<PAGE>
BEA Strategic Global Income Fund, Inc.
153 East 53rd Street
New York, NY 10022
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
William W. Priest, Jr. Gregg M. Diliberto
CHAIRMAN OF THE BOARD INVESTMENT OFFICER
Prof. Enrique R. Arzac Suzanne E. Moran
DIRECTOR INVESTMENT OFFICER
Lawrence J. Fox Hal Liebes
DIRECTOR SENIOR VICE PRESIDENT
James S. Pasman, Jr. Michael A. Pignataro
DIRECTOR SECRETARY
Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT
OFFICER
</TABLE>
- --------------------------------------------------------
INVESTMENT ADVISER
Credit Suisse Asset Management
153 East 53rd Street
New York, New York 10022
Phone 1-800-293-1232
- --------------------------------------------------------
ADMINISTRATOR
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
- --------------------------------------------------------
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
- --------------------------------------------------------
SHAREHOLDER SERVICING AGENT
BankBoston, N.A.
P.O. Box 1865
Mailstop 45-02-62
Boston, Massachusetts 02105-1865
Phone 1-800-730-6001
- --------------------------------------------------------
LEGAL COUNSEL
Willkie Farr & Gallagher
787 7th Avenue
New York, New York 10019
- --------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------
INCREASE YOUR FUND HOLDINGS THROUGH DIVIDEND
REINVESTMENT AND DIRECT CASH PURCHASES
The Fund offers the opportunity for all shareholders to participate in the
Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan"). Under the
Plan, participating shareholders receive, in lieu of cash dividends, common
stock of the Fund. In addition, participants in the Plan have the option of
making voluntary cash payments of $100 to $1,000 (per investment period), plus
any dividends received in cash, to the Plan Agent to purchase Fund shares in the
open market. A description of the Plan and additional information concerning
terms and conditions, and any applicable charges relating to the Plan is
included at the back of this report.
- --------------------------------------------------------------------------------
BEA Strategic Global Income Fund, Inc.
- --------------------------------------------------------------------------------
FIRST QUARTER REPORT
March 31, 1999
<PAGE>
BEA STRATEGIC GLOBAL INCOME FUND, INC.
- ----------
Dear Shareholders: April 27, 1999
We are writing to report on the activities of the BEA Strategic Global Income
Fund, Inc. ("the Fund") for the quarter ended March 31, 1999 and to discuss our
investment strategy.
At March 31, 1999, the Fund's net asset value ("NAV") was $9.19, compared to
an NAV of $9.29 at December 31, 1998. The Fund's total return (based on NAV and
assuming reinvestment of dividends of $0.27 per share) for the period was 2.1%.
At March 31, 1999, $51.9 million was invested in high yield debt securities;
$3.0 million in investment-grade debt securities; $15.2 million in
emerging-market debt securities; and the balance of $6.6 million in equity
securities. Of the debt securities, the largest concentration (54.4%) was
invested in B-rated issues.
THE MARKET: MORE COMFORTABLE WITH RISK
The revival in prices of "spread product"--debt securities whose market
valuation is driven by the difference, known as the "spread," between their
yields and those of U.S. Treasury debt--that began in the fourth quarter of
1998, continued into the first quarter of 1999. Investor sentiment became much
calmer, as the fear of risk that had hurt most spread product categories in
mid-1998 subsided.
Several factors combined to create an environment in which riskier fixed
income sectors like high yield and emerging market debt returned to favor:
- - The U.S. economy proved stronger than many people expected. This, in turn,
reduced the likelihood of further cuts in U.S. interest rates after the
Federal Reserve eased by 75 basis points in the fourth quarter, which meant
that Treasuries would probably not rally. Spread product thus did not have to
compete with Treasuries for investor attention as much as it did earlier in
1998.
- - Brazil devalued its currency in mid-January in a move that many considered
one of the last potential pieces of truly bad news that could come from the
emerging world. With the devaluation out of the way, a more aggressive
approach from Brazilian policy makers and little "contagion"-type effect on
other emerging markets, a significant source of anxiety for financial markets
worldwide declined. Not surprisingly, so much good news from Brazil was
especially favorable for emerging debt markets.
- - Liquidity was ample, fueled by a remarkable 70+ interest-rate reductions
globally since the beginning of the fourth quarter and the completion of the
fairly orderly sale of huge fixed income positions by battered hedge funds.
- - There were indications that Japan was beginning to act in an increasingly
market-friendly way to stimulate its depressed economy. While the economy
itself remained mired in recession, investor perception about Japan became
notably more positive.
The generalized improvement in spread product was disproportionately
beneficial for high yield as well as emerging market debt:
- - As represented by the Salomon Smith Barney High-Yield Market Index (SSBHYMI),
high yield returned 1.5% and was the top-performing sector in the U.S. fixed
income universe.
- - Emerging debt, in the form of the J.P. Morgan Emerging Markets Bond Index
Plus, returned 5.1%.
- - Both performances were substantially better than that of the Lehman Brothers
Aggregate Bond Index, a standard proxy for U.S. investment-grade instruments,
which declined 0.5%.
In addition to the overall environment, market-specific factors contributed
to high yield's strength. Increasing investor appetite was reflected in higher
cash flows into high yield mutual funds, as well as heavy demand for
collateralized bond obligations backed by high yield instruments. New issuance
of $30.1 billion was nearly 40% lower than the $49.7 billion level recorded in
the first quarter of 1998, which helped to tighten the market's supply/demand
profile.
PERFORMANCE: EFFECTIVE SECTOR ALLOCATION
Our confidence in the long-term viability of our strategy paid off in the
quarter, as the Fund performed strongly due to effective sector allocation on
several different levels:
INTERNATIONAL. With nearly one-quarter of the portfolio invested in
emerging markets, the Fund was a natural beneficiary of the quarter's strength
in the emerging sector. Our emerging allocation focused on countries with strong
or improving fundamentals, such as Mexico, South Korea and the Philippines, and
we raised exposure to nations like Venezuela that should benefit as commodity
prices stabilize.
INDUSTRIES. Among industries, our three largest exposures remained in
telecommunications and cable/media. The Fund's performance benefited in two
ways: not only did both industries perform much better than the overall high
yield market (as represented by SSBHYMI), but we significantly overweighted them
(relative to SSBHYMI) as well.
We also underweighted health care and energy, which were two of the
quarter's three worst-performing sectors in the entire high yield market.
ZEROS VS. CASH-PAY. Through our substantial overweighting in
telecommunications, the portfolio was more highly exposed than the high yield
market to deferred-interest
2
<PAGE>
instruments such as zero-coupon bonds. Zeros outperformed traditional cash-pay
instruments during the quarter by nearly a five-to-one margin.
CREDIT RATINGS. On the credit spectrum, the Fund's single biggest high
yield concentration was in B-rated securities, which outperformed SSBHYMI.
OUTLOOK: OPTIMISTIC ON HIGH YIELD AND EMERGING MARKETS
HIGH YIELD. Our near-term outlook for the high yield market is optimistic.
We expect sentiment and price appreciation to be supported by the ongoing
strength of the economy; minimal inflation; the likelihood that interest rates
will stay at current levels; and signs of improvement in economically sensitive
industries. Yield spreads relative to comparable-maturity U.S. Treasury
bonds--which have steadily fallen since peaking in mid-1998--should continue to
narrow, which should push bond prices higher.
We see two main areas for potential concern at the moment. The first of
these is the market's persistently high level of volatility. The other is the
rising vulnerability of the U.S. equity market (to which activity in high yield
is closely correlated), whose share valuations are becoming increasingly
stretched. Although we do not expect the Federal Reserve to raise interest
rates, furthermore, we would not be surprised if Fed Chairman Alan Greenspan
made comments designed to dampen buying activity in U.S. financial markets. If
he did so, bond prices would likely fall to some degree.
The essential strategy with which we have managed the Fund for some time
remains intact. We are keeping the portfolio most heavily weighted in
telecommunications and cable/ media, whose positive industry and company
fundamentals are unchanged. Although we continue to avoid meaningful positions
in economically sensitive industries, in which fundamentals have been lackluster
for some time, we may selectively increase exposure if prospects keep improving.
