<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1999
SECURITIES ACT FILE NO. 333-84153
INVESTMENT COMPANY ACT FILE NO. 811-5458
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM N-2
/X/ REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/X/ PRE-EFFECTIVE AMENDMENT NO. 1
/ / POST-EFFECTIVE AMENDMENT NO.
/X/ REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/X/ AMENDMENT NO. 6
---------------------
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC
GLOBAL INCOME FUND, INC.
(Exact name of registrant as specified in its charter)
--------------------------
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(Address of principal executive offices)
(212) 832-2626
(Registrant's telephone number, including area code)
--------------------------
HAL LIEBES, ESQ.
SENIOR VICE PRESIDENT
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(Name and address of agent for service)
--------------------------
WITH COPIES TO:
<TABLE>
<S> <C>
DANIEL SCHLOENDORN, ESQ. GARY S. SCHPERO, ESQ.
WILLKIE FARR & GALLAGHER SIMPSON THACHER & BARTLETT
787 SEVENTH AVENUE 425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10017-3954
</TABLE>
--------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
--------------------------
If any securities being registered on this form will be offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
other than securities offered in connection with a dividend reinvestment plan,
check the following box. / /
If it is proposed that this filing will become effective when declared
effective pursuant to Section 8(c), check the following box. / /
If appropriate, check the following box:
/ / This amendment designates a new effective date for a previously filed
registration statement.
/ / This Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is .
--------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT (1) OFFERING PRICE FEE (2)
<S> <C> <C> <C> <C>
Shares of Common Stock, par value $.001
per share................................ 3,522,559 $8.87 $31,262,697.84 $8,691.03
</TABLE>
(1) As calculated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended. Based on the average of the high and low sales prices reported on
the New York Stock Exchange on June 29, 1999.
(2) Previously paid.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
FORM N-2
CROSS REFERENCE SHEET
PARTS A AND B OF PROSPECTUS
<TABLE>
<CAPTION>
ITEM NO. CAPTION LOCATION IN PROSPECTUS
- --------- --------------------------------------------------- ---------------------------------------------------
<C> <S> <C>
PART A -- Information Required in a Prospectus
1. Outside Front Cover................................ Front Cover Page
2. Inside Front and Outside Back Cover Page........... Front Cover Page
3. Fee Table and Synopsis............................. Prospectus Summary; Fee Table
4. Financial Highlights............................... Financial Highlights
5. Plan of Distribution............................... Front Cover Page; Prospectus Summary; The Offer;
Distribution Arrangements
6. Selling Shareholders............................... Not Applicable
7. Use of Proceeds.................................... Use of Proceeds
8. General Description of the Registrant.............. Front Cover Page; Prospectus Summary; The Fund;
Investment Objective and Policies; Risk Factors
and Special Considerations; Common Stock; Net
Asset Value
9. Management......................................... Management; Portfolio Transactions; Transfer Agent,
Dividend-Disbursing Agent, Registrar and Custodian
10. Capital Stock, Long-Term Debt and Other
Securities........................................ The Offer; Common Stock; Dividends and
Distributions; InvestLink-SM- Program; Net Asset
Value; Taxation
11. Defaults and Arrears on Senior Securities.......... Not Applicable
12. Legal Proceedings.................................. Not Applicable
13. Table of Contents of the Statement of Additional
Information....................................... Table of Contents of the Statement of Additional
Information
PART B -- Information required in a Statement of Additional Information
14. Cover Page......................................... Front Cover Page
15. Table of Contents.................................. Front Cover Page
16. General Information and History.................... General Information
17. Investment Objectives and Policies................. Investment Objective and Policies; Investment
Restrictions
18. Management......................................... Management
19. Control Persons and Principal Holders of
Securities........................................ Common Stock
20. Investment Advisory and Other Services............. Management
21. Brokerage Allocation and Other Practices........... Portfolio Transactions
22. Tax Status......................................... Taxation
23. Financial Statements............................... Financial Statements
PART C -- Information required to be included in Part C is set forth under the appropriate item, so numbered, in
Part C to this Registration Statement.
</TABLE>
<PAGE>
PROSPECTUS
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
2,818,047 SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF RIGHTS
TO SUBSCRIBE FOR SHARES
-----------
Credit Suisse Asset Management Strategic Global Income Fund, Inc. is issuing
to its shareholders rights to purchase additional shares. You will receive one
right for each share of common stock you own on the record date, which is
September 27, 1999. You need three rights to purchase one share at the
subscription price per share. The Global Income Fund will not issue fractional
shares upon the exercise of less than three rights. If you exercise all your
rights you will be entitled to subscribe for additional shares not acquired by
other shareholders. The Global Income Fund may increase the number of shares
subject to subscription by up to 25%, or 704,512 shares, for an aggregate total
of 3,522,559 shares. The rights are not transferable; you may not purchase or
sell them and they will not trade on the New York Stock Exchange (the "NYSE") or
any other exchange. The shares to be issued pursuant to the rights will trade on
the NYSE under the symbol "CGF."
The subscription price per share will be 95% of the lower of:
(1) the average of the last reported sales price of a share on the NYSE on
the expiration date of the offer and on the previous four business days,
and
(2) the net asset value per share as of the close of business on the
expiration date of the offer.
You will not know the actual subscription price at the time you exercise
your rights. Once you subscribe for shares and the Global Income Fund receives
payment or a guarantee of payment, you will not be able to change your decision.
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON OCTOBER 22, 1999,
UNLESS EXTENDED TO NOT LATER THAN OCTOBER 29, 1999.
The Global Income Fund is a closed-end, diversified management investment
company. Its investment objective is high current income consistent with the
preservation of capital. The Global Income Fund invests in higher-yielding U.S.
and foreign fixed-income securities, with an emphasis on U.S. high yield ("junk
bonds") and emerging market debt securities. These securities are subject to
high risks and are predominantly speculative. See "Risk Factors and Special
Considerations" beginning on page 17 of this prospectus for a more comprehensive
discussion of risks you may incur when making an investment in the Global Income
Fund. There can be no assurance that the Global Income Fund will achieve its
investment objective.
--------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
SUBSCRIPTION ESTIMATED PROCEEDS TO
PRICE (1) SALES LOAD (2) THE FUND (3)(4)
<S> <C> <C> <C>
Per Share...................................... $8.47 $0.32 $8.15
Total Maximum (5).............................. $23,868,858 $901,775 $22,967,083
</TABLE>
(FOOTNOTES ON THE FOLLOWING PAGE)
This prospectus sets forth concisely the information about the Global Income
Fund that a prospective investor should know before investing and should be
retained for future reference. A statement of additional information dated
September 24, 1999 containing additional information about the Global Income
Fund has been filed with the Commission and legally forms a part of this
prospectus. The table of contents of the statement of additional information
appears on page 37 of this prospectus. You may obtain a copy of the statement of
additional information without charge by contacting Georgeson Shareholder
Communications, Inc., the Global Income Fund's information agent for the offer.
If you have questions or need further information about the offer, please
call the information agent collect at (212) 440-9800 (for banks and brokers) and
toll free at (800) 223-2064 (for all others).
SALOMON SMITH BARNEY, INC.
The date of this prospectus is September 24, 1999
<PAGE>
(FOOTNOTES FROM THE PREVIOUS PAGE)
(1) Estimated on the basis of 95% of the average of the last reported sales
price of a share on the NYSE on September 17, 1999 and on the previous four
business days. Actual amounts may vary due to rounding.
(2) In connection with the offer, the Global Income Fund will pay Salomon Smith
Barney, Inc., the dealer manager for the offer, a fee for its financial
advisory services and marketing assistance equal to 1.25% of the
subscription price per share. The Global Income Fund will also pay
broker-dealers, including Salomon Smith Barney, Inc., fees for their
soliciting efforts equal to 2.50% of the subscription price per share. The
Global Income Fund has agreed to indemnify Salomon Smith Barney, Inc.
against certain liabilities, including liabilities under the Securities Act.
(3) Before deduction of offering expenses incurred by the Global Income Fund,
estimated at $441,000 including an aggregate of up to $100,000 to be paid to
Salomon Smith Barney, Inc. as partial reimbursement for its expenses.
(4) Funds received by check prior to the final due date of this offer will be
deposited into a segregated interest-bearing account pending allocation and
distribution of shares. Interest on subscription moneys will be paid to the
Global Income Fund regardless of whether shares are issued by the Global
Income Fund.
(5) Assumes all rights are exercised at the estimated subscription price. The
Global Income Fund may increase the number of shares subject to subscription
by up to 25% of the shares offered. If the Global Income Fund increases the
number of shares subject to subscription by 25%, the aggregate maximum
estimated subscription price, estimated sales load and estimated proceeds
will be $29,836,075, $1,127,219 and $28,708,856, respectively.
--------------
2
<PAGE>
PROSPECTUS SUMMARY
You should read the entire prospectus, including the statement of additional
information which legally forms part of this prospectus, before you decide
whether to exercise your rights.
BENEFITS OF THE OFFER
The board of directors has determined that increasing the Global Income
Fund's assets through a rights offering may provide the following benefits:
- additional investment flexibility
- increased ability to take advantage of timely opportunities in the U.S.
and global bond markets as a result of
- the strong economic growth in the U.S. and
- an improving outlook in the emerging and other foreign markets
- lower expense ratios
- improved liquidity of the trading market for shares on the NYSE
- opportunity to purchase additional shares at a price below current market
price
The Global Income Fund may choose to make additional rights offerings in the
future for a number of shares and on terms which may or may not be similar to
this offer.
IMPORTANT TERMS OF THE OFFER
<TABLE>
<S> <C>
Total number of shares available for
primary subscription:................. 2,818,047
Total number of shares available to
cover over-subscription requests:..... 704,512
Number of rights you will receive for
each outstanding share you own on the
record date:.......................... One right for every one share
Number of shares you may purchase with
your rights at the subscription price
per share:............................ One share for every three rights
Subscription price:..................... 95% of the lower of (1) the average of
the last reported sales price per share
on the NYSE on the expiration date and
on the preceding four business days and
(2) the net asset value per share on the
expiration date
</TABLE>
HOW TO EXERCISE RIGHTS
To exercise your rights, please follow the following instructions:
- If you do not own your shares through a broker, bank or other nominee, you
should have received a subscription certificate. The subscription
certificate elicits the necessary information to enable you to exercise
your rights. Please complete and sign the subscription certificate. Mail
it in the envelope provided or deliver the completed and signed
subscription certificate with payment in full to BankBoston, N.A., the
subscription agent for the offer, at the address indicated on the
subscription certificate. Your completed and signed subscription
certificate and payment must be received by the
3
<PAGE>
expiration date, which is October 22, 1999 (unless extended). You should
calculate the total payment on the basis of an estimated subscription
price of $8.47 per share. If you do not own your shares through a broker,
bank or other nominee and have not received a subscription certificate,
please contact Georgeson Shareholder Communications, the information agent
for the offer, collect at (212) 440-9800 (for banks and brokers) and toll
free at (800) 223-2064 (for all others).
- If you own your shares through a broker or other nominee, please contact
your broker, banker or trust company. It can arrange to exercise rights on
your behalf and to guarantee payment and delivery of a properly completed
and executed subscription certificate pursuant to a notice of guaranteed
delivery by the close of business on the expiration date. A fee may be
charged for this service. The notice of guaranteed delivery must be
received on or before the expiration date, which is October 22, 1999
(unless extended).
IMPORTANT DATES TO REMEMBER
Please note that the dates in the table below may change if the offer is
extended.
<TABLE>
<CAPTION>
EVENT DATE
- ---------------------------------------------------------------- ------------------------------------------------
<S> <C>
Record date..................................................... September 27, 1999
Subscription period............................................. September 27, 1999 to October 22, 1999
Payment for shares or notice of guaranteed delivery due......... October 22, 1999
Expiration and pricing date..................................... October 22, 1999
Payment for guarantees of delivery due.......................... October 27, 1999
Confirmation to participants.................................... November 3, 1999
Final payment for shares........................................ November 17, 1999
</TABLE>
OVER-SUBSCRIPTION PRIVILEGE
If you exercise all your rights, you may subscribe for shares which were not
subscribed for by other shareholders. If sufficient shares are not available to
honor all requests for over-subscriptions, the Global Income Fund may increase
the number of shares available for subscription by up to 25%, or 704,512 shares,
in order to satisfy these over-subscription requests. Available shares will be
allocated ratably among those who over-subscribe based on the number of rights
originally issued to them.
RIGHTS MAY NOT BE PURCHASED OR SOLD
You may not purchase or sell the rights and they will not trade on any
exchange. If you do not exercise your rights before the conclusion of the rights
offer, your rights will expire without value.
RESTRICTIONS ON FOREIGN SHAREHOLDERS
The Global Income Fund will not mail subscription certificates to
shareholders whose record addresses are outside the United States. BankBoston
will hold the rights to which subscription certificates relate for foreign
shareholder accounts until instructions are received to exercise the rights. If
no instructions are received prior to the expiration date, these rights will
expire.
FURTHER INFORMATION
If you have any questions or inquiries relating to the offer, please contact
the information agent at:
[LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
4
<PAGE>
OFFERING FEES AND EXPENSES
Salomon Smith Barney, Inc. will act as the dealer manager for the offer. The
Global Income Fund will pay Salomon Smith Barney, Inc. a fee for its financial
advisory services and marketing assistance equal to 1.25% of the subscription
price per share. The Global Income Fund will also pay broker-dealers, including
Salomon Smith Barney, Inc., fees for their soliciting efforts equal to 2.50% of
the subscription price per share. Other offering expenses incurred by the Global
Income Fund are estimated at $441,000, which includes up to $100,000 that may be
paid to Salomon Smith Barney, Inc. as partial reimbursement for its expenses
relating to the offer.
USE OF PROCEEDS
We estimate the net proceeds of the offer to be approximately $22,526,083.
If the Global Income Fund increases the number of shares subject to subscription
by up to 25% in order to satisfy over-subscription requests, the additional net
proceeds will be approximately $5,741,773.
CSAM anticipates that it will take up to one month for the Global Income
Fund to invest these proceeds in accordance with its investment objective and
policies under current market conditions.
INFORMATION REGARDING THE GLOBAL INCOME FUND
The Global Income Fund has been engaged in business as a closed-end,
diversified management investment company since April 22, 1988. Its investment
objective is high current income consistent with the preservation of capital.
The Global Income Fund invests in higher yielding U.S. and foreign fixed-income
securities, with an emphasis on U.S. high yield (junk bonds) and emerging market
debt securities.
There can be no assurance that the Global Income Fund will achieve its
investment objective. The shares are listed and traded on the New York Stock
Exchange under the symbol "CGF." As of August 31, 1999, the net assets were
approximately $77 million.
INVESTMENT ADVISER AND ADMINISTRATOR
Credit Suisse Asset Management (formerly known as BEA Associates) is the
investment adviser. CSAM is the institutional asset management and mutual fund
arm of Credit Suisse Group.
Brown Brothers Harriman & Co. is the administrator and custodian.
ADVISORY FEES
The Global Income Fund pays CSAM aggregate annual fees for investment advice
equal to 0.50% of its average weekly net assets.
Since CSAM receives fees based on net assets, it will benefit from the
increase in assets that will result from the offer. As a result, one director
who is an "interested person" of the Global Income Fund because of his position
as a director and officer of CSAM could benefit indirectly from the offer
because of this affiliation.
RISK FACTORS AND SPECIAL CONSIDERATIONS
YOU WILL INCUR IMMEDIATE DILUTION IN THIS OFFER. If you do not exercise all
your rights, after the offer you will own a smaller proportional interest in the
Global Income Fund. In addition, whether or not you exercise your rights, the
net asset value per share of your shares will be reduced as a result of the
offer because:
- the shares offered will be sold at less than their then current net asset
value
- you will indirectly bear the expenses of the offer
5
<PAGE>
- the number of shares outstanding after the offer will have increased
proportionately more than the increase in the size of the net assets
You will incur a greater dilution in net asset value per share if you do not
exercise your rights than if you do.
CHANGES IN INTEREST RATES MAY REDUCE YOUR RETURN ON INVESTMENT. Since the
market price of fixed-income securities generally decreases when interest rates
rise, the net asset value and market price of your shares may decline if
interest rates rise. This risk may or may not be offset by additional income
from new or existing securities carrying higher interest rates. Conversely, if
rates decline, you may over time receive less current income from your
investment, although the net asset value and market price of your shares may
immediately increase.
MARKET FLUCTUATIONS MAY AFFECT THE VALUE OF YOUR INVESTMENT. The market
value of fixed-income securities may move up and down, sometimes rapidly and
unpredictably. These fluctuations, which are often referred to as "volatility,"
may cause a security to be worth less than it was worth at an earlier time.
Volatility will affect the net asset value and market price of your shares and
may over time reduce your return on investment.
YOUR INVESTMENT IS EXPOSED TO THE CREDIT RISK INHERENT IN FIXED-INCOME
SECURITIES. The issuer of a debt security may fail to make timely payments of
either principal or interest. When holding shares, you indirectly bear this
credit risk.
HIGH YIELD SECURITIES PRESENT INCREASED AND SPECIAL RISKS. These risks
include:
- greater volatility
- greater credit risk
- potential lack of attractive resale opportunities (illiquidity)
As of June 30, 1999, high yield fixed-income securities represented 72.4% of
net assets. Because of this focus on high yield securities, your investment is
directly exposed to all these risks.
INVESTING OUTSIDE THE U.S PRESENTS SPECIAL RISKS. The risks which the
Global Income Fund faces when it invests in foreign debt securities include:
- fluctuations in exchange rates between the U.S. dollar and foreign
currencies
- unavailable or deficient key information about an issuer, security or
market
- expropriations, capital or currency controls, punitive taxes or
nationalizations
- economic policy changes, social and political instability, military action
and war
THE RISKS OF INVESTING OUTSIDE THE U.S. ARE COMPOUNDED FOR INVESTMENTS IN
EMERGING MARKETS. Because it also invests in emerging markets, the Global
Income Fund incurs greater risks than a fund investing in developed countries
since investing in emerging markets involves special risks not encountered in
developed countries, including:
- potentially more limited access to investments or less advantageous terms
for foreign investors
- less-developed securities markets
- economic, political and social problems
- deficiencies in regulatory oversight, market infrastructure, shareholder
protections and company laws
THE FUND'S SHARES HAVE TRADED AND MAY CONTINUE TO TRADE AT A DISCOUNT TO NET
ASSET VALUE. Shares of closed-end investment companies frequently trade at a
discount to net asset value. Since the commencement of operations, the shares
have generally traded in the market at a discount to net asset value.
6
<PAGE>
THE FAILURE OF COMPUTER SYSTEMS TO BE YEAR 2000 (Y2K) COMPLIANT COULD HURT
THE GLOBAL INCOME FUND. Like any other financial business, the Global Income
Fund could be adversely affected if computer systems on which it relies, which
include primarily those used by CSAM and Brown Brothers Harriman & Co. and their
affiliates and suppliers, are unable to correctly process date-related
information on and after January 1, 2000. Since a portion of its investments are
held by subcustodians in foreign or emerging countries, the Global Income Fund
will be exposed to a greater risk of Y2K deficiencies than other investment
companies that do not engage in international investing. There is also a
separate and different risk that Y2K deficiencies may have an adverse effect on
the companies whose securities are held by the Global Income Fund or on global
markets or economies generally.
OTHER RISKS MAY ARISE FROM CERTAIN INVESTMENT TECHNIQUES WHICH THE GLOBAL
INCOME FUND MAY USE. These techniques include repurchase agreements, lending of
portfolio securities, short sales, options on U.S. government securities,
interest rate futures and related options, direct placement securities,
restricted and illiquid securities and foreign exchange currency transactions.
For a description of these techniques and the risks associated with them, please
see "Other Investment Techniques" in this prospectus beginning on page 24.
7
<PAGE>
FEE TABLE
The following table sets forth certain fees and expenses of the Global
Income Fund.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales load (as a percentage of the subscription price per share)(1)............. 3.75%
Dividend Reinvestment and Cash Purchase Plan Fees............................... *
ANNUAL EXPENSES (as a percentage of net assets)
Management fees................................................................. 0.50%
Other expenses(2)............................................................... 0.43%
TOTAL ANNUAL EXPENSES(2)............................................................ 0.93%
</TABLE>
<TABLE>
<CAPTION>
1 3 5 10
EXAMPLE YEAR YEARS YEARS YEARS
- -------------------------------------------------- ----- ----- ------ ------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment assuming a 5% annual return
(3)........................................... $47 $67 $88 $148
</TABLE>
- ---------
* Participants in the Fund's InvestLink(SM) Program only pay transaction-based
charges. Actual costs will vary for each participant depending on the nature
and number of transactions made. For a description of the charges payable by
participants in the Fund's InvestLink(SM) Program, see "Dividends and
Distributions: InvestLink(SM) Program."
(1) The Global Income Fund will pay Salomon Smith Barney, Inc. a fee for
financial advisory services and marketing assistance equal to 1.25% of the
subscription price per share. The Global Income Fund will also pay
broker-dealers, including Salomon Smith Barney, Inc., fees for their
soliciting efforts equal to 2.50% of the subscription price per share. Since
these fees will be paid by the Global Income Fund, you will indirectly bear
this fee as a shareholder of the Global Income Fund, even if you do not
exercise your rights.
(2) Based upon estimated amounts for the current fiscal year and on the net
assets of the Global Income Fund after giving effect to the anticipated net
proceeds of the offer, including proceeds from the issuance of up to 25% of
the shares under the over-subscription privilege. This figure does not
include expenses of the Global Income Fund incurred in connection with the
offer, estimated at $441,000. Total expenses for the six month period ended
June 30, 1999 were 1.07% of average net assets.
(3) The example reflects the sales load and other expenses of the Global Income
Fund incurred in connection with the offer and assumes that all of the
rights are exercised and that all dividends and distributions are
reinvested.
WE HAVE PREPARED THE FOREGOING TABLE AND EXAMPLE TO ASSIST YOU IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT YOU BEAR, DIRECTLY OR
INDIRECTLY, BUT YOU SHOULD NOT CONSIDER IT AS A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATE OF RETURN. THE ACTUAL EXPENSES OF THE GLOBAL INCOME FUND MAY BE
GREATER OR LESS THAN THOSE SHOWN. For more complete descriptions of certain of
the Global Income Fund's costs and expenses, see "Management" in this prospectus
and in the statement of additional information.
8
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes selected financial data for a share of common
stock outstanding throughout each period presented. The per share operating
performance and ratios for each of the periods, other than the six-month period
ended June 30, 1999, have been derived from financial statements audited by
PricewaterhouseCoopers LLP, the Global Income Fund's independent accountants, as
stated in their report which legally forms a part of the statement of additional
information. The following information should be read in conjunction with the
financial statements and notes, which legally forms a part of the prospectus and
which is available upon request.
PER SHARE OPERATING PERFORMANCE
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
06/30/99(1) 12/31/98 12/31/97 12/31/96 12/31/95(2)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $ 9.29 $ 10.79 $ 10.37 $ 10.01 $ 9.26
Offering Costs.......................................... -- -- -- -- --
Net Investment Income................................... 0.43 0.94 0.89 0.91 0.95
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 0.06 (1.49) 0.41 0.26 0.61
Total from Investment Activities.......................... 0.49 (0.55) 1.30 1.17 1.56
Less Distributions:
From Net Investment Income.............................. (0.49) (0.95) (0.88) (0.81) (0.76)
In Excess of Net Investment Income...................... -- -- -- -- --
From Return of Capital.................................. -- -- -- -- (0.05)
----------- ----------- ----------- ----------- -----------
Total Distributions....................................... (0.49) (0.95) (0.88) (0.81) (0.81)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period............................ $ 9.29 $ 9.29 $ 10.79 $ 10.37 $ 10.01
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Per Share Market Value, End of Period..................... $ 8.88 $ 8.63 $ 10.06 $ 9.00 $ 8.88
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total Investment Return
Net Asset Value(3)...................................... 5.82%(5) (5.13)% 13.82% 13.27% 17.57%
Market Value............................................ 8.92%(5) (5.56)% 22.34% 11.03% 18.16%
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90
----------- ----------- ----------- ----------- -----------
<S> <C>
Net Asset Value, Beginning of Period...................... $ 10.45 $ 9.80 $ 9.62 $ 8.70 $ 10.06
Offering Costs.......................................... -- -- -- -- --
Net Investment Income................................... 0.95 1.04 1.22 1.16 1.17
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (1.33) 0.66 0.01 0.96 (1.33)
Total from Investment Activities.......................... (0.38) 1.70 1.23 2.12 (0.16)
Less Distributions:
From Net Investment Income.............................. (0.62) (1.04) (1.05) (1.20) (1.20)
In Excess of Net Investment Income...................... -- (0.01) -- -- --
From Return of Capital.................................. (0.19) -- -- -- --
----------- ----------- ----------- ----------- -----------
Total Distributions....................................... (0.81) (1.05) (1.05) (1.20) (1.20)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period............................ $ 9.26 $ 10.45 $ 9.80 $ 9.62 $ 8.70
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Per Share Market Value, End of Period..................... $ 8.25 $ 9.50 $ 9.50 $ 10.38 $ 7.88
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total Investment Return
Net Asset Value(3)...................................... (3.80)% 18.29% 13.28% 25.32% (1.66)%
Market Value............................................ (4.72)% 10.94% 3.50% 53.35% 0.38%
<CAPTION>
YEAR ENDED
12/31/89
-----------
Net Asset Value, Beginning of Period...................... $ 10.86
Offering Costs.......................................... --
Net Investment Income................................... 1.27
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (0.76)
Total from Investment Activities.......................... 0.51
Less Distributions:
From Net Investment Income.............................. (1.00)
In Excess of Net Investment Income...................... --
From Return of Capital.................................. (0.31)
-----------
Total Distributions....................................... (1.31)
-----------
-----------
Net Asset Value, End of Period............................ $ 10.06
-----------
-----------
Per Share Market Value, End of Period..................... $ 9.25
-----------
-----------
Total Investment Return
Net Asset Value(3)...................................... 4.99%
Market Value............................................ (2.53)%
</TABLE>
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
06/30/99(1) 12/31/98 12/31/97 12/31/96 12/31/95(2) 12/31/94
------------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Assets, End of Period (Thousands).......... $78,520 $78,510 $91,194 $87,656 $84,618 $78,252
Ratio of Expenses to Average Net Assets........ 1.07%(4) 1.17% 1.10% 1.11% 0.99% 1.12%
Ratio of Net Investment Income to Average Net
Assets........................................ 9.44%(4) 9.17% 8.43% 8.99% 9.80% 9.66%
Portfolio Turnover Rate........................ 26.5%(5) 107.8% 119.1% 65.1% 54.5% 83.1%
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Assets, End of Period (Thousands).......... $88,319 $82,450 $80,606 $73,068 $84,488
Ratio of Expenses to Average Net Assets........ 1.06% 1.01% 1.00% 1.00% 1.07%
Ratio of Net Investment Income to Average Net
Assets........................................ 10.28% 12.34% 12.13% 12.48% 12.13%
Portfolio Turnover Rate........................ 128.5% 107.7% 48.0% 81.0% 105.5%
</TABLE>
- ------------
(1) Unaudited.
(2) CSAM replaced CS First Boston Investment Management ("CSFB Investment
Management") as the fund's investment adviser effective June 13, 1995.
(3) Total investment return based on per share net asset value reflects the
effects of change in net asset value on the performance of the Global Income
Fund during each period, and assumes dividends and capital gains
distributions were reinvested. These percentages are not an indication of
the performance of a shareholder's investment in the Global Income Fund
based on market value because the market value of the stock and the net
asset value of the Global Income Fund differ.
(4) Annualized.
(5) Not Annualized.
9
<PAGE>
THE OFFER
BENEFITS OF THE OFFER
The board of directors of the Global Income Fund has determined that
increasing its assets through a rights offering is in your best interest.
In consultation with CSAM, the board determined that the rights offering may
provide the following benefits:
- additional investment flexibility
- increased ability to take advantage of timely opportunities in the U.S.
and global bond markets as a result of
- the strong economic growth in the U.S. and
- an improving outlook in the emerging and other foreign markets
- lower expense ratios
- improved liquidity of the trading market for shares on the NYSE
- opportunity to purchase additional shares at a price below current market
price
Prior to reaching this conclusion, the board, in consultation with CSAM and
Salomon Smith Barney, Inc., reviewed the structure, timing and terms of the
offer, and its dilutive effect on both shareholders who exercise their rights
and those who don't. After careful consideration, the board unanimously voted to
approve the offer.
There can be no assurance that the offer will provide any of the benefits
listed above.
The Global Income Fund may choose to make additional rights offerings from
time to time for a number of shares and on terms which may or may not be similar
to the offer.
TERMS OF THE OFFER
The Global Income Fund is issuing to its shareholders rights to purchase
additional shares. You will receive one right for each share you own on the
record date, which is September 27, 1999. You need three rights to purchase one
share at the subscription price per share. The Global Income Fund will not issue
fractional shares upon the exercise of less than three rights. You may exercise
your rights to acquire shares at any time during the subscription period, which
begins on September 27, 1999 and ends at 5.00 p.m., New York City time, on
October 22, 1999, unless extended by the Global Income Fund to 5:00 p.m., New
York City time, on a date which will be no later than October 29, 1999. The
right of a shareholder of record to acquire one share for every three rights
during the subscription period at the subscription price is called the "primary
subscription."
Rights are evidenced by subscription certificates. The Global Income Fund
will send subscription certificates to all persons whose names appear on the
list of shareholders of the Global Income Fund on September 27, 1999, the record
date of the offer.
If you exercise all your rights, you may subscribe for additional shares.
Shares available for purchase pursuant to this over-subscription privilege are
subject to allotment and increase. The over-subscription privilege is more fully
described below. For purposes of determining the maximum number of shares you
may acquire pursuant to the offer, if your shares are held of record by Cede, as
nominee for The Depository Trust Company, or by any other depository or nominee,
you will be deemed to be the holder of the rights that are issued to Cede or
such other depository or nominee on your behalf.
Since the Global Income Fund will not issue fractional shares, if you
receive or have remaining fewer than three rights, you will be unable to
purchase shares upon the exercise of such rights and no cash will be paid to you
in lieu of such rights. You may, however, subscribe for shares pursuant to the
over-subscription privilege provided you have exercised all your rights. Once
you subscribe for shares and the Global Income Fund receives payment or a
guarantee of payment, you will not be able to change your decision.
10
<PAGE>
IMPORTANT DATES TO REMEMBER
Please note that the dates in the table below may change if the offer is
extended.
<TABLE>
<CAPTION>
EVENT DATE
- ---------------------------------------------------------------- ------------------------------------------------
<S> <C>
Record date..................................................... September 27, 1999
Subscription period............................................. September 27, 1999 to October 22, 1999
Payment for shares or notice of guaranteed delivery due......... October 22, 1999
Expiration and pricing date..................................... October 22, 1999
Payment for guarantees of delivery due.......................... October 27, 1999
Confirmation to participants.................................... November 3, 1999
Final payment for shares........................................ November 17, 1999
</TABLE>
OVER-SUBSCRIPTION PRIVILEGE
If shares remain available for purchase after all shareholders have had a
chance to exercise their rights pursuant to the primary subscription, the Global
Income Fund will offer such shares to shareholders who have exercised all their
rights and who desire to acquire additional shares. You may subscribe for those
additional shares pursuant to the over-subscription privilege only if you
exercise all your rights pursuant to the primary subscription. If you exercise
all your rights and wish to subscribe for additional shares, please indicate on
the subscription certificate the number of additional shares desired through the
over-subscription privilege.
If sufficient shares remain from unexercised rights, all over-subscriptions
may be honored in full. If sufficient shares are not available to honor all
over-subscription requests, the Global Income Fund may issue up to an additional
704,512 shares, representing 25% of the shares available pursuant to the primary
subscription, to satisfy over-subscription requests. Whether or not the Global
Income Fund issues these additional shares, if there are not enough shares
available to honor all over-subscriptions, the available shares will be
allocated among you and all the other shareholders who subscribe for additional
shares pursuant to the over-subscription privilege in proportion to the number
of rights issued to you and such shareholders. The allocation process may
involve a series of allocations in order to assure that the total number of
shares available for over-subscriptions is distributed on a pro rata basis.
The Global Income Fund will not sell any shares that are not subscribed for
under the primary subscription or the over-subscription privilege.
SUBSCRIPTION PRICE
You may purchase one share for every three rights at the subscription price.
The subscription price is 95% of the lower of:
(1) the average of the last reported sales price of a share on the NYSE
on the expiration date of the offer (October 22, 1999, unless extended) and
on the four preceding business days; and
(2) the net asset value per share as of the close of business on the
expiration date of the offer (October 22, 1999, unless extended).
For example, if the average of the last reported sales price on the NYSE on
October 22, 1999 and on the four preceding business days of a share of the
Global Income Fund's common stock is $8.92, and the net asset value as of the
close of business on the pricing date is $8.98, the subscription price will be
$8.47 (95% of $8.92). If, however, the average of the last reported sales price
of a share on that exchange on October 22, 1999 and on the four preceding
business days thereof is $9.00, and the net asset value as of the close of
business on October 22, 1999 is $8.98, the subscription price will be $8.53 (95%
of $8.98).
The Global Income Fund announced the offer on May 11, 1999. The last
reported net asset value per share of common stock at the close of business on
May 11, 1999 and September 21, 1999 was $9.53 and $8.98, respectively, and the
last reported sales price of a share on the NYSE on those dates was $8 1/2 and
11
<PAGE>
$8 7/8, respectively. The Global Income Fund paid a dividend of $0.0725 per
share on May 17, June 15, July 15, 1999, August 16, 1999 and September 15, 1999.
RIGHTS MAY NOT BE PURCHASED OR SOLD
The rights are non-transferable. You may not purchase or sell them. The
rights will not trade on the NYSE or any other exchange. The shares to be issued
under the rights, however, will trade on the NYSE under the symbol "CGF". If you
do not exercise your rights before the conclusion of the rights offer, your
rights will expire without value.
EXPIRATION OF THE OFFER AND RIGHTS
The offer will expire at 5:00 p.m., New York City time, on October 22, 1999
unless the Global Income Fund extends it until 5:00 p.m., New York City time, to
a date not later than October 29, 1999. Rights will expire at that time and
thereafter you will no longer be able to exercise them. Since the expiration
date for exercise of the rights and the pricing date of the shares subscribed
will be the same date, you will not know the purchase price when you decide to
acquire shares.
If the Global Income Fund decides to extend the offer, it will make an
announcement to that effect as promptly as practicable. The Global Income Fund
may elect to extend the offer, for example, if it determines that shareholders
require extra time to exercise their rights in a timely fashion. The Global
Income Fund will not, unless otherwise required by law, have any obligation to
publish, advertise or otherwise communicate any such announcement other than by
making a release to the Dow Jones News Service or such other means of
announcement as the Global Income Fund deems appropriate.
SUBSCRIPTION AGENT
The subscription agent, BankBoston, N.A., will receive for its
administrative, processing, invoicing and other services as subscription agent,
a fee estimated to be approximately $11,000 plus reimbursement for its
out-of-pocket expenses related to the offer. The subscription agent is also the
Global Income Fund's transfer agent, dividend-paying agent and registrar with
respect to the common stock. If you have any questions regarding subscription
certificates, please contact Georgeson Shareholder Communications Inc., the
information agent for the offer, at (800) 223-2064. You must send completed
subscription certificates together with payment of the estimated subscription
price to BankBoston by one of the methods described below.
