This is filed purusant to Rule 497(e).
File Nos. 333-137564 and No. 811-07732.





                                     [LOGO]

                               ALLIANCEBERNSTEIN
                                  Investments


                  ALLIANCE WORLD DOLLAR GOVERNMENT FUND, INC.

                          1345 Avenue of the Americas
                           New York, New York 10105

                                                               October 27, 2006

Dear Stockholders:

   The Board of Directors (the "Directors") of Alliance World Dollar Government
Fund, Inc. ("AWDGF") is pleased to invite you to a Special Meeting of
Stockholders of AWDGF (the "Meeting") to be held on Tuesday, December 12, 2006.
At this Meeting, we are asking you to approve the acquisition of the assets and
the assumption of the liabilities of AWDGF by Alliance World Dollar Government
Fund II, Inc. ("AWDGF II") and the dissolution of AWDGF. The proposed
acquisition is described in more detail in the attached Prospectus/Proxy
Statement.

   AWDGF II is much larger than AWDGF, with a similar investment objective and
slightly broader investment policies. We anticipate that the proposed
acquisition will result in benefits to the stockholders of AWDGF as more fully
discussed in the Prospectus/Proxy Statement.

   The Directors of AWDGF have given careful consideration to the proposed
acquisition and have concluded that the acquisition is in the best interests of
AWDGF and its stockholders. The Directors recommend that you vote "for" the
proposed acquisition of AWDGF by AWDGF II.

   If the acquisition of AWDGF by AWDGF II is approved by stockholders of
AWDGF, each AWDGF stockholder will receive shares of AWDGF II having an
aggregate net asset value ("NAV") equal to the aggregate NAV of the
stockholder's shares in AWDGF. AWDGF would then cease operations. You will not
be assessed any sales charges or other stockholder fees in connection with the
proposed acquisition.

   We welcome your attendance at the Meeting. If you are unable to attend, we
encourage you to authorize proxies to cast your vote. The Altman Group, Inc.
(the "Proxy Solicitor"), a proxy solicitation firm, has been selected to assist
in the proxy solicitation process. If we have not received your proxy as the
date of the Meeting approaches, you may receive a telephone call from the Proxy
Solicitor to remind you to submit your proxy. No matter how many shares you
own, your vote is important.

Sincerely,

Marc O. Mayer
President



                                     [LOGO]

                               ALLIANCEBERNSTEIN
                                  Investments


                  ALLIANCE WORLD DOLLAR GOVERNMENT FUND, INC.

                          1345 Avenue of the Americas
                           New York, New York 10105
                                (800) 221-5672

                  NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS
                        SCHEDULED FOR DECEMBER 12, 2006

To the stockholders of Alliance World Dollar Government Fund, Inc. ("AWDGF"), a
  Maryland corporation:

   Notice is hereby given that a Special Meeting of the Stockholders of AWDGF
(the "Meeting") will be held at 1345 Avenue of the Americas, 41st Floor, New
York, New York 10105 on Tuesday, December 12, 2006, at 11:30 a.m., Eastern
Time, to consider and vote on the following proposal, which is more fully
described in the accompanying Prospectus/Proxy Statement dated October 27, 2006:

    1. To approve an Agreement and Plan of Acquisition and Liquidation (the
       "Plan") among AWDGF, Alliance World Dollar Government Fund II, Inc.
       ("AWDGF II"), a Maryland corporation, and AllianceBernstein L.P.
       providing for the acquisition by AWDGF II of all of the assets and
       assumption of all of the liabilities of AWDGF in exchange for shares of
       AWDGF II (the "Proposal"). A vote in favor of this Proposal by the
       stockholders of AWDGF also will constitute a vote in favor of the
       dissolution of AWDGF and termination of its registration under the
       Investment Company Act of 1940, as amended.

    2. To transact any other business that may properly come before the Meeting
       and any adjournments or postponements thereof.

   Any stockholder of record of AWDGF at the close of business on October 13,
2006 (the "Record Date") is entitled to notice of, and to vote at, the Meeting
or any adjournments or postponements thereof. Proxies are being solicited on
behalf of the Board of Directors. Each stockholder who does not expect to
attend the Meeting and vote in person is requested to complete, date, sign and
promptly return the enclosed proxy card, or to submit voting instructions by
telephone as described on the enclosed proxy card.

                                                  By Order of the Board of
                                                  Directors,

                                                  Marc O. Mayer
                                                  President

New York, New York
October 27, 2006

                            YOUR VOTE IS IMPORTANT

   Please indicate your voting instructions on the enclosed proxy card, sign
and date it, and return it in the envelope provided, which needs no postage if
mailed in the United States. Your vote is very important no matter how many
shares you own. In order to save any additional costs of further proxy
solicitation and to allow the Meeting to be held as scheduled, please complete,
date, sign and return your proxy card promptly.

--------------------------------------------------------------------------------

AllianceBernstein(R) and the AB Logo are registered trademarks and service
marks used by permission of the owner AllianceBernstein L.P.



                          PROSPECTUS/PROXY STATEMENT

        Acquisition of the Assets and Assumption of the Liabilities of

                  ALLIANCE WORLD DOLLAR GOVERNMENT FUND, INC.

                      By, and in Exchange for Shares of,

                ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.

                               October 27, 2006

                               TABLE OF CONTENTS


                                                                                     
Questions and Answers                                                                          4
Proposal --  Approval of an Agreement and Plan of Acquisition and Liquidation among AWDGF II,
             AWDGF and AllianceBernstein L.P.                                                  6
Summary                                                                                        7
   Comparison of Operating Expense Ratios                                                      7
   Comparison of Investment Advisory Fees                                                      7
   Comparison of Investment Objectives and Policies                                            7
   Principal Risks                                                                             9
   Federal Income Tax Consequences                                                             9
   Service Providers                                                                           9
   Comparison of Stockholder Services                                                         10
   Comparison of Business Structures                                                          10
Information about the Proposed Transaction                                                    11
   Introduction                                                                               11
   Description of the Plan                                                                    11
   Reasons for the Acquisition                                                                12
   Description of Securities to be Issued                                                     13
   Dividends and Other Distributions                                                          14
   Surrender and Exchange of AWDGF Stock Certificates                                         14
   Federal Income Tax Consequences                                                            14
   Capitalization Information                                                                 15
   Trading History and Share Price Data                                                       15
Information about the Funds                                                                   15
   Management of the Funds                                                                    15
   Advisory Agreement and Fees                                                                15
   Administrator                                                                              16
   Other Service Providers                                                                    16
Voting Information                                                                            17
Legal Matters                                                                                 17
Experts                                                                                       18
Financial Highlights                                                                          18


                                                                                     
Appendix A --  Fee Table                                                                      19
Appendix B --  Comparison of Investment Objectives and Policies                               21
Appendix C --  Description of Principal Risks of the Funds                                    33
Appendix D --  Other Information                                                              35
Appendix E --  Form of Agreement and Plan of Acquisition and Liquidation among Alliance World
               Dollar Government Fund II, Inc., Alliance World Dollar Government, Inc. and
               AllianceBernstein L.P.                                                         39


                                      2




                                                                   
Appendix F --  Capitalization                                               54
Appendix G --  Trading History and Share Price Data                         55
Appendix H --  Legal Proceedings                                            56
Appendix I --  Share Ownership Information                                  58
Appendix J --  Financial Highlights                                         59


                                      3



                             QUESTIONS AND ANSWERS

The following questions and answers provide an overview of key features of the
proposed acquisition and of the information contained in this Prospectus/Proxy
Statement. Please review the full Prospectus/Proxy Statement before casting
your vote.

1. What is this document and why did we send it to you?

This is a combined Prospectus/Proxy Statement that provides you with
information about the proposed acquisition (the "Acquisition") of the assets
and liabilities of Alliance World Dollar Government Fund, Inc. ("AWDGF") by
Alliance World Dollar Government Fund II, Inc. ("AWDGF II") and the subsequent
dissolution of AWDGF. (AWDGF II and AWDGF are each a "Fund" and collectively,
the "Funds"). This document also solicits your vote on the Acquisition by
requesting that you approve the Agreement and Plan of Acquisition and
Liquidation dated as of September 20, 2006 (the "Plan"), among AWDGF II, AWDGF
and AllianceBernstein L.P. (the "Adviser").

On September 13, 2006, the Directors approved and declared advisable the
Acquisition of AWDGF by AWDGF II and the subsequent dissolution of AWDGF and
directed that the Acquisition and dissolution be submitted to the stockholders
for approval at a Special Meeting of Stockholders to be held on December 12,
2006, 11:30 a.m., Eastern Time (the "Meeting"). You are receiving this
Prospectus/Proxy Statement because you own shares of AWDGF. Each stockholder of
record of AWDGF as of the close of business on the record date has the right
under applicable legal and regulatory requirements to vote on the Acquisition
and dissolution. The Acquisition will not occur unless it is approved by AWDGF
stockholders. This Prospectus/Proxy Statement contains the information you
should know before voting on the proposed Acquisition.

You may contact a Fund at 1-800-221-5672 or write to a Fund at 1345 Avenue of
the Americas, New York, NY 10105.

2. Who is eligible to vote on the Acquisition?

Stockholders of record of AWDGF at the close of business on October 13, 2006
(the "Record Date") are entitled to notice of and to vote at the Meeting or any
adjournment or postponement of the Meeting. If you owned shares of AWDGF on the
Record Date, you have the right to vote even if you subsequently sold your
shares.

Each share is entitled to one vote. Shares represented by properly executed
proxies, unless revoked before or at the Meeting, will be voted according to
stockholders' instructions. If you sign and return a proxy card but do not fill
in a vote, your shares will be voted "FOR" the Acquisition. If any other
business properly comes before the Meeting, your shares will be voted at the
discretion of the persons named as proxies.

3. How will the Acquisition work?

The Plan provides for (i) the transfer of all of the assets of AWDGF to AWDGF
II, (ii) the assumption by AWDGF II of all of the liabilities of AWDGF and the
subsequent redemption of shares of AWDGF, (iii) the liquidating distribution to
AWDGF stockholders of shares of AWDGF II, equal in aggregate net asset value
("NAV") to the NAV of their former AWDGF shares and (iv) the dissolution of
AWDGF.

As a result of the Acquisition, stockholders of AWDGF will no longer hold
shares of AWDGF, and instead, will become stockholders of AWDGF II having the
same aggregate NAV as the shares of AWDGF that they held immediately before the
Acquisition. Please note that AWDGF stockholders who do not participate in
AWDGF's Dividend Reinvestment Plan will receive cash in lieu of fractional
shares. You will not be assessed any sales charges or other stockholder fees in
connection with the proposed Acquisition. The Acquisition will not occur unless
it is approved by the stockholders of AWDGF.

                                      4



4. Why is the Acquisition being proposed?

Based on the recommendation of the Adviser, the Board of Directors of AWDGF
(the "Board") concluded that participation by AWDGF in the proposed Acquisition
is in the best interests of AWDGF and its stockholders. The Board also
concluded that the proposed Acquisition would not dilute stockholders'
interests. In reaching this conclusion, the Board considered, among other
things, the Funds' similar investment objectives and investment policies,
expense benefits for stockholders of AWDGF expected to result from the
Acquisition, the investment performance and trading history of the Funds, the
costs of the Acquisition, and the tax-free nature of the Acquisition.

5. When will the Acquisition take place?

If the stockholders of AWDGF approve the Acquisition on December 12, 2006, the
Acquisition is expected to take place in the first quarter of 2007.

6. Where May I Find Additional Information Regarding the Funds?

Additional information about the Funds is available in the Statement of
Additional Information ("SAI") dated October 27, 2006 that has been filed with
the Securities and Exchange Commission ("SEC") in connection with this
Prospectus/Proxy Statement. The SAI and each Fund's Annual Report to
Stockholders, which contain audited financial statements for the Funds'
respective fiscal years, are incorporated by reference into this
Prospectus/Proxy Statement. In addition, the Semi-Annual Report for AWDGF for
the six months ended April 30, 2006 and the Annual Report for AWDGF II for the
12 months ended March 31, 2006 are also incorporated by reference into this
Prospectus/Proxy Statement. To request a copy of any of these documents, please
call AllianceBernstein Investments, Inc. at (800) 227-4618.

All of this information is filed with the SEC. You may view or obtain these
documents from the SEC:


                 
In person:          at the SEC's Public Reference Room in Washington, D.C.

By phone:           202-551-8090 (for information on the operations of the Public
                    Reference Room only)

By mail:            Public Reference Section, Securities and Exchange Commission,
                    Washington, DC 20549-0102 (duplicating fee required)

By electronic mail: publicinfo@sec.gov (duplicating fee required)

On the Internet:    www.sec.gov


The shares of the Funds are listed and publicly traded on the New York Stock
Exchange ("NYSE") under the following symbols: AWDGF - "AWG" and AWDGF II -
"AWF." Reports, proxy statements and other information concerning the Funds may
be inspected at the offices of the NYSE. Additional copies of the annual and
semi-annual reports, as well as the Prospectus/Proxy Statement and SAI, are
available upon request without charge by writing to or calling the address and
telephone number listed below.


