<PAGE>
Credit Suisse Asset Management 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 CHIEF FINANCIAL OFFICER, VICE
Richard J. Lindquist PRESIDENT AND SECRETARY
PRESIDENT AND CHIEF INVESTMENT Robert M. Rizza
OFFICER VICE PRESIDENT AND TREASURER
</TABLE>
- --------------------------------------------------------
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
153 East 53rd Street
New York, New York 10022
Phone 1-800-293-1232
- --------------------------------------------------------
ADMINISTRATOR AND CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
- --------------------------------------------------------
SHAREHOLDER SERVICING AGENT
BankBoston, N.A.
P.O. Box 1865
Mailstop 45-02-62
Boston, Massachusetts 02105-1865
Phone 1-800-730-6001
- --------------------------------------------------------
LEGAL COUNSEL
Willkie Farr & Gallagher
787 7th Avenue
New York, New York 10019
- --------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
- --------------------------------------------------------
- ---------------------------------------------------------------------------
Credit Suisse Asset Management
Strategic Global Income Fund, Inc.
- ---------------------------------------------------------------------------
ANNUAL REPORT
December 31, 1999
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
FOURTH QUARTER REPORT - 12/31/99
- ----------
Dear Shareholders: January 25, 2000
We are writing to report on the activities of Credit Suisse Asset Management
Strategic Global Income Fund, Inc. ("the Fund") for the quarter ended December
31, 1999 and to discuss our investment strategy.
At December 31, 1999, the Fund's net asset value ("NAV") was $8.46, compared
to an NAV of $8.90 at September 30, 1999. The Fund's total return (based on NAV
and assuming reinvestment of dividends of $0.145 per share) for the period was
- -2.9%. For 1999 as a whole, the Fund returned 1.9%.
At December 31, 1999, $62.7 million was invested in high yield debt
securities; $1.7 million in investment-grade debt securities; $23.3 million in
emerging-market debt securities; and the balance of $11.5 million in
developed-world debt securities, equity securities and cash equivalents. Of the
debt securities, the largest concentration (62.2%) was invested in B-rated
issues.
THE MARKET: REBOUNDING
Sentiment and performance in the high yield market rebounded nicely in the
fourth quarter from their weakness in the third quarter. As measured by the
Salomon Smith Barney High-Yield Market Index, the broad high yield market rose
1.7% after falling by the same amount in the third quarter.
On a big-picture level, two factors helped to set a generally positive tone.
The first was changing perceptions about higher U.S. inflation which, in turn,
would likely compel the Federal Reserve to raise interest rates. While high
yield participants had previously joined investors in most other financial
markets in expressing great concern about increasing inflation and rates, they
took a more optimistic approach this time around.
The consensus high yield perspective was simply more hopeful and reflected
confidence--whether based on careful analysis, wishful thinking or both--that
strong economic growth would benefit high yield issuers more in terms of
increasing revenues and cash flow than it would hurt them via rising rates due
to inflation. When the Fed raised rates by 25 basis points on November 16,
therefore, the market didn't fall apart. If anything, the Fed's indications that
it would postpone any further rate hikes until after the new year served to
boost confidence even more.
The second big-picture factor was receding fears of Y2K-related technology
dangers, which had been a growing part of investor consciousness as the year
progressed. Such fears began to dissipate around mid-November, though, thus
flashing a figurative green light to investors in relatively risky assets like
equities and high yield. Ironically, the lower trading volumes in late December
resulting from Y2K-based precautions helped to magnify price swings on the
upside for selected instruments.
Quarterly performance among emerging debt markets was even stronger. In
addition to the same big-picture elements that helped high yield, they benefited
from interest from buyers who sought to initiate positions ahead of a widely
anticipated rally in the first quarter of 2000; buoyancy in global equity
markets; a favorable environment for global economic growth; greater investor
comfort with risk; and improving sovereign creditworthiness.
PERFORMANCE: STRENGTH IN HIGH YIELD AND EMERGING MARKETS
The Fund underperformed the broad high yield market during the quarter. We
attribute this to the effect of a rights offering to existing shareholders that
we successfully completed in late October. As we indicated to shareholders at
that time, the issuance of new shares as per the rights offering would likely
have a dilutive impact on the Fund's NAV. This is exactly what happened.
Performance within the portfolio was much more favorable. The high yield
portion did well in the quarter primarily due to our ongoing overweight
allocations to three key industries:
- TELECOMMUNICATIONS. While the high yield telecom sector outperformed the
overall high yield market on the back of equities' strength and an active
environment for industry consolidation, our choices within the sector
helped the Fund's telecom holdings to do even better. More specifically,
we emphasized wireless companies, which excelled, and avoided paging
companies, which underperformed; and we favored deferred-interest issues,
which decisively outperformed traditional cash-paying securities.
- CABLE/MEDIA. We have long overweighted cable and media companies in the
belief that they would benefit from enduring trends of consolidation and
improving operating results. Both such trends were very much in evidence
not simply in the quarter, but throughout the entire year.
- GAMING. Our comments about cable/media also apply to the gaming business.
In addition, we shifted our holdings away from companies with significant
operations in the gaming centers of Las Vegas and Atlantic City, where
industry conditions were somewhat problematic, and toward those with
facilities in more favorable environments elsewhere.
Performance of the emerging markets portion of the portfolio, which
accounted for roughly one-quarter of total assets, also was strong and added to
the Fund's overall return.
OUTLOOK: CAUTIOUS IN NEAR TERM, OPTIMISTIC FURTHER AHEAD
HIGH YIELD. We continue to see current fundamentals for the broad high
yield market as quite good. Nonetheless,
2
<PAGE>
we expect overall high yield activity to be most responsive to external
conditions, particularly the outlook for U.S. interest rates.
Our sense is that the obsessive "Fed-watching" behavior that we used to
describe the market in the second and third quarters will reassume a dominant
psychological role throughout the fixed income universe. Investors are unlikely
to think and act beyond a month-to-month perspective until the interest-rate
environment becomes clearer. We do not anticipate this occurring before the
middle of the year or so.
The bottom line: we believe that a cautious stance is most appropriate for
the time being, and expect high yield to outperform investment-grade sectors
based on its higher absolute yields and relatively better prospects during
periods of strong macroeconomic growth.
The essential strategy with which we have managed the Fund's high yield
portion for some time remains intact. We are keeping the portfolio most heavily
weighted in telecommunications, cable/media and gaming, whose positive industry
and company fundamentals are unchanged. We are also selectively adding to
positions in economically sensitive industries such as paper and energy, whose
underlying fundamentals are beginning to show genuine signs of improvement, and
will continue to do so if this trend continues.
INTERNATIONAL. Our outlook for emerging debt markets remains optimistic,
but a bit less so than previously, for two reasons. The first, simply, is that
prices already include much of our earlier expectations.
The second--similar to our view on the high yield market--is that we expect
investors to fall into a Fed-watching pattern that is most responsive to
economic and monetary conditions in the U.S. during much of the first half of
the year. Nervousness about Mexican elections to be held in July should inject
an additional element of political uncertainty into market sentiment.
By midyear, though, there should be greater visibility about both of these
matters, which should help investors to form stronger opinions about the
market's direction. The most probable outcome of the Mexican elections,
furthermore, could well clear the way for Mexican debt to be upgraded to
investment-grade status; if that occurs, it would likely have a highly positive
impact on prices of emerging debt securities generally.
We are reducing risk in the Fund's emerging portion in line with our
concerns about its vulnerability to what happens in the U.S. More specifically:
we are emphasizing Eastern European nations like Bulgaria, Croatia and Turkey,
which have greater exposure to the upbeat scenario we envision for Western
Europe; raising the allocation to Argentina, whose short-duration assets offer
good value; and lowering the Fund's positions in Russia and Mexico, as we
perceive greater downside than upside in each.
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, LLC 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, LLC:
I. Effective January 12, 1999, the Fund's investment adviser, BEA
Associates, changed its name to Credit Suisse Asset Management, LLC ("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 had changed its name to Credit Suisse
Asset Management Strategic Global Income Fund, Inc. The Fund's ticker symbol on
the New York Stock Exchange changed to "CGF" from"FBI" accordingly.
III. Effective September 7, 1999, shareholders whose shares are registered
in their name are automatically eligible to participate in a dividend
reinvestment program known as the InvestLink Program (the "Program"). The
Program can be of value to shareholders in maintaining their proportional
ownership interest in the Fund in an easy and convenient way. A shareholder
whose shares are held in the name of a broker/dealer or nominee should contact
the Fund's Transfer Agent for details about participating in the Program. The
Program also provides for additional share purchases. The Program is described
on pages 25 through 26 of this report.
* Richard J. Lindquist, who is a Managing Director of Credit Suisse Asset
Management, LLC ("CSAM"), is primarily responsible for management of the Fund's
assets. He has served in such capacity since November 21, 1996. Prior to that
date, he served as Vice President to the Fund, a position he assumed on August
15, 1989. Mr. Lindquist joined CSAM on May 1, 1995 as a result of CSAM's
acquisition of CS First Boston Investment Management Corporation ("CSFBIM").
Prior to joining CSAM and beginning in July, 1989, he held various offices at
CSFBIM. Mr. Lindquist also is President and Chief Investment Officer of Credit
Suisse Asset Management Income Fund, Inc.
** William W. Priest, Jr., who is a Managing Director and Chief Executive
Officer-Americas of Credit Suisse Asset Management, LLC ("CSAM"), joined CSAM in
1972. Mr. Priest is a Director and Chairman of other investment companies
advised by CSAM.
3
<PAGE>
CSAM STRATEGIC GLOBAL INCOME FUND
TOP TEN HOLDINGS (UNAUDITED)
<TABLE>
<CAPTION>
(as a % of net assets as of 12/31/99)
<C> <S> <C>
- -----------------------------------------------------------------------------------
1. Federal Republic of Brazil, Capitalization Bonds 8.00%,
4/15/14................................................... 2.10%
2. Republic of Argentina, Debentures 6.8125%, 3/31/05.......... 1.47%
3. Federal Republic of Brazil, Bearer 6.9375%, 4/15/06......... 1.45%
4. Spanish Broadcasting System, Inc............................ 1.41%
5. Dr. Pepper Bottling Holdings, Inc. Class A.................. 1.11%
6. Federal Republic of Brazil, Foreign Government Gtd. 7.00%,
4/15/12................................................... 1.01%
7. Republic of Argentina Secured Par Bonds, Series L-GP 6.00%,
3/31/23................................................... 0.86%
8. Russia Federation, Registered Series 8.75%, 7/24/05......... 0.81%
9. Federal Republic of Brazil, Debentures Series EI-L Bearer
10.125%, 5/15/27.......................................... 0.77%
10. Banco Nacional de Commercio 7.25%, 02/02/04................. 0.76%
</TABLE>
CREDIT QUALITY BREAKDOWN (UNAUDITED)
<TABLE>
<CAPTION>
(as a % of total investments as of 12/31/99)
<S> <C>
- ------------------------------------------------------------------------------
AAA/Aaa..................................................... 1.1%
A/A......................................................... 0.2
BBB/Baa..................................................... 0.4
BB/Ba....................................................... 12.3
B/B......................................................... 55.6
CCC/Caa..................................................... 7.2
N/R......................................................... 12.7
----------------
Subtotal.................................................. 89.5
Equities and Other.......................................... 10.5
----------------
Total..................................................... 100.0%
================
</TABLE>
4
<PAGE>
PORTFOLIO OF INVESTMENTS
- ---------
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
DOMESTIC SECURITIES (72.0%)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS (62.3%)
- --------------------------------------------------------------------------------------------
- -----------------
AEROSPACE/DEFENSE (0.2%)
Sequa Corp.
