MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Annual Report
December 31, 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
Edward D. Zinbarg, 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 Funds Operations
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
DEAR SHAREHOLDER
Mexican Investment Environment
On December 20, 1994, Mexico abruptly altered its exchange rate
policy by allowing the peso to devalue by 15% and surprised the
financial community again on December 21 by free-floating the peso.
The consequence of these actions was confusion, panic and a dramatic
run on the peso, which resulted in a 55% depreciation in the value
of the peso by year-end. Foreign investors in Mexico were surprised
by the devaluation coming so soon after the reaffirmation of the
PACTO currency bands in November, which was publicly supported by
the new president of Mexico. We believe that the decision was forced
by speculative pressure on the currency band in response to the
escalating Zapatista movement in Chiapas as well as other political
developments. In addition, it appears that the Mexican leadership
believed that both uncertainties concerning capital outflows
(impacted by rising interest rates in the United States) and
political developments would continue to grow. The peso debacle has
resulted in a critical evaluation of Mexico, which has been the
benchmark credit among emerging nations.
<PAGE>
The Mexican government has unveiled its new economic program to
combat this financial crisis. The first step is a series of credit
facilities which Mexico hopes to finalize in the near future from a
consortium of lenders including the United States, Canada, The Bank
for International Settlements, International Monetary Fund, The
World Bank and a group of commercial banks led by Citibank and J.P.
Morgan. Second, the Mexican government has stated it will tighten
fiscal and monetary policy. Development bank spending will be
severely cut back, from 4.4% of gross domestic product to 2.4% in
1995, and a fiscal budget surplus of 0.5% is forecast. Additionally,
a new PACTO was signed which intends to control labor costs and
prices by restricting wage and price increases. Finally, a more
aggressive privatization program is on schedule for 1995--1997,
which includes increased foreign ownership of banks and intends to
raise between $12 billion--$14 billion. The idea is to get through
this crisis with the new credit lines and greatly reduce the current
account deficit to much more manageable levels while controlling
inflation. The plan looks encouraging on paper but much will depend
on the execution of this plan.
As for the impact of these developments on our market, the first and
most important factor in the short term will be redemptions in the
mutual fund sector. If redemptions exceed the expectations of fund
managers, mutual funds will be forced into additional liquidations
which could accelerate price action and eventually lead to further
redemptions. Second, distress in the banking system may lead to bank
failures or defaults (or both), which would precipitate a credit
crisis. A credit crisis could also be precipitated by Eurobond
defaults in the Mexican private sector. In the event of a credit
crisis, the market would be faced with an inordinate supply of
Eurobonds which would hit dealer inventory and force dealers to
short Brady bonds as a hedge. Some of this is already occurring and
could escalate if the market was faced with a credit crisis. In the
long run, investors will have to evaluate Mexico for its resilience
to bounce back from such setbacks and continue on its path to
economic growth.
Our view on Mexico is one of guarded optimism. We believe 1995 will
be very difficult and the government's ambitious economic targets
will be hard to meet. The government is also predicting mild
economic growth, which is optimistic, in our view. We believe the
consequences of the devaluation will cause a slowdown in the economy
in 1995 with the result being zero to negative economic growth. We
believe the first half of 1995 will be characterized by higher
inflation, higher interest rates and volatility in the peso.
The first quarter of 1995 will be crucial as the Mexican government
must work to rebuild a level of confidence which will restore order
to the markets. The government has made important steps in the right
direction and we believe it will ultimately succeed in stabilizing
the situation. However, it is critical for the Mexican government to
continue to expand on its recently announced rescue and return a
level of stability to the markets.
<PAGE>
We believe the crisis in Mexico is one of confidence, not one of
solvency. The new economic plan is workable but will require more
finesse on the part of the Mexican administration than demonstrated
recently. It will have to keep the peso in check, support the
banking system, enforce the PACTO and restore confidence quickly.
Mexico is a well reformed economy which is capable of managing this
crisis.
Argentine Investment Environment
It appears that the investment outlook for Argentina is that it is
closely linked to the situation in Mexico, and the country's
financial markets will be hostage to the crisis in Mexico. Although
Argentina has a higher level of foreign exchange reserves than
Mexico and has a much smaller pool of "hot money" to contend with,
it is facing a confidence crisis very similar to Mexico. There is
concern over the budget deficit, the ability of the country to
finance its current account deficit, the liquidity crisis among the
smaller wholesale banks, high domestic interest rates and the
convertibility law which pegs the Argentine peso at parity with the
US dollar.
