<PAGE>
MORGAN STANLEY
GLOBAL OPPORTUNITY BOND FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs William G. Morton, Jr.
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS Frederick B. Whittemore
Warren J. Olsen DIRECTOR
PRESIDENT AND DIRECTOR James W. Grisham
Peter J. Chase VICE PRESIDENT
DIRECTOR Harold J. Schaaff, Jr.
John W. Croghan VICE PRESIDENT
DIRECTOR Joseph P. Stadler
David B. Gill VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Graham E. Jones SECRETARY
DIRECTOR James R. Rooney
John A. Levin TREASURER
DIRECTOR Joanna M. Haigney
ASSISTANT TREASURER
</TABLE>
- ---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- ---------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street
Boston, Massachusetts 02108
- ---------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company (International)
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank, N.A. (Domestic)
770 Broadway
New York, New York 10003
- ---------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- ---------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
- ---------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- ---------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
------------------------
MORGAN STANLEY
GLOBAL OPPORTUNITY
BOND FUND, INC.
---------------------
ANNUAL REPORT
DECEMBER 31, 1995
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- --------
For the year ended December 31, 1995, the Morgan Stanley Global Opportunity Bond
Fund, Inc. (the "Fund") had a total return, based on net asset value per share,
of 20.34% as compared with 27.54% for the J.P. Morgan Emerging Markets Bond
Index (the "Index"). For the fourth quarter of 1995, the Fund's total return was
5.16% compared to 10.20% for the Index. We believe that the markets' two-quarter
strength is extendable into the next several quarters -- albeit not at the same
pace as the last six months -- by virtue of still broadly attractive valuations
which exist in the benchmark assets for the countries in which the Fund is
invested.
Following a bout of profit taking early in the fourth quarter, the market
resumed its upward climb. Profit taking was triggered by broker/dealers who were
reducing positions due to fiscal year-end considerations. An improvement in the
markets sentiment toward Argentina prompted all market participants to increase
capital committed to this asset class. Hopes of a balanced budget agreement in
the U.S. provided a favorable backdrop to the currency and fixed income markets,
in general, over this period.
The fourth quarter was characterized by a high degree of dispersion in the
individual country performances, as investors re-positioned their portfolios.
Panama, Argentina and Venezuela were the outperformers and Poland, the
Philippines, South Africa, Mexico and Russia were the underperformers for the
quarter.
The markets perception of Argentina's credit risk changed dramatically as the
political infighting between rival contenders for power came to an end, as
President Menem seized the political initiative. Aggressive moves to tackle the
federal budget, remedial measures to tackle the fiscal problems in the provinces
and the privatization of the remaining state assets pulled Argentina out of the
vicious circle of declining confidence and poor economic performance following
the tequila crisis of the first quarter.
Brazilian assets recovered quite strongly during the last weeks of the quarter
as President Cardoso re-established the political momentum for the reform
program. The fiscal condition of the federal government will continue to be
strained as the current constitution does not provide the government with
sufficient degrees of freedom. Any long term corrective measures will have to
wait until such time when reforms (including the administrative, tax and social
security reform measures currently being discussed) are passed and implemented
in the future. We remain optimistic that the political process will deliver
reforms eventually.
Mexico once again proved to be a difficult credit to understand. Concerns over
the state of the banking system and the lack of a pick-up in domestic growth
caused nervousness in the foreign exchange markets in the fourth quarter. The
markets believed that the government lacked the political will and economic
policy alternatives to meet year-end demand for dollars. Fears about another
peso crisis and the lack of a clear and timely strategic response on the part of
the policy makers to combat the speculative demand for dollars produced the
second peso crisis within the space of less than twelve months. Our holdings in
peso denominated local treasury bills were affected as interest rates eventually
increased and the peso weakened dramatically. We continued to hold our positions
as we believed that this time around the pressures on the currency were seasonal
and temporary and a drastic tightening of monetary policy would reverse the
slide in the currency. Our outlook for 1996 is one of cautious optimism.
Russia, one of our relatively large bets against the Index, finally reached an
agreement with its external creditors. The non-performing loans, based on the
parameters of the announced restructuring, trade at spreads close to 2,000 bps
above U.S. Treasuries, 700 bps wider than the assets of Ecuador, Bulgaria and
Venezuela. We believe that given the current state of the economy (declining
inflation, trade surpluses, a low external debt burden and a resumption in
growth) and the willingness of any future administration to service
2
<PAGE>
their external debts, the market is mis-pricing Russian risk. The prices of the
asset should increase on the announcement of an IMF Extended Fund Facility and
continued compliance by the government under the terms of the restructuring
agreement. We do not envisage any changes in our exposure to Russia at this
point.
Our outlook for emerging markets debt remains positive. A slowdown in growth in
the U.S. and Europe and signs of inflation should result in a decline in market
rates. Credit stories unfolding in Latin America and Eastern Europe show
dramatic improvements over 1995. Policy makers commitment to reform has only
been strengthened in the post tequila days. The perfect line up of interest
rates, spreads and fund flows should result in price appreciation. We will
remain vigilant, however, for the first signs of a turnaround in market
sentiment or fundamentals.
