<PAGE> 1
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
March 22, 1996
Dear Shareholders:
We are pleased to provide this quarterly report for the Salomon Brothers
Worldwide Income Fund Inc (the "Fund"), including market commentary and a
statement of the Fund's current investments.
During the fiscal quarter ended January 31, 1996, the net asset value for the
Fund increased from $10.71 per share at October 31, 1995 to $13.64 per share at
January 31, 1996. 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 January 31, 1996, was
31.5%, compared to a 20.3% return for the Salomon Brothers Brady Bond Index,
which we use as a measure of the return of the overall market for emerging
markets debt.
Investments in securities of emerging markets issues, including both obligations
of sovereign governments and corporate issuers, totaled 78.0% of invested assets
at the end of the quarter. The remainder of the Fund's long-term portfolio
assets was invested in U.S. high-yield corporate bonds.
EMERGING MARKETS
The continued recovery in emerging markets debt has been driven by the improving
fundamentals in the major Latin American countries and the effects of additional
funding into the market.
In Argentina, the Brady bond market rose 29.5% during the quarter due to
investor optimism for continuing economic recovery and a stabilizing political
situation. In December, Argentina's Congress passed the 1996 budget legislation.
While the legislation fell short of meeting all the administration's objectives,
the passage of the budget maintains Argentina's forward momentum toward Economy
Minister Cavallo's reform initiatives and the securing of additional financing
backed by tax receipts. In January, President Menem campaigned for the
Congressional approval of the "superpowers" legislation which is considered
vital in obtaining further disbursements from multilateral government agencies.
Brazilian Brady bonds gained 17.5% during the quarter, lagging other major Latin
countries due to a lack of favorable reform developments. The Brazilian Congress
convened an extraordinary session from January 8 through February 15 to resume
consideration of a number of constitutional reform measures, the most important
of which are the social security and administrative reform proposals.
Ecuadorian Brady bonds rose 24.4% between November 1, 1995 and January 31, 1996.
In addition to the positive technical factors contributing to the market's
performance, Ecuador continued its progress toward economic development.
The Moroccan Brady bond market rose 22.6% during the quarter. The Moroccan
Privatization Minister plans to accelerate initiatives in 1996 with the
privatization of as many as 80 companies in a wide range of industries this
year. Record levels of rainfall in coastal and agricultural regions of Morocco
have raised the prospect of an above-average harvest and a resulting sharp
increase in Moroccan Gross Domestic Product growth. Morocco's recent
<PAGE> 2
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
association with the European Union is clearly a long-term positive, linking
Morocco's future to that of Europe.
During the quarter, the Polish Brady bond market rose 19.5%. Moody's Investors
Service, Inc. granted Polish Brady bonds an investment grade rating, the first
such rating in the six-year history of the Brady bond market. The rating
agency's recognition of the lower likelihood of default for Polish Brady bonds
is very positive for the market's long-term performance.
HIGH-YIELD MARKET
The Salomon Brothers High-Yield Market Index rose 4.0% between November 1, 1995
and January 31, 1996. The high-yield market's performance during the period was
driven largely by the U.S. interest rate rally.
U.S. economic growth slowed and non-cyclical issues outperformed cyclical
corporate debt issues significantly. Top performing sectors included airlines,
telecommunications, gaming and media, while retailers, restaurants,
transportation and textile companies underperformed the market average as
represented by the Salomon Brothers High-Yield Market Index.
Technical conditions in the U.S. high-yield market continued to be strong
through the end of 1995. Approximately $47 billion of new issues were priced
during 1995, compared to $43 billion in 1994. Net investments in high-yield
mutual funds reached approximately $11 billion in 1995, well above the $1.0
billion recorded in 1994.
