As filed with the Securities and Exchange Commission on February 29, 2000
File No. 811-7302
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 11 |x|
---
EMERGING MARKETS DEBT PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (713) 626-1919
Samuel D. Sirko, Esq.
A I M Advisors, Inc.
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Name and Address of Agent for Service)
<PAGE>
EXPLANATORY NOTE
This Amendment to the Registration Statement of Emerging Markets Debt
Portfolio has been filed by the Registrant pursuant to Section 8(b) of the
Investment Company Act of 1940, as amended (the "1940 Act"). However, beneficial
interests in the Registrant have not been registered under the Securities Act of
1933, as amended (the "1933 Act"), since such interests are offered solely in
private placement transactions that do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may
only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Amendment to the Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any beneficial interests in the Registrant.
<PAGE>
EMERGING MARKETS DEBT PORTFOLIO
CONTENTS OF REGISTRATION STATEMENT
This registration statement of Emerging Markets Debt Portfolio contains the
following documents:
Facing Sheet
Contents of Registration Statement
Part A
Part B
Part C
Signature Page
Exhibits
<PAGE>
PART A
Responses to Items 1, 2, 3, 5 and 9 have been omitted pursuant to
paragraph B.2(b) of the General Instructions to Form N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement of Emerging Markets Debt Portfolio (the "Portfolio") are
incorporated herein by reference from Post-Effective Amendment No. 59 to the
Registration Statement of AIM Investment Funds (1940 Act File No. 811-5426), as
filed with the Securities and Exchange Commission ("SEC") on February 28, 2000
("Feeder Registration Statement"). Part A of the Feeder Registration Statement
includes the prospectus of AIM Emerging Markets Debt Fund ("Feeder's Part A").
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.
Information on the Portfolio's investment objectives, principal investment
strategies and the principal risk factors associated with investments in the
Portfolio is incorporated herein by reference from the sections entitled
"Investment Objectives and Strategies" and "Principal Risks of Investing in the
Fund" in the Feeder's Part A. Additional investment techniques, features and
limitations concerning the Portfolio's investment program are described in Part
B of this Registration Statement.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
The Portfolio is managed and administered by A I M Advisors, Inc. ("AIM")
and is sub-advised by INVESCO Asset Management Ltd. (the "Sub-advisor"). AIM and
the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
A more complete description of how the business of the Portfolio is
managed is incorporated herein by reference from the section entitled "Fund
Management" in the Feeder's Part A.
Beneficial interests in the Portfolio are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Amendment to the Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any "security" within the meaning of the
1933 Act.
A-1
<PAGE>
Investor inquiries may be directed to the Advisor at the following
address: 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
ITEM 7. SHAREHOLDER INFORMATION.
An investment in the Portfolio may be made without a sales load at the net
asset value next determined after an order is received in "good order" by the
Portfolio. There is no minimum initial or subsequent investment in the
Portfolio. However, investments must be made in federal funds (i.e., monies
credited to the account of the Portfolio's custodian bank by a Federal Reserve
Bank). Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each day the New York Stock Exchange ("NYSE") is open for trading.
Information on the time and method of valuation of the Portfolio's assets
is incorporated by reference from the section entitled "Shareholder Information
- - Pricing of Shares" in the Feeder's Part A.
The Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
An investor in the Portfolio may reduce any portion or all of its
investment at any time at the net asset value next determined after a request in
"good order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any reduction
may be suspended or the payment of the proceeds therefrom postponed during any
period (1) when the NYSE is closed (other than customary weekend or holiday
closings) or trading on the NYSE is restricted as determined by the SEC, (2)
when an emergency exists, as defined by the SEC, which would prohibit the
Portfolio in disposing of its portfolio securities or in fairly determining the
value of its assets, or (3) as the SEC may otherwise permit.
The Portfolio intends to distribute to its investors the Portfolio's net
investment income monthly and its net realized capital gains, if any, annually
after the end of the Portfolio's fiscal year on October 31.
Under the current method of the Portfolio's operation, it is not subject
to any income tax. However, each investor in the Portfolio is taxable on its
share (as determined in accordance with the governing instruments of the
Portfolio) of the Portfolio's taxable income, gain, loss, deductions and credits
in determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended ("Code")
and regulations promulgated thereunder. It is intended that the Portfolio's
assets, income and distributions will be managed in such a way that an investor
in the Portfolio will be able to satisfy the requirements of Subchapter M of the
Code, assuming that the investor invested all of its assets in the Portfolio.
A-2
<PAGE>
ITEM 8. DISTRIBUTION ARRANGEMENTS.
Not applicable.
A-3
<PAGE>
APPENDIX A
RATINGS OF SECURITIES
A description of corporate bond and commercial paper ratings is
incorporated herein by reference from "Appendix" in the Feeder's Part B.
A-4
<PAGE>
PART B
Part B of this Registration Statement should be read only in conjunction
with Part A. Capitalized terms used in Part B and not otherwise defined have the
meanings given them in Part A of this Registration Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement are incorporated herein by reference from the Feeder
Registration Statement. Part B of the Feeder Registration Statement includes the
joint statement of additional information of the AIM Investment Funds ("Feeder's
Part B").
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
Cover Page: Not applicable.
Page
History of the Portfolio...............................................B-1
Description of the Portfolio and its Investments and Risks.............B-1
Management of the Portfolio............................................B-2
Control Persons and Principal Holders of Securities....................B-2
Investment Advisory and Other Services.................................B-3
Brokerage Allocation and Other Practices...............................B-3
Capital Stock and Other Securities.....................................B-3
Purchase, Redemption and Pricing of Securities.........................B-5
Taxation of the Portfolio..............................................B-6
Underwriters...........................................................B-6
Calculation of Performance Data........................................B-6
Financial Statements...................................................B-6
ITEM 11. HISTORY OF THE PORTFOLIO.
Emerging Markets Debt Portfolio (the "Portfolio") was organized as a
Delaware business trust on May 7, 1998. On May 29, 1998, the Portfolio acquired
the assets and assumed the liabilities of Global High Income Portfolio, a New
York common law trust. Prior to September 8, 1998, the Portfolio operated under
the name "Global High Income Portfolio."
ITEM 12. DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS.
The Portfolio is a non-diversified, open-end management investment
company.
Part A contains basic information about the investment objectives,
principal investment strategies and principal risks of the Portfolio. This Part
B supplements the discussion in Part A of the investment objectives, principal
investment strategies and principal risks of the Portfolio.
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of the Portfolio, the types
of securities bought and investment techniques used by the Portfolio, and
certain risks attendant thereto, as well as other information on the Portfolio's
B-1
<PAGE>
investment programs, is incorporated by reference from the sections entitled
"Investment Strategies and Risks," "Options, Futures and Currency Strategies,"
"Risk Factors," "Investment Limitations" and "Execution of Portfolio
Transactions" in the Feeder's Part B.
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
Information about the Trustees and officers of the Portfolio, and their
roles in management of the Portfolio and other AIM Funds, is incorporated herein
by reference from the section entitled "Trustees and Executive Officers" in the
Feeder's Part B.
For the year ended October 31, 1999, Mr. Anderson, Mr. Bayley, Mr. Patterson
(a Trustee until September 27, 1999, when he retired) and Miss Quigley, who
are not directors, officers or employees of the Sub-advisor or any affiliated
company, received total compensation of $101,833, $103,833, $93,583 and
$103,833, respectively, from the investment companies which are managed or
administered by AIM and which may be sub-advised and sub-administered by the
Sub-advisor or sub-advised by IAML for which he or she serves as a Director
or Trustee. Fees and expenses disbursed to the Trustees contained no accrued
or payable pension or retirement benefits.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
As of the date of this filing, Emerging Markets Debt Fund owned 99.9% of
the value of the outstanding interests in the Portfolio. Because Emerging
Markets Debt Fund controls the Portfolio, Emerging Markets Debt Fund may take
actions affecting its Portfolio without the approval of any other investor.