In the United States, as 1995 closed, the high yield market wrapped up one of
its finest years. While market returns were excellent, there were several
undercurrents that one had to be aware of to stay ahead of the competition.
While the market rallied, spreads to Treasuries widened. More importantly,
intra-market quality spreads widened as well. Market participants were concerned
that the economy was entering an economic downturn. This view was supported by
an extremely weak retail environment. Several major retailers filed for
bankruptcy during the year. Also auto sales seemed to be softening and steel and
paper prices were reported to be declining after strong run-ups in late 1994 and
early 1995.
The Fund's strong performance in the U.S. portion of the portfolio was a result
of overweight positions in the casino, communications, cable television and
chemical sectors. As important as investing in winning ideas is avoiding trouble
situations. Two of the weakest industries in 1995 were retailers and
restaurants, sectors which the Fund avoided entirely.
It is difficult to formulate a strategy for 1996. Other than retailers, which
have had a horrible history in the high yield market, it is hard to find a
clearly undervalued industry. Steel and auto-related companies have widened to
the rest of the market but it is a question of timing the market to catch a
rebound in their bond prices and earnings momentum. Treasury rates have dropped
precipitously and therefore cushion bonds have some appeal. Long-term interest
rates are near the lows achieved at the end of 1993, however the shape of the
yield curve is very different. Short-term rates are much higher than at the end
of 1993 and it does not appear that a tightening is likely in the near future.
We are also faced with the uncertainty of an election year. We expect to play it
fairly close to the vest in 1996. We will be searching for bonds that generate
good current income but do not represent undue credit risk.
Sincerely,
[SIGNATURE]
Robert E. Angevine
PORTFOLIO MANAGER
[SIGNATURE]
Paul Ghaffari
PORTFOLIO MANAGER
February 7, 1996
3
<PAGE>
Morgan Stanley Global Opportunity Bond Fund, Inc.
Investment Summary as of December 31, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION
TOTAL RETURN (%)
----------------------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (1)(3)**
---------------------------- ---------------------------- ----------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C>
---------------------------- ---------------------------- ----------------------------
ONE YEAR 13.49% 13.49% 20.34% 20.34% 27.54% 27.54%
SINCE INCEPTION* 8.37 5.16 12.62 7.72 19.31 11.69
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
A BAR CHART REFLECTING THE DATA BELOW IS REFLECTED HERE.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31:
<S> <C> <C>
1994* 1995
Net Asset Value Per Share $12.25 $12.99
Market Value Per Share $12.50 $12.50
Premium/(Discount) 2.0% -3.8%
Income Dividends $0.91 $1.59
Fund Total Return (2) (6.42%) 20.34%
Index Total Return (1) (3)
** (6.45%) 27.55%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) JP Morgan Emerging Markets Bond Index
* The Fund commenced operations on May 27, 1994.
**Unaudited.
4
<PAGE>
Morgan Stanley Global Opportunity Bond Fund, Inc.
Portfolio Summary as of December 31, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Debt Securities 99.0%
Short-Term Investments 0.8%
Other 0.2%
</TABLE>
- --------------------------------------------------------------------------------
COUNTRY WEIGHTINGS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United States 26.7%
Argentina 24.5%
Brazil 15.6%
Mexico 8.8%
Morocco 8.4%
Russia 7.7%
Panama 3.2%
Bulgaria 2.7%
Ecuador 1.9%
Nigeria 0.7%
Other -0.2%
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
------------
<C> <S> <C>
1. Banco de Galicia 9.00%, 11/1/03 8.9%
2. Republic of Argentina 'L' Bond
6.8125%, 3/31/05 8.6
3. Kingdom of Morocco Restructuring and
Consolidation Agreement 'A' 1990
6.59375%, 1/1/09 8.4
4. Bank for Foreign Economic Affairs 6.7
5. Banamex Pagare Discount Bond Zero
Coupon, 10/23/97 5.9
<CAPTION>
PERCENT OF
NET ASSETS
------------
<C> <S> <C>
6. Federative Republic of Brazil 'C' Bond
'Euro' 8.00%, 4/15/14 PIK 5.0%
7. Minas Gerais 8.25%, 2/10/00 4.2
8. Metrogas 'A' 12.00%, 8/15/00 3.4
9. Republic of Panama 6.75%, 5/10/02 3.2
10. Iochpe Maxion 12.375%, 11/8/02 2.8
-----
57.1%
-----
-----
</TABLE>
5
<PAGE>
FINANCIAL STATEMENTS
- ---------
STATEMENT OF NET ASSETS
- ---------
DECEMBER 31, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<C> <S> <C> <C>
- ---------------------------------------------
- ------------
DEBT INSTRUMENTS (99.2%)
- ---------------------------------------------
- ------------
ARGENTINA (24.5%)
BONDS
Banco de Galicia 9.00%,
11/1/03 U.S.$ 5,500 U.S.$4,819
Metrogas 'A' 12.00%, 8/15/00 1,800 1,832
+++ Republic of Argentina Discount
Bond 6.5625%, 3/31/23 2,000 1,313
