<PAGE>
Credit Suisse Asset Management Income Fund, Inc.
466 Lexington Avenue
New York, NY 10017
---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
William W. Priest, Jr. Suzanne E. Moran
CHAIRMAN OF THE BOARD INVESTMENT OFFICER
Prof. Enrique R. Arzac Hal Liebes
DIRECTOR SENIOR VICE PRESIDENT
Lawrence J. Fox Michael A. Pignataro
DIRECTOR CHIEF FINANCIAL OFFICER,
VICE PRESIDENT AND
James S. Pasman, Jr. SECRETARY
DIRECTOR Maxine C. Evertz
Richard J. Lindquist ASSISTANT SECRETARY
PRESIDENT AND CHIEF
INVESTMENT OFFICER Robert M. Rizza
VICE PRESIDENT AND
TREASURER
John L. Hogan
ASSISTANT TREASURER
</TABLE>
--------------------------------------------------------
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, New York 10017
Phone 1-800-293-1232
--------------------------------------------------------
ADMINISTRATOR AND CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
--------------------------------------------------------
SHAREHOLDER SERVICING AGENT
BankBoston N.A.
P.O. Box 1865
Mailstop 45-02-62
Boston, Massachusetts 02105-1865
Phone 1-800-730-6001
--------------------------------------------------------
LEGAL COUNSEL
Willkie Farr & Gallagher
787 7th Avenue
New York, New York 10019
--------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
--------------------------------------------------------
--------------------------------------------------------
Credit Suisse Asset Management Income Fund, Inc.
---------------------------------------------
SEMI-ANNUAL REPORT
June 30, 2000
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
SECOND QUARTER REPORT - 6/30/00
----------
Dear Shareholders: July 24, 2000
We are writing to report on the activities of Credit Suisse Asset Management
Income Fund, Inc. ("the Fund") for the quarter ended June 30, 2000 and to
discuss our investment strategy.
On June 30, 2000, the Fund's net asset value ("NAV") was $6.66, compared to
an NAV of $7.04, at March 31, 2000. The Fund's total return (based on NAV and
assuming reinvestment of dividends of $0.24 per share) for the period was -1.7%.
For the first six months of 2000, the Fund returned -2.4%.
At June 30, 2000, $184.0 million was invested in high yield debt securities;
$19.1 million in investment-grade debt securities; $21.0 million in equity
securities; and the balance of $5.0 million in cash equivalents. The
investment-grade component consisted of short- and intermediate-term mortgages,
asset-backed securities and corporate bonds of intermediate maturity. Of the
debt securities, the largest concentration (60.9%) was invested in B-rated
issues.
THE MARKET: ONGOING MALAISE
The overall investment climate for high yield remained poor for much of the
quarter against intensified concerns of accelerated interest-rate increases,
ongoing turbulence in equity markets and deteriorating liquidity. Fears
surrounding the Federal Reserve's aggressiveness in slowing the U.S. economy
maintained pressure across most fixed income markets, with selling especially
pronounced among lower-rated debt. A volatile NASDAQ heightened worries of event
risk in sectors plagued by languishing equity valuations, while a combination of
little new issuance, broker/dealers' low inventories and lack of follow-through
on brief rallies restrained liquidity.
When the central bank raised the Fed Funds rate on May 16 for the sixth time
since June 30, 1999, the half-point increase was widely viewed as marking the
Fed's shift away from a policy of gradual tightening. Although high yield had
staged a minor rebound prior to the announcement, it surrendered all of its
gains afterwards.
The average high yield issue traded 650 basis points (bps) over Treasuries
by mid-June, 200 bps wider than its three-year average. This heightened risk
premium partially reflected increased concerns about defaults, already running
at an elevated level, in an environment of slowing growth. Additionally, the
weakness in technology, media and telecommunications stocks weighed heavily on
the high yield telecom sector, and investors also avoided many non-technology
"Old Economy" issuers with limited financial flexibility.
The investment environment for high yield bonds improved in June. Market
participants had begun to price in a less-aggressive Fed following later reports
of lower-than-expected growth in new jobs and wages for the previous month.
Releases indicating economic slowing and tame consumer-price-inflation data for
May further strengthened market tone. Thus, for the quarter as a whole, the high
yield market rose 1.2%, as represented by the Salomon Smith Barney High-Yield
Market Index (SSBHYMI).
PERFORMANCE: HURT BY SECTOR ALLOCATION
The Fund significantly lagged the broad high yield market during the period.
Although the equity-oriented component of our high yield portfolio helped
returns during the first quarter, it resulted in much of the portfolio's
underperformance in the second. This was due to the NASDAQ sell-off among mostly
telecom and cable-related stocks (including warrants and restricted shares).
Relative underweights in some of the better-performing sectors such as energy,
lodging and interest-rate-sensitive industries (including utilities, banks and
homebuilders) also detracted somewhat from performance.
Our continued overweight in gaming and comparatively lower emphasis on
metals/mining and non-banking financial issues, were positive contributors.
OUTLOOK: CAUTIOUS NEAR TERM, SOMEWHAT OPTIMISTIC LONGER TERM
Looking ahead, we remain cautious about the high yield market over the short
term:
- Despite the fact that negative sentiment began to reverse in early
June--indeed, June marked the first month of positive cash inflows into
the high yield sector in 2000--we are not yet convinced of the rebound's
longevity.
- Sentiment regarding further interest-rate increases is still driving fund
flows into and out of the high yield market, and continues to heavily
impact related factors, like stock-market trading activity and dealers'
bond inventories.
2
<PAGE>
- We believe that summer may prove to be a testing period for financial
markets, as upcoming economic releases better reflect the effectiveness of
earlier efforts by the Fed to slow the economy.
Further out, we are more optimistic. We believe that high yield valuations
remain attractive both on a historical and relative basis, and are likely to
attract investors increasingly disenchanted with lower-return/higher-risk
prospects for equities in the months ahead.
The overall approach with which we have managed the Fund holds firm. Our
focus remains on marginally reducing positions that entail relatively high
downside risk due to company- or sector-specific factors. We are maintaining our
overweights in telecommunications, cable/media and gaming, whose industry and
company fundamentals remain strong. Furthermore, we are avoiding
interest-rate-sensitive sectors such as homebuilders and textiles, and other
industries with rising cost structures and low pricing power.
As developments occur that we believe would be of interest to you, we will
keep you informed. Meanwhile, if you have any questions about your portfolio or
the capital markets generally, please feel free to call upon us at any time.
We appreciate your interest in the Fund and would be pleased to respond to
your questions or comments. Any questions regarding net asset value,
performance, dividends, portfolio management or allocations should be directed
to Credit Suisse Asset Management at (800) 293-1232. All other inquiries
regarding account information, requests for the latest financial information or
other reports should be directed to the Fund's Shareholder Servicing Agent at
(800) 730-6001.
Sincerely yours,
/s/ Richard J. Lindquist
Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT OFFICER*
/s/ William W. Priest, Jr.
William W. Priest, Jr.
CHAIRMAN OF THE BOARD **
*Richard J. Lindquist, who is a Managing Director of Credit Suisse Asset
Management , LLC ("CSAM"), is primarily responsible for management of the Fund's
assets. He has served in such capacity since November 21, 1996. Prior to that
date, he served as Vice President to the Fund, a position he assumed on
August 15, 1989. Mr. Lindquist joined CSAM on May 1, 1995 as a result of CSAM's
acquisition of CS First Boston Investment Management Corporation ("CSFBIM").
Prior to joining CSAM and beginning in July, 1989, he held various offices at
CSFBIM. Mr. Lindquist also is President and Chief Investment Officer of Credit
Suisse Asset Management Strategic Global Income Fund, Inc.
**William W. Priest, Jr., who is a Managing Director and Chairman-Americas
of Credit Suisse Asset Management, LLC ("CSAM"), joined CSAM in 1972.
Mr. Priest is Director and Chairman of other investment companies advised by
CSAM.
3
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
JUNE 30, 2000
TOP TEN HOLDINGS (UNAUDITED)
<TABLE>
<CAPTION>
(as a % of net assets as of 6/30/00)
<C> <S> <C>
-----------------------------------------------------------------------
1. Spanish Broadcasting System, Inc.
Class B............................ 1.0%
2. Price Communications Corp............ 0.9%
3. Univision Network Holding L.P. Sub.
Notes 7.00%, 12/17/02.............. 0.9%
4. Ainsworth Lumber Co., Ltd. Yankee Sr.
Secured Notes 12.50%, 7/15/07...... 0.8%
5. Dr. Pepper Bottling Holdings, Inc.
Class A............................ 0.8%
6. Capstar Broadcasting Partners, Inc.,
Sr. Discount Notes 0.00%, 2/1/09... 0.8%
7. Telewest Communications plc, Yankee
Sr. Sub. Discount Debentures 0.00%,
10/1/07............................ 0.8%
8. Coinstar, Inc., Sr. Discount Notes
13.00%, 10/1/06.................... 0.8%
9. Meditrust Conv. Debentures 7.50%,
3/1/01............................. 0.8%
10. Pagemart Nationwide, Inc. Sr.
Discount Notes 0.00%, 2/1/05....... 0.7%
</TABLE>
CREDIT QUALITY BREAKDOWN (UNAUDITED)
<TABLE>
<CAPTION>
(as a % of total investments as of 6/30//00)
<S> <C>
------------------------------------------------------
AAA/Aaa................................... 3.2%
AA/Aa..................................... 1.1
A/A....................................... 0.8
BBB/Baa................................... 3.2
BB/Ba..................................... 6.6
B/B....................................... 51.1
CCC/Caa................................... 11.2
NR........................................ 11.4
--------
Subtotal................................ 88.6
Equities and Other........................ 11.4
--------
Total................................... 100.0%
========
</TABLE>
4
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
---------
JUNE 30, 2000
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
DOMESTIC SECURITIES (95.2%)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
CORPORATE OBLIGATIONS (82.6%)
--------------------------------------------------------------------------------------------
-----------------
AEROSPACE/DEFENSE (0.6%)
(1) Decrane Aircraft Holdings
Series B, Gtd.
12.00%, 9/30/08 Caa1 $ 800 $ 708,000
Lockheed Martin Corp.
Notes
7.95%, 12/1/05 Baa3 195 196,219
Raytheon Co.
Notes
6.45%, 8/15/02 Baa2 400 389,704
United Technologies Corp.
Notes
6.625%, 11/15/04 A2 195 190,856
------------
GROUP TOTAL 1,484,779
------------
--------------------------------------------------------------------------------------------
-----------------
AUTOMOTIVE (2.7%)
Aetna Industries, Inc.
Sr. Notes
11.875%, 10/1/06 B3 600 571,500
(2) Breed Technologies, Inc.
Gtd. Sr. Sub. Notes
9.25%, 4/15/08 Caa3 400 2,500
Cambridge Industries,
Inc.
Series B, Gtd. Sr. Sub.
Notes
10.25%, 7/15/07 B3 500 125,000
Collins & Aikman
Products Corp.
Sr. Sub. Notes
11.50%, 4/15/06 B3 700 682,500
DaimlerChrysler NA
Holdings, Corp.:
Gtd.
7.40%, 1/20/05 A1 250 249,375
7.20%, 9/1/09 A1 220 211,792
Delco Remy
International, Inc.
Gtd. Sr. Sub. Notes
10.625%, 8/1/06 B2 500 496,250
Diamond Triumph Auto
Gtd.
