MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Quarterly Report
March 31, 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 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.
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.
<PAGE>
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.
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.
<PAGE>
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Joseph T. Monagle Jr., Senior Vice President
Alex V. Bouzakis, Vice President
Donald C. Burke, Vice President
Paolo H. Valle, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDER
The main factors that contributed to the powerful rally in emerging
markets debt valuations in 1996 remained in place during the early
part of 1997. The generally favorable interest rate outlook in the
United States along with positive global liquidity conditions,
improving credit fundamentals in the principal emerging market
economies, and cross-over investor quest for yield, all helped
propel prices of emerging market debt higher. This trend was
abruptly halted toward the end of February as Federal Reserve Board
Chairman Alan Greenspan's ominous warnings about US economic
indicators led investors to question whether the benign US interest
rate environment would continue.
<PAGE>
The unmanaged JP Morgan Emerging Market Composite Index fell
approximately 6% from its peak in late February to the first week of
April. Emerging debt markets staged only a modest recovery in
subsequent weeks. Investor attention is now focused on US economic
fundamentals and the Federal Reserve Board monetary policy which
should continue to have a significant impact on emerging market debt
valuations for the foreseeable future.
Despite this recent setback, the credit fundamentals in the major
emerging economies are sound and improving. Sovereign ratings
upgrades already have occurred in Argentina and Brazil. In late
April, Standard & Poor's Corp. (S&P) also upgraded the ratings of
several Argentine banks and corporate issues above the Argentine
sovereign rating; most were upgraded to investment grade. This was
surprising as most investors believed in a "sovereign ceiling" for
non-government debt. Currently, S&P appears to have limited this
action to countries which have "dollarized" their economies.
However, it opens the possibility of similar action for companies in
"non-dollarized" economies which have significant dollar earnings or
overseas assets. In addition to the positive investment tone this
sets for emerging markets debt, investment-grade ratings imply a
much larger investor base.
Investment Environment
Mexico
Mexico's economic fundamentals continue to show signs of improvement
in 1997. Economic growth is expanding and includes more sectors of
the economy. The downward trend in inflation should continue in 1997
with a corresponding drop in local interest rates. The main risks
continue to be political and social, as Mexico faces contentious
elections in July and the need to improve the economic well being of
a population which has become more impoverished since the
devaluation of the peso.
Mexico, along with most other emerging countries, may also have to
deal with the prospect of higher international interest rates and
reduced global liquidity. This will make the structural reforms
instituted over the past few years all the more important. These
include a vastly reduced amount of short-term external debt and much
lower current account deficit which have dramatically reduced
Mexico's dependence on external savings. In fact, Mexico has already
met all of its public debt amortization needs for 1997.
<PAGE>
Argentina
Argentina's economy continued to recover smartly from its "tequila
effect" recession. (The devaluation of the Mexican peso negatively
affected the other Latin American economies.) Gross domestic product
is expected to grow in excess of 5% in 1997, which should help the
government's finances and alleviate a major source of investor
concern. Argentina also made significant progress in restructuring
its foreign debt. There were concerns surrounding the approximately
$12 billion of public debt amortization in 1997. Argentina's rapidly
improving economic fundamentals along with a favorable global
investment climate enabled the country to successfully place
approximately $6 billion of debt in international capital markets
since the final months of 1996. Investors will now be mainly focused
on the progress surrounding labor and state reforms while keeping an
eye on October 1997 elections.
Brazil
Brazil continued to benefit from the real plan, as inflation remains
under control. This program conquered hyperinflation and brought the
level of price increases down to 10% in 1996 and a projected 8% in
1997. The downside to this program was the currency, which has
appreciated. Estimates vary on the amount of the overvaluation, but
the result can be seen in a deteriorating trade balance. Brazil must
also make progress on its chronic fiscal deficit and attack
significant structural imbalances in its economy. Investors are
hopeful as President Cardoso--who instituted the real plan as
finance minister in the previous administration--is expected to
succeed in his bid to change the constitution, which would enable
him to run for another term. This measure already passed the lower
house of congress and is expected to become law during the second
quarter. Progress was also made on the privatization program. Brazil
successfully sold cellular phone licenses in early April. The sale
of the state's massive CVRD mining operations is also expected to
occur in the months ahead.
Ecuador
In Ecuador, the political risk which tends to be inherent in
emerging nations was manifested in the ouster of its president in
February. Ecuador's congress voted to impeach the highly unpopular
President Bucaram on the dubious charge of mental incompetence.
