<PAGE>
- -------------------------------------------------------------------------------
MORGAN STANLEY
EMERGING MARKETS
DEBT FUND, INC.
- -------------------------------------------------------------------------------
FIRST QUARTER REPORT
MARCH 31, 1999
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY
EMERGING MARKETS DEBT FUND, INC.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Michael F. Klein
PRESIDENT AND DIRECTOR
Peter J. Chase
DIRECTOR
John W. Croghan
DIRECTOR
David B. Gill
DIRECTOR
Graham E. Jones
DIRECTOR
John A. Levin
DIRECTOR
William G. Morton, Jr.
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT AND ACTING
SECRETARY
Harold J. Schaaff, Jr.
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Joanna M. Haigney
TREASURER
Belinda A. Brady
ASSISTANT TREASURER
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- -------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
- -------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
- -------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
Boston Equiserve
Investor Relations Department
P.O. Box 644
Boston, Massachusetts 02102-0644
(800) 730-6001
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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- -------------------------------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726 or visit our website at
www.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
- ------------------
For the three months ended March 31, 1999, the Morgan Stanley Emerging Markets
Debt Fund, Inc. (the "Fund") had a total return, based on net asset value per
share, of 6.73% compared to 5.06% for the J.P. Morgan Emerging Markets Bond Plus
Index (the "Index"). For the period since the Fund's commencement of operations
on July 23, 1993 through March 31, 1999, the Fund's total return, based on net
asset value per share, was 67.83% compared to 72.78% for the Index. On March 31,
1999, the closing price of the Fund's shares on the New York Stock exchange was
$7 1/2, representing a 3.6% premium to the Fund's net asset value per share.
During the three months ended March 31, 1999, emerging market investors decided
that many of the negative external factors overhanging the market were reflected
in debt prices and that the worst in terms of economic conditions would soon
pass. As a result, despite a poor start, the Fund had a strong rebound during
the latter part of the first quarter of 1999. The challenges facing emerging
market countries as they entered 1999 were daunting. The prospects for lower
Organization for Economic Co-operation and Development (OECD) growth, continued
weak commodity prices, global excess capacity and rising deficits were enough to
discourage even the most optimistic investor. However, OECD growth as a whole
held up a little better than expected during the first quarter of 1999. The
Japanese economy stabilized, at least temporarily, which helped to underpin a
modest recovery in most of the economies of Emerging Asia. The U.S. economy
continued to perform above trend while weakness was evident only in the Euro
block countries. Another positive surprise was higher oil prices, which resulted
from a mid-March OPEC agreement to cut oil production. This development eased
the fiscal pressures burdening many of the commodity exporting countries this
year. While base metals and other commodity prices remain weak, the 45% move in
the price of oil since the beginning of the year will serve as a windfall to
emerging countries such as Ecuador, Mexico, Russia and Venezuela. Still, global
excess oil capacity remains high and the moderate OECD growth rates will not
materially improve the outlook for oil. But to their credit, emerging countries
have by and large made the necessary adjustments to cope with the realities of
lower revenues from commodity exports and higher costs of capital.
During the month of January 1999, the Index had a total return of -3.71% with
spreads widening by 137 basis points to +1,288 basis points over comparable U.S.
Treasury securities. In comparison, the Fund returned -3.00%, and benefited from
underweight positions in Ecuador, Brazil and Venezuela, the three worst
performing countries for the month. Fund performance was enhanced by overweights
in Mexico and Bulgaria, and to a lesser extent South Korea, as assets rallied in
response to an upward revision in the country's credit rating and outlook by
S&P. An underweight in Poland and Nigeria, the only other countries to post
positive returns in January, detracted from performance. Also during January,
Brazil floated its currency. The real subsequently depreciated 42% during the
month. The immediate economic fallout will be felt in the form of a deeper
economic contraction, higher inflation, higher interest rates and a
deteriorating public sector debt dynamic. The Brazilians will need to make
further fiscal cuts and adhere to a tighter monetary policy to combat the
short-term negative effects of the devaluation.
For the month of February 1999, the Fund returned 1.92%. In comparison the Index
had a total return of 1.44% during the same period. Latin America led the market
higher as Brazil, Peru and Venezuela were among the top four performers during
the month. Bulgaria, with a 4.22% return, was the only non-Latin country to post
strong positive returns. Latin America also produced one of the worst performers
of the month as Ecuador declined by 9.67% due to a deteriorating fiscal and
political environment, which has reduced the prospects for IMF aid this year.
