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April 1, 2000
FUND PROFILE
T. ROWE PRICE
Emerging Markets Bond Fund
A worldwide income fund seeking high income and capital growth through
investment in emerging market bonds.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.
TROWEPRICELOGO
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FUND PROFILE
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What is the fund's objective?
The fund seeks to provide high income and capital appreciation.
What is the fund's principal investment strategy?
The fund invests at least 65% (and potentially all) of its total assets in
the government or corporate debt securities of emerging nations. Fund
holdings may include the lowest-rated bonds, including those in default.
There are no maturity restrictions and the fund's weighted average maturity
normally ranges between five and 10 years but may vary substantially because
of market conditions.
Under normal circumstances, most of the fund's total assets are expected to
be denominated in U.S. dollars, and the fund will not usually attempt to
cushion the impact of foreign currency fluctuations on the dollar. Security
selection relies heavily on research, which analyzes political and economic
trends as well as creditworthiness. The fund tends to favor bonds it expects
will be upgraded.
The fund may sell securities for a variety of reasons, such as to adjust the
portfolio's average maturity or quality, to shift assets into higher-yielding
securities, or to alter geographic exposure.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of any of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
The fund is subject to the usual risks of fixed income investing as well as
the special risks of investing in emerging markets.
. Interest rate risk This risk refers to the decline in bond prices that
usually accompanies a rise in interest rates. Longer-maturity bonds typically
suffer greater declines than those with shorter maturities.
. Credit risk This is the chance that any fund holding could have its credit
rating downgraded, or that a bond issuer will default (the failure of an
issuer to make timely payments of interest or principal), potentially
reducing the fund's income level and share price. The bonds in the fund's
portfolio have significant credit risk.
. Emerging market risk Investments in emerging markets are subject to abrupt
and severe price declines. The economic and political structures of
developing nations, in most cases, do not compare favorably with the U.S. or
other developed countries in terms of wealth and stability, and their
financial markets often lack liquidity. These economies are less well
developed and can be overly reliant on particular industries and more
vulnerable to the ebb and
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FUND PROFILE
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flow of international trade and capital, trade barriers, and other
protectionist or retaliatory measures. Certain countries have legacies of
hyperinflation and currency devaluations versus the dollar (which adversely
affects returns to U.S. investors). Significant devaluations have occurred in
recent years in Russia, Brazil, and other Asian and Latin American nations.
Governments of certain emerging market countries have defaulted on their
bonds and investors in this sector must be prepared for similar events in the
future.
. Nondiversified risk Because it is nondiversified, the fund can invest more
of its assets in a fewer number of issuers than diversified funds. This could
result in greater potential losses than funds investing in a broader variety
of issues.
. Currency risk This is a decline in the value of a foreign currency versus
the U.S. dollar, which reduces the dollar value of securities denominated in
that currency. The overall impact on the fund's holdings can be significant
and long lasting, depending on the currencies represented in the portfolio,
how each one appreciates or depreciates in relation to the U.S. dollar, and
whether currency positions are hedged. Bonds held in the fund are often
denominated in U.S. dollars to improve their marketability, but this does not
protect them from substantial price declines in the face of political and
economic turmoil. In addition, many emerging market currencies cannot be
effectively hedged. Currency trends are unpredictable and to the extent the
fund purchases and sells currencies, it will also be subject to the risk that
its trading strategies, including efforts at hedging, will not be successful.
Furthermore, hedging costs can be significant and reduce fund net asset
values.
. Derivatives risk To the extent the fund uses these instruments, it may be
exposed to additional volatility and potential losses.
As with all mutual funds, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of fixed income investing. If you are
willing to accept the special risks associated with emerging market investing
and the general risks of investing in fixed income securities to achieve
current income and potential capital growth, this fund could be appropriate
for you.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
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FUND PROFILE
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. The fund should not represent your complete investment program or be used
for short-term trading purposes.
How has the fund performed in the past?