Emerging Markets Debt Fund has informed the Portfolio that whenever it is
requested to vote on any proposal of the Portfolio, it will hold a meeting of
shareholders and will cast its vote as instructed by its shareholders. It is
anticipated that other investors in the Portfolio will follow the same or a
similar practice.
The address of Emerging Markets Debt Fund is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046.
As of February 14, 2000, the officers and Trustees and their families as a
group owned in the aggregate beneficially or of record less than 1% of the
outstanding shares of the Portfolio.
B-2
<PAGE>
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
Information on the investment management and other services provided for
or on behalf of the Portfolio is incorporated herein by reference from the
sections entitled "Management" and "Miscellaneous Information" in the Feeder's
Part B. The following list identifies the specific sections in the Feeder's Part
B under which the information required by Item 15 of Form N-1A may be found;
each section is incorporated herein by reference.
================================================================================
Item 15(a) Management; Miscellaneous Information
- --------------------------------------------------------------------------------
Item 15(b) Not Applicable
- --------------------------------------------------------------------------------
Item 15(c) Not Applicable
- --------------------------------------------------------------------------------
Item 15(d) Management
- --------------------------------------------------------------------------------
Item 15(e) Not Applicable
- --------------------------------------------------------------------------------
Item 15(f) Not Applicable
- --------------------------------------------------------------------------------
Item 15(g) Not Applicable
- --------------------------------------------------------------------------------
Item 15(h) Miscellaneous Information
================================================================================
For the fiscal year ended October 31, 1997, the Portfolio paid investment
management and administration fees of $2,971,167, respectively, to INVESCO (NY),
Inc. For the period November 1, 1997 to May 29, 1998, the Portfolio paid
investment management and administration fees of $976,376 to INVESCO (NY), Inc.
For the period May 30, 1998 to October 31, 1998, the Portfolio paid aggregate
investment management and administration fees of $1,265,573 to AIM and/or
INVESCO (NY), Inc. For the fiscal year ended October 31, 1999, the Portfolio
paid aggregate investment management and administration fees of $1,199,895 to
AIM. For the fiscal year ended October 31, 1999, AIM reimbursed the Portfolio
for investment management and administration fees in the amount of $26,077.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
A description of the Portfolio's brokerage allocation and other practices
is incorporated herein by reference from the section entitled "Execution of
Portfolio Transactions" in the Feeder's Part B.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
Under the Portfolio's Agreement and Declaration of Trust, the Trustees are
authorized to issue beneficial interests in the Portfolio. Investors are
entitled to participate PRO RATA in distributions of taxable income, loss, gain
and credit of the Portfolio. Upon liquidation or dissolution of the Portfolio,
investors are entitled to share PRO RATA in the Portfolio's net assets available
for distribution to its investors. Investments in the Portfolio may not be
transferred, but an investor may withdraw all or any portion of its investment
B-3
<PAGE>
at any time at net asset value. Investments in the Portfolio have no preference,
preemptive, conversion or similar rights and are fully paid and nonassessable,
except as set forth below.
Under Delaware law, AIM Emerging Markets Debt Fund ("Emerging Markets Debt
Fund") and other entities that invest in the Portfolio enjoy the same
limitations of liability extended to shareholders of private, for-profit
corporations. There is a remote possibility, however, that under certain
circumstances an investor in the Portfolio may be held liable for the
Portfolio's obligations. However, the Portfolio's Agreement and Declaration of
Trust disclaims shareholder liability for acts or obligations of the Portfolio
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Portfolio or a trustee.
The Agreement and Declaration of Trust also provides for indemnification from
the Portfolio property for all losses and expenses of any shareholder held
personally liable for the Portfolio's obligations. Thus, the risk of an investor
incurring financial loss on account of such liability is limited to
circumstances in which the Portfolio itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer. The Agreement and Declaration of Trust also provides that the
Portfolio shall maintain appropriate insurance (for example, fidelity bonding
and errors and omissions insurance) for the protection of the Portfolio, its
investors, Trustees, officers, employees and agents covering possible tort and
other liabilities. Thus, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations.
Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees of the Portfolio if they
choose to do so and in such event the other investors in the Portfolio would not
be able to elect any Trustee. Investors also have under certain circumstances
the right to remove one or more Trustees without a meeting. The Portfolio is not
required to hold annual meetings of investors but the Portfolio will hold
special meetings of investors when in the judgment of the Portfolio's Trustees
it is necessary or desirable to submit matters for an investor vote. No
amendment required to be approved by investors may be made to the Portfolio's
Agreement and Declaration of Trust without the affirmative majority vote of
investors (with the vote of each being in proportion to the amount of their
investment).
As of the date of this Registration Statement, Emerging Markets Debt Fund
owns a majority interest in the Portfolio. However, the Emerging Markets Debt
Fund has undertaken that, with respect to matters on which the Portfolio seeks a
vote of its interestholders, the Emerging Markets Debt Fund will seek a vote of
its shareholders and will vote its interest in the Portfolio in accordance with
their instructions.
The Portfolio may be terminated by (1) "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Portfolio, or
(2) if there are fewer than 100 record owners of a beneficial interest in the
Portfolio, the Trustees pursuant to written notice to the record owners of the
Portfolio. The Trustees may cause (i) the Portfolio to the extent consistent
with applicable law to sell all or substantially all of its assets, or be merged
into or consolidated with another business trust or company, (ii) the beneficial
interests of a record owner in the Portfolio to be converted into beneficial
B-4
<PAGE>
interests in another business trust (or series thereof) created pursuant to
Section 10.4 of Article X of the Portfolio's Agreement and Declaration of Trust,
or (iii) the beneficial interests of a record owner of the Portfolio to be
exchanged under or pursuant to any state or federal statute to the extent
permitted by law. In all respects not governed by statute or applicable law, the
Trustees shall have power to prescribe the procedure necessary or appropriate to
accomplish a sale of assets, merger or consolidation including the power to
create one or more separate business trusts to which all or any part of the
assets, liabilities, profits or losses of the Trust may be transferred and to
provide for the conversion of interests in the Trust or any Portfolio into
beneficial interests in such separate business trust or trusts (or series or
class thereof).
The Agreement and Declaration of Trust provides that obligations of the
Portfolio are not binding upon the Trustees individually but only upon the
property of the Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Agreement and Declaration of Trust
protects a Trustee against any liability to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. The Agreement and
Declaration of Trust provides that the trustees and officers will be indemnified
by the Portfolio against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the
Portfolio, unless, as to liability to the Portfolio or its investors, it is
finally adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless with respect to any other matter it is finally adjudicated that they did
not act in good faith in the reasonable belief that their actions were in the
best interests of the Portfolio. In the case of settlement, such indemnification
will not be provided unless it has been determined by a court or other body
approving the settlement or other disposition, or by a reasonable determination,
based upon a review of readily available facts, by vote of a majority of
disinterested Trustees or in a written opinion of independent counsel, that such
officers or Trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended.
Information on the method followed by the Portfolio in determining its net
asset value and the timing of such determination is incorporated by reference
from the section entitled "Net Asset Value Determination" in the Feeder's Part
B. See also Item 7 in Part A.
The Portfolio reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase order by
making payment in whole or in part in readily marketable securities chosen by
the Portfolio and valued as they are for purposes of computing the Portfolio's
net asset value (a redemption in kind). If payment is made in securities, an
investor may incur transaction expenses in converting these securities into
cash. The Portfolio has elected, however, to be governed by Rule 18f-1 under the
1940 Act as a result of which the Portfolio is obligated to redeem beneficial
B-5
<PAGE>
interests with respect to any one investor during any 90 day period, solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the Portfolio
at the beginning of the period.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each day that the NYSE is open for trading. At the close of
trading, on each such day, the value of each investor's interest in the
Portfolio will be determined by multiplying the net asset value of the Portfolio
by the percentage representing that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or reductions which are to be effected
on that day will then be effected. The investor's percentage of the aggregate
beneficial interests in the Portfolio will then be recomputed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of the close of trading on such day plus or
minus, as the case may be, the amount of net additions to or reductions in the
investor's investment in the Portfolio effected on such day, and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
close of trading on such day plus or minus, as the case may be, the amount of
the net additions to or reductions in the aggregate investments in the Portfolio
by all investors in the Portfolio. The percentage so determined will then be
applied to determine the value of the investor's interest in the Portfolio as of
the close of trading on the following day the NYSE is open for trading.
