Alliance
World Dollar
Government
Fund II
Semi-Annual Report
September 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
November 3, 1995
Dear Shareholder:
The U.S. bond market continued its impressive, broad-based rally over the past
six months. The rally was supported by a slower U.S. economy, restrained
inflationary pressures and a shift in Federal Reserve monetary policy. Outside
the U.S., emerging market and other foreign debt prices also rose sharply as
positive developments in Mexico and Argentina encouraged foreign investors.
FUND PERFORMANCE
Alliance World Dollar Government Fund II (New York Stock Exchange symbol:
'AWF') benefited significantly from the recent bond market gains. For the six
months ended September 30, 1995, the Fund posted a total return of +25.62% on a
net asset value basis. Over the same period, the unmanaged J.P. Morgan Emerging
Markets Bond Index returned +30.16%. Twelve-month performance was restrained by
the difficult market conditions that existed in late 1994 and early 1995; AWF's
total return was +2.90% on a net asset value basis, compared with the Index's
return of +6.04%. The Fund declared dividends totaling $0.71 per share during
the previous six months, or $0.1186 per month.
ECONOMIC REVIEW
While the U.S. economy slowed in the first half of 1995, growth reaccelerated
in the third quarter due to larger than expected increases in residential
housing, government spending and business inventories. For the quarter, gross
domestic product rose 4.2%, up from 1.3% in the second quarter. Growth in
consumer spending, excluding housing, was moderate. For economic growth to
continue, consumer spending, which represents two-thirds of the U.S. economy,
must increase from its third quarter pace of 0.7%. Currently, support for
higher consumer spending remains weak. Real disposable income has risen very
modestly in 1995 and personal debt levels continue to escalate.
Despite the strong third quarter growth, concerns regarding inflation have
largely subsided. Broad price indices such as the Consumer Price Index and
Producer Price Index have risen very modestly and labor costs remain under
control. The favorable inflation outlook and the chance of a significant
federal government deficit reduction package may allow the Federal Reserve to
cut interest rates in the months ahead.
BOND MARKET REVIEW
Since we last reported, the U.S. bond market continued to post significant
gains across nearly all fixed income sectors. The rally was fueled largely by
the aforementioned economic developments. Investment grade and high yield
corporate securities offered the highest total return (income plus price
appreciation). Treasury and mortgage obligations also performed well, though
mortgage returns were tempered by higher prepayment activity. Across all major
sectors of the U.S. fixed income market, longer-duration securities
outperformed shorter-duration securities as interest rates for all maturities
declined.
Outside the U.S., emerging market and other foreign debt prices have rebounded
sharply since March. The rebound is due, in part, to the favorable U.S.
interest rate environment and some improvement in the Mexican and Argentine
economic outlook.
INVESTMENT OUTLOOK
It is our view that U.S. economic growth will moderate in the fourth quarter,
to an annual growth rate of approximately 2.7%. This projected growth rate is
not expected to add significantly to inflationary pressures, and if our
forecast proves correct the result should be further gains in U.S. bond prices.
Brazil and Poland may offer good investment opportunities in emerging markets
over the next six months. It is our expectation that Brazilian debt will
outperform obligations of other Latin American countries as a result of
improving economic conditions and a possible debt buy-back program that would
help boost bond prices over the near term. Similarly, Polish debt obligations
should outperform other non-Latin debt as the country continues its impressive
economic growth.
1
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
We continue to believe that AWF's strategy will provide superior relative
investment results for long-term shareholders. We appreciate your continued
investment in the Fund and look forward to reporting to you again in the coming
months.
