MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Annual Report
December 31, 1996
<PAGE>
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
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
<PAGE>
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 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.
DEAR SHAREHOLDER
During 1996, global liquidity was the driving force behind lower
yields in the United States, continental Europe and Japan. As a
result, investors in search of higher yields initiated or increased
allocations to emerging markets debt. The higher yields and spreads
of emerging markets debt over US Treasury securities attracted
investors from a broad base including global bond funds, US high-
yield funds, pension funds, insurance companies and equity funds.
Unless default risk should appear, these investors appear to be
longer-term investors.
<PAGE>
Additionally, the Latin American region and most Eastern European
countries are experiencing an improving trend in economic and
political fundamentals. Therefore, these markets are attracting the
highest levels of foreign direct investment and lending in history.
We expect this trend to continue and consequently believe some
countries may receive credit rating upgrades from Standard & Poor's
Corp. and Moody's Investors Service, Inc. in 1997.
Finally, the countries that have Brady Bonds outstanding have
liability management plans in progress or in the process of
implementation. We expect the debt buy-back program initiated by
several of these countries to continue to provide a positive
technical support to the price of Brady Bonds.
Looking ahead, the global liquidity determined by the monetary
policy of the Group of Seven Industrialized Nations will be of
significance in setting the direction of yield spreads of emerging
markets debt. Nevertheless, the moderate growth environment in the
United States with slow inflation is favorable for the export-
oriented economies of the Latin American region. As long as
fundamentals continue their improving trend, emerging markets are
likely to make progress attracting capital. In our view, the
principal current risk to emerging markets is a reversal of global
liquidity or a drastic decline in the US stock market.
Investment Environment
Mexico
The Mexican economic and investment outlook continued to improve in
the final months of 1996. Economic growth, the declining rate of
inflation and the relative strength of the peso exceeded most
investors' expectations. The end of 1996 also marks a turning point
in Mexico's dramatic economic austerity program which preoccupied
the nation and investors for the past two years. Mexico successfully
refinanced its short-term debt, dramatically lowered its current
account deficit, instituted much-needed pension reform and
stabilized its financial system. The country is now beginning to
enjoy the fruits of this painful economic restructuring. As 1997
begins, many observers expect the Mexican economic recovery to
accelerate and broaden, while inflation and local interest rates
continue to trend lower.
In 1997, Mexico will face the challenge of maintaining tight fiscal
and monetary policies during what promises to be a difficult
election year. In July, Mexico will hold congressional elections in
which the incumbent political party faces the possibility of losing
control for the first time in decades. Additionally, Mexico City
residents will elect their mayor for the first time. Despite these
challenges, it is hoped that the Zedillo administration will adhere
to the economic policies that have brought it such hard won success.
<PAGE>
Argentina
As difficult as 1996 seemed, it proved to be a successful year for
Argentina. The country's recession was overcome as Argentina shifted
into a growth mode driven by exports and direct investment. The
economic program was consolidated and was not affected by the feared
departure of former Finance Minister Cavallo.
Looking ahead, we foresee investments in export-oriented sectors
start to yield benefits, creating new job opportunities. Bank
deposits and international reserves, at US$52.96 billion and
US$20.23 billion, respectively, are at record highs since the
implementation of the convertibility program. Our main concern is
related to the political scenario as Argentines are expected to
elect 50% of the congress in November 1997.
Brazil
Brazil ended 1996 with its major achievement being the reduction of
inflation to approximately 10%. Another positive fact is the
important shift in the composition of the capital accounts, as
growth in foreign direct investment replaces the decline in
portfolio and speculative investment.
Our main concerns continue to be related to the trade and fiscal
deficits. Regarding trade, it is worrisome that exports are expected
to grow no more than 3% year-on-year. We expect additional measures
to promote exports.
With respect to the fiscal deficit, we think that little lasting
progress will be achieved without the previous approval of the
pending constitutional reforms, including the social security
tax and administrative reforms.
In the upcoming months, we expect the government to dedicate all of
its strength to the passage of the so-called re-election amendment
(which would allow the current president to run for a second term),
and we are hopeful that such an event will precede the passage of
the aforementioned constitutional reforms. We anticipate the re-
election amendment to clear both congressional houses by mid or late
1997, consequently boosting investors' confidence.
Ecuador
During 1996, Ecuadorians elected Mr. Abdala Bucaram as their
president, to remain in office through the year 2000. After less
than six months in power, the Bucaram administration has started
discussions with multilateral organizations to introduce an economic
stabilization program in 1997. President Bucaram also appears
committed to introducing a convertibility plan similar to that of
Argentina, improving tax collections, reducing subsidies, and
reforming the financial system, labor market and Social Security
system to help balance the budget in 1997. Congressional support for
those reforms and tough fiscal discipline through 1997 are necessary
for the success of this ambitious program.
