(ICON)
Prudential
Intermediate
Global
Income
Fund, Inc.
SEMI
ANNUAL
REPORT
June 30, 1997
(LOGO)
<PAGE>
Prudential Intermediate Global Income Fund, Inc.
Performance At A Glance.
A strengthening U.S. dollar and rising U.S. interest rates
crimped returns of
investors in foreign bond markets during the six months
ended June 30. Still,
despite unfavorable market conditions, your Prudential
Intermediate Global
Income Fund performed better than competing funds as
measured by Lipper
Analytical Services. That's because of our holdings in
emerging market debt
and our decision to limit our exposure to foreign
currencies.
<TABLE>
<CAPTION>
Cumulative
Total
Returns1
As of 6/30/97
Six One
Five Since
Months Year
Years Inception2
<S> <C> <C> <C>
<C>
Class A 1.7% 9.8%
52.3% 104.3%
Class B 1.5 9.2 47.8
51.8
Class C 1.5 9.2 N/A
34.7
Class Z 1.8 N/A N/A
7.1
Lipper Global
Income Fund Avg3 0.9 9.3 37.1
***
</TABLE>
<TABLE>
<CAPTION>
Average
Annual Total
Returns1
As of 6/30/97
One
Five Since
Year
Years Inception2
<S> <C> <C>
<C>
Class A 6.5%
8.1% 7.8%
Class B 9.2
8.1 8.0
Class C 8.2
N/A 10.8
</TABLE>
<TABLE>
<CAPTION>
Dividends
& Yields
As of 6/30/97
Total Dividends
30-Day
Paid for Six Mos.
SEC Yield
<S> <C>
<C>
Class A $0.26
5.63%
Class B $0.23
5.20
Class C $0.23
5.20
Class Z $0.26
5.96
</TABLE>
Past performance is not indicative of future results.
Investment return and
principal value will fluctuate so that an investor's
shares, when redeemed,
may be worth more or less than the original cost.
1Source: Prudential Investments Fund Management and Lipper
Analytical Services.
The cumulative total returns do not take into account
applicable sales charges.
The average annual total returns do take into account
applicable sales charges.
The Fund charges a maximum front end sales load of 3% for
Class A shares. Class
B shares are subject to a declining contingent deferred
sales charge (CDSC) of
3%, 2%, 1% and 1% for four years. Class C shares have a 1%
CDSC for one year.
Class B shares will automatically convert to Class A shares
on a quarterly
basis, after approximately five years. Class Z shares are
not subject to a
sales charge or distribution fee. Since Class Z shares have
been in existence
less than one year, no average annual total returns are
shown. The Fund
commenced operations on May 26, 1988 as a closed-end
investment company.
Effective October 7, 1991, the Fund commenced operations as
an open-end
investment company.
2Inception dates: 5/26/88 Class A; 1/15/92 Class B; 8/1/94
Class C; 9/13/96
Class Z.
3These are the average cumulative total returns of 131
funds in the Lipper
Global Income Fund category for one year, and 38 funds for
five years.
*** Lipper Since Inception returns are: Class A, 93.9%;
Class B, 41.4%; Class
C, 30.7% and Class Z, 5.0% for all funds in each Lipper
share class.
How Investments Compared.
(As of 6/30/97)
(GRAPHIC)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services. Financial markets
change, so a mutual
fund's past performance should never be used to predict
future results. The
risks to each of the investments listed above are different
- -- we provide 12-
month total returns for several Lipper mutual fund
categories to show you that
reaching for higher returns means tolerating more risk. The
greater the risk,
the larger the potential reward or loss. In addition, we've
included historical
20-year average annual returns. These returns assume the
reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great deal. Investors
have received higher
historical total returns from stocks than from most other
investments. Smaller
capitalization stocks offer greater potential for long-term
growth but may be
more volatile than larger capitalization stocks.
General Bond Funds provide more income than stock funds,
which can help smooth
out their total returns year by year. But their prices
still fluctuate
(sometimes significantly) and their returns have been
historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds issued by
state governments,
state agencies and/or municipalities. This investment
provides income that is
usually exempt from federal and state income taxes.
Money Market Funds attempt to preserve a constant share
value; they don't
fluctuate much in price but, historically, their returns
have been generally
among the lowest of the major investment categories.
<PAGE>
Gabriel Irwin and Simon Wells, Fund Managers
(PHOTOS)
Portfolio Managers' Report
Your Fund seeks to maximize total return, which is current
income plus any
capital appreciation of its underlying bonds. The Fund
invests primarily in
intermediate-term, investment grade bonds issued throughout
the world. The
Fund may also invest up to 10% of total net investments in
bonds rated below
investment grade with a minimum rating of "B" by Standard &
Poor's or Moody's
or of comparable quality in our view. Lower rated
securities carry a greater
risk of loss of principal and interest than higher rated
securities. There are
special risks associated with foreign investing, including
social, political
and currency risks and potential illiquidity. There can be
no assurance that
the Fund's investment objective will be achieved.
How We Invest.
We look to invest in countries with well-managed economies
and currencies.
These are critical factors in determining a bond's value
and its prospects for
appreciation. Once we have identified our preferred
countries, we look at
specific types of bonds and issuers. It's a top-down
investment philosophy
that governs our broad country and currency allocation.
Strategy Session.
U. S. Rates Rise.
After posting double-digit returns in 1996, global bonds
faced more difficult
times in the first quarter of 1997 as the U.S. economy
expanded rapidly,
driving domestic interest rates higher. When economic
growth is too strong,
it can lead to inflationary pressures that erode the value
of a bond's fixed
interest and principal payments. Fearing this, investors
drove world bond
prices lower and yields higher. Then, in March, the U.S.
Federal Reserve
increased short-term interest rates by a quarter percentage
point to 5.5%
After the Federal Reserve acted, U.S. economic growth
slowed, so investors bid
bond prices higher and the 30-year U.S. Treasury bond yield
tumbled back below
7%.
Throughout this period, we modestly adjusted duration, a
measure of your
Fund's sensitivity to interest rate changes. We shortened
duration when we
expected interest rates to rise, and lengthened as they
fell. We were careful
not to extend duration too much as summer began because we
expect interest
rates to edge higher later in the year.
Fewer Dollars.
We slightly trimmed the Fund's substantial holding in
dollar-bloc currencies
(United States, Australia, Canada and New Zealand) to 78%
of total
investments as of June 30, 1997. Our outlook on the U.S.
dollar remains
favorable, but we believe the currency, which has soared in
value, will
eventually come back to a more realistic level.
Arrivederci Roma.
The expectation of currency union in Europe made Italian
bonds very attractive
last year, providing investors with a 27% return in local
currency terms,
according to Salomon Brothers. Your Fund held 4.6% of total
investments in
Italian bonds at the beginning of 1997, but we sold them
because the risk of
losses outweighed the possibility for further gains.
