MERRILL
LYNCH
AMERICAS
INCOME
FUND, INC.
Semi-Annual Report June 30, 1994
The Fund is leveraged to provide shareholders with a potentially
higher rate of return. However, leveraging may exaggerate changes in
the net asset value of the Fund's shares and in the yield on the
Fund's portfolio.
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term
investment for investors capable of assuming the risks of investing
in emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the prospectus for details.
<PAGE>
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch
Americas Income Fund, Inc.
Box 9011
Princeton, NJ 08543-9011
MERRILL LYNCH AMERICAS INCOME FUND, INC.
The Benefits and
Risks of
Leveraging
The Fund is authorized to borrow money from banks in an amount up to
33-1/3% of the Fund's total assets (including the amount borrowed),
less all liabilities and indebtedness other than the bank borrowing.
The Fund is also authorized to borrow an additional 5% of its total
assets without regard to this limitation for temporary purposes.
Borrowings by the Fund create an opportunity for greater total
return but, at the same time, increase exposure to capital risk. For
example, leveraging may exaggerate changes in the net asset value of
Fund shares and in the yield on the Fund's portfolio. Although the
principal of such borrowings will be fixed, the Fund's assets may
change in value during the time the borrowings are outstanding.
Borrowing will create interest expenses for the Fund which can
exceed the income from the assets retained. To the extent the income
derived from securities purchased with borrowed funds exceeds the
interest the Fund will have to pay, the Fund's net income will be
greater than if borrowing were not used. Conversely, if the income
from the assets retained with borrowed funds is not sufficient to
cover the cost of borrowing, the net income of the Fund will be less
than if borrowing were not used, and therefore the amount available
for distribution to shareholders as dividends will be reduced.
<PAGE>
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Joseph T. Monagle, Jr., Senior Vice President
Alex V. Bouzakis, Vice President
Donald C. Burke, Vice President
Paolo H. Valle, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Financial Data Services, Inc.
Transfer Agency Mutual Fund Operation
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
DEAR SHAREHOLDER
During the period ended June 30, 1994, the volatility of the
secondary market for Latin American country debt was high. A major
influence in the market was the continued uncertainty of US interest
rates caused by investors' inflationary expectations and the
weakening US dollar. Additionally, emerging markets investors have
focused their attention on the upcoming political events in several
countries during the second half of 1994. Garnering the majority of
attention are the presidential elections in Mexico and Brazil.
The combination of these factors resulted in a significant drop in
the flow of assets to the Latin America area. During the first half
of 1994, new financing to Latin America is estimated to have
declined 22% to $8.4 billion, compared to $10.8 billion during the
same period of l993. For the second half of 1994, we expect the
activity of new issues to be concentrated in the higher credit
quality countries, such as Mexico and Argentina. Because of the
uncertain US interest rate outlook, floating rate issues and shorter
maturity dates are expected to continue rising in market
attractiveness.
<PAGE>
We believe the long-term economic fundamentals of the Latin American
countries remain generally positive, with the exception of
Venezuela. The uncertainty of US interest rates will continue to
influence emerging markets. However, the current low price levels,
wide spreads over US Treasuries and the high yields of emerging
markets debt limit to some extent the downside from current levels.
We believe that relative price stability in the US Treasury market
is necessary to improve investor sentiment in emerging markets.
Capital inflows to finance the economic growth and improved
political stability of Latin American countries will also depend on
continued efforts to improve the creditworthiness of the area.
Investment Activities
During the period ended June 30, l994, the portfolio grew in net
assets from $122.8 million to $132.4 million.
The most significant investment decision was increasing the
allocation in Brazil Brady/sovereign bonds from 1.1% to 7.0%. As we
receive confirmation that the new economic plan and Cardoso's
electoral chances improve, we will look to increase our allocation
to Brazil. We also increased our allocation in Argentina and Mexico
Brady/Eurobonds and reduced the allocation in Venezuela Brady bonds
from 11.5% to 9.6% of net assets. Additionally, we reduced the level
of cash reserves from 8.4% to 4.3% of total assets. During the
period, we maintained the same level of allocation to the US high
yield bond market, which outperformed the emerging bond markets. For
the quarter ended June 30, 1994, the level of leverage as a percent
of total assets was reduced to 10.4% from 11.3% at the end of the
previous quarter.
Argentine Investment
Environment
Structural economic reform and fiscal responsibility helped
Argentina continue to post strong economic growth and decreasing
inflation in the first five months of the year. The continued
opening of the economy, deregulation and primarily the strong
investment in capital goods increased Argentina's competitiveness,
production and exports. Sizable capital goods imports also increased
the trade deficit for the first quarter. But the government is
committed to increasing competitiveness through productivity gains
rather than through foreign exchange policy. At the same time, the
constitutional reform to allow for President Menem's May l995 re-
election bid seems to be well on track.