<PAGE>
Venezuela
During 1996, Venezuela entered into a stand-by agreement with the
International Monetary Fund (IMF) and started an aggressive
privatization program, mostly in the telecommunications and banking
sectors. At the same time, the country has liberalized interest
rates, prices and currency markets. Higher international crude oil
prices helped the central government budget reach a surplus in 1996
and increase international reserves from US$10 billion at the
beginning of the IMF program to US$15 billion by December 1996.
Looking forward, the government of Venezuela has plans to privatize
the aluminum and steel industries, and are expecting to receive $2.5
billion. The government still faces the challenge of reducing
inflation from more than 100% in 1996 to an estimated 30% in 1997,
without sacrificing the growth in the already depressed non-oil
sector and return positive real interest rates by mid-1997.
Structural reforms involving transfers to local governments and
reduction of the government payroll are more difficult than those
reforms implemented in 1996. However, we believe the authorities
will remain committed to improving the participation of the private
sector in the economy.
Fiscal Year in Review
During 1996, as in 1995, the Fund remained overweighted in Latin
American dollar-denominated bonds. The improved economic and
political fundamentals were the compelling rational behind our
decision. This strategy was weighted relatively to other dollar-
denominated, fixed-income markets in the Western Hemisphere such as
US high-yield and US Treasury markets.
Within the Latin American region, Venezuela, Argentina, Brazil and
Ecuador (in order of importance) were our main investment
allocations. Again this year, we opted for Brady Bonds and longer
duration Eurobonds in response to their better liquidity and highest
spread duration. These bonds benefited the most from the spread
reduction that emerging markets debt experienced in 1996. These
strategies enhanced the Fund's total returns for the fiscal year
ended December 31, 1996. In addition, the Fund was 11.53% leveraged
by year-end.
In Conclusion
In late October 1996, the Fund's Board of Directors gave approval
for us to invest up to 20% of the Fund outside of the Western
Hemisphere. Looking ahead, this action will give us more flexibility
to achieve additional risk diversification as well as investment
opportunities.
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.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and Senior
Portfolio Manager
February 12, 1997
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.)
<PAGE>
* 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.
<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
1996 9.70 11.36 -- 1.450 +33.64
------
Total $2.562
Cumulative total return as of 12/31/96: +62.51%**
<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.
++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>
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
1996 9.65 11.31 -- 1.365 +32.75
------
Total $3.275
Cumulative total return as of 12/31/96: +58.21%**
<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
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<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
1996 9.65 11.31 -- 1.358 +32.66
------
Total $2.380
Cumulative total return as of 12/31/96: +58.93%**
<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
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<PAGE>
<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
1996 9.65 11.31 -- 1.420 +33.44
------
Total $3.441
Cumulative total return as of 12/31/96: +60.95%**
<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.
++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>
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 A Shares and Class C Shares compared to growth of an
investment in the JP Morgan Latin Brady Bond Index. Beginning and
ending values are:
10/21/94** 12/96
ML Americas Income Fund, Inc.++--
Class A Shares*+++ $ 9,600 $15,601
<PAGE>
ML Americas Income Fund, Inc.++--
Class C Shares* $10,000 $15,893
JP Morgan Latin Brady Bond Index++++ $10,000 $15,900
A line graph depicting the growth of an investment in the Fund's
Class B Shares 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** 12/96
ML Americas Income Fund, Inc.++--
Class B Shares* $10,000 $15,721
ML Americas Income Fund Inc.++--
Class D Shares*+++ $ 9,600 $15,451
JP Morgan Latin Brady Bond Index++++ $10,000 $15,815
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses including advisory fees.
**Commencement of Operations.
+++Class A Shares outstanding prior to October 21, 1994 were
redesignated to Class D Shares.
++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 a dollar-denominated
restructured sovereign bonds, the securities created through the
restructing of a commercial bank debt. It includes a large
percentage of Brady bonds.