                     
              By Mail:  AllianceBernstein Investor Services, Inc.
                        P.O. Box 786003
                        San Antonio, TX 78278-6003

              By Phone: For Information: (800) 221-5672
                        For Literature: (800) 227-4618


Other Important Things to Note:

    .  You may lose money by investing in the Fund.

    .  The SEC has not approved or disapproved these securities or passed upon
       the adequacy of this Prospectus/Proxy Statement. Any representation to
       the contrary is a criminal offense.

                                      5



                                   PROPOSAL
       APPROVAL OF AN AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION
               AMONG AWDGF II, AWDGF AND ALLIANCEBERNSTEIN L.P.

   On September 13, 2006, the Board of Directors of AWDGF declared advisable
and voted to approve the Plan and the Acquisition, subject to the approval of
the stockholders of AWDGF. The Plan provides for (i) the transfer of all of the
assets of AWDGF to AWDGF II, (ii) the assumption by AWDGF II of all of the
liabilities of AWDGF, (iii) the liquidating distribution to AWDGF stockholders
of shares of AWDGF II, equal in aggregate NAV to the NAV of their former AWDGF
shares and (iv) the dissolution of AWDGF.

   Each AWDGF stockholder will receive the number of full shares of AWDGF II,
plus fractional shares for stockholders that participate in a Dividend
Reinvestment and Cash Purchase Plan ("DRIP") and cash in lieu of any fractional
shares for non-DRIP participating stockholders, having an aggregate NAV that is
equal to the aggregate NAV of the stockholder's shares of AWDGF. Stockholders
of AWDGF will recognize no gain or loss, except with respect to any cash
received in lieu of fractional AWDGF II shares by non-DRIP participating
stockholders. If approved by stockholders of AWDGF, the Acquisition is expected
to occur in the first quarter of 2007.

   An exchange of AWDGF shares for AWDGF II shares at NAV may result in AWDGF
stockholders' receiving AWDGF II shares with an aggregate market value on the
date of exchange that is higher or lower than the market value of their shares
immediately prior to the exchange. The reason for this difference is that the
market price for shares of the Funds in relation to their NAVs may be
different, i.e., a Fund's shares may trade at different discounts or premiums
to its NAV.

   The stockholders of AWDGF must approve the Acquisition for it to occur.
Approval of the Acquisition requires the affirmative vote of the holders of a
majority of the votes entitled to be cast. The Acquisition does not require
approval of the stockholders of AWDGF II.

   A quorum for the transaction of business by stockholders of AWDGF at the
Meeting will consist of the presence in person or by proxy of the holders of a
majority of the shares of AWDGF entitled to vote at the Meeting.

   The Board of Directors of AWDGF concluded that participation by AWDGF in the
proposed Acquisition is in the best interests of AWDGF and its stockholders.
The Board also concluded that the proposed Acquisition would not dilute
stockholders' interests. In reaching this conclusion, the Board considered,
among other things, the similar investment strategies of the Funds, the expense
benefits for the stockholders expected to result from the Acquisition, the cost
thereof, and the tax-free nature of the Acquisition.

   For a more complete discussion of the factors considered by the Board in
approving the Acquisition, see "Reasons for the Acquisition" in Information
About the Proposed Transaction.

                                      6



                                    SUMMARY

   The following summary highlights differences between the Funds. This summary
is not complete and does not contain all of the information that you should
consider before voting on the Acquisition. For more complete information,
please read this entire document. Note that certain information is presented as
of March 31, 2006. At the September 13, 2006 Special Meeting of the Board of
Directors of AWDGF referred to below ("September 13 Special Meeting"), the
Adviser represented to the Board that, if the information was updated, it would
not differ in any material respect.

Comparison of Operating Expense Ratios

   AWDGF, because of its small asset size, has higher operating costs and
therefore a higher expense ratio. The Acquisition is expected to result in an
operating expense ratio, excluding interest expense, for the combined Fund that
is lower than the current expense ratio of AWDGF. The current and estimated
combined Fund expense ratios, before interest expense, as of March 31, 2006,
are set forth below:



                                                     Projected Total
                             Total Operating            Operating
                              Expense Ratio           Expense Ratio
                          (as of March 31, 2006)        Reduction
                          ----------------------     ---------------
                                               
            AWDGF                  1.36%                   .34%
            AWDGF II               1.03%                   .01%
            Combined Fund          1.02% (pro forma)        --


As the table indicates, the Acquisition would benefit AWDGF stockholders
through a sizeable reduction in expenses before interest expense. The Fee
Table, attached hereto as Appendix A, describes the fees and expenses of each
Fund as of March 31, 2006 and includes expenses for the combined Fund on a pro
forma basis assuming that the Acquisition is approved by stockholders of AWDGF.

Comparison of Investment Advisory Fees

   Since October 1, 2005, the advisory fee rates for each of AWDGF and AWDGF II
are identical. The advisory fee rates for the Funds are as follows:



                                          Advisory
                                          Fee Rates
                                          ---------
                                       
                            AWDGF            .90%
                            AWDGF II         .90%*
                            Combined Fund    .90%

--------
*  The effective advisory fee rate for AWDGF II, as of March 31, 2006, was
   .95%, which is a blended rate because prior to October 1, 2005, the Fund
   paid the Adviser an advisory fee at an annual rate of 1.00%.

Comparison of Investment Objectives and Policies

   The Funds' investment objectives and strategies are similar but AWDGF II has
a somewhat broader strategy that allows for investments of up to 20% of its
assets in corporate fixed-income securities. The following table shows the
Funds' investment objectives and certain principal investment strategies.



                            AWDGF                                    AWDGF II
           ---------------------------------------- -------------------------------------------
                                              
Investment AWDGF's investment objective is to seek  AWDGF II's primary investment ob-
Objective: high current income by investing ex-     jective is to seek high current income. Its
           clusively in fixed income securities de- secondary investment objective is capital
           nominated in U.S. dollars.               appreciation.


                                      7





                                         AWDGF                                       AWDGF II
                     --------------------------------------------- ---------------------------------------------
                                                             
Principal Investment . Under normal circumstances, the Fund        . The Fund invests, under normal circum-
Strategies:            invests at least 80% of its net assets in     stances, at least 80% of its total assets
                       U.S. dollar-denominated debt obliga-          in U.S. dollar-denominated debt secu-
                       tions issued or guaranteed by foreign         rities issued or guaranteed by foreign
                       governments and zero coupon obliga-           governments, including Sovereign
                       tions issued or guaranteed by the U.S.        Debt Obligations.
                       Government, its agencies or in-             . The Fund may invest up to 20% of its
                       strumentalities, including participation      total assets in U.S. corporate fixed in-
                       in loans between foreign governments          come securities.
                       and financial institutions, and interests   . Substantially all of the Fund's assets
                       in entities organized and operated for        are invested in high yield, high risk
                       the purpose of restructuring the              (i.e., below investment grade) debt
                       investment characteristics of instru-         securities.
                       ments issued or guaranteed by foreign
                       governments ("Sovereign Debt
                       Obligations").
                     . Under normal circumstances, the Fund
                       invests at least 75% of its total assets
                       in (i) Sovereign Debt Obligations and
                       (ii) Zero Coupon Obligations.
                     . Substantially all of the Fund's assets
                       are invested in high yield, high risk
                       (i.e., below investment grade) debt
                       securities.


   As the table above shows, each Fund invests a majority of its assets in
Sovereign Debt Obligations. In addition, the Funds are subject to similar
investment strategies and have the same portfolio management team. However, as
noted above, AWDGF II may invest up to 20% of its total assets in U.S.
corporate fixed income securities whereas AWDGF normally does not invest in
corporate fixed-income securities. A more detailed comparison of the investment
strategies and policies of the Funds is provided in Appendix B. You can find
additional information on the Funds in the SAI.

   At the Special Meeting of the Board of Directors of AWDGF II held on
September 13, 2006, the Board of Directors of AWDGF II approved a change in
AWDGF II's investment policies to allow it to invest in
non-U.S. Dollar-denominated debt securities as well as U.S. Dollar-denominated
debt securities. Under the policies approved by the Board, AWDGF II would also
be able to invest without limit in emerging market and developed market
government securities as well as in debt securities of U.S. and non-U.S.
corporate issuers. The Adviser expects that these broader guidelines will allow
the combined Fund access to broader investment opportunities over time. The
combined Fund will continue to invest a substantial portion of its assets in
high yield, below investment grade securities. In connection with these policy
changes, the Board approved a change in AWDGF II's name to AllianceBernstein
Global High Income Fund, Inc.

   The contemplated policy changes are dependent on AWDGF II's stockholders
approving the elimination of a fundamental policy that requires AWDGF II to
invest at least 65% of its assets in U.S. Dollar-denominated Sovereign Debt
Obligations. The 65% limitation policy would not permit the combined Fund to
invest, without limit, in non-U.S. Dollar-denominated debt securities. The
Acquisition is not contingent on AWDGF II's stockholders approving the
elimination of this fundamental policy. If the proposal is not approved by its
stockholders, AWDGF II's investment guidelines will be expanded only with
respect to 35% of its assets. The Board believes that AWDGF stockholders should
benefit over time from the broadened investment mandate of AWDGF II, regardless
of whether the elimination of the fundamental policy is approved by AWDGF II's
stockholders. However, AWDGF stockholders should recognize that AWDGF II's
broader investment universe, both now and as it is proposed to be further
broadened, involves greater risk than that of AWDGF.

                                      8



   In connection with the Acquisition, at the September 13 Special Meeting, the
Board of Directors of AWDGF approved adoption of a new policy, upon approval of
the Acquisition, that AWDGF may invest up to 20% of its net assets in corporate
fixed income securities, which include debt securities, convertible securities
and preferred stocks of corporate issuers. In addition to the adoption of that
policy, the Board of Directors also granted the Adviser the authority to
operate AWDGF pursuant to the same investment policies and restrictions that
govern AWDGF II. Each of the foregoing changes is subject to AWDGF stockholders
approving the Acquisition.

   The intent of these changes is to allow the repositioning of AWDGF's
portfolio to align it with the broader investment strategies of AWDGF II prior
to the effective date of the Acquisition. The costs of the portfolio
repositioning are expected to be approximately $75,000, or $0.01 per share.
Upon the recommendation of the Adviser, the Board determined that it would be
appropriate for AWDGF to pay the costs of the portfolio repositioning because
AWDGF's stockholders would derive the greatest benefits from the Acquisition.

Principal Risks

   Each Fund is subject to market risk, interest rate risk, foreign risk,
emerging markets risk, and currency risk. A description of each of these and
other risks is provided in Appendix C.

Federal Income Tax Consequences

   No gain or loss will be recognized by the AWDGF stockholders except with
respect to cash received in lieu of fractional shares of AWDGF II by non-DRIP
stockholders, as a result of the Acquisition. The aggregate tax basis of the
shares of AWDGF II received by a stockholder of AWDGF (including any fractional
shares to which the stockholder may be entitled) will be the same as the
aggregate tax basis of the stockholder's shares of AWDGF, decreased by any cash
received and increased by any gain recognized with respect to cash received in
lieu of fractional shares by non-DRIP stockholders. The holding period of the
shares of AWDGF II received by a stockholder of AWDGF (including any fractional
shares to which the stockholder may be entitled) will include the holding
period of the shares of AWDGF held by the stockholder, provided that such
shares are held as capital assets by the stockholder of AWDGF at the time of
the Acquisition. The holding period and tax basis of each asset of AWDGF in the
hands of AWDGF II as a result of the Acquisition will be the same as the
holding period and tax basis of each such asset in the hands of AWDGF prior to
the Acquisition. Any gain or loss realized by a stockholder of AWDGF upon
receipt of cash in lieu of fractional shares of AWDGF II by non-DRIP
stockholders will be recognized by the stockholder and measured by the
difference between the amount of cash received and the basis of the fractional
share and, provided that the AWDGF shares surrendered constitute capital assets
in the hands of the stockholder, will be capital gain or loss. This tax
information is based on the advice of Seward & Kissel LLP, counsel to each of
the Funds. It is a condition to the closing of the Acquisition that such advice
be confirmed in a written opinion of counsel. An opinion of counsel is not
binding on the Internal Revenue Service.

   AWDGF has realized capital gains and capital loss carryforwards, which would
partially offset these gains leaving no capital loss carryforwards that would
be transferred in the Acquisition. It is anticipated that AWDGF will make a
distribution of capital gains to stockholders prior to the closing of the
Acquisition.

