<PAGE> 1
AMERICAN STOCK TRANSFER & TRUST COMPANY BULK RATE
40 WALL STREET U.S. POSTAGE
NEW YORK, NEW YORK 10005 PAID
STATEN ISLAND, NY
PERMIT No.
169
-------------------------------------------------------------
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC
ANNUAL REPORT
OCTOBER 31, 1995
-------------------------------------
SALOMON BROTHERS ASSET MANAGEMENT
-----------------------------------
<PAGE> 2
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
December 22, 1995
Dear Shareholders:
During the quarter ended October 31, 1995, the net asset value for the Salomon
Brothers Worldwide Income Fund Inc (the "Fund") increased from $10.40 per share
at July 31, 1995 to $10.71 per share at October 31, 1995. Dividends of $0.35625
per share were declared during the quarter. Assuming that these dividends were
reinvested in additional shares of the Fund, the net asset value return for the
quarter ended October 31, 1995 was 6.45%, compared to a 5.09% return for the
Salomon Brothers Brady Bond Index, which we use as a measure of the return of
the overall market for emerging market debt. At October 31, the Fund's stock
traded at $11.375 per share, up $0.375 per share from July 31, representing a 6%
premium to the underlying net asset value per share of $10.71.
Investments in securities of emerging market issues, including both obligations
of sovereign governments and companies, totaled 79% of total assets at the end
of the quarter, up from 77% at the beginning of the quarter. The remainder of
the Fund's portfolio assets was invested in U.S. high-yield corporate bonds. As
the market for emerging market debt securities stabilized from the trough in the
market in early 1995, we have decreased our allocation to U.S.-based corporate
issues to take advantage of the higher relative yields in emerging market debt
securities. U.S. high-yield securities represented as much as 32% of the Fund's
total assets earlier in the year, which helped preserve net asset value for the
Fund during the emerging market debt sell off.
The U.S. high-yield market has returned 16.77% in the first ten months of 1995
(as measured by the Salomon Brothers High-Yield Index), ahead of the 14.63%
returned by the Salomon Brothers Brady Bond Index. More important for the Fund,
the U.S. high-yield market had a positive return in every month of 1995,
compared to the emerging debt market's negative returns for three straight
months in the first quarter of 1995. Diversification by the Fund into the U.S.
high-yield market in 1995 had a stabilizing effect on the Fund's net asset
value.
MARKET OVERVIEW
The fiscal quarter ended October 31, 1995 saw continued recovery in emerging
market debt after the dismal first calendar quarter of 1995. The decline of U.S.
interest rates and continued economic and structural reform momentum developing
in Brazil led to continued upward momentum in bond prices. The market, after its
5.09% return in the quarter ended October 31, 1995, returned 2.90% in November.
Spreads for the Salomon Brothers Brady Bond Index above U.S. Treasuries widened
modestly from 1,076 basis points at the beginning of the quarter to 1,089 basis
points at October 31.
<PAGE> 3
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
PORTFOLIO REVIEW
U.S. dollar-denominated bonds of the Republic of Brazil remain the largest
holding of the portfolio, totaling 11.8% of total assets. Brazilian Brady Bonds
were the top performing component of the Salomon Brothers Brady Bond Index
during the fiscal quarter. The key to Brazil's economic and credit quality
improvement in 1995 has been the credibility of its new currency, the Real, and
the ability of Brazil's monetary policy to drastically reduce inflation.
Inflation is expected to total 15% in 1995, down from 1,094% in 1994. After
initiating a strong burst of consumption upon the introduction of the new
currency in July 1994, the central bank has used high interest rates to bring
economic growth rates down in the later part of 1995, reducing inflationary
pressures.
The key to Brazil's performance going forward, however, is fiscal policy and the
ability to reduce government expenditures, principally social spending, and to
privatize business to pay down government debt. With high real interest rates,
domestic debt levels are increasing substantially, although external debt
remains at reasonable levels. The risk in Brazil is that the political will to
downsize the government and sell off state owned companies will diminish. We
view the momentum of developments in Brazil as positive and sustainable, and
feel that Brazilian external debt represents an acceptable level of risk.
Obligations of the Republic of Argentina constitute 10.8% of the Fund's total
assets. Argentine debt experienced substantial volatility during the quarter due
to worries that Finance Minister Domingo Cavallo would resign. Cavallo is the
architect of Argentina's convertibility program, which is responsible for the
sharp decline in inflation in Argentina, and is believed by the investment
community to be the key to Argentina's continued stability. Although we do not
expect Cavallo to resign, we believe Argentina's economic management team is
deeper than one man and that the country will continue to improve in its credit
characteristics even if Cavallo were to depart. We expect to continue to
maintain a large exposure to Argentina.