ITEM 19. TAXATION OF THE PORTFOLIO.
Information on the taxation of the Portfolio is incorporated by reference
herein from the section entitled "Dividends, Distributions and Tax Matters" in
the Feeder's Part B.
ITEM 20. UNDERWRITERS.
Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
Audited financial statements for the Portfolio for the fiscal year ended
October 31, 1999 are included herein, in reliance on the report of
PricewaterhouseCoopers LLP, independent auditors, given on the authority of said
firm as experts in auditing and accounting.
B-6
<PAGE>
SCHEDULE OF INVESTMENTS
October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
CORPORATE BONDS-12.54%
ARGENTINA-2.29%
Banco Hipotecario S.A.
(Banks-Regional), Sr. Unsec.
Unsub. Notes, 10.00%, 04/17/03
(Acquired 04/07/98; Cost
$1,277,171)(b) $ 1,279,000 $ 1,179,877
- --------------------------------------------------------------
CEI Citicorp Holdings S.A.
(Investment Banking/Brokerage),
Bonds, 11.25%, 02/14/07
(Acquired 08/13/99; Cost
$2,175,315)(b)(c) ARS 3,000,000 2,333,597
- --------------------------------------------------------------
3,513,474
- --------------------------------------------------------------
BRAZIL-1.83%
Banco Nacional De Desenvolri
(Banks- Regional), Unsec. Unsub.
Floating Rate Notes, 13.64%,
06/16/08(d) 3,250,000 2,810,997
- --------------------------------------------------------------
CAYMAN ISLANDS-1.14%
PDVSA Finance Ltd.,
(Banks-Regional), Sr. Unsec.
Notes, 9.75%, 02/15/10 (Acquired
03/31/99; Cost $1,837,494)(b) 1,850,000 1,753,469
- --------------------------------------------------------------
JAMAICA-1.06%
Mechala Group
(Manufacturing-Diversified),
Series B, Sr. Gtd. Sub. Notes,
12.75%, 12/30/99 4,134,000 1,622,595
- --------------------------------------------------------------
MEXICO-6.22%
Alestra S.A., Sr. Notes, 12.625%
5/15/09 3,918,000 3,790,665
- --------------------------------------------------------------
Fideicomiso Petacalco Trust-Topolo
(Financial-Diversified), Sec.
Notes, 10.16%, 12/23/09
(Acquired 06/25/99; Cost
$1,575,000)(b) 1,750,000 1,540,000
- --------------------------------------------------------------
Grupo Televisa S.A.
(Entertainment), Sr. Disc.
Notes, 13.25%, 05/15/08(e) 2,400,000 2,055,000
- --------------------------------------------------------------
Petroleos Mexicanos (Oil &
Gas-Refining & Marketing),
Sr. Gtd. Sub. Bonds, 9.50%,
09/15/27 300,000 257,250
- --------------------------------------------------------------
Unsub. Bonds, 9.50%, 09/15/27 2,000,000 1,925,000
- --------------------------------------------------------------
9,567,915
- --------------------------------------------------------------
Total Corporate Bonds (Cost
$20,115,100) 19,268,450
- --------------------------------------------------------------
GOVERNMENT BONDS & GOVERNMENT
AGENCY OBLIGATIONS-80.17%
ARGENTINA-11.39%
Province of Buenos Aires, Series
2, Unsec. Unsub. Notes, 12.50%,
03/15/02 1,100,000 1,086,250
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
ARGENTINA-(CONTINUED)
Republic of Argentina,
Floating Rate Deb., 6.8125%,
03/31/05(d) $ 4,092,000 $ 3,666,526
- --------------------------------------------------------------
Series L, Floating Rate Gtd.
Bonds, 6.00%, 03/31/23(d) 4,670,000 3,576,281
- --------------------------------------------------------------
Unsec. Unsub. Bonds,
11.375%, 01/30/17 3,395,000 3,250,713
- --------------------------------------------------------------
9.75%, 09/19/27 6,959,000 5,923,849
- --------------------------------------------------------------
17,503,619
- --------------------------------------------------------------
BRAZIL-19.31%
Republic of Brazil,
Bonds,
11.625%, 04/15/04 1,009,000 967,379
- --------------------------------------------------------------
5.75%, 04/15/24(f) 4,220,000 2,540,271
- --------------------------------------------------------------
Floating Rate Deb., 6.9375%,
04/15/06(d) 4,136,000 3,397,782
- --------------------------------------------------------------
Floating Rate Gtd. Notes, 7.00%,
04/15/09(d) 2,100,000 1,553,177
- --------------------------------------------------------------
Floating Rate Gtd. Bonds,
7.00%, 04/15/12(d) 9,493,000 6,297,836
- --------------------------------------------------------------
6.9375%, 04/15/24(d) 5,450,000 3,816,684
- --------------------------------------------------------------
Notes, 14.50%, 10/15/09 2,014,000 2,091,539
- --------------------------------------------------------------
Series C, Bonds, 8.00%, 04/15/14 9,175,507 6,215,626
- --------------------------------------------------------------
Unsec. Bonds, 10.125%, 05/15/27 3,520,000 2,786,164
- --------------------------------------------------------------
29,666,458
- --------------------------------------------------------------
BULGARIA-4.66%
Republic of Bulgaria,
Series A, Gtd. Bonds, 2.75%,
07/28/12(f) 3,520,000 2,379,041
- --------------------------------------------------------------
Series A, Gtd. Floating Rate
Sec. Bonds, 6.50%, 07/28/24(d) 3,999,000 2,984,670
- --------------------------------------------------------------
Floating Rate PDI Deb., 6.50%,
07/28/11(d) 2,350,000 1,795,896
- --------------------------------------------------------------
7,159,607
- --------------------------------------------------------------
COLOMBIA-1.80%
Republic of Colombia,
Unsec. Unsub. Notes, 7.625%,
02/15/07 1,880,000 1,551,000
- --------------------------------------------------------------
Unsub. Notes, 9.75%, 04/23/09 1,324,000 1,208,150
- --------------------------------------------------------------
2,759,150
- --------------------------------------------------------------
QATAR-1.13%
State of Qatar, Bonds, 9.50%,
05/21/09 (Acquired 06/25/99;
Cost $1,674,580)(b) 1,658,000 1,728,714
- --------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
KAZAKHSTAN-1.74%
Republic of Kazakhstan, Bonds,
13.625%, 10/18/04 (Acquired
09/28/99; Cost $2,669,490)(b) $ 2,700,000 $ 2,673,000
- --------------------------------------------------------------
KOREA-4.37%
Republic of Korea, Unsub. Unsec.
Notes, 8.875%, 04/15/08 6,435,000 6,707,155
- --------------------------------------------------------------
LEBANON-1.22%
Republic of Lebanon, Series 3,
Notes, 10.25%, 10/06/09 1,850,000 1,869,686
- --------------------------------------------------------------
MALAYSIA-2.37%
Republic of Malaysia, Bonds,
8.75%, 06/01/09 3,538,000 3,647,041
- --------------------------------------------------------------
MEXICO-10.64%
United Mexican States,
Bonds,
10.375%, 02/17/09 1,700,000 1,731,875
- --------------------------------------------------------------
11.375%, 09/15/16 2,381,000 2,552,263
- --------------------------------------------------------------
11.50%, 05/15/26 5,248,000 5,930,980
- --------------------------------------------------------------
Series D, Floating Rate Sec.