Past performance is not predictive of future performance.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
<PAGE>
Year Ended 12/31/96 +33.64% +28.29%
Inception (10/21/94) through 12/31/96 +24.77 +22.47
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/96 +32.75% +28.75%
Inception (8/27/93) through 12/31/96 +14.70 +14.48
[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 12/31/96 +32.66% +31.66%
Inception (10/21/94) through 12/31/96 +23.50 +23.50
[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 12/31/96 +33.44% +28.10%
Inception (8/27/93) through 12/31/96 +15.29 +13.89
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
12/31/96 9/30/96 12/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $11.36 $11.21 $9.70 +17.11% +1.34%
ML Americas Income Fund Class B Shares* 11.31 11.17 9.65 +17.20 +1.25
ML Americas Income Fund Class C Shares* 11.31 11.17 9.65 +17.20 +1.25
ML Americas Income Fund Class D Shares* 11.31 11.16 9.65 +17.20 +1.34
ML Americas Income Fund Class A Shares--Total Return* +33.64(1) +8.01(2)
ML Americas Income Fund Class B Shares--Total Return* +32.75(3) +7.73(4)
ML Americas Income Fund Class C Shares--Total Return* +32.66(5) +7.71(6)
ML Americas Income Fund Class D Shares--Total Return* +33.44(7) +7.97(8)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 7.99%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 7.53%
ML Americas Income Fund Class C Shares--Standardized 30-day Yield 7.46%
ML Americas Income Fund Class D Shares--Standardized 30-day Yield 7.75%
<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 $1.450 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.765 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $1.365 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.739 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $1.358 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.737 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $1.420 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.756 per share ordinary
income dividends.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Bonds Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <S> <C> <C>
Argentina Banking US$ 8,000,000 Banco de Credito Argentina 8.50 % 12/18/1998 $ 8,000,000 3.7%
4,000,000 Banco de Galicia y Buenos
Aires S.A.--Yankee 9.00 11/01/2003 3,950,000 1.8
------------ ------
11,950,000 5.5
<PAGE>
Communications 3,000,000 Telefonica de Argentina S.A. 11.875 11/01/2004 3,315,000 1.5
Total Bonds in Argentina
(Cost--$15,316,875) 15,265,000 7.0
Brazil Communications 8,000,000 ++Comtel Brasileira Ltd. 10.75 9/26/2004 8,220,000 3.8
Utilities-- 4,000,000 Centrais Electricas
Electric Brasileiras S.A.--Eletrobras 10.00 7/06/2004 4,070,000 1.9
Total Bonds in Brazil
(Cost--$12,008,000) 12,290,000 5.7
Hong Kong Utilities 1,000,000 AES China Generating Co. Ltd. 10.125 12/15/2006 1,035,000 0.5
Total Bonds in Hong Kong
(Cost--$999,040) 1,035,000 0.5
Mexico Banking 1,500,000 Banamex S.A. 11.00 7/15/2003 1,526,250 0.7
Broadcasting & 5,000,000 Grupo Televisa S.A. 11.375 5/15/2003 5,337,500 2.4
Publishing 3,000,000 Grupo Televisa S.A. (a) 11.976 5/15/2008 1,987,500 0.9
------------ ------
7,325,000 3.3
Industrials 5,000,000 Cemex S.A. 12.75 7/15/2006 5,550,000 2.5
Paper 7,000,000 Grupo Industrial Durango, S.A.
de C.V. 12.625 8/01/2003 7,612,500 3.5
Transportation 6,000,000 Transportacion Maritima
Mexicana, S.A. de C.V. 10.00 11/15/2006 6,022,500 2.8
Total Bonds in Mexico
(Cost--$26,946,307) 28,036,250 12.8
United US Government 20,000,000 United States Treasury Bond,
States Obligations 6.50% due 11/15/2026 6.50 11/15/2026 19,628,200 9.0
Total Bonds in the United
States (Cost--$19,818,750) 19,628,200 9.0
Total Investments in Bonds
(Cost--$75,088,972) 76,254,450 35.0
<PAGE>
Brady Bonds***
Argentina Sovereign 37,500,000 Republic of Argentina,
Government Global Bonds 11.00 10/09/2006 39,375,000 18.0
Obligations
Total Brady Bonds in
Argentina (Cost--$38,081,250) 39,375,000 18.0
Brazil Sovereign 14,868,495 Republic of Brazil, Floating
Government Rate 'C' Bond 8.00 4/15/2014 11,002,686 5.0
Obligations
Total Brady Bonds in Brazil
(Cost--$10,663,138) 11,002,686 5.0
Bulgaria Sovereign 5,000,000 Republic of Bulgaria,
Government Discount 'A' Bonds 6.687 7/28/2024 2,812,500 1.3
Obligations
Total Brady Bonds in
Bulgaria (Cost--$2,837,500) 2,812,500 1.3
Ecuador Sovereign 36,797,172 Republic of Ecuador, PDI
Government (Registered) 6.50 2/27/2015 22,538,268 10.3
Obligations 5,286,950 Republic of Ecuador, PDI
(Bearer) 6.50 2/27/2015 3,244,866 1.5
Total Brady Bonds in Ecuador
(Cost--$21,504,514) 25,783,134 11.8
Mexico Sovereign 10,076,000 United Mexican States, Global
Government Bonds 11.50 5/15/2026 10,630,180 4.9
Obligations 1,000 United Mexican States, Value
Recovery Rights (b) 0.00 0 0.0
Total Brady Bonds in Mexico
(Cost--$10,146,846) 10,630,180 4.9