Bucaram was leading Ecuador down the difficult path of reforming the
economy and instituting fiscal and monetary austerity measures. The
congress took advantage of the ensuing public outcry to oust the
president and install their choice, Fabian Alarcon. The current
president, who is scheduled to remain in office until August 1998,
has committed to carrying out a more limited, yet important, set of
economic reforms.
Venezuela
Venezuela benefited from higher-than-expected oil prices which led
to a significant fiscal and current account surplus in 1996.
Although oil prices fell substantially since last year, they are
still above projections used by the Venezuelan government in their
fiscal projections for 1997. At the same time, the country appears
to be making progress addressing structural and economic
deficiencies. Large-scale privatizations are expected to eventually
occur in the aluminum and steel industries which will help reduce
the bloated state influence on the economy. Further progress is
necessary in areas such as state subsidies and labor reform in order
to continue along the path of free market reform.
<PAGE>
In Conclusion
We thank you for your investment in Merrill Lynch Americas Income
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and
Senior Portfolio Manager
May 8, 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:
<PAGE>
* 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. However, in the case of certain
eligible investors, the shares 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 repre-
sentation 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.
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <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--3/31/97 11.36 10.66 -- 0.171 - 4.50
------
Total $2.733
<PAGE>
Cumulative total return as of 3/31/97: +55.20%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charges; results would be lower if
sales charge was included.
</TABLE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
8/27/93--12/31/93 $10.00 $10.84 -- $0.281 +11.30%
1994 10.84 8.48 -- 0.754 -15.08
1995 8.48 9.65 -- 0.875 +26.10
1996 9.65 11.31 -- 1.365 +32.75
1/1/97--3/31/97 11.31 10.62 -- 0.151 - 4.62
------
Total $3.426
Cumulative total return as of 3/31/97: +50.90%**
<FN>
*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>
<PAGE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <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--3/31/97 11.31 10.62 -- 0.150 - 4.63
------
Total $2.530
Cumulative total return as of 3/31/97: +51.57%**
<FN>
*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>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
8/27/93--12/31/93 $10.00 $10.84 -- $0.300 +11.49%
1994 10.84 8.48 -- 0.802 -14.65
1995 8.48 9.65 -- 0.919 +26.75
1996 9.65 11.31 -- 1.420 +33.44
1/1/97--3/31/97 11.31 10.61 -- 0.164 - 4.58
------
Total $3.605
Cumulative total return as of 3/31/97: +53.57%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charges; results would be lower if
sales charge was included.
</TABLE>
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
3/31/97 12/31/96 3/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $10.66 $11.36 $9.82 + 8.55% -6.16%
ML Americas Income Fund Class B Shares* 10.62 11.31 9.78 + 8.59 -6.10
ML Americas Income Fund Class C Shares* 10.62 11.31 9.78 + 8.59 -6.10
ML Americas Income Fund Class D Shares* 10.61 11.31 9.78 + 8.49 -6.19
ML Americas Income Fund Class A Shares--Total Return* +23.07(1) -4.50(2)
ML Americas Income Fund Class B Shares--Total Return* +22.20(3) -4.62(4)
ML Americas Income Fund Class C Shares--Total Return* +22.11(5) -4.63(6)
ML Americas Income Fund Class D Shares--Total Return* +22.71(7) -4.58(8)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 8.17%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 7.70%
ML Americas Income Fund Class C Shares--Standardized 30-day Yield 7.63%
ML Americas Income Fund Class D Shares--Standardized 30-day Yield 7.90%
<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 $1.401 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.171 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $1.314 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.151 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $1.306 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.150 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $1.370 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.164 per share ordinary