Sr. Notes
9.00%, 08/01/09 Ba2 $ 250 $ 242,812
------------
- --------------------------------------------------------------------------------------------
- -----------------
AUTOMOTIVE (1.3%)
Cambridge Industries, Inc.
Sr. Sub. Notes
10.25%, 7/15/07 B3 250 101,875
Collins & Aikman
Products
Sr. Sub. Notes
11.50%, 4/15/06 B3 250 246,875
Delco Remy
International, Inc.
Gtd. Sr. Sub. Notes
10.625%, 8/1/06 B2 250 258,750
Hayes Lemmerz
International, Inc.
Series B,
Gtd. Sr. Sub. Notes
8.25%, 12/15/08 B2 250 227,500
Motor Coach Industries
International, Inc.
Gtd.
11.25%, 5/1/09 B2 250 255,625
Oxford Automotive, Inc.
Gtd. Sr. Sub. Notes
10.125%, 6/15/07 Caa1 250 235,625
------------
GROUP TOTAL 1,326,250
------------
- --------------------------------------------------------------------------------------------
- -----------------
BROADCASTING (5.1%)
(1) Acme Television L.L.C./
ACME Financial Corp.
Gtd. Sr. Discount Notes
0.00%, 9/30/04 B3 500 450,625
AMFM, Inc.
Gtd.
9.00%, 10/1/08 B1 250 260,000
(1)(2) Australis Holdings Pty. Ltd.
Yankee Sr. Secured
Discount Notes
0.00%, 11/1/02 N/R 650 6,500
(2) Australis Media Ltd.
Yankee Units
15.75%, 5/15/03 C 729 3,644
Capstar Broadcasting
Partners, Inc.:
Sr. Sub. Notes
9.25%, 7/1/07 B2 200 203,500
(1) Sr. Discount Notes
0.00%, 2/1/09 B2 500 446,875
Citadel Broadcasting Co.
Gtd.
9.25%, 11/15/08 B3 250 252,500
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
EchoStar
Communications Corp.
Gtd Sr. Discount Notes
9.375%, 2/1/09 B2 $ 250 $ 250,625
Granite Broadcasting, Inc.
Sr. Sub. Notes
8.875%, 5/15/08 B3 250 238,750
Pegasus Media &
Communications, Inc.
Series B, Notes
12.50%, 7/1/05 B2 250 268,125
Salem Communications
Series B, Gtd.
9.50%, 10/1/07 B3 250 251,875
Sinclair Broadcast
Group, Inc.:
Sr. Sub. Notes
10.00%, 9/30/05 B2 300 298,500
8.75%, 12/15/07 B2 250 231,250
Susquehanna Media Co.
Sr. Sub. Notes
8.50%, 5/15/09 B1 150 145,875
Time Warner
Telecom LLC
Sr. Notes
9.75%, 7/15/08 B2 250 256,250
(1) United International
Holdings, Inc.
Series B,
Sr. Discount Notes
0.00%, 2/15/08 B3 500 316,250
Univision Network
Holding L.P.
Sub. Notes
7.00%, 12/17/02 N/R 573 693,421
Young Broadcasting, Inc.:
Series B,
Gtd. Sr. Sub. Notes
9.00%, 1/15/06 B2 200 193,500
8.75%, 6/15/07 B2 450 430,875
------------
GROUP TOTAL 5,198,940
------------
- --------------------------------------------------------------------------------------------
- -----------------
BUSINESS SERVICES (0.4%)
General Binding Corp.
Gtd. Sr. Sub. Notes
9.375%, 6/1/08 B2 250 111,875
Iron Mountain, Inc.
Sr. Notes
8.75%, 9/30/09 B3 250 241,250
------------
GROUP TOTAL 353,125
------------
- --------------------------------------------------------------------------------------------
- -----------------
CABLE (6.5%)
Adelphia Communications
Sr. Notes
8.375%, 2/1/08 B1 200 186,000
(1) Avalon Cable Holdings, Inc.
Sr. Discount Notes
0.00%, 12/1/08 Caa1 500 328,125
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
CSC Holdings, Inc.
Sr. Sub. Debentures
9.875%, 2/15/13 B1 $ 250 $ 263,750
Century Communications
Corp.
Sr. Notes
8.75%, 10/1/07 Ba3 250 238,125
Charter Communication
Holdings:
Sr. Notes
8.625%, 4/1/09 B3 250 231,250
(1) Sr. Discount Notes
0.00%, 4/1/11 B3 300 176,625
Classic Cable, Inc.
Gtd.
Sr. Sub. Notes
3.375%, 8/1/09 B3 250 245,625
Coaxial Communications, Inc.
Gtd. Sr. Notes
10.00%, 8/15/06 B3 250 245,625
Comcast Corp.
Sr. Sub. Notes
9.125%, 10/15/06 B2 250 254,587
(1) Comcast UK Cable
Partners, Ltd.
Yankee Sr. Debentures
0.00%, 11/15/07 B2 500 475,000
(1) DIVA Systems Corp.
Series B,
Sr. Discount Notes
0.00%, 3/1/08 N/R 810 270,540
(1) Diamond Cable
Communications plc
Yankee Discount Notes
0.00%, 12/15/05 Caa1 300 283,500
Falcon Holdings
Group L.P.
Series B, Debentures
8.375%, 4/15/10 B2 250 251,875
(1) Falcon Holdings
Group L.P./
Falcon Funding Corp.
Sr. Discount Debentures
0.00%, 4/15/10 B2 500 373,125
(1) International Cable
Television
Sr. Notes
0.00%, 2/1/06 B3 500 450,000
James Cable Partners L.P.
Series B, Sr. Notes
10.75%, 8/15/04 N/R 250 253,750
Lenfest Communications, Inc.
Sr. Sub. Notes
10.50%, 6/15/06 B2 350 385,000
Mediacom LLC/Capital Corp.
Sr. Notes
7.875%, 2/15/11 B2 250 220,625
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
NTL Communications Corp.:
Series B, Sr. Notes
10.00%, 2/15/07 B3 $ 250 $ 257,500
(1) 0.00%, 10/1/08 B3 250 175,000
Northland Cable
Television
Gtd.
10.25%, 11/15/07 B3 250 251,250
Olympus Communications
LP/Capital Corp.
Series B, Sr. Notes
10.625%, 11/15/06 B1 250 270,313
Rogers Cablesystems Ltd.
Yankee Gtd.
10.00%, 12/1/07 Ba3 250 265,625
(1) Telewest Communications plc
Yankee Sr. Sub.
Discount Debentures
0.00%, 10/1/07 B1 250 233,125
------------
GROUP TOTAL 6,585,940
------------
- --------------------------------------------------------------------------------------------
- -----------------
CHEMICALS (1.5%)
General Chemical
Industrial Products
Sr. Sub. Notes
10.625%, 5/1/09 B3 250 246,875
(3) Huntsman Corp.
Sr. Sub. Notes
9.50%, 7/1/07 B2 250 238,125
Huntsman Polymers Corp.
Sr. Notes
11.75%, 12/1/04 B1 250 262,500
Lyondell Chemical Co.
Series B, Secured Notes
9.875%, 5/1/07 Ba3 250 258,750
NL Industries, Inc.
Sr. Secured Notes
11.75%, 10/15/03 B1 150 155,250
Philipp Brothers
Chemicals, Inc.
Gtd.
9.875%, 6/1/08 B3 150 131,813
Texas Petrochemical Corp.
Series B,
Sr. Sub. Notes
11.125%, 7/1/06 N/R 250 216,875
------------
GROUP TOTAL 1,510,188
------------
- --------------------------------------------------------------------------------------------
- -----------------
CONSTRUCTION & BUILDING MATERIALS (0.8%)
American Architectural
Products Corp.
Gtd. Sr. Notes
11.75%, 12/01/07 Caa1 250 71,875
Brand Scaffold Services
Sr. Notes
10.25%, 2/15/08 B3 150 135,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Collins & Aikman
Floor Coverings
Series B,
Sr. Sub. Notes
10.00%, 1/15/07 B3 $ 250 $ 245,000
International Utility
Structures, Inc.
Yankee Sr. Sub. Notes
10.75%, 2/1/08 Caa1 150 124,875
Presley Companies
Sr. Notes
12.50%, 7/1/01 Caa3 250 212,500
------------
GROUP TOTAL 790,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
CONSUMER PRODUCTS & SERVICES (1.8%)
(1) Coinstar, Inc.
Sr. Discount Notes
0.00%, 10/1/06 Caa1 350 366,187
Drypers Corp.
Series B, Sr. Notes
10.25%, 6/15/07 Caa1 150 122,250
Holmes Products Corp.
Gtd. Sr. Sub. Notes
9.875%, 11/15/07 B3 200 149,500
Jordan Industries, Inc.
Series B, Sr. Notes
10.375%, 8/1/07 B3 225 224,438
(1) Knology Holdings, Inc.
Sr. Discount Notes
0.00%, 10/15/07 N/R 250 164,688
Playtex Products, Inc.
Series B, Gtd. Sr. Notes
8.875%, 7/15/04 B1 200 200,000
Revlon Consumer
Products Corp.
Series B,
Sr. Sub. Notes
8.625%, 2/1/08 B3 250 122,500
(3)(4) Scotts Co.
Sr. Sub. Notes
8.625%, 1/15/09 B2 250 244,375
United Rentals, Inc.
Sr. Sub. Notes
9.25%, 1/15/09 B1 250 240,000
------------
GROUP TOTAL 1,833,938
------------
- --------------------------------------------------------------------------------------------
- -----------------
ELECTRONICS (1.0%)
Details, Inc.
Series B, Sr. Sub. Notes
10.00%, 11/15/05 B3 250 230,625
Metromedia Fiber
Networks, Inc.
Series B, Sr. Notes
10.00%, 11/15/08 B2 250 256,250
Numatics, Inc.
Series B, Gtd.
9.625%, 4/1/08 B3 200 149,500
Unisys Corp.
Sr. Notes
11.75%, 10/15/04 B1 100 110,000
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Viasystems, Inc.
Sr. Sub. Notes
9.75%, 6/1/07 B3 $ 250 $ 136,875
Zilog, Inc.
Series B, Gtd.
Sr. Notes
9.50%, 3/1/05 B2 150 138,750
------------
GROUP TOTAL 1,022,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
ENERGY (3.6%)
AES Corp.
Sr. Notes
9.50%, 6/1/09 Ba1 250 251,875
Bellwether Exploration Co.