Panama Sovereign 10,000,000 Republic of Panama, PDI 6.5625 7/17/2016 7,800,000 3.6
Government
Obligations
<PAGE>
Total Brady Bonds in Panama
(Cost--$6,787,500) 7,800,000 3.6
Philippines Sovereign 3,000,000 ++Republic of the Philippines
Government (Registered) 8.75 10/07/2016 3,105,000 1.4
Obligations
Total Brady Bonds in the
Philippines( Cost--$3,036,750) 3,105,000 1.4
Venezuela Sovereign 13,250,000 Republic of Venezuela, DCB 6.50 12/18/2007 11,676,562 5.4
Government 36,500,000 Republic of Venezuela,
Obligations Floating Rate 'A' Bond* 6.625 3/31/2007 32,530,625 14.9
5,500,000 Republic of Venezuela,
Floating Rate 'B' Bond 6.4375 3/31/2007 4,901,875 2.2
Total Brady Bonds in Venezuela
(Cost--$41,582,117) 49,109,062 22.5
Total Investments in Brady Bonds
(Cost--$134,639,615) 149,617,562 68.5
Loan Agreements
Russia Sovereign 15,000,000 Vneshenconombank
Government Participation Agreements (c) 0.00 12/30/2004 11,906,250 5.5
Obligations
Total Investments in Loan
Agreements (Cost--$11,478,750) 11,906,250 5.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Interest Maturity Value Percent of
Face Amount Short-Term Securities Rate Date (Note 1a) Net Assets
<S> <C> <S> <C> <S> <C> <C>
Commercial US$ 3,298,000 General Motors Acceptance Corp. 7.50 % 1/02/1997 $ 3,298,000 1.5%
Paper**
Total Investments in Short-Term
Securities (Cost--$3,298,000) 3,298,000 1.5
<PAGE>
Total Investments (Cost--$224,505,337) 241,076,262 110.5
Liabilities in Excess of Other Assets (22,897,800) (10.5)
------------ ------
Net Assets $218,178,462 100.0%
============ ======
<FN>
(a)Represents a step bond; the interest rate shown is the effective
yield at the time of purchase.
(b)The rights may be exercised until 2/31/2019.
(c)Non-income producing security.
*Security represents collateral in connection with reverse
repurchase agreements.
**Commercial Paper is traded on a discount basis; the interest rate
shown is the discount rate paid at the time of purchase by the Fund.
***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.
++Restricted security as to resale. The value of the Fund's
investment in restricted securities was $11,325,000, representing
5.2% of net assets.
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <S> <C> <C>
Comtel Brasileira Ltd.,
10.75% due 9/26/2004 9/18/1996 $ 8,000,000 $ 8,220,000
Republic of the Philippines
(Registered) 11/14/1996 3,036,750 3,105,000
Total $11,036,750 $11,325,000
=========== ===========
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$224,505,337) (Note 1a) $241,076,262
Receivables:
Interest $ 5,007,647
Capital shares sold 1,080,035 6,087,682
------------
Deferred organization expenses (Note 1f) 34,369
Prepaid registration fees and other assets (Note 1f) 59,704
------------
Total assets 247,258,017
------------
<PAGE>
Liabilities: Payables:
Reverse repurchase agreements (Note 5) 22,350,300
Distributions to shareholders (Note 1g) 4,222,841
Captial shares redeemed 2,028,973
Investment adviser (Note 2) 123,328
Distributor (Note 2) 112,594
Interest expense (Note 5) 12,106 28,850,142
------------
Accrued expenses and other liabilities 229,413
------------
Total liabilities 29,079,555
------------
Net Assets: Net assets $218,178,462
============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 247,683
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 1,416,265
Class C Common Stock, $0.10 par value, 100,000,000 shares authorized 101,107
Class D Common Stock, $0.10 par value, 100,000,000 shares authorized 162,756
Paid-in capital in excess of par 198,500,226
Undistributed realized capital gains on investments and foreign
currency transations--net 1,179,500
Unrealized appreciation on investments and foreign currency
transactions--net 16,570,925
------------
Net assets $218,178,462
============
Net Asset Class A--Based on net assets of $28,136,646 and 2,476,832
Value: shares outstanding $ 11.36
============
Class B--Based on net assets of $160,204,058 and 14,162,649
shares outstanding $ 11.31
============
Class C--Based on net assets of $11,435,835 and 1,011,067
shares outstanding $ 11.31
============
Class D--Based on net assets of $18,401,923 and 1,627,563
shares outstanding $ 11.31
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 18,995,532
(Note 1e):
Expenses: Investment advisory fees (Note 2) $ 1,139,364
Account maintenance and distribution fees--Class B (Note 2) 1,048,581
Interest expense (Note 5) 491,343
Transfer agent fees--Class B (Note 2) 261,751
Registration fees (Note 1f) 114,429
Printing and shareholder reports 106,905
Custodian fees 72,879
Professional fees 68,805
Account maintenance and distribution fees--Class C (Note 2) 59,213
Accounting services (Note 2) 57,697
Account maintenance fees--Class D (Note 2) 41,769
Trustees' fees and expenses 37,600
Transfer agent fees--Class A (Note 2) 27,993
Transfer agent fees--Class D (Note 2) 27,061
Amortization of organization expenses (Note 1f) 20,908
