a major sentiment change among U.S. investors, who
suddenly grew more concerned about a possible recession than about
inflationary growth. The ensuing bond rally spilled over to other developed
and emerging markets. By midyear, these markets had already begun to factor
in a reduction in key short-term interest rates in the major economies.
In Japan, economic growth receded after the Kobe earthquake, increasing
demand for bonds among Japanese investors despite their low nominal yields.
While European bonds underperformed U.S. and Japanese fixed income
securities, they nevertheless responded well to expectations of slower growth
and to rising demand from domestic investors.
The sharpest performance turnaround by far came from emerging markets.
After the peso devaluation at the start of the year, all emerging markets
suffered the consequences of the Mexican disaster. However, this was a clear
case of adversity creating opportunity. Political problems in Brazil and
Argentina were resolved favorably, and Poland achieved investment-grade
status with one of the major rating agencies. As a consequence of the savage
price declines of the first quarter, investors were given the opportunity to
participate in improving credits at attractive yield and price levels.
Developed Markets Performance
3 Months Ended 6/30/95
In Local In U.S.
Currency Dollars
_________ _________
Australia 5.86% 2.31%
France 3.48 2.38
Germany 2.57 1.41
Italy 5.87 9.76
Japan 6.17 8.04
United Kingdom 2.54 0.15
United States 5.82 5.82
Source: J.P. Morgan
Emerging Markets Performance
3 Months
Ended 6/30/95
In U.S. Dollars
___________
Emerging Market Bond Index 22.83%
Brady Indexes (by issuer)*:
Argentina 17.18
Brazil 21.64
Mexico 28.85
Poland 32.53
Venezuela 20.01
*Brady bonds are restructured debt obligations of many emerging market
countries, denominated in U.S. dollars with extended maturities and lower
interest rates, that enable these nations to repay loans while they implement
economic reforms.
Source: J.P. Morgan
#
PORTFOLIO REVIEW
INTERNATIONAL BOND FUND
Your fund turned in an impressive absolute performance for the first six
months of the year, which owed much to the appreciation of foreign currencies
in the first quarter. While bond prices continued to rally into the second
quarter, a major portion of the return was registered during the first.
Performance Comparison
Periods Ended 6/30/95
3 Months 6 Months
__________________
International Bond Fund 3.81% 16.79%
J.P. Morgan Non-U.S. Dollar
Government Bond Index 4.62 19.32
The fund lagged the benchmark index
because of our reduced allocation to Japanese yen-denominated bonds at 22% of
the portfolio, down from 36% at the end of March. Japanese bonds returned 8%
in dollar terms in the quarter, fueled by investor demand despite
historically low yields. Your fund was also over-
weighted in bonds denominated in German marks and British pounds while other
markets, including Italy, were stronger in dollar terms.
We reduced exposure to both Germany and the
International Bond Fund
based on assets as of 6/30/95
Other
and Reserves
29%
Netherlands
7%
Japan
22%
Denmark
7%
France
7%
United
States
6%
U.K.
9%
Germany
13%
*Based on the currency denomination of the fund's securities. Does not
include the effects of forward currency contracts and currency exposure from
hybrid instruments.
#
U.K. significantly over the quarter, but still had relatively high holdings
at 13% and 9% of the portfolio, respectively. The U.S. position shown in the
pie chart represents foreign bonds denominated in U.S. dollars.
EMERGING MARKETS BOND FUND
The strong bond rally in emerging markets enabled your fund to overcome the
negative performance of the first quarter and register solid returns for both
the three- and six-month periods ended June 30, surpassing the benchmark
index over the longer period.
Performance Comparison
Periods Ended 6/30/95
3 Months 6 Months
__________________
Emerging Markets Bond Fund 17.56% 9.98%
J.P. Morgan Emerging Market
Bond Index 22.83 9.23
Your fund began operations on the last business day of 1994 amid the
turmoil surrounding the Mexican peso devaluation. Retaining a significant
cash allocation through the early part of 1995 helped the fund avoid much of
the market turbulence in January and February. However, as is often the case
in the midst of adversity, opportunities presented themselves.
In this instance, as investors cut their Latin American holdings, bond
markets in other emerging markets fell in sympathy, but without the same
deterioration in their economies that occurred in Mexico. We took this
opportunity to initiate positions at extremely low prices prior to the strong
rally that followed.
We increased our exposure to Argentina and Brazil in the quarter from 18%
and 17% to 23% and 21%, respectively. We are encouraged by the election
results in Argentina and by Brazil's free market reforms, which continue on
course. We also have holdings in Poland, whose economic progress earned it an
investment-grade rating from one of the leading U.S. rating agencies in June,
as previously mentioned.
Geographical Diversification*
Emerging Markets Bond Fund
based on net assets as of 6/30/95
Other
39% (includes
reserves of 31%)
Argentina
23%
Brazil
21%
Mexico
4%
Bulgaria
5%
Ecuador
4%
Poland
4%
*Based on the issuing country of the fund's securities.
OUTLOOK
The strong performance of foreign bonds has justified the positive view we
have taken since late last year, and our outlook remains essentially positive
for the remainder of 1995. How-ever, the picture is more clouded than it was
six months ago, and we would introduce a significant note of caution to our
generally optimistic view. We would be surprised to see bond returns in the
second half of the year match those in the first.