9.25%, 4/1/08 B3 500 390,000
Hayes Lemmerz
International, Inc.:
Series B, Gtd. Sr. Notes
9.125%, 7/15/07 B2 500 447,500
8.25%, 12/15/08 B2 750 630,000
Motor Coach Industries
International, Inc.
Gtd.
11.25%, 5/1/09 B2 1,000 851,250
Oxford Automotive, Inc.
Gtd. Sr. Sub. Notes
10.125%, 6/15/07 Caa1 1,375 1,196,250
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
(2) Safety Components
International, Inc.
Series B, Gtd.
Sr. Sub. Notes
10.125%, 7/15/07 B3 $ 500 $ 100,000
Stanadyne Automotive
Series B,
Gtd. Sr. Sub. Notes
10.25%, 12/15/07 Caa1 400 330,000
------------
GROUP TOTAL 6,283,917
------------
--------------------------------------------------------------------------------------------
-----------------
BROADCASTING (4.8%)
(2)(3) Australis Holdings Pty.
Ltd.
Yankee Sr. Secured
Discount Notes
0.00%, 11/1/02 N/R 3,950 395
(2)(6) Australis Media Ltd.
Yankee Units
15.75%, 5/15/03 C 2,412 12,060
(3) Capstar Broadcasting
Partners, Inc.
Sr. Discount Notes
0.00%, 2/1/09 B2 2,000 1,835,000
(1) Chancellor Media Corp.
Sr. Sub. Notes
9.00%, 10/1/08 B1 500 515,000
Cumulus Media, Inc.
Sr. Sub. Notes
10.375%, 7/1/08 B3 800 676,000
EchoStar
Communications Corp.
Sr. Notes
9.375%, 2/1/09 B2 750 720,000
Granite Broadcasting
Corp.:
Series A,
Sr. Sub. Notes
9.375%, 12/1/05 B3 300 268,500
8.875%, 5/15/08 B3 900 760,500
Pegasus Media &
Communications, Inc.
Series B, Notes
12.50%, 7/1/05 B2 250 266,250
Salem
Communications Corp.
Series B, Gtd.
9.50%, 10/1/07 B3 600 562,500
Sinclair Broadcast
Group, Inc.:
Sr. Sub. Notes
10.00%, 9/30/05 B2 900 846,000
Gtd. Sr. Sub. Notes
8.75%, 12/15/07 B2 350 306,250
Time Warner
Telecom, LLC
Sr. Notes
9.75%, 7/15/08 B2 500 485,000
Turner Broadcasting
Systems, Inc.
Sr. Notes
7.40%, 2/1/04 Ba1 65 63,007
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
(3) United International
Holdings, Inc.
Series B,
Sr. Discount Notes
0.00%, 2/15/08 B3 $ 1,450 $ 971,500
Univision Network
Holding L.P.
Sub. Notes
7.00%, 12/17/02 N/R 1,500 1,987,500
Young Broadcasting, Inc.
Series B, Gtd.
Sr. Sub. Notes
8.75%, 6/15/07 B2 865 791,475
------------
GROUP TOTAL 11,066,937
------------
--------------------------------------------------------------------------------------------
-----------------
BUSINESS SERVICES (0.5%)
Comdisco, Inc.:
Medium Term Notes
7.23%, 8/16/01 Baa1 35 34,388
Sr. Notes
7.25%, 9/1/02 Baa1 100 96,875
General Binding Corp.
Gtd. Sr. Sub. Notes
9.375%, 6/1/08 B2 250 162,500
Iron Mountain, Inc.
Sr. Sub. Notes
8.75%, 9/30/09 B3 450 414,000
Premier Graphics, Inc.
Gtd.
11.50%, 12/1/05 Caa3 1,500 375,000
------------
GROUP TOTAL 1,082,763
------------
--------------------------------------------------------------------------------------------
-----------------
CABLE (10.2%)
Adelphia
Communications Corp.
Series B, Sr. Notes
8.375%, 2/1/08 B1 800 707,000
CSC Holdings, Inc.:
Sr. Sub. Notes
9.875%, 5/15/06 B1 400 409,000
Series B,
Sr. Sub. Debentures
8.125%, 8/15/09 Ba2 350 340,225
9.875%, 2/15/13 B1 850 872,313
Century
Communications Corp.:
Series B,
0.00%, 1/15/08 Ba3 650 263,250
Sr. Notes
9.75%, 2/15/02 Ba3 500 497,500
8.75%, 10/1/07 Ba3 400 360,000
Charter
Communications Holdings:
Sr. Notes
8.625%, 4/1/09 B2 500 439,375
(1) 10.25%, 1/15/10 B2 750 725,625
(3) Sr. Discount Notes
9.92%, 4/1/11 B2 1,000 567,500
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Classic Cable, Inc.
Series B, Gtd.
9.375%, 8/1/09 B3 $ 400 $ 349,000
Coaxial
Communications, Inc.
Gtd. Notes
10.00%, 8/15/06 B3 1,000 947,500
Comcast Corp.
Sr. Sub. Notes
9.125%, 10/15/06 Ba3 750 785,160
(3) Diamond Cable
Communications plc
Yankee Discount Notes
0.00%, 12/15/05 Caa1 1,500 1,425,000
(3) DIVA Systems Corp.
Series B, Sr. Discount
Notes
0.00%, 3/1/08 N/R 3,075 1,629,750
James Cable Partners L.P.
Series B, Sr. Notes
10.75%, 8/15/04 N/R 1,550 1,488,000
Jones Intercable, Inc.
Sr. Notes
7.625%, 4/15/08 Ba2 1,150 1,107,542
Lenfest
Communications, Inc.:
Sr. Notes
8.375%, 11/1/05 Ba3 500 506,720
10.50%, 6/15/06 B2 900 994,500
8.25%, 2/15/08 B2 200 198,500
Mediacom LLC/Capital
Corp.
Sr. Notes
7.875%, 2/15/11 B2 600 525,000
NTL Communications Corp.:
Series B, Sr. Notes
(3) 0.00%, 10/1/08 B3 1,500 982,500
11.50%, 10/1/08 B3 600 603,000
NTL, Inc.:
Sr. Notes,
(3) Series A,
0.00%, 4/15/05 B3 1,000 1,022,500
Series B,
(3) 0.00%, 2/1/06 B3 1,050 966,000
10.00%, 2/15/07 B3 500 472,500
Northland Cable
Television
Sr. Sub. Notes
10.25%, 11/15/07 N/R 500 415,000
Olympus
Communications, L.P./
Olympus Capital Corp.
Series B, Sr. Notes
10.625%, 11/15/06 B1 1,000 990,000
(3) Renaissance Media Group
Sr. Discount Notes
0.00%, 4/15/08 B3 1,000 680,000
Rogers Cablesystems, Ltd.
Gtd.
10.00%, 12/1/07 Ba3 450 460,125
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Rogers Communications,
Inc.
Sr. Notes
8.875%, 7/15/07 Ba3 $ 200 $ 196,000
(3) Telewest
Communications plc
Yankee Sr. Sub.
Discount Debentures
0.00%, 10/1/07 B1 1,850 1,762,125
------------
GROUP TOTAL 23,688,210
------------
--------------------------------------------------------------------------------------------
-----------------
CHEMICALS (2.0%)
Applied Extrusion
Technologies
Series B, Sr. Notes
11.50%, 4/1/02 B2 1,500 1,511,250
(1) Huntsman, Inc.
Sr. Sub. Notes
9.50%, 7/1/07 B2 400 364,000
Huntsman Polymers Corp.
Sr. Notes
11.75%, 12/1/04 B1 900 913,500
(2) Laroche Industries, Inc.
Series B, Sr. Sub. Notes
9.50%, 9/15/07 Ca 400 84,000
Lyondell Chemical Co.
Series B, Secured Notes
9.875%, 5/1/07 Ba3 500 493,750
NL Industries, Inc.
Sr. Secured Notes
11.75%, 10/15/03 B1 250 255,000
Sterling Chemical
Holdings, Inc.
Sr. Secured
Discount Notes
0.00%, 8/15/08 Caa1 1,000 430,000
Sterling Chemicals, Inc.
Sr. Sub. Notes
11.75%, 8/15/06 B3 334 273,880
Texas Petrochemical Corp.
Series B, Sr. Sub. Notes
11.125%, 7/1/06 N/R 350 297,500
------------
GROUP TOTAL 4,622,880
------------
--------------------------------------------------------------------------------------------
-----------------
CONSTRUCTION & BUILDING MATERIALS (1.1%)
AFC Enterprises
Sr. Sub. Notes
10.25%, 5/15/07 N/R 400 388,000
American Architectural
Products Corp.
Gtd. Sr. Notes
11.75%, 12/1/07 Caa1 1,150 195,500
Collins & Aikman Floor
Coverings, Inc.
Series B, Sr. Sub. Notes
10.00%, 1/15/07 B3 1,000 985,000
International Utility
Structures, Inc.
Yankee Sr. Sub. Notes
10.75%, 2/1/08 Caa1 500 410,000
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
MMI Products, Inc.
Series B, Sr. Sub. Notes
11.25%, 4/15/07 B2 $ 250 $ 246,250
Waxman Industries, Inc.
Series B, Sr. Notes
12.75%, 6/1/04 Caa1 600 270,000
------------
GROUP TOTAL 2,494,750
------------
--------------------------------------------------------------------------------------------
-----------------
CONSUMER PRODUCTS & SERVICES (2.3%)
Coinstar, Inc.
Sr. Discount Notes
13.00%, 10/1/06 Caa1 1,700 1,751,000
Doskocil
Manufacturing Co., Inc.
Gtd. Sr. Sub. Notes
10.125%, 9/15/07 B3 500 174,375
Drypers Corp.
Series B, Sr. Notes
10.25%, 6/15/07 Caa1 250 161,250
Fort James Corp.
Sr. Notes
6.234%, 3/15/01 Baa3 155 153,594
Holmes Products Corp.
Gtd. Sr. Sub. Notes
9.875%, 11/15/07 B3 800 560,000
Indesco International,
Inc.
Gtd. Sr. Sub. Notes
9.75%, 4/15/08 B3 600 222,000
Jordan Industries, Inc.
Series B, Sr. Notes
10.375%, 8/1/07 B3 1,150 1,052,250
Packaged Ice, Inc.
Gtd. Sr. Notes
9.75%, 2/1/05 B3 100 83,000
Playtex Products, Inc.
Series B, Gtd. Sr. Notes
8.875%, 7/15/04 B3 225 217,125
(1) Scotts Co.
Sr. Sub. Notes
8.625%, 1/15/09 B2 300 288,000
Sealy Mattress Co.
Gtd. Sr. Sub. Notes
9.875%, 12/15/07 B3 200 193,000
United Rentals, Inc.
Sr. Sub. Notes
9.25%, 1/15/09 B1 500 450,000
------------
GROUP TOTAL 5,305,594
------------
--------------------------------------------------------------------------------------------
-----------------
ELECTRONICS (0.7%)
(1) Condor Systems, Inc.
Gtd. Sr. Sub. Notes
11.875%, 5/1/09 B3 400 193,000
Details, Inc.
Series B, Sr. Sub. Notes
10.00%, 11/15/05 B3 500 470,000
Unisys Corp.:
Sr. Notes
11.75%, 10/15/04 B1 225 238,500
7.875%, 4/1/08 B1 250 232,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Viasystems, Inc.:
Sr. Sub. Notes
9.75%, 6/1/07 B3 $ 300 $ 259,500
Series B, Sr. Sub. Notes
9.75%, 6/1/07 B3 150 129,750
------------
GROUP TOTAL 1,523,250
------------
--------------------------------------------------------------------------------------------
-----------------
ENERGY (5.2%)
Abraxas Petroleum Corp.