ANNUAL SHAREHOLDERS MEETING
The Fund held its annual meeting of shareholders on February 26, 1996. At the
meeting, shareholders elected the nominees proposed for election to the Fund's
Board of Directors and ratified the selection of Price Waterhouse LLP as the
independent accountants of the Fund. The following table provides information
concerning the matters voted on at the meeting:
<TABLE>
<CAPTION>
1. Election of
Directors
NOMINEES VOTES FOR VOTES AGAINST
- -----------------------------------------------------------
<S> <C> <C>
Allan C. Hamilton 11,668,144 216,750
Riordan Roett 11,667,973 216,921
Jeswald W. Salacuse 11,669,973 214,921
<CAPTION>
2. Ratification of Price Waterhouse LLP as the Independent
Accountants of the Fund
VOTES FOR VOTES AGAINST VOTES ABSTAINED
- -----------------------------------------------------------
<S> <C> <C>
11,678,192 63,873 142,829
</TABLE>
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
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
January 31, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS -- 88.7% VALUE
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ARGENTINA -- 15.9%
Peso 5,289+ Republic of Argentina, BOCON, Pre 1, 3.5124%, 4/1/01*,**.............. $ 3,908,284
2,297 Republic of Argentina, BOCON, Pre 3, 3.5201%, 9/1/02*,**.............. 1,471,499
US$ 28,600+ Republic of Argentina, FRB, 6.8125%, 3/31/05*......................... 22,111,375
------------
27,491,158
------------
BRAZIL -- 6.5%
8,053+ Federal Republic of Brazil, C Bond, 8.00%, 4/15/14**.................. 5,430,607
2,000 Federal Republic of Brazil, Investment (Exit) Bond, 6.00%, 9/15/13.... 1,297,500
6,500+ Federal Republic of Brazil, NMB, Series L, 6.875%, 4/15/09*........... 4,493,125
------------
11,221,232
------------
BULGARIA -- 12.1%
49,750+ Republic of Bulgaria, FLIRB, Series A, 2.00%, 7/28/12*................ 19,153,750
3,250 Republic of Bulgaria, IAB, 6.25%, 7/28/11*............................ 1,710,313
------------
20,864,063
------------
COSTA RICA -- 3.4%
10,000+ Costa Rica, Principal Bond, Series B, 6.25%, 5/21/15.................. 5,800,000
------------
ECUADOR -- 21.7%
87,469+ Republic of Ecuador, PDI Bond, 6.8125%, 2/28/15*,**................... 37,502,442
------------
HUNGARY -- 4.4%
8,000+ National Bank of Hungary, 8.875%, 11/1/13............................. 7,560,000
------------
MEXICO -- 4.0%
United Mexican States, Par Bond, Series A, 6.25%, 12/31/19 (including
10,000 10,002,000 rights).................................................. 6,893,750
------------
PANAMA -- 4.6%
9,000+ Republic of Panama, FRN, 6.75%, 5/10/02*.............................. 7,875,000
------------
POLAND -- 6.0%
13,201+ Republic of Poland, PDI Bond, 3.75%, 10/27/14*........................ 10,354,534
------------
SOUTH AFRICA -- .9%
ZAL 6,000 Republic of South Africa Notes, 12.00%, 2/28/05....................... 1,505,610
------------
</TABLE>
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
January 31, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS (CONTINUED) VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TRINIDAD & TOBAGO -- 1.8%
US$ 3,000+ Trinidad & Tobago Notes, 9.75%, 11/3/00............................... $ 3,135,000
------------
URUGUAY -- 1.1%
2,500+ Uruguay, DCB, Series B, 6.4375%, 2/18/07*............................. 1,975,000
------------
VENEZUELA -- 6.3%
12,000+ Republic of Venezuela, FLIRB, Series A, 6.8125%, 3/31/07*............. 7,305,000
6,000 Republic of Venezuela, FLIRB, Series B, 6.625%, 3/31/07*.............. 3,652,500
------------
10,957,500
------------
TOTAL SOVEREIGN BONDS (cost $133,374,717)............................. 153,135,289
------------
<CAPTION>
LOAN PARTICIPATIONS++ -- 11.3%
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Republic of Jamaica,
722 Tranche A, 6.40625%, 10/15/00* (Chase Manhattan).................... 664,433
Kingdom of Morocco,
9,350+ Tranche A, 6.59375%, 1/1/09* (Merrill Lynch, J P Morgan)............ 6,679,406
14,118 Tranche B, 6.75%, 1/1/04* (Morgan Stanley, Bankers Trust)........... 12,202,942
------------
TOTAL LOAN PARTICIPATIONS (cost $20,153,620).......................... 19,546,781
------------
<CAPTION>
CORPORATE BONDS -- 17.2%
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brazil,
1,000+ Aracruz Celulose, 10.375%, 1/31/02#................................. 957,500
Canada,
C$ 3,000+ Rogers Cable Systems, 9.65%, 1/15/14................................ 1,975,623
Indonesia,
US$ 1,500+ Indah Kiat International Finance, 12.50%, 6/15/06................... 1,503,750
Mexico,
2,000+ Grupo Industrial Durango, 12.00%, 7/15/01........................... 1,905,000
United States,
2,000+ Berry Plastics Corp., 12.25%, 4/15/04............................... 2,200,000
