<PAGE>
<PAGE>
GLOBAL PARTNERS
INCOME FUND INC.
ANNUAL REPORT
AUGUST 31, 1997
--------------------
American Stock Transfer & Trust Company BULK RATE
40 Wall Street U.S. POSTATE
New York, New York 10005 PAID
STATEN ISLAND, NY
PERMIT No.
169
-------------------
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
October 24, 1997
To Our Shareholders:
We are pleased to provide this annual report for the Global Partners Income Fund
Inc. (the 'Fund') for the fiscal year ended August 31, 1997. Included are market
commentary, audited financial statements, the related report of independent
accountants and other information about the Fund.
During the twelve months ended August 31, 1997, the net asset value for the Fund
increased from $13.88 per share to $16.18 per share as of August 31, 1997.
Dividends of $1.715 per share were paid during this period. Assuming the
reinvestment of these dividends in additional shares of the Fund, the net asset
value return for the fiscal year ended August 31, 1997 was 30.37%. During the
same period, the Salomon Brothers Brady Bond Index and the Salomon Brothers
High-Yield Market Index returned 31.15% and 15.55%, respectively.
On August 31, 1997, the Fund, as a percentage of total investments, was
approximately 48% invested in securities of emerging market issuers, including
obligations of sovereign governments and companies. The balance of the Fund's
assets was invested in U.S. high-yield securities and short-term investments.
EMERGING MARKET DEBT SECURITIES
The emerging debt markets enjoyed a strong performance in the twelve months
ended August 31, 1997, and maintained strong investor support. The impact on
these markets from the heightened U.S. stock market volatility has been limited.
Indeed, emerging debt markets have benefited from favorable market conditions,
attractive yields and positive economic and political settings in many key
countries, as well as from the Federal Reserve's decision to hold U.S. interest
rates steady since March.
Latin America. We believe prospects for economic growth in Latin America are
especially bright, with annual GDP growth rates of 4%-6% expected over the next
two years. In Mexico, the recent election results signal a decisive step toward
greater democracy and, in our view, are not likely to derail the ongoing reform
process. Earlier this year, Mexico's balance of payments situation improved with
the prepayment of the last $3.5 billion of its $12.5 billion U.S. Treasury loan
and the reduction of its outstanding balance to the International Monetary Fund
('IMF').
Brazil's launch of its $3 billion, 30-year global bond was the largest amount
ever issued by an emerging market borrower, and will likely allow Brazilian
corporates to obtain more attractive, longer-term financing.
Argentina aggressively tapped the markets early this year, taking advantage of
favorable global conditions. In April, a change in methodology by
S&P -- whereby, under certain circumstances, a sovereign country's rating is no
longer a ceiling for its corporate issuers -- allowed for the upgrading of
twelve Argentine corporate ratings to BBB-. This represents an investment-grade
rating two notches above the sovereign and spurred a strong rally in the bonds
that were upgraded.
Venezuela's privatization efforts and restructurings have continued. The
Government is planning a longer-term debt management strategy that would reduce
the amount budgeted for debt service from 40% of the budget to 25% by the year
2000. S&P upgraded Venezuela's long-term foreign currency debt to B+ from B,
reflecting the country's commitment to reform, higher world oil prices, fiscal
restraint and increased oil production.
Although political instability earlier this year caused a great deal of
volatility in Ecuador, current interim Government officials remain committed to
correcting the fiscal imbalances. Moody's assigned Ecuador's long-term foreign
currency debt a B1 rating, reflecting its competitive export sector and
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
basically sound economic policies. However, the recent announcement that
gasoline prices will not be increased significantly reduces the potential for an
IMF deal.
Eastern Europe. Following a period of declining economic activity and a weak
currency, Bulgaria has embarked on an impressive turnaround. In exchange for IMF
support, Bulgaria agreed to launch a currency board and to implement tight
fiscal and monetary policies. With the victory of the pro-reform UDF party
earlier this year, there is both the incentive and the political majority to
deliver swift economic reform. The momentum of stabilization and reform efforts
continues to be strong, and market expectations remain solid, as Bulgarian debt
instruments continue to outperform.
In Russia, President Yeltsin's return from a prolonged illness provided an
element of stability. The debt restructuring process is under way, with more
than 90% of an estimated US$24.3 billion in eligible debt having been
reconciled. Progress on the inflation front reflects the impact of high real
interest rates and tight monetary policy. The government achieved its
self-imposed deadline of July 1 for repaying outstanding pension arrears.
S&P reaffirmed the BBB- rating for Poland's long-term foreign currency debt but
raised its outlook to positive from stable. The recent underperformance of
Polish Brady bonds reflects growing investor concern about the upcoming
elections and the widening current account deficit. Tighter monetary policy, in
the form of a higher discount rate and greater reserve requirements, should help
to improve macroeconomic stability, but higher levels of public sector saving
still need to be achieved.
U.S. HIGH-YIELD SECURITIES
The U.S. high-yield market posted a strong performance in the twelve months
ended August 31, 1997, buoyed by both fundamental and technical factors. The
near-perfect combination of moderate U.S. economic growth and low
inflation -- which has kept the Federal Reserve on hold since March -- has
served to improve credit among a broad spectrum of issuers. In addition, mutual
fund cash inflows continued at a healthy pace, and CBO (collateralized bond
obligation) funding created strong demand for mid-to better-quality paper. New
issuance remained heavy and is on track to surpass record levels this year.
In the portfolio, we remain overweighted in manufacturing, consumer
non-cyclicals and energy and underweighted in media, housing and transportation.
* * *
On September 24, 1997, Travelers Group ('Travelers') and Salomon Inc
('Salomon'), the ultimate parent company of Salomon Brothers Asset Management
Inc ('SBAM'), announced their agreement (the 'Transaction') to merge Salomon
with and into Smith Barney Holdings Inc., a subsidiary of Travelers, to form a
new company expected to be called Salomon Smith Barney Holdings Inc. Travelers
is a diversified financial services company engaged in investment services,
asset management, consumer finance and life and property casualty insurance
services.
The Transaction is expected to be completed by the end of November, 1997,
subject to a number of conditions, including the receipt of U.S. and foreign
regulatory approvals and the approval of Salomon stockholders. Upon consummation
of the Transaction, Travelers will become the ultimate parent of SBAM, which
will continue to serve as investment adviser to the Fund.
At a special meeting of stockholders of the Fund held on October 14, 1997, the
Fund's shareholders approved a new investment management agreement for the Fund
with Value Advisors LLC ('Value Advisors') and a new investment advisory and
administration agreement among the Fund, Value
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
Advisors and SBAM. The new agreements will take effect upon the closing of the
sale of Value Advisors by Oppenheimer Group Inc. to PIMCO Advisors L.P., which
is expected to occur in November, 1997. Prior to the closing, Value Advisors
will assume the responsibilities and obligations that are currently performed by
Advantage Advisers, Inc. under the existing agreements.
As another current matter, in response to recent amendments to Maryland
corporate law, the Board of Directors recently reviewed various corporate
governance provisions in the Fund's By-Laws and approved amendments to the
Fund's By-Laws to (1) increase the percentage of stockholder voting power that
is required to call a special meeting of its stockholders to a majority of the
votes entitled to be cast at the meeting and (2) reduce the minimum permissible
board committee size to one director.