Transfer agent fees--Class C (Note 2) 15,485
Pricing fees 807
Other 6,589
------------
Total expenses 3,599,179
------------
Investment income--net 15,396,353
------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 22,386,062
(Loss) on Foreign currency transactions--net (303,309) 22,082,753
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 14,949,752
(Notes 1b, 1c, Foreign currency transactions--net 9,630 14,959,382
1e & 3): ------------ ------------
Net realized and unrealized gain on investments and foreign
currency transactions 37,042,135
------------
Net Increase in Net Assets Resulting from Operations $ 52,438,488
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the
Year Ended
December 31,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 15,396,353 $ 11,613,604
Realized gain (loss) on investments and foreign currency
transactions--net 22,082,753 (4,707,448)
Change in unrealized appreciation on investments and foreign
currency transactions--net 14,959,382 18,061,845
------------ ------------
Net increase in net assets resulting from operations 52,438,488 24,968,001
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (1,756,766) (119,581)
Shareholders Class B (12,358,235) (9,482,996)
(Note 1g): Class C (678,129) (58,666)
Class D (1,554,156) (1,952,361)
In excess of investment income--net:
Class A (236,371) --
Class B (1,662,785) --
Class C (91,241) --
Class D (209,110) --
Realized gain on investments--net:
Class A (801,439) --
Class B (4,369,170) --
Class C (310,794) --
Class D (512,917) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (24,541,113) (11,613,604)
------------ ------------
Capital Share Net increase (decrease) in net assets derived from capital
Transactions share transactions 70,086,193 (10,358,969)
(Note 4): ------------ ------------
Net Assets: Total increase in net assets 97,983,568 2,995,428
Beginning of year 120,194,894 117,199,466
------------ ------------
End of year* $218,178,462 $120,194,894
============ ============
<PAGE>
<FN>
*Undistributed investment income--net (Note 1h) -- $ 950,933
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Year Ended December 31, 1996
<S> <S> <C>
Cash Provided by Net increase in net assets resulting from operations $ 52,438,488
Operating Adjustments to reconcile net increase in net assets resulting
Activities: from operations to net cash provided by operating activities:
Increase in receivables (2,304,703)
Decrease in other assets 26,222
Increase in other liabilities 179,370
Realized and unrealized gain on investments and foreign currency
transactions--net (37,042,135)
Amortization of discount (1,938,673)
--------------
Net cash provided by operating activities 11,358,569
--------------
Cash Used for Proceeds from sales of long-term securities 736,654,155
Investing Purchases of long-term securities (813,780,381)
Activities: Purchases of short-term investments (2,401,715,817)
Proceeds from sales and maturities of short-term investments 2,404,095,905
--------------
Net cash used for investing activities (74,746,138)
--------------
Cash Provided by Cash receipts from issuance of common stock 155,351,787
Financing Cash receipts from borrowings 998,214,202
Activities: Cash payments on borrowings (984,593,969)
Cash payments on shares of beneficial interest redeemed (98,109,176)
Dividends paid to shareholders (7,475,275)
--------------
Net cash provided by financing activities 63,387,569
--------------
<PAGE>
Cash: Net increase in cash --
Cash at beginning of year --
--------------
Cash at end of year $ --
==============
Cash Flow Cash paid for interest $ 486,865
Information: ==============
Non-Cash Capital shares issued on reinvestment of dividends paid to shareholders $ 13,781,236
Financing ==============
Activities:
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
The following per share data
and ratios have been derived For the For the
from information provided in Period Period
the financial statements. For the Oct. 21, For the Aug. 27,
Year Ended 1994++ to Year Ended 1993++ to
Increase (Decrease) in December 31, Dec. 31, December 31, Dec. 31,
Net Asset Value: 1996+++++ 1995 1994 1996+++++ 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 9.70 $ 8.51 $ 9.08 $ 9.65 $ 8.48 $ 10.84 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- -------
Investment income--net .97 .94 .17 .88 .88 .75 .24
Realized and unrealized
gain (loss) on investments
and foreign currency
transactions--net 2.14 1.19 (.57) 2.15 1.17 (2.36) .88
------- ------- ------- ------- ------- ------- -------
Total from investment
operations 3.11 2.13 (.40) 3.03 2.05 (1.61) 1.12
------- ------- ------- ------- ------- ------- -------
Less dividends and
distributions:
Investment income--net (1.00) (.94) (.14) (.93) (.88) (.64) (.24)
In excess of investment
income--net (.13) -- -- (.12) -- -- --
Realized gain on
investments--net (.32) -- (.03) (.32) -- (.11) (.04)