At current levels of inflation, bonds offer reasonable valuations compared
with stocks. Also, anticipated inflation levels and economic policies in most
international markets do not appear to be a serious threat to fixed income
markets at this time. On the currency front, we do not expect a return of the
extreme volatility seen earlier this year.
The main note of caution stems from our view that U.S. bonds are not likely
to repeat their per-
formance of recent months. At current yield and price levels, they are
somewhat overvalued and susceptible to disappointment should future economic
activity be stronger than investors expect. Poor returns in the U.S. could
have a dampening effect elsewhere, since foreign markets sometimes follow the
U.S. lead even though their economic fundamentals may be different.
Europe offers the best prospects, in our opinion, with a combination of
attractive valuations and protective measures in place against inflation. We
expect Japanese bonds to perform steadily in the absence of serious
inflation, but there is some risk that the government could resort to
inflationary measures in an effort to revive the economy.
All in all, the months ahead should provide opportunities for investors in
international fixed income markets, with perhaps more moderate returns over
the next six months than we have enjoyed so far this year.
Respectfully submitted,
Peter Askew
Executive Vice President
July 21, 1995
Portfolio Highlights
T. Rowe Price International Bond Fund / June 30, 1995
Key Statistics
Dividend Yield* Periods Ended 6/30/95
______________________________________________________
SEC 30-Day 6.34%
3 Months 5.87
6 Months 5.93
Dividend Per Share
_________________________________
3 Months $0.15
6 Months 0.29
Change in Price Per Share
_________________________________
3 Months (From $10.36 to $10.60) $0.24
6 Months (From $9.34 to $10.60) 1.26
Average Annual Compound Total Return
_______________________________________________________
1 Year 17.33%
5 Years 13.36
Since Inception (9/10/86) 10.54
Total Net Assets $945.9 Million
*Dividends earned and reinvested for the periods indicated are annualized and
divided by the average daily net asset values per share for the same period.
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
Maturity Diversification
Range Percent of Net Assets
_____________________________ ____________________
Short-Term (0 to 1 Year) 11%
Short Intermediate-Term
(1+ to 5 Years) 23
Long Intermediate-Term
(5+ to 10 Years) 57
Long-Term
(Over 10 Years) 9
Weighted Average Maturity 8.0 yrs.
Weighted Average Duration 5.1 yrs.
Quality Diversification
RPFI Quality Rating* Percent of Net Assets
____________________________ ____________________
1 45%
2 44
3 7
4 --
5 and below 4
Weighted Average Quality 1.7
*On a scale of 1 to 10, with Grade 1 representing highest quality.
Portfolio Highlights
T. Rowe Price Emerging Markets Bond Fund / June 30, 1995
Key Statistics
Dividend Yield* Periods Ended 6/30/95
______________________________________________________
SEC 30-Day 10.65%
3 Months 10.25
6 Months 10.24
Dividend Per Share
_________________________________
3 Months $0.26
6 Months 0.49
Change in Price Per Share
_________________________________
3 Months (From $9.13 to $10.47) $1.34
6 Months (From $10.00 to $10.47) 0.47
Total Net Assets $7.1 Million
*Dividends earned and reinvested for the periods indicated are annualized and
divided by the average daily net asset values per share for the same period.
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
Maturity Diversification
Range Percent of Net Assets
_____________________________ ____________________
Short-Term (0 to 1 Year) 38%
Short Intermediate-Term
(1+ to 5 Years) 3
Long Intermediate-Term
(5+ to 10 Years) 22
Long-Term
(Over 10 Years) 37
Weighted Average Maturity 11.8 yrs.
Weighted Average Duration 1.2 yrs.
Quality Diversification
RPFI Quality Rating* Percent of Net Assets
____________________________ ____________________
1 22%
2 15
3 1
4 35
5 and below 27
Weighted Average Quality 4.0
*On a scale of 1 to 10, with Grade 1 representing highest quality.