In a continuing effort to provide timely information concerning Global Partners
Income Fund Inc., shareholders may call 1-888-777-0102 (a toll-free number),
Monday through Friday from 8:00 am to 6:00 pm EST for the Fund's net asset
value, market price and other information regarding the Fund's portfolio
holdings and allocations. Should you require specific information regarding your
Global Partners Income Fund Inc. stock account, or for information regarding the
Fund's Dividend Reinvestment Plan, please call American Stock Transfer & Trust
Company at 1-800-937-5449 (1-718-921-8200 if you are calling from within New
York City).
Cordially,
<TABLE>
<S> <C>
MICHAEL S. HYLAND ALAN RAPPAPORT
- ------------------------ --------------------
Michael S. Hyland Alan Rappaport
Chairman of the Board President
</TABLE>
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments
August 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds -- 69.7% (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Basic Industries -- 8.7%
$ 2,000 Algoma Steel Inc., 12.375%, 7/15/05(C)......................................... $ 2,295,000
1,500 Asia Pulp & Paper International Finance, 11.75%, 10/01/05..................... 1,578,750
2,000 Berry Plastics, 12.25%, 4/15/04(C)............................................. 2,202,500
2,000 Doman Industries Limited, 8.75%, 3/15/04(C).................................... 1,970,000
1,000 Envirosource Inc., 9.75%, 6/15/03............................................. 995,000
2,000 Freedom Chemicals Inc., 10.625%, 10/15/06..................................... 2,100,000
2,000 NL Industries, Zero Coupon until 10/15/98 (13.00% thereafter), 10/15/05(C)..... 1,925,000
1,000 Printpack Inc., 10.625%, 8/15/06(C)............................................ 1,078,750
2,000 Radnor Holdings, 10.00%, 12/01/03............................................. 2,050,000
2,000Units Stone Container Corp., 12.25%, 4/01/02@....................................... 2,060,000
1,000 Tekni-Plex Inc., 11.25%, 4/01/07(W)............................................ 1,090,000
1,000 Tjiwi Kimia, 10.00%, 8/01/04(W)................................................ 972,500
------------
20,317,500
------------
Consumer Cyclicals -- 5.5%
750 AFC Enterprises, 10.25%, 5/15/07(W)............................................ 772,500
2,000 Collins & Aikman, 10.00%, 1/15/07............................................. 2,010,000
1,500 CSK Auto Inc., 11.00%, 11/01/06(C)............................................. 1,586,250
2,000 Finlay Fine Jewelry, 10.625%, 5/01/03(C)....................................... 2,100,000
2,000 Hills Stores, 12.50%, 7/01/03................................................. 1,685,000
1,500 HMH Properties Inc., 8.875%, 7/15/07(W)........................................ 1,518,750
1,000 Synthetic Industries, 9.25%, 2/15/07.......................................... 1,030,000
2,000 Wyndham Hotel Corp., 10.50%, 5/15/06(C)........................................ 2,260,000
------------
12,962,500
------------
Consumer Non-Cyclicals -- 18.1%
2,000 Ameristar Casinos Inc., 10.50%, 8/01/04(C,W)................................... 1,965,000
1,000 B&G Foods Inc., 9.625%, 8/01/07(W)............................................. 995,000
1,000 Brunos Inc., 10.50%, 8/01/05.................................................. 840,000
2,000 Carr-Gottstein Foods Co., 12.00%, 11/15/05(C).................................. 2,220,000
2,000 CFP Holdings Inc., 11.625%, 1/15/04........................................... 2,030,000
3,500 Coleman Escrow Corp., Zero Coupon, 5/15/01(W).................................. 2,091,250
1,000 Dade International Inc., 11.125%, 5/01/06..................................... 1,126,250
1,000 Doane Products Company, 10.625%, 3/01/06...................................... 1,060,000
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 1
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ---------------------------
Statement of Investments (continued)
August 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds (continued) (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Consumer Non-Cyclicals -- 18.1% (concluded)
$ 1,500 Genesis Eldercare, 9.00%, 8/01/07(W)........................................... $ 1,503,750
2,250 Hines Horticulture, 11.75%, 10/15/05(C)........................................ 2,385,000
1,500 Horseshoe Gaming, 9.375%, 6/15/07(W)........................................... 1,530,000
1,900 North Atlantic Trading, 11.00%, 6/15/04(W)..................................... 1,966,500
500 Pen-Tab Industries Inc., 10.875%, 2/01/07..................................... 493,750
1,500 Plastic Specialty, 11.25%, 12/01/03(C)......................................... 1,597,500
500 Playtex Products Inc., 8.875%, 7/15/04(W)...................................... 505,000
1,000 Pueblo XTRA International, 9.50%, 8/01/03..................................... 977,500
1,000 Pueblo XTRA International, Series C, 9.50%, 8/01/03........................... 985,000
2,000 Rayovac Corp., 10.25%, 11/01/06(C)............................................. 2,097,500
3,000 Revlon Worldwide, Zero Coupon, 3/15/01(C)...................................... 2,118,750
1,500 Riddell Sports Inc., 10.50%, 7/15/07.......................................... 1,567,500
900 SC International Services, 9.25%, 9/01/07(W)................................... 906,750
1,000 SC International Services, 13.00%, 10/01/05(C)................................. 1,132,500
1,000 Selmer Co. Inc., 11.00%, 5/15/05(C)............................................ 1,090,000
1,000 Shop Vac Corp., 10.625%, 9/01/03(C)............................................ 1,077,500
1,550 Stroh Brewery, 11.10%, 7/01/06(C).............................................. 1,619,750
2,000 Trump Atlantic City Associates, 11.25%, 5/01/06(C)............................. 1,950,000
1,500 Twin Laboratories Inc., 10.25%, 5/15/06(C)..................................... 1,650,000
2Units Urohealth Systems Inc., 12.50%, 4/01/04(W,Y)................................ 1,935,000
1,000 Waterford Gaming LLC, 12.75%, 11/15/03........................................ 1,105,000
------------
42,521,750
------------
Energy -- 7.3%
2,000 Benton Oil & Gas, 11.625%, 5/01/03(C).......................................... 2,180,000
2,000 Cliffs Drilling, 10.25%, 5/15/03(C)............................................ 2,140,000
1,000 Dailey Petroleum, 9.75%, 8/15/07(W)............................................ 1,017,500
1,000 KCS Energy Inc., 11.00%, 1/15/03.............................................. 1,095,000
1,000 Magnum Hunter, 10.00%, 6/01/07(W).............................................. 1,005,000
2,000 National Energy Group, 10.75%, 11/01/06....................................... 2,085,000
2,000 Parker Drilling Corp., 9.75%, 11/15/06(C)...................................... 2,120,000
1,500 Snyder Oil Corp., 8.75%, 6/15/07.............................................. 1,507,500
600 TransAmerican Energy, 11.50%, 6/15/02(W)....................................... 582,000
2,000 TransAmerican Energy, Zero Coupon until 6/15/99 (13.00% thereafter),
6/15/02(W)................................................................... 1,515,000
