MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Quarterly Report
September 30, 1997
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 fluc-tuations, 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 diversi-fication and not as a complete
investment program. Please refer to the prospectus for details.
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 #16801 -- 9/97
[RECYCLE LOGO}
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.
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.
Merrill Lynch Americas Income Fund, Inc., September 30, 1997
DEAR SHAREHOLDER
During the three-month period ended September 30, 1997, the investment
environment in emerging markets was driven by several factors. First,
the abundance of liquidity caused by the accommodative monetary policy
in Japan and weak demand in Germany continued to provide bullish
momentum to Latin American markets. The recent hike in interest rates
by the Bundesbank was the first indication that the liquidity cycle
has matured. With European interest rates at record low levels and
concerns of further tightening in both Germany and the United States,
further convergence in global interest rates seems unlikely. With many
European and American financial markets trading at record levels, a
reversal in global liquidity will be very negative.
Second, the US economy continued to be very strong. Inflation has been
benign despite above-trend economic growth, tight labor markets and
record consumer confidence levels. The US economy has been operating
at full employment for most of this year. We believe that the
probability of encountering inflation in such an environment is high.
Producer price inflation, which in the past two quarters had surprised
consensus forecasts on the downside, surprised economists on the
upside in August. Federal Reserve Board (FRB) Chairman Greenspan and
other FRB governors recently began to comment that US economic growth
is proceeding at an unsustainable pace. Forecasts for both third and
fourth quarter of 1997 US economic growth are being revised upward by
most economists. Sentiment is gradually shifting from the view of
lower inflation and interest rates to one that recognizes that the FRB
may have to be preemptive in the face of further strong economic
growth.
Third, the Asian currency crisis, which started with an attack on the
Thai baht, has spread to Indonesia, the Philippines and Malaysia. This
crisis has resulted in substantial loss of market capitalization and
has generated volatility in peripheral markets such as Taiwan and
South Korea. Other than brief periods of volatility in Brazil and
South Africa, contagion of the Asian currency crisis has been muted so
far.
We believe that the Asian currency crisis could set the stage for an
upward revision in risk premiums for emerging market investments. We
believe that the current complacency of the market in recognizing the
broader impact of the Asian currency crisis is not warranted. Given
the global nature of today's financial markets, any perceived
decoupling from the Asian currency crisis is more a result of abundant
global liquidity rather than distinctly different fundamentals. We are
of the opinion that the liquidity cycle is mature and could reverse
with the FRB tightening monetary policy, which we believe is a
distinct possibility in the near future.
Finally, emerging fixed-income markets are at record levels but remain
dependent on global liquidity and a benign US interest rate
environment. Major countries in Latin America are taking advantage of
the abundance of liquidity by extending the maturity profile of their
external debt.
Following the close of the September quarter, the Asian currency
crisis continued deepening and spreading to other countries. The
crisis deepened to such an extent that both Thailand and Indonesia
requested, and finally received, support of the International Monetary
Fund and the Group of Seven Industrialized Nations. The currency board
in Hong Kong came under strong attack, forcing leading banks to halt
early withdrawals of time deposits and allowing local interest rates
to increase significantly. The resulting crash of the Hong Kong market
spread to European, US and non-Asian emerging markets.
With a currency reportedly overvalued by approximately 25%--30% by
some financial analysts' estimates and with little obvious progress in
their fiscal and structural reform, Brazil was the most affected by
the spreading of the crisis. Brazilian equities and Brady bonds led
the market down. The recent market developments have highlighted the
vulnerability of the Brazilian Real Plan. Its survival appears to be
hinging on the ability of the Brazilian government to obtain very
quick passage in congress of the fiscal reforms that have fizzled in
the past few years.
In Argentina, the congressional mid-term elections gave the victory to
the opposition, which captured the majority in congress. This event
increased the possibility of gridlock in congress in the remaining two
years of President Menem's administration, despite the opposition
support of the current economic program.