<PAGE>
What Went Well.
Sweden, Yes.
We used proceeds from the sale of Italian and German bonds
to buy Swedish
bonds, which appreciated amid lower-than-expected inflation
and falling
interest rates.
Currency Jitters.
Currency risk is an integral part of investing in global
bonds. Fortunately,
we avoided trouble in Europe and Asia by selling Czech
bonds and entering into
contracts to sell Indonesian rupiahs on a future date in
exchange for U.S.
dollars. Here's what happened:
- - Investors sold the Czech koruna in May, betting that the
government would
be forced to devalue the currency in an effort to narrow
the country's trade
deficit. As expected, the Czech National Bank freed the
koruna from certain
trading restrictions, thereby allowing the value of
currency to tumble. Earlier
in the year, we could see the koruna might weaken so we
sold our Czech bonds.
- - As the reporting period was ending, sign of instability
in Southeast Asia
caused us to become wary of currencies there. Shortly
after, we entered into
forward contracts to sell Indonesian rupiahs. Doing this
removed the risk of
owning rupiahs from the Fund's Indonesian bonds. Shifting
the currency risk to
U.S. dollars proved to be a wise choice because a sharp
decline in the value
of the Thai baht in July triggered a region-wide currency
scare that spilled
over to many Southeast Asian currencies, including the
rupiah.
Five Largest Holdings.
9.0% U.S. Treasury Note
6/30/99
4.9% U.S. Treasury Note
9/30/00
4.8% Canadian Gov't Bond
12/01/04
4.3% Swedish Gov't Bond
2/09/05
4.1% German Gov't Bond
1/03/05
Expressed as a percentage of total investments as of
6/30/97.
And Not So Well.
A Yen For Yen.
Over the past six months, your Fund did not hold any
Japanese government bonds
or currency. Official Japanese interest rates have remained
at historically
low levels, making the nation's currency and bonds less
attractive to yield-
hungry investors. Yet some investors clung to the notion
during the second
quarter that Japanese interest rates would soon rise
because the economy had
strengthened sufficiently to withstand higher rates. As a
result, the Japanese
yen gained against the U.S. dollar in the spring. Our
performance would have
been better had we held yen at that time.
Looking Ahead.
After the reporting period, we adjusted our holdings in
Australia and New
Zealand because we were concerned about slower economic
growth in both
countries. Moderating growth typically leads to lower
interest rates that tend
to hurt a currency's value by decreasing returns when that
weaker currency is
sold for U.S. dollars. (In Australia, short-term interest
rates have already
slid beneath the level of comparable rates in the United
States.) So we entered
into contracts to sell Australian and New Zealand dollars
at a future date in
exchange for U.S. dollars. These transactions have shifted
into U.S. dollars
most of the currency risk on our Australian bonds and all
of the currency risk
on our New Zealand bonds. We are generally cautious about
bonds because we
expect global interest rates to edge higher later in the
year. However, the
vast world bond market still offers a variety of attractive
investment
opportunities.
Portfolio Breakdown.
Expressed as a percentage of
total investments as of 6/30/97.
(PIE CHART)
- -----------------------------------------------------------
- --------------------
1
<PAGE>
President's Letter
August 4, 1997
(PHOTO)
Dear Shareholder:
With the midpoint of 1997 behind us, I'm pleased to report
that the recent
news from the financial markets has been decidedly upbeat.
The Dow Jones
Industrial Average has gained more than 20% through the end
of June, while
lower long-term interest rates have made bonds an
attractive investment.
This stands in contrast to April when the Dow fell 10% from
a record high on
fears of higher interest rates and surging inflation.
Interest rates have
since fallen as the economy slowed and the Dow has reached
several new highs.
The market swings we've seen this year illustrate the
importance of "staying
the course" to your financial goal. We realize that
maintaining investment
discipline when faced with market uncertainty isn't easy.
Here are some
thoughts that may help:
- - Keep Your Expectations Realistic. The best investors
know that financial
markets rise and fall -- and so too, will the value of
their investments.
Over time, however, stocks have been shown to produce
very attractive
returns that were well ahead of inflation. And where
income is the primary
goal, bonds have also provided attractive returns.
- - Remember Your Time Horizon. If your investment goals are
long term (several
years or more), your time horizon should be too. During
this period, it's
not unusual for stocks and bonds to experience several
periods of market
uncertainty.
- - We're On Your Side. Your Prudential Securities Financial
Advisor or Pruco
Securities Registered Representative can help you
understand what's
happening in the financial markets. They can assist you
in making informed
decisions based upon a thorough knowledge of your
financial needs and long-
term goals. Call him or her today.
Thank you for your continued confidence in Prudential
mutual funds. We'll do
everything we can to keep you informed and to earn your
trust.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
- -----------------------------------------------------------
- --------------------
2
<PAGE>
Portfolio of Investments PRUDENTIAL
INTERMEDIATE GLOBAL
as of June 30, 1997 (Unaudited) INCOME FUND, INC.
- -----------------------------------------------------------
- -
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- -----------------------------------------------------------
- -
LONG-TERM INVESTMENTS--85.7%
- -----------------------------------------------------------
- -
Australia--5.3%
A$ 2,900 New South Wales Treasury
Corporation,
6.50%, 5/1/06 $
2,070,290
8,500 Queensland Treasury
Corporation,
8.00%, 8/14/01
6,744,087
---------
- ---
8,814,377
- -----------------------------------------------------------
- -
Canada--7.9%
C$ 3,000 British Columbia Provincial
Bonds,
7.75%, 6/16/03
2,360,884
9,500 Canadian Government Bonds,
9.00%, 12/1/04
8,056,844(a)
3,400 Province of Quebec,
9.25%, 4/1/02
2,799,086
---------
- ---
13,216,814
- -----------------------------------------------------------
- -
Denmark--5.9%
Danish Government Bonds,
DKr 15,000 8.00%, 5/15/03
2,556,383
27,500 7.00%, 12/15/04
4,438,201
16,500 8.00%, 3/15/06
2,796,838(a)
---------
- ---
9,791,422
- -----------------------------------------------------------
- -
France--1.2%
FF 10,500 National Bank of Hungary,
8.00%, 11/12/99
1,938,235
- -----------------------------------------------------------
- -
Germany--8.6%
German Government Bonds,
DM 10,500 7.375%, 1/3/05
6,748,320(a)
2,500 6.25%, 1/4/24
1,386,336(a)
4,000 Republic of Colombia,
7.25%, 12/21/00
2,440,986
DM 4,000 Tokyo Gas Co. Ltd.,
7.00%, 7/27/05 $
2,472,000
2,000 United Mexican States,
8.125%, 9/10/04, FRB
1,233,129
---------
- ---
14,280,771
- -----------------------------------------------------------
- -
Greece--2.4%
Hellenic Republic,
GRD 525,000 10.70%, 12/31/99
1,957,841
545,000 12.60%, 12/31/03
2,050,306
---------
- ---
4,008,147
- -----------------------------------------------------------
- -
Hungarian--0.4%
HUF 120,000 Hungary Government Bonds,
16.50%, 4/12/99, Ser. 99-F
625,615
- -----------------------------------------------------------
- -
Netherlands--3.9%
Dutch Government Bonds,
NLG 9,000 7.00%, 6/15/05
5,061,209(a)
2,600 7.50%, 1/15/23
1,515,175
---------
- ---
6,576,384
- -----------------------------------------------------------
- -
New Zealand--3.1%
NZ$ 2,500 Federal National Mortgage
Associaton,
7.25%, 6/20/02
1,702,006
4,800 New Zealand Government Bonds,
8.00%, 2/15/01
3,382,329
---------
- ---
5,084,335
- -----------------------------------------------------------
- -
Poland--0.2%
PLZ 1,250 Polish Government Bonds,
16.00%, 10/12/98
357,550
</TABLE>
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments PRUDENTIAL
INTERMEDIATE GLOBAL
as of June 30, 1997 (Unaudited) INCOME FUND, INC.
