MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Semi-Annual Report
June 30, 1998
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.
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.
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
DEAR SHAREHOLDER
The investment environment was challenging for Merrill Lynch
Americas Income Fund, Inc. during the quarter ended June 30, 1998.
With greater volatility in mature equity markets, investors became
increasingly sensitive to vulnerabilities in emerging economies
during the quarter. Although the announcement of the International
Monetary Fund (IMF) package was initially successful in supporting
investor confidence in Russia, investor sentiment was reversed by
subsequent events. Russia exchanged its short-term ruble-denominated
debt for medium-term and long-term US dollar-denominated debt.
Additional supply of US dollar-denominated Russian debt pressured
Russian and other emerging market bond spreads relative to US
Treasury issues. Investors focused on Russia's ability to implement
fiscal measures, since successful implementation of such reforms is
important for improving investor confidence not only in Russia, but
in emerging markets worldwide.
Brazil continued to see improvements in its external sector, but
faces some fiscal pressures in an electoral year. The government has
scheduled the bulk of its aggressive privatization calendar for the
third quarter of 1998, which will provide greater support to
Brazil's international reserves and fiscal accounts. Current
electoral polls indicate that a re-election of President Cardoso in
the first round is possible in October. It is too early to speculate
on what measures would be implemented if President Cardoso were re-
elected, especially on the fiscal front, in an effort to continue
strengthening the Real Plan.
Venezuela, a country which is a large oil producer, has seen its
fiscal accounts impacted by lower international oil prices and
political concerns going into regional and presidential elections
toward the end of 1998. The government is attempting to move forward
in its privatization efforts and in passing legislation to improve
the fiscal accounts.
Ecuador and Colombia recently elected candidates who intend to
tighten fiscal accounts. Ecuador's recent fiscal performance started
to improve markedly over last year, even before the new president is
inaugurated.
Portfolio Matters
During the quarter ended June 30, 1998, we remained cautiously
constructive on the outlook for emerging market bonds, especially at
current yields compared to those of US Treasury bonds. We also were
attentive to developments in the developed markets to the extent
that they affected emerging markets. For example, the deteriorating
economic situation in Japan and the lack of credible plans to
revitalize business activity, support its currency, and reform the
beleagured banking sector, are of concern to emerging market
investors. Given the relative size and importance of the Japanese
economy relative to the rest of Asia, it appears that the overall
strength of the region hinges on developments in Japan.
During the quarter ended June 30, 1998, we also extended the Fund's
duration to 5.49 years, and overweighted our exposure to Venezuela,
Russia and Brazil in the expectation that a package from the IMF for
Russia would be approved shortly. We effectively achieved the
increase in duration by replacing short-term securities with longer-
term issues. We also increased the Fund's leverage to 23.9% of total
assets by June 30, 1998, which improved the Fund's net yields. (For
a complete explanation of the benefits and risks of leveraging, see
page 1 of this report to shareholders.) We expected the approval of
the IMF package to provide a valuable window of opportunity for
Russia, which, if used appropriately, would support the market as a
whole, and especially Venezuela and Brazil. In July, after the
closing of the quarter, a multi-billion IMF and Group of Seven
Industrialized Countries (G-7) financial rescue package was enacted.
After a brief period during which asset prices recovered, domestic
market weakness and capital flight resumed in the face of unfinished
fiscal legislation, deterioration in Russia's domestic banking
sector, renewed Japanese yen weakness and the sharp correction in
the US equity markets. In order to protect its foreign currency
reserves, Russian authorities decreed on August 17, 1998 a widening
of the Russian ruble band and forced restructuring of its local
currency debt.
We have adopted a cautious view in emerging market bonds, where
yield spreads over US Treasury bonds appear generous, but risks need
to be monitored very closely. We remain vigilant of developments in
G-7 markets, of further macroeconomic policy implementation in
Russia and of contagion risks in Latin America.