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 2
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- -------------------------
Statement of Investments (continued)
August 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds (continued) (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Energy -- 7.3% (concluded)
$ 2,000 United Refining, 10.75%, 6/15/07(W)............................................ $ 2,000,000
------------
17,247,000
------------
Financial -- 2.4%
1,000 Airplanes Pass Through Trust, 10.875%, 3/15/19(C).............................. 1,141,250
2,000 Central Transport Rental, 9.50%, 4/30/03...................................... 2,100,000
1,000 Cityscape Financial Corp., 12.75%, 6/01/04(W).................................. 800,000
1,500 Williams Scotsman Inc., 9.875%, 6/01/07(W)..................................... 1,511,250
------------
5,552,500
------------
Housing Related -- .4%
1,000 Waxman Industries Inc., Zero Coupon until 6/01/99 (12.75% thereafter),
6/01/04..................................................................... 868,750
------------
Industrial/Manufacturing -- 9.3%
1,000 Alvey Systems Inc., 11.375%, 1/31/03(C)........................................ 1,037,500
1,250 Burke Industries Inc., 10.00%, 8/15/07(W)...................................... 1,268,750
1,500 Clark-Schwebel Inc., 10.50%, 4/15/06(C)........................................ 1,623,750
2,000 Foamex L.P., 9.875%, 6/15/07(W)................................................ 2,030,000
1Unit Glasstech Inc., 12.75%, 7/01/04(W,Z)............................................ 1,062,500
900 HCC Industries, 10.75%, 5/15/07(W)............................................. 963,000
1,900 High Voltage Engineering, 10.50%, 8/15/04(W)................................... 1,916,625
1,000 Insilco Corp., 10.25%, 8/15/07(W).............................................. 1,016,250
2,000 Jordan Industries, 10.375%, 8/01/07(C,W)....................................... 2,015,000
2,000 L-3 Comms Corp., 10.375%, 5/01/07(W)........................................... 2,145,000
2,000 Talley Mfg. & Technology, 10.75%, 10/15/03.................................... 2,100,000
2,000 Terex Corp., 13.25%, 5/15/02(C)................................................ 2,275,000
500 Venture Holdings Trust, 9.50%, 7/01/05(W)...................................... 493,750
1,885 Venture Holdings Trust, 9.75%, 4/01/04........................................ 1,823,738
------------
21,770,863
------------
Media/Telecommunications -- 10.9%
1,750 Adelphia Communications, 12.50%, 5/15/02(C).................................... 1,850,625
1,500 American Media Operations, Inc., 11.625%, 11/15/04............................ 1,642,500
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 3
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND
- -------------------------
Statement of Investments (continued)
August 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds (continued) (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Media/Telecommunications -- 10.9% (concluded)
$ 2,000 Cablevision Systems Corp., 10.50%, 5/15/16(C).................................. $ 2,240,000
2,050 Diamond Cable Co., Zero Coupon until 12/15/00 (11.75% thereafter),
12/15/05(C).................................................................. 1,463,188
2,000 Granite Broadcasting, 10.375%, 5/15/05(C)...................................... 2,055,000
6,000 Hollinger Inc., Convertible Bond, Zero Coupon, 10/05/13....................... 2,280,000
1,750 ICG Holding Inc., Zero Coupon until 9/15/00 (13.50% thereafter), 9/15/05(C).... 1,343,125
2,000 Intermedia Communications of Florida, Zero Coupon until 5/15/01 (12.50%
thereafter), 5/15/06........................................................ 1,460,000
3,500 Marcus Cable Co., Zero Coupon until 6/15/00 (14.25% thereafter), 12/15/05(C)... 2,843,750
2,500 NTL Inc., Zero Coupon until 2/01/01 (11.50% thereafter), 2/01/06.............. 1,812,500
2,000 Rogers Communications, 8.875%, 7/15/07........................................ 1,992,500
1,500 SFX Broadcasting, 10.75%, 5/15/06(C)........................................... 1,620,000
3,000 United International Holdings, Zero Coupon, 11/15/99.......................... 2,385,000
1,000 Wireless One Inc., 13.00%, 10/15/03(C)......................................... 530,000
------------
25,518,188
------------
Services/Other -- 3.3%
2,200 Allied Waste Industries, Zero Coupon until 6/01/02 (11.30% thereafter),
6/01/07(W)................................................................... 1,485,000
2,000 Borg-Warner Security Corp., 9.125%, 5/01/03(C)................................. 2,000,000
1,000 Dyncorp Inc., 9.50%, 3/01/07.................................................. 1,010,000
1,300 Intertek Finance PLC, 10.25%, 11/01/06........................................ 1,358,500
1,000 Norcal Waste Systems, 13.25%, 11/15/05*....................................... 1,130,000
1,000 Speedy Muffler King Inc., 10.875%, 10/01/06(C)................................. 900,000
------------
7,883,500
------------
Technology/Electronics -- 1.3%
900 Amphenol Corp., 9.875%, 5/15/07............................................... 938,250
900 DecisionOne Corp., 9.75%, 8/01/07............................................. 922,500
1,000 Exide Electronics Group, 11.50%, 3/15/06...................................... 1,143,750
------------
3,004,500
------------
Transportation -- 1.3%
1,000 Atlantic Express, 10.75%, 2/01/04(W)........................................... 1,045,000
2,000 TFM Sa De Cv, Zero Coupon until 6/15/02 (11.75% thereafter), 6/15/09(W)........ 1,235,000
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 4
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ---------------------------
Statement of Investments (continued)
August 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds (concluded) (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Transportation -- 1.3% (concluded)
$ 750 TFM Sa De Cv, 10.25%, 6/15/07(W)............................................... $ 772,500
------------
3,052,500
------------
Utilities -- 1.2%
1,000 AES China Generating Co., 10.125%, 12/15/06................................... 1,085,000
1,250 AES Corp., 10.25%, 7/15/06(C).................................................. 1,368,750
500 Companhia Energetica De Sao Paul, 9.125% until 6/26/02 (9.625% thereafter),
6/26/07(W)..................................................................... 492,500
------------
2,946,250
------------
Total Corporate Bonds (cost $157,747,741).................................... 163,645,801
------------
Sovereign Bonds -- 42.5%
- ----------------------------------------------------------------------------------------------------------
Argentina -- 8.4%
6,548 Republic of Argentina, FRB, Series L, 6.75%, 3/31/05*,(C)...................... 6,228,309
18,500 Republic of Argentina, Par Bond, Series L-GP, 5.50%, 3/31/23*,(C).............. 13,609,063
------------
19,837,372
------------
Brazil -- 9.2%
13,824 Federal Republic of Brazil, C Bond, 8.00%, 4/15/14C,(X)....................... 11,266,880
6,500 Federal Republic of Brazil, DCB, Series L, 6.9375%, 4/15/12*,(C)............... 5,382,813
