UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: | 811-06342 | |
Exact name of registrant as specified in charter: | Aberdeen Global Income Fund, Inc. | |
Address of principal executive offices: | 800 Scudders Mill Road Plainsboro, New Jersey 08536 | |
Name and address of agent for service: | Ms. Megan Kennedy Aberdeen Asset Management Inc. 1735 Market Street 37th Floor Philadelphia, PA 19103 | |
Registrants telephone number, including area code: | 866-839-5233 | |
Date of fiscal year end: | October 31 | |
Date of reporting period: | 4/30/09 |
Item 1 Reports to Stockholders
09
Invests primarily in global fixed-income securities.
Aberdeen Global Income Fund, Inc.
Semi-Annual Report
April 30, 2009
Letter to Shareholders (unaudited)
June 11, 2009
Dear Shareholder,
We present this Semi-Annual Report which covers the activities of Aberdeen Global Income Fund, Inc. (the Fund) for the six months ended April 30, 2009. The Funds principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective.
Net Asset Value Performance
The Funds total return based on net asset value (NAV) was 15.42% for the six months ended April 30, 2009 and 6.75% per annum since inception, assuming the reinvestment of distributions.
Share Price Performance
The Funds share price increased by 10.5% over the six months, from $8.20 on October 31, 2008 to $9.06 on April 30, 2009. The Funds share price on April 30, 2009 represented a discount of 7.4% to the NAV per share of $9.78 on that date, compared with a discount of 14.7% to the NAV per share of $9.61 on October 31, 2008. At the date of this letter, the share price was $10.89, representing a premium of 3.2% to the NAV per share of $10.55.
Credit Quality: 68.4% of Securities Rated or Deemed Equivalent to A or Better
As of April 30, 2009, 68.4% of the Funds portfolio was invested in securities where either the issue or the issuer was rated A or better, or judged by Aberdeen Asset Management Asia Limited (the Investment Manager) to be of equivalent quality.
Distributions
Distributions to common shareholders for the twelve months ended April 30, 2009 totaled $1.59 per share (including a special distribution of 75 cents per share). Based on the share price of $9.06 on April 30, 2009, the distribution rate over the twelve months then ended was 17.5% (9.3% excluding the special distribution). Since all distributions are paid after deducting applicable withholding taxes, the effective distribution rate may be higher for those U.S. investors who are able to claim a tax credit.
On June 9, 2009, the Board of Directors (Board) authorized a monthly distribution of 7.0 cents per share, payable on July 10, 2009 to common shareholders of record as of June 30, 2009.
The Boards policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in-capital. It is the Boards intention that a monthly distribution of at least 7.0 cents per share be maintained for twelve months, beginning with the July 10, 2009 distribution payment. This policy is subject to regular review at the Boards quarterly meetings, unless market conditions require an earlier evaluation. The next review is scheduled to take place in September 2009.
Share Repurchase Policy
The Boards policy is generally to buy back Fund shares on the open market when the Fund trades at certain discounts to NAV. During the six months ended April 30, 2009 and the fiscal year ended October 31, 2008, the Fund repurchased 31,000 and 283,400 shares, respectively, through this program.
Revolving Credit Facility and Leverage
The Fund has entered into a $30 million loan facility with The Bank of Nova Scotia. The loan facility with the Bank of Nova Scotia was renewed for another 364 day term on March 5, 2009. The Funds Board continues to evaluate the use of leverage for the Fund. In December 2008, the Funds Board authorized the Fund to use reverse repurchase agreements as another form of leverage. The Fund may implement a reverse repurchase agreement program if the Board determines it would be advantageous for the Fund and stockholders to do so.
Portfolio Holdings Disclosure
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds Forms N-Q are available on the SECs website at http://www.sec.gov and may be reviewed and copied at the SECs Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund makes the information on Form N-Q available to shareholders on the Funds website or upon request and without charge by calling Investor Relations toll-free at 1-866-839-5233.
Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, and
Aberdeen Global Income Fund, Inc.
1
Letter to Shareholders (unaudited) (concluded)
information regarding how the Fund voted proxies related to portfolio securities during the twelve months ended June 30, 2008, is available: (i) upon request and without charge by calling Investor Relations toll-free at 1-866-839-5233; and (ii) on the SECs website at http://www.sec.gov.
Investor Relations Information
For information about the Fund, daily updates of share price, NAV, and details of recent distributions, contact Aberdeen Asset Management Inc. by:
| calling toll free at 1-866-839-5233 in the United States, |
| emailing InvestorRelations@aberdeen-asset.com, or |
| visiting the website at www.aberdeenfco.com. |
For information about the Aberdeen Group, visit the Aberdeen website at www.aberdeen-asset.com.
Yours sincerely,
Christian Pittard
President
All amounts are U.S. dollars unless otherwise stated.
Distribution Disclosure Classification (unaudited)
Your Boards policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax accounting rules, the amount of distributable income for each fiscal period depends on the actual exchange rates during the entire year between the U.S. dollar and the currencies in which Fund assets are denominated and on the aggregate gains and losses realized by the Fund during the entire year.
Therefore, the exact amount of distributable income for each fiscal year can only be determined as of the end of the Funds fiscal year, October 31. However, under the U.S. Investment Company Act of 1940, as amended (the 1940 Act), the Fund may be required to indicate the sources of certain distributions to shareholders.
The Fund estimates that distributions for the fiscal year commencing November 1, 2008, including the distribution paid on June 12, 2009 are comprised of 90% net investment income and 10% return of paid-in capital.
This estimated distribution composition may vary from month to month because it may be materially impacted by future realized gains and losses on securities and fluctuations in the value of the currencies in which Fund assets are denominated.
In January 2010, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2009 calendar year.
Aberdeen Global Income Fund, Inc.
2
Automatic Dividend Reinvestment and Cash Purchase Plan (unaudited)
Common shareholders are automatically enrolled in the Funds Automatic Dividend Reinvestment and Cash Purchase Plan (the Plan), which allows you to automatically reinvest your distributions in shares of the Funds common stock at favorable commission rates, unless an election is made to receive distributions in cash. Distributions made under the Plan are taxable to the same extent as are cash distributions. The Plan also enables you to make additional cash investments in shares of at least $100 per transaction, with a maximum of $10,000 per month, and an aggregate annual limit of $120,000. Under this arrangement, The Bank of New York Mellon Corporation (the Plan Agent) will purchase shares for you on the New York Stock Exchange or otherwise on the open market on or before the investment date. The investment date is the 15th day of each month, but if such date is not a business day, the preceding business day.
As a participant in the Plan you will benefit from:
| Automatic reinvestment the Plan Agent will automatically reinvest your distributions, allowing you to gradually grow your holdings in the Fund; |
| Lower costs shares are purchased on your behalf under the Plan at low brokerage rates. Brokerage on share purchases is currently 2 cents per share; |
| Convenience the Plan Agent will hold your shares in non-certificated form and will provide a detailed plan account statement of your holdings at the end of each month. |
To request a brochure containing information on the Plan, please contact the Plan Agent;
The Bank of New York Mellon Corporation
Shareholder Relations Department
480 Washington Blvd.
Jersey City, NJ 07310
or call toll free at 1-866-221-1606.
Report of the Investment Manager (unaudited)
Share Price Performance
On April 30, 2009, the Funds share price was $9.06, which represented a discount of 7.4% to the NAV per share of $9.78. As of June 11, 2009, the share price was $10.89, representing a premium of 3.2% to the NAV per share of $10.55.
Loan Facility and the Use of Leverage
The Fund utilizes leverage to seek to increase the yield for its common stockholders. Until March 13, 2008, the Fund had issued AMPS for its leverage. The AMPS were redeemed and the leverage for investment purposes now involves borrowing under a loan facility. The amounts borrowed from the line of credit may be invested at higher rates in the Funds portfolio. However, the cost of leverage could exceed the income earned by the Fund on the proceeds of such leverage. To the extent that the Fund is unable to invest the proceeds from the use of leverage in assets which pay interest at a rate which exceeds the rate paid on the leverage, the yield on the Funds common stock will decrease. In addition, in the event of a general market decline in the value of assets in which the Fund invests, the effect of that decline will be magnified in the Fund because of the additional assets purchased with the proceeds of the leverage. Non-recurring expenses in connection with the implementation of the loan facility and the redemption of the AMPS will reduce the Funds performance.
The Funds leveraged capital structure creates special risks not associated with unleveraged funds having similar investment objectives and policies. The funds borrowed pursuant to the loan facility may constitute a substantial lien and burden by reason of their prior claim against the income of the Fund and against the net assets of the Fund in liquidation. The Fund is not permitted to declare dividends or other distributions in the event of default under the loan facility. In the event of a default under the credit agreement, the lenders have the right to cause a liquidation of the collateral (i.e., sell portfolio securities and other assets of the Fund) and, if any such default is not cured, the lenders may be able to control the liquidation as well. The loan facility has a term of 364 days and is not a perpetual form of leverage; there can be no assurance that the loan facility will be available for renewal on acceptable terms, if at all.
The credit agreement governing the loan facility includes usual and customary covenants for this type of transaction. These covenants
Aberdeen Global Income Fund, Inc.
3
Report of the Investment Manager (unaudited) (continued)
impose on the Fund asset coverage requirements, fund composition requirements and limits on certain investments, such as illiquid investments, which are more stringent than those imposed on the Fund by the 1940 Act. The covenants or guidelines could impede the Investment Manager or Investment Adviser from fully managing the Funds portfolio in accordance with the Funds investment objective and policies. Furthermore, non-compliance with such covenants or the occurrence of other events could lead to the cancellation of the loan facility. The covenants also included a requirement that the Fund maintain an NAV of no less than $90 million.
Prices and availability of leverage are extremely volatile in the current market environment. The Funds Board continues to evaluate the use of leverage for the Fund and will explore other forms of leverage. In December 2008, the Funds Board authorized the Fund to use reverse repurchase agreements as another form of leverage. The Fund may implement a reverse repurchase agreement program if the Board determines it would be advantageous for the Fund and stockholders to do so. A reverse repurchase agreement involves the sale of a security, with an agreement to repurchase the same or substantially similar securities at an agreed upon price and date. Whether such a transaction produces a gain for a Fund depends upon the costs of the agreements and the income and gains of the securities purchased with the proceeds received from the sale of the security. If the income and gains on the securities purchased fail to exceed the costs, the Funds NAV will decline faster than otherwise would be the case. Reverse repurchase agreements, as with any leveraging techniques, may increase the Funds return; however, such transactions also increase the Funds risks in down markets.
