SUPPLEMENT DATED OCTOBER 1, 1997
TO THE PROSPECTUS DATED APRIL 25, 1997
MERRILL LYNCH SHORT-TERM GLOBAL INCOME FUND, INC.
A settlement agreement, subject to approval by the Court, has been
signed by the parties in the class action described in "Additional
Information--Pending Litigation" in which the Fund is named as a defendant.
The Fund will not be paying any money toward the settlement.
Pursuant to the terms of the settlement agreement, Merrill Lynch & Co.,
Inc. will pay into a settlement fund (i) $50 million in cash and (ii) coupons
with a face value of $40 million to be used to pay front-end sales charges on
purchases of shares of other mutual funds advised by Merrill Lynch Asset
Management L.P., the Fund's investment adviser, or its affiliate, Fund Asset
Management L.P. The coupons are also exchangeable for cash equal to 50% of
the coupon's face value.
If the settlement agreement is approved by the Court and a final
judgment is entered, each investor will receive, at a minimum, a $70.00
coupon. Cash from the settlement fund will first be distributed to those
Fund shareholders who experienced losses on a total return basis as of
September 15, 1993 (the date the Fund was added as a defendant) and to those
shareholders of the World Fund who experienced such losses as of June 8,
1993. The net settlement amount remaining in the settlement fund after
payment of certain costs and attorney's fees and expenses will be distributed
to the members of the class.
The settlement does not represent a finding or admission of wrongdoing
by the defendants in the management or marketing of the Fund or the World
Fund.
Code#11099-0497ALL