- -----------------------------------------------------------
- -
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- -----------------------------------------------------------
- -
Spain--3.5%
Spanish Government Bonds,
Pts 250,000 10.30%, 6/15/02 $
2,035,836(a)
500,000 8.20%, 2/28/09
3,847,826(a)
---------
- ---
5,883,662
- -----------------------------------------------------------
- -
Sweden--4.2%
SEK 56,000 Swedish Government Bonds,
6.00%, 2/9/05
7,082,305
- -----------------------------------------------------------
- -
United Kingdom--7.2%
BP 1,300 Powergen PLC,
8.875%, 3/26/03
2,265,000
300 Republic of Argentina,
11.50%, 8/14/01
533,421
United Kingdom Treasury Bonds,
2,900 7.75%, 9/8/06
5,021,039
2,200 8.75%, 8/25/17
4,267,615(a)
---------
- ---
12,087,075
- -----------------------------------------------------------
- -
United States--31.9%
Corporate Bonds--2.6%
US$ 350 Banco Ganadero S.A.,
9.75%, 8/26/99
367,850
1,100 Financiera Energetica Nacional
(Colombia),
9.00%, 11/8/99
1,140,150
2,000 Petroleas Mexicano (Mexico),
6.8125%, 3/8/99
2,000,000
750 Romanian Commercial Bank,
9.125%, 3/10/00
746,250
---------
- ---
4,254,250
Sovereign Bonds--9.1%
1,000 Ministry Of Finance (Russia),
10.00%, 6/26/07
997,500
US$ 750 Municipality of Rio de Janeiro,
10.375%, 7/12/99 $
780,937
750 National Bank of Romania,
9.75%, 6/25/99, FRN
767,344
970 Republic of Argentina,
6.75%, 3/31/05, FBR
911,800
1,044 Republic of Brazil,
6.50%, 1/1/01, FBR/IDU
1,029,645
1,500 Republic of Colombia,
7.25%, 2/23/04
1,450,500
1,446 Republic of Croatia,
6.50%, 7/31/06, FRN
1,422,187
3,500 Republic of Poland,
6.9375%, 10/27/24, FRB
3,421,250
750 Sultan of Oman,
7.125%, 3/20/02
751,875
500 Trinidad & Tobago Republic,
9.75%, 11/3/00
527,500
United Mexican States,
1,000 9.75%, 2/6/01
1,057,500
2,000 9.80%(b), 8/6/01, FRN
2,003,800
---------
- ---
15,121,838
Supranational Bonds--0.8%
1,350 Corporacion Andina de Formento,
7.375%, 7/21/00
1,368,900
U.S. Government Obligations--19.4%
United States Treasury Notes,
15,000 6.75%, 6/30/99
15,182,850
8,100 6.125%, 9/30/00
8,064,522(a)
6,000 5.75%, 8/15/03
5,793,720(a)
3,100 7.875%, 11/15/04
3,345,582(a)
---------
- ---
32,386,674
---------
- ---
53,131,662
---------
- ---
Total long-term investments
(cost US$142,689,777)
142,878,354
---------
- ---
</TABLE>
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments PRUDENTIAL
INTERMEDIATE GLOBAL
as of June 30, 1997 (Unaudited) INCOME FUND, INC.
- -----------------------------------------------------------
- -
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- -----------------------------------------------------------
- -
SHORT-TERM INVESTMENTS--12.7%
- -----------------------------------------------------------
- -
Hungarian--0.6%
HUF 180,000 Hungary Government Bonds,
23.50%, 5/17/98 $
989,719
- -----------------------------------------------------------
- -
Indonesia--1.6%
INR 2,000,000 Asia Pulp And Paper,
14.45%(b), 1/27/98
756,003
2,000,000 Bakrie And Brothers,
17.50%(b), 2/19/98, NCD
738,961
Bank Negara Indonesia,
1,000,000 13.75(b)%, 11/7/97
393,513
2,000,000 12.65(b)%, 12/7/97
775,375
---------
- ---
2,663,852
- -----------------------------------------------------------
- -
Poland--1.4%
PLZ 1,250 General Electric Capital
Corporation,
18.25%, 2/27/98
372,233
1,000 ING Poland,
21.50%, 8/4/97
303,495
Polish Treasury Bills,
1,500 20.75%(b), 8/20/97
443,191
1,500 21.125(b)%, 10/8/97
430,780
3,000 21.82(b)%, 4/15/98
778,881
---------
- ---
2,328,580
- -----------------------------------------------------------
- -
Spain--1.2%
Pts 300,000 Republic of Argentina,
12.80%, 12/9/97
2,086,447
United States--7.9%
Repurchase Agreement--6.6%
US$ 10,911 Joint Repurchase Agreement
Account,
5.96%, 7/1/97, (Note 5) $
10,911,000
Sovereign Bonds--1.3%
2,185 Republic of Colombia,
7.125%, 5/11/98
2,192,647
---------
- ---
13,103,647
---------
- ---
Total short-term investments
(cost US$22,034,581)
21,172,245
---------
- ---
- -----------------------------------------------------------
- -
Total Investments--98.4%
(cost US$164,724,358; Note 4)
164,050,599
Other assets in excess of
liabilities--1.6%
2,749,700
---------
- ---
Net Assets--100%
$166,800,299
---------
- ---
---------
- ---
</TABLE>
- ---------------
Portfolio securities are classified according to the
securities
currency denomination.
(a) Principal amount segregated as collateral for forward
currency contracts.
Aggregate value of segregated securities-US$51,404,648.
(b) Percentages quoted represent yield-to-maturity as of
purchase date.
FRB-Floating Rate Bond.