Interest Rate Swaps
The Fund previously entered into interest rate swap agreements, based on an aggregate notional amount of $12.0 million, which represented 40% of the total borrowings. On April 17, 2009, the Fund unwound two previously held interest rate swap agreements and entered into two new interest rate swap agreements with an aggregate notional amount of $14 million. As of April 30, 2009, the Fund held interest rate swap agreements with an aggregate notional amount of $21 million which represented 70% of the total borrowings. Under the terms of the agreements currently in effect, the Fund receives a floating rate of interest (three month USD-LIBOR BBA rate) and pays fixed rates of interest for the terms and based upon the notional amounts set forth below:
Remaining Term as of April 30, 2009 |
Amount (in $ million) |
Fixed Rate Payable (%) | ||
36 months | 7.0 | 1.817 | ||
24 months | 7.0 | 1.470 | ||
2 months | 7.0 | 3.370 |
A significant risk associated with interest rate swaps is the risk that the counterparty may default or file for bankruptcy, in which case the Fund would bear the risk of loss of the amount expected to be received under the swap agreements. There can be no assurance that the Fund will have an interest rate swap in place at any given time nor can there be any assurance that, if an interest rate swap is in place, it will be successful in hedging the Funds interest rate risk with respect to the loan facility. The implementation of this strategy is at the discretion of the Leverage Committee of the Board.
Economic Review
Economic weakness continued into 2009 with even worse economic data releases around the world, coupled with an increased pace of official rate cuts with most major countries reaching rates of sub 1%. The European Central Bank (ECB) continues to be a notable exception with a slower pace of easing to their concerns over the level of inflation. Fiscal expansion plans were announced globally and the U.S. continued to use Troubled Asset Relief Program (TARP) funds widely. Economic data in March, while still weak, implied a moderation in the pace of contraction. There were improvements in forward looking survey data in the U.S., UK, Europe and China although Japanese data remained very weak on all fronts, as did employment data everywhere.
The Bank of England were the first to announce the Quantitative Easing (QE) program with the initial purchase of £75bn of gilts, with permission to increase this to £150bn if required, sparking a significant rally in UK gilt yields. In the U.S., the Federal Reserve announced that it is to buy $300bn in U.S. Treasuries, an additional $750bn of mortgage debt and an extra $100bn in agency debt. The U.S. Treasury also announced the much anticipated Public Private Investment Program (PPIP), which provide financial support to encourage the private sector to take problem loans and legacy assets (toxic assets) off banks balance sheets.
Aberdeen Global Income Fund, Inc.
4
Report of the Investment Manager (unaudited) (concluded)
After having had a very strong fourth quarter, government bond yields rose over the quarter, although the QE programs announced in the U.S. and UK did help yields fall back in those markets towards the end of the quarter and rally in April. Euro bonds lagged given the official rate differential. Short-dated yields were helped by the rate cuts seen. Yield curves broadly steepened. Emerging market and high yield spreads narrowed sharply after the severe sell off seen through the fourth quarter and outperformed investment grade bonds. The dollar was generally stronger during the first quarter posting gains against the euro and yen, although the euro staged a partial recovery during March. The oil price saw greatly reduced volatility compared with recent quarters, improving to around $50 a barrel from around $45 at the end of 2008.
The weakness of the Japanese economy was the main reason for the decline in the yen against most currencies. The euro which had rallied strongly against the dollar in December reversed.
Looking ahead, the fixed income market will be torn between the near term disinflationary pull expected to arise from the slack in the labor and product markets (bullish for bonds on a real yield basis) and ongoing concerns that the fiscal deterioration and Fed bond buying program will undermine the non-domestic investors perceptions of the U.S. governments credit worthiness and inflation credentials (clearly negative). Against this backdrop, we expect yields to remain highly volatile in the coming months.
In emerging markets, we remain cautiously optimistic that emerging market debt can extend the recent gains. Market technicals remain favorable, coupled with renewed inflows into the asset class being supportive. Commodity prices are ticking higher, which will improve the balance of payments position of the major exporters, notably in Latin America. In addition, a continued improvement in risk appetite should bode well for emerging market debt, with renewed weakness of the U.S. dollar resulting in further emerging market foreign currency appreciation.
Aberdeen Global Income Fund, Inc.
5
Portfolio Composition (unaudited)
Quality of Investments
As of April 30, 2009, 68.4% of the Funds total investments were invested in securities where either the issue or the issuer was rated at least A by Standard & Poors Corporation or Moodys Investors Service, Inc. or, if unrated, judged to be of equivalent quality by the Investment Manager. The table below shows the asset quality of the Funds portfolio as of April 30, 2009, compared with the previous six and twelve months:
Date | AAA/Aaa % |
AA/Aa % |
A % |
BBB/Baa % |
BB/Ba* % |
B* % |
CCC* % | |||||||
April 30, 2009 | 41.4 | 12.5 | 14.5 | 10.3 | 18.1 | 2.9 | 0.3 | |||||||
October 31, 2008 | 48.9 | 15.6 | 11.6 | 9.3 | 11.5 | 3.1 | | |||||||
April 30, 2008 | 43.3 | 15.3 | 12.0 | 7.5 | 16.0 | 5.9 | |
* | Below investment grade |
Geographic Composition
The Funds investments are divided into three categories: Developed Markets, Investment Grade Developing Markets and Sub-Investment Grade Developing Markets. The table below shows the geographic composition (i.e., with U.S. dollar denominated bonds issued by foreign issuers allocated into country of issuance) of the Funds total investments as of April 30, 2009, compared with the previous six and twelve months:
Date | Developed Markets % |
Investment Grade Developing Markets |
Sub-Investment Grade Developing Markets % | |||
April 30, 2009 | 70.2 | 8.3 | 21.5 | |||
October 31, 2008 | 75.9 | 4.5 | 19.6 | |||
April 30, 2008 | 70.4 | 5.6 | 24.0 |
Currency Composition
The table below shows the currency composition of the Funds total investments as of April 30, 2009, compared with the previous six and twelve months:
Date | Developed Markets % |
Investment Grade Developing Markets |
Sub-Investment Grade Developing Markets % | |||
April 30, 2009 | 96.6 | 1.4 | 2.0 | |||
October 31, 2008 | 96.7 | 0.4 | 2.9 | |||
April 30, 2008 | 82.6 | 11.8 | 5.6 |
Maturity Composition
As of April 30, 2009, the average maturity of the Funds total investments was 10.3 years, compared with 7.1 years on October 31, 2008. The table below shows the maturity composition of the Funds investments as of April 30, 2009, compared with the previous six and twelve months:
Date | Under 3 Years % |
3 to 5 Years % |
5 to 10 Years % |
10 Years & Over % | ||||
April 30, 2009 | 25.0 | 17.8 | 32.1 | 25.1 | ||||
October 31, 2008 | 27.9 | 18.5 | 37.3 | 16.3 | ||||
April 30, 2008 | 23.9 | 21.2 | 37.4 | 17.5 |
Aberdeen Global Income Fund, Inc.
6
Summary of Key Rates (unaudited)
The following table summarizes the movements of key interest rates and currencies from the previous six and twelve month periods.
April 30, 2009 | October 31, 2008 | April 30, 2008 | ||||
Australia |
||||||
90 day bank bills | 3.08% | 5.81% | 7.80% | |||
10 year bonds | 4.57% | 5.17% | 6.29% | |||
Australian Dollar | $0.73 | $0.66 | $0.94 | |||
Canada |
||||||
90 day bank bills | 0.28% | 1.90% | 2.64% | |||
10 year bonds | 3.10% | 3.76% | 3.59% | |||
Canadian Dollar | $0.84 | $0.82 | $0.99 | |||
Malaysia |
||||||
90 day T-bills | 1.83% | 3.59% | 3.34% | |||
10 year bonds | 3.96% | 4.35% | 3.75% | |||
Malaysian Ringgit* | ||||||
New Zealand |
||||||
90 day bank bills | 2.87% | 7.16% | 8.85% | |||
10 year bonds | 5.31% | 6.03% | 6.54% | |||
New Zealand Dollar | $0.57 | $0.58 | $0.78 | |||
Philippines |
||||||
90 day T-bills | 4.51% | 6.84% | N/A | |||
10 year bonds | 8.13% | 9.48% | N/A | |||
Philippines Peso* | ||||||
Singapore |
||||||
90 day T-bills | 0.20% | 0.87% | 0.95% | |||
10 year bonds | 2.04% | 2.95% | 2.44% | |||
Singapore Dollar* | ||||||
South Korea |
||||||
90 day T-bills | 1.96% | 5.01% | 4.99% | |||
10 year bonds | 4.69% | 5.50% | 5.14% | |||
South Korean Won* | ||||||
Thailand |
||||||
90 day deposits | 0.75% | 2.38% | 2.25% | |||
10 year bonds | 2.92% | 3.77% | 4.74% | |||
Thai Baht* | ||||||
United Kingdom |
||||||
90 day bank bills | 1.45% | 5.84% | 4.85% | |||
10 year bonds | 3.50% | 4.52% | 4.67% | |||
British Pound | £1.48 | £1.62 | £1.98 | |||
U.S.$ Bonds** |
||||||
Malaysia | 2.73% | 2.83% | 3.45% | |||
Philippines | 7.03% | 8.24% | 6.16% | |||
South Korea | 5.85% | 7.39% | 4.79% |
* | These currencies are quoted Asian currency per U.S. dollar. The Australian, Canadian and New Zealand dollars and British pound are quoted U.S. dollars per currency. |
** | Sovereign issues. |
Aberdeen Global Income Fund, Inc.