Argentina will have to put together a comprehensive plan to deal
with the concerns of the marketplace and restore confidence. We
believe that such a plan is in the works and that the current
administration, which is well regarded by the investment community,
is capable of dealing with the situation. Like Mexico, Argentina is
a fundamentally sound and reformed economy.
Brazilian Investment Environment
Our view on Brazil is positive. While Brazil has yet to implement
the economic reforms that are in place in Argentina and Mexico, its
new administration appears firmly determined to carry them to
completion. The Real plan is working successfully to curb inflation,
as indicated by December's lower-than-expected inflation data.
Compared to its peers, Brazil has more financial and natural
resources to rely on during the current crisis of confidence in
emerging markets. Brazil has $42 billion--$43 billion in foreign
exchange reserves, a number of national assets that can be
privatized, and an administration with a mandate for change.
Venezuelan Investment Outlook
Our view on Venezuela is neutral and unchanged from our view of
three months ago. Investors are still awaiting the implementation of
the economic stabilization plan outlined in mid-1994. In the
meantime, Venezuela's ability to service external debt is
unimpaired. The country has a unique status as an oil-rich country,
since it produces the third largest amount of oil in the world and
is one of the most important suppliers of oil to the United States.
Fiscal Year in Review
The momentous events that occurred in December overshadowed Merrill
Lynch Americas Income Fund, Inc.'s entire fiscal year. Therefore,
the most significant strategies affecting the Fund's total returns
for the fiscal year were those that were in place just prior to and
immediately following the Mexican crisis.
<PAGE>
Before December 20, 1994, we had increased the Fund's allocation to
Brazil to approximately 25%, the maximum permitted by the
prospectus. At the same time, we had significantly reduced exposure
to Argentina and slightly reduced investments in Mexico. Most of our
Mexican investments were denominated in US dollars, since at the
time we viewed the risk/reward tradeoff for US dollar-denominated
Mexican debt to be more attractive than peso-denominated issues. In
addition, we were overweighted in Brady bonds. These securities were
more attractive to us than Eurobonds, despite their longer
maturities, because they are more liquid. The US high-yield debt
allocation was relatively unchanged from the 8.4% of net assets at
September month-end. Immediately prior to December 20, 13% of the
portfolio was leveraged.
These strategies largely served the Fund well during the ensuing
Mexican crisis. However, there was no way for us to avoid incurring
negative total returns for the fiscal year. Once the initial peso
devaluation took place, we recognized that increasing the
portfolio's short-term investments would be of primary importance.
As a result, we eliminated leverage, sold off our US high-yield debt
position and sharply reduced holdings in longer-term issues to raise
cash reserves to 27.0% of net assets by the end of December. These
actions helped to limit losses to some degree as the Mexican
government allowed the peso to free float and prices for emerging
markets debt deteriorated still further.
In the weeks ahead, we will continue to monitor developments in
Mexico and the other markets in which the Fund invests as we seek to
respond to often rapidly changing conditions and extreme volatility.
In Conclusion
We thank you for your investment in Merrill Lynch Americas Income
Fund, Inc., and we look forward to updating our outlook and strategy
with you in our next quarterly report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and Portfolio Manager
<PAGE>
February 13, 1995
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
*Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors, as
detailed in the Fund's prospectus. If you were a Class A shareholder
prior to October 21, 1994, your Class A Shares were redesignated to
Class D Shares on October 21, 1994, which, in the case of certain
eligible investors, were simultaneously exchanged for Class A
Shares.
*Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.50% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 10 years.
*Class C Shares are subject to a distribution fee of 0.55% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
*Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class B and Class D Shares are
presented in the "Total Return Based on a $10,000 Investment",
"Recent Performance Results", "Performance Summary" and "Average
Annual Total Return" tables on pages 5, 6 and 7. Data for Class A
and Class C Shares are presented in the "Recent Performance Results"
and "Aggregate Total Return" tables on pages 5 and 7.
The "Recent Performance Results" table on page 7 shows investment
results before the deduction of any sales charges for Class B and
Class D Shares for the 12-month and 3-month periods ended December
31, 1994 and for Class A and Class C Shares for the period since
inception through December 31, 1994. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
<PAGE>
None of the past results shown should 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. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
Average Annual
Total Return
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -15.08% -18.19%
Inception (8/27/93) through 12/31/94 - 4.11 - 6.01
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/94 -14.65% -18.06%
Inception (8/27/93) through 12/31/94 - 3.62 - 6.50
[FN]
*Maximum sales charge is 4%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
<PAGE>
Inception (10/21/94) through 12/31/94 -4.45% -8.27%
[FN]
*Maximum sales charge is 4%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 12/31/94 -5.06% -5.99%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after one year.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (concluded)
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's
Class B and Class D Shares compared to growth of an investment
in the JP Morgan Latin Brady Bond Index. Beginning and ending
values are:
8/27/93** 12/94
ML Americas Income Fund, Inc.--
Class B Shares++ $10,000 $9,200
ML Americas Income Fund, Inc.--
Class D Shares++ $ 9,600 $9,135
JP Morgan Latin Brady
Bond Index++++ $10,000 $7,160
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Americas Income Fund, Inc. invests primarily in debt
securities denominated in a currency of a country
located in the Western Hemisphere (i.e., North and
South America and the surrounding waters).