Sincerely,
John D. Carifa
Chairman
Wayne D. Lyski
President
2
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 (UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ----------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS - 83.8%
COLLATERALIZED BRADY BONDS* - 43.5%
ARGENTINA - 7.6%
Republic of Argentina
Euro Par Bond VRN
5.00%, 3/31/23
(cost $61,013,661) $127,250 $61,835,229
BRAZIL - 11.4%
Republic of Brazil
Series YL3 Par Bonds VRN
4.25%, 4/15/24 15,000 7,303,125
Series YL4 Par Bonds VRN
4.25%, 4/15/24 175,500 85,446,562
Total Brazilian Securities
(cost $87,495,683) 92,749,687
BULGARIA - 1.8%
Republic of Bulgaria
Discount Bonds FRN
6.75%, 7/28/24
(cost $12,606,385) 28,000 14,280,000
ECUADOR - 6.1%
Republic of Ecuador
Discount Bonds FRN
6.812%, 2/28/25 77,500 38,265,625
Par Bonds
3.00%, 2/28/25 34,000 11,113,750
Total Ecuadorian Securities
(cost $48,918,407) 49,379,375
JORDAN - 0.7%
National Government of Jordan
Euro Par Bonds VRN
4.00%, 12/23/23
(cost $5,302,904) 12,400 5,549,000
MEXICO - 2.4%
United Mexican States
Euro Par Bonds Series B
6.25%, 12/31/19
(cost $17,775,356) 31,250 19,042,969
NIGERIA - 5.5%
Central Bank of Nigeria
Par Bonds VRN
6.25%, 11/15/20
(cost $43,845,922) 100,000 44,875,000
PHILLIPINES - 4.8%
Central Bank of the Phillipines
Par Bonds VRN
5.75%, 12/01/17
(cost $39,014,273) 52,750 39,150,391
POLAND - 0.4%
Republic of Poland
Discount Bonds FRN
7.125%, 10/27/24
(cost $3,050,789) 4,000 3,097,500
VENEZUELA - 2.8%
Republic of Venezuela
Par Bonds
Series W-A
6.75%, 3/31/20
(cost $21,831,681) 45,000 23,090,625
Total Collateralized Brady Bonds
(cost $340,855,061) 353,049,776
3
PORTFOLIO OF INVESTMENTS (CONT.)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ----------------------------------------------------------------------
NON-COLLATERALIZED BRADY BONDS - 27.0%
ARGENTINA - 2.8%
Republic of Argentina FRB
6.8125%, 3/31/05
(cost $22,170,000) $ 36,000 $22,410,000
BRAZIL - 2.6%
Republic of Brazil
C-Bonds
8.00%, 4/15/14(a)
(cost $19,725,806) 39,535 21,064,948
BULGARIA - 4.6%
Republic of Bulgaria
IAB FRN
6.75%, 7/28/11
(cost $34,189,167) 83,000 37,427,605
ECUADOR - 1.4%
Republic of Ecuador
PDI Bonds FRN
6.8125%, 2/27/15(h)(c) 28,371 8,794,934
IE Bonds FRN
6.75%, 12/21/04 5,379 3,173,654
Total Ecuadorian Securities
(cost $13,410,770) 11,968,588
POLAND - 8.8%
Republic of Poland
PDI Bonds VRN
3.25%, 10/27/14
(cost $63,260,585) 112,750 71,419,796
VENEZUELA - 6.8%
Republic of Venezuela
DCB FRN
6.8125%, 12/18/07
(cost $54,487,555) $108,500 $54,894,219
Total Non-Collateralized Brady Bonds
(cost $207,243,883) 219,185,156
LOAN PARTICIPATIONS & ASSIGNMENTS - 7.0%
MOROCCO - 5.8%
Kingdom of Morocco
Loan Participation FRN
6.6875%, 1/01/09
(cost $49,220,078) 75,000 46,898,250
RUSSIA - 1.2%
Vneshekonombank
Loan Assignment(b)
(cost $9,553,125) 30,000 9,843,750
Total Loan Participations & Assignments
(cost $58,773,203) 56,742,000
OTHER SOVEREIGN DEBT-RELATED - 6.3%
Bayerische Landesbank
Spread Notes
U.S. Treasury Bond
6.25%, 8/15/23 vs Brazil
Par Bonds 4.00%, 4/15/24
9.125%, 10/13/95(e) 4,500 4,408,200
4
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ----------------------------------------------------------------------
Morgan Guaranty Trust Co
Index Notes(f)
Indexed to Ivory Coast
Restructured Loan Assignment
9.00%, 12/19/95 $ 7,434 $7,832,164
Indexed to Ivory Coast
Unrestructured Loan Assignment
9.00%, 12/19/95 6,117 6,054,847
Indexed to Russian
Vneshekonombank Loan Assignment
10.00%, 1/23/96 30,250 32,941,861
Total Other Sovereign Debt-Related
(cost $48,300,689) 51,237,072
Total Sovereign Debt Obligations
(cost $655,172,836) 680,214,004
CORPORATE DEBT OBLIGATIONS - 14.6%
Algoma Steel, Inc.