Series D, Sr. Notes.
11.50%, 11/1/04 B2 1,085 911,400
Bellwether
Exploration Co.
Gtd. Sr. Sub. Notes
10.875%, 4/1/07 B3 1,250 1,120,313
Canadian Forest Oil Ltd.
Gtd. Sr. Sub. Notes
8.75%, 9/15/07 B2 450 423,000
Cliffs Drilling Co.
Series D,
Gtd. Sr. Notes
10.25%, 5/15/03 B1 1,100 1,102,750
Cogentrix Energy, Inc.
Gtd. Unsecured Notes
8.75%, 10/15/08 Ba1 1,000 956,250
Continental Resources
Gtd. Sr. Notes
10.25%, 8/1/08 B3 250 223,125
Contour Energy Co.
Gtd.
14.00%, 4/15/03 B3 651 667,275
Dominion Resources, Inc.
Sr. Notes
8.125%, 6/15/10 Baa1 185 186,619
First Wave Marine, Inc.
Gtd. Sr. Notes
11.00%, 2/1/08 B3 1,000 590,000
Frontier Oil Corp.
Sr. Notes
11.75%, 11/15/09 B2 800 800,000
Giant Industries, Inc.
Gtd. Sr. Sub. Notes
9.00%, 9/1/07 B2 500 450,000
Gothic Production Corp.
Series B,
Gtd. Sr. Secured Notes
11.125%, 5/1/05 B3 250 233,125
H.S. Resources, Inc.:
Gtd. Sr. Sub. Notes
9.25%, 11/15/06 B2 600 588,000
Sr. Sub. Notes
9.875%, 12/1/03 B2 500 498,750
Key Energy Services, Inc.
Sr. Sub. Notes
14.00%, 1/15/09 B3 1,250 1,406,250
Keyspan Gas East
Unsub. Notes
7.875%, 2/1/10 A3 230 230,575
Korea Electric Power
Yankee
Unsecured Debentures
7.00%, 2/1/07 Baa3 240 221,582
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Parker Drilling Co.
Series D, Gtd. Sr. Notes
9.75%, 11/15/06 B1 $ 300 $ 290,250
Phillips Petroleum Co.:
Notes
8.50%, 5/25/05 Baa2 35 36,225
8.75%, 5/25/10 Baa2 55 58,230
Plains Resources, Inc.
Series B, Gtd.
Sr. Sub. Notes
10.25%, 3/15/06 B2 375 372,188
Southwest Royalties, Inc.
Series B, Gtd. Sr. Notes
10.50%, 10/15/04 B3 500 320,000
Wiser Oil Co.
Gtd. Sr. Sub. Notes
9.50%, 5/15/07 B2 450 355,500
------------
GROUP TOTAL 12,041,407
------------
--------------------------------------------------------------------------------------------
-----------------
ENTERTAINMENT (1.7%)
American Skiing Co.
Series B, Sr. Sub. Notes
12.00%, 7/15/06 B3 425 357,000
Bally Total
Fitness Holdings
Series D, Sr. Sub. Notes
9.875%, 10/15/07 B3 350 320,250
Booth Creek Ski
Holdings, Inc.
Series B, Sr. Sub. Notes
12.50%, 3/15/07 Caa1 1,000 720,000
Cinemark U.S.A., Inc.
Series D, Sr. Sub. Notes
9.625%, 8/1/08 B2 250 130,000
KSL Recreation Group,
Inc.
Series B, Sr. Sub. Notes
10.25%, 5/1/07 B2 430 408,500
Loews Cineplex
Sr. Sub. Notes
8.875%, 8/1/08 B3 900 423,000
Outboard Marine Corp.
Series B, Gtd. Sr. Notes
10.75%, 6/1/08 B3 500 250,000
(1)(2) Premier Cruises, Ltd.
Gtd. Sr. Notes
11.00%, 3/15/08 B3 900 27,000
Production Resource
Group,
LLC/PRG Finance Group
Gtd. Sr. Sub. Notes
11.50%, 1/15/08 Caa2 750 153,750
Regal Cinemas, Inc.
Sr. Sub. Notes
9.50%, 6/1/08 Caa1 1,400 336,000
(2) Silver Cinemas, Inc.
Sr. Sub. Notes
10.50%, 4/15/05 Caa1 1,900 190,000
Time Warner, Inc.:
Debentures
7.48%, 1/15/08 Ba1 630 615,038
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Notes
8.11%, 8/15/06 Baa3 $ 60 $ 61,125
------------
GROUP TOTAL 3,991,663
------------
--------------------------------------------------------------------------------------------
-----------------
FINANCIAL SERVICES (2.4%)
American Tissue, Inc.
Series B, Gtd.
12.50%, 7/15/06 B3 340 328,100
Associates Corp.
Sr. Notes
6.25%, 11/1/08 Aa3 400 358,700
Bank of America Corp.
Sub. Notes
7.80%, 2/15/10 Aa3 345 343,275
CIT Group, Inc.
Unsub. Notes
7.375%, 3/15/03 A1 45 44,438
Citicorp
Series F, Sub. Notes
6.375%, 11/15/08 A1 140 128,502
Conseco
Finance Trust III
Bonds
8.796%, 4/1/27 Ba2 55 23,100
Conseco, Inc.:
Notes
6.40%, 2/10/03 Baa3 155 105,400
9.00%, 10/15/06 Baa3 100 70,000
Enron Corp.
Notes
7.875%, 6/15/03 Baa1 60 60,375
(1) ERAC USA Finance Co.
Notes
7.95%, 12/15/09 Baa2 50 48,625
Finova Capital Corp.:
Notes
6.55%, 11/15/02 Baa1 155 136,206
7.25%, 11/8/04 Baa1 135 118,969
Ford Motor Credit Co.
Notes
7.875%, 6/15/10 A2 430 429,406
GE Global Insurance
Notes
7.50%, 6/15/10 Aa1 355 351,894
(1) John Hancock Global
Funding II
Notes
7.90%, 7/2/10 Aa2 240 239,426
Lehman Brothers
Holdings:
Notes
6.625%, 4/1/04 Baa1 50 47,750
8.25%, 6/15/07 A3 60 60,075
Long Island Savings
Bank F.S.B.
Notes
7.00%, 6/13/02 Baa3 770 756,402
(1) Madison River
Capital/Finance
Sr Notes
13.25%, 3/1/10 Caa1 1,250 1,125,000
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Morgan Stanley
Dean Witter & Co.
Notes
7.75%, 6/15/05 Aa3 $ 95 $ 95,475
(1) Potomac Capital
Investment Corp.
Notes
7.55%, 11/19/01 Baa1 150 149,625
(1) US West Cap
Funding, Inc.
Gtd.
6.875%, 8/15/01 Baa1 120 119,400
(2) Westfed Holdings
Sr. Debentures
15.50%, 9/15/99 N/R 1,750 525,000
------------
GROUP TOTAL 5,665,143
------------
--------------------------------------------------------------------------------------------
-----------------
FOOD & BEVERAGES (2.1%)
Archibald Candy Corp.
Gtd. Sr. Secured Notes
10.25%, 7/1/04 B2 1,000 725,000
Aurora Foods, Inc.
Series B, Sr. Sub. Notes
9.875%, 2/15/07 Caa1 750 435,000
Eagle Family Foods
Series B, Gtd. Sr. Notes
8.75%, 1/15/08 B3 450 270,000
Fleming Companies, Inc.
Sr. Sub. Notes
10.50%, 12/1/04 B3 700 631,750
International Home
Foods, Inc.
Gtd. Sr. Sub. Notes
10.375%, 11/1/06 B2 1,000 1,060,000
Kroger Co.
Sr. Notes
7.625%, 9/15/06 Baa3 400 391,500
Premier International
Foods, plc
Sr. Notes
12.00%, 9/1/09 B3 1,000 895,000
Stater Brothers
Holdings, Inc.
Sr. Notes
10.75%, 8/15/06 B2 500 440,000
------------
GROUP TOTAL 4,848,250
------------
--------------------------------------------------------------------------------------------
-----------------
HEALTH CARE (1.4%)
ICN Pharmaceutical
Sr. Notes
8.75%, 11/15/08 Ba3 500 492,500
Icon Health &
Fitness, Inc.
Gtd.
12.00%, 9/27/05 N/R 222 144,300
Meditrust
Conv. Debentures
7.50%, 3/1/01 Baa3 2,000 1,750,000
Oxford Health Plans
Sr. Notes
11.00%, 5/15/05 Caa1 590 610,650
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
(2) Paracelsus Healthcare
Sr. Sub. Notes
10.00%, 8/15/06 B3 $ 750 $ 180,000
------------
GROUP TOTAL 3,177,450
------------
--------------------------------------------------------------------------------------------
-----------------
INDUSTRIAL GOODS & MATERIALS (2.1%)
APCOA, Inc.
Gtd. Sr. Notes
9.25%, 3/15/08 Caa1 430 151,038
Atlantis Group, Inc.
Sr. Notes
11.00%, 2/15/03 B1 585 582,806
CLARK Material
Handling Co.
Gtd. Sr. Notes
10.75%, 11/15/06 B1 550 90,750
Elgar Holdings, Corp.
Gtd.
9.875%, 2/1/08 B2 200 110,000
Haynes
International, Inc.
Sr. Notes
11.625%, 9/1/04 B3 500 350,000
(1) Holley Performance
Products
Sr. Notes
12.25%, 9/15/07 B2 500 360,000
International Knife &
Saw, Inc.
Sr. Sub. Notes
11.375%, 11/15/06 B3 750 390,000
K N Energy, Inc.
Notes
6.30%, 3/1/01 Baa2 270 267,910
Motors & Gears, Inc.
Series D, Sr. Notes
10.75%, 11/15/06 B3 1,400 1,347,500
Neenah Corp.
Series B, Sr. Sub. Notes
11.125%, 5/1/07 B3 250 183,750
Park-Ohio
Industries, Inc.
Sr. Sub. Notes
9.25%, 12/1/07 B2 400 352,000
(3) Thermadyne
Manufacturing, LLC /
Thermadyne Capital Corp.
Gtd. Sr. Sub. Notes
0.00%, 6/1/08 B3 975 351,000
Thermadyne Holdings
Corp.
Sr. Discount Notes
9.875%, 6/1/08 Caa1 300 230,625
------------
GROUP TOTAL 4,767,379
------------
--------------------------------------------------------------------------------------------
-----------------
METALS & MINING (2.7%)
Algoma Steel, Inc.
Yankee First Mortgage
Notes
12.375%, 7/15/05 B1 1,000 870,000
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Bayou Steel Corp.
First Mortgage Notes
9.50%, 5/15/08 B1 $ 500 $ 410,000
GS Technologies
Operating Co.
Sr. Notes
12.00%, 9/1/04 Caa1 525 184,406
(2) Gulf States Steel, Inc.
First Mortgage Notes
13.50%, 4/15/03 B1 1,050 89,250
Kaiser Aluminum &
Chemical Corp.
Series D, Sr. Notes
10.875%, 10/15/06 B1 675 641,250
Lodestar Holdings, Inc.
Sr. Notes
11.50%, 5/15/05 Caa2 800 160,000
Metallurg, Inc.
Series B, First Mortgage
Gtd. Sr. Notes
11.00%, 12/1/07 B3 950 750,500
National Steel Corp.