FRN-Floating Rate Note.
IDU-Interest Due and Unpaid Bonds.
NCD-Negotiable Certificates of Deposit
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 5
<PAGE>
Statement of Assets and Liabilities PRUDENTIAL
INTERMEDIATE GLOBAL
(Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
<TABLE>
<S>
<C>
Assets
June 30, 1997
Investments, at value (cost
$164,724,358)..............................................
..................... $164,050,599
Foreign currency, at value (cost
$644)......................................................
................ 628
Interest
receivable.................................................
........................................ 3,232,574
Forward currency contracts-net amount receivable from
counterparties........................................
434,881
Receivable for Fund shares
sold.......................................................
...................... 105,281
Other
assets.....................................................
...........................................
5,432
- -------------
Total
assets.....................................................
........................................ 167,829,395
- -------------
Liabilities
Bank
overdraft..................................................
............................................
185,358
Payable for Fund shares
reacquired.................................................
......................... 294,834
Dividends
payable....................................................
....................................... 235,813
Accrued
expenses...................................................
......................................... 183,477
Due to
Manager....................................................
..........................................
103,323
Due to
Distributor................................................
..........................................
26,291
- -------------
Total
liabilities................................................
........................................ 1,029,096
- -------------
Net
Assets.....................................................
.............................................
$166,800,299
- -------------
- -------------
Net assets were comprised of:
Common stock, at
par........................................................
............................. $ 20,258
Paid-in capital in excess of
par........................................................
................. 240,196,396
- -------------
240,216,654
Undistributed net investment
income.....................................................
................. 6,660,007
Accumulated net realized loss on investments and foreign
currency transactions...........................
(79,770,740)
Net unrealized depreciation on investments and foreign
currencies........................................
(305,622)
- -------------
Net assets, June 30,
1997.......................................................
............................ $166,800,299
- -------------
- -------------
Class A:
Net asset value and redemption price per share
($153,263,087 / 18,615,122 shares of common stock
issued and outstanding).............................
$8.23
Maximum sales charge (3.00% of offering
price).....................................................
...... .25
- -------------
Maximum offering price to
public.....................................................
.................... $8.48
- -------------
- -------------
Class B:
Net asset value, offering price and redemption price per
share
($11,350,075 / 1,377,550 shares of common stock
issued and outstanding)...............................
$8.24
- -------------
- -------------
Class C:
Net asset value, offering price and redemption price per
share
($197,915 / 24,020 shares of common stock issued and
outstanding).....................................
$8.24
- -------------
- -------------
Class Z:
Net asset value, offering price and redemption price per
share
($1,989,222 / 241,573 shares of common stock issued
and outstanding)..................................
$8.23
- -------------
- -------------
</TABLE>
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 6
<PAGE>
PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC.
Statement of Operations (Unaudited)
- -----------------------------------------------------------
- -
<TABLE>
<CAPTION>
Six
Months
Ended
June
30,
Net Investment Income 1997
<S> <C>
Income
Interest and discount earned................. $
6,926,858
--------
- ---
Expenses
Management fee...............................
640,939
Distribution fee--Class A....................
118,141
Distribution fee--Class B....................
45,641
Distribution fee--Class C....................
707
Transfer agent's fees and expenses...........
173,000
Custodian's fees and expenses................
79,000
Reports to shareholders......................
35,000
Registration fees............................
22,000
Audit fee....................................
18,000
Directors' fees and expenses.................
14,000
Legal fees and expenses......................
6,000
Insurance expense............................
2,000
Miscellaneous................................
4,913
--------
- ---
Total expenses............................
1,159,341
--------
- ---
Net investment income...........................
5,767,517
--------
- ---
Net Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions
Net realized gain on:
Investment transactions......................
1,353,226
Foreign currency transactions................
4,690,353
--------
- ---
6,043,579
--------
- ---
Net change in unrealized
appreciation/depreciation of:
Investments..................................
(8,870,870)
Foreign currencies...........................
170,977
--------
- ---
(8,699,893)
--------
- ---
Net loss on investments and foreign
currencies...................................
(2,656,314)
--------
- ---
Net Increase in Net Assets
Resulting from Operations....................... $
3,111,203
--------
- ---
--------
- ---
</TABLE>
PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC.
Statement of Changes in Net Assets (Unaudited)
- -----------------------------------------------------------
- -
<TABLE>
<CAPTION>
Six Months
Ended Year
Ended
Increase (Decrease) June 30,
December 31,
in Net Assets 1997
1996
<S> <C> <C>
Operations
Net investment income.......... $ 5,767,517 $
12,015,379
Net realized gain on investment
and foreign currency
transactions................ 6,043,579
8,525,984
Net change in unrealized
appreciation/depreciation on
investments and foreign
currencies.................. (8,699,893)
(1,630,745)
------------ -------
- -----
Net increase in net assets
resulting from operations... 3,111,203
18,910,618
------------ -------
- -----
Dividends and distributions (Note
1)
Dividends from net investment
income
Class A..................... (4,957,397)
(11,085,209)
Class B..................... (347,320)
(920,752)
Class C..................... (5,361)
(6,619)
Class Z..................... (33,458)
(2,799)
------------ -------
- -----
(5,343,536)
(12,015,379)
------------ -------
- -----
Distributions in excess of net
investment income
Class A..................... --
(5,793,623)
Class B..................... --
(474,939)
Class C..................... --
(4,101)
Class Z..................... --
(4,774)
------------ -------
- -----
--
(6,277,437)
------------ -------
- -----
Fund share transactions (net of
share conversions) (Note 6)
Net proceeds from shares
sold........................ 5,628,847
16,398,099
Net asset value of shares
issued in reinvestment of
dividends and
distributions............... 1,942,466
6,011,409
Cost of shares reacquired...... (17,884,997)
(42,995,654)
------------ -------
- -----
Net decrease in net assets from
Fund share transactions..... (10,313,684)
(20,586,146)
------------ -------
- -----
Total decrease.................... (12,546,017)
(19,968,344)
Net Assets
Beginning of period............... 179,346,316
199,314,660
------------ -------
- -----
End of period..................... $166,800,299
$179,346,316
------------ -------
- -----
------------ -------
- -----
</TABLE>
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 7
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Notes to Financial Statements (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
Prudential Intermediate Global Income Fund, Inc., (the
'Fund') was organized in
Maryland as a closed-end, non-diversified management
investment company and
commenced investment operations on May 26, 1988. On October
4, 1991 the Fund
concluded operations as a closed-end investment company and
effective October 7,
1991, commenced operations as an open-end, non-diversified
investment company.
The Fund's investment objective is to maximize total
return, the components of
which are current income and capital appreciation, by
investing in a portfolio
consisting primarily of U.S. and foreign government
securities. The Fund will
also engage in certain hedging strategies to meet its
investment objective. The
ability of issuers of debt securities held by the Fund to
meet their obligations
may be affected by economic and political developments in a
specific country or
region.