Gtd. Sr. Sub. Notes
10.875%, 4/1/07 B3 250 229,375
Canadian Forest Oil, Ltd.
Sr. Sub. Notes
8.75%, 9/15/07 B2 250 238,750
Cliffs Drilling Co.
Series D, Gtd. Sr. Notes
10.25%, 5/15/03 B1 250 255,625
(3) CMS Energy/Atlantic Methanol
Secured Notes
10.875%, 12/15/00 B1 250 250,938
Continental Resources, Inc.
Gtd. Sr. Notes
10.25%, 8/1/08 B3 150 130,875
Contour Energy Co.
Gtd.
14.00%, 4/15/03 B3 184 178,480
Dual Drilling Co.
Gtd.
Sr. Sub. Notes
9.875%, 1/15/04 Baa3 250 258,363
Energy Corp. of America
Series A, Sr. Sub. Notes
9.50%, 5/15/07 B2 250 175,000
Frontier Oil Corp.:
Series A, Sr. Notes
9.125%, 2/15/06 B2 200 180,500
11.75%, 11/15/09 B2 250 245,625
H.S. Resources, Inc.
Gtd. Sr. Sub. Notes
9.25%, 11/15/06 B2 250 248,125
Key Energy Services
Sr. Sub. Notes
14.00%, 1/15/09 B3 250 272,813
Ocean Energy Inc.
Series B, Gtd.
8.375%, 7/1/08 Ba3 150 147,000
Parker Drilling Co.
Series D, Gtd.
9.75%, 11/15/06 B1 250 241,875
Southwest Royalties, Inc.
Series B, Gtd. Sr. Notes
10.50%, 10/15/04 B3 250 137,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Wiser Oil Co.
Gtd.
Sr. Sub. Notes
9.50%, 5/15/07 B2 $ 250 $ 193,125
------------
GROUP TOTAL 3,635,844
------------
- --------------------------------------------------------------------------------------------
- -----------------
ENTERTAINMENT (2.1%)
Ackerley Group, Inc.
Series B, Sr. Sub. Notes
9.00%, 1/15/09 B2 250 244,375
American Skiing Co.
Series B, Sr. Sub. Notes
12.00%, 7/15/06 B3 200 180,500
Bally Total Fitness
Holdings, Corp.
Series D, Sr. Sub. Notes
9.875%, 10/15/07 B3 150 145,125
Booth Creek Ski
Holdings, Inc.
Series B, Sr. Notes
12.50%, 3/15/07 Caa1 250 179,375
Cinemark U.S.A. Inc.,
Series D, Sr. Sub. Notes
9.625%, 8/1/08 B3 200 184,500
PTI Holdings, Inc.
Sub. Notes
7.00%, 12/17/02 N/R 507 613,367
(2)(3) Premier Cruises, Ltd.
Sr. Notes
11.00%, 3/15/08 B3 250 12,500
Premier Parks, Inc.
Sr. Notes
9.75%, 6/15/07 B3 150 149,625
Production Resource
Group L.L.C./PRG
Finance Group
Gtd.
Sr. Sub. Notes
11.50%, 1/15/08 Caa2 250 222,500
Regal Cinemas, Inc.:
Sr. Sub. Notes
9.50%, 6/1/08 Caa1 50 38,000
8.875%, 12/15/10 Caa1 250 184,375
------------
GROUP TOTAL 2,154,242
------------
- --------------------------------------------------------------------------------------------
- -----------------
FINANCIAL SERVICES (0.6%)
Arcadia Financial Ltd.
Sr. Notes
11.50%, 03/15/07 B3 275 283,938
Sovereign Bancorp
Sr. Notes
10.50%, 11/15/06 Ba3 250 253,750
(2) Westfed Holdings
Sr. Debentures
15.50%, 9/15/99 N/R 250 47,500
------------
GROUP TOTAL 585,188
------------
- --------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
FOOD & BEVERAGES (1.4%)
AmeriServ Food
Distribution, Inc.
Gtd. Sr. Notes
8.875%, 10/15/06 B1 $ 200 $ 110,000
Archibald Candy Corp.
Gtd. Sr. Secured Notes
10.25%, 7/1/04 B2 250 242,500
Carrols Corp.
Gtd.
9.50%, 12/1/08 B2 150 137,625
Fleming Companies, Inc.
Sr. Sub. Notes
10.50%, 12/1/04 B3 200 185,000
(3) Premier International
Foods plc
Sr. Notes
12.00%, 9/1/09 B3 400 399,000
Stater Brothers
Holdings, Inc.
Sr. Notes
10.75%, 8/15/06 B2 250 250,625
Vlasic Foods
International, Inc.
Series B, Sr. Sub. Notes
10.25%, 7/1/09 B2 150 143,063
------------
GROUP TOTAL 1,467,813
------------
- --------------------------------------------------------------------------------------------
- -----------------
HEALTH CARE (0.6%)
(3) ICN Pharmaceutical
Sr. Notes
8.75%, 11/15/08 Ba3 250 231,563
Insight Health Services Corp.
Gtd. Sr. Sub. Notes
9.625%, 6/15/08 B3 200 188,500
(3)(4) Unilab Finance Corp.
Sr. Sub. Notes
12.75%, 10/1/09 B3 150 156,375
------------
GROUP TOTAL 576,438
------------
- --------------------------------------------------------------------------------------------
- -----------------
INDUSTRIAL GOODS & MATERIALS (1.6%)
AAF-McQuay, Inc.
Sr. Notes
8.875%, 2/15/03 B3 150 127,125
Applied Extrusion
Technologies Corp.
Sr. Notes
11.50%, 4/1/02 B2 250 253,750
Atlantis Group, Inc.
Sr. Notes
11.00%, 2/15/03 B2 250 252,500
(4) Equinix, Inc.
Units
13.00%, 12/1/07 N/R 200 206,000
GSI Group, Inc.
Gtd.
10.25%, 11/01/07 B2 150 104,812
Hayes International, Inc.
Sr. Notes
11.625%, 9/1/04 B2 250 207,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
(3)(4) Holley Performance Products
Sr. Notes
12.25%, 9/15/07 B2 $ 250 $ 238,125
Jackson Products, Inc.
Gtd. Series B,
9.50%, 4/15/05 B3 100 91,000
Park-Ohio Industries, Inc.
Sr. Sub. Notes
9.25%, 12/1/07 B2 200 192,000
------------
GROUP TOTAL 1,672,812
------------
- --------------------------------------------------------------------------------------------
- -----------------
MEDICAL (0.2%)
Triad Hospitals Holdings
11.00%, 5/15/09 B3 200 208,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
METALS & MINING (2.0%)
AK Steel Corp.
Sr. Notes
9.125%, 12/15/06 Ba2 250 255,625
Algoma Steel, Inc.
Yankee First
Mortgage Notes
12.375%, 7/15/05 B1 250 234,375
GS Technologies Operating Co.
Sr. Notes
12.00%, 9/1/04 Caa1 150 83,625
(2) Gulf States Steel, Inc.
First Mortgage Notes
13.50%, 4/15/03 B1 250 25,000
Metallurg, Inc.
Series B, Gtd. Sr. Notes
11.00%, 12/1/07 B3 250 230,625
National Steel Corp.
Series D,
First Mortgage Bonds
9.875%, 3/1/09 Ba3 250 256,250
Sheffield Steel Corp.
Series B,
First Mortgage Bonds
11.50%, 12/1/05 Caa2 250 207,500
WCI Steel, Inc.
Series B, Sr. Secured Notes
10.00%, 12/1/04 B2 250 256,875
Weirton Steel Corp.
Sr. Notes
11.375%, 7/1/04 B2 200 193,000
Wheeling-Pittsburg Corp.
Sr. Notes
9.25%, 11/15/07 B2 250 235,000
------------
GROUP TOTAL 1,977,875
------------
- --------------------------------------------------------------------------------------------
- -----------------
PACKAGING/CONTAINERS (2.0%)
AEP Industries, Inc.
Sr. Sub. Notes
9.875%, 11/15/07 B2 400 387,000
Amtrol, Inc
Sr. Sub Notes
10.625%, 12/31/06 B3 200 196,750
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
BWAY Corp.
Gtd. Sr. Sub. Notes
10.25%, 4/15/07 B2 $ 150 $ 149,625
(3)(4) Berry Plastics Corp.
Sr. Sub. Notes
11.00%, 7/15/07 B3 150 151,875
Container Corp. of America
Gtd. Sr. Notes
9.75%, 4/1/03 B1 250 255,000
(1) Crown Packaging
Enterprises, Ltd.
Yankee Sr. Secured
Discount Notes
0.00%, 8/1/06 Ca1 925 463
Gaylord Container Corp.
Series B, Sr. Notes
9.75%, 6/15/07 B3 250 235,000
Radnor Holdings, Inc.
Series B, Gtd. Sr. Notes
10.00%, 12/1/03 B2 400 400,000
(3) Stone Container Finance Co.
Yankee Gtd. Sr. Notes
11.50%, 8/15/06 B2 250 265,937
------------
GROUP TOTAL 2,041,650
------------
- --------------------------------------------------------------------------------------------
- -----------------
PAPER & FOREST PRODUCTS (1.8%)
Ainsworth Lumber Co., Ltd.
Yankee Sr. Secured Notes
12.50%, 7/15/07 B3 250 275,000
Color Spot Nurseries
Sr. Sub. Notes
10.50%, 12/15/07 Caa1 200 145,000
Crown Paper Co.
Sr. Sub. Notes
11.00%, 9/1/05 B3 100 61,000
Doman Industries Ltd.
Yankee Gtd.
12.00%, 7/1/04 B3 150 156,000
Repap New Brunswick, Inc.
Yankee Sr. Notes
10.625%, 4/15/05 Caa1 300 279,000
Riverwood International Corp.
Gtd. Sr. Notes
10.875%, 4/1/08 Caa1 250 245,000
SD Warren Co.
Debentures
14.00%, 12/15/06 N/R 603 689,920
------------
GROUP TOTAL 1,850,920
------------
- --------------------------------------------------------------------------------------------
- -----------------
PUBLISHING & INFORMATION SERVICES (2.1%)
American Lawyer Media
Series B, Gtd.
9.75%, 12/15/07 B1 150 148,125
(3)(4) American Media Operation
Sr. Sub. Notes
10.25%, 5/1/09 B2 250 252,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Ampex Corp.
Series B, Sr. Notes
12.00%, 3/15/03 N/R $ 250 $ 251,250
(1) Earthwatch, Inc.
Units
0.00%, 7/15/07 N/R 250 171,875
Hollinger International
Publishing
Gtd.
9.25%, 3/15/07 Ba3 150 147,750
(3) InterAct Systems, Inc.
Sr. Discount Notes
14.00%, 8/1/03 N/R 400 111,500
(4) Liberty Group Operating
Gtd.
9.375%, 2/1/08 B3 100 86,375
(1) Liberty Group
Publishing, Inc.
Sr. Discount Debentures
0.00%, 2/1/09 Caa1 300 150,000
Mentus Media Corp.
Units
12.00%, 2/1/03 N/R 414 128,340
TV Guide, Inc.