++++This unmanaged Index is comprised of dollar-denominated
restructured sovereign bonds, the securities created
through the restructuring of commercial bank debt. It
includes a large percentage of Brady Bonds.
Past performance is not predictive of future performance.
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
8/27/93--12/31/93 $10.00 $10.84 -- $0.281 +11.30%
1994 10.84 8.48 -- 0.754 -15.08
------
Total $1.035
Cumulative total return as of 12/31/94: -5.49%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
8/27/93--12/31/93 $10.00 $10.84 -- $0.300 +11.49%
1994 10.84 8.48 -- 0.802 -14.65
------
Total $1.102
Cumulative total return as of 12/31/94: -4.84%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charges; results would be lower if sales charge was
included.
***As a result of the implementation of the Merrill Lynch
Select Pricing SM System, Class A Shares of the Fund outstanding
prior to October 21, 1994 have been redesignated to Class D Shares.
</TABLE>
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
12/31/94 9/30/94++ 12/31/93 % Change % Change++
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $8.51 $9.08 -- -- -6.28%
ML Americas Income Fund Class B Shares* 8.48 9.18 $10.84 -21.77% -7.63
ML Americas Income Fund Class C Shares* 8.47 9.08 -- -- -6.72
ML Americas Income Fund Class D Shares* 8.48 9.18 10.84 -21.77 -7.63
ML Americas Income Fund Class A Shares--Total Return* -- -4.45(1)
ML Americas Income Fund Class B Shares--Total Return* -15.08(2) -5.50(3)
ML Americas Income Fund Class C Shares--Total Return* -- -5.06(4)
ML Americas Income Fund Class D Shares--Total Return* -14.65(5) -5.36(6)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 11.82%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 11.43%
ML Americas Income Fund Class C Shares--Standardized 30-day Yield 11.30%
ML Americas Income Fund Class D Shares--Standardized 30-day Yield 11.50%
<FN>
*Investment results shown for the 3-month and 12-month periods are
before the deduction of any sales charges.
++Investment results shown for Class A and Class C Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.168 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.754 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.219 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.152 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.802 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.232 per share ordinary
income dividends.
</TABLE>
<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 Galica y Buenos
<PAGE> Aires S.A.--Yankee (2) 9.00 % 11/01/2003 $ 4,320,000 3.7%
7,000,000 Banco Rio de la Plata
S.A.--Yankee (2) 8.75 12/15/2003 5,005,000 4.3
2,000,000 Republic of Argentina Floating
Rate Bond (1) 6.50 3/31/2005 1,275,000 1.1
4,000,000 Republic of Argentina--
Global (1) 8.375 12/20/2003 2,780,000 2.4
2,000,000 Sociedad Commercial del
Plata (4) 8.75 12/14/1998 1,610,000 1.4
Total Investments in Argentina
(Cost--$20,234,710) 14,990,000 12.9
Brazil Bonds 4,000,000 Banco de Estado de Parana (2) 10.00 2/27/1996 3,870,000 3.3
1,500,000 Banco Real S.A. (2) 10.00 5/27/1995 1,500,000 1.3
1,000,000 +++Celulose Nipo-Brasileira
S.A. (CENIBRA) (15) 9.375 12/21/2003 903,470 0.8
1,000,000 +++Compania Brazileira de Petroleo
Ipiranga (8) 8.625 2/25/2002 910,000 0.8
1,000,000 Klabine Fabricadora Papel (12) 10.00 12/20/2001 885,000 0.8
3,000,000 Uniao de Bancos Brasileiros S.A.