Series D,
First Mortgage Bonds
9.875%, 3/1/09 Ba3 750 626,250
Sheffield Steel Corp.
Series B,
First Mortgage Bonds
11.50%, 12/1/05 Caa2 750 525,000
WCI Steel, Inc.
Series B,
Sr. Secured Notes
10.00%, 12/1/04 B2 925 876,438
Weirton Steel Corp.
Sr. Notes
11.375%, 7/1/04 B2 500 490,000
Wheeling-Pittsburg Corp.
Sr. Notes
9.25%, 11/15/07 B2 750 577,500
------------
GROUP TOTAL 6,200,594
------------
--------------------------------------------------------------------------------------------
-----------------
PACKAGING/CONTAINERS (1.8%)
AEP Industries, Inc.
Sr. Sub. Notes
9.875%, 11/15/07 B2 250 221,250
AMTROL, Inc.
Sr. Sub. Notes
10.625%, 12/31/06 B3 400 358,000
BPC Holding Corp.
Series B,
Sr. Secured Notes
12.50%, 6/15/06 Caa3 1,023 869,153
Container Corp. of
America
Gtd. Sr. Notes
9.75%, 4/1/03 B1 500 497,500
(3) Crown Packaging
Enterprises, Ltd.
Yankee Sr. Secured
Discount Notes
0.00%, 8/1/06 Ca1 2,450 245
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Four M Corp.
Series B, Sr. Notes
12.00%, 6/1/06 Caa2 $ 500 $ 468,750
Gaylord Container Corp.
Series B, Sr. Notes
9.75%, 6/15/07 B3 700 546,000
Radnor Holdings, Inc.
Series B,
Gtd. Sr. Notes
10.00%, 12/1/03 B2 500 447,500
Stone Container
Finance Co.
Yankee Gtd. Sr. Notes
11.50%, 8/15/06 B2 530 548,550
------------
GROUP TOTAL 3,956,948
------------
--------------------------------------------------------------------------------------------
-----------------
PAPER & FOREST PRODUCTS (2.4%)
Ainsworth Lumber Co.,
Ltd.
Yankee Sr. Secured Notes
12.50%, 7/15/07 B3 1,900 1,885,750
Color Spot Nurseries
Sr. Sub. Notes
10.50%, 12/15/07 Caa1 1,000 710,000
(2) Crown Paper Co.
Sr. Sub. Notes
11.00%, 9/1/05 B3 800 231,000
QUNO Corp.
Yankee Sr. Notes
9.125%, 5/15/05 Baa3 315 329,175
(1) Repap Enterprises
Convertible Debentures
6.00%, 6/30/05 N/R 250 147,500
Repap New
Brunswick, Inc.
Sr. Secured Debentures
10.625%, 4/15/05 B3 800 704,000
Riverwood
International Corp.
Gtd. Sr. Notes
10.875%, 4/1/08 Caa1 600 522,000
SD Warren Co.
Debentures
14.00%, 12/15/06 N/R 995 1,099,060
------------
GROUP TOTAL 5,628,485
------------
--------------------------------------------------------------------------------------------
-----------------
PUBLISHING & INFORMATION SERVICES (2.5%)
American Lawyer Media
Holdings, Inc.
Gtd. Sr. Notes
9.75%, 12/15/07 B1 450 410,625
Ampex Corp.
Series B, Sr. Notes
12.00%, 3/15/03 N/R 750 562,500
(3) Earthwatch, Inc.
Units
0.00%, 7/15/07 N/R 900 585,000
Hollinger International
Publishing
Gtd. Sr. Notes
9.25%, 3/15/07 Ba3 1,000 985,000
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Lamar Advertising Co.
Gtd. Sr. Sub. Notes
9.625%, 12/1/06 B1 $ 250 $ 251,250
(3) Liberty Group
Publishing, Inc.
Sr. Discount Debentures
0.00%, 2/1/09 Caa1 600 294,000
Mentus Media Corp.
Units
12.00%, 2/1/03 N/R 1,693 846,500
Printpack, Inc.
Series B, Sr. Sub. Notes
10.625%, 8/15/06 Caa1 300 288,000
TV Guide, Inc.
Sr. Sub. Notes
8.125%, 3/1/09 Ba3 500 498,750
Tri-State Outdoor Media
Sr. Notes
11.00%, 5/15/08 N/R 1,023 941,160
------------
GROUP TOTAL 5,662,785
------------
--------------------------------------------------------------------------------------------
-----------------
REAL ESTATE (0.0%)
EOP Operating, L.P.
Sr. Notes
6.375%, 2/15/03 Baa1 65 62,400
------------
--------------------------------------------------------------------------------------------
-----------------
RESTAURANTS, HOTELS & GAMING (7.1%)
American Restaurant
Group, Inc.
Gtd. Sr. Secured Notes
11.50%, 2/15/03 B3 750 577,500
AmeriKing, Inc.
Sr. Notes
10.75%, 12/1/06 B3 250 210,313
Ameristar Casinos
Series B, Gtd.
10.50%, 8/1/04 B3 750 753,750
Autotote Corp.
Series B,
10.875%, 8/1/04 B2 750 780,000
Aztar Corp.
Sr. Sub. Notes
8.875%, 5/15/07 B1 500 471,250
Bluegreen Corp.
Gtd. Sr. Secured Notes
10.50%, 4/1/08 B3 1,000 620,000
Boyd Gaming Corp.
Sr. Sub. Notes
9.50%, 7/15/07 B1 150 144,000
CapStar Hotel Co.
Sr. Sub. Notes
8.75%, 8/15/07 B1 375 332,813
Casino Magic of Louisiana
Corp.
Series B, Gtd. First
Mortgage Notes
13.00%, 8/15/03 B3 1,300 1,394,250
(2) Fitzgeralds Gaming Corp.
Series B, Gtd. Sr. Notes
12.25%, 12/15/04 Caa3 500 275,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Friendly Ice Cream Corp.
Gtd. Sr. Notes
10.50%, 12/1/07 B1 $ 800 $ 642,000
HMH Properties
Series B, Gtd. Sr. Notes
7.875%, 8/1/08 Ba2 500 448,750
Hard Rock Hotel, Inc.
Sr. Sub. Notes
9.25%, 4/1/05 B3 1,400 1,284,500
Hollywood Park, Inc.
Series B,
Gtd. Sr. Sub. Notes
9.50%, 8/1/07 B2 675 671,625
Horseshoe Gaming
Holdings:
Series B, Sr. Sub. Notes
9.375%, 6/15/07 B2 750 735,000
8.625%, 5/15/09 B2 750 706,875
Intrawest Corp.
Sr. Notes
9.75%, 8/15/08 B1 250 247,500
Isle of Capri
Casinos, Inc.
Sr. Sub. Notes
8.75%, 4/15/09 B3 450 416,250
Lodgian Financing Corp.
Sr. Sub. Notes
12.25%, 7/15/09 B3 500 400,625
(1) Majestic Star
Casino/ LLC
Secured Notes
10.875%, 7/1/06 B2 500 495,000
Mandalay Resort Group
Sr. Sub. Notes
9.25%, 12/1/05 Ba3 150 144,750
Mohegan Tribal Gaming
Authority
Sr. Notes
8.125%, 1/1/06 Ba1 900 855,000
(1) Park Place
Entertainment Corp.
Sr. Sub Notes
9.375%, 2/15/07 Ba2 500 500,000
Prime Hospitality Corp.
Secured First
Mortgage Notes
9.25%, 1/15/06 Ba2 850 837,250
Romacorp, Inc.
Sr. Notes
12.00%, 7/1/06 B3 750 487,500
Sante Fe Hotel, Inc.
Gtd. First Mortgage
Notes
11.00%, 12/15/00 Caa2 704 693,440
Station Casinos
Sr. Sub. Notes
9.75%, 4/15/07 B2 1,400 1,396,500
------------
GROUP TOTAL 16,521,441
------------
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
-----------------
RETAIL (4.0%)
(3) Advance Holdings Corp.
Series B,
Sr. Discount Debentures
0.00%, 4/15/09 Caa2 $ 1,500 $ 630,000
Advance Stores Co.
Gtd. Sr. Sub. Notes
10.25%, 4/15/08 Caa1 2,000 1,650,000
Dairy Mart Convenience
Stores, Inc.
Sr. Sub. Notes
10.25%, 3/15/04 B3 275 200,750
Finlay Enterprises, Inc.
Sr. Debentures
9.00%, 5/1/08 B2 400 352,000
Finlay Fine Jewelry Corp.
Gtd. Sr. Notes
8.375%, 5/1/08 Ba3 1,050 945,000
Flooring America, Inc.
Series B, Gtd.
9.25%, 10/15/07 Caa1 518 295,089
(2) Jitney-Jungle Stores of
America, Inc.
Gtd. Sr. Sub. Notes
10.375%, 9/15/07 B3 300 5,250
Jo-Ann Stores, Inc.
Sr. Sub. Notes,
10.375%, 5/1/07 B2 250 223,750
K Mart Corp.
Debentures
7.75%, 10/1/12 Ba2 1,175 1,049,534
Mrs. Fields Holding, Co.
Sr. Discount Notes
14.00%, 12/01/05 Caa2 1,750 752,500
Mrs. Fields Original
Cookies, Inc.
Gtd. Sr. Notes
(1) 10.125%, 12/1/04 B2 1,650 1,369,500
Pantry, Inc.
Sr. Sub. Notes
10.25%, 10/15/07 B3 550 523,875
Pathmark Stores, Inc.
Sr. Sub. Notes
9.625%, 5/1/03 Caa1 1,100 781,000
Safelite Glass Corp.
Series B, Sr. Sub. Notes
9.875%, 12/15/06 Ca 1,500 13,125
Saks, Inc.:
Gtd.
7.00%, 7/15/04 Baa3 90 80,775
8.25%, 11/15/08 Baa3 80 70,900
Wal-Mart Stores, Inc.:
Sr. Notes
6.55%, 8/10/04 Aa2 250 246,563
6.875%, 8/10/09 Aa2 165 161,184
------------
GROUP TOTAL 9,350,795
------------
--------------------------------------------------------------------------------------------
-----------------
TELECOMMUNICATIONS (19.8%)
Alamosa PCS
Holdings, Inc.
Gtd.
0.00%, 2/15/10 Caa1 400 208,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
(3) COLT Telecom Group plc
Yankee Units
0.00%, 12/15/06 B1 $ 400 $ 507,500
(3) Call-Net
Enterprises, Inc.
Sr. Discount Notes
0.00%, 5/15/09 B2 500 180,000
(3) Clearnet
Communications, Inc.
Yankee Sr. Discount
Notes
0.00%, 12/15/05 B3 1,050 1,074,938
(1) Colo.Com
Units
13.875%, 3/15/10 N/R 400 430,000
Concentric Network Corp.
Units
12.75%, 12/15/07 N/R 750 791,250
(3) DTI Holdings, Inc.
Units
0.00%, 3/1/08 N/R 1,850 779,313
Dobson/Sygnet
Communications, Co.
Sr. Notes
12.25%, 12/15/08 N/R 1,300 1,384,500
Dolphin Telecom plc:
(3) Sr. Discount Notes
0.00%, 6/1/08 Caa1 750 236,250
Series B, Yankee
Sr. Discount Notes
14.00%, 5/15/09 Caa1 700 231,000
(3) e. spire
Communications, Inc.
Sr. Discount Notes
0.00%, 11/1/05 N/R 2,700 1,255,500
Exodus
Communications, Inc.
Sr. Notes
11.25%, 7/1/08 N/R 550 544,500
(3) Focal
Communications Corp.