Ecuadorian bonds are trading at distressed levels reflecting the fact that
without multi-lateral aid, the probability of default this year is high. Russia
was the only country to fair worse, with a return of -9.76% for the month, as
investors continued to doubt the government's ability to service its external
debt. Since the crisis last summer, the Russians have not articulated a coherent
economic policy framework. In the absence of such a framework, the prospects for
hyperinflation and continued capital flight remain high. Fund returns were aided
by overweights in Bulgaria, Turkey, Colombia and, to a lesser extent, Peru.
Underperformance attributable to underweight positions in Brazil and Venezuela
was mitigated somewhat by beneficial security selection within those countries.
Emerging markets debt staged a significant rally in the month of March 1999. The
Index rallied by 7.56%, with spreads tightening by 159 basis points to 1,171
basis points over U.S. Treasuries. In comparison the Fund returned 7.80% during
the same period. The market was led higher by the riskier Latin American
credits, with Brazil, Ecuador and Venezuela producing the best returns for the
month. Despite a positive 14.87% return in March, Ecuadorian assets remain the
worst performers in 1999, as Ecuador has returned -7.98% year to date. In
general, the Fund rallied in March as many of the negative events that had been
an-
2
<PAGE>
ticipated by investors failed to materialize. Inflation in Brazil, while
still high by most standards, was tamer than expected allowing the Central
Bank to lower domestic interest rates sooner than had been anticipated. The
current government in Ecuador was able to piece together a fragile political
coalition in support of a fiscal reform package that is a pre-condition to
any agreement with the IMF. While the situation remains tenuous and banking
sector reform still needs to be addressed, the formation of this coalition is
a significant first step towards reform and again was unanticipated by the
general market. Lastly, the recent rebound in the price of oil had a
significant positive impact on Venezuelan, Mexican and Russian assets.
The conflict in Kosovo proved to be the only cloud hanging over the Fund in
March. Bulgarian assets bore the brunt of investors' fears, as Bulgarian debt
declined by 2.99%, making it the only country to produce negative returns last
month. While Bulgaria shares a border with Serbia, the trade links between the
countries are limited. Exports to Yugoslavia account for approximately 2.2% of
Bulgaria's total exports. However, most of the trade routes from Bulgaria to
Western Europe run through Yugoslavia and are now effectively closed due to the
war. Bulgarian goods must now be transported by a more circuitous route, which
will hinder trade flows in the future. In addition, fears that the war will
spread and destabilize the entire Balkan region adversely impacted Bulgaria's
performance. An overweight in Bulgarian assets and an underweight in Venezuelan
assets dampened Fund returns in March.
This confluence of positive external developments mentioned above helped propel
emerging debt prices during the first quarter and is likely to continue to
provide the necessary environment for a continued rally in the months ahead.
However, these conditions remain fragile. It may only be a matter of months
before OPEC quotas are ignored and the recent run up in oil prices reverses. The
nascent recovery in Japan appears to us to have been driven by last summer's
fiscal stimulus package. The effects of the government work spending became
visible during the fourth quarter of 1998 and the first quarter of 1999. All
other sectors of the economy continued to decline. So far, Brazil has done an
estimable job of managing investor expectations and market technicalities.
However, the difficult tasks of holding the line on fiscal cuts and implementing
structural reforms remain ahead. In short, the developments in March were
undoubtedly positive for the market, but the gains may be fleeting. Therefore we
will shift to a more aggressive posture only upon further evidence that these
positive trends are sustainable.
Sincerely,
/s/ Michael F. Klein
Michael F. Klein
PRESIDENT AND DIRECTOR
April 1999
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
- -------------------------------------------------------------------------------
DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO CHARACTERISTICS,
CAN NOW BE ACCESSED AT WWW.MSDW.COM/INSTITUTIONAL/INVESTMENTMANAGEMENT.
3
<PAGE>
Morgan Stanley Emerging Markets Debt Fund, Inc.