INTERNATIONAL. We view the prospects for emerging debt markets as positive
both on a near- and long-term basis. In the near term, activity should benefit
from a combination of effective monetary policy management in Brazil, firming
oil prices and improving investor sentiment about conditions both in emerging
and developed markets. In the long term, yields compare favorably with those of
other asset classes on a risk-adjusted basis.
We must also caution, though, that emerging debt markets are vulnerable to
potentially adverse developments (E.G., slower U.S. or global economic growth,
Chinese currency devaluation) that may cause periods of turbulence.
Our emerging strategy continues to favor stronger sovereign credits--which
should best weather periodic phases of market volatility--and those with high
exposure to commodity prices, notably oil. In addition to Mexico, which is a
member of both groups, examples of stronger credits include Panama, Peru, South
Korea and the Philippines, while attractive commodity-related credits are
Venezuela and Colombia.
As developments occur that we believe would be of interest to you, we will
keep you informed. Meanwhile, if you have any questions about your portfolio or
the capital markets generally, please feel free to call upon us at any time.
We appreciate your interest in the Fund and would be pleased to respond to
your questions or comments. Any questions regarding net asset value,
performance, dividends, portfolio management or allocations should be directed
to Credit Suisse Asset Management at (800) 293-1232. All other inquiries
regarding account information or requests for a prospectus or other reports
should be directed to the Fund's Shareholder Servicing Agent at (800) 730-6001.
Sincerely yours,
/s/ Richard J. Lindquist
Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT OFFICER*
/s/ William W. Priest, Jr.
William W. Priest, Jr.
CHAIRMAN OF THE BOARD*
FROM CREDIT SUISSE ASSET MANAGEMENT:
I. Effective January 12, 1999, the Fund's investment adviser, BEA
Associates, changed its name to Credit Suisse Asset Management ("CSAM"). In
making the announcement, the firm said that it expected the new name to enhance
its recognition as a global asset manager. CSAM is the investment division of
Credit Suisse Group, one of the world's largest financial organizations, with
$600 billion in assets under management.
II. Effective May 11, 1999, the BEA Strategic Global Income Fund, Inc.
announced that following approval by shareholders at their Annual Shareholders'
Meeting held on May 10, 1999, the fund has changed its name to Credit Suisse
Asset Management Strategic Global Income Fund, Inc.
* Richard J. Lindquist, who is a Managing Director of Credit Suisse Asset
Management ("CSAM"), formerly known as BEA Associates, is primarily responsible
for management of the Fund's assets. He has served in such capacity since
November 21, 1996. Prior to that date, he served as Vice President to the Fund,
a position he assumed on August 15, 1989. Mr. Lindquist joined CSAM on May 1,
1995 as a result of CSAM's acquisition of CS First Boston Investment Management
Corporation ("CSFBIM"). Prior to joining CSAM and beginning in July, 1989, he
held various offices at CSFBIM. Mr. Lindquist is also President and Chief
Investment Officer of BEA Strategic Global Income Fund, Inc.
* William W. Priest, Jr., who is a Managing Director and Chief Executive
Officer-Americas of Credit Suisse Asset Management ("CSAM"), formerly known as
BEA Associates, joined CSAM in 1972. Mr. Priest is Director and Chairman of the
Board of BEA Strategic Global Income Fund, Inc.; The Brazilian Equity Fund,
Inc.; The Chile Fund, Inc.; The Emerging Markets Infrastructure Fund, Inc.; The
Emerging Markets Telecommunications Fund, Inc.; The First Israel Fund, Inc.; The
Indonesia Fund, Inc.; The Latin America Equity Fund, Inc.; The Latin America
Investment Fund, Inc.; and The Portugal Fund, Inc.
3
<PAGE>
PORTFOLIO OF INVESTMENTS
- ---------
MARCH 31, 1999
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
- -----------------
DOMESTIC SECURITIES (78.4%)
- --------------------------------------------------------------------------------------------
- -----------------
CORPORATE OBLIGATIONS (67.9%)
- --------------------------------------------------------------------------------------------
- -----------------
AUTOMOTIVE (1.7%)
Cambridge Industries, Inc.
Sr. Sub. Notes
10.25%, 7/15/07 B3 $ 250 $ 209,375
Delco Remy International, Inc.
Gtd. Sr. Sub. Notes
10.625%, 8/1/06 B2 250 265,938
(2) MCII Holdings Corp.
Secured Notes
12.00%, 11/15/02 N/R 400 352,000
Oxford Automotive, Inc.
Gtd. Sr. Sub. Notes
10.125%, 6/15/07 Caa1 250 260,000
(1) 10.125%, 6/15/07 Caa1 250 258,750
------------
GROUP TOTAL 1,346,063
------------
- --------------------------------------------------------------------------------------------
- -----------------
BROADCASTING (6.5%)
(2) Acme Television, L.L.C./ ACME
Financial Corp.
Gtd. Sr. Discount Notes
0.00%, 9/30/04 B3 500 426,250
(2)(3) Australis Holdings Pty. Ltd.
Yankee Sr. Secured Discount
Notes
0.00%, 11/1/02 N/R 650 6,500
(2)(3) Australis Media Ltd.
Yankee Units
15.75%, 5/15/03 C 229 1,144
15.75%, 5/15/03 C 500 2,500
Capstar Broadcasting Partners,
Inc.:
Sr. Sub. Notes
9.25%, 7/1/07 B2 200 210,000
(2) Sr. Discount Notes
0.00%, 2/1/09 N/R 500 422,500
(1) Chancellor Media Corp.
Sr. Notes
8.00%, 11/1/08 Ba2 200 208,250
Digital Television Services,
Inc./DTS Capital, Inc.
Series B, Gtd. Sr. Sub. Notes
12.50%, 8/1/07 B3 250 277,500
(2) EchoStar Communications Corp.
Gtd. Sr. Discount Notes
0.00%, 6/1/04 B2 400 414,000
(1) Granite Broadcasting, Inc.
Sr. Sub. Notes
8.875%, 5/15/08 B3 250 251,250
Pegasus Media &
Communications, Inc.
Series B, Notes
12.50%, 7/1/05 B2 250 275,000
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
Sinclair Broadcast Group,
Inc.:
Sr. Sub. Notes
10.00%, 9/30/05 B2 $ 300 $ 318,000
Sr. Sub. Notes
8.75%, 12/15/07 B2 250 255,000
(2) Spanish Broadcasting System,
Inc.
Sr. Notes
7.50%, 6/15/02 B3 250 280,937
(2) United International Holdings,
Inc.
Series B, Sr. Discount Notes
0.00%, 2/15/08 B3 500 340,000
Univision Network Holding,
L.P.
Sub. Notes
Zero Coupon, 12/17/02 N/R 573 690,555
Young Broadcasting, Inc.:
Series B, Gtd. Sr. Sub. Notes
9.00%, 1/15/06 B2 200 205,000
8.75%, 6/15/07 B2 450 463,500
------------
GROUP TOTAL 5,047,886
------------
- --------------------------------------------------------------------------------------------
- -----------------
BUSINESS SERVICES (0.7%)
(1) General Binding Corp.
Gtd. Sr. Sub. Notes
9.375%, 6/1/08 B2 250 254,375
(1) Iron Mountain, Inc.
Sr. Notes
8.75%, 9/30/09 B3 250 257,500
------------
GROUP TOTAL 511,875
------------
- --------------------------------------------------------------------------------------------
- -----------------
CABLE (7.3%)
Adelphia Communications Corp.
Series B, Sr. Notes
8.375%, 2/1/08 B3 200 204,250
Avalon Cable Holdings, Inc.
Units
Zero Coupon, 12/1/08 Caa1 500 320,625
CSC Holdings, Inc.
Sr. Sub. Notes
9.875%, 2/15/13 B1 250 276,562
Century Communications Corp.
Sr. Notes
8.75%, 10/1/07 Ba3 250 260,625
(1) Charter Communications
Holdings:
(2) Sr. Discount Notes
0.00%, 4/1/11 B2 300 193,500
Sr. Notes
8.625%, 4/1/09 B2 200 205,250
Comcast Corp.
Sr. Sub. Notes
9.125%, 10/15/06 Ba3 250 269,657
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
(2) Comcast UK Cable Partners,
Ltd.
Yankee Sr. Debentures
0.00%, 11/15/07 B2 $ 500 $ 436,875
(1)(2) DIVA Systems Corp.