Sr. Discount Notes
0.00%, 2/15/08 N/R 1,400 945,000
(3) GST USA, Inc.
Gtd. Sr. Discount Notes
0.00%, 12/15/05 N/R 1,800 612,000
Global Crossing
Holdings, Ltd.
Gtd. Sr. Notes
9.625%, 5/15/08 N/R 1,100 1,072,500
Globalstar,
L.P./Globalstar
Capital Corp.:
Sr. Notes
10.75%, 11/1/04 B3 1,000 280,000
11.25%, 6/15/04 Caa1 200 60,000
11.50%, 6/1/05 B3 500 145,000
(3) Golden Sky DBS, Inc.
Series B,
Sr. Discount Notes
0.00%, 3/1/07 Caa1 250 168,750
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
(3) Hyperion
Telecommunications, Inc.
Series B, Sr. Discount
Notes
0.00%, 4/15/03 B3 $ 450 $ 414,000
(3) ICG Holdings, Inc.:
Gtd. Sr. Discount Notes
0.00%, 9/15/05 B3 650 628,875
0.00%, 5/1/06 B3 600 496,500
0.00%, 3/15/07 B3 1,750 1,207,500
(3) ICG Services, Inc.:
Gtd. Sr. Discount Notes
0.00%, 2/15/08 N/R 500 265,000
0.00%, 5/1/08 N/R 1,350 702,000
ITC DeltaCom, Inc.
Sr. Notes
11.00%, 6/1/07 B2 259 259,000
Insight Midwest/Insight
Capital
Sr. Notes
9.75%, 10/1/09 B1 650 637,000
(1) Interact Operating Co.
Notes
14.00%, 8/1/03 N/R 508 172,805
Intermedia
Communications, Inc.
Sr. Notes
8.875%, 11/1/07 B2 200 187,000
KMC Telecom Holdings,
Inc.
Sr. Notes
13.50%, 5/15/09 Caa2 500 440,000
(3) Knology Holdings, Inc.
Sr. Discount Notes
0.00%, 10/15/07 N/R 1,000 540,000
Level 3
Communications, Inc.:
Sr. Notes
9.125%, 5/1/08 B3 1,050 942,375
(3) Sr. Discount Notes
0.00%, 12/1/08 B3 1,000 607,500
MCI WorldCom, Inc.:
Notes
8.00%, 5/15/06 A3 120 121,350
Sr. Unsecured Notes
6.50%, 4/15/10 Baa2 5 4,544
McLeod USA, Inc.:
Sr. Discount Notes
(3) 0.00%, 3/1/07 B2 800 660,000
Sr. Notes
9.25%, 7/15/07 B2 400 385,000
9.50%, 11/1/08 B2 1,000 977,500
Metromedia
International Group
Series B,
Sr. Discount Notes
10.50%, 9/30/07 N/R 2,635 1,238,259
MetroNet Communications
Corp.:
Sr. Discount Notes
10.75%, 11/1/07 B 1,100 966,625
(3) 0.00%, 6/15/08 B3 1,000 812,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Microcell
Telecommunications, Inc.
Series B, Yankee
Sr. Discount Notes
14.00%, 6/1/06 B3 $ 470 $ 432,400
(3) Millicom
International Cellular
Yankee Sr. Sub.
Discount Notes
0.00%, 6/1/06 Caa1 850 722,500
NEXTLINK
Communications, Inc.:
Sr. Discount Notes
(3) 0.00%, 4/15/08 B3 1,700 1,062,500
Sr. Notes
12.50%, 4/15/06 B3 350 369,250
10.75%, 11/15/08 B3 500 492,500
(3) Nextel
Communications, Inc.
Sr. Discount Notes
0.00%, 2/15/08 B2 1,700 1,253,750
Orange plc
Sr. Notes
9.00%, 6/1/09 B3 100 102,000
Orbital Imaging Corp.
Series B, Sr. Notes
11.625%, 3/1/05 N/R 500 228,750
Orion Network
Systems, Inc.
Gtd. Sr. Notes
11.25%, 1/15/07 B2 500 302,500
PSINET, Inc.
Sr. Notes
11.50%, 11/1/08 B3 1,050 987,000
(3) Pagemart
Nationwide, Inc.
Sr. Discount Notes
0.00%, 2/1/05 B3 1,750 1,675,625
(1) Pegasus
Communications Corp.
Sr. Sub Notes
12.50%, 8/1/07 N/R 750 787,500
(3) Qwest Communications
International, Inc.
Sr. Discount Notes
0.00%, 10/15/07 B2 1,100 924,000
RCN Corp.:
Series B,
(3) Sr. Discount Notes
0.00%, 2/15/08 B3 900 513,000
Sr. Notes
10.125%, 1/15/10 B3 500 416,250
RSL Communications plc:
Yankee Gtd. Sr. Notes
9.125%, 3/1/08 B3 200 128,000
10.50%, 11/15/08 B3 250 172,500
9.875%, 11/15/09 B2 1,100 713,625
Rhythms
Netconnections, Inc.:
Sr. Notes
12.75%, 4/15/09 B3 250 176,250
Units
13.00%, 5/15/08 N/R 1,500 600,000
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Rogers Cablesystems, Ltd.
Series B,
Yankee Sr. Secured 2nd
Priority Notes
10.00%, 3/15/05 Ba3 $ 250 $ 255,625
Rogers Cantel, Inc.
Yankee Sr. Secured
Debentures
9.375%, 6/1/08 Ba3 350 360,500
Sprint Capital Corp.
Medium Term Notes
6.50%, 11/15/01 Baa1 300 296,625
Sprint Spectrum L.P./
Sprint
Spectrum Finance Corp.
Sr. Notes
11.00%, 8/15/06 B2 1,500 1,641,195
Star Choice
Communications, Inc.
Yankee Sr. Notes
13.00%, 12/15/05 N/R 500 513,125
Startec Global
Communications Corp.
Units
12.00%, 5/15/08 N/R 750 600,000
Telesystem
International Wireless
Series B,
Sr. Discount Notes
13.25%, 6/30/07 Caa1 500 347,500
Teligent, Inc.
Sr. Notes
11.50%, 12/1/07 Caa1 750 592,500
(1) (3) Tritel PCS, Inc.
Sr. Discount Notes
0.00%, 5/15/09 B3 500 331,250
(3) Triton PCS, Inc.
Gtd.
0.00%, 5/1/08 B3 800 580,000
(1) (3) US Unwired, Inc.
Sr. Discount Notes
0.00%, 11/1/09 Caa1 700 379,750
Viatel, Inc.:
Sr. Notes
11.25%, 4/15/08 Caa1 850 629,000
(1) 11.50%, 3/15/09 B3 1,098 834,180
Voicestream Wireless
Sr. Notes
10.375%, 11/1/09 B2 500 517,500
Western Wireless Corp.
Sr. Sub. Notes
10.50%, 2/1/07 B3 350 357,000
Williams Communications
Group, Inc.:
Sr. Notes
10.70%, 10/1/07 B2 400 397,000
10.875%, 10/1/09 B2 500 488,750
(3) Winstar
Commuications, Inc.
Sr. Notes
12.75%, 4/15/10 B3 250 233,125
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
(1) Worldwide Fiber, Inc.
Sr. Notes
12.00%, 8/1/09 B3 $ 800 $ 756,000
------------
GROUP TOTAL 45,741,859
------------
--------------------------------------------------------------------------------------------
-----------------
TEXTILES/APPAREL (1.1%)
Phillips-Van Heusen Corp.
Sr. Sub. Notes
9.50%, 5/1/08 B1 800 728,000
Pillowtex Corp.
Gtd. Sr. Sub. Notes
10.00%, 11/15/06 B2 500 177,500
Simmons Co.
Series B, Sr. Sub. Notes
10.25%, 3/15/09 B3 650 576,875
Tropical Sportswear
International
Series A, Gtd. Sr. Notes
11.00%, 6/15/08 B3 600 576,000
William Carter Co.
Series A, Sr. Sub. Notes
10.375%, 12/1/06 B3 500 477,500
------------
GROUP TOTAL 2,535,875
------------
--------------------------------------------------------------------------------------------
-----------------
TRANSPORTATION (1.4%)
AirTran Airlines, Inc.
Yankee Sr. Notes
10.50%, 4/15/01 N/R 1,000 950,000
(2) Canadian Airlines Corp.
Yankee Sr. Notes
12.25%, 8/1/06 Caa2 1,950 273,000
(2) Golden Ocean Group, Ltd.
Gtd. Sr. Notes
10.00%, 8/31/01 B3 1,148 172,200
Hermes Europe Railtel
B.V.
Sr. Notes
11.50%, 8/15/07 B3 1,000 855,000
(2) Pegasus Shipping
(Hellas),
Ltd.
Series A, First
Preferred
Ship Mortgage Notes
11.875%, 11/15/04 B3 300 102,000
Sea Containers, Ltd.
Yankee Sr. Notes
10.75%, 10/15/06 Ba3 500 375,000
Trans World
Airlines, Inc.
Sr. Notes
11.375%, 3/1/06 Caa1 1,500 585,000
------------
GROUP TOTAL 3,312,200
------------
--------------------------------------------------------------------------------------------
-----------------
TOTAL CORPORATE OBLIGATIONS
(Cost $235,722,694) 191,017,754
------------
--------------------------------------------------------------------------------------------
-----------------
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
GOVERNMENT & AGENCY SECURITIES (1.7%)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (0.9%)
Various Pools:
7.125%, 2/15/05 Aaa $ 100 $ 100,346
7.25%, 1/15/10 Aaa 1,470 1,482,001
7.125%, 1/15/30 Aaa 60 60,440
STRIPS, Series H,
Class 2
11.50%, 5/1/09 Aaa 468 511,275
------------
GROUP TOTAL 2,154,062
------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (0.1%)
Various Pools:
10.50%, 9/15/15 Aaa 33 35,441
10.50%, 12/15/15 Aaa 3 3,303
10.50%, 3/15/16 Aaa 25 27,163
10.50%, 8/15/16 Aaa 33 35,935
------------
GROUP TOTAL 101,842
------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
UNITED STATES TREASURY NOTES (0.7%)
6.625%, 5/31/02 Aaa 115 115,431
5.50%, 1/31/03 Aaa 280 274,050
7.25%, 5/15/04 Aaa 230 237,224
5.875%, 11/15/04 Aaa 920 906,633
6.50%, 2/15/10 Aaa 35 36,198
------------
GROUP TOTAL 1,569,536
------------
--------------------------------------------------------------------------------------------
-----------------
TOTAL GOVERNMENT & AGENCY SECURITIES
(Cost $3,774,372) 3,825,440
------------
--------------------------------------------------------------------------------------------
-----------------
COLLATERALIZED MORTGAGE OBLIGATIONS (0.5%)
Commercial Mortgage
Asset Trust
Series 1999, Class A3
6.64%, 9/17/10 Aaa 310 292,950
GMAC Commercial
Mortgage
Securities, Inc.:
6.853%, 9/15/06 Aaa 80 78,515
6.945%, 9/15/33 Aaa 550 525,279
Nomura Asset
Securities Corp.