Investment Summary as of March 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL TOTAL RETURN (%)
INFORMATION -------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
---------------------- ----------------------- ---------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
---------- ------- ---------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Fiscal Year to Date 7.84% -- 6.73% -- 5.06% --
One Year -35.06 -35.06% -33.29 -33.29% -14.47 -14.47%
Five Year 51.45 8.66 70.39 11.25 84.75 13.06
Since Inception* 73.86 10.21 67.83 9.53 72.78 10.09
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- -------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
THREE MONTHS
ENDED
MARCH 31,
1993* 1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share...... $18.96 $ 12.23 $12.40 $17.31 $15.21 $ 7.01 $7.24
Market Value Per Share ........ $18.13 $ 11.38 $12.50 $15.13 $15.38 $ 7.19 $7.50
Premium/(Discount)............. -4.4% -7.0% 0.8% -12.6% 1.1% 2.6% 3.6%
Income Dividends............... $ 0.16 $ 1.49 $ 1.72 $ 1.08 $ 1.27 $ 1.41 $0.24
Capital Gains Distributions.... -- $ 0.41 -- -- $ 3.44 $ 2.94 --
Fund Total Return (2).......... 35.96% -25.95% 26.85%+ 50.98% 21.71% -33.00% 6.73%
Index Total Return (3)......... 18.67% -18.93% 26.77% 39.31% 13.02% -14.35% 5.06%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) The J.P. Morgan Emerging Markets Bond Plus Index is a market weighted index
composed of all Brady bonds, outstanding loans and Eurobonds, as well as
U.S. Dollar local market instruments of Argentina, Brazil, Bulgaria, Mexico,
Morocco, Russia, Nigeria, the Philippines, Poland and Venezuela. Because the
J.P. Morgan Emerging Markets Bond Plus Index was not available prior to
January 1, 1994, the performance of the J.P. Morgan Emerging Markets Bond
Index is shown for the period July 23, 1993 to December 31, 1993, and used
for purposes of computing cumulative performance of the benchmark index for
that period.
* The Fund commenced operations on July 23, 1993.
+ This return does not include the effect of the rights issued in connection
with the Rights Offering.
4
<PAGE>
Morgan Stanley Emerging Markets Debt Fund, Inc.
Portfolio Summary as of March 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Debt Instruments (98.2%)
Short-Term Investments (1.8%)
</TABLE>
- -------------------------------------------------------------------------------
COUNTRY WEIGHTINGS
[CHART]
<TABLE>
<S> <C>
Mexico (21.3%)
Argentina (20.7%)
Brazil (20.2%)
Colombia (5.5%)
Bulgaria (5.3%)
Russia (3.2%)
Philippines (2.9%)
Panama (2.6%)
Korea (2.6%)
Peru (2.3%)
Other (13.4%)
</TABLE>
- -------------------------------------------------------------------------------
TEN LARGEST HOLDINGS*
<TABLE>
<CAPTION>
PERCENT OF
TOTAL
INVESTMENTS
-----------
<S> <C>
1. Republic of Argentina 9.3%
6.188%, 3/31/05 (Argentina)
2. United Mexican States Par Bond 7.5
6.25%, 12/31/19 (Mexico)
3. Federative Republic of Brazil 'EI-L' Bond 6.1
6.625%, 4/15/06 (Brazil)
4. United Mexican States Discount Bond 5.5
12/31/19 (Mexico)
5. Republic of Argentina Global Units 5.5
12.125%, 2/15/19 (Argentina)
6. Federative Republic of Brazil 'C' Bond 4.4
PIK 8.00%, 4/15/06 (Brazil)
7. United Mexican States Euro Bond 4.0
10.375%, 2/17/09 (Mexico)
8. United Mexican States Global Bond 3.5
11.375%, 9/15/16 (Mexico)
9. Republic of Bulgaria Discount Bond 'A' 3.2
Euro 6.688%, 7/28/24 (Bulgaria)
10. Federative Republic of Brazil 3.1
Debt Conversion 'L' Bond ---
6.688%, 4/15/12 (Brazil)
52.1%
-----
-----
</TABLE>
* Excludes short-term investments.
5
<PAGE>
FINANCIAL STATEMENTS
- ---------
STATEMENT OF NET ASSETS (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- ---------
MARCH 31, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------------------------------
DEBT INSTRUMENTS(98.2%)
- -------------------------------------------------------------------------------
<S> <C> <C>
ARGENTINA (20.7%)
CORPORATE (3.9%)
CIA International Telecom
10.375%, 8/1/04 ARP 350 U.S.$ 271
(a)10.375%, 8/1/04 2,820 2,187
Nortel Inversora 'A'
6.00%, 3/31/07 U.S.$ 7,296 4,387
(a)Supercanal Holdings S.A.