12.375%, 7/15/05 12,000 11,040,000
GNF Corp.
10.625%, 4/01/03 4,000 3,500,000
HMH Properties, Inc.
9.50%, 5/15/05(g) 10,000 9,850,000
In Flight Phone Corp.
14.00%, 5/15/02(d)(g) 5,000 2,025,000
IXC Communications, Inc.
Series A
12.50%, 10/01/05(g)(i) $ 7,000 $6,886,250
Mesa Capital Corp.
12.75%, 6/30/98(d) 10,750 9,997,500
Monarch Acquisition
12.50%, 7/01/03(g) 4,000 4,080,000
Nextel Communications
9.75%, 8/15/04(d) 20,000 9,900,000
NS Group, Inc.
13.50%, 7/15/03 3,000 2,880,000
Pegasus Media & Communications
12.50%, 7/01/05(g) 5,000 5,100,000
Revlon Worldwide
Zero coupon, 3/15/98 13,500 9,922,500
Sinclair Broadcast Group
10.00%, 9/30/05 6,000 6,135,000
Telewest Communications
9.625%, 10/01/06 5,500 5,524,062
11.00%, 10/01/07(d) 14,000 8,277,500
Terra Industries
10.50%, 6/15/05 7,000 7,385,000
TransTexas Gas Corp.
11.50%, 6/15/02 3,000 3,150,000
Trump Taj Mahal
11.35%, 11/15/99 10,000 8,518,100
WRT Energy Corp.
13.875%, 3/01/02 4,700 4,136,000
Total Corporate Debt Obligations
(cost $119,752,736) 118,306,912
5
PORTFOLIO OF INVESTMENTS (CONT.)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
SHARES, OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ----------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATION - 6.4%
U.S. Treasury Stripped Bond
Zero coupon, 8/15/20
(cost $50,381,408) $280,000 $52,066,280
COMMON STOCK - 0.0%
Transamerican Refining Corp.
warrants, expiring 2/15/02
(cost $726) 264 924
PREFERRED STOCK - 1.0%
Prime Retail Inc.
Convertible Pfd. Series B 8.50%
(cost $10,500,000) 420,000 7,770,000
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ----------------------------------------------------------------------
TIME DEPOSIT - 1.4%
Bank of New York
5.625%, 10/02/95
(cost $11,138,000) $11,138 $ 11,138,000
TOTAL INVESTMENTS - 107.2%
(cost $846,945,706) 869,496,120
Other assets less liabilities - (7.2%) (57,741,417)
NET ASSETS - 100% $811,754,703
* Sovereign debt obligations issued as part of debt restructuring that are
collateralized in full as to principal due at maturity by U.S. Treasury zero
coupon obligations which have the same maturity as the Brady Bond.
(a) Coupon consists of 4.00% cash payment and 4.00% paid-in-kind.
(b) Non-income producing security.
(c) Coupon consist of 3.00% cash payment and 3.8125% paid-in-kind.
(d) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective until
final maturity.
(e) The redemption value of this security is indexed to the spread between the
referenced treasury yield and the referenced emerging market debt yield.
(f) The redemption value of these securities is linked to the change in the
bid price of the referenced emerging market debt.
(g) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30, 1995
these securities amounted to $27,941,250 or 3.4% of net assets.