Units
0.00%, 3/1/08 N/R 810 247,050
(2) Diamond Cable Communications
plc
Yankee Discount Notes
0.00%, 12/15/05 Caa1 300 261,000
(1)(2) Falcon Holdings Group,
L.P./Falcon Funding Corp.
Sr. Discount Debentures
0.00%, 4/15/10 B2 500 348,125
Helicon Group, L.P.
Series B, Sr. Secured Notes
11.00%, 11/1/03 B1 200 209,000
InterMedia Capital Partners
IV, L.P./ InterMedia Partners
Capital Corp.
Sr. Notes
11.25%, 8/1/06 B2 250 284,375
International CableTelevision
Sr. Notes
11.50%, 2/1/06 B3 500 435,000
James Cable Partners, L.P.
Series B, Sr. Notes
10.75%, 8/15/04 N/R 100 107,000
(1) Lenfest Communications, Inc.
Sr. Sub. Notes
10.50%, 6/15/06 B2 350 411,250
NTL, Inc.:
Series B, Sr. Notes
10.00%, 2/15/07 B3 250 265,000
(1)(2) 0.00%, 10/1/08 B3 250 170,625
OpTel, Inc.
Series B, Sr. Notes
13.00%, 2/15/05 B3 250 245,000
Rifkin Acquisitions Partners,
L.P.
Sr. Sub. Notes
11.125%, 1/15/06 B3 250 280,312
(2) Telewest Communications plc
Yankee Sr. Sub. Discount
Debentures
0.00%, 10/1/07 B1 250 220,000
------------
GROUP TOTAL 5,651,081
------------
- --------------------------------------------------------------------------------------------
- -----------------
CHEMICALS (1.0%)
Huntsman Polymers Corp.
Sr. Notes
11.75%, 12/1/04 B1 400 435,500
NL Industries, Inc.
Sr. Secured Notes
11.75%, 10/15/03 B1 150 160,687
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
Texas Petrochemical Corp.
Series B, Sr. Sub. Notes
11.125%, 7/1/06 N/R $ 200 $ 197,500
------------
GROUP TOTAL 793,687
------------
- --------------------------------------------------------------------------------------------
- -----------------
CONSTRUCTION & BUILDING MATERIALS (1.1%)
American Architectural
Products Corp.
Gtd. Sr. Notes
11.75%, 12/01/07 Caa1 250 199,375
Brand Scaffold Services
Sr. Notes
10.25%, 2/15/08 B3 150 147,562
Collins & Aikman Floor
Coverings, Inc.
Gtd. Sr. Sub. Notes
10.00%, 1/15/07 B3 250 265,625
Presley Companies
Sr. Notes
12.50%, 7/1/01 Caa3 250 211,250
------------
GROUP TOTAL 823,812
------------
- --------------------------------------------------------------------------------------------
- -----------------
CONSUMER PRODUCTS & SERVICES (2.5%)
(2) Coinstar, Inc.
Sr. Discount Notes
0.00%, 10/1/06 Caa1 350 311,062
Holmes Products Corp.
Gtd. Sr. Sub. Notes
9.875%, 11/15/07 B3 200 192,750
Jordan Industries, Inc.
Series B, Sr. Notes
10.375%, 8/1/07 B3 225 223,875
Playtex Products, Inc.
Series B, Gtd. Sr. Notes
8.875%, 7/15/04 B1 200 207,000
Revlon Consumer Products Corp.
Series B, Sr. Sub. Notes
8.625%, 2/1/08 B3 250 232,500
Signature Brands USA, Inc.
Sr. Sub. Notes
13.00%, 8/15/02 B3 500 543,342
(3)(4) Town & Country Corp.
Sr. Sub. Notes
13.00%, 5/31/98 N/R 616 0
(2) United Rentals, Inc.
Sr. Sub. Notes
8.783%, 1/15/09 B1 250 254,375
------------
GROUP TOTAL 1,964,904
------------
- --------------------------------------------------------------------------------------------
- -----------------
ELECTRONICS (1.4%)
Details, Inc.
Series B, Sr. Sub Notes
10.00%, 11/15/05 B3 250 244,063
Unisys Corp.
Sr. Notes
11.75% 10/15/04 B1 100 113,250
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
(1) Verio, Inc.
Units
13.50%, 6/15/04 B3 $ 400 $ 464,000
Viasystems, Inc.
Sr. Sub. Notes
9.75%, 6/1/07 B3 250 235,312
------------
GROUP TOTAL 1,056,625
------------
- --------------------------------------------------------------------------------------------
- -----------------
ENERGY (3.3%)
Belden & Blake Energy Co.
Series B, Gtd. Sr. Sub. Notes
9.875%, 6/15/07 B3 200 116,000
Bellwether Exploration Co.
Gtd. Sr. Sub. Notes
10.875%, 4/1/07 B3 250 254,062
(1) Canadian Forest Oil, Ltd.
Sr. Sub. Notes
8.75%, 9/15/07 B2 250 240,625
Cliffs Drilling Co.
Series D, Gtd. Sr. Notes
10.25%, 5/15/03 B1 250 240,000
Continental Resources, Inc.
Gtd. Sr. Notes
10.25%, 8/1/08 B3 150 114,750
Dual Drilling Co.
Gtd. Sr. Sub. Notes
9.875%, 1/15/04 Baa3 250 262,890
Energy Corp. of America
Series A, Sr. Sub. Notes
9.50%, 5/15/07 B2 250 232,812
H.S. Resources, Inc.
Gtd. Sr. Sub. Notes
9.25%, 11/15/06 B2 250 245,000
Key Energy Service
Units
14.00%, 1/15/09 N/R 250 232,500
Korea Electric Power Co.
Debentures
7.00%, 2/1/27 Baa3 215 195,371
6.75%, 8/1/27 Baa3 160 146,515
(1) Southwest Royalties, Inc.
Series B, Gtd. Sr. Notes
10.50%, 10/15/04 B3 250 110,000
TransAmerican Energy Corp.
Sr. Secured Notes
11.50%, 6/15/02 B3 200 50,000
Wiser Oil Co.
Gtd. Sr. Sub. Notes
9.50%, 5/15/07 B2 250 160,000
------------
GROUP TOTAL 2,600,525
------------
- --------------------------------------------------------------------------------------------
- -----------------
ENTERTAINMENT (3.2%)
American Skiing Co.
Series B, Sr. Sub. Notes
12.00%, 7/15/06 B3 200 180,500
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
(1) Bally Total Fitness Holding
Corp.
Sr. Sub. Notes
9.875%, 10/15/07 B3 $ 150 $ 148,500
Booth Creek Ski Holdings, Inc.
Series B, Sr. Notes
12.50%, 3/15/07 Caa1 250 238,750
Cinemark U.S.A., Inc.
Series D, Sr. Sub. Notes
9.625%, 8/1/08 B2 200 207,500
Genmar Holdings, Inc.
Series A, Sr. Sub. Notes
13.50%, 7/15/01 Caa2 500 500,000
IHF Holdings, Inc.
Series B, Sr. Sec. Discount
Notes
Zero Coupon, 11/15/04 Caa2 300 54,375
PTI Holdings, Inc.
Sub. Notes
7.00%, 12/17/02 N/R 507 610,833
(1) Premier Cruises, Ltd.
Sr. Notes
11.00%, 3/15/08 B3 250 61,875
Production Resource Group,
L.L.C./PRG Finance Group
Gtd. Sr. Sub. Notes
11.50%, 1/15/08 Caa2 250 249,375
(1) Regal Cinemas, Inc.
Sr. Sub. Notes
8.875%, 12/15/10 B2 250 245,625
------------
GROUP TOTAL 2,497,333
------------
- --------------------------------------------------------------------------------------------
- -----------------
FINANCIAL SERVICES (0.3%)
(3) Westfed Holdings
Sr. Debentures
15.50%, 9/15/99 N/R 250 205,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
FOOD & BEVERAGES (0.8%)
AmeriServ Food Distribution,
Inc.
Gtd. Sr. Notes
8.875%, 10/15/06 B1 200 168,250
Archibald Candy Corp.
Gtd. Sr. Secured Notes
10.25%, 7/1/04 B2 250 256,875
(1) Fleming Companies, Inc.