Portfolio of Investments
T. Rowe Price International Bond Fund / June 30, 1995 (Unaudited)
(VALUES IN THOUSANDS)
AUSTRALIA -- 3.7%
Value
______
GOVERNMENT BONDS
AUD 20,000,000Commonwealth of Australia,
6.25%, 3/15/99....... $13,273
14,000,000.................... Commonwealth of Australia,
7.00%, 4/15/00....... 9,341
18,150,000.................... Commonwealth of Australia,
9.00%, 9/15/04....... 12,770
TOTAL AUSTRALIA35,384
AUSTRIA -- 3.5%
GOVERNMENT BONDS
ATS 233,800,000Republic of Austria,
7.00%, 2/14/00....... 24,520
88,000,000.................... Republic of Austria,
7.00%, 5/16/05....... 8,881
TOTAL AUSTRIA 33,401
CANADA -- 3.1%
GOVERNMENT BONDS
CAD 20,750,000Government of Canada,
7.75%, 9/1/99........ 15,255
22,000,000.................... Government of Canada,
6.50%, 6/1/04........ 14,556
TOTAL CANADA 29,811
DENMARK -- 6.8%
GOVERNMENT BONDS
DKK 77,500,000Kingdom of Denmark,
9.00%, 11/15/00...... 14,866
50,000,000.................... Kingdom of Denmark,
8.00%, 5/15/03....... 8,991
245,000,000.................... Kingdom of Denmark,
7.00%, 12/15/04...... 40,834
TOTAL DENMARK 64,691
FRANCE -- 6.7%
GOVERNMENT BONDS
FRF 50,000,000Obligation Assimilable
du Tresor, 7.75%, 4/12/0010,535
175,000,000.................... Obligation Assimilable
du Tresor, 7.50%, 4/25/0535,770
FRF 81,000,000.................... Obligation Assimilable
du Tresor, 8.50%, 4/25/23$17,273
TOTAL FRANCE 63,578
GERMANY -- 12.7%
GOVERNMENT BONDS
DEM 30,000,000Bundesrepublic,
6.25%, 1/4/24........ 18,354
30,000,000.................... Province of Ontario,
6.25%, 1/13/04....... 20,166
10,000,000.................... Republic of Portugal, FRN,
4.75%, 7/15/99....... 7,237
39,000,000.................... Treuhandanstalt,
6.875%, 6/11/03...... 27,965
73,722
CORPORATE BONDS
23,000,000.................... LKB Baden-Wurttemberg,
6.50%, 9/15/08....... 15,347
36,000,000.................... Norddeutsche LB Finance,
6.00%, 1/5/04........ 23,845
10,000,000.................... Union Bank of Finland, FRN,
4.65%, 9/22/97....... 7,235
46,427
TOTAL GERMANY 120,149
IRELAND -- 2.6%
GOVERNMENT BONDS
IEP 4,000,000.................... Republic of Ireland,
6.25%, 4/1/99........ 6,062
11,500,000.................... Republic of Ireland,
8.00%, 10/18/00...... 18,356
TOTAL IRELAND 24,418
ITALY -- 4.8%
GOVERNMENT BOND
ITL 35,250,000,000Buoni del Tesoro Poliennali,
9.50%, 12/1/97....... 20,451
SHORT-TERM INVESTMENT
40,552,599,474Chase Manhattan Bank,
N.A., Fixed Deposit,
10.3125%, 7/6/95..... 24,784
TOTAL ITALY 45,235
#
JAPAN -- 22.1%
GOVERNMENT BONDS
JPY2,750,000,000Government of Japan,
5.50%, 3/20/02....... $ 38,130
4,400,000,000Government of Japan,
3.40%, 3/22/04....... 53,954
940,000,000.................... Government of Japan,
4.60%, 9/20/04....... 12,649
735,000,000.................... Government of Japan,
4.60%, 3/21/05....... 9,871
860,000,000.................... International Bank for
Reconstruction & Development,
4.50%, 6/20/00....... 11,324
2,000,000,000International Bank for
Reconstruction & Development,
5.25%, 3/20/02....... 27,468
3,100,000,000International Bank for
Reconstruction & Development,
4.75%, 12/20/04...... 42,300
195,696
CORPORATE BOND
1,000,000,000Japan Development Bank,
5.00%, 10/1/99....... 13,312
OPTION PURCHASED
940,000,000.................... * Government of Japan #174,
4.60%, 9/20/04, European-
Style Put Option, expires
12/95................ 251
TOTAL JAPAN 209,259
NETHERLANDS -- 7.2%
GOVERNMENT BONDS
NLG 20,000,000Government of Netherlands,
6.75%, 10/1/98....... 13,261
25,000,000.................... Government of Netherlands,
8.75%, 5/1/00........ 17,767
27,250,000.................... Government of Netherlands,
7.75%, 3/1/05........ 18,436
26,600,000.................... Government of Netherlands,
8.25%, 9/15/07....... 18,550
TOTAL NETHERLANDS68,014
PORTUGAL -- 0.3%
GOVERNMENT BONDS
PTE 100,000,000European Investment Bank,
12.50%, 2/24/98...... $ 695
100,000,000.................... European Investment Bank,
8.875%, 12/15/98..... 630
200,000,000.................... European Investment Bank,
10.40%, 5/26/99...... 1,312
TOTAL PORTUGAL 2,637
SPAIN -- 5.0%
GOVERNMENT BONDS
ESP3,750,000,000Bonos del Estado,
11.00%, 6/15/97...... 30,960
2,000,000,000Bonos del Estado,
11.45%, 8/30/98...... 16,507
TOTAL SPAIN 47,467
SWEDEN -- 1.0%
GOVERNMENT BOND
SEK 91,000,000Kingdom of Sweden,
6.00%, 2/9/05........ 9,015
UNITED KINGDOM -- 9.1%
GOVERNMENT BONDS
GBP 4,000,000.................... Republic of Austria, 9.00%,
7/22/04.............. 6,401
18,750,000.................... United Kingdom Treasury,
9.75%, 8/27/02....... 31,883
6,000,000.................... United Kingdom Treasury,
8.00%, 6/10/03....... 9,299
47,583
CORPORATE BONDS