(h) Restricted security.
(I) Security will have an increased interest rate of 1/2% until registration
under Rule 144A of the Securities Act of 1933 becomes effective. At that time,
interest will accrue at the rate shown.
Glossary of Terms:
DCB Debt conversion bond.
FRB Floating rate bond. Stated interest rate in effect at September 30,
1995.
FRN Floating rate note. Stated interest rate in effect at September 30,
1995.
IAB Interest arrears bond.
IE Interest equalization.
PDI Past due interest.
VRN Variable rate note. Stated interest rate in effect at September 30,
1995.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 (UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $846,945,706) $869,496,120
Receivable for investment securities sold 36,492,692
Interest receivable 24,329,949
Deferred organization expenses and other assets 83,404
Total assets 930,402,165
LIABILITIES
Due to custodian 7,976
Payable for investment securities purchased 117,675,334
Advisory fee payable 663,204
Administrative fee payable 99,481
Accrued expenses and other liabilities 201,467
Total liabilities 118,647,462
NET ASSETS
(equivalent to $11.35 per share, based on 71,535,274
shares outstanding) $811,754,703
COMPOSITION OF NET ASSETS
Capital stock, at par $ 715,353
Additional paid-in capital 983,149,672
Undistributed net investment income 1,774,761
Accumulated net realized loss on investments (196,450,324)
Net unrealized appreciation of investments and other assets 22,565,241
-------------
$811,754,703
NET ASSET VALUE PER SHARE $11.35
See notes to financial statements.
7
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Interest $48,289,462
Dividends 446,250 $48,735,712
EXPENSES
Advisory fee 3,822,279
Administrative fee 573,342
Custodian 173,845
Transfer agency 160,543
Taxes 125,976
Audit and legal 41,036
Registration 36,528
Printing 21,926
Directors' fees 10,664
Amortization of organization expenses 3,023
Miscellaneous 37,720
Total expenses 5,006,882
Net investment income 43,728,830
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 6,088,917
Net change in unrealized depreciation of investments and
other assets 119,820,214
Net gain on investments 125,909,131
NET INCREASE IN NET ASSETS FROM OPERATIONS $169,637,961
See notes to financial statements.
8
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
SIX MONTHS ENDED
SEP. 30,1995 YEAR ENDED
(UNAUDITED) MARCH 31,1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 43,728,830 $ 82,068,447
Net realized gain (loss) on investment
transactions 6,088,917 (251,236,720)
Net change in unrealized depreciation of
investments and other assets 119,820,214 90,659,718
Net increase (decrease) in net assets
from operations 169,637,961 (78,508,555)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income (41,954,069) (82,068,447)
Distributions in excess of net investment income -0- (15,520,836)
Distribution from net realized gain on investments -0- (15,412,493)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in issuance
of common stock 17,503,739 30,133,909
Total increase (decrease) 145,187,631 (161,376,422)
NET ASSETS
Beginning of period 666,567,072 827,943,494
End of period $811,754,703 $666,567,072
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 (UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance World Dollar Government Fund II, Inc. (the 'Fund') was incorporated
under the laws of the State of Maryland on May 20, 1993 and is registered under
the Investment Company Act of 1940, as a non-diversified, closed-end management
investment company. On July 15, 1993, the Fund sold 7,200 shares of common
stock for $100,440 to Alliance Capital Management L.P. (the 'Adviser'). The
Fund commenced operations on July 28, 1993. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange are valued at the
last sales price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recently quoted bid and asked price
provided by the principal market makers. Publicly traded Sovereign Debt
Obligations are typically traded internationally on the over-the-counter
market. Because of the nature of the markets for Sovereign Debt Obligations,
quotations from several sources will be obtained so that the Fund's portfolio
investments will not generally be priced by a single source. Readily marketable
Sovereign Debt Obligations may be valued on the basis of prices provided by a
pricing service when such prices are believed by the Adviser to reflect the
fair value of such securities. Securities for which market quotations are not
readily available are valued in good faith, at fair value, using methods
determined by the Board of Directors. Securities which mature in 60 days or
less are valued at amortized cost, which approximates fair value, unless this
method does not represent fair value.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $30,000 have been deferred and are being
amortized on a straight-line basis through July, 1998.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with tax regulations.