+++ Republic of Argentina 'L' Bond
6.8125%, 3/31/05 6,500 4,631
/ / Republic of Argentina Par Bond
5.00%, 3/31/23 1,000 571
-----------
13,166
-----------
- ---------------------------------------------
- ------------
BRAZIL (15.6%)
BONDS
# Brazil Abril S.A. 12.00%,
10/25/03 1,000 1,007
/\ Federative Republic of Brazil
'C' Bond 8.00%, 4/15/14 PIK 4,722 2,709
+++ Federative Republic of Brazil
"New" New Money 'L' Bond
7.3125%, 4/15/09 1,500 932
Iochpe Maxion 12.375%, 11/8/02 1,750 1,496
Minas Gerais 8.25%, 2/10/00 2,750 2,283
-----------
8,427
-----------
- ---------------------------------------------
- ------------
BULGARIA (2.7%)
BOND
+++# The Republic of Bulgaria
Discount Bond 'A' 6.75%,
7/28/24 2,750 1,470
-----------
- ---------------------------------------------
- ------------
ECUADOR (1.9%)
BOND
+++ Republic of Ecuador Discount
Bond 6.8125%, 2/28/25 2,000 1,014
-----------
</TABLE>
- ---------------------------------------------------------
- ------------
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- ---------------------------------------------
- ------------
<C> <S> <C> <C>
MEXICO (8.0%)
BONDS
Banamex Pagare Discount Bond,
Zero Coupon, 10/23/97 MXP 45,124 U.S.$3,188
BNCE International Finance
7.25%, 2/2/04 U.S.$ 500 392
# Petroleos Mexicanos 8.625%,
12/1/23 1,000 750
-----------
4,330
-----------
- ---------------------------------------------
- ------------
MOROCCO (8.4%)
LOAN AGREEMENT
+++~ Kingdom of Morocco
Restructuring and
Consolidation Agreement 'A'
1990 6.59375%, 1/1/09
(Participation: Goldman
Sachs, Lehman Brothers,
Salomon Brothers) 6,700 4,548
-----------
- ---------------------------------------------
- ------------
NIGERIA (0.7%)
BONDS
Central Bank of Nigeria Par
Bond 6.25%, 11/15/20 750 369
-----------
- ---------------------------------------------
- ------------
PANAMA (3.2%)
BOND
+++ Republic of Panama 6.75%,
5/10/02 2,000 1,709
-----------
- ---------------------------------------------
- ------------
RUSSIA (7.7%)
LOAN AGREEMENTS
++ Bank for Foreign Economic
Affairs 10,500 3,583
++ Bank for Foreign Economic
Affairs CHF 2,000 585
-----------
4,168
-----------
</TABLE>
- ---------------------------------------------------------
- ------------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<C> <S> <C> <C>
- ---------------------------------------------
- ------------
UNITED STATES (26.5%)
BONDS
Ackerley Communications,
Inc., 'A', 10.75%, 10/1/03 U.S.$ 800 U.S.$ 856
AES Corp. 9.75%, 6/15/00 1,000 1,032
Arcadian Partners, L.P., 'B'
10.75%, 5/1/05 500 549
Cablevision Systems Corp.,
9.875%, 2/15/13 1,300 1,384
Columbia Gas Systems Inc. 'A'
6.39%, 11/28/00 70 70
Columbia Gas Systems Inc. 'B'
6.61%, 11/28/02 68 69
Columbia Gas Systems Inc. 'C'
6.80%, 11/28/05 68 69
Columbia Gas Systems Inc. 'D'
7.05%, 11/28/07 68 68
Columbia Gas Systems Inc. 'E'
7.32%, 11/28/10 68 68
Columbia Gas Systems Inc. 'F'
7.42%, 11/28/15 68 67
Columbia Gas Systems Inc. 'G'
7.62%, 11/28/25 68 67
Corporate Express, Inc.
9.125%, 3/15/04 1,300 1,320
IMC Global, Inc., 9.25%,
10/1/00 450 473
Marvel Holdings, Inc., Zero
Coupon, 4/15/98 1,150 828
Maxus Energy Corp., 11.50%,
11/15/15 1,000 1,040
#/ / Norcal Waste Systems, Inc.
12.50%, 11/15/05 500 504
Owens-Illinois, Inc. 9.75%,
8/15/04 500 524
Owens-Illinois, Inc. 9.95%,
10/15/04 500 525
Pilgrim's Pride Corp.,
10.875%, 8/1/03 500 454
Plantronics, Inc. 10.00%,
1/15/01 500 514
Sheffield Steel Corp. 12.00%,
11/1/01 150 131
/ / Six Flags Theme Parks, Inc.,
0.00%, 6/15/05 1,700 1,326
Viacom, Inc 8.00%, 7/7/06 1,000 1,017
Westpoint Stevens, Inc.,
9.375%, 12/15/05 1,050 1,042
-----------
13,997
-----------
UNITS
## Trump Taj Mahal PIK (Bond + 1
share of Taj Mahal Holding
Corp. 'B' Common Stock)
11.35%, 11/15/99 260 250
-----------
14,247
-----------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
(000)
<C> <S> <C> <C>
- ---------------------------------------------
- ------------
TOTAL DEBT INSTRUMENTS
(Cost U.S.$52,154) U.S.$53,448
-----------
- ---------------------------------------------------------
- ------------
<CAPTION>
NO. OF
WARRANTS
<C> <S> <C> <C>
- ---------------------------------------------
- ------------
WARRANTS (0.0%)
- ---------------------------------------------
- ------------
NIGERIA (0.0%)
+* Central Bank of Nigeria,
expiring 11/15/20 750 --
-----------
- ---------------------------------------------
- ------------
UNITED STATES (0.0%)
+ Petro PSC Properties, expiring
6/1/97 1,000 34
+ Sheffield Steel Corp.,
expiring 11/1/01 750 4
-----------
38
-----------
- ---------------------------------------------
- ------------
TOTAL WARRANTS
(Cost U.S.$4) 38
-----------
- ---------------------------------------------------------
- ------------
<CAPTION>
NO. OF
SHARES
<C> <S> <C> <C>
- ---------------------------------------------
- ------------
PREFERRED STOCK (0.1%)
- ---------------------------------------------
- ------------
UNITED STATES (0.1%)
Columbia Gas Systems, Inc.
