MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Quarterly Report
September 30, 1996
The Fund has the ability to leverage to seek 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.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch
Americas Income Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
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.
<PAGE>
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 that 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 borrow-ing, 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.
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
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDER
<PAGE>
As we stated in our June 30, 1996 semi-annual report, emerging
markets debt is attractive as an investment for several reasons. One
reason we cited is that the emerging markets--mainly those in the
Latin America region--are experiencing an improving trend in
economic and political fundamentals. In addition, we stressed the
liability management plans that several Brady countries have in
progress or are implementing. In our view, this is a very important
development for emerging Brady bond countries underscoring the
markets' relatively good technical basis. We also cited the
favorable global liquidity environment and the higher yields of
emerging markets debt as continuing to attract investors in search
of yield.
Investment Environment
Mexico
In Mexico, the pace of economic recovery continued to run ahead of
expectations as evidenced by the 7.2% gross domestic product (GDP)
growth reported for the second quarter of 1996. This positive news
was followed by a current account surplus for the first half of the
year. One main achievement in 1996 was the successful extension of
the maturity profile of public sector debt due in 1996-1997. In the
first half of 1996, the fiscal surplus was equal to 1% of GDP. The
Zedillo administration continues to reiterate its commitment to a
balanced fiscal budget as well as support for a tight monetary
policy by Banco de Mexico.
Argentina
In Argentina, Finance Minister Cavallo resigned on July 26, 1996 and
was replaced by Roque Fernandez, an orthodox economist with
excellent credentials, who was previously the central bank
president. Fernandez proposed new fiscal measures to eliminate the
fiscal deficit in 1996-1997. We expect the real impact of these
measures to be felt in 1997. However, congress still needs to
approve these measures. We expect their approval with some
modifications. The approval by the International Monetary Fund's
(IMF) board of directors should follow as well as new economic
targets for fiscal years 1996 and 1997. These new fiscal measures
will not be easy to implement and confirm the commitment of the
government to economic orthodoxy. We expect additional fiscal
expense reduction measures later in 1996 or early 1997, when the
economy is back on track and reporting stronger economic growth. We
also anticipate the implementation of labor reform to address the
high unemployment in Argentina.
Brazil
In Brazil, there was no progress on constitutional reform and none
is expected until after the mayoral elections in October. On the
positive side, the congress is expected to approve legislation to
allow the central bank to use part of its foreign exchange reserves
to repurchase existing external debt.
<PAGE>
While the trade and current accounts are expected to deteriorate in
the second half of 1996, they will show an improvement over fiscal
year 1995. The current account deficit is expected to reach $15
billion this year, down from $17.8 billion in 1995. In addition,
inflation continues to show an improving trend but GDP growth
remains weak. By year-end 1996, inflation is expected to be 13%,
down from 14.5% in 1995; and GDP growth is expected to be 2.5%, down
from 4.1% in 1995. While the 1996 fiscal accounts will show an
improvement over last year, the real problem will be in 1997 when
the public sector salary freeze can no longer be maintained. In our
view, Brazil needs structural reforms and privatizations to address
the fiscal deficit. In the absence of these measures, the
administration has no choice but to maintain a restrictive monetary
policy and an inflexible exchange rate policy, which affects the
domestic economy and the level of exports.
Venezuela
Venezuela continued to perform well, satisfactorily meeting the
targets under the standby facility set by the IMF. The inflation
rate is coming down much faster than expected and the currency, the
bolivar, continued to be relatively stable. Venezuela has now
successfully endured the critical stage of the stabilization plan
without any significant social or political back-lash. With a stable
crude oil market and successful privatization program, the outlook
for Venezuela appears positive.
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
<PAGE>
(Paolo Valle)
Paolo Valle
Vice President and Senior Portfolio Manager
October 23, 1996
PERFORMANCE DATA
About Fund
Performance
Investors are 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 approximately 10 years. (There is no initial
sales charge for automatic share conversions.)
* 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).
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.
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class A Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.08 $ 8.51 -- $0.168 - 4.45%
1995 8.51 9.70 -- 0.944 +27.27
1/1/96--9/30/96 9.70 11.21 -- 0.685 +23.73
------
Total $1.797
Cumulative total return as of 9/30/96: +50.47%**
</TABLE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change***
<S> <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
1995 8.48 9.65 -- 0.875 +26.10
1/1/96--9/30/96 9.65 11.17 -- 0.626 +23.23
------
Total $2.536
Cumulative total return as of 9/30/96: +46.86%***
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change***
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.08 $ 8.47 -- $0.152 - 5.06%
1995 8.47 9.65 -- 0.870 +26.18
1/1/96--9/30/96 9.65 11.17 -- 0.621 +23.16
------
Total $1.643
Cumulative total return as of 9/30/96: +47.55%***
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1995 8.48 9.65 -- 0.919 +26.75
1/1/96--9/30/96 9.65 11.16 -- 0.664 +23.59
------
Total $2.685
Cumulative total return as of 9/30/96: +49.07%**
<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 payable date, and do not
include sales charges; results would be lower if sales charge was
included.
***Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
++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 were redesignated to Class D Shares.
</TABLE>
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
9/30/96 6/30/96 9/30/95 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $11.21 $10.23 $9.07 +23.59% + 9.58%
ML Americas Income Fund Class B Shares* 11.17 10.19 9.02 +23.84 + 9.62
ML Americas Income Fund Class C Shares* 11.17 10.18 9.02 +23.84 + 9.72
ML Americas Income Fund Class D Shares* 11.16 10.18 9.02 +23.73 + 9.63
ML Americas Income Fund Class A Shares--Total Return* +35.88(1) +11.98(2)
ML Americas Income Fund Class B Shares--Total Return* +35.09(3) +11.81(4)
ML Americas Income Fund Class C Shares--Total Return* +35.01(5) +11.90(6)
ML Americas Income Fund Class D Shares--Total Return* +35.68(7) +11.96(8)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 8.59%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 8.18%
ML Americas Income Fund Class C Shares--Standardized 30-day Yield 8.11%
ML Americas Income Fund Class D Shares--Standardized 30-day Yield 8.34%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.962 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.233 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.882 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.212 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.876 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.210 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.933 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.225 per share ordinary
income dividends.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
<PAGE>
Year Ended 9/30/96 +35.88% +30.44%
Inception (10/21/94) through 9/30/96 +23.37 +20.81
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/96 +35.09% +31.09%
Inception (8/27/93) through 9/30/96 +13.23 +12.98
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/96 +35.01% +34.01%
Inception (10/21/94) through 9/30/96 +22.14 +22.14
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/96 +35.68% +30.25%
Inception (8/27/93) through 9/30/96 +13.78 +12.29
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Percent of
COUNTRY Industry Face Amount Bonds Rate Date Value Net Assets
<S> <S> <C> <S> <C> <S> <C> <C>
Argentina Banking US$ 4,000,000 Banco de Galicia y Buenos Aires
S.A.--Yankee 9.00 % 11/01/2003 $ 3,720,000 1.7%
3,000,000 Banco Rio de la Plata S.A.--Yankee 8.75 12/15/2003 2,801,250 1.3
------------ ------
6,521,250 3.0
Utilities 1,000,000 Telecom Argentina Stet--France
Telecom S.A. 12.00 11/15/2002 1,070,000 0.5
Total Bonds in Argentina
(Cost--$7,888,795) 7,591,250 3.5
Brazil Banking 1,000,000 Banco Bozano, Simonsen S.A. 10.375 5/23/2004 1,016,250 0.5
Communications 8,000,000 Comtel Brasieira Ltd. 10.75 9/26/2004 8,180,000 3.8
Industrial 3,000,000 Metalurgica Gerdau S.A. 11.125 5/24/2004 3,056,250 1.4
Paper 1,000,000 Klabine Fabricadora Papel 10.00 12/20/2001 1,002,500 0.5
Utilities-- 4,000,000 Centrais Electricas Brasileiras
Electric S.A.--Eletrobras 10.00 7/06/2004 4,008,000 1.8
Total Bonds in Brazil
(Cost--$17,005,700) 17,263,000 8.0
Mexico Banking 1,500,000 Banamex Eurobond S.A. 9.125 4/06/2000 1,498,125 0.7
Broadcasting 5,000,000 Grupo Televisa S.A. 11.375 5/15/2003 5,231,250 2.4
& Publishing 3,000,000 Grupo Televisa S.A. (b) 11.976 5/15/2008 1,856,250 0.9
------------ ------
7,087,500 3.3
Industrials 5,000,000 Cemex S.A. 12.75 7/15/2006 5,412,500 2.5
Paper 7,000,000 Grupo Industrial Durango, S.A.