   The per share amount of capital loss carryforwards of AWDGF II before the
Acquisition, as of March 31, 2006, was $1.15 per share and, after giving effect
to the Acquisition as if it occurred on such date, the per share amount of
capital loss carryforwards of the combined Fund will be $1.02 per share. The
decrease in per share amount is due to the spreading of losses remaining
available over the merged share base based on the estimated share conversion
ratio. AWDGF's stockholders would potentially benefit from the increased amount
of losses available, but, as a practical matter, we do not believe that this
will affect AWDGF's stockholders since we do not expect the redeployment of the
combined Fund's assets or its continuing investments to result in substantial
capital gains.

Service Providers

   The Funds have the same service providers, which will continue in their
capacity after the Acquisition.

                                      9



Comparison of Stockholder Services

   The stockholder services of each Fund are generally the same. The DRIP,
which is available to the Funds' stockholders, provides automatic reinvestment
of dividends and capital gain distributions in additional Fund shares. The DRIP
also allows stockholders to make optional cash investments in Fund shares
through a plan agent. Assuming the Acquisition is approved, the DRIP
stockholders of AWDGF will automatically be enrolled in the DRIP for AWDGF II.
A more detailed discussion of the DRIP and other stockholder services and
procedures is provided in Appendix D.

Comparison of Business Structures

   Each Fund is organized as a Maryland corporation and is governed by its
Charter, Bylaws and Maryland law. Generally, there are no significant
differences between the Funds in terms of their respective corporate
organizational structure. For more information on the comparison of the
business structure of the Funds, see Appendix D.

                                      10



                  INFORMATION ABOUT THE PROPOSED TRANSACTION

Introduction

   This Prospectus/Proxy Statement is provided to you to solicit your proxy for
exercise at the Meeting to approve the acquisition of the assets and assumption
of the liabilities of AWDGF by AWDGF II and the subsequent liquidation and
dissolution of AWDGF. The Meeting will be held at 1345 Avenue of the Americas,
41st Floor, New York, New York 10105 at 11:30 a.m., Eastern Time, on
December 12, 2006. This Prospectus/Proxy Statement, the accompanying Notice of
the Special Meeting of Stockholders and the enclosed proxy card are being
mailed to stockholders of AWDGF on or about October 27, 2006.

Description of the Plan

   As provided in the Plan, AWDGF II will acquire all the assets and assume all
the liabilities of AWDGF at the effective time of the Acquisition (the
"Effective Time"). In return, AWDGF II will issue, and AWDGF will distribute to
its stockholders, a number of full and fractional shares of AWDGF II (and cash
in lieu of fractional shares for non-DRIP stockholders), determined by dividing
the net value of all the assets of AWDGF by the NAV of one share of AWDGF II.
For this purpose, the Plan provides the times for and methods of determining
the net value of the assets of each Fund. The Plan provides that stockholders
of AWDGF will be credited with shares of AWDGF II (or cash in lieu of
fractional shares for non-DRIP stockholders) corresponding to the aggregate NAV
of the AWDGF's shares that the stockholder holds of record at the Effective
Time.

   Following the distribution of shares of AWDGF II in full liquidation of
AWDGF, AWDGF will wind up its affairs, and liquidate and dissolve as soon as is
reasonably practicable after the Acquisition. In the event the Acquisition does
not receive the required stockholder approval, AWDGF will continue its
operations and its Directors will consider what future action, if any, is
appropriate.

   The projected expenses of the Acquisition, largely those for legal,
accounting, printing and proxy solicitation expenses, are estimated to total
approximately $236,000, or $0.03 per share, and will be borne by AWDGF.

   The Acquisition is expected to occur in the first quarter of 2007. The
Acquisition is conditioned upon approval of the Plan by AWDGF stockholders and
AWDGF satisfying the terms of the Plan. Under applicable legal and regulatory
requirements, none of AWDGF's stockholders will be entitled to exercise
objecting stockholders' appraisal rights, i.e., to demand the fair value of
their shares in connection with the Acquisition. Therefore, stockholders will
be bound by the terms of the Acquisition under the Plan. However, any
stockholder of AWDGF may sell shares of the Fund's common stock on the NYSE
prior to the Acquisition. The shares of AWDGF may cease trading on the NYSE
beginning several days prior to the date of the Acquisition. Any cessation of
trading will be accomplished in compliance with NYSE rules, including issuance
of a press release.

   After the Acquisition, AWDGF's shares of common stock will be removed from
listing on the NYSE. In addition, AWDGF's shares of common stock will be
withdrawn from registration under the Securities Exchange Act of 1934 and AWDGF
will deregister as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act") and will dissolve under Maryland law.

   Completion of the Acquisition is subject to certain conditions set forth in
the Plan, some of which may be waived by a party to the Plan. The Plan may be
amended in any mutually agreed manner, except that no amendment may be made
subsequent to stockholder approval of the Acquisition that materially alters
the obligations of either party. The parties to the Plan may terminate the Plan
by mutual consent and either party has the right to terminate the Plan under
certain circumstances. Among other circumstances, either party may at any time
terminate the Plan unilaterally upon a determination by the party's Board of
Directors that proceeding with the Plan is not in the best interests of the
Fund or its stockholders.

   A copy of a form of the Plan is attached as Appendix E.

                                      11



Reasons for the Acquisition

   At the September 13 Special Meeting, the Adviser recommended that the Board
of Directors of AWDGF approve and recommend to the Fund's stockholders for
their approval the proposed Plan and the Acquisition. The Directors considered
the factors discussed below from the point of view of the interests of the Fund
and its stockholders. After careful consideration, the Board of Directors
(including all Directors who are not "interested persons" of the Fund, the
Adviser or its affiliates) determined that the Acquisition would be in the best
interests of the Fund's stockholders and that the interests of existing
stockholders of the Fund would not be diluted as a result of the Acquisition.
The Directors of AWDGF approved the Plan and the Acquisition and recommended
that the stockholders of AWDGF vote in favor of the Acquisition by approving
the Plan.

   The Adviser presented the following reasons in favor of the Acquisition:

  .   The Funds date back to 1992-93, when they were launched in close
      succession. AWDGF's current assets are, as of March 31, 2006, $129
      million. AWDGF II's current assets are, as of March 31, 2006, $984
      million. AWDGF II was modeled after AWDGF and has similar investment
      objectives, with a somewhat broader strategy that allows for investments
      in corporate fixed-income securities.

  .   The Adviser discussed with the Board that it believes that the
      Acquisition of AWDGF, which is a smaller fund with higher operating
      expenses, by its larger counterpart, AWDGF II, would benefit the Fund and
      its stockholders. AWDGF and AWDGF II have similar investment strategies
      of primarily investing in U.S. Dollar-denominated Sovereign Debt
      Obligations. The Adviser believes that AWDGF's stockholders would benefit
      from the somewhat broader strategy of AWDGF II because it may also invest
      in corporate securities. The Adviser believes that this benefit would be
      augmented by virtue of the policy changes that it recommended to, and
      were approved by, the Board, which would permit AWDGF II to also invest
      in non-U.S. Dollar-denominated debt securities.

  .   The Adviser discussed that, historically, there has been some disparity
      between the Funds' respective performances at NAV, with AWDGF II
      generally outperforming AWDGF. The Adviser believes that these
      disparities are primarily due to AWDGF II's ability to invest in
      corporate debt and its lower expenses. As of July 31, 2006, AWDGF II's
      cumulative return for year-to-date, and average annual total returns for
      1, 3, 5 and 10 years outperformed AWDGF's returns for the same periods.
      The five-year annualized return, for example, was .81% higher for AWDGF
      II. On a calendar year basis, AWDGF II outperformed AWDGF in seven of the
      last ten years.

   At the September 13 Special Meeting, the Directors (with the advice and
assistance of independent counsel) also considered, among other things:

  .   potential stockholder benefits including (i) the fact that total expenses
      before interest expense of the combined Fund would be significantly lower
      than the current expenses before interest expense of AWDGF and (ii) the
      potential for AWDGF's stockholders to benefit from increased earnings of
      the combined Fund due to the higher earnings of AWDGF II, and (iii) the
      redeployment of AWDGF's portfolio immediately prior to the Acquisition to
      take advantage of AWDGF II's ability to invest in corporate debt
      securities;

  .   the current asset levels of AWDGF and the combined pro forma asset levels
      of AWDGF II;

  .   the historical investment performance of the Funds, including the fact
      that AWDGF II's investment performance over time has been better than
      that of AWDGF;

  .   the similar investment objectives and principal investment strategies of
      the Funds, as well as the fact that AWDGF II may also invest in corporate
      fixed income securities and the proposed change to AWDGF II's fundamental
      and non-fundamental investment policies discussed above;

  .   the distribution and trading history of the two Funds, including the fact
      that the trading price of AWDGF II's common stock compared to its NAV
      has, over time and currently, been somewhat more favorable than that of
      AWDGF (trading price information for the two Funds is provided in
      Appendix G);

                                      12



  .   the amount and type of leverage used by the two Funds;

  .   the tender offer/repurchase policies of the two Funds, which are very
      similar; and

  .   the portfolio management team, which is the same for AWDGF and AWDGF II,
      and will continue to manage the combined portfolios after the Acquisition.

   The Directors also considered, among other things:

  .   the historical and pro forma tax attributes of AWDGF , including that
      AWDGF has realized gains and no loss carryforwards and that AWDGF II has
      sizeable capital loss carryforwards, although the availability of these
      capital loss carry forwards in the combined Fund may not be meaningful
      because it is not expected that the redeployment of the Fund's assets or
      its continuing investments would result in substantial capital gains;

  .   the form of the Plan and the terms and conditions of the Acquisition;

  .   the fact that the Funds have identical advisory fees;

  .   whether the Acquisition would result in the dilution of stockholders'
      interests;

  .   the number of stockholder accounts and average account sizes of the Funds;

  .   changes in service providers that would result from the Acquisition;

  .   the fact that realignment of the investment holdings of AWDGF before the
      effective date of the Acquisition is anticipated and associated costs
      would be borne by AWDGF;

  .   the benefits of the Acquisition to persons other than AWDGF and its
      stockholders, in particular, the Adviser, which will benefit from the
      elimination of monitoring and administering AWDGF, a relatively small
      fund that is duplicative of its substantially similar and larger
      counterpart, AWDGF II;

  .   the fact that AWDGF II will assume all the liabilities of AWDGF ;

  .   the expected federal income tax consequences of the Acquisition;

  .   whether the Acquisition would be preferable to acquisition by potential
      acquirers other than AWDGF II, including funds that are not sponsored by
      the Adviser;

  .   the fact that the costs of the Acquisition will be borne by AWDGF; and

  .   the fact that the Adviser has agreed to indemnify AWDGF II for a
      three-year period against any undisclosed or other liability of AWDGF, to
      reimburse AWDGF II for any costs in connection with investigating any
      such liability and to continue certain insurance coverage for AWDGF for a
      three-year period.

   Also at the September 13 Special Meeting, the Board of Directors of AWDGF II
(comprised of the same persons as the Board of AWDGF) approved the proposed
Plan. No vote of stockholders of AWDGF II is required in connection with the
Acquisition.

Description of Securities to be Issued

   Under the Plan, AWDGF II will issue additional shares of common stock for
distribution to AWDGF. Under its Charter and Bylaws, AWDGF II may issue up to
100,000,000 shares of common stock, par value $.01 per share. Each share of
AWDGF II represents an equal proportionate interest with other shares of the
Fund. Each share has equal earnings, assets and voting privileges and is
entitled to dividends and other distributions out of the income earned and gain
realized on the assets belonging to the Fund as authorized by the Board of
Directors. Shares of AWDGF II entitle their holders to one vote per full share
and fractional votes for fractional shares held. Shares of AWDGF II issued in
the Acquisition will be fully paid and non-assessable.

                                      13



Dividends and Other Distributions

   On or before the Closing Date, as defined in the Plan, AWDGF will, if
necessary, declare and pay as a distribution substantially all of its
undistributed net investment income, net short-term capital gain, net long-term
capital gain and net gains from foreign currency transactions, as applicable,
to maintain its treatment as a regulated investment company.

Surrender and Exchange of AWDGF Stock Certificates

   After the Plan's Effective Time, each holder of a certificate (or
certificates) formerly representing shares of AWDGF will be entitled to
receive, upon surrender of the certificate, a certificate representing the
number of AWDGF II shares distributable as a result of the Acquisition.
Promptly, after the Plan's Effective Time, Computershare Trust Company, N.A.
will mail to AWDGF's certificate holders instructions and a letter of
transmittal for use in surrendering the certificates. Please do not send share
certificates at this time. Although the certificates will be deemed for all
purposes to evidence ownership of the equivalent number of AWDGF II shares, no
dividends will be paid to holders of certificates of AWDGF until the holder
surrenders the certificates in accordance with the instructions and letter of
transmittal. Any dividends on AWDGF II shares payable after the Effective Time,
will be paid to the certificate holder, without interest, when that holder
surrenders an AWDGF share certificate for exchange.