7
Portfolio of Investments (unaudited)
As of April 30, 2009
Principal Amount (000) |
Description | Value (US$) | |||
|
LONG-TERM FIXED INCOME INVESTMENTS125.7% | ||||
|
ARGENTINA1.5% | ||||
USD | 450 | Republic of Argentina, 7.00%, 3/28/11 |
$ 208,590 | ||
USD | 2,660 | Republic of Argentina, 7.00%, 4/17/17 |
1,070,177 | ||
1,278,767 | |||||
|
AUSTRALIA25.5% | ||||
AUD | 500 | ABN Amro Bank NV, 6.50%, 5/17/13 (a)(b) |
288,379 | ||
AUD | 500 | ASIF II, 3.4133%, 5/27/09 (a) |
358,387 | ||
AUD | 500 | Australia and New Zealand Banking Group, Ltd., 6.25%, 5/23/11 (a)(b) |
347,267 | ||
AUD | 500 | AXA SA, 7.50%, 10/26/16 (a)(b) |
175,662 | ||
AUD | 1,000 | Brisbane Airport Corporation, Ltd., 7.30%, 6/30/10 |
729,201 | ||
AUD | 1,200 | Caisse dAmortissement de la Dette Sociale, 7.50%, 2/28/13 |
949,729 | ||
AUD | 500 | CFS Retail Property Trust, 6.25%, 12/22/14 |
295,279 | ||
AUD | 500 | Cie de Financement Foncier, 6.25%, 1/30/17 |
341,242 | ||
AUD | 250 | Commonwealth of Australia, 5.75%, 6/15/11 |
191,322 | ||
AUD | 500 | Deutsche Bank AG, 7.50%, 10/19/12 |
374,123 | ||
AUD | 200 | Eurofima, 6.00%, 1/28/14 |
149,702 | ||
AUD | 500 | FGL Finance Australia, Ltd., 6.25%, 3/17/10 |
366,383 | ||
AUD | 600 | General Electric Capital Australia Funding Pty, 6.00%, 4/15/15 |
333,139 | ||
AUD | 500 | Goldman Sachs Group, Inc., 6.35%, 4/12/16 |
286,971 | ||
AUD | 500 | HBOS PLC, 6.75%, 5/01/12 (a)(b) |
301,137 | ||
AUD | 2,000 | HSBC Bank Australia, 4.77%, 5/20/11 (a)(b) |
1,288,078 | ||
AUD | 1,000 | ING Bank Australia, Ltd., 7.00%, 4/24/12 |
737,541 | ||
AUD | 750 | International Finance Corp., 7.50%, 2/28/13 |
594,406 | ||
AUD | 500 | Kommunalbanken AS, 6.375%, 3/30/12 |
378,152 | ||
AUD | 500 | Kreditanstalt fuer Wiederaufbau, 6.25%, 1/30/12 |
379,210 | ||
AUD | 1,700 | Kreditanstalt fuer Wiederaufbau, 7.50%, 8/26/11 |
1,323,079 | ||
AUD | 500 | Macquarie Bank, Ltd., 5.0%, 2/25/14 (a) |
357,397 | ||
AUD | 500 | Macquarie Bank, Ltd., 6.50%, 5/31/12 (a)(b) |
261,049 | ||
AUD | 500 | Merrill Lynch & Co., Inc., 6.50%, 7/28/09 |
361,391 | ||
AUD | 200 | Merrill Lynch & Co., Inc., 6.75%, 3/12/14 |
117,441 | ||
AUD | 500 | Monumental Global Funding, 6.50%, 11/08/11 |
349,672 | ||
AUD | 1,000 | National Australia Bank, 5.75%, 12/19/13 |
748,945 | ||
AUD | 500 | National Capital Trust III, 4.088%, 9/30/16 (a)(b) |
215,252 | ||
AUD | 1,000 | New South Wales Treasury Corporation, 7.00%, 12/01/10 |
765,408 | ||
AUD | 400 | Queensland Treasury Corporation, 6.00%, 10/14/15 |
301,030 | ||
AUD | 750 | Queensland Treasury Corporation, 6.00%, 6/14/21 |
551,515 | ||
AUD | 500 | RWH Finance Pty. Limited, 6.20%, 3/26/17 (a) |
341,081 | ||
AUD | 500 | SLM Corp., 6.50%, 5/18/09 |
361,938 | ||
AUD | 600 | SPI Electricity & Gas, 6.50%, 11/03/11 |
442,279 | ||
AUD | 1,000 | St. George Bank, Ltd., 10.00% 5/09/13 (a)(b) |
738,731 | ||
AUD | 1,000 | Suncorp Metway Insurance, Ltd., 5.75%, 4/15/12 |
749,540 | ||
AUD | 1,000 | Sydney Airport Finance, 6.25%, 11/21/11 |
712,363 | ||
AUD | 500 | Telstra Corporation, Ltd., 7.25%, 3/30/10 |
371,659 | ||
AUD | 1,550 | Western Australia Treasury Corporation, 8.00%, 6/15/13 |
1,258,673 | ||
AUD | 2,550 | Western Australia Treasury Corporation, 8.00%, 7/15/17 |
2,147,028 | ||
AUD | 750 | Westpac Banking Corp., 4.75%, 3/05/14 |
538,179 | ||
AUD | 700 | Westpac Banking Corp., 8.25%, 4/18/11 |
545,640 | ||
22,424,600 | |||||
|
BRAZIL4.1% | ||||
USD | 470 | Dasa Finance Corp., 8.75%, 5/29/13 (b) |
394,800 | ||
BRL | 500 | Electropaulo Metropolitian, 19.125%, 6/28/10 |
239,476 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
8
Portfolio of Investments (unaudited) (continued)
As of April 30, 2009
Principal Amount (000) |
Description | Value (US$) | |||
|
LONG-TERM FIXED INCOME INVESTMENTS (continued) | ||||
|
BRAZIL (continued) | ||||
USD | 400 | Federal Republic of Brazil, 5.875%, 1/15/19 |
$ 396,920 | ||
USD | 410 | Federal Republic of Brazil, 10.00%, 8/07/11 |
469,450 | ||
BRL | 2,600 | Federal Republic of Brazil, 10.00%, 1/01/17 |
1,014,544 | ||
USD | 210 | ISA Capital do Brasil SA, 8.80%, 1/30/17 |
197,400 | ||
BRL | 470 | Nota Do Tesouro Nacional, 10.0%, 1/01/14 |
196,582 | ||
USD | 370 | Odebrecht Finance Ltd., 9.625%, 4/09/14 |
384,800 | ||
USD | 270 | Telemar Norte Leste SA, 9.5%, 4/23/19 |
281,475 | ||
3,575,447 | |||||
|
CANADA20.1% | ||||
CAD | 800 | Canadian Government, 5.50%, 6/01/10 |
706,706 | ||
CAD | 2,000 | Canadian Government, 8.00%, 6/01/23 |
2,474,969 | ||
CAD | 2,000 | Canadian Government, 9.00%, 6/01/25 |
2,718,260 | ||
CAD | 400 | Canadian Government, 9.50%, 6/01/10 |
367,740 | ||
CAD | 3,000 | Canadian Government, 10.25%, 3/15/14 |
3,469,119 | ||
CAD | 500 | Ontario Hydro, 8.50%, 5/26/25 |
576,163 | ||
CAD | 2,000 | Province of British Columbia, 9.50%, 1/09/12 |
2,025,861 | ||
CAD | 2,000 | Province of New Brunswick, 7.75%, 1/13/14 |
2,020,826 | ||
CAD | 1,000 | Province of Newfoundland, 5.125%, 12/29/10 |
880,252 | ||
CAD | 2,000 | Quebec Hydro, 9.625%, 7/15/22 |
2,401,626 | ||
17,641,522 | |||||
|
CHINA0.3% | ||||
USD | 310 | Parkson Retail Group, 7.875%, 11/14/11 |
299,150 | ||
|
COLOMBIA1.4% | ||||
USD | 100 | EEB International, Ltd., 8.75%, 10/31/11 (b) |
98,750 | ||
USD | 400 | Republic of Colombia, 7.375%, 3/18/19 |
420,440 | ||
COP | 1,420,000 | Republic of Colombia, 12.00%, 10/22/15 |
742,808 | ||
1,261,998 | |||||
|
DOMINICAN REPUBLIC0.9% | ||||
USD | 1,100 | Dominican Republic International Bond, 8.625%, 4/20/27 |
792,000 | ||
|
EL SALVADOR1.5% | ||||
USD | 1,320 | Republic of El Salvador, 7.65%, 6/15/35 |
1,056,000 | ||
USD | 320 | Republic of El Salvador, 8.25%, 4/10/32 |
273,600 | ||
1,329,600 | |||||
|
GABON0.9% | ||||
USD | 940 | Gabonese Republic, 8.20%, 12/12/17 |
752,000 | ||
|
GEORGIA0.8% | ||||
USD | 940 | Republic of Georgia, 7.50%, 4/15/13 |
685,730 | ||
|
GHANA0.8% | ||||
USD | 950 | Republic of Ghana, 8.50%, 10/04/17 |
703,000 | ||
|
INDONESIA3.9% | ||||
USD | 1,380 | Indonesia Government International Bond, 10.375%, 5/04/14 |
1,496,773 | ||
IDR | 1,150,000 | Indonesia Government International Bond, 13.40%, 2/15/11 |
114,989 | ||
IDR | 2,900,000 | Indonesia Government International Bond, 13.45%, 8/15/11 |
292,814 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
9
Portfolio of Investments (unaudited) (continued)
As of April 30, 2009
Principal Amount (000) |
Description | Value (US$) | |||
|
LONG-TERM FIXED INCOME INVESTMENTS (continued) | ||||
|
INDONESIA (continued) | ||||
USD | 490 | Majapahit Holding BV, 7.75%, 10/17/16 |
$ 410,058 | ||
USD | 210 | MGTI Finance Co. Ltd., 8.375%, 9/15/10 |
202,022 | ||
USD | 730 | Republic of Indonesia, 6.875%, 3/09/17 |
659,916 | ||
USD | 300 | Republic of Indonesia, 8.50%, 10/12/35 |
274,500 | ||
3,451,072 | |||||
|
KAZAKSTAN0.9% | ||||
USD | 480 | Kazakstan Temir Zholy, 6.5%, 5/11/11 |
370,789 | ||
USD | 470 | KazMunaiGaz Finance Sub. BV, 8.375%, 7/02/13 |
430,050 | ||
800,839 | |||||
|
KOREA0.9% | ||||
USD | 780 | Industrial Bank of Korea, 7.125%, 4/23/14 |
775,788 | ||
|
MEXICO2.5% | ||||
MXN | 5,300 | Desarrolladora Homex SAB de CV, 7.25%, 12/15/16 |
379,400 | ||
USD | 421 | Desarrolladora Homex SAB de CV, 7.50%, 9/28/10 (b) |
317,855 | ||
MXN | 3,880 | Mexican Fixed Rate Bonds, 10.00%, 12/05/24 |
332,605 | ||
MXN | 4,480 | Mexican Fixed Rate Bonds, 10.00%, 11/20/36 |
392,268 | ||
USD | 360 | Mexico Government International Bond, 8.30%, 8/15/31 |
408,600 | ||
USD | 470 | Pemex Project Funding Master Trust, 6.625%, 6/15/38 |
373,650 | ||
2,204,378 | |||||
|
NETHERLANDS0.7% | ||||
USD | 450 | GTB Finance BV, 8.50%, 1/29/12 |
317,250 | ||
USD | 480 | HSBK Europe BV, 9.25%, 10/16/13 |
284,813 | ||
602,063 | |||||
|
NEW ZEALAND24.7% | ||||
NZD | 3,000 | ANZ National Bank, Ltd., 7.60%, 3/02/12 (a)(b) |
1,684,119 | ||
NZD | 1,000 | Auckland Healthcare Services, Ltd., 7.75%, 9/15/15 |
623,419 | ||
NZD | 3,000 | Bank of America Corp., 7.53%, 3/08/12 |
1,651,266 | ||
NZD | 2,000 | Deutsche Bank AG, 7.14%, 6/16/09 (a)(b) |
1,094,144 | ||
NZD | 2,000 | European Investment Bank, 6.50%, 9/10/14 |
1,185,774 | ||
AUD | 1,000 | European Investment Bank, 7.00%, 1/24/12 |
774,125 | ||
NZD | 500 | European Investment Bank, 7.25%, 2/08/10 |
290,197 | ||
NZD | 1,000 | General Electric Capital Corp., 6.50%, 9/28/15 |
490,186 | ||
NZD | 1,000 | General Electric Capital Corp., 6.75%, 9/26/16 |
460,488 | ||
NZD | 2,000 | Inter-American Development Bank, 6.00%, 12/15/17 |
1,134,969 | ||
NZD | 1,000 | International Finance Corp., 6.75%, 7/15/09 |
569,567 | ||
NZD | 1,500 | Morgan Stanley, 6.86%, 9/06/12 |
741,119 | ||
NZD | 5,750 | New Zealand Government, 6.00%, 12/15/17 |
3,405,115 | ||
NZD | 500 | New Zealand Government, 6.50%, 4/15/13 |
305,596 | ||
NZD | 1,000 | Powerco, Ltd., 6.39%, 3/29/13 |
529,326 | ||
NZD | 1,000 | Province of Manitoba, 6.375%, 9/01/15 |
564,304 | ||
NZD | 1,500 | Province of Ontario, 6.25%, 6/16/15 |
848,354 | ||
NZD | 1,000 | Province of Quebec, 6.75%, 11/09/15 |
577,462 | ||
NZD | 3,000 | Rabo Australia, Ltd., 6.25%, 11/22/11 |
1,739,539 | ||
NZD | 1,500 | SLM Corp., 6.50%, 6/15/10 |
684,866 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