1,000 Carr-Gottstein Foods, 12.00%, 11/15/05#............................. 1,032,500
1,000+ Flagstar Corp., 10.75%, 9/15/01..................................... 912,500
</TABLE>
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
January 31, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) CORPORATE BONDS (CONTINUED) VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Semi-Tech, Zero Coupon until 8/15/00 (11.50%
US$ 2,000 thereafter), 8/15/03.............................................. $ 1,150,000
Jordan Industries, Inc., Zero Coupon until 8/1/98 (11.75%
5,000+ thereafter) 8/1/05................................................ 3,050,000
Marcus Cable Co., Zero Coupon until 6/15/00 (14.25% thereafter),
1,750 12/15/05.......................................................... 1,181,250
1,500+ Motor Wheel Corp., Series B, 11.50%, 3/1/00......................... 1,357,500
1,000 Norcal Waste Systems, 12.50%, 11/15/05*,#........................... 1,032,500
500 Pathmark Stores, 9.625%, 5/1/03..................................... 482,500
2,000+ Penn Traffic Co., 9.625%, 4/15/05................................... 1,665,000
2,500+ Plastic Specialty & Technology, 11.25%, 12/1/03..................... 2,306,250
1,000 Samsonite Corp., 11.125%, 7/15/05................................... 975,000
1,000 Selmer Co. Inc., 11.00%, 5/15/05.................................... 1,012,500
2,000+ U.S. Banknote Corp., 11.625%, 8/1/02................................ 1,040,000
1,250+ Valcor Inc., 9.625%, 11/1/03........................................ 1,168,750
2,000+ Venture Holdings Trust, 9.75%, 4/1/04............................... 1,610,000
1,000 William House Regency, Inc., 13.00%, 11/15/05#...................... 1,072,500
------------
TOTAL CORPORATE BONDS (cost $32,311,613).............................. 29,590,623
------------
PURCHASED OPTIONS -- .3%
- ----------------------------------------------------------------------------------------------------------------
Federal Republic of Brazil, C Bond, 8.00%, 4/15/14** (expiring
32,215 2/29/96, exercise price $67.125) (cost $537,986).................... 548,811
------------
</TABLE>
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PAGE 3
<PAGE> 6
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (concluded)
January 31, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SHORT-TERM INVESTMENTS -- 15.9% VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENT
J.P. Morgan, 5.85%, dated 1/31/96, $2,471,402 due 2/1/96,
(collateralized by $4,281,000, Zero Coupon U.S. Treasury Strips due
US$ 2,471 5/15/05, valued at $2,520,439)...................................... $ 2,471,000
------------
U.S. GOVERNMENT SECURITY
25,000 U.S. Treasury Bill, 4.79%(a), 2/8/96.................................. 24,980,333
------------
TOTAL SHORT-TERM INVESTMENTS (cost $27,451,333)....................... 27,451,333
------------
TOTAL INVESTMENTS -- 133.4% (cost $213,829,269)....................... 230,272,837
------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (33.4%)...................... (57,604,782)
------------
NET ASSETS -- 100.0%.................................................. $172,668,055
===========
NET ASSET VALUE PER SHARE
($172,668,055 / 12,657,133 shares of common stock issued and
outstanding)........................................................ $13.64
======
</TABLE>
- --------------------------------------------------------------------------------
* 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.
# Pursuant to Rule 144A under the Securities Act of 1933, this security can
only be sold to qualified institutional investors.
(a) Percentage quoted represents yield to maturity as of purchase date.
<TABLE>
<S> <C> <C> <C>
BOCON -- Bonos de Consolidacion.
DCB -- Debt Conversion Bond.
FLIRB -- Front Loaded Interest Reduction Bond.
FRB -- Floating Rate Bond.
FRN -- Floating Rate Note.
IAB -- Interest in Arrears Bond.
NMB -- New Money Bond.
PDI -- Past Due Interest.
ZAL -- South African Rand.
</TABLE>
PAGE 4
<PAGE> 7
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
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.
- --------------------------------------------------------------------------------
<PAGE> 8
AMERICAN STOCK TRANSFER & TRUST COMPANY ---------------------
40 WALL STREET BULK RATE
NEW YORK, NEW YORK 10005 U.S. POSTAGE
PAID
STATEN ISLAND, NY
PERMIT NO.
169
---------------------
<PAGE> 9
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SALOMON BROTHERS
WORLDWIDE INCOME FUND INC
INTERIM REPORT
----------------------------------------------
JANUARY 31, 1996
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SALOMON BROTHERS ASSET MANAGEMENT
-----------------------------------