The Fund's third largest holding is in bonds of the Republic of Poland, which
represents 10.5% of the Fund's total assets. Poland has shown remarkable
economic advancements during 1995 and we expect Poland to develop into a major
European economic force. Poland was the first Brady Bond issuing country to
receive an investment grade rating, Baa3 by Moody's Investors Service, Inc. We
expect that large investment grade bond buyers will focus increasingly on Poland
which should cause spreads to tighten.
U.S. dollar-denominated bonds of Ecuador have grown to be the fourth largest
position in the Fund during the past six months. Ecuador has experienced
significant political volatility since the spring, including Vice President
Dahik's fleeing of the country amid corruption charges. We have viewed this
volatility as a buying opportunity and remain favorable on Ecuador as a credit.
Moroccan government loans continue as a core holding in the portfolio,
accounting for 8.1% of total assets. Moroccan debt has lagged the market for
much of the year, but rebounded 5.2%
<PAGE> 4
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
during the quarter. Morocco's economic output and governmental finances were
hurt by a drought in 1995, which caused a sharp rise in imports as well as a
decline in agricultural exports. We view this as a short-term concern and expect
Morocco to remain a core holding in the portfolio.
As noted previously, we have reduced our allocation in the portfolio of U.S.
high-yield bonds to 8.9% of total assets at quarter end. We currently view both
the emerging market debt market and the U.S. high-yield market as attractively
valued. However, we view near term appreciation prospects in the emerging
markets as greater. We will, however, continue to invest in the U.S. market as
opportunities arise.
We have continued to maintain $60 million in borrowings. This provides both
additional income to the Fund and potential for appreciation as spreads in the
market narrow.
We appreciate your continued interest in the Fund. A recorded periodic update of
the developments affecting the markets in which the Fund invests is available by
calling (800) 725-6666.
Sincerely,
/s/ MICHAEL S. HYLAND
----------------------
MICHAEL S. HYLAND
Chairman and President
<PAGE> 5
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS -- 93.10% VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ARGENTINA -- 16.16%
Peso 5,258 Republic of Argentina, BOCON, Pre 1, 3.4502%*,**, 4/1/01.............. $ 2,477,218
US$ 3,651 Republic of Argentina, BOCON, Pre 2, 5.875%*,**, 4/1/01............... 2,392,999
28,600+ Republic of Argentina, FRB, 6.8125%*, 3/31/05......................... 17,034,875
------------
21,905,092
------------
BRAZIL -- 17.72%
37,740+ Federal Republic of Brazil, C Bond, 8.00%**, 4/15/14.................. 19,223,757
6,500+ Federal Republic of Brazil, NMB, Series L, 6.875%*, 4/15/09........... 3,818,750
2,000+ Federal Republic of Brazil, Par Bond, 4.25%*, 4/15/24................. 971,250
------------
24,013,757
------------
BULGARIA -- 7.59%
36,750+ Republic of Bulgaria, FLIRB, Series A, 2.00%*, 7/28/12................ 10,290,000
------------
COSTA RICA -- 3.69%
10,000+ Costa Rica, Principal Bond, Series B, 6.25%, 5/21/15.................. 5,000,000
------------
ECUADOR -- 12.65%
531+ Republic of Ecuador, EIB, 6.75%*, 12/21/04............................ 308,197
50,637+ Republic of Ecuador, PDI Bond, 6.8125%*,**, 2/28/15................... 16,836,690
------------
17,144,887
------------
HUNGARY -- 4.96%
8,000+ National Bank of Hungary, 8.875%, 11/1/13............................. 6,720,000
------------
PANAMA -- 4.24%
7,000+ Republic of Panama, FRN, 7.25%*, 5/10/02.............................. 5,740,000
------------
POLAND -- 15.78%
33,201+ Republic of Poland, PDI Bond, 3.75%*, 10/27/14........................ 21,393,894
------------
SOUTH AFRICA -- 1.04%
ZAL 6,000 Republic of South Africa Notes, 12.00%, 2/28/05....................... 1,413,202
------------
TRINIDAD & TOBAGO -- 2.31%
US$ 3,000+ Trinidad & Tobago Notes, 9.75%, 11/3/00............................... 3,135,000
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 1
<PAGE> 6
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS (CONCLUDED) VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
URUGUAY -- 1.37%
US$ 2,500+ Uruguay, DCB, Series B, 6.75%*, 2/18/07............................... $ 1,850,000
------------
VENEZUELA -- 5.59%
12,000+ Republic of Venezuela, FLIRB, Series A, 6.8125%*, 3/31/07............. 6,060,000
3,000 Republic of Venezuela, FLIRB, Series B, 7.00%*, 3/31/07............... 1,515,000
------------
7,575,000
------------
TOTAL SOVEREIGN BONDS (cost $129,223,621)............................. 126,180,832
------------