Sr. Sub. Notes
8.125%, 3/1/09 Ba3 350 350,000
Tri-State Outdoor Media
Group, Inc.
Sr. Notes
11.00%, 5/15/08 N/R 300 297,000
------------
GROUP TOTAL 2,094,715
------------
- --------------------------------------------------------------------------------------------
- -----------------
REAL ESTATE (0.2%)
Bluegreen Corp
Series B, Gtd.
Sr. Secured Notes
10.50%, 4/1/08 B3 200 174,750
------------
- --------------------------------------------------------------------------------------------
- -----------------
RESTAURANTS, HOTELS & GAMING (5.6%)
American Restaurant
Group, Inc.
Series B, Gtd. Sr. Secured
Notes
11.50%, 2/15/03 B3 250 200,000
Ameristar Casinos, Inc.
Series B, Gtd. Notes
10.50%, 8/1/04 B3 250 251,875
Argosy Gaming Co.
Gtd,
10.75%, 6/1/09 B3 100 105,500
Autotote Corp.
Series B, Gtd.
10.875%, 8/1/04 B2 200 205,000
Aztar Corp.
Sr. Sub. Notes
8.875%, 5/15/07 B1 250 241,875
Boyd Gaming Corp.
Sr. Sub. Notes
9.50%, 7/15/07 B1 250 247,500
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Casino Magic of Louisiana
Corp.
Series B, Gtd. First
Mortgage Notes
13.00%, 8/15/03 B3 $ 300 $ 338,250
Circus Circus
Sr. Sub. Notes
9.25%, 12/1/05 Ba2 150 152,250
Coast Hotels &
Casinos, Inc.
Gtd.
9.50% 4/1/09 B3 150 142,875
Colorado Gaming &
Entertainment Co.
Gtd. Sr. Notes
12.00%, 6/1/03 N/R 443 353,375
(2) Fitzgeralds Gaming Corp.
Series B, Gtd. Sr.
Notes
12.25%, 12/15/04 Caa3 200 109,000
Friendly Ice Cream Corp.
Gtd. Sr. Notes
10.50%, 12/1/07 B1 250 214,375
HMH Properties
Gtd. Sr. Secured Notes
7.875%, 8/1/08 Ba2 250 222,500
Hard Rock Hotel, Inc.
Sr. Sub. Notes
9.25%, 4/1/05 B3 400 296,000
Hollywood Park, Inc.
Sr. Sub. Notes
9.50%, 8/1/07 B2 200 200,000
Horseshoe Gaming
Holdings:
Series B, Sr. Sub. Notes
9.375%, 6/15/07 B1 300 300,000
(3) 8.625%, 5/15/09 B2 250 241,250
Isle of Capri Casinos, Inc.
Gtd.
8.75%, 4/15/09 B3 250 230,625
(5) Jazz Casino Co. LLC
Sr. Sub. Notes
5.987%, 11/15/09 N/R 150 81,000
Majestic Star LLC
Series B, Gtd.
10.875%, 7/1/06 B2 250 240,000
Mohegan Tribal Gaming
Authority
Series B, Sr. Secured Notes
8.125%, 1/1/06 Ba1 200 196,000
Park Place Entertainment
Corp.
Sr. Sub. Notes
7.875%, 12/15/05 Ba2 250 239,375
Prime Hospitality Corp.
Secured First Mortgage
Notes
9.25%, 1/15/06 Ba2 250 249,375
Romacorp, Inc.
Sr. Notes
12.00%, 7/1/06 B3 250 226,875
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Sante Fe Hotel, Inc.
First Mortgage Notes
11.00%, 12/15/00 Caa2 $ 150 $ 147,000
Station Casinos, Inc.
Sr. Sub. Notes
9.75%, 4/15/07 B1 215 217,150
------------
GROUP TOTAL 5,649,025
------------
- --------------------------------------------------------------------------------------------
- -----------------
RETAIL (1.9%)
(1) Advance Holdings Corp.
Sr. Discount Debentures
0.00%, 4/15/09 Caa2 350 181,562
Advance Stores Co., Inc.
Gtd. Sr. Sub. Notes
10.25%, 4/15/08 Caa1 250 216,875
(3) Buhrmann US, Inc.
Sr. Sub. Notes
12.25%, 11/1/09 B2 250 259,375
Dairy Mart Convenience
Stores, Inc.
Sr. Sub. Notes
10.25%, 3/15/04 B3 251 206,447
Jitney-Jungle Stores
of America, Inc.
Gtd. Sr. Sub. Notes
10.375%, 9/15/07 B2 250 5,000
K Mart Corp.
Debentures
7.75%, 10/1/12 Ba2 200 181,250
(1) Mrs. Fields Holding Co.
Units
0.00%, 12/1/05 Caa2 500 280,000
Pantry, Inc.
Sr. Sub. Notes
10.25%, 10/15/07 B3 200 196,000
Pathmark Stores, Inc.
Sr. Sub. Notes
9.625%, 5/1/03 Caa1 250 185,000
Simmons Co.
Sr. Sub. Notes
10.25%, 3/15/09 B3 250 241,875
------------
GROUP TOTAL 1,953,384
------------
- --------------------------------------------------------------------------------------------
- -----------------
TELECOMMUNICATIONS (15.4%)
AMSC Acquisition Co., Inc.
Series B, Gtd. Sr. Notes
12.25%, 4/1/08 N/R 150 118,874
(4) Caprock Communications
Sr. Notes
11.50%, 5/1/09 B3 150 154,125
Carrier1 International SA
Sr. Notes
13.25%, 2/15/09 B3 300 300,000
(1) Clearnet Communications, Inc.
Yankee
Sr. Discount Notes
0.00%, 12/15/05 B3 250 245,000
Concentric Network Corp.
Sr. Notes
12.75%, 12/15/07 N/R 250 264,375
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
(1) DTI Holdings, Inc.
Units
0.00%, 3/1/08 N/R $ 300 $ 108,000
Dobson/Sygnet
Communications, Co.
Sr. Notes
12.25%, 12/15/08 N/R 250 276,875
Dolphin Telecom plc:
(1) Sr. Discount Notes
0.00%, 6/1/08 Caa1 250 114,375
Series B, Yankee
Sr. Discount Notes
14.00%, 5/15/09 Caa1 300 140,625
(1) e. spire Communications, Inc.
Sr. Discount Notes
0.00%, 11/1/05 N/R 750 375,000
(3) Energis plc
Sr. Unsub. Notes
9.75%, 6/15/09 B1 100 104,750
Exodus Communications, Inc.
Sr. Notes
11.25%, 7/1/08 N/R 50 51,875
(1) Focal Communications
Corp.
Sr. Discount Notes
0.00%, 2/15/08 N/R 400 248,000
(1) 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 250 249,375
Globalstar L.P./Globalstar
Capital Corp.
Sr. Notes
10.75%, 11/1/04 B3 300 195,750
Globix Corp.
Sr. Notes
13.00%, 5/1/05 N/R 250 252,500
(1) ICG Holdings, Inc.:
Gtd. Sr. Discount Notes
0.00%, 9/15/05 N/R 350 302,750
0.00%, 5/1/06 N/R 255 192,525
0.00%, 3/15/07 N/R 750 489,375
(1) ICG Services, Inc.
Gtd. Sr. Discount Notes
0.00%, 5/1/08 N/R 250 126,250
(3)(4) Insight Midwest/
Insight Capital
Sr. Notes
9.75%, 10/1/09 B1 250 259,375
Intermedia
Communications, Inc.:
(1) Series B, Sr. Discount Notes
0.00%, 7/15/07 B2 300 220,500
Sr. Notes
8.875%, 11/1/07 B2 150 141,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
IXC Communications, Inc.
Sr. Sub. Notes
9.00%, 4/15/08 B1 $ 250 $ 252,500
(1) Jordan Telecommunications
Products, Inc.
Series B, Sr. Discount Notes
0.00%, 8/1/07 B3 250 264,375
Level 3 Communications, Inc.:
Sr. Notes
9.125%, 5/1/08 B3 275 259,875
(1) Sr. Discount Notes
0.00%, 12/1/08 B3 300 181,125
McLeod USA, Inc.:
(1) Sr. Discount Notes
0.00%, 3/1/07 B2 100 81,000
Sr. Notes
9.25%, 7/15/07 B2 200 200,500
Metromedia
International Group, Inc.
Series B,
Sr. Discount Notes
10.50%, 9/30/07 N/R 916 430,699
MetroNet
Communications Corp.:
Sr. Discount Notes
10.75%, 11/1/07 B 350 288,750
(1) 0.00%, 6/15/08 B3 250 196,562
Microcell
Telecommunications, Inc.
Series B,
Yankee Sr. Discount Notes
14.00%, 6/1/06 B3 300 264,000
(1) Millicom International
Cellular
Yankee Sr. Sub.
Discount Notes
0.00%, 6/1/06 Caa1 300 246,375
NEXTLINK
Communications, Inc.:
Sr. Notes
12.50%, 4/15/06 B3 100 108,000
10.75%, 11/15/08 B3 250 257,500
(3)(4) 10.50%,12/1/09 B2 250 256,875
(1) Nextel Communications, Inc.
Sr. Discount Notes
0.00%, 2/15/08 B2 900 632,250
Orion Network
Systems, Inc.
Gtd. Sr. Notes
11.25%, 1/15/07 B2 250 187,500
Pagemart Nationwide, Inc.
Sr. Discount Notes
12.50%, 2/1/05 B3 750 651,563
PSINet, Inc.
Series B, Sr. Notes
10.00%, 2/15/05 B3 250 248,125
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
(3) Pegasus Communications Corp.
Sr. Sub. Notes
12.50%, 8/1/07 N/R $ 250 $ 269,375
(1) Qwest Communications
International, Inc.:
Sr. Discount Notes
0.00%, 10/15/07 B2 250 202,812
Series B,
0.00%, 2/1/08 Ba1 250 190,938
(1) RCN Corp.:
Sr. Discount Notes
0.00%, 10/15/07 B3 150 107,437
Series B,
0.00%, 2/15/08 B3 300 197,625
RSL Communications plc
Yankee Gtd. Sr. Notes
9.125%, 3/1/08 B3 250 223,750
(1) Rhythms Netconnections
Units
13.50%, 5/15/08 N/R 250 135,000
Sprint Spectrum
L.P./Sprint
Spectrum Finance Corp.
Sr. Notes
11.00%, 8/15/06 B2 450 497,772
Star Choice
Communications, Inc.
Yankee Sr. Notes
13.00%, 12/15/05 N/R 200 201,250
Startec Global
Communications Corp.
Units
12.00%, 5/15/08 N/R 350 296,625
T/SF Communications Corp.
Series B,
Gtd. Sr. Sub. Notes
10.375%, 11/1/07 B3 200 192,500
Teligent, Inc.
Sr. Notes
11.50%, 12/1/07 Caa1 300 292,500
(1) Triton PCS, Inc.
Gtd.
0.00%, 5/1/08 B3 300 212,625
(1)(3) US Unwired, Inc.