Industrial production grew 6.4% in the first quarter of 1994
following the 1993 gross national product (GNP) expansion.
Performance on the inflation front is equally impressive. Consumer
prices rose only 3.3% for the 12 months ended May 31, 1994, down
from 7% for 1993. Economy Minister Cavallo expects inflation to be
3% in 1994 and GNP to grow 6%.
<PAGE>
The current strength and modernization efforts of Argentina's
industry spurred the trade deficit for the first four months of
1994, which grew to $2.34 billion, about three times the level of
the same period in 1993. This translates into a projected current
account deficit of around 3.5% of gross domestic product (GDP).
Brazilian Investment
Environment
As we move closer to the October presidential election, Brazil
becomes increasingly focused on recent electoral polls which favor a
victory by the leftist candidate, Luiz lnacio da Silva (Lula). At
the same time, the current administration is moving ahead with the
implementation of former Minister Cardoso's economic program. The
strategy seems to be to try to obtain gains on the inflation and
growth fronts so that Cardoso, who is now running as a presidential
candidate behind Lula, can garner enough public support to at least
deny Lula a first-round victory in October. This would give Cardoso
time to develop alliances with other political parties to win the
second round in November. If elected, Cardoso is expected to tackle
the fiscal deficit, spur privatization monopolies and deregulate the
economy. At this time, it is too early to predict the outcome of the
election.
Earlier this year congress passed the administration's proposed
Emergency Social Plan into law and approved a tax increase to reduce
the fiscal deficit in 1994. Congress later failed to reform the
constitution and its tax code, civil service and government monopoly
provisions, limiting the improvement of the fiscal deficit beyond
l994. As part of the economic plan, a new currency, the real, was
introduced on July 1 and is linked to the US dollar at par, thus
attempting to minimize inflationary expectations. Although the new
currency is not fully convertible, it is backed by the estimated $39
billion in foreign reserves. On the external accounts, Brazil showed
a continuation of large monthly trade surpluses. In 1994, the
cumulative figure for the first four months was $4.27 billion.
Mexican Investment
Environment
Political events surpassed economic fundamentals as the driving
force behind the Mexican financial markets in 1994. The peasant
uprising in Chiapas, the assassination of Luis Colosio and the hotly
contested presidential election all added to the political
uncertainty and perceived risk surrounding Mexican investment. The
Bolsa, Mexican Brady bonds and Eurobonds all fell sharply, while
interest rates in the local Cetes market climbed substantially.
During this tumultuous period, it was easy to lose sight of the
generally positive economic fundamentals that exist in Mexico.
<PAGE>
Mexico appears to be slowly emerging from recession with GDP growth
of 0.5% in the first quarter. During the same period, the benefits
of the historic North American Free Trade Agreement began to be felt
as trade surged between the United States and Mexico. Inflation has
been dropping steadily since 1988 when it was 114.2%. The annual
inflation rate is currently below 7%. The government's budget
continues to be balanced, and the central bank, despite massive
intervention to support the peso, has large foreign exchange
reserves which are estimated at close to $20 billion.
The period leading up to the August 21 presidential election could
be volatile. Mexico is going through both political and economic
transformation. This period of change may make the country unstable
in the short term, but will likely lead to a more prosperous and
stable country in the long term, in our view.
Venezuelan Investment
Environment
A major shift from market-oriented policies shocked the market on
June 27, 1994. President Caldera justified recent measures,
described by Finance Minister Sosa as temporary, with the need to
restore confidence in the Venezuelan bolivar (devalued from Bs.
115/$1 US dollar in April to near Bs.200/$1 US in the last trading
session), and in the banking system. Contrary to initial official
statements, the extent of the banking system crisis is not yet
clear. Nine financial institutions have already been intervened.
However, President Caldera has energetically expressed his
determination to end this crisis and the willingness of his
government to make whatever decision is needed.
Initial economic forecasts have been restated, inflation is
projected at 80% compared to 45% in 1993, and GDP growth is at -4%
compared to -1% in 1993. International reserves are now estimated in
US $8.5 billion or an imports-coverage ratio of 10 months, and debt
service ratio remains one of the lowest in Latin America at 27% of
export earnings. A tax reform program is also underway, and a
temporary tax on banking transactions and a sales tax at the
wholesale level are in place. As a result of this, the central
government's fiscal deficit, not including the Venezuelan Deposit
Guaranty Fund's aid to troubled banks, has been reduced to 1% of
GDP. Additionally, Venezuela signed a free trade pact with Colombia
and Mexico, opening a market with a population of over 145 million
and over US $462 billion in GDP to their export sector.
