ALLIANCE WORLD DOLLAR GOVERNMENT FUND II
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1996
LETTER TO SHAREHOLDERS
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
November 15, 1996
Dear Shareholder:
Throughout most of 1996, U.S. bond market returns have been subdued. The market
has reacted negatively to stronger-than-expected job growth and uncertainty
about whether the Federal Reserve would raise rates to slow economic growth.
Across all major sectors of the bond market, shorter-duration securities have
outperformed longer-duration securities as interest rates for all maturities
have increased. Outside of the U.S., many emerging and developed market
governments continued to pursue policies of economic reform which supported
higher bond prices in these markets.
INVESTMENT RESULTS
In spite of sluggish domestic bond market returns, the emerging market and high
yield bond sectors continued their impressive performance over the past six
months. We are pleased to report that Alliance World Dollar Government Fund II
was well positioned to capitalize on gains in both of these sectors and posted
strong positive returns over the most recent reporting period. For the six
months ended September 30, 1996, the Fund returned 22.67% on a net asset value
basis which compared with 20.62% for its benchmark, the J.P. Morgan Emerging
Markets Bond Index. Over the 12-month period ended September 30, the Fund
achieved a total return of 37.17% on a net asset value basis compared with
37.92% for the benchmark index.
ECONOMIC REVIEW
Rebounding from a slowdown at the end of 1995, the U.S. economy gathered steam
as 1996 progressed. Following first quarter's growth of 2.0% [as measured by
the Gross Domestic Product (GDP)] the economic resurgence gained strength
during the second quarter, led by a rapidly improving labor market. Employment
gains averaged 272,000 per month and total hours worked climbed by an
annualized 5.7%. Consumer confidence remained elevated and real household
spending continued to grow at a healthy clip. These factors combined to produce
"overheated" GDP growth for the second quarter of 4.7%
However, the most recent data point to an economy that has slowed sharply from
its strong second quarter pace.
Overall GDP growth declined to a more moderate 2.2%, dragged down by a dramatic
deceleration in consumer spending. The annualized gain in retail sales of
merchandise measured only 0.4% during the third quarter while construction
spending dropped 5.8% from second quarter's level. On the production side,
industrial production growth slowed to an annualized 4.3% (from second
quarter's 6.6%), total hours worked grew by only 2.8%, and non-farm payroll
growth slowed to 145,000 per month.
On the inflation front, the Commerce Department's price index for the key gross
domestic purchases aggregate (which measures prices paid on all purchases by
U.S. residents) decelerated for the second quarter in a row, rising at a
seasonally adjusted annual rate of only 1.8% in the third quarter versus 2.1%
in the second quarter and 2.3% in the first quarter. At this broadest level of
economic coverage, inflation remains very well-behaved. As a result, the
Federal Reserve has been in a holding pattern since January and is expected to
maintain that stance for the foreseeable future.
INVESTMENT OUTLOOK
Our outlook for the U.S. economy assumes that while economic growth may
temporarily bounce higher during the fourth quarter of 1996, it will moderate
again during the first half of 1997. As this occurs, recent upward pressures on
inflation should dissipate. Until clear signs of a slowing economy emerge,
concerns about inflation will keep U.S. interest rates within their recent
ranges with a tendency to move toward the lower end of the yield range.
Outside of the U.S., we continue to have a favorable outlook for emerging
market debt. However, as risk premiums for this asset class have narrowed from
their highs at the end of 1994, we expect the pace of price appreciation of
these securities to slow somewhat.
In Mexico and Argentina, the success of economic programs undertaken since the
peso devaluation two years ago has led to lower inflation, improving current
account deficits and growing investor confidence. These factors should support
higher bond prices in these markets in the future.
1
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
In Russia, current economic indicators show encouraging signs. Reserves have
increased considerably in the past two years and the current account surplus
continues to grow. We expect the impact of market-oriented reforms to be more
noticeable in 1997 and produce further spread tightening (and hence, price
appreciation) in Russian securities. Investments in emerging markets securities
are always speculative, and the risk elements in the current Russian situation
have been well publicized. However, we believe Russian sovereign debt
obligations are a compelling long-term investment opportunity. Numerous factors
lead us to this opinion, including the recent credit ratings of Russian debt by
both Moody's and Standard & Poor's, successful steps toward the restructuring
of Russia's external debt, the receding likelihood of reactionary economic
policies and the growing representation of Russia in the emerging market bond
indices. In this regard, at our recommendation the Fund's Board of Directors
recently approved an increase of up to 25% of the Fund's total assets that may
be invested in U.S. Dollar-denominated Russian sovereign debt obligations, thus
positioning the Fund to afford its shareholders greater access to this
opportunity. This puts Russia on a par, in terms of the Fund's investment
limitations, with other significant "emerging market" sovereign debt issuers:
Argentina, Brazil, Mexico, Morocco, the Philippines and Venezuela.