Sr. Discount Notes
0.00%, 11/1/09 Caa1 400 237,500
Verio, Inc.
Units
13.50%, 6/15/04 B3 400 439,000
(3) Viatel, Inc.
Sr. Notes
11.50%, 3/15/09 B3 343 343,001
Western Wireless Corp.
Sr. Sub. Notes
10.50%, 2/1/07 B3 250 261,250
Williams Communications
Group, Inc.
Sr. Notes
10.875%, 10/1/09 B2 250 261,875
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
(1) WinStar Communications, Inc.
Sr. Discount Notes
0.00%, 10/15/05 Caa1 $ 400 $ 388,000
(3) Worldwide Fiber, Inc.
Sr. Notes
12.00%, 8/1/09 B3 250 260,000
------------
GROUP TOTAL 15,589,933
------------
- --------------------------------------------------------------------------------------------
- -----------------
TEXTILES/APPAREL (0.2%)
Maxim Group, Inc.
Gtd. Sr. Sub. Notes
9.25%, 10/15/07 B2 250 199,375
------------
- --------------------------------------------------------------------------------------------
- -----------------
TRANSPORTATION (2.0%)
AirTran Airlines, Inc.
Sr. Notes
10.50%, 4/15/01 N/R 500 483,750
Allied Holdings
Gtd. Series B,
8.625%, 10/1/07 B1 250 221,875
Canadian Airlines Corp.
Yankee Sr. Notes
12.25%, 8/1/06 Caa2 300 170,250
Cenargo International plc
First Priority Ship
Mortgage Notes
9.75%, 6/15/08 Ba3 100 87,500
First Wave Marine, Inc.
Sr. Notes
11.00%, 2/1/08 B3 100 70,375
Golden Ocean Group, Ltd.
Gtd. Sr. Notes
10.00%, 8/31/01 B3 263 14,465
Sea Containers Ltd.
Yankee Sr. Notes
10.75%, 10/15/06 Ba3 200 198,500
(1) TFM Sa De CV
0.00%, 06/15/09 N/R 850 547,187
Trans World Airlines, Inc.
Sr. Notes
11.375%, 3/1/06 Caa1 250 104,375
Ultrapetrol (Bahamas) Ltd.
First Mortgage Notes
10.50%, 4/1/08 B1 150 123,375
------------
GROUP TOTAL 2,021,652
------------
- --------------------------------------------------------------------------------------------
- -----------------
WASTE MANAGEMENT (0.4%)
Safety-Kleen Corp.
Gtd.
9.25%, 5/15/09 B3 100 95,250
Waste Systems
International, Inc.
Sr. Notes
11.50%, 1/15/06 Caa1 350 346,937
------------
GROUP TOTAL 442,187
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL CORPORATE OBLIGATIONS
(Cost $69,147,357) $ 63,158,996
------------
- --------------------------------------------------------------------------------------------
- -----------------
U.S. TREASURY NOTES (0.3%)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
7.25%, 5/15/04
(Cost $273,203) Aaa $ 260 267,842
------------
- --------------------------------------------------------------------------------------------
- -----------------
ASSET BACKED OBLIGATIONS (1.0%)
Green Tree Financial Corp.
Manufactured Housing
Installment Sale Contracts:
Series 1993-4, Class B1
7.20%, 1/15/19 Aaa 743 710,983
Merrill Lynch Home Equity
Acceptance Trust
Series 1994-A, Class A-2
6.47%, 7/17/22 A3 212 198,889
Nationscredit Grantor Trust
Boat Retail Installment
Sale Contracts
Series 1996-1, Class A
5.85%, 9/15/11 Aaa 81 78,495
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL ASSET BACKED OBLIGATIONS
(Cost $1,041,457) 988,367
------------
Shares/
Units
- --------------------------------------------------------------------------------------------
- -----------------
COMMON STOCKS (5.3%)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
BROADCASTING (1.8%)
(3)(6) Spanish Broadcasting
System, Inc.
Class B 35,700 1,428,000
(6) UnitedGlobalCom, Inc.,
Class A 5,442 384,341
-----------
GROUP TOTAL 1,812,341
-----------
- --------------------------------------------------------------------------------------------
- -----------------
CABLE (0.0%)
(6) OpTel, Inc. 500 5
-----------
- --------------------------------------------------------------------------------------------
- -----------------
CONSUMER PRODUCTS & SERVICES (0.2%)
(6) Coinstar, Inc. 4,196 58,744
(6) Concentric Network Corp. 3,170 97,676
(6) Crown Packaging Holdings,
Ltd. 100,848 1,008
-----------
GROUP TOTAL 157,428
-----------
- --------------------------------------------------------------------------------------------
- -----------------
ENERGY (0.0%)
(6) Weatherford
International, Inc. 27 1,078
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
Shares/ Value
Units (Note A-1)
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- -----------------
ENTERTAINMENT (0.1%)
Premier Holdings, Ltd. 18,515 $ 48,602
-----------
- --------------------------------------------------------------------------------------------
- -----------------
FINANCIAL SERVICES (0.0%)
(6)(7) Westfed Holdings, Inc.
Class B (acquired
9/20/88,
cost $127) 4,223 0
-----------
- --------------------------------------------------------------------------------------------
- -----------------
FOOD & BEVERAGES (1.1%)
(6)(7) Dr. Pepper Bottling
Holdings, Inc. Class A
(acquired 10/21/88,
cost $40,500) 45,000 1,125,000
(6) Specialty Foods Corp. 22,500 1,125
-----------
GROUP TOTAL 1,126,125
-----------
- --------------------------------------------------------------------------------------------
- -----------------
INDUSTRIAL GOODS & MATERIALS (0.3%)
(6)(7)(8) CIC I Acquisition Corp.
(acquired 10/18/89, cost
$1,076,725) 2,944 273,056
-----------
- --------------------------------------------------------------------------------------------
- -----------------
METALS & MINING (0.0%)
(6) Sheffield Steel Corp. 2,500 5,000
-----------
- --------------------------------------------------------------------------------------------
- -----------------
PAPER & FOREST PRODUCTS (0.1%)
(3)(6)(8) Mail-Well, Inc. 10,652 143,802
-----------
- --------------------------------------------------------------------------------------------
- -----------------
RESTAURANTS, HOTELS & GAMING (0.1%)
(6) Elsinore Corp. 6,177 2,316
(6) Isle of Capri
Casinos, Inc. 4,982 65,700
(3)(6) Motels of America, Inc. 250 4,500
-----------
GROUP TOTAL 72,516
-----------
- --------------------------------------------------------------------------------------------
- -----------------
TELECOMMUNICATIONS (1.7%)
(6) Advanced Radio Telecom
Corp. 5,058 121,392
(6) CompleTel Holdings LLC
Class B Shares 2,500 2,500
(6) e. spire
Communications, Inc. 14,168 82,352
(6) Globix Corp. 1,760 105,600
(6) ICG Communications, Inc. 1,155 21,656
(6) Intermedia
Communications, Inc. 3,430 133,126
(6) Loral Space &
Communications Co. 151 3,671
(6) Price Communications Corp. 25,818 718,063
(6) Verio, Inc. 11,266 520,348
-----------
GROUP TOTAL 1,708,708
-----------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL COMMON STOCKS
(Cost $1,701,047) 5,348,661
-----------
- --------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Shares/ Value
Units (Note A-1)
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PREFERRED STOCKS (2.5%)
- --------------------------------------------------------------------------------------------
- -----------------
AEROSPACE/DEFENSE (0.3%)
(6) GPA Group plc 7% Second
Preferred
Cum. Conv. 650,000 $ 334,750
-----------
- --------------------------------------------------------------------------------------------
- -----------------
BROADCASTING (0.0%)
(5)(6) Granite Broadcasting Corp.
12.75% Cum. Exchangeable 11 11,220
(6) Source Media, Inc. 5,052 22,734
-----------
GROUP TOTAL 33,954
-----------
- --------------------------------------------------------------------------------------------
- -----------------
CABLE (0.3%)
Adelphia Communications Corp.
13% Cum Exchangeable, Series B 2,500 277,500
NTL, Inc.
13% Exchangeable,
Series B 1 1,110
-----------
GROUP TOTAL 278,610
-----------
- --------------------------------------------------------------------------------------------
- -----------------
FINANCIAL SERVICES (0.0%)
(8) Westfed Holdings, Inc.
Class A (acquired
9/20/88-6/18/93, cost
$1,203,486) 14,246 14,246
-----------
- --------------------------------------------------------------------------------------------
- -----------------
PUBLISHING & INFORMATION SERVICES (0.4%)
Primedia, Inc.
10% Cum. Exchangeable, Series D 3,500 358,750
-----------
- --------------------------------------------------------------------------------------------
- -----------------
RESTAURANTS, HOTELS & GAMING (0.2%)
AmeriKing, Inc.
13% Cum. Exchangeable 7,099 156,178
-----------
- --------------------------------------------------------------------------------------------
- -----------------
TELECOMMUNICATIONS (1.3%)
Intermedia
Communications, Inc.
7% Jr. Convertible,
Series E 15,000 506,250
NEXTLINK
Communications, Inc. 14%
Cum. Exchangeable 8,759 490,504
Nextel
Communications, Inc. 13%
Exchangeable, Series D 328 339,480
-----------
GROUP TOTAL 1,336,234
-----------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL PREFERRED STOCKS
(Cost $3,198,821) 2,512,722
-----------
- --------------------------------------------------------------------------------------------
- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
Shares/ Value
Units (Note A-1)
- ------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------
RIGHTS (0.1%)
(6)(7) Primestar, Inc.