Sr. Sub. Notes
10.50%, 12/1/04 B3 200 188,250
------------
GROUP TOTAL 613,375
------------
- --------------------------------------------------------------------------------------------
- -----------------
HEALTH CARE (0.8%)
(1) ICN Pharmaceutical
Sr. Notes
8.75%, 11/15/08 Ba3 250 251,875
(1) Insight Health Services Corp.
Gtd. Sr. Sub. Notes
9.625%, 6/15/08 B3 200 196,000
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
Integrated Health Services,
Inc.
Sr. Sub. Notes
9.25%, 1/15/08 B2 $ 250 $ 160,000
------------
GROUP TOTAL 607,875
------------
- --------------------------------------------------------------------------------------------
- -----------------
INDUSTRIAL GOODS & MATERIALS (3.2%)
Atlantis Group, Inc.
Sr. Notes
11.00%, 2/15/03 B2 250 252,500
(1) Golden Ocean Group, Ltd.
Gtd. Sr. Notes
10.00%, 8/31/01 B3 513 106,447
(1) Hayes Lemmerz International,
Inc.
Gtd. Sr. Notes
8.25%, 12/15/08 B2 500 502,500
Haynes International, Inc.
Sr. Notes
11.625%, 9/1/04 B3 250 195,000
MVE, Inc.
Sr. Secured Debentures
12.50%, 2/15/02 B3 440 470,800
Park-Ohio Industries, Inc.
Sr. Sub. Notes
9.25%, 12/1/07 B2 200 204,750
(1) Romacorp., Inc.
Sr. Notes
12.00%, 7/1/06 B3 250 243,750
SRI Receivables Purchase Co.,
Inc.
Series B, Notes
12.50%, 12/15/00 N/R 500 515,000
------------
GROUP TOTAL 2,490,747
------------
- --------------------------------------------------------------------------------------------
- -----------------
METALS & MINING (2.7%)
Algoma Steel, Inc.
Yankee First Mortgage Notes
12.375%, 7/15/05 B1 250 242,500
Gulf States Steel, Inc.
First Mortgage Notes
13.50%, 4/15/03 B1 250 60,000
(1) Metallurg, Inc.
Series B, Gtd. Sr. Notes
11.00%, 12/1/07 B3 250 231,875
NS Group, Inc.
Gtd. Sr. Secured Debentures
13.50%, 7/15/03 B3 150 159,562
(1) National Steel Corp.
First Mortgage Bonds
9.875%, 3/1/09 Ba3 250 256,875
Republic Engineered Steel,
Inc.
First Mortgage Bonds
9.875%, 12/15/01 Caa1 250 251,563
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
(1) Sheffield Steel Corp.
Series B, First Mortgage
Bonds
11.50%, 12/1/05 Caa2 $ 250 $ 232,188
WCI Steel, Inc.
Series B, Sr. Secured Notes
10.00%, 12/1/04 B2 250 255,625
Weirton Steel Corp.
Sr. Notes
11.375%, 7/1/04 B2 200 192,000
Wheeling-Pittsburg Corp.
Sr. Notes
9.25%, 11/15/07 B2 250 246,250
------------
GROUP TOTAL 2,128,438
------------
- --------------------------------------------------------------------------------------------
- -----------------
PACKAGING/CONTAINERS (2.9%)
AEP Industries, Inc.
Sr. Sub. Notes
9.875%, 11/15/07 B2 400 412,000
BWAY Corp.
Gtd. Sr. Sub. Notes
10.25%, 4/15/07 B2 150 160,500
Container Corp. of America
Gtd. Sr. Notes
9.75%, 4/1/03 B1 250 263,125
(2) Crown Packaging Enterprises,
Ltd.
Yankee Sr. Secured Discount
Notes
0.00%, 8/1/06 Ca1 925 13,875
Gaylord Container Corp.
Series B, Sr. Notes
9.75%, 6/15/07 B3 250 241,250
Plastic Containers, Inc.
Series B, Sr. Secured Notes
10.00%, 12/15/06 B1 250 265,000
(1) Radnor Holdings, Inc.
Series B, Gtd. Sr. Notes
10.00%, 12/1/03 B2 400 412,000
Riverwood International Corp.
Gtd. Sr. Sub. Notes
10.875%, 4/1/08 Caa1 250 241,250
(1) Stone Container Finance Co.
Yankee Gtd. Sr. Notes
11.50%, 8/15/06 B2 250 271,875
------------
GROUP TOTAL 2,280,875
------------
- --------------------------------------------------------------------------------------------
- -----------------
PAPER & FOREST PRODUCTS (0.8%)
(1) Ainsworth Lumber Co., Ltd.
Yankee Sr. Secured Notes
12.50%, 7/15/07 B3 250 265,000
Color Spot Nurseries
Sr. Sub. Notes
10.50%, 12/15/07 Caa1 200 109,500
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
Crown Paper Co.
Sr. Sub. Notes
11.00%, 9/1/05 B3 $ 100 $ 85,500
Malette, Inc.
Yankee Sr. Secured Debentures
12.25%, 7/15/04 Ba3 150 160,125
------------
GROUP TOTAL 620,125
------------
- --------------------------------------------------------------------------------------------
- -----------------
PUBLISHING & INFORMATION SERVICES (2.7%)
Ampex Corp.
Series B, Sr. Notes
12.00%, 3/15/03 N/R 250 260,000
(2) InterAct Systems, Inc.
Sr. Discount Notes
0.00%, 8/1/03 N/R 400 144,000
(1) Level 3 Communications, Inc.
Sr. Notes
9.125%, 5/1/08 B3 275 275,688
0.00%, 12/1/08 B3 550 345,813
(2) Liberty Group Publishing, Inc.
Sr. Discount Debentures
0.00%, 2/1/09 Caa1 300 161,625
(1) Mentus Media Corp.
Units
12.00%, 2/1/03 N/R 391 381,225
Tri-State Outdoor Media Group,
Inc.
Sr. Notes
11.00%, 5/15/08 N/R 300 312,750
TV Guide, Inc.
Sr. Sub. Notes
8.125%, 3/1/09 Ba3 250 253,750
------------
GROUP TOTAL 2,134,851
------------
- --------------------------------------------------------------------------------------------
- -----------------
RESTAURANTS, HOTELS & GAMING (4.4%)
American Restaurant Group,
Inc.
Gtd. Sr. Secured Notes
11.50%, 2/15/03 B3 250 225,313
Casino America, Inc.
Gtd. Sr. Notes
12.50%, 8/1/03 B1 250 285,313
Casino Magic of Louisiana,
Corp.
Series B, Gtd. First Mortgage
Notes
13.00%, 8/15/03 B3 300 336,000
(4) Colorado Gaming &
Entertainment Co.
Gtd. Sr. Notes
12.00%, 6/1/03 N/R 443 476,891
Friendly Ice Cream Corp.
Gtd. Sr. Notes
10.50%, 12/1/07 B1 250 231,875
HMH Properties
Gtd. Sr. Secured Notes
7.875%, 8/1/08 Ba2 250 240,000
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
Hard Rock Hotel, Inc.
Sr. Sub. Notes
9.25%, 4/1/05 B3 $ 250 $ 243,125
(1) Hollywood Park, Inc.
Sr. Sub. Notes
9.50%, 8/1/07 B2 200 205,000
Horseshoe Gaming L.L.C.
Series B, Gtd. Sr. Notes
12.75%, 9/30/00 B1 375 397,500
Series B, Sr. Sub. Notes
9.375%, 6/15/07 B3 300 307,500
Mohegan Tribal Gaming
Authority
Series B, Sr. Secured Notes
8.125%, 1/1/06 Ba1 200 204,250
Prime Hospitality Corp.
Secured First Mortgage Notes
9.25%, 1/15/06 Ba2 250 258,750
------------
GROUP TOTAL 3,411,517
------------
- --------------------------------------------------------------------------------------------
- -----------------
RETAIL (2.9%)
(1)(2) Advance Holdings Corp.
Sr. Discount Debentures
0.00%, 4/15/09 Caa2 350 214,813
(1) Advance Stores Co., Inc.
Gtd. Sr. Sub. Notes
10.25%, 4/15/08 Caa1 150 152,625
(1) County Seat Stores, Inc.
Units
12.75%, 11/1/04 N/R 250 87,500
Dairy Mart Convenience Stores,
Inc.