These factors, combined with the improvement and expected stability
of oil prices, allows us to reiterate our belief that Venezuelan
Brady and Eurobonds are trading below their fundamental value and
debt servicing capacity.
<PAGE>
In Conclusion
We thank you for your investment in Merrill Lynch Americas Income
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and Portfolio Manager
August 8, 1994
PERFORMANCE DATA
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (8/27/93) through 6/30/94 -5.62% -8.45%
[FN]
*Maximum sales charge is 3%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Inception (8/27/93) through 6/30/94 -6.00% -9.00%
[FN]
*Maximum contingent deferred sales charge is 3% and is reduced to 0%
after 3 years.
**Assuming payment of applicable contingent deferred sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
Since
Inception 3 Month
6/30/94 3/31/94 8/27/93** % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares $8.81 $9.18 $10.00 -11.90% -4.03%
ML Americas Income Fund Class B Shares 8.81 9.18 10.00 -11.90 -4.03
ML Americas Income Fund Class A Shares--Total Return - 5.62(1) -2.10(2)
ML Americas Income Fund Class B Shares--Total Return - 6.00(3) -2.12(4)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 10.10%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 9.88%
<FN>
*Investment results shown for the 3-month and since inception periods are before the deduction of any sales charges.
**Commencement of Operations.
(1)Percent change includes reinvestment of $0.659 per share ordinary income dividends.
(2)Percent change includes reinvestment of $0.189 per share ordinary income dividends.
(3)Percent change includes reinvestment of $0.618 per share ordinary income dividends.
(4)Percent change includes reinvestment of $0.178 per share ordinary income dividends.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Face Amount Issue Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Argentina Bonds $ 6,000,000 ++Banco de Credito Argentino (2) 8.50% 10/29/1998 $ 5,520,000 4.2%
6,000,000 Banco de Galicia y Buenos Aires S.A.
--Yankee (2) 9.00 11/01/2003 5,040,000 3.8
1,000,000 ++Banco Rio de la Plata S.A. (2) 8.50 7/15/1998 937,500 0.7
6,000,000 Banco Rio de la Plata S.A.--Yankee (2) 8.75 12/15/2003 4,950,000 3.8
4,000,000 Republic of Argentina--Global (1) 8.375 12/20/2003 3,290,000 2.5
2,000,000 Sociedad Commercial del Plata (16) 8.75 12/14/1998 1,820,000 1.4
3,000,000 Telecom Argentina Stet S.A. (4) 8.375 10/18/2000 2,685,000 2.0
5,000,000 Telefonica de Argentina S.A. (4) 8.375 10/01/2000 4,525,000 3.4
Brady Bonds 17,000,000 Argentina Par Series 'L' (1)* 4.25 3/31/2023 8,436,250 6.4
7,000,000 Republic of Argentina FLRB (1)* 5.00 3/31/2005 4,996,250 3.8
Total Investments in Argentina (Cost--$48,874,171) 42,200,000 32.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Face Amount Issue Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Brazil Bonds $ 4,000,000 Banco de Estado de Parana (2) 10.00% 2/27/1996 $ 3,820,000 2.9%
4,000,000 Banco de Estado Sao Paulo (Banespa) (2) 9.25 10/04/1996 3,960,000 3.0
1,500,000 Banco Real, S.A. (2) 10.00 5/27/1995 1,496,250 1.1
1,000,000 ++Celulose Nipo-Brasileira, S.A.
(CENIBRA) (15) 9.375 12/21/2003 900,000 0.7
1,000,000 ++Compania Brazileira de Petroleo
Ipiranga (8) 8.625 2/25/2002 905,000 0.7
1,000,000 Klabine Fabricadora Papel (12) 10.00 12/20/2001 897,500 0.7
3,000,000 Uniao de Bancos Brasileiros S.A.