Series 1998-D6,
Class A1B6
6.59%, 3/17/28 Aaa 310 293,531
--------------------------------------------------------------------------------------------
-----------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,266,970) 1,190,275
------------
--------------------------------------------------------------------------------------------
-----------------
ASSET BACKED OBLIGATIONS (1.3%)
Chase Credit
Card Master Trust
Series 1999-3, Class A
6.66%, 1/15/07 Aaa 420 412,322
(1) Constellation Finance,
LLC
Series 1997-1, Class 1
9.80%, 12/14/02 N/R 250 232,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
Contimortgage Home
Equity Loan Trust
7.22%, 1/15/28 Aaa $ 125 $ 122,656
Green Tree Recreational,
Equipment & Consumer
Trust, Consumer Products
& Equipment Retail
Installment Sale
Contracts
Series 1997-C,
Class A-1,
6.49%, 2/15/18 N/R 354 348,599
MBNA Master
Credit Card Trust:
Series 1999-G, Class A
6.35%, 12/15/06 Aaa 130 125,328
Credit Card Trust
Series 1997-I, Class A
6.55%, 1/15/07 Aaa 160 157,299
Series 1999-J, Class A Aaa 310 302,734
Peco Energy Transition
Trust:
Series 1999-A, Class A7
6.13%, 3/1/09 Aaa 335 305,688
A4 7.65% 3/1/10 Aaa 290 293,072
Prudential Securities
Secured Financing Corp.
Series 1999-C2,
Class A2
7.193%, 4/15/09 Aaa 385 375,616
Residential Asset
Securities Corp.
Series 1999-KS3,
Class AI2
7.075%, 9/25/20 Aaa 125 123,477
UCFC Home Equity Loan:
Series 1996-B1,
Class A7
8.20%, 9/15/27 Aaa 110 108,333
Series 1998-A,
Class A7,
6.87%, 7/15/29 Aaa 50 45,531
--------------------------------------------------------------------------------------------
-----------------
TOTAL ASSET BACKED OBLIGATIONS
(Cost $3,037,414) 2,953,155
------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares/
Units
<C> <S> <C> <C>
--------------------------------------------------------------------------------------------
-----------------
COMMON STOCKS (4.6%)
--------------------------------------------------------------------------------------------
-----------------
CABLE (0.0%)
(1) (4) OpTel, Inc. 1,000 10
-----------
--------------------------------------------------------------------------------------------
-----------------
CONSUMER PRODUCTS & SERVICES (0.1%)
(4) Coinstar, Inc. 11,887 119,613
(4) Crown Packaging Enterprises, Ltd. 253,746 2,537
-----------
GROUP TOTAL 122,150
-----------
--------------------------------------------------------------------------------------------
-----------------
<CAPTION>
Shares/ Value
Units (Note A-1)
--------------------------------------------------------------------------
<C> <S> <C> <C>
--------------------------------------------------------------------------
ENERGY (0.0%)
(4) Abraxas Petroleum Corp 63,003 $ 94,504
-----------
--------------------------------------------------------------------------------------------
-----------------
ENTERTAINMENT (0.1%)
(4) (6) Premier Holdings, Ltd. 66,653 174,964
-----------
--------------------------------------------------------------------------------------------
-----------------
FINANCIAL SERVICES (0.0%)
(4)(5)(6) Westfed Holdings, Inc.
Class B (acquired 9/20/88, cost $383) 12,670 0
-----------
--------------------------------------------------------------------------------------------
-----------------
FOOD & BEVERAGES (0.8%)
(4) (5) Dr. Pepper Bottling Holdings, Inc.
Class A (acquired 2/25/97, cost
$1,181,250) 75,000 1,875,000
(1) (4) Specialty Foods Corp. 30,000 300
-----------
GROUP TOTAL 1,875,300
-----------
--------------------------------------------------------------------------------------------
-----------------
METALS & MINING (0.0%)
(4) Sheffield Steel Corp. 6,250 9,375
-----------
--------------------------------------------------------------------------------------------
-----------------
PAPER & FORESTS PRODUCTS (0.1%)
(1)(4)(6) Mail-Well, Inc. 21,306 183,764
-----------
--------------------------------------------------------------------------------------------
-----------------
RESTAURANTS, HOTELS & GAMING (0.1%)
(4) Elsinore Corp. 86,538 102,764
(4) Isle of Capri Casinos, Inc. 14,947 202,719
(1) (4) Motels of America, Inc. 500 8,000
-----------
GROUP TOTAL 313,483
-----------
--------------------------------------------------------------------------------------------
-----------------
TELECOMMUNICATIONS (3.4%)
(4) Advanced Radio Telecom Corp. 18,211 266,336
(1) (4) CompleTel Holdings, LLC
Class B Shares 6,500 318,500
(4) e. spire Communications, Inc. 28,337 191,275
(4) Globix Corp. 14,080 412,720
(4) ICG Communications, Inc. 2,145 47,324
(4) Intermedia Communications, Inc. 7,152 212,772
(4) Loral Space & Communications, Co. 302 2,095
(4) Microcell Telecommunications,
Class B 3,436 124,126
(4) Nextel Communications, Inc.
Class A 620 37,936
(4) Nextlink Communications, Inc.
Class A 12,237 464,241
(4) Price Communications Corp. 88,727 2,090,630
(1) (4) Spanish Broadcasting System, Inc.
Class B 107,100 2,329,425
(4) UnitedGlobalCom, Inc.
Class A 26,756 1,250,840
(4) Viatel, Inc. 3,424 97,796
-----------
GROUP TOTAL 7,846,016
-----------
--------------------------------------------------------------------------------------------
-----------------
TOTAL COMMON STOCKS
(Cost $3,374,760) 10,619,566
-----------
--------------------------------------------------------------------------------------------
-----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
<CAPTION>
Shares/ Value
Units (Note A-1)
--------------------------------------------------------------------------
<C> <S> <C> <C>
--------------------------------------------------------------------------
PREFERRED STOCKS (3.6%)
--------------------------------------------------------------------------------------------
-----------------
AEROSPACE/DEFENSE (0.4%)
(4) GPA Group plc
7% Second Preferred Cum. Conv. 2,125,000 $ 1,020,000
-----------
--------------------------------------------------------------------------------------------
-----------------
BROADCASTING (0.3%)
Benedek Communications Corp.
11.50% Sr. Exchangeable 150 82,500
(4) Pegasus Communications Corp.:
12.75% Cum. Exchangeable,
Series A 104 104,052
Units 250 289,825
(4) Source Media, Inc.
13.50% Units 76,651 344,930
-----------
GROUP TOTAL 821,307
-----------
--------------------------------------------------------------------------------------------
-----------------
CABLE (0.7%)
Adelphia Communications Corp.
13% Cum. Exchangeable, Series B 5,000 502,500
(4) DIVA Systems Corp.
Series D 56,913 1,024,430
NTL, Inc.
13% Exchangeable, Series B 1 550
-----------
GROUP TOTAL 1,527,480
-----------
--------------------------------------------------------------------------------------------
-----------------
FINANCIAL SERVICES (0.1%)
(1) Deutsche Bank Capital Funding Tr I
7.872% Non-cumulated 120,000 111,262
Lehman Brothers Holdings:
5.67% 1,100 41,349
5.94% Series C 500 20,250
(6) Westfed Holdings, Inc.
Class A (aquired 9/20/88-6/18/93,
cost $3,611,992) 42,759 42,759
-----------
GROUP TOTAL 215,620
-----------
--------------------------------------------------------------------------------------------
-----------------
METALS & MINING (0.1%)
(1) (4) International Utility
Structures, Inc.:
13% Units 150 132,000
14% Units 29 2,030
-----------
GROUP TOTAL 134,030
-----------
--------------------------------------------------------------------------------------------
-----------------
PUBLISHING & INFORMATION SERVICES (0.3%)
(4) Interact Electronic Marketing
14% Conv. Preferred 950 190,000
Primedia, Inc.
10% Cum. Exchangeable, Series D 5,000 480,000
-----------
GROUP TOTAL 670,000
-----------
--------------------------------------------------------------------------------------------
-----------------
RESTAURANTS, HOTELS & GAMING (0.1%)
AmeriKing, Inc.
13% Cum. Exchangeable 22,715 181,720
-----------
--------------------------------------------------------------------------------------------
-----------------
TELECOMMUNICATIONS (1.6%)
e. spire Communications, Inc.
12.75% 338 65,488
<CAPTION>
Shares/ Value
Units (Note A-1)
--------------------------------------------------------------------------
<C> <S> <C> <C>
--------------------------------------------------------------------------
Intermedia Communications, Inc.:
13.50% Exchangeable, Series B 372 $ 357,120
7% Jr. Convertible, Series E 44,000 1,127,500
NEXTLINK Communications, Inc.
14% Cum. Exchangeable 14,856 765,084
Nextel Communications, Inc.
13% Exchangeable, Series D 1,130 1,209,100
Rural Cellular Corp.
11.375% Sr. Exchangeable 309 290,460
-----------
GROUP TOTAL 3,814,752
-----------
--------------------------------------------------------------------------------------------
-----------------
TOTAL PREFERRED STOCKS
(Cost $12,376,782) 8,384,909
-----------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
RIGHTS (0.1%)
Abraxas Petroleum Corp.
expiring 12/21/00 92,408 46,204
(4) Terex Corp.
expiring 5/15/02 6,000 84,000
--------------------------------------------------------------------------------------------
-----------------
TOTAL RIGHTS
(Cost $0) 130,204
-----------
--------------------------------------------------------------------------------------------
-----------------
WARRANTS (0.8%)
(4) Ampex Corp.
expiring 3/15/03 25,500 255
(1) (4) Australis Holdings Pty. Ltd.
expiring 10/30/01 2,250 23
(4) CHC Helicopter Corp.
expiring 12/15/00 6,000 6,000
(4) (6) CHI Energy, Inc.:
Series B, expiring 11/6/03 7,578 18,195
Series C, expiring 11/8/05 4,919 11,811
(4) Crown Packaging
Enterprises, Ltd.
expiring 11/1/03 2,000 20
(4) Dairy Mart
Convenience Stores, Inc.
expiring 12/1/01 11,665 4,083
(4) Decrane Aircraft Holdings
expiring 9/30/08 800 800
(1) (4) DIVA Systems Corp.:
expiring 5/15/06 1,925 1,347,500
expiring 3/1/08 9,225 166,050
(1) (4) DTI Holdings, Inc.
expiring 3/1/08 9,250 93
(4) HF Holdings, Inc.
expiring 9/27/09 9,752 97,520
(4) Interact Electronic Marketing
expiring 12/31/09 950 10
(1) (4) Interact Systems, Inc.
expiring 8/1/03 750 0
(4) Isle of Capri Casinos, Inc.
expiring 5/3/01 2,646 26
(1) (4) Key Energy Services
expiring 1/15/09 1,250 75,000
(4) McCaw International, Ltd.
expiring 4/15/07 1,000 2,500
(1) (4) Mentus Media Corp.
expiring 2/1/08 3,757 38
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
<CAPTION>
Shares/ Value
Units (Note A-1)
--------------------------------------------------------------------------
<C> <S> <C> <C>
--------------------------------------------------------------------------
(1) (4) Mrs. Fields Holding,
expiring 12/01/05 1,750 $ 17,500
(4) PLD Telekom, Inc.
expiring 6/1/06 1,610 56,350
(4) Source Media, Inc.
expiring 11/1/07 30,731 89,121
(1) (4) Star Choice
Communications, Inc.
expiring 12/5/05 11,580 70,467
(4) Startec
Global Communications Corp.
expiring 5/15/08 750 263
(4) USN Communications, Inc.
expiring 8/15/04 7,600 0
(4) Wright Medical Technology
expiring 6/30/03 617 0
--------------------------------------------------------------------------------------------
-----------------
TOTAL WARRANTS
(Cost $3,048,591) 1,963,625
-----------
--------------------------------------------------------------------------------------------
-----------------
TOTAL DOMESTIC SECURITIES
(Cost $262,601,583) 220,084,928
-----------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face
Moody's Amount
Ratings (000)
<C> <S> <C> <C> <C>
--------------------------------------------------------------------------------------------
-----------------
FOREIGN SECURITIES (1.8%)
--------------------------------------------------------------------------------------------
-----------------
CORPORATE OBLIGATIONS (1.4%)
--------------------------------------------------------------------------------------------
-----------------
CANADA (0.1%)
(3) GT Group Telecom
Units
0.00%, 2/1/10 Caa1 USD $300 166,500
------------
--------------------------------------------------------------------------------------------
-----------------
FINLAND (0.1%)
(7) Okobank Perpetual
Medium Term Notes
5.739%, 3/29/49 A3 USD 140 137,200
------------
--------------------------------------------------------------------------------------------
-----------------
FRANCE (0.1%)
(7) Credit Lyonnais Paris
6.563%, 9/19/49 Baa2 USD 210 203,700
------------
--------------------------------------------------------------------------------------------
-----------------
NETHERLANDS (0.4%)
(1) (3) CompleTel Europe N.V.