   Each AWDGF stockholder will receive the number of full shares of AWDGF II,
plus fractional shares for stockholders that participate in a DRIP and cash in
lieu of any fractional shares for non-DRIP stockholders, having an aggregate
NAV that, on the effective date of the Acquisition, is equal to the aggregate
NAV of the stockholder's shares of AWDGF II. Stockholders of AWDGF will
recognize no gain or loss, except with respect to any cash received in lieu of
fractional AWDGF II shares by non-DRIP stockholders.

Federal Income Tax Consequences

   Subject to certain stated assumptions contained therein, the Funds will
receive an opinion of Seward & Kissel LLP, its counsel, substantially to the
following effect: (i) the Acquisition will constitute a "reorganization" within
the meaning of section 368(a) of the Code and that the Funds will each be "a
party to a reorganization" within the meaning of section 368(b) of the Code;
(ii) a stockholder of AWDGF will recognize no gain or loss on the exchange of
the stockholder's shares of AWDGF solely for shares of AWDGF II, except with
respect to cash received in lieu of a fractional share of AWDGF II by non-DRIP
stockholders in connection with the Acquisition; (iii) neither AWDGF nor AWDGF
II will recognize any gain or loss upon the transfer of all of the assets of
AWDGF to AWDGF II in exchange for shares of AWDGF II (plus cash in lieu of
certain fractional shares by non-DRIP stockholders) and the assumption by AWDGF
II of the liabilities of AWDGF pursuant to a Plan or upon the distribution of
shares of AWDGF II to stockholders of AWDGF (and cash to non-DRIP stockholders
for their fractional shares) in exchange for shares of AWDGF; (iv) the holding
period and tax basis of the assets of AWDGF acquired by AWDGF II will be the
same as the holding period and tax basis that AWDGF had in such assets
immediately prior to the Acquisition; (v) the aggregate tax basis of shares of
AWDGF II received in connection with the Acquisition by each stockholder of
AWDGF (including any fractional share to which the stockholder may be entitled)
will be the same as the aggregate tax basis of the shares of AWDGF surrendered
in exchange therefore, decreased by any cash received by non-DRIP stockholders
and increased by any gain recognized on the exchange; (vi) the holding period
of shares of AWDGF II received in connection with the Acquisition by each
stockholder of AWDGF (including any fractional share to which the stockholder
may be entitled) will include the holding period of the shares of AWDGF
surrendered in exchange therefor, provided that such AWDGF shares constitute
capital assets in the hands of the stockholder as of the Closing Date;
(vii) AWDGF II will succeed to the capital loss carryovers of AWDGF, if any,
under section 381 of the Code, but the use by AWDGF II of any such capital loss
carryovers (and of capital loss carryovers of AWDGF II) may be subject to
limitation under section 383 of the Code; and (viii) any gain or loss realized
by a non-DRIP stockholder of AWDGF upon the receipt of cash for a fractional
share of AWDGF II to which the stockholder is entitled will be recognized to
the stockholder and measured by the difference between the amount of cash
received and the basis of the fractional share and, provided that the AWDGF
shares surrendered constitute capital assets in the hands of

                                      14



the stockholder, will be capital gain or loss. This opinion of counsel will not
be binding on the Internal Revenue Service or a court and there is no assurance
that the Internal Revenue Service or a court will not take a view contrary to
those expressed in the opinion.

   Stockholders of AWDGF are encouraged to consult their tax advisers regarding
the effect, if any, of the Acquisition in light of their individual
circumstances. Because the foregoing only relates to the federal income tax
consequences of the Acquisition, those stockholders also are encouraged to
consult their tax advisers as to state and local tax consequences, if any, of
the Acquisition.

Capitalization Information

   For information on the existing and pro forma capitalization of the Funds,
see Appendix F.

Trading History and Share Price Data

   For information on the trading history and share price data for the Funds,
see Appendix G.

                          INFORMATION ABOUT THE FUNDS

   AWDGF and AWDGF II are each a non-diversified, closed-end management
investment company registered under the 1940 Act and organized as a Maryland
corporation in 1992 and 1993, respectively.

Management of the Funds

   The Board of Directors of each Fund directs the management of the business
and affairs of the Fund. Each Board of Directors approves all significant
agreements between the respective Fund and persons or companies furnishing
services to it, including a Fund's agreements with the Adviser and the Fund's
administrator, custodian and transfer and dividend disbursing agent. The
day-to-day operations of a Fund are delegated to its officers and the Fund's
Adviser, subject to the Fund's investment objective and policies and to general
supervision by the Fund's Board of Directors. Subsequent to the consummation of
the Acquisition, the directors and officers of AWDGF II will continue to serve
as the directors and officers of the combined Fund. Messrs. Paul J. DeNoon,
Fernando Grisales, Michael Mon, Douglas Peebles and Matthew Sheridan, members
of the Adviser's Global Fixed Income Emerging Market Investment Team, are
primarily responsible for day-to-day management of AWDGF's and AWDGF II's
portfolios. Mr. DeNoon is a Senior Vice President of the Adviser with which he
has been associated since prior to 2001. Mr. Grisales is an Assistant Vice
President of the Adviser with which he has been associated since October 2001.
Messrs. Mon and Sheridan are Vice Presidents of the Adviser with which they
have been associated since prior to 2001. Mr. Peebles is an Executive Vice
President of the Adviser with which he has been associated since prior to 2001.
Subsequent to the consummation of the Acquisition, Messrs. DeNoon, Grisales,
Mon, Peebles and Sheridan will continue to be primarily responsible for
day-to-day management of the combined Fund.

   The SAI provides additional information about the portfolio managers'
compensation, other accounts managed by the portfolio managers, and the
portfolio managers' ownership of securities in AWDGF II.

Advisory Agreement and Fees

   Each Fund's investment adviser is AllianceBernstein L.P., 1345 Avenue of the
Americas, New York, New York 10105. The Adviser is a leading international
investment adviser managing client accounts with assets as of June 30, 2006
totaling more than $625 billion (of which more than $88 billion represented the
assets of investment companies). As of June 30, 2006, the Adviser managed
retirement assets for many of the largest public and private employee benefit
plans (including 41 of the nations' FORTUNE 100 companies), for public employee
retirement funds in 37 states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide. The 45 registered
investment companies managed by the Adviser, comprising 126 separate investment
portfolios, currently have approximately 4.0 million stockholder accounts.

                                      15



   Under each Fund's advisory agreement with the Adviser (the "Advisory
Agreement"), the Adviser provides office space, investment advisory services,
and order placement facilities for the Fund and pays all compensation of
directors and officers of the Fund who are affiliated persons of the Adviser.
Under the Advisory Agreements of AWDGF and AWDGF II, each of the Funds pays the
Adviser an advisory fee at an annual rate of .90% of its average weekly net
assets. Prior to October 1, 2005, each of the Funds paid the Adviser an
advisory fee at an annual rate of 1.00% of its average weekly net assets. Such
fee is accrued daily and paid monthly.

   The Advisory Agreements by their terms continue in effect from year to year
if such continuance is specifically approved, at least annually, by a majority
vote of the directors of a Fund who neither are interested persons of the Fund
nor have any direct or indirect financial interest in the Advisory Agreement,
cast in person at a meeting called for the purpose of voting on such approval.
A discussion regarding the basis for the Board of Directors approving the
investment advisory contracts of AWDGF and AWDGF II is available in AWDGF's
Annual Report to Stockholders for AWDGF's fiscal year ended October 31, 2005
and AWDGF II's Semi-Annual Report for the six months ended September 30, 2005,
respectively.

   The Adviser is the subject of certain legal proceedings instituted by the
SEC and the Office of the New York Attorney General. A discussion of those
proceedings is presented in Appendix H.

Administrator

   Under administration agreements, the Adviser serves as administrator for
AWDGF and AWDGF II. Under the administration agreements, the Adviser performs
standard administration services for the Funds.

   Pursuant to an Administration Agreement, effective October 1, 2005, each of
AWDGF and AWDGF II pays the Adviser an administrative fee in the amount of
$106,000 and $107,000 per year, respectively, for its costs incurred for
providing administrative services, however that the reimbursement may not
exceed the prior fee of .15% of average weekly net assets. Prior to October 1,
2005, each of the Funds paid the Adviser an administration fee at an annual
rate of .15% of its average weekly net assets.

Other Service Providers

   AllianceBernstein Investor Services, Inc. ("ABIS"), an affiliate of the
Adviser, provides stockholder services for the Funds. The Funds compensate ABIS
for these services. The Bank of New York, One Wall Street, New York, NY 10286,
serves as custodian for AWDGF and AWDGF II. Computershare Trust Company N.A.
(formerly known as Equiserve Trust Company), P.O. Box 43010, Providence, RI
02940, serves as the Funds' transfer agent. The Bank of New York and
Computershare Trust Company will serve, respectively, as custodian and transfer
agent for the combined Fund. Ernst & Young LLP serves as the Funds' independent
registered public accounting firm.

                                      16



                              VOTING INFORMATION

   The Board of Directors of AWDGF has fixed the close of business on
October 13, 2006 as the Record Date for the determination of stockholders
entitled to notice of, and to vote at, the Meeting and at any adjournments
thereof. Appendix I to this Prospectus/Proxy Statement lists the total number
of AWDGF's shares outstanding as of August 15, 2006. It also identifies holders
of more than five percent of shares of each Fund, and contains information
about the executive officers and Directors of each Fund and their shareholdings
in each Fund.

   Those stockholders who hold shares directly and not through a broker or
nominee (that is, a stockholder of record) may authorize their proxies to cast
their votes by completing a proxy card and returning it by mail in the enclosed
postage-paid envelope as well as telephoning toll free 1-800-331-5817. Owners
of shares held through a broker or nominee (who is the stockholder of record
for those shares) should follow directions provided to the stockholder by the
broker or nominee to submit voting instructions. Instructions to be followed by
a stockholder of record to submit a proxy via telephone, including use of the
Control Number on the stockholder's proxy card, are designed to verify
stockholder identities, to allow stockholders to give voting instructions and
to confirm that stockholder instructions have been recorded properly.
Stockholders who authorize proxies by telephone should not also return a proxy
card. A stockholder of record may revoke that stockholder's proxy at any time
prior to exercise thereof by giving written notice to the Secretary of the
applicable Fund at 1345 Avenue of the Americas, New York, New York 10105, by
authorizing a later-dated proxy (either by signing and mailing another proxy
card or, by telephone as indicated above), or by personally attending and
voting at the Meeting.

   Properly executed proxies may be returned with instructions to abstain from
voting or to withhold authority to vote (an "abstention") or represent a broker
"non-vote" (which is a proxy from a broker or nominee indicating that the
broker or nominee has not received instructions from the beneficial owner or
other person entitled to vote shares on a particular matter with respect to
which the broker or nominee does not have the discretionary power to vote).
Approval of the Proposal requires the affirmative vote of the holders of a
majority of the votes entitled to be cast. Abstentions and broker non-votes
will be considered present for purposes of determining the existence of a
quorum for the transaction of business but will have the effect of a vote
against the Proposal.

   If any proposal, other than the Proposal, properly comes before the Meeting,
the shares represented by proxies will be voted on all such proposals in the
discretion of the person or persons voting the proxies. AWDGF has not received
notice of, and is not aware of, any other matter to be presented at the Meeting.

   A quorum for the transaction of business by stockholders of AWDGF at the
Meeting will consist of the presence in person or by proxy of the holders of a
majority of the shares of the Fund entitled to vote at the Meeting. In the
event that a quorum is not represented at the Meeting or, even if a quorum is
so present, in the event that sufficient votes in favor of the position
recommended by the Board of Directors on the Proposal are not timely received,
the Chairman of the Board of Directors may authorize, or the persons named as
proxies may propose and vote for, one or more adjournments of the Meeting with
no other notice than announcement at the Meeting, up to 120 days after the
Record Date, in order to permit further solicitation of proxies. Shares
represented by proxies indicating a vote against the Proposal will be voted
against adjournment.

   AWDGF has engaged The Altman Group, Inc. (the "Proxy Solicitor"), 60 East
42nd Street, Suite 405, New York, New York 10165 to assist in soliciting
proxies for the Meeting. The Proxy Solicitor will receive a fee of
approximately $14,000 from the Fund for its solicitation services, plus
reimbursement of out-of-pocket expenses.

                                 LEGAL MATTERS

   The validity of the shares offered hereby will be passed upon for AWDGF by
Seward & Kissel LLP. Seward & Kissel LLP will rely upon the opinion of Venable
LLP for certain matters relating to Maryland law.