(UNIBANCO) (2) 8.50 7/29/1996 2,850,000 2.2
850,000 Usinas Siderurgicas de Minas Gerais--
Usiminas S.A. (2) 10.00 1/15/1996 803,250 0.6
Brady Bonds 5,000,000 Brazil Exit Bonds (1) 6.00 9/15/2013 2,375,000 1.8
10,000,000 Republic of Brazil (1) DCB 5.25 4/15/2012 4,800,000 3.7
5,000,000 Republic of Brazil (1) New Money 5.25 4/15/2009 2,550,000 1.9
Total Investments in Brazil (Cost--$26,672,950) 25,357,000 19.3
<PAGE>
Colombia Bonds 2,000,000 Banco de Colombia (2) 7.50 10/21/1998 1,895,000 1.4
Total Investments in Colombia (Cost--$1,952,500) 1,895,000 1.4
Ecuador Loan 3,000,000 Banco Central de Equador Consolidated
Agreement Agreement (17) 10.00 3/09/2024 1,575,000 1.2
Total Investments in Ecuador (Cost--$1,798,750) 1,575,000 1.2
Mexico Bonds 1,500,000 Banamex Eurobond, S.A. (1) 9.125 4/06/2000 1,498,125 1.1
1,000,000 ++Banco de Atlantico, S.A. (2) 7.875 11/05/1998 933,750 0.7
3,000,000 Cementos Mexicanos, S.A. de C.V.
(Cemex) (18) 10.00 11/15/1996 3,082,500 2.4
2,000,000 Fomento Economico Mexicano, S.A. de C.V.
(Femsa) (10) 9.50 7/22/1997 2,017,500 1.5
1,000,000 Grupo Financiero Bancomer, S.A. de
C.V. (2) 8.00 7/07/1998 960,000 0.7
2,000,000 ++Grupo Simec, S.A. de C.V., guaranteed
by Grupo Sidek, S.A. (5) 8.875 12/15/1998 1,885,000 1.4
3,500,000 Grupo Situr, S.A. de C.V., guaranteed
by Grupo Sidek, S.A. (6) 8.75 9/14/1998 3,298,750 2.5
Brady Bonds 14,000,000 United Mexican States Par 'A' (1) 6.25 12/31/2019 4,427,500 3.4
48,001,000 United Mexican States Par 'B' (1)* 6.25 12/31/2019 15,180,000 11.5
Cetes 10,814,040 Mexican Cetes (1) 12.80+++ 10/20/1994 3,034,384 2.3
Repurchase 5,000,000 Banco de Mexico, purchased on 6/30/94 6.25 7/05/1994 5,004,340 3.8
Agreement
Total Investments in Mexico (Cost--$45,931,235) 41,321,849 31.3
United Corporate 2,000,000 ADT Operations (3) 9.25 8/01/2003 1,865,000 1.4
States Bonds 1,000,000 Chiquita Brands International, Inc.
(10) 9.125 3/01/2004 920,000 0.7
2,000,000 Flagstar Companies, Inc. (13) 11.375 9/15/2003 1,820,000 1.4
1,000,000 Fort Howard Corporation (12) 9.00 2/01/2006 850,000 0.7
1,000,000 ++Fresh Del Monte Produce N.V. (10) 10.00 5/01/2003 910,000 0.7
1,000,000 Gulf Canada Resources, Ltd. (15) 9.25 1/15/2004 920,000 0.7
1,000,000 Reliance Group Holdings, Inc. (2) 9.75 11/15/2003 905,000 0.7
2,000,000 Riverwood International Corporation
(12) 11.25 6/15/2002 2,070,000 1.6
2,000,000 Sequa Corp. (9) 9.375 12/15/2003 1,960,000 1.5
500,000 Trump Plaza Funding Inc. (11) 10.875 6/15/2001 410,000 0.3
1,500,000 WestPoint Stevens, Inc. (14) 9.375 12/15/2005 1,357,500 1.0
Total Investments in the United States (Cost--$15,499,750) 13,987,500 10.7
<PAGE>
Venezuela Bonds 1,000,000 Bariven, S.A. (8) 10.625 3/17/2002 865,000 0.7
750,000 ++Venezolana de Cementos S.A.C.A.
(VENCEMOS) (7) 9.25 11/22/1996 710,625 0.6
Brady Bonds 12,080,000 Republic of Venezuela Par 'A' (1) 6.75 3/31/2020 5,820,000 4.4
16,060,000 Republic of Venezuela Par 'B' (1) 6.75 3/31/2020 7,760,000 5.9
Total Investments in Venezuela (Cost--$18,642,054) 15,155,625 11.6
SHORT-TERM
SECURITIES
United Commercial 640,000 General Electric Capital Corp. 4.30 7/01/1994 640,000 0.4
States Paper**
Total Investments in Short-Term Securities (Cost--$640,000) 640,000 0.4
<CAPTION>
PUT OPTIONS Par Strike Expiration
PURCHASED Value Price Date
<C> <S> <C> <S> <C> <C>
$10,000,000 US Treasury Bonds $100.00 July 1994 79,688 0.0
Total Put Options Purchased (Cost--$72,600) 79,688 0.0
Total Investments (Cost--$160,084,010) 142,211,662 107.9
Liabilities in Excess of Other Assets (10,455,834) (7.9)
------------ ------
Net Assets $131,755,828 100.0%
============ ======
<PAGE>
<FN>
++Restricted securities as to resale. The value of the Fund's investment in
restricted securities was approximately $12,702,000, representing 9.6% of net assets.