(UNIBANCO) (2) 8.50 7/29/1996 2,880,000 2.5
850,000 Usinas Siderurgicas de Minas
Gerais--Usiminas S.A. (2) 10.00 1/15/1996 813,875 0.7
</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 Brady $ 2,500,000 Brazil Exit Bonds (1) 6.687% 4/15/2006 $ 1,681,250 1.4%
(concluded) Bonds 5,000,000 Brazil Exit Bonds (1) 6.00 9/15/2013 2,450,000 2.1
17,000,000 Republic of Brazil Floating Rate
Bond (1) DCB* 6.75 4/15/2012 10,115,000 8.6
10,200,000 Republic of Brazil C Bonds
(1) (a)*++ 8.00 4/15/2014 4,845,000 4.1
2,450,000 Republic of Brazil IDU Bond (1) 6.062 1/01/2001 2,045,750 1.7
9,500,000 Republic of Brazil Floating Rate
Bond (1) New Money* 6.75 4/15/2009 5,985,000 5.1
Total Investments in Brazil
(Cost--$39,986,245) 38,884,345 33.2
Colombia Bonds 2,000,000 Banco de Colombia (2) 7.50 10/21/1998 1,805,000 1.5
Total Investments in Colombia
(Cost--$1,952,500) 1,805,000 1.5
<PAGE>
Ecuador Bonds 3,000,000 Republic of Ecuador (1) 10.00 12/15/2024 1,620,000 1.4
Loan 3,000,000 Banco Central de Equador
Agreement Consolidated Agreement (7) 10.00 3/09/2024 1,380,000 1.2
Total Investments
in Ecuador (Cost--$3,402,743) 3,000,000 2.6
Mexico Bonds 1,500,000 Banamex Eurobond, S.A. (1) 9.125 4/06/2000 1,395,000 1.2
1,000,000 +++Banco de Atlantico, S.A. (2) 7.875 11/05/1998 757,500 0.6
2,000,000 +++Grupo Simec, S.A. de C.V.,
guaranteed by Grupo Sidek, S.A. (5) 8.875 12/15/1998 1,612,500 1.4
3,500,000 Grupo Situr, S.A. de C.V.,
guaranteed by Grupo Sidek, S.A. (6) 8.75 9/14/1998 2,660,000 2.3
Brady Bonds 5,000,000 United Mexican States Par
'A' (1)++ 6.25 12/31/2019 2,668,750 2.3
5,501,000 United Mexican States Par
'A' (Rights) (1) -- -- 0 0.0
8,000,000 United Mexican States Par
'B' (1)*++ 6.25 12/31/2019 4,270,000 3.6
7,500,000 United Mexican States Par
'B' (Rights) (1) -- -- 0 0.0
Total Investments in
Mexico (Cost--$16,892,416) 13,363,750 11.4
United States Bonds 2,000,000 ADT Operations (3) 9.25 8/01/2003 1,850,000 1.6
1,000,000 Chiquita Brands International,
Inc. (10) 9.125 3/01/2004 870,000 0.7
2,000,000 Flagstar Companies, Inc. (13) 11.375 9/15/2003 1,660,000 1.4
1,000,000 Fort Howard Corporation (12) 9.00 2/01/2006 860,000 0.7
1,000,000 Fresh Del Monte Produce N.V. (10) 10.00 5/01/2003 680,000 0.6
1,000,000 Gulf Canada Resources, Ltd. (15) 9.25 1/15/2004 920,000 0.8
1,000,000 Reliance Group Holdings, Inc. (2) 9.75 11/15/2003 875,000 0.7
2,000,000 Riverwood International Corporation
(12) 11.25 6/15/2002 2,055,000 1.7
2,000,000 Sequa Corp. (9) 9.375 12/15/2003 1,760,000 1.5
500,000 Trump Plaza Funding, Inc. (11) 10.875 6/15/2001 380,000 0.3
1,500,000 WestPoint Stevens, Inc. (14) 9.375 12/15/2005 1,357,500 1.2
Total Investments in the
United States (Cost--$15,499,750) 13,267,500 11.2
<PAGE>
Venezuela Bonds 1,000,000 Bariven S.A.(8) 10.625 3/17/2002 795,000 0.7
Brady Bonds 5,000,000 Republic of Venezuela Floating
Rate Bond (1) 7.00 3/31/2007 2,300,000 2.0
8,000,000 Republic of Venezuela Par
'A' (1)++ 6.75 3/31/2020 3,660,000 3.1
40,000 Republic of Venezuela Par
'A' (Rights)(1) -- -- 0 0.0
12,000,000 Republic of Venezuela Par
'B' (1) 6.75 3/31/2020 5,490,000 4.7
60,000 Republic of Venezuela Par
'B' (Rights) (1) -- -- 0 0.0
Total Investments in
Venezuela (Cost--$15,917,676) 12,245,000 10.5
SHORT-TERM
SECURITIES
United States Commercial 3,733,000 General Electric Capital Corp. 5.80 1/03/1995 3,733,000 3.2
Paper**
US Govern- 10,000,000 Federal Home Loan Bank 5.84 1/11/1995 9,987,022 8.5
ment & 6,000,000 Federal National Mortgage Association 5.96 1/31/1995 5,972,187 5.1
Agency 12,000,000 Federal National Mortgage Association 5.83 1/18/1995 11,970,850 10.2
Obliga-
tions**
Total Investments in
Short-Term Securities (Cost--$31,663,059) 31,663,059 27.0
Total Investments (Cost--$145,549,099) 129,218,654 110.3
<CAPTION>
OPTIONS Par Strike Expiration
WRITTEN Value Price Date
<S> <C> <S> <C> <S> <C> <C>
Call 2,500,000 Republic of Brazil C Bonds $65.500 Jan. 1995 (2,000) (0.0)
Options 5,000,000 Republic of Brazil L Bonds 66.375 Feb. 1995 (15,500) (0.0)
Written 10,000,000 Republic of Venezuela Par 'A' 51.750 Jan. 1995 (25,000) (0.0)
4,000,000 United Mexican States Par 'A' 66.000 Jan. 1995 (400) (0.0)
Put Options 2,500,000 Republic of Brazil C Bonds 65.500 Jan. 1995 (137,750) (0.1)
Written 4,000,000 United Mexican States Par 'B' 64.000 Jan. 1995 (341,200) (0.2)
Total Options Written
(Premiums Received--$402,000) (521,850) (0.3)
<PAGE>
Total Investments, Net of Options