LOAN PARTICIPATIONS++ -- 14.05%
- ----------------------------------------------------------------------------------------------------------------
Republic of Jamaica,
778 Tranche A, 6.75%*, 10/15/00 (Chase Manhattan)....................... 699,993
Kingdom of Morocco,
9,350+ Tranche A, 6.6875%*, 1/1/09 (Merrill Lynch, J P Morgan)............. 5,586,625
15,000 Tranche B, 6.6875%*, 1/1/04 (Morgan Stanley, Bankers Trust)......... 10,912,500
Russia,
Bank for Foreign Economic Affairs, Vnesheconombank,
DEM 7,500 Floating Rate#, 8/14/99 (Chase Manhattan)........................... 1,849,080
------------
TOTAL LOAN PARTICIPATIONS (cost $22,474,352).......................... 19,048,198
------------
</TABLE>
<TABLE>
<CAPTION>
CORPORATE BONDS -- 17.95%
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brazil,
US$ 1,000+ Aracruz Celulose, 10.375%, 1/31/02##................................ 945,000
Canada,
C$ 3,000+ Rogers Cable Systems, 9.65%, 1/15/14................................ 1,904,406
Indonesia,
US$ 1,500+ Indah Kiat International Finance, 12.50%, 6/15/06................... 1,545,000
Mexico,
2,000+ Grupo Industrial Durango, 12.00%, 7/15/01........................... 1,770,000
United States,
2,000+ Berry Plastics Corp., 12.25%, 4/15/04............................... 2,125,000
1,000+ Flagstar Corp., 10.75%, 9/15/01..................................... 930,000
5,000+ General Electric Capital Corp., 43.70%*, 10/29/96(a)................ 2,050,000
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 2
<PAGE> 7
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) CORPORATE BONDS (CONCLUDED) VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Jordan Industries, Inc., Zero Coupon (until 8/1/98), 11.75%
US$ 5,000+ thereafter, 8/1/05.................................................. $ 2,850,000
1,500+ Motor Wheel Corp., Series B, 11.50%, 3/1/00......................... 1,417,500
1,000+ Parisian Inc., 9.875%, 7/15/03...................................... 840,000
2,000+ Penn Traffic Co., 9.625%, 4/15/05................................... 1,470,000
2,500+ Plastic Specialty & Technology, 11.25%, 12/1/03..................... 2,256,250
2,000+ U.S. Banknote Corp., 11.625%, 8/1/02................................ 1,100,000
1,500+ Valcor Inc., 9.625%, 11/1/03........................................ 1,387,500
2,000+ Venture Holdings Trust, 9.75%, 4/1/04............................... 1,740,000
------------
TOTAL CORPORATE BONDS (cost $30,943,123).............................. 24,330,656
------------
SHORT-TERM INVESTMENTS -- 6.78%
- ----------------------------------------------------------------------------------------------------------------
MEXICO
Peso 14,727 Cetes, 11/9/95...................................................... 2,048,342
51,609 Cetes, 11/16/95..................................................... 7,135,726
------------
TOTAL SHORT-TERM INVESTMENTS (cost $10,431,319)....................... 9,184,068
------------
TOTAL INVESTMENTS -- 131.88% (cost $193,072,415)...................... 178,743,754
------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (31.88%)..................... (43,203,525)
------------
NET ASSETS -- 100.0%
(equivalent to $10.71 per share on 12,657,133 common shares
outstanding).......................................................... $135,540,229
===========
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 3
<PAGE> 8
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (concluded)
October 31, 1995
- --------------------------------------------------------------------------------
* Rate shown reflects current rate on variable rate instrument or instrument
with step coupon rates.
** Payment-in-kind security for which all or part of the interest earned is
capitalized as additional principal.
+ All or a portion of this security is segregated as collateral pursuant to a
loan agreement.
++ Loan Participation Notes were acquired through the financial institutions
indicated parenthetically.
# Non-income producing. Security is currently in default.
## Pursuant to Rule 144A under the Securities Act of 1933, this security can
only be sold to qualified institutional investors.
<TABLE>
<S> <C> <C>
BOCON -- Bonos de Consolidacion.
DCB -- Debt Conversion Bond.
DEM -- Deutschemark.
EIB -- Eligible Interest Bond.
FLIRB -- Front Loaded Interest Reduction Bond.
FRB -- Floating Rate Bond.
FRN -- Floating Rate Note.
NMB -- New Money Bond.
PDI -- Past Due Interest.
ZAL -- South African Rand.
</TABLE>
(a) The Fund's proceeds at maturity will be increased or decreased by the
percentage fluctuation in the Mexican Spot Tesobono rate between the date of
issuance and the date of maturity of the note. Coupon resets quarterly and
is based on the 91 day Mexican Cetes rate.
See accompanying notes to financial statements.