+++The interest rate shown represents the yield-to-maturity on this zero
coupon issue.
*Security represents collateral in connection with reverse repurchase agreements (Note 5).
**Commercial Paper is traded on a discount basis; the interest rate shown is the
discount rate paid at the time of purchase by the Fund.
Corresponding industry groups for securities (percent of net assets):
(1) Sovereign Government Obligations--48.7%
(2) Banking--25.8%
(3) Industrial--1.4%
(4) Telecommunications--5.4%
(5) Steel--1.4%
(6) Tourism--2.5%
(7) Cement--0.6%
(8) Oil--1.4%
(9) Capital Goods--1.5%
(10) Food & Beverage--2.9%
(11) Hotels & Casinos--0.3%
(12) Paper--3.0%
(13) Restaurants--1.4%
(14) Textiles--1.0%
(15) Energy--1.4%
(16) Conglomerate-Energy--1.4%
(17) Loan Agreement--1.2%
(18) Building & Construction--2.4%
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of June 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$160,011,410)(Note 1a) $ 142,131,974
Put options purchased at value (cost--$72,600)(Notes 1a & 1c) 79,688
Cash 364
Receivables:
Securities sold $ 11,779,625
Interest 2,720,830
Beneficial interest sold 386,520 14,886,975
-------------
Deferred organization expenses (Note 1f) 97,151
Prepaid registration fees and other assets (Note 1f) 27,695
-------------
Total assets 157,223,847
-------------
<PAGE>
Liabilities: Payables:
Reverse repurchase agreements (Note 5) 15,192,000
Securities purchased 8,863,368
Dividends to shareholders (Note 1g) 420,146
Interest expense (Note 5) 270,715
Beneficial interest redeemed 249,416
Investment adviser (Note 2) 115,040
Distributor (Note 2) 75,407
Options purchased 72,600 25,258,692
-------------
Accrued expenses and other liabilities 209,327
-------------
Total liabilities 25,468,019
-------------
Net Assets: Net assets $ 131,755,828
=============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 217,642
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 1,278,434
Paid-in capital in excess of par 148,754,907
Accumulated realized capital losses--net (621,660)
Unrealized depreciation on investments and foreign currency transactions
--net (17,873,495)
-------------
Net assets $ 131,755,828
=============
Net Asset Value: Class A--Based on net assets of $19,166,303 and 2,176,424 shares
outstanding $ 8.81
=============
Class B--Based on net assets of $112,589,525 and 12,784,343 shares
outstanding $ 8.81
=============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended June 30, 1994
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 6,165,960
Income -------------
(Notes 1d & 1e):
Expenses: Investment advisory fees (Note 2) 407,745
Interest expense (Note 5) 403,204
Distribution and account maintenance fees--Class B (Note 2) 399,687
Custodian fees 71,379
Transfer agent fees--Class B (Note 2) 65,490
Printing and shareholder reports 61,788
Registration fees (Note 1f) 52,784
Accounting services (Note 2) 45,792
Professional fees 33,091
Account maintenance fees--Class A (Note 2) 21,894
Directors' fees and expenses 12,848
Amortization of organization expenses (Note 1f) 10,615
Transfer agent fees--Class A (Note 2) 10,172
Pricing fees 769
Other 1,318
-------------
Total expenses before reimbursement 1,598,576
Reimbursement of expenses (Note 2) (277,033)
-------------
Total expenses after reimbursement 1,321,543
-------------
Investment income--net 4,844,417
-------------
Realized & Realized loss on investments--net (2,263,951)
Unrealized Gain Change in unrealized appreciation/depreciation on:
(Loss) on Investments--net (24,160,531)
Investments & Foreign currency transactions--net (1,163) (24,161,694)
Foreign ------------- -------------
Currency Net realized and unrealized loss on investments and foreign currency
Transactions transactions (26,425,645)
- --Net -------------
(Notes 1b, 1d Net Decrease in Net Assets Resulting from Operations $ (21,581,228)
& 3): =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the
Period
For the Six Aug. 27,
Months Ended 1993++ to
Increase (Decrease) in Net Assets: June 30, 1994 Dec. 31, 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 4,844,417 $ 2,249,938
Realized gain (loss) on investments and foreign currency transactions
--net (2,263,951) 2,023,899
Unrealized appreciation/depreciation on investments and foreign currency
transactions--net (24,161,694) 6,288,199
------------- -------------
Net increase (decrease) in net assets resulting from operations (21,581,228) 10,562,036
------------- -------------
Dividends & Investment income--net:
Distributions to Class A (722,522) (390,108)
Shareholders Class B (4,121,895) (1,859,830)
(Note 1g): Realized gain on investments--net:
Class A -- (50,931)
Class B -- (330,677)
------------- -------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (4,844,417) (2,631,546)
------------- -------------
Capital Share Net increase in net assets derived from capital share transactions 44,257,301 105,893,682
Transactions ------------- -------------