Written (Cost--$145,147,099) 128,696,804 110.0
Liabilities in Excess of Other Assets (11,497,338) (10.0)
------------ ------
Net Assets $117,199,466 100.0%
============ ======
(a)Represents a paid-in-kind security.
Corresponding industry groups for securities (percent of net
assets):
(1)Sovereign Government Obligations--4.8%
(2)Banking--18.6%
(3)Industrial--1.6%
(4)Conglomerate Energy--1.4%
(5)Steel--1.4%
(6)Tourism--2.3%
(7)Loan Agreement--1.2%
(8)Oil--1.5%
(9)Capital Goods--1.5%
(10)Food & Beverage--1.3%
(11)Hotels & Casinos--0.3%
(12)Paper--3.2%
(13)Restaurants--1.4%
(14)Textiles--1.2%
(15)Energy--1.6%
++Security represents collateral in connection with an open call/put
option written.
*Security represents collateral in connection with reverse
repurchase agreements (Note 5).
**Commercial Paper and certain US Government & Agency Obligations
are traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
+++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately $4,200,000,
representing 3.57% of net assets.
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Banco de Atlantico, S.A. 11/16/93 $ 980,000 $ 757,500
Celulose Nipo--Brasileria S.A.
(CENIBRA) 2/10/94 1,000,000 903,470
Grupo Simec, S.A. de C.V., guaranteed
by Grupo Sidek, S.A. 12/02/93 1,990,880 1,612,500
Compania Brazileira de Petroleo
Ipiranga 2/15/94 999,078 910,000
Total $4,969,958 $4,183,470
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of December 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$145,549,099) (Note 1a) $129,218,654
Cash 382
Foreign cash 151
Receivables:
Securities sold $ 11,839,225
Interest 2,358,753
Beneficial interest sold 303,350 14,501,328
------------
Deferred organization expenses (Note 1f) 76,243
Prepaid registration fees and other assets (Note 1f) 34,844
------------
Total assets 143,831,602
------------
Liabilities: Options written, at value (premiums received--$402,000)
(Notes 1a & 1b) 521,850
Payables:
Reverse repurchase agreements (Note 5) 17,058,000
Securities purchased 6,227,361
Beneficial interest redeemed 1,414,843
Dividends to shareholders (Note 1g) 883,877
Interest expense (Note 5) 152,460
Investment adviser (Note 2) 77,514
Distributor (Note 2) 77,065 25,891,120
------------
Accrued expenses and other liabilities 219,166
------------
Total liabilities 26,632,136
------------
Net Assets: Net assets $117,199,466
============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 2,972
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 1,202,598
Class C Common Stock, $0.10 par value, 100,000,000 shares authorized 890
Class D Common Stock, $0.10 par value, 100,000,000 shares authorized 176,251
Paid-in capital in excess of par 139,319,248
Undistributed investment income--net 1,641,618
Accumulated realized capital losses on investments and foreign
currency transactions--net (Note 6) (8,693,809)
Unrealized depreciation on investments and foreign currency
transactions--net (16,450,302)
<PAGE> ------------
Net assets $117,199,466
============
Net Asset Value: Class A--Based on net assets of $252,912 and 29,717
shares outstanding $ 8.51
============
Class B--Based on net assets of $101,933,390 and 12,025,984
shares outstanding $ 8.48
============
Class C--Based on net assets of $75,423 and 8,904 shares
outstanding $ 8.47
============
Class D--Based on net assets of $14,937,741 and 1,762,508
shares outstanding $ 8.48
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended December 31, 1994
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned $ 13,972,840
Income (Note 1e): ------------
Expenses: Interest expense (Note 5) $ 918,080
Investment advisory fees (Note 2) 876,465
Distribution fees--Class B (Note 2) 846,454
Transfer agent fees--Class B (Note 2) 158,575
Printing and shareholder reports 149,278
Registration fees (Note 1f) 109,261
Accounting services (Note 2) 100,005
Professional fees 96,195
Custodian fees 67,304
Account maintenance fees--Class D (Note 2) 46,087
Trustees' fees and expenses 36,423
Transfer agent fees--Class D (Note 2) 23,196
Amortization of organization expenses (Note 1f) 18,946
Other 1,483
------------
Total expenses before reimbursement 3,447,752
Reimbursement of expenses (Note 2) (277,033)
------------
Total expenses after reimbursement 3,170,719
------------
Investment income--net 10,802,121
------------
<PAGE>
Realized & Realized loss from:
Unrealized Loss on Investments--net (7,579,371)