10,000,000.................... Abbey National, 8.00%,
4/2/03............... 14,983
4,000,000.................... Credit Local De France,
8.375%, 6/16/04...... 6,124
10,000,000.................... Guaranteed Export Finance
Corporation,
10.625%, 9/15/01..... 17,218
38,325
TOTAL UNITED KINGDOM.................... 85,908
#
T. Rowe Price International Bond Fund/Portfolio of Investments
UNITED STATES -- 18.3%
GOVERNMENT BONDS
USD 5,000,000.................... Republic of Argentina,
FRN, 4.25%, 3/31/05.. $ 3,081
7,000,000.................... Republic of Argentina, FRN,
4.25%, 3/31/23....... 3,334
5,900,000.................... Republic of Argentina, BOCON
PRE 2, FRN, 6.0625%, 4/1/014,432
2,285,800.................... Republic of Argentina,
BOTE 1, FRN,
..... 6.0833%, 5/31/96 2,241
6,750,000............ Republic of Brazil Discount
Bonds, FRN, 7.25%, 4/15/24 3,856
2,750,000.................... Republic of Brazil EI,
FRN, 7.25%, 4/15/06.. 1,646
11,155,000.................... Republic of Brazil IDU,
FRN, 7.8125%, 1/1/01. 8,994
9,000,000.................... Republic of Poland, FRN,
7.125%, 10/27/24..... 6,919
34,503
HYBRID INSTRUMENTS
8,800,000.................... Bank of Scotland Treasury
Services Singapore Dollar
Linked Note, Zero Coupon,
5/3/96: Principal repayment
value linked to the
performance of the
Singapore dollar8,557
2,118,644.................... Bankers Trust Polish Zloty
Linked Note, Zero Coupon,
4/18/96: Principal repayment
value linked to the
performance of the Polish
zloty 1,766
1,355,932.................... Bankers Trust Polish Zloty
Linked Note, Zero Coupon,
7/24/96: Principal repayment
value linked to the
performance of the Polish
zloty 1,348
USD 4,180,703............ Morgan Guaranty Polish Zloty
Linked Note, Zero Coupon,
10/11/95: Principal
repayment value linked to
the performance of the
Polish zloty $3,932
8,150,000.................... Swedish Export Credit Czech
Crown Linked Note, Zero
Coupon, 7/28/95: Principal
repayment value linked to
the performance of the
Czech crown and German
deutschemark 8,102
23,705
OPTION PURCHASED
28,000,000........... * U.S. dollar Call / Japanese yen
Put, expires 5/31/96 700
SHORT-TERM INVESTMENTS
COMMERCIAL PAPER
12,000,000.................... American General, 6.00%,
7/10/95.............. 11,981
14,000,000.................... American Home Food
Products, 6.00%, 7/7/95 13,986
20,000,000.................... Asset Securitization
Cooperative, 5.95%, 7/6/95 19,983
35,000.................... Cargill Financial Services,
6.10%, 7/3/95........ 35
11,000,000.................... Countrywide Funding, 6.00%,
7/17/95.............. 10,970
10,000,000.................... Electronic Data Systems,
5.95%, 7/12/95....... 9,981
11,875,000.................... Preferred Receivables
Funding, 5.825%, 7/25/95 11,826
12,800,000.................... Siemens, 6.20%, 7/3/95 12,796
10,000,000.................... Swiss Bank, 6.01%, 7/21/95 9,999
12,200,000.................... Yale University, 5.95%,
7/26/95.............. 12,148
113,705
TOTAL UNITED STATES172,613
#
TOTAL INVESTMENTS IN SECURITIES -- 106.9% OF NET ASSETS (COST
$975,215)............................ $1,011,580
FORWARD CURRENCY EXCHANGE CONTRACTS
Unrealized
Counterparty Settlement Deliver Receive Gain (Loss)
___________ __________ _____________ ___________ ____________
Citibank 7/6/95 FRF 30,639 DEM 8,720 $ (7)
Chase 7/7/95 JPY 569,904 DEM 9,300 (4)
JP Morgan 7/7/95 USD 134,913 JPY 11,513,089 1,061
Citibank 7/12/95 SEK 83,214 DEM 15,998 141
Chase 7/12/95 DEM 16,027 SEK 83,214 (162)
Citibank 7/13/95 IEP 10,000 DEM 22,833 157
Citibank 7/19/95 ESP 3,322,471 FRF 134,508 335
JP Morgan 7/19/95 ESP 874,650 FRF 35,000 4
Citibank 7/20/95 GBP 6,000 DEM 13,262 58
JP Morgan 7/20/95 GBP 4,500 DEM 9,852 (25)
Citibank 7/24/95 AUD 25,936 USD 18,800 385
JP Morgan 8/7/95 SEK 67,606 DEM 12,826 21
Citibank 12/15/95 USD 9,450 IDR 22,113,000 475
_____
Net unrealized gain (loss) on open forward currency exchange contracts.. 2,439
FUTURES CONTRACTS
Contract
Expiration Value
__________ ________
Long, 150 Commonwealth of Australia
10-year Treasury Bond contracts9/95 $9,673 (4) (4)
_____
OTHER ASSETS LESS LIABILITIES (68,120)
___________
NET ASSETS.................................. $ 945,895
___________
___________
*........ Non-income producing
.. Listed by currency denomination
(ATS)Austrian schilling
(AUD)Australian dollar
(CAD)Canadian dollar
(DEM)German deutschemark
(DKK)Danish krone
(ESP)Spanish peseta
(FRF)French franc
(GBP)British sterling
(IDR)Indonesian rupia
(IEP)Irish punt
(ITL)Italian lira
(JPY)Japanese yen
(NLG)Dutch guilder
(PTE)Portuguese escudo
(SEK)Swedish krona
(USD)U.S. dollar
The accompanying notes are an integral part of these financial statements.