Share Appreciation Right
expiring 5/10/00 2,383 $ 118,950
(6) Terex Corp.
expiring 5/15/02 2,000 28,000
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL RIGHTS
(Cost $0) 146,950
-----------
- --------------------------------------------------------------------------------------------
- -----------------
WARRANTS (0.5%)
(3)(6) Ampex Corp.
expiring 3/15/03 8,500 27,625
(6) Australis Holdings
Pty. Ltd.
expiring 10/30/01 250 3
(6) Australis Media Ltd.
expiring 5/15/00 225 2
(3)(6) Carrier1 International SA
expiring 2/19/09 300 3,000
(6) Central Bank of Nigeria
expiring 11/15/20 250 0
(6) CHC Helicopter Corp.
expiring 12/15/00 2,000 2,000
(6)(8) CHI Energy, Inc.:
Series B, expiring
11/8/03 3,790 9,100
Series C, expiring
11/8/05 2,459 5,904
(6) Crown Packaging Holdings,
Ltd.
expiring 11/1/03 1,000 80
(6) DIVA Systems Corp.:
(3) expiring 5/15/06 900 327,240
expiring 3/1/08 2,430 29,160
(3)(6) DTI Holdings, Inc.
expiring 3/1/08 1,500 15
(6) Dairy Mart Convenience
Stores, Inc.
expiring 12/1/01 4,172 1,460
(6) Golden Ocean Group, Ltd.
expiring 8/31/01 342 0
(6) HF Holdings, Inc.
expiring 7/15/02 1,578 15,780
(6) InterAct Systems, Inc.
expiring 8/1/03 400 0
(6) Isle of Capri
Casinos, Inc. expiring
5/3/01 882 9
(6) Key Energy Services
expiring 1/15/09 250 6,250
(6) McCaw International Ltd.
expiring 4/15/07 750 1,875
(6) Mentus Media Corp.
expiring 2/1/08 974 10
(6) Petersburg Long
Distance, Inc.
expiring 6/01/04 560 22,400
(6) Source Media, Inc.
expiring 11/1/07 2,235 22,350
(6) Star Choice
Communications, Inc.
expiring 12/5/05 4,632 18,453
<CAPTION>
Shares/ Value
Units (Note A-1)
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(6) Startec Global
Communications
expiring 5/15/08 350 $ 350
(6) USN Communications, Inc.
expiring 8/15/04 3,050 0
(6) Waste Systems
International, Inc.
expiring 3/2/04 5,250 3,937
(6) Wright Medical Technology
expiring 6/30/03 206 2
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL WARRANTS
(Cost $1,073,434) 497,005
-----------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL DOMESTIC SECURITIES
(Cost $76,435,319) 72,920,543
-----------
- --------------------------------------------------------------------------------------------
- -----------------
</TABLE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount
(Unaudited) (000)
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN SECURITIES (23.9%)
- --------------------------------------------------------------------------------------------
- -----------------
CORPORATE OBLIGATIONS (2.8%)
- --------------------------------------------------------------------------------------------
- -----------------
ARGENTINA (0.1%)
CIA Internacional
Telecommunicacoes
Sr. Notes
10.375%, 8/1/04 N/R ARP $145 118,538
- --------------------------------------------------------------------------------------------
- -----------------
BELGIUM (0.3%)
Hermes Europe
Railtel B.V.
Yankee Sr. Notes
10.375%, 1/15/09 B3 USD 300 297,750
- --------------------------------------------------------------------------------------------
- -----------------
INDONESIA (0.4%)
APP Fin II Maurtius
Ltd.
Yankee
12.00% ,12/29/49 Caa USD 270 177,525
Indah Kiat Fin
Mauritius
10.00%, 07/01/07 Caa1 USD 250 185,000
------------
GROUP TOTAL 362,525
------------
- --------------------------------------------------------------------------------------------
- -----------------
MEXICO (1.0%)
Banco National De
Commercio
7.25%, 02/02/04 Ba2 USD 825 769,313
(3) Nuevo Grupo Iusacell
SA
Sr. Notes
14.25%, 12/1/06 B1 USD 270 279,450
------------
GROUP TOTAL 1,048,763
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- -----------------
NETHERLANDS (0.7%)
(1)(3) CompleTel Europe N.V.
Yankee Gtd.
14.00%, 2/15/09 Caa1 USD $250 $ 140,000
(3) KPNQwest N.V.
Sr. Notes
8.125%, 6/1/09 N/R USD 250 241,562
(3) United Pan-Europe
Communications N.V.
Sr. Notes
10.875%, 8/1/09 B2 USD 300 304,875
------------
GROUP TOTAL 686,437
------------
- --------------------------------------------------------------------------------------------
- -----------------
POLAND (0.3%)
(3)(4) PTC International
Finance II SA
Gtd.
11.25%, 12/1/09 B2 USD 370 361,212
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL CORPORATE OBLIGATIONS
(Cost $2,842,068) 2,875,225
------------
- --------------------------------------------------------------------------------------------
- -----------------
GOVERNMENT OBLIGATIONS (21.1%)
- --------------------------------------------------------------------------------------------
- -----------------
ARGENTINA (5.1%)
(9) Argentina
9.75%, 9/19/27 Ba3 USD 730 649,700
Series L-GL
6.875%, 3/31/23 Ba3 USD 600 475,500
Bocon PRO1 Notes
5.82%, 4/1/07 Ba3 USD 877 610,312
Secured Par Bonds,
Series L-GP
6.00%, 3/31/23 Ba3 USD 1,330 874,475
Republic of
Argentina:
Series BGL5
11.00%, 10/9/06 Ba3 USD 225 221,625
11.375%, 1/30/17 Ba3 USD 410 407,950
Unsubordinated
11.75%, 4/7/09 B1 USD 420 422,100
Debentures
6.8125%, 3/31/05 B1 USD 1,637 1,489,488
------------
GROUP TOTAL 5,151,150
------------
- --------------------------------------------------------------------------------------------
- -----------------
BRAZIL (6.1%)
Federal Republic of
Brazil:
Series RG
(9) 7.00%, 4/15/09 B2 USD 330 268,538
Debentures
Series EI-L
Registered
(9) 6.9375%, 4/15/06 B1 USD 160 140,424
(9) 7.00%, 4/15/12 B1 USD 500 370,000
Bearer
(9) 6.9375%, 4/15/06 B2 USD 1,669 1,468,280
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10.125%, 5/15/27 B1 USD 910 780,780
Foreign Government
Gtd.
7.00%, 4/15/12 B2 USD $1,380 $ 1,028,100
Capitalization Bonds
8.00%, 4/15/14 B2 USD 2,835 2,129,552
------------
GROUP TOTAL 6,185,674
------------
- --------------------------------------------------------------------------------------------
- -----------------
BULGARIA (0.9%)
(9) Republic of Bulgaria:
Floating Rate Notes
2.75%, 7/28/12 B2 USD 450 324,000
(3) Front Loaded
Interest
Reduction Bonds,
Series A
6.50%, 7/28/24 B2 USD 400 319,500
Debentures
Series PDI,
6.50%, 7/28/11 B2 USD 405 319,444
------------
GROUP TOTAL 962,944
------------
- --------------------------------------------------------------------------------------------
- -----------------
COLOMBIA (0.4%)
Republic of Colombia:
Bonds
9.75%, 4/23/09 Ba2 USD 260 241,800
Yankee Notes
11.442%, 8/13/05 Baa3 USD 190 183,350
------------
GROUP TOTAL 425,150
------------
- --------------------------------------------------------------------------------------------
- -----------------
ECUADOR (0.2%)
Government of
Ecuador:
Bearer Past Due
Interest (PDI)
6.75%, 02/27/15 B3 USD 578 138,652
Registered Past Due
Interest (PDI)
6.75%, 02/27/15 B3 USD 92 22,170
------------
GROUP TOTAL 160,822
------------
- --------------------------------------------------------------------------------------------
- -----------------
MEXICO (2.4%)
United Mexican
States:
9.75%, 04/06/05 Ba2 USD 275 285,313
10.375%, 2/17/09 N/R USD 550 585,750
11.50%, 5/15/26 Ba2 USD 415 494,888
Foreign Government
Gtd.
Series D
6.90%, 12/31/19 Ba2 USD 500 468,125
Secured Par Bonds
Series W-A
6.25%, 12/31/19 Ba2 USD 750 588,750
------------
GROUP TOTAL 2,422,826
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- -----------------
MOROCCO (0.3%)
(9) Republic of Morocco
6.8825%, 1/1/09 N/R USD $290 $ 262,450
------------
- --------------------------------------------------------------------------------------------
- -----------------
NIGERIA (0.1%)
(9) Central Bank of
Nigeria
6.25%, 11/15/20 N/R USD 250 145,625
------------
- --------------------------------------------------------------------------------------------
- -----------------
PANAMA (0.3%)
Republic of Panama
8.875%, 9/30/27 Ba1 USD 325 273,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
PERU (0.6%)
Republic of Peru:
Front Loaded
Interest
Reduction Bonds
Series 20 year
4.00%, 3/7/17 N/R USD 495 305,663
Past Due Interest
(PDI)
Series 20 Year
4.00%, 3/7/17 N/R USD 390 268,125
------------
GROUP TOTAL 573,788
------------
- --------------------------------------------------------------------------------------------
- -----------------
PHILIPPINES (0.6%)
Republic of the
Philippines
Bonds
9.875%, 1/15/19 Ba1 USD 625 617,969
------------
- --------------------------------------------------------------------------------------------
- -----------------
RUSSIA (2.9%)
Government of Russia
9.25%, 11/27/01 B3 USD 115 92,288
Russia Federation:
Registered Series
8.75%, 7/24/05 B3 USD 1,315 818,588
10.00%, 06/26/07 B3 USD 845 529,181
11.00%, 7/24/18 B3 USD 1,250 756,250
Russian Registered
Bonds
12.75%, 6/24/28 B3 USD 520 360,100
(9) Vnesheconombank
Bank
6.90625%, 12/15/15 N/R USD 690 120,750
Series 24 year
6.8925%, 12/15/20 N/R USD 1,802 283,815
------------
GROUP TOTAL 2,960,972
------------
- --------------------------------------------------------------------------------------------
- -----------------
TURKEY (0.1%)
Republic of Turkey
Bonds
11.875%, 11/5/04 B1 USD 80 82,600
------------
- --------------------------------------------------------------------------------------------
- -----------------
<CAPTION>
Moody's Face
Ratings Amount Value
(Unaudited) (000) (Note A-1)
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VENEZUELA (1.2%)
Republic of
Venezuela:
(9) Front Loaded Interest
Reduction Bonds,
Series A
6.875%, 3/31/07 B2 USD $357 $ 281,250
(9) Debt Conversion
Bonds,
7.00%, 12/18/07 B2 USD 381 300,057
Series DL
Unsecured Bonds
9.25%, 9/15/27 Ba2 USD 880 580,800
------------
GROUP TOTAL 1,162,107
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL GOVERNMENT OBLIGATIONS
(Cost $19,397,261) 21,387,077
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL FOREIGN SECURITIES
(Cost $22,239,329) 24,262,302
------------
- --------------------------------------------------------------------------------------------
- -----------------
TIME DEPOSITS (1.9%)
(Cost $1,901,000) 1,901,000
------------
- --------------------------------------------------------------------------------------------
- -----------------
TOTAL INVESTMENTS (97.8%)
(Cost $100,575,648) 99,083,845
------------
- --------------------------------------------------------------------------------------------
- -----------------
OTHER ASSETS IN EXCESS OF
LIABILITIES (2.2%)
2,231,304
------------
- --------------------------------------------------------------------------------------------
- -----------------
NET ASSETS (100%)
Applicable to 11,976,699 issued and outstanding $.001
par value shares (authorized 100,000,000 shares)
$101,315,149
============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
N/R--Not Rated
ARP--Argentine Peso
(1) 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.
(2) Defaulted Security.
(3) 144A Security. Certain conditions for public sale may exist
(4) Private Placement.
(5) Payment in kind bond. Market value includes accrued interest.
(6) Non-income producing security.
(7) Restricted as to private and public resale. Total cost of restricted
securities at December 31, 1999 aggregated $1,117,352. Total market value
of restricted securities owned at December 31, 1999 was $1,517,006 or 1.50%
of Net Assets.
(8) Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by the Board of Directors.
(9) Floating Rate--The interest rate changes on these instruments based upon a
designated base rate. The rates shown are those in effect at December 31,
1999.