750 Federal Republic of Brazil, Global Bond, 10.125%, 5/15/27..................... 730,313
3,000 Federal Republic of Brazil, Investment (Exit) Bond, 6.00%, 9/15/13(C).......... 2,377,500
2,000 Federal Republic of Brazil, NMB, Series L, 6.9375%, 4/15/09*,(C)............... 1,765,000
------------
21,522,506
------------
Bulgaria -- 1.3%
500 Republic of Bulgaria, FLIRB, Series A, 2.25%, 7/28/12*........................ 309,687
3,500 Republic of Bulgaria, IAB, 6.6875%, 7/28/11*,(C)............................... 2,695,000
------------
3,004,687
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 5
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments (continued)
August 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Sovereign Bonds (concluded) (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Costa Rica -- 5.6%
$ 7,000 Costa Rica, Principal Bond, Series A, 6.25%, 5/21/10##........................ $ 6,160,000
8,500 Costa Rica, Principal Bond, Series B, 6.25%, 5/21/15##........................ 6,970,000
------------
13,130,000
------------
Ecuador -- 2.2%
7,098 Republic of Ecuador, PDI Bond, 6.6875%, 2/27/15*,(C,X).......................... 5,057,384
------------
Ivory Coast -- .3%
2,000 Ivory Coast, FLIRB*,#......................................................... 785,000
------------
Mexico -- 4.4%
9,000 United Mexican States, Global Bond, 11.375%, 9/15/16(C)........................ 10,417,500
------------
Panama -- 2.4%
900 Republic of Panama, IRB, 3.75%, 7/17/14*...................................... 698,624
5,669 Republic of Panama, PDI Bond, 6.6875%, 7/17/16*,(C,X)......................... 4,974,184
------------
5,672,808
------------
Peru -- 1.9%
7,250 Republic of Peru, FLIRB, 3.25%, 3/07/17*,(C)................................... 4,368,125
------------
Poland -- 1.1%
3,000 Republic of Poland, PDI Bond, 4.00%, 10/27/14*,(C)............................. 2,591,250
------------
Venezuela -- 5.7%
14,250 Republic of Venezuela, DCB Trust, Series DL, 6.75%, 12/18/07*,(C).............. 13,332,656
------------
Total Sovereign Bonds (cost $88,263,718)...................................... 99,719,288
------------
Loan Participations -- 16.8%
- ----------------------------------------------------------------------------------------------------------
13,750 Bank for Foreign Economic Affairs, Vnesheconombank(a),(b) (Merrill Lynch
International, Chase Manhattan, London, J.P. Morgan Securities)(T)............ 13,689,845
23,706 Kingdom of Morocco, Tranche B, 6.8125%, 1/01/04* (Morgan Guaranty Trust
Company of New York, Morgan Stanley Emerging Markets Inc.)(T,F)............... 23,705,880
2,300 The People's Democratic Republic of Algeria, Tranche A, 6.909%, 9/04/06*
(Chase Manhattan)(T).......................................................... 2,035,500
------------
Total Loan Participations (cost $33,982,410).................................. 39,431,225
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 6
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- --------------------------------------------------------------------------------
Statement of Investments (continued)
August 31, 1997
<TABLE>
<CAPTION>
VALUE
Common Stock -- .0% (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
3,900 Anvil Holdings, Inc. Class B (cost $19,800)(a)................................ $ 19,831
Shares
------------
Preferred Stock -- .5%
- ----------------------------------------------------------------------------------------------------------
1,000,000 Asia Pulp & Paper Finance (II) Mauritius Limited, Series A, 12.00%*........... 997,500
Shares
12,394 Anvil Holdings, Inc., 13.00%, 3/15/09(X)...................................... 290,026
Shares
------------
Total Preferred Stock (cost $1,290,058)....................................... 1,287,526
------------
Warrants & Rights(a) -- .1%
- ----------------------------------------------------------------------------------------------------------
2,000 Exide Electronics Group (Exercise price of $13.475 per share expiring on
Warrants 3/15/06. Each warrant exercisable for 5.15 shares of common stock.)......... 102,000
5,000 In Flight Phone (Exercise price of $.01 per share expiring on 8/31/02. Each
Warrants warrant exercisable for one share of common stock.)......................... 0
8,000 Terex Corporation Stock Appreciation Rights (Expiring on 5/15/02)............. 120,000
Rights
6,000 United International Holdings (Exercise price of $15 per share expiring on
Warrants 11/15/99. Each warrant exercisable for 4.535 shares of common stock.)....... 30,000
3,000 Wireless One Inc. (Exercise price of $11.55 per share. Each warrant
Warrants exercisable for one share of common stock.)................................. 3,000
Total Warrants & Rights (cost $152,964)....................................... 255,000
------------
PRINCIPAL
AMOUNT
(000) Repurchase Agreement -- 1.2%
- ----------------------------------------------------------------------------------------------------------
State Street Bank, 5.50%, cost $2,742,000 dated 8/29/97, $2,743,676 due
9/02/97, (collateralized by $2,725,000 U.S. Treasury Note, 6.125%, due
$ 2,742 3/31/98, valued at $2,799,938).............................................. 2,742,000
------------
Total Investments -- 130.8% (cost $284,198,691)............................... 307,100,671
------------
Liabilities in Excess of Other Assets -- (30.8%).............................. (72,365,819)
Net Assets -- 100.0%
(equivalent to $16.18 per share on 14,507,134 common shares outstanding).... $234,734,852
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 7
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- -------------------------
Statement of Investments (concluded)
August 31, 1997
- --------------------------------------------------------------------------------
* Rate shown reflects current rate on instrument with variable rate or step
coupon rates.
(C) All or a portion of the security is segregated as collateral pursuant to a
loan agreement.
(F) Fair valued security (Note 2).
(W) Pursuant to Rule 144A under the Securities Act of 1933, this security can
only be sold to qualified institutional investors.
(X) Payment-in-kind security for which all or part of the income earned is
capitalized as additional principal.
(Y) Each unit is comprised of a $1,000 par Senior Note due 4/01/04 and a warrant
to purchase common stock.
(Z) Each unit is comprised of a $1,000 par Senior Note due 7/01/04 and a warrant
to purchase .0125 shares of common stock.
@ Each unit is comprised of a $1 par 10.75% Senior Debenture Note due 4/01/02
and a 1.50% Supplemental Interest Certificate.
## Securities valued at $13,130,000 as of August 31, 1997 were segregated to be
available for the purchase of delayed delivery and 'when and if issued'
securities with a cost of $7,756,750.
# 'When and if issued' security.
(T) Participation interests were acquired through the financial institutions
indicated parenthetically.
(a) Non-income producing security.
(b) Security is currently in default.
DCB -- Debt Conversion Bond.
FLIRB -- Front Loaded Interest Reduction Bond.
FRB -- Floating Rate Bond.
IAB -- Interest in Arrears Bond.
IRB -- Interest Reduction Bond.
NMB -- New Money Bond.