10
Portfolio of Investments (unaudited) (continued)
As of April 30, 2009
Principal Amount (000) |
Description | Value (US$) | |||
|
LONG-TERM FIXED INCOME INVESTMENTS (continued) | ||||
|
NEW ZEALAND (continued) | ||||
NZD | 1,000 | Telstra Corporation, Ltd., 7.15%, 11/24/14 |
$ 557,140 | ||
NZD | 3,000 | Total Capital SA, 6.50%, 7/20/12 |
1,765,754 | ||
21,676,829 | |||||
|
PANAMA1.9% | ||||
USD | 1,040 | Republic of Panama, 8.875%, 9/30/27 |
1,183,000 | ||
USD | 440 | Republic of Panama, 9.375%, 7/23/12 |
500,698 | ||
1,683,698 | |||||
|
PERU1.8% | ||||
EUR | 1,120 | Republic of Peru, 7.5%, 10/14/14 |
1,541,148 | ||
|
PHILIPPINES1.4% | ||||
USD | 210 | Republic of Philippines, 9.375%, 1/18/17 (b) |
244,218 | ||
USD | 520 | Republic of Philippines, 9.50%, 2/02/30 |
621,712 | ||
USD | 310 | Republic of Philippines, 10.625%, 3/16/25 |
394,862 | ||
1,260,792 | |||||
|
RUSSIA4.9% | ||||
RUB | 12,400 | GPB Eurobond Finance PLC, 7.25%, 2/22/10 |
346,436 | ||
USD | 400 | Mobile Telesystems, 8.0%, 1/28/12 |
378,142 | ||
RUB | 17,044 | Red Arrow International Leasing, 8.375%, 6/30/12 |
419,544 | ||
USD | 866 | RHSB Capital SA, 7.75%, 5/29/18 |
697,130 | ||
USD | 980 | Russian Agricultural Bank, 7.175%, 5/16/13 |
866,839 | ||
USD | 384 | Russian Federation, 7.50%, 3/31/30 |
373,816 | ||
USD | 510 | UBS Lux SA (Sberbank), 6.23%, 2/11/15 |
408,331 | ||
USD | 480 | Vimpel-Communication, 8.375%, 4/30/13 |
390,000 | ||
USD | 550 | VTB Capital SA, 6.875%, 5/29/18 |
450,687 | ||
4,330,925 | |||||
|
SERBIA0.6% | ||||
USD | 720 | Republic of Serbia, 3.75%, 11/01/09 (a)(b) |
540,000 | ||
|
SOUTH AFRICA1.6% | ||||
USD | 410 | Republic of South Africa, 6.50%, 6/02/14 |
423,325 | ||
USD | 880 | Republic of South Africa, 7.375%, 4/25/12 |
935,396 | ||
1,358,721 | |||||
|
TURKEY2.5% | ||||
USD | 730 | Republic of Turkey, 7.25%, 3/15/15 |
758,105 | ||
USD | 640 | Republic of Turkey, 9.50%, 1/15/14 |
721,363 | ||
TRY | 180 | Republic of Turkey, 16.00%, 3/07/12 |
119,288 | ||
TRY | 1,040 | Republic of Turkey, Zero Coupon, 4/14/10 |
586,169 | ||
2,184,925 | |||||
|
UKRAINE0.9% | ||||
USD | 100 | Alfa Bank Ukraine, 9.25%, 7/26/10 |
58,000 | ||
USD | 400 | Alfa Bank Ukraine, 9.75%, 12/22/09 |
248,000 | ||
USD | 160 | CJSC, The EXIM of Ukraine, 7.65%, 9/07/11 |
98,400 | ||
USD | 610 | Ukraine Government International Bond, 6.75%, 11/14/17 |
359,900 | ||
764,300 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
11
Portfolio of Investments (unaudited) (continued)
As of April 30, 2009
Principal Amount (000) |
Description | Value (US$) | |||
|
LONG-TERM FIXED INCOME INVESTMENTS (continued) | ||||
|
UNITED KINGDOM13.7% | ||||
GBP | 1,000 | Lloyds TSB Group PLC, 9.125%, 10/17/11 |
$ 1,495,170 | ||
GBP | 260 | Lloyds TSB Group PLC, 12.00%, 1/02/11 |
411,607 | ||
GBP | 7,060 | United Kingdom Treasury, 4.25%, 12/07/49 |
10,155,467 | ||
12,062,244 | |||||
|
URUGUAY1.8% | ||||
UYU | 24,200 | Republica Orient Uruguay, 4.25%, 4/05/27 |
632,722 | ||
UYU | 3,260 | Republica Orient Uruguay, 5.00%, 9/14/18 |
99,806 | ||
USD | 1,030 | Republica Orient Uruguay, 7.625%, 3/21/36 |
891,825 | ||
1,624,353 | |||||
|
VENEZUELA3.2% | ||||
USD | 1,400 | Petroleos de Venezuela SA, 5.25%, 4/12/17 |
634,900 | ||
USD | 1,220 | Republic of Venezuela, 2.10063%, 4/20/11 |
951,600 | ||
USD | 760 | Republic of Venezuela, 5.75%, 2/26/16 |
433,200 | ||
USD | 567 | Republic of Venezuela, 8.50%, 10/08/14 |
394,632 | ||
USD | 280 | Republic of Venezuela, 9.00%, 5/07/23 |
162,400 | ||
USD | 327 | Republic of Venezuela, 10.75%, 9/19/13 |
261,600 | ||
2,838,332 | |||||
Total Long-Term Investments (cost $118,572,242) |
110,444,221 | ||||
|
SHORT-TERM INVESTMENTS1.0% | ||||
USD | 871 | Time Deposit, State Street Bank and Trust Company, 0.08%, due 5/01/09 |
871,000 | ||
Total Short-Term Investments (cost $871,000) |
871,000 | ||||
Total Investments126.7% (cost $119,443,242) |
111,315,221 | ||||
Liabilities in Excess of Other Assets(26.7)% |
(23,424,130) | ||||
Net Assets Applicable to Common Shareholders100.0% |
$ 87,891,091 |
AUDAustralian dollar | EUREuro |
NZDNew Zealand dollar |
UYUUruguayan peso | |||
BRLBrazilian real | GBPBritish pound |
RUBRussian ruble |
||||
CADCanadian dollar | IDRIndonesian rupiah |
TRYTurkish lira |
||||
COPColombian peso | MXNMexican peso |
USDUnited States dollar |
(a) | Indicates a variable rate security. The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at April 30, 2009. |
(b) | The maturity date presented for these instruments represents the next call/put date. |
Interest Rate Swap Agreements
Counterparty | Termination Date |
Notional Amount (000) |
Fixed Rate Paid by the Fund |
Floating Rate received by the Fund |
Unrealized Appreciation/ (Depreciation) |
|||||||||
Deutsche Bank |
April 21, 2011 | $ | 7,000 | 1.470 | % | 3 month LIBOR | $ | (480 | ) | |||||
Deutsche Bank |
April 21, 2012 | 7,000 | 1.817 | 3 month LIBOR | 20,710 | |||||||||
Merrill Lynch |
June 26, 2009 | 7,000 | 3.370 | 3 month LIBOR | (21,457 | ) | ||||||||
$ | (1,227 | ) |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
12
Portfolio of Investments (unaudited) (continued)
As of April 30, 2009
Futures Contracts
Decription | Expiration | Contracts | Unrealized Appreciation/ (Depreciation) |
|||||
Purchase Contract: |
||||||||
Australian Treasury Bond 6%3 year |
June 2009 | 20 | $ | 1,338 | ||||
Australian Treasury Bond 6%10 year |
June 2009 | 96 | (129,742 | ) | ||||
$ | (128,404 | ) |
Forward Foreign Currency Exchange Contracts
Purchase/Sale | Amount Purchased |
Amount Sold | Purchase Value as of April 30, 2009 |
Sale Value as of April 30, 2009 |
Unrealized Appreciation/ (Depreciation) |
|||||||||
Canadian Dollar/United States Dollar |
||||||||||||||
settlement date 7/17/09 |
CAD1,477,000 | USD1,195,466 | $ | 1,238,381 | $ | 1,195,466 | $ | 42,915 | ||||||
Indonesian Rupiah/United States Dollar |
||||||||||||||
settlement date 5/15/09 |
IDR2,983,024,000 | USD234,884 | 280,870 | 234,884 | 45,986 | |||||||||
settlement date 5/15/09 |
IDR4,686,324,000 | USD387,460 | 441,246 | 387,460 | 53,786 | |||||||||
Mexican Peso/United States Dollar |
||||||||||||||
settlement date 7/17/09 |
MXN3,473,000 | USD260,804 | 248,197 | 260,804 | (12,607 | ) | ||||||||
Russian Ruble/United States Dollar |
||||||||||||||
settlement date 5/15/09 |
RUB13,129,000 | USD364,694 | 394,650 | 364,694 | 29,956 | |||||||||
United States Dollar/Brazilian Real |
||||||||||||||
settlement date 5/15/09 |
USD510,566 | BRL1,208,000 | 510,566 | 549,521 | (38,955 | ) | ||||||||
settlement date 5/15/09 |
USD165,449 | BRL385,000 | 165,449 | 175,137 | (9,688 | ) | ||||||||
United States Dollar/British Pound |
||||||||||||||
settlement date 7/17/09 |
USD11,495,615 | GBP7,853,000 | 11,495,615 | 11,617,517 | (121,902 | ) | ||||||||
United States Dollar/Canadian Dollar |
||||||||||||||
settlement date 7/17/09 |
USD5,089,034 | CAD6,316,000 | 5,089,034 | 5,295,610 | (206,576 | ) | ||||||||
United States Dollar/Colombian Peso |
||||||||||||||
settlement date 5/15/09 |
USD522,255 | COP1,309,294,000 | 522,255 | 570,357 | (48,102 | ) | ||||||||
settlement date 5/15/09 |
USD53,064 | COP127,195,000 | 53,064 | 55,409 | (2,345 | ) | ||||||||
United States Dollar/Euro |
||||||||||||||
settlement date 7/17/09 |
USD1,356,180 | EUR1,050,000 | 1,356,180 | 1,388,779 | (32,599 | ) | ||||||||
United States Dollar/Indonesian Rupiah |
||||||||||||||
settlement date 5/15/09 |
USD608,196 | IDR7,669,348,000 | 608,196 | 722,116 | (113,920 | ) | ||||||||
United States Dollar/Mexican Peso |
||||||||||||||
settlement date 7/17/09 |
USD587,209 | MXN7,911,000 | 587,209 | 565,358 | 21,851 | |||||||||
United States Dollar/New Zealand Dollar |
||||||||||||||
settlement date 7/17/09 |
USD7,671,235 | NZD13,840,000 | 7,671,235 | 7,793,262 | (122,027 | ) | ||||||||
United States Dollar/Russian Ruble |
||||||||||||||
settlement date 5/15/09 |
USD336,210 | RUB13,129,000 | 336,210 | 394,650 | (58,440 | ) | ||||||||
United States Dollar/Turkish Lira |
||||||||||||||
settlement date 7/17/09 |
USD544,731 | TRY917,000 | 544,731 | 562,373 | (17,642 | ) | ||||||||
Net USD Total |
$ | 31,543,088 | $ | 32,133,397 | $ | (590,309 | ) |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
13
Portfolio of Investments (unaudited) (concluded)
As of April 30, 2009
Tax Cost of Investments
The United States federal income tax basis of the Funds investments and net unrealized depreciation as of April 30, 2009 were as follows:
Cost | Appreciation | Depreciation | Net Unrealized Depreciation | ||||||
$121,170,850 | $ | 5,615,065 | $ | 15,470,694 | $ | 9,855,629 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
14
Statement of Assets and Liabilities (unaudited)
As of April 30, 2009
Assets | ||||
Investments, at value (cost $119,443,242) |
$ | 111,315,221 | ||
Foreign currency, at value (cost $5,001,782) |
5,195,133 | |||
Cash |
196,688 | |||
Cash at broker |
1,184,219 | |||
Interest receivable |
2,193,634 | |||
Unrealized appreciation on forward foreign currency exchange contracts |
194,494 | |||
Unrealized appreciation on interest rate swaps | 20,710 | |||
Total assets |