de C.V. 12.625 8/01/2003 7,446,250 3.5
Total Bonds in Mexico
(Cost--$21,005,714) 21,444,375 10.0
<PAGE>
Venezuela Oil 1,000,000 Bariven S.A. 10.625 3/17/2002 1,058,750 0.5
Total Bonds in Venezuela
(Cost--$1,075,000) 1,058,750 0.5
Total Investments in Bonds
(Cost--$46,975,209) 47,357,375 22.0
Brady Bonds*
Argentina Sovereign 39,988,500 Republic of Argentina, Floating
Government Rate Bonds 6.625 3/31/2005 33,490,369 15.6
Obligations 6,000,000 Republic of Argentina, Par 'L' Bonds 5.25 3/31/2023 3,502,500 1.6
Total Brady Bonds in Argentina
(Cost--$34,631,824) 36,992,869 17.2
Brazil Sovereign 28,684,454 Republic of Brazil, Floating Rate C
Government Bonds 8.00 4/15/2014 20,222,540 9.4
Obligations
Total Brady Bonds in Brazil
(Cost--$18,880,035) 20,222,540 9.4
Ecuador Sovereign 20,936,322 Republic of Ecuador--PDI 6.50 2/27/2015 10,651,354 5.0
Government
Obligations
Total Brady Bonds in Ecuador
(Cost--$9,344,529) 10,651,354 5.0
Mexico Sovereign 476,000 United Mexican States, Global Bonds 11.50 5/15/2026 472,430 0.2
Government 10,000,000 United Mexican States, Series A 6.25 12/31/2019 6,900,000 3.2
Obligations 10,001,000 United Mexican States, Value
Recovery Rights (a) 0.00 -- 10 0.0
Total Brady Bonds in Mexico
(Cost--$6,981,008) 7,372,440 3.4
Panama Sovereign 10,000,000 Republic of Panama--PDI 6.75 7/17/2016 6,875,000 3.2
Government
Obligations
Total Brady Bonds in Panama
(Cost--$6,787,500) 6,875,000 3.2
Venezuela Sovereign 13,250,000 Republic of Venezuela, DCB 6.625 12/18/2007 10,964,375 5.1
Government 36,500,000 Republic of Venezuela, Floating
Obligations Rate A Bonds 6.625 3/31/2007 30,660,000 14.3
5,500,000 Republic of Venezuela, Floating
Rate B Bonds 6.50 3/31/2007 4,620,000 2.1
Total Brady Bonds in Venezuela
(Cost--$41,496,392) 46,244,375 21.5
Total Investments in Brady Bonds
(Cost--$118,121,288) 128,358,578 59.7
<PAGE>
Short-Term Securities
Commercial** 11,065,000 General Electric Capital Corp. 5.80 10/01/1996 11,065,000 5.1
Paper
Total Investments in Commercial
Paper (Cost--$11,065,000) 11,065,000 5.1
US Government 7,000,000 Federal Home Loan Mortgage Corp. 5.65 10/01/1996 7,000,000 3.3
& Agency 26,000,000 Federal Home Loan Mortgage Corp. 5.35 10/03/1996 25,992,272 12.1
Obligations**
Total US Government & Agency
Obligations (Cost--$32,992,272) 32,992,272 15.4
Total Short-Term Investments
(Cost--$44,057,272) 44,057,272 20.5
Total Investments (Cost--$209,153,769) 219,773,225 102.2
<CAPTION>
OPTIONS Nominal Value Strike Expiration
WRITTEN Covered by Options Issue Price Date
Call Options 6,000,000 Republic of Argentina, Par 'L' Bonds $56.50 Oct. 1996 (132,000) 0.0
Written
Put Options 6,000,000 Republic of Argentina, Par 'L' Bonds 52.50 Oct. 1996 (1,800) 0.0
Written
Total Options Written
(Premiums Received--$105,000) (133,800) 0.0
Total Investments, Net of Options Written (Cost--$209,048,769) 219,639,425 102.2
Other Assets Less Liabilities (4,659,578) (2.2)
------------ ------
Net Assets $214,979,847 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $27,245,782
and 2,429,952 shares outstanding $ 11.21
============
Class B--Based on net assets of $159,036,896 and
14,241,800 shares outstanding $ 11.17
============
Class C--Based on net assets of $10,575,778 and
947,155 shares outstanding $ 11.17
============
Class D--Based on net assets of $18,121,391 and
1,623,503 shares outstanding $ 11.16
============
<PAGE>
<FN>
(a)The rights may be exercised until 12/31/2019.
(b)Represents a step bond; the interest rate shown is the effective
yield at the time of purchase by the Fund.
*Brady Bonds are securities which have been issued to refinance
commercial bank loans and other debt. They are created when
creditors tender eligible debt in exchange for new bonds.
**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.
</TABLE>