(Note 4):
Net Assets: Total increase in net assets 17,831,656 113,824,172
Beginning of period 113,924,172 100,000
------------- -------------
End of period $ 131,755,828 $ 113,924,172
============= =============
<FN>
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Six
Months Ended
June 30, 1994
<S> <S> <C>
Cash Net decrease in net assets resulting from operations $ (21,581,228)
Provided by Adjustments to reconcile net decrease in net assets resulting from operations to
Operating net cash provided by operating activities:
Activities: Decrease in receivables 41,683
Increase in other liabilities 318,755
Realized and unrealized gain on investments and foreign currency transactions--net 26,425,645
Amortization of premium and discount 339,585
-------------
Net cash provided by operating activities 5,544,440
-------------
<PAGE>
Cash Used for Proceeds from sales of long-term securities 100,115,638
Investing Purchases of long-term securities (144,393,148)
Activities:
Purchases of short-term investments 609,034,000
Proceeds from sales and maturities of short-term investments (604,612,116)
-------------
Net cash used for investing activities (39,855,626)
-------------
Cash Cash receipts from issuance of common stock 60,111,829
Provided by Repayments of borrowings--net (6,354,000)
Financing Cash payments on capital shares redeemed (16,942,084)
Activities: Dividends paid to shareholders (3,265,454)
-------------
Net cash provided by financing activities 33,550,291
-------------
Cash: Net decrease in cash (760,895)
Cash at beginning of period 761,259
-------------
Cash at end of period $ 364
=============
Cash Flow Cash paid for interest $ 403,204
Information: =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
For the For the For the For the
Six Period Six Period
The following per share data and ratios have been derived Months Aug. 27, Months Aug.27,
from information provided in the financial statements. Ended 1993++ to Ended 1993++ to
June 30, Dec. 31, June 30, Dec. 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1994 1993
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.84 $ 10.00 $ 10.84 $ 10.00
Operating --------- --------- --------- ---------
Performance: Investment income--net .36 .26 .34 .24
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net (2.03) .88 (2.03) .88
--------- --------- --------- ---------
Total from investment operations (1.67) 1.14 (1.69) 1.12
--------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.36) (.26) (.34) (.24)
Realized gain on investments--net -- (.04) -- (.04)
--------- --------- --------- ---------
Total dividends and distributions (.36) (.30) (.34) (.28)
--------- --------- --------- ---------
Net asset value, end of period $ 8.81 $ 10.84 $ 8.81 $ 10.84
========= ========= ========= =========
Total Based on net asset value per share (15.35)%+++ 11.49%+++ (15.54%)+++ 11.30%+++
Investment ========= ========= ========= =========
Return:**
Ratios to Expenses, excluding account maintenance/distribution
Average fee and net of reimbursement 1.46%* .35%* 1.46%* .35%*
Net Assets: ========= ========= ========= =========
Expenses, net of reimbursement 1.71%* .60%* 2.21%* 1.10%*
========= ========= ========= =========
Expenses 2.14%* 2.03%* 2.66%* 2.53%*
========= ========= ========= =========
Investment income--net 8.20%* 7.14%* 7.69%* 6.76%*
========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 19,166 $ 15,076 $ 112,590 $ 98,848
Data: ========= ========= ========= =========
Portfolio turnover 81.80% 75.18% 81.80% 75.18%
========= ========= ========= =========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Americas Income Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified, open-
end management investment company. The Fund offers both Class A and
Class B Shares. Class A Shares are sold with a front-end sales
charge. Class B Shares may be subject to a contingent deferred sales
charge. Both classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions,
except that Class A Shares bear the expenses of the ongoing account
maintenance fee with respect to the Class A Shares and Class B
Shares bear the expenses of the ongoing account maintenance and
distribution fees with respect to the Class B Shares, and each class
has exclusive voting rights with respect to matters relating to
their respective account maintenance and distribution plans. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of Securities--Securities traded in the over-the-
counter market are valued at the last available bid price or yield
equivalents obtained from one or more dealers in the over-the-
counter market prior to the time of valuation. Portfolio securities
which are traded on stock exchanges are valued at the last sale
price on the principal market on which such securities are traded,
as of the close of business on the day the securities are being
valued or, lacking any sales, at the last available bid price.