120,300,099 | |||
Liabilities |
||||
Bank loan payable (Note 5) |
30,000,000 | |||
Unrealized depreciation on forward foreign currency exchange contracts |
784,803 | |||
Dividends payable to common shareholders |
629,392 | |||
Payable for investments purchased |
584,163 | |||
Variation margin payable for futures contracts |
128,404 | |||
Due to brokerinterest rate swap interest due |
73,593 | |||
Investment management fee payable |
70,643 | |||
Interest payable on bank loan |
51,560 | |||
Unrealized depreciation on interest rate swaps |
21,937 | |||
Administration fee payable |
16,302 | |||
Accrued expenses and other liabilities | 48,211 | |||
Total liabilities |
32,409,008 | |||
Net Assets Applicable to Common Shareholders |
$ | 87,891,091 | ||
Composition of Net Assets Applicable to Common Shareholders |
||||
Common Stock (par value $.001 per share) |
$ | 8,991 | ||
Paid-in capital in excess of par |
109,884,508 | |||
Distributions in excess of net investment income |
(3,937,749 | ) | ||
Accumulated net realized loss on investments, swaps, and futures |
(9,924,505 | ) | ||
Net unrealized depreciation on investments |
(2,458,866 | ) | ||
Accumulated net realized foreign exchange gains |
483,048 | |||
Net unrealized foreign exchange losses | (6,164,336 | ) | ||
Net Assets Applicable to Common Shareholders |
$ | 87,891,091 | ||
Net asset value per common share based on 8,991,308 shares issued and outstanding | $ | 9.78 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
15
Statement of Operations (unaudited)
For the Six Months Ended April 30, 2009
Net Investment Income | ||||
Income |
||||
Interest and amortization of discount and premium (net of foreign withholding taxes of $45,183) | $ | 4,035,339 | ||
Expenses |
||||
Investment management fee |
373,134 | |||
Legal fees and expenses |
191,713 | |||
Directors fees and expenses |
111,851 | |||
Bank loan fees and expenses (Note 5) |
98,374 | |||
Administration fee |
86,108 | |||
Independent auditors fees and expenses |
69,488 | |||
Reports to shareholders and proxy solicitation |
65,539 | |||
Insurance expense |
47,205 | |||
Custodians fees and expenses |
47,196 | |||
Investor relations fees and expenses |
41,301 | |||
Transfer agents fees and expenses |
10,809 | |||
Miscellaneous | 24,155 | |||
Total operating expenses | 1,166,873 | |||
Interest expense (Note 5) | 365,788 | |||
Total expenses | 1,532,661 | |||
Net investment income | 2,502,678 | |||
Realized and Unrealized Gains/(Losses) on Investments, Swaps, Futures, and Foreign Currencies |
||||
Net realized gain/(loss) on: |
||||
Investment transactions |
(2,249,396 | ) | ||
Interest rate swaps |
(914,364 | ) | ||
Futures contracts |
363,635 | |||
Foreign currency transactions | (2,844,287 | ) | ||
(5,644,412 | ) | |||
Net change in unrealized appreciation/(depreciation) on: |
||||
Investments |
6,114,913 | |||
Interest rate swaps |
488,204 | |||
Futures contracts |
(170,460 | ) | ||
Foreign currency translation | 8,615,920 | |||
15,048,577 | ||||
Net gain on investments, swaps, futures, and foreign currencies | 9,404,165 | |||
Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations | $ | 11,906,843 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
16
Statements of Changes in Net Assets Applicable to Common Shareholders
For the Six Months Ended April 30, 2009 (unaudited) |
For the Year Ended October 31, 2008 |
|||||||
Increase/(Decrease) in Net Assets Applicable to Common Shareholders | ||||||||
Operations | ||||||||
Net investment income |
$ | 2,502,678 | $ | 7,418,359 | ||||
Net realized loss on investments, swaps and futures |
(2,800,125 | ) | (1,658,215 | ) | ||||
Net realized gain/(loss) on foreign currency transactions |
(2,844,287 | ) | 7,319,803 | |||||
Net change in unrealized appreciation/(depreciation) on investments, swaps and futures |
6,432,657 | (33,996,677 | ) | |||||
Net change in unrealized appreciation/(depreciation) on foreign currency translation |
8,615,920 | (11,079,325 | ) | |||||
Net increase/(decrease) in net assets resulting from operations |
11,906,843 | (31,996,055 | ) | |||||
Dividends to preferred shareholders from net investment income |
| (609,571 | ) | |||||
Net Increase/(Decrease) in Net Assets Applicable to Common Shareholders Resulting From Operations |
11,906,843 | (32,605,626 | ) | |||||
Distributions to common shareholders from: | ||||||||
Net investment income |
(10,520,706 | ) | (9,389,550 | ) | ||||
Total decrease in net assets from distributions to shareholders |
(10,520,706 | ) | (9,389,550 | ) | ||||
Common Stock Transactions | ||||||||
Repurchase of common stock resulting in the reduction of 31,000 and 283,400 shares of common stock, respectively |
(237,772 | ) | (3,297,657 | ) | ||||
Total increase/(decrease) in net assets applicable to common shareholders |
1,148,365 | (45,292,833 | ) | |||||
Net Assets Applicable to Common Shareholders | ||||||||
Beginning of period |
86,742,726 | 132,035,559 | ||||||
End of period (including distributions in excess of net investment income of ($3,937,749) and undistributed net investment income of $4,080,279, respectively) |
$ | 87,891,091 | $ | 86,742,726 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
17
Statement of Cash Flows (unaudited)
For the Six Months Ended April 30, 2009
Increase (Decrease) in Cash (Including Foreign Currency) |
||||
Cash flows provided from (used for) operating activities |
||||
Interest received (excluding discount and premium amortization of ($25,340)) |
$ | 4,618,368 | ||
Operating expenses paid |
(1,623,578 | ) | ||
Purchases of short-term portfolio investments, net |
(5,252,664 | ) | ||
Purchases of long-term portfolio investments |
(23,021,831 | ) | ||
Proceeds from sales of long-term portfolio investments |
37,414,535 | |||
Proceeds on forward foreign currency exchange transactions, net |
4,099,234 | |||
Realized loss on interest rate swap transactions |
(878,464 | ) | ||
Payments made to brokers for collateral on interest rate swaps |
(80,000 | ) | ||
Other Assets |
29,420 | |||
Net cash provided from operating activities | 15,305,020 | |||
Cash flows used for financing activities |
||||
Due to custodian |
(1,121,660 | ) | ||
Dividends paid to common shareholders |
(10,522,876 | ) | ||
Repurchase of common shares |
(237,772 | ) | ||
Net cash used for financing activities |
(11,882,308 | ) | ||
Effect of exchange rate on cash | 65,091 | |||
Net increase in cash |
3,487,803 | |||
Cash at beginning of year | 1,904,018 | |||
Cash at end of year | $ | 5,391,821 | ||
Reconciliation of Net Increase in Net Assets from Operations to Net Cash (Including Foreign Currency) Provided From Operating Activities |
||||
Net increase in net assets resulting from operations | $ | 11,906,843 | ||
Increase in investments |
7,641,831 | |||
Net realized losses on investments |
2,249,396 | |||
Net realized losses on swap transactions |
914,364 | |||
Net realized gains on futures transactions |
(363,635 | ) | ||
Net realized foreign exchange losses |
2,844,287 | |||
Net change in unrealized appreciation/depreciation on investments, futures and swaps |
(6,432,657 | ) | ||
Net change in unrealized foreign exchange gains/losses |
(8,615,920 | ) | ||
Decrease in interest receivable |
571,142 | |||
Increase in payable for investments purchased |
595,732 | |||
Increase in payable for interest on Bank Loan |
51,560 | |||
Proceeds on forward foreign currency exchange transactions, net |
4,099,234 | |||
Increase in receivable for collateral on interest rate swaps |
(80,000 | ) | ||
Increase in payable for interest rate swap interest |
35,900 | |||
Decrease in prepaid assets, accrued expenses and other liabilities | (113,057 | ) | ||
Total adjustments | 3,398,177 | |||
Net cash provided from operating activities | $ | 15,305,020 |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
18
Financial Highlights
For the Six Months Ended April 30, 2009 (unaudited) |
For the Year Ended October 31, | |||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||
PER SHARE OPERATING PERFORMANCE(1): | ||||||||||||||||||
Net asset value per common share, beginning of period | $9.61 | $14.19 | $13.46 | $13.87 | $13.72 | $12.43 | ||||||||||||
Net investment income | 0.28 | 0.81 | 0.81 | 0.69 | 0.76 | 0.68 | ||||||||||||
Net realized and unrealized gains/(losses) on investments, swaps futures and foreign currencies | 1.05 | (4.35 | ) | 0.88 | 0.14 | 0.21 | 1.38 | |||||||||||
Dividends to preferred shareholders from net investment income | | (0.07 | ) | (0.18 | ) | (0.16 | ) | (0.10 | ) | (0.05 | ) | |||||||
Total from investment operations applicable to common shareholders | 1.33 | (3.61 | ) | 1.51 | 0.67 | 0.87 | 2.01 | |||||||||||
Distributions to common shareholders from: | ||||||||||||||||||
Net investment income | (1.17 | ) | (1.02 | ) | (0.78 | ) | (0.98 | ) | (0.72 | ) | (0.72 | ) | ||||||
Tax return of capital | | | | (0.10 | ) | | | |||||||||||
Total distributions | (1.17 | ) | (1.02 | ) | (0.78 | ) | (1.08 | ) | (0.72 | ) | (0.72 | ) | ||||||
Effect of Fund shares repurchased | 0.01 | 0.05 | | | | | ||||||||||||