Investments & Foreign currency transactions--net (1,113,965) (8,693,336)
Foreign Currency ------------
Transactions--Net Change in unrealized appreciation/depreciation on:
(Notes 1b, 1c, Investments--net (22,739,624)
1e & 3): Foreign currency transactions--net (23) (22,739,647)
------------ ------------
Net realized and unrealized loss on
investments and foreign currency transactions (31,432,983)
------------
Net Decrease in Net Assets Resulting from Operations $(20,630,862)
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION> For the
Period
For the Aug. 27,
Year Ended 1993++ to
Increase (Decrease) in Net Assets: Dec. 31, 1994 Dec. 31, 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 10,802,121 $ 2,249,938
Realized gain (loss) on investments and foreign
currency transactions--net (8,693,336) 2,023,899
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net (22,739,647) 6,288,199
------------ ------------
Net increase (decrease) in net assets resulting from
operations (20,630,862) 10,562,036
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (11,403) (390,108)
Shareholders Class B (7,795,228) (1,859,830)
(Note 1g): Class C (1,064) --
Class D (1,352,808) --
Realized gain on investments--net:
Class A (2,044) (50,931)
Class B (1,396,952) (330,677)
Class C (191) --
Class D (242,431) --
------------ ------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (10,802,121) (2,631,546)
------------ ------------
<PAGE>
Capital Share Net increase in net assets derived from capital
Transactions share transactions 34,708,277 105,893,682
(Note 4): ------------ ------------
Net Assets: Total increase in net assets 3,275,294 113,824,172
Beginning of period 113,924,172 100,000
------------ ------------
End of period* $117,199,466 $113,924,172
============ ============
<FN>
*Undistributed net investment income--net $ 1,641,618 --
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Year Ended December 31, 1994
<S> <S> <C>
Cash Provided by Net decrease in net assets resulting from operations $(20,630,862)
Operating Adjustments to reconcile net decrease in net assets
Activities: resulting from operations to net cash provided
by operating activities:
Decrease in receivables 403,760
Increase in other liabilities 174,471
Realized and unrealized loss on investments and
foreign currency transactions--net 31,432,983
Decrease in other assets 13,608
Amortization of premium and discount (514,989)
------------
Net cash provided by operating activities 10,878,971
------------
Cash Used for Proceeds from sales of long-term securities 457,698,833
Investing Purchases of long-term securities (470,139,089)
Activities: Purchases of short-term investments (949,880,582)
Proceeds from sales and maturities of short-term investments 929,059,250
------------
Net cash used for investing activities (33,261,588)
------------
<PAGE>
Cash Provided by Cash receipts from issuance of common stock 95,187,339
Financing Repayments of borrowings--net (4,488,000)
Activities: Cash payments on capital shares redeemed (62,569,620)
Dividends paid to shareholders (6,507,828)
------------
Net cash provided by financing activities 21,621,891
------------
Cash: Net decrease in cash (760,726)
Cash at beginning of year 761,259
------------
Cash at end of year $ 533
============
Cash Flow Cash paid for interest $ 877,112
Information: ============
Non-Cash Capital shares issued and reinvestment of dividends paid to shareholders $ 4,209,700
Financing ============
Activities:
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B Class C Class D
For the For the For the For the
The following per share data and ratios Period For the Period Period For the Period
have been derived from information Oct. 21, Year Aug. 27, Oct. 21, Year Aug. 27,
provided in the financial statements. 1994++ to Ended 1993++ to 1994++ to Ended 1993++ to
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1994 1994 1993
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.08 $ 10.84 $ 10.00 $ 9.08 $ 10.84 $ 10.00
Operating -------- -------- -------- -------- -------- --------
Performance: Investment income--net .17 .75 .24 .15 .80 .26
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (.57) (2.36) .88 (.61) (2.36) .88
-------- -------- -------- -------- -------- --------
Total from investment operations (.40) (1.61) 1.12 (.46) (1.56) 1.14
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.14) (.64) (.24) (.13) (.68) (.26)