Portfolio Matters
Given the historically tight credit spreads, we favor the short end of
the yield curve. As we indicated in our June 30, 1997 letter to
shareholders, we have been in the process of adding good quality
short-term issues to the portfolio. We have successfully deployed our
cash positions during the past quarter into a well-diversified
portfolio of short-term instruments. While we are now fully invested,
the emerging markets sector of the portfolio is primarily weighted in
short-term and floating rate instruments as a hedge against the
greater downside risk of the current global financial environment. The
duration of this sector of the portfolio was 1.8 years as of September
30, with 65% of the portfolio maturing within one year and 85% of the
portfolio maturing within three years. The yield-to-maturity of the
emerging markets area of the portfolio was 9.65% as of September 30,
which is a spread of 381 basis points (3.81%) over US Treasury
securities.
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 upcoming annual report to shareholders.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/PAOLO VALLE
Paolo Valle
Senior Vice President and
Senior Portfolio Manager
November 13, 1997
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select PricingSM System, which offers four pricing alternatives:
[bullet] 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.
[bullet] 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.)
[bullet] 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.
[bullet] 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. Figures shown in the "Average Annual Total
Return" tables as well as the total returns and cumulative total
returns in the "Performance Summary" tables assume reinvestment of all
dividends and capital gains distributions at net asset value on the
payable date. 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.
<TABLE>
<CAPTION>
Performance
Summary --
Class A Shares
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
1996 9.70 11.36 -- 1.450 +33.64
1/1/97 -- 9/30/97 11.36 10.92 -- 0.494 + 0.75
Total $3.056
Cumulative total return as of 9/30/97: +63.74%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class B Shares
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
1996 9.65 11.31 -- 1.365 +32.75
1/1/97 -- 9/30/97 11.31 10.87 -- 0.432 + 0.16
Total $3.707
Cumulative total return as of 9/30/97: +58.45%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class C Shares
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
1996 9.65 11.31 -- 1.358 +32.66
1/1/97 -- 9/30/97 11.31 10.87 -- 0.427 + 0.11
Total $2.807
Cumulative total return as of 9/30/97: +59.10%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class D Shares
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
1996 9.65 11.31 -- 1.420 +33.44
1/1/97 -- 9/30/97 11.31 10.87 -- 0.472 + 0.55
Total $3.913
Cumulative total return as of 9/30/97: +61.83%**
* Figures may include short-term capital gains distributions.
** Figures do not include sales charges; results would be lower if sales charge was included.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/97 + 8.82% + 4.47%
Inception (10/21/94) through 9/30/97 +18.24 +16.61
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/97 + 7.90% + 4.02%
Inception (8/27/93) through 9/30/97 +11.90 +11.90
* 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 9/30/97 + 7.83% + 6.86%
Inception (10/21/94) through 9/30/97 +17.10 +17.10
* 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 9/30/97 + 8.56% + 4.21%
Inception (8/27/93) through 9/30/97 +12.48 +11.36
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
<TABLE>
<CAPTION>
Recent
Performance
Results
12 Month 3 Month
9/30/97 6/30/97 9/30/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $10.92 $10.90 $11.21 -2.59% +0.18%
ML Americas Income Fund Class B Shares* 10.87 10.85 11.17 -2.69 +0.18
ML Americas Income Fund Class C Shares* 10.87 10.85 11.17 -2.69 +0.18
ML Americas Income Fund Class D Shares* 10.87 10.84 11.16 -2.60 +0.28
ML Americas Income Fund Class A Shares -- Total Return* +8.82(1) +1.77(2)
ML Americas Income Fund Class B Shares -- Total Return* +7.90(3) +1.57(4)
ML Americas Income Fund Class C Shares -- Total Return* +7.83(5) +1.56(6)
ML Americas Income Fund Class D Shares -- Total Return* +8.56(7) +1.80(8)
ML Americas Income Fund Class A Shares -- Standardized 30-day Yield 7.67%
ML Americas Income Fund Class B Shares -- Standardized 30-day Yield 7.20%
ML Americas Income Fund Class C Shares -- Standardized 30-day Yield 7.13%
ML Americas Income Fund Class D Shares -- Standardized 30-day Yield 7.43%
* 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 $1.259 per share ordinary income dividends.
(2) Percent change includes reinvestment of $0.168 per share ordinary income dividends.
(3) Percent change includes reinvestment of $1.170 per share ordinary income dividends.
(4) Percent change includes reinvestment of $0.147 per share ordinary income dividends.