#
Portfolio of Investments
T. Rowe Price Emerging Markets Bond Fund / June 30, 1995 (Unaudited)
(VALUES IN THOUSANDS)
ARGENTINA -- 22.8%
Value
______
GOVERNMENT BONDS
USD 1,000,000............ Republic of Argentina, FRB,
7.3125%, 3/31/05..... $ 617
500,000............ Republic of Argentina
Discount Bonds,
FRN, 6.875%, 3/31/23. 289
750,000............ Republic of Argentina
Par Bonds, FRN, 5.00%,
3/31/23.......... 357
200,000............ Republic of Argentina, BOCON
PRE 2, FRN, 6.0625%, 4/1/01150
110,000............ Republic of Argentina, BOTE 1,
FRN, 6.0833%, 5/31/96 108
104,000............ Republic of Argentina, BOTE 2,
FRN, 6.0625%, 9/1/97. 97
TOTAL ARGENTINA1,618
BRAZIL -- 21.4%
GOVERNMENT BONDS
250,000............ Republic of Brazil Discount Bonds,
FRN, 7.25%, 4/15/24.. 143
750,000............ Republic of Brazil EI, FRN,
7.25%, 4/15/06....... 449
727,500............ Republic of Brazil IDU, FRN,
7.8125%, 1/1/01...... 587
750,000............ Republic of Brazil Par Bonds,
FRN, 4.00%, 4/15/24.. 334
TOTAL BRAZIL 1,513
BULGARIA -- 4.7%
GOVERNMENT BONDS
250,000............ Republic of Bulgaria Discount
Bonds, FRN, 7.5625%,
7/28/24 125
500,000............ Republic of Bulgaria IAB, FRN,
7.5625%, 7/28/11..... 211
TOTAL BULGARIA 336
COLOMBIA -- 1.4%
CORPORATE BOND
100,000............ Financiera Energetica
Nacional, 9.00%, 11/8/99 102
CZECH REPUBLIC -- 1.4%
HYBRID INSTRUMENT
USD 100,000............ Swedish Export Credit
Czech Crown Linked Note,
Zero Coupon, 7/28/95:
Principal repayment value
linked to the performance of
the Czech crown and German deutschemark. $ 99
ECUADOR -- 4.1%
GOVERNMENT BOND
900,000............ Republic of Ecuador Par
Bonds, FRN, 3.00%,
2/28/25 292
MEXICO -- 4.3%
GOVERNMENT BONDS
250,000............ Republic of Mexico Par
Bonds, Series A, 6.25%,
12/31/19 152
250,000............ Republic of Mexico Par
Bonds, Series B, 6.25%,
12/31/19 153
TOTAL MEXICO 305
PANAMA -- 3.3%
GOVERNMENT BOND
300,000............ Republic of Panama, FRN,
7.25%, 5/10/02....... 230
POLAND -- 3.8%
GOVERNMENT BOND
250,000............ Republic of Poland Par
Bonds, FRN, 2.75%, 10/27/24107
HYBRID INSTRUMENT
169,488............ Morgan Guaranty Polish
Zloty Linked Note, Zero
Coupon, 10/11/95: Principal
repayment value linked to
the performance of the
Polish zloty 160
TOTAL POLAND 267
#
SINGAPORE -- 1.4%
HYBRID INSTRUMENT
USD 100,000............ Bank of Scotland Treasury
Services Singapore Dollar
Linked Note, Zero Coupon,
5/3/96: Principal repayment
value linked to the
performance of the
Singapore dollar$ 97
SHORT-TERM INVESTMENTS -- 9.4%
COMMERCIAL PAPER
USD 269,000............ Cargill Financial Services,
6.10%, 7/3/95.... $ 269
200,000............ Hershey Foods,
5.93%, 7/10/95....... 199
200,000............ Pitney Bowes,
6.00%, 7/5/95.... 200
TOTAL SHORT-TERM INVESTMENTS........ 668
TOTAL INVESTMENTS IN SECURITIES -- 78.0% OF NET ASSETS
(COST $5,342)........................... 5,527
OTHER ASSETS LESS LIABILITIES ...................... 1,559
________
NET ASSETS.................................. $ 7,086
________
________
(USD)U.S. dollar
The accompanying notes are an integral part of these financial statements.