                                      17



                                    EXPERTS

   The audited financial statements and financial highlights in the
Prospectus/Proxy Statement and the SAI have been included in reliance on the
report of Ernst & Young LLP, the independent registered public accounting firm
for the Funds, 5 Times Square, New York, NY 10036, given on its authority as
experts in auditing and accounting.

                             FINANCIAL HIGHLIGHTS

   Financial highlights information for the Funds is available at Appendix J.

                 THE DIRECTORS RECOMMEND THAT YOU VOTE FOR THE
 ACQUISITION OF THE ASSETS AND LIABILITIES OF ALLIANCE WORLD DOLLAR GOVERNMENT
         FUND, INC. BY ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
            AND THE DISSOLUTION OF ALLIANCE WORLD DOLLAR GOVERNMENT
                                  FUND, INC.

                                      18



                                  APPENDIX A

                                   FEE TABLE

   The purpose of the tables below is to assist an investor in understanding
the various costs and expenses that a stockholder bears directly and indirectly
from an investment in the Funds. The tables allow you to compare the sales
charges and expenses of each Fund as of March 31, 2006, and the estimates for
the pro forma combined Fund in its first year following the Acquisition.



                                                                                 AWDGF II
                                                               AWDGF AWDGF II   (pro forma)
                                                               ----- --------   -----------
                                                                       
Shareholder Transaction Expenses
   Sales Load (as a percentage of offering price)              None    None        None
   Dividend Reinvestment Plan Fees(a)                          None    None        None
Annual Expenses (as a percentage of net assets attributable to
  common shares)
   Management Fees                                              .90%    .90%        .90%
   Interest Payments on Borrowed Funds                          .09%    .08%        .08%
   Other Expenses                                               .46%    .13%        .12%(b)
Total Annual Expenses(c)                                       1.45%   1.11%       1.10%
Total Annual Expenses Net of Interest Payment on Borrowed
  Funds                                                        1.36%   1.03%(d)    1.02%

--------
(a)There are no charges with respect to shares issued directly by a Fund to
   satisfy the dividend reinvestment requirements. However, each participant
   will pay a pro-rata share of brokerage commissions incurred with respect to
   a Fund's dividend reinvestment plan agent's open market purchases of shares.
   In each case, the cost per share of shares purchased for each stockholder's
   account will be the average cost, including brokerage commissions, of any
   shares purchased in the open market plus the cost of any shares issued by a
   Fund.
(b)Based on estimated expenses.
(c)In connection with the Acquisition, there are certain other transaction
   expenses, largely those for legal, accounting, printing and proxy
   solicitation expenses, and costs associated with the repositioning of
   AWDGF's portfolio to align it with the investment strategies of AWDGF II
   prior to the effective date of the Acquisition. The Board of Directors of
   each Fund reviewed the fees and expenses that will be borne directly or
   indirectly by the Funds in connection with the Acquisition. After
   considering various alternatives for allocating these costs, the Board of
   Directors of AWDGF agreed that, in the event the Acquisition is approved and
   completed, the Acquisition and portfolio repositioning costs will be borne
   by AWDGF because it will derive significant benefits as a result of the
   Acquisition. The Fund would bear these costs even if the Acquisition is not
   approved by AWDGF stockholders. The table below summarizes each Fund's net
   assets at March 31, 2006, projected annual savings as a result of the
   Acquisition, allocation of the Acquisition and portfolio repositioning costs
   to AWDGF in dollars and percentages, an estimated pay-back period (in years)
   and the resulting effect on each Fund's NAV per share at March 31, 2006. The
   projected annual expense savings are generally not expected to be
   immediately realized. If an AWDGF stockholder sells his or her shares prior
   to the estimated pay-back period, then that stockholder may not realize any
   of the projected expense savings resulting from the reduced expense ratio of
   the combined Fund. The NAV per share of AWDGF will be reduced at the closing
   date of the Acquisition to reflect the allocation of the Acquisition and
   portfolio repositioning costs to AWDGF. The numbers presented in the table
   are estimates; actual results may differ.



                            Projected Acquisition and Portfolio   Estimated
                             Annual      Repositioning Costs    Payback Period Effect on NAV
                Net Assets   Savings    (Dollars/Percentage)      (In Years)     per Share
               ------------ --------- ------------------------- -------------- -------------
                                                                
AWDGF          $129,364,129 $439,838         311,000/100%            0.71          .035
AWDGF II        983,787,664   98,379                 0/0%
Total Expenses                               311,000/100%


(d)Assumes that the current lower advisory fee and the conversion of the
   administrative fee from a fixed fee to a reimbursement of expenses subject
   to a 0.15% cap were in effect for a full year.

                                      19



EXAMPLE

   You would pay the following on a $1,000 investment assuming a 5% annual
return. The Example assumes the reinvestment of all dividends and distributions
at net asset value and reflects all recurring and nonrecurring fees.



                                                  AWDGF II
                                  AWDGF AWDGF II (pro forma)
                                  ----- -------- -----------
                                        
                   After 1 Year   $ 15    $ 11      $ 11
                   After 3 Years  $ 46    $ 35      $ 35
                   After 5 Years  $ 79    $ 61      $ 61
                   After 10 Years $174    $135      $134


   The projected post-Acquisition pro forma Annual Fund Expenses and Example
presented above are based upon numerous material assumptions, including that
(1) the current contractual agreements will remain in place and (2) certain
fixed costs involved in operating the AWDGF are eliminated. Although these
projections represent good faith estimates, there can be no assurance that any
particular level of expenses or expense savings will be achieved, because
expenses depend on a variety of factors, including the future level of fund
assets, many of which are beyond the control of AWDGF II or the Adviser.
Consequently, the Example should not be considered a representation of future
expenses. Actual expenses may be greater or less than those shown.

                                      20



                                  APPENDIX B

               COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES


                                                                   
                                           Investment Objective

                        AWDGF                          AWDGF II                      Differences
           ------------------------------- -------------------------------- ------------------------------

Investment The Fund's investment ob-       The Fund's primary invest-       As a practical matter, the
Objective  jective is to seek high current ment objective is to seek high   Funds' primary investment
           income by investing ex-         current income. Its secondary    objectives are identical.
           clusively in fixed income       investment objective is capital
           securities denominated in       appreciation. (F)
           U.S. dollars. (F)

                                          Investment Policies/1/


Status     The Fund is non-diversified.    The Fund is                      None.
                                           non-diversified.

Investment The Fund will invest, under     The Fund will normally invest    As a practical matter, the
Policies   normal circumstances, at least  at least 80% of its total assets Funds' investment policies
           80% of its net assets in U.S.   in U.S. dollar-denominated       are substantially the same
           dollar denominated debt obli-   debt securities issued or guar-  because both Funds invest
           gations issued or guaranteed    anteed by foreign govern-        primarily in Sovereign Debt
           by foreign governments and      ments, including                 Obligations, with the ex-
           zero coupon obligations is-     participations in loans be-      ception that AWDGF II may
           sued or guaranteed by the       tween foreign governments        also invest in corporate fixed
           U.S. Government, its agencies   and financial institutions and   income securities.
           or instrumentalities.           interests in entities organized
                                           and operated for the purpose
           Under normal circumstances,     of restructuring the invest-
           the Fund invests at least 75%   ment characteristics of
           of its total assets in a        instruments issued or guaran-
           combination of (i) U.S.         teed by foreign governments
           dollar-denominated debt         ("Sovereign Debt
           obligations issued or guaran-   Obligations"). The balance of
           teed by foreign governments,    the Fund's investment portfo-
           including participations in     lio, up to 20% of its total as-
           loans between foreign           sets, may be invested in U.S.
           governments and financial       corporate fixed income secu-
           institutions, and interests in  rities.
           entities organized and oper-
           ated for the purpose of re-     The Fund will invest at least
           structuring the investment      65% of its total assets in Sov-
           characteristics of instruments  ereign Debt Obligations. (F)
           issued or guaranteed by for-
           eign governments ("Sovereign    The Fund will emphasize in-
           Debt Obligations") and (ii)     vestments in the Sovereign
           zero coupon obligations is-     Debt Obligations of countries
           sued or guaranteed by the       that are considered emerging
           U.S. government, its agencies   market countries at the time
           or instrumentalities ("Zero     of purchase.
           Coupon Obligations"). (F)

           The Fund invests substantially
           all of its assets in Sovereign
           Debt Obligations and Zero
           Coupon Obligations.

--------
/1/  Policies with the notation "F" are fundamental policies, which means that
     they may not be changed without a stockholder vote.

                                      21





                             AWDGF                         AWDGF II                    Differences
                ------------------------------- ------------------------------- --------------------------
                                                                       

Securities of   The Fund will not invest 25%    The Fund will not invest 25%    As a practical matter, the
Any One         or more of its total assets in  or more of its total assets in  Funds' investment policies
Country         the Sovereign Debt Obliga-      the Sovereign Debt Obliga-      are identical.
                tions of any one country.       tions of any one of Argentina,
                                                Brazil, Mexico, Morocco, the
                                                Philippines, Russia or Ven-
                                                ezuela (or of any other single
                                                foreign country), and the Fund
                                                does not expect to invest more
                                                than 5% of its total assets in
                                                the Sovereign Debt Obliga-
                                                tions of any other single for-
                                                eign country.

High Yield      Substantially all of the        Substantially all of the Fund's In practice, the Funds'
Debt Securities Fund's assets may be in-        investments in Sovereign        investment policies are
                vested in high yield, high risk Debt Obligations and U.S.       identical.
                debt securities that are low-   corporate fixed income secu-
                rated (i.e., below investment   rities will be in high yield,
                grade) or unrated and in both   high risk debt securities that
                cases that are considered to    are low-rated (i.e., below in-
                be predominantly speculative    vestment grade) or unrated
                as regards the issuer's ca-     and in both cases that are
                pacity to pay interest and      considered to be predom-
                repay principal.                inantly speculative as regards
                                                the issuer's capacity to pay
                                                interest and repay principal.

Structured      The Fund may invest up to       The Fund may invest up to       None.
Securities      25% of its total assets in      25% of its total assets in
                interests in entities organized interests in entities organized
                and operated solely for the     and operated solely for the
                purpose of restructuring the    purpose of restructuring the
                investment characteristics of   investment characteristics of
                Sovereign Debt Obligations.     Sovereign Debt Obligations.


                                      22





                            AWDGF                           AWDGF II                       Differences
               -------------------------------- -------------------------------- -------------------------------
                                                                        

Loan           The Fund may invest in fixed     The Fund may invest in fixed     The Funds' investment poli-
Participations and floating rate loans          and floating rate loans          cies are essentially identical.
and            ("Loans") arranged through       ("Loans") arranged through
Assignments    private negotiations between     private negotiations between
               an issuer of Sovereign Debt      an issuer of Sovereign Debt
               Obligations and one or more      Obligations and one or more
               financial institutions           financial institutions
               ("Lenders"). The Fund's in-      ("Lenders"). The Fund's in-
               vestments in Loans are ex-       vestments in Loans are ex-
               pected in most instances to be   pected in most instances to be
               in the form of participations    in the form of participations
               in Loans ("Participations")      in Loans ("Participations")
               and assignments of all or a      and assignments of all or a
               portion of Loans                 portion of Loans
               ("Assignments") from third       ("Assignments") from third
               parties. The Fund may invest     parties. The Fund may invest
               up to 25% of its total assets    up to 25% of its total assets
               in Participations and            in Participations and
               Assignments. The govern-         Assignments. The govern-
               ment that is the borrower on     ment that is the borrower on
               the Loan will be considered      the Loan will be considered
               by the Fund to be the issuer     by the Fund to be the issuer
               of a Participation or Assign-    of a Participation or Assign-
               ment for purposes of the         ment for purposes of the
               Fund's fundamental invest-       Fund's fundamental invest-
               ment policy that it will not     ment policy that it will not
               invest 25% or more of its to-    invest 25% or more of its to-
               tal assets in securities of is-  tal assets in securities of is-
               suers conducting their           suers conducting their
               principal business activities    principal business activities
               in the same industry (for this   in the same industry (i.e.,
               purpose, each foreign            foreign government).
               government is treated as a
               separate industry).