(5) Percent change includes reinvestment of $1.163 per share ordinary income dividends.
(6) Percent change includes reinvestment of $0.145 per share ordinary income dividends.
(7) Percent change includes reinvestment of $1.228 per share ordinary income dividends.
(8) Percent change includes reinvestment of $0.161 per share ordinary income dividends.
</TABLE>
<TABLE>
<CAPTION>
Merrill Lynch Americas Income Fund, Inc., September 30, 1997
SCHEDULE OF INVESTMENTS (in US dollars)
Interest Maturity Percent of
COUNTRY Industry Face Amount Bonds Rate Date Value Net Assets
<S> <C> <C> <C> <C> <C> <C> <C>
Argentina Banking US$ 5,000,000 Banco de Credito
Argentina 8.50 % 12/18/1998 $5,075,000 3.2%
Industrials 3,000,000 Banco Hipotecario
Nacional 8.00 6/04/1999 3,015,000 1.9
2,250,000 Transport de Gas
del Sur S.A. 7.75 12/23/1998 2,266,875 1.5
------------ ------
5,281,875 3.4
Total Bonds in
Argentina (Cost --
$10,277,749) 10,356,875 6.6
============ ======
Brazil Oil 2,100,000 Petroleo Brasileiro
S.A. -- Petrobras 7.25 2/06/1998 2,101,050 1.3
------------ ------
Total Bonds in Brazil
(Cost -- $2,101,050) 2,101,050 1.3
============ ======
Mexico Banking 2,500,000 Banco Nacional S.A. 8.00 4/14/2000 2,519,315 1.6
1,000,000 Grupo Financiero
Bancomer S.A. 8.00 7/07/1998 1,007,500 0.6
------------ ------
3,526,815 2.2
Industrials 2,000,000 AXA, S.A. de C.V. 8.50 10/01/1998 2,020,000 1.3
5,000,000 Cemex S.A. 10.75 7/15/2000 5,367,000 3.4
2,450,000 Controladora Comercial
Mexicana S.A. 8.75 4/21/1998 2,477,563 1.6
3,500,000 Empresas ICA Sociedad
Controladora S.A. 9.75 2/11/1998 3,535,000 2.3
------------ ------
13,399,563 8.6
Oil 2,500,000 Petroleos Mexicanos
S.A. 8.00 7/01/1998 2,531,250 1.6
Paper 3,000,000 Grupo Industrial
Durango, S.A. de C.V. 12.625 8/01/2003 3,431,250 2.2
------------ ------
Total Bonds in Mexico
(Cost -- $22,859,626) 22,888,878 14.6
============ ======
Russia Financial Services 5,000,000 SBS-AGRO Bank B.V. 10.25 7/21/2000 5,012,500 3.2
------------ ------
Total Bonds in Russia
(Cost -- $5,005,000) 5,012,500 3.2
============ ======
Venezuela Financial Services 2,000,000 Vencemos Financial
Investment Ltd. 8.625 11/19/1998 2,025,000 1.3
------------ ------
Total Bonds in
Venezuela (Cost --
$2,029,000) 2,025,000 1.3
============ ======
Total Investments in
Bonds (Cost --
$42,272,425) 42,384,303 27.0
============ ======
<CAPTION>
Brady Bonds*
<S> <C> <C> <C> <C> <C> <C> <C>
Argentina Sovereign 5,000,000 Republic of
Government Argentina, Global
Obligations Bonds 8.375 12/20/2003 5,025,000 3.2
------------ ------
Total Brady Bonds
in Argentina (Cost --
$5,101,700) 5,025,000 3.2
============ ======
Ecuador Sovereign 7,000,000 Republic of Ecuador,
Government Discount Bonds 6.687 2/28/2025 5,713,750 3.7
Obligations ------------ ------
Total Brady Bonds
in Ecuador (Cost --
$5,713,750) 5,713,750 3.7
============ ======
Mexico Sovereign US$ 1,000 United Mexican
Government States, Value Recovery
Obligations Rights (a) 0.00 -- 0 0.0
------------ ------
Total Brady Bonds in
Mexico (Cost -- $0) 0 0.0
============ ======
Venezuela Sovereign 34,250,000 Republic of Venezuela,
Government DCB, Floating Rate
Obligations Bond 6.75 12/18/2007 32,644,702 20.8
------------ ------
Total Brady Bonds in
Venezuela (Cost --
$31,831,094) 32,644,702 20.8
============ ======
Total Investments in
Brady Bonds (Cost --
$42,646,544) 43,383,452 27.7