Realized gain on investments--net (.03) (.11) (.04) (.02) (.12) (.04)
-------- -------- -------- -------- -------- --------
Total dividends and distributions (.17) (.75) (.28) (.15) (.80) (.30)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 8.51 $ 8.48 $ 10.84 $ 8.47 $ 8.48 $ 10.84
======== ======== ======== ======== ======== ========
<PAGE>
Total Based on net asset value per share (4.45%)+++ (15.08%) 11.30%+++ (5.06%)+++(14.65%) 11.49%+++
Investment ======== ======== ======== ======== ======== ========
Return:**
Ratios to Expenses, excluding distribution
Average fees and net of reimbursement++ 1.22%* 1.04% .27%* 1.44%* 1.03% .25%*
Net Assets: ======== ======== ======== ======== ======== ========
Expenses, net of reimbursement++ 1.22%* 1.79% 1.03%* 2.24%* 1.28% .50%*
======== ======== ======== ======== ======== ========
Expenses++ 1.22%* 2.00% 2.45%* 2.24%* 1.48% 1.93%*
======== ======== ======== ======== ======== ========
Interest expense .69%* .70% .08%* .81%* .69% .10%*
======== ======== ======== ======== ======== ========
Investment income--net 8.63%* 8.14% 6.76%* 8.87%* 8.65% 7.14%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 253 $101,933 $ 98,848 $ 75 $ 14,938 $ 15,076
Data: ======== ======== ======== ======== ======== ========
Portfolio turnover 353.33% 353.33% 75.18% 353.33% 353.33% 75.18%
======== ======== ======== ======== ======== ========
*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 four classes of
shares under the Merrill Lynch Select Pricing SM System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares
of Class B and Class C may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions,
except that Class B, Class C and Class D Shares bear certain
expenses related to the account maintenance of such shares, and
Class B and Class C Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive voting rights
with respect to matters relating to its account maintenance and
distribution expenditures. The following is a summary of significant
accounting policies followed by the Fund.
<PAGE>
(a) Valuation of Securities--Securities traded in the over-the-
counter market are valued at the last available bid price 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 last asked price. Options purchased
by the Fund are valued at their last sale price in the case of
exchange-traded options or, in the case of options traded in the
over-the-counter market, the last bid price.
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 Board of Directors of the Fund.
(b) Derivative Financial Instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Forward Foreign Exchange Contracts--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.
* 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).
<PAGE>
Written and purchased options are non-income producing
investments.
* 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.
(c) 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.
NOTES TO FINANCIAL STATEMENTS (continued)
(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.
(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.
<PAGE>
(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.
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. ("PSI"), an indirect
wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."),
which is the limited partner. 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 Merrill Lynch Group, Inc.
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 year ended December 31, 1994, MLAM
earned fees of $876,465, of which $277,033 was voluntarily waived.
Pursuant to the distribution plans ("the Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
Account Distribution
Maintenance Fee Fee
Class B .25% .50%
Class C .25% .55%
Class D .25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
<PAGE>
For the year ended December 31, 1994, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $ -- $ --
Class D $ 2,329 $ 16,654
MLPF&S received contingent deferred sales charges of $257,524
relating to transactions in Class B Shares of beneficial interest
for the Fund for the year ended December 31, 1994.
Financial Data Services, Inc. (FDS), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, MLIM, MLPF&S, PSI, MLFD, FDS and/or
ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended December 31, 1994 were $466,588,898 and
$466,520,727, respectively.