Net asset value per common share, end of period | $9.78 | $9.61 | $14.19 | $13.46 | $13.87 | $13.72 | ||||||||||||
Market value, end of period | $9.06 | $8.20 | $12.97 | $13.00 | $13.05 | $14.02 | ||||||||||||
Total Investment Return Based on(2): | ||||||||||||||||||
Market value | 25.30% | (30.80% | ) | 5.90% | 8.23% | (1.94% | ) | 8.77% | ||||||||||
Net asset value | 15.42% | (25.87% | ) | 11.90% | 5.43% | 6.50% | 16.64% | |||||||||||
Ratio to Average Net Assets Applicable to Common Shareholders/Supplementary Data(3): | ||||||||||||||||||
Net assets applicable to common shareholders, end of period (000 omitted) | $87,891 | $86,743 | $132,036 | $125,229 | $129,080 | $127,404 | ||||||||||||
Average net assets applicable to common shareholders (000 omitted) | 85,716 | 120,990 | 126,436 | 125,426 | 131,739 | 121,359 | ||||||||||||
Operating expenses(4) | 3.61% | (5) | 2.47% | 1.93% | 2.02% | 1.71% | 1.96% | |||||||||||
Operating expenses, excluding interest expenses | 2.75% | (5) | 1.91% | 1.93% | 2.02% | 1.71% | 1.96% | |||||||||||
Net investment income | 5.89% | (5) | 5.63% | 4.63% | 3.97% | 4.65% | 4.86% | |||||||||||
Portfolio turnover | 23% | 42% | 71% | 30% | 36% | 22% | ||||||||||||
Senior securities (loan facility) outstanding (000 omitted) | $30,000 | $30,000 | | | | | ||||||||||||
Senior securities (preferred stock) outstanding (000 omitted) | | | $30,000 | $30,000 | $30,000 | $30,000 | ||||||||||||
Asset coverage ratio on revolving credit facility at period end | 393% | 389% | | | | | ||||||||||||
Asset coverage per $1,000 on revolving credit facility at period end | $3,930 | $3,891 | | | | | ||||||||||||
Asset coverage ratio on preferred stock at period end | | | 540% | 517% | 530% | 525% | ||||||||||||
Asset coverage per share on preferred stock at period end | | | $135,030 | $129,357 | $132,566 | $131,170 |
(1) | Based on average shares outstanding. |
(2) | Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for the purposes of this calculation to be reinvested at prices obtained under the Funds dividend reinvestment plan. Total investment return does not reflect brokerage commissions. |
(3) | Ratios are calculated on the basis of income and expenses applicable to both the common and preferred shares relative to the average net assets of common shareholders. Ratio of net investment income before preferred stock dividends to average net assets of common shareholders is 5.89%, 6.13%, 5.93%, 5.13%, 5.35%, and 5.22%, respectively. |
(4) | Includes expenses of both preferred and common stock. |
(5) | Annualized. |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
19
Notes to Financial Statements (unaudited)
Aberdeen Global Income Fund, Inc. (the Fund) was incorporated in Maryland on June 28, 1991, as a closed-end, non-diversified investment company.
The Funds principal investment objective is to provide high current income by investing primarily in fixed-income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective. The Funds investments are divided into three categories: Developed Markets, Investment Grade Developing Markets and Sub-Investment Grade Developing Markets. Developed Markets are those countries contained in the Citigroup World Government Bond Index, Luxembourg and Hong Kong Special Administrative Region. Investment Grade Developing Markets are those countries whose sovereign debt is rated not less than Baa3 by Moodys or BBB- by S&P. Sub-Investment Grade Developing Markets are those countries that are not Developed Markets or Investment Grade Developing Markets. Under normal circumstances, at least 60% of the Funds total assets would be invested in a portfolio of fixed income securities from issuers in Developed Markets or Investment Grade Developing Markets, whether or not denominated in the currency of such country; provided, however, that the Fund will invest at least 40% of its total assets in fixed income securities of issuers in Developed Markets. The Fund may only invest up to 40% of its total assets in fixed income securities of issuers in Sub-Investment Grade Developing Markets whether or not denominated in the currency of such country.
In order to comply with a rule adopted by the Securities and Exchange Commission under the 1940 Act regarding fund names, the Board of Directors has adopted an investment policy that, for as long as the name of the Fund remains Aberdeen Global Income Fund, Inc., it shall be the policy of the Fund normally to invest at least 80% of its net assets plus the amount of any borrowings for investment purposes, in debt securities. This 80% investment policy is a non-fundamental policy of the Fund and may be changed by the Board of Directors upon 60 days prior written notice to shareholders. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic developments in a specific industry, country or region.
1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Basis of Presentation:
The financial statements of the Fund are prepared in accordance with accounting principles generally accepted in the United States of America using the United States dollar as both the functional and reporting currency. However, the Australian Dollar, Canadian Dollar and British Pound are the functional currencies for Federal tax purposes.
Securities Valuation:
The Funds Board of Directors has adopted Valuation and Liquidity Procedures (the Procedures) to be used in determining the value of the assets held by the Fund. The Procedures were revised and approved by the Board of Directors on December 9, 2008. In accordance with the Procedures, investments are stated at current fair value. Investments for which market quotations are readily available are valued at the last quoted closing price on the date of determination as obtained from a pricing source. If no such trade price is available, such investments are valued at the last quoted bid price as obtained from a pricing agent or broker selected by the Funds Manager.
Short-term debt securities which mature in more than 60 days are valued as described above. Short-term debt securities of sufficient credit quality which mature in 60 days or less are valued at amortized cost using a pricing source quote that approximates amortized cost.
Securities for which market quotations are not readily available (including investments which are subject to limitations as to their sale) are to be valued at fair value. As a general rule, whether or not the Fund is required to fair value price an asset is dependent on the ready availability of current market quotes or, even if readily available, the reliability of such quotes. Any assets for which market quotations are not readily available or for which available prices are not reliable, shall be determined in a manner that most fairly reflects the assets (or group of assets) fair value (i.e., the amount that the Fund might reasonably expect to receive for the asset upon its current sale) on the valuation date, based on consideration of all available information.
The Procedures provide that in certain instances, including without limitation, if there is a stale price for a portfolio security, in an emergency situation, or if a significant event occurs after the close of trading of a portfolio security, but before the calculation of the Funds net asset value, the security may be valued at its fair value.
In 2009, the Fund commenced complying with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157), effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. FAS 157 establishes a single authoritative definition of fair value, establishes a framework for measuring fair value and expands disclosure requirements for fair value measurements. In accordance
Aberdeen Global Income Fund, Inc.
20
Notes to Financial Statements (unaudited) (continued)
with FAS 157, fair value is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. FAS 157 establishes a three-tier hierarchy to classify fair value measurements for disclosure purposes. The three broad levels of the hierarchy are listed below.
Level 1 quoted prices in active markets for identical securities
Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.)
Level 3 significant unobservable inputs (including the Funds own assumptions in determining fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value each of the Funds investments as of April 30, 2009.
Valuation Inputs | Investments in Securities |
Other Financial Instruments* | |||||||
Assets | Liabilities | ||||||||
Level 1 |
$ | | $ | | $ | 128,404 | |||
Level 2 |
111,315,221 | 215,204 | 806,740 | ||||||
Level 3 |
| | | ||||||
Total |
$ | 111,315,221 | $ | 215,204 | $ | 935,144 |
* | Other financial instruments include futures contracts, forward foreign currency exchange contracts and interest rate swaps. |
In April 2009, the FASB issued FASB Staff Position No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That are Not Orderly (FSP 157-4). FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157, when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP 157-4 will have on the Funds financial statement disclosures.