#
T. Rowe Price Global Government Bond Fund / Portfolio of Investments
Statement of Assets and Liabilities
T. Rowe Price Foreign Bond Funds / June 30, 1995 (Unaudited)
(IN THOUSANDS)
Emerging
International Markets Bond
Bond Fund Fund
___________ ___________
ASSETS
Investments in securities, at value (cost $975,215
and $5,342)........................................$1,011,580 $ 5,527
Cash and foreign currencies in interest bearing
accounts...............................................30,661 --
Receivable for investment securities sold..... 15,948 1,245
Other assets.................................. 39,311 369
____________ __________
Total assets................................ 1,097,500 7,141
____________ __________
LIABILITIES
Payable for investment securities purchased.......... 136,285 --
Other liabilities............................... 15,320 55
____________ __________
Total liabilities............................... 151,605 55
____________ __________
NET ASSETS.................................. $ 945,895 $ 7,086
____________ __________
____________ __________
NET ASSETS CONSIST OF:
Accumulated net investment income -
net of distributions............ $ 5,068 $ --
Accumulated net realized gain/loss -
net of distributions........... (8,161) 278
Net unrealized gain (loss)..................... 41,879 185
Paid-in-capital applicable to 89,267,270 and 676,522 shares
of $0.01 par value capital stock outstanding,
2,000,000,000 shares of the Corporation authorized....907,109 6,623
____________ __________
NET ASSETS.................................. $ 945,895 $ 7,086
____________ __________
____________ __________
NET ASSET VALUE PER SHARE........................... $10.60 $10.47
____________ __________
____________ __________
The accompanying notes are an integral part of these financial statements.
#
Statement of Operations
T. Rowe Price Foreign Bond Funds (Unaudited)
(IN THOUSANDS)
International Bond Fund Emerging Market Bond Fund
_______________________ ______________________
Six Months From Dec. 30, 1994
Ended Commencement of
June 30, 1995 Operations to 6/30/95
_______________________ ______________________
INVESTMENT INCOME
Interest income................................. $ 28,038 $ 221
__________ __________
Expenses
Investment management............................. 2,860 --
Shareholder servicing............................. 595 14
Custody and accounting............................ 236 60
Prospectus and shareholder reports.................... 46 1
Registration.................................. 20 3
Legal and audit............................... 18 10
Directors................................. 10 3
Organization.................................. -- 3
Miscellaneous................................. 13 1
Reimbursed by Manager............................. -- (71)
__________ _________
Total expenses................................ 3,798 24
__________ _________
Net investment income............................... 24,240 197
__________ _________
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities................................ 45,369 278
Futures................................... 106 --
Options................................... (623) --
Foreign currency transactions............. (3,316) --
__________ _________
Net realized gain (loss).......................... 41,536 278
__________ _________
Change in net unrealized gain or loss on:
Securities................................ 54,789 185
Futures................................... (4) --
Options................................... 645 --
Other assets and liabilities denominated in foreign currencies. 4,411 --
Change in net unrealized gain or loss.............. 59,841 185
__________ _________
Net realized and unrealized gain (loss)........ 101,377 463
__________ _________
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 125,617 $ 660
__________ _________
__________ _________
The accompanying notes are an integral part of these financial statements.
#
Statement of Changes in Net Assets
T. Rowe Price Foreign Bond Funds (Unaudited)
(IN THOUSANDS)
International Bond Fund Emerging Markets Bond Fund
_______________________________ ______________________
From December 30, 1994
Six Months Year Ended (Commencement of
Ended December 31, Operations) to
June 30, 1995 1994 June 30, 1995
___________________________________________________________
INCREASE (DECREASE) IN NET
ASSETS FROM
Operations
Net investment income.....$ 24,240 $ 45,552 $ 197
Net realized gain (loss).. 41,536 (35,246) 278
Change in net unrealized gain or loss 59,841 (24,542) 185
__________ __________ _________
Increase (decrease) in net assets
from operations............ 125,617 (14,236) 660
__________ __________ _________
Distributions to shareholders
Net investment income.......... (24,234) (45,550) (197)
Net realized gain.......... -- (16,210) --
__________ __________ _________
Decrease in net assets from
distributions.............. (24,234) (61,760) (197)
__________ __________ _________
Capital share transactions*
Shares sold............ 226,439 376,286 9,121
Distributions reinvested....... 21,231 52,742 180
Shares redeemed............ (141,261) (360,173) (2,678)
__________ __________ _________
Increase (decrease) in net assets
from capital share transactions.. 106,409 68,855 6,623
__________ __________ _________
Increase (decrease) in net assets.... 207,792 (7,141) 7,086
NET ASSETS
Beginning of period.......... 738,103 745,244 --
__________ __________ _________
End of period............ $ 945,895 $738,103 $7,086
__________ __________ _________
__________ __________ _________
*Share information
Shares sold............ 22,103 37,991 920
Distributions reinvested....... 2,079 5,463 18
Shares redeemed............ (13,932) (36,546) (261)
__________ __________ _________
Increase (decrease) in shares
outstanding............ 10,250 6,908 677
__________ __________ _________
__________ __________ _________
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
Notes to Financial Statements
T. Rowe Price Foreign Bond Funds / June 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The International Bond Fund and the
Emerging Markets Bond Fund, non-diversified, open-end management investment
companies, are two of the portfolios established by the Corporation.
A) Valuation - Debt securities are generally traded in the over-the-counter
market and are valued at a price deemed best to reflect fair value as quoted
by dealers who make markets in these securities or by an independent pricing
service. Purchased options are valued at the latest bid price. Financial
futures contracts are valued at closing settlement prices.