Polish bonds, which have experienced substantial price appreciation since
receiving an investment grade rating earlier this year, appear to be near their
peak and we have begun reducing our exposure in this market.
In the months ahead, some factors which could impact emerging market bond
prices will be the possible resumption of the Mexican privatization program,
International Monetary Fund negotiations with the new coalition government in
Turkey, continued market reforms in Russia and expected S&P and Moody's ratings
on six to eight emerging countries' debt.
Thank you for your continued interest and investment in Alliance World Dollar
Government Fund II. We look forward to reporting to you again on market
activity and the Fund's investment results in coming periods.
Sincerely,
John D. Carifa
Chairman
Wayne D. Lyski
President
2
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-80.8%
COLLATERALIZED BRADY BONDS*-40.8%
BRAZIL-4.2%
Republic of Brazil Par Bonds Series YL4
5.00%, 4/15/24 (a) $ 70,000 $ 41,671,875
BULGARIA-5.3%
Republic of Bulgaria Discount Bonds FRN
6.6875%, 7/28/24 104,000 52,942,500
ECUADOR-5.0%
Republic of Ecuador Discount Bonds FRN
6.50%, 2/28/25 80,500 50,111,250
MEXICO-11.0%
United Mexican States Euro Par Bonds
Series A
6.25%, 12/31/19 (b) 140,100 97,106,812
Series B
6.25%, 12/31/19 (b) 18,750 12,996,094
Total Mexican Securities 110,102,906
NIGERIA-2.4%
Central Bank of Nigeria Par Bonds
6.25%, 11/15/20 (c) 40,500 24,236,719
VENEZUELA-12.9%
Republic of Venezuela Par Bonds
Series W-A
6.75%, 3/31/20 (d) 102,700 71,376,500
Series W-B
6.75%, 3/31/20 (d) 82,000 56,990,000
Total Venezuelan Securities 128,366,500
Total Collateralized Brady Bonds
(cost $372,557,962) 407,431,750
NON-COLLATERALIZED BRADY BONDS-24.0%
ARGENTINA-8.3%
Republic of Argentina FRB
6.625%, 3/31/05 99,000 82,881,562
BRAZIL-2.3%
Republic of Brazil C-Bonds
8.00%, 4/15/14 (e) 32,473 22,873,099
BULGARIA-3.2%
Republic of Bulgaria
IAB FRN
6.6875%, 7/28/11 43,000 19,726,250
FLIRB FRN
2.25%, 7/28/12 36,500 11,976,563
Total Bulgarian Securities 31,702,813
3
PORTFOLIO OF INVESTMENTS (CONT.)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
PANAMA-4.9%
Republic of Panama IRB
3.50%, 7/17/14 (a)(f) $ 79,000 $ 49,572,500
PERU-5.3%
Peru FLIRB
3.25%, 3/15/16 (f)(g) 35,000 18,200,000
Peru PDI
3.00%, 12/29/49 (f)(g) 59,000 34,367,500
Total Peruvian Securities 52,567,500
Total Non-Collateralized Brady Bonds
(cost $220,344,180) 239,597,474
SOVEREIGN DEBT-RELATED-11.6%
Morgan Guaranty Trust Co.
Spread Note U.S. Treasury Bond
5.875%, 11/15/05 vs.
Poland PDI Bonds 3.75%, 10/27/14
8.00%, 1/24/97 (h) 11,000 11,028,600
Morgan Guaranty Trust Co.
Index Note Linked Russian US $
Vneshckonombank Loan Assignment
10.00%, 7/23/96 (i) 92,635 104,501,544
Total Sovereign Debt-Related
(cost $103,635,000) 115,530,144
LOAN PARTICIPATION-4.4%
RUSSIA-4.4%
Vneshckonombank Loan Participation (j)
(cost $34,489,237) 63,000 43,981,875
Total Sovereign Debt Obligations
(cost $731,026,379) 806,541,243
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
CORPORATE DEBT OBLIGATIONS-20.2%
Allbritton Communications
9.75%, 11/30/07 (f) $ 30,000 $ 29,175,000
Cemex SA
12.75%, 7/15/06 (f) 15,900 17,450,250
Commonwealth Aluminum
10.75%, 10/01/06 (f) 10,625 10,903,906
Home Holdings, Inc.