In Conclusion
We thank you for your continued 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
Senior Vice President and
Portfolio Manager
August 20, 1998
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
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
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. 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 representation
of future performance. Figures shown in the "Recent Performance
Results" and "Average Annual Total Return" 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.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/98 - 8.24% -11.91%
Inception (10/21/94) through 6/30/98 +11.13 + 9.91
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/98 -8.72% -11.61%
Inception (8/27/93) through 6/30/98 +7.57 + 7.57
[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 6/30/98 - 8.77% - 9.50%
Inception (10/21/94) through 6/30/98 +10.16 +10.16
[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 6/30/98 -8.16% -11.83%
Inception (8/27/93) through 6/30/98 +8.13 + 7.22
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
Standardized
12 Month 3 Month Since Inception 30-Day Yield
Total Return Total Return Total Return As of 6/30/98
<S> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares -8.24% -15.59% +47.62% 11.16%
ML Americas Income Fund Class B Shares -8.72 -15.71 +42.40 10.85
ML Americas Income Fund Class C Shares -8.77 -15.72 +42.91 10.78
ML Americas Income Fund Class D Shares -8.16 -15.51 +45.99 10.98
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
reinvestment returns are based on changes in net asset values for
the periods shown, and assume reinvestment of all dividends and
capital gains distributions at net asset value on the
payable date. The Fund's inception dates are: Class A and Class C
Shares, 10/21/94; and Class B and Class D Shares, 8/27/93.
</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> <S> <S> <C> <C> <C> <C>
Brazil Industrials US$ 1,000,000 MRS Logistica S.A. 10.625% 8/15/2005 $ 850,000 1.2%
Utilities-- 4,500,000 Espirito Santo Centrais 10.00 7/15/2007 3,836,250 5.4
Electric
Total Bonds in Brazil
(Cost--$5,287,500) 4,686,250 6.6
China Transportation 1,000,000 Cathay International
Ltd. (c) 13.00 4/15/2008 880,000 1.2
Total Bonds in China
(Cost--$1,000,000) 880,000 1.2
Mexico Industrials 4,000,000 Petroleos Mexicanos 9.50 9/15/2027 3,795,000 5.3
Total Bonds in Mexico
(Cost--$4,045,000) 3,795,000 5.3
Russia Financial 2,000,000 SBS-AGRO Finance B.V. 10.25 7/21/2000 1,510,000 2.1
Services
Total Bonds in Russia
(Cost--$2,002,000) 1,510,000 2.1
Total Investments in Bonds
(Cost--$12,334,500) 10,871,250 15.2
Brady Bonds*
Argentina Sovereign 5,000,000 Republic of Argentina,
Government Global Bonds 9.75 9/19/2027 4,632,500 6.5
Obligations
Total Brady Bonds in Argentina
(Cost--$4,997,500) 4,632,500 6.5
Brazil Sovereign 31,905,775 Republic of Brazil, Floating
Government Rate 'C' Bonds (b)(d) 8.00 4/15/2014 23,490,627 32.8
Obligations
Total Brady Bonds in Brazil
(Cost--$25,893,678) 23,490,627 32.8
</TABLE>
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Bonds Rate Date (Note 1a) Net Assets
<S> <S> <S> <S> <C> <C> <C> <C>
Colombia Sovereign US$ 4,000,000 Republic of Colombia,
Government Global Bonds 8.625% 4/01/2008 $ 3,794,000 5.3%
Obligations
Total Brady Bonds in Colombia
(Cost--$3,772,000) 3,794,000 5.3
Mexico Sovereign 1,000 United Mexican States, Value
Government Recovery Rights (a) 0.00 0 0.0
Obligations
Total Brady Bonds in Mexico
(Cost--$0) 0 0.0
Panama Sovereign 2,000,000 Republic of Panama, Global
Government Bonds 8.875 9/30/2027 1,890,000 2.6
Obligations
Total Brady Bonds in Panama
(Cost--$1,980,000) 1,890,000 2.6
Peru Sovereign 2,000,000 Republic of Peru, Floating
Government Rate Reduction Bond 3.25 3/07/2017 1,117,500 1.6
Obligations
Total Brady Bonds in Peru
(Cost--$1,235,012) 1,117,500 1.6
Russia Sovereign 535,073 Republic of Russia, IAN
Government (b)(c) 6.625 12/15/2015 237,098 0.3
Obligations 29,000,000 Republic of Russia,
Principal Loan 6.625 12/15/2020 13,702,500 19.2
Total Brady Bonds in Russia
(Cost--$17,091,567) 13,939,598 19.5
South Sovereign 3,000,000 Republic of Korea,
Korea Government Global Bonds 8.875 4/15/2008 2,722,548 3.8
Obligations
Total Brady Bonds in South Korea
(Cost--$2,886,000) 2,722,548 3.8
Venezuela Sovereign 11,500,000 Republic of Venezuela,
Government Global Bonds (d) 9.25 9/15/2027 8,912,500 12.5
Obligations
Total Brady Bonds in Venezuela
(Cost--$10,445,250) 8,912,500 12.5
Total Investments in Brady Bonds
(Cost--$68,301,007) 60,499,273 84.6
Short-Term Securities
Mexico Foreign MXP 20,246,060 Mexican Cetes 20.75 2/11/1999 1,951,140 2.7
Government
Obligations**
Total Short-Term Securities
in Mexico (Cost--$2,114,476) 1,951,140 2.7
United US US$ 4,698,000 Federal Home Loan
States Government Mortgage Corp. 5.85 7/01/1998 4,698,000 6.6
Agency
Obligations**
Total Short-Term Securities
in the United States
(Cost--$4,698,000) 4,698,000 6.6
Total Investments in
Short-Term Securities
(Cost--$6,812,476) 6,649,140 9.3
Total Investments (Cost--$87,447,983) 78,019,663 109.1
Liabilities in Excess of Other Assets (6,518,235) (9.1)
------------ ------
Net Assets $ 71,501,428 100.0%
============ ======
<FN>
(a)The rights may be exercised until 3/31/2020.
