MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Quarterly Report
September 30, 1999
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., September 30, 1999
DEAR SHAREHOLDER
Investment Environment
By September 30, 1999, the emerging markets investment environment
was relatively stable, with asset prices having recovered most of
the sharp losses experienced in May, when the Federal Reserve Board
shifted policy toward higher interest rates. At September 30, 1999,
the unmanaged J.P. Morgan Emerging Markets Bond-Latin Index (EMBI-
Latin) had a total return of +8.99% year-to-date. The Fund's Class
A, Class B, Class C and Class D Shares had total returns of +11.79%,
+10.97%, +10.93% and +11.61%, respectively, for the same nine-month
period. The EMBI-Latin outperformed the unmanaged CS First Boston US
High Yield Index and the unmanaged Lehman US Aggregate Index, which
returned +1.17% and -0.70%, year-to-date ended September 30, 1999,
respectively. We positioned the Fund to generate an attractive level
of monthly income. For example, the Class B Share's monthly dividend
rose from $0.0315 on June 30, 1999 to $0.0380 at September 30, 1999.
(Complete performance information can be found on pages 4 and 5 of
this report to shareholders.)
Several factors contributed to the emerging markets' resilience and
investment returns that surpassed those of most fixed-income classes
this year. First, economic and investment fundamentals are holding
well in the core countries. For example Brazil, where fiscal
performance is paramount in determining market sentiment, has been
in line with expectations. Second, the doubling of oil prices from
their February 1999 lows has benefited many countries' external
payments situation and government finances, most notably in Mexico
and Venezuela. Other commodities relevant to emerging countries are
on the upswing as well. Third, the market is enjoying strong
technical support because prices are unusually depressed, leverage
is scarce, and liquidity and new issuance have declined.
Going forward, we expect that emerging markets' returns will be
determined, to an important extent, by the course of US interest
rates. Other systemic risks have declined, and individual country
risks, always present in this asset class, seem to have abated in
the short term. It is possible that higher US and international
interest rates may delay emerging markets' economic recovery and
limit their access to international capital markets. In addition,
emerging markets are also vulnerable to capital markets' tight-
liquidity episodes (such as the one this summer), which led to
widening of spreads in most fixed-income markets. Potential Year
2000 problems may also have a negative effect on emerging markets.
In the next few months, we believe that coupon income will make the
strongest contribution to the Fund's total returns. Any advances are
likely to be modest in the short term, as we see emerging market
spreads remaining in a range of 1000 basis points over US Treasury
securities, as measured by the EMBI-Latin.
Portfolio Matters
In terms of country allocations, we continued to overweight Mexico,
because of its economic recovery, declining inflation and orderly
pre-presidential election politics, which have earned it an upgrade
from rating agencies. We also favored Venezuela in relative terms,
because of the strength in oil prices and the expectation that the
reform of its institutional framework will prove of long-term
benefit. We continued to underweight Argentina, where we believe the
upcoming presidential election is likely to generate volatility and
expose some of the contradictions in the country's underlying
economic policy, particularly its fixed foreign exchange regime.
We profited from having an overweight position in Brazil earlier,
but at September 30, 1999, we were neutral on its credit. We sold
our remaining Ecuadorean position in March, anticipating the
country's bond default, and eliminated positions outside Latin
America in accordance with our more regionally focused investment
discipline. By September quarter-end, the Fund was fully invested,
with cash levels at 0.4% of Fund net assets.
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 in our next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Aldo Roldan)
Aldo Roldan
Vice President and
Portfolio Manager
November 9, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Joseph T. Monagle Jr., Senior Vice President
Romualdo Roldan, Vice President
Donald C. Burke, Vice President and Treasurer
Barbara G. Fraser, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Americas Income Fund, Inc., September 30, 1999
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 9/30/99 +18.18% +13.45%
Inception (10/21/94) through 9/30/99 + 3.40 + 2.55
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/99 +17.09% +13.09%
Five Years Ended 9/30/99 + 2.39 + 2.39
Inception (8/27/93) through 9/30/99 + 1.96 + 1.96
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/99 +17.02% +16.02%
Inception (10/21/94) through 9/30/99 + 2.48 + 2.48
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/99 +17.93% +13.21%
Five Years Ended 9/30/99 + 2.93 + 2.09
Inception (8/27/93) through 9/30/99 + 2.49 + 1.81