- -----------------------------------------------------------
- -
Note 1. Accounting Policies
The following is a summary of significant accounting
policies followed by the
Fund in the preparation of its financial statements.
Security Valuation: In valuing the Fund's assets,
quotations of foreign
securities in a foreign currency are converted to U.S.
dollar equivalents at the
then current currency rate. Portfolio securities (including
options) are valued
at their current market value as determined by an
independent pricing service,
principal market maker or by reference to the applicable
exchange price. Forward
currency exchange contracts are valued at the current cost
of covering or
offsetting the contract on the day of valuation. Securities
and assets for which
market quotations are not readily available are valued at
fair value as
determined in good faith by or under the direction of the
Board of Directors of
the Fund.
Short-term securities which mature in more than 60 days are
valued at current
market quotations. Short-term securities which mature in 60
days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements
with U.S. financial
institutions, it is the Fund's policy that its custodian or
designated
subcustodians under triparty repurchase agreements, as the
case may be take
possession of the underlying collateral securities, the
value of which exceeds
the principal amount of the repurchase transaction
including accrued interest.
If the seller defaults and the value of the collateral
declines or if bankruptcy
proceedings are commenced with respect to the seller of the
security,
realization of the collateral by the Fund may be delayed or
limited.
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 on
the following basis:
(i) market value of investment securities, other assets and
liabilities--at the
current rates of exchange;
(ii) purchases and sales of investment securities, income
and expenses--at the
rates of exchange prevailing on the respective 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 long-term debt
securities sold
during the period. Accordingly, such realized foreign
currency gains and losses
are included in the reported net realized gains/losses on
investment
transactions.
Net realized gains on foreign currency transactions
represent net foreign
exchange gains and losses from sales and maturities of
short-term securities and
forward currency contracts, holding of foreign currencies,
currency gains or
losses realized between the trade and settlement dates on
securities
transactions, and the difference between the amounts of
interest and foreign
taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts
actually received or paid. Net currency gains and losses
from valuing foreign
currency denominated assets (excluding investments) and
liabilities at period
end exchange rates are reflected as a component of net
unrealized depreciation
on investments and foreign currencies.
Foreign security and currency transactions may involve
certain considerations
and risks not typically associated with those of U.S.
companies as a result of,
among other factors, the possibility of political or
economic instability and
the level of governmental supervision and regulation of
foreign securities
markets.
Forward Currency Contracts: A forward currency contract is
a commitment to
purchase or sell a foreign currency at a future date at a
negotiated forward
rate. The Fund enters into forward currency contracts in
order to hedge its
exposure to changes in foreign currency exchange rates on
its
- -----------------------------------------------------------
- ---------------------
-----
8
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Notes to Financial Statements (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
foreign portfolio holdings or on specific receivables and
payables denominated
in a foreign currency. The contracts are valued daily at
current exchange rates
and any unrealized gain or loss is included in net
unrealized appreciation or
depreciation on investments. Gain or loss is realized on
the settlement date of
the contract equal to the difference between the settlement
value of the
original and renegotiated forward contracts. This gain or
loss, if any, is
included in net realized gain (loss) on foreign currency
transactions. Risks may
arise upon entering into these contracts from the potential
inability of the
counterparties to meet the terms of their contracts.
Security Transactions and Net Investment Income: Security
transactions are
recorded on the trade date. Realized gains and losses from
security and currency
transactions are calculated on the identified cost basis.
Interest income is
recorded on the accrual basis. Expenses are recorded on the
accrual basis which
may require the use of certain estimates by management.
Net investment income (other than distribution fees), and
unrealized and
realized gains or losses are allocated daily to each class
of shares based upon
the relative proportion of net assets of each class at the
beginning of the day.
Taxes: It is the Fund's policy to continue to meet the
requirements of the
Internal Revenue Code applicable to regulated investment
companies and to
distribute all of its taxable income to shareholders.
Therefore, no federal
income tax provision is required.
Withholding taxes on foreign interest have been provided
for in accordance with
the Fund's understanding of the applicable country's tax
rules and rates.
Dividends and Distributions: The Fund declares daily and
pays dividends of net
investment income monthly and makes distributions at least
annually of any net
capital gains. Dividends and distributions are recorded on
the ex-dividend date.
Income distributions and capital gain distributions are
determined in accordance
with income tax regulations which may differ from generally
accepted accounting
principles. These differences are primarily due to
differing treatments for
foreign currency transactions.
Reclassification of Capital Accounts: The Fund accounts for
and reports
distributions to shareholders in accordance with AICPA
Statement of Position
93-2: Determination, Disclosure, and Financial Statement
Presentation of Income,
Capital Gain, and Return of Capital Distributions by
Investment Companies. The
effect of applying this Statement of Position was to
reclassify $4,559,946 of
foreign currency gains from accumulated net realized loss
on investments to
undistributed net investment income. Net investment income,
net realized gains
and net assets were not affected by this change.
- -----------------------------------------------------------
- -
Note 2. Agreements
The Fund has a management agreement with Prudential
Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has
responsibility for all
investment advisory services and supervises the
subadviser's performance of such
services. PIFM has entered into a subadvisory agreement
with The Prudential
Investment Corporation ('PIC'); PIC furnishes investment
advisory services in
connection with the management of the Fund. PIFM pays for
the cost of the
subadviser's services, the compensation of officers of the
Fund, occupancy and
certain clerical and bookkeeping costs of the Fund. The
Fund bears all other
costs and expenses.
The management fee paid PIFM is computed daily and payable
monthly at an annual
rate of .75% of the Fund's average daily net assets.
The Fund has a distribution agreement with Prudential
Securities Incorporated
('PSI'), which acts as the distributor of the Class A, B, C
and Z shares of the
Fund. The Fund compensates PSI for distributing and
servicing the Fund's Class
A, Class B and Class C shares, pursuant to plans of
distribution (the 'Class A,
B and C Plans'), regardless of expenses actually incurred
by PSI. The
distribution fees are accrued daily and payable monthly. No
distribution or
service fees are paid to PSI as distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund
compensates PSI for
distribution-related activities at an annual rate of up to
.30 of 1%, 1% and 1%,
of the average daily net assets of the Class A, B and C
shares, respectively.
Such expenses under the Plans were .15% of 1%, .75% of 1%
and .75 of 1% of the
average daily net assets of the Class A, B and C shares,
respectively, for the
six months ended June 30, 1997.
PSI has advised the Fund that it has received approximately
$6,500 in front-end
sales charges resulting from sales of Class A shares during
the six months ended
June 30, 1997. From these fees, PSI paid such sales charges
to Pruco Securities
Corporation, an affiliated broker-dealer, which in turn
paid commissions to
salespersons and incurred other distribution costs.