<TABLE>
<S> <C> <C>
(1) By Overnight, Certified or Express
By First Class Mail: Mail:
EquiServe EquiServe
Corporate Reorganization Corporate Reorganization
P.O. Box 9573 40 Campanelli Drive
Boston, MA 02205-9573 Braintree, MA 02184
By Hand:
Securities Transfer & Reporting Services, Inc.
c/o EquiServe
100 William Street
Galleria
New York, NY 10038
By Facsimile (Telecopy):
For Notice Of Guaranteed Delivery Only
(781) 575-4826 with the original Subscription Certificate to be sent
(2) by method (1) above. Confirm facsimile by telephone at (781)
575-4816.
</TABLE>
The Global Income Fund will accept only subscription certificates actually
received on a timely basis. DELIVERY TO AN ADDRESS OTHER THAN THOSE SET FORTH
ABOVE DOES NOT CONSTITUTE GOOD DELIVERY.
12
<PAGE>
HOW TO EXERCISE RIGHTS
Rights will be evidenced by subscription certificates. Except as described
below under "Restrictions on Foreign Shareholders," the Global Income Fund will
mail subscription certificates directly to you if your shares are registered in
your name or, if you own your shares through a broker, depository or nominee, to
Cede or such other depository or nominee. You may exercise your rights by
either:
- completing and signing a subscription certificate and mailing it in the
envelope provided, together with payment for the shares to the
subscription agent
- contacting your broker, banker or trust company, which can guarantee
payment and delivery of a properly completed and executed subscription
certificate before October 22, 1999. A fee may be charged for this
service.
Fractional shares will not be issued. Therefore, if you receive, or have
remaining, fewer than three rights, you will not be able to purchase any shares
upon the exercise of rights. You will not be entitled to cash for less than
three rights. You may, however, subscribe for additional shares pursuant to the
over-subscription privilege provided you have exercised all your rights pursuant
to the primary subscription.
The subscription agent must have received at its office indicated above
completed subscription certificates or notices of guaranteed delivery prior to
5:00 p.m., New York City time, on October 22, 1999.
IF YOU DO NOT OWN YOUR SHARES THROUGH A BROKER OR OTHER NOMINEE. As a
record holder, you can choose between two options set forth under "Payment for
Shares" below. If time is of the essence, option (2) will permit delivery of the
completed subscription certificate and payment after October 22, 1999.
IF YOU OWN YOUR SHARES THROUGH A BROKER OR OTHER NOMINEE. You must contact
that broker or nominee to exercise your rights. In that case, the nominee will
complete the subscription certificate on your behalf and arrange for proper
payment by one of the methods set forth under "Payment for Shares".
IF YOU ARE A NOMINEE. If you hold shares for the account of others, you
should notify the beneficial owners of such shares as soon as possible to obtain
instructions. If the beneficial owner so instructs, you should complete the
subscription certificate and submit it to the subscription agent with proper
payment.
RESTRICTIONS ON FOREIGN SHAREHOLDERS
The Global Income Fund will not mail subscription certificates to
shareholders whose record addresses are outside the United States. For these
purposes, the United States includes its territories and possessions and the
District of Columbia. The rights to which those subscription certificates relate
will be held by BankBoston for foreign shareholders' accounts until instructions
are received to exercise the rights. If no instructions are received prior to
October 22, 1999, such rights will expire.
INFORMATION AGENT
If you have any questions or inquiries relating to the offer, please contact
the information agent at:
[GEORGESON SHAREHOLDER COMMUNICATIONS, INC. LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
You may also contact your broker or nominee for information with respect to
the offer.
The Global Income Fund will pay the information agent for its services in
connection with the offer a fee estimated to be approximately $8,000 plus
reimbursement for its out-of-pocket expenses.
13
<PAGE>
PAYMENT FOR SHARES
You may choose between the following methods of payment to exercise your
rights:
(1) You can send the completed subscription certificate together with
payment for shares to the subscription agent. You should calculate the total
payment on the basis of an estimated subscription price of $8.47 per share. To
be accepted, your payment accompanied by a properly executed and completed
subscription certificate must be received by the subscription agent prior to
5:00 p.m., New York City time, on October 22, 1999.
If you pay using this method, please make sure that your payment:
- is made in United States dollars by money order or check drawn on a bank
located in the United States
- is made to "Credit Suisse Asset Management Strategic Global Income Fund,
Inc."
- accompanies an executed subscription certificate.
(2) Alternatively, you may contact your broker, bank or trust company and
request that it sends on your behalf a notice of guaranteed delivery by
facsimile or otherwise to the subscription agent. The subscription agent will
accept all notices of guaranteed delivery received from brokers, banks, trust
companies or NYSE members prior to 5:00 p.m., New York City time, on October 22,
1999. The notice must guarantee delivery to the subscription agent of (a)
payment of the full subscription price for the shares subscribed for pursuant to
the primary subscription and any additional shares subscribed for pursuant to
the over-subscription privilege, and (b) a properly completed and executed
subscription certificate. The subscription agent will not honor a notice of
guaranteed delivery if a properly completed and executed subscription
certificate, together with payment, is not received by the close of business on
October 27, 1999.
No later than November 3, 1999, the subscription agent will send a
confirmation to each shareholder or, if the shareholder's shares are held by
Cede or any other depository or nominee, to Cede or such depository or nominee.
This confirmation will show:
- the number of shares you acquired pursuant to the primary subscription;
- the number of shares, if any, you acquired pursuant to the
over-subscription privilege;
- the per share and total purchase price for the shares; and
- any additional amount that you must pay to the Global Income Fund or any
excess to be refunded by the Global Income Fund to you.
You will not receive any other evidence of title unless you have requested a
stock certificate at the time of exercise of the rights. You must ensure that
the subscription agent receives any additional payment required from you before
November 17, 1999. The subscription agent will mail any excess payment owed to
you within a reasonable time after the expiration date. The Global Income Fund
will not pay interest on any excess payment. All your payments to the Global
Income Fund must be in U.S. Dollars by money order or check drawn on a bank
located in the United States of America and payable to Credit Suisse Asset
Management Strategic Global Income Fund, Inc.
The subscription agent will deposit all checks received by it prior to the
final due date into a segregated interest-bearing account pending distribution
of the shares. Interest will accrue to the benefit of the Global Income Fund
regardless of whether shares are issued or not by the Global Income Fund.
Issuance and delivery of evidence of title for the shares purchased are
subject to collection of checks and actual payment pursuant to any notice of
guaranteed delivery.
14
<PAGE>
YOU WILL HAVE NO RIGHT TO RESCIND YOUR SUBSCRIPTION AFTER RECEIPT OF YOUR
PAYMENT FOR SHARES BY THE SUBSCRIPTION AGENT.
If you subscribe for shares and do not pay any additional amounts due, the
Global Income Fund may:
(1) sell these shares to other shareholders;
(2) sell you only the number of shares your payment covers; and/or
(3) exercise any and all other rights or remedies to which it may be
entitled to collect the additional amount due, including enforcing any
guaranty of payment.
You may choose the method of delivery of subscription certificates and
payment of the subscription price from those indicated above. Whichever method
you choose, you will make delivery and payment at your own risk. If you use
mail, subscription certificates and payment should be sent by registered mail
and properly insured, with return receipt requested. Please allow a sufficient
number of days to ensure delivery to the Global Income Fund and clearance of
payment prior to 5:00 p.m., New York City time, on the last applicable payment
date. Because uncertified personal checks may take at least five business days
to clear, you are strongly urged to pay, or arrange for payment, by means of
certified or cashier's check or money order.
The Global Income Fund will determine all questions concerning the
timeliness, validity, form and eligibility of any exercise of rights. The Global
Income Fund's determinations will be final and binding. The Global Income Fund
may waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine. The Global Income Fund may also
reject the purported exercise of any right. Subscriptions will not be deemed to
have been received or accepted until all irregularities have been waived or
cured within such time as the Global Income Fund determines. The Global Income
Fund will not be under any duty to give notification of any defect or
irregularity related to the submission of subscription certificates. The Global
Income Fund will not incur any liability for failure to give any such
notification.
DELIVERY OF STOCK CERTIFICATES
The Global Income Fund will issue certificates for shares acquired through
subscription only upon request made at the time of exercise of the rights. If a
request is made, stock certificates will be mailed promptly after November 3,
1999 and after payment for the shares subscribed for has cleared. If you are a
participant in the Global Income Fund's dividend reinvestment and cash purchase
plan, your shares will be credited to your account in the plan. The Global
Income Fund will not issue certificates for subscription shares credited to plan
accounts. If your shares are held of record by Cede or by any other depository
or nominee on your behalf or your broker-dealer's behalf, the shares that you
acquire will be credited to the account of Cede or such other depository or
nominee.
OFFERING FEES AND EXPENSES
Salomon Smith Barney, Inc. will act as the dealer manager for the offer
pursuant to a dealer manager agreement with the Global Income Fund. Salomon
Smith Barney, Inc. will provide financial advisory services and marketing
assistance in connection with the offer. Together with its associated
broker-dealers, Salomon Smith Barney, Inc. will also solicit the exercise of
rights and participation in the over-subscription privilege. The Global Income
Fund will pay Salomon Smith Barney, Inc. a fee for its financial advisory
services and marketing assistance equal to 1.25% of the subscription price for
each share issued. The Global Income Fund will also pay broker-dealers,
including Salomon Smith Barney, Inc., fees for their soliciting efforts equal to
2.50% of the subscription price for each share issued.
The Global Income Fund and CSAM have agreed to indemnify Salomon Smith
Barney, Inc. or contribute to losses arising out of certain liabilities,
including liabilities under the Securities Act. Salomon Smith Barney, Inc. will
not be liable to the Global Income Fund in rendering the services described
above
15
<PAGE>
except for any act of bad faith, willful misconduct or gross negligence on its
part or reckless disregard of its obligations and duties.
Other offering expenses incurred by the Global Income Fund are estimated at
$441,000 which includes up to $100,000 that may be paid to Salomon Smith Barney,
Inc. as partial reimbursement for its expenses related to the offer.
FEDERAL INCOME TAX CONSEQUENCES
For United States federal income tax purposes, neither the receipt nor the
exercise of the rights will result in taxable income to you. Moreover, you will
not realize a loss if you do not exercise the rights. The holding period for a
share acquired upon exercise of a right begins with the date of exercise. The
basis for determining gain or loss upon the sale of a share acquired upon the
exercise of a right will be equal to the sum of:
- the subscription price per share,
- any servicing fee charged to you by your broker, bank or trust company,
and
- the basis, if any, in the rights that you exercised.
A gain or loss recognized upon a sale of a share acquired upon the exercise
of a right will be a capital gain or loss assuming the share is held as a
capital asset at the time of sale. This gain or loss will be a long-term capital
gain or loss if the share has been held at the time of sale for more than one
year.
As noted above, your basis in shares issued under the offer includes your
basis in the rights underlying those shares. The basis of the rights will be
zero unless you elect to allocate your basis of previously owned shares to the
rights issued in the offer. This allocation is based upon the relative fair
market value of such shares and the rights as of the date of distribution of the
rights. Thus, if you make such an election, the basis in the shares you
originally owned will be reduced by an amount equal to the basis you allocated
to the rights. This election must be made in a statement attached to your
federal income tax return for the year in which the offer occurs.
If you do not exercise the rights, however, you will not be able to
recognize a loss or to allocate a portion of your basis in the shares to the
unexercised rights.
The foregoing is a general summary of the material United States federal
income tax consequences of the receipt and exercise of rights. The discussion is
based upon applicable provisions of the U.S. Internal Revenue Code of 1986, U.S.
Treasury regulations and other authorities currently in effect, and does not
cover state, local or foreign taxes. The Code and regulations are subject to
change by legislative or administrative action. You should consult your tax
advisors regarding specific questions as to federal, state, local or foreign
taxes. You should also review the discussion of certain tax considerations
affecting yourself and the Global Income Fund set forth under "Taxation."
TAX-ADVANTAGED ACCOUNTS
The rules and regulations governing benefit plans are complex and include
penalties for noncompliance. If you hold your shares through an employee benefit
plan that is subject to the Employee Retirement Income Security Act of 1974,
including corporate savings and 401(k) plans, Keogh Plans of self-employed
individuals and Individual Retirement Accounts, please consult counsel and tax
advisors for such plan regarding the consequences under ERISA and the Code of an
exercise of the rights.
INVESTMENT ADVISORY FEES
CSAM will benefit from the offer because the investment advisory fee is
based on the net assets of the Global Income Fund. Assuming all rights are
exercised at the estimated subscription price, including up to an additional 25%
of the shares which may be issued to satisfy over-subscriptions, the annual
compensation to be received by CSAM would be increased by approximately
$143,544. Actual compensation paid may vary depending on the number of shares
purchased and investment return. One of the Global Income
16
<PAGE>
Fund's directors who voted to authorize the offer is an "interested person" of
the Global Income Fund within the meaning of the 1940 Act because of his
position as a director and an officer of CSAM. This director could benefit
indirectly from the offer because of his affiliation. The other three directors
are not "interested persons" of the Global Income Fund.
DIVIDENDS
The Global Income Fund does not expect to pay dividends or other
distributions with respect to the shares acquired pursuant to rights until
November 1999.
USE OF PROCEEDS
Assuming the Global Income Fund sells all shares offered pursuant to the
primary subscription at the estimated subscription price, the net proceeds of
the offer are estimated to be $22,526,083, after payment of the dealer manager's
fees, the soliciting fees and the estimated offering expenses. The Global Income
Fund will pay these expenses, which will reduce the net asset value per share.
If the Global Income Fund increases the number of shares subject to the offer by
25%, or 704,512 shares, in order to satisfy over-subscription requests, the
additional net proceeds will be approximately $5,741,773. CSAM expects that,
under current market conditions, the Global Income Fund will invest
substantially all of the net proceeds of the offer in accordance with its
investment objective and policies approximately within one month from the date
of receipt. Pending such investment, the proceeds will be invested in certain
short-term debt instruments.
THE FUND
The Global Income Fund, incorporated in Maryland on January 27, 1988, is a
diversified, closed-end management investment company registered under the 1940
Act. Its shares are traded on the NYSE under the symbol "CGF."
The Global Income Fund commenced operations on April 22, 1988 after an
initial public offering of 8,337,500 shares of common stock. The net proceeds
were approximately $93,046,500.
The Global Income Fund's investment objective is high current income
consistent with the preservation of capital. The Global Income Fund seeks to
achieve this investment objective by investing in higher-yielding U.S. and
foreign fixed-income securities, with an emphasis on U.S. high yield (junk
bonds) and emerging market debt securities. The Global Income Fund may invest up
to 35% of its net assets in the securities of issuers located in the emerging
markets. Investments in fixed-income securities are not subject to any rating
quality limitation. Accordingly, the Global Income Fund may invest a substantial
portion of its assets in securities rated below investment grade by a nationally
recognized rating service or unrated but in CSAM's opinion of comparable
quality. The Global Income Fund may, for cash management or temporary defensive
purposes, hold short-term investments, including cash and cash equivalents.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Please consider carefully the matters set forth below. You should read the
entire prospectus and the statement of additional information before you decide
whether to exercise your rights.
YOU WILL INCUR IMMEDIATE DILUTION IN THIS OFFER.
If you do not exercise all your rights, when the offer is over you will own
a smaller proportional interest in the Global Income Fund. In addition, whether
or not you exercise your rights, the per share net asset value of your shares
will be diluted (reduced) immediately as a result of the offer because:
- the shares offered will be sold at less than their then current net asset
value
- you will indirectly bear the expenses of the offer
- the number of shares outstanding after the offer will have increased
proportionately more than the increase in the size of the net assets.
17
<PAGE>
This dilution may be substantial and will increase if the share price
declines in relation to the net asset value as shown by the following examples:
Scenario 1: Shares trade above per share net asset value (premium)(1)
<TABLE>
<S> <C>
Share Price...................................................... $ 9.20
NAV.............................................................. $ 9.00
Subscription Price (95.0% of NAV)................................ $ 8.55
Reduction in NAV ($)(2).......................................... $ (0.26)
Reduction in NAV (%)............................................. (2.9)%
</TABLE>
Scenario 2: Shares trade below per share net asset value at the time the
offer expires (discount)(1)
<TABLE>
<S> <C>
Share Price...................................................... $ 8.70
NAV.............................................................. $ 9.00
5-day average share price(3)..................................... $ 8.70
Subscription Price (95.0% of 5-day average share price).......... $ 8.26
Reduction in NAV ($)(4).......................................... $ (0.34)
Reduction in NAV (%)............................................. (3.8)%
</TABLE>
- ---------
(1) Both examples assume full primary and over-subscription privilege exercised.
Actual amounts may vary due to rounding.
(2) Assumes $1,570,420 in estimated offering expenses (including sales load).
(3) The expiration date and the four preceding business days.
(4) Assumes $1,532,113 in estimated offering expenses (including sales load).
You will incur a greater dilution in net asset value per share if you do not
exercise your rights than if you do.
CHANGES IN INTEREST RATES MAY REDUCE YOUR RETURN ON INVESTMENT.
Since the market price of fixed-income securities generally decreases when
interest rates rise, the net asset value and market price of your shares may
decline if interest rates rise. The magnitude of the decrease will generally be
greater for securities with longer maturities and securities with higher yields,
which are those in which the Global Income Fund primarily invests. This risk may
or may not be offset by additional income from new or existing securities
carrying higher interest rates. Conversely, if rates decline, you may over time
receive less current income from your investment, although the net asset value
and market price of your shares may immediately increase. No assurance can be
given that the securities purchased by the Global Income Fund will continue to
earn yields comparable to those earned historically.
MARKET FLUCTUATIONS MAY AFFECT THE VALUE OF YOUR INVESTMENT.
The market value of fixed-income securities may move up and down, sometimes
rapidly and unpredictably. These fluctuations, which are often referred to as
"volatility," may cause a security to be worth less than it was worth at an
earlier time. Volatility may affect a single issuer, industry, sector of the
economy, or the market as a whole. Volatility affects most
investments--including bonds, and the funds that invest in them. The risk of
volatility in bond prices can vary significantly depending upon factors such as
issuer and maturity. Volatility will affect the net asset value and market price
of your shares and may reduce your return on investment.
YOUR INVESTMENT IS EXPOSED TO THE CREDIT RISK INHERENT IN FIXED-INCOME
SECURITIES.
The issuer of a debt security may fail to make timely payments of either
principal or interest. When holding shares, you indirectly bear this credit
risk. A deterioration in financial or general economic conditions usually
increases credit risk. Even with investment grade securities, differences exist
in credit quality and some investment grade securities may have speculative
characteristics. A security's price may
18
<PAGE>
be adversely affected by the market's opinion of the security's credit quality
level even if the issuer or counterparty has suffered no degradation in its
ability to honor the obligation. In addition, the Global Income Fund may
purchase securities that are in default or not current in the payment of
interest or principal. No assurance can be given that issuers whose obligations
the Global Income Fund acquires will make payments on such obligations as they
become due.
HIGH YIELD SECURITIES PRESENT INCREASED AND SPECIAL RISKS.
High yield securities generally pay a premium above the yields of U.S.
government debt securities or mature corporate issuers because they are subject
to greater risks than these securities. Hence, high yield securities usually
carry a medium-grade or below investment grade rating, which reflects their
speculative character and the following risks:
- greater volatility
- greater credit risk
- potentially greater sensitivity to general economic or industry conditions
- potential lack of attractive resale opportunities (illiquidity)
- additional expenses to seek recovery from issuers who default
The market value of lower-rated securities may be more volatile than the
market value of higher-rated securities and generally tends to reflect the
market's perception of the creditworthiness of the issuer and short-term market
developments to a greater extent than more highly rated securities, which
reflect primarily fluctuations in general levels of interest rates.
Ratings are relative and subjective and not absolute standards of quality.
Securities ratings are based largely on the issuer's historical financial
condition and the rating agencies' analysis at the time of rating. Consequently,
the rating assigned to any particular security is not necessarily a reflection
of the issuer's current financial condition.
INVESTING OUTSIDE THE U.S. PRESENTS SPECIAL RISKS.
The risks which the Global Income Fund faces when it invests in foreign debt
securities include:
- fluctuations in exchange rates between the U.S. dollar and foreign
currencies
- unavailable or deficient key information about an issuer, security or
market
- expropriations, capital or currency controls, punitive taxes or
nationalizations
- economic policy changes, social and political instability, military action
and war
Additional risks present when investing outside the U.S. include:
- changed circumstances in dealings between nations
- greater volatility and illiquidity of foreign securities
- costs incurred in connection with conversions between various currencies
- higher foreign brokerage commissions
- possible extended settlement periods
THE RISKS OF INVESTING OUTSIDE THE U.S. ARE COMPOUNDED FOR INVESTMENTS IN
EMERGING MARKETS.
There are greater risks involved in investing in emerging markets than in
developed foreign markets, including:
- potentially more limited access to investments or less advantageous terms
for foreign investors
- less-developed securities markets
19
<PAGE>
- heightened economic, political and social problems
- deficiencies in regulatory oversight, market infrastructure, shareholder
protections and company laws.
- less rigorous and/or enforced accounting, auditing and financial reporting
standards and requirements
- potential difficulties in enforcing contractual obligations.
MORTGAGE-BACKED SECURITIES MAY REDUCE CURRENT INCOME.
Depending on market conditions, mortgage-backed securities may at times
constitute a substantial portion of the Global Income Fund's portfolio.
Mortgage-backed securities are subject to the following risks:
- default on the underlying debt
- substantial decline in value when interest rates rise
- potential lack of attractive resale opportunities (illiquidity)
- loss of income due to prepayments and foreclosures
THE FUND'S SHARES HAVE TRADED AND MAY CONTINUE TO TRADE AT A DISCOUNT TO NET
ASSET VALUE.
Shares of closed-end investment companies frequently trade at a discount to
net asset value. This characteristic of shares of a closed-end fund is a risk
separate and distinct from the risk that its net asset value may decrease. Since
the commencement of operations, the shares have generally traded in the market
at a discount to net asset value. See "Common Stock." The risk of purchasing
shares of a closed-end fund that might trade at a discount is more pronounced
for investors who wish to sell their shares in a relatively short period of
time. For those investors, realization of a gain or loss on their investments is
likely to be more dependent upon the existence of a premium or discount than
upon portfolio performance.
THE FAILURE OF COMPUTER SYSTEMS TO BE Y2K COMPLIANT COULD HURT THE GLOBAL INCOME
FUND.
Like other registered investment companies and financial business
organizations worldwide, the Global Income Fund could be adversely affected if
computer systems on which it relies, which include primarily those used by CSAM
and Brown Brothers Harriman & Co. and their affiliates and suppliers, are unable
to correctly process date-related information on and after January 1, 2000.
Since a portion of its investments are held by subcustodians in foreign or
emerging countries, the Global Income Fund will be exposed to a greater risk of
Y2K deficiencies than other investment companies that do not engage in
international investing. There is also a separate and different risk that Y2K
deficiencies may have an adverse effect on the companies whose securities are
held by the Global Income Fund or on global markets or economies generally.
OTHER RISKS MAY ARISE FROM CERTAIN INVESTMENT TECHNIQUES WHICH THE GLOBAL INCOME
FUND MAY USE.
These techniques include repurchase agreements, lending of portfolio
securities, short sales, options on U.S. government securities, interest rate
futures and related options, direct placement securities, restricted and
illiquid securities and foreign exchange currency transactions. For a
description of risks associated with these techniques, please see "Other
Investment Techniques" in this prospectus beginning on page 29.
20
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
GENERAL
The investment objective of the Global Income Fund is high current income
consistent with the preservation of capital. The Global Income Fund seeks to
achieve this objective by investing in higher yielding U.S. and foreign
fixed-income securities, with an emphasis on U.S. high yield (junk bonds) and
emerging market securities. The Global Income Fund may invest up to 35% of its
net assets in the securities of issuers located in the emerging markets.
At least 65% of the Global Income Fund's total assets must be invested in
income-producing securities. CSAM expects that substantially all of the Fund's
assets will be invested in income-producing securities.
The investment objective is a fundamental policy and cannot be changed
without the approval of the holders of a majority of the outstanding voting
securities. As used herein, a "majority of the outstanding voting securities"
means the lesser of (a) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (b) more than 50% of the
outstanding shares. No assurance can be given that the investment objective will
be achieved. For a more detailed discussion of the investment objective and
policies, see "Investment Objective and Policies" in the Statement of Additional
Information.
At June 30, 1999, the portfolio of investments was composed as follows (as a
percentage of net assets):
<TABLE>
<S> <C>
Corporate Obligations:........................................... 68.0%
Government and Agency Securities:................................ 18.6%
Collateralized Securities:....................................... 0.3%
Asset Backed Obligations:........................................ 1.5%
Common Stocks:................................................... 3.8%
Preferred Stocks:................................................ 3.9%
Warrants:........................................................ 1.0%
Time Deposits and Other Assets:.................................. 2.9%
</TABLE>
At the same date, 72.4% of the net assets were invested in high yield
fixed-income securities.
Investments in fixed-income securities are not subject to any rating quality
limitation. Accordingly, the Global Income Fund may invest a substantial portion
of its assets in securities rated below investment grade by a nationally
recognized rating service or unrated but in CSAM's opinion of comparable
quality. The table below sets forth the percentages of assets invested as of
June 30, 1999 in the various Standard & Poor's Rating Group and Moody's
Investors Service, Inc. rating categories and in unrated securities determined
by CSAM to be of comparable quality. The percentages are based on the
dollar-weighted credit ratings of all securities held as of June 30, 1999. For
information regarding the various ratings of Moody's and S&P, see the appendix
to this prospectus.
<TABLE>
<CAPTION>
SIX MONTH PERIOD ENDED JUNE 30, 1999
-------------------------------------------------------------
UNRATED SECURITIES OF
RATED SECURITIES AS A COMPARABLE QUALITY
PERCENTAGE OF PORTFOLIO AS A PERCENTAGE OF
RATING CATEGORY VALUE PORTFOLIO VALUE TOTAL
- ------------------------------------------------------------ ----------------------- ------------------------- ---------
<S> <C> <C> <C>
AAA/Aaa..................................................... 1.2% - 1.2%
AA/Aa....................................................... - - -
A/A......................................................... 0.3% - 0.3%
BBB/Baa..................................................... 1.1% 0.8% 1.9%
BB/Ba....................................................... 13.7% 0.3% 14.0%
B/B......................................................... 56.0% 2.5% 58.5%
CCC/Caa..................................................... 9.1% 3.9% 13.0%
CC/Ca....................................................... 0.4% - 0.4%
C/C......................................................... 0.1% - 0.1%
D........................................................... 0.5% - 0.5%
Subtotal.................................................. 82.4% 7.5% 89.9%
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
SIX MONTH PERIOD ENDED JUNE 30, 1999
-------------------------------------------------------------
UNRATED SECURITIES OF
RATED SECURITIES AS A COMPARABLE QUALITY
PERCENTAGE OF PORTFOLIO AS A PERCENTAGE OF
RATING CATEGORY VALUE PORTFOLIO VALUE TOTAL
- ------------------------------------------------------------ ----------------------- ------------------------- ---------
<S> <C> <C> <C>
U.S. Government, Equities and Other......................... 10.1% n/a 10.1%
Total..................................................... 92.5% 7.5% 100.0%
</TABLE>
- ---------
n/a: not applicable
The percentage of the assets invested in securities of various grades may
from time to time vary substantially from those set forth above. Under current
market conditions, CSAM anticipates that it will invest a substantial portion of
the net proceeds of the offer in securities rated B or lower by S&P or Moody's
or unrated but deemed of comparable quality by CSAM. This would cause the
percentage of the portfolio invested in securities rated B or lower or unrated
but deemed of comparable quality by CSAM to increase from its current level.
As of June 30, 1999, the assets were invested in the following industries
and financial instruments:
<TABLE>
<CAPTION>
INDUSTRY % OF NET ASSETS
- -------------------------------------------------------------------------- ---------------
<S> <C>
Aerospace/Defense 0.4%
Automotive 0.9%
Broadcasting 7.5%
Business Services 0.6%
Cable 7.3%
Chemicals 1.3%
CMO's & Asset Backed Securities 1.8%
Construction & Building Materials 0.7%
Consumer Products & Services 3.0%
Electronics 1.3%
Energy 3.5%
Entertainment 3.1%
Fin'l Services 0.1%
Food & Beverages 2.5%
Health Care 0.8%
Industrial 3.5%
Metals/Mining 2.7%
Packaging/Containers 2.9%
Paper/Forest Products 1.9%
Publ. & Info. Services 3.1%
Restaurants, Hotels & Gaming 4.3%
Retail 2.4%
Rights, Warrants & Other 1.0%
Telecommunications 17.5%
Textiles/Apparel 0.3%
Transport 1.7%
Waste Management 0.4%
------
Subtotal for Long-term Domestic Investments 76.5%
Foreign Corporate Obligations 2.0%
Foreign Government Obligations 18.6%
Time Deposit 1.1%
Net Other Assets 1.8%
------
100.00%
</TABLE>
22
<PAGE>
The ten largest holdings at June 30, 1999 (as a percentage of net assets)
were:
<TABLE>
<CAPTION>
% OF NET
POSITION ASSETS
------------------------------------------------------------------------------------------------- -----------
<S> <C> <C>
1) Federal Republic of Brazil: Capitalization Bonds, 8.00%, 4/15/14 1.8%
2) Dr. Pepper Bottling Holdings, Inc.: Class A 1.7%
3) Federal Republic of Brazil: Series RG, Debentures Series E1-L, 6.125%, 4/15/06 1.6%
4) Republic of Venezuela: Unsecured Bonds, 9.25%, 9/15/27 1.6%
5) Republic of Argentina: Debentures, 6.188%, 3/31/05 1.4%
6) Green Tree Financial Corp. Manufactured Housing Installment Sales Contracts:
Series 1993-4, Class B-1, 7.20%, 1/15/19 1.1%
7) United Mexican States: 11.50%, 5/15/26 1.0%
8) Banco Nacional De Comercio: 7.25%, 2/02/04 1.0%
9) Spanish Broadcasting System, Inc.: 13.50%, Cumulative Exchangeable 144A 0.9%
10) Univision Network Holding, L.P.: Sub Notes, 7.0%, 12/17/02 0.9%
</TABLE>
INVESTMENT POLICIES
U.S. FIXED-INCOME SECURITIES
The Global Income Fund invests primarily in higher-yielding, lower rated
U.S. corporate fixed income securities, including debt securities, convertible
securities and preferred stocks. It may also invest in securities rated single A
or higher by Moody's or by Standard & Poor's and unrated corporate fixed-income
securities. Normally substantially all of the high yield securities in which the
Global Income Fund invests are in the lower-rated categories. Lower-rated
securities generally provide yields superior to those of more highly rated
securities, but involve greater risks and are speculative in nature. The rating
services' descriptions of these rating categories, including the speculative
characteristics of the lower categories, are set forth in appendix A. As of June
30, 1999, U.S. high yield corporate fixed-income securities represented 66.0% of
the net assets of the Global Income Fund.
The Global Income Fund may also invest in debt securities issued or
guaranteed by the U.S. government, or by agencies or instrumentalities
established or sponsored by the U.S. government, including mortgage-backed
securities. Depending on market conditions, the Global Income Fund may invest a
substantial portion of its assets in mortgage-backed securities. Mortgage-backed
securities are collateralized by mortgages or interests in mortgages and may be
issued by government or non-government entities. Mortgage-backed securities
issued by government entities typically provide a monthly payment consisting of
interest and principal payments, and additional payments will be made out of
unscheduled payments of principal. Non-government issued mortgage-backed
securities may offer higher yields than those issued by government entities, but
may be subject to greater price fluctuations. CSAM may take full advantage of
the entire range of maturities of U.S. government securities and may adjust the
average maturity of the investments held in the portfolio from time to time,
depending on its assessment of relative yields of securities of different
maturities and its expectations of future changes in interest rates. To the
extent that the Global Income Fund invests in the mortgage market, CSAM will
evaluate relevant economic, environmental and security-specific variables such
as housing starts, coupon and age trends. As of June 30, 1999, mortgage-backed
securities represented 1.8% of the net assets of the Global Income Fund.
FOREIGN FIXED-INCOME SECURITIES
The Global Income Fund invests in debt obligations and other fixed income
securities denominated in non-U.S. currencies or composite currencies including:
- debt obligations issued or guaranteed by foreign national, provincial,
state, municipal or other governments with taxing authority or by their
agencies or instrumentalities
- debt obligations of supranational entities
- debt obligations of the U.S. government issued in non-dollar securities
23
<PAGE>
- dollar and non-dollar denominated debt obligations and other
fixed-income securities of foreign and U.S. corporate issuers
The Fund may invest up to 35% of its net assets in the securities of issuers
located in the emerging markets.
OTHER INVESTMENT TECHNIQUES
To enhance return as market opportunities arise, the Global Income Fund may
use the following investment techniques. Associated risks are indicated for each
technique.
REPURCHASE AGREEMENTS. The Global Income Fund may invest in repurchase
agreements collateralized by U.S. government securities, certificates of deposit
and certain bankers' acceptances for the purpose of realizing additional income.
The use of repurchase agreements involves the risk that the counterparty may
default on its obligation to repurchase the underlying securities at the agreed
upon repurchase price at a time when the value of the underlying securities has
declined, thus causing a loss upon their disposition.
SECURITIES LENDING. The Global Income Fund may lend its portfolio
securities to banks, brokers, dealers and other financial institutions who may
need to borrow securities in order to complete certain transactions, such as
covering short sales, avoiding failures to deliver securities or completing
arbitrage operations. Securities lending involves the following risks:
- volatility
- credit
SHORT SALES. The Global Income Fund may engage in short sales (the sale of
a security that it does not own). The Global Income Fund will only engage in
short sales when it owns an equal amount of such securities or securities
convertible into or exchangeable, without payment of further consideration, for
securities of the same issue as, and equal in amount to, the securities sold
short ("short sales against the box"), and only if not more than 5% of the net
assets is held as collateral for such sales at any one time.