PDI -- Past Due Interest.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 8
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ------------------------------------
Statement of Assets and Liabilities
August 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost -- $284,198,691)................................................ $307,100,671
Cash.......................................................................................... 445
Interest receivable........................................................................... 6,493,514
Receivable for investments sold............................................................... 6,236,250
Unamortized organization expenses (Note 2).................................................... 25,751
Prepaid expenses.............................................................................. 14,413
------------
Total assets.......................................................................... 319,871,044
------------
LIABILITIES
Loan payable (Note 5)......................................................................... 75,000,000
Payable for investments purchased............................................................. 7,756,750
Accrued interest expense on loan (Note 5)..................................................... 2,032,031
Accrued management fee (Note 3)............................................................... 220,822
Accrued audit and tax return preparation fees................................................. 66,833
Accrued legal fee............................................................................. 26,999
Accrued custodian expense..................................................................... 14,200
Accrued printing and mailing fees............................................................. 11,000
Other accrued expenses........................................................................ 7,557
------------
Total liabilities..................................................................... 85,136,192
------------
NET ASSETS
Common Stock ($.001 par value, 100,000,000 shares authorized; 14,507,134 shares
outstanding)................................................................................ 14,507
Additional paid-in capital.................................................................... 202,591,603
Undistributed net investment income........................................................... 2,263,633
Accumulated net realized gain on investments.................................................. 5,639,379
Net unrealized appreciation on investments (Note 7)........................................... 24,225,730
------------
Net assets............................................................................ $234,734,852
------------
NET ASSET VALUE PER SHARE ($234,734,852[div]14,507,134 shares)................................ $ 16.18
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 9
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ----------------------------
Statement of Operations
For the Year Ended August 31, 1997
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
INCOME
Interest (includes discount accretion of $5,786,416)....................... $30,460,210
EXPENSES
Interest expense (Note 5).................................................. $4,985,618
Management fee (Note 3).................................................... 2,447,677
Legal...................................................................... 124,297
Custodian.................................................................. 83,047
Audit and tax services..................................................... 70,000
Transfer agent............................................................. 43,985
Directors' fees and expenses (Note 3)...................................... 33,408
Printing................................................................... 26,608
Listing fee................................................................ 25,736
Amortization of deferred organization expenses (Note 2).................... 22,272
Shareholder annual meeting................................................. 17,328
Other...................................................................... 17,833 7,897,809
---------- -----------
Net investment income.......................................................... 22,562,401
-----------
NET REALIZED AND UNREALIZED GAIN
Net Realized Gain on Investments............................................... 18,834,581
Change in Net Unrealized Appreciation on Investments........................... 16,819,689
-----------
Net realized gain and change in net unrealized appreciation on investments..... 35,654,270
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS..................................... $58,216,671
-----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 10
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1997 1996
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income....................................................... $ 22,562,401 $ 24,678,884
Net realized gain on investments............................................ 18,834,581 12,229,692
Change in net unrealized appreciation (depreciation) on investments......... 16,819,689 24,872,414
------------ ------------
Net increase in net assets from operations.................................. 58,216,671 61,780,990
DIVIDENDS
From net investment income.................................................. (24,879,757) (21,561,250)
------------ ------------
Total increase in net assets................................................ 33,336,914 40,219,740
NET ASSETS
Beginning of year........................................................... 201,397,938 161,178,198
------------ ------------
End of year (includes undistributed net investment income of $2,263,633 and
$4,580,989, respectively)................................................. $234,734,852 $201,397,938
------------ ------------
</TABLE>
- ------------------------------------------------
Statement of Cash Flows
For the Year Ended August 31, 1997
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Purchases of portfolio securities......................................................... $(306,751,114)
Proceeds from sales of portfolio securities and principal paydowns........................ 310,593,940
Net sales of short-term investments....................................................... 6,170,000
-------------
10,012,826
Net investment income..................................................................... 22,562,401
Accretion of discount on investments...................................................... (5,786,416)
Capitalized income on payment-in-kind securities.......................................... (1,880,263)
Amortization of organization expenses..................................................... 22,272
Net change in receivables/payables related to operations.................................. (51,118)
-------------
Net cash provided by operating activities............................................. 24,879,702
-------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Common stock dividends paid............................................................... (24,879,757)
-------------
Net cash used by financing activities................................................. (24,879,757)
-------------
Net decrease in cash.......................................................................... (55)
Cash at beginning of year..................................................................... 500
-------------
CASH AT END OF YEAR........................................................................... $ 445
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 11
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- -------------------------------
Notes to Financial Statements
Note 1. Organization
Global Partners Income Fund Inc. (the 'Fund') was incorporated in Maryland on
September 3, 1993 and is registered as a non-diversified, closed-end, management
investment company under the Investment Company Act of 1940, as amended. The
Fund commenced operations on October 29, 1993. The Fund seeks to maintain a high
level of current income by investing primarily in a portfolio of high-yield U.S.
and non-U.S. corporate debt securities and high-yield foreign sovereign debt
securities. As a secondary objective, the Fund seeks capital appreciation.
Note 2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles
('GAAP'). The preparation of financial statements in accordance with GAAP
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
SECURITIES VALUATION. In valuing the Fund's assets, all securities for which
market quotations are readily available are valued (i) at the last sale price
prior to the time of determination if there were a sale on the date of
determination, (ii) at the mean between the last current bid and asked prices if
there were no sales on such date and bid and asked quotations are available, and
(iii) at the bid price if there were no sales price on such date and only bid
quotations are available. Publicly traded foreign government debt securities are
typically traded internationally in the over-the-counter market, and are valued
at the mean between the last current bid and asked price as of the close of
business of that market. However, when the spread between bid and asked price
exceeds five percent of the par value of the security, the security is valued at
the bid price. Securities may also be valued by independent pricing services
which use prices provided by market-makers or estimates of market values
obtained from yield data relating to instruments or securities with similar
characteristics. Short-term investments having a maturity of 60 days or less are
valued at amortized cost which approximates market value. Securities for which
reliable quotations are not readily available are valued at fair value as
determined in good faith by, or under procedures established by, the Board of
Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are
recorded on the trade date. Interest income is accrued on a daily basis. Market
discount on securities purchased is accreted on an effective yield basis over
the life of the security. The Fund uses the specific identification method for
determining realized gain or loss on investments sold.
PAGE 12
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ------------------------------
Notes to Financial Statements (continued)
FEDERAL INCOME TAXES. The Fund has complied and intends to continue to comply
with the requirements of the Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies, and to distribute all of its
income and capital gains, if any, to its shareholders. Therefore, no federal
income tax or excise tax provision is required.
DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends to
shareholders monthly from net investment income. Net realized gains, if any, in
excess of loss carryovers (See Note 4) are expected to be distributed annually.
Dividends and distributions to shareholders are recorded on the ex-dividend
date. The amount of dividends and distributions from net investment income and
net realized gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These differences are due primarily to
deferral of wash sale and post-October losses. Dividends which exceed net
investment income for financial reporting purposes but not for tax purposes are
reported as dividends in excess of net investment income.
UNAMORTIZED ORGANIZATION EXPENSES. Organization expenses amounting to $113,655
were incurred in connection with the organization of the Fund. These costs have
been deferred and are being amortized ratably over a five-year period from
commencement of operations.
REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund's policy to take possession, through its custodian, of the underlying
collateral and to monitor its value at the time the arrangement is entered into
and during the term of the repurchase agreement to ensure that it equals or
exceeds the repurchase price. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in the
event of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral may be subject to legal proceedings.
CASH FLOW INFORMATION. The Fund invests in securities and distributes
dividends from net investment income and net realized gains from investment
transactions. These activities are reported in the Statement of Changes in Net
Assets. Additional information on cash receipts and cash payments is presented
in the Statement of Cash Flows. Accounting practices that do not affect
reporting activities on a cash basis include carrying investments at value and
amortizing premium or accreting discount on debt obligations. For the year ended
August 31, 1997, the Fund paid interest expense of $5,025,462.