PAGE 4
<PAGE> 9
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost -- $193,072,415)................................................. $178,743,754
Cash......................................................................................... 2,353,734
Receivable for investments sold.............................................................. 18,681,258
Interest receivable.......................................................................... 3,135,865
Deferred organization expenses and other assets.............................................. 105,670
------------
Total assets......................................................................... 203,020,281
------------
LIABILITIES
Payable for investments purchased............................................................ 3,083,373
Loan payable (Note 5)........................................................................ 60,000,000
Loan interest payable (Note 5)............................................................... 2,259,272
Dividend payable............................................................................. 1,502,984
Payable for compensated foreign currency contracts........................................... 370,546
Accrued expenses............................................................................. 140,475
Advisory fee payable......................................................................... 105,783
Administration fee payable................................................................... 17,619
------------
Total liabilities.................................................................... 67,480,052
------------
NET ASSETS
Common Stock ($.001 par value, authorized 100,000,000 shares; 12,657,133 shares
outstanding)............................................................................... 12,657
Additional paid-in capital................................................................... 176,709,696
Distributions in excess of net investment income............................................. (973,643)
Accumulated net realized loss on investments................................................. (25,842,453)
Net unrealized depreciation on investments and foreign currency translation.................. (14,366,028)
------------
Net assets........................................................................... $135,540,229
------------
NET ASSET VALUE PER SHARE ($135,540,229 / 12,657,133 shares)................................. $ 10.71
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 5
<PAGE> 10
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- -----------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1995
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Interest (includes discount accretion of $6,110,543)..................... $ 28,156,023
EXPENSES
Investment advisory fees................................................. $1,155,700
Administration fees...................................................... 192,616
Reports to shareholders.................................................. 82,000
Custodian's fees and expenses............................................ 77,000
Legal fees and expenses.................................................. 77,000
Audit fees and expenses.................................................. 75,000
Accounting fees.......................................................... 59,000
Transfer agent's fees and expenses....................................... 37,000
Directors' fees.......................................................... 30,000
Amortization of organization expenses.................................... 25,041
Registration fees........................................................ 19,691
Insurance................................................................ 4,769
Miscellaneous............................................................ 2,000
----------
Total operating expenses..................................................... 1,836,817
Loan interest expense (Note 5)........................................... 4,695,000
----------
Total expenses............................................................... 6,531,817
------------
Net investment income........................................................ 21,624,206
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on:
Investment transactions.................................................. (28,060,297)
Foreign currency transactions............................................ (746,786)
------------
(28,807,083)
------------
Net change in unrealized depreciation on:
Investments.............................................................. 17,325,455
Foreign currencies....................................................... 248,323
------------
17,573,778
------------
Net loss on investments and foreign currency transactions.................... (11,233,305)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS................................... $ 10,390,901
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 6
<PAGE> 11
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
For the Year Ended October 31, 1995
<TABLE>
<S> <C>
INCREASE (DECREASE) IN CASH
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Purchases of short-term portfolio investments, net...................................... $ (10,343,817)
Purchases of long-term portfolio investments............................................ (186,444,538)
Proceeds from disposition of long-term portfolio investments and principal paydowns..... 197,570,441
-------------
782,086
Net investment income................................................................... 21,624,206
Net accretion on investments............................................................ (6,110,543)
Amortization of organization expenses................................................... 25,041
Net change in receivables/payables related to operations................................ 3,263,930
-------------
Net cash flows provided by operating activities..................................... 19,584,720
-------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Adjustment to offering costs............................................................ 26,656
Cash dividends paid..................................................................... (18,036,444)
-------------
Net cash used for financing activities.............................................. (18,009,788)
-------------
Net increase in cash........................................................................ 1,574,932
Cash at beginning of period................................................................. 778,802
-------------
Cash at end of period....................................................................... $ 2,353,734
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 7
<PAGE> 12
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE DECEMBER 31, 1993*
YEAR ENDED THROUGH
OCTOBER 31, 1995 OCTOBER 31, 1994
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income........................................... $ 21,624,206 $ 12,970,453
Net realized loss on investments and foreign currency
transactions.................................................. (28,807,083) (1,040,505)
Net change in unrealized depreciation on investments and foreign
currencies.................................................... 17,573,778 (31,939,806)
------------ ------------
Net increase (decrease) in net assets from operations........... 10,390,901 (20,009,858)
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income............................ (17,770,598) (12,818,926)
Distributions in excess of net investment income................ (265,818) (708,383)
------------ ------------
Total dividends and distributions............................... (18,036,416) (13,527,309)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets from initial public offering of
shares........................................................ 26,656+ 160,467,500
Increase in net assets from underwriters' over-allotment
option........................................................ -- 16,128,750
------------ ------------
Net increase in net assets from capital share transactions...... 26,656 176,596,250
------------ ------------
Total increase (decrease)....................................... (7,618,859) 143,059,083
NET ASSETS
Beginning of period............................................. 143,159,088 100,005
------------ ------------
End of period................................................... $135,540,229 $143,159,088
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
+ Adjustment to offering costs.
See accompanying notes to financial statements.