(b)Represents a pay-in-kind security which may pay interest in
additional shares/face.
(c)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
(d)All or a portion of the security held as collateral in connection
with reverse repurchase agreements (Note 5).
*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.
**Certain Foreign Government and 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.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of June 30, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$87,447,983) (Note 1a) $ 78,019,663
Foreign cash (Note 1c) 3,462
Cash 764
Receivables:
Securities sold $ 19,839,748
Interest 1,852,213
Capital shares sold 539,935 22,231,896
------------
Deferred organization expenses (Note 1f) 13,461
Prepaid registration fees and other assets (Note 1f) 23,613
------------
Total assets 100,292,859
------------
Liabilities: Payables:
Reverse repurchase agreements (Note 5) 24,000,000
Securities purchased 4,043,922
Distributions to shareholders (Note 1g) 256,400
Capital shares redeemed 188,742
Investment adviser (Note 2) 51,462
Distributor (Note 2) 41,893
Interest on reverse repurchase agreements (Note 5) 6,750 28,589,169
------------
Accrued expenses and other liabilities 202,262
------------
Total liabilities 28,791,431
------------
Net Assets: Net assets $ 71,501,428
============
Net Assets Class A Common Stock, $0.10 par value,
Consist of: 100,000,000 shares authorized $ 27,346
Class B Common Stock, $0.10 par value,
100,000,000 shares authorized 688,633
Class C Common Stock, $0.10 par value,
100,000,000 shares authorized 34,495
Class D Common Stock, $0.10 par value,
100,000,000 shares authorized 126,697
Paid-in capital in excess of par 86,009,928
Accumulated capital losses on investments--net (3,080,760)
Accumulated distributions in excess of capital
gains on investments--net (Note 1g) (2,876,442)
Unrealized depreciation on investments--net (9,428,469)
------------
Net assets $ 71,501,428
============
Net Asset Class A--Based on net assets of $2,234,901 and
Value: 273,457 shares outstanding $ 8.17
============
Class B--Based on net assets of $56,132,546 and
6,886,325 shares outstanding $ 8.15
============
Class C--Based on net assets of $2,811,671 and
344,952 shares outstanding $ 8.15
============
Class D--Based on net assets of $10,322,310 and
1,266,968 shares outstanding $ 8.15
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended June 30, 1998
<S> <S> <C> <C>
Investment Income Interest and discount earned $ 5,665,293
(Note 1e):
Expenses: Interest expense (Note 5) $ 733,351
Investment advisory fees (Note 2) 340,838
Account maintenance and distribution fees--Class B (Note 2) 263,267
Transfer agent fees--Class B (Note 2) 63,865
Printing and shareholder reports 50,597
Custodian fees 37,638
Accounting services (Note 2) 37,274
Registration fees (Note 1f) 36,423
Professional fees 31,490
Directors' fees and expenses 19,793
Account maintenance and distribution fees--Class C (Note 2) 14,829
Account maintenance fees--Class D (Note 2) 13,877
Transfer agent fees--Class D (Note 2) 8,980
Amortization of organization expenses (Note 1f) 7,160
Transfer agent fees--Class A (Note 2) 3,659
Transfer agent fees--Class C (Note 2) 3,498
Interest on short sales (Note 1h) 563
Pricing fees 279
Other 9,232
------------
Total expenses 1,676,613
------------
Investment income--net 3,988,680
------------
Realized & Realized loss from:
Unrealized Investments--net (2,921,180)
Loss on Foreign currency transactions--net (159,580) (3,080,760)
Investments--Net ------------
(Notes 1b, 1c, Change in unrealized appreciation/depreciation on:
1e & 3): Investments--net (9,494,266)
Foreign currency transactions--net (149) (9,494,415)
------------ ------------
Net realized and unrealized loss on investments and
foreign currency transactions (12,575,175)
------------
Net Decrease in Net Assets Resulting from Operations $ (8,586,495)
============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
June 30, December 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 3,988,680 $ 10,175,244
Realized gain (loss) on investments and foreign
currency transactions--net (3,080,760) 7,854,219
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (9,494,415) (16,504,979)
------------ ------------
Net increase (decrease) in net assets resulting from operations (8,586,495) 1,524,484
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (215,652) (1,563,878)
Shareholders Class B (3,091,421) (7,096,209)
(Note 1g): Class C (162,081) (487,460)
Class D (519,526) (1,027,697)