7.75%, 12/15/98 4,825 3,618,750
Home Holdings, Inc.
8.625%, 12/15/03 3,370 1,078,400
IXC Communications, Inc.
12.50%, 10/01/05 (f)(k) 10,000 10,587,500
MCII Holding
12.00%, 11/15/02 (f)(l) 30,000 24,300,000
Mc-Cuernavaca Trust
9.25%, 7/25/99 9,193 8,273,451
Mexico City Toluca Toll Road
11.00%, 5/19/02 (f) 26,639 24,640,663
Millicom International Cellular
13.50% 6/01/07 (f)(l) 37,500 21,562,500
Park Broadcasting, Inc.
11.75%, 5/15/04 (f) 15,500 17,786,250
Pegasus Media & Communications
12.50%, 7/01/05 (f) 5,000 5,275,000
TransTexas Gas Corp.
11.50%, 6/15/02 14,340 15,272,100
Unisys Corp.
12.00%, 4/15/03 (f) 11,000 11,440,000
Total Corporate Debt Obligations
(cost $193,402,623) 201,363,770
PREFERRED STOCK-2.2%
Cablevision Systems Corp., Series M, 11.125%
(cost $21,598,750) 224,000 21,840,000
4
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCK & OTHERINVESTMENTS-0.0%
Pegasus Media & Communications (j) 500 $175,000
Transamerican Refining Corp.
Warrants, expiring Feb '02 (j) 264 528
Total Common Stock & Other Investments
(cost $36,543) 175,528
TOTAL INVESTMENTS-103.2%
(cost $946,064,295) $1,029,920,541
Other assets less liabilities-(3.2%) (31,515,224)
NET ASSETS-100% $998,405,317
* 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 will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at September 30, 1996.
(b) Security trades with value recovery rights expiring June 30, 2003.
(c) Security trades with oil warrants expiring November 15, 2020.
(d) Security trades with oil warrants expiring April 15, 2020.
(e) Coupon consists of 4.50% cash payment and 3.50% paid-in-kind.
(f) 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, 1996
these securities amounted to $275,261,069 or 27.6% of net assets.
(g) When issued.
(h) Principal amount represents par value at purchase date. The redemption
value of these securities are indexed to the spread between the referenced
treasury yield and the referenced emerging market debt yield.
(i) Principal amount represents par value at purchase date. The redemption
value of these securities is linked to the change in the bid price of the
referenced emerging market debt.
(j) Non-income producing security.
(k) Security will have an increased interest rate of .50% until registration
under Rule 144A of the Securities Act of 1933 becomes effective. At that time
interest will accrue at the rate shown.
(l) 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.
Glossary of Terms:
FLIRB - Front loaded interest reduction bonds.
FRB - Floating rate bond. Stated interest rate in effect at
September 30, 1996.
FRN - Floating rate note. Coupon will fluctuate based upon an interest
rate index. Stated interest rate in effect at September 30, 1996.
IAB - Interest arrears bond.
IRB - Interest reduction bond.
PDI - Past due interest.