OPTIONS ON U.S. GOVERNMENT SECURITIES. The Global Income Fund may write
covered call options (rights to purchase a security from the Global Income Fund)
and put options (rights to sell a security to the Global Income Fund) with
respect to its U.S. government securities to hedge against price fluctuations
and to increase current income. The Global Income Fund may also purchase put
options (right to sell a security to a third party) or call options (right to
purchase a security from a third party) on U.S. government securities to protect
its portfolio against price fluctuations. These options involve the following
risks:
- volatility
- imperfect correlation between the prices of the option and the
underlying security credit
- illiquidity
- reduced ability to profit from price and interest rate fluctuations on
the securities being hedged
INTEREST RATE FUTURES AND RELATED OPTIONS. The Global Income Fund may enter
into interest rate futures contracts and options that are traded on U.S. futures
exchanges. The Global Income Fund intends to use these techniques only for bona
fide hedging purposes, i.e., for the purpose of protecting its portfolio against
yield and price fluctuations. The Global Income Fund is not required to hedge
its investments. Interest rate futures and related options may not be available
or may be too costly, and, as a result, the Global Income Fund may not be able
to use them when it decides to do so. When used, interest rate futures contracts
and related options involves the following risks:
- volatility
- imperfect correlation between prices
- reduced ability to profit from price and interest rate fluctuations on
the securities being hedged
RESTRICTED AND ILLIQUID SECURITIES. The Global Income Fund may invest up to
10% of its total assets in securities that are not readily marketable. These
include securities which are not registered under the
24
<PAGE>
Securities Act and not publicly traded. They are usually considered less liquid
than publicly-traded securities and the Global Income Fund may have to accept a
lower price upon a decision to sell such a security or may not be able to sell
the security at all. Companies whose securities are not publicly traded may not
be subject to the same investor protection requirements as publicly traded
securities.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Global Income Fund may (but is
not required to) engage in foreign currency exchange transactions to hedge
against fluctuations in future exchange rates. Foreign currency hedging involves
the following risks:
- imperfect correlation between prices
- credit risk
- volatility in currency prices
- illiquidity
- reduced ability to profit from price and interest rate fluctuations on
the securities being hedged
The Global Income Fund will have a limited ability to hedge its portfolio
denominated in currencies of emerging markets against potential devaluations
because of the lack of suitable instruments and even if such instruments are
available may elect not to hedge its currency exposure.
DEFENSIVE STRATEGIES
There may be times when, in CSAM's judgment, conditions in the securities
markets would make pursuing the Global Income Fund's basic investment strategy
inconsistent with the best interests of its shareholders. At such times, CSAM
may employ alternative strategies to reduce fluctuations in the value of the
portfolio. In implementing these defensive strategies the Global Income Fund may
temporarily shift its portfolio emphasis to higher rated securities, hedge
currency risks, reduce or suspend its option writing activities or generally
reduce the average maturity of its holdings. Under unusual market conditions the
Global Income Fund could invest for temporary defensive purposes up to 100% of
its total assets in cash or money market instruments. Such money market
instruments include short-term obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, domestic, foreign and non-U.S.
dollar denominated commercial paper, domestic and foreign certificates of
deposit, domestic and foreign bankers' acceptances and other bank obligations.
The Global Income Fund may also hold a portion of its assets in cash or money
market instruments for liquidity purposes. It is impossible to predict when, or
for how long, such alternative strategies will be utilized. To the extent that
the Global Income Fund employs these temporary defensive strategies, it may not
achieve its investment objective.
PORTFOLIO TURNOVER AND SHORT-TERM TRADING
CSAM will buy and sell securities for the Global Income Fund to accomplish
its investment objective. The investment policies of the Global Income Fund may
lead to frequent changes in investments, particularly in periods of rapidly
fluctuating interest or currency exchange rates. Investments may also be traded
to take advantage of perceived short-term disparities in market values or yields
among securities of comparable quality and maturity. From time to time,
consistent with its investment objective, the Global Income Fund may also trade
securities for the purpose of seeking short-term profits to take advantage of
short-term opportunities during periods of fluctuating markets. Securities may
be sold in anticipation of a market decline or bought in anticipation of a
market rise.
MANAGEMENT
CREDIT SUISSE ASSET MANAGEMENT
Credit Suisse Asset Management is the investment adviser pursuant to an
advisory agreement with the Global Income Fund which became effective on June
13, 1995. Prior to that date, CS First Boston Investment Management Corporation
was the investment adviser.
25
<PAGE>
CSAM is a registered investment adviser under the Investment Advisers Act of
1940. CSAM is the institutional asset management and mutual Fund arm of Credit
Suisse Group. CSAM employs approximately 1,600 people worldwide and has global
assets under management of approximately $175 billion in multiple product
services, including equities, fixed income, derivatives and balanced portfolios.
The principal business address of CSAM is Uetlibergstrasse 231, CH 8045, Zurich,
Switzerland. CSAM's U.S. asset management business, formerly known as BEA
Associates, changed its name to CSAM in January 1999 to more accurately reflect
its integration into Credit Suisse Asset Management. Together with its
predecessor firms, CSAM has been engaged in the investment advisory business in
the United States for over 60 years. In the United States, CSAM is an investment
manager for corporate and state pension funds, endowments and other
institutions, and has assets under management of approximately $58 billion. The
principal business address of CSAM's U.S. operations is 153 East 53rd Street,
New York, New York 10022. CSAM is organized as a limited liability company which
is an indirect wholly owned U.S. subsidiary of Credit Suisse Group.
CSAM has sole investment discretion with respect to the Global Income Fund's
portfolio under the supervision of the board of directors and in accordance with
the Global Income Fund's stated policies. CSAM will select investments for the
Global Income Fund and will place purchase and sale orders on behalf of the
Global Income Fund. For its services, CSAM is paid a quarterly fee computed at
an annual rate of 0.50% of the Global Income Fund's average weekly net assets.
THE ADMINISTRATOR
The Fund employs Brown Brothers Harriman & Co., 40 Water Street, Boston, MA
02109, under a service agreement dated as of March 1, 1999, to provide
administration and accounting services to the Global Income Fund. The services
provided by Brown Brothers Harriman under the service agreement are subject to
the supervision of the directors and officers of the Global Income Fund, and
include day to day administration of matters related to its corporate existence,
maintenance of its records, preparation of reports and supervision of
arrangements with custodians and the transfer and dividend disbursing agent.
Brown Brothers Harriman is a commercial bank organized as a partnership
under the laws of the states of New York, Pennsylvania and Massachusetts. Brown
Brothers Harriman provides corporate management and administrative services to
investment companies that at April of 1999 had approximately $80 billion of net
assets.
The Global Income Fund pays Brown Brothers Harriman a fee based on average
net assets.
Brown Brothers Harriman is also the custodian of the Global Income Fund.
DIRECTORS AND OFFICERS
The business and affairs of the Global Income Fund are managed under the
direction of its board of directors, and day to day operations are conducted
through or under the direction of its officers. For information regarding the
directors and officers, see "Management--Directors and Officers" in the
statement of additional information.
PORTFOLIO MANAGEMENT
Richard Lindquist, who has been a Managing Director of CSAM since 1997, is
primarily responsible for the management of the Global Income Fund's assets. Mr.
Lindquist joined CSAM in May 1995 and became President and Chief Investment
Officer of the Global Income Fund in November 1996. He is also President and
Chief Investment Officer of Credit Suisse Asset Management Income Fund, Inc. Mr.
Lindquist has served the Global Income Fund in various positions since its
inception.
Gregg Diliberto, who has been a Managing Director of CSAM since May, 1995,
shares responsibility for the management of the Global Income Fund's investments
in emerging markets. Mr. Diliberto has been an Investment Officer of the Global
Income Fund since 1997.
26
<PAGE>
Maryam Ettehadieh, who has been a Vice President of CSAM since January,
1997, shares responsibility for the management of the Global Income Fund's
investments in emerging markets. Ms. Ettehadieh joined CSAM in 1993. She has
been a portfolio manager of the Global Income Fund since July, 1999.
ESTIMATED EXPENSES
CSAM and Brown Brothers Harriman are each obligated to pay expenses
associated with providing the services contemplated by the agreements to which
they are parties, including compensation of and office space for their
respective officers and employees connected with investment and economic
research, trading and investment management and administration of the Global
Income Fund, as well as the fees of all directors of the Global Income Fund who
are affiliated with those companies or any of their affiliates.
The Global Income Fund pays all other expenses incurred in its operation
including, among other things:
- fees of legal counsel and independent accountants
- costs of printing proxies, stock certificates and shareholder reports
- charges of the custodians, any sub-custodians and the transfer and
dividend-paying agent
- expenses in connection with the InvestLink-SM- Program
- Securities and Exchange Commission fees
- fees and expenses of unaffiliated directors
- accounting and pricing costs
- membership fees in trade associations
- fidelity bond coverage for officers and employees
- directors' and officers' errors and omissions insurance coverage
- interest, brokerage costs and stock exchange fees
- taxes, stock exchange listing fees and expenses
- expenses of qualifying the shares for sale in various states
- litigation and other extraordinary or non-recurring expenses
27
<PAGE>
PORTFOLIO TRANSACTIONS
CSAM will select the brokers or dealers that will execute the purchases and
sales of portfolio securities for the Global Income Fund. In connection with the
selection of brokers and dealers, the primary objective is to seek to obtain the
execution of each investment transaction at a price and commission which
provides the most favorable total cost or proceeds reasonably obtainable under
the circumstances. For a more detailed discussion of the Global Income Fund's
brokerage allocation practice, see the statement of additional information under
"Portfolio Transactions."
DIVIDENDS AND DISTRIBUTIONS; INVESTLINK-SM- PROGRAM
The Global Income Fund distributes monthly to shareholders substantially all
of its net investment income. Net short-term capital gains, if any, are
distributed annually. The board intends to distribute annually any net long-term
realized capital gains (the excess of net long-term capital gains over net
short-term capital losses). See "Taxation."
You may elect to have all dividends and distributions, net of any U.S.
withholding tax, automatically reinvested in additional shares through the
Fund's InvestLink-SM- Program. BankBoston, N.A. c/o EquiServe-Boston is the
administrator for the InvestLink-SM- Program. "InvestLink" is a service mark of
EquiServe.
PURPOSE OF THE INVESTLINK-SM- PROGRAM
The purpose of the InvestLink-SM- Program is to provide you with a simple
and convenient way to invest funds and reinvest dividends in shares of Global
Income Fund stock at prevailing prices, with reduced brokerage commissions and
fees.
ELIGIBILITY AND PARTICIPATION
You may join the program at any time by completing and signing the
enrollment form and returning it to BankBoston. Enrollment forms may be obtained
at any time by calling the program administrator at one of the telephone numbers
listed below:
- First Time Investors - 1-800-523-8506
- Current Shareholders - 1-800-730-6001
Beneficial owners whose shares are registered in the name of a bank, broker
or other nominee must make arrangements with such bank, broker or nominee to
have the shares transferred into their own names if they wish to have dividends
on such shares paid to the program administrator pursuant to the program.
Purchases of shares with funds from your cash payment or automatic account
deduction will begin on the next day on which funds are invested. If you select
the dividend reinvestment option, automatic investment of dividends will begin
with the next dividend payable after the program administrator receives your
enrollment form, provided it is received prior to the dividend record date. If
your enrollment form arrives after the record date, automatic investment of
dividends will begin with the following dividend. Once in the program, you will
remain a participant until you terminate your participation or sell all shares
held in your program account, or your account is terminated by the program
administrator.
PROGRAM OPTIONS
The program offers various investment options, as outlined below:
- "Automatic Bank Account Deduction": Funds in the amount you specify
will be charged to your bank account each month and the program
administrator will invest such funds to purchase additional shares of
the Global Income Fund.
28
<PAGE>
- "Full Dividend Reinvestment": The program administrator will receive
all cash dividends payable on shares held in your program account and
on any other shares registered in your name. In addition, the program
administrator will invest in shares of the Global Income Fund all of
your cash dividends on all of the shares then or subsequently
registered in your name or held in your program account.
- "Partial Dividend Reinvestment": The program administrator will receive
a portion of cash dividends payable on shares held in your program
account and on any other shares of the Global Income Fund registered in
your name. In addition, the program administrator will invest that
portion of cash dividends on shares held in your program account and
any other shares of the Global Income Fund registered in your name.
- "Cash Investments": The program administrator will not invest any
portion of cash dividends due you on shares held in your program
account or on shares registered in your name.
You may change your investment options at any time by requesting a new
enrollment form and returning it to the program administrator. The program
administrator must receive notice on or before the 15th calendar day preceding a
dividend payment date in order for a change in your dividend reinvestment option
to be effective for that dividend.
COSTS TO PARTICIPANTS IN CONNECTION WITH PURCHASES AND SALES UNDER THE PROGRAM
In connection with the following transactions, participants will be assessed
the following charges:
- First-time investors will be subject to an initial service charge which
will be deducted from the initial cash deposit.
- All optional cash deposit investments will have a service charge
deducted from the cash to be invested.
- Sales processed through the program will have a service fee deducted
from the net proceeds, after brokerage commissions.
- Participants are responsible for all commission costs associated with
purchases and sales. In addition to the transaction charges outlined
above, participants will be assessed per share processing fees which
include brokerage commissions.
PURCHASE OF GLOBAL INCOME FUND SHARES
The program administrator uses dividends and funds of participants to
purchase shares of Global Income Fund common stock in the open market. Such
purchases will be made by participating brokers as agent for the participants.
Transaction processing will generally occur within 30 days of the receipt of
funds. 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 you.
Shares offered under the program to participants in certain jurisdictions
may be offered only through broker-dealers registered in these jurisdictions.
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 you in connection with the shares
purchased for your account with your 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 you in connection with the
shares sold for your account pursuant to your sell orders received by the
program administrator during such time period.
29
<PAGE>
CASH PAYMENTS AND AUTOMATIC BANK ACCOUNT DEDUCTIONS
If you are not already a registered owner of Global Income Fund common
stock, your initial investment under the program must be at least $250.00. All
other cash payments or bank account deductions must be at least $100.00, up to a
maximum of $250,000.00 annually.
The same amount of cash payment need not be sent each month and you are
under no obligation to make a cash payment in any month. The amount of automatic
bank account deduction must be specified by you on the enrollment form and will
continue until changed by you by notifying the program administrator in writing.
ADMINISTRATION
BankBoston, as program administrator, administers the program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the program. Shares of Global Income Fund
common stock purchased under the program will be registered in the name of the
accounts of the respective participants.
REPORTS TO PARTICIPANTS
Each participant in the program will receive a statement of his or her
account following each purchase of shares. These statements are a record of the
cost of purchase of shares under the program and should be retained for tax
purposes. The statements will also show the amount of dividends credited to such
participant's account (if applicable), as well as the fees paid by the
participant. In addition, each participant will receive copies of the Fund's
annual report to shareholders, proxy statements and, if applicable, dividend
income information for tax reporting purposes.
CERTIFICATES FOR SHARES
Unless requested, the Global Income Fund will not issue to participants
certificates for shares of Global Income Fund common stock purchased under the
program. The number of shares purchased for your account under the program will
be shown on your statement of account. This feature protects against loss, theft
or destruction of stock certificates.
Certificates for any number of whole shares credited to your account under
the program will be issued to you at no charge upon your written request to
withdraw such shares from your account. Certificates for fractions of shares
will not be issued.
WITHDRAWAL OF SHARES IN PROGRAM ACCOUNTS
You may withdraw all or a portion of the shares from your program account by
notifying the program administrator. A withdrawal/termination form is provided
on the account statement for this purpose. This notice should be mailed to the
address on the form.
Within five business days of receipt of your request, certificates for the
whole shares of Global Income Fund common stock so withdrawn will be issued to
you or, if you request, the program administrator will sell the shares for you
and send you the proceeds, less applicable brokerage commissions, fees, and
transfer taxes, if any. Proceeds are normally paid by check and will be
distributed to you within four business days after your shares are sold. In no
case will certificates for fractional shares be issued.
If you withdraw all full and fractional shares in your program account, your
participation in the program will be terminated by the program administrator.
30
<PAGE>
RIGHTS OFFERINGS, STOCK DIVIDENDS AND STOCK SPLITS
Participation in any rights offering (including the offer), dividend
distribution or stock split will be based upon both the shares of the Global
Income Fund registered in participants' names and the shares (including
fractional shares) credited to participants' program accounts. Any stock
dividend or shares resulting from stock splits with respect to shares of the
Global Income 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 in book-entry form.
VOTING OF A PARTICIPANT'S PROGRAM SHARES AT A MEETING OF SHAREHOLDERS
All shares (including any fractional share) credited to your account under
the program will be voted as you direct. If on the record date for a meeting of
shareholders there are shares credited to your account under the program, you
will be sent the proxy materials for such meeting. When you return an executed
proxy, all of such shares will be voted as indicated. Or, if you so elect, you
may vote all of such shares in person at the shareholders' meeting. If you do
not provide instructions or return an executed proxy, the plan will not vote
your shares.
FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PROGRAM
You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends does not relieve you 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.
RESPONSIBILITY OF THE PROGRAM ADMINISTRATOR UNDER THE PROGRAM
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 Global Income Fund nor the
program administrator can provide any assurance of a profit or protection
against loss on any shares purchased under the program.
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. 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
by the program administrator in good faith and any such determination will be
final.
CONTACT INFORMATION
All correspondence regarding the program should be directed to:
BankBoston, N.A.
"InvestLink" Program
P.O. Box 8040
Boston, MA 02266-8040
Phone: 1-800-730-6001
31
<PAGE>
TAXATION
The following discussion of United States Federal income taxation is based
on the advice of Willkie Farr & Gallagher, counsel to the Global Income Fund.
GENERAL. The following information is meant to be a summary. Please see the
statement of additional information for additional information. You should rely
on your own tax advisor for advice about the particular federal, state and local
tax consequences to you of investing in the Global Income Fund.
Although the Global Income Fund intends to operate so that it will not have
to pay federal income or excise tax, if it does have to pay tax, this would
adversely affect investment performance.
The Global Income Fund will distribute substantially all of its income and
gains to shareholders every year, and you will be taxed on distributions you
receive, regardless of whether they are paid in cash or are reinvested in
shares. If the Global Income Fund declares a dividend in October, November or
December but pays it in January, you may be taxed on the dividend as if you
received it in the previous year.
The Global Income Fund will send you a tax report each year. The report will
tell you which dividends and redemptions must be treated as taxable ordinary
income and which, if any, are long-term capital gain. If the Global Income Fund
designates a dividend as a capital gain distribution, you will pay tax on that
dividend at the long-term capital gains tax rate, no matter how long you have
held your shares.
If you hold your shares in a tax-deferred retirement account, such as an
IRA, you generally will not have to pay tax on dividends until they are
distributed from the account. These accounts are subject to complex tax rules,
and you should consult your tax adviser about investment through a tax-deferred
account.
You will generally have a capital gain or loss if you sell your shares. The
amount of the gain or loss and the rate of tax will depend primarily upon how
much you paid for the shares, how much you sell them for, and how long you held
them.
The Global Income Fund may be required to withhold U.S. federal income tax
at the rate of 31% of all taxable distributions payable to you if you fail to
provide your correct taxpayer identification number or to make required
certifications, or if you have been notified by the IRS that you are subject to
backup withholding. Backup withholding is not an additional tax. Any amounts
withheld may be credited against your U.S federal income tax liability.
FOREIGN SHAREHOLDERS. If you are a nonresident alien individual, a foreign
trust or estate, a foreign corporation, or a foreign partnership under U.S.
laws, you will be subject to U.S. withholding tax at the rate of 30% (or
applicable lower treaty rate) except where such distributions are effectively
connected with a trade or business carried on by you in the United States.
Under certain circumstances more fully described in the statement of
additional information, distributions of net long-term capital gains to you and
gains from sales of shares by you may not be subject to U.S. income tax.
If the income from the Global Income Fund is effectively connected with a
trade or business carried on by you, distributions of net investment income and
net long-term capital gains, and any gains realized upon the sale or redemption
of shares, will be subject to U.S. income tax at the graduated rates applicable
to U.S. citizens or domestic corporations.
If you are entitled to claim the benefits of an applicable tax treaty, the
tax consequences to you may be different from those described herein. You are
advised to consult your own tax adviser with respect to the particular tax
consequences to you of an investment in the Global Income Fund.
OTHER TAXATION. Income received by the Global Income Fund from sources
within foreign countries may be subject to withholding and other taxes imposed
by such countries. Tax conventions between certain
32
<PAGE>
countries and the United States may reduce or eliminate such taxes. It is
impossible to determine the effective rate of foreign tax in advance since the
amount of assets to be invested in various countries is not known.
Distributions also may be subject to additional state, local and foreign
taxes depending on your particular situation. You are advised to consult your
own tax adviser with respect to the particular tax consequences to you of an
investment in the Global Income Fund and of the possible impact of proposed
changes in applicable tax laws.
NET ASSET VALUE
The net asset value per share is determined as of the close of business on
the NYSE on the last business day of each week and at month-end, by dividing the
value of the Global Income Fund's net assets (the value of its assets less its
liabilities, exclusive of capital stock and surplus) by the total number of
shares of Common Stock outstanding. Net asset value includes interest on
fixed-income securities which is accrued daily. 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 were no sale on such day, the last bid price quoted on such day.
Quotations of foreign currency prices denominated in a foreign currency are
converted to U.S. dollars at the current exchange rate on the valuation date.
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. In determining net asset value,
consideration is given to cost, operating and other financial data.
COMMON STOCK
The authorized capital stock of the Global Income Fund consists of
100,000,000 shares of common stock, $.001 par value. Shares, when issued, will
be fully paid and nonassessable. All shares are equal as to dividends, assets
and voting privileges and have no conversion, preemptive or other subscription
rights. In the event of liquidation, each share of common stock is entitled to
its proportion of the Fund's assets after payment of debts and expenses. As a
holder of shares of common stock, you are entitled to one vote per share and do
not have cumulative voting rights.
Set forth below is information with respect to the common stock as of August
31, 1999:
<TABLE>
<CAPTION>
AMOUNT HELD BY FUND
AMOUNT AUTHORIZED FOR ITS OWN ACCOUNT AMOUNT OUTSTANDING
- --------------------- -------------------- -------------------
<S> <C> <C>
100,000,000 Shares 0 Shares 8,454,140 Shares
</TABLE>
The number of shares outstanding as of August 31, 1999, adjusted to give
effect to the issuance of all the shares pursuant to the offer, including 25% of
the shares available for issuance pursuant to the over-subscription privilege,
would be 11,976,698.
The outstanding shares are listed and traded on the NYSE. The average weekly
trading volume of the common stock on the NYSE during the year ended December
31, 1998 was 10,960 shares. The following table sets forth for the quarters
indicated the high and low sales prices on the NYSE per share of common
33
<PAGE>
stock and the net asset value and the premium or discount from net asset value
at which the common stock was trading, expressed as a percentage of net asset
value, at each of the high and low sales prices provided.
<TABLE>
<CAPTION>
PREMIUM/DISCOUNT AS % OF
MARKET PRICE(1) NET ASSET VALUE NAV(2)
---------------------- -------------------- --------------------------
QUARTER ENDED HIGH LOW HIGH LOW HIGH LOW
- --------------------------------------- ---------- ---------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
March 31, 1997......................... 9 1/2 9 $ 10.51 $ 10.24 (12.11)% (8.57 )%
June 30, 1997.......................... 9 11/16 9 10.58 10.18 (11.59 ) (8.03 )
September 30, 1997..................... 10 9 11/16 10.94 10.65 (10.38 ) (8.14 )
December 31, 1997...................... 10 1/4 9 5/8 11.05 10.67 (9.96 ) (4.70 )
March 31, 1998......................... 10 1/2 10 1/16 11.03 10.64 (6.50 ) (3.31 )
June 30, 1998.......................... 10 1/2 9 15/16 10.99 10.74 (7.02 ) (4.28 )
September 30, 1998..................... 10 1/8 8 1/8 10.72 9.24 (12.81 ) (4.84 )
December 31, 1998...................... 8 7/8 8 9.42 9.08 (11.89 ) (4.26 )
March 31, 1999......................... 8 11/16 8 3/16 9.29 9.05 (11.20 ) (5.67 )
June 30, 1999.......................... 8 7/8 8 7/16 9.53 9.19 (11.46 ) (5.41 )
Through September 21, 1999............. 9 8 5/8 9.32 8.98 0.22 (5.63 )
</TABLE>
- ---------
(1) As reported by the NYSE.
(2) Based on the Global Income Fund's computations.
The by-laws provide that if the average discount from net asset value at
which shares of the common stock have traded is substantial in the determination
of the board of directors, the board of directors will consider, at its next
regularly scheduled quarterly meeting, taking actions designed to eliminate the
discount, including amendments to the articles of incorporation to convert the
Global Income Fund to an open-end investment company. Any such amendment would
require a favorable vote of a majority of the shares entitled to vote on the
matter and the amendment would have to be declared advisable by the board of
directors prior to its submission to shareholders. Shareholders of an open-end
investment company may require the company to redeem their shares at any time
(except in certain circumstances as authorized by or under the 1940 Act) at
their net asset value, less such redemption charge, if any, as might be in
effect at the time of a redemption.
The board of directors has approved a share repurchase program authorizing
the Global Income Fund from time to time to make open-market purchases of shares
on the NYSE up to 10% of the number of shares that were outstanding as of
December 11, 1990. There were no repurchases of shares during the year ended
December 31, 1998.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT,
REGISTRAR AND CUSTODIAN
The transfer agent, dividend disbursing agent and registrar for the common
stock is BankBoston, N.A., P.O. Box 1865, Mailstop 45-02-62, Boston,
Massachusetts 02105-1865.
The Global Income Fund's securities and cash are held by Brown Brothers
Harriman as custodian.
DISTRIBUTION ARRANGEMENTS
Salomon Smith Barney, Inc., located at 388 Greenwich Street, New York, New
York 10013, will act as dealer manager for the offer. Under the terms and
subject to the conditions contained in the dealer manager agreement between the
Global Income Fund and Salomon Smith Barney, Inc., Salomon Smith Barney, Inc.
will provide financial advisory services and marketing assistance in connection
with the offer and will solicit the exercise of rights by record date
shareholders. The offer is not contingent upon any number of rights being
exercised. The Global Income Fund has agreed to pay Salomon Smith Barney, Inc. a
fee for financial advisory and marketing services equal to 1.25% of the
subscription price per share for
34
<PAGE>
shares issued upon exercise of the rights and the over-subscription privilege
and to pay broker-dealers, including Salomon Smith Barney, Inc., fees for their
soliciting efforts of 2.50% of the subscription price per share for each share
issued upon exercise of the rights and the over-subscription privilege.
The Global Income Fund has also agreed to reimburse Salomon Smith Barney,
Inc. up to $100,000 for its reasonable expenses incurred in connection with the
offer.
The Global Income Fund and CSAM have agreed to indemnify Salomon Smith
Barney, Inc. or to contribute for losses arising out of certain liabilities
including liabilities under the Securities Act. The dealer manager agreement
also provides that Salomon Smith Barney, Inc. will not be subject to any
liability to the Global Income Fund in rendering the services contemplated by
the agreement except in instances involving bad faith, willful misfeasance, or
gross negligence on its part or the reckless disregard of its obligations and
duties under the agreement.
The Global Income Fund has agreed, subject to certain exceptions, including
automatic reinvestment in additional shares pursuant to the InvestLink(SM)
Program, not to offer or sell, or enter into any agreement to sell, any equity
or equity related securities or securities convertible into such securities for
a period of 180 days after the date of the dealer manager agreement without the
prior consent of Salomon Smith Barney, Inc.
In connection with the offer, Salomon Smith Barney, Inc. may, but is not
obligated to, effect transactions designed to keep the market price of the
shares higher than they might otherwise be without such trading. Such
transactions may be effected on the NYSE or elsewhere. Such stabilizing, if
commenced, may be discontinued at any time. There can be no assurance that such
transactions, if effected, will be able to keep the market price of the shares
higher than they might otherwise be without such trading. Salomon Smith Barney,
Inc. may realize profits or losses independent of any fees described in this
prospectus.
LEGAL MATTERS
With respect to matters of United States law, the validity of the shares
offered hereby will be passed on for the Global Income Fund by Willkie Farr &
Gallagher, New York, New York. Certain legal matters will be passed on for the
dealer manager by Simpson Thacher & Bartlett, New York, New York. Counsel for
the Global Income Fund and the dealer manager may rely, as to matters of
Maryland law, on Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
EXPERTS
The financial statements of the Global Income Fund as of December 31, 1998
have been incorporated by reference into the statement of additional information
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting. PricewaterhouseCoopers LLP is located at 1177 Avenue of the
Americas, New York, New York 10036.
FURTHER INFORMATION
Further information concerning these securities and their issuer may be
found in the Registration Statement of which this prospectus constitutes a part
on file with the Securities and Exchange Commission. The Commission maintains a
World Wide Web site on the Internet at http://www.sec.gov. that contains the
prospectus, material incorporated by reference and other information regarding
registrants, such as the Global Income Fund, that file electronically with the
Commission. The Registration Statement may also be inspected without charge at
the Commission's office in Washington, D.C., and copies of all or any part
thereof may be obtained from such office after payment of the fees prescribed by
the Commission.
35
<PAGE>
The Global Income Fund is subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act, and in accordance therewith
files reports and other information with the Commission. Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, NW, Washington, D.C. 20549 and
the Commission's regional offices at Seven World Trade Center, New York, New
York 10048. Copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, NW, Washington, D.C. 20549 at
prescribed rates. Such reports and other information concerning the Global
Income Fund also may be inspected at the offices of the NYSE and are available
on the Commission's World Wide Web site on the Internet at http://www.sec.gov.
36
<PAGE>
TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
General Information........................................................................................ 2
Investment Policies........................................................................................ 2
Investment Restrictions.................................................................................... 13
Management................................................................................................. 15
Portfolio Transactions..................................................................................... 18
Taxation................................................................................................... 19
Common Stock............................................................................................... 26
Financial Statements....................................................................................... 26
</TABLE>
37
<PAGE>
APPENDIX A
CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE'S CORPORATE BOND RATINGS
<TABLE>
<S> <C>
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edged".
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than the Aaa securities.
A Bonds which are rated A possess many favorable investment attributes and are to be
considered as upper medium grade obligations. Factors giving security to principal
and interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium-grade obligations, (i.e., they
are neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
</TABLE>
<TABLE>
<S> <C>
Ba Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate, and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterize
bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Ca Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
</TABLE>
Note: Moody's applies numerical modifiers "1", "2" and "3" in each generic
rating classification from Aaa through B in its corporate bond rating system.
The modifier "1" indicates that the security ranks in the higher end of its
generic rating category: the modifier "2" indicates a mid-range ranking; and the
modifier "3" indicates that the issue ranks in the lower end of its generic
rating category.
STANDARD & POOR'S CORPORATE AND MUNICIPAL BOND RATINGS
<TABLE>
<S> <C>
AAA An obligation rated AAA has the highest rating assigned by Standard & Poor's. The
obligor's capacity to meet its financial commitment on the obligation is extremely
strong.
AA An obligation rated AA differs from the highest-rated obligations only in a small
degree. The obligor's capacity to meet its financial commitment on the obligation
is very strong.
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C>
A An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher rated
categories. However, the obligor's capacity to meet its financial commitment on
the obligation is still strong.
BBB An obligation rated BBB exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to meet its financial commitment on the obligation. Obligations
rated BB, B, CCC and CC and C are regarded as having significant speculative
characteristics. BB indicates the lowest degree of speculation and C the highest.
While such bonds will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse
conditions.
BB An obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions, which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.
B An obligation rated B is more vulnerable to nonpayment than obligations rated BB,
but the obligor currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial, or economic conditions will likely impair
the obligor's capacity or willingness to meet its financial commitment on the
obligation.
CCC An obligation rated CCC is currently vulnerable to nonpayment and is dependent
upon favorable business, financial and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of adverse business,
financial or economic conditions, the obligor is not likely to have the capacity
to meet its financial commitment on the obligation.
CC An obligation rated CC is currently highly vulnerable to nonpayment.
C The C rating may be used to cover a situation where a bankruptcy petition has been
filed or similar action has been taken, but payments on this obligation are being
continued.
D An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless Standard & Poor's believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.
</TABLE>
Plus (+) or minus (-)--The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
r--This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk--such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
A-2
<PAGE>
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT
THE GLOBAL INCOME FUND HAS REFERRED YOU TO. THE GLOBAL INCOME FUND HAS NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER, SOLICITATION OR SALE
IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE GLOBAL INCOME FUND SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Prospectus Summary........................................................ 3
Fee Table................................................................. 8
Financial Highlights...................................................... 9
The Offer................................................................. 10
Use of Proceeds........................................................... 17
The Fund.................................................................. 17
Risk Factors and Special Considerations................................... 17
Investment Objective and Policies......................................... 21
Management................................................................ 25
Portfolio Transactions.................................................... 28
Dividends and Distributions; InvestLink(SM) Program....................... 28
Taxation.................................................................. 32
Net Asset Value........................................................... 33
Common Stock.............................................................. 33
Transfer Agent, Dividend Disbursing Agent, Registrar and Custodian........ 34
Distribution Arrangements................................................. 34
Legal Matters............................................................. 35
Experts................................................................... 35
Further Information....................................................... 35
Appendix A................................................................ A-1
</TABLE>
2,818,047 SHARES
CREDIT SUISSE
ASSET MANAGEMENT
STRATEGIC GLOBAL
INCOME FUND, INC.
COMMON STOCK
($.001 PAR VALUE)
---------------------
PROSPECTUS
---------------------
SALOMON SMITH BARNEY
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<PAGE>
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
------------------------
STATEMENT OF ADDITIONAL INFORMATION
Credit Suisse Asset Management Strategic Global Income Fund, Inc. is a
diversified, closed-end management investment company seeking high current
income consistent with the preservation of capital. The Global Income Fund seeks
to achieve this objective by investing in higher-yielding U.S. and foreign
securities, with an emphasis on U.S. high yield (junk bonds) and emerging market
securities.
This statement of additional information is not a prospectus, but you
should read it in conjunction with the prospectus for the Global Income Fund
dated September 24, 1999. This statement of additional information does not
include all information that you should consider before purchasing shares,
and you should obtain and read the prospectus prior to purchasing shares. You
may obtain a copy of the prospectus without charge, by calling (800)
733-8481, extension 349, and from outside the United States, by calling (212)
805-7000. This statement of additional information incorporates by reference
the entire prospectus.
------------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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GENERAL INFORMATION........................................................................................ 2
INVESTMENT POLICIES........................................................................................ 2
INVESTMENT RESTRICTIONS.................................................................................... 10
MANAGEMENT................................................................................................. 12
PORTFOLIO TRANSACTIONS..................................................................................... 15
TAXATION................................................................................................... 16
COMMON STOCK............................................................................................... 21
FINANCIAL STATEMENTS....................................................................................... 21
</TABLE>
------------------------
The prospectus and this statement of additional information omit certain of
the information contained in the registration statement filed with the
Securities and Exchange Commission, Washington, D.C. You may obtain the
registration statement from the Securities and Exchange Commission upon payment
of the fee prescribed, or inspect it at the Securities and Exchange Commission's
office at no charge.
------------------------
This statement of additional information is dated
September 24, 1999
<PAGE>
GENERAL INFORMATION
The Global Income Fund changed its name from CS First Boston Strategic
Income Fund, Inc. to BEA Strategic Income Fund, Inc. in August 1995, to BEA
Strategic Global Income Fund, Inc. in June of 1997, and to Credit Suisse Asset
Management Strategic Global Income Fund, Inc. in May 1999.
INVESTMENT POLICIES
INVESTMENT POLICIES
U.S. FIXED-INCOME SECURITIES.
HIGH YIELD FIXED-INCOME SECURITIES. The Global Income Fund invests
primarily in higher yielding, lower rated U.S. corporate fixed income
securities, including debt securities, convertible securities and preferred
stocks. It may also invest in securities rated single A or higher by Moody's or
by Standard & Poor's and unrated corporate fixed-income securities when CSAM
determines that such securities are offering high yields in relation to risk due
to current market or other conditions.