------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions (1.45) (.94) (.17) (1.37) (.88) (.75) (.28)
------- ------- ------- ------- ------- ------- -------
Net asset value, end
of period $ 11.36 $ 9.70 $ 8.51 $ 11.31 $ 9.65 $ 8.48 $ 10.84
======= ======= ======= ======= ======= ======= =======
<PAGE>
Total Investment Based on net asset
Return:** value per share 33.64% 27.27% (4.45%)+++ 32.75% 26.10% (15.08%) 11.30%+++
======= ======= ======= ======= ======= ======= =======
Ratios to Average Expenses, excluding
Net Assets: interest expense
and net of
reimbursement 1.05% 1.20% 1.22%* 1.83% 1.97% 1.79% 1.03%*
======= ======= ======= ======= ======= ======= =======
Expenses, excluding
interest expense 1.05% 1.20% 1.22%* 1.83% 1.97% 2.00% 2.45%*
======= ======= ======= ======= ======= ======= =======
Expenses 1.32% 1.36% 1.91%* 2.10% 2.13% 2.70% 2.53%*
======= ======= ======= ======= ======= ======= =======
Investment income--net 8.97% 11.25% 8.63%* 8.36% 10.40% 8.14% 6.76%*
======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of
Data: period (in thousands) $ 28,136 $ 1,165 $ 253 $160,204 $103,465 $101,933 $ 98,848
======== ======== ======= ======== ======== ======== ========
Portfolio turnover 420.35% 127.17% 353.33% 420.35% 127.17% 353.33% 75.18%
======== ======== ======= ======== ======== ======== ========
Leverage: Amount of reverse
repurchase agreements
outstanding, end of
period (in thousands) $ 22,350 $ 10,265 $17,058 $ 22,350 $ 10,265 $ 17,058 $ 21,546
======== ======== ======= ======== ======== ======== ========
Average amount of reverse
repurchase agreements
outstanding during the
period (in thousands) $ 8,277 $ 2,640 $17,315 $ 8,277 $ 2,640 $ 17,315 $ 18,977
======== ======== ======= ======== ======== ======== ========
Average amount of reverse
repurchase agreements
per share during
the period $ .48 $ .20 $ 1.19 $ .48 $ .20 $ 1.19 $ 1.81
======== ======== ======= ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
+++++Based on average shares outstanding during the period.
<PAGE>
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C Class D
The following per share data
and ratios have been derived For the For the
from information provided in Period Period
the financial statements. For the Oct. 21, For the Aug. 27,
Year Ended 1994++ to Year Ended 1993++ to
Increase (Decrease) in December 31, Dec. 31, December 31, Dec. 31,
Net Asset Value: 1996+++++ 1995 1994 1996+++++ 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 9.65 $ 8.47 $ 9.08 $ 9.65 $ 8.48 $ 10.84 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- -------
Investment income--net .87 .87 .15 .95 .92 .80 .26
Realized and unrealized
gain (loss) on investments
and foreign currency
transactions--net 2.15 1.18 (.61) 2.13 1.17 (2.36) .88
------- ------- ------- ------- ------- ------- -------
Total from investment
operations 3.02 2.05 (.46) 3.08 2.09 (1.56) 1.14
------- ------- ------- ------- ------- ------- -------
Less dividends and
distributions:
Investment income--net (.92) (.87) (.13) (.97) (.92) (.68) (.26)
In excess of investment
income--net (.12) -- -- (.13) -- -- --
Realized gain on
investments--net (.32) -- (.02) (.32) -- (.12) (.04)
------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions (1.36) (.87) (.15) (1.42) (.92) (.80) (.30)
------- ------- ------- ------- ------- ------- -------
Net asset value, end
of period $ 11.31 $ 9.65 $ 8.47 $ 11.31 $ 9.65 $ 8.48 $ 10.84
======= ======= ======= ======= ======= ======= =======
Total Investment Based on net asset
Return:** value per share 32.66% 26.18% (5.06%)+++ 33.44% 26.75% (14.65%) 11.49%+++
======= ======= ======= ======= ======= ======= =======
<PAGE>
Ratios to Average Expenses, excluding
Net Assets: interest expense and net
of reimbursement 1.90% 2.05% 2.24%* 1.31% 1.44% 1.28% .50%*
======= ======= ======= ======= ======= ======= =======
Expenses, excluding
interest expense 1.90% 2.05% 2.24%* 1.31% 1.44% 1.48% 1.93%*
======= ======= ======= ======= ======= ======= =======
Expenses 2.17% 2.19% 3.05%* 1.58% 1.60% 2.17% 2.03%*
======= ======= ======= ======= ======= ======= =======
Investment income--net 8.17% 10.23% 8.87%* 8.92% 10.85% 8.65% 7.14%*
======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of
Data: period (in thousands) $11,436 $ 1,396 $ 75 $18,402 $14,169 $14,938 $15,076
======= ======= ======= ======= ======= ======= =======
Portfolio turnover 420.35% 127.17% 353.33% 420.35% 127.17% 353.33% 75.18%
======= ======= ======= ======= ======= ======= =======
Leverage: Amount of reverse
repurchase agreements
outstanding, end of
period (in thousands) $22,350 $10,265 $17,058 $22,350 $10,265 $17,058 $21,546
======= ======= ======= ======= ======= ======= =======
Average amount of reverse
repurchase agreements
outstanding during the
period (in thousands) $ 8,277 $ 2,640 $17,315 $ 8,277 $ 2,640 $17,315 $18,977