Note 3. Management and Advisory Fees and Other Transactions
The Fund entered into a management agreement with Advantage Advisers, Inc. (the
'Investment Manager'), a subsidiary of Oppenheimer & Co., Inc. ('Oppenheimer'),
pursuant to which the Investment Manager, among other things, supervises the
Fund's investment program and monitors the performance of the Fund's service
providers.
PAGE 13
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------
Notes to Financial Statements (continued)
The Investment Manager and the Fund entered into an investment advisory and
administration agreement with Salomon Brothers Asset Management Inc (the
'Investment Adviser'), pursuant to which the Investment Adviser provides
investment advisory and administrative services to the Fund. The Investment
Adviser is responsible for the management of the Fund's portfolio in accordance
with the Fund's investment objectives and policies and for making decisions to
buy, sell, or hold particular securities and is responsible for day-to-day
administration of the Fund.
The Fund pays the Investment Manager a monthly fee at an annual rate of 1.10% of
the Fund's average weekly net assets for its services, out of which the
Investment Manager pays the Investment Adviser a monthly fee at an annual rate
of .65% of the Fund's average weekly net assets for its services.
At August 31, 1997, Oppenheimer and the Investment Adviser owned 3,567 and 4,587
shares of the Fund, respectively.
Certain officers and/or directors of the Fund are also officers and/or directors
of the Investment Manager or the Investment Adviser.
The Fund pays each Director not affiliated with the Investment Manager or the
Investment Adviser a fee of $5,000 per year, $700 for attendance at each board
meeting, $100 for participation in each telephonic meeting and reimbursement for
travel and out-of-pocket expenses for each board and committee meeting attended.
Note 4. Portfolio Activity
Purchases and sales of investment securities, other than short-term investments,
for the year ended August 31, 1997, aggregated $309,595,364 and $312,796,775,
respectively. The federal income tax cost basis of the Fund's investments at
August 31, 1997 was substantially the same as the cost basis for financial
reporting. Gross unrealized appreciation and depreciation amounted to
$25,948,580 and $1,722,850, respectively, resulting in net unrealized
appreciation for federal income tax purposes of $24,225,730.
In the current year ended August 31, 1997, the Fund utilized a capital loss
carryforward of $12,899,400 to offset net realized capital gains.
Note 5. Bank Loan
The Fund has outstanding a $75,000,000 loan pursuant to a secured loan agreement
with ING Baring (U.S.) Capital Corporation. The current interest rate on the
loan is equal to six-month LIBOR plus 0.4375% and the maturity date is April 1,
1998. The collateral for the loan was valued at $147,099,575 on August 31, 1997
and is being held in a segregated account by the
PAGE 14
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ------------------------------
Notes to Financial Statements (continued)
Fund's custodian. In accordance with the terms of the loan agreement, the Fund
must maintain a level of collateral to debt of at least 150%.
Note 6. Loan Participations
The Fund invests in fixed and floating rate loans arranged through private
negotiations between a foreign sovereign entity and one or more financial
institutions. The Fund's investment in any such loan may be in the form of a
participation in or an assignment of the loan. The market value of the Fund's
loan participations at August 31, 1997 was $39,431,225.
In connection with purchasing loan participations, the Fund generally will have
no right to enforce compliance by the borrower with the terms of the loan
agreement relating to the loan, nor any rights of set-off against the borrower,
and the Fund may not benefit directly from any collateral supporting the loan in
which it has purchased the participation. As a result, the Fund will assume the
credit risk of both the borrower and the lender that is selling the
participation. In the event of the insolvency of the lender selling the
participation, the Fund may be treated as a general creditor of the lender and
may not benefit from any set-off between the lender and the borrower.
Note 7. 'When and If' Issued Bonds
'When and if' issued bonds are recorded as investments in the Fund's portfolio
and marked-to-market to reflect the current value of the bonds. When the Fund
sells a 'when and if' issued bond, an unrealized gain or loss is recorded equal
to the difference between the selling price and purchase cost of the bond.
Settlement of trades (i.e., receipt and delivery) of the 'when and if' issued
bond is contingent upon the successful issuance of such bond. In the event its
sponsor is unable to successfully issue the security, all trades in 'when and
if' issued bonds become null and void, and, accordingly, the Fund will reverse
any gain or loss recorded on such transactions.
For the year ended August 31, 1997, the Fund sold approximately $9 million of
'when and if' issued Russian IAN bonds and recorded an unrealized gain of
$1,323,750. Settlement of the transaction and recognition of the realized gain
is contingent upon the successful closing of Russia's Brady plan before December
31, 1997.
Note 8. Credit Risk
The yields of emerging market debt obligations and high-yield corporate debt
obligations reflect, among other things, perceived credit risk. The Fund's
investment in securities rated below investment grade typically involve risks
not associated with higher rated securities including, among others, overall
greater risk of timely and ultimate payment of interest and principal, greater
market price volatility and less liquid secondary market trading. The
consequences of political, social, economic or diplomatic changes may have
disruptive effects on the market prices of sovereign bonds and loan
participations held by the Fund.
PAGE 15
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ------------------------------
Notes to Financial Statements (concluded)
Note 9. Events Subsequent to August 31, 1997
On September 2 and October 1, 1997, the Board of Directors of the Fund declared
a dividend from net investment income, each in the amount of $.11875 per share,
payable on September 30 and October 31, 1997, to shareholders of record on
September 16 and October 15, 1997, respectively.
On September 24, 1997, Travelers Group ('Travelers') and Salomon Inc
('Salomon'), the ultimate parent company of the Investment Adviser, announced
their agreement (the 'Transaction') to merge Salomon with and into Smith Barney
Holdings Inc., a subsidiary of Travelers, to form a new company expected to be
called Salomon Smith Barney Holdings Inc. Travelers is a diversified financial
services company engaged in investment services, asset management, consumer
finance and life and property casualty insurance services.
The Transaction is expected to be completed by the end of November, 1997,
subject to a number of conditions, including the receipt of U.S. and foreign
regulatory approvals and the approval of Salomon stockholders. Upon consummation
of the Transaction, as proposed, Travelers will become the ultimate parent of
the Investment Adviser, which will continue to serve as investment adviser to
the Fund.
At a special meeting of stockholders of the Fund held on October 14, 1997, the
Fund's shareholders approved a new investment management agreement for the Fund
with Value Advisors LLC ('Value Advisors') and a new investment advisory and
administration agreement among the Fund, Value Advisors and the Investment
Adviser. The new agreements will take effect upon the closing of the sale of
Value Advisors by Oppenheimer Group Inc. to PIMCO Advisors L.P., which is
expected to occur in November, 1997. Prior to the closing, Value Advisors will
assume the responsibilities and obligations that are currently performed by the
Investment Manager under the existing agreements.