- -----------------------------------------------------------
- ---------------------
-----
9
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Notes to Financial Statements (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
PSI has advised the Fund that for the six months ended June
30, 1997, it
received approximately $6,500 and $50 in contingent
deferred sales charges
imposed upon certain redemptions by Class B and C
shareholders, respectively.
PSI, PIFM and PIC are indirect, wholly-owned subsidiaries
of The Prudential
Insurance Company of America.
The Fund, along with other affiliated registered investment
companies (the
'Funds'), entered into a credit agreement (the 'Agreement')
on December 31, 1996
with an unaffiliated lender. The maximum commitment under
the Agreement is
$200,000,000. The Agreement expires on December 30, 1997.
Interest on any such
borrowings outstanding will be at market rates. The
purposes of the Agreement is
to serve as an alternative source of funding for capital
share redemptions. The
Fund has not borrowed any amounts pursuant to the Agreement
as of June 30, 1997.
The Funds pay a commitment fee at an annual rate of .055 of
1% on the unused
portion of the credit facility. The commitment fee is
accrued and paid quarterly
on a pro-rata basis by the Funds.
- -----------------------------------------------------------
- -
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly-
owned subsidiary of PIFM,
serves as the Fund's transfer agent and during the six
months ended June 30,
1997, the Fund incurred fees of approximately $157,000 for
the services of PMFS.
As of June 30, 1997, fees of approximately $28,000 were due
to PMFS. Transfer
agent fees and expenses in the Statement of Operations
include certain
out-of-pocket expenses paid to non-affiliates.
- -----------------------------------------------------------
- -
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than
short-term investments
for the six months ended June 30, 1997, aggregated
$33,272,244 and $36,662,194,
respectively.
At June 30, 1997, the Fund had outstanding forward currency
contracts to sell
foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Sale Contracts Receivable Value
Appreciation
- ------------------------------ --------------- ---------
- -- ---------------
<S> <C> <C>
<C>
Australian Dollars,
expiring 7/30/97............. $ 3,125,261 $
3,107,746 $ 17,515
French Francs,
expiring 7/30/97............. 6,033,435
5,974,320 59,115
Netherlands Guilders,
expiring 7/30/97............. 21,200,546
21,004,912 195,634
New Zealand Dollars,
expiring 7/30/97............. 3,555,253
3,506,511 48,742
Spanish Pesetas,
expiring 7/30/97............. 799,140
789,020 10,120
Swiss Francs,
expiring 7/30/97............. 8,722,959
8,619,204 103,755
--------------- ---------
- -- ---------------
$43,436,594
$43,001,713 $ 434,881
--------------- ---------
- -- ---------------
--------------- ---------
- -- ---------------
</TABLE>
The cost basis of investments for federal income tax
purposes is substantially
the same as for financial reporting purposes and,
accordingly, as of June 30,
1997 net unrealized depreciation for federal income tax
purposes was $673,759
(gross unrealized appreciation--$4,330,097 gross unrealized
depreciation--$5,003,856).
For federal income tax purposes, the Fund has a capital
loss carryforward as of
December 31, 1996, of approximately $81,232,300 of which
$39,358,200 expires in
1997, $23,240,000 expires in 1998 and $18,634,100 expires
in 2002. Accordingly,
no capital gains distribution is expected to be paid to
shareholders until net
gains have been realized in excess of the aggregate of such
amounts.
- -----------------------------------------------------------
- -
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment
companies, transfers
uninvested cash balances into a single joint account, the
daily aggregate
balance of which is invested in one or more repurchase
agreements collateralized
by U.S. Treasury or federal agency obligations. As of June
30, 1997, the Fund
has a 1.6% undivided interest in the joint account. The
undivided interest for
the Fund represents $10,911,000 in the principal amount. As
of such date, each
repurchase agreement in the joint account and the
collateral therefor were as
follows:
- -----------------------------------------------------------
- ---------------------
-----
10
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Notes to Financial Statements (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
Dean Witter Reynolds, Inc., 5.90%, in the principal amount
of $100,000,000,
repurchase price $100,016,389, due 7/1/97. The value of the
collateral including
accrued interest is $102,000,893.
Deutsche Bank Securities Corp., 5.95%, in the principal
amount of $184,000,000,
repurchase price $184,030,411, due 7/1/97. The value of the
collateral including
accrued interest is $187,680,112.
J.P. Morgan Securities, 6.00%, in the principal amount of
$170,000,000,
repurchase price $170,028,333, due 7/1/97. The value of the
collateral including
accrued interest is $173,400,988.
SBC Warburg, Ltd., 5.95%, in the principal amount of
$227,000,000, repurchase
price $227,037,518, due 7/1/97. The value of the collateral
including accrued
interest is $232,448,194.
- -----------------------------------------------------------
- -
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z
shares. Class A shares are
sold with a front-end sales charge of up to 3.0%. Class B
shares are sold with a
contingent deferred sales charge which declines from 3% to
zero depending on the
period of time the shares are held. Class C shares are sold
with a contingent
deferred sales charge of 1% during the first year. Class B
shares will
automatically convert to Class A shares on a quarterly
basis approximately five
years after purchase. A special exchange privilege is also
available for
shareholders who qualify to purchase Class A shares at net
asset value.
Effective September 13, 1996, the Fund commenced offering
Class Z shares. Class
Z shares are not subject to any sales or redemption charge
and are offered
exclusively for sale to a limited group of investors.
There are 2 billion authorized shares of $.001 par value
common stock divided
equally into Class A, B, C and Z shares. Of the 20,258,265
shares of common
stock issued and outstanding at June 30, 1997, PIFM owned
12,717 Class A shares.