Sr. Sub. Notes
10.25%, 3/15/04 B3 251 235,312
Jitney-Jungle Stores of
America, Inc.:
Gtd. Sr. Notes
12.00%, 3/1/06 B3 250 277,500
Gtd. Sr. Sub. Notes
10.375%, 9/15/07 B2 250 253,750
K Mart Corp.
Debentures
7.75%, 10/1/12 Ba2 200 206,250
(2) Mrs. Fields Holding Co.
Units
0.00%, 12/1/05 Caa2 500 278,750
Pantry, Inc.
Sr. Sub. Notes
10.25%, 10/15/07 B3 200 210,000
Pathmark Stores, Inc.
Sr. Sub. Notes
9.625%, 5/1/03 Caa1 100 102,500
(1) Simmons Co.
Sr. Sub. Notes
10.25%, 3/15/09 B3 250 258,125
------------
GROUP TOTAL 2,277,125
------------
- --------------------------------------------------------------------------------------------
- -----------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
TELECOMMUNICATIONS (15.8%)
Applied Extrusion Technologies
Corp.
Sr. Notes
11.50%, 4/1/02 B2 $ 250 $ 255,000
Carrier1
Units
13.25%, 2/15/09 B3 300 312,000
(2) Clearnet Communications, Inc.
Sr. Discount Notes
0.00%, 12/15/05 B3 250 229,063
Concentric Network Corp.
Sr. Notes
12.75%, 12/15/07 N/R 250 285,000
(1)(2) DTI Holdings, Inc.
Units
0.00%, 3/1/08 N/R 300 82,500
(1) Dobson/Sygnet Communications
Co.
Sr. Notes
12.25%, 12/15/08 N/R 250 268,125
(1)(2) Dolphin Telecom plc
Sr. Discount Notes
0.00%, 6/1/08 Caa1 250 126,250
(2) E Spire Communications, Inc.
Sr. Discount Notes
0.00%, 11/1/05 N/R 750 510,000
Econophone, Inc.
Sr. Discount Notes
0.00%, 2/15/08 N/R 500 275,000
(1) Exodus Communications, Inc.
Sr. Notes
11.25%, 7/1/08 N/R 50 55,000
(1)(2) Focal Communications Corp.
Sr. Discount Notes
0.00%, 2/15/08 N/R 200 112,000
(2) GST USA, Inc.
Gtd. Sr. Discount Notes
0.00%, 12/15/05 N/R 600 440,250
Global Crossing Holdings, Ltd.
Gtd. Sr. Notes
9.625%, 5/15/08 N/R 250 278,437
Globalstar L.P./Globalstar
Capital Corp.
Sr. Notes
10.75%, 11/1/04 B3 300 189,000
Globix Corp.
Sr. Notes
13.00%, 5/1/05 N/R 250 241,250
ICG Holdings, Inc.:
(2) Gtd. Sr. Sub. Notes
0.00%, 9/15/05 N/R 350 309,750
(2) Gtd. Sr. Discount Notes
0.00%, 3/15/07 N/R 750 547,500
ICG Services, Inc.
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
(1)(2) Gtd. Sr. Discount Notes
0.00%, 5/1/08 N/R $ 250 $ 149,375
Intermedia Communications,
Inc.:
(2) Series B, Sr. Discount Notes
0.00%, 7/15/07 B2 300 228,000
Sr. Notes
8.875%, 11/1/07 B2 150 152,625
Iridium Opertating L.L.C./
Iridium Capital Corp.
Series C/EN Gtd. Sr. Notes
11.25%, 7/15/05 B3 250 95,000
Jacor Communications, Inc.
Gtd. Sr. Sub. Notes
8.00%, 2/15/10 B2 250 266,875
Jordan Telecommunications
Products, Inc.
Series B, Sr. Discount Notes
0.00%, 8/1/07 B3 250 203,750
(2) McCaw International, Ltd.
Sr. Discount Notes
0.00%, 4/15/07 Caa1 500 295,000
McLeod USA, Inc.:
(2) Sr. Discount Notes
0.00%, 3/1/07 B2 200 209,000
Sr. Notes
9.25%, 7/15/07 B2 100 80,250
(1)(2) MetroNet Communications Corp.
Sr. Discount Notes
0.00%, 11/1/07 B 350 282,188
0.00%, 6/15/08 B3 250 193,438
NEXTLINK Communications, Inc.:
Sr. Notes
12.50%, 4/15/06 B3 100 110,125
10.75%, 11/15/08 B3 250 268,125
(1)(2) Nextel Communications, Inc.
Sr. Discount Notes
0.00%, 2/15/08 B2 900 630,000
Orion Network Systems, Inc.
Gtd. Sr. Notes
11.25%, 1/15/07 B2 250 222,500
PLD Telekom, Inc.
Gtd. Sr. Notes
14.00%, 6/1/04 N/R 560 308,000
(2) Pagemart Nationwide, Inc.
Sr. Discount Notes
0.00%, 2/1/05 B3 750 629,063
(1) Petersburg Long Distance, Inc.
Conv. Sub. Notes
9.00%, 6/1/06 N/R 80 36,000
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
Price Communications
Corp./Price Communications
Cellular Holdings, Inc.
Sr. Discount Notes
11.25%, 8/15/08 Caa1 $ 212 $ 201,578
(2) Qwest Communications
International, Inc.
Sr. Discount Notes
0.00%, 10/15/07 B2 250 198,438
(2) RCN Corp.
Series B, Sr. Discount Notes
0.00%, 2/15/08 B3 300 190,875
RSL Communications plc:
Gtd. Senior Notes
9.125%, 3/1/08 B3 250 248,750
(1)(2) Rhythms Netconnections
Units
0.00%, 5/15/08 N/R 500 275,000
Sprint Spectrum, L.P./ Sprint
Spectrum Finance Corp.
Sr. Notes
11.00%, 8/15/06 B2 450 527,135
Star Choice Communications,
Inc.
Yankee Sr. Notes
13.00%, 12/15/05 N/R 200 204,750
(1) Startec Global Communications
Corp.
Units
12.00%, 5/15/08 N/R 350 310,975
T/SF Communications Corp
Series B, Guaranteed Sr. Sub.
Notes
10.375%, 11/1/07 B3 200 206,250
TCI Satillite Entertainment,
Inc.
Sr. Sub. Notes
10.875%, 2/15/07 B3 200 154,000
(2) Sr. Sub. Discount Notes
0.00%, 2/15/07 B3 150 87,375
Talton Holdings, Inc.
Gtd. Sr. Notes
11.00%, 6/30/07 B2 250 224,375
(2) USN Communications, Inc.
Units
0.00%, 8/15/04 Caa1 3 0
Western Wireless Corp.
Sr. Sub. Notes
10.50%, 2/1/07 B3 250 273,125
(2) WinStar Communications, Inc.
Sr. Discount Notes
0.00%, 10/15/05 Caa1 400 285,000
------------
GROUP TOTAL 12,263,065
------------
- --------------------------------------------------------------------------------------------
- -----------------
TEXTILES/APPAREL (0.3%)
Maxim Group, Inc.
Gtd. Sr. Sub. Notes
9.25%, 10/15/07 B2 250 247,186
------------
- -------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
TRANSPORTATION (1.1%)
AirTran Airlines, Inc.
Sr. Notes
10.50%, 4/15/01 N/R $ 500 $ 434,375
Canadian Airlines Corp.
Sr. Notes
12.25%, 8/1/06 Caa2 300 167,250
(1) Cenargo International plc
First Priority Ship Mortgage
Notes
9.75%, 6/15/08 Ba3 100 93,750
(1) Trans World Airlines, Inc.
Sr. Notes
11.375%, 3/1/06 Caa1 250 131,875
------------
GROUP TOTAL 827,250
------------
- --------------------------------------------------------------------------------------------
- -----------------
WASTE MANAGEMENT (0.5%)
Waste Systems International,
Inc.
Sr. Notes
11.50%, 1/15/06 Caa1 350 349,563
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL CORPORATE OBLIGATIONS
(Cost $56,046,587) 52,750,783
------------
- --------------------------------------------------------------------------------------------
- -----------------
COLLATERALIZED MORTGAGE OBLIGATIONS (0.3%)
- -------------------------------------------------------------------------------------------
- -----------------
Asset Securitization Corp.