PAGE 16
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- ---------------------
Financial Highlights
DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1997 1996 1995 1994(a)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period........... $ 13.88 $ 11.11 $ 12.01 $ 14.02
-------- --------- -------- --------
Net investment income.......................... 1.55 1.70 1.54 0.97
Net realized gain (loss) and change in net
unrealized appreciation (depreciation) on
investments.................................. 2.46 2.56 (1.02) (1.86)
-------- --------- -------- --------
Total from investment operations............... 4.01 4.26 0.52 (0.89)
-------- --------- -------- --------
Less distributions
Dividends from net investment income......... (1.71) (1.49) (1.42) (0.98)
Dividends from short-term gains.............. -- -- -- (0.07)
Dividends in excess of net investment
income..................................... -- -- -- (0.02)
-------- --------- -------- --------
Total distributions............................ (1.71) (1.49) (1.42) (1.07)
-------- --------- -------- --------
Offering costs on issuance of common stock..... -- -- -- (0.05)
-------- --------- -------- --------
Net asset value, end of period................. $ 16.18 $ 13.88 $ 11.11 $ 12.01
-------- --------- -------- --------
Per share market value, end of period.......... $15.4375 $ 13.25 $ 11.125 $ 11.75
Total investment return based on market
price per share(c)........................... 31.28% 34.22% 8.01% (9.02%)(b)
Ratios to average net assets:
Operating expenses......................... 1.31% 1.32% 1.39% 1.38%(d)
Interest expense........................... 2.24% 2.87% 3.46% 1.39%(d)
Total expenses............................. 3.55% 4.19% 4.85% 2.77%(d)
Net investment income...................... 10.14% 13.51% 14.10% 9.05%(d)
Portfolio turnover rate.................... 106.79% 91.80% 85.15% 11.71%
Net assets, end of period (000)............ $234,735 $ 201,398 $161,178 $174,252
Bank loans outstanding, end of period
(000).................................... $ 75,000 $ 75,000 $ 75,000 $ 75,000
Weighted average bank loans (000).......... $ 75,000 $ 75,000 $ 75,000 $ 47,272
Weighted average interest rate on bank
loans.................................... 6.65% 6.99% 7.34% 5.44%(d)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period October 29, 1993 (commencement of investment operations)
through August 31, 1994.
(b) Return calculated based on beginning of period price of $14.02 (initial
offering price of $15.00 less sales load of $0.98) and end of period market
value of $11.75 per share. This calculation is not annualized.
(c) For purposes of this calculation, dividends on common shares are assumed to
be reinvested at prices obtained under the Fund's dividend reinvestment
plan and the broker commission paid to purchase or sell a share is
excluded.
(d) Annualized.
See accompanying notes to financial statements.
PAGE 17
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- --------------------------------------
Report of Independent Accountants
To the Board of Directors and Shareholders of
Global Partners Income Fund Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations, of
changes in net assets and of cash flows and the financial highlights present
fairly, in all material respects, the financial position of Global Partners
Income Fund Inc. (the 'Fund') at August 31, 1997, the results of its operations
and cash flows for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the three years in the period then ended and for the period October 29, 1993
(commencement of operations) through August 31, 1994, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as 'financial statements') are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1997 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
New York, N.Y.
October 16, 1997
PAGE 18
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------------------
Selected Quarterly Financial Information (unaudited)
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
NET REALIZED GAIN
(LOSS) & CHANGE
IN NET UNREALIZED
NET INVESTMENT APPRECIATION
INCOME (DEPRECIATION)
---------------------- ---------------------
QUARTERS ENDED* TOTAL PER SHARE TOTAL PER SHARE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
November 30, 1995............................................. $5,821 $.40 $ 7,198 $ .50
February 29, 1996............................................. 6,198 .43 13,594 .93
May 31, 1996.................................................. 6,347 .44 9,993 .69
August 31, 1996............................................... 6,313 .43 6,317 .44
November 30, 1996............................................. 6,038 .42 18,781 1.29
February 28, 1997............................................. 5,658 .39 10,982 .76
May 31, 1997.................................................. 5,426 .37 (1,100) (.07)
August 31, 1997............................................... 5,440 .37 6,991 .48
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Totals expressed in thousands of dollars except per share amounts.
See accompanying notes to financial statements.
PAGE 19
<PAGE>
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
- --------------------------------------------------------------------------------
PURSUANT TO CERTAIN RULES OF THE SECURITIES AND EXCHANGE COMMISSION, THE
FOLLOWING ADDITIONAL DISCLOSURE IS PROVIDED.
Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan
1. Each shareholder initially purchasing shares of common stock ('Shares') of
Global Partners Income Fund Inc. (the 'Fund') on or after September 6, 1996 will
be deemed to have elected to be a participant in the Amended and Restated
Dividend Reinvestment and Cash Purchase Plan (the 'Plan'), unless the
shareholder specifically elects in writing (addressed to the Agent at the
address below or to any nominee who holds Shares for the shareholder in its
name) to receive all income dividends and distributions of capital gains in
cash, paid by check, mailed directly to the record holder by or under the
direction of American Stock Transfer & Trust Company as the Fund's
dividend-paying agent (the 'Agent'). A shareholder whose Shares are held in the
name of a broker or nominee who does not provide an automatic reinvestment
service may be required to take such Shares out of 'street name' and register
such Shares in the shareholder's name in order to participate, otherwise
dividends and distributions will be paid in cash to such shareholder by the
broker or nominee. Each participant in the Plan is referred to herein as a
'Participant.' The Agent will act as Agent for each Participant, and will open
accounts for each Participant under the Plan in the same name as their Shares
are registered.
2. Unless the Fund declares a dividend or distribution payable only in the form
of cash, the Agent will apply all dividends and distributions in the manner set
forth below.
3. If, on the determination date, the market price per Share equals or exceeds
the net asset value per Share on that date (such condition, a 'market premium'),
the Agent will receive the dividend or distribution in newly issued Shares of
the Fund on behalf of Participants. If, on the determination date, the net asset
value per Share exceeds the market price per Share (such condition, a 'market
discount'), the Agent will purchase Shares in the open-market. The determination
date will be the fourth New York Stock Exchange trading day (a New York Stock
Exchange trading day being referred to herein as a 'Trading Day') preceding the
payment date for the dividend or distribution. For purposes herein, 'market
price' will mean the average of the highest and lowest prices at which the
Shares sell on the New York Stock Exchange on the particular date, or if there
is no sale on that date, the average of the closing bid and asked quotations.
4. Purchases made by the Agent will be made as soon as practicable commencing on
the Trading Day following the determination date and terminating no later than
30 days after the dividend or distribution payment date except where temporary
curtailment or suspension of purchase is necessary to comply with applicable
provisions of federal securities law; provided, however, that
PAGE 20
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GLOBAL PARTNERS INCOME FUND INC.
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Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (continued)
such purchases will, in any event, terminate on the Trading Day prior to the
'ex-dividend' date next succeeding the dividend or distribution payment date.
5. If (i) the Agent has not invested the full dividend amount in open-market
purchases by the date specified in paragraph 4 above as the date on which such
purchases must terminate or (ii) a market discount shifts to a market premium
during the purchase period, then the Agent will cease making open-market
purchases and will receive the uninvested portion of the dividend amount in
newly issued Shares (x) in the case of (i) above, at the close of business on
the date the Agent is required to terminate making open-market purchases as
specified in paragraph 4 above or (y) in the case of (ii) above, at the close of
business on the date such shift occurs; but in no event prior to the payment
date for the dividend or distribution.