NOTE B: ADVISORY AND ADMINISTRATIVE FEES
Under the terms of an Investment Advisory Agreement, the Fund pays Alliance
Capital Management L.P. (the 'Adviser'), a monthly fee equal to the annualized
rate of 1% of the Fund's average weekly net assets. Under the terms of an
Administrative Agreement, the Fund pays Alliance Capital Management L.P. (the
'Administrator'), a monthly fee equal to the annualized rate of .15 of 1% of
the Fund's average weekly net assets. The Administrator provides administrative
functions as well as other clerical services to the Fund and prepares financial
and regulatory reports.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $1,803,696,783 and $1,706,023,675, respectively, for the six months
ended September 30, 1995.
At September 30, 1995, the cost of investments for federal income tax purposes
was $861,822,656. Accordingly, gross unrealized appreciation of investments was
$28,807,873 and gross unrealized depreciation of investments was $21,119,582,
resulting in net unrealized appreciation of $7,688,291. At March 31, 1995, the
Fund had a capital loss carryforward of approximately $99,700,000 which expires
in the year 2003.
10
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $0.01 par value common stock authorized.
Of the 71,535,274 shares outstanding at September 30, 1995, the Adviser owned
7,200 shares. During the six months ended September 30, 1995, and the year
ended March 31, 1995, the Fund issued 1,603,672 and 2,700,756 shares
respectively, in connection with the Fund's dividend reinvestment plan.
NOTE E: CONCENTRATION OF RISK
Investing in securities of foreign governments involves special risks, which
include revaluation of currencies and the possibility of future adverse
political and economic developments. Moreover, securities of many foreign
governments and their markets may be less liquid and their prices more volatile
than those of the United States government. The Fund invests in the sovereign
debt obligations of countries that are considered emerging market countries at
the time of purchase. Therefore, the Fund is susceptible to governmental
factors and economic and debt restructuring developments adversely affecting
the economies of these emerging market countries. In addition, these debt
obligations may be less liquid and subject to greater volatility than debt
obligations of more developed countries.
NOTE F: QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED (DECREASE)
AND UNREALIZED IN NET ASSETS
NET INVESTMENT GAIN (LOSS) ON RESULTING FROM MARKET PRICE
INCOME INVESTMENTS OPERATIONS ON NYSE
---------------- ------------------- ------------------ -----------------
TOTAL PER TOTAL PER TOTAL PER
QUARTER ENDED (000) SHARE (000) SHARE (000) SHARE HIGH LOW
- -------------------- ------- ------ ---------- ------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 1995 $20,878 $ .29 $ 25,542 $ .36 $ 46,420 $ .65 $11.375 $10.750
June 30, 1995 22,851 .33 100,367 1.43 123,218 1.76 $11.750 $10.250
$43,729 $ .62 $ 125,909 $ 1.79 $169,638 $ 2.41
March 31, 1995 $21,256 $ .29 $ (91,260) $(1.31) $(70,004) $(1.02) $11.125 $ 9.000
December 31, 1994 21,618 .32 (107,085) (1.56) (85,467) (1.24) $12.250 $10.000
September 30, 1994 20,269 .30 74,278 1.08 94,547 1.38 $12.875 $11.625
June 30, 1994 18,925 .28 (36,510) (.53) (17,585) (.25) $13.625 $11.500
$82,068 $1.19 $(160,577) $(2.32) $(78,509) $(1.13)
</TABLE>
11
FINANCIAL HIGHLIGHTS ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS ENDED JULY 28, 1993*
SEP. 30,1995 YEAR ENDED TO
(UNAUDITED) MAR.31,1995 MAR.31,1994
------------ ------------ -----------
Net asset value, beginning of period $9.53 $12.31 $13.93(a)
INCOME FROM INVESTMENT OPERATIONS
Net investment income .62(d) 1.19(d) .77
Net realized and unrealized gain (loss)
on investments and other assets 1.79 (2.32) (1.28)
Net increase (decrease) in net asset
value from operations 2.41 (1.13) (.51)
LESS: DISTRIBUTIONS
Dividends from net investment income (.59) (1.19) (.77)
Distributions in excess of
net investment income -0- (.23) (.10)
Distributions from net realized gain
on investments -0- (.23) (.24)
Total dividends and distributions (.59) (1.65) (1.11)
Net asset value, end of period $11.35 $ 9.53 $12.31
Market value, end of period $10.875 $10.375 $13.375
TOTAL RETURN
Total investment return based on: (b)
Market value 10.56% (10.08)% (4.05)%
Net asset value 25.62% (10.26)% (5.04)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $811,755 $666,567 $827,943
Ratio of expenses to average net assets 1.29%(c) 1.28% 1.26%(c)
Ratio of net investment income to
average net assets 11.30%(c) 10.31% 7.62%(c)
Portfolio turnover rate 238% 274% 192%
* Commencement of operations.