For purposes of determining each fund's net asset value per share,
the U.S. dollar value of all assets and liabilities initially expressed in
foreign currencies is determined by using the mean of the bid and offer
prices of such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the officers
of each fund, as authorized by the Board of Directors.
B) Currency Translation - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign exchange rates on realized
and unrealized security gains and losses is reflected as a component of such
gains and losses.
C) Premiums and Discounts - Premiums and discounts on debt securities are
amortized for both financial and tax reporting purposes.
D) Other - Income and expenses are recorded on the accrual basis.
Investment transactions are accounted for on the trade date. Realized gains
and losses are reported on an identified cost basis. Distributions to
shareholders are recorded by each fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. Payments ("variation margin") made
or received by a fund to settle the daily fluctuations in the value of
futures contracts, are recorded as unrealized gain or loss until the
contracts are closed. Unrealized gains and losses on futures and forward
currency exchange contracts are included in Other assets and Other
liabilities, respectively, and in Change in net unrealized gain or loss in
the accompanying financial statements.
NOTE 2 - ORGANIZATION
The Emerging Markets Bond Fund was organized on November 2, 1994, and had no
operations prior to December 30, 1994, other than those related to
organizational matters.
NOTE 3 - INVESTMENT TRANSACTIONS
Consistent with their investment objectives, the funds engage in the
following practices to manage exposure to certain risks and enhance
performance. The investment objective, policies, program, risk factors, and
following practices of each fund are described more fully in each fund's
Prospectus and Statement of Additional Information.
A) Emerging Markets - At June 30, 1995, each fund held investments issued by
governments of emerging market countries or by companies located in emerging
markets. Each fund also held investments whose value is linked to the
currencies of emerging market countries. Future economic or political
developments could adversely affect the liquidity or value, or both, of such
securities.
Notes to Financial Statements (Cont'd)
B) Noninvestment-Grade Debt Securities - At June 30, 1995, each fund held
investments in noninvestment-grade debt securities, commonly referred to as
"high yield" or "junk" bonds. A real or perceived economic downturn or
higher interest rates could adversely affect the liquidity or value, or both,
of such securities because such events could lessen the ability of issuers to
make principal and interest payments.
C) Forward Currency Exchange Contracts - At June 30, 1995, the International
Bond Fund was a party to forward currency exchange contracts under which it
is obligated to exchange currencies at specified future dates and exchange
rates. Risks arise from the possible inability of counterparties to meet the
terms of their agreements and from movements in currency values.
D) Futures Contracts - At June 30, 1995, the International Bond Fund was a
party to futures contracts, which provide for the future sale by one party
and purchase by another of a specified amount of a specific financial
instrument at an agreed upon price, date, time and place. Risks arise from
possible illiquidity of the futures market and from movements in security
values, interest rates and currency values.
E) Options - Call and put options give the holder the right to purchase or
sell, respectively, a security or currency at a specified price on a certain
date. Risks arise from possible illiquidity of the options market and from
movements in security or currency values. Options are reflected in the
International Bond Fund's accompanying Portfolio of Investments at market
value.
F) Other - Purchases and sales of portfolio securities, other than
short-term and U.S. government securities, for the periods ended June 30,
1995, were as follows:
Emerging
International Markets
Bond Fund Bond Fund
_______________________________________________
Purchases $1,183,411,000 $9,496,000
Sales 1,004,219,000 5,343,000
NOTE 4 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since each fund intends to
qualify or continue to qualify as a regulated investment company and
distribute all of its taxable income. The International Bond Fund has unused
realized capital loss carryforwards for federal income tax purposes of
$31,400,000 which expire in 2002. The fund intends to retain gains realized
in future periods that may be offset by available capital loss carryforwards.
At June 30, 1995, the aggregate cost of investments for the
International Bond and Emerging Markets Bond funds for federal income tax and
financial reporting purposes was $975,215,000 and $5,342,000, respectively.
Net unrealized gain (loss) on investments was as follows:
Emerging
International Markets
Bond Fund Bond Fund
___________ ___________
Appreciated
Investments $39,482,000 $ 204,000
Depreciated
Investments (3,117,000) (19,000)
__________ __________
Net Unrealized
Gain (Loss) $36,365,000 $ 185,000
__________ __________
__________ __________
NOTE 5 - RELATED PARTY TRANSACTIONS
Each fund is managed by Rowe Price-Fleming International, Inc. (the Manager),
which is owned by T. Rowe Price Associates, Inc. (Price Associates), Robert
Fleming Holdings Limited, and Jardine Fleming Holdings Limited under a joint
venture agreement.
The investment management agreement between each fund and the Manager
provides for an annual investment management fee, of
which $531,000 was payable at June 30, 1995 by the International Bond Fund.
The fee is computed daily and paid monthly, and consists of an Individual
Fund Fee equal to 0.35% of average daily net assets for the International Bond
Fund and 0.45% of average daily net assets for the Emerging Markets Bond
Fund, and a Group Fee. The Group Fee is based on the combined assets of
certain mutual funds sponsored by the Manager or Price Associates (the
Group). The Group Fee rate ranges from 0.48% for the first $1 billion of
assets to 0.31% for assets in excess of $34 billion. At June 30, 1995, and
for the periods then ended, the effective annual Group Fee rate was 0.34%.