The bar chart showing calendar year returns and the average annual total
return table indicate risk by illustrating how much returns can differ from
one year to the next. The fund's past performance is no guarantee of its
future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
LOGO
<TABLE>
<CAPTION>
Calendar Year Total Returns
"95" "96" "97" "98" "99"
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<S> <C> <C> <C> <C>
25.81 36.77 16.83 -23.09 22.97
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</TABLE>
Quarter ended Total return
Best quarter 6/30/95 17.56%
Worst quarter 9/30/98 -30.20%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 3/31/00
Since inception
1 year 5 years (12/30/1994)
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<S> <C> <C> <C>
Emerging Markets Bond Fund 29.80% 17.16% 14.81%
J.P. Morgan Emerging Mkt Bd Plus 29.05 21.12 17.38
Index
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Lipper Emerging Markets Debt Funds 27.77 17.47 13.74
Average
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</TABLE>
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These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
What fees or expenses will I pay?
The fund is 100% no load. There are no other fees or charges to buy or sell
fund shares, reinvest dividends, or exchange into other T. Rowe Price funds.
There are no 12b-1 fees.
<TABLE>
Table 2 Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
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<S> <C>
Management fee 0.77%/a/
Other expenses 0.53%
Total annual fund operating
expenses 1.30%/a/
Fee waiver/reimbursement
Net expenses 1.25%
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</TABLE>
/a/Price-Fleming is contractually obligated to waive its fees and bear any
expenses to the extent such fees or expenses would cause the fund's ratios of
expenses to average net assets to exceed the indicated percentage
limitations. Fees waived or expenses paid or assumed are subject to
reimbursement to Price-Fleming by the fund through the indicated
reimbursement date, but no reimbursement will be made if it would result in
the fund's expense ratio exceeding its specified limit. A summary of the
fund's expense limitation and the periods for which it is effective is set
forth below:
<TABLE>
<CAPTION>
<C> <C> <C> <S>
Limitation Period Expense Ratio Limitation Reimbursement Date
1/1/99-12/31/00 1.25% 12/31/02
</TABLE>
Previously, the fund operated under a 1.25% limitation that expired December
31, 1996. Effective January 1, 1997, Price-Fleming agreed to extend the
limitation period through December 31, 1998. Fees waived or expenses assumed
under these agreements are subject to reimbursement to Price-Fleming by the
fund whenever the fund's expense ratio is below 1.25%. However, no
reimbursement will be made after December 31, 2000, or if it would result in
the expense ratio exceeding 1.25%.
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, the expense limitation currently in place is not renewed, you
invest $10,000, you earn a 5% annual return, and you hold the investment for
the following periods:
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<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
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<S> <C> <C> <C>
$127 $402 $703 $1,559
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</TABLE>
Who manages the fund?
The fund is managed by Rowe Price-Fleming International, Inc., a joint
venture between T. Rowe Price Associates, Inc. and the London-based Fleming
Group. Established in 1979, Price-Fleming manages investments for individual
and institutional accounts, including 12 no-load mutual funds sold directly
to the public.
The fund has an Investment Advisory Group with day-to-day responsibility for
managing the funds. The advisory group consists of Peter Askew, who joined
Price-Fleming in 1988 and has been managing multicurrency fixed income
portfolios since 1976; Christopher Rothery, who joined Price-Fleming in 1994
and has been managing multicurrency fixed income portfolios since 1988; and
Michael Conelius, who joined T. Rowe Price in 1988 and Price-Fleming in 1995,
and has been managing investments since 1992.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50 for
IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
open an account by bank wire, by exchanging from another T. Rowe Price fund,
or by transferring assets from another financial institution.
How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
When will I receive income and capital gain distributions?
The fund distributes income monthly and net capital gains, if any, at
year-end. For regular accounts, income and short-term gains are taxable at
ordinary income rates, and long-term gains are taxable at the capital gains
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FUND PROFILE
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rate.; Distributions are reinvested automatically in additional shares unless
you choose another option, such as receiving a check. Distributions paid to
IRAs and employer-sponsored retirement plans are automatically reinvested.
What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F06-035
T. Rowe Price Investment Services, Inc., Distributor
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