Differing yields on fixed-income securities of the same maturity are a
function of several factors, including the relative financial strength of the
issuers. Higher yields are generally available from securities in the lower
categories of recognized rating agencies, i.e., Baa or lower by Moody's or BBB
or lower by Standard & Poor's. The Global Income Fund may invest in any security
which is rated by Moody's or by Standard & Poor's or in any unrated security
which CSAM determines is of suitable quality. However, substantially all of the
securities in which the Global Income Fund invests will be in the lower-rated
categories. Lower-rated securities generally provide yields superior to those of
more highly-rated securities, but involve greater risks and are speculative in
nature. Securities in the rating categories below Baa as determined by Moody's
and BBB as determined by Standard & Poor's are considered to be of poor standing
and predominantly speculative. The rating services' descriptions of these rating
categories, including the speculating characteristics of the lower categories,
are set forth in Appendix A to the prospectus.
Securities ratings are based largely on the issuer's historical financial
information and the rating agencies' investment analysis at the time of rating.
Consequently, the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better or
worse than the rating would indicate. Although CSAM considers security ratings
when making investment decisions for high yield securities, it performs its own
investment analysis and does not rely principally on the ratings assigned by the
rating services. CSAM's analysis may include consideration of the issuer's
experience and managerial strength, changing financial condition, borrowing
requirements or debt maturity schedules, and its responsiveness to changes in
business conditions and interest rates. It also considers relative values based
on anticipated cash flow, interest or dividend coverage, asset coverage and
earnings prospects.
CSAM bases its investment decisions in high yield securities on the results
of issuer and security-specific credit analysis. CSAM evaluates each issuer's
rating, cash flow, financial structure and business risk. CSAM takes into
account, among other things, the issuer's financial resources, its sensitivity
to economic conditions and trends, its operating history, the quality of the
issuer's management and regulatory matters. CSAM evaluates the covenants of each
security and pursues a strategy of broad issuer and industry diversification.
U.S. GOVERNMENT FIXED-INCOME SECURITIES. The Fund may invest in U.S.
government securities and may engage in options, futures contracts and
repurchase transactions with respect to such securities. U.S. government
securities refers to debt securities issued or guaranteed by the U.S.
government, by various of
2
<PAGE>
its agencies, or by various instrumentalities established or sponsored by the
U.S. government. These securities may or may not be supported by the full faith
and credit of the United States.
Depending on market conditions, the Global Income Fund may invest a
substantial portion of its assets in mortgage-backed securities. Mortgage-backed
securities are collateralized by mortgages or interests in mortgages and may be
issued by government or non-government entities. Mortgage-backed securities
issued by government entities typically provide a monthly payment consisting of
interest and principal payments, and additional payments will be made out of
unscheduled payments of principal. Non-government issued mortgage-backed
securities may offer higher yields than those issued by government entities, but
may be subject to greater price fluctuations.
Mortgage securities that are government securities include the securities of
GNMA, Federal Home Loan Mortgage Corporation ("FHLMC"), and Federal National
Mortgage Association ("FNMA"). Each of these agencies issue mortgage
pass-through securities. Pass-through securities are bonds backed by pools of
mortgages. These securities include mortgage pass-through Certificates,
collateralized mortgage obligations, including real estate investment conduits
as authorized under the Internal Revenue Code of 1986, as amended ("CMO's"), and
mortgage-backed bonds. Mortgage-related securities may also be issued by
financial institutions such as commercial banks, savings and loan associations,
mortgage bankers and securities broker-dealers (or separate trusts or affiliates
of such institutions established to issue the securities), with the underlying
securities being U.S. Government securities or non-U.S. government issued
securities. Mortgage-related securities issued by financial institutions (or
separate trusts or affiliates of such institutions), even where backed by U.S.
Government securities, are not considered U.S. Government securities and have a
different set of risks and features.
Interests in pools of mortgage-related securities differ from other forms of
debt securities, which normally provide for periodic payment of interest in
fixed amounts and principal payments at maturity or specified call dates.
Instead, mortgage-related securities provide a "pass-through" of monthly
payments of interest and principal made by the borrowers on their residential
mortgage loans, net of any fees paid to the issuer or guarantor of such
securities. Additional payments are caused by repayments of principal resulting
from the sale of the underlying residential property, refinancing or
foreclosure, net of fees or costs which may be incurred. Some mortgage-related
securities (such as securities issued by GNMA) are described as "modified
pass-through." These securities entitle the holder to receive timely payment of
all interest and principal payments owed on the mortgages in the pool, net of
certain fees, regardless of whether or not the mortgagors actually make the
payments.
A CMO series is made up of a group of bonds that together are fully
collateralized directly or indirectly by a pool of mortgages on which the
payments of principal and interest are dedicated to payment of principal and
interest on the bonds in the series. Each class of bonds in the series may have
a different maturity than the other classes of bonds in the series, bear a
different coupon and have a different priority in receiving payments. The
different maturities come from the fact that all principal payments, both
regular principal payments as well as any prepayment of principal, are passed
through first to the holders of the class with the shortest maturity until it is
completely retired. Thereafter, principal payments are passed through to the
next class of bonds in the series, until all the classes have been paid off. As
a result, an acceleration in the rate of prepayments that may be associated with
declining interest rates shortens the expected life of each class, with the
greatest impact on those classes with the shortest maturities. Similarly, should
the rate of prepayments slow down, as may happen in times of rising interest
rates, the expected life of each class lengthens, again with the greatest impact
on those classes with the shortest maturities. In the case of some CMO series,
each class may receive a differing proportion of the monthly interest and
principal repayments on the underlying collateral. In these series, the classes
having proportionally greater interests in principal repayments generally would
be more affected by an acceleration (or slowing) in the rate of prepayments.
Mortgage-backed bonds are general obligations of the issuer fully collateralized
directly or indirectly by a pool of mortgages. The mortgages serve as collateral
for the issuer's payment obligations on the bonds, but interest and principal
payments on the mortgages are not passed through
3
<PAGE>
either directly (as with mortgage pass-through certificates) or on a modified
basis (as with CMO's). Accordingly, a change in the rate of prepayments on the
pool of mortgages could change the effective maturity of a CMO but not that of a
mortgage-backed bond (although, like many bonds, mortgage-backed bonds can
provide that they are callable by the issuer prior to maturity).
In purchasing securities for the U.S. government sector, CSAM may take full
advantage of the entire range of maturities of U.S. government securities and
may adjust the average maturity of the investments held in the portfolio from
time to time, depending on its assessment of relative yields of securities of
different maturities and its expectations of future changes in interest rates.
To the extent that the Global Income Fund invests in the mortgage market, CSAM
evaluates relevant economic, environmental and security-specific variables such
as housing starts, coupon and age trends.
FOREIGN FIXED-INCOME SECURITIES. The Global Income Fund invests in debt
obligations and other fixed income securities denominated in non-U.S. currencies
or composite currencies including:
- debt obligations issued or guaranteed by foreign national, provincial,
state, municipal or other governments with taxing authority or by their
agencies or instrumentalities
- debt obligations of supranational entities
- debt obligations of the U.S. government issued in non-dollar securities
- dollar and non-dollar denominated debt obligations and other fixed-income
securities of foreign and U.S. corporate issuers
The Fund may invest up to 35% of its net assets in the securities of issuers
located in the emerging markets.
In making these investments CSAM considers the relative growth and inflation
rates of different countries. CSAM considers expected changes in foreign
currency exchange rates, including the prospects for central bank intervention,
in determining the anticipated returns of securities denominated in foreign
currencies. CSAM further evaluates, among other things, foreign yield curves and
regulatory and political factors, including the fiscal and monetary policies of
such countries.
In the past, during periods of falling U.S. exchange rates, yields available
from securities denominated in foreign currencies have often been higher, in
U.S. dollar terms, than those of securities denominated in U.S. dollars. CSAM
considers expected changes in foreign currency exchange rates in determining the
anticipated returns of securities denominated in foreign currencies. The
obligations of foreign governmental entities, including supranational issuers,
have various kinds of government support. Obligations of foreign governmental
entities include obligations issued or guaranteed by national, provincial, state
or other governments with taxing power or by their agencies. These obligations
may or may not be supported by the full faith and credit of a foreign
government.
OTHER INVESTMENT TECHNIQUES
To enhance return as market opportunities arise, the Global Income Fund may
use the following investment techniques.
REPURCHASE AGREEMENTS. The Global Income Fund may invest in repurchase
agreements collateralized by U.S. government securities, certificates of deposit
and certain bankers' acceptances for the purpose of realizing additional income.
Repurchase agreements are transactions by which the Global Income Fund purchases
a security and simultaneously commits to resell that security to the seller (a
bank or securities dealer) at an agreed upon price on an agreed upon date
(usually within seven days of purchase). The resale price reflects the purchase
price plus an agreed-upon market rate of interest that is unrelated to the
coupon rate or date of maturity of the purchased security. Use of repurchase
agreements can permit the Global Income Fund to keep its assets at work while
retaining short-term flexibility in pursuit of
4
<PAGE>
investments of a longer-term nature. CSAM will continually monitor the value of
the underlying securities to ensure that their value always equals or exceeds
the repurchase price.
SECURITIES LENDING. The Global Income Fund may lend its portfolio
securities to banks, brokers, dealers and other financial institutions who may
need to borrow securities in order to complete certain transactions, such as
covering short sales, avoiding failures to deliver securities or completing
arbitrage operations. By lending its portfolio securities, the Global Income
Fund attempts to increase its income through the receipt of interest on the
loan. Any gain or loss in the market price of the securities lent that might
occur during the term of the loan would be for the account of the Global Income
Fund.
The Global Income Fund may lend its portfolio securities so long as the
terms and the structure of such loans are not inconsistent with the 1940 Act or
the rules and regulations or interpretations of the Securities and Exchange
Commission. The Global Income Fund will not lend portfolio securities if, as a
result, the aggregate of such loans exceeds 33-1/3% of the value of the its
total assets. Loan arrangements made by the Global Income Fund will comply with
all other applicable regulatory requirements, including, if applicable, those of
the rules of the NYSE.
CSAM will consider all relevant facts and circumstances, including the
creditworthiness of the borrower, in making decisions about the lending of
securities, subject to review by the board. The creditworthiness of such bank,
broker, dealer or other financial institution will be monitored by CSAM during
the time any securities are loaned. Voting rights, if any, may pass with the
loaned securities. If a material event were to occur affecting an investment on
loan, however, the loan must be called and the securities voted by the Global
Income Fund.
SHORT SALES. The Global Income Fund may engage in short sales (the sale of
a security that it does not own), but only when it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
further consideration, for securities of the same issue as, and equal in amount
to, the securities sold short ("short sales against the box"), and only if not
more than 5% of the Global Income Fund's net assets is held as collateral for
such sales at any one time.
OPTIONS ON U.S. GOVERNMENT SECURITIES. The Global Income Fund may seek to
increase its current income by writing covered call or put options with respect
to some or all of the U.S. government securities held in its portfolio. In
addition, the Global Income Fund may at times, through the writing and purchase
of options on U.S. government securities, seek to reduce fluctuations in net
asset value by hedging against a decline in the value of its U.S. government
securities or an increase in the price of securities which the Global Income
Fund plans to purchase.
Significant option writing opportunities generally exist only with respect
to longer term U.S. government securities. The Global Income Fund may only write
covered options, which means that, so long as the Global Income Fund is
obligated as the writer of a call option, it will own the underlying securities
subject to the option (or comparable securities satisfying the cover
requirements of securities exchanges). In the case of put options, the Global
Income Fund will maintain short term U.S. government securities with a value
equal to or greater than the exercise price of the underlying securities. The
Global Income Fund may also write combinations of covered puts and calls on the
same security.
The Global Income Fund receives a premium from writing a put or call option,
which increases return on the underlying security in the event the option
expires unexercised or is closed out at a profit. The amount of premium
reflects, among other things, the relationship of the market price of the
underlying security to the exercise price of the option and the remaining term
of the option. The Global Income Fund may terminate an option that it has
written prior to its expiration by entering into a closing purchase transaction
in which it purchases an option having the same terms as the option written. The
Global Income Fund realizes a profit or loss from a transaction if the cost of
the transaction is less or more than the premium received from writing the
option. Because increases in the market price of a call option generally reflect
increases in the market price of the underlying security, any loss resulting
from the
5
<PAGE>
repurchase of a call option may be offset in whole or in part by unrealized
appreciation of the underlying security.
The Global Income Fund may purchase put options on U.S. government
securities to protect its portfolio holdings in an underlying security against a
substantial decline in market value. Such hedge protection is provided during
the life of the put option since the Global Income Fund, as holder of the put
option, is able to sell the underlying security at the put exercise price
regardless of any decline in the underlying security's market price. In order
for a put option to be profitable, the market price of the underlying security
must decline sufficiently below the exercise price to cover the premium and
transaction costs.
The Global Income Fund may purchase call options on U.S. government
securities to hedge against an increase in prices of securities that the Global
Income Fund ultimately wants to buy. Such hedge protection is provided during
the life of the call option since the Global Income Fund, as holder of the
option, is able to buy the underlying security at the exercise price regardless
of any increase in such security's market price. In order for a call option to
be profitable, the market price of the underlying security must rise
sufficiently above the exercise price to cover the premium and transaction
costs.
The Global Income Fund will not purchase put and call options if as a result
more than 5% of the value of its total assets would at the time be invested in
such options.
INTEREST RATE FUTURES AND RELATED OPTIONS. The Global Income Fund may enter
into interest rate futures contracts to purchase or sell U.S. government
securities or other interest rate-sensitive instruments and options thereon that
are traded on U.S. futures exchanges. When the Global Income Fund attempts to
hedge its portfolio by selling an interest rate futures contract, purchasing a
put option thereon, or writing a call option thereon, it will own an amount of
U.S. government securities corresponding to the open futures or option position
thereby ensuring that the position is unleveraged. The Global Income Fund only
intends to engage in futures contracts or options for bona fide hedging
purposes. In accordance with the current rules of the Commodity Futures Trading
Commission, the Global Income Fund will not enter into any interest rate futures
contract or option thereon if, immediately thereafter, the aggregate initial
margin and premiums paid for all existing futures contracts and options thereon
not entered into for bona fide hedging purposes would exceed 5% of its total
assets. Positions in interest futures contracts may be closed out only on the
exchange where the contract was made (or on a linked exchange). The Global
Income Fund intends to purchase or sell interest rate futures contracts only on
exchanges or boards of trade where there appears to be an active market for such
contracts.
Interest rate futures contracts are contracts that obligate the buyer to
take and the seller to make delivery at a future date of a specified quantity of
the underlying financial instrument. However, some interest rate futures
contracts provide for settlement in cash rather than by delivery of the
securities underlying the contract. Each futures contract is traded on a
commodity exchange that has been designated a "contract market" by the
Commodities Futures Trading Commission. Interest rate futures contracts are
currently available on several types of fixed income securities, including U.S.
Treasury Bonds, U.S. Treasury Notes and GNMA securities on The Chicago Board of
Trade, and on U.S. Treasury Bills on the International Monetary Market Division
of The Chicago Mercantile Exchange.
A call option for a futures contract gives the purchaser, in return for a
premium paid, has the right to buy the futures contract underlying the option at
a specified exercise price at any time during the term of the option. The writer
of the call option, who receives the premium, has the obligation, upon exercise
of the option, to deliver the underlying futures contract against payment of the
exercise price. A put option for a futures contract gives the purchaser, in
return for a premium, the right to sell the underlying futures contract at a
specified price during the term of the option. The writer of the put, who
receives the premium, has the obligation to buy the underlying futures contract
upon demand at the exercise price.
6
<PAGE>
In contrast to the purchase or sale of a security, the full purchase price
of the futures contract is not paid or received by the Global Income Fund upon
its purchase or sale. Instead, the Global Income Fund will deposit in a
segregated custodial account as initial margin an amount of cash or U.S.
Treasury bills equal to approximately 5% of the value of the contract. This
amount is known as initial margin. The nature of initial margin in futures
transactions is different from that of margin in security transactions in that
futures contract margin does not involve the borrowing of funds by the customer
to finance the transactions. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
Global Income Fund upon termination of the futures contract assuming all
contractual obligations have been satisfied. Subsequent payments to and from the
broker, called variation margin, will be made on a daily basis as the price of
the underlying security fluctuates, making the long and short positions in the
futures contract more or less valuable, a process known as "mark to the market."
For example, when the Global Income Fund has purchased an interest rate futures
contract and the price of the underlying security has risen, that position will
have increased in value and the Global Income Fund will receive from the broker
a variation margin payment equal to that increase in value. Conversely, where
the Global Income Fund has purchased an interest rate futures contract and the
price of the underlying security has declined, the position would be less
valuable and the Global Income Fund would be required to make a variation margin
payment to the broker. At any time prior to expiration of the futures contract,
the Global Income Fund may elect to terminate the position by taking an opposite
position. A final determination of variation margin is then made, additional
cash is required to be paid by or released to the Global Income Fund, and the
Global Income Fund realizes a loss or gain. No assurance can be given that the
Global Income Fund will be able to take an opposite position.
The purpose of selling an interest rate futures contract is to protect a
portfolio from fluctuations in asset value resulting from interest rate changes.
Selling a futures contract has an effect similar to selling portfolio
securities. If interest rates were to increase, the value of the securities in
the portfolio would decline, but the value of the Global Income Fund's futures
contracts would increase, thereby keeping the net asset value of the Global
Income Fund from declining as much as it otherwise might have. In this way,
selling futures contracts acts as a hedge against the effects of rising interest
rates. However, a decline in interest rates resulting in an increase in the
value of portfolio securities tends to be offset by a decrease in the value of
the corresponding futures contracts.
Similarly, when interest rates are expected to decline, futures contracts
may be purchased to hedge against anticipated subsequent purchases of portfolio
securities at higher prices. By buying futures, the Global Income Fund could
effectively hedge against an increase in the price of the securities it intends
to purchase at a later date in order to permit the purchase to be effected in an
orderly manner. At that time, the futures contracts could be liquidated at a
profit if rates had in fact declined as expected, and the Global Income Fund's
cash position could be used to purchase securities.
Although most interest rate futures contracts call for making or taking
delivery of the underlying securities, these obligations are typically canceled
or closed out before the scheduled settlement date. The closing is accomplished
by purchasing (or selling) an identical futures contract to offset a short (or
long) position. Such an offsetting transaction cancels the contractual
obligations established by the original futures transaction. If the price of an
offsetting futures transaction varies from the price of the original futures
transaction, the Global Income Fund will realize a gain or loss corresponding to
the difference. That gain or loss will tend to offset the unrealized loss or
gain on the hedged securities transaction, but may not always or completely do
so.
The selection of futures and options strategies requires skills different
from those needed to select portfolio securities; however, CSAM does have
experience in the use of futures and options.
RESTRICTED AND ILLIQUID SECURITIES. The Global Income Fund may invest up to
10% of its total assets in securities that are not readily marketable. These
include securities which are not registered under the Securities Act and not
publicly traded. Restricted and illiquid securities are purchased in placements
from
7
<PAGE>
the issuer or in the secondary market. The purchase of these securities will
depend on their relative attractiveness as compared to securities that have been
publicly offered.
Restricted and illiquid securities have frequently resulted in higher yields
and restrictive covenants providing greater protection for the purchaser, such
as longer call or refunding protection, than typically would be available with
publicly offered securities of the same type. An issuer is often willing to
create more attractive features in its securities issued privately, because it
has avoided the expense and delay involved in a public offering of its
securities. For various reasons, an issuer may prefer or be required as a
practical matter to obtain private financing. At certain times adverse
conditions in the public securities markets may preclude a public offering of an
issuer's securities.
These securities can only be resold to certain categories of purchasers,
including qualified institutional buyers, and are usually considered less liquid
than publicly-traded securities, which means that the Global Income Fund may
take longer to liquidate them than would be the case for publicly-traded
securities.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Global Income Fund may engage
in foreign currency exchange transactions to protect against changes in future
exchange rates. The Global Income Fund will only engage in foreign currency
exchange transactions for transaction hedging (in connection with the purchase
or sale of portfolio securities) or position hedging (to protect the value of a
specific portfolio position), although there is no limit on the percentage of
its total assets that may be invested in forward foreign currency transactions.
The Global Income Fund may engage in U.S. dollar-denominated or non-U.S. dollar
denominated hedging. The Global Income Fund's ability to engage in hedging and
related option transactions may be limited by tax considerations. See "Taxation"
below.
The Global Income Fund may engage in "transaction hedging" to protect
against a change in the foreign currency exchange rate between the date on which
it contracts to purchase or sell the security and the settlement date, or to
"lock in" the U.S. dollar equivalent of a dividend or interest payment in a
foreign currency. For that purpose, the Global Income Fund may purchase or sell
a foreign currency on a spot (or cash) basis at the prevailing spot rate in
connection with the settlement of transactions in portfolio securities
denominated in that foreign currency. The Global Income Fund may also enter into
forward currency exchange contracts and purchase exchange-listed and
over-the-counter call and put options on foreign currency futures contracts and
on foreign currencies. A foreign currency forward contract is a negotiated
agreement to exchange currency at a future time at a rate or rates that may be
higher or lower than the spot rate. Foreign currency futures contracts are
standardized exchange-traded contracts and have margin requirements.
For transaction hedging purposes, the Global Income Fund may also purchase
exchange-listed and over-the-counter call and put options on foreign currency
futures contracts and on foreign currencies. A put option on a futures contract
gives the Global Income Fund the right to assume a short position in the futures
contract until expiration of the option. A put option on currency gives the
Global Income Fund the right to sell a currency at an exercise price until the
expiration of the option. A call option on a futures contract gives the Global
Income Fund the right to assume a long position in the futures contract until
the expiration of the option. A call option on currency gives the Global Income
Fund the right to purchase a currency at the exercise price until the expiration
of the option.
The Global Income Fund may engage in "position hedging" to protect against
the decline in the value relative the U.S. dollar of the currencies in which its
portfolio securities are denominated or quoted (or an increase in the value of
currency for securities which the portfolio intends to buy, when it holds cash
reserves and short term investments). For position hedging purposes, the Global
Income Fund may purchase or sell foreign currency futures contracts and foreign
currency forward contracts, and may purchase put or call options on foreign
currency futures contracts and on foreign currencies on exchanges or
over-the-counter markets. In connection with position hedging, the Global Income
Fund may also purchase or sell foreign currency on a spot basis.
8
<PAGE>
It is impossible to forecast with precision the market value of portfolio
securities at the expiration or maturity of a forward or futures contract. The
precise matching of the amounts of foreign currency exchange transactions and
the value of the portfolio securities involved will not generally be possible
since the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
dates the currency exchange transactions are entered into and the dates they
mature or expire. Accordingly, it may be necessary for the Global Income Fund to
purchase additional foreign currency on the spot market (and bear the expense of
such purchase) if the market value of the security or securities being hedged is
less than the amount of foreign currency the Global Income Fund is obligated to
deliver and if a decision is made to sell the security or securities and make
delivery of the foreign currency. Conversely, it may be necessary to sell on the
spot market some of the foreign currency received upon the sale of the portfolio
security or securities if the market value of such security or securities
exceeds the amount of foreign currency the Global Income Fund is obligated to
deliver.
Hedging transactions involves costs and may result in losses. The Global
Income Fund may write covered call options on foreign currencies to offset some
of the costs of hedging those currencies. They simply establish a rate of
exchange that one can achieve at some future point in time. The Global Income
Fund engages in over-the-counter transactions only when appropriate
exchange-traded transactions are unavailable and when, in the opinion of CSAM,
the pricing mechanism and liquidity are satisfactory and the participants are
responsible parties likely to meet their contractual obligations.
Positions in foreign currency futures contracts may be closed out only on an
exchange or board of trade that provides a secondary market in such contracts.
The Global Income Fund intends to purchase or sell foreign currency futures
contracts only on exchanges or boards of trade where there appears to be an
active secondary market.
The Global Income Fund may enter into forward foreign currency exchange
contracts (an obligation to purchase or sell a specific currency at a future
date) solely for hedging or other appropriate risk management purposes as
defined in regulations of the Commodities Futures Trading Commission. A forward
foreign currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract as agreed by the parties, at a price set at the time of
the contract. In the case of a cancelable forward contract, the holder has the
unilateral right to cancel the contract at maturity by paying a specific fee.
The contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. A foreign currency futures contract is a standardized
contract for the future delivery of a specified amount of a foreign currency at
a future date at a price set at the time of the contract. Foreign currency
futures contracts traded in the United States are designed by and traded on
exchanges regulated by the CFTC, such as the New York Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. For example, the maturity date of a
forward contract may be any fixed number of days from the date of the contract
agreed upon by the parties, rather than a predetermined date in any given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A forward
contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, the Global Income Fund may
either accept or make delivery of the currency specified in the contract, or at
or prior to maturity enter into a closing transaction involving the purchase or
sale of an offsetting contract. Closing transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract. Closing transactions with respect to futures
contracts are effected on a commodities exchange: a clearing corporation
associated with the exchange assumes responsibility for closing out such
contracts.
9
<PAGE>
The Global Income Fund may also write or purchase options on foreign
currencies. Options on foreign currencies operate similarly to options on
securities, and are traded primarily in the over-the-counter market, although
options on foreign currencies have recently been listed on several exchanges.
Such options are purchased or written only when CSAM believes that a liquid
secondary market exists for such options. There can be no assurance that a
liquid secondary market will exist for a particular option at any specific time.
Options on foreign currencies are affected by all of those factors which
influence foreign exchange rates and investments generally. If the Global Income
Fund sells call options on foreign currencies, it may cover by holding that
currency or by holding a separate call option on the currency with a strike
price no higher than that of the call option sold.
The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the options markets.
INVESTMENT RESTRICTIONS
The Global Income Fund is subject to the following restrictions that may not
be changed without the approval of at least a majority of its outstanding voting
securities, as defined in the Investment Company Act. The Investment Company Act
defines a "majority" as the lesser of (1) 67% of the shares represented at a
meeting of which more than 50% of the outstanding shares are present in person
or represented by proxy, or (2) more than 50% of the outstanding shares.
The Global Income Fund will not:
(1) invest more than 5% of the value of its total assets in the securities
of any one issuer, excluding obligations of the U.S. government or any agency or
instrumentality thereof and except that up to 25% of the value of its total
assets may be invested without regard to this limitation;
(2) own more than 10% of the outstanding voting stock or other securities
(other than securities of the U.S. government or any agency or instrumentality
thereof), or both, of any one issuer;
(3) purchase shares of other investment companies except as part of a plan
of reorganization, merger, consolidation or an offer of exchange;
(4) borrow money except as a temporary measure for extraordinary or
emergency purposes, and in no event in excess of 15% of the value of its total
assets, except that for the purpose of this restriction, short-term credits
necessary for settlement of securities transactions are not considered
borrowings (the Global Income Fund will not purchase any securities at any time
while such borrowings exceed 5% of total assets);
(5) purchase securities on margin, except that it may make margin payments
in connection with transactions in future contracts and related options;
10
<PAGE>
(6) sell securities short unless at all times when a short position is open
it owns an equal amount of such securities or securities convertible into or
exchangeable, for, without payment of any further consideration, securities of
the same issue as, and equal in amount to, the securities sold short, and unless
not more than 5% of the value of the Global Income Fund's total assets are held
as collateral for such sales at any one time;
(7) purchase or sell commodities or commodity contracts, except that it may
write, purchase or sell financial futures contracts and related options, and
futures, forward contracts and options on foreign currencies;
(8) invest for the purpose of exercising control over management of any
company;
(9) make loans, except (i) by purchasing bonds, debentures or similar
obligations (including repurchase agreements, subject to the limitation
described in (11) below), which are either publicly distributed or customarily
purchased by institutional investors, and (ii) by lending its securities to
banks, brokers, dealers and other financial institutions so long as such loans
are not inconsistent with the 1940 Act or the rules and regulations or
interpretations of the Securities and Exchange Commission thereunder;
(10) underwrite the securities of other issuers, except to the extent that
in connection with the disposition of portfolio securities the Global Income
Fund may be deemed to be an underwriter;
(11) invest more than 10% of the value of its total assets in securities
subject to legal or contractual restrictions on resale or in securities which
are not readily marketable, including repurchase agreements having maturities of
more than 7 days and restricted and illiquid securities;
(12) purchase real estate, although the Global Income Fund may purchase or
sell securities of companies which deal in real estate or interests therein;
(13) pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 20% of the value of its total assets and then only to secure
borrowings permitted by restriction 4 above;
(14) invest directly in interests in oil, gas or other mineral exploration
development programs;
(15) invest 25% or more of the value of its total assets in any one
industry, except that (i) for purposes of this restriction securities of the
U.S. government, its agencies or instrumentalities are not considered to
represent industries, and (ii) the Global Income Fund may invest 25% or more of
the value of its total assets in securities issued by or backed by the credit of
supranational entities and securities of foreign governments, their agencies or
instrumentalities, provided that it will not invest 25% or more of the value of
its total assets in securities issued or backed by the credit of the national
government of any single country or its agencies or instrumentalities or of any
single supranational entity. The deposit of initial and variation margin and
collateral arrangements in connection with interest rate futures contracts and
related options shall not be deemed to be in violation of any of the foregoing
investment restrictions; or
(16) issue senior securities, except as permitted under the 1940 Act.
If a percentage restriction on investment or use of assets set forth above
is adhered to at the time a transaction is effected, later changes in
percentages resulting from changing values will not be considered a violation.
Under the Investment Company Act, the Global Income Fund may neither invest
more than 5% of its total assets in the securities of any one investment
company, nor acquire more than 3% of the outstanding voting securities of any
such investment company. In addition, the Global Income Fund may not invest more
than 10% of its total assets in securities issued by all investment companies.
As a shareholder in any investment company, the Global Income Fund will bear its
ratable share of that investment company's expenses, and would remain subject to
payment of the advisory, sub-advisory and administrative fees with respect to
assets so invested.
11
<PAGE>
MANAGEMENT
DIRECTORS AND OFFICERS
The names of the directors and principal officers of the Global Income Fund
are set forth below, together with their positions and their principal
occupations during the past five years.
The officers manage day to day operations. The officers are directly
responsible to the board of directors. The directors set broad policies and
choose the officers.
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH THE FUND PRINCIPAL OCCUPATIONS FOR THE PAST FIVE YEARS
- --------------------------------- ---------------------- ------------------------------------------------
<S> <C> <C>
William W. Priest (57)* ......... Director and Chairman Chairman-Management Committee, Chief Executive
Credit Suisse Asset Management of the Board since Officer and Managing Director of CSAM (U.S.)
153 East 53rd Street 1997 (12/90-present); Director of TIG Holdings, Inc.;
New York, NY 10022 Director of other CSAM-advised investment
companies.
Dr. Enrique R. Arzac (57) ....... Director since 1990 Professor of Finance and Economics, Graduate
Columbia University School of Business, Columbia University
Graduate School of Business (1971-present); Director of The Adams Express
New York, NY 10027 Fund and Petroleum and Resources Corporation.
Director of other CSAM-advised investment
companies.
Lawrence J. Fox (56) ............ Director since 1990 Partner of Drinker Biddle & Reath LLP ("DB&R")
1 Logan Square (since 1976); Former Managing Partner of DB&R
18th and Cherry Streets (1990-1998); Visiting Professor of Cornell Law
Philadelphia, PA 19103 School since July, 1999; Director of one other
CSAM-advised investment company.
James S. Pasman, Jr. (68) ....... Director since 1988 Currently retired; President and Chief Operating
29 The Trillium Officer of National InterGroup, Inc.
Pittsburgh, PA 15238 (4/89-3/91); Chairman of Permian Oil Co.
(4/89-3/91); Director of Education Management
Corp., Tyco International Ltd.; Trustee, BT
Insurance Funds Trust; Director of other CSAM-
advised investment companies.
Richard J. Lindquist (38) ....... President since 1997 Managing Director of CSAM (4/95-present);
Credit Suisse Asset Management and Chief Investment Managing Director of CS First Boston Investment
153 East 53rd Street Officer since 1996 Management Corporation ("CSFBIM") (3/93-3/95);
New York, NY 10022 Director of CSFBIM (4/92-2/93).
Hal Liebes, Esq. (34) ........... Senior Vice President Director and General Counsel of CSAM
Credit Suisse Asset Management since 1997 (1/99-present); Senior Vice President and
153 East 53rd Street General Counsel of CSAM (3/97-1/99) Vice
New York, NY 10022 President and Legal Counsel of Lehman
Brothers, Inc. (6/96-3/97) Vice President
and Legal Counsel of CSAM 6/95-6/96); Chief
(Compliance Officer, CS First Boston Investment
Management (94-95); Staff Attorney, Division of
Enforcement, U.S. Securities and Exchange
Commission (91-94); Associate, Morgan, Lewis &
Bockius (89-91).
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH THE FUND PRINCIPAL OCCUPATIONS FOR THE PAST FIVE YEARS
- --------------------------------- ---------------------- ------------------------------------------------
<S> <C> <C>
Gregg Diliberto (42) ............ Investment Officer Managing Director of CSAM (5/95-present); Senior
Credit Suisse Asset Management since 1997 Vice President of CSAM (1/92-5/95).
153 East 53rd Street
New York, NY 10022
Suzanne Moran (32) .............. Investment Officer Vice President of CSAM (1/97-present); Assistant
Credit Suisse Asset Management since 1996 Vice President and Fixed Income Trader of CSAM
153 East 53rd Street (5/95-12/96); Assistant Vice President and
New York, NY 10022 Portfolio Analyst at CS First Boston
(8/91-4/95).
Michael A. Pignataro (39) ....... Vice President and Vice President of CSAM (12/95-present);
Credit Suisse Asset Management Chief Financial Assistant Vice President and Chief
153 East 53rd Street Officer since 1999 and Administrative Officer for investment companies
New York, NY 10022 Secretary since 1997 advised by CSAM (9/89-12/95).
Robert Rizza (33) ............... Vice President and Administrative Officer for investment companies
Credit Suisse Asset Management Treasurer since 1999 advised by CSAM (3/98-present); Assistant
153 East 53rd Street Treasurer, Fund Administration, Bankers Trust
New York, NY 10022 Co. (4/94-3/98).
</TABLE>
- ------------------------
* Mr. Priest is an interested person of the Global Income Fund by virtue of
his position as an officer of CSAM.
The Global Income Fund pays each of its directors who is not a director,
officer or employee of CSAM or any affiliate thereof an annual fee of $10,000
plus $500 for each meeting attended. In addition, the Global Income Fund
reimburses those directors for travel and out-of-pocket expenses incurred in
connection with meetings. The aggregate remuneration paid to all such
unaffiliated directors by the Global Income Fund during the fiscal year ended
December 31, 1998 was $51,171.
The following table shows certain compensation information for the directors
for the fiscal year ended December 31, 1998. None of the executive officers or
directors who are also officers or directors of CSAM received any compensation
from the Global Income Fund for such period. The Global Income Fund has no
bonus, profit sharing, pension or retirement plans.