PAGE 8
<PAGE> 13
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
The Salomon Brothers Worldwide Income Fund Inc (the "Fund") was incorporated in
Maryland on October 21, 1993 and is registered under the Investment Company Act
of 1940, as amended, as a non-diversified, closed-end management investment
company. The Fund commenced operations on December 31, 1993.
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.
SECURITIES VALUATION. In valuing the Fund's assets, all securities for which
market quotations are readily available are valued (except as described below)
(i) at the last sales price prior to the time of determination if there were a
sales price on the date of determination, (ii) at the mean between the last
current bid and asked prices if there were no sales price 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
sovereign bonds are typically traded internationally in the over-the-counter
market and will be valued at the mean between the last current bid and asked
price as of the close of business of that market. However, where 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 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.
REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund's policy that its custodian takes possession of the underlying collateral
securities, the value of which at least equals the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
PAGE 9
<PAGE> 14
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(i) market value of investment securities, other assets and liabilities -- at
the 12:00 noon rate of exchange reported by Reuters;
(ii) purchases and sales of investment securities, income and expenses -- at the
rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the period, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of securities held at the end of the period. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of portfolio securities sold during
the period.
Net realized losses on foreign currency transactions represent net foreign
exchange losses from disposition of foreign currency, gains or losses realized
between the trade and settlement dates on security transactions, and the
difference between amounts of interest recorded on the Fund's books and the U.S.
dollar equivalent amounts actually received. Net currency gains and losses from
valuing foreign currency denominated assets, except portfolio securities, and
liabilities at period end exchange rates are reflected as a component of
unrealized depreciation on foreign currencies.
FORWARD CURRENCY CONTRACTS. A forward currency contract ("forward contract")
is a commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The contracts are valued on each valuation date at
current exchange rates and any unrealized gain or loss is included in net
unrealized appreciation or depreciation on investments and foreign currencies.
The Fund records realized gains or losses on delivery of the currency or at the
time the forward contract is extinguished (compensated) by entering into a
closing transaction prior to delivery. This gain or loss, if any, is included in
net realized gain (loss) on foreign currency transactions.
CASH FLOW INFORMATION. The Fund invests in securities and distributes
dividends and distributions from net investment income and from net realized
gains which are paid in cash and may be reinvested at the discretion of
shareholders. These activities are reported in the Statement of Changes in Net
Assets and 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 discounts or premiums on
debt obligations. For the year ended October 31, 1995, the Fund paid interest
expense of $2,662,499.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest
PAGE 10
<PAGE> 15
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
income is recorded on the accrual basis and the Fund accretes discount on
securities purchased using the effective interest method.
TAXES. It is the Fund's intention to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income and capital gains, if any, to
shareholders. Therefore, no federal income tax or excise tax provision is
required.
DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends and
distributions monthly first from net investment income, then from realized
short-term capital gains and other sources, if necessary. Net long-term capital
gains, if any, in excess of loss carryforwards will be distributed annually.
Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in accordance
with federal income tax regulations which may differ from generally accepted
accounting principles. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require
reclassifications. Dividends and distributions which exceed net investment
income and net realized capital gains for financial reporting purposes, but not
for tax purposes are reported as distributions in excess of net investment
income and distributions in excess of net realized capital gains.
DEFERRED ORGANIZATION EXPENSES. A total of $116,182 was incurred in connection
with the organization of the Fund. These costs have been deferred and are being
amortized on a straight-line basis over a period of sixty months from the date
the Fund commenced investment operations.
NOTE 3. MANAGEMENT AND ADMINISTRATION FEES AND OTHER TRANSACTIONS
The Fund has an Investment Advisory Agreement with Salomon Brothers Asset
Management Inc (the "Adviser"), an indirect wholly-owned subsidiary of Salomon
Inc, pursuant to which the Adviser acts as the Fund's investment adviser and 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. Through August 31, 1995, the Fund also had an
Administration Agreement with Prudential Mutual Fund Management, Inc. (the
"Administrator"), pursuant to which the Administrator performed administrative
services necessary for the operation of the Fund.
The Fund pays the Adviser a monthly fee for its advisory services at an annual
rate of .90% of the value of the Fund's average weekly net assets. The Fund paid
the Administrator a monthly fee for its administration services at an annual
rate of .15% of the value of the Fund's average
PAGE 11
<PAGE> 16
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
weekly net assets up to $250 million and .125% of the value of such net assets
in excess of $250 million.
Effective September 1, 1995, the Administration Agreement was amended to provide
for the appointment of the Adviser as Administrator and Prudential Mutual Fund
Management, Inc. as Sub-administrator (the "Sub-administrator"). Under the
amended Agreement, the Fund pays the Administrator a monthly fee at an annual
rate of .15% of the value of the Fund's average weekly net assets up to $250
million and .125% of the value of such net assets in excess of $250 million for
its services, out of which the Administrator pays the Sub-administrator eighty
percent of such fees collected for its services.