Each fund pays a pro rata share of the Group Fee based on the ratio of its
net assets to those of the Group.
Under the terms of the investment management agreement, the Manager
is required to bear any expenses through December 31, 1996, which would cause
the Emerging Markets Bond Fund's ratio of expenses to average net assets to
exceed 1.25%. Thereafter through December 31, 1998, the Emerging Markets
Bond Fund is required to reimburse the Manager for these expenses, provided
that average net assets have grown or expenses have declined sufficiently to
allow reimbursement without causing the fund's ratio of expenses to average
net assets to exceed 1.25%. Pursuant to this agreement, $15,000 of
management fees were not accrued by the Emerging Markets Bond Fund for the
period ended June 30, 1995, and $71,000 of other expenses were borne by the
Manager.
In addition, each fund has entered into agreements with Price
Associates and two wholly owned subsidiaries of Price Associates, pursuant to
which each fund receives certain other services. Price Associates computes
the daily share price and maintains the financial records of each fund. T.
Rowe Price Services, Inc. (TRPS) is each fund's transfer and dividend
disbursing agent and provides shareholder and administrative services to the
funds. T. Rowe Price Retirement Plan Services, Inc. provides subaccounting
and recordkeeping services for certain retirement accounts invested in each
fund. Additionally, the International Bond Fund is one of several T. Rowe
Price mutual funds (the Underlying Funds) in which the T. Rowe Price Spectrum
Income Fund (Spectrum) invests. In accordance with an Agreement among
Spectrum, the Underlying Funds, Price Associates and TRPS, expenses from the
operation of Spectrum are borne by the Underlying Funds based on each
Underlying Fund's proportionate share of assets owned by Spectrum. The
International Bond and Emerging Markets Bond funds incurred expenses pursuant
to these related party agreements totaling approximately $585,000 and
$59,000, respectively, for the periods ended June 30, 1995, of which $98,000
and $9,000, respectively, were payable at
period-end.
Financial Highlights
T. Rowe Price International Bond Fund (Unaudited)
For a share
outstanding throughout each period
Six Months
Ended Year Ended December 31,
June 30, 1995 1994 1993 1992 1991 1990
NET ASSET VALUE, BEGINNING
OF PERIOD..................... $ 9.34 $10.34 $ 9.61 $10.35 $ 9.53 $ 9.15
______ ______ ______ ______ ______ ______
Investment Activities
Net investment income.......... 0.29 0.60 0.69 0.87 0.77 0.83
Net realized and unrealized
gain (loss).................. 1.26 (0.79) 1.18 (0.63) 0.82 0.55
______ ______ ______ ______ ______ ______
Total from Investment Activities.... 1.55 (0.19) 1.87 0.24 1.59 1.38
______ ______ ______ ______ ______ ______
Distributions
Net investment income....... (0.29) (0.60) (0.69) (0.83) (0.77) (0.83)
Net realized gain............. -- (0.21) (0.45) (0.15) -- (0.17)
______ ______ ______ ______ ______ ______
Total Distributions............ (0.29) (0.81) (1.14) (0.98) (0.77) (1.00)
______ ______ ______ ______ ______ ______
NET ASSET VALUE, END OF PERIOD. $10.60 $ 9.34 $10.34 $ 9.61 $10.35 $9.53
______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return................... 16.79% (1.84)% 20.00% 2.39% 17.75% 16.05%
Ratio of Expenses to Average
Net Assets................... 0.92% 0.98% 0.99% 1.08% 1.24% 1.15%
Ratio of Net Investment Income
to Average Net Assets........ 5.85% 6.07% 6.58% 8.66% 8.11% 9.04%
Portfolio Turnover Rate....... 285.3% 345.2% 395.7% 357.7% 295.6% 211.4%
Net Assets, End of Period
(in thousands).... $945,895 $738,103 $745,244 $513,927 $413,985 $430,386
Annualized
Financial Highlights
T. Rowe Price Emerging Markets Bond Fund (Unaudited)
For a share outstanding
throughout the period
December 30, 1994
(Commencement of
Operations) to
June 30, 1995
NET ASSET VALUE, BEGINNING OF PERIOD.................. $10.00
______
Investment Activities
Net investment income.................................... 0.49*
Net realized and unrealized
gain (loss)......................................... 0.47
______
Total from Investment Activities........................... 0.96
______
Distributions
Net investment income.................................... (0.49)
______
NET ASSET VALUE, END OF PERIOD............................ $10.47
______
______
RATIOS/SUPPLEMENTAL DATA
Total Return.............................................. 9.98%*
Ratio of Expenses to Average
Net Assets............................................ 1.25%*
Ratio of Net Investment Income
to Average Net Assets.................................... 10.14%*
Portfolio Turnover Rate.................................... 324.5%
Net Assets, End of Period
(in thousands)............................................$7,086
Annualized.
* Excludes expenses in excess of a 1.25% voluntary expense limitation in
effect through December 31, 1996.