Series 1996-MD6, Class A6,
7.11%, 11/13/26
(cost $233,342) Baa2 230 214,906
------------
- --------------------------------------------------------------------------------------------
- -----------------
ASSET BACKED OBLIGATIONS (1.8%)
- -------------------------------------------------------------------------------------------
- -----------------
Green Tree Financial Corp.
Manufactured Housing
Installment Sale Contracts:
Series 1993-4, Class B1
7.20%, 1/15/19 Baa3 964 950,320
Series 1995-6, Class A3
6.65%, 9/15/26 Aaa 104 104,159
Merrill Lynch Home Equity
Acceptance Trust
Series 1994-A, Class A-2
6.47%, 7/17/22 A3 212 207,053
Nationscredit Grantor Trust
Boat Retail Installment Sale
Contracts
Series 1996-1, Class A
5.85%, 9/15/11 Aaa 106 105,294
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL ASSET BACKED OBLIGATIONS
(Cost $1,394,184) 1,366,826
- -------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Shares/
Units
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
- -----------------
COMMON STOCKS (2.3%)
- -------------------------------------------------------------------------------------------
- -----------------
CABLE (0.0%)
(5) OpTel, Inc. 250 3
------------
- --------------------------------------------------------------------------------------------
- -----------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Shares/
Units Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
CONSUMER PRODUCTS & SERVICES (0.1%)
(5) Coinstar, Inc. 4,196 $ 67,136
Crown Packaging Holdings, Ltd. 100,848 1,008
------------
GROUP TOTAL 68,144
------------
- --------------------------------------------------------------------------------------------
- -----------------
FINANCIAL SERVICES (0.0%)
(5)(6) Westfed Holdings, Inc.
Class B (acquired 9/20/88,
$127) 4,223 0
------------
- --------------------------------------------------------------------------------------------
- -----------------
FOOD & BEVERAGES (1.7%)
(5)(6) Dr. Pepper Bottling Holdings,
Inc.
Class A (acquired 10/21/88,
cost $40,500) 45,000 1,302,187
(5) Specialty Foods Corp. 22,500 1,125
------------
GROUP TOTAL 1,303,312
------------
- --------------------------------------------------------------------------------------------
- -----------------
INDUSTRIAL GOODS & MATERIALS (0.2%)
(5)(6)(7) CIC I Acquisitions Corp.
(acquired 10/18/89, cost
$1,076,715) 2,944 200,192
------------
- --------------------------------------------------------------------------------------------
- -----------------
METALS & MINING (0.0%)
Sheffield Steel Corp. 2,500 10,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
PAPER & FOREST PRODUCTS (0.2%)
(1)(5)(8) Mail-Well, Inc. 7,102 94,989
(5) Mail-Well, Inc. 3,550 47,481
------------
GROUP TOTAL 142,470
------------
- --------------------------------------------------------------------------------------------
- -----------------
RESTAURANTS, HOTELS & GAMING (0.0%)
(5) Elsinore Corp. 6,178 2,317
(5) Isle Of Capri Casinos, Inc. 4,982 22,419
(5) Motels of America, Inc. 250 4,500
------------
GROUP TOTAL 29,236
------------
- --------------------------------------------------------------------------------------------
- -----------------
RETAIL (0.0%)
(5)(6) Jewel Recovery, L.P.
(acquired 7/30/93,
cost $0) 33,040 0
------------
- --------------------------------------------------------------------------------------------
- -----------------
TELECOMMUNICATIONS (0.1%)
(5) Intermedia Communications,
Inc. 1,253 33,361
(5) Pagemart Nationwide, Inc. 3,500 23,625
------------
GROUP TOTAL 56,986
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL COMMON STOCKS
(Cost $1,309,193) 1,810,343
------------
- --------------------------------------------------------------------------------------------
- -----------------
PREFERRED STOCKS (4.7%)
- --------------------------------------------------------------------------------------------
- -----------------
AEROSPACE/DEFENSE (0.4%)
(5) GPA Group plc
7% Second Preference Cum.
Conv. 650,000 325,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Shares/
Units Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
BROADCASTING (1.0%)
(5) Granite Broadcasting Corp.
12.75%, Cum. Exchangeable 11 $ 11,037
(1)(5) Source Media, Inc. 4,723 92,099
(5) Spanish Broadcasting System,
Inc.
14.25%, Cum. Exchangeable 6,545 700,315
------------
GROUP TOTAL 803,451
------------
- --------------------------------------------------------------------------------------------
- -----------------
CABLE (0.4%)
Adelphia Communications Corp.
13% Cum. Exchangeable, Series
B 2,500 286,250
------------
- --------------------------------------------------------------------------------------------
- -----------------
CONSUMER PRODUCTS & SERVICES (0.0%)
Renaissance Cosmetics, Inc.
14% Cumulative 3 0
------------
- --------------------------------------------------------------------------------------------
- -----------------
FINANCIAL SERVICES (0.0%)
(7) Westfed Holdings, Inc.
Class A (aquired
9/20/88-6/18/93, cost
$1,203,486) 14,246 14,246
------------
- --------------------------------------------------------------------------------------------
- -----------------
INDUSTRIAL GOODS & MATERIALS (0.0%)
NTL, Inc.
13% Exchangable, Series B 1 1,189
------------
- --------------------------------------------------------------------------------------------
- -----------------
MISCELLANEOUS (0.0%)
(5) TCR Holdings Corp.
Series B 351 21
Series C (non-voting) 193 11
Series D (non-voting) 509 27
Series E (non-voting) 1,053 66
------------
GROUP TOTAL 125
------------
- --------------------------------------------------------------------------------------------
- -----------------
PAPER & FOREST PRODUCTS (0.9%)
(5) SD Warren Co.
14% Cum. Exchangeable, Series
B 13,000 695,500
------------
- --------------------------------------------------------------------------------------------
- -----------------
PUBLISHING & INFORMATION SERVICES (0.5%)
Primedia, Inc.
10% Cum. Exchangeable, Series
D 3,500 362,250
------------
- --------------------------------------------------------------------------------------------
- -----------------
RESTAURANTS, HOTELS & GAMING (0.2%)
AmeriKing, Inc.
13%, Cum. Exchangeable 6,451 161,275
------------
- --------------------------------------------------------------------------------------------
- -----------------
TELECOMMUNICATIONS (1.3%)
(3) Intermedia Communications,
Inc.:
7% Jr. Convertible, Series E 15,000 300,000
NEXTLINK Communications, Inc.
14% Cum. Exchangeable 7,901 402,961
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares/
Units Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
Nextel Communications, Inc.
13% Exchangeable, Series D 308 $ 308,425
------------
GROUP TOTAL 1,011,386
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL PREFERRED STOCKS
(Cost $4,012,307) 3,660,672
------------
- --------------------------------------------------------------------------------------------
- -----------------
RIGHTS (0.0%)
- -------------------------------------------------------------------------------------------
- -----------------
(5) Terex Corp. expiring 5/15/02
(Cost $0) 2,000 28,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
WARRANTS (1.4%)
- --------------------------------------------------------------------------------------------
- -----------------
(5) Advanced Radio
Telecommunications Corp.
expiring 2/15/07 3,750 34,688
(5) American Telecasting, Inc.
expiring 6/23/99 350 0
(5) Ampex Corp.
expiring 3/15/03 8,500 12,750
(5) Australis Holdings Pty. Ltd.
expiring 10/30/01 250 3
(5) Bell Technology, Inc.
expiring 5/1/05 250 3
(5) CHC Helicopter Corp.
expiring 12/15/00 2,000 6,000
(5)(7) Chi Energy, Inc.:
Series B, expiring 11/8/03 3,790 9,100
expiring 12/31/03 2,700 6,482
Series C, expiring 11/8/05 2,459 5,904
(5) Concentric Network Corp.
expiring 12/15/07 250 75,000
(5) Crown Packaging Holdings, Ltd.
expiring 11/1/03 1,000 500
(5) DIVA Systems Corp.
expiring 5/15/06 900 6,300
expiring 3/1/08 2,430 24
(5) DTI Holdings, Inc.
expiring 3/1/08 1,500 1,500
(5) Dairy Mart Convenience Stores,
Inc.