Transactions in shares of common stock for the six months
ended June 30, 1997
and the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ---------------------------------- ----------- ---------
- ---
<S> <C> <C>
Six months ended June 30, 1997:
Shares sold....................... 334,178 $
2,753,020
Shares issued in reinvestment of
dividends....................... 207,698
1,707,595
Shares reacquired................. (1,961,068)
(16,125,734)
----------- ---------
- ---
Net decrease in shares outstanding
before conversion............... (1,419,192)
(11,665,119)
Shares issued upon conversion from
Class B......................... 141,861
1,166,234
----------- ---------
- ---
Net decrease in shares
outstanding..................... (1,277,331)
$(10,498,885)
----------- ---------
- ---
----------- ---------
- ---
Year ended December 31, 1996:
Shares sold....................... 1,627,906
$13,874,864
Shares issued in reinvestment of
dividends....................... 623,439
5,190,056
Shares reacquired................. (4,456,896)
(37,256,995)
----------- ---------
- ---
Net decrease in shares outstanding
before conversion............... (2,205,551)
(18,192,075)
Shares issued upon conversion from
Class B......................... 176,554
1,485,956
----------- ---------
- ---
Net decrease in shares
outstanding..................... (2,028,997)
$(16,706,119)
----------- ---------
- ---
----------- ---------
- ---
<CAPTION>
Class B
- ----------------------------------
Six months ended June 30, 1997:
Shares sold....................... 140,974 $
1,159,099
Shares issued in reinvestment of
dividends....................... 24,189
199,082
Shares reacquired................. (202,450)
(1,666,183)
----------- ---------
- ---
Net decrease in shares outstanding
before conversion............... (37,287)
(308,002)
Shares reacquired upon conversion
into Class A.................... (141,770)
(1,166,234)
----------- ---------
- ---
Net decrease in shares
outstanding..................... (179,057)
$(1,474,236)
----------- ---------
- ---
----------- ---------
- ---
Year ended December 31, 1996:
Shares sold....................... 221,716 $
1,860,253
Shares issued in reinvestment of
dividends....................... 95,574
795,836
Shares reacquired................. (667,933)
(5,574,736)
----------- ---------
- ---
Net decrease in shares outstanding
before conversion............... (350,643)
(2,918,647)
Shares reacquired upon conversion
into Class A.................... (176,501)
(1,485,956)
----------- ---------
- ---
Net decrease in shares
outstanding..................... (527,144)
$(4,404,603)
----------- ---------
- ---
----------- ---------
- ---
</TABLE>
- -----------------------------------------------------------
- ---------------------
-----
11
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Notes to Financial Statements (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
<TABLE>
<CAPTION>
Class C Shares
Amount
- ---------------------------------- ----------- ---------
- ---
<S> <C> <C>
Six months ended June 30, 1997:
Shares sold....................... 1,701 $
14,031
Shares issued in reinvestment of
dividends....................... 618
5,089
Shares reacquired................. (1,035)
(8,576)
----------- ---------
- ---
Net increase in shares
outstanding..................... 1,284 $
10,544
----------- ---------
- ---
----------- ---------
- ---
Year ended December 31, 1996:
Shares sold....................... 33,617 $
278,856
Shares issued in reinvestment of
dividends....................... 1,399
11,666
Shares reacquired................. (13,861)
(116,335)
----------- ---------
- ---
Net increase in shares
outstanding..................... 21,155 $
174,187
----------- ---------
- ---
----------- ---------
- ---
<CAPTION>
Class Z
- ----------------------------------
Six months ended June 30, 1997:
Shares sold....................... 207,215 $
1,702,697
Shares issued in reinvestment of
dividends....................... 3,738
30,700
Shares reacquired................. (10,304)
(84,504)
----------- ---------
- ---
Net increase in shares
outstanding..................... 200,649 $
1,648,893
----------- ---------
- ---
----------- ---------
- ---
September 13, 1996(a) through
December 31, 1996:
Shares sold....................... 44,728 $
384,126
Shares issued in reinvestment of
dividends and distributions..... 1,667
13,851
Shares reacquired................. (5,471)
(47,588)
----------- ---------
- ---
Net increase in shares
outstanding..................... 40,924 $
350,389
----------- ---------
- ---
----------- ---------
- ---
</TABLE>
- ---------------
(a) Commencement of offering of Class Z shares.
- -----------------------------------------------------------
- ---------------------
-----
12
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Financial Highlights (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
<TABLE>
<CAPTION>
Class A
----
- ----------------------------------------------------------
Six
Months
Ended Year Ended December 31,
June 30, ---------------------------------------------
- --
1997 1996 1995 1994 1993
----
- ------ -------- -------- -------- --------
<S> <C>
<C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $
8.34 $ 8.30 $ 7.32 $ 8.43 $ 7.77
----
- ------ -------- -------- -------- --------
Income from investment operations
Net investment income...............................
.28 .56 .52(d) .50 .59
Net realized and unrealized gain (loss) on
investment and foreign currency transactions.....
(.13) .33 1.20(d) (1.09) .63
----
- ------ -------- -------- -------- --------
Total from investment operations.................
.15 .89 1.72 (.59) 1.22
----
- ------ -------- -------- -------- --------
Less distributions
Dividends from net investment income................
(.26) (.56) (.52)(d) (.29) (.48)
Distributions in excess of net investment income....
- -- (.29) (.22)(d) -- --
Distributions from capital gains....................
- -- -- -- (.01) (.08)
Tax return of capital distributions.................
- -- -- -- (.22) --
----
- ------ -------- -------- -------- --------
Total distributions..............................
(.26) (.85) (.74) (.52) (.56)
----
- ------ -------- -------- -------- --------
Net asset value, end of period...................... $
8.23 $ 8.34 $ 8.30 $ 7.32 $ 8.43
----
- ------ -------- -------- -------- --------
----
- ------ -------- -------- -------- --------
TOTAL RETURN(c):....................................
1.68% 11.13% 24.01% (7.02)% 16.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).....................
$153,263 $165,829 $181,985 $207,153
$320,406
Average net assets (000)............................
$158,827 $169,219 $200,759 $262,882
$355,018
Ratios to average net assets:
Expenses, including distribution fees............
1.31%(a) 1.40% 1.40% 1.46% 1.41%
Expenses, excluding distribution fees............
1.16%(a) 1.25% 1.25% 1.31% 1.26%
Net investment income............................
6.79%(a) 6.55% 6.09% 6.04% 7.42%
For Class A, B, C and Z shares:
Portfolio turnover rate..........................
22% 45% 220% 554% 361%
<CAPTION>
Ten
Months
Ended
December 31,
1992(b)
-----
- -------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $
8.39
-----
- -------
Income from investment operations
Net investment income...............................
.61
Net realized and unrealized gain (loss) on
investment and foreign currency transactions.....
(.36)
-----
- -------
Total from investment operations.................
.25
-----
- -------
Less distributions
Dividends from net investment income................
(.59)
Distributions in excess of net investment income....
- --
Distributions from capital gains....................
(.28)
Tax return of capital distributions.................
- --
-----
- -------
Total distributions..............................
(.87)
-----
- -------
Net asset value, end of period...................... $
7.77
-----
- -------
-----
- -------
TOTAL RETURN(c):....................................
3.09%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).....................
$378,865
Average net assets (000)............................
$331,339
Ratios to average net assets:
Expenses, including distribution fees............
1.30%(a)
Expenses, excluding distribution fees............
1.15%(a)
Net investment income............................
9.08%(a)
For Class A, B, C and Z shares:
Portfolio turnover rate..........................
201%
</TABLE>
- ---------------
(a) Annualized.
(b) The Fund changed its fiscal year end to December 31.
(c) Total return does not consider the effect of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each period reported and includes
reinvestment of dividends and
distributions. Total returns for periods of less than a
full year are not
annualized.
(d) Calculated based upon average shares outstanding during
the fiscal year.