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1999
<S> <C>
- ---------------------------------------------------------------------------------------------------
ASSETS:
Investments at Value
(Cost $100,575,648) (Note A-1)............................................ $99,083,845
Receivables:
Interest (Note A-6)....................................................... 2,646,855
Investments Sold............................................................ 20,122
Other Assets................................................................ 9,343
- ---------------------------------------------------------------------------------------------------
Total Assets............................................................ 101,760,165
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment Advisory Fees (Note B)......................................... 115,322
Investments Purchased..................................................... 107,438
Professional Fees......................................................... 57,204
Shareholders' Reports..................................................... 26,327
Due to Custodian Bank..................................................... 21,631
Shareholder Servicing Fees................................................ 16,954
Administrative Fees (Note C).............................................. 14,715
Custodian Fees............................................................ 11,835
Directors' Fees........................................................... 9,213
Other Liabilities......................................................... 64,377
- ---------------------------------------------------------------------------------------------------
Total Liabilities....................................................... 445,016
- ---------------------------------------------------------------------------------------------------
NET ASSETS...................................................................... $101,315,149
==============
NET ASSETS CONSIST OF:
Capital Shares at $.001 Par Value........................................... $11,977
Capital Paid in Excess of Par Value......................................... 110,690,040
Undistributed Net Investment Income......................................... 1,398,161
Accumulated Net Realized Loss............................................... (9,293,226)
Unrealized Depreciation on Investments and Foreign Currency Translations.... (1,491,803)
--------------
NET ASSETS APPLICABLE TO 11,976,699 ISSUED AND OUTSTANDING SHARES (AUTHORIZED
100,000,000 SHARES)........................................................... $101,315,149
==============
NET ASSET VALUE PER SHARE....................................................... $8.46
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS Year Ended
December 31, 1999
<S> <C>
- ---------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest (Note A-6)
(Net of foreign taxes withheld of $61,279)................................. $ 9,189,783
Dividends (Note A-6)........................................................ 89,156
- ---------------------------------------------------------------------------------------------------
Total Income.............................................................. 9,278,939
- ---------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees (Note B)........................................... 406,567
Professional Fees........................................................... 89,224
Administrative Fees (Note C)................................................ 76,576
Shareholders' Reports....................................................... 75,896
Custodian Fees.............................................................. 67,114
Shareholder Servicing Fees.................................................. 61,065
Directors' Fees and Expenses................................................ 44,162
Annual Meeting Fees......................................................... 18,521
Other....................................................................... 44,068
- ---------------------------------------------------------------------------------------------------
Total Expenses............................................................ 883,193
- ---------------------------------------------------------------------------------------------------
Net Investment Income..................................................... 8,395,746
- ---------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS):
Investments................................................................. (2,078,747)
Foreign Currency............................................................ 44,243
- ---------------------------------------------------------------------------------------------------
Total Net Realized Loss................................................... (2,034,504)
- ---------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS................. 3,536,816
- ---------------------------------------------------------------------------------------------------
Net Realized Loss and Change in Unrealized Appreciation (Depreciation) 1,502,312
- ---------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,898,058
===================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
Year Ended
December 31, Year Ended
1999 December 31, 1998
- ------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net Investment Income............................................. $ 8,395,746 $ 7,929,213
Net Realized Loss on Investments.................................. (2,034,504) (5,939,600)
Change in Unrealized Appreciation (Depreciation) on Investments... 3,536,816 (6,663,506)
- ------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 9,898,058 (4,673,893)
- ------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income............................................. (8,309,716) (8,010,301)
- ------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Common Stocks Issued through Rights Offering (3,522,559 shares)... 21,657,541 --
Offering Costs.................................................... (441,000) --
- ------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Capital Share
Transactions.................................................... 21,216,541
- ------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets......................... 22,804,883 (12,684,194)
- ------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Year................................................. 78,510,266 91,194,460
- ------------------------------------------------------------------------------------------------------------
End of Year (Including undistributed net investment income of
$1,398,161 and $990,088, respectively) $101,315,149 $78,510,266
============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1999 1998 1997 1996 1995Section
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR........... $ 9.29 $ 10.79 $ 10.37 $ 10.01 $ 9.26
- ---------------------------------------------------------------------------------------------------------
Investment Activities:
Net Investment Income.................... 0.89 0.94 0.89 0.91 0.95
Net Realized and Unrealized Gain (Loss)
on Investments.......................... 0.42 (1.49) 0.41 0.26 0.61
- ---------------------------------------------------------------------------------------------------------
Total from Investment Activities....... 1.31 (0.55) 1.30 1.17 1.56
- ---------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income.................... (0.92) (0.95) (0.88) (0.81) (0.76)
Return of Capital........................ -- -- -- -- (0.05)
- ---------------------------------------------------------------------------------------------------------
Total Distributions (0.92) (0.95) (0.88) (0.81) (0.81)
- ---------------------------------------------------------------------------------------------------------
Decrease in Net Asset Value due to Shares
Issued through Rights Offering.............. (1.18) -- -- -- --
Offering Costs............................... (0.04) -- -- -- --
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR................. $ 8.46 $ 9.29 $ 10.79 $ 10.37 $ 10.01
=========================================================================================================
PER SHARE MARKET VALUE, END OF YEAR.......... $ 6.63 $ 8.63 $ 10.06 $ 9.00 $ 8.88
=========================================================================================================
TOTAL INVESTMENT RETURN:
Net Asset Value (1)...................... 1.89% (5.13)% 13.82% 13.27% 17.57%
Market Value............................. (14.03)%* (5.56)% 22.34% 11.03% 18.16%
=========================================================================================================
RATIOS AND SUPPLEMENTAL DATA:
=========================================================================================================
Net Assets, End of Year (Thousands).......... $101,315 $78,510 $91,914 $87,656 $84,618
- ---------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
Including Expense Offsets................... 1.09% 1.17% 1.08% 1.11% 1.12%
Ratio of Expenses to Average Net Assets...... 1.09% 1.17% 1.10% 1.11% --
Ratio of Net Investment Income to Average Net
Assets...................................... 10.35% 9.17% 8.43% 8.99% 9.80%
Portfolio Turnover Rate...................... 41.2% 107.8% 119.1% 65.1% 54.5%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Section Credit Suisse Asset Management, LLC formerly known as BEA Associates
replaced CS First Boston Investment Management as the Fund's
investment adviser effective June 13, 1995.
* Total market value return taken into consideration the rights
offering would have been (12.26)%.
(1) Total investment return based on per share net asset value reflects
the effects of change in net asset value on the performance of the
Fund during each period, and assumes dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the
Fund based on market value, due to differences between the market
price of the stock and the net asset value of the Fund.
Note: Current period permanent book-tax differences, if any, are not
included in the calculation of net investment income per
share.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ------------
Credit Suisse Asset Management Strategic Global Income Fund, Inc., formerly
known as BEA Strategic Global Income Fund, Inc. (the "Fund"), was incorporated
on January 27, 1988 and is registered as a diversified, closed-end investment
company under the Investment Company Act of 1940. The Fund's investment
objective is to seek high current income through investments primarily in debt
securities.
A. The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. Generally accepted
accounting principles may require management to make estimates and assumptions
that affect the amounts and disclosures in the financial statements. Actual
reported results could differ from those estimates.
1. SECURITY VALUATION: Market values for fixed income securities are valued at
the latest quoted bid price in the over-the-counter market. However, fixed
income securities may be valued on the basis of prices provided by a pricing
service which are based primarily on institutional size trading in similar
groups of securities. Other securities listed on an exchange are valued at
the latest quoted sales prices on the day of valuation or if there was no
sale on such day, the last bid price quoted on such day. Quotations of
foreign security prices denominated in a foreign currency are converted to
U.S. dollars at the current exchange rate on 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 investments which are subject
to limitations as to their sale) are valued at fair value as determined in
good faith by the Board of Directors. Such securities have a value of $84,496
(or 0.08% of net assets) at December 31, 1999. In determining fair value,
consideration is given to cost, operating and other financial data.
The Fund may invest up to 10% of its total assets in securities which are not
readily marketable, including those which are restricted as to disposition
under securities law ("restricted securities") (excludes 144A securities).
These securities are valued pursuant to the valuation procedures noted above.
2. FEDERAL INCOME TAXES: It is the Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income to
shareholders. Accordingly, no provision for Federal income taxes is required
in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, a bank as custodian for the Fund takes possession of the
underlying securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the Fund
has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. In the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral
and proceeds may be subject to legal proceedings.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the bid price of such currencies against U.S. dollars last quoted
by a major bank as follows:
- investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
- - investments, transactions and investment income at the prevailing rates of
exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the period, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of the securities held at period end. Similarly the fund does not isolate
the effect of changes in foreign exchange rates from the fluctuations arising
from changes in the market prices of securities sold during the period.
Accordingly, realized and unrealized foreign currency gains (losses) are
included in the reported net realized and unrealized gains (losses) on
investment transactions and balances.
Net realized gains/losses on foreign currency transactions represent net foreign
exchange gains/losses from sales and maturities of forward currency contracts,
disposition of foreign currencies, currency gains or losses realized between the
trade and settlement dates on securities transactions, and the difference
between the amount of investment income and foreign withholding taxes recorded
on the Fund's books and the U.S. dollar equivalent amounts actually received or
paid. Net currency gains (losses) from valuing foreign currency denominated
assets and liabilities at period end exchange rates are included in unrealized
depreciation of investments and foreign currency.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the level of governmental
supervision and regulation of foreign securities markets and the possibility of
political or economic instability.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into forward
foreign currency exchange contracts to protect securities and related
receivables and
20
<PAGE>
payables against changes in future foreign exchange rates. A forward currency
contract is an agreement between two parties to buy or sell currency at a set
price on a future date. The market value of the contract will fluctuate with
changes in currency exchange rates. The contract is marked-to-market daily
using the forward rate and the change in market value is recorded by the Fund
as unrealized gain or loss. The Fund recognizes realized gain or loss when
the contract is closed equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
Risks may arise upon entering into these contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
The Fund had no outstanding forward foreign currency exchange contracts at
December 31, 1999.
6. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on the date the securities are purchased or sold. Costs used in
determining realized gains and losses on the sale of investment securities
are those of specific securities sold. Interest income is recognized on the
accrual basis. Discounts on securities purchased are amortized according to
the effective yield method over their respective lives. Discount or premium
on mortgage backed securities is recognized upon receipt of principal
payments on the underlying mortgage pools. Dividend income is recorded on the
ex-dividend date.
7. DELAYED DELIVERY COMMITMENTS: The Fund may purchase or sell securities on a
when-issued or forward commitment basis. Payment and delivery may take place
a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered and
paid for are fixed at the time the transaction is negotiated.
8. DIVIDENDS AND DISTRIBUTIONS: The Fund pays dividends of net investment income
monthly and makes distributions at least annually of any net capital gains in
excess of applicable capital losses, including capital loss carryforward.
Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with U.S. Federal Income Tax regulations which may differ from
generally accepted accounting principles. These differences are principally
due to the timing of the recognition of defaulted bond interest and to
differing book and tax treatment for foreign currency transactions.
Permanent book and tax differences relating to shareholder distributions may
result in reclassifications to undistributed net investment income (loss),
undistributed realized gain (loss) and paid in capital.