Gtd. Bonds 6.0675%,
12/31/19(d) 2,220,000 1,970,752
- --------------------------------------------------------------
Sec. Gtd. Bonds, 6.25%, 12/31/19 5,500,000 4,166,382
- --------------------------------------------------------------
16,352,252
- --------------------------------------------------------------
MOROCCO-1.68%
Morocco Tranche A, Registered
Loans, 5.906%, 01/01/09
(Acquired 03/11/99; Cost
$2,420,780)(b) 2,964,000 2,582,385
- --------------------------------------------------------------
PANAMA-1.61%
Republic of Panama,
Bonds,
8.875%, 09/30/27 1,017,000 828,490
- --------------------------------------------------------------
9.375%, 04/01/29 626,000 593,135
- --------------------------------------------------------------
Gtd. Deb., 4.25%, 07/17/14(f) 1,400,000 1,053,392
- --------------------------------------------------------------
2,475,017
- --------------------------------------------------------------
PERU-2.30%
Republic of Peru,
Gtd. Bonds, 3.75%, 03/07/17(f) 2,725,000 1,535,478
- --------------------------------------------------------------
PDI Bonds, 4.50%, 03/07/17(f) 3,136,000 1,984,150
- --------------------------------------------------------------
3,519,628
- --------------------------------------------------------------
PHILIPPINES-1.12%
Republic of Philippines, Bonds,
9.875%, 01/15/19 1,770,000 1,721,325
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
POLAND-2.62%
Republic of Poland,
Sec. Bonds, 3.50%, 10/27/24(f) $ 2,475,000 $ 1,524,214
- --------------------------------------------------------------
Unsec. PDI Bonds, 6.00%,
10/27/14(f) 2,812,000 2,503,501
- --------------------------------------------------------------
4,027,715
- --------------------------------------------------------------
RUSSIA-6.73%
Bank of Foreign Economic Affairs
(Vnesheconombank),
Interest in Arrears Notes, 6.0625%,
12/15/15(d)(g) 627,107 72,901
- --------------------------------------------------------------
Principal Loans, 6.0625%,
12/15/20(d)(g) 37,242,372 3,468,382
- --------------------------------------------------------------
Russian Federation, Sr. Unsec.
Unsub. Bonds, 11.75%, 06/10/03 9,870,000 6,028,191
- --------------------------------------------------------------
12.75%, 06/24/28 1,413,000 771,748
- --------------------------------------------------------------
10,341,222
- --------------------------------------------------------------
TURKEY-1.09%
Republic of Turkey,
Notes, 12.00%, 12/15/08 1,290,000 1,306,125
- --------------------------------------------------------------
Sr. Unsec. Unsub. Notes, 12.375%,
06/15/09 370,000 372,313
- --------------------------------------------------------------
1,678,438
- --------------------------------------------------------------
VENEZUELA-4.39%
Republic of Venezuela,
Floating Rate Deb., 6.313%,
12/18/07(d) 2,226,180 1,800,002
- --------------------------------------------------------------
Gtd. Sec. Bonds, 6.75%, 03/31/20 3,299,000 2,322,239
- --------------------------------------------------------------
Unsec. Bonds, 9.25%, 09/15/27 3,859,000 2,619,007
- --------------------------------------------------------------
6,741,248
- --------------------------------------------------------------
Total Government Bonds &
Government Agency
Obligations (Cost
$135,981,782) 123,153,660
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
WARRANTS-0.33%
SOVEREIGN DEBT-0.33%
Republic of Argentina (Argentina),
expiring 12/03/99(h) 8,810 9,911
- --------------------------------------------------------------
expiring 02/25/00(h) 9,630 217,879
- --------------------------------------------------------------
United Mexican States (Mexico),
expiring 02/18/00(h) 4,033 270,715
- --------------------------------------------------------------
498,505
- --------------------------------------------------------------
Total Warrants (Cost $0) 498,505
- --------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-3.78%
STIC Liquid Assets Portfolio(i) 2,901,337 $ 2,901,337
- --------------------------------------------------------------
STIC Prime Portfolio(i) 2,901,337 2,901,337
- --------------------------------------------------------------
Total Money Market Funds (Cost
$5,802,674) 5,802,674
- --------------------------------------------------------------
TOTAL INVESTMENTS-96.82%
(Cost $161,899,556) 148,723,289
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-3.18% 4,884,100
- --------------------------------------------------------------
NET ASSETS-100.00% $153,607,389
==============================================================
</TABLE>
Investment Abbreviations:
ARS - Argentine Peso
Deb. - Debentures
Gtd. - Guaranteed
PDI - Past Due Interest
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a)Principal amount is in U.S. dollars except as indicated by note (c).
(b)Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of 1933,
as amended. The valuation of this security has been determined in accordance
with procedures established by the Board of Trustees. The aggregate market
value of these securities at 10/31/99 was $13,791,042, which represented
8.98% of the Fund's net assets.
(c)Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(d)The coupon rate shown of floating rate note represents the rate at period
end.
(e)Discount bond at purchase. Interest rate shown represents the coupon rate at
which the bond will accrue at a specified future date.
(f)The coupon rate shown on step-up coupon bonds represents the rate at period
end.
(g)Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(h)Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(i)The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $161,899,556) $148,723,289
- -----------------------------------------------------------
Foreign currencies, at value (cost $37) 37
- -----------------------------------------------------------
Receivables for:
Investments sold 2,521,069
- -----------------------------------------------------------
Dividends and interest 3,619,496
- -----------------------------------------------------------
Other assets 22,931
- -----------------------------------------------------------
Total assets 154,886,822
===========================================================
LIABILITIES FOR:
Payables for:
- -----------------------------------------------------------
Investments purchased 1,082,939
- -----------------------------------------------------------
Fund shares reacquired 75,256
- -----------------------------------------------------------
Accrued advisory fees 94,087
- -----------------------------------------------------------
Accrued custodian fees 23,664
- -----------------------------------------------------------
Accrued professional fees 1,272
- -----------------------------------------------------------
Accrued operating expenses 2,215
- -----------------------------------------------------------
Total liabilities 1,279,433
- -----------------------------------------------------------
Net assets applicable to beneficial interest
outstanding $153,607,389
===========================================================
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 5,558
- -----------------------------------------------------------
Interest 21,776,257
- -----------------------------------------------------------
Securities lending income 179,871
- -----------------------------------------------------------
Total investment income 21,961,686
===========================================================
EXPENSES:
Advisory and administrative fees 1,275,467
- -----------------------------------------------------------
Custodian fees 57,074
- -----------------------------------------------------------
Directors fees 214
- -----------------------------------------------------------
Interest expense (Note 3) 221,531
- -----------------------------------------------------------
Printing fees 3,055
- -----------------------------------------------------------
Professional fees 11,590
- -----------------------------------------------------------
Total expenses 1,568,931
- -----------------------------------------------------------
Less: Fees waived by advisor (26,077)
- -----------------------------------------------------------
Net expenses 1,542,854
- -----------------------------------------------------------
Net investment income 20,418,832
- -----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FOREIGN CURRENCY CONTRACTS:
Net realized gain (loss) from:
Investment securities (22,051,102)
- -----------------------------------------------------------
Foreign currencies (372,656)
- -----------------------------------------------------------
Foreign currency contracts 476,983
- -----------------------------------------------------------
(21,946,775)
- -----------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
- -----------------------------------------------------------
Investment securities 32,555,182
- -----------------------------------------------------------
Foreign currency contracts (31,683)
- -----------------------------------------------------------
32,523,499
- -----------------------------------------------------------
Net gain from investment securities, foreign
currencies and foreign currency contracts 10,576,724
- -----------------------------------------------------------
Net increase in net assets resulting from
operations $ 30,995,556
===========================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 20,418,832 $ 37,514,837
- -------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and foreign currency contracts (21,946,775) (69,501,940)
- -------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies and foreign
currency contracts 32,523,499 (49,143,194)
- -------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 30,995,556 (81,130,297)
- -------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS:
Contributions 41,721,190 108,512,638
- -------------------------------------------------------------------------------------------
Withdrawals (100,408,280) (214,723,268)
- -------------------------------------------------------------------------------------------
Net decrease from beneficial interest transactions (58,687,090) (106,210,630)
- -------------------------------------------------------------------------------------------
Total decrease in net assets (27,691,534) (187,340,927)
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of year 181,298,923 368,639,850
- -------------------------------------------------------------------------------------------
End of year $ 153,607,389 $ 181,298,923
===========================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
The Emerging Markets Debt Portfolio (the "Portfolio") is organized as a
Delaware business trust which is registered under the 1940 Act as an open-end
management investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Portfolio in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the closing bid price on that day. Each security
reported on the NASDAQ National Market System is valued at the last sales
price on the valuation date or absent a last sales price, at the closing bid
price. Debt obligations (including convertible bonds) are valued on the basis
of prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue,
coupon rate and maturity date. Securities for which market prices are not
provided by any of the above methods are valued based upon quotes furnished
by independent sources and are valued at the last bid price in the case of
equity securities and in the case of debt obligations, the mean between the
last bid and asked prices. Securities for which market quotations are not
readily available or are questionable are valued at fair value as determined
in good faith by or under the supervision of the Trust's officers in a manner
specifically authorized by the Board of Trustees. Short-term obligations
having 60 days or less to maturity are valued at amortized cost which
approximates market value. For purposes of determining net asset value per
share, futures and options contracts generally will be valued 15 minutes
after the close of trading of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities are determined as of such times. Foreign currency exchange rates
are also generally determined prior to the close of the NYSE. Occasionally,
events affecting the values of such securities and such exchange rates may
occur between the times at which they are determined and the close of the
NYSE which would not be reflected. If events materially affecting the value
of such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis.