7.89% (Cost U.S.$47) 1,913 47
-----------
- ---------------------------------------------
- ------------
CONVERTIBLE PREFERRED STOCK (0.1%)
- ---------------------------------------------
- ------------
UNITED STATES (0.1%)
Columbia Gas Systems, Inc.
5.22% (Cost U.S.$47) 1,171 47
-----------
- ---------------------------------------------------------
- ------------
<CAPTION>
FACE
AMOUNT
(000)
<C> <S> <C> <C>
- ---------------------------------------------
- ------------
SHORT TERM INVESTMENTS (0.8%)
- ---------------------------------------------
- ------------
MEXICO (0.8%)
Mexican Cetes, 2/22/96
(Cost U.S. $526) MXP 3,336 405
-----------
- ---------------------------------------------
- ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AMOUNT
(000) (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
TOTAL INVESTMENTS (100.2%)
(Cost U.S.$52,778) U.S.$53,985
-----------
- ---------------------------------------------------------
- ------------
OTHER ASSETS (10.5%)
Receivable for Investments
Sold U.S.$4,556
Interest Receivable 1,061
Deferred Organization Costs 21
Other Assets 4 5,642
---------- -----------
- ---------------------------------------------------------
- ------------
LIABILITITES (-10.7%)
Payable for:
Investments Purchased (3,966)
Dividends Declared (1,557)
Bank Overdraft (120)
Investment Advisory Fees (44)
Professional Fees (44)
Shareholder Reporting Expenses (25)
Administrative Fees (13)
Custodian Fees (6)
Directors' Fees and Expenses (4)
Other Liabilities (1) (5,780 )
---------- -----------
- ---------------------------------------------------------
- ------------
NET ASSETS (100%)
Applicable to 4,145,999 issued and
outstanding U.S.$0.01 par values shares
(100,000,000 shares authorized) U.S.$53,847
-----------
- ---------------------------------------------------------
- ------------
NET ASSET VALUE PER SHARE U.S.$12.99
-----------
- ---------------------------------------------------------
- ------------
<CAPTION>
AMOUNT
(000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
AT DECEMBER 31, 1995, NET ASSETS CONSISTED OF:
Common Stock U.S.$ 41
Capital Surplus 57,664
Accumulated Undistributed Net
Investment Income 159
Accumulated Net Realized Loss (5,210 )
Unrealized Appreciation on
Investments and Foreign
Currency Translations 1,193
- ---------------------------------------------------------
TOTAL NET ASSETS U.S.$53,847
-----------
- ---------------------------------------------------------
- ------------
</TABLE>
<TABLE>
<C> <C> <S>
+ -- Non-income producing.
++ -- Non-income producing -- in default.
+++ -- Variable/floating rate security -- rate
disclosed is as of December 31, 1995.
# -- 144A security -- certain conditions for public
sale may exist.
## -- 9.375% of 11.35% represents amount paid in cash,
the remainder is payment-in-kind.
~ -- Participation interests were acquired through
the financial institutions indicated
parenthetically.
/ / -- Step Bond -- coupon rate increases in increments
to maturity. Rate disclosed is as of December
31, 1995. Maturity date disclosed is the
ultimate maturity.
/\ -- 4.00% of 8.00% represents amount paid in cash.
The remainder is payment-in-kind. Cash payment
rate increases in increments to maturity.
* -- Security valued at cost-see note A-1 to
financial statements.
PIK -- Payment-in-Kind. Income may be paid in
additional securities or cash at the discretion
of the issuer.