Options written are valued based upon the last asked price in the
case of exchange-traded options or, in the case of options traded in
the over-the-counter market, the average of the last asked price as
obtained from one or more dealers. Options purchased by the Fund are
valued at their last bid price in the case of exchange-traded
options or, in the case of options traded in the over-the-counter
market, the average of the last bid price as obtained from two or
more dealers.
<PAGE>
Other investments, including futures contracts and related options,
are stated at market value or otherwise at the fair value at which
it is expected they may be resold, as determined in good faith by or
under the direction of the Board of Directors of the Fund.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Directors of the Fund.
(b) Foreign Currency Transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or
portfolio positions. Such contracts are not entered on the Fund's
records. However, the effect on operations is recorded from the date
the Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.
(c) Options--When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written. When a security is purchased or sold through an exercise of
an option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction is less than or exceeds the premiums paid or
received).
Written and purchased options are non-income producing investments.
(d) Income Taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is
required. Under the applicable foreign tax law, a withholding tax
may be imposed on interest and capital gains at various rates.
<PAGE>
(e) Security Transactions and Investment Income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
discount) is recognized on the accrual basis. Realized gains and
losses on security transactions are determined on the identified
cost basis.
(f) Deferred Organization Expenses and Prepaid Registration Fees--
Deferred organization expenses are charged to expense over a five-
year period. Prepaid registration fees are charged to expense as the
related shares are issued.
(g) Dividends and Distributions--Dividends from net investment
income are declared daily and paid monthly. Distribution of capital
gains are recorded on the ex-dividend date.
(h) Financial Futures Contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts as
a hedge against adverse changes in interest rates. A futures
contract is an agreement between two parties to buy and sell a
security, respectively, for a set price on a future date. Upon
entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund
as unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the
time it was closed.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc., an indirect wholly-owned
subsidiary of Merrill Lynch & Co. ("ML & Co."). The limited partners
are ML & Co. and Merrill Lynch Investment Management, Inc. ("MLIM"),
which is also an indirect wholly-owned subsidiary of ML & Co. The
Fund has also entered into a Distribution Agreement and a
Distribution Plan with Merrill Lynch Funds Distributor, Inc. ("MLFD"
or "Distributor"), a wholly-owned subsidiary of MLIM.
<PAGE>
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and
certain other services necessary to the operation of the Fund. For
such services, the Fund pays a monthly fee of 0.60%, on an annual
basis, of the average daily value of the Fund's net assets plus the
principal amount of borrowings incurred by the Fund for leverage
purposes. The most restrictive annual expense limitation requires
that the Investment Adviser reimburse the Fund to the extent the
Fund's expenses (excluding interest, taxes, distribution fees,
brokerage fees and commissions, and extraordinary items) exceed 2.5%
of the Fund's first $30 million of average daily net assets, 2.0% of
the next $70 million of average daily net assets, and 1.5% of the
average daily net assets in excess thereof. The Investment Adviser's
obligation to reimburse the Fund is limited to the amount of the
investment advisory fee. No fee payment will be made to the
Investment Adviser during any fiscal year which will cause such
expenses to exceed the most restrictive expense limitation at the
time of such payment. For the six months ended June 30, 1994, MLAM
earned fees of $407,745 of which $184,959 was voluntarily waived. In
addition, MLAM voluntarily reimbursed the Fund $92,074 for
additional expenses.
The Fund has adopted separate Plans of Distribution (the
"Distribution Plans") for Class A and Class B Shares in accordance
with Rule 12b-1 under the Investment Company Act of 1940 pursuant to
which MLFD receives from the Fund at the end of each month (a) an
account maintenance fee, at an annual rate of 0.25% of the average
daily net assets of the Fund's Class A Shares in order to compensate
the Distributor in connection with account maintenance activities,
and (b) an account maintenance fee of 0.25% and a distribution fee
of 0.50% of the average daily net assets of the Fund's Class B
Shares in order to compensate the Distributor and Merrill Lynch for
providing distribution and account maintenance services to the Fund.