expiring 12/1/01 4,172 1,043
(5) E. Spire Communications, Inc.
expiring 11/1/05 1,000 110,000
(5) Golden Ocean Group, Ltd.
expiring 8/31/01 342 86
(5) Great American Cookie Co.
expiring 1/15/01 90 0
(5) Hemmeter Enterprises, Inc.
expiring 12/15/99 3,000 0
(5) IntelCom Group, Inc.
expiring 9/1/05 1,155 19,635
<CAPTION>
Shares/
Units Value
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -----------------
(5) Interact Systems, Inc.
expiring 8/1/03 400 $ 0
(5) Intermedia Communications,
Inc.
expiring 6/1/00 300 27,075
(5) Isle Capri Casinos, Inc.
expiring 5/3/01 882 9
(5) Loral Orion Network Systems,
Inc.
expiring 1/31/07 250 2,750
(5) McCaw International, Ltd.
expiring 4/15/07 750 1,875
(5) Mentus Media Corp.
expiring 2/1/08 1,034 10
(5) NEXTLINK Communications, Inc.
expiring 2/1/09 6,000 0
(5) Nextel Communications, Inc.
expiring 4/25/99 500 6,000
(5) PLD Telekom, Inc.
expiring 6/01/06 560 0
(5) Price Communications Corp.
expiring 8/1/07 1,204 12,040
(5) Rhythms Netconnections
expiring 5/15/08 2,000 80,000
(5) SD Warren Co.
expiring 12/15/06 8,000 40,000
(5) Signature Brands, Ltd.
expiring 8/15/02 500 0
(5) Source Media, Inc.
expiring 11/1/07 2,235 18,439
(5) Spanish Broadcasting Systems
expiring 6/29/99 500 102,500
expiring 6/30/99 500 245,000
(5) Star Choice Communications,
Inc.
expiring 12/5/05 4,632 8,134
(5) United International Holdings
expiring 11/15/99 600 600
(5) Verio, Inc.
expiring 6/15/04 3,200 246,400
(5) Waste Systems International,
Inc.
expiring 3/2/04 5,250 52
(5) Wright Medical Technology
expiring 6/30/03 206 3
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL WARRANTS
(Cost $1,219,139) 1,079,905
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL DOMESTIC SECURITIES
(Cost $64,214,752) 60,911,435
------------
- --------------------------------------------------------------------
- -------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
FOREIGN SECURITIES (20.4%)
- --------------------------------------------------------------------------------------------
- -----------------
CORPORATE OBLIGATIONS (0.7%)
- --------------------------------------------------------------------------------------------
- -----------------
ARGENTINA (0.1%)
CIA Internacional
Telecomunicacoes
Sr. Notes
10.375%, 8/1/04 N/R ARP 145 $ 108,025
------------
- --------------------------------------------------------------------------------------------
- -----------------
BELGIUM (0.4%)
(1) Hermes Europe Railtel B.V.
Sr. Notes
10.375%, 1/15/09 N/R USD 250 267,500
------------
- --------------------------------------------------------------------------------------------
- -----------------
NETHERLANDS (0.2%)
CompleTelecom Europe N.V.
Units
14.00%, 2/15/09 Caa2 USD 250 130,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL CORPORATE OBLIGATIONS
(Cost $515,557) 505,525
------------
- --------------------------------------------------------------------------------------------
- -----------------
GOVERNMENT OBLIGATIONS (19.7%)
- --------------------------------------------------------------------------------------------
- -----------------
ARGENTINA (4.2%)
Argentina
9.75%, 9/19/27 Ba3 USD 270 224,775
Argentina Non-U.S. Global
Series L-GL
6.0625%, 3/31/23 Ba3 USD 850 624,750
Republic of Argentina:
11.00%, 10/9/06 Ba3 USD 50 47,813
Debentures
6.188%, 3/31/05 B1 USD 1,001 856,942
(9) Bocon PRO1 Notes
2.953%, 4/1/07 Ba3 USD 980 757,583
Secured Par Bonds,
Series L-GP
5.75%, 3/31/23 Ba1 USD 1,040 720,200
------------
GROUP TOTAL 3,232,063
------------
- --------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
- -----------------
BRAZIL (3.3%)
Federal Republic of Brazil:
Debentures
Series EI-L
6.125%, 4/15/06 B2 USD 163 $ 118,524
6.125%, 4/15/06 B1 USD 1,123 811,512
10.125%, 5/15/27 B1 USD 210 153,300
Capitialization Bonds
5.00%, 4/15/14 B1 USD 1,702 1,078,917
Discount Bond
6.125%, 4/15/24 N/R USD 610 380,488
------------
GROUP TOTAL 2,542,741
------------
- --------------------------------------------------------------------------------------------
- -----------------
BULGARIA (0.9%)
Republic of Bulgaria:
(2) Floating Rate Notes
2.50%, 7/28/12 B2 USD 650 367,250
(1)(9) Front Loaded Interest
Reduction Bonds, Series A
5.875%, 7/28/24 B2 USD 500 335,000
------------
GROUP TOTAL 702,250
------------
- --------------------------------------------------------------------------------------------
- -----------------
COLOMBIA (0.2%)
Republic of Colombia
12.243%, 8/13/05 Baa3 USD 190 173,850
------------
- --------------------------------------------------------------------------------------------
- -----------------
CROATIA (0.2%)
(9) Republic of Croatia
Floating Rate Notes
5.813%, 7/31/10 Baa3 USD 205 161,950
------------
- --------------------------------------------------------------------------------------------
- -----------------
HUNGARY (0.3%)
Republic of Hungary
Bonds
15.00%, 7/24/01 N/R HUF 50,000 220,463
------------
- --------------------------------------------------------------------------------------------
- -----------------
JORDAN (0.4%)
(2) Kingdom of Jordan
5.50%, 12/23/23 Ba3 USD 500 277,500
------------
- --------------------------------------------------------------------------------------------
- -----------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- -----------------
MEXICO (4.2%)
Cetes:
0.00%, 1/13/00 N/R MXN 3,250 $ 279,281
United Mexican States:
11.50%, 5/15/26 Ba2 USD 740 824,175
11.50%, 5/15/26 Ba2 USD 240 267,000
Secured Par Bonds
Series W-A
6.25%, 12/31/19 Ba2 USD 1,945 1,572,834
Secured Par Bonds
Series W-B
6.25%, 12/31/19 Ba2 USD 360 291,116
------------
GROUP TOTAL 3,234,406
------------
- --------------------------------------------------------------------------------------------
- -----------------
MOROCCO (0.7%)
(9) Republic of Morocco
6.0625%, 1/1/09 N/R USD 675 546,750
------------
- --------------------------------------------------------------------------------------------
- -----------------
PANAMA (0.3%)
Republic of Panama
Bonds
8.875%, 9/30/27 Ba1 USD 245 226,135
------------
- --------------------------------------------------------------------------------------------
- -----------------
PERU (0.8%)
Republic of Peru:
Interest Reduction Bonds
Series 20 year
3.25%, 3/7/17 N/R USD 540 319,950
PDI--Series 20YR
4.00%, 3/7/17 N/R USD 495 314,944
------------
GROUP TOTAL 634,894
------------
- --------------------------------------------------------------------------------------------
- -----------------
PHILLIPINES (0.8%)
Republic of the Phillipines
Bonds
9.875%, 1/15/19 Ba1 USD 625 623,438
------------
- --------------------------------------------------------------------------------------------
- -----------------
POLAND (0.3%)
Republic of Poland
PDI--Bonds
5.00%, 10/27/14 Baa3 USD 250 230,625
------------
- --------------------------------------------------------------------------------------------
- -----------------
RUSSIA (0.4%)
Russian Registered Bonds
12.75%, 6/24/28 B3 USD 1,150 342,603
------------
- --------------------------------------------------------------------------------------------
- -----------------
SOUTH AFRICA (0.3%)
Republic of South Africa
12.0%, 2/28/05 Baa1 1,600 233,816
------------
- --------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000) Value
<C> <S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
- -----------------
TURKEY (0.3%)
Government of Turkey
Treasury Bills
0.00%, 7/21/99 N/R TRL108,747,000 $ 271,078
------------
- --------------------------------------------------------------------------------------------
- -----------------
VENEZUELA (2.1%)
Republic of Venezuela:
Debt Conversion Bonds, Series
DL
6.625%, 12/18/07 Ba2 USD 321 225,402
Front Loaded Interest
Reduction Bonds, Series A
6.125%, 3/31/07 Ba2 USD 405 271,189
Unsecured Bonds
9.25%, 9/15/27 Ba2 USD 1,850 1,134,050
------------
GROUP TOTAL 1,630,641
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL GOVERNMENT OBLIGATIONS
(Cost $14,898,682) 15,285,203
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL FOREIGN SECURITIES
(Cost $15,414,239) 15,790,728
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL INVESTMENTS (98.8%)
(Cost $79,628,991) 76,702,163
------------
- ---------------------------------------------------------------------------------------
- -----------------
OTHER ASSETS IN EXCESS OF
OTHER LIABILITIES (1.2%) 957,495
------------
- --------------------------------------------------------------------------------------------
- -----------------
NET ASSETS (100%)
Applicable to 8,454,140 issued and outstanding $.001 par value
Shares (authorized 100,000,000 shares) $ 77,659,658
------------
------------
- ---------------------------------------------------------------------------------------
- -----------------
N/R--Not Rated
ARP--Argentine Peso
HUF--Hungarian Forint
MXN--Mexican Peso
TRL--Turkish Lira
(1) 144A Security. Certain conditions for public sale may exist
(2) Step Bond--Coupon rate is low or zero for an initial period and then increases to
a higher coupon rate thereafter. Maturity date disclosed is the ultimate maturity.