======= ======= ======= ======= ======= ======= =======
Average amount of reverse
repurchase agreements per
share during the period $ .48 $ .20 $ 1.19 $ .48 $ .20 $ 1.19 $ 1.81
======= ======= ======= ======= ======= ======= =======
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
+++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
<PAGE>
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.
(a) Valuation of securities--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
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. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written are valued
at the 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
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded or, in the case of options traded in the
over-the-counter market, the last bid price. Short-term securities
are valued at amortized cost, which approximates market value. Other
investments, including futures contracts and related options, are
stated at market value. Securities and assets for which market value
quotations are not available are valued at their fair value as
determined in good faith by or under the direction of the Fund's
Board of Directors.
(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.
<PAGE>
* 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--The Fund is authorized to write and purchase call and put
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 exceeds the premium paid or received).
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.
NOTES TO FINANCIAL STATEMENTS (continued)
<PAGE>
(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.
(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 on a straight-
line basis over a five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(g) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distribution of capital
gains are recorded on the ex-dividend date.
(h) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of
$2,199,507 have been reclassified between undistributed net realized
capital gains and undistributed net investment income. These
reclassifications have no effect on net assets or net asset values
per share.
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 Distribution Plans with Merrill Lynch
Funds Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
<PAGE>
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operation of the Fund. For such
services, the Fund pays a monthly fee of 0.60%, on an annual basis,
of the average daily value of the Fund's net assets plus the
principal amount of borrowings incurred by the Fund for leverage
purposes.
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
Maintenance Distribution
Fee Fee
Class B 0.25% 0.50%
Class C 0.25% 0.55%
Class D 0.25% --
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.
For the year ended December 31, 1996, MLFD earned underwriting
discounts and direct commissions 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 $ 135 $ 1,237
Class D $3,912 $41,977
For the year ended December 31, 1996, MLPF&S received contingent
deferred sales charges of $405,525 and $4,459 relating to
transactions in Class B and Class C Shares, respectively.
<PAGE>
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), 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, PSI, MLPF&S, MLFD, MLFDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended December 31, 1996 were $813,780,381 and
$723,055,200, respectively.
Realized and unrealized gains (losses) as of December 31, 1996 were
as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 22,448,405 $ 16,570,925
Short-term investments (304,018) --
Options written 148,000 --
Financial futures contracts 93,675 --
Foreign currency transactions (303,309) --
------------- -------------
Total $ 22,082,753 $ 16,570,925
============= =============
Transactions in options written for the year ended December 31, 1996
were as follows:
Nominal Value
Covered by Premiums
Call Options Written Written Options Received
Outstanding call options written,
beginning of year -- --
Options written 20,000,000 $ 247,000
Options exercised (16,000,000) (162,000)
Options expired (4,000,000) (85,000)
------------ -------------
Outstanding call options written,
end of year -- $ --
============ =============
<PAGE>
Nominal Value
Covered by Premiums
Put Options Written Written Options Received
Outstanding put options written,
beginning of year -- --
Options written 6,000,000 $ 63,000
Options expired (6,000,000) (63,000)
------------ -------------
Outstanding put options written,
end of year -- $ --
============ =============
As of December 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $14,845,086, of which $16,603,802
related to appreciated securities and $1,758,716 related to
depreciated securities. At December 31, 1996, the aggregate cost of
investments for Federal income tax purposes was $226,231,176.