At October 31, 1995, the Adviser owned 7,133 shares of the Fund.
Certain officers and/or directors of the Fund are also officers and/or directors
of the Adviser.
The Fund pays each Director not affiliated with the Adviser a fee of $5,000 per
year, a fee of $700 for attendance at each in-person meeting, a fee of $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 AND FEDERAL INCOME TAX STATUS
Purchases and sales of investment securities, other than short-term investments,
for the year ended October 31, 1995 aggregated $185,129,161 and $213,612,393,
respectively.
For the year ended October 31, 1995, the Fund had a realized loss on forward
foreign currency exchange contracts closed of $370,546.
The federal income tax basis of the Fund's investments at October 31, 1995 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized depreciation for federal income tax purposes was $14,328,661
(gross unrealized appreciation -- $7,596,541; gross unrealized
depreciation -- $21,925,202).
During the year ended October 31, 1995, permanent book/tax differences of
$3,853,608 arising from foreign currency losses have been reclassified to
distributions in excess of net investment income from accumulated net realized
loss on investments. Net investment income, net realized losses and net assets
were not affected by this reclassification.
For federal income tax purposes, the Fund has a capital loss carryforward as of
October 31, 1995 of approximately $25,472,000 of which approximately $889,000
and $24,583,000 expires in 2002 and 2003, respectively. Accordingly, no capital
gain distributions are expected to be paid to shareholders until net gains have
been realized in excess of such amount.
PAGE 12
<PAGE> 17
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 5. BANK LOAN
The Fund borrowed $60,000,000 pursuant to a secured term loan agreement (the
"Loan") with Morgan Guaranty Trust Company of New York. The Loan agreement was
renewed on May 5, 1995 at an interest rate of 7.5625%, which is equal to
six-month LIBOR plus 1.375% and the maturity date is November 6, 1995. Interest
is payable upon maturity. In accordance with the terms of the Loan, the Fund
must maintain a level of collateral to debt of between 175-225%. The collateral
for the Loan was valued at $137,078,159 on October 31, 1995 and is being held in
a segregated account by the Fund's custodian.
The net asset value of the Fund could be negatively affected if the Fund were
required to liquidate assets in other than an orderly manner and/or in adverse
market conditions to repay any bank loans outstanding.
NOTE 6. LOAN PARTICIPATIONS
The Fund invests in U.S. dollar-denominated fixed and floating rate loans
("Loans") arranged through private negotiations between a foreign sovereign
entity and one or more financial institutions ("Lenders"). The Fund invests in
such Loans in the form of participations in Loans ("Participations") or
assignments of all or a portion of loans from third parties ("Assignments").
Participations typically result in the Fund having a contractual relationship
only with the Lender, not with the sovereign borrower. The Fund has the right to
receive payments of principal, interest and any fees to which it is entitled
only from the Lender selling the Participation and only upon receipt by the
Lender of the payments from the borrower. In connection with purchasing
Participations, the Fund generally has no right to enforce compliance by the
borrower with the terms of the loan agreements relating to the loan, nor any
rights of set-off against the borrower, and the Fund will not benefit directly
from any collateral supporting the Loan in which it has purchased the
Participation. As a result, the Fund assumes the credit risk of both the
borrower and the Lender that is selling the Participation. The Fund may have
difficulty disposing of Participations and Assignments because the market for
such instruments is not highly liquid.
NOTE 7. CREDIT AND MARKET 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
PAGE 13
<PAGE> 18
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
consequences of political, social, economic or diplomatic changes may have
disruptive effects on the market prices of investments held by the Fund. At
October 31, 1995, the Fund has a concentration of credit risk in sovereign debt
of emerging market countries.
Investing in foreign securities may also involve certain considerations and
risks not typically associated with those of domestic origin as a result of,
among other factors, the level of governmental supervision and regulation of
foreign securities markets and the risks of loss from currency devaluations and
other exchange rate fluctuations.
NOTE 8. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Fund enters into forward contracts in order to hedge its exposure to changes
in foreign currency exchange rates on its foreign portfolio holdings or on
specific receivables and payables denominated in a foreign currency. Forward
contracts involve elements of market risk in excess of the amount reflected in
the Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward contract.
Risks may also arise upon entering into these contracts from the potential
inability of the counterparties to meet the terms of their contracts. As of
October 31, 1995, all forward contracts which the Fund has entered into have
been compensated by the Fund with offsetting closing transactions.
Consistent with its objective to seek high current income, the Fund invests in
instruments whose values and interest rates may be linked to foreign currencies,
interest rates, indices or some other financial indicator. The value at maturity
or interest rates for these instruments will increase or decrease according to
the change in the indicator to which it is indexed. These securities are
generally more volatile in nature and the risk of loss of principal or interest
is greater.