income dividends.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/97 +23.07% +18.14%
Inception (10/21/94) through 3/31/97 +19.73 +17.74
<PAGE>
<FN>
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/97 +22.20% +18.20%
Inception (8/27/93) through 3/31/97 +12.14 +11.93
<FN>
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/97 +22.11% +21.11%
Inception (10/21/94) through 3/31/97 +18.57 +18.57
<FN>
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/97 +22.71% +17.80%
Inception (8/27/93) through 3/31/97 +12.69 +11.41
<FN>
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Percent of
COUNTRY Industry Face Amount Bonds Rate Date Value Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Argentina Banking US$ 5,000,000 Banco de Credito Argentina 8.50 % 12/18/1998 $ 5,000,000 2.7%
Total Bonds in Argentina
(Cost--$5,009,000) 5,000,000 2.7
Mexico Paper 3,000,000 Grupo Industrial Durango,
S.A. de C.V. 12.625 8/01/2003 3,247,500 1.8
Total Bonds in Mexico
(Cost--$3,378,750) 3,247,500 1.8
Total Investments in Bonds
(Cost--$8,387,750) 8,247,500 4.5
Brady Bonds*
Argentina Sovereign 2,500,000 Republic of Argentina,
Obligations Global Bonds 11.00 10/09/2006 2,565,625 1.4
Government 6,500,000 Republic of Argentina,
Global Bonds 11.375 1/30/2017 6,695,000 3.6
7,000,000 Republic of Argentina, PESO 11.75 2/12/2007 7,001,120 3.8
Total Brady Bonds in Argentina
(Cost--$16,442,875) 16,261,745 8.8
Brazil Sovereign 31,389,045 Republic of Brazil,
Government Floating Rate 'C' Bond 8.00 4/15/2014 23,247,669 12.6
Obligations
Total Brady Bonds in Brazil
(Cost--$25,229,131) 23,247,669 12.6
Bulgaria Sovereign 10,000,000 Republic of Bulgaria, IAB 6.562 7/28/2011 5,675,000 3.1
Government
Obligations
Total Brady Bonds in Bulgaria
(Cost--$6,000,000) 5,675,000 3.1
<PAGE>
Ecuador Sovereign 5,381,550 Republic of Ecuador, PDI
Government (Bearer) 6.4375 2/27/2015 3,033,849 1.6
Obligations 26,692,488 Republic of Ecuador, PDI
(Registered) 6.4375 2/27/2015 15,047,890 8.2
Total Brady Bonds in Ecuador
(Cost--$19,059,686) 18,081,739 9.8
Mexico Sovereign 8,500,000 United Mexican States,
Government Global Bonds 11.50 5/15/2026 8,776,250 4.7
Obligations 1,000 United Mexican States,
Value Recovery Rights (a) 0.00 0 0.0
Total Brady Bonds in Mexico
(Cost--$8,912,250) 8,776,250 4.7
Panama Sovereign 10,140,600 Republic of Panama, PDI 6.5625 7/17/2016 8,049,101 4.3
Government
Obligations
Total Brady Bonds in Panama
(Cost--$6,901,123) 8,049,101 4.3
Philippines Sovereign 3,000,000 Republic of the Philippines
Government (Registered) 8.75 10/07/2016 2,932,500 1.6
Obligations
Total Brady Bonds in the
Philippines (Cost--$3,036,750) 2,932,500 1.6
Venezuela Sovereign 45,000,000 Republic of Venezuela,
Government Par 'A' Bonds 6.75 3/31/2020 31,443,750 17.0
Obligations 157,500 Republic of Venezuela,
Recovery Rights (b) 0.00 0 0.0
Total Brady Bonds in Venezuela
(Cost--$35,718,750) 31,443,750 17.0
Total Investments in
Brady Bonds (Cost--$121,300,565) 114,467,754 61.9
Loan Agreements
Morocco Sovereign 10,000,000 Morocco Restructuring &
Government Consolidation Agreements 6.375 1/01/2009 8,750,000 4.7
Obligations
Total Investments in Loan
Agreements (Cost--$8,962,500) 8,750,000 4.7
<PAGE>
Short-Term Securities
Commercial 2,340,000 General Motors Acceptance Corp. 6.75 4/01/1997 2,340,000 1.3
Paper**
Total Investments in
Short-Term Securities (Cost--$2,340,000) 2,340,000 1.3
Total Investments (Cost--$140,990,815) 133,805,254 72.4
Other Assets Less Liabilities 50,985,582 27.6
------------ ------
Net Assets $184,790,836 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $19,407,731
and 1,820,028 shares outstanding $ 10.66
============
Class B--Based on net assets of $138,236,760
and 13,018,965 shares outstanding $ 10.62
============
Class C--Based on net assets of $10,202,901
and 960,974 shares outstanding $ 10.62
============
Class D--Based on net assets of $16,943,444
and 1,596,516 shares outstanding $ 10.61
============
<FN>
(a)The rights may be exercised until 3/31/2020.
(b)The rights may be exercised until 12/31/2019.
*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 is traded on a discount basis; the interest rate
shown is the discount rate paid at the time of purchase by the Fund.
</TABLE>