C. Federal Income Taxes -- The Portfolio intends to comply with the requirements
of the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
D. Futures Contracts -- The Portfolio may purchase or sell futures contracts as
a hedge against changes in market conditions. Initial margin deposits
required upon entering into futures contracts are satisfied by the
segregation of specific securities as collateral for the account of the
broker (the Portfolio's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Portfolio recognizes a realized gain or loss equal to the
difference between the proceeds from, or cost of, the closing transaction and
the Portfolio's basis in the contract. Risks include the possibility of an
illiquid market and that a change in value of the contracts may not correlate
with changes in the value of the securities being hedged.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Portfolio
does not separately account for that portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Portfolio may enter into a foreign currency contract to attempt to
minimize the risk to the Portfolio from adverse changes in the relationship
between currencies. The Portfolio may also enter into a foreign currency
contract for the purchase or sale of a security denominated in a foreign
currency in order to "lock in" the U.S. dollar price of that security. The
Portfolio could be exposed to risk if
10
<PAGE>
counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
G. Foreign Securities -- There are certain additional considerations and risks
associated with investing in foreign securities and currency transactions
that are not inherent in investments of domestic origin. The Portfolio's
investment in emerging market countries may involve greater risks than
investments in more developed markets and the price of such investments may
be volatile. These risks of investing in foreign and emerging markets may
include foreign currency exchange fluctuations, perceived credit risk,
adverse political and economic developments and possible adverse foreign
government intervention.
H. Indexed Securities -- The Portfolio may invest in indexed securities whose
value is linked either directly or indirectly to changes in foreign
currencies, interest rates, equities, indices, or other reference
instruments. Indexed securities may be more volatile than the reference
instrument itself, but any loss is limited to the amount of the original
investment.
NOTE 2- ADVISORY FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
A I M Advisors, Inc. ("AIM") is the Portfolio's investment manager and
administrator. INVESCO Asset Management Limited is the Portfolio's subadvisor.
The Portfolio pays AIM investment management and administration fees at an
annual rate of 0.475% on the first $500 million of the Portfolio's average daily
net assets, plus 0.45% on the next $1 billion of the Portfolio's average daily
net assets, plus 0.425% on the next $1 billion of the Portfolio's average daily
net assets, plus 0.40% on the Portfolio's average daily net assets exceeding
$2.5 billion, plus 2% of the Portfolio's total investment income calculated in
accordance with generally accepted accounting principles, adjusted daily for
currency revaluations, on a mark to market basis, of the Portfolio's assets;
provided, however, that during any fiscal year this amount shall not exceed 2%
of the Portfolio's total investment income calculated in accordance with
generally accepted accounting principles.
NOTE 3-BANK BORROWINGS
The Portfolio is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for
borrowings. The Portfolio and other funds advised by AIM which are parties to
the line of credit may borrow on a first come, first served basis. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period. Prior to
May 28, 1999, the Portfolio, along with certain other funds advised and/or
administered by AIM, had a line of credit with BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allowed the Portfolio and
certain other funds to borrow, on a first come, first served basis, an aggregate
maximum amount of $250,000,000.
During the year ended October 31, 1999, the average outstanding daily balance
of bank loans for the Portfolio was $3,956,575 with a weighted average interest
rate of 5.60%. Interest expense for the Portfolio for the year ended October 31,
1999 was $221,531.
NOTE 4-PORTFOLIO SECURITIES LOANED
At October 31, 1999, there were no securities on loan to brokers. For the year
ended October 31, 1999, the Portfolio received fees of $179,871 for securities
lending.
For international securities, cash collateral is received by the Fund against
loaned securities in an amount at least equal to 105% of the market value of the
loaned securities at the inception of each loan. This collateral must be
maintained at not less than 103% of the market value of the loaned securities
during the period of the loan. For domestic securities, cash collateral is
received by the Fund against loaned securities in the amount at least equal to
102% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 100% of the market value of
the loaned securities during the period of the loan. The cash collateral is
invested in a securities lending trust which consists of a portfolio of high
quality short duration securities whose average effective duration is restricted
to 120 days or less.
NOTE 5-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the year ended October 31, 1999 was
$553,770,582 and $602,932,879, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 4,402,200
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (22,874,837)
- ---------------------------------------------------------
Net unrealized appreciation (depreciation)
of investment securities $(18,472,637)
=========================================================
Cost of investments for tax purposes is $167,195,926.
</TABLE>
11
<PAGE>
NOTE 6-SUPPLEMENTAL DATA
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $153,607 $181,299 $368,640 $447,071 $358,681
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 11.64% 12.20% 8.23% 10.31% 12.8%
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets excluding interest
expense:
With expense waivers 0.75% 0.80% 0.69% 0.83% 0.78%
- ------------------------------------------------------------------------------------------------------------------
Without expense waivers 0.77% 0.80% 0.74% 0.83% 0.78%
- ------------------------------------------------------------------------------------------------------------------
Ratio of interest expense to average net assets 0.13% N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 336% 339% 214% 290% 213%
==================================================================================================================
</TABLE>
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Emerging Markets Debt
Portfolio and Board of Trustees of AIM Investment Funds:
In our opinion, the accompanying statement of assets and
liabilities, including the schedule 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 the
AIM Emerging Markets Debt Portfolio at October 31, 1999,
and the results of its operations, the changes in its net
assets and the supplemental data for the periods
indicated, in conformity with generally accepted
accounting principles. These financial statements and
supplemental data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio'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 generally accepted auditing standards
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 securities at
October 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinions
expressed above.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 23, 1999
13
<PAGE>
PART C: OTHER INFORMATION
EMERGING MARKETS DEBT PORTFOLIO
ITEM 23. EXHIBITS.
Exhibit
NUMBER DESCRIPTION
(a) (1) - Agreement and Declaration of Trust of Registrant, dated May 7, 1998,
was filed electronically as an Exhibit to Amendment No. 9 to the
Registration Statement on Form N-1A, on February 26, 1999, and is
hereby incorporated by reference.