Concentration  The Fund will not invest 25%     The Fund will not invest 25%     None.
               or more of its total assets      or more of its total assets
               (valued at the time of           (valued at the time of
               investment) in securities of     investment) in securities of
               issuers conducting their prin-   issuers conducting their prin-
               cipal business activities in the cipal business activities in the
               same industry, except that       same industry, except that
               this restriction does not apply  this restriction does not apply
               to U.S. Government Secu-         to U.S. Government Secu-
               rities. (F)                      rities. (F)


                                      23





                           AWDGF                          AWDGF II                    Differences
              ------------------------------- -------------------------------- --------------------------
                                                                      

Loans         The Fund will not make loans    The Fund will not make loans     None.
              except through (i) the pur-     except through (i) the pur-
              chase of debt obligations in    chase of debt obligations in
              accordance with its invest-     accordance with its invest-
              ment objective and policies;    ment objective and policies;
              (ii) the lending of portfolio   (ii) the lending of portfolio
              securities; or (iii) the use of securities; or (iii) the use of
              repurchase agreements. (F)      repurchase agreements. (F)

Borrowing and The Fund may not borrow         The Fund may not borrow          As a practical matter, the
Senior        money or issue senior secu-     money or issue senior secu-      Funds' investment policies
Securities    rities, except that the Fund    rities, except that (a) the      are the same.
              may borrow from a bank or       Fund may borrow from a
              other entity in a privately ar- bank or other entity in a pri-
              ranged transaction for (i) the  vately arranged transaction
              repurchase and/or tenders for   for (i) the repurchase and/or
              its shares or to pay dividends  tenders for its shares or to
              for purposes of complying       pay dividends for purposes of
              with the Internal Revenue       complying with the Internal
              Code of 1986, as amended, if    Revenue Code of 1986, as
              after such borrowing there is   amended, if after such bor-
              asset coverage of at least      rowing there is asset cover-
              300% as defined in the 1940     age of at least 300% as
              Act and (ii) temporary pur-     defined in the 1940 Act and
              poses in an amount not ex-      (ii) temporary purposes in an
              ceeding 5% of the value of      amount not exceeding 5% of
              the total assets of the         the value of the total assets of
              Fund. (F)                       the Fund ; (b) the Fund may
                                              enter into reverse repurchase
                                              agreements and dollar rolls;
                                              and (c) the Fund may write
                                              put and call options. (F)


                                      24





                        AWDGF                           AWDGF II             Differences
           -------------------------------- -------------------------------- -----------
                                                                    

Borrowings The Fund may borrow from a       The Fund may borrow from a          None.
           bank or other entity in a pri-   bank or other entity in a pri-
           vately arranged transaction to   vately arranged transaction to
           the maximum extent permit-       the maximum extent permit-
           ted under the 1940 Act, but      ted under the 1940 Act, but
           only in order to finance the     only in order to finance the
           repurchase and/or tenders of     repurchase and/or tenders of
           its shares or to pay dis-        its shares or to pay dis-
           tributions for purposes of       tributions for purposes of
           complying with the Code.         complying with the Code.
           The 1940 Act requires the        The 1940 Act requires the
           Fund to maintain "asset          Fund to maintain "asset
           coverage" of not less than       coverage" of not less than
           300% of its "senior securities   300% of its "senior securities
           representing indebtedness" as    representing indebtedness" as
           those terms are defined and      those terms are defined and
           used in the 1940 Act. In addi-   used in the 1940 Act. In addi-
           tion, the Fund may not pay       tion, the Fund may not pay
           any cash dividend or make        any cash dividend or make
           any cash distribution to         any cash distribution to
           stockholders if, after the       stockholders if, after the
           dividend or distribution, there  dividend or distribution, there
           would be less than 300% as-      would be less than 300% as-
           set coverage of a senior secu-   set coverage of a senior secu-
           rity representing                rity representing
           indebtedness for borrowings      indebtedness for borrowings
           (excluding for this purpose      (excluding for this purpose
           certain evidences of             certain evidences of
           indebtedness made to a bank      indebtedness made to a bank
           or other entity and privately    or other entity and privately
           arranged, and not intended to    arranged, and not intended to
           be publicly distributed).        be publicly distributed).
           The Fund may also borrow         The Fund may also borrow
           for temporary purposes in an     for temporary purposes in an
           amount not exceeding 5% of       amount not exceeding 5% of
           the value of the total assets of the value of the total assets of
           the Fund. Such borrowings        the Fund. Such borrowings
           are not subject to the asset     are not subject to the asset
           coverage restrictions set forth  coverage restrictions set forth
           in the preceding paragraph.      in the preceding paragraph.


                                      25





                          AWDGF                         AWDGF II                      Differences
             ------------------------------- ------------------------------- ------------------------------
                                                                    

Money Market The Fund may also at any        The Fund may also at any        As a practical matter, the
Instruments  time temporarily invest funds   time, with respect to up to     Funds' investment policies
             awaiting reinvestment or held   20% of its total assets,        are the same.
             for reserves for dividends and  temporarily invest funds
             other distributions to stock-   awaiting reinvestment or held
             holders in such U.S. dollar-    for reserves for dividends and
             denominated money market        other distributions to stock-
             instruments.                    holders in such U.S. dollar-
                                             denominated money market
                                             instruments.

Zero Coupon  The Zero Coupon Obliga-                                         AWDGF II does not have an
Obligations  tions in which the Fund may                                     investment policy to invest in
             invest include Treasury bills                                   zero coupon obligations.
             and the principal components
             of U.S. Treasury bonds, U.S.
             Treasury notes and obliga-
             tions of U.S. government
             agencies or instrumentalities.

Options      The Fund may write covered      Same.                           None.
             put and call options and pur-
             chase put and call options
             that are traded on U.S. and
             foreign securities exchanges
             and over-the-counter, includ-
             ing options on market in-
             dices. The Fund may also
             write call options for cross-
             hedging purposes. There are
             no specific limitations on the
             Fund's writing and purchas-
             ing of options.

Warrants     The Fund may invest in war-     The Fund may invest in war-     None.
             rants, which are securities     rants, which are securities
             permitting, but not obligat-    permitting, but not obligat-
             ing, their holder to subscribe  ing, their holder to subscribe
             for other securities. The Fund  for other securities. The Fund
             may invest in warrants for      may invest in warrants for
             debt securities or warrants for debt securities or warrants for
             equity securities that are ac-  equity securities that are ac-
             quired as units with debt in-   quired as units with debt in-
             struments.                      struments.


                                      26





                           AWDGF                          AWDGF II             Differences
              ------------------------------- -------------------------------- -----------
                                                                      

Illiquid      The Fund may invest up to       The Fund may invest up to           None.
Securities    50% of its total assets in      50% of its total assets in secu-
              securities that are not readily rities that are not readily mar-
              marketable. These securities    ketable. These securities
              include, among others, (i)      include, among others, (i) di-
              direct placements or other      rect placements or other secu-
              securities that are subject to  rities which are subject to
              legal or contractual re-        legal or contractual re-
              strictions on resale or for     strictions on resale or for
              which there is no readily       which there is no readily
              available market (e.g., trad-   available market (e.g., trading
              ing in the security is sus-     in the security is suspended
              pended or, in the case of       or, in the case of unlisted
              unlisted securities, market     securities, market makers do
              makers do not exist or will     not exist or will not entertain
              not entertain bids or offers),  bids or offers), and (ii) re-
              and (ii) repurchase agree-      purchase agreements not
              ments not terminable within     terminable within seven days.
              seven days. Securities eligi-   Securities eligible for resale
              ble for resale under Rule       under Rule 144A under the
              144A under the Securities       Securities Act, that have legal
              Act, that have legal or con-    or contractual restrictions on
              tractual restrictions on resale resale but have a readily
              but have a readily available    available market, are not
              market, are not deemed secu-    deemed securities not readily
              rities not readily marketable   marketable for purposes of
              for purposes of this limi-      this limitation.
              tation.

Interest Rate The Fund may enter into inter-  The Fund may enter into inter-      None.
Transactions  est rate swaps and may pur-     est rate swaps and may pur-
              chase or sell (i.e., write)     chase or sell (i.e., write)
              interest rate caps and floors.  interest rate caps and floors.
              The Fund expects to enter       The Fund expects to enter
              into these transactions         into these transactions
              primarily to preserve a return  primarily to preserve a return
              or spread on a particular in-   or spread on a particular in-
              vestment or portion of its      vestment or portion of its
              portfolio. The Fund may also    portfolio. The Fund may also
              enter into these transactions   enter into these transactions
              to protect against any in-      to protect against any in-
              crease in the price of secu-    crease in the price of secu-
              rities the Fund anticipates     rities the Fund anticipates
              purchasing at a later date.     purchasing at a later date.
              The Fund does not intend to     The Fund does not intend to
              use these transactions in a     use these transactions in a
              speculative manner.             speculative manner.


                                      27





                         AWDGF                           AWDGF II             Differences
            -------------------------------- -------------------------------- -----------
                                                                     

Forward     The Fund may enter into          The Fund may enter into             None.
Commitments forward commitments for the      forward commitments for the
            purchase or sale of securities.  purchase or sale of securities.
            Such transactions may in-        Such transactions may in-
            clude purchases on a "when-      clude purchases on a "when-
            issued" basis or purchases or    issued" basis or purchases or
            sales on a "delayed delivery"    sales on a "delayed delivery"
            basis. In some cases, a for-     basis. In some cases, a for-
            ward commitment may be           ward commitment may be
            conditioned upon the occur-      conditioned upon the occur-
            rence of a subsequent event,     rence of a subsequent event,
            such as approval and con-        such as approval and con-
            summation of a debt re-          summation of a debt re-
            structuring (i.e., a "when, as   structuring (i.e., a "when, as
            and if issued" trade).           and if issued" trade).

Loans of    The Fund may make secured        The Fund may make secured           None.
Portfolio   loans of its portfolio secu-     loans of its portfolio secu-
Securities  rities to entities with which it rities to entities with which it
            can enter into repurchase        can enter into repurchase
            agreements, provided that        agreements, provided that
            cash and/or U.S. Government      cash and/or U.S. Government
            Securities equal to at least     Securities equal to at least
            100% of the market value of      100% of the market value of
            the securities loaned are de-    the securities loaned are de-
            posited and maintained by        posited and maintained by
            the borrower with the Fund.      the borrower with the Fund.
            The Fund does not lend port-     The Fund will not lend portfo-
            folio securities in excess of    lio securities in excess of
            30% of the value of its total    30% of the value of its total
            assets, nor lend its portfolio   assets, nor lend its portfolio
            securities to any officer,       securities to any officer,
            director, employee or affiliate  director, employee or affiliate
            of the Fund or Alliance.         of the Fund or the Adviser.


                                      28





                         AWDGF                           AWDGF II              Differences
           --------------------------------- --------------------------------- -----------
                                                                      

Repurchase The Fund may enter into re-       The Fund may enter into re-          None.
Agreements purchase agreements pertain-      purchase agreements pertain-
           ing to the types of securities in ing to the types of securities in
           which it invests with member      which it invests with member
           banks of the Federal Reserve      banks of the Federal Reserve
           System or "primary dealers"       System or "primary dealers"
           (as designated by the Federal     (as designated by the Federal
           Reserve Bank of New York)         Reserve Bank of New York)
           in securities in which the        in securities in which the
           Fund may invest. The Fund         Fund may invest. The Fund
           may enter into repurchase         may enter into repurchase
           agreements with respect to up     agreements with respect to up
           to 35% of its total assets. The   to 35% of its total assets. The
           Fund currently enters into        Fund currently enters into
           repurchase agreements only        repurchase agreements only
           with its custodian and such       with its custodian and such
           primary dealers.                  primary dealers.

Reverse    The Fund may also use re-         The Fund may also use re-            None.
Repurchase verse repurchase agreements       verse repurchase agreements
Agreements and dollar rolls as part of its   and dollar rolls as part of its
and Dollar investment strategy.              investment strategy.
Rolls

Standby    The Fund may from time to         The Fund may from time to            None.
Commitment time enter into standby           time enter into standby
Agreements commitment agreements.            commitment agreements.
           The Fund enters into such         The Fund will enter into such
           agreements only for the pur-      agreements only for the pur-
           pose of investing in the secu-    pose of investing in the secu-
           rity underlying the               rity underlying the
           commitment at a yield and         commitment at a yield and
           price that are considered ad-     price that are considered ad-
           vantageous to the Fund and        vantageous to the Fund and
           that are unavailable on a firm    that are unavailable on a firm
           commitment basis. The Fund        commitment basis. The Fund
           will not enter into a standby     will not enter into a standby
           commitment with a remain-         commitment with a remain-
           ing term in excess of 45 days     ing term in excess of 45 days
           and will limit its investment     and will limit its investment
           in such commitments so that       in such commitments so that
           the aggregate purchase price      the aggregate purchase price
           of the securities subject to the  of the securities subject to the
           commitments, together with        commitments, together with
           the value of portfolio secu-      the value of portfolio secu-
           rities that are not readily       rities that are not readily
           marketable, will not exceed       marketable, will not exceed
           50% of its assets taken at the    50% of its assets taken at the
           time of acquisition of such       time of acquisition of such
           commitment of security.           commitment of security.