============ ======
<CAPTION>
Loan Agreements
<S> <C> <C> <C> <C> <C> <C> <C>
Russia Sovereign 9,000,000 Vnesheconombank
Government Participation
Obligations Agreements 5.00 12/29/2049 6,716,250 4.3
------------ ------
Total Investments
in Loan Agreements
(Cost -- $6,725,250) 6,716,250 4.3
============ ======
<CAPTION>
Short-Term Securities
<S> <C> <C> <C> <C> <C> <C> <C>
Argentina Commercial 3,900,000 Banco de Credito
Paper** Argentina 8.00 4/22/1998 3,748,251 2.4
5,000,000 Banco de Galicia ECP 6.625 7/30/1998 4,738,500 3.0
------------ ------
Total Short-Term
Investments in
Argentina (Cost --
$8,475,368) 8,486,751 5.4
============ ======
Brazil Certificates of 3,000,000 Banco Bradesco S.A. 7.06 12/17/1997 3,000,000 1.9
Deposit 5,000,000 Banco Excel S.A. 7.875 7/15/1998 4,702,190 3.0
2,100,000 Banco Itau S.A. 6.605 11/12/1997 2,083,941 1.3
------------ ------
9,786,131 6.2
Commercial 4,490,000 Globo Communicacoes
Paper** Participitoes 7.50 2/09/1998 4,372,488 2.8
6,500,000 SABESP ECP 7.875 5/14/1998 6,196,333 4.0
------------ ------
10,568,821 6.8
------------ ------
Total Short-Term
Investments in
Brazil (Cost --
$20,362,832) 20,354,952 13.0
============ ======
Ecuador Certificates 2,000,000 Banco Popular of
of Deposit Ecuador 7.875 2/20/1998 1,940,570 1.2
5,000,000 Banco Popular of
Ecuador 8.30 8/21/1998 4,654,460 3.0
------------ ------
Total Short-Term
Investments in Ecuador
(Cost -- $6,595,328) 6,595,030 4.2
============ ======
Russia Sovereign 10,000,000 Russian Treasury Bill
Government -- Hedged Note 12.00 11/17/1997 9,857,405 6.3
Obligations 10,000,000 Russian Treasury Bill
-- Hedged Note 10.09 11/26/1997 10,001,551 6.4
------------ ------
Total Short-Term
Investments in Russia
(Cost -- $19,855,391) 19,858,956 12.7
============ ======
United States US Government 17,262,000 Federal Home Loan
Agency Mortgage Corp. 6.05 10/01/1997 17,262,000 11.0
Obligations ------------ ------
Total Short-Term
Investments in the
United States
(Cost -- $17,262,000) 17,262,000 11.0
============ ======
Total Investments in
Short-Term Securities
(Cost -- $72,550,919) 72,557,689 46.3
============ ======
Total Investments (Cost -- $164,195,138) 165,041,694 105.3
Liabilities in Excess of Other Assets (8,296,918) (5.3)
------------ ------
Net Assets $156,744,776 100.0%
============ ======
Net Asset Value: Class A -- Based on net assets of $32,512,309 and 2,977,163
shares outstanding $10.92
============
Class B -- Based on net assets of $103,166,583 and 9,487,834
shares outstanding $10.87
============
Class C -- Based on net assets of $6,765,591 and 622,252
shares outstanding $10.87
============
Class D -- Based on net assets of $14,300,293 and 1,315,828
shares outstanding $10.87
============
(a) The rights may be exercised until 3/31/2020.
* Brady Bonds are securities which have been issued to refinance
commercial bank loans and other debt. The risk associated with these
instruments is the amount of any uncollateralized principal or
interest payments since there is a high default rate of commercial
bank loans by countries issuing these securities.
** 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>
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
Paolo H. Valle, Senior Vice President
Alex V. Bouzakis, Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Barbara G. Fraser, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