Yankee Gtd.
0.00%, 2/15/09 Caa2 USD 650 325,000
(1) United Pan Europe N.V.
Sr. Notes
10.875%, 8/1/09 B2 USD 850 739,500
------------
GROUP TOTAL 1,064,500
------------
--------------------------------------------------------------------------------------------
-----------------
<CAPTION>
Face
Moody's Amount Value
Ratings (000) (Note A-1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
POLAND (0.3%)
(1) PTC International
Finance II SA
Gtd.
11.25%, 12/1/09 B2 USD $500 $ 507,500
PTC International
Finance BV
Yankee Gtd.
10.75%, 7/1/07 B2 USD 350 248,500
------------
GROUP TOTAL 756,000
------------
--------------------------------------------------------------------------------------------
-----------------
SWEDEN (0.4%)
(7) ForeningsSparbanken AB
Perpetual Jr. Sub.
Medium Term Notes
6.438%, 12/29/49 Baa2 USD 500 500,000
Skandinaviska Enskilda
Banken AB
Perpetual Sub. Notes
6.625%, 3/29/49 Baa1 USD 400 395,268
------------
GROUP TOTAL 895,268
------------
--------------------------------------------------------------------------------------------
-----------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,420,209) 3,223,168
------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
<CAPTION>
GOVERNMENT OBLIGATIONS (0.4%)
--------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
-----------------
ARGENTINA (0.1%)
Republic of Argentina
Series B, Gtd.
Zero Coupon, 4/15/01 Ba3 USD 125 115,938
------------
--------------------------------------------------------------------------------------------
-----------------
ITALY (0.3%)
Buoni Poliennali Del Tes
Bonds
3.00%, 2/15/02 Aa3 EUR 770 710,323
------------
--------------------------------------------------------------------------------------------
-----------------
TOTAL GOVERNMENT OBLIGATIONS
(Cost $829,006) 826,261
------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
TOTAL FOREIGN SECURITIES
(Cost $4,249,215) 4,049,429
------------
--------------------------------------------------------------------------------------------
-----------------
TIME DEPOSITS (2.1%)
(Cost $4,973,000) 4,973,000
------------
--------------------------------------------------------------------------------------------
-----------------
TOTAL INVESTMENTS (99.1%)
(Cost $271,823,798) 229,107,357
------------
--------------------------------------------------------------------------------------------
-----------------
OTHER ASSETS IN EXCESS OF
LIABILITIES (0.9%)
2,099,670
------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
<TABLE>
<CAPTION>
Value
(Note A-1)
<C> <S> <C> <C> <C>
--------------------------------------------------------------------------------------------
-----------------
NET ASSETS (100%)
Applicable to 34,708,362 issued and outstanding
$.001 par value shares (authorized 100,000,000
shares) $231,207,027
============
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
N/R -- Not Rated
EUR -- Euro
STRIPS -- Separate Trading of Registered Interest and Principal Securities.
(1) 144A Security. Certain conditions for public sale may exist.
(2) Defaulted security.
(3) Step Bond -- Coupon rate is low or zero for an initial period and then
increases to a higher coupon rate thereafter. Maturity date disclosed is
the ultimate maturity.
(4) Non-income producing security.
(5) Restricted as to private and public resale. Total cost of restricted
securities at June 30, 2000 aggregated $1,181,633. Total market value of
restricted securities owned at June 30, 2000 was $1,875,000 or 0.81% of
net assets.
(6) Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by the Board of
Directors.
(7) Floating Rate -- The interest rate changes on these instruments based
upon a designated base rate. The rates shown are those in effect at
June 30, 2000.
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(unaudited)
<S> <C>
---------------------------------------------------------------------------------------------------
ASSETS:
Investments at Value
(Cost $271,823,798) (Note A-1)............................................ $229,107,357
Receivables:
Dividend and Interest Receivable
(Note A-4).............................................................. 5,979,946
Investments Sold............................................................ 531,689
Other Assets................................................................ 19,055
---------------------------------------------------------------------------------------------------
Total Assets............................................................ 235,638,047
---------------------------------------------------------------------------------------------------
LIABILITIES:
Distributions Payable..................................................... 2,082,502
Investments Purchased..................................................... 1,881,894
Investment Advisory Fees (Note B)......................................... 293,244
Professional Fees......................................................... 44,793
Administrative Fees (Note C).............................................. 36,902
Due to Custodian Bank..................................................... 29,361
Shareholders' Reports..................................................... 25,460
Directors' Fees........................................................... 2,622
Other Liabilities......................................................... 34,242
---------------------------------------------------------------------------------------------------
Total Liabilities....................................................... 4,431,020
---------------------------------------------------------------------------------------------------
NET ASSETS...................................................................... $231,207,027
=================
NET ASSETS CONSIST OF:
Capital Shares at $.001 Par Value........................................... $34,708
Capital Paid in Excess of Par Value......................................... 292,824,686
Accumulated Net Investment Loss............................................. (2,182,627)
Accumulated Net Realized Loss............................................... (16,752,935)
Unrealized Depreciation on Investments...................................... (42,716,805)
-----------------
NET ASSETS APPLICABLE TO 34,708,362 ISSUED AND OUTSTANDING SHARES (AUTHORIZED
100,000,000 SHARES)........................................................... $231,207,027
=================
NET ASSET VALUE PER SHARE....................................................... $6.66
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six Months Ended
June 30, 2000
(unaudited)
<S> <C>
---------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest (Note A-4)......................................................... $ 12,178,974
Dividends (Note A-4)........................................................ 284,884
---------------------------------------------------------------------------------------------------
Total Income.............................................................. 12,463,858
---------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees (Note B)........................................... 605,339
Administrative Fees (Note C)................................................ 96,321
Shareholders' Reports....................................................... 81,005
Shareholder Servicing Fees.................................................. 41,752
Professional Fees........................................................... 45,309
Custodian Fees.............................................................. 45,246
Directors' Fees and Expenses................................................ 19,751
Other....................................................................... 34,980
---------------------------------------------------------------------------------------------------
Total Expenses............................................................ 969,703
---------------------------------------------------------------------------------------------------
Net Investment Income................................................... 11,494,155
---------------------------------------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS................................................ (3,395,077)
---------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS................. (15,776,218)
---------------------------------------------------------------------------------------------------
Net Realized Loss and Change in Unrealized Appreciation (Depreciation).......... (19,171,295)
---------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $(7,677,140)
===================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
Six Months Ended
June 30, 2000 Year Ended
(unaudited) December 31, 1999
-----------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net Investment Income............................................. $ 11,494,155 $ 25,914,757
Net Realized Loss on Investments.................................. (3,395,077) (5,299,393)
Change in Unrealized Appreciation (Depreciation) on Investments... (15,776,218) (10,358,673)
-----------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (7,677,140) 10,256,691
-----------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income............................................. (15,972,788) (24,985,674)
-----------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Common Stock Issued through Reinvestment of
Distributions (10,356 shares).................................. -- 78,652
-----------------------------------------------------------------------------------------------------------
Total Decrease in Net Assets................................ (23,649,928) (14,650,331)
-----------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period............................................... 254,856,955 269,507,286
-----------------------------------------------------------------------------------------------------------
End of Period (Including undistributed (accumulated) net
investment income (loss) of
($2,182,627) and $2,296,006, respectively)..................... $231,207,027 $254,856,955
===========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Six Months
Ended Year Ended December 31,
June 30, 2000 -------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: (unaudited) 1999 1998 1997 1996 1995Section
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 7.34 $ 7.77 $ 8.44 $ 8.12 $ 8.63 $ 8.05
-----------------------------------------------------------------------------------------------------------------------------
Investment Activities:
Net Investment Income.................... 0.33 0.75 0.71 0.69 0.75 0.86
Net Realized and Unrealized Gain (Loss)
on Investments.......................... (0.55) (0.46) (0.66) 0.39 0.18 0.48
-----------------------------------------------------------------------------------------------------------------------------
Total from Investment Activities....... (0.22) 0.29 0.05 1.08 0.93 1.34
-----------------------------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income.................... (0.46) (0.72) (0.72) (0.76) (0.90) (0.76)
-----------------------------------------------------------------------------------------------------------------------------
Decrease in Net Asset Value due to Shares
Issued through Rights Offering.............. -- -- -- -- (0.52) --
-----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $ 6.66 $ 7.34 $ 7.77 $ 8.44 $ 8.12 $ 8.63
=============================================================================================================================
PER SHARE MARKET VALUE, END OF PERIOD........ $ 6.31 $ 6.06 $ 7.56 $ 8.75 $ 7.63 $ 7.88
=============================================================================================================================
TOTAL INVESMENT RETURN:
Net Asset Value (1)...................... (2.35)% 4.50% 0.47% 14.03% 10.59%* 17.41%
Market Value............................. 12.10% (11.32)% (5.68)% 25.90% 10.05%* 24.34%
=============================================================================================================================
RATIOS AND SUPPLEMENTAL DATA:
=============================================================================================================================
Net Assets, End of Period (Thousands)........ $231,207 $254,857 $269,507 $291,959 $280,634 $210,441
-----------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
Including Expense Offsets................... 0.80% 0.78% 0.81% 0.84% 0.94% 0.92%
Ratio of Expenses to Average Net Assets...... 0.80% 0.78% 0.81% 0.84% 0.95% --
Ratio of Net Investment Income to Average Net
Assets...................................... 9.49% 9.90% 8.59% 8.47% 9.23% 10.22%
Portfolio Turnover Rate...................... 18.8% 43.5% 84.7% 97.7% 81.0% 44.1%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Section Credit Suisse Asset Management, LLC formerly known as BEA Associates
replaced CS First Boston Investment management as the Fund's
investment adviser effective June 13, 1995.
* Adjusted for Rights Offering.
(1) Total investment return based on per share net asset value reflects
the effects of change in net asset value on the performance of the
Fund during each period, and assumes dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the
Fund based on market value, due to differences between the market
price of the stock and the net asset value of the Fund.
Note: Current period permanent book-tax differences, if any, are not
included in the calculation of net investment income per
share.
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
---------
Credit Suisse Asset Management Income Fund, Inc., formerly known as BEA Income
Fund, Inc. (the "Fund"), was incorporated on February 11, 1987 and is registered
as a diversified, closed-end investment company under the Investment Company Act
of 1940. The Fund's investment objective is to seek current income through
investments primarily in debt securities.