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $70,086,193 and $(10,358,969) for the years ended
December 31, 1996 and December 31, 1995, respectively.
Transactions in shares of capital were as follows:
Class A Shares for the Year Dollar
Ended December 31, 1996 Shares Amount
Shares sold 3,188,362 $ 33,640,007
Shares issued to shareholders
in reinvestment of dividends
and distributions 223,634 2,467,894
------------ ------------
Total issued 3,411,996 36,107,901
Shares redeemed (1,055,288) (11,591,124)
------------ ------------
Net increase 2,356,708 $ 24,516,777
============ ============
Class A Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 424,389 $ 3,709,129
Shares issued to shareholders
in reinvestment of dividends 31,496 58,341
------------ ------------
Total issued 455,885 3,767,470
Shares redeemed (365,478) (3,126,616)
------------ ------------
Net increase 90,407 $ 640,854
============ ============
<PAGE>
Class B Shares for the Year Dollar
Ended December 31, 1996 Shares Amount
Shares sold 9,423,373 $ 97,739,290
Shares issued to shareholders
in reinvestment of dividends
and distributions 874,443 9,531,248
------------ ------------
Total issued 10,297,816 107,270,538
Automatic conversion of shares (481,977) (1,098,316)
Shares redeemed (6,374,330) (71,172,295)
------------ ------------
Net increase 3,441,509 $ 34,999,927
============ ============
NOTES TO FINANCIAL STATEMENTS (concluded)
Class B Shares for the
Year Ended Dollar
December 31, 1995 Shares Amount
Shares sold 2,917,112 $ 25,020,930
Shares issued to shareholders
in reinvestment of dividends 466,431 3,936,697
------------ ------------
Total issued 3,383,543 28,957,627
Shares redeemed (4,688,387) (38,740,392)
------------ ------------
Net decrease (1,304,844) $ (9,782,765)
============ ============
Class C Shares for the
Year Ended Dollar
December 31, 1996 Shares Amount
Shares sold 1,097,995 $ 11,420,812
Shares issued to shareholders
in reinvestment of dividends
and distributions 67,079 736,136
------------ ------------
Total issued 1,165,074 12,156,948
Shares redeemed (298,711) (3,200,889)
------------ ------------
Net increase 866,363 $ 8,956,059
============ ============
<PAGE>
Class C Shares for the
Year Ended Dollar
December 31, 1995 Shares Amount
Shares sold 201,258 $ 1,740,118
Shares issued to shareholders
in reinvestment of dividends 3,112 27,775
------------ ------------
Total issued 204,370 1,767,893
Shares redeemed (68,570) (583,898)
------------ ------------
Net increase 135,800 $ 1,183,995
============ ============
Class D Shares for the Year Dollar
Ended December 31, 1996 Shares Amount
Shares sold 1,242,352 $ 12,804,879
Shares issued to shareholders
in reinvestment of dividends
and distributions 95,879 1,045,958
Automatic conversion of shares 104,699 1,098,316
------------ ------------
Total issued 1,442,930 14,949,153
Shares redeemed (1,284,258) (13,335,723)
------------ ------------
Net increase 158,672 $ 1,613,430
============ ============
Class D Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 2,439,964 $ 21,030,210
Shares issued to shareholders
in reinvestment of dividends 108,946 935,152
------------ ------------
Total issued 2,548,910 21,965,362
Shares redeemed (2,842,527) (24,366,415)
------------ ------------
Net decrease (293,617) $ (2,401,053)
============ ============
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, 1996, the Fund had entered into reverse
repurchase agreements in the amount of $22,350,300. For the year
ended December 31, 1996, the maximum amount entered into was
$43,760,579, the average amount outstanding was approximately
$8,277,000, and the daily weighted average interest rate was 5.94%.
<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, 1996, the related
statements of operations and cash flows for the year then ended,
changes in net assets for each of the years in the two-year period
then ended and the financial highlights for each of the years in the
three-year period 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, 1996, by correspondence with the custodian and broker. 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, 1996,
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.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
February 12, 1997
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
Merrill Lynch Americas Income Fund, Inc. during the year ended
December 31, 1996 are attributable to income received by the Fund
from foreign sources. Additionally, the Fund paid a short-term
capital gains distribution of $0.315483 per share to shareholders of
record on December 18, 1996. There were no long-term capital gains
distributions paid by the Fund during the year.
Please retain this information for your records.
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