6. In the event that all or part of a dividend or distribution amount is to be
paid in newly issued Shares, such Shares will be issued to Participants in
accordance with the following formula: (i) if, on the valuation date, the net
asset value per Share is less than or equal to the market price per Share, then
the newly issued Shares will be valued at net asset value per Share on the
valuation date; provided, however, that if the net asset value is less than 95%
of the market price on the valuation date, then such Shares will be issued at
95% of the market price and (ii) if, on the valuation date, the net asset value
per Share is greater than the market price per Share, then the newly issued
Shares will be issued at the market price on the valuation date. The valuation
date will be the dividend or distribution payment date, except that with respect
to Shares issued pursuant to paragraph 5 above, the valuation date will be the
date such Shares are issued. If a date that would otherwise be a valuation date
is not a Trading Day, the valuation date will be the next preceding Trading Day.
7. Participants have the option of making additional cash payments to the Agent,
monthly, in a minimum amount of $250, for investment in Shares. The Agent will
use all such funds received from Participants to purchase Shares in the open
market on or about the first business day of each month. To avoid unnecessary
cash accumulations, and also to allow ample time for receipt and processing by
the Agent, Participants should send in voluntary cash payments to be received by
the Agent approximately 10 days before an applicable purchase date specified
above. A Participant may withdraw a voluntary cash payment by written notice, if
the notice is received by the Agent not less than 48 hours before such payment
is to be invested.
8. Purchases by the Agent pursuant to paragraphs 4 and 7 above may be made on
any securities exchange on which the Shares of the Fund are traded, in the
over-the-counter market or in negotiated transactions, and may be on such terms
as to price, delivery and otherwise as the Agent shall determine. Funds held by
the Agent uninvested will not bear interest, and it is understood that, in any
event, the Agent shall have no liability in connection with any inability to
PAGE 21
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GLOBAL PARTNERS INCOME FUND INC.
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Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (continued)
purchase Shares within the time periods herein provided, or with the timing of
any purchases effected. The Agent shall have no responsibility as to the value
of the Shares acquired for the Participant's account. The Agent may commingle
amounts of all Participants to be used for open-market purchases of Shares and
the price per Share allocable to each Participant in connection with such
purchases shall be the average price (including brokerage commissions) of all
Shares purchased by the Agent.
9. The Agent will maintain all Participants' accounts in the Plan and will
furnish written confirmations of all transactions in each account, including
information needed by Participants for personal and tax records. The Agent will
hold Shares acquired pursuant to the Plan in noncertificated form in the
Participant's name or that of its nominee, and each Participant's proxy will
include those Shares purchased pursuant to the Plan. The Agent will forward to
Participants any proxy solicitation material and will vote any Shares so held
for Participants only in accordance with the proxy returned by Participants to
the Fund. Upon written request, the Agent will deliver to Participants, without
charge, a certificate or certificates for the full Shares.
10. The Agent will confirm to Participants each acquisition made for their
respective accounts as soon as practicable but not later than 60 days after the
date thereof. Although Participants may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share of the Fund,
no certificates for fractional shares will be issued. Dividends and
distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of the Fund's Shares at the time of termination less the pro rata
expense of any sale required to make such an adjustment.
11. Any share dividends or split shares distributed by the Fund on Shares held
by the Agent for Participants will be credited to their respective accounts. In
the event that the Fund makes available to Participants rights to purchase
additional Shares or other securities, the Shares held for Participants under
the Plan will be added to other Shares held by the Participants in calculating
the number of rights to be issued to Participants.
12. The Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged a pro rata
share of brokerage commissions on all open-market purchases.
13. Participants may terminate their accounts under the Plan by notifying the
Agent in writing. Such termination will be effective immediately if notice is
received by the Agent not less than 10 days prior to any dividend or
distribution record date; otherwise such termination will be effective on the
first Trading Day after the payment date for such dividend or distribution with
respect to any subsequent dividend or distribution. The Plan may be amended or
terminated by the Fund as
PAGE 22
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GLOBAL PARTNERS INCOME FUND INC.
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Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (concluded)
applied to any voluntary cash payments made and any income dividend or capital
gains distribution paid subsequent to written notice of the change or
termination sent to Participants at least 30 days prior to the record date for
the income dividend or capital gains distribution. The Plan may be amended or
terminated by the Agent, with the Fund's prior written consent, on at least 30
days' written notice to Participants. Notwithstanding the preceding two
sentences, the Agent or the Fund may amend or supplement the Plan at any time or
times when necessary or appropriate to comply with applicable law or rules or
policies of the Securities and Exchange Commission or any other regulatory
authority. Upon any termination, the Agent will cause a certificate or
certificates for the full Shares held by each Participant under the Plan and
cash adjustment for any fraction to be delivered to each Participant without
charge.
14. Any amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Agent receives
written notice of the termination of the Participant's account under the Plan.
Any such amendment may include an appointment by the Agent in its place and
stead of a successor Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Agent under
these terms and conditions. Upon any such appointment of an Agent for the
purpose of receiving dividends and distributions, the Fund will be authorized to
pay to such successor Agent, for each Participant's account, all dividends and
distributions payable on Shares of the Fund held in each Participant's name or
under the Plan for retention or application by such successor Agent as provided
in these terms and conditions.
15. In the case of Participants, such as banks, broker-dealers or other
nominees, which hold Shares for others who are beneficial owners ('Nominee
Holders'), the Agent will administer the Plan on the basis of the number of
Shares certified from time to time by each Nominee Holder as representing the
total amount registered in the Nominee Holder's name and held for the account of
beneficial owners who are to participate in the Plan.
16. The Agent shall at all times act in good faith and use its best efforts
within reasonable limits to insure the accuracy of all services performed under
this Agreement and to comply with applicable law, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless such error is
caused by its negligence, bad faith, or willful misconduct or that of its
employees.
17. All correspondence concerning the Plan should be directed to the Agent at 40
Wall Street, 46th Floor, New York, New York 10005.
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GLOBAL PARTNERS INCOME FUND INC.
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Directors
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
LESLIE H. GELB
President, The Council on Foreign Relations
MICHAEL S. HYLAND
Chairman of the Board;
Managing Director, Salomon Brothers Inc President, Salomon Brothers
Asset Management Inc
ALAN RAPPAPORT
President;
Executive Vice President,
Oppenheimer & Co., Inc.
RIORDAN ROETT
Professor and Director, Latin American
Studies Program, Paul H. Nitze
School of Advanced International Studies,
Johns Hopkins University
JESWALD (W) SALACUSE
Henry J. Braker Professor of Commercial Law,
and formerly Dean, The Fletcher School of
Law & Diplomacy Tufts University
- ----------
Officers
MICHAEL S. HYLAND
Chairman of the Board
ALAN RAPPAPORT
President
PETER J. WILBY
Executive Vice President
BETH SEMMEL
Executive Vice President
THOMAS K. FLANAGAN
Executive Vice President
ALAN M. MANDEL
Treasurer
LAURIE A. PITTI
Assistant Treasurer
NOEL B. DAUGHERTY
Secretary
JENNIFER G. MUZZEY
Assistant Secretary
- ----------------------
Global Partners
Income Fund Inc.
7 World Trade Center
New York, New York 10048
INVESTMENT MANAGER
Advantage Advisers, Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281
INVESTMENT ADVISER
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
CUSTODIAN
The Chase Manhattan Bank
Four Metrotech Center
Brooklyn, New York 11245
DIVIDEND DISBURSING AND TRANSFER AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
NEW YORK STOCK EXCHANGE SYMBOL
GDF
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STATEMENT OF DIFFERENCES
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The division sign shall be expressed as....................... [div]