B. Credit Suisse Asset Management, LLC, formerly known as BEA Associates (the
"Adviser"), provides investment advisory services to the Fund under the terms of
an Advisory Agreement. Under the Advisory Agreement, the Adviser is paid a fee,
computed weekly and payable quarterly at an annual rate of .50% of average
weekly net assets.
C. Effective March 1, 1999, Brown Brothers Harriman & Co. ("BBH&Co."), replaced
Chase Manhattan Bank as the Fund's Administrator and Custodian.
BBH&Co. provides services to the fund. Under the Administration and Custody
Agreements, BBH&Co. is paid a fee based on average net assets.
Effective January 25, 1999, BankBoston N.A. replaced Chase Manhattan Bank as the
Fund's Transfer Agent.
BankBoston provides transfer agent services to the fund. Under the Transfer
Agent Agreement, BankBoston is paid a fee based on the number of accounts in the
Fund per year. In addition, the Fund was charged certain out-of-pocket expenses
by BankBoston.
D. Purchases and sales of investment securities (excluding short-term
investments and U.S. government securities) aggregated $49,948,037 and
$32,333,074, respectively, for the year ended December 31, 1999. Purchases and
sales of U.S. government and government agency securities aggregated $273,203
and $0, respectively, for the year ended December 31, 1999.
At December 31, 1999, the cost of investments for Federal income tax purposes
was $100,679,362. Accordingly, net unrealized depreciation for Federal income
tax purposes aggregated $1,595,517 of which $9,754,797 related to appreciated
securities and $11,350,314 related to depreciated securities.
At December 31, 1999, the Fund had a capital loss carryforward of $9,081,642
available to offset future capital gains of which $90,877, $743,988, $211,706,
$4,354, $4,724,203 and $3,306,514 will expire on December 31, 2000, 2002, 2003,
2005, 2006 and 2007, respectively. Net capital losses incurred after
October 31, and within the taxable year are deemed to arise on the first
business day of the Fund's next taxable year. For the period from November 1,
1999 to December 31, 1999 the Fund incurred and elected to defer until
January 1, 2000 for U.S. Federal income tax purposes net losses of approximately
$107,894.
E. At December 31, 1999, 85.9% of the Fund's net assets comprised high-yield
fixed income securities. The financial condition of the issuers of the
securities and general economic conditions may affect the issuers' ability to
make payments of income and principal, as well as the market value of the
securities. Such investments may also be less liquid and more volatile than
investments in higher rated fixed income securities.
21
<PAGE>
At December 31, 1999, 23.9% of the Fund's net assets comprised foreign currency
denominated fixed income securities. Changes in currency exchange rates will
affect the value and net investment income from such securities.
F. The Fund's Board of Directors has approved a share repurchase program
authorizing the Fund from time to time to make open-market purchases on the New
York Stock Exchange of up to 10% percent of the Fund's shares outstanding as of
December 11, 1990. There were no repurchases of shares during the year ended
December 31, 1999.
G. The Fund issued to its shareholders of record as of the close of business on
September 27, 1999 transferable Rights to subscribe for up to an aggregate of
3,522,559 shares of Common Stock of the Fund at a rate of one share of Common
Stock for three Rights held at the subscription price of $6.38 per share. During
October 1999, the Fund issued a total of 3,522,559 shares of Common Stock on
exercise of such Rights. Rights' offering costs of $441,000 were charged
directly against the proceeds of the Offering.
H. The Fund, together with other Funds advised by CSAM, LLC have established a
$250 million committed, unsecured, line of credit facility ("Credit Facility")
with Deutsche Bank, AG as administrative agent, State Street Bank and Trust
Company as operations agent, Bank of Nova Scotia as syndication agent and
certain other lenders, for temporary or emergency purposes. Under the terms of
the Credit Facility, the Funds with access to the Credit Facility pay an
aggregate commitment fee at a rate of .075% per annum on the average daily
balance of the Credit Facility that is undisbursed and uncanceled during the
preceding quarter, allocated among the participating Funds in such manner as is
determined by the governing Boards of the various Funds. In addition, the
participating Funds will pay interest on borrowing at the Federal Funds rate
plus .50%. At December 31, 1999, there were no loans outstanding for the Fund.
During the year ended December 31, 1999 there were no borrowings on this line of
credit.
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- ----------
To the Shareholders and Board of Directors of
Credit Suisse Asset Management
Strategic Global Income Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Credit Suisse Asset Management
Strategic Global Income Fund, Inc. (the "Fund") at December 31, 1999, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of the securities at
December 31, 1999 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 21, 2000
23
<PAGE>
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
THREE MONTHS ENDED
-------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
MARCH 31, 1999 JUNE 30, 1999 1999 1999
--------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income...................................... $ 2,057 $ 0.24 $ 2,005 $ 0.24 $ 2,094 $ 0.25 $ 3,123 $ 0.26
Net Investment Income.................................. 1,841 0.22 1,805 0.21 1,866 0.22 2,884 0.24
Net Realized Gain (Loss) and Change in
Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency...................... 204 0.03 281 0.03 (2,702) (0.32) 3,719 0.68
Net Increase in Net Assets Resulting from Operations... 2,045 0.25 2,086 0.24 (836) (0.10) 6,603 0.92
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
MARCH 31, 1998 JUNE 30, 1998 1998 1998
--------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income...................................... $ 2,309 $ 0.27 $ 2,280 $ 0.26 $ 2,163 $ 0.26 $ 2,255 $ 0.27
Net Investment Income.................................. 2,049 0.24 1,912 0.23 1,931 0.23 2,037 0.24
Net Realized Gain (Loss) and Change in
Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency...................... 2,428 0.29 (2,809) (0.33) (11,239) (1.28) (983) (0.17)
Net Increase (Decrease) in Net Assets Resulting from
Operations............................................ 4,477 0.53 (897) 0.10 (9,689) (1.15) 1,436 0.17
</TABLE>
SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of the Stockholders of the Credit Suisse Asset Management
Strategic Global Income Fund, Inc. was held on Monday, May 10, 1999 at the
offices of Willkie Farr & Gallagher, 787 7th Avenue, New York City. The
following is a summary of each proposal presented and the total number of shares
voted:
<TABLE>
<CAPTION>
VOTES IN VOTES VOTES
PROPOSAL FAVOR OF AGAINST ABSTAINED
- ------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1. To elect the following four Directors:
Enrique R. Arzac 7,314,343 102,068 --
Lawrence J. Fox 7,328,561 87,850 --
James S. Pasman, Jr. 7,319,300 97,111 --
William W. Priest, Jr. 7,326,261 90,150
2. To ratify the selection of
PricewaterhouseCoopers LLP as independent
public accountants of the Fund until the next
annual meeting. 7,297,548 58,973 59,890
3. To approve an amendment to the Fund's
Articles of Incorporation to change the name
of the Fund to Credit Suisse Asset Management
Strategic Global Income Fund, Inc. 7,038,978 235,109 142,323
</TABLE>
24
<PAGE>
DESCRIPTION OF INVESTLINK(SM) PROGRAM
- ------------
The InvestLink-SM- Program is sponsored and administered by BankBoston, N.A.,
not by Credit Suisse Asset Management Strategic Global Income Fund, Inc., (the
"Fund"). BankBoston, N.A., will act as program administrator (the "Program
Administrator") of the InvestLink-SM- Program (the "Program"). The purpose of
the Program is to provide interested investors with a simple and convenient way
to invest funds and reinvest dividends in shares of the Fund's common stock
("Shares") at prevailing prices, with reduced brokerage commissions and fees.
An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
include brokerage commissions.) Participants will not be charged any fee for
reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount
of his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of the Fund's common stock in the open market. Such purchases will be
made by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the purchase date. In all cases, transaction processing will occur within
30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.
The average price of all Shares purchased by the Program Administrator with
all funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.
BankBoston, N.A., as Program Administrator administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such participant's
account (if applicable), as well as fees paid by the participant. In addition,
each participant will receive copies of the Fund's annual and semi-annual
reports to shareholders, proxy statements and, if applicable, dividend income
information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the
name of the accounts of the respective participants. Unless requested, the Fund
will not issue to participants certificates for Shares of the Fund purchased
under the Program. The Program Administrator will hold the Shares in book-entry
form until a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split
will be based upon both the Shares of the Fund registered in participants' names
and the Shares (including
25
<PAGE>
fractional Shares) credited to participants' Program accounts. Any stock
dividend or Shares resulting from stock splits with respect to Shares of the
Fund, both full and fractional, which participants hold in their Program
accounts and with respect to all Shares registered in their names will be
automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his
account under the Program will be voted as the participant directs. The
participants will be sent the proxy materials for the annual meetings of
shareholders. When a participant returns an executed proxy, all of such shares
will be voted as indicated. A participant may also elect to vote his Shares in
person at the Shareholders' meeting.
A participant will receive tax information annually for his personal records
and to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable
for any act done in good faith or for any good faith omission to act. However,
the Program Administrator will be liable for loss or damage due to error caused
by its negligence, bad faith or willful misconduct. Shares held in custody by
the Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgement and research.
While the Program Administrator hopes to continue the Program indefinitely,
the Program Administrator reserves the right to suspend or terminate the Program
at any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested investor may participate in the Program. To participate in
the Program, an investor who is not already a registered owner of the Shares
must make an initial investment of at least $250.00. All other cash payments or
bank account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including terms and conditions) may be obtained by calling the Program
Administrator at one of the following telephone numbers: First Time
Investors--(800) 523-8506. Current Shareholders--(800) 730-6001. All
correspondence regarding the Program should be directed to: BankBoston, N.A.,
InvestLink Program, P.O. Box 8040, Boston, MA 02266-8040.
- ------------------------------------------------------
*InvestLink is a service mark of Boston EquiServe Limited Partnership.
26
<PAGE>
RECENT DEVELOPMENTS (UNAUDITED)
- ------------
Recently, the Securities and Exchange Commission (the "SEC") amended Rule
14a-4(c) under the Securities Exchange Act of 1934, as amended (the "1934 Act")
which governs the Fund's use of discretionary proxy voting authority with
respect to shareholder proposals that are not being included in the Fund's proxy
solicitation material pursuant to Rule 14a-8 of the 1934 Act. In light of these
amendments, the Fund's Board of Directors reviewed the By-laws of the Fund and
made the following material changes: 1) the percentage of ownership needed for
stockholders to request a special meeting has been increased from 25% to a
majority of the outstanding capital stock of the Fund entitled to vote at such
meeting; 2) the advance notice requirements applicable to stockholder proposals
at annual meetings and for nominations by stockholders for election to the Board
of Directors have been revised to reflect changes in Rule 14a-4(c); 3) the
Board's ultimate authority concerning reimbursement of expenses in soliciting
proxies for the election of Directors has been clarified; and 4) the power to
amend the By-laws is reserved to the Board of Directors. The Fund's By-laws are
on file with the SEC and are accessible through the SEC web site (www.sec.gov)
or may be obtained from the Secretary of the Fund upon request.
27
<PAGE>
4947-AR-99