Realized gain on investments--net:
Class A -- (416,733)
Class B -- (7,162,455)
Class C -- (379,099)
Class D -- (1,075,432)
In excess of realized gain on investments--net:
Class A -- (132,693)
Class B -- (2,280,609)
Class C -- (120,710)
Class D -- (342,430)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (3,988,680) (22,085,405)
------------ ------------
Capital Share Net decrease in net assets derived from capital
Transactions share transactions (15,786,856) (97,754,082)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (28,362,031) (118,315,003)
Beginning of period 99,863,459 218,178,462
------------ ------------
End of period $ 71,501,428 $ 99,863,459
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Six Months Ended June 30, 1998
<S> <S> <C>
Cash Provided by Net decrease in net assets resulting from operations $ (8,586,495)
Operating Adjustments to reconcile net decrease in net assets
Activities: resulting from operations to net cash used for operating activities:
Increase in receivables (505,785)
Decrease in other liabilities (13,095)
Realized and unrealized loss on investments--net 12,575,175
Amortization of discount (1,639,361)
--------------
Net cash provided by operating activities 1,830,439
--------------
Cash Used for Proceeds from sales of long-term securities 188,594,657
Investing Purchases of long-term securities (236,154,386)
Activities: Purchases of short-term investments (638,608,030)
Proceeds from sales and maturities of short-term investments 686,032,178
--------------
Net cash used for investing activities (135,581)
--------------
Cash Used for Cash receipts from issuance of capital shares 6,050,586
Financing Cash receipts from borrowings 69,816,809
Activities: Cash payments on borrowings (45,816,809)
Cash payments on capital shares redeemed (23,962,310)
Dividends paid to shareholders (7,781,015)
--------------
Net cash used for financing activities (1,692,739)
--------------
Cash: Net increase in cash 2,119
Cash at beginning of period 2,107
--------------
Cash at end of period $ 4,226
==============
Cash Flow Cash paid for interest $ 727,164
Information: ==============
Non-Cash Capital shares issued on reinvestment of dividends paid to shareholders $ 1,688,928
Financing ==============
Activities:
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
For the For the
Six Period
The following per share data and ratios have been derived Months Oct. 21,
from information provided in the financial statements. Ended For the Year 1994++ to
June 30, Ended December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996+++++ 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.60 $ 11.36 $ 9.70 $ 8.51 $ 9.08
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .45 .72 .97 .94 .17
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.43) (.54) 2.14 1.19 (.57)
-------- -------- -------- -------- --------
Total from investment operations (.98) .18 3.11 2.13 (.40)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.45) (.72) (1.00) (.94) (.14)
In excess of investment income--net -- -- (.13) -- --
Realized gain on investments--net -- (.93) (.32) -- (.03)
In excess of realized gain on
investments--net -- (.29) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.45) (1.94) (1.45) (.94) (.17)
-------- -------- -------- -------- --------
Net asset value, end of period $ 8.17 $ 9.60 $ 11.36 $ 9.70 $ 8.51
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (10.71%)+++ 1.74% 33.64% 27.27% (4.45%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense 1.44%* 1.38% 1.05% 1.20% 1.22%*
Net Assets: ======== ======== ======== ======== ========
Expenses 3.10%* 1.48% 1.32% 1.36% 1.91%*
======== ======== ======== ======== ========
Investment income--net 9.55%* 6.31% 8.97% 11.25% 8.63%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 2,235 $ 4,842 $ 28,136 $ 1,165 $ 253
Data: ======== ======== ======== ======== ========
Portfolio turnover 216.19% 942.74% 420.35% 127.17% 353.33%
======== ======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements
outstanding, end of period
(in thousands) $ 24,000 $ -- $ 22,350 $ 10,265 $ 17,058
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements outstanding during the
period (in thousands) $ 24,420 $ 3,185 $ 8,277 $ 2,640 $ 17,315
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements per share during
the period $ 2.54 $ .20 $ .48 $ .20 $ 1.19
======== ======== ======== ======== ========
<CAPTION>
Class B
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended December 31,
June 30,