A. The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. Generally accepted
accounting principles may require management to make estimates and assumptions
that affect the amounts and disclosures in the financial statements. Actual
reported results could differ from those estimates.
1. SECURITY VALUATION: Market values for fixed income securities are valued at
the latest quoted bid price in the over-the-counter market. However, fixed
income securities may be valued on the basis of prices provided by a pricing
service which are based primarily on institutional size trading in similar
groups of securities. Other securities listed on an exchange are valued at
the latest quoted sales prices on the day of valuation or if there was no
sale on such day, the last bid price quoted on such day. Securities purchased
with remaining maturities of 60 days or less are valued at amortized cost, if
it approximates market value. Securities for which market quotations are not
readily available (including restricted investments which are subject to
limitations as to their sale) are valued at fair value as determined in good
faith by the Board of Directors. Such securities have a value of $259,519 (or
0.11% of net assets) at June 30, 2000. In determining fair value,
consideration is given to cost, operating and other financial data.
The Fund may invest up to 10% of its total assets in securities which are not
readily marketable, including those which are restricted as to disposition
under securities law ("restricted securities") (excludes 144A securities).
These securities are valued pursuant to the valuation procedures noted above.
2. FEDERAL INCOME TAXES: It is the Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income to
shareholders. Accordingly, no provision for Federal income taxes is required
in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, a bank as custodian for the Fund takes possession of the
underlying securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the Fund
has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. In the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral
or proceeds may be subject to legal proceedings.
4. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on the date the securities are purchased or sold. Costs used in
determining realized gains and losses on the sale of investment securities
are those of specific securities sold. Interest income is recognized on the
accrual basis. Discounts on securities purchased are amortized according to
the effective yield method over their respective lives. Discount or premium
on mortgage backed securities is recognized upon receipt of principal
payments on the underlying mortgage pools. Dividend income is recorded on the
ex-dividend date.
5. DELAYED DELIVERY COMMITMENTS: The Fund may purchase or sell securities on a
when-issued or forward commitment basis. Payment and delivery may take place
a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered and
paid for are fixed at the time the transaction is negotiated.
6. DIVIDENDS AND DISTRIBUTIONS: The Fund pays dividends of net investment income
monthly and makes distributions at least annually of any net capital gains in
excess of applicable capital losses, including capital loss carryforward.
Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gains distributions are determined in
accordance with U.S. Federal Income Tax regulations which may differ from
generally accepted accounting principles. These differences are principally
due to timing of the recognition of defaulted bond interest.
Permanent book and tax differences relating to shareholder distributions may
result in reclassifications to undistributed net investment income (loss),
undistributed net realized gain (loss) and paid in capital.
B. Credit Suisse Asset Management, LLC, formerly known as BEA Associates (the
"Adviser") provides investment advisory services to the Fund under the terms of
an Advisory Agreement. Under the Advisory Agreement, the Adviser is paid a fee,
computed weekly and payable quarterly at an annual rate of .50% of average
weekly net assets.
C. Brown Brothers Harriman & Co. ("BBH&Co."), provides administrative and
custodial services to the Fund. Under the Administration and Custody Agreements,
BBH&Co. is paid a fee based on average net assets.
22
<PAGE>
BankBoston N.A. (BankBoston) provides transfer agent services to the Fund. Under
the Transfer Agent Agreement, BankBoston is paid a fee based on the number of
accounts in the Fund per year. In addition, the Fund is charged certain
out-of-pocket expenses by BankBoston.
D. Purchases and sales of investment securities (excluding short-term
investments and U.S. government securities) aggregated $16,242,331 and
$25,127,711, respectively, for the six months ended June 30, 2000. Purchases and
sales of U.S. government and government agency securities aggregated $27,610,412
and $27,625,724, respectively, for the six months ended June 30, 2000.
At June 30, 2000, the cost of investments for Federal income tax purposes was
$266,851,162. Accordingly, net unrealized depreciation for Federal income tax
purposes aggregated $42,716,805 of which $14,391,166 related to appreciated
securities and $57,107,971 related to depreciated securities.
At June 30, 2000 the Fund had a capital loss carryforward of $12,297,212
available to offset future capital gains of which $3,830,007, $2,261,380 and
$6,205,825 will expire on December 31, 2000, 2003 and 2007 respectively.
E. At June 30, 2000, 79.6% of the Fund's net assets comprised high yield fixed
income securities. The financial condition of the issuers of the securities and
general economic conditions may affect the issuers' ability to make payments of
income and principal, as well as the market value of the securities. Such
investments may also be less liquid and more volatile than investments in higher
rated fixed income securities.
At June 30, 2000, 1.8% of the Fund's net assets comprised foreign currency
denominated fixed income securities. Changes in currency exchange rates will
affect the value and net investment income from such securities.
F. The Fund's Board of Directors has approved a share repurchase program
authorizing the Fund from time to time to make open-market purchases on the New
York Stock Exchange of up to 10 percent of the Fund's shares outstanding as of
December 11, 1990. There were no repurchases of shares during the six months
ended June 30, 2000.
G. The Fund issued to its shareholders of record as of the close of business on
September 27, 1996 transferable Rights to subscribe for up to an aggregate of
10,160,570 shares of Common Stock of the Fund at a rate of one share of Common
Stock for three Rights held at the subscription price of $7.15 per share. During
October 1996, the Fund issued a total of 10,160,570 shares of Common Stock on
exercise of such Rights. Rights' offering costs of $550,000 were charged
directly against the proceeds of the Offering.
H. The Fund, together with other Funds advised by CSAM, LLC have established a
$350 million committed, unsecured, line of credit facility ("Credit Facility")
with Deutsche Bank, AG as administrative agent, State Street Bank and Trust
Company as operations agent, Bank of Nova Scotia as syndication agent and
certain other lenders, for temporary or emergency purposes. Under the terms of
the Credit Facility, the Funds with access to the Credit Facility pay an
aggregate commitment fee at a rate of .075% per annum on the entire amount of
the Credit Facility, which is allocated among the participating Funds in such
manner as is determined by the governing Boards of the various Funds. In
addition, the participating Funds will pay interest on borrowing at the Federal
Funds rate plus .50%. At June 30, 2000, there were no loans outstanding for the
Fund. During the six months ended June 30, 2000 there were no borrowings on this
line of credit.
23
<PAGE>
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
THREE MONTHS ENDED
----------------------------------------------------------------
MARCH 31, 2000 JUNE 30, 2000
--------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income...................................... $6,316 $0.18 $6,148 $0.18
Net Investment Income.................................. 5,818 0.17 5,676 0.16
Net Realized Gain (Loss) and Change in Unrealized
Appreciation (Depreciation) on Investments and Foreign
Currency.............................................. (8,644) (0.25) (10,527) (0.30)
Net Decrease in Net Assets Resulting from Operations... (2,826) (0.08) (4,851) (0.14)
<CAPTION>
MARCH 31, 1999 JUNE 30, 1999 SEPTEMBER 30, 1999 DECEMBER 31, 1999
--------------- --------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income.................................. $6,573 $0.19 $6,817 $0.20 $ 6,931 $0.20 $ 7,634 $0.22
Net Investment Income.............................. 6,085 0.18 6,359 0.18 6,420 0.18 7,051 0.21
Net Realized Gain (Loss) and Change in Unrealized
Appreciation (Depreciation) on Investments and
Foreign Currency.................................. (2,250) (0.07) (5,495) (0.16) (9,201) (0.26) 1,288 0.03
Net Increase (Decrease) in Net Assets Resulting
from Operations................................... 3,835 0.11 864 0.02 (2,781) (0.08) 8,339 0.24
</TABLE>
SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of the Stockholders of the Credit Suisse Asset Management
Income Fund, Inc. was held on Monday, May 8, 2000 at the offices of Credit
Suisse Asset Management, LLC 466 Lexington Avenue, New York City. The following
is a summary of each proposal presented and the total number of shares voted:
<TABLE>
<CAPTION>
VOTES
PROPOSAL VOTES FOR WITHHELD
-------- ---------- ----------
<S> <C> <C> <C>
1. To elect the following four Directors:
Enrique R. Arzac 31,775,455 521,707
Lawrence J. Fox 31,800,047 497,115
James S. Pasman, Jr. 31,757,869 539,293
William W. Priest, Jr. 31,785,574 511,588
</TABLE>
<TABLE>
<CAPTION>
VOTES VOTES
PROPOSAL VOTES FOR AGAINST ABSTAINED
-------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
2. At the Meeting, the ratification of the
selection of PricewaterhouseCoopers LLP as
the Fund's independent public accountants
for the fiscal year ending December 31,
2000 was approved by the following vote: 31,856,363 191,561 249,238
</TABLE>
24
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM
---------
The InvestLink-SM- Program is sponsored and administered by BankBoston, N.A.,
not by Credit Suisse Asset Management Income Fund, Inc., (the "Fund").
BankBoston, N.A., will act as program administrator (the "Program
Administrator") of the InvestLink-SM- Program (the "Program"). The purpose of
the Program is to provide interested investors with a simple and convenient way
to invest funds and reinvest dividends in shares of the Fund's common stock
("Shares") at prevailing prices, with reduced brokerage commissions and fees.
An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
include brokerage commissions.) Participants will not be charged any fee for
reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount
of his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of the Fund's common stock in the open market. Such purchases will be
made by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the purchase date. In all cases, transaction processing will occur within
30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.
The average price of all Shares purchased by the Program Administrator with
all funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.
BankBoston, N.A., as Program Administrator administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such participant's
account (if applicable), as well as fees paid by the participant. In addition,
each participant will receive copies of the Fund's annual and semi-annual
reports to shareholders, proxy statements and, if applicable, dividend income
information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the
name of the accounts of the respective participants. Unless requested, the Fund
will not issue to participants certificates for Shares of the Fund purchased
under the Program. The Program Administrator will hold the Shares in book-entry
form until a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split
will be based upon both the Shares of the Fund registered in participants' names
and the Shares (including fractional Shares) credited to participants' Program
accounts.
25
<PAGE>
Any stock dividend or Shares resulting from stock splits with respect to Shares
of the Fund, both full and fractional, which participants hold in their Program
accounts and with respect to all Shares registered in their names will be
automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his
account under the Program will be voted as the participant directs. The
participants will be sent the proxy materials for the annual meetings of
shareholders. When a participant returns an executed proxy, all of such shares
will be voted as indicated. A participant may also elect to vote his Shares in
person at the Shareholders' meeting.
A participant will receive tax information annually for his personal records
and to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable
for any act done in good faith or for any good faith omission to act. However,
the Program Administrator will be liable for loss or damage due to error caused
by its negligence, bad faith or willful misconduct. Shares held in custody by
the Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgement and research.
While the Program Administrator hopes to continue the Program indefinitely,
the Program Administrator reserves the right to suspend or terminate the Program
at any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested investor may participate in the Program. To participate in
the Program, an investor who is not already a registered owner of the Shares
must make an initial investment of at least $250.00. All other cash payments or
bank account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including terms and conditions) may be obtained by calling the Program
Administrator at one of the following telephone numbers: First Time Investors--
(888) 697-8026. Current Shareholders--(800) 730-6001. All correspondence
regarding the Program should be directed to: BankBoston, N.A., InvestLink
Program, P.O. Box 8040, Boston, MA 02266-8040.
------------------------------------------------------
*InvestLink is a service mark of Boston EquiServe Limited Partnership
26
<PAGE>
4946-SAR-00