(a) Net of offering costs of $.02.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
the period reported. Dividends and distributions, if any, are assumed, for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment Plan. Generally, total investment return based on
net asset value will be higher than total investment return based on market
value in periods where there is an increase in the discount or a decrease in
the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on net asset
value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total investment return calculated for a period of less than one
year is not annualized.
(c) Annualized.
(d) Based on average shares outstanding.
12
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN
RUTH BLOCK
DAVID H. DIEVLER
JOHN H. DOBKIN
WILLIAM H. FOULK, JR.
DR. JAMES M. HESTER
CLIFFORD L. MICHEL
ROBERT C. WHITE
OFFICERS
WAYNE D. LYSKI, PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
PAUL J. DENOON, VICE PRESIDENT
VICKI L. FULLER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
ADMINISTRATOR
ALLIANCE CAPITAL MANAGEMENT, L.P.
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110-1520
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
shareholders of Alliance World Dollar Government Fund II, Inc. for their
information. The financial information included herein is taken from the
records of the Fund. This is not a prospectus, circular or representation
intended for use in the purchase of shares of the Fund or any securities
mentioned in this report.
13
Alliance World Dollar Government Fund II, Inc.
Summary of General Information
THE FUND
Alliance World Dollar Government Fund II, Inc. is a non-diversified, closed-end
management investment company investing exclusively in fixed income securities
denominated in U.S. dollars. The Fund is designed for investors who seek high
current income and capital appreciation over a period of years from investment
in a portfolio of high yielding, high risk sovereign debt & U.S. corporate
fixed income obligations which the Fund's investment adviser expects to benefit
from improving economic fundamentals.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transactions Section of newspaper each day. The Fund's NYSE
trading symbol is 'AWF'. Weekly comparative net asset value (NAV) and market
price information about the Fund is published each Monday in the Wall Street
Journal and each Saturday in the New York Times and Barron's and other
newspapers in a table called 'Closed-End Funds.' Additional information about
the Fund is available by calling 1-800-247-4154.
DIVIDEND REINVESTMENT PLAN
If your shares are held in your own name, you will automatically be a
participant in the Plan unless you elect to receive cash. If your shares are
held in nominee or street name through a broker or nominee who provides this
service, you will also automatically be a participant in the Plan. If your
shares are held in the name of a broker or nominee who does not provide this
service, you will need to instruct them to participate in the Plan on your
behalf or your distributions will not be reinvested. In such case, you will
receive your distributions in cash. For a copy of the Plan Brochure, please
call State Street Bank and Trust Company at 1-800-219-4218.
Alliance World Dollar Government Fund II, Inc.
1345 Avenue of the Americas
New York, New York 10105
Alliance Capital
Mutual funds without the Mystery.SM
R These registered service marks used under license from the owner, Alliance
Capital Management L.P.
WDGIISR