<TABLE>
<CAPTION>
TOTAL
PENSION OR ESTIMATED COMPENSATION
AGGREGATE RETIREMENT BENEFITS ANNUAL BENEFITS FROM FUND AND
COMPENSATION ACCRUED AS PART OF UPON FUND COMPLEX
NAME OF DIRECTOR FROM FUND FUND EXPENSES RETIREMENT PAID TO DIRECTORS
- -------------------------------------------- ------------- ----------------------- --------------------- -----------------
<S> <C> <C> <C> <C>
William W. Priest........................... $ 0 $ 0 $ 0 $ 0
Enrique R. Arzac............................ $ 12,000 $ 0 $ 0 $ 92,500
Lawrence J. Fox............................. $ 12,000 $ 0 $ 0 $ 24,000
James S. Pasman, Jr......................... $ 12,000 $ 0 $ 0 $ 24,000
</TABLE>
The Articles of Incorporation and Bylaws of the Global Income Fund provide
that it will indemnify its directors and officers against liabilities and
expenses incurred in connection with litigation in which they may be involved
because of their positions with the Global Income Fund to the fullest extent
permitted by law. In addition, the Articles of Incorporation provide that the
directors and officers will not be liable to the shareholders for money damages,
except in limited instances. However, nothing in the Articles of Incorporation
or the Bylaws protects or indemnifies a director, officer, employee or agent
against any
13
<PAGE>
liability to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office.
ADVISORY ARRANGEMENTS
CSAM is the investment adviser pursuant to an Advisory Agreement with the
Global Income Fund (the "Advisory Agreement") which became effective on June 13,
1995. Prior to this date, CS First Boston Investment Management provided
investment advisory services to the Global Income Fund under substantially the
same terms, conditions and fees.
The Advisory Agreement provides that CSAM shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Global Income Fund
in connection with the matters to which the Advisory Agreement relates, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of CSAM in the performance of its duties or from reckless disregard of its
obligations and duties under the Advisory Agreement.
For the fiscal years ended December 31, 1998, 1997 and 1996, CSAM was paid
for advisory services rendered to the Global Income Fund $433,203, $446,640, and
$429,140, respectively.
ADMINISTRATIVE ARRANGEMENT
Brown Brothers Harriman & Co. is the Global Income Fund's administrator. The
services provided by Brown Brothers Harriman under its Administration Agreement
with the Global Income Fund are subject to the supervision of the directors and
officers, and include day to day administration of matters related to its
corporate existence, maintenance of its records, preparation of reports and
supervision of arrangements with custodians and the transfer and dividend
disbursing agent.
DURATION AND TERMINATION; NON-EXCLUSIVE SERVICES
The Advisory Agreement became effective on June 13, 1995. Unless earlier
terminated as described below, the Advisory Agreement remains in effect if
approved annually (a) by the board of directors or by the holders of a majority
of the outstanding voting securities (as defined in the Investment Company Act)
and (b) by a majority of the directors who are not parties to the Advisory
Agreement or "interested persons" (as defined in the 1940 Act) of any such
party. The Advisory Agreement terminates on its assignment by any party and may
be terminated without penalty on 60 days' written notice at the option of the
board of directors or by the vote of the majority of the holders of the shares,
or upon 90 days' written notice, by CSAM.
The Administration Agreement is terminable upon 60 days' notice by either
party.
The services of CSAM and Brown Brothers Harriman are not deemed to be
exclusive, and nothing in the relevant service agreements will prevent any of
them or their affiliates from providing similar services to other investment
companies and other clients (whether or not such clients' investment objectives
and policies are similar to those of the Global Income Fund) or from engaging in
other activities.
CUSTODIAN
Brown Brothers Harriman acts as custodian under a Custodian Agreement dated
January 29, 1999.
Foreign securities are held by certain foreign banks and securities
depositories which have been approved by the board of directors upon
recommendation by Brown Brothers Harriman, in accordance with Rule 17f-5 under
the 1940 Act as currently in effect. Approval of a foreign subcustodian is made
by the board following a consideration of a number of factors, including, but
not limited to, the reliability and
14
<PAGE>
financial stability of the institution; the ability of the institution to
perform capably custodial services; the reputation of the institution in its
national market; the political and economic stability of the country or
countries in which the subcustodian will be located; and the risk of potential
nationalization or expropriation of the assets.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities are made by CSAM, subject to the
overall review of the board of directors. Portfolio securities transactions are
placed on behalf of the Global Income Fund by persons authorized by CSAM. CSAM
manages other investment companies and accounts that invest in fixed-income
securities. Although investment decisions for the Global Income Fund are made
independently from those of these other accounts, CSAM may make investments of
the type the Global Income Fund makes on behalf of these other accounts. When
the Global Income Fund and one or more other accounts is prepared to invest in,
or desires to dispose of, the same security, CSAM will allocate available
investments or opportunities for each in a manner believed by CSAM to be
equitable to each. In some cases, this procedure may adversely affect the price
paid or received by the Global Income Fund or the size of the position it
obtains or disposes of. The Global Income Fund may utilize CS First Boston
Corporation and other affiliates of Credit Suisse in connection with the
purchase or sale of securities in accordance with rules or exemptive orders
adopted by the Securities and Exchange Commission when CSAM believes that the
charge for the transaction does not exceed usual and customary levels.
Transactions on U.S. and some foreign stock exchanges involve the payment of
negotiated brokerage commissions, which may vary among different brokers. The
cost of securities purchased from underwriters includes an underwriter's
commission or concession, and the prices at which securities are purchased from
and sold to dealers in the over-the-counter markets include a dealer's mark-up
or mark-down, which normally is not disclosed. Fixed-income securities are
generally traded on a "net" basis with dealers acting as principal for their own
accounts without a stated commission, although the price of the security will
likely include a profit to the dealer.
In selecting brokers or dealers to execute portfolio transactions on behalf
of the Global Income Fund, CSAM will seek the best overall terms available. In
addition, unless otherwise directed by the board of directors, the Advisory
Agreement authorizes CSAM, in selecting brokers or dealers to execute a
particular transaction and in evaluating the best overall terms available, to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) and cause the Global
Income Fund to pay a broker-dealer which furnishes such services a higher
commission than that which might be charged by another broker-dealer for
effecting the same transaction, provided that such commission is deemed
reasonable in terms of either that particular transaction or the overall
responsibilities of CSAM to the Global Income Fund. The fees payable under the
Advisory Agreement are not reduced as a result of CSAM's receiving such
brokerage and research services.
Currently, it is the Global Income Fund's policy that CSAM may at times pay
higher commissions than might otherwise be obtainable in recognition of
brokerage services felt necessary for the achievement of best available price
and most favorable execution of certain securities transactions. CSAM will only
pay such higher commissions if it believes this to be in the best interest of
the Global Income Fund. Some brokers or dealers who may receive such higher
commissions in recognition of brokerage services related to execution of
securities transactions are also providers of research information to CSAM
and/or the Global Income Fund. Subject to the primary objective set forth above,
CSAM has informed the Global Income Fund that it may pay higher commission rates
specifically for the purpose of obtaining research services. The Global Income
Fund will not pay to any affiliate of CSAM a higher commission rate specifically
for the purpose of obtaining research services.
The Global Income Fund paid no affiliated brokerage commissions in any of
the fiscal years ended December 31, 1998, 1997 and 1996.
15
<PAGE>
TAXATION
The following is a summary of the material United States federal income tax
considerations, regarding the purchase, ownership and disposition of shares. You
are urged to consult your own tax adviser with respect to the specific federal,
state, local and foreign tax consequences of investing in the Global Income
Fund. The summary is based on the laws in effect on the date of this statement
of additional information, which are subject to change.
UNITED STATES FEDERAL INCOME TAXES
THE GLOBAL INCOME FUND AND ITS INVESTMENTS. The Global Income Fund has
qualified and continues to qualify and elect to be treated as a regulated
investment company for each taxable year under the Code. To so qualify, the
Global Income Fund must, among other things:
- derive at least 90% of its gross income in each taxable year from:
- dividends
- interest
- payments with respect to securities loans
- gains from the sale or other disposition of stock or securities or foreign
currencies
- other income (including, but not limited to, gains from options, futures
or forward contracts) derived with respect to its business of investing in
such stock, securities or currencies, and
- diversify its holdings so that, at the end of each quarter of the taxable
year:
- at least 50% of the market value of the assets is represented by cash,
securities of other regulated investment companies, United States
government securities and other securities, with such other securities
limited, in respect of any one issuer, to an amount not greater than 5% of
the Global Income Fund's assets and not greater than 10% of the
outstanding voting securities of such issuer, and
- not more than 25% of the value of its assets is invested in the securities
(other than United States government securities or securities of other
regulated investment companies) of any one issuer or any two or more
issuers that the Global Income Fund controls and are determined to be
engaged in the same or similar trades or businesses or related trades or
businesses.
As a regulated investment company, the Global Income Fund is not
subject to United States federal income tax on its net investment income
(i.e., income other than its net realized long- and short-term capital gains)
and its net realized long- and short-term capital gains, if any, that it
distributes to its shareholders, provided that an amount equal to at least
90% of the sum of its investment company taxable income (i.e., its taxable
income minus the excess, if any, of its net realized long-term capital gains
over its net realized short-term capital losses (including any capital loss
carryovers), plus or minus certain other adjustments as specified in section
852 of the Code) and its net tax-exempt income for the taxable year, if any,
is distributed, but is subject to tax at regular corporate rates on any
taxable income or gains that it does not distribute.
The Code imposes a 4% nondeductible excise tax on the Global Income Fund to
the extent it does not distribute by the end of any calendar year at least 98%
of its net investment income for that year and 98% of the net amount of its
capital gains (both long- and short-term) for the one-year period ending, as a
general rule, on October 31 of that year. For this purpose, however, any income
or gain retained by the Global Income Fund that is subject to corporate income
tax will be considered to have been distributed by year-end. In addition, the
minimum amounts that must be distributed in any year to avoid the excise tax
16
<PAGE>
will be increased or decreased to reflect any underdistribution or
overdistribution, as the case may be, from the previous year. The Global Income
Fund anticipates that it will pay such dividends and will make such
distributions as are necessary in order to avoid the application of this tax.
If, in any taxable year, the Global Income Fund fails to qualify as a
regulated investment company under the Code, the Global Income Fund would be
taxed in the same manner as an ordinary corporation and distributions to you
would not be deductible by the Global Income Fund in computing its taxable
income. In addition, in the event of a failure to qualify, the Global Income
Fund's distributions, to the extent derived from current or accumulated earnings
and profits, would constitute dividends (eligible for the corporate
dividends-received deduction) which are taxable to you as ordinary income, even
though those distributions might otherwise (at least in part) have been treated
as long-term capital gains when received by you. If the Global Income Fund fails
to qualify as a regulated investment company in any year, it must pay out its
earnings and profits accumulated in that year in order to qualify again as a
regulated investment company. In addition, if the Global Income Fund failed to
qualify as a regulated investment company for a period greater than one taxable
year, it may be required to recognize any net built-in gains (the excess of the
aggregate gains, including items of income, over aggregate losses that would
have been realized if it had been liquidated) in order to qualify as a regulated
investment company in a subsequent year.
The Global Income Fund pays dividends of net investment income monthly and
makes distributions at least annually of any net realized long-term and
short-term capital gains in excess of applicable capital losses, including
capital loss carryforwards. The board of directors determines annually whether
to distribute any net realized long-term capital gains in excess of net realized
short-term capital losses (including any capital loss carryovers). The Global
Income Fund currently expects to distribute any excess annually to you. However,
if the Global Income Fund retains for investment an amount equal to all or a
portion of its net realized long-term capital gains in excess of its net
realized short-term capital losses and capital loss carryovers, it will be
subject to a corporate tax (currently at a rate of 35%) on the amount retained.
In that event, the Global Income Fund expects to designate such retained amounts
as undistributed capital gains in a notice to you and you (a) will be required
to include in income for United States federal income tax purposes, as long-term
capital gains, your proportionate share of the undistributed amount, (b) will be
entitled to credit your proportionate share of the 35% tax paid by the Global
Income Fund on the undistributed amount against you United States federal income
tax liabilities, if any, and to claim refunds to the extent your credits exceed
your liabilities, if any, and (c) will be entitled to increase your tax basis,
for United States federal income tax purposes, in your shares by an amount equal
to 65% of the amount of undistributed capital gains included in your income.
Any dividend declared by the Global Income Fund in October, November or
December of any calendar year and payable to shareholders of record on a
specified date in such a month shall be deemed to have been received by each
shareholder on December 31 of such calendar year and to have been paid by the
Global Income Fund not later than such December 31, provided that such dividend
is actually paid by the Global Income Fund during January of the following
calendar year.
DIVIDENDS AND DISTRIBUTIONS. If you are a U.S. shareholder, dividends of
net investment income and distributions of net realized short-term capital gains
are taxable to you as ordinary income, whether paid in cash or in shares.
Distributions of net long-term capital gains, if any, that the Global Income
Fund designates as capital gains dividends are taxable as long-term capital
gains, whether paid in cash or in shares and regardless of how long you have
held shares. Dividends and distributions paid by the Global Income Fund (except
for the portion thereof, if any, attributable to dividends on stock of U.S.
corporations received by the Global Income Fund) will not qualify for the
deduction for dividends received by corporations. Distributions in excess of the
Global Income Fund's current and accumulated earnings and profits will, as to
you, be treated as a tax-free return of capital, to the extent of your basis in
your shares, and as a capital gain thereafter (if you hold your shares as
capital assets).
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If you receive dividends or distributions in the form of additional shares
pursuant to the Dividend Reinvestment and Cash Purchase Plan you should be
treated for United States federal income tax purposes as receiving a
distribution in the amount equal to the amount of money that shareholders
receiving cash dividends or distributions will receive, and should have a cost
basis in the shares received equal to such amount.
If you are considering buying shares just prior to a dividend or capital
gain distribution you should be aware that, although the price of shares just
purchased at that time may reflect the amount of the forthcoming distribution,
such dividend or distribution may nevertheless be taxable to you.
If the Global Income Fund is the holder of record of any stock on the record
date for any dividends payable with respect to such stock, such dividends are
included in the Global Income Fund's gross income not as of the date received
but as of the later of (a) the date such stock went ex-dividend (i.e., the date
on which a buyer of the stock would not be entitled to receive the declared, but
unpaid, dividends) or (b) the date the Global Income Fund acquired such stock.
Accordingly, in order to satisfy its income distribution requirements, the
Global Income Fund may be required to pay dividends based on anticipated
earnings, and you may receive dividends in an earlier year than would otherwise
be the case.
SALES OF SHARES. Upon the sale or exchange of your shares, you will realize
a taxable gain or loss equal to the difference between the amount realized and
the basis in your shares. Such gain or loss will be treated as capital gain or
loss, if the shares are capital assets in your hands, and will be long-term
capital gain or loss if the shares are held for more than one year and
short-term capital gain or loss if the shares are held for one year or less. Any
loss realized on a sale or exchange will be disallowed to the extent the shares
disposed of are replaced, including replacement through the reinvesting of
dividends and capital gains distributions in the Global Income Fund under the
Dividend Reinvestment and Cash Purchase Plan, within a 61-day period beginning
30 days before and ending 30 days after the disposition of the shares. In such a
case, the basis of the shares acquired will be increased to reflect the
disallowed loss. Any loss realized by you on the sale of a share held by you for
six months or less will be treated for United States federal income tax purposes
as a long-term capital loss to the extent of any distributions or deemed
distributions of long-term capital gains received by you with respect to such
share.
BACKUP WITHHOLDING. If you fail to provide the Global Income Fund with your
correct taxpayer identification number or to make required certifications, or
have been notified by the Internal Revenue Service that you are subject to
backup withholding, the Global Income Fund may be required to withhold, for
United States federal income tax purposes, 31% of the dividends and
distributions payable. Corporate shareholders and certain other shareholders are
or may be exempt from backup withholding. Backup withholding is not an
additional tax and any amount withheld may be credited against your United
States federal income tax liabilities. If you are a foreign investor additional
tax withholding requirements which apply are discussed below.
FOREIGN SHAREHOLDERS. If you are a foreign investor (such as a nonresident
alien individual, a foreign trust or estate, a foreign corporation or a foreign
partnership) under U.S. laws, taxation depends, in part, on whether your income
from the Global Income Fund is "effectively connected" with a United States
trade or business carried on by you.
If you are not a resident alien and your income from the Global Income Fund
is not effectively connected with a United States trade or business carried on
by the foreign investor, distributions of net investment income and net realized
short-term capital gains will be subject to a 30% (or lower treaty rate) United
States withholding tax. If you are a non-resident alien distributions of net
realized long-term capital gains, amounts retained by the Global Income Fund
which are designated as undistributed capital gains, and gains realized upon the
sale of shares of the Global Income Fund generally will not be subject to United
States tax unless you are physically present in the United States for more than
182 days during the taxable year and, in the case of gain realized upon the sale
of shares, unless (a) such gain is attributable to an office or fixed place of
business in the United States or (b) you have a tax home in the United States
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and such gain is not attributable to an office or fixed place of business
located outside the United States. However, a determination by the Global Income
Fund not to distribute long-term capital gains will cause the Global Income Fund
to incur a U.S. federal tax liability with respect to retained long-term capital
gains, thereby reducing the amount of cash held by the Global Income Fund that
is available for investment, and you may not be able to claim a credit or
deduction with respect to such taxes.
In general, if you are a resident alien or if dividends or distributions
from the Global Income Fund are effectively connected with a United States trade
or business carried on by you, then dividends of net investment income,
distributions of net short-term and long-term capital gains, amounts retained by
the Global Income Fund that are designated as undistributed capital gains and
any gains realized upon the sale of shares will be subject to United States
income tax at the rates applicable to United States citizens or domestic
corporations. If you are a corporation, and your income from the Global Income
Fund is effectively connected with a United States trade or business, you may
also be subject to the 30% (or lower treaty rate) branch profits tax. If you are
entitled to claim the benefits of an applicable tax treaty the tax consequences
to you may be different from those described in this section. You may be
required to provide appropriate documentation to establish your entitlement to
the benefits of such a treaty. You are advised to consult your own tax adviser
with respect to (a) whether your income from the Global Income Fund is or is not
effectively connected with a United States trade or business carried on by you,
(b) whether you may claim the benefits of an applicable tax treaty, and (c) any
other tax consequences to you of an investment in the Global Income Fund.
NOTICES. You will be notified annually by the Global Income Fund as to the
United States federal income tax status of the dividends, distributions and
deemed distributions made by the Global Income Fund to you. Furthermore, you
will also receive, if appropriate, various written notices after the close of
the Global Income Fund's taxable year regarding the United States federal income
tax status of certain dividends, distributions and deemed distributions that
were paid (or that are treated as having been paid) by the Global Income Fund to
you during the preceding taxable year.
OTHER TAXATION. Distributions also may be subject to additional state,
local and foreign taxes depending on your particular situation.
FUND INVESTMENTS
MARKET DISCOUNT. If the Global Income Fund purchases a debt security at a
price lower than the stated redemption price of such debt security, the excess
of the stated redemption price over the purchase price is "market discount." If
the amount of market discount is more than a de minimis amount, the Global
Income Fund must include a portion of such market discount as ordinary income
(not capital gain) in each taxable year in which the Global Income Fund owns an
interest in such debt security and receives a principal payment on it. In
particular, the Global Income Fund will be required to allocate that principal
payment first to the portion of the market discount on the debt security that
has accrued but has not previously been includable in income. In general, the
amount of market discount that must be included for each period is equal to the
lesser of (i) the amount of market discount accruing during such period (plus
any accrued market discount for prior periods not previously taken into account)
or (ii) the amount of the principal payment with respect to such period.
Generally, market discount accrues on a daily basis for each day the debt
security is held by the Global Income Fund at a constant rate over the time
remaining to the debt security's maturity or, at the election of the Global
Income Fund, at a constant yield to maturity which takes into account the
semi-annual compounding of interest. Gain realized on the disposition of a
market discount obligation must be recognized as ordinary interest income (not
capital gain) to the extent of the "accrued market discount."
ORIGINAL ISSUE DISCOUNT. Certain debt securities acquired by the Global
Income Fund may be treated as debt securities that were originally issued at a
discount. Generally, original issue discount is defined as the difference
between the price at which a security was issued and its stated redemption price
at maturity.
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Although no cash income is actually received by the Global Income Fund, original
issue discount that accrues on a debt security in a given year generally is
treated for federal income tax purposes as interest and, therefore, such income
would be subject to the distribution requirements applicable to regulated
investment companies. In order to maintain its status as a regulated investment
company, the Global Income Fund could therefore be required to incur debt or to
dispose of portfolio securities to generate cash for distribution. Some debt
securities may be purchased by the Global Income Fund at a discount that exceeds
the original issue discount on such debt securities, if any. This additional
discount represents market discount for federal income tax purposes (see above).
OPTIONS, FUTURES AND FORWARD CONTRACTS. The Global Income Fund's
transactions in options and futures contracts will be subject to special
provisions of the Code that, among other things, may affect the character of
gains and losses realized by the Global Income Fund (i.e., it may affect whether
gains or losses are ordinary or capital), accelerate recognition of income and
defer losses. These rules could therefore affect the character, amount and
timing of distributions to you. These provisions also (a) will require the
Global Income Fund to mark-to-market certain types of the positions in its
portfolio (i.e., treat them as if they were closed out) and (b) may cause the
Global Income Fund to recognize income without receiving cash to pay dividends
or make distributions in amounts necessary to satisfy the distribution
requirements for avoiding income and excise taxes. The Global Income Fund will
monitor its transactions, will make the appropriate tax elections and will make
the appropriate entries in its books and records when it acquires any option,
futures contract or hedged investment in order to mitigate the effect of these
rules and prevent its disqualification as a regulated investment company.
Any regulated futures contracts and certain options (namely, nonequity
options and dealer equity options) in which the Global Income Fund may invest
may be "section 1256 contracts." Gains (or losses) on these contracts generally
are considered to be 60% long-term and 40% short-term capital gains or losses.
Also, section 1256 contracts held by the Global Income Fund at the end of each
taxable year (and on certain other dates prescribed in the Code) are "marked to
market" with the result that unrealized gains or losses are treated as though
they were realized.
Transactions in options, futures and forward contracts undertaken by the
Global Income Fund may result in "straddles" for federal income tax purposes.
The straddle rules may affect the character of gains (or losses) realized from
such transactions, and losses realized by the Global Income Fund on positions
that are part of a straddle may be deferred under the straddle rules, rather
than being taken into account in calculating the taxable income for the taxable
year in which the losses are realized. In addition, certain carrying charges
(including interest expense) associated with positions in a straddle may be
required to be capitalized rather than deducted currently. Certain elections
that the Global Income Fund may make with respect to its straddle positions may
also affect the amount, character and timing of the recognition of gains or
losses from the affected positions.
Because only a few regulations implementing the straddle rules have been
promulgated, the consequences of such transactions to the Global Income Fund are
not entirely clear. The straddle rules may increase the amount of short-term
capital gain realized by the Global Income Fund, which is taxed as ordinary
income when distributed to you. Because application of the straddle rules may
affect the character of gains or losses, defer losses and/or accelerate the
recognition of gains or losses from the affected straddle positions, the amount
which must be distributed to you as ordinary income or long-term capital gain
may be increased or decreased substantially as compared to a fund that did not
engage in such transactions.
CONSTRUCTIVE SALES. Under certain circumstances, the Global Income Fund may
recognize gain from a constructive sale of an "appreciated financial position"
it holds if it enters into a short sale, forward contract or other transaction
that substantially reduces the risk of loss with respect to the appreciated
position. In that event, the Global Income Fund would be treated as if it had
sold and immediately repurchased the property and would be taxed on any gain
(but not loss) from the constructive sale. The character of gain from a
constructive sale would depend upon the Global Income Fund's holding period in
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the property. Loss from a constructive sale would be recognized when the
property was subsequently disposed of, and its character would depend on the
Global Income Fund's holding period and the application of various loss deferral
provisions of the code. Constructive sale treatment does not apply to
transactions closed prior to the end of the 30th day after the close of the
taxable year, if certain conditions are met.
SECTION 988 GAINS OR LOSSES. Gains or losses attributable to fluctuations
in exchange rates which occur between the time the Global Income Fund accrues
income or other receivables or accrues expenses or other liabilities denominated
in a foreign currency and the time the Global Income Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. Similarly, on disposition of some investments, including debt
securities and certain forward contracts denominated in a foreign currency,
gains or losses attributable to fluctuations in the value of the foreign
currency between the acquisition and disposition of the position also are
treated as ordinary gain or loss. These gains and losses, referred to under the
Code as "section 988" gains or losses, increase or decrease the amount of the
Global Income Fund's investment company taxable income available to be
distributed to you as ordinary income. If section 988 losses exceed other
investment company taxable income during a taxable year, the Global Income Fund
would not be able to make any ordinary dividend distributions, or distributions
made before the losses were realized would be recharacterized as a return of
capital to you, rather than as an ordinary dividend, reducing the basis in your
shares.
THE FOREGOING IS ONLY A SUMMARY OF CERTAIN MATERIAL TAX CONSEQUENCES
AFFECTING THE GLOBAL INCOME FUND AND YOURSELF. YOU ARE ADVISED TO CONSULT YOUR
OWN TAX ADVISER WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO YOU OF AN
INVESTMENT IN THE GLOBAL INCOME FUND.
COMMON STOCK
The authorized capital stock of the Global Income Fund is 100,000,000 shares
of Common Stock. The Fund has no present intention of offering additional shares
other than pursuant to the offer, except that additional shares may be issued
under the Dividend Reinvestment and Cash Purchase Plan. Other offerings of
shares, if made, will require approval of the board of directors. Any additional
offering will be subject to the requirement of the Investment Company Act that
shares not be sold at a price below the then current net asset value (exclusive
of underwriting discounts and commissions) except in connection with an offering
to existing shareholders or with the consent of the holders of a majority of the
outstanding voting securities, as such term is defined under the Investment
Company Act.
BENEFICIAL OWNERSHIP
The Global Income Fund does not know of any persons who may be deemed
beneficial owners of 5% or more of the shares because they possessed or shared
voting or investment power with respect to them. The officers and directors of
the Global Income Fund, in the aggregate, own less than 1% of the outstanding
shares.
FINANCIAL STATEMENTS
The annual report for the fiscal year ended December 31, 1998 and the
unaudited semi-annual report for the fiscal period ended June 30, 1999, which
either accompany this statement of additional information or have previously
been provided to you, are incorporated herein by reference with respect to all
information other than the information set forth in the letter to shareholders
included therein. The Global Income Fund will furnish, without charge, a copy of
these reports upon request to Shareholder Relations at Credit Suisse Asset
Management, One Citicorp Center, 153 East 53rd Street, New York, New York 10022,
(800) 293-1232.
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PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
1. FINANCIAL STATEMENTS
Contained in Part A:
(a) Financial Highlights
Incorporated in Part B by reference to Registrant's December 31, 1998
annual report:
(1) Portfolio of Investments as of December 31, 1998
(2) Statement of Assets and Liabilities as of December 31, 1998
(3) Statement of Operations for the year ended December 31, 1998
(4) Statements of Changes in Net Assets for the years ended December
31, 1998 and December 31, 1997
(5) Notes to Financial Statements
Incorporated in Part B by reference to Registrant's June 30, 1999
semi-annual report:
(1) Portfolio of Investments as of June 30, 1999
(2) Statement of Assets and Liabilities as of June 30, 1999
(3) Statement of Operations for the fiscal period ended June 30, 1999
(4) Statement of Changes in Net Assets for the fiscal period ended
June 30, 1999
(5) Notes to Financial Statements
2. EXHIBITS
(a) Articles of Incorporation of the Registrant, as amended*
(b) By-Laws of the Registrant*
(c) Not applicable
(d) (1) Specimen Certificate for Shares of Common Stock of the Registrant
(2) Form of Subscription Certificate
(3) Form of Notice of Guaranteed Delivery
(4) Form of DTC Participant Over-Subscription Certificate
(5) Form of Nominee Holder Over-Subscription Certificate
(6) Form of Beneficial Listing
(7) Subscription Agent Agreement between the Registrant and
BankBoston, N.A. dated July 27, 1999*
(e) InvestLink-SM-Program*
(f) Not Applicable
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(g) Investment Advisory Agreement between the Registrant and BEA
Associates (now Credit Suisse Asset Management) dated June 13, 1995*
(h) (1) Form of Dealer Manager Agreement between the Registrant, Credit
Suisse Asset Management and Salomon Smith Barney, Inc.
(2) Form of Soliciting Dealer Agreement
(i) Not Applicable
(j) Custody Agreement between the Registrant and Brown Brothers Harriman
& Co. dated January 29, 1999*
(k) (1)Registrar, Transfer Agency and Service Agreement between the
Registrant and BankBoston, N.A. dated October 26, 1998*
(2)Administrative and Accounting Agency Agreement between the
Registrant and Brown Brothers Harriman & Co. dated February 27,
1999*
(l) (1) Opinion and Consent of Willkie Farr & Gallagher
(2) Opinion of Venable, Baetjer and Howard, LLP
(m) Not Applicable
(n) Consent of PricewaterhouseCoopers LLP
(o) Not Applicable
(p) Not Applicable
(q) Not Applicable
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* Previously filed.
ITEM 25. MARKETING ARRANGEMENTS
Not Applicable
ITEM 26. OTHER EXPENSES OF ISSUANCE, DISTRIBUTION AND ORGANIZATION
<TABLE>
<S> <C>
Registration Fees......................................................... $ 9,000
New York Stock Exchange listing fees...................................... 12,400
NASD fees................................................................. 4,000
Printing (other than stock certificates).................................. 100,000
Fees and Expenses of qualification under state securities laws (including
fees of counsel)........................................................ 5,000
Legal fees and expenses................................................... 100,000
Dealer Manager's expenses................................................. 100,000
Accounting fees and expenses.............................................. 20,000
Information Agent's fees and expenses..................................... 30,000
Subscription Agent's fees and expenses.................................... 25,000
Postage................................................................... 25,000
Miscellaneous expenses.................................................... 10,600
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Total................................................................. $ 441,000
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</TABLE>
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ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is not controlled by or under common control with any person and
has no subsidiaries
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
1,123 as of August 31, 1999
ITEM 29. INDEMNIFICATION
Section 2-418 of the Corporation Law of the State of Maryland gives
Registrant the power to indemnify the directors and officers. Section 2-418
provides in pertinent part:
(B)(1) A corporation may indemnify any director made a party to any proceeding
by reason of service in that capacity unless it is proved that:
(I) The act or omission of the director was material to the cause of
action adjudicated in the proceeding; and
(1) Was committed in bad faith; or
(2) Was the result of active and deliberate dishonesty; or
(II) The director actually received an improper personal benefit in
money, property or services; or
(III) In the case of any criminal proceeding, the director had reasonable
cause to believe that the act or omission was unlawful.
(2)(I) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(II) However, if the proceeding was one by or in the right of the
corporation, indemnification may be made only against reasonable expenses
and may not be made in respect of any proceeding in which the director shall
have been adjudged to be liable to the corporation.
(3)(I) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(II) The termination of any proceeding by conviction, or a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the director did not meet
that standard of conduct.
(C) A director may not be indemnified under subsection (B) of this section
in respect of any proceeding charging improper personal benefit to the director,
whether or not involving action in the director's official capacity, in which
the director was adjudged to be liable on the basis that personal benefit was
improperly received.
(D) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise, in the
defense of any proceeding referred to in subsection (B) of this section shall be
indemnified against reasonable expenses incurred by the director in connection
with the proceeding.
(2) A court of appropriate jurisdiction upon application of a director and
such notice as the court shall require, may order indemnification in the
following circumstances:
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(I) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses in
securing such reimbursement; or
(II) If it determines that the director is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances, whether or not
the director has met the standards of conduct set forth in Subsection (B) of
this section or has been adjudged liable under the circumstances described
in subsection (c) of this section, the court may order such indemnification
as the court shall deem proper. However, indemnification with respect to any
proceeding by or in the right of the corporation or in which liability shall
have been adjudged in the circumstances described in subsection (c) shall be
limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in which the
proceeding involving the director's liability took place.
(K)(1) A corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee, or agent of the corporation,
or who, while a director, officer, employee, or agent of the corporation, is or
was serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise, or employee benefit plan
against any liability asserted against and incurred by such person in any such
capacity or arising out of such person's position, whether or not the
corporation would have the power to indemnify against liability under the
provisions of this section.
(2) A corporation may provide similar protection, including a trust Fund,
letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a subsidiary or
an affiliate of the corporation.
In addition, Sections 3, 4, 5 and 6 of Article VIII of the Global Income
Fund's Articles of incorporation provide that:
Section 3. The Corporation shall indemnify to the fullest extent
permitted by law (including the Investment Company Act of 1940) as currently
in effect or as the same may hereafter be amended, any person made or
threatened to be made a party to any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person or such person's testator or intestate is or was a director or
officer of the Corporation or serves or served at the request of the
Corporation any other enterprise as a director or officer. To the fullest
extent permitted by law (including the Investment Company Act of 1940) as
currently in effect or as the same may hereafter be amended, expenses
incurred by any such person in defending any such action, suit or proceeding
shall be paid or reimbursed by the Corporation promptly upon receipt by it
of an undertaking of such person to repay such expenses if it shall
ultimately be determined that such person is not entitled to be indemnified
by the Corporation. The rights provided to any person by this Section of
this Article shall be enforceable against the Corporation by such person who
shall be presumed to have relied upon it in serving or continuing to serve
as director or officer as provided above. No amendment of this Section of
this Article shall impair the rights of any person arising at any time with
respect to events occurring prior to such amendment. For purposes of this
Section of this Article, the term "Corporation" shall include any
predecessor of the Corporation and any constituent corporation (including
any constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include any
corporation, partnership, joint venture, trust or employee benefit plan;
service "at the request of the Corporation" shall include service as a
director or officer of the Corporation which imposes duties on, or involves
services by, such director or officer with respect to an employee benefit
plan, its participants or beneficiaries; any excise taxes assessed on a
person with respect to an employee benefit plan shall be deemed to be
indemnifiable expenses and action by a
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person with respect to any employee benefit plan which such person
reasonably believes to be in the interest of the participants and
beneficiaries of such plan shall be deemed to be action not opposed to the
best interests of the Corporation.
Section 4. Nothing in this Article protects or purports to protect, any
director or officer against any liability to the Corporation or its security
holders to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
Section 5. A director or officer of the Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director or officer, except to the extent such exemption
from liability or limitation thereof is not permitted by law (including the
Investment Company Act of 1940) as currently in effect or as the same may
hereafter be amended.
No amendment, modification or repeal of this Section of this Article
shall adversely affect any right or protection of a director or officer that
exists at the time of such amendment, modification or repeal.
Section 6. Each section or portion thereof of this Article shall be
deemed severable from the remainder, and the invalidity of any such section
or portion shall not affect the validity of the remainder of this Article.
No amendment, modification or repeal of this Article shall adversely affect
any right or protection of a director or officer that exists at the time of such
amendment, modification or repeal.
The Global Income Fund's By-laws provide that the Fund shall indemnify its
directors and officers against judgments, fines, settlements and expenses to the
fullest extent authorized and in the manner permitted, by applicable federal and
state law and the Fund's Articles of incorporation.