</TABLE>
- ---------------------------------------------
- ---------
DECEMBER 31, 1995 EXCHANGE RATES:
- ---------------------------------------------------------
CHF Swiss Franc 1.154=U.S.$1.00
MXP Mexican Peso 7.695=U.S.$1.00
- ---------------------------------------------------------
- ------------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
SUMMARY OF TOTAL INVESTMENTS BY INDUSTRY
CLASSIFICATION -- DECEMBER 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
INDUSTRY (000) ASSETS
<S> <C> <C>
- --------------------------------------------------------------------------------
- ------------
Automobiles
Broadcast -- Radio & Television U.S.$ 2,241 4.2 %
Chemicals 1,022 1.9
Coal, Gas, & Oil 2,363 4.4
Entertainment & Leisure 2,154 4.0
Financial Services 4,819 8.9
Foreign Government Bonds & Notes 23,825 44.2
Gaming & Lodging 250 0.5
Loan Agreements 5,133 9.5
Machinery 504 0.9
Metals 131 0.3
Packaging & Container 1,049 1.9
Telecommunications 1,532 2.8
Textiles & Apparel 1,042 1.9
Other 7,920 14.8
----------- -----------
U.S.$53,985 100.2 %
----------- -----------
----------- -----------
- --------------------------------------------------------------------------------
- ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
STATEMENT OF OPERATIONS (000)
<S> <C>
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Interest..................................................... U.S.$ 7,705
- -------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees..................................... 508
Administrative Fees.......................................... 151
Professional Fees............................................ 86
Shareholder Reporting Expenses............................... 56
Interest Expense............................................. 54
Custodian Fees............................................... 48
Directors' Fees and Expenses................................. 24
Transfer Agent Fees.......................................... 17
Other Expenses............................................... 104
- -------------------------------------------------------------------------------
Total Expenses............................................. 1,048
- -------------------------------------------------------------------------------
Net Investment Income.................................... 6,657
- -------------------------------------------------------------------------------
NET REALIZED LOSS
Investment Securities Sold................................... (3,624)
Foreign Currency Transactions................................ (153)
- -------------------------------------------------------------------------------
Net Realized Loss........................................ (3,777)
- -------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
Investments.................................................. 6,730
Foreign Currency Translations................................ 1
- -------------------------------------------------------------------------------
Change in Unrealized Appreciation/Depreciation........... 6,731
- -------------------------------------------------------------------------------
Total Net Realized Loss and Change in Unrealized
Appreciation/Depreciation....................................... 2,954
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... U.S.$ 9,611
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
MAY 27, 1994*
TO YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1995
STATEMENT OF CHANGES IN NET ASSETS (000) (000)
<S> <C> <C>
- -----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income.................... U.S.$ 3,944 U.S.$ 6,657
Net Realized Loss........................ (1,547) (3,777)
Change in Unrealized
Appreciation/Depreciation............... (5,538) 6,731
- -----------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations............... (3,141) 9,611
- -----------------------------------------------------------------------------
Distributions:
Net Investment Income.................... (3,771) (6,562)
- -----------------------------------------------------------------------------
Capital Share Transactions:
Initial Public Offering of Shares
(4,122,956 shares)...................... 58,133 --
Offering Costs........................... (714) --
Reinvestment of Distributions (15,950
shares)................................. -- 191
- -----------------------------------------------------------------------------
Net Increase in Net Assets Resulting From
Capital Share Transactions.............. 57,419 191
- -----------------------------------------------------------------------------
Total Increase........................... 50,507 3,240
Net Assets:
Beginning of Period...................... 100 50,607
- -----------------------------------------------------------------------------
End of Period (including accumulated
undistributed net investment income of
U.S.$212 and U.S.$159, respectively).... U.S.$50,607 U.S.$53,847
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
PERIOD FROM
MAY 27,
1994*
TO DECEMBER YEAR ENDED
31, DECEMBER 31,
SELECTED PER SHARE DATA AND RATIOS: 1994 1995
- -------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............. U.S.$ 14.10 U.S.$ 12.25
- -------------------------------------------------------------------------------------
Offering Costs.................................... (0.17) --
- -------------------------------------------------------------------------------------
Net Investment Income............................. 0.95 1.61
Net Realized and Unrealized Gain (Loss) on
Investments...................................... (1.72) 0.72
- -------------------------------------------------------------------------------------
Total from Investment Operations.............. (0.77) 2.33
- -------------------------------------------------------------------------------------
Distributions:
Net Investment Income......................... (0.91) (1.59)
- -------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.................... U.S.$ 12.25 U.S.$ 12.99
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
PER SHARE MARKET VALUE, END OF PERIOD............. U.S.$ 12.50 U.S.$ 12.50
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN:
Market Value.................................. (4.51)% 13.49%
Net Asset Value (1)........................... (6.42)% 20.34%
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
RATIOS, SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS)............. U.S.$50,607 U.S.$53,847
- -------------------------------------------------------------------------------------
Ratio of Expenses Before Interest Expense to
Average Net Assets............................... 1.75%** 1.95%
Ratio of Expenses After Interest Expense to
Average Net Assets............................... 2.97%** 2.06%
Ratio of Net Investment Income to Average Net
Assets........................................... 11.90%** 13.07%
Portfolio Turnover Rate........................... 86% 160%
- -------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
**Annualized.
(1)Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
the period, and assumes dividends and distributions, if any, were reinvested.
This percentage is not an indication of the performance of a shareholder's
investment in the Fund based on market value due to differences between the
market price of the stock and the net asset value of the Fund.
Note: Current period permanent book-tax differences, if any, are not included
in the calculation of net investment income per share.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
- ------------
The Morgan Stanley Global Opportunity Bond Fund, Inc. (the "Fund"), was
incorporated in Maryland on March 31, 1994, 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 May 27, 1994
pursuant to the initial public offering of 4,000,000 shares of Common Stock. An
additional 122,956 shares of Common Stock were issued on July 6, 1994 to cover
over-allotments. Prior to May 27, 1994 the Fund had no operations other than the
issuance of 7,093 shares of Common Stock on May 10, 1994 to Morgan Stanley Asset
Management Inc. (the "Adviser"). The Fund's primary objective is to produce high
current income and as a secondary objective to seek capital appreciation through
investments primarily in high yield bonds.