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996 (UNAUDITED)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $946,064,295) $1,029,920,541
Receivable for investment securities sold 53,102,969
Interest receivable 30,819,060
Deferred organization expenses and other assets 68,275
Total assets 1,113,910,845
LIABILITIES
Due to custodian 472,688
Payable for investment securities purchased 113,712,675
Advisory fee payable 796,706
Administrative fee payable 119,506
Accrued expenses and other liabilities 403,953
Total liabilities 115,505,528
NET ASSETS $ 998,405,317
COMPOSITION OF NET ASSETS
Capital stock, at par $ 719,803
Additional paid-in capital 988,628,046
Distributions in excess of net investment income (8,027,742)
Accumulated net realized loss on investments (66,786,664)
Net unrealized appreciation of investments and other assets 83,871,874
$ 998,405,317
NET ASSET VALUE PER SHARE(based on 71,980,285 shares outstanding) $13.87
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 49,108,915
EXPENSES
Advisory fee $4,535,594
Administrative fee 680,340
Custodian 317,611
Transfer agency 215,060
Audit and legal 43,738
Registration 38,898
Printing 33,242
Taxes 23,258
Directors' fees 8,490
Amortization of organization expenses 3,007
Miscellaneous 17,023
Total expenses 5,916,261
Net investment income 43,192,654
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 66,961,561
Net change in unrealized appreciation of investments
and other assets 78,629,007
Net gain on investments 145,590,568
NET INCREASE IN NET ASSETS FROM OPERATIONS $188,783,222
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
SIX MONTHS ENDED
SEP. 30,1996 YEAR ENDED
(UNAUDITED) MARCH 31,1996
------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 43,192,654 $ 88,898,479
Net realized gain on investment transactions 66,961,561 72,802,329
Net change in unrealized appreciation of
investments and other assets 78,629,007 102,497,840
Net increase in net assets from operations 188,783,222 264,198,648
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income (43,192,654) (88,898,479)
Distributions in excess of net investment income (8,027,742) (4,011,313)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in
issuance of common stock -0- 22,986,563
Total increase 137,562,826 194,275,419
NET ASSETS
Beginning of year 860,842,491 666,567,072
End of period $998,405,317 $860,842,491
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 (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. 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 The 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 The
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.
The Fund entered into a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Advisor, whereby the
Fund reimburses AFS for costs relating to servicing calls for the Fund. During
the six months ended September 30, 1996 there was no reimbursement paid to AFS.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. Government Securities) aggregated $1,261,391,239 and $1,240,665,288,
respectively, for the six months ended September 30, 1996.
At September 30, 1996, the cost of investments for federal income tax purposes
was $946,064,295. Accordingly, gross unrealized appreciation of investments was
$87,762,050 and gross unrealized depreciation of investments was $3,905,804,
resulting in net unrealized appreciation of $83,856,246. At March 31, 1996, the
Fund had a capital loss carryforward of approximately $161,154,911, of which
$99,736,778 expires in 2003 and $61,418,133 expires in 2004.
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $0.01 par value common stock authorized.
Of the 71,980,285 shares outstanding at September 30, 1996, the Adviser owned
7,200 shares. During the six months ended September 30, 1996, the Fund did not
issue shares in connection with the dividend reinvestment plan. During the year
ended March 31, 1996, the Fund issued 2,048,683 shares 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.
10
FINANCIAL HIGHLIGHTS
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED MARCH 31, JULY 28,1993*
SEP. 30,1996 ------------------------ TO
(UNAUDITED) 1996 1995 MARCH 31, 1994
------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.96 $ 9.53 $12.31 $13.93(a)
INCOME FROM INVESTMENT OPERATIONS
Net investment income .60 1.25(b) 1.19(b) .77
Net realized and unrealized gain (loss)
on investments and other assets 2.02 2.49 (2.32) (1.28)
Net increase (decrease) in net asset
value from operations 2.62 3.74 (1.13) (.51)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.60) (1.25) (1.19) (.77)
Distributions in excess of net
investment income (.11) (.06) (.23) (.10)
Distributions from net realized gain
on investments -0- -0- (.23) (.24)
Total dividends and distributions (.71) (1.31) (1.65) (1.11)
Net asset value, end of period $13.87 $11.96 $ 9.53 $12.31
Market value, end of period $12.875 $12.375 $10.375 $13.375
TOTAL RETURN
Total investment return based on: (c)
Market value 10.05% 33.51% (10.08)% (4.05)%
Net asset value 22.67% 40.48% (10.26)% (5.04)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $998,405 $860,842 $666,567 $827,943
Ratio of expenses to average net assets 1.30%(d) 1.30% 1.28% 1.26%(d)
Ratio of net investment income to
average net assets 9.49%(d) 10.99% 10.31% 7.62%(d)
Portfolio turnover rate 172% 395% 274% 192%
</TABLE>
* Commencement of operations.
(a) Net of offering costs of $.02.
(b) Based on average shares outstanding.
(c) 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.
(d) Annualized.
11
ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
ROBERT C. WHITE (1)
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, NY10105
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY10286
DIVIDENDPAYINGAGENT,
TRANSFERAGENTANDREGISTRAR
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA02110-1520
INDEPENDENTAUDITORS
ERNST &YOUNG LLP
787 Seventh Avenue
New York, NY 10019
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
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.
12
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, each Sunday in the NEW YORK TIMES and each Saturday in 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
INVESTING WITHOUT THE MYSTERY
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
WDGIISR