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
3 Month 12 Month Since Inception Standardized
As of September 30, 1999 Total Return Total Return Total Return 30-Day Yield
<S> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares +2.81% +18.18% +17.96% 9.07%
ML Americas Income Fund Class B Shares +2.43 +17.09 +12.55 8.67
ML Americas Income Fund Class C Shares +2.42 +17.02 +12.88 8.61
ML Americas Income Fund Class D Shares +2.75 +17.93 +16.18 8.83
<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 since inception periods are from 10/21/94 for Class A &
Class C Shares and from 8/27/93 for Class B & Class D Shares.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Face Interest Maturity Percent of
COUNTRY Industry Amount Bonds Rate Date Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Industrials US$ 1,800,000 Perez Companc SA 8.125% 7/15/2007 $ 1,590,296 4.9%
Sovereign 2,300,000 Republic of Argentina 9.75 9/19/2027 1,937,750 5.9
Government
Obligations
Telecommunications 1,750,000 Telefonica de Argentina SA 9.125 5/07/2008 1,535,625 4.7
Total Bonds in Argentina (Cost--$4,780,062) 5,063,671 15.5
Brazil Media-- 1,900,000 Globo Comunicacoes e
Communications Participacoes, Ltd. 10.50 12/20/2006 1,406,000 4.3
Metals 2,100,000 CSN Iron SA 9.125 6/01/2007 1,554,000 4.8
Sovereign 75,000 Republic of Brazil 9.375 4/07/2008 59,625 0.2
Government 150,000 Republic of Brazil 10.125 5/15/2027 111,750 0.3
Obligations ------------ ------
171,375 0.5
Utilities--Electric 1,590,000 Centrais Electricas Brasileiras SA 10.00 7/06/2004 1,562,175 4.8
1,750,000 Companie Paranaense de Energia 9.75 5/02/2005 1,557,500 4.7
------------ ------
3,119,675 9.5
Total Bonds in Brazil (Cost--$6,001,413) 6,251,050 19.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Face Interest Maturity Percent of
COUNTRY Industry Amount Bonds Rate Date Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Mexico Broadcasting-- US$ 1,470,000 Grupo Televisa SA 11.875 % 5/15/2006 $ 1,533,062 4.7%
Radio Television
Industrials 1,875,000 Petroleos Mexicanos 9.50 9/15/2027 1,584,375 4.8
Paper 1,400,000 Grupo Industrial Durango 12.625 8/01/2003 1,368,500 4.2
Sovereign 1,350,000 United Mexican States 11.50 5/15/2026 1,486,688 4.6
Government
Obligations
Total Bonds in Mexico (Cost--$6,072,100) 5,972,625 18.3
Panama Sovereign 630,000 Republic of Panama 8.875 9/30/2027 504,000 1.6
Government
Obligations
Total Bonds in Panama (Cost--$573,300) 504,000 1.6
Venezuela Sovereign 575,000 Republic of Venezuela 13.625 8/15/2018 523,250 1.6
Government 2,100,000 Republic of Venezuela 9.25 9/15/2027 1,380,750 4.2
Obligations
Total Bonds in Venezuela (Cost--$1,753,610) 1,904,000 5.8
Total Investments in Bonds (Cost--$19,180,485) 19,695,346 60.3
Brady Bonds*
Argentina Sovereign 1,450,000 Republic of Argentina, Par 'L' 6.00 3/31/2023 924,375 2.8
Government
Obligations
Total Brady Bonds in Argentina (Cost--$935,926) 924,375 2.8
Brazil Sovereign 2,988,200 Republic of Brazil 'C'++ 6.909 4/15/2014 1,867,625 5.7
Government 750,000 Republic of Brazil, Discount++ 5.875 4/15/2024 470,625 1.5
Obligations 1,377,500 Republic of Brazil 'EI'++ 5.875 4/15/2006 1,083,059 3.3
2,050,000 Republic of Brazil NMB++ 5.9375 4/15/2009 1,445,353 4.4
Total Brady Bonds in Brazil (Cost--$4,833,290) 4,866,662 14.9
Mexico Sovereign 3,000,000 United Mexican States 'W-A' 6.25 12/31/2019 2,205,000 6.7
Government 380,000 United Mexican States 'W-B' 6.25 12/31/2019 279,300 0.9
Obligations
Total Brady Bonds in Mexico (Cost--$2,483,699) 2,484,300 7.6
Panama Sovereign 500,000 Republic of Panama, Interest
Government Reduction Bonds++ 4.00 7/17/2014 357,500 1.1
Obligations
Total Brady Bonds in Panama (Cost--$358,247) 357,500 1.1
Peru Sovereign 1,020,000 Republic of Peru, Front-Loaded
Government Interest Rate Reduction Bonds++ 3.75 3/07/2017 549,525 1.7
Obligations 800,000 Republic of Peru, Past Due
Interest++ 4.50 3/07/2017 494,000 1.5
Total Brady Bonds in Peru (Cost--$1,054,037) 1,043,525 3.2
Venezuela Sovereign 1,416,660 Republic of Venezuela DCB++ 6.3125 12/18/2007 1,089,057 3.3
Government 535,710 Republic of Venezuela, Front-
Obligations Loaded Interest Rate Reduction
Bonds 'B'++ 6.125 3/31/2007 403,390 1.3
Total Brady Bonds in Venezuela (Cost--$1,346,210) 1,492,447 4.6
Total Investments in Brady Bonds (Cost--$11,011,409) 11,168,809 34.2
Short-Term Securities
United Commercial 133,000 General Electric Capital Corp. 5.60 10/01/1999 133,000 0.4
States Paper**
Total Investments in Short-Term Securities
(Cost--$133,000) 133,000 0.4
Total Investments (Cost--$30,324,894) 30,997,155 94.9
Other Assets Less Liabilities 1,677,016 5.1
------------ ------
Net Assets $ 32,674,171 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $1,797,028 and 308,454
shares outstanding $ 5.83
============
Class B--Based on net assets of $24,783,475 and 4,263,804
shares outstanding $ 5.81
============
Class C--Based on net assets of $1,143,797 and 196,795
shares outstanding $ 5.81
============
Class D--Based on net assets of $4,949,871 and 852,104
shares outstanding $ 5.81
============
<FN>
*Brady Bonds are securities that 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 reflects the discount rate paid at the time of purchase by the
Fund.
++Floating rate note.
</TABLE>