                                      29





                          AWDGF                           AWDGF II                   Differences
             -------------------------------- -------------------------------- -----------------------
                                                                      

Pledge,      The Fund may not pledge,         The Fund may not pledge,         None.
Hypothecate, hypothecate, mortgage or         hypothecate, mortgage or
Mortgage or  otherwise encumber its as-       otherwise encumber its as-
Encumber     sets, except to secure permit-   sets, except to secure permit-
Assets       ted borrowings. (F)              ted borrowings. (F)

Investments  The Fund may not invest in       The Fund may not invest in       None.
for Control  companies for the purpose of     companies for the purpose of
             exercising control. (F)          exercising control. (F)

Short Sales  The Fund may not make            The Fund may not make            None.
             short sales of securities or     short sales of securities or
             maintain a short position,       maintain a short position,
             unless at all times when a       unless at all times when a
             short position is open it owns   short position is open it owns
             an equal amount of such          an equal amount of such
             securities or securities con-    securities or securities con-
             vertible into or exchangeable    vertible into or exchangeable
             for, without payment of any      for, without payment of any
             further consideration, secu-     further consideration, secu-
             rities of the same issue as,     rities of the same issue as,
             and equal in amount to, the      and equal in amount to, the
             securities sold short ("short    securities sold short ("short
             sales against the box"), and     sales against the box"), and
             unless not more than 10% of      unless not more than 10% of
             the Fund's net assets (taken     the Fund's net assets (taken
             at market value) is held as      at market value) is held as
             collateral for such sales at     collateral for such sales at
             any one time (it being the       any one time (it being the
             Fund's present intention to      Fund's present intention to
             make such sales only for the     make such sales only for the
             purpose of deferring realiza-    purpose of deferring realiza-
             tion of gain or loss for federal tion of gain or loss for federal
             income tax purposes). (F)        income tax purposes). (F)

Real Estate  The Fund may not purchase        The Fund may not purchase        In practice, the Funds'
             or sell real estate, except that or sell real estate, except that investment policies are
             it may purchase and sell         it may purchase and sell         identical.
             securities of companies          securities of companies
             which deal in real estate or     which deal in real estate or
             interests therein and secu-      interests therein and secu-
             rities that are secured by real  rities that are secured by real
             estate, provided such secu-      estate, provided such secu-
             rities are Sovereign Debt        rities are securities of the
             Obligations. (F)                 type in which the Fund may
                                              invest. (F)


                                      30





                          AWDGF                         AWDGF II                    Differences
             ------------------------------- ------------------------------- --------------------------
                                                                    

Oil, Gas and The Fund may not invest in      The Fund may not invest in      None.
Minerals     interests in oil, gas, or other interests in oil, gas, or other
             mineral exploration or devel-   mineral exploration or
             opment programs. (F)            development programs. (F)

Margin       The Fund may not purchase       The Fund may not purchase       None.
             securities on margin, except    securities on margin, except
             for such short-term credits as  for such short-term credits as
             may be necessary for the        may be necessary for the
             clearance of transactions. (F)  clearance of transactions. (F)

Underwriting The Fund may not act as an      The Fund will not act as an     As a practical matter, the
Securities   underwriter of securities,      underwriter of securities,      Fund's investment policies
             except that the Fund may        except that the Fund may        are identical.
             acquire restricted securities   acquire restricted securities
             under circumstances in          under circumstances in
             which, if such securities were  which, if such securities were
             sold, the Fund might be         sold, the Fund might be
             deemed to be an underwriter     deemed to be an underwriter
             for purposes of the Securities  for purposes of the Securities
             Act. (F)                        Act.

Commodities  The Fund will not purchase      The Fund may not purchase       As a practical matter, the
             or sell commodities or com-     or sell commodities or com-     Funds' investment policies
             modity contracts.               modity contracts, including     are identical.
                                             futures contracts (except
                                             forward commitment con-
                                             tracts or contracts for the fu-
                                             ture acquisition or delivery of
                                             debt securities). (F)

Portfolio    The Fund may engage in ac-      The Fund is actively man-       As a practical matter, the
Turnover     tive short-term trading to      aged and, in some cases in      Funds' investment policies
             benefit from yield disparities  response to market con-         are identical.
             among different issues of       ditions, the Fund's portfolio
             securities, to seek short-term  turnover may exceed 100%.
             profits during periods of fluc-
             tuating interest rates or for
             other reasons. Such trading
             will increase the Fund's rate
             of turnover and the incidence
             of short-term capital gain
             taxable as ordinary income.
             Alliance anticipates that the
             annual turnover in the Fund
             will not be in excess of 500%
             (excluding turnover of secu-
             rities having a maturity of
             one year or less).


                                      31





                           AWDGF                          AWDGF II                      Differences
               ------------------------------ --------------------------------- ---------------------------
                                                                       

Investments in In accordance with the 1940    The Fund may invest in other      The Funds' investment poli-
Other          Act, the Fund may invest up    investment companies whose        cies are identical.
Investment     to 10% of its total assets in  investment objectives and
Companies      securities of other investment policies are consistent with
               companies. In addition, under  those of the Fund. In accord-
               the 1940 Act the Fund may      ance with the 1940 Act, the
               not own more than 3% of the    Fund may invest up to 10%
               total outstanding voting stock of its total assets in securities
               of any investment company      of other investment compa-
               and not more than 5% of the    nies. In addition, under the
               value of the Fund's total as-  1940 Act the Fund may not
               sets may be invested in the    own more than 3% of the to-
               securities of any investment   tal outstanding voting stock
               company.                       of any investment company
                                              and not more than 5% of the
                                              value of the Fund's total as-
                                              sets may be invested in the
                                              securities of any investment
                                              company.


                                      32



                                  APPENDIX C

                  DESCRIPTION OF PRINCIPAL RISKS OF THE FUNDS

   Among the principal risks of investing in a Fund are market risk, interest
rate risk, credit risk, leverage risk, foreign (non-U.S.) risk, emerging market
risk, currency risk, derivatives risk, liquidity risk and management risk. Each
of these risks is more fully described below. Each Fund could become subject to
additional risks because the types of investments made by each Fund can change
over time.


                       
Market Risk and           This is the risk that the value of a Fund's investments will fluctuate as the
Net Asset Value of Shares stock or bond markets fluctuate and that prices overall will decline over
                          shorter- or longer-term periods. Shares of common stock of closed-end
                          investment companies, such as the Funds, frequently trade at a discount
                          to their NAVs. Whether an investor will realize gains or losses upon the
                          sale of shares of a Fund does not depend directly upon changes in the
                          Fund's NAV, but rather upon whether the market price of the shares at
                          the time of sale is above or below the investor's purchase price for the
                          shares. The market price of the shares of each Fund is determined by
                          such factors as relative demand for and supply of the shares in the mar-
                          ket, general market and economic conditions, changes in the Fund's
                          NAV and other factors beyond the control of the Fund. This market risk
                          is separate and distinct from the risk that each Fund's NAV may de-
                          crease.

Interest Rate Risk        Changes in interest rates will affect the yield and value of a Fund's
                          investments in fixed-income securities. When interest rates rise, the value
                          of a Fund's investments tends to fall and this decrease in value may not
                          be offset by higher interest income from new investments. Interest rate
                          risk is generally greater for Funds that invest in fixed-income securities
                          with longer maturities or durations.

Credit Risk               This is the risk that the issuer or the guarantor of a fixed-income security,
                          or the counterparty to a derivatives or other contract, will be unable or
                          unwilling to make timely payments of interest or principal, or to other-
                          wise honor its obligations. The issuer or guarantor may default causing a
                          loss of the full principal amount of a security and any accrued interest.
                          The degree of risk for a particular security may be reflected in its credit
                          rating. Investments in fixed-income securities with lower ratings tend to
                          have a higher probability that an issuer will default or fail to meet its
                          payment obligations.

Leverage Risk             When a Fund borrows money or otherwise leverages its portfolio, it may
                          be volatile because leverage tends to ex-aggregate the effect of any in-
                          crease or decrease in the value of a Fund's investments. A Fund may cre-
                          ate leverage through the use of reverse repurchase arrangements, forward
                          contracts or dollar rolls or by borrowing money.


                                      33




                      

Foreign (Non-U.S.) Risk  A Fund's investments in foreign (non-U.S.) securities may experience
                         more rapid and extreme changes in value than investments in securities
                         of U.S. companies. The securities markets of many foreign countries are
                         relatively small, with a limited number of companies representing a small
                         number of securities. Foreign companies usually are not subject to the
                         same degree of regulation as U.S. issuers. Reporting, accounting, and
                         auditing standards of foreign countries differ, in some cases significantly,
                         from U.S. standards. Nationalization, expropriation or confiscatory tax-
                         ation, currency blockage, political changes, or diplomatic developments
                         could adversely affect a Fund's investments in a foreign country. These
                         risks are heightened for emerging market countries because there may be
                         more economic, political and social instability, and investments in
                         companies in emerging markets may have more risk because these secu-
                         rities may be more volatile and less liquid. To the extent a Fund invests
                         in a particular country or geographic region, the Fund may have more
                         significant risk due to market changes or other factors affecting that
                         country or region, including political instability and unpredictable eco-
                         nomic conditions.

Emerging Market Risk
                         Foreign investment risk may be particularly high to the extent a Fund
                         invests in emerging market securities of issuers based in countries with
                         developing economies. These securities may present market, credit, cur-
                         rency, liquidity, legal, political and other risks different from, or greater
                         than, the risks of investing in developed foreign (non-U.S.) countries.

Currency Risk
                         This is the risk that fluctuations in the exchange rates between the U.S.
                         Dollar and foreign (non-U.S.) currencies may negatively affect the value
                         of a Fund's investments or reduce the returns of a Fund. When AWDGF
                         II expands its investments to non-U.S. Dollar-denominated debt secu-
                         rities, the Fund will be exposed to increased currency risk.

Derivatives Risk
                         The Funds may use derivatives. These investment strategies may be risk-
                         ier than other investment strategies and may result in greater volatility for
                         a Fund, particularly during periods of market declines.

Liquidity Risk
                         Liquidity risk exists when particular investments are difficult to purchase
                         or sell, possibly preventing a Fund from selling out of these illiquid secu-
                         rities at an advantageous time or price. Derivatives and securities involv-
                         ing substantial market and credit risk tend to involve greater liquidity
                         risk.

Non-Diversification Risk
                         A Fund may have more risk if it is "non-diversified" meaning that it can
                         invest more of its assets in a smaller number of companies than many
                         other funds.

Management Risk
                         Each Fund is subject to management risk because it is an actively man-
                         aged investment portfolio. The Adviser will apply its investment tech-
                         niques and risk analyses in making investment decisions for each Fund,
                         but there can be no guarantee that its decisions will produce the desired
                         results.


                                      34



                                  APPENDIX D

                               OTHER INFORMATION

   The following information provides only a summary of the key features of the
organizational structure, governing documents, and stockholder services of the
Funds.

   Each Fund is organized as a Maryland corporation. The Bylaw provisions that
govern each of the Funds are the same. Unless noted below, there are no
significant differences between the Funds in terms of their respective
corporate organizational structures.

   The procedures available to a Fund's stockholders for calling stockholders'
meetings and for the removal of directors are the same. Under the Funds'
charters, a director may be removed only for cause at a meeting duly called and
at which a quorum is present by the affirmative vote of the holders of 75% of
all the votes entitled to be cast for the election of directors.
Stockholder-requested special meetings of stockholders for any purpose may be
called by a Fund's Secretary only upon the written request of holders of shares
entitled to cast not less than a majority of the votes entitled to be cast at a
meeting.

   Except as otherwise required by law, the presence in person or by proxy of
the holders of a majority of the shares entitled to be cast constitutes a
quorum at any meeting of stockholders of a Fund. Under Maryland law, a Maryland
corporation generally cannot dissolve, amend its charter, merge, sell all or
substantially all of its assets, engage in a share exchange or engage in
similar transactions outside the ordinary course of business, unless approved
by the affirmative vote of stockholders entitled to cast at least two-thirds of
the votes entitled to be cast on the matter. However, a Maryland corporation
may provide in its charter for approval of these matters by a lesser
percentage, but not less than a majority of all of the votes entitled to be
cast on the matter. Subject to various exceptions, each Fund's charter
generally provides for approval of charter amendments and extraordinary
transactions by the stockholders entitled to cast at least a majority of the
votes entitled to be cast on the matter. The Bylaws of each Fund provides that
each director shall be elected by the affirmative vote of the holders of a
majority of the votes entitled to be cast thereon. For other matters not
requiring a vote under the 1940 Act, when a quorum is present, the affirmative
vote of a majority of the votes cast shall decide any question brought before
such meeting unless a statute or charter requires a higher voting margin.