NOTE 9. EVENTS SUBSEQUENT TO OCTOBER 31, 1995
Subsequent to October 31, 1995, the Board of Directors of the Fund declared
dividends of $.11875 per common share payable November 30, 1995 and December 29,
1995 to shareholders of record on November 13, 1995 and December 18, 1995,
respectively.
The Loan Agreement with Morgan Guaranty Trust Company was renewed on November 6,
1995 at an interest rate of 6.75%, which is equal to six-month LIBOR plus
1.375%, and the maturity date is May 6, 1996.
PAGE 14
<PAGE> 19
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (concluded)
NOTE 10. QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
NET REALIZED AND
CHANGE IN UNREALIZED NET INCREASE
GAINS (LOSSES) ON (DECREASE) IN NET
NET INVESTMENT INVESTMENTS AND ASSETS RESULTING FROM
INCOME FOREIGN CURRENCIES OPERATIONS
------------------ ---------------------- ----------------------
TOTAL PER PER PER
QUARTERLY PERIOD INCOME AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1993*
to January 31, 1994............ $ 855,302 $ 666,958 $.053 $ 651,408 $ .051 $ 1,318,366 $ .104
February 1, 1994
to April 30, 1994.............. 3,755,934 3,068,100 .242 (30,047,353) (2.374) (26,979,253) (2.132)
May 1, 1994
to July 31, 1994............... 5,659,468 4,838,529 .382 (4,196,038) (.332) 642,491 .050
August 1, 1994
to October 31, 1994............ 6,377,379 4,396,866 .347 611,672 .048 5,008,538 .395
November 1, 1994
to January 31, 1995............ 6,109,343 4,500,735 .356 (54,531,478) (4.308) (50,030,743) (3.952)
February 1, 1995
to April 30, 1995.............. 6,621,361 5,010,043 .396 31,740,675 2.508 36,750,718 2.904
May 1, 1995
to July 31, 1995............... 7,260,442 5,647,319 .446 9,571,130 .756 15,218,449 1.202
August 1, 1995
to October 31, 1995............ 8,164,877 6,466,109 .511 1,986,368 .157 8,452,477 .668
<CAPTION>
DIVIDENDS AND
DISTRIBUTIONS SHARE PRICE
------------------ ------------
PER
QUARTERLY PERIOD AMOUNT SHARE HIGH LOW
---------------------------------------------------------------
<S> <C> <C> <C> <C>
December 31, 1993*
to January 31, 1994............ -- -- $15 1/8 $ 15
February 1, 1994
to April 30, 1994.............. $4,509,103 $.356 15 1/8 12
May 1, 1994
to July 31, 1994............... 4,509,103 .356 13 1/2 11 1/8
August 1, 1994
to October 31, 1994............ 4,509,103 .356 12 5/8 10 3/4
November 1, 1994
to January 31, 1995............ 4,509,103 .356 11 3/4 9 1/4
February 1, 1995
to April 30, 1995.............. 4,509,103 .356 11 1/8 9 3/8
May 1, 1995
to July 31, 1995............... 4,509,105 .356 11 3/4 10 3/4
August 1, 1995
to October 31, 1995............ 4,509,105 .356 11 5/8 11
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
PAGE 15
<PAGE> 20
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE YEAR DECEMBER 31, 1993*
ENDED THROUGH
OCTOBER 31, 1995 OCTOBER 31, 1994
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.............................. $ 11.31 $ 14.03++
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................................. 1.71 1.02
Net realized and unrealized losses on investments................. (.89) (2.60)
-------- --------
Total from investment operations.............................. .82 (1.58)
-------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income.............................. (1.37) (1.01)
Distributions in excess of net investment income.................. (.05) (.06)
-------- --------
Total distributions........................................... (1.42) (1.07)
-------- --------
Offering costs with respect to issuance of shares................. -- (.07)
-------- --------
Net asset value, end of period.................................... $ 10.71 $ 11.31
================ ===================
Market price per share, end of period............................. $ 11.375 $ 10.75
================ ===================
TOTAL INVESTMENT RETURN(A)........................................ 20.61% (16.55)%+
RATIOS TO AVERAGE NET ASSETS:
Total expenses................................................ 5.04% 2.90%#
Operating expenses............................................ 1.42% 1.36%#
Interest expense.............................................. 3.62% 1.54%#
Net investment income......................................... 16.70% 10.24%#
SUPPLEMENTAL DATA:
Net assets, end of period (000)............................... $135,540 $143,159
Average net assets (000)...................................... $129,516 $151,954
Portfolio turnover rate....................................... 101% 13%
Asset coverage for Loan outstanding........................... 326% 339%
Weighted average bank loan (000).............................. $ 60,000 $ 39,934
Weighted average interest rate on bank loan................... 7.83% 5.88%#
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
(a) Total investment return is calculated assuming a purchase of common
stock at the current market price on the first day and a sale at the
current market price on the last day of each period reported. Dividends
and distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return for periods of less than one full year are not
annualized.