A. The following significant accounting policies, which are in conformity with
generally accepted accounting principles for investment companies, are
consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: In valuing the Fund's assets, all
listed securities for which market quotations are readily available are
valued at the last sale price on the valuation date, or if there was no sale
on such date, at the mean between the current bid and asked prices or the
bid price if only bid quotations are available. Securities which are traded
over-the-counter are valued at the average of the mean of the current bid
and asked prices obtained from reputable brokers. 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
investments or securities with similar characteristics. Short-term
securities which mature in 60 days or less are valued at amortized cost. All
other securities and assets for which market values are not readily
available (including investments which are subject to limitations as to
their sale) are valued at fair value as determined in good faith by the
Board of Directors (the "Board") although the actual calculations may be
done by others.
2. TAXES: It is the Fund's intention to continue to
qualify as a regulated investment company and distribute all of its taxable
income. Accordingly, no provision for U.S. Federal income taxes is required
in the financial statements.
The Fund may be subject to taxes imposed by countries in which it invests.
Such taxes are generally based on either income or gains earned or
repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation as such income and/or gains
are earned.
Capital surplus, accumulated undistributed net investment income and
accumulated net realized loss have been adjusted for current and prior
period permanent book-tax differences. Current period adjustments arose
principally from differing book-tax treatments for foreign currency
transactions.
3. REPURCHASE AGREEMENTS: In connection with
transactions in repurchase agreements, a bank as custodian for the Fund takes
possession of the underlying securities, the value of which equals or
exceeds 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 determine the adequacy of the collateral. In the event of default
on the obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. To the
extent that proceeds from the sale of the underlying securities are less
than the repurchase price under the agreement, the Fund may incur a loss. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject to
legal proceedings.
4. REVERSE REPURCHASE AGREEMENTS: In order to
leverage the Fund, the Fund may enter into reverse repurchase agreements with
institutions that the Fund's investment adviser has determined are
creditworthy. Under a reverse repurchase agreement, the Fund sells
securities and agrees to repurchase them at a mutually agreed upon date and
price. Reverse repurchase agreements involve the risk that the market value
of the securities purchased with the proceeds from the sale of securities
received by the Fund may decline below the price of the securities the Fund
is obligated to repurchase. Securities subject to repurchase under reverse
repurchase agreements, if any, are designated as such in the Statement of
Net Assets. There were no reverse repurchase agreements outstanding at
December 31, 1995.
The average weekly balance of reverse repurchase agreements outstanding
during the year ended December 31, 1995 was approximately $677,000 at a
weighted average interest rate of 6.39%.
5. FOREIGN CURRENCY TRANSLATION: The books and
records of the Fund are maintained in U.S. dollars. Foreign currency amounts
are translated into U.S.
12
<PAGE>
dollars at the mean of the bid and asked prices of such currencies against
U.S. dollars last quoted by a major bank as follows:
- investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
- investment transactions and investment income at the prevailing rates of
exchange on the 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 the securities held at period end.
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 securities sold during the period. Accordingly, realized and
unrealized foreign currency gains (losses) are included in the reported net
realized and unrealized gains (losses) on investment transactions and
balances.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from sales and maturities of forward foreign
currency contracts, disposition of foreign currencies, currency gains or
losses realized between the trade and settlement dates on securities
transactions, and the difference between the amount of investment income and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized currency gains
(losses) from valuing foreign currency denominated assets and liabilities at
period end exchange rates are reflected as a component of unrealized
appreciation (depreciation) in the Statement of Net Assets. The change in
net unrealized currency gains (losses) for the period is reflected in the
Statement of Operations.
6. FORWARD FOREIGN CURRENCY CONTRACTS: The Fund
may enter into forward foreign currency contracts to protect securities and
related receivables and payables against changes in future foreign exchange
rates. A forward foreign currency contract is an agreement between two
parties to buy or sell currency at a set price on a future date. The market
value of the contract will fluctuate with changes in currency exchange
rates. The contract is marked-to-market daily and the change in market value
is recorded by the Fund as unrealized gain or loss. The Fund records
realized gains or losses when the contract is closed equal to the difference
between the value of the contract at the time it was opened and the value at
the time it was closed. Risk may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms of their
contracts and is generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
7. LOAN AGREEMENTS: The Fund may invest in fixed
and floating rate loans ("Loans") arranged through private negotiations
between an issuer of sovereign debt obligations and one or more financial
institutions ("Lenders") deemed to be creditworthy by the investment
adviser. The Fund's investments in Loans may be in the form of
participations in Loans ("Participations") or assignments of all or a
portion of Loans ("Assignments") from third parties. The Fund's investment
in Participations typically results in the Fund having a contractual
relationship with only the Lender and not with the 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. The Fund generally
has no right to enforce compliance by the borrower with the terms of the
loan agreement. As a result, the Fund may be subject to the credit risk of
both the borrower and the Lender that is selling the Participation. When the
Fund purchases Assignments from Lenders it acquires direct rights against
the borrower on the Loan. Because Assignments are arranged through private
negotiations between potential assignees and potential assignors, the rights
and obligations acquired by the Fund as the purchaser of an Assignment may
differ from, and be more limited than, those held by the assigning Lender.