(2) - Certificate of Amendment to Certificate of Trust of Registrant was
filed electronically as an Exhibit to Amendment No. 9 to the
Registration Statement on Form N-1A, on February 26, 1999, and is
hereby incorporated by reference.
(b) (1) - By-Laws of Registrant was filed electronically as an Exhibit to
Amendment No. 9 to the Registration Statement on Form N-1A, on
February 26, 1999, and is hereby incorporated by reference.
(2) - Amended and Restated By-Laws of Registrant was filed
electronically as an Exhibit to Amendment No. 9 to the Registration
Statement on Form N-1A, on February 26, 1999, and is hereby
incorporated by reference.
(3) - Amendment to Amended and Restated By-Laws of Registant, adopted June
15, 1999, is filed herewith electornically.
(c) - Provisions of instruments defining the rights of holders of
Registrant's securities are contained in the Agreement and
Declaration of Trust, as amended, Articles II, VI, VII, VIII and IX
and By-Laws Articles IV, V, VI, VII and VIII, which were included as
part of Exhibits (a)(1) and (b) to Amendment No. 9 to the
Registration Statement on Form N-1A, on February 26, 1999, and are
hereby incorporated by reference.
(d) (1) - Investment Management and Administration Contract, dated May 29,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Amendment No. 9 to the Registration
Statement on Form N-1A, on February 26, 1999, and is hereby
incorporated by reference.
(2) Amended and Restated Investment and Administration, dated September
8, 1998, between Registrant and AIM Advisors, Inc. is filed herewith
electronically.
(3) - Sub-Advisory Contract, between A I M Advisors, Inc. and INVESCO
Asset Management Ltd., dated Dec. 14, 1998, with respect to
Registrant is filed herewith electronically.
(e) - Underwriting Contracts - None.
(f) - Bonus or Profit Sharing Contracts - None.
(g) - Amendment to Custodian Contract, dated January 26, 1999, was filed
electronically as an Exhibit to Amendment No. 9 to the Registration
C-1
<PAGE>
Statement on Form N-1A, on February 26, 1999, and is hereby
incorporated by reference.
(h) - Other Material Contracts - None.
(i) - Legal Opinion - None.
(j) - Consent of PricewaterhouseCoopers LLP, independent auditors, is
filed herewith electronically.
(k) - Omitted Financial Statements - None.
(l) - Initial Capitalization Agreements - None.
(m) - Rule 12b-1 Plan - None.
(n) - Financial Data Schedule - None.
(o) - Rule 18f-3 Plan - None.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
PROVIDE A LIST OR DIAGRAM OF ALL PERSONS DIRECTLY OR INDIRECTLY CONTROLLED
BY OR UNDER COMMON CONTROL WITH THE FUND. FOR ANY PERSON CONTROLLED BY ANOTHER
PERSON, DISCLOSE THE PERCENTAGE OF VOTING SECURITIES OWNED BY THE IMMEDIATELY
CONTROLLING PERSON OR OTHER BASIS OF THAT PERSON'S CONTROL. FOR EACH COMPANY,
ALSO PROVIDE THE STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH THE
COMPANY IS ORGANIZED.
None.
ITEM 25. INDEMNIFICATION.
STATE THE GENERAL EFFECT OF ANY CONTRACT, ARRANGEMENTS OR STATUTE UNDER
WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR AFFILIATED PERSON OF THE FUND IS
INSURED OR INDEMNIFIED AGAINST ANY LIABILITY INCURRED IN THEIR OFFICIAL
CAPACITY, OTHER THAN INSURANCE PROVIDED BY ANY DIRECTOR, OFFICER, AFFILIATED
PERSON, OR UNDERWRITER FOR THEIR OWN PROTECTION.
Article VIII of the Registrant's Agreement and Declaration of Trust, as
amended, provides for indemnification of certain persons acting on behalf
of the Registrant. Article VIII, Section 8.1 provides that a Trustee, when
acting in such capacity, shall not be personally liable to any person for
any act, omission, or obligation of the Registrant or any Trustee;
provided, however, that nothing contained in the Registrant's Agreement and
Declaration of Trust or in the Delaware Business Trust Act shall protect
any Trustee against any liability to the Registrant or the Shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of the office of Trustee.
C-2
<PAGE>
Article VIII, Section 3 of the Registrant's By-Laws also provides that
every person who is, or has been, a Trustee or Officer of the Registrant
to the fullest extent permitted by the Delaware Business Trust Act, the
Registrant's By-Laws and other applicable law.
Section 9 of the Investment Management and Administration Contract between
the Registrant and AIM provides that AIM shall not be liable, and each
series of the Registrant shall indemnify AIM and its directors, officers
and employees, for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by any series of the
Registrant or the Registrant in connection with the matters to which the
Investment Management and Administration Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of AIM in the performance by AIM of its duties or from reckless
disregard by AIM of its obligations and duties under the Investment
Management and Administration Contract.
Section 8 of the Sub-Advisory and Sub-Administration Contract between the
Registrant and the Sub-advisor provides that the Sub-advisor shall not be
liable, and each series of the Registrant shall indemnify the Sub-advisor
and its directors, officers and employees, for any costs or liabilities
arising from any error of judgment or mistake of law or any loss suffered
by any series of the Registrant or the Registrant in connection with the
matters to which the Sub-Advisory and Sub-Administration Contract relates
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-advisor in the performance by the
Sub-advisor of its duties or from reckless disregard by the Sub-advisor of
its obligations and duties under the Sub-Advisory and Sub-Administration
Contract.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
DESCRIBE ANY OTHER BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT OF A
SUBSTANTIAL NATURE THAT EACH INVESTMENT ADVISOR, AND EACH DIRECTOR, OFFICER OR
PARTNER OF THE ADVISOR, IS OR HAS BEEN ENGAGED WITHIN THE LAST TWO FISCAL YEARS
FOR HIS OR HER OWN ACCOUNT OR IN THE CAPACITY OF DIRECTOR, OFFICER, EMPLOYEE,
PARTNER, OR TRUSTEE.
See the material under the headings "Trustees and Executive Officers" and
"Management" included in Part B (Statement of Additional Information) of
this Amendment. Information as to the Directors and Officers of A I M
Advisors, Inc. and INVESCO Asset Management Ltd. is included in Schedule A
and Schedule D of Part I of each entity's Form ADV (File No. 801-12313 and
File No. 801-50197, respectively), filed with the Securities and Exchange
Commission, which are incorporated herein by reference thereto.
ITEM 27. PRINCIPAL UNDERWRITERS.
None.
C-3
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
STATE THE NAME AND ADDRESS OF EACH PERSON MAINTAINING PHYSICAL POSSESSIONS
OF EACH ACCOUNT, BOOK, OR OTHER DOCUMENT REQUIRED TO BE MAINTAINED BY SECTION
31(A) [15 U.S.C. 80A-30(A)] AND THE RULES UNDER THAT SECTION.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended, are maintained and held in
the offices of the Registrant and its advisor, A I M Advisors, Inc., 11
Greenway Plaza, Suite 100, Houston, Texas 77046, and its custodian, State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110.
ITEM 29. MANAGEMENT SERVICES.
PROVIDE A SUMMARY OF THE SUBSTANTIVE PROVISIONS OF ANY MANAGEMENT-RELATED
SERVICE CONTRACT NOT DISCUSSED IN PART A OR B, DISCLOSING THE PARTIES TO THE
CONTRACT AND THE TOTAL AMOUNT PAID AND BY WHOM FOR THE FUND'S LAST THREE FISCAL
YEARS.
None.
ITEM 30. UNDERTAKINGS.
None.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Emerging Markets Debt Portfolio has duly caused this Registration Statement on
Form N-1A to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston and the State Texas on the 28th day of
February, 2000.