11.50%, 5/15/05 1,410 635
-----------
7,480
-----------
SOVEREIGN (16.8%)
Republic of Argentina
11.75%, 4/7/09 3,860 3,753
Republic of Argentina 'L'
6.188%, 3/31/05 20,734 17,769
Republic of Argentina Global
Units (Euro)
12.125%, 2/15/19 10,500 10,400
-----------
31,922
-----------
39,402
-----------
- -------------------------------------------------------------------------------
BRAZIL (20.2%)
SOVEREIGN (20.2%)
Brazil Global Bond
10.125%, 5/15/27 7,500 5,475
Federative Republic of Brazil
'C' Bond PIK
8.00%, 4/15/14 13,285 8,428
Federative Republic of Brazil
'EI-L' Bond
6.625%, 4/15/06 15,898 11,526
Federative Republic of Brazil 'L'
4.50%, 1/1/80 2,000 1,110
Federative Republic of Brazil
Debt Conversion 'L' Bond
6.688%, 4/15/12 10,260 5,983
Federative Republic of Brazil
Debt Conversion Bond
6.188%, 4/15/12 1,590 927
Federative Republic of Brazil E-I
Euro
6.125%, 4/15/06 1,123 814
Federative Republic of Brazil New
Money Bond
6.188%, 4/15/09 910 579
Federative Republic of Brazil New
Money Bond 'L'
6.75%, 1/1/80 5,490 3,493
-----------
38,335
-----------
- -------------------------------------------------------------------------------
BULGARIA (5.3%)
SOVEREIGN (5.3%)
(b)Republic of Bulgaria Discount
Bond 'A' Euro
6.688%, 7/28/24 U.S.$ 8,900 U.S.$ 6,052
(c)Republic of Bulgaria Front Loaded
Interest Reduction Bond
2.50%, 7/28/12 3,550 2,032
(c)Republic of Bulgaria Past Due
Interest Bond
6.688%, 7/28/11 2,900 1,954
-----------
10,038
-----------
- -------------------------------------------------------------------------------
COLOMBIA (5.5%)
CORPORATE (0.3%)
(b)Transtel
1.57%, 8/13/08 5,513 606
-----------
SOVEREIGN (5.2%)
Republic of Colombia Global Euro
10.875%, 3/9/04 5,700 5,909
Republic of Colombia
8.82%, 8/13/05 4,320 3,964
-----------
9,873
-----------
-----------
10,479
-----------
- -------------------------------------------------------------------------------
ECUADOR (2.1%)
CORPORATE (0.3%)
Consorcio Ecuatorian Notes
14.00%, 5/1/02 1,410 585
(a)14.00%, 5/1/02 150 63
-----------
648
-----------
SOVEREIGN (1.8%)
(b)Republic of Ecuador
Discount Bond
6.625%, 2/28/25 6,870 3,263
-----------
3,911
-----------
- -------------------------------------------------------------------------------
INDIA (1.7%)
CORPORATE (1.7%)
(a)Reliance Industries Ltd.
10.375%, 6/24/16 2,520 2,250
Saurashtra Cement Ltd.
19.00%, 9/27/99 INR 40,000 898
-----------
3,148
-----------
- -------------------------------------------------------------------------------
JORDAN (0.9%)
SOVEREIGN (0.9%)
Jordan Discount Bond
(a,b)6.00%, 12/23/23 U.S.$ 2,147 1,202
(b)6.00%, 12/23/23 1,061 594
-----------
1,796
-----------
- -------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
KOREA (2.6%)
QUASI-SOVEREIGN (2.6%)
Export-Import Bank of Korea
6.50%, 2/10/02 U.S.$ 1,690 U.S.$ 1,630
Korea Electric Power Corp.
7.00%, 10/1/02 3,400 3,239
-----------
4,869
-----------
- -------------------------------------------------------------------------------
MEXICO (21.3%)
CORPORATE (0.9%)
(a)Innova
12.875%, 4/1/07 530 440
(b)Petro Mexicanos
11.157%, 7/15/05 1,280 1,197
-----------
1,637
-----------
SOVEREIGN (20.4%)
(b)United Mexican States Discount
Bond 'A'
6.594%, 12/31/19 4,320 3,683
(b)United Mexican States Discount
Bond 'B'
6.477%, 12/31/19 2,350 2,003
(b)United Mexican States
Discount Bond 'C'
6.617%, 12/31/19 1,800 1,534
(b)United Mexican States
Discount Bond 'D'
6.602%, 12/31/19 3,750 3,197
United Mexican States Euro Bond
10.375%, 2/17/09 7,300 7,565
United Mexican States Global Bond
11.375%, 9/15/16 6,190 6,697
United Mexican States Par Bond
'W-A'
6.25%, 12/31/19 14,710 11,557
United Mexican States Par Bond
'W-B'
6.25%, 12/31/19 3,333 2,618
-----------
38,854
-----------
40,491
-----------
- -------------------------------------------------------------------------------
MOROCCO (1.0%)
SOVEREIGN (1.0%)
Morocco R&C 'A'
6.063%, 1/1/09 2,400 1,954
-----------
- -------------------------------------------------------------------------------
NIGERIA (1.0%)
SOVEREIGN (1.0%)
Central Bank of Nigeria Par Bond
6.25%, 11/15/20 1,500 941
Central Bank of Nigeria
Promissory Note
3.586%, 1/5/10 2,320 963
-----------
1,904
-----------
- -------------------------------------------------------------------------------
PANAMA (2.6%)