Repurchase Agreements:
In connection with transactions in repurchase agreements with U.S. financial institutions, it is the Funds policy that its custodian/counterparty segregates the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the collateral is valued on a daily basis to determine its adequacy. 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:
Foreign currency amounts are translated into United States dollars on the following basis:
(i) | market value of investment securities, other assets and liabilities at the exchange rates at the end of the reporting period; |
(ii) | purchases and sales of investment securities, income and expenses at the rates of exchange prevailing on the respective dates of such transactions. |
The Fund isolates 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 the end of the reporting period. Similarly, the Fund isolates the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the reporting period.
Net realized foreign exchange gains/(losses) includes realized foreign exchange gains/(losses) from sales and maturities of portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of interest, discount and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized foreign exchange appreciation/(depreciation) includes changes in the value of portfolio securities and other assets and liabilities arising as a result of changes in the exchange rate. Accumulated realized and unrealized foreign exchange gains/(losses) shown in the composition of net assets represent foreign exchange gains/(losses) for book purposes that have not yet been recognized for tax purposes.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.
Securities Transactions and Investment Income:
Securities transactions are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the identified cost basis. Interest income is recorded on
Aberdeen Global Income Fund, Inc.
21
Notes to Financial Statements (unaudited) (continued)
an accrual basis. Discounts and premiums on securities purchased are accreted or amortized on an effective yield basis over the estimated lives of the respective securities. Expenses are accrued on a daily basis.
Derivative Financial Instruments:
The Fund is authorized to use derivatives to manage currency risk, credit risk and interest rate risk and to replicate or as a substitute for physical securities. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities.
Interest Rate Swaps:
The Fund may engage in certain interest rate swap transactions to hedge the Funds leverage facility. An interest rate swap is an agreement between two parties, which involves the exchange of floating and fixed rate interest payments for a specified period of time. Interest rate swaps involve the accrual and exchange of interest payments between the parties. These payments are recorded as realized gain/(loss).
During the term of the swap, changes in the value of the swap are recognized as unrealized appreciation or depreciation by marking-to-market the fair market value of the swap. When the swap is terminated, the Fund will record a realized gain/(loss) equal to the difference, if any, between the proceeds from (or cost of) the closing transaction and the Funds basis in the contract. The Fund is exposed to credit risk in the event of non-performance by the counterparty to the swap. However, the Fund does not anticipate non-performance by any counterparty.
Notional amounts of swaps are used to express the extent of involvement in these transactions, although the risk of loss may exceed amounts recognized in the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts terms and the possible lack of liquidity with respect to the contracts.
Forward Foreign Currency Exchange Contracts:
A forward foreign currency exchange contract (Forward Contract) involves an obligation to purchase and sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. The Forward Contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation. When the Forward Contract is closed, the Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. Risks arise from the unanticipated movements in the value of the foreign currency relative to the functional currencies and from potential inability of counterparties to meet the terms of their contracts. The Fund is subject to off balance sheet risk to the extent of the value of the contracts for purchases of foreign currency and in an unlimited amount for sales of foreign currency.
Futures Contracts:
A futures contract is an agreement between two parties to buy and sell a security for a set price on a future date. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss 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. Use of long futures contracts subjects the Fund to the risk of loss in excess of the amounts on the Statement of Assets and Liabilities up to the notional value of the futures contracts. Use of short futures subjects the Fund to unlimited risk of loss.
Options:
When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). As of April 30, 2009, there were no open option contracts.
Distributions:
It is the Funds current policy to pay distributions from net investment income supplemented by net realized foreign exchange gains, net realized short-term capital gains and return of capital distributions if necessary, on a monthly basis. The Fund will also declare and pay distributions at least annually from net realized gains on investment transactions and net realized foreign exchange
Aberdeen Global Income Fund, Inc.
22
Notes to Financial Statements (unaudited) (continued)
gains, if any. Distributions to common shareholders are recorded on the ex-dividend date.
Income distributions and capital and currency gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for foreign currencies, loss deferrals and recognition of market discount and premium.
Recent Accounting Pronouncements:
In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161) was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entitys results of operations and financial position. Management is currently evaluating the implications of FAS 161. The impact on the Funds financial statement disclosures, if any, is currently being assessed.
Taxes:
For Federal income and excise tax purposes, substantially all of the Funds transactions are accounted for using the functional currencies. Accordingly, only realized currency gains/(losses) resulting from the repatriation of any of the functional currencies (Australian Dollar, Canadian Dollar or British Pound) into U.S. dollars or another functional currency and realized currency gains and losses on non-functional currencies are recognized for U.S. tax purposes.
No provision has been made for U.S. Federal income taxes because it is the Funds policy to meet the requirements of the U.S. Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to shareholders. Under the applicable foreign tax law, a withholding tax may be imposed on interest and discounts earned at various rates.
Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Since tax authorities can examine previously filed tax returns, the Funds tax returns for each of the four years in the period ended October 31, 2008 are subject to such review.
Cash Flow Information:
The Fund invests in securities and distributes dividends from net investment income and net realized gains on investment and currency transactions which are paid in cash or are reinvested at the discretion of shareholders. These activities are reported in the Statements of Changes in Net Assets Applicable to Common Shareholders and additional information on cash receipts and cash payments is presented in the Statement of Cash Flows. Cash includes domestic and foreign currency, but does not include cash at brokers in segregated accounts for financial futures because it is designated as collateral.
Use of Estimates:
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Concentration Risk Disclosure:
The Fund may have elements of risk not typically associated with investments in the United States of America due to concentrated investments in a limited number of countries or regions. Such concentrations may subject the Fund to additional risks resulting from political or economic conditions in such countries or regions and the possible imposition of adverse governmental laws or currency exchange restrictions could cause the securities and their markets to be less liquid and their prices to be more volatile than those of comparable U.S. securities.
2. Agreements
Aberdeen Asset Management Asia Limited (the Investment Manager) serves as the investment manager to the Fund and Aberdeen Asset Management Limited (the Investment Adviser) serves as the investment adviser to the Fund, pursuant to a management agreement and an advisory agreement, respectively. The Investment Adviser is an indirect wholly-owned subsidiary of the Investment Manager, which is a direct wholly-owned subsidiary of Aberdeen Asset Management PLC. The Investment Manager has also entered into an agreement with CIBC World Markets, Inc. (the Consultant).
At the Annual Meeting of Shareholders held on March 6, 2009, Shareholders approved a Sub-Advisory Agreement among the Fund, the Investment Manager and Aberdeen Asset Management Investment Services Limited (the Sub-Advisory Agreement). The Sub-Advisory Agreement provides that Aberdeen Asset Management Investment Services Limited (AAMISL or the Sub-Adviser) will manage that portion of all of the assets of the Fund that the Investment Manager allocates to it.
As compensation for its services under the Sub-Advisory Agreement, AAMISL will receive an annual fee paid by the Investment Manager
Aberdeen Global Income Fund, Inc.
23
Notes to Financial Statements (unaudited) (continued)
based on average weekly Managed Assets of the Fund at the following annual rates: 0.17% of the Funds average weekly Managed Assets up to $200 million; 0.16% of Managed Assets between $200 million and $500 million; 0.15% of Managed Assets in excess of $500 million.
The Investment Manager makes investment decisions on behalf of the Fund on the basis of recommendations and information furnished to it by the Investment Adviser and the Consultant, including the selection of and the placement of orders with brokers and dealers to execute portfolio transactions on behalf of the Fund.
The management agreement provides the Investment Manager with a fee, payable monthly, at the following annual rates: 0.65% of the Funds average weekly Managed Assets up to $200 million, 0.60% of Managed Assets between $200 million and $500 million, and 0.55% of Managed Assets in excess of $500 million. Managed Assets are defined in the management agreement as net assets plus the amount of any borrowings, including Auction Market Preferred Stock (AMPS), for investment purposes. The Investment Manager pays fees to the Investment Adviser and the Consultant for their services rendered. The Funds Investment Manager informed the Fund that it paid $288,973 to the Investment Adviser and $3,000 to the Consultant during the six months ended April 30, 2009.
Aberdeen Asset Management Inc. (AAMI), an affiliate of the Investment Manager and the Investment Adviser, is the Funds Administrator, pursuant to an agreement under which AAMI receives a fee, payable monthly, at an annual rate of 0.15% of the Funds average weekly Managed Assets up to $600 million and 0.125% of the Funds average weekly Managed Assets in excess of $600 million. Managed Assets are defined as net assets plus the amount of any borrowings, including AMPS, for investment purposes.
Under terms of an Investor Relations Services Agreement, AAMI serves as the Funds investor relations services provider. This agreement provides AAMI with a monthly retainer of $4,000 plus out-of-pocket expenses. During the six months ended April 30, 2009, the Fund incurred fees of $22,300 for the investor relations services of AAMI. Investor relations fees and expenses in the Statement of Operations include certain out-of-pocket expenses.
3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments, for the six months ended April 30, 2009, aggregated $23,617,563 and $37,414,535 respectively.
4. Common Stock
There are 300 million shares of $.001 par value common stock authorized. At April 30, 2009, there were 8,991,308 shares issued and outstanding.
On March 1, 2001, the Board of Directors approved a stock repurchase program. The Board of Directors amended the program on December 12, 2007. The stock repurchase program allows the Fund to repurchase up to 10% of its common stock in the open market during any 12-month period, if and when the discount to NAV is at least 8%. For the six months ended April 30, 2009, and the fiscal year ended October 31, 2008, the Fund repurchased 31,000 and 283,400 shares respectively through this program. The weighted average discount on shares repurchased by the Fund was 21.7% during the fiscal six months ended April 30, 2009.
5. Revolving Credit Facility
On March 13, 2008, the Fund entered into a $30 million revolving credit loan facility with The Bank of Nova Scotia. The revolving credit loan facility was renewed for another 364 day term on March 5, 2009. For the six months ended April 30, 2009, the average interest rate on the loan facility was 2.44% and the average balance of the revolving credit loan facility was $30 million. The interest expense is accrued on a daily basis and is payable to The Bank of Nova Scotia on a monthly basis.
The amounts borrowed from the line of credit may be invested at higher rates in the Funds portfolio. However, the cost of leverage could exceed the income earned by the Fund on the proceeds of such leverage. To the extent that the Fund is unable to invest the proceeds from the use of leverage in assets which pay interest at a rate which exceeds the rate paid on the leverage, the yield on the Funds common stock will decrease. In addition, in the event of a general market decline in the value of assets in which the Fund invests, the effect of that decline will be magnified in the Fund because of the additional assets purchased with the proceeds of the leverage.