8. WHEN-ISSUED/DELAYED DELIVERY SECURITIES: The
Fund may purchase securities on a when-issued or delayed delivery basis.
Securities purchased on a when-issued or delayed delivery basis are
purchased for delivery beyond the normal settlement date at a stated price
and yield, and no income accrues to the Fund on such securities prior to
delivery. When the Fund enters into a purchase transaction on a when-issued
or delayed delivery basis, it establishes a segregated account in which it
maintains liquid assets in an amount at least equal in value to the Fund's
commitments to purchase such securities. Purchasing securities on a
when-issued or delayed delivery basis may involve a risk that the market
price at the time of delivery may be lower than the agreed-upon purchase
price, in which case there could be an unrealized loss at the time of
delivery.
9. OTHER: Security transactions are accounted for on
the date the securities are purchased or sold. Realized gains and losses on
the sale of investment securities are determined on the specific identified
cost basis. Interest income is recognized on the accrual basis and discounts
and premiums on investments purchased
are accreted or amortized in accordance with the effective yield method over
their respective lives, except where collection is in doubt. Distributions
to
13
<PAGE>
shareholders are recorded on the ex-date. Income distributions and capital
gain distributions are determined in accordance with U.S. Federal income tax
regulations which may differ from generally accepted accounting principles.
These differences are principally due to the timing of the recognition of
losses on securities and due to the permanent differences described in note
A-2.
B. Morgan Stanley Asset Management Inc. provides investment advisory services
to the Fund under the terms of an Investment Advisory and Management Agreement
(the "Agreement"). Under the Agreement, the Adviser is paid a fee computed
weekly and payable monthly at an annual rate of 1.00% of the Fund's average
weekly net assets.
C. Effective September 1, 1995, The Chase Manhattan Bank, N.A., through its
affiliate Chase Global Funds Services Company (the "Administrator"), (formerly
Mutual Funds Service Company, a wholly owned subsidiary of the United States
Trust Company of New York), provides administrative services to the Fund under
an Administration Agreement. Under the Administration Agreement, the
Administrator is paid a fee computed weekly and payable monthly at an annual
rate of .08% of the Fund's average weekly net assets, plus $100,000 per annum.
In addition, the Fund is charged certain out of pocket expenses by the
Administrator. Effective September 1, 1995, The Chase Manhattan Bank, N.A. acts
as custodian for the Fund's assets held in the United States. Prior to September
1, 1995, Mutual Funds Service Company and United States Trust Company of New
York provided administrative and custodian services, respectively, to the Fund
under the same terms, conditions and fees as stated above.
D. Morgan Stanley Trust Company (the "International Custodian"), an affiliate
of the Adviser, acts as custodian for the Fund's assets held outside the United
States in accordance with a Custody Agreement. Custodian fees are payable
monthly based on assets under custody, investment purchase and sale activity, an
account maintenance fee, plus reimbursement for certain out-of-pocket expenses.
Investment transaction fees vary by country and security type. For the year
ended December 31, 1995, the Fund incurred International Custodian fees of
$39,000, of which $5,000 was payable to the International Custodian at December
31, 1995. In addition, for the year ended December 31, 1995, the Fund has earned
interest income of $4,000 and incurred interest expense of $20,000 on balances
with the International Custodian.
E. For the year ended December 31, 1995, the Fund made purchases and sales
totaling $80,534,000 and $92,655,000, respectively, of investments other than
long-term U.S. Government securities and short-term investments. There were no
purchases and sales of long-term U.S. Government securities. At December 31,
1995, the U.S. Federal income tax cost basis of securities was $53,267,000 and
accordingly, net unrealized appreciation for U.S. Federal income tax purposes
was $718,000 of which $2,105,000 related to appreciated securities and
$1,387,000 related to depreciated securities. At December 31, 1995, the Fund had
a capital loss carryforward for U.S. Federal income tax purposes totaling
approximately $4,559,000 available to offset future capital gains of which
$1,390,000 and $3,169,000 will expire on December 31, 2002 and 2003,
respectively. To the extent that capital gains are offset, such gains will not
be distributed to shareholders. For the year ended December 31, 1995, the Fund
expects to defer to January 1, 1996 for U.S. Federal income tax purposes,
post-October capital losses of $162,000.
F. The Fund entered into an Agreement with a number of underwriters (the
"Underwriters"), including Morgan Stanley & Co. Incorporated, an affiliate of
the Adviser, for the initial public offering of its shares and issued 4,122,956
shares in May and July 1994. The Fund has been advised that the total of
underwriting discounts and placement commissions paid to the Underwriters
relating to the initial public offering was $3,160,000.
G. In connection with its organization and initial public offering of shares,
the Fund incurred $30,000 and $714,000 of organization and offering costs,
respectively. The organization costs are being amortized on a straight-line
basis over a five year period beginning May 27, 1994, the date the Fund
commenced operations. The offering costs were charged to capital.