(3) Defaulted Security.
(4) Payment in kind bond. Market value includes accrued interest.
(5) Non-income producing security.
(6) Restricted as to private and public resale. Total cost of restricted securities
at March 31, 1999 aggregated $1,117,342. Total market value of restricted
securities owned at March 31, 1999 was $1,502,379 or 1.9% of Net Assets.
(7) Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Boad of Directors.
(8) Private Placement.
(9) Floating Rate--The interest rate changes on these instruments based upon a
designated base rate. The rates shown are those in effect at March 31, 1999.
</TABLE>
14
<PAGE>
DESCRIPTION OF DIVIDEND REINVESTMENT
AND CASH PURCHASE PLAN
- ---------
Pursuant to the BEA Strategic Global Income Fund, Inc.'s (the "Fund") Dividend
Reinvestment and Cash Purchase Plan (the "Plan"), shareholders may elect to have
all dividends and distributions, net of any applicable U.S. withholding tax,
automatically reinvested in additional shares of the Fund by Boston Equiserve,
as the plan agent (the "Plan Agent"). Shareholders who do not make this election
will receive all dividends and distributions in cash, net of any applicable U.S.
withholding tax, paid in dollars by check mailed directly to the shareholder by
the Plan Agent, as dividend-paying agent. Shareholders who wish to have
dividends and distributions automatically reinvested should notify the Plan
Agent for the Fund, at Bank Boston, N.A., Boston EquiServe, c/o Dividend
Reinvestment Department, P.O. Box 9041, Boston, MA 02205-9041. A shareholder
whose shares are held by a broker or nominee that does not provide a dividend
reinvestment program may be required to have his shares registered in his own
name to participate in the Plan. Investors who own shares of the Fund's common
stock registered in street name should contact the broker or nominee for details
concerning participation in the Plan.
Certain distributions of cash attributable to (a) some of the dividends and
interest amounts paid to the Fund and (b) certain capital gains earned by the
Fund that are derived from securities of certain foreign issuers are subject to
taxes payable by the Fund at the time amounts are remitted. Such taxes, if any,
will be borne by the Fund and allocated to all shareholders in proportion to
their interests in the Fund.
The Plan Agent serves as agent for the shareholders in administering the
Plan. If the Board of Directors of the Fund declares an income dividend or a
capital gains distribution payable either in the Fund's common stock or in cash,
as shareholders may have elected, nonparticipants in the Plan will receive cash
and participants in the Plan will receive the equivalent in shares of the Fund
valued at the lower of market price or net asset value as determined at the time
of purchase (generally on the payable date of the dividend) as set forth below.
Whenever market price is equal to or exceeds net asset value at the time shares
are valued for the purpose of determining the number of shares equivalent to the
cash dividend or distribution, participants will be issued shares of the Fund at
a price equal to net asset value but not less than 95% of the then current
market price of the Fund shares. The Fund will not issue shares under the Plan
below net asset value. If net asset value determined as at the time of purchase
exceeds the market price of Fund shares at such time, or if the Fund should
declare a dividend or other distribution payable only in cash (i.e., if the
Board of Directors should preclude reinvestment at net asset value), the Agent
will, as agent for the participants, endeavor to buy Fund shares in the open
market, on the New York Stock Exchange or elsewhere, on behalf of all
participants, and will allocate to you your pro rata portion based on the
average price paid (including brokerage commissions) for all shares purchased.
Shares acquired on behalf of participants in the open market will be purchased
at the prevailing market price. Fractions of a share allocated to you will be
computed to four decimal places. If, before the Agent has completed its
purchases, the market price exceeds the net asset value of a Fund share, the
average per share purchase price paid by the Agent may exceed the net asset
value of the Fund's shares, resulting in the acquisition of fewer shares than if
the dividend or distribution had been paid in shares issued by the Fund.
For all purposes of the Plan: (a) the market price of the Fund's common
stock on a dividend payment date shall be the last sale price on the New York
Stock Exchange on that date, or, if there is no such sale, then the mean between
the closing bid and asked quotations for such stock, and (b) net asset value per
share of the Fund's common stock on a particular date shall be as determined by
or on behalf of the Fund.
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, monthly, in any amount from $100 to $1,000, for investment in
the Fund's common stock. Shareholders should be aware that cash contributions
will be used to purchase shares of the Fund in the open market regardless of
whether such shares are selling above, at or below the net asset value of the
Fund. As a result, shareholders may be purchasing shares at a market price that
reflects a premium to the Fund's net asset value.
Cash contributions should be in the form of a check or money order and made
payable in U.S. dollars and directed to Bank Boston, N.A., c/o Boston EquiServe,
P.O. Box 9041, Boston, MA 02205-9041. Deliveries to any other address do not
constitute valid delivery.
A detachable form for use in making voluntary cash payments will be attached
to each Dividend Reinvestment Plan statement you receive. The same amount of
money need not be sent each month and there is no obligation to make an optional
cash payment each month.
Payments received by the Agent will be used to purchase stock under the
Plan. Prior to such purchase of stock by the Agent, no interest will be paid on
such funds sent to the Agent. Therefore, voluntary cash payments should be sent
to reach the Agent shortly (but at least five business days) before the dividend
payment date. Voluntary cash payments received after the five business day
deadline will be invested by the Agent on the next succeeding dividend payment
date. Dividend payment dates are expected to be the 15th (or next business day)
of each month.
You may obtain a refund of any voluntary cash payment if a request for such
a refund is received in writing by the Agent not less than 48 hours before the
next succeeding dividend payment.
There is no charge to participants for reinvesting dividends or capital
gains distributions. The Agent's fees for the handling of reinvestment of
dividends and distributions will be paid by the Fund. There will be no brokerage
charges with respect to shares issued directly by the Fund as a result of
15
<PAGE>
dividends or capital gains distributions payable either in shares or in cash.
However, each participant will pay a pro rata share of brokerage commissions
incurred with respect to the Agent's open market purchases in connection with
the reinvestment of dividends, capital gains distributions, or voluntary cash
payments.
Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions because the Agent will be purchasing stock for all
participants in blocks and pro rating the lower commissions thus attainable.
The receipt of dividends and distributions in stock under the Plan will not
relieve participants of any income tax (including withholding tax) that may be
payable on such dividends and distributions.
While the Fund presently intends to continue the Plan indefinitely,
experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
notice of the change sent to all shareholders of the Fund at least 30 days
before the record date for such dividend or distribution. The Plan also may be
amended or terminated by the Agent by at least 30 days' written notice to all
shareholders of the Fund.
Any notices, questions or other correspondence regarding the Plan should be
addressed to Bank Boston, N.A., Boston EquiServe; c/o The BEA Strategic Global
Income Fund, P.O. Box 8040, Boston, MA 02266-8040, or you may call (800)
730-6001.
16