Increase (Decrease) in Net Asset Value: 1998 1997 1996+++++ 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.57 $ 11.31 $ 9.65 $ 8.48 $ 10.84
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .41 .63 .88 .88 .75
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.42) (.52) 2.15 1.17 (2.36)
-------- -------- -------- -------- --------
Total from investment operations (1.01) .11 3.03 2.05 (1.61)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.41) (.63) (.93) (.88) (.64)
In excess of investment income--net -- -- (.12) -- --
Realized gain on investments--net -- (.93) (.32) -- (.11)
In excess of realized gain on
investments--net -- (.29) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.41) (1.85) (1.37) (.88) (.75)
-------- -------- -------- -------- --------
Net asset value, end of period $ 8.15 $ 9.57 $ 11.31 $ 9.65 $ 8.48
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (10.99%)+++ 1.12% 32.75% 26.10% (15.08%)
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest
Net Assets: expense and net of reimbursement 2.21%* 2.16% 1.83% 1.97% 1.79%
======== ======== ======== ======== ========
Expenses, excluding interest expense 2.21%* 2.16% 1.83% 1.97% 2.00%
======== ======== ======== ======== ========
Expenses 3.84%* 2.26% 2.10% 2.13% 2.70%
======== ======== ======== ======== ========
Investment income--net 8.81%* 5.76% 8.36% 10.40% 8.14%
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 56,132 $ 78,733 $160,204 $103,465 $101,933
======== ======== ======== ======== ========
Portfolio turnover 216.19% 942.74% 420.35% 127.17% 353.33%
======== ======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements
outstanding, end of period
(in thousands) $ 24,000 $ -- $ 22,350 $ 10,265 $ 17,058
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements outstanding during the
period (in thousands) $ 24,420 $ 3,185 $ 8,277 $ 2,640 $ 17,315
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements per share during
the period $ 2.54 $ .20 $ .48 $ .20 $ 1.19
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
+++Aggregate total investment return.
+++++Based on average shares outstanding.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C
For the For the
Six Period
The following per share data and ratios have been derived Months Oct. 21,
from information provided in the financial statements. Ended For the Year 1994++ to
June 30, Ended December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996+++++ 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.57 $ 11.31 $ 9.65 $ 8.47 $ 9.08
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .41 .63 .87 .87 .15
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.42) (.52) 2.15 1.18 (.61)
-------- -------- -------- -------- --------
Total from investment operations (1.01) .11 3.02 2.05 (.46)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.41) (.63) (.92) (.87) (.13)
In excess of investment income--net -- -- (.12) -- --
Realized gain on investments--net -- (.93) (.32) -- (.02)
In excess of realized gain on
investments--net -- (.29) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.41) (1.85) (1.36) (.87) (.15)
-------- -------- -------- -------- --------
Net asset value, end of period $ 8.15 $ 9.57 $ 11.31 $ 9.65 $ 8.47
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (11.02%)+++ 1.06% 32.66% 26.18% (5.06%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense 2.26%* 2.23% 1.90% 2.05% 2.24%*
Net Assets: ======== ======== ======== ======== ========
Expenses 3.90%* 2.33% 2.17% 2.19% 3.05%*
======== ======== ======== ======== ========
Investment income--net 8.74%* 5.64% 8.17% 10.23% 8.87%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 2,812 $ 4,222 $ 11,436 $ 1,396 $ 75
======== ======== ======== ======== ========
Portfolio turnover 216.19% 942.74% 420.35% 127.17% 353.33%
======== ======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements
outstanding, end of period
(in thousands) $ 24,000 $ -- $ 22,350 $ 10,265 $ 17,058
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements outstanding during the
period (in thousands) $ 24,420 $ 3,185 $ 8,277 $ 2,640 $ 17,315
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements per share during
the period $ 2.54 $ .20 $ .48 $ .20 $ 1.19
======== ======== ======== ======== ========
<CAPTION>
Class D
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended December 31,
June 30,
Increase (Decrease) in Net Asset Value: 1998 1997 1996+++++ 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.57 $ 11.31 $ 9.65 $ 8.48 $ 10.84