Shares of Common Stock of the Funds

   There are no subscription/preemptive or exchange rights under any of the
charters. Each share of a Fund has equal voting, dividend, distribution and
liquidation rights. Stockholders are entitled to one vote per share. All voting
rights for the election of directors are non-cumulative, which means that the
holders of more than 50% of the shares of common stock of a Fund can elect 100%
of the directors then nominated for election if they choose to do so and, in
such event, the holders of the remaining shares of common stock will not be
able to elect any directors. Under the rules of the NYSE applicable to listed
companies, each Fund is required to hold an annual meeting of stockholders each
year.

Distributions

   The Funds intend to distribute all of their net investment income. Dividends
from such net investment income will be declared and paid monthly to
stockholders. All net realized long or short-term capital gains, if any, will
be distributed at least annually. To permit a Fund to maintain a more stable
monthly distribution, a Fund may, from time to time, pay out less than the
entire amount of net investment income and net realized short-term capital
gains earned in any particular period. Any such amount retained by a Fund would
be available to stabilize future distributions. As a result, distributions paid
by a Fund for any particular period may be more or less than the amount of net
investment income and net realized short-term capital gains actually earned by
the Fund during such period. There are no assurances that a Fund will be able
to maintain a constant level of monthly distributions to stockholders.

   Distributions are taxable to stockholders as ordinary income or capital
gains. Stockholders may be proportionately liable for taxes on income and gains
of a Fund but stockholders not subject to tax on their income

                                      35



will not be required to pay tax on amounts distributed to them. A Fund
distributes written notice to stockholders regarding the tax status of all
distributions made during each calendar year.

Dividend Reinvestment Plans

   Stockholders of a Fund whose shares are registered in their own names may
elect to be participants in a Fund's Dividend Reinvestment and Cash Purchase
Plan (the "DRIP"), under which dividends and capital gain distributions to
stockholders will be paid or reinvested in additional shares of the Fund (the
"Dividend Shares"). Assuming the Acquisition is approved, the DRIP stockholders
of AWDGF will automatically be enrolled in the DRIP for AWDGF II. Computershare
Trust Company (the "Agent") acts as the agent for participants under the AWDGF
II DRIP. Stockholders whose shares are held in the name of a broker or nominee
will automatically have distributions reinvested by the broker or nominee in
additional shares under the DRIP, unless the automatic reinvestment service is
not provided by the particular broker or nominee or the stockholder elects to
receive distributions in cash.

   Stockholders who do not elect to participate in the DRIP will receive all
distributions in cash paid by check mailed directly to the stockholder of
record (or, if the shares are held in street or other nominee name, then to the
nominee) by Computershare Trust Company as dividend paying agent.

   The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions.

   A stockholder who has elected to participate in the DRIP may withdraw from
the DRIP at any time. There will be no penalty for withdrawal from the DRIP and
stockholders who have previously withdrawn from the DRIP may rejoin it at any
time. Changes in elections must be in writing and should include the
stockholder's name and address as they appear on the share certificate. An
election to withdraw from the DRIP will, until such election is changed, be
deemed to be an election by a stockholder to take all subsequent distributions
in cash. An election will be effective only for a distribution declared and
having a record dated of at least 10 days after the date on which the election
is received. A stockholder whose shares are held in the name of a broker or
nominee should contact such broker or nominee concerning changes in that
stockholder's election.

   All correspondence concerning the DRIP for AWDGF II should be directed to
Computershare Trust Company, P.O. Box 43011, Providence, RI 02940-3011.

Repurchase of Shares

   Each Fund's Board of Directors has determined that it would be in the
interest of stockholders of a Fund to attempt to reduce or eliminate any market
value discount should it exist. To that end, each Fund's Board of Directors
presently contemplates that a Fund would from time to time take action either
to repurchase in the open market or to make a tender offer for its own shares
at net asset value. AWDGF II's policy also states that the Fund would take such
actions and the Board would only consider such actions if the Fund's shares had
been trading at a discount to NAV in excess of 5% as of the last day of each
week in the 12 weeks preceding a Board meeting. The Boards of Directors
presently intend each quarter to consider the making of a tender offer. A Board
of Directors may at any time, however, decide that a Fund should not make a
tender offer.

   Any tender offer made by a Fund will be at a price equal to the NAV of the
shares on a date subsequent to receipt by the Fund of all tenders. Each offer
will be made and stockholders notified in accordance with the requirements of
the Securities and Exchange Act of 1934 and the 1940 Act, either by publication
or mailing or both. Each offering document will contain such information as is
prescribed by such laws and the rules and regulations promulgated thereunder.
When a tender offer is authorized to be made by a Board of Directors, a
stockholder wishing to accept the offer will be required to tender all (and not
less than all) of the shares owned by such stockholder (or attributed to the
stockholder for federal income tax purposes under Section 318 of the Code). A
Fund will purchase all shares tendered in accordance with the terms of the
offer unless it determines to accept none of them (based upon one of the
conditions set forth above). Each person tendering shares will be required to
submit a check in the amount of $25.00, payable to the Fund, which will be used
to help defray the costs associated with effecting the tender offer. This
$25.00 fee will be imposed upon each tendering stockholder any of

                                      36



whose tendered shares are purchased in the offer, and will be imposed
regardless of the number of shares purchased. A Fund expects the cost to the
Fund of effecting a tender offer will exceed the aggregate of all such fees
received from those who tender offer their shares. Costs associated with the
tender offer will be charged against capital. During the period of the tender
offer, a Fund's stockholders will be able to obtain the Fund's current net
asset value by use of a toll-free telephone number.

Certain Anti-Takeover Provisions of the Funds' Charters and Bylaws

   The Funds presently have provisions in their Charters and Bylaws (together,
the "Charter Documents") that are intended to limit (i) the ability of other
entities or persons to acquire control of a Fund, (ii) a Fund's freedom to
engage in certain transactions, or (iii) the ability of a Fund's directors or
stockholders to amend the Charter Documents or effect changes in the Fund's
management. These provisions of the Charter Documents may be regarded as
"anti-takeover" provisions.

   The Board of Directors of each Fund is divided into three classes, each
having a term of three years. Each class of Directors serves for a three year
term. Accordingly, only those directors in one class may be changed in any one
year, and it would require two years to change a majority of the Board of
Directors (although under Maryland law procedures are available for the removal
of directors even if they are not then standing for reelections and under SEC
regulations procedures are available for including stockholder proposals in
management's annual proxy statement). Such a system of electing directors may
have the effect of maintaining the continuity of management and, thus, make it
more difficult for a Fund's stockholders to change the majority of directors.
Generally, under a Fund's Charter, the affirmative vote of the holders of a
majority of the votes entitled to be cast is required for the consolidation of
the Fund with another corporation, a merger of the Fund with or into another
corporation (except for certain mergers in which the Fund is the successor), a
statutory share exchange in which the Fund is not the successor, a sale or
transfer of all or substantially all of the Fund's assets, the dissolution of
the Fund and certain amendments to the Fund's Charter. In addition, the
affirmative vote of 75% (which is higher than that required under Maryland law
or the 1940 Act) of the outstanding shares of common stock of a Fund is
required generally to authorize any of the following transactions or to amend
the provisions of the Charter relating to such transactions:

    (i)merger, consolidation or statutory share exchange of the Fund with or
       into any corporation, person or other entity;

   (ii)issuance of any securities of the Fund to any corporation, person or
       other entity for cash;

  (iii)sale, lease or exchange of all or any substantial part of the assets of
       the Fund to any corporation, person or other entity (except assets
       having an aggregate fair market value of less than $1,000,000); or

   (iv)sale, lease or exchange to the Fund, in exchange for securities of the
       Fund, of any assets of any corporation, person or other entity (except
       assets having an aggregate fair market value of less than $1,000,000);

   if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of more than 5% of the outstanding shares of
the Fund (a "principal stockholder"). However, such vote would not be required
where, under certain conditions, the Board of Directors approves the
transaction, although in certain cases involving merger, consolidation or
statutory share exchange or sale of all or substantially all of a Fund's assets
the affirmative vote of a majority of the outstanding shares of the Fund would
nevertheless be required.

   The provisions of the Charter Documents described above and a Fund's right
to repurchase or make a tender offer for its common stock could have the effect
of depriving the owners of shares of opportunities to sell their shares at a
premium over prevailing market prices, by discouraging a third party from
seeking to obtain control of the Fund in a tender offer or similar transaction.
The overall effect of these provisions is to render more difficult the
accomplishment of a merger or the assumption of control by a principal
stockholder. However, they provide the advantage of potentially requiring
persons seeking control of the Fund to negotiate with its management regarding
the price to be paid and facilitating the continuity of the Fund's management
and investment objective and policies. The Board of Directors of each Fund has
considered the foregoing anti-takeover provisions and concluded that they are
in the best interests of the Fund and its stockholders.

                                      37



Indemnification and Liability of Directors and Officers

   The charters of each of the Funds generally provides for the indemnification
of officers and directors, as applicable, to the full extent permitted by law.
This indemnification does not protect any such person against any liability to
a Fund or any stockholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the satisfaction of such person's
office.

   Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (i) actual receipt of an improper benefit or profit in money,
property or services or (ii) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. Each Fund's charter
contains such a provision which eliminates directors' and officers' liability
to the maximum extent permitted by Maryland law. This indemnification does not
protect any such person against any liability to a Fund or any stockholder
thereof to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the satisfaction of such person's office.

                                      38



                                  APPENDIX E

           FORM OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION
      RELATING TO THE ACQUISITION OF ALL OF THE ASSETS AND LIABILITIES OF
                  ALLIANCE WORLD DOLLAR GOVERNMENT FUND, INC.


   This Agreement and Plan of Acquisition and Liquidation (the "Plan") is made
as of this [  ] day of [      ], 2006, by and among            (the "Acquiring
Fund"), a Maryland corporation,            (the "Acquired Fund"), a Maryland
corporation, and AllianceBernstein L.P. (the "Adviser").

   WHEREAS, the Acquiring Fund and the Acquired Fund are closed-end management
investment companies registered with the Securities and Exchange Commission
(the "SEC") under the Investment Company Act of 1940, as amended (the "1940
Act") and the Securities Exchange Act of 1934, as amended (the "1934 Act") and
shares of common stock of each Fund are currently purchased and sold on the New
York Stock Exchange (the "NYSE");

   WHEREAS, the parties desire that the Acquiring Fund acquire the assets and
assume the liabilities of the Acquired Fund in exchange for shares of equal net
asset value of the Acquiring Fund and the distribution of such shares of the
Acquiring Fund to the stockholders of the Acquired Fund (the "Acquisition") and
that the Acquired Fund thereafter liquidate and dissolve; and

   WHEREAS, the parties intend that the Acquisition qualify as a
"reorganization" within the meaning of section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and any successor
provisions, and that with respect to the Acquisition, the Acquiring Fund and
the Acquired Fund will each be a "party to a reorganization" within the meaning
of section 368(b) of the Code;

   Now, therefore, the Acquiring Fund and the Acquired Fund agree as follows:

1. Definitions

   In addition to the terms elsewhere defined herein, each of the following
terms shall have the meaning indicated for that term as follows:


                  
1933 Act             Securities Act of 1933, as amended.

Acquiring Fund Share A share of common stock of the Acquiring Fund.

Assets               All assets of any kind and all interests, rights, privileges and powers of or
                     attributable to the Acquired Fund or its shares, as appropriate, whether or
                     not determinable at the appropriate Effective Time and wherever located,
                     including, without limitation, all cash, cash equivalents, securities, claims
                     (whether absolute or contingent, known or unknown, accrued or un-
                     accrued or conditional or unmatured), contract rights and receivables
                     (including dividend and interest receivables) owned by the Acquired
                     Fund or attributable to its shares and any deferred or prepaid expense,
                     other than unamortized organizational expenses, shown as an asset on the
                     Acquired Fund's books.

Closing Date         Shall be on such date following the date that stockholders of the Ac-
                     quired Fund approve the Plan, as the parties may agree.

Effective Time       5:00 p.m. Eastern Time on the Closing Date, or such other time as the
                     parties may agree to in writing.

Financial Statements The audited financial statements of the relevant Fund for its most re-
                     cently completed fiscal year and, if applicable, the unaudited financial
                     statements of that Fund for its most recently completed semi-annual
                     period.

Fund                 The Acquiring Fund and/or the Acquired Fund, as the case may be.


                                      39




                         
Liabilities                 All liabilities, expenses and obligations of any kind whatsoever of the
                            Acquired Fund, whether known or unknown, accrued or unaccrued, abso-
                            lute or contingent or conditional or unmatured, except that expenses of
                            the Acquisition, if any, contemplated hereby to be paid by the Acquired
                            Fund pursuant to Section 25 of this Plan, which shall not be assumed or
                            paid by the Acquiring Fund, shall not fall within the definition of
                            Liabilities for purposes of this Plan.

N-14 Registration Statement The Registration Statement of the Acquiring Fund on