The Fund has purchased insurance insuring its officers and directors against
certain liabilities incurred in their capacities as such, and insuring the
Global Income Fund against any payments which it is obligated to make to such
persons under the foregoing indemnification provisions.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Global Income Fund pursuant to the provisions described under Item 29 above, or
otherwise, the Global Income Fund has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Global Income Fund of expenses
incurred or paid by a director, officer or controlling person of the Global
Income Fund in the successful defense of any action, suit or proceeding) is
asserted against the Global Income Fund by such director, officer or controlling
person in connection with the securities being registered, the Global Income
Fund will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Registrant is fulfilling the requirements of this Item 30 to provide a list
of the officers and directors of its investment adviser together with
information as to any other business, profession, vocation or employment of a
substantial nature engaged in by that entity or those of its officers and
directors during the past two years, by incorporating by reference the
information contained in the Form ADV filed with the SEC pursuant to the
Investment Advisers Act of 1940 by Credit Suisse Asset Management (SEC File
No. 801-37170).
II-5
<PAGE>
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
c/o Credit Suisse Asset Management
One Citicorp Center, 57th Floor
153 East 53rd Street
New York, NY 10022
(Registrant's Articles of Incorporation and By-Laws)
Credit Suisse Asset Management
One Citicorp Center, 57th Floor
153 East 53rd Street
New York, NY 10022
(with respect to its services as investment adviser)
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
(with respect to its services as Administrator)
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
(with respect to its services as Custodian for the Fund's assets)
BankBoston, N.A.
P.O. Box 1865
Mailstop 45-02-62
Boston, MA 02105-1865
(with respect to its services as dividend-paying agent, transfer agent and
registrar)
ITEM 32. MANAGEMENT SERVICES
Other than the Administrative and Accounting Agency Agreement with Brown
Brothers Harriman & Co. which has been filed as Exhibit (k)(2) and described in
the prospectus contained in Part A, the Registrant is not a party to any
management-related service contract.
ITEM 33. UNDERTAKINGS
(a) The Fund undertakes to suspend offering of the shares covered hereby
until it amends its prospectus contained herein if (1) subsequent to the
effective date of this Registration Statement, its net asset value per share
declines more than 10 percent from its net asset value per share as of the
effective date of this Registration Statement, or (2) its net asset value
increases to an amount greater than its net proceeds as stated in the prospectus
contained herein.
(b) The Registrant hereby undertakes to send by, first class mail or other
means designed to ensure equally prompt delivery, within two business days of
receipt of a written or oral request, any statement of additional information.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
the Registration Statement on Form N-2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and the State
of New York on the 23rd day of September, 1999.
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC
GLOBAL INCOME FUND, INC.
By: /s/ MICHAEL A. PIGNATARO
-----------------------------------------
Michael A. Pignataro
Vice President, Chief Financial Officer
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on September 23, 1999 by
the following persons in the capacities indicated:
<TABLE>
<C> <S>
*
- --------------------------------- Director and Chairman of the Board
William W. Priest
*
- --------------------------------- President and Chief Investment Officer
Richard J. Lindquist
/s/ MICHAEL A. PIGNATARO
- --------------------------------- Vice President, Chief Financial Officer and Secretary
Michael A. Pignataro
*
- --------------------------------- Director
Enrique R. Arzac
*
- --------------------------------- Director
Lawrence J. Fox
*
- --------------------------------- Director
James S. Pasman, Jr.
* /s/ MICHAEL A. PIGNATARO
- ---------------------------------
Michael A. Pignataro
ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NUMBER EXHIBITS
<S> <C>
(d)(1) Specimen Certificate for Shares of Common Stock of the Registrant
(2) Form of Subscription Certificate
(3) Notice of Guaranteed Delivery
(4) Form of DTC Participant Over-Subscription Certificate
(5) Form of Nominee Holder Over-Subscription Certificate
(6) Form of Beneficial Listing
(h)(1) Form of Dealer Manager Agreement among the Registrant, Credit Suisse Asset
Management and Salomon Smith Barney, Inc.
(2) Form of Soliciting Dealer Agreement
(l)(1) Opinion and Consent of Willkie Farr & Gallagher
(2) Opinion of Venable, Baetjer and Howard, LLP
(n) Consent of PricewaterhouseCoopers LLP
</TABLE>
<PAGE>
COMMON STOCK COMMON STOCK
[LOGO] SHARES
INCORPORATED UNDER THE LAWS [SEE REVERSE SIDE
OF THE STATE OF MARYLAND FOR CERTAIN
DEFINITIONS]
[CUSIP054916 10 1]
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $.001 PER
SHARE OF THE COMMON STOCK OF CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL
INCOME FUND, INC., TRANSFERABLE ON THE BOOKS OF SAID CORPORATION IN PERSON OR BY
DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.
THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT
AND REGISTERED BY THE REGISTRAR.
IN WITNESS WHEREOF, CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL
INCOME FUND, INC. HAS CAUSED ITS CORPORATE SEAL TO BE HERETO AFFIXED AND THIS
CERTIFICATE TO BE EXECUTED IN ITS NAME AND BEHALF BY ITS DULY AUTHORIZED
OFFICERS.
DATED:
COUNTERSIGNED AND REGISTERED:
BANKBOSTON, N.A.
TRANSFER AGENT
AND REGISTRAR
[BY]
AUTHORIZED OFFICER SECRETARY CHAIRMAN
[CORPORATE]
[ SEAL ]
[CERTIFICATE OF STOCK]
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR
DESTROYED THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE
ISSUANCE OF A REPLACEMENT CERTIFICATE.
------------
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT -- _______ Custodian _______
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of (Cust) (Minor)
survivorship and not as tenants in common Under Uniform Gifts to Minors
Act _________________________
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, _________, hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
/ /
..........................................
(PLEASE PRINT OR TYPEWRITE NAME AND
ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
..........................................
..........................................
______________________________________ shares
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
______________________________________ Attorney
TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH
FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED _______________
...............................................................................
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OF ENLARGEMENT OR ANY CHANGE WHATEVER.
OR
SIGNATURE(S) GUARANTEED
BY __________________________________________
THE SIGNATURES SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 99.d(2)
FORM OF SUBSCRIPTION CERTIFICATE
THIS OFFER EXPIRES AT 5:00 PM. NEW YORK CITY TIME ON OCTOBER 22, 1999*
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
SUBSCRIPTION RIGHTS FOR COMMON STOCK
SUBSCRIPTION CERTIFICATE
Dear Shareholder:
As the registered owner of this Subscription Certificate, you are entitled
to exercise the rights issued to you as of September 27, 1999, the record date
for the Global Income Fund's rights offering, to subscribe for the number of
shares of common stock of the Global Income Fund shown on this Certificate
pursuant to the primary subscription upon the terms and conditions and at the
subscription price for each share of common stock as specified in the Global
Income Fund's Prospectus dated September 24, 1999. The terms and conditions of
the rights offering set forth in the Prospectus are incorporated herein by
reference. In accordance with the over-subscription privilege described in the
Prospectus, you are entitled to subscribe for additional shares if shares
remaining after exercise of rights pursuant to primary subscription are
available and you have fully exercised your primary subscription rights. If
there are not sufficient shares remaining to satisfy all over-subscriptions, the
available shares will be allocated among you and the other shareholders who
oversubscribe generally in proportion to the number of shares you own on the
record date. As described in the Prospectus, the Global Income Fund may in its
discretion issue up to an additional 25% of the shares available pursuant to the
rights offering to satisfy over-subscriptions.
SAMPLE CALCULATION
- --------------------------------------------------------------------------------
FULL PRIMARY SUBSCRIPTION ENTITLEMENT
(one share for every three Rights)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
No. of whole shares 33 DIVIDED BY 3 = 33 new shares
owned on the Record ------------------------- ---------------
Date 100 DIVIDED BY 3 (equals no. of Rights (ignore
= issued) fractions)
</TABLE>
- --------------------------------------------------------------------------------
METHOD OF EXERCISE OF RIGHTS
IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST EITHER (i) COMPLETE THE SECTIONS
ON THE BACK OF THIS SUBSCRIPTION CERTIFICATE AND RETURN IT TOGETHER WITH
PAYMENT, OR (ii) PRESENT A PROPERLY COMPLETED NOTICE OF GUARANTEED DELIVERY TO
THE SUBSCRIPTION AGENT, BANKBOSTON, BEFORE 5:00 P.M. ON THE EXPIRATION DATE.*
<TABLE>
<S> <C>
BY FIRST CLASS MAIL BY HAND
Securities Transfer & Reporting Services, Inc.
c/o EquiServe
100 William Street Galleria
New York, NY 10038
EquiServe
Corporate Reorganization
P.O. Box 9573
Boston, MA 02205-9573
<CAPTION>
BY FIRST CLASS MAIL BY OVERNIGHT, CERTIFIED OR EXPRESS MAIL
<S> <C>
EquiServe EquiServe
Corporate Reorganization Corporate Reorganization
P.O. Box 9573 40 Campanelli Drive
Boston, MA 02205-9573 Braintree, MA 02184
</TABLE>
Full payment of the estimated subscription price of $8.47 per share for all
shares subscribed for pursuant to both the primary subscription and
over-subscription privilege must accompany this Subscription Certificate and
must be made payable in United States dollars by money order or check drawn on a
bank located in the United States payable to CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC. Alternatively, if a Notice of Guaranteed
Delivery is used, a properly completed Subscription Certificate, together with
payment in full, as described above, must be received by BankBoston by no later
than October 27, 1999.* See pages 3-4 and 13 of the Prospectus.
No later than November 3, 1999 BankBoston will send you a confirmation (or,
if you own your shares through Cede or any other depository or nominee, to Cede
or such depository or nominee), showing (i) the number of shares acquired
pursuant to the primary subscription, (ii) the number of shares, if any,
acquired pursuant to the over-subscription privilege, (iii) the per share and
total purchase price for the shares, and (iv) any additional amount payable by
you or any excess to be refunded to you. You will not receive any other evidence
of title unless you have requested a stock certificate pursuant to this
certificate. (See Item D on reverse) Shares subscribed for pursuant to the
primary subscription and over-subscription privilege will be evidenced by
book-entry registration only. Any refund in connection with your subscription
will be delivered as soon as practicable after October 22, 1999.*
THIS SUBSCRIPTION RIGHT IS NON-TRANSFERABLE IF YOU DO NOT EXERCISE YOUR RIGHTS
BEFORE THE CONCLUSION OF THE OFFER, YOUR RIGHTS WILL EXPIRE WITHOUT VALUE
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC
GLOBAL INCOME FUND, INC.
By: /s/ Richard J. Lindquist
Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT OFFICER
- ----------------------------------------
* Unless the rights offering is extended.
<PAGE>
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY
SECTION 1: DETAILS OF SUBSCRIPTION:
IF YOU WISH TO SUBSCRIBE FOR YOUR FULL ENTITLEMENT:
<TABLE>
<S> <C> <C>
A: I apply for ALL of my entitlement of new shares pursuant to the
primary subscription X $8.47
(no. of new shares) (Estimated
Subscription
Price)
B: I apply for new shares pursuant to the over-subscription privilege+ X $8.47
(no. of additional shares) (Estimated
Subscription
Price)
AMOUNT ENCLOSED $
(make check payable to Credit Suisse Asset Management
Strategic Global Income Fund, Inc.)
<CAPTION>
A: I apply for ALL of my entitlement of new shares pursuant to the
(amount required to
be paid)
B: I apply for new shares pursuant to the over-subscription privilege+ * = $
(amount required to
be paid)
<CAPTION>
primary subscription * = $
</TABLE>
+ YOU CAN ONLY OVER-SUBSCRIBE IF YOU HAVE FULLY EXERCISED YOUR PRIMARY
SUBSCRIPTION RIGHTS.
IF YOU DO NOT WISH TO APPLY FOR YOUR FULL ENTITLEMENT:
C. I apply for
- ------------------------------------------------ X $8.47* = $___________________
(no. of new shares) (AMOUNT ENCLOSED)
D. I wish to receive stock certificates for the shares I have applied
for. / /
(Please check)
SECTION 2: TO SUBSCRIBE:
I acknowledge that I have received the Prospectus for the rights offering,
and I hereby irrevocably subscribe for the number of new shares indicated above
on the terms and conditions set forth in the Prospectus. I UNDERSTAND AND AGREE
THAT I WILL BE OBLIGATED TO PAY ANY ADDITIONAL AMOUNT TO THE FUND IF THE
SUBSCRIPTION PRICE AS DETERMINED ON THE PRICING DATE IS IN EXCESS OF THE $8.47
ESTIMATED SUBSCRIPTION PRICE PER SHARE.
I hereby agree that if I fail to pay in full for the shares for which I have
subscribed, the Fund may exercise any of the remedies provided for in the
Prospectus.
Signature of Subscriber(s)______________________________________________________
____________________________________________________________________
Please give your telephone # ( )_______________________________________________
If you wish to have your confirmation and refund check (if any) delivered to
an address other than that listed on this Certificate you must have your
signature guaranteed by a member of the New York Stock Exchange or a bank or
trust company. Please provide the delivery address below and note if it is a
permanent change.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 3: DESIGNATION OF BROKER-DEALER:
The following broker-dealer is hereby designated as having been instrumental
in the exercise of the Subscription Rights:
FIRM: __________________________________________________________________________
REPRESENTATIVE NAME: ___________________________________________________________
REPRESENTATIVE NUMBER: _________________________________________________________
* NOTE: $8.47 per share is an estimated price only. The final subscription price
will be determined on October 22, 1999, the pricing date, (which is also the
date when your rights will expire), and could be higher or lower depending on
changes in the net asset value and share price of the common stock.
<PAGE>
EXHIBIT 99.d (3)
NOTICE OF GUARANTEED DELIVERY FOR SHARES OF COMMON
STOCK OF CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
SUBSCRIBED FOR PURSUANT TO THE PRIMARY SUBSCRIPTION
AND THE OVER-SUBSCRIPTION PRIVILEGE
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC. RIGHTS
OFFERING
As set forth in the Global Income Fund's Prospectus dated September 24, 1999
under "The Offer-Payment for Shares," this form or one substantially equivalent
hereto may be used as a means of effecting subscription and payment for all
shares of the Global Income Fund common stock subscribed for by exercise of
rights pursuant to the primary subscription and the over-subscription privilege.
Such form may be delivered by hand or sent by facsimile transmission, overnight
courier or mail to BankBoston, N.A., the subscription agent, and must be
received prior to 5:00 p.m. New York City time on October 22, 1999.* The terms
and conditions of the rights offering set forth in the Prospectus are
incorporated by reference herein. Capitalized terms not defined here have the
meanings attributed to them in the Prospectus.
THE SUBSCRIPTION AGENT IS:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
BY FIRST CLASS MAIL BY HAND BY OVERNIGHT, CERTIFIED OR
EXPRESS MAIL:
EquiServe Securities Transfer & EquiServe
Corporate Reorganization Reporting Services, Inc. Corporate Reorganization
P.O. Box 9573 c/o EquiServe 40 Campanelli Drive
Boston, MA 02205-9573 100 William Street Galleria Braintree, MA 02184
New York, NY 10038
</TABLE>
BY FACSIMILE (TELECOPY):
(781) 575-4826, with the original Subscription Certificate
to be sent by one of the three methods above.
Confirm facsimile by telephone at (781) 575-4816.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A TELECOPY OR FACSIMILE NUMBER, OTHER THAN AS SET FORTH
ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
The New York Stock Exchange member firm or bank or trust company which
completes this form must communicate the guarantee and the number of shares
subscribed for under both the primary subscription and the over-subscription
privilege to BankBoston and must deliver this Notice of Guaranteed Delivery
guaranteeing delivery of (i) payment in full for all subscribed shares and (ii)
a properly completed and executed Subscription Certificate to BankBoston prior
to 5:00 p.m., New York City time, on October 22, 1999.* The Subscription
Certificate and full payment must then be delivered by the close of business on
October 27, 1999* to BankBoston. Failure to do so will result in a forfeiture of
the rights.
(CONTINUED ON OTHER SIDE)
- -----------------------------
* Unless extended by the Global Income Fund.
<PAGE>
GUARANTEE
The undersigned, a member firm of the New York Stock Exchange or a bank or
trust company guarantees delivery of payment to BankBoston by the close of
business (5:00 p.m., New York City time) on October 27, 1999 (unless extended)
of (i) a properly completed and executed Subscription Certificate and (ii)
payment of the full subscription price for shares subscribed for on primary
subscription and pursuant to the over-subscription privilege, if applicable, as
subscription for such shares is indicated herein or in the Subscription
Certificate.
Number of primary subscription
shares for which you are
guaranteeing delivery
of rights and payment:
- ---------------------------------------------------
Number of over-subscription
shares for which you are
guaranteeing delivery of payment:
- ---------------------------------------------------
Number of rights to be delivered:
- ---------------------------------------------------
Total subscription price payment to
be delivered:
- ---------------------------------------------------
Method of delivery of rights (circle one) A. through The Depository Trust
Company ("DTC")*
B. direct to BankBoston
Please note that if you are guaranteeing for over-subscription shares, and
are a DTC participant, you must also execute and forward to BankBoston, a
Nominee Holder Over-Subscription Certification.
<TABLE>
<S> <C>
- --------------------------------------------- ---------------------------------------------
Name of Firm Authorized Signature
- --------------------------------------------- ---------------------------------------------
Address Title
- --------------------------------------------- ---------------------------------------------
Zip Code Name (Please Type or Print)
- ---------------------------------------------
Name of Registered Holder (If Applicable)
- --------------------------------------------- ---------------------------------------------
Telephone Number Date
</TABLE>
* IF THE RIGHTS ARE TO BE DELIVERED THROUGH DTC, A REPRESENTATIVE OF BANKBOSTON
WILL PHONE YOU WITH A PROTECT IDENTIFICATION NUMBER, WHICH NEEDS TO BE
COMMUNICATED BY YOU TO DTC.
2
<PAGE>
EXHIBIT 99.d (4)
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
RIGHTS OFFERING
DTC PARTICIPANT OVER-SUBSCRIPTION CERTIFICATE
THIS FORM IS TO BE USED ONLY BY THE DEPOSITORY TRUST COMPANY PARTICIPANTS TO
EXERCISE THE OVER-SUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO
WHICH THE PRIMARY SUBSCRIPTION WAS EXERCISED AND DELIVERED THROUGH THE
FACILITIES OF THE DEPOSITORY TRUST COMPANY. ALL OTHER EXERCISES OF
OVER-SUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF THE
SUBSCRIPTION CERTIFICATE.
------------------------
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE GLOBAL
INCOME FUND'S PROSPECTUS DATED SEPTEMBER , 1999 AND ARE INCORPORATED HEREIN BY
REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE
INFORMATION AGENT AND THE SUBSCRIPTION AGENT.
------------------------
VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL OR WITH
A PROPERLY COMPLETED NOTICE OF GUARANTEED DELIVERY BY 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 22, 1999, UNLESS EXTENDED.
------------------------
1. The undersigned hereby certifies to the Global Income Fund and
BankBoston that it is a participant in The Depository Trust Company ("DTC") and
that it has either:
(a) exercised all of its rights under the primary subscription and
delivered these exercised rights to BankBoston by way of transfer to its DTC
account or
(b) delivered to BankBoston a Notice of Guaranteed Delivery relating to the
exercise of primary subscription rights and will deliver these rights to
BankBoston by way of transfer to its DTC account.
2. The undersigned hereby certifies to the Global Income Fund and Bank
Boston that it owned shares of common stock on September 27, 1999, the ("record
date").
3. The undersigned hereby exercises the over-subscription privilege to
purchase available shares of common stock and certifies to the Global Income
Fund and BankBoston that it is exercising the over-subscription privilege on
behalf of the account or accounts of persons (which may include the undersigned)
that have exercised all primary subscription rights.
4. The undersigned understands that:
(a) the BankBoston must receive payment of the estimated subscription price
of $8.47 for each share of common stock subscribed for under the
over-subscription privilege before 5:00 p.m., New York City time, on
October 22, 1999 (unless extended) or
(b) if a Notice of Guaranteed Delivery is used, payment in full must be
made by the close of business on October 27, 1999.
5. The undersigned understands that $8.47 is an estimated price only. The
subscription price will be determined on October 22, 1999, the pricing date
(unless extended), and could be higher or lower depending on the movement in net
asset value and share price of the Global Income Fund's common stock. Payment of
any additional amounts due must be made by November 17, 1999 (unless the rights
offering is extended). The undersigned represents that this payment, in the
aggregate amount of $ either
(check appropriate box):
/ / has been or is being delivered to BankBoston under the Notice of
Guaranteed Delivery
or
/ / is being delivered to BankBoston herewith
or
/ / has been delivered separately to BankBoston; and, if funds are not
delivered under a Notice of Guaranteed Delivery, is or was delivered in
the following manner (check appropriate box and complete the following
information):
(CONTINUED ON OTHER SIDE)
<PAGE>
/ / uncertified check
/ / certified check
/ / bank draft
...............................................................................
Primary Subscription Confirmation Number
...............................................................................
DTC Participant Number
...............................................................................
Name of DTC Participant
Registration into which shares of common stock, interest and/or refund checks
should be issued:
Name: .................................................................
.................................................................
Address: ...............................................................
.................................................................
Certified TIN: .................................................................
By:.............................................................................
Name:
Title:
Contact Name: ..................................................................
Phone Number: ..................................................................
Date: ...................................................................., 1999
PLEASE ATTACH A BENEFICIAL OWNER LISTING CONTAINING THE RECORD DATE POSITION OF
RIGHTS OWNED, THE NUMBER OF PRIMARY SHARES SUBSCRIBED AND THE NUMBER OF OVER-
SUBSCRIPTION SHARES REQUESTED BY EACH OWNER.
2
<PAGE>
EXHIBIT 99.d(5)
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
RIGHTS OFFERING
NOMINEE HOLDER OVER-SUBSCRIPTION CERTIFICATION
PLEASE COMPLETE ALL APPLICABLE INFORMATION
<TABLE>
<S> <C>
BY FIRST CLASS MAIL BY OVERNIGHT, CERTIFIED OR EXPRESS MAIL:
EquiServe EquiServe
Corporate Reorganization Corporate Reorganization
P. O. Box 9573 40 Campanelli Drive
Boston, MA 02205-9573 Braintree, MA 02184
</TABLE>
BY HAND
Securities Transfer & Reporting Services, Inc.
c/o EquiServe
100 William Street Galleria
New York, NY 10038
THIS FORM IS TO BE USED ONLY BY NOMINEE HOLDERS TO EXERCISE THE
OVER-SUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO WHICH THE
PRIMARY SUBSCRIPTION WAS EXERCISED IN FULL AND DELIVERED THROUGH THE FACILITIES
OF A COMMON DEPOSITORY. ALL OTHER EXERCISES OF OVER-SUBSCRIPTION PRIVILEGES MUST
BE EFFECTED BY THE DELIVERY OF THE SUBSCRIPTION CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE FUND'S
PROSPECTUS DATED SEPTEMBER 24, 1999 (THE "PROSPECTUS") AND ARE INCORPORATED
HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM
THE INFORMATION AGENT AND THE SUBSCRIPTION AGENT.
VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL OR WITH
A PROPERLY COMPLETED NOTICE OF GUARANTEED DELIVERY BY 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 22, 1999 (THE "EXPIRATION DATE"), UNLESS EXTENDED BY THE FUND.
1. The undersigned hereby certifies to the Subscription Agent that it is a
participant in [Name of Depository] (the "Depository") and that it has either
(a) exercised all of its Rights under the Primary Subscription (the
"Primary Subscription Rights") and delivered these exercised Rights to
the Subscription Agent by way of transfer to the Fund's Depository
Account or
(b) delivered to the Subscription Agent a Notice of Guaranteed Delivery
relating to the exercise of Primary Subscription Rights and will deliver
these Rights to the Subscription Agent by way of transfer to the Fund's
Depository Account.
2. The undersigned hereby exercises the Over-Subscription Privilege to
purchase available shares of Common Stock and certifies to the Subscription
Agent that it is exercising the Over-Subscription Privilege on behalf of the
account or accounts of persons (which may include the undersigned) that have
exercised all Primary Subscription Rights.
3. The undersigned understands that:
(a) the Subscription Agent must receive payment of the Estimated
Subscription Price of $8.47 for each share of Common Stock subscribed for
under the Over-Subscription Privilege before 5:00 p.m., New York City
time, on the Expiration Date (unless extended) or
(b) if a Notice of Guaranteed Delivery is used, the Subscription Agent must
receive payment in full before the close of business on the third
business day after the Expiration Date.
<PAGE>
4. The undersigned represents that payment, in the aggregate amount of
$ either
(check appropriate box):
/ / has been or is being delivered to the Subscription Agent under the Notice
of Guaranteed Delivery referred to above
or
/ / is being delivered to the Subscription Agent herewith
or
/ / has been delivered separately to the Subscription Agent; and, if funds are
not delivered under a Notice of Guaranteed Delivery, is or was delivered in
the following manner (check appropriate box and complete the following
information):
/ / uncertified check
/ / certified check
/ / bank draft
- ------------------------------------------ ----------------------------------
Primary Subscription Name of Nominee Holder
Confirmation Number
- ------------------------------------------ ----------------------------------
Depository Participant Number Address
Contact Name: ____________________________ __________________________________
City State Zip Code
Phone Number: ____________________________ By: ______________________________
Name: __________________________
Dated: , 1999 Title: _________________________
PLEASE ATTACH A BENEFICIAL OWNER LISTING CONTAINING THE RECORD DATE POSITION OF
RIGHTS OWNED, THE NUMBER OF PRIMARY SHARES SUBSCRIBED AND THE NUMBER OF OVER-
SUBSCRIPTION SHARES, IF APPLICABLE, REQUESTED BY EACH SUCH OWNER.
2
<PAGE>
EXHIBIT (D)(6)
BENEFICIAL OWNER LISTING CERTIFICATION
The undersigned, a bank, broker or other nominee holder of Rights ("Rights")
to purchase shares of Common Stock, $0.001 par value ("Common Stock"), of CREDIT
SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, Inc. (the "Fund") pursuant
to the Rights Offering (the "Offer") described and provided for in the Fund's
Prospectus dated September 24, 1999 (the "Prospectus"), hereby certifies to the
Fund and to BankBoston, N.A., as Subscription Agent for such Offer, that for
each numbered line filled in below, the undersigned has exercised, on behalf of
the beneficial owner thereof (which may be the undersigned), the number of
Rights specified on such line pursuant to the Primary Subscription (as defined
in the Prospectus) and such beneficial owner wishes to subscribe for the
purchase of additional shares of Common Stock pursuant to the Over-Subscription
Privilege (as defined in the Prospectus), in the amount set forth in the third
column of such line.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF RIGHTS EXERCISED REQUESTED PURSUANT TO THE
NUMBER OF RECORD DATE SHARES OWNED PURSUANT TO PRIMARY SUBSCRIPTION OVER-SUBSCRIPTION PRIVILEGE
<S> <C> <C>
1) -----------------------------------
-------------------------------------- --------------------------------------
2) -----------------------------------
-------------------------------------- --------------------------------------
3) -----------------------------------
-------------------------------------- --------------------------------------
4) -----------------------------------
-------------------------------------- --------------------------------------
5) -----------------------------------
-------------------------------------- --------------------------------------
6) -----------------------------------
-------------------------------------- --------------------------------------
7) -----------------------------------
-------------------------------------- --------------------------------------
8) -----------------------------------
-------------------------------------- --------------------------------------
9) -----------------------------------
-------------------------------------- --------------------------------------
10) ----------------------------------
-------------------------------------- --------------------------------------
</TABLE>
______________________________________
Name of Nominee Holder
By: __________________________________
Name: _____________________________
Title: ____________________________
Dated: _________________________, 1999
Provide the following information, if
applicable:
______________________________________ Name of Broker: ________________________
Depository Trust Corporation ("DTC")
Participant Number
______________________________________ Address: _______________________________
DTC Primary Subscription
Confirmation Number(s)
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
2,818,047 Shares of Common Stock
Issuable Upon Exercise of Non-Transferable Rights
to Subscribe for Such Shares of Common Stock
DEALER MANAGER AGREEMENT
New York, New York
September 24, 1999
SALOMON SMITH BARNEY, INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Each of Credit Suisse Asset Management Strategic Global Income Fund,
Inc., a Maryland corporation (the "Company"), and Credit Suisse Asset
Management, a Delaware limited liability company (the "Investment Adviser"),
confirms its agreement with and appointment of Salomon Smith Barney, Inc. to act
as dealer manager (the "Dealer Manager") in connection with the issuance by the
Company to the holders of record at the close of business on September 27, 1999,
or such other date as is established as the record date for such purpose (each a
"Holder" and collectively the "Holders"), of 8,454,141 non-transferable rights
entitling such Holders to subscribe for 2,818,047 shares (each a "Share" and
collectively the "Shares") of common stock, par value $0.001 per share (the
"Common Stock"), of the Company (the "Offer"). Pursuant to the terms of the
Offer, the Company is issuing each Holder one non-transferable right (each a
"Right" and collectively the "Rights") for each share of Common Stock held by
such Holder on the record date (the "Record Date") set forth in the Prospectus
(as defined herein). Such Rights entitle Holders to acquire during the
subscription period (the "Subscription Period") set forth in the Prospectus, at
the price (the "Subscription Price") set forth in such Prospectus, one Share for
each three Rights exercised on the terms and conditions set forth in such
Prospectus. No fractional shares will be issued. Any Holder who fully exercises
all Rights initially issued to such Holder will be entitled to subscribe for,
subject to allotment, additional Shares (the "Over-Subscription Privilege").
Pursuant to the Over-Subscription Privilege, the Company may, at its discretion,
increase the number of Shares subject to subscription by up to 25%, or 704,512
Shares, for an aggregate total of 3,522,559 Shares.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form N-2 (File Nos. 333-84153 and
811-5458) and a
<PAGE>
2
related preliminary prospectus and preliminary statement of additional
information for the registration of the Shares under the Securities Act of 1933,
as amended (the "Securities Act"), the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations of the
Commission under the Securities Act and the Investment Company Act (the "Rules
and Regulations"), and has filed such amendments to such registration statement
on Form N-2, if any, and such amended preliminary prospectuses and preliminary
statements of additional information as may have been required to the date
hereof. If the registration statement has not become effective, a further
amendment to such registration statement, including forms of a final prospectus
and final statement of additional information necessary to permit such
registration statement to become effective will promptly be filed by the Company
with the Commission. If the registration statement has become effective and any
prospectus or statement of additional information constituting a part thereof
omits certain information at the time of effectiveness pursuant to Rule 430A of
the Rules and Regulations, a final prospectus and final statement of additional
information containing such omitted information will promptly be filed by the
Company with the Commission in accordance with Rule 497(h) of the Rules and
Regulations. The term "Registration Statement" means the registration statement,
as amended (if applicable), at the time it becomes or became effective,
including financial statements and all exhibits and all documents, if any,
incorporated therein by reference, and any information deemed to be included by
Rule 430A. The term "Prospectus" means the final prospectus and final statement
of additional information in the forms filed with the Commission pursuant to
Rule 497(c), (h) or (j) of the Rules and Regulations, as the case may be, as
from time to time amended or supplemented pursuant to the Securities Act. The
Prospectus and letters to beneficial owners of the shares of Common Stock of the
Company, forms used to exercise rights, any letters from the Company to
securities dealers, commercial banks and other nominees and any newspaper
announcements, press releases and other offering materials and information that
the Company may use or approve or authorize in writing for use in connection
with the Offer are collectively referred to hereinafter as the "Offering
Materials".
1. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) The Company represents and warrants to, and agrees with,
the Dealer Manager as of the date hereof (such date being hereinafter referred
to as the "Representation Date") that:
(i) The Company meets the requirements for use of Form N-2 under
the Securities Act and the Investment Company Act and the Rules and
Regulations. At the time the Registration Statement becomes effective, the
Registration Statement will contain all statements required to be stated
therein in accordance with and will comply in all material respects with
the requirements of the Securities Act, the Investment Company Act and the
Rules and Regulations and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. From
the time the Registration Statement becomes effective through the latest
date that a prospectus is required to be delivered under the Securities
Act, the Prospectus and the other Offering Materials will not contain
<PAGE>
3
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement, Prospectus or other Offering Materials made in
reliance upon and in conformity with information furnished to the Company
in writing by the Dealer Manager expressly for use in the Registration
Statement, Prospectus or other Offering Materials.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, has full power and authority (corporate and other) to conduct
its business as described in the Registration Statement and the
Prospectus, and is duly qualified to do business as a foreign corporation
in each jurisdiction wherein it owns or leases real property or in which
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in a material adverse effect
upon the business, properties, financial position or results of operations
of the Company (a "Material Adverse Effect"). The Company has no
subsidiaries.
(iii) The Company is registered with the Commission under the
Investment Company Act as a closed-end, diversified management investment
company; no order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or threatened by the
Commission; all required action has been taken under the Securities Act
and the Investment Company Act to make the public offering and consummate
the issuance of the Rights and the issuance and sale of the Shares by the
Company upon exercise of the Rights, and the provisions of the Company's
charter and by-laws comply as to form in all material respects with the
requirements of the Investment Company Act.
(iv) PricewaterhouseCoopers LLP, the accountants who certified
the financial statements of the Company set forth or incorporated by
reference in the Registration Statement and the Prospectus, are
independent public accountants as required by the Securities Act, the
Investment Company Act and the Rules and Regulations.
(v) The financial statements of the Company, set forth or
incorporated by reference in the Registration Statement and the Prospectus
present fairly in all material respects the assets and liabilities,
results of operations and changes in net assets of the Company as of the
dates or for the periods indicated in conformity with generally accepted
accounting principles applied on a consistent basis except, in the case of
the financial statements as of June 30, 1999, for customary year-end
adjustments ; and the other financial information relating to the Company
included in the Registration Statement and the Prospectus was prepared on
a basis consistent with such financial statements and the books and
records of the Company.
<PAGE>
4
(vi) The Company has an authorized capitalization as set forth
in the Prospectus; the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable and
conform in all material respects to the description thereof in the
Prospectus under the heading "Common Stock"; the Rights have been duly
authorized by all requisite action on the part of the Company for issuance
pursuant to the Offer; the Shares have been or, with respect to the Shares
to be issued pursuant to the Oversubscription Privilege, will be duly
authorized by all requisite action on the part of the Company for issuance
and sale pursuant to the terms of the Offer and, when issued and delivered
by the Company pursuant to the terms of the Offer against payment of the
consideration set forth in the Prospectus, will be validly issued, fully
paid and non-assessable; the Shares and the Rights conform in all material
respects to all statements relating thereto contained in the Registration
Statement, the Prospectus and the other Offering Materials; and the
issuance of each of the Rights and the Shares is not subject to any
preemptive rights.
(vii) Except as set forth in the Registration Statement and
Prospectus, subsequent to the respective date(s) as of which information
is given in the Registration Statement and the Prospectus, (A) the Company
has not incurred any liabilities or obligations, direct or contingent, or
entered into any transactions, other than in the ordinary course of
business, that are material to the Company, (B) there has not been any
material change in the capital stock or material increase in the
short-term or long-term debt of the Company, or any material adverse
change, or any development involving or which may reasonably be expected
to involve a prospective material adverse change, in the condition
(financial or other), business, prospects, net worth or results of
operations of the Company and (C) there has been no dividends or
distributions paid or, except with respect to (i) a dividend which may be
declared in September to Shareholders of record as of September 27, 1999
and (ii) in the event the Subscription Period is extended, a similar
dividend, consistent with the past dividend practice of the Company, which
may be declared in October to shareholders of record as of a date in
November, declared in respect of the Company's capital stock.