As authorized by the Distribution Plans, the Distributor has entered
into an agreement with Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), which provides for the compensation of MLPF&S in
connection with account maintenance activities for Class A Shares
and for providing distribution-related services to the Fund for
Class B Shares. For the six months ended June 30, 1994, MLFD earned
$21,894 and $399,687 for Class A and Class B Shares, respectively,
under the Distribution Plans, all of which was paid to MLPF&S
pursuant to the agreement.
For the six months ended June 30, 1994, MLFD earned underwriting
discounts of $5,659 and MLPF&S earned dealer concessions of $52,933
on sales of Class A Shares. MLPF&S also received contingent deferred
sales charges of $109,316 relating to Class B Share transactions.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
During the period May 25, 1994 to June 30, 1994, the Fund paid
Merrill Lynch Security Pricing Service, an affiliate of MLPF&S, $769
for security price quotations to compute the net asset value of the
Fund.
Accounting services are provided to the Fund by MLAM at cost.
<PAGE>
Certain officers and/or directors of the Fund are officers and/or
directors of MLIM, MLPF&S, MLFD, FDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for six months ended June 30, 1994 were $143,874,415 and
$109,020,263, respectively.
Realized and unrealized gains (losses) as of June 30, 1994 were as
follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $(2,353,738) $(17,879,436)
Options purchased 89,787 7,088
Foreign currency transactions -- (1,147)
----------- ------------
Total $(2,263,951) $(17,873,495)
=========== ============
As of June 30, 1994, net unrealized depreciation for Federal income
tax purposes aggregated $17,872,348, of which $7,088 related to
appreciated securities and $17,879,436 related to depreciated
securities. At June 30, 1994, the aggregate cost of investments,
including options purchased, for Federal income tax purposes was
$160,084,010.
4. Beneficial Interest Transactions:
Net increase in net assets derived from beneficial interest
transactions was $44,257,301 and $105,893,682 for the six months
ended June 30, 1994 and the period ended December 31, 1993,
respectively.
Transactions in shares of beneficial interest were as follows:
Class A Shares for the Six Months Dollar
Ended June 30, 1994 Shares Amount
Shares sold 1,128,233 $ 11,228,726
Shares issued to shareholders in
reinvestment of dividends to
shareholders 33,092 313,912
----------- ------------
Total issued 1,161,325 11,542,638
Shares redeemed (376,044) (3,745,657)
----------- ------------
Net increase 785,281 $ 7,796,981
=========== ============
<PAGE>
Class A Shares for the Period Dollar
Aug. 27, 1993++ to Dec. 31, 1993 Shares Amount
Shares sold 1,903,377 $ 19,440,340
Shares issued to shareholders in
reinvestment of dividends &
distributions to shareholders 13,895 147,557
----------- ------------
Total issued 1,917,272 19,587,897
Shares redeemed (531,129) (5,477,202)
----------- ------------
Net increase 1,386,143 $ 14,110,695
=========== ============
[FN]
++Prior to August 27, 1993 (Commencement of Operations), the Fund
issued 5,000 shares to MLAM for $50,000.
Class B Shares for the Six Months Dollar
Ended June 30, 1994 Shares Amount
Shares sold 4,887,952 $ 48,174,736
Shares issued to shareholders in
reinvestment of dividends to
shareholders 172,676 1,644,189
----------- ------------
Total issued 5,060,628 49,818,925
Shares redeemed (1,397,190) (13,358,605)
----------- ------------
Net increase 3,663,438 $ 36,460,320
=========== ============
Class B Shares for the Period Dollar
Aug. 27, 1993++ to Dec. 31, 1993 Shares Amount
Shares sold 9,729,435 $ 98,081,463
Shares issued to shareholders in
reinvestment of dividends &
distributions to shareholders 86,577 922,566
----------- ------------
Total issued 9,816,012 99,004,029
Shares redeemed (700,106) (7,221,042)
----------- ------------
Net increase 9,115,906 $ 91,782,987
=========== ============
<PAGE>
[FN]
++Prior to August 27, 1993 (Commencement of Operations), the Fund
issued 5,000 shares to MLAM for $50,000.
5. Reverse Repurchase Agreements:
Under a reverse repurchase agreement, the Fund sells securities and
agrees to repurchase them at a mutually agreed upon date and price.
At the time the Fund enters into a reverse repurchase agreement, it
may establish a segregated account with the custodian containing
cash, cash equivalents or liquid high grade debt securities having a
value at least equal to the repurchase price.
As of June 30, 1994, the Fund had entered into reverse repurchase
agreements in the amount of $15,192,000. For the six months ended
June 30, 1994, the maximum amount entered into was $15,192,000, the
average amount outstanding was $14,179,200, and the daily weighted
average interest rate was 4.75%.