Realized and unrealized losses as of December 31, 1994 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $(7,952,654) $(16,330,445)
Short-term investments (834) --
Options written 343,376 (119,850)
Options purchased 30,741 --
Foreign currency transactions (1,113,965) (7)
----------- ------------
Total $(8,693,336) $(16,450,302)
=========== ============
Transactions in call options written for the year ended
December 31, 1994 were as follows:
Par Premiums
Call Options Written Value Received
<PAGE>
Outstanding call options written,
beginning of year -- --
Options written $41,572,000 $ 534,476
Options closed (20,072,000) (263,476)
----------- ------------
Outstanding call options written,
end of year $21,500,000 $ 271,000
=========== ============
Transactions in put options written for the year ended
December 31, 1994 were as follows:
Par Premiums
Put Options Written Value Received
Outstanding put options written,
beginning of year -- --
Options written $22,510,000 $ 369,513
Options closed (16,010,000) (238,513)
----------- ------------
Outstanding put options written,
end of year $ 6,500,000 $ 131,000
=========== ============
As of December 31, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $18,605,397, of which $1,205,621
related to appreciated securities and $19,811,018 related
to depreciated securities. At December 31, 1994, the aggregate cost of
investments, including options purchased less premiums received for
options written, for Federal income tax purposes was $147,422,051.
4. Capital Share Transactions:
Net increase in net assets derived from beneficial interest
transactions was $34,708,277 and $105,893,682 for the year ended
December 31, 1994 and the period ended December 31, 1993,
respectively.
Transactions in shares of beneficial interest were as follows:
Class A Shares for the Period Dollar
October 21, 1994++ to Dec. 31, 1994 Shares Amount
Shares sold 398,776 $ 3,605,150
Shares issued to shareholders in
reinvestment of dividends &
distributions 52 444
----------- ------------
Total issued 398,828 3,605,594
Shares redeemed (369,111) (3,244,117)
----------- ------------
Net increase 29,717 $ 361,477
=========== ============
<PAGE>
[FN]
++Commencement of Operations.
Class B Shares for the Year Dollar
Ended December 31, 1994 Shares Amount
Shares sold 7,923,270 $ 75,478,521
Shares issued to shareholders
in reinvestment of dividends &
distributions 386,490 3,561,014
----------- ------------
Total issued 8,309,760 79,039,535
Shares redeemed (5,404,682) (48,873,193)
----------- ------------
Net increase 2,905,078 $ 30,166,342
=========== ============
NOTES TO FINANCIAL STATEMENTS (concluded)
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 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
=========== ============
[FN]
++Prior to August 27, 1993 (commencement of operations),
the Fund issued 5,000 shares to MLAM for $50,000.
Class C Shares for the Period Dollar
October 21, 1994++ to December 31, 1994 Shares Amount
Shares sold 21,072 $ 188,454
Shares issued to shareholders
in reinvestment of dividends &
distributions 13 115
----------- ------------
Total issued 21,085 188,569
Shares redeemed (12,181) (107,206)
----------- ------------
Net increase 8,904 $ 81,363
=========== ============
<PAGE>
[FN]
++Commencement of Operations.
Class D Shares for the Year Dollar
Ended December 31, 1994 Shares Amount
Shares sold 1,554,975 $15,123,677
Shares issued to shareholders
in reinvestment of dividends &
distributions 77,493 648,127
----------- ------------
Total issued 1,632,468 15,771,804
Shares redeemed (1,261,103) (11,672,709)
----------- ------------
Net increase 371,365 $ 4,099,095
=========== ============
Class D 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 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.
As a result of the implementation of the Merrill Lynch Select
Pricing SM System, Class A Shares of the Fund outstanding prior to
October 21, 1994 have been redesignated Class D Shares. There were
1,959,335 shares redesignated amounting to $19,962,223.
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.
<PAGE>
As of December 31, 1994, the Fund had entered into reverse
repurchase agreements in the amount of $17,058,000. For the year
ended December 31, 1994, the maximum amount entered into was
$24,824,125, the average amount outstanding was $17,315,402, and the
daily weighted average interest rate was 5.21%.
6. Capital Loss Carryforward:
At December 31, 1994, the Fund had a net capital loss carryforward
of approximately $3,796,000, all of which expires in 2002. This
amount is available to offset like amounts of any future taxable
gains.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Americas Income Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Americas Income Fund, Inc. as of December 31, 1994, the related
statements of operations for the year then ended, changes in net
assets, and cash flows and the financial highlights for the year
then ended and the period August 27, 1993 (commencement of
operations) to December 31, 1993. These financial statements and the
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December
31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Americas Income Fund, Inc. as of December 31, 1994,
the results of its operations, the changes in its net assets, its
cash flows, and the financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.
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Deloitte & Touche LLP
Princeton, New Jersey
February 15, 1995
</AUDIT-REPORT>