+ Based on beginning period price of $14.03 (initial offering price of
$15.00 less sales load of $.975) and end of period market value of $10.75
per share.
++ Net asset value immediately after closing of initial public offering
was $13.96.
# Annualized.
PAGE 16
<PAGE> 21
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Salomon Brothers Worldwide Income Fund Inc
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations, of cash
flows and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Salomon Brothers Worldwide
Income Fund Inc (the "Fund") at October 31, 1995, the results of its operations
and cash flows for the year then ended, and the changes in its net assets and
the financial highlights for the year then ended and for the period December 31,
1993 (commencement of operations) through October 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 October 31, 1995 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
December 15, 1995
PAGE 17
<PAGE> 22
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- ---------------------------------------------------------------------------
OTHER INFORMATION
Pursuant to certain rules of the Securities and Exchange Commission the
following additional disclosure is provided.
Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"), shareholders may
elect to have all distributions automatically reinvested by American Stock
Transfer & Trust Company (the "Plan Agent") in Fund Shares. Shareholders who do
not participate in the Plan will receive all distributions in cash paid by check
in dollars mailed directly to the shareholder by the custodian, as dividend
disbursing agent. In the case of shareholders, such as banks, brokers or
nominees, that hold Shares for others who are the beneficial owners, the Plan
Agent will administer the Plan on the basis of the number of Shares certified
from time to time by the shareholders as representing the total amount
registered in such shareholders' name and held for the account of beneficial
owners who are participants in the Plan. Investors that own shares registered in
the name of a bank, broker-dealer or other nominee should consult with such
nominee as to the participation in the Plan through such nominee, and may be
required to have their shares registered in their own names in order to
participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
After the Fund declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy the Fund's Shares in the open market, on the New
York Stock Exchange or elsewhere, for the participants' accounts. The Fund does
not intend to issue any new shares in connection with the Plan.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in the name of the
participant, and each shareholder's proxy will include those Shares purchased
pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions. The Plan Agent's fees for the reinvestment of dividends and
capital gains distributions will be paid by the Fund. However, each participant
will pay a pro rata share of brokerage commissions incurred with respect to the
Plan Agent's open market purchases in connection with the reinvestment of
dividends and distributions. Brokerage charges for purchasing small amounts of
stock for individual accounts through the Plan are expected to be less than the
usual brokerage charges for such transactions because the Plan Agent will be
purchasing stock for all participants in blocks and prorating the lower
commission thus attainable.
The receipt of dividends and distributions under the Plan will not relieve
participants of any income tax which may be payable on such dividends or
distributions.
Experience under the Plan may indicate that changes in the Plan are desirable.
Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan
as applied to any dividend or distribution paid subsequent to notice of the
termination sent to all participants in
PAGE 18
<PAGE> 23
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- ---------------------------------------------------------------------------
OTHER INFORMATION (concluded)
the Plan at least 30 days before the record date for the dividend or
distribution. The Plan also may be amended by the Fund or the Plan Agent, but
(except when necessary or appropriate to comply with applicable laws, rules or
policies of a regulatory authority) only by at least 30 days' written notice to
participants in the Plan. All correspondence concerning the Plan should be
directed to the Plan Agent at 40 Wall Street, 46th floor, New York, New York
10005.
PAGE 19
<PAGE> 24
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- -----------
DIRECTORS
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
THOMAS W. BROCK
Chairman and Chief Executive Officer,
Salomon Brothers Asset Management Inc
DANIEL P. CRONIN
Vice President -- General Counsel,
Pfizer International Inc.
ALLAN C. HAMILTON
Consultant; formerly Vice President
and Treasurer, Exxon Corp.
MICHAEL S. HYLAND
President;
Salomon Brothers Asset Management 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,
The Fletcher School of Law & Diplomacy, Tufts University
- ---------
OFFICERS
MICHAEL S. HYLAND
Chairman and President
THOMAS FLANAGAN
Executive Vice President
PETER J. WILBY
Executive Vice President
LAWRENCE H. KAPLAN
Executive Vice President
ALAN M. MANDEL
Treasurer
LAURIE A. PITTI
Assistant Treasurer
TANA E. TSELEPIS
Secretary
- ----------------------
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC
Seven World Trade Center
New York, New York 10048
For information call (toll free)
1-800-SALOMON
INVESTMENT ADVISER AND ADMINISTRATOR
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
SUB-ADMINISTRATOR
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, New York 10292
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
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
New York, New York 10017
NEW YORK STOCK EXCHANGE SYMBOL
SBW
- --------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase, from time to time, shares of
its common stock at market prices.
- --------------------------------------------------------------------------------
This report is for stockholder information.
This is not a prospectus intended for use in
the purchase or sale of Fund shares.
- --------------------------------------------------------------------------------