(viii) There is no pending or, to the knowledge of the Company,
threatened or contemplated action, suit or proceeding affecting the
Company or to which the Company is a party before or by any court or
governmental agency, authority or body or any arbitrator, whether foreign
or domestic.
(ix) There are no contracts or other documents of the Company
required to be described in the Registration Statement or the Prospectus,
or to be filed or incorporated by reference as exhibits which are not
described or filed or incorporated by reference therein as permitted by
the Securities Act, the Investment Company Act or the Rules and
Regulations.
(x) Each of this agreement (the "Agreement"), the Subscription
Agent Agreement (the "Subscription Agent Agreement") dated as of July 27,
1999 between the
<PAGE>
5
Company and BankBoston, N.A. (the "Subscription Agent"), the Information
Agent Agreement (the "Information Agent Agreement") dated as of May 19,
1999 between the Company and Georgeson & Company Inc. (the "Information
Agent"), the Advisory Agreement (the "Advisory Agreement") dated as of
June 13, 1995 between the Company and Credit Suisse Asset Management, as
successor to BEA Associates, the Administrative and Accounting Agency
Agreement (the "Administration Agreement") dated as of February 27, 1999
between the Company and Brown Brothers Harriman & Co., the Custody
Agreement (the "Custodian Agreement") dated as of January 29, 1999 between
the Company and Brown Brothers Harriman & Co. and the Registrar, Transfer
Agency and Service Agreement (the "Service Agreement") dated as of October
26, 1998, between the Company and BankBoston, N.A. (the Subscription Agent
Agreement, Information Agent Agreement, the Advisory Agreement, the
Administration Agreement, the Custodian Agreement and the Transfer Agent
Agreement are collectively referred to herein as the "Company Agreements")
has been duly authorized, executed and delivered by the Company; each of
this Agreement and the Company Agreements complies with all applicable
provisions of the Investment Company Act and the Rules and Regulations
thereunder; and, assuming due authorization, execution and delivery by the
other parties thereto, each of this agreement and the Company Agreements
constitutes a legal, valid, binding and enforceable obligation of the
Company, subject to the qualification that the enforceability of the
Company's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights, and to
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and subject to the
qualification that the right to indemnity hereunder and thereunder may be
limited by federal or state securities laws.
(xi) Neither the issuance of the Rights, nor the issuance and sale
of the Shares, nor the performance and consummation by the Company of any
other of the transactions contemplated in this Agreement and the Company
Agreements nor the consummation of the transactions contemplated in the
Registration Statement will (A) result in a breach or violation of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any properties or assets of the Company
under the charter or by-laws of the Company, or the terms and provisions
of any agreement, indenture, mortgage, lease or other instrument to which
the Company is a party or by which it may be bound or to which any of the
property or assets of the Company is subject, or (B) result in any
violation of any order, law, rule or regulation of any court or
governmental agency or body, whether foreign or domestic, having
jurisdiction over the Company or any of its properties.
(xii) No consent, approval, authorization, notification or order
of, or any registration or filing with, any court, regulatory body,
administrative or other governmental agency or body, whether foreign or
domestic, is required for the consummation by the Company of the
transactions contemplated by this Agreement, the Company Agreements or the
Registration Statement, except such as have been obtained,
<PAGE>
6
or if the registration statement filed with respect to the Shares is not
effective under the Securities Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this
Agreement) under the Securities Act, Investment Company Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
state securities laws.
(xiii) The Company owns or possesses all material governmental
licenses, permits, consents, orders, approvals or other authorizations,
whether foreign or domestic, to enable the Company to continue to carry on
its business and to invest in securities as contemplated in the
Prospectus; the Company has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the Company under any such permit, subject in each case to such
qualification as may be set forth in the Registration Statement.
(xiv) The Common Stock has been duly listed on the New York Stock
Exchange and prior to their issuance the Shares will have been duly
approved for listing, subject to official notice of issuance, on the New
York Stock Exchange.
(xv) The Company (A) has not taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
issuance of the Rights or the sale or resale of the Shares, (B) has not
since the filing of the Registration Statement sold, bid for or purchased,
or paid anyone any compensation for soliciting purchases of, shares of
Common Stock of the Company and (C) will not, until the later of the
expiration of the Rights or the completion of the distribution (within the
meaning of Regulation M under the Exchange Act) of the Shares, sell, bid
for or purchase, pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except
for the solicitation of the exercise of Rights and the Over-Subscription
Privilege pursuant to this Agreement); PROVIDED THAT any action authorized
by and taken pursuant to the Company's InvestLink-SM- Program will not be
deemed to be within the terms of this Section 1(a)(xv).
(xvi) The Company intends to direct the investment of the proceeds
of the offering described in the Registration Statement and the Prospectus
in such a manner as to continue to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended ("Subchapter
M of the Code"), and has at all times since its inception qualified and
intends to continue to qualify as a regulated investment company under
Subchapter M of the Code.
(xvii) There are no material restrictions, limitations or
regulations with respect to the ability of the Company to invest its
assets as described in the Prospectus other than as described therein.
<PAGE>
7
(xviii) Neither the filing of the Registration Statement nor the
Offer as contemplated by this Agreement and the Subscription Agency
Agreement gives rise to any rights, other than those which have been
waived or satisfied, for or relating to the registration of any shares of
Common Stock or other securities of the Company.
(xix) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization and with the applicable requirements of the Investment
Company Act and the Rules and Regulations thereunder and the Internal
Revenue Code of 1986, as amended (the "Code"); (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets and to maintain compliance with the books and
records requirements under the Investment Company Act and the Rules and
Regulations thereunder; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xx) The Company, subject to the registration statement having
been declared effective and the filing of the Prospectus under Rule 497
under the Securities Act Rules and Regulations, has taken all required
action under the Securities Act, the Investment Company Act and the Rules
and Regulations to make the public offering and consummate the sale of the
Shares as contemplated by this Agreement.
(xxi) The Company has, after due inquiry, no reason to believe
that the Investment Adviser, the Custodian, or the Transfer Agent have
failed to analyze and address the risk that its computer hardware and
software may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December
31, 1999 (the "Year 2000 Problem") except to the extent that such a
failure would not have a material adverse effect on the Company. The
Company is in compliance with the Commission's staff legal bulletin No. 5
dated January 12, 1998 relating to Year 2000 compliance, as amended to
date.
(xxii) The Company will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of
the Securities Act Rules and Regulations, whichever is applicable or, if
applicable, will timely file the certification permitted by Rule 497(j) of
the Securities Act Rules and Regulations and will advise the Dealer
Manager of the time and manner of such filing.
(xxiii) The Company will use its best efforts to perform all of the
agreements required of it and discharge all conditions to closing as set
forth in this Agreement.
<PAGE>
8
(b) The Investment Adviser represents and warrants to, and
agrees with, the Dealer Manager as of the date hereof that:
(i) The Investment Adviser has been duly organized and is
validly existing as a limited liability company under the laws of the
State of Delaware, has full power and authority to own its properties and
conduct its business as described in the Registration Statement and the
Prospectus, and is duly qualified to do business as a foreign entity in
each jurisdiction wherein it owns or leases real property or in which the
conduct of its business requires such qualification, except where the
failure to be so qualified does not involve a material adverse risk to the
business, properties, financial position or results of operations of the
Investment Adviser or the ability of the Investment Adviser to perform its
obligations under the Advisory Agreement (an "Adviser Material Adverse
Effect").
(ii) The Investment Adviser is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act") and is not prohibited by the Advisers Act or the
Investment Company Act, or the rules and regulations under such Acts, from
acting as an investment adviser for the Company as contemplated in the
Prospectus and the Advisory Agreement. There does not exist to the
knowledge of the Investment Adviser any proceeding or any facts or
circumstances the existence of which is reasonably likely to lead to any
proceeding which might materially adversely affect the registration of the
Investment Adviser with the Commission.
(iii) Each of this Agreement, the Advisory Agreement and any other
Company Agreement to which the Investment Adviser is a party has been duly
authorized, executed and delivered by the Investment Adviser and complies
with all applicable provisions of the Advisers Act, the Investment Company
Act, and the rules and regulations under such Acts, and is, assuming due
authorization, execution and delivery by the other parties thereto, a
legal, valid, binding and enforceable obligation of the Investment
Adviser, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights, and to general principles of
equity (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(iv) Neither the execution, delivery or performance by the
Investment Adviser of its obligations under this Agreement, the Advisory
Agreement or any other Company Agreement to which the Investment Adviser
is a party nor the consummation of the transactions contemplated therein
or in the Registration Statement nor the fulfillment of the terms thereof
will result in a breach or violation of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any properties or assets of the Investment Adviser under the limited
liability company agreement of the Investment Adviser, or the terms and
provisions of any material agreement, indenture, mortgage, lease or other
instrument to which the Investment Adviser is a party or by which it may
be bound or to which any of the property or assets of the Investment
Adviser is subject, nor will such action result in any violation of any
<PAGE>
9
order, law, rule or regulation of any court or governmental agency or
body, whether foreign or domestic, having jurisdiction over the Investment
Adviser or any of its properties.
(v) There is no pending or, to the knowledge of the Investment
Adviser, threatened action, suit or proceeding to which the Investment
Adviser is a party before or by any court or governmental agency,
authority or body or any arbitrator, whether foreign or domestic, which
reasonably might result in a Material Adverse Effect or might materially
and adversely affect the ability of the Investment Adviser to perform its
obligations under the Advisory Agreement.
(vi) No consent, approval, authorization, notification or order
of, or any filing with, any court or governmental agency or body, whether
foreign or domestic, is required for the consummation by the Investment
Adviser of the transactions contemplated by this Agreement.
(vii) The Investment Adviser owns or possesses all material
governmental licenses, permits, consents, orders, approvals or other
authorizations, whether foreign or domestic, to enable the Investment
Adviser to perform its obligations under the Advisory Agreement.
(viii) The Investment Adviser (a) has not taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the issuance of the Rights or the sale or resale of the
Shares, (b) has not since the filing of the Registration Statement sold,
bid for or purchased, or paid anyone any compensation for soliciting
purchases of, shares of Common Stock of the Company and (c) will not,
until the later of the expiration of the Rights or the completion of the
distribution (within the meaning of Regulation M under the Exchange Act)
of the Shares, sell, bid for or purchase, pay or agree to pay any person
any compensation for soliciting another to purchase any other securities
of the Company (except for the solicitation of the exercise of Rights and
the Over-Subscription Privilege pursuant to this Agreement); PROVIDED THAT
any action authorized by and taken pursuant to the Company's
InvestLink-SM- Program will not be deemed to be within the terms of this
Section l(b)(viii).
(ix) The information regarding the Investment Adviser in the
Registration Statement and the Prospectus complies with the requirements
of Form N-2 and does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) Any certificate required by this Agreement that is signed
by any officer of the Company or the Investment Adviser and delivered to the
Dealer Manager or counsel for the Dealer Manager shall be deemed a
representation and warranty by the Company or the
<PAGE>
10
Investment Adviser, as the case may be, to the Dealer Manager, as to the matters
covered thereby.
2. AGREEMENT TO ACT AS DEALER MANAGER.
(a) On the basis of the representations and warranties contained
herein, and subject to the terms and conditions of the Offer:
(i) The Company appoints the Dealer Manager as the exclusive
dealer manager in connection with the Offer and the Dealer Manager accepts
that appointment. The Company also authorizes the Dealer Manager to form
and manage a group of securities dealers (each, a "Soliciting Dealer" and,
collectively, the "Soliciting Group") to solicit the exercise of Rights
pursuant to a Soliciting Dealer Agreement, in the form attached hereto as
Exhibit A. The Dealer Manager represents and warrants that it is a
broker-dealer registered under the Exchange Act.
(ii) The Dealer Manager agrees to (A) solicit, in accordance
with the Securities Act, the Investment Company Act and the Exchange Act
and the rules and regulations thereunder and its customary practice, the
exercise of the Rights, subject to the terms and conditions of this
Agreement, the Subscription Agent Agreement and the procedures described
in the Registration Statement; and (B) form and manage the Soliciting
Group to solicit, in accordance with the Securities Act, the Investment
Company Act and the Exchange Act and the Rules and Regulations thereunder
and its customary practice the exercise of the Rights, subject to the
terms and conditions of this Agreement, the Subscription Agent Agreement
and the procedures described in the Registration Statement. No securities
dealer shall be considered a Soliciting Dealer until it shall have entered
into a Soliciting Dealer Agreement with the Dealer Manager in the form of
Exhibit A hereto.
(iii) The Company agrees to furnish, or cause to be furnished,
to the Dealer Manager, lists, or copies of those lists, showing the names
and addresses of, and number of shares of Common Stock held by, Holders as
of the Record Date, and the Dealer Manager agrees to use such information
only in connection with the Offer.
(b) The Dealer Manager agrees to provide to the Company, in
addition to the services described in paragraph (a) of this Section 2, financial
advisory and marketing services in connection with the Offer. No advisory fee,
other than the fees provided for in Section 3 of this Agreement and the
reimbursement of the Dealer Manager's out-of-pocket expenses as described in
Section 5 of this Agreement, will be payable by the Company to the Dealer
Manager in connection with the financial advisory and marketing services
provided by the Dealer Manager pursuant to this Section 2(b).
(c) The Company and the Dealer Manager agree that the Dealer
Manager is an independent contractor with respect to the solicitation of the
exercise of Rights and the Over-Subscription Privilege and the performance of
financial advisory and marketing services for the
<PAGE>
11
Company contemplated by this Agreement and the Dealer Manager represents and
warrants that it is acting on its own behalf in entering into this Agreement and
performing its obligations hereunder.
(d) In rendering the services contemplated by this Agreement,
the Dealer Manager will not be subject to any liability to the Company, the
Investment Adviser, any of their affiliates or any other person, for any act or
omission on the part of any soliciting broker or dealer or any other person, and
the Dealer Manager will not be liable for acts or omissions in performing its
obligations under this Agreement, except as otherwise set forth in Section 7
hereto and except for any losses, claims, damages, liabilities and expenses that
are finally judicially determined to have resulted primarily from the bad faith,
willful misconduct or gross negligence of the Dealer Manager or by reason of the
reckless disregard of the obligations and duties of the Dealer Manager under
this Agreement.
3. DEALER MANAGER AND SOLICITATION FEES. In full payment for
the financial advisory and marketing services rendered and to be rendered
hereunder by the Dealer Manager, the Company agrees to pay the Dealer Manager a
fee (the "Dealer Manager Fee"), equal to 1.25% of the aggregate Subscription
Price for the Shares issued pursuant to the exercise of Rights and the
Over-Subscription Privilege. The Company also agrees to pay Soliciting Dealers
and the Dealer Manager, in full payment for their soliciting efforts, fees (the
"Solicitation Fees") (such Solicitation Fees paid to the Dealer Manager are in
addition to the Dealer Manager Fee) equal to 2.50% of the Subscription Price per
Share for each Share issued pursuant to the exercise of Rights and the
Over-Subscription Privilege. The Company agrees to pay the Solicitation Fees to
the broker-dealer designated on the applicable portion of the form used by the
Holder to exercise Rights and the Over-Subscription Privilege, and if no
broker-dealer is so designated or a broker-dealer is otherwise not entitled to
receive compensation pursuant to the terms of the Soliciting Dealer Agreement,
then to pay the Dealer Manager the Solicitation Fee for such exercise of Rights
and the Over-Subscription Privilege. Payment to the Dealer Manager by the
Company will be in the form of a wire transfer of same day funds to an account
or accounts identified by the Dealer Manager. Such payment will be made on each
date on which the Company issues Shares. Payment to a Soliciting Dealer will be
made by the Company directly to such Soliciting Dealer by check to an address
identified by such Soliciting Dealer. Such payments shall be made in next day
funds on or before November 22, 1999; PROVIDED, HOWEVER, that if the Expiration
Date as set forth in the Prospectus is extended by any number of days, then such
payment date shall be extended by the same number of days.
4. OTHER AGREEMENTS.
(a) The Company covenants with the Dealer Manager as follows:
(i) The Company will use its best efforts to cause the
Registration Statement to become effective under the Securities Act, and
will advise the Dealer Manager
<PAGE>
12
promptly as to the time at which the Registration Statement and any
amendments thereto (including any post-effective amendment) becomes so
effective.
(ii) The Company will notify the Dealer Manager immediately,
and confirm the notice in writing, (A) of the effectiveness of the
Registration Statement and any amendment thereto (including any
post-effective amendment), (B) of the receipt of any comments from the
Commission, (C) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose, (E) of the suspension
of the qualification of the Shares or the Rights for offering or sale in
any jurisdiction or (F) of the occurrence of any event that necessitates
the making of any change in the Registration Statement or the Prospectus
in order to make any statement therein or omission therefrom not
misleading. The Company will make every reasonable effort to prevent the
issuance of any stop order described in subsection (D) hereunder and, if
any such stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(iii) The Company will give the Dealer Manager notice of its
intention to file any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes
for use by the Dealer Manager in connection with the Offer, which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 497(c) or Rule 497(h) of the Rules
and Regulations), whether pursuant to the Investment Company Act, the
Securities Act, or otherwise, and will furnish the Dealer Manager with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not
file any such amendment or supplement to which the Dealer Manager or
counsel for the Dealer Manager shall reasonably object.
(iv) The Company will, without charge, deliver to the Dealer
Manager, as soon as practicable, the number of copies of the Registration
Statement as originally filed and of each amendment thereto as it may
reasonably request, in each case with the exhibits filed therewith.
(v) The Company will, without charge, furnish to the Dealer
Manager, from time to time during the period when the Prospectus is
required to be delivered under the Securities Act, such number of copies
of the Prospectus (as amended or supplemented) as the Dealer Manager may
reasonably request for the purposes contemplated by the Securities Act or
the Rules and Regulations thereunder. The Company consents to the use of
the Prospectus in accordance with the provisions of the Securities Act and
with the state securities or blue sky laws of the jurisdictions in which
the Shares are offered by the Dealer Manager and by all Soliciting Dealers
in connection with the offering and sale of
<PAGE>
13
the Shares and for such period of time thereafter as the Prospectus is
required by the Securities Act to be delivered in connection therewith.
(vi) If any event shall occur as a result of which it is
necessary, in the judgment of the Company or the reasonable opinion of
counsel for the Dealer Manager, to amend or supplement the Registration
Statement or the Prospectus in order to make the Prospectus not misleading
in the light of the circumstances existing at the time it is delivered to
a Holder, the Company will forthwith amend or supplement the Prospectus by
preparing and filing with the Commission (and furnishing to the Dealer
Manager a reasonable number of copies of) an amendment or amendments of
the Registration Statement or an amendment or amendments of or a
supplement or supplements to, the Prospectus (in form and substance
satisfactory to counsel for the Dealer Manager), at the Company's expense,
which will amend or supplement the Registration Statement or the
Prospectus so that the Prospectus will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances existing at the time the Prospectus is delivered to a
Holder, not misleading; PROVIDED, HOWEVER, that if the Company does not
promptly amend or supplement the Registration Statement or the Prospectus
in form and substance satisfactory to counsel for the Dealer Manager, then
the Dealer Manager may terminate this Agreement pursuant to Section
9(a)(vi) and the Company shall, at the Company's expense, amend or
supplement the Registration Statement or the Prospectus to state the
Dealer Manager has terminated this Agreement with respect to the Offer.
(vii) The Company will endeavor, in cooperation with the Dealer
Manager and its counsel, to assist such counsel to qualify the Rights and
the Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the Dealer
Manager may designate and maintain such qualifications in effect for the
duration of the Offer; PROVIDED, HOWEVER, that the Company will not be
obligated to qualify in any jurisdiction in which the Company would be
required to (x) file any general consent to service of process, (y)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not now so qualified or (z) be subject to
taxation in such jurisdiction. The Company will file such statements and
reports as may be required by the laws of each jurisdiction in which the
Rights and the Shares have been qualified as above provided.
(viii) The Company will make generally available to its security
holders as soon as practicable, but no later than 60 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Rules and Regulations thereunder) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective" date (as defined in said Rule 158) of the
Registration Statement.
<PAGE>
14
(ix) For a period of 180 days from the date of this Agreement,
the Company will not, without the prior consent of the Dealer Manager,
offer or sell, or enter into any agreement to sell, any equity or
equity-related securities of the Company or securities convertible into
such securities, other than the Rights and the Shares or Common Stock
issued pursuant to reinvestment of dividends or distributions in
accordance with the InvestLink-SM- or pursuant to any distribution of
dividends or capital gains payable in Common Stock declared by the Company
or pursuant to a Common Stock split declared by the Company.
(x) The Company will apply the net proceeds from the Offer as
set forth under "Use of Proceeds" in the Prospectus.
(xi) The Company will use its best efforts to cause the Shares
to be duly authorized for listing by the New York Stock Exchange prior to
the time the Shares are issued.
(xii) The Company will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of the
Code.
(xiii) The Company will advise or cause the Subscription Agent
to advise the Dealer Manager and each Soliciting Dealer from day to day
during the period of, and promptly after the termination of, the Offer, as
to the names and addresses of all Holders exercising Rights, the total
number of Rights exercised and the number of Shares, including Shares
requested pursuant to the Over-Subscription Privilege, related thereto by
each Holder during the immediately preceding day, indicating the total
number of Rights verified to be in proper form for exercise, rejected for
exercise and being processed and, for the Dealer Manager and each
Soliciting Dealer, the number of Rights exercised and the number of
Shares, including Shares requested pursuant to the Over-Subscription
Privilege, related thereto on subscription certificates indicating the
Dealer Manager or such Soliciting Dealer, as the case may be, as the
broker-dealer with respect thereto, and as to such other information as
the Dealer Manager may reasonably request; and will notify the Dealer
Manager and each Soliciting Dealer, not later than 5:00 P.M., New York
City time, on the first business day following the expiration date of the
Offer set forth in the Prospectus (the "Expiration Date"), of the total
number of Rights exercised and the number of Shares, including Shares
requested pursuant to the Over-Subscription Privilege, related thereto,
the total number of Rights verified to be in proper form for exercise,
rejected for exercise and being processed and, for the Dealer Manager and
each Soliciting Dealer, the number of Rights exercised and the number of
Shares, including Shares requested pursuant to the Over-Subscription
Privilege, related thereto on subscription certificates indicating the
Dealer Manager or such Soliciting Dealer, as the case may be, as the
broker-dealer with respect thereto, and as to such other information as
the Dealer Manager may reasonably request.
<PAGE>
15
(xiv) The Company will comply with the undertaking contained
in paragraph (b) of Item 33 in Part C of the Registration Statement.
(xv) In the event that at any time on or prior to the final
issuance and sale of Shares pursuant to the Offer any of the
representations, warranties or agreements of the Company would not be true
and correct in all material respects as if given or made at such time, the
Company shall promptly notify the Dealer Manager thereof. The Company
shall also promptly notify the Dealer Manager of its failure to perform
any obligation on its part required to be performed or to satisfy any
condition on its part required to be satisfied on or before any of the
date hereof, the Representation Date, the Expiration Date and any date of
the issuance and sale of Shares pursuant to the Offer.
(b) The Company and the Investment Adviser will not take,
directly or indirectly, any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the issuance of the Rights or the sale or resale of the Shares;
PROVIDED that any action authorized by and taken pursuant to the Company's
InvestLink-SM- Program will not be deemed to be within the meaning of this
Section 4(b).
(c) In the event that at any time on or prior to the final
issuance and sale of Shares pursuant to the Offer any of the representations,
warranties or agreements of the Investment Adviser would not be true and correct
in all material respects as if given or made at such time, the Investment
Adviser shall promptly notify the Dealer Manager thereof. The Investment Adviser
shall also promptly notify the Dealer Manager of its failure to perform any
obligation on its part required to be performed or to satisfy any condition on
its part required to be satisfied on or before any of the date hereof, the
Representation Date, the Expiration Date and any date of issuance and sale of
the Shares pursuant to the Offer.
<PAGE>
16
5. PAYMENT OF EXPENSES.
(a) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including, but not limited
to, expenses relating to (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificates for the Shares and
subscription certificates relating to the Rights, (iii) the fees and
disbursements of the Company's counsel (including the fees and disbursements of
local counsel) and accountants, (iv) the qualification of the Rights and the
Shares under securities laws in accordance with the provisions of Section
4(a)(vii) of this Agreement, including filing fees and the preparation of the
Blue Sky Survey by counsel to the Dealer Manager, (v) the printing or other
production and delivery to the Dealer Manager of copies of the Registration
Statement as originally filed and of each amendment thereto and of the
Prospectus and any amendments or supplements thereto, (vi) the printing and
other production and delivery of copies of the Blue Sky Survey, (vii) the fees
and expenses incurred with respect to filing with the National Association of
Securities Dealers, Inc.(the "NASD"), (viii) the fees and expenses incurred in
connection with the listing of the Shares on the New York Stock Exchange, (ix)
the printing or other production, mailing and delivery expenses incurred in
connection with Offering Materials and (x) the fees and expenses incurred with
respect to the Subscription Agent and Information Agent.
(b) In addition to any fees that may be payable to the Dealer
Manager under this Agreement, the Company agrees to reimburse the Dealer Manager
upon request made from time to time for its reasonable expenses incurred in
connection with its activities under this Agreement, including the reasonable
fees and disbursements of its legal counsel (excluding Blue Sky and NASD fees
and expenses which are paid directly by the Company), in an amount up to
$100,000.
(c) If this Agreement is terminated by the Company for any
reason (other than a material breach by the Dealer Manager of its duties
hereunder) or by the Dealer Manager in accordance with the provisions of Section
6 or Section 9(a), the Company agrees to reimburse the Dealer Manager for all of
its reasonable out-of-pocket expenses incurred in connection with its
performance hereunder, including the reasonable fees and disbursements of
counsel for the Dealer Manager. In the event the transactions contemplated
hereunder are not consummated, the Company agrees to pay all of the costs and
expenses set forth in paragraph (a) of this Section 5 which the Company would
have paid if such transactions had been consummated.
6. CONDITIONS OF THE DEALER MANAGER'S OBLIGATIONS. The
obligations of the Dealer Manager hereunder are subject to the accuracy of the
respective representations and warranties of the Company and the Investment
Adviser contained herein on the date hereof and as if made on each date up to
and including the final issuance and sale of Shares pursuant to the Offer, to
the performance by the Company and the Investment Adviser of their respective
obligations hereunder, and to the following further conditions:
<PAGE>
17
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York City time, on the date hereof, or at such later
time and date as may be approved in writing by the Dealer Manager; the
Prospectus and any amendment or supplement thereto shall have been filed with
the Commission in the manner and within the time period required by Rule 497(c),
(e) or (h), as the case may be, under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the Company, the
Investment Adviser or the Dealer Manager, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) On the Representation Date or as soon as practicable
thereafter, the Dealer Manager shall have received:
(1) The favorable opinion, dated the Representation Date, of
Willkie, Farr & Gallagher, counsel for the Company, in form and substance
satisfactory to counsel for the Dealer Manager, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland, has full corporate power and authority to conduct
its business as described in the Registration Statement and
Prospectus, except that counsel need express no opinion as to
securities or "blue sky" laws of any state, and is duly qualified to
do business as a foreign corporation in each jurisdiction wherein it
owns or leases real property or in which the conduct of its business
requires such qualification, except where the failure to be so
qualified would not result in a Material Adverse Effect.
(ii) The Company is registered with the Commission under
the Investment Company Act as a closed-end, diversified management
investment company; to the knowledge of such counsel, no order of
suspension or revocation of such registration has been issued or
proceedings therefor initiated or threatened by the Commission; all
required action has been taken under the Securities Act and the
Investment Company Act to make the public offering and consummate
the issuance of the Rights and the issuance and sale of the Shares
by the Company upon exercise of the Rights, and the provisions of
the Company's charter and by-laws comply as to form in all material
respects with the requirements of the Investment Company Act.
(iii) The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Common Stock"; the
outstanding shares of Common Stock have been duly authorized and are
validly issued, fully paid and non-assessable and conform in all
material respects to the description thereof in
<PAGE>
18
the Prospectus under the heading "Common Stock"; the Rights have
been duly authorized by all requisite action on the part of the
Company for issuance pursuant to the Offer; the Shares have been or,
with respect to Shares to be issued pursuant to the Oversubscription
Privilege, will be duly authorized by all requisite action on the
part of the Company for issuance and sale pursuant to the terms of
the Offer and, when issued and delivered by the Company pursuant to
the terms of the Offer against payment of the consideration set
forth in the Prospectus, will be validly issued, fully paid and
non-assessable; the Rights conform in all material respects to all
statements relating thereto contained in the Prospectus under the
heading "The Offer"; and, to the knowledge of such counsel, the
issuance of each of the Rights and the Shares is not subject to any
preemptive rights.
(iv) To the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding affecting the Company or to
which the Company is a party before or by any court or governmental
agency, authority or body or any arbitrator, whether foreign or
domestic.
(v) There are no contracts or other documents of the
Company required to be described in the Registration Statement or
the Prospectus, or to be filed or incorporated by reference as
exhibits which are not described or filed or incorporated by
reference therein as permitted by the Securities Act, the Investment
Company Act or the Rules and Regulations.
(vi) Each of this Agreement, the Subscription Agent
Agreement, the Information Agent Agreement and the Advisory
Agreement has been duly authorized, executed and delivered by the
Company; each of this Agreement, the Subscription Agent Agreement,
the Information Agent Agreement and the Advisory Agreement complies
with all applicable provisions of the Investment Company Act and the
Advisers Act; and, assuming due authorization, execution and
delivery by the other parties thereto, each of this Agreement, the
Subscription Agent Agreement, the Information Agent Agreement and
the Advisory Agreement constitutes a legal, valid, binding and
enforceable obligation of the Company, subject to the qualification
that the enforceability of the Company's obligations thereunder may
be limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or
at law) and subject to the qualification that the right to indemnity
may be limited by federal or state laws.
(vii) Neither the issuance of the Rights, nor the issuance
and sale of the Shares, nor the consummation by the Company of any
other of the transactions contemplated in this Agreement, the
Subscription Agent Agreement or the Information Agent Agreement nor
the consummation of the transactions
<PAGE>
19
contemplated in the Registration Statement will result in a breach
or violation of, or constitute a default under, the charter or
by-laws of the Company, or, to the knowledge of such counsel, result
in a breach or violation of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company under the
terms and provisions of any agreement, indenture, mortgage, lease or
other instrument to which the Company is a party or by which it may
be bound or to which any of the property or assets of the Company is
subject, nor, to the knowledge of such counsel, will such action
result in any violation of any order, law, rule or regulation of any
court or governmental agency or body under the laws of New York,
federal law or the laws of any other jurisdiction in the United
States having jurisdiction over the Company or any of its
properties.
(viii) No consent, approval, authorization, notification or
order of, or any filing with, any court or governmental agency or
body is required under the laws of New York, federal law or, to such
counsel's knowledge, the laws of any other jurisdiction in the
United States for the consummation by the Company of the
transactions contemplated by this Agreement or the Registration
Statement, except (A) such as have been obtained and (B) such as may
be required under the blue sky laws of any jurisdiction in
connection with the transactions contemplated hereby.
(ix) The Common Stock has been duly listed on the New
York Stock Exchange and the Shares have been duly approved for
listing, subject to official notice of issuance, on the New York
Stock Exchange.
(x) The Registration Statement has become effective
under the Securities Act; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been
instituted or threatened; and the Registration Statement, the
Prospectus and each amendment thereof or supplement thereto (other
than the financial statements and the notes thereto and the
schedules and other financial and statistical data contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Securities Act and the Investment Company Act and the Rules and
Regulations.
(xi) The statements in the Prospectus under the heading
"Taxation" fairly summarize the matters therein described.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of the laws of Maryland to the extent they deem proper and specified
in such opinion, upon the opinion of Venable, Baetjer and Howard, LLP or upon
the opinion of other counsel of good standing whom such counsel believes to be
reliable and who are satisfactory to counsel for the
<PAGE>
20
Dealer Manager, and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public officials.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise verified, and
are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or the
Prospectus, in the course of their review and discussion of the contents of the
Registration Statement and Prospectus with certain officers and employees of the
Company and its independent accountants, no facts have come to their attention
which cause them to believe that the Registration Statement (except as to such
financial statements or schedules or other financial or statistical data
included or incorporated by reference in the Registration Statement or the
Prospectus, as to which such counsel expresses no belief), on the date it became
effective, contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements contained therein not misleading or that the Prospectus, as of its
date and on such Representation Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(2) The favorable opinion, dated the Representation Date, of
Venable, Baetjer and Howard, LLP, special Maryland counsel to the Company,
addressed to Willkie, Farr & Gallagher and in form and substance
satisfactory to counsel for the Dealer Manager, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland, and has full corporate power and authority to
conduct its business in the State of Maryland as described in the
Registration Statement and Prospectus, except that counsel need
express no opinion as to securities or "blue sky" laws of the State
of Maryland.
(ii) The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Common Stock"; the
outstanding shares of Common Stock of the Company have been duly
authorized and are validly issued and are fully paid and
nonassessable and, with respect to statements pertaining to Maryland
law thereto, the Shares conform in all material respects to the
description thereof in the Prospectus under the heading "Common
Stock"; the Rights have been duly authorized by all requisite action
on the part of the Company for issuance pursuant to the Offer; the
Shares have been or, with respect to the Shares to be issued
pursuant to the Over-Subscription Privilege will be, duly authorized
by all requisite action on the part of the Company for issuance and
sale pursuant to the terms of the Offer and, when issued and
delivered by the Company pursuant to the terms of the Offer against
payment of the consideration set forth in the Prospectus, will be
validly issued, fully paid and nonassessable;
<PAGE>
21
the Rights conform in all material respects to all statements with
respect to Maryland law relating thereto contained in the Prospectus
under the heading "The Offer"; and the issuance of each of the
Rights and the Shares is not subject to any preemptive rights under
the Company's charter or bylaws under Maryland law or, to their
knowledge, otherwise.
(iii) To the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding affecting the Company or to
which the Company is a party before or by any Maryland court or
Maryland governmental agency, authority or body or any arbitrator in
the State of Maryland.
(iv) Each of this Agreement and the Subscription Agent
Agreement has been duly authorized by the Company.
(v) Neither the issuance of the Rights, nor the issuance
and sale of the Shares by the Company, nor the consummation by the
Company of any other of the transactions contemplated in this
Agreement, the Subscription Agent Agreement and the Information
Agent Agreement nor the consummation of the transactions
contemplated in the Registration Statement will result in a breach
or violation of, or constitute a default under the charter or
by-laws of the Company nor to our knowledge will such action result
in any violation of any order, law, rule or regulation of any
Maryland court or Maryland governmental agency or body.
(vi) No consent, approval, authorization, notification or
order of, or any filing with, any Maryland court or Maryland
governmental agency or body is required under the Maryland General
Corporation Law for the consummation by the Company of the
transactions contemplated by this Agreement or the Registration
Statement in connection with the issuance of the Rights and the sale
of the Shares by the Company, except (A) such as have been obtained
and (B) such as may be required under the securities and "Blue Sky"
laws of the State of Maryland in connection with the transactions
contemplated hereby.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
(3) The favorable opinion, dated the Representation Date, of
the general counsel for the Investment Adviser, in form and substance
satisfactory to counsel for the Dealer Manager, to the effect that:
(i) The Investment Adviser is duly organized and validly
existing as a limited liability company under the laws of the State
of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to do
<PAGE>
22
business as a foreign entity in each jurisdiction wherein it owns or
leases real property or in which the conduct of its business
requires such qualification, except where the failure to be so
qualified does not result in an Adviser Material Adverse Effect.