SOVEREIGN (2.6%)
Republic of Panama
9.375%, 4/1/29 U.S.$ 5,000 U.S.$ 4,999
-----------
- -------------------------------------------------------------------------------
PERU (2.3%)
SOVEREIGN (2.3%)
(c)Peru Past Due Interest Bond
4.00%, 3/7/17 2,820 1,800
Republic of Peru Front Loaded
Interest Reduction Bond
(c)3.25%, 3/7/17 3,950 2,350
(a,c)3.25%, 3/7/17 498 296
-----------
4,446
-----------
- -------------------------------------------------------------------------------
PHILIPPINES (2.9%)
SOVEREIGN (2.9%)
(c)Republic of Philippines 'B'
5.962%, 6/1/08 6,290 5,567
-----------
- -------------------------------------------------------------------------------
RUSSIA (3.2%)
SOVEREIGN (3.2%)
(b)Russia Interest Arrears Notes
6.625%, 12/15/15 331 27
(b)Russia Principal Note, PIK
3.313%, 12/15/20 15,846 1,109
Russian Federation
(a)8.75%, 7/24/05 6,940 1,752
(a)11.00%, 7/24/18 8,320 2,153
11.00%, 7/24/18 4,280 1,107
-----------
6,148
-----------
- -------------------------------------------------------------------------------
TURKEY (1.8%)
CORPORATE (1.8%)
Cellco Finance NV
(a)15.00%, 8/1/05 2,210 2,155
15.00%, 8/1/05 100 98
Pera Financial Services
(a)9.375%, 10/15/02 1,130 960
9.375%, 10/15/02 250 212
-----------
3,425
-----------
- -------------------------------------------------------------------------------
UNITED STATES (0.8%)
CORPORATE (0.8%)
(c)At Entertainment Inc.
0.00%, 2/1/09 3,550 1,580
-----------
- -------------------------------------------------------------------------------
VENEZUELA (2.3%)
SOVEREIGN (2.3%)
Republic of Venezuela Debt
Conversion Bond 'DL'
6.625%, 12/18/07 4,929 3,465
- -------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
VENEZUELA (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of Venezuela
Global Bond
9.25%, 9/15/27 U.S.$ 1,400 U.S.$ 860
-----------
4,325
-----------
- -------------------------------------------------------------------------------
TOTAL DEBT INSTRUMENTS
(Cost U.S.$183,647) 186,817
-----------
- -------------------------------------------------------------------------------
<CAPTION>
NO. OF
RIGHTS
- -------------------------------------------------------------------------------
RIGHTS (0.0%)
- -------------------------------------------------------------------------------
MEXICO
United Mexican States Value
Recovery Rights, expiring
06/30/03 (Cost U.S.$--@) 15,338,000 --
-----------
- -------------------------------------------------------------------------------
<CAPTION>
NO. OF
WARRANTS
- -------------------------------------------------------------------------------
WARRANTS (0.0%)
- -------------------------------------------------------------------------------
ARGENTINA (0.0%)
Republic of Argentina (Cost U.S.$--) 10,500 29
-----------
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS(1.8%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT(1.8%)
Chase Securities, Inc. 4.65%, dated
3/31/99, due 4/1/99, to be
repurchased at U.S.$3,386,
collateralized by U.S.$2,580
United States Treasury Bonds,
8.875%, due 8/15/17, valued
at U.S.$3,414
(Cost U.S.$3,386) U.S.$ 3,386 3,386
-----------
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS(100.0%)
(Cost U.S.$187,033) 190,232
-----------
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES
Other Assets U.S.$ 19,772
Liabilities (51,257) (31,485)
------------- -----------
- -------------------------------------------------------------------------------
<CAPTION>
VALUE
(000)
- -------------------------------------------------------------------------------
NET ASSETS
Applicable to 21,930,226 issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$158,747
------------
------------
- -------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 7.24
------------
------------
- -------------------------------------------------------------------------------
</TABLE>
(a) -- 144A Security - certain conditions for public sale may exist.
(b) -- Variable/floating rate security -- rate disclosed is as of
March 31, 1999.
(c) -- Step Bond -- coupon rate increases in increments to maturity. Rate
disclosed is as of March 31, 1999. Maturity date disclosed
is ultimate maturity.
@ -- Amount is less than U.S.$500.
PIK -- Payment-in-Kind. Income may be paid in additional securities
or cash.
8