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 13
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Financial Highlights (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
<TABLE>
<CAPTION>
Class B
----
- -----------------------------------------------------------
- ------------
Six
Months
Ten Months
Ended Year Ended December 31,
Ended
June 30, -------------------------------------------
December 31,
1997 1996 1995 1994 1993
1992(b)
----
- ------ ------- ------- ------- -------
- ------------
<S> <C>
<C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $
8.34 $ 8.31 $ 7.33 $ 8.44 $ 7.79
$ 8.40
----
- ------ ------- ------- ------- -------
- ------
Income from investment operations
Net investment income...............................
.26 .53 .47(d) .45 .54
.57
Net realized and unrealized gain (loss) on
investment and foreign currency transactions.....
(.13) .30 1.20(d) (1.09) .63
(.35)
----
- ------ ------- ------- ------- -------
- ------
Total from investment operations.................
.13 .83 1.67 (.64) 1.17
.22
----
- ------ ------- ------- ------- -------
- ------
Less distributions
Dividends from net investment income................
(.23) (.53) (.47)(d) (.26) (.44)
(.55)
Distributions in excess of net investment income....
- -- (.27) (.22)(d) -- --
- --
Distributions from capital gains....................
- -- -- -- (.01) (.08)
(.28)
Tax return of capital distributions.................
- -- -- -- (.20) --
- --
----
- ------ ------- ------- ------- -------
- ------
Total distributions..............................
(.23) (.80) (.69) (.47) (.52)
(.83)
----
- ------ ------- ------- ------- -------
- ------
Net asset value, end of period...................... $
8.24 $ 8.34 $ 8.31 $ 7.33 $ 8.44
$ 7.79
----
- ------ ------- ------- ------- -------
- ------
----
- ------ ------- ------- ------- -------
- ------
TOTAL RETURN(c):....................................
1.52% 10.36% 23.25% (7.69)% 15.29%
2.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)..................... $
11,350 $12,987 $17,317 $22,906 $39,440
$ 33,500
Average net assets (000)............................ $
12,272 $15,491 $19,336 $31,835 $36,197
$ 18,358
Ratios to average net assets:
Expenses, including distribution fees............
1.91% 2.00% 2.00% 2.07% 2.01%
1.90%(a)
Expenses, excluding distribution fees............
1.16% 1.25% 1.25% 1.31% 1.26%
1.15%(a)
Net investment income............................
6.19% 5.94% 5.49% 5.44% 6.67%
8.54%(a)
</TABLE>
- ---------------
(a) Annualized.
(b) The Fund changed its fiscal year end to December 31.
(c) Total return does not consider the effect of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each period reported and includes
reinvestment of dividends and
distributions. Total returns for periods of less than a
full year are not
annualized.
(d) Calculated based upon average shares outstanding during
the fiscal year.
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 14
<PAGE>
PRUDENTIAL
INTERMEDIATE GLOBAL
Financial Highlights (Unaudited) INCOME
FUND, INC.
- -----------------------------------------------------------
- ---------------------
<TABLE>
<CAPTION>
Class C Class Z
----
- --------------------------------------------------- ---
- -------
August 1,
Six
Months 1994(e) Six
Months
Ended Year Ended December 31, Through
Ended
June 30, ----------------------- December 31,
June 30,
1997 1996 1995 1994
1997
----
- ------ --------- --------- ------------ ---
- -------
<S> <C>
<C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $
8.34 $ 8.31 $ 7.33 $ 7.69 $
8.34
----
- ------ --------- --------- ----- ---
- -------
Income from investment operations
Net investment income...............................
.26 .53 .47(d) .14
.28
Net realized and unrealized gain (loss) on
investment and foreign currency transactions.....
(.13) .30 1.20(d) (.32)
(.13)
----
- ------ --------- --------- ----- ---
- -------
Total from investment operations.................
.13 .83 1.67 (.18)
.15
----
- ------ --------- --------- ----- ---
- -------
Less distributions
Dividends from net investment income................
(.23) (.53) (.47)(d) (.10)
(.26)
Distributions in excess of net investment income....
- -- (.27) (.22)(d) --
- --
Tax return of capital distributions.................
- -- -- -- (.08)
- --
----
- ------ --------- --------- ----- ---
- -------
Total distributions..............................
(.23) (.80) (.69) (.18)
(.26)
----
- ------ --------- --------- ----- ---
- -------
Net asset value, end of period...................... $
8.24 $ 8.34 $ 8.31 $ 7.33 $
8.23
----
- ------ --------- --------- ----- ---
- -------
----
- ------ --------- --------- ----- ---
- -------
TOTAL RETURN(c):....................................
1.52% 10.36% 23.25% (2.44)%
1.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)..................... $
198 $ 190 $ 13 $ 193(b) $
1,989
Average net assets (000)............................ $
190 $ 110 $ 11 $ 197(b) $
1,045
Ratios to average net assets:
Expenses, including distribution fees............
1.91%(a) 2.00% 2.00% 1.05%(a)
1.16%(a)
Expenses, excluding distribution fees............
1.16%(a) 1.25% 1.25% .30%(a)
1.16%(a)
Net investment income............................
6.19%(a) 6.02% 5.49% 3.30%(a)
6.94%(a)
<CAPTION>
September 13,
1996(f)
Through
December 31,
1996
-----
- --------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................ $
8.39
- -----
Income from investment operations
Net investment income...............................
.32
Net realized and unrealized gain (loss) on
investment and foreign currency transactions.....
.12
- -----
Total from investment operations.................
.44
- -----
Less distributions
Dividends from net investment income................
(.32)
Distributions in excess of net investment income....
(.17)
Tax return of capital distributions.................
- --
- -----
Total distributions..............................
(.49)
- -----
Net asset value, end of period...................... $
8.34
- -----
- -----
TOTAL RETURN(c):....................................
5.21%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)..................... $
341
Average net assets (000)............................ $
142
Ratios to average net assets:
Expenses, including distribution fees............
1.11%(a)
Expenses, excluding distribution fees............
1.11%(a)
Net investment income............................
6.94%(a)
</TABLE>
- ---------------
(a) Annualized.
(b) Figures are actual and not rounded to the nearest
thousand.
(c) Total return does not consider the effect of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each period reported and includes
reinvestment of dividends and
distributions. Total returns for periods of less than a
full year are not
annualized.
(d) Calculated based upon average shares outstanding during
the fiscal year.
(e) Commencement of offering of Class C shares.
(f) Commencement of offering of Class Z shares.
- -----------------------------------------------------------
- ---------------------
-----
See Notes to Financial Statements. 15
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
Officers
Richard A. Redeker, President
Thomas A. Early, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
The views expressed in this report and information about
the Fund's portfolio
holdings are for the period covered by this report and are
subject to change
thereafter.
The accompanying financial statements as of June 30, 1997
were not audited and,
accordingly, no opinion is expressed on them.
This report is not authorized for distribution to
prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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