(ii) The Investment Adviser is duly registered as an
investment adviser under the Advisers Act and is not prohibited by
the Advisers Act or the Investment Company Act, or the rules and
regulations under such Acts, from acting as an investment adviser
for the Company as contemplated in the Prospectus and the Advisory
Agreement.
(iii) Each of this Agreement and the Advisory Agreement has
been duly authorized, executed and delivered by the Investment
Adviser; each of this Agreement and the Advisory Agreement complies
with all applicable provisions of the Advisers Act, the Investment
Company Act and the rules and regulations under such Acts; and each
of this Agreement and the Advisory Agreement is, assuming due
authorization, execution and delivery by the other parties thereto,
a legal, valid, binding and enforceable obligation of the Investment
Adviser, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights, and to general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(iv) Neither the performance by the Investment Adviser of
its obligations under this Agreement nor the consummation of the
transactions contemplated therein or in the Registration Statement
nor the fulfillment of the terms thereof will result in a breach or
violation of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Investment Adviser under the limited
liability company agreement of the Investment Adviser, or, to the
knowledge of such counsel, the terms and provisions of any
agreement, indenture, mortgage, lease or other instrument to which
the Investment Adviser is a party or by which it may be bound or to
which any of the property or assets of the Investment Adviser is
subject, or any order, law, rule or regulation of any court or
governmental agency or body under the laws of Delaware, federal law
or the laws of any other jurisdiction in the United States having
jurisdiction over the Investment Adviser or any of its properties.
(v) To the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding to which the Investment
Adviser is a party before or by any court or governmental agency,
authority or body or any arbitrator, whether foreign or domestic,
which reasonably might result in a Material Adverse Effect or might
materially and adversely affect the ability of the Investment
Adviser to perform its obligations under the Advisory Agreement.
<PAGE>
23
(vi) No consent, approval, authorization, notification or
order of, or any filing with, any court or governmental agency or
body, under the laws of Delaware, federal law or the laws of any
other jurisdiction in the United States is required for the
consummation by the Investment Adviser of the transactions
contemplated by this Agreement.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of the
Investment Adviser and public officials.
(c) The Dealer Manager shall have received from Simpson
Thacher & Bartlett, counsel for the Dealer Manager, such opinion, dated the
Representation Date, with respect to the Offer, the Registration Statement, the
Prospectus and other related matters as the Dealer Manager may reasonably
require, and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to the Dealer Manager a
certificate of the Company, signed by the Chairman of the Board, the President
or a Vice President of the Company, dated the Representation Date, to the effect
that the signers of such certificate have examined the Registration Statement,
the Prospectus, any supplement to the Prospectus and this Agreement and that, to
the best of their knowledge:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Representation Date with the same effect as if made on the Representation
Date and the Company has complied with all the agreements and satisfied
all the conditions in this Agreement on its part to be performed or
satisfied at or prior to the Representation Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened.
(iii) Since the date of the most recent balance sheet included or
incorporated by reference in the Prospectus, there has been no material
adverse change in the condition (financial or other), earnings, business
or properties of the Company, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectus.
(e) The Investment Adviser shall have furnished to the Dealer
Manager a certificate, signed by a Managing Director, dated the Representation
Date, to the effect that the signer of such certificate has read the
Registration Statement, the Prospectus and this Agreement and, to the best
knowledge of such signer, the representations and warranties of the Investment
Adviser in this Agreement are true and correct in all material respects on and
as of the Representation Date with the same effect as if made on the
Representation Date and the
<PAGE>
24
Investment Adviser has complied with all the agreements and satisfied all the
conditions in this Agreement on its part to be performed or satisfied at or
prior to the Representation Date.
(f) PricewaterhouseCoopers LLP shall have furnished to the
Dealer Manager a Letter, dated the Representation Date, in form and substance
satisfactory to the Dealer Manager, and stating in effect that:
(i) They are independent accountants with respect to the Company
within the meaning of the Securities Act and the applicable Rules and
Regulations.
(ii) In their opinion, the audited financial statements examined
by them and included or incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Investment Company
Act and the respective Rules and Regulations with respect to registration
statements on Form N-2.
(iii) They have performed specified procedures, not constituting
an audit, including a reading of the latest available interim financial
information of the Company, a reading of the minute books of the Company,
inquiries of officials of the Company responsible for financial or
accounting matters and such other inquiries and procedures which shall be
specified in such letter, and on the basis of such inquiries and
procedures nothing came to their attention that caused them to believe
that at the date of the latest available financial information read by
such accountants, or at a subsequent specified date not more than five
business days prior to the Representation Date, there was any change in
the capital stock, increase in long-term debt or decrease in net assets of
the Company as compared with amounts shown in the most recent statement of
assets and liabilities included or incorporated by reference in the
Registration Statement, except as the Registration Statement discloses has
occurred or may occur or as disclosed in their letter.
(iv) In addition to the procedures referred to in clause (iii)
above, they have performed other specified procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data and
financial information appearing in the Registration Statement, which have
previously been specified by the Dealer Manager and which shall be
specified in such letter, and have compared such items with, and have
found such items to be in agreement with, the accounting and financial
records of the Company.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not have
been (i) any change or decrease specified in the letter or letters referred to
in paragraph (f) of this Section 6, (ii) any change, or any development
involving a prospective change, in or affecting the business, condition
(financial or otherwise), properties, net assets or results of operations of the
Company, the effect of which, in any case referred to in clause (i) or (ii)
above, makes it, in the reasonable judgment
<PAGE>
25
of the Dealer Manager, impractical or inadvisable to proceed with the Offer as
contemplated by the Registration Statement and the Prospectus.
(h) Prior to the Representation Date, the Company shall have
furnished to the Dealer Manager such further information, certificates and
documents as the Dealer Manager may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects satisfactory in form and
substance to the Dealer Manager and its counsel, this Agreement and all
obligations of the Dealer Manager hereunder may be canceled at, or at any time
prior to, the Representation Date by the Dealer Manager. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless the Dealer
Manager, the directors, officers, employees and agents of the Dealer Manager and
each person, if any, who controls the Dealer Manager within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several (including any
investigation, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act, the Investment Company Act, the Advisers Act
or other statutory law or regulation, at common law or otherwise, whether
foreign or domestic, insofar as such losses, claims, damages or liabilities
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or the Offering Materials, and any amendment or supplement thereto,
or the omission or alleged omission to state in any or all such documents a
material fact required to be stated therein or necessary to make the statements
in it not misleading (in the case of the Prospectus, in light of the
circumstances under which such statements were made), (ii) the failure by the
Company to make the Offer, including the withdrawal or termination of the Offer
by the Company or (iii) the failure of the Company to comply with the
undertaking contained in paragraph (b) of Item 33 in Part C of the Registration
Statement; PROVIDED that the Company will not be liable to the extent that such
loss, claim, damage or liability arises from an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information furnished in writing to the Company by the Dealer Manager expressly
for use in the document.
(b) The Investment Adviser will indemnify and hold harmless
the Dealer Manager, the directors, officers, employees and agents of the Dealer
Manager and each person, if any, who controls the Dealer Manager within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several
(including any investigation, legal and other expenses reasonably incurred in
<PAGE>
26
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted) to which they or any of them may become
subject under the Securities Act, the Exchange Act, the Investment Company Act,
the Advisers Act or other statutory law or regulation, at common law or
otherwise, whether foreign or domestic, insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus or the Offering Materials and any amendment or supplement thereto, or
the omission or alleged omission to state in any or all such documents a
material fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the Investment Adviser shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Dealer Manager specifically for use in connection
with the preparation thereof; and PROVIDED FURTHER that (x) the obligation of
the Investment Adviser under this Section 7(b) shall not apply to any loss,
claim, damage or liability to the extent arising out of or based upon any untrue
statement or alleged untrue statement of or omission or alleged omission
contained in the Registration Statement, the Prospectus or the Offering
Materials (or any amendment or supplement thereto) except in respect of
statements contained under the caption "Management -- Credit Suisse Asset
Management" or under the caption "Prospectus Summary" insofar as the statements
under such second caption relate to the information under the first caption
referred to in this proviso, and (y) the Investment Adviser will be liable to
any party to be indemnified by it under this Section 7(b) in any case only to
the extent that the Company fails to indemnify and hold harmless such
indemnified party pursuant to Section 7(a). The foregoing indemnity agreement is
in addition to any liability which the Investment Adviser may otherwise have to
the Dealer Manager or any controlling person of the Dealer Manager. This Section
7(b) is not intended to diminish in any way the Company's obligation timely to
indemnify and hold harmless any indemnified party pursuant to Section 7(a). Each
indemnified party agrees that the Investment Adviser may bring suit, or take any
other appropriate action in law or in equity, against the Company in the name of
such indemnified party to enforce the Company's indemnity obligation to such
indemnified party pursuant to Section 7(a) in respect of any amount that the
Investment Adviser has paid to such indemnified party pursuant to this Section
7(b). Such indemnified party will cooperate with and assist the Investment
Adviser in the conduct of any such action and the Investment Adviser will pay
all expenses of such action and will reimburse such indemnified party for all
reasonable out-of-pocket expenses. The Investment Adviser will be entitled to
all amounts recovered in any such action.
(c) The Dealer Manager will indemnify and hold harmless the
Company, the Investment Adviser, each director and officer of the Company who
signs the Registration Statement and each person, if any, who controls the
Company or the Investment Adviser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company or the Investment Adviser to the Dealer
Manager, but only insofar as losses, claims, damages or liabilities arise out of
or are based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on
<PAGE>
27
and in conformity with information furnished in writing to the Company by the
Dealer Manager expressly for use in preparation of the documents in which the
statement or omission is made or alleged to be made. This indemnity agreement
will be in addition to any liability that the Dealer Manager might otherwise
have.
(d) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission to notify such indemnifying party
will not, except to the extent set forth below, relieve it from liability that
it may have to any indemnified party. No indemnification provided for in
Sections 7(a) - (c) hereof shall be available to any party who shall fail to
give notice as provided in this Section 7(d) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but the omission to notify
such indemnifying party of such action shall not relieve it from any liability
that it may have to any indemnified party for contribution or otherwise on
account of the provisions in Sections 7(a) - (c). If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in, and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its counsel in any such
action, but the fees and expenses of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded that there may be legal defenses available to it
or other indemnified parties that are different from or in addition to those
available to the indemnifying party (in which case the indemnifying party will
not have the right to direct the defense of such action on behalf of the
indemnified party) or (3) the indemnifying party has not in fact employed
counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees and expenses of counsel will be at the expense of the
indemnifying party or parties. All such fees and expenses will be reimbursed
promptly as they are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent or, in
connection with any proceeding or related proceeding in the same jurisdiction,
for the fees and expenses of more than one separate counsel for all indemnified
parties except to the extent provided herein.
(e) In no case shall the indemnification provided in this
Section 7 be available to protect any person against any liability to which any
such person would otherwise be subject
<PAGE>
28
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its or his obligations or duties hereunder, or by reason of its
or his reckless disregard of its or his obligations and duties hereunder.
(f) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 7 is unavailable or insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), the Company, the Investment
Adviser and the Dealer Manager, in order to provide for just and equitable
contribution, agree as provided below. The Company and the Dealer Manager shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportions as are appropriate to reflect the relative benefits received
by the Company on the one hand and by the Dealer Manager on the other from the
offering of the Shares; PROVIDED, HOWEVER, that neither the Company nor the
Dealer Manager shall contribute to the amount paid or payable by such
indemnified party as a result of any such losses, claims, damages or liabilities
(or actions in respect thereof) arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission contained
in the Prospectus (or any amendment or supplement thereto) in respect of
statements contained under the captions "Management -- Credit Suisse Asset
Management" or under the caption "Prospectus Summary" insofar as the statements
under the second caption related to the information under the first caption
referred to above, which amounts shall be contributed by the Investment Adviser
to the amount paid or payable by the indemnified party. If the allocation
between the Company and the Dealer Manager provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Dealer Manager shall
contribute in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Dealer Manager, respectively, in connection with the statements or omissions
that result in such loss, claim, damage or liability (or actions in respect
thereof) as well as any other relevant equitable considerations, subject,
however, to the proviso contained in the immediately preceding sentence. The
relative benefits received by the Company on the one hand and the Dealer Manager
on the other shall be deemed to be in the same proportion as the aggregate net
proceeds from the subscription for the Shares (before deducting expenses)
received by the Company bears to the amounts received by the Dealer Manager
pursuant to Section 3 hereof. The relative fault of the Company on the one hand
and the Dealer Manager on the other shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Dealer Manager, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Investment Adviser and the Dealer Manager agree that
it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation or by any other method of allocation that does
not take into account the equitable considerations referred to above in this
paragraph (f). Notwithstanding any other provision of this paragraph (f), the
Dealer Manager shall not be obligated to make contribution hereunder that in the
aggregate exceeds (i) the amount of the total fees paid to the Dealer Manager
pursuant to Section 3 of this Agreement, less (ii) the aggregate amount of any
damages that the Dealer Manager has otherwise been required
<PAGE>
29
to pay in respect of the same or any substantially similar claim, and no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this paragraph
(f), each person, if any, who controls the Investment Adviser or the Dealer
Manager within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Investment
Adviser or the Dealer Manager, respectively, and each director of the Company,
each officer of Company who signed the Registration Statement and each person,
if any, who controls the Company, within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, shall have the same rights to contribution as
the Company. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 7, notify such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have otherwise than under this Section 7. No
party will be liable for contribution with respect to any action or claim
settled without its written consent.
(g) The Company and the Investment Adviser agree to indemnify
each Soliciting Dealer, the directors, officers, employees and agents of each
Soliciting Dealer and controlling persons of each Soliciting Dealer to the same
extent and subject to the same conditions and to the same agreements, including
with respect to contribution, provided for in subsections (a), (b), (c), (d),
(e) and (f) of this Section 7.
(h) The Company and the Investment Adviser acknowledge that
the statements contained in the first two sentences of the first paragraph and
the last paragraph under the caption "Distribution Arrangements" in the
Prospectus constitute the only information furnished in writing to the Company
by the Dealer Manager expressly for use in such document; and the Dealer Manager
confirms that such statements are correct.
8 REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The respective agreements, representations warranties, indemnities and
other statements of the Company or its officers, of the Investment Adviser and
of the Dealer Manager set forth in or made pursuant to this Agreement shall
survive the Expiration Date and will remain in full force and effect, regardless
of any investigation made by or on behalf of Dealer Manager, the Company or the
Investment Adviser or any of the officers directors or controlling persons
referred to in Section 7 hereof, and will survive delivery of and payment for
the Shares pursuant to the Offer; PROVIDED, HOWEVER, that following delivery and
payment for the Shares, the remedies against the Investment Adviser for breach
of its representations and warranties shall, in the absence of fraudulent
misrepresentation by the Investment Adviser, which shall not include fraudulent
misrepresentation attributed to the Investment Adviser solely by virtue of and
in the event of its being a controlling person of the Company, be limited to
those available pursuant to Section 7 hereof. The provisions of Section 5 and 7
hereof shall survive the termination or cancellation of this Agreement.
<PAGE>
30
9 TERMINATION OF AGREEMENT. (a) This Agreement shall be
subject to termination in the absolute discretion of the Dealer Manager, by
notice given to the Company prior to the expiration of the Offer, if prior to
such time (i) there has been a material change in general economic, political,
social or financial conditions in the United States or the effect of
international conditions on the financial markets in the United States such
that, in the Dealer Manager's judgment, it is impracticable or inadvisable to
proceed with the Offer, (ii) there has occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which, in
the Dealer Manager's judgment, renders it impracticable or inadvisable to
proceed with the Offer, (iii) trading in the shares of Common Stock shall have
been suspended by the Commission or the New York Stock Exchange, (iv) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited, (v) a banking moratorium shall have been declared either by Federal or
New York State authorities or (vi) the Company shall fail to amend or supplement
the Registration Statement or the Prospectus as provided in Section 4(a)(vi).
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 5.
10 NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Dealer Manager, will be
mailed, delivered or telegraphed and confirmed to Salomon Smith Barney, Inc.,
Attn.: William B. Ogden, III, 388 Greenwich Street, New York, New York 10013; or
if sent to the Company or the Investment Adviser, will be mailed, delivered or
telegraphed and confirmed to them at: Credit Suisse Asset Management Strategic
Global Income Fund, Inc., [c/o Credit Suisse Asset Management,] One Citicorp
Center, 153 East 53rd Street, [58th Floor,] New York, New York 10022 or Credit
Suisse Asset Management, One Citicorp Center, 153 East 53rd Street, [57th
Floor,] New York, New York 10022, respectively.
11 SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and will
inure to the benefit of the officers and directors and controlling persons
referred to in Section 7 hereof, and no other person will have any right or
obligation hereunder.
12 APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
13 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
<PAGE>
31
If the foregoing is in accordance with your understanding of our
agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
the Investment Adviser and the Dealer Manager.
Very truly yours,
Credit Suisse Asset Management Strategic
Global Income Fund, Inc.
By:
----------------------------
Name:
Title:
Credit Suisse Asset Management
By:
----------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Salomon Smith Barney, Inc.
By:
-----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
Credit Suisse Asset Management
Strategic Global Income Fund, Inc.
Rights Offering for Shares of Common Stock
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK TIME,
October 22, 1999.(1)
To Securities Dealers and Brokers:
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
(the "Company") is issuing to its shareholders of record ("Record Date
Shareholders") as of the close of business on September 27, 1999 (the "Record
Date") non-transferable rights ("Rights") to subscribe for an aggregate of up to
2,818,047 shares (the "Shares") of common stock, par value $0.001 per share (the
"Common Stock"), of the Company upon the terms and subject to the conditions set
forth in the Company's Prospectus (the "Prospectus") dated September 24, 1999,
(the "Offer"). Each such Record Date Shareholder is being issued one Right for
each full share of Common Stock owned on the Record Date. The Rights entitle the
Record Date Shareholder, during the Subscription Period (as hereinafter defined)
to acquire at the Subscription Price (as hereinafter defined), one Share for
each three Rights held in the primary subscription. No fractional Shares will be
issued. The Subscription Price will be 95% of the lower of (i) the average of
the last reported sales prices of a share of the Company's Common Stock on the
New York Stock Exchange on the date of the expiration of the Offer (the "Pricing
Date") and the four preceding business days and (ii) the net asset value per
share as of the Pricing Date. The Subscription Period will commence on September
24, 1999 and end on the Expiration Date. (With respect to the Offer, the term
"Expiration Date" means 5:00 p.m., New York time, on October 22, 1999, unless
and until the Company shall, in its sole discretion, have extended the period
for which the Offer is open, in which event the term "Expiration Date" with
respect to the Offer will mean the latest time and date on which the Offer, as
so extended by the Company, will expire.) Any Record Date Shareholder who fully
exercises all Rights issued to such shareholder is entitled to subscribe for
Shares which were not otherwise subscribed for by others on primary subscription
(the "Over-Subscription Privilege"). Shares acquired pursuant to the
Over-Subscription Privilege are subject to allotment, as more fully discussed in
the Prospectus.
For the duration of the Offer, the Company has agreed to pay
Solicitation Fees to any qualified broker or dealer executing a Soliciting
Dealer Agreement who solicits the exercise of Rights and the Over-Subscription
Privilege in connection with the Offer and who complies with the procedures
described below (a "Soliciting Dealer"). Upon timely delivery to The Chase
Manhattan Bank, the Company's Subscription Agent for the Offer, of payment for
Shares
- --------------------------
(1) Unless extended to a date no later than October 29, 1999.
<PAGE>
purchased pursuant to the exercise of Rights and the Over Subscription Privilege
and of properly completed and executed documentation as set forth in this
Soliciting Dealer Agreement, a Soliciting Dealer will be entitled to receive
Solicitation Fees equal to 2.50% of the Subscription Price per Share so
purchased; provided, however, that no payment shall be due with respect to the
issuance of any Shares until payment therefor is actually received. A qualified
broker or dealer is a broker or dealer which is a member of a registered
national securities exchange in the United States or the National Association of
Securities Dealers, Inc. ("NASD") or any foreign broker or dealer not eligible
for membership who agrees to conform to the Conduct Rules of the NASD, including
Rules 2730, 2740, 2420 and 2750 thereof, in making solicitations in the United
States to the same extent as if it were a member thereof.
The Company has agreed to pay the Solicitation Fees payable to the
undersigned Soliciting Dealer and to indemnify such Soliciting Dealer on the
terms set forth in the Dealer Manager Agreement, dated September 24, 1999, among
Salomon Smith Barney, Inc. as the Dealer Manager, the Company and Credit Suisse
Asset Management (the "Dealer Manager Agreement"). Solicitation and other
activities by Soliciting Dealers may be undertaken only in accordance with the
applicable rules and regulations of the Securities and Exchange Commission and
only in those states and other jurisdictions where such solicitations and other
activities may lawfully be undertaken and in accordance with the laws thereof.
Compensation will not be paid for solicitations in any state or other
jurisdiction in which, in the opinion of counsel to the Company or counsel to
the Dealer Manager, such compensation may not lawfully be paid. No Soliciting
Dealer shall be paid Solicitation Fees with respect to Shares purchased pursuant
to an exercise of Rights or the Over-Subscription Privilege for its own account
or for the account of any affiliate of the Soliciting Dealer, except that the
Dealer Manager shall receive the Solicitation Fees with respect to Shares
purchased pursuant to an exercise of Rights or the Over-Subscription Privilege
for its own account provided that such Shares are offered and sold by the Dealer
Manager to its clients. No Soliciting Dealer or any other person is authorized
by the Company or the Dealer Manager to give any information or make any
representations in connection with the Offer other than those contained in the
Prospectus and other authorized solicitation material furnished by the Company
through the Dealer Manager. No Soliciting Dealer is authorized to act as agent
of the Company or the Dealer Manager in any connection or transaction. In
addition, nothing herein contained shall constitute the Soliciting Dealers
partners with the Dealer Manager or with one another, or agents of the Dealer
Manager or of the Company, or create any association between such parties, or
shall render the Dealer Manager or the Company liable for the obligations of any
Soliciting Dealer. The Dealer Manager shall be under no liability to make any
payment to any Soliciting Dealer, and shall be subject to no other liabilities
to any Soliciting Dealer, and no obligations of any sort shall be implied.
In order for a Soliciting Dealer to receive Solicitation Fees, the
Subscription Agent must have received from such Soliciting Dealer no later than
5:00 p.m., New York City time, on the Expiration Date, either (i) a properly
completed and duly executed Subscription Certificate with respect to Shares
purchased pursuant to the exercise of Rights or the Over-Subscription Privilege
and full payment for such Shares; or (ii) a Notice of Guaranteed Delivery
guaranteeing delivery to the Subscription Agent by close of business on the
third business day after the Expiration Date, of (a) full payment for such
Shares with respect to Shares purchased pursuant to the exercise of Rights and
the Over-Subscription Privilege and (b) a properly
A-2
<PAGE>
completed and duly executed Subscription Certificate with respect to such
Shares, Solicitation Fees will only be paid after receipt by the Subscription
Agent of a properly completed and duly executed Soliciting Dealer Agreement (or
a facsimile thereof). In the case of a Notice of Guaranteed Delivery, Soliciting
Fees will only be paid after delivery in accordance with such Notice of
Guaranteed Delivery has been effected. Pursuant the Dealer Manager Agreement,
Solicitation Fees are to be paid by the Company to the Soliciting Dealer in next
day funds to an address designated by the Soliciting Dealer below by November
22, 1999; PROVIDED, HOWEVER, that if the Expiration Date as set forth in the
Prospectus is extended by any number of days, then such payment date shall be
extended by the same number of days.
All questions as to the form, validity and eligibility (including
time or receipt) of this Soliciting Dealer Agreement will be determined by the
Company, in its sole discretion, which determination shall be final and binding.
Unless waived, any irregularities in connection with a Soliciting Dealer
Agreement or delivery thereof must be cured within such time as the Company
shall determine. None of the Company, the Dealer Manager, the Subscription
Agent, the Information Agent for the Offer (Shareholder Communications
Corporation) or any other person will be under any duty to give notification of
any defects or irregularities in any Soliciting Dealer Agreement or incur any
liability for failure to give such notification.
The acceptance of Solicitation Fees from the Company by the
undersigned Soliciting Dealer shall constitute a representation by such
Soliciting Dealer to the Company that: (i) it has received and reviewed the
Prospectus; (ii) in soliciting purchases of Shares pursuant to the exercise of
the Rights and the Over-Subscription Privilege, it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the applicable rules and regulations thereunder, any applicable
securities laws of any state or jurisdiction where such solicitations may
lawfully be made, and the applicable rules and regulations of any
self-regulatory organization or registered national securities exchange; (iii)
in soliciting purchases of Shares pursuant to the exercise of Rights and the
Over-Subscription Privilege, it has not published, circulated or used any
soliciting materials other than the Prospectus and any other authorized
solicitation material furnished by the Company through the Dealer Manager; (iv)
it has not purported to act as agent of the Company or the Dealer Manager in any
connection or transaction relating to the Offer; (v) the information contained
in this Soliciting Dealer Agreement is, to its best knowledge, true and
complete; (vi) it is not affiliated with the Company; (vii) it will not accept
Solicitation Fees paid by the Company pursuant to the terms hereof with respect
to Shares purchased by the Soliciting Dealer pursuant to an exercise of Rights
and the Over-Subscription Privilege for its own account; (viii) it will not
remit, directly or indirectly, any part of Solicitation Fees paid by the Company
pursuant to the terms hereof to any beneficial owner of Shares purchased
pursuant to the Offer; and (ix) it has agreed to the amount of the Solicitation
Fees and the terms and conditions set forth herein with respect to receiving
such Solicitation Fees. By returning a Soliciting Dealer Agreement and accepting
Solicitation Fees, a Soliciting Dealer will be deemed to have agreed to
indemnify the Company and the Dealer Manager against losses, claims, damages and
liabilities to which the Company or the Dealer Manager may become subject as a
result of the breach of such Soliciting Dealer's representations made herein and
described above. In making the foregoing representations, Soliciting Dealers are
reminded of the possible applicability of Rule 10b-6 under the Exchange
A-3
<PAGE>
Act if they have bought, sold, dealt in or traded in any Shares for their own
account since the commencement of the Offer.
Upon expiration of the Offer, no Solicitation Fees will be payable
to Soliciting Dealers with respect to Shares purchased thereafter.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Dealer Manager Agreement or, if not defined
therein, in the Prospectus.
This Soliciting Dealer Agreement will be governed by the laws of the
State of New York without reference to the choice of law principles thereof.
Please execute this Soliciting Dealer Agreement below accepting the
terms and conditions hereof and confirming that you are a member firm of a
registered national securities exchange or of the NASD or a foreign broker or
dealer not eligible for membership who has conformed to the Conduct Rules of the
NASD, including Rules 2730, 2740, 2420 and 2750 thereof, in making solicitations
of the type being undertaken pursuant to the Offer in the United States to the
same extent as if you were a member thereof, and certifying that you have
solicited the purchase of the Shares pursuant to exercise of the Rights and the
Over-Subscription Privilege, all as described above, in accordance with the
terms and conditions set forth in this Soliciting Dealer Agreement. Please
forward two executed copies of this Soliciting Dealer Agreement to EquiServe
Corporate Reorganization, 40 Campanelli Drive, Braintree, MA 02184. A signed
copy of this Soliciting Dealer Agreement will be promptly returned to the
Soliciting Dealer at the address set forth below.
Very truly yours,
Salomon Smith Barney, Inc.
By:
--------------------------
Name:
Title:
A-4
<PAGE>
- --------------------------------------------------------------------------------
PLEASE COMPLETE THE INFORMATION BELOW:
ACCEPTED AND CONFIRMED BY SOLICITING DEALER
- ---------------------------------- -------------------------------------
Printed Firm Name Address
- ---------------------------------- -------------------------------------
Authorized Signature Area Code and Telephone Number
- ---------------------------------- -------------------------------------
Name and Title Area Code and Facsimile Number
Dated: ____________________
A-5
<PAGE>
Payment of the Solicitation Fee should
be mailed by check to the following address:
- ---------------------------
- ---------------------------
- ---------------------------
A-6
<PAGE>
September 23, 1999
Credit Suisse Asset Management
Strategic Global Income Fund, Inc.
One Citicorp Center
153 East 53rd Street
57th Floor
New York, NY 10022
Ladies and Gentlemen,
We have acted as counsel to Credit Suisse Asset Management Strategic Global
Income Fund, Inc. (the "Fund"), a corporation organized under the laws of the
State of Maryland, in connection with the issuance of up to 3,522,559 shares,
consisting of 2,818,047 shares to be issued under the Primary Subscription (the
"Primary Subscription Shares") and up to 704,512 shares to be issued pursuant to
the Over-Subscription Privilege (the "Additional Shares") of its common stock,
par value $.001 per share (the "Common Stock"), pursuant to the exercise of
rights (the "Rights") to purchase Common Stock to be distributed to shareholders
of the Fund (the "Offer") in accordance with the Fund's Registration Statement
on Form N-2 (File Nos. 333-84153 and 811-5458) under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as amended (the
"Registration Statement").
We have examined copies of the Articles of Incorporation and By-Laws of the
Fund, as amended, the Registration Statement, resolutions adopted by the Fund's
Board of Directors and other records and documents that we have deemed necessary
for the purpose of this opinion, including certification of the initial
directors of the Fund. We have also examined such other documents, papers,
statutes and authorities as we have deemed necessary to form a basis for the
opinion hereinafter expressed.
In our examination, we have assumed the genuineness of all signatures and the
conformity to original documents of all copies submitted to us. As to various
questions of fact material to our opinion, we have relied upon statements and
certificates of officers and representatives of the Fund and others. We have
further assumed that if the Fund decides to extend the Offer, that extension
will have been
<PAGE>
Credit Suisse Asset Management
Strategic Global Income Fund, Inc.
September 23, 1999
Page 2
duly authorized by the Board of Directors pursuant to the authority that has
heretofore been delegated to it by the Board of Directors. As to matters
governed by the laws of the State of Maryland, we have relied upon the opinion
of Venable, Baetjer and Howard, LLP that is attached to this opinion.
Based upon the foregoing, we are of the opinion that when the Primary
Subscription Shares have been issued and paid for as contemplated by the
Registration Statement, the Primary Subscription Shares to be issued upon
exercise of the Rights will have been validly and legally authorized and issued
and will be fully paid and non-assessable. We are further of the opinion that
when the Board of Directors of the Fund has taken appropriate further action to
authorize the issuance of the Additional Shares, the Additional Shares to be
issued upon exercise of the Rights will have been duly authorized and, upon such
exercise, when the Additional Shares have been issued and paid for as
contemplated by the Registration Statement, the Additional Shares will have been
validly and legally authorized and issued and will be fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus included as part of the Registration Statement.
Very truly yours,
/s/ Willkie Farr & Gallagher
Willkie Farr & Gallagher
<PAGE>
September 23, 1999
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
Re: CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
Ladies and Gentlemen:
We have acted as special Maryland counsel to Credit Suisse Asset
Management Strategic Global Income Fund, Inc., a Maryland corporation (the
"Company"), in connection with the issuance of up to 3,522,559 additional
shares, consisting of up to 2,818,047 primary subscription shares (the "Primary
Subscription Shares") and up to 704,512 additional over-subscription shares (the
"Additional Over-Subscription Shares") that may, at the discretion of the Board
of Directors, be issued pursuant to an over-subscription privilege, of the
Company's common stock, par value $.001 per share (the "Common Stock"), pursuant
to the exercise of non-transferable rights (the "Rights") to purchase Common
Stock to be distributed to the Company's shareholders in accordance with the
Company's Registration Statement on Form N-2 (Securities Act File No. 333-84153,
Investment Company Act File No. 811-5458) (the "Registration Statement").
We have examined the Company's prospectus included in the Registration
Statement substantially in the form in which it is to become effective (the
"Prospectus"), the form of subscription certificate for exercise of the Rights,
the Company's Charter and Bylaws, and resolutions adopted by the Board of
Directors of the Company with respect to the Rights, and have further examined
and relied upon a certificate of the Maryland State Department of Assessments
and Taxation to the effect that the Company is duly incorporated and existing
under the laws of the State of Maryland and is in good standing and duly
authorized to transact business in the State of Maryland. With respect to the
due organization of the Company under Maryland law and with the consent of
Wilkie
<PAGE>
Willkie Farr & Gallagher
September 23, 1999
Page 2
Farr & Gallagher, we have also relied on certifications of the initial directors
of the Company. We have assumed that if the initial Expiration Date of the
offering and the Rights is extended as described in the Registration Statement,
such action will have been duly authorized by further action of the Board of
Directors.
We have also examined and relied upon such other corporate records of
the Company and documents and certificates with respect to factual matters as we
have deemed necessary for purposes of this opinion. With respect to the
documents we have received, we have assumed, without independent verification,
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the conformity with originals of all documents submitted
to us as copies.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland.
2. The Primary Subscription Shares to be issued upon exercise of the
Rights have been duly authorized, and, upon such exercise, when the Primary
Subscription Shares have been issued and paid for as contemplated by the
Registration Statement, the Primary Subscription Shares will have been validly
and legally authorized and issued and will be fully paid and nonassessable. When
the Board of Directors has taken appropriate further action to authorize the
issuance of the Additional Over-Subscription Shares, the Additional
Over-Subscription Shares to be issued upon exercise of the Rights will have been
duly authorized and, upon such exercise, when the Additional Over-Subscription
Shares have been issued and paid for as contemplated by the Registration
Statement, the Additional Over-Subscription Shares will have been validly and
legally authorized and issued and will be fully paid and nonassessable.
This letter expresses our opinion with respect to the Maryland General
Corporation Law governing matters such as due organization and the authorization
and issuance of stock. It does not extend to the securities or "Blue Sky" laws
of Maryland, to federal securities laws or to other laws.
<PAGE>
Willkie Farr & Gallagher
September 23, 1999
Page 3
You may rely on this opinion in rendering your opinion to the Company
that is to be filed as an exhibit to the Registration Statement. We consent to
the filing of this opinion as an exhibit to the Registration Statement and to
the reference to us in the Prospectus under the caption "Legal Matters." We do
not thereby admit that we are "experts" within the meaning of the Securities Act
of l933 and the regulations thereunder. This opinion may not be relied upon by
any other person or for any other purpose without our prior written consent.
Very truly yours,
/s/Venable, Baetjer and Howard, LLP
Venable, Baetjer and Howard, LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Pre-Effective
Amendment No. 1 to the registration statement on Form N-2 (the "Registration
Statement") of our report dated February 19, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of Credit Suisse Asset Management Strategic Global
Income Fund, Inc., which financial statements and financial highlights are
also incorporated by reference into the Registration Statement. We also
consent to the references to our firm under the headings "Financial
Highlights" and "Experts" in the Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
September 23, 1999