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .44 .69 .95 .92 .80
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.42) (.52) 2.13 1.17 (2.36)
-------- -------- -------- -------- --------
Total from investment operations (.98) .17 3.08 2.09 (1.56)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.44) (.69) (.97) (.92) (.68)
In excess of investment income--net -- -- (.13) -- --
Realized gain on investments--net -- (.93) (.32) -- (.12)
In excess of realized gain on
investments--net -- (.29) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.44) (1.91) (1.42) (.92) (.80)
-------- -------- -------- -------- --------
Net asset value, end of period $ 8.15 $ 9.57 $ 11.31 $ 9.65 $ 8.48
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (10.76%)+++ 1.65% 33.44% 26.75% (14.65%)
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense
Net Assets: and net of reimbursement 1.69%* 1.63% 1.31% 1.44% 1.28%
======== ======== ======== ======== ========
Expenses, excluding interest expense 1.69%* 1.63% 1.31% 1.44% 1.48%
======== ======== ======== ======== ========
Expenses 3.34%* 1.73% 1.58% 1.60% 2.17%
======== ======== ======== ======== ========
Investment income--net 9.36%* 6.30% 8.92% 10.85% 8.65%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 10,322 $ 12,066 $ 18,402 $ 14,169 $ 14,938
Data: ======== ======== ======== ======== ========
Portfolio turnover 216.19% 942.74% 420.35% 127.17% 353.33%
======== ======== ======== ======== ========
Leverage: Amount of reverse repurchase
agreements outstanding, end of period
(in thousands) $ 24,000 $ -- $ 22,350 $ 10,265 $ 17,058
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements outstanding during the
period (in thousands) $ 24,420 $ 3,185 $ 8,277 $ 2,640 $ 17,315
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements per share during
the period $ 2.54 $ .20 $ .48 $ .20 $ 1.19
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
+++Aggregate total investment return.
+++++Based on average shares outstanding.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
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. These unaudited financial
statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. 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 distri-bution 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 options 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.
* 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 for a set price on a future date. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(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 period not exceeding five years. 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. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due to primarily to differing tax
treatments for post-October losses.
(h) Short sales--When the Fund engages in a short sale, an amount
equal to the proceeds 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 market value of the
short sale. The Fund maintains a segregated account of securities as
collateral for the short sales. The Fund is exposed to market risk
based on the amount, if any, that the market value of the stock
exceeds the market value of the securities in the segregated
account.
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 ("MLFD" or "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of
Merrill Lynch Group, Inc.
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operation of the Fund. For such
services, the Fund pays a monthly fee of 0.60%, on an annual basis,
of the average daily value of the Fund's net assets plus the
principal amount of borrowings incurred by the Fund for leverage
purposes.
Pursuant to 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 six months ended June 30, 1998, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Fund's Class D Shares as follows:
MLFD MLPF&S
Class D $302 $3,848
For the six months ended June 30, 1998, MLPF&S received contingent
deferred sales charges of $141,958 and $735 relating to transactions
in Class B and Class C Shares, respectively.
For the six months ended June 30, 1998, the Fund paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $6 for security
price quotations to compute the net asset value of the Fund.
Merrill Lynch Americas Income Fund, Inc., June 30, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
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, PFD, MLFDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended June 30, 1998 were $220,657,918 and
$206,648,088, respectively.