H. At December 31, 1995, approximately 27% of the Fund's total investments
consist of high yield securities rated below investment grade. Investment in
high yield securities are accompanied by a greater degree of credit risk and the
risk tends to be more sensitive to economic conditions than higher-rated
securities.
I. Each Director of the Fund who is not an officer of the Fund or an affiliated
person as defined under the Investment Company Act of 1940, as amended, may
elect to participate in the Directors' Deferred Compensation Plan (the "Plan").
Under the Plan, such Directors may elect to defer payment of a percentage of
their total fees earned as a Director of the Fund. These deferred portions are
treated, based on an election by the Director, as if they were either invested
in the Fund's shares or invested in U.S. Treasury Bills, as defined under the
Plan. At December 31, 1995, none of the Directors elected to participate in the
Plan.
J. During December 1995, the Board declared a distribution of $0.38 per share,
derived from net investment income, payable on January 9, 1996, to shareholders
of record on December 29, 1995.
14
<PAGE>
- --------------------------------------------------------------------------------
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
U.S. AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
MARCH 31, 1995 JUNE 30, 1995 1995 1995
------------------ ----------------- ----------------- -----------------
TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE
------- --------- ------ --------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income............................ $ 2,066 $ 0.50 $1,999 $0.48 $1,686 $0.41 $1,954 $0.48
Net Investment Income........................ $ 1,776 $ 0.43 $1,760 $0.42 $1,454 $0.35 $1,667 $0.41
Net Realized Gain (Loss) and Change in
Unrealized Appreciation/ Depreciation....... $(5,656) $(1.37) $6,230 $1.52 $1,317 $0.32 $1,063 $0.25
Net Increase (Decrease) in Net Assets
Resulting
from Operations............................. $(3,880) $(0.94) $7,990 $1.94 $2,771 $0.67 $2,730 $0.66
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------
PERIOD FROM
MAY 27, 1994* TO SEPTEMBER 30, DECEMBER 31,
JUNE 30, 1994 1994 1994
------------------ ----------------- -------------------
TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE
------- --------- ------ --------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income................................................ $ 575 $ 0.14 $1,912 $0.46 $ 2,443 $ 0.59
Net Investment Income............................................ $ 445 $ 0.11 $1,505 $0.36 $ 1,994 $ 0.48
Net Realized Gain (Loss) and Change in Unrealized Appreciation
(Depreciation).................................................. $(3,146) $(0.79) $2,051 $0.53 $(5,990) $(1.46)
Net Increase (Decrease) in Net Assets Resulting
from Operations................................................. $(2,701) $(0.68) $3,556 $0.89 $(3,996) $(0.98)
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
The Fund may purchase shares of its Common Stock in the open market at such
prices and in such amounts as the Board of Directors may deem advisable.
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------
To the Shareholders and Board of Directors of
Morgan Stanley Global Opportunity Bond Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Morgan Stanley Global Opportunity Bond Fund, Inc. (the "Fund") at December 31,
1995, the results of its operations 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 May 27, 1994 (commencement of operations) through December 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 December 31, 1995 by
correspondence with the custodians and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 9, 1996
16
<PAGE>
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
- ---------
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
each shareholder may elect by providing written instructions to American Stock
Transfer & Trust Company (the "Plan Agent") to have all distributions
automatically reinvested in Fund shares. Participants in the Plan have the
option of making additional voluntary cash payments to the Plan Agent,
quarterly, in any amount from $100 to $3,000, for investment in Fund shares.
Dividend and capital gain distributions will be reinvested on the
reinvestment date in full and fractional shares. If the market price per share
equals or exceeds net asset value per share on the reinvestment date, the Fund
will issue shares to participants at net asset value. If net asset value is less
than 95% of the market price on the reinvestment date, shares will be issued at
95% of the market price. If net asset value exceeds the market price on the
reinvestment date, participants will receive shares valued at market price. The
Fund may purchase shares of its Common Stock in the open market in connection
with dividend reinvestment requirements at the discretion of the Board of
Directors. Should the Fund declare a dividend or capital gain distribution
payable only in cash, the Plan Agent will purchase Fund shares for participants
in the open market as agent for the participants.
The Plan Agent's fees for the reinvestment of dividends and distributions
will be paid by the Fund. However, each participant's account will be charged a
pro rata share of brokerage commissions incurred on any open market purchases
effected on such participant's behalf. A participant will also pay brokerage
commissions incurred on purchases made by voluntary cash payments. Although
shareholders in the Plan may receive no cash distributions, participation in the
Plan will not relieve participants of any income tax which may be payable on
such dividends or distributions.
In the case of shareholders, such as banks, brokers or nominees, which 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
shareholder as representing the total amount registered in the shareholder's
name and held for the account of beneficial owners who are participating in the
Plan.
Participants who wish to withdraw from the Plan should notify the Plan Agent
in writing. There is no penalty for non-participation or withdrawal from the
Plan, and shareholders who have previously withdrawn from the Plan may rejoin at
any time. Requests for additional information or any correspondence concerning
the Plan should be directed to the Plan Agent at:
Morgan Stanley Global Opportunity Bond Fund, Inc.
American Stock Transfer & Trust Company
Dividend Reinvestment and Cash Purchase Plan
40 Wall Street
New York, NY 10005
1-800-278-4353
17