The Funds leveraged capital structure creates special risks not associated with unleveraged funds having similar investment objectives and policies. The funds borrowed pursuant to the loan facility may constitute a substantial lien and burden by reason of their prior claim against the income of the Fund and against the net assets of the Fund in liquidation. The Fund is not permitted to declare dividends or other distributions in the event of default under the loan facility. In the event of a default under the credit agreement, the lenders have the right to cause a liquidation of the collateral (i.e., sell portfolio securities and other assets of the Fund) and, if any such default is not cured, the lenders may be able to control the liquidation as well. The loan facility has a term of 364 days and is not a perpetual form of leverage; there can be no assurance that the loan facility will be available for renewal on acceptable terms, if at all. The loan facility was renewed for another 364 day term on March 5, 2009. Bank loan fees and expenses
Aberdeen Global Income Fund, Inc.
24
Notes to Financial Statements (unaudited) (concluded)
included in the Statement of Operations include fees for the renewal of the loan facility as well as commitment fees for any portion of the loan facility not drawn upon at any time during the period.
The credit agreement governing the loan facility includes usual and customary covenants for this type of transaction. These covenants impose on the Fund asset coverage requirements, fund composition requirements and limits on certain investments, such as illiquid investments, which are more stringent than those imposed on the Fund by the 1940 Act. The covenants or guidelines could impede the Investment Manager or Investment Adviser from fully managing the Funds portfolio in accordance with the Funds investment objective and policies. Furthermore, non-compliance with such covenants or the occurrence of other events could lead to the cancellation of the loan facility. The covenants also included a requirement that the Fund maintain an NAV of no less than $90 million.
6. Subsequent Events
Subsequent to April 30, 2009, the Fund declared monthly distributions of 7 cents per common share payable on June 12, 2009 and July 10, 2009 to common shareholders of record on May 29, 2009 and June 30, 2009, respectively.
7. Change in Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP (PwC), 300 Madison Avenue, New York, New York 10017, an independent registered public accounting firm, was the independent registered public accounting firm for the Fund for the fiscal year ended October 31, 2008. At the meetings held on June 9, 2009, the Audit Committee and the Board of Directors engaged KPMG LLP to replace PwC as the independent registered public accounting firm for the Fund.
The reports of the financial statements, previously issued by PwC for the Fund for each of the two most recent fiscal years ended October 31, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. For the past two most recent fiscal years and through the date of the auditor change, there were no disagreements between the Fund and PwC on any matters of accounting principles or practices, financial statement disclosures, auditing scope or procedures, or any other matter which, if not resolved to the satisfaction of PwC, would have caused PwC to make reference to the subject matter of the disagreements in connection with the issuance of PwCs reports on the financial statements of such periods.
Supplemental Information (unaudited)
Results of Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on Friday, March 6, 2009 at 1735 Market Street, Philadelphia, Pennsylvania. The description of the proposals and number of shares voted at the meeting are as follows:
1. | To elect two directors to serve as Class II directors for three-year terms and until their successors are duly elected and qualify: |
Votes For | Votes Withheld | |||
William J. Potter | 5,847,571 | 472,168 | ||
Peter D. Sacks | 5,847,164 | 472,575 |
Directors whose term of office continued beyond this meeting are as follows: Martin Gilbert, P. Gerald Malone, Neville J. Miles, and John T. Sheehy.
2. | To approve a new sub-advisory agreement among the Fund, Aberdeen Asset Management Asia Limited and Aberdeen Asset Management Investment Services Limited. |
Votes For | Votes Withheld | |
4,413,097 | 280,264 |
Aberdeen Global Income Fund, Inc.
25
Corporate Information
Directors
P. Gerald Malone, Chairman
Martin J. Gilbert
Neville J. Miles
William J. Potter
Peter D. Sacks
John T. Sheehy
Officers
Christian Pittard, President
William Baltrus, Vice President
Kevin Daly, Vice President
Martin Gilbert, Vice President
Anthony Michael, Vice President
John Murphy, Vice President
Jennifer Nichols, Vice President
Timothy Sullivan, Vice President
Alan Goodson, Vice President and Secretary
Vincent McDevitt, Chief Compliance Officer and Vice President Compliance
Megan Kennedy, Treasurer and Principal Accounting Officer
Matthew Keener, Assistant Treasurer
Lucia Sitar, Assistant Secretary
Investment Manager
Aberdeen Asset Management Asia Limited
21 Church Street
#01-01 Capital Square Two
Singapore 049480
Investment Adviser
Aberdeen Asset Management Limited
Level 6, 201 Kent Street
Sydney, NSW 2000, Australia
Investment Sub-Adviser
Aberdeen Asset Management Investment Services Limited
One Bow Churchyard
London United Kingdom
EC4M9HH
Administrator
Aberdeen Asset Management Inc.
1735 Market Street, 37th Floor
Philadelphia, PA 19103
Consultant
CIBC World Markets, Inc.
BCE Place, Canada Trust Tower
P.O. Box 500
Toronto, Ontario, M5J 2S8 Canada
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
The Bank of New York Mellon Corporation
Shareholder Relations Department
480 Washington Blvd.
Jersey City, NJ 07310
1-866-221-1606
Independent Registered Public Accounting Firm
KPMG LLP
1601 Market Street
Philadelphia, PA 19103
Investor Relations
Aberdeen Asset Management Inc.
1735 Market Street, 37th Floor
Philadelphia, PA 19103
1-866-839-5233
InvestorRelations@aberdeen-asset.com
Aberdeen Asset Management Asia Limited
The accompanying Financial Statements as of April 30, 2009, were not audited and accordingly, no opinion is expressed thereon.
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 in the open market.
The common shares of Aberdeen Global Income Fund, Inc. are traded on the New York Stock Exchange under the symbol FCO. Information about the Funds net asset value and market price is available at www.aberdeenfco.com.
This report, including the financial information herein, is transmitted to the shareholders of Aberdeen Global Income Fund, Inc. for their general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. Past performance is no guarantee of future returns.
Item 2 | Code of Ethics. | |
Not applicable to this filing. | ||
Item 3 | Audit Committee Financial Expert. | |
Not required to be included in this filing. | ||
Item 4 | Principal Accountant Fees and Services. | |
Not required to be included in this filing. | ||
Item 5 | Audit Committee of Listed Registrants. | |
Not required to be included in this filing. |
Item 6 | Investments. | |||
(a) | Included as part of the Report to Stockholders filed under Item 1 of this Form N-CSR. | |||
(b) | Not applicable. | |||
Item 7 | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. | |||
Not required to be included in this filing. | ||||
Item 8 | Portfolio Managers of Closed-End Management Investment Companies. | |||
(a) | Not required to be included in this filing | |||
(b) | During the period ended April 30, 2009, there was no change in any of the Portfolio Managers identified in the Registrants Annual Report on Form N-CSR filed on January 9, 2009. | |||
Item 9 | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
REGISTRANT PURCHASES OF EQUITY SECURITIES
Period |
(a) Total Number of Shares Purchased |
(b) Average Price Paid per Share |
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 1 |
(d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs 1 | ||||
November 1 through November 30, 2008 | 18,500 | 7.61 | 18,500 | 900,381 | ||||
December 1 through December 31, 2008 | 12,500 | 7.56 | 31,000 | 899,131 | ||||
January 1 through January 31, 2009 | 0 | 0 | 31,000 | 899,131 | ||||
February 1 through February 29, 2009 | 0 | 0 | 31,000 | 899,131 | ||||
March 1 through March 31, 2009 | 0 | 0 | 31,000 | 899,131 | ||||
April 1 through April 30, 2009 | 0 | 0 | 31,000 | 899,131 | ||||
Total |
31,000 | 7.59 | 31,000 | | ||||
1 | The Registrants stock repurchase program was announced on March 19, 2001 and further amended by the Registrants Board of Directors on December 12, 2007. Under the terms of the current program, the Registrant is permitted to repurchase up to 10% of its outstanding shares of common stock, par value $.001 per share, on the open market during any 12 month period if and when the discount to net asset value is at least 8%. |
Item 10 Submission of Matters to a Vote of Security Holders.
In December 2008, the Registrants Board of Directors adopted amendments to the Registrants Amended and Restated Bylaws dated as of December 12, 2007 (Bylaws) pertaining to certain corporate governance matters. Many of these amendments reflect recent changes to the Maryland general corporation law; other amendments were also approved to conform the Bylaws to those of the other closed-end funds managed by the Investment Manager. The amended Bylaws include:
| Updates to the procedures required for shareholders to call a special meeting of shareholders, including provisions that (a) clarify which shareholders may call a special meeting; (b) establish procedures to fix a record date; (c) establish procedures to set the date, time and place of special shareholders meetings; (d) address revocation of requests for special shareholders meetings; and (e) allow for verification of the validity of a shareholder request for a special meeting. |
| Enhancements to the advance notice provisions of the Bylaws. These amendments require shareholders to notify the Secretary of the Registrant of Director nominations and other shareholder proposals to be brought at an annual meeting, beginning with the 2010 annual meeting of shareholders, not earlier than the 150th day and not later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the preceding years proxy statement. |
| Additionally, the enhanced advance notice provisions (a) expand the information required to be provided by the shareholder making the proposal or nomination, including information regarding hedging activities and investment strategies of such shareholder and the shareholders affiliates; and (b) require shareholders to update or correct any previously-submitted information. |
| Clarification that only those individuals nominated in compliance with the advance notice provisions of the Bylaws are eligible to serve as Directors, and that individuals must meet the substantive qualification requirements at both the time of nomination and at the time of election. |
Item 11 Controls and Procedures.
(a) | It is the conclusion of the Registrants principal executive officer and principal financial officer that the effectiveness of the Registrants current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the Registrant has been recorded, processed, summarized and reported within the time period specified in the Commissions rules and forms and that the information required to be disclosed by the Registrant has been accumulated and communicated to the Registrants principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. |
(b) | There have been no changes in the Registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting. |
Item 12 Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Aberdeen Global Income Fund, Inc.
By: | /s/ Christian Pittard | |
Christian Pittard, | ||
President of Aberdeen Global Income Fund, Inc. |
Date: June 29, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Christian Pittard | |
Christian Pittard, | ||
President of Aberdeen Global Income Fund, Inc. |
Date: June 29, 2009
By: | /s/ Megan Kennedy | |
Megan Kennedy, | ||
Treasurer of Aberdeen Global Income Fund, Inc. |
Date: June 29, 2009
Exhibit List
12(a)(2) Rule 30a-2(a) Certifications
12(b) Rule 30a-2(b) Certifications