EMERGING MARKETS DEBT PORTFOLIO
By: /s/ Robert H. Graham
---------------------
Robert H. Graham, President
SIGNATURES TITLE DATE
/s/ Robert H. Graham Chairman, February 28, 2000
- ----------------------------- Trustee & President
(Robert H. Graham) (Principal Executive Officer)
/s/ C. Derek Anderson Trustee February 28, 2000
- -----------------------------
(C. Derek Anderson)
/s/ Frank S. Bayley Trustee February 28, 2000
- -----------------------------
(Frank S. Bayley)
/s/ Ruth H. Quigley Trustee February 28, 2000
- -----------------------------
(Ruth H. Quigley)
/s/ Dana R. Sutton Vice President February 28, 2000
- ----------------------------- & Treasurer
(Dana R. Sutton) (Principal Financial and
Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
EMERGING MARKETS DEBT PORTFOLIO
EXHIBIT NUMBER
(b)(3) Amendment to Amended and Restated Bylaws
(d)(2) Amended and Restated Investment Management and Administration Contract
(d)(3) Sub-Advisory Contract
(j) Consent of PricewaterhouseCoopers LLP, independent auditors
Other Exhibits
FIRST AMENDMENT TO AMENDED AND RESTATED
BYLAWS OF EMERGING MARKETS DEBT PORTFOLIO
(A DELAWARE BUSINESS TRUST)
ADOPTED JUNE 15, 1999
The Bylaws of Emerging Markets Debt Portfolio are hereby amended as
follows:
WHEREAS, the Board of Trustees of the Fund desires to modify the manner in
which a chairman is appointed to preside at each shareholder meeting;
NOW THEREFORE BE IT RESOLVED, that paragraph (a) of Article IV, Section 9
of each Fund's Bylaws be, and it hereby is, amended by deleting paragraph
(a) of Article IV, Section 9 in its entirety and replacing it with the
following:
Section 9. Organization of Meetings.
(a) The meetings of the Holders shall be presided over
by the Chairman of the Board, or if the Chairman shall not be
present or if there is no Chairman, by the President, or if the
President shall not be present, by a Vice President, or if no Vice
President is present, by a chairman appointed for such purpose by
the Board of Trustees or, if not so appointed, by a chairman
appointed for such purpose by the officers and Trustees present at
the meeting. The Secretary of the Trust, if present, shall act as
Secretary of such meetings, or if the Secretary is not present, an
Assistant Secretary of the Trust shall so act, and if no Assistant
Secretary is present, then a person designated by the Secretary of
the Trust shall so act, and if the Secretary has not designated a
person, then the meeting shall elect a secretary for the meeting.
EX.99(d)(2)
EMERGING MARKETS DEBT PORTFOLIO
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
EMERGING MARKETS DEBT PORTFOLIO
AND
A I M ADVISORS, INC.
Contract made as of September 8, 1998, between Emerging Markets Debt
Portfolio, a Delaware business trust ("Company), and A I M Advisors, Inc., a
Delaware corporation (the "Adviser").
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
WHEREAS the Company has retained Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company, and the Company and Adviser entered into
an Investment Management and Administration Contract dated May 29, 1998, with
respect to the Company ("Advisory Agreement"); and
WHEREAS the Company and the Adviser desire to amend and restate the
Advisory Agreement in order to (i) change the name of Global High Income
Portfolio to Emerging Markets Debt Portfolio as of September 8, 1998;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints Adviser as investment manager and
administrator of the Company for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for the Company,
including investment research and management with respect to all securities and
investments and cash equivalents of the Company. Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Company, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Company or provide the Company or Adviser's other clients with research,
analysis, advice and similar services. Adviser may pay to brokers and dealers,
in return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to Adviser's determining in good
faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of Adviser to the
Company and its other clients and that the total commissions or spreads paid by
the Company will be reasonable in relation to the benefits to the Company over
1
<PAGE>
the long term. In no instance will portfolio securities be purchased from or
sold to Adviser or any affiliated person thereof except in accordance with the
federal securities laws and the rules and regulations thereunder and any
exemptive orders currently in effect. Whenever Adviser simultaneously places
orders to purchase or sell the same security on behalf of a Company and one or
more other accounts advised by Adviser, such orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable to
each account. The Company recognizes that in some cases this procedure may
adversely affect the results obtained for the Company.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Company, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a3 under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the Company are
the property of the Company, agrees to preserve for the periods prescribed by
Rule 31a2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a1 under the 1940 Act, and further
agrees to surrender promptly to the Company any records which it maintains for
the Company upon request by the Company.
3. DUTIES AS ADMINISTRATOR. Adviser will administer the affairs of the Company
subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of the Company,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Company.
(b) At Adviser's expense, Adviser will provide the Company with such
corporate, administrative and clerical personnel (including officers of the
Company) and services as are reasonably deemed necessary or advisable by the
Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of the Company's proxy
material, tax returns and required reports with or to the Company's
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.
(d) Adviser will provide the Company with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Agreement and Declaration of
Trust, ByLaws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER AND ADMINISTRATOR.
With respect to the Company, Adviser may enter into one or more contracts
("SubAdvisory or SubAdministration Contract") with a subadviser or
subadministrator in which Adviser delegates to such subadviser or
subadministrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each SubAdvisory and
SubAdministration Contract imposes on the subadviser or subadministrator bound
thereby all the duties and conditions to which Adviser is subject with respect
to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
2
<PAGE>
SubAdvisory and SubAdministration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a SubAdvisory
or SubAdministration Contract unless it is approved by the Board prior to
implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser shall be free to furnish similar services to
others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
7. EXPENSES.
(a) During the term of this Contract, the Company will bear all expenses,
not specifically assumed by Adviser.
(b) Expenses borne by the Company will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Company and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Company by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company; (v) expenses of
preparing filing reports and other documents with governmental and regulatory
agencies; (vi) filing fees and expenses relating to the registration and
qualification of the Company's shares and the Company under federal and/or state
securities laws and maintaining such registrations and qualifications; (vii)
costs incurred in connection with the issuance, sale or repurchase of the
Company's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Company; (xix) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xx) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxi) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xxii) costs of
mailing, stationery and communications equipment.
(c) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.
3
<PAGE>
(d) The payment or assumption by Adviser of any expense of the Company
that Adviser is not required by this Contract to pay or assume shall not
obligate Adviser to pay or assume the same or any similar expense of the Company
on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided to the Company under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of the Company as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of the Company. The
Company will also pay the Adviser a fee equal to 2% of the Company's total
investment income calculated in accordance with generally accepted accounting
principles, adjusted daily for currency revaluations, on a marked to market
basis, of the Company's assets; provided, however, that during any fiscal year
this amount shall not exceed 2% of the Company's total investment income
calculated in accordance with generally accepted accounting principles.
(b) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall not
be liable and the Company shall indemnify Adviser and its directors, officers
and employees, for any costs or liabilities arising from any error of judgment
or mistake of law or any loss suffered by the Company in connection with the
matters to which this Contract relates except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to the Company or acting with respect to any business of the
Company, to be rendering such service to or acting solely for the Company and
not as an officer, partner, employee, or agent or one under the control or
direction of Adviser even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to the Company
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Company's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Company this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Company.
4
<PAGE>
(c) Notwithstanding the foregoing, with respect to the Company this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Compnay on sixty days' written notice to Adviser or by Adviser
at any time, without the payment of any penalty, on sixty days' written notice
to the Company. This Contract will automatically terminate in the event of its
assignment.
11. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Company's outstanding voting
securities, when required by the 1940 Act.
12. GOVERNING LAW. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. LICENSE AGREEMENT. The Company shall have the nonexclusive right to use the
name "AIM" to designate any current or future series of shares only so long as A
I M Advisors, Inc. serves as investment manager or adviser to the Company with
respect to such series of shares.
14. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Company, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Company
and shareholders of the Company, and this Contract has been executed and
delivered by an authorized officer of the Company acting as such; neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Company, as provided in the Company's Agreement and
Declaration of Trust.
15. MISCELLANEOUS. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: EMERGING MARKETS DEBT PORTFOLIO
By: /s/ Kathleen J. Pflueger By:/s/ Robert H. Graham
- ---------------------------- ---------------------
Name: Kathleen J. Pflueger Name: Robert H. Graham
Title: Assistant Secretary Title: President
Attest: A I M ADVISORS, INC.
By: /s/ Kathleen J. Pflueger By: /s/ Robert H. Graham
------------------------ ---------------------
Name: Kathleen J. Pflueger Name: Robert H. Graham
Title: Assistant Secretary Title: President
6
<PAGE>
APPENDIX A
TO
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
EMERGING MARKETS DEBT PORTFOLIO
In addition to amounts otherwise payable under Section 8(a) of the
Contract, the Company shall pay the Adviser, out of the assets of the Company,
as full compensation for all services rendered and all facilities furnished
hereunder, a management fee for the Company set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of the Company for the calendar year computed in the manner used for the
determination of the net asset value of shares of the Company.
EMERGING MARKETS DEBT PORTFOLIO
NET ASSETS ANNUAL RATE
First $500 million.......................................... .475%
Next $1 billion............................................. .45%
Next $1 billion............................................. .425%
On amounts thereafter....................................... .40%
EX.99.23(d)(3)
EMERGING MARKETS DEBT PORTFOLIO
SUBADVISORY CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO ASSET MANAGEMENT LIMITED
Contract made as of December 14, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO Asset Management Limited, a
company organized under the laws of England and Wales ("SubAdviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with Emerging Markets Debt Portfolio ("Company"), an
openend management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"); and
WHEREAS Adviser desires to retain SubAdviser as subadviser to furnish
certain advisory services to the Company, and SubAdviser is willing to furnish
such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Adviser hereby appoints SubAdviser as subadviser of the
Company for the period and on the terms set forth in this Contract. SubAdviser
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. DUTIES AS SUBADVISER.
(a) Subject to the supervision of the Company's Board of Trustees
("Board") and Adviser, the SubAdviser will provide a continuous investment
program for the Company, including investment research and management, with
respect to all securities and investments and cash equivalents of the Company.
The SubAdviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Company, and the brokers
and dealers through whom trades will be executed.
(b) The SubAdviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the SubAdviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Company or provide the Company, Adviser's other
clients, or SubAdviser's other clients with research, analysis, advice and
similar services. The SubAdviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to the SubAdviser determining in good faith
that such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of the Adviser and the SubAdviser
1
<PAGE>
to the Company and their other clients and that the total commissions or spreads
paid by the Company will be reasonable in relation to the benefits to the
Company over the long term. In no instance will portfolio securities be
purchased from or sold to the SubAdviser, or any affiliated person thereof,
except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
the SubAdviser simultaneously places orders to purchase or sell the same
security on behalf of the Company and one or more other accounts advised by the
SubAdviser, such orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable to each account.
(c) The SubAdviser will maintain all books and records with respect to
the securities transactions of the Company, and will furnish the Board and
Adviser with such periodic and special reports as the Board or Adviser
reasonably may request. In compliance with the requirements of Rule 31a3 under
the 1940 Act, the SubAdviser hereby agrees that all records which it maintains
for the Company are the property of the Company, agrees to preserve for the
periods prescribed by Rule 31a2 under the 1940 Act any records which it
maintains for the Company and which are required to be maintained by Rule 31a1
under the 1940 Act, and further agrees to surrender promptly to the Company any
records which it maintains for the Company upon request by the Company.
3. FURTHER DUTIES. In all matters relating to the performance of this Contract,
SubAdviser will act in conformity with the Agreement and Declaration of Trust,
ByLaws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
4. SERVICES NOT EXCLUSIVE. The services furnished by SubAdviser hereunder are
not to be deemed exclusive and SubAdviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of SubAdviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
5. EXPENSES.
(a) During the term of this Contract, the Company will bear all expenses,
not specifically assumed by SubAdviser, incurred in its operations.
(b) Expenses borne by the Company will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Company and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Company by SubAdviser under this Contract; (iii) investment consulting fees
and related costs; (iv) expenses of organizing the Company; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Company's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Company's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
2
<PAGE>
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Company; (xix) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xx) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxi) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xxii) costs of
mailing, stationery and communications equipment.
(c) The payment or assumption by SubAdviser of any expense of the Company
that SubAdviser is not required by this Contract to pay or assume shall not
obligate SubAdviser to pay or assume the same or any similar expense of the
Company on any subsequent occasion.
6. COMPENSATION.
(a) For the services provided to the Company under this Contract, Adviser
will pay SubAdviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto. Adviser will also pay SubAdviser a fee equal to 0.8% of the
Company's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
marked to market basis, of the Company's assets; provided, however, that during
any fiscal year this amount shall not exceed 0.8% of the Company's total
investment income calculated in accordance with generally accepted accounting
principles.
(b) The fee shall be computed weekly and paid monthly to SubAdviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
7. LIMITATION OF LIABILITY OF SUBADVISER AND INDEMNIFICATION. SubAdviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Company in connection with the
matters to which this Contract relates except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of SubAdviser in the
performance by SubAdviser of its duties or from reckless disregard by SubAdviser
of its obligations and duties under this Contract. Any person, even though also
an officer, partner, employee, or agent of SubAdviser, who may be or become a
Trustee, officer, employee or agent of the Company, shall be deemed, when
rendering services to the Company or acting with respect to any business of the
Company to be rendering such service to or acting solely for the Company and not
as an officer, partner, employee, or agent or one under the control or direction
of SubAdviser even though paid by it.
3
<PAGE>
8. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect unless it has first been
approved (i) by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of the Company's outstanding voting securities, when required by
the 1940 Act.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated this Contract shall continue automatically for successive periods not
to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Company.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Company on sixty days'
written notice to SubAdviser or by SubAdviser at any time, without the payment
of any penalty, on sixty days' written notice to the Company. This Contract will
automatically terminate in the event of its assignment.
9. AMENDMENT. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Company's outstanding voting securities, when required
by the 1940 Act.
10. GOVERNING LAW. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
11. MISCELLANEOUS. The captions in this Contract are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Contract shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Contract shall not be affected thereby. This
Contract shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. As used in this Contract, the terms
"majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
A I M ADVISORS, INC.
Attest: /s/ Nancy L. Martin By: /s/ Robert H. Graham
------------------- --------------------
Name: Robert H. Graham
Title: President
INVESCO ASSET MANAGEMENT LIMITED
Attest: /s/ Graeme Proudfoot By: /s/ Tristan Hilgrath
-------------------- ---------------------
Name: Tristan Hillgrath
Title: Deputy CEO
5
<PAGE>
APPENDIX A
TO
SUBADVISORY CONTRACT
EMERGING MARKETS DEBT PORTFOLIO
0.8% of the Company's total investment income, plus
NET ASSETS ANNUAL RATE
First $500 million........................................ 0.29%
Next $1 billion........................................... 0.28%
Next $1 billion........................................... 0.27%
On amounts thereafter..................................... 0.26%
EX.99.23(j)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Emerging Markets Debt Portfolio:
RE: Emerging Markets Debt Portfolio
AIM Emerging Markets Debt Fund
We consent to the inclusion in Amendment No. 11 to the Registration Statement on
Form N-1A, under the Investment Company Act of 1940, as amended, of Emerging
Markets Debt Portfolio, of our report dated December 23, 1999, on our audit of
the financial statements and financial highlights of the AIM Emerging Markets
Debt Fund, which report is included in the Annual Report to Shareholders for the
periods stated therein, which is also included in this Registration Statement.
We also consent to the reference to our Firm under the caption "Financial
Statements" in the statement of additional information.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 28, 2000