Net realized gains (losses) for the six months ended June 30, 1998
and net unrealized losses as of June 30, 1998 were as follows:
Realized
Gains Unrealized
(Losses) Losses
Long-term investments $ (2,663,715) $ (9,264,984)
Short-term investments (290,205) (163,336)
Short sales (51,000) --
Options written 71,000 --
Financial futures contracts 12,740 --
Foreign currency transactions (209,545) (149)
Forward foreign exchange
contracts 49,965 --
------------ ------------
Total $ (3,080,760) $ (9,428,469)
============ ============
Transactions in call options written for the six months ended
June 30, 1998 were as follows:
Nominal Value
Covered by Premiums
Options Written Received
Outstanding call options
written, beginning of period -- --
Options written 14,000,000 $ 71,000
Options expired (14,000,000) (71,000)
------------ ------------
Outstanding call options
written, end of period -- $ --
------------ ------------
As of June 30, 1998, net unrealized depreciation for Federal income
tax purposes aggregated $9,428,320, of which $22,000 related to
appreciated securities and $9,450,320 related to depreciated
securities. At June 30, 1998, the aggregate cost of investments for
Federal income tax purposes was $87,447,983.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $15,786,856 and $97,754,082 for the six months ended June 30,
1998 and for the year ended December 31, 1997, respectively.
Transactions in shares of capital were as follows:
Class A Shares for the Six Months Dollar
Ended June 30, 1998 Shares Amount
Shares sold 152,882 $ 1,420,271
---------- ------------
Shares issued to shareholders
in reinvestment of dividends 16,102 154,006
---------- ------------
Total issued 168,984 1,574,277
Shares redeemed (399,888) (3,695,472)
---------- ------------
Net decrease (230,904) $ (2,121,195)
========== ============
Class A Shares for the Year Dollar
Ended December 31, 1997 Shares Amount
Shares sold 5,151,636 $ 56,403,293
Shares issued to shareholders
in reinvestment of dividends
and distributions 51,107 445,703
---------- ------------
Total issued 5,202,743 56,848,996
Shares redeemed (7,175,214) (79,112,077)
---------- ------------
Net decrease (1,972,471) $(22,263,081)
========== ============
Class B Shares for the Six Months Dollar
Ended June 30, 1998 Shares Amount
Shares sold 345,037 $ 3,188,853
Shares issued to shareholders
in reinvestment of dividends 131,323 1,238,193
---------- ------------
Total issued 476,360 4,427,046
Automatic conversion of shares (13,379) (124,632)
Shares redeemed (1,802,161) (17,011,564)
---------- ------------
Net decrease (1,339,180) $(12,709,150)
========== ============
Class B Shares for the Year Dollar
Ended December 31, 1997 Shares Amount
Shares sold 3,167,804 $ 34,931,742
Shares issued to shareholders
in reinvestment of dividends
and distributions 820,562 8,237,832
---------- ------------
Total issued 3,988,366 43,169,574
Automatic conversion of shares (47,292) (520,368)
Shares redeemed (9,878,218) (107,912,244)
---------- ------------
Net decrease (5,937,144) $(65,263,038)
========== ============
Class C Shares for the Six Months Dollar
Ended June 30, 1998 Shares Amount
Shares sold 19,722 $ 185,287
Shares issued to shareholders
in reinvestment of dividends 6,862 64,816
---------- ------------
Total issued 26,584 250,103
Shares redeemed (122,731) (1,148,147)
---------- ------------
Net decrease (96,147) $ (898,044)
========== ============
Class C Shares for the Year Dollar
Ended December 31, 1997 Shares Amount
Shares sold 402,764 $ 4,445,980
Shares issued to shareholders
in reinvestment of dividends
and distributions 54,337 552,404
---------- ------------
Total issued 457,101 4,998,384
Shares redeemed (1,027,069) (11,235,615)
---------- ------------
Net decrease (569,968) $ (6,237,231)
========== ============
Class D Shares for the Six Months Dollar
Ended June 30, 1998 Shares Amount
Shares sold 191,657 $ 1,687,718
Automatic conversion of shares 13,385 124,632
Shares issued to shareholders
in reinvestment of dividends 24,614 231,913
---------- ------------
Total issued 229,656 2,044,263
Shares redeemed (223,936) (2,102,730)
---------- ------------
Net increase (decrease) 5,720 $ (58,467)
========== ============
Class D Shares for the Year Dollar
Ended December 31, 1997 Shares Amount
Shares sold 1,019,918 $ 11,315,694
Automatic conversion of shares 47,304 520,368
Shares issued to shareholders
in reinvestment of dividends
and distributions 139,825 1,406,202
---------- ------------
Total issued 1,207,047 13,242,264
Shares redeemed (1,573,362) (17,232,996)
---------- ------------
Net decrease (366,315) $ (3,990,732)
========== ============
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.
For the six months ended June 30, 1998, the average amount
outstanding was approximately $24,420,000 and the daily weighted
average interest rate was 6.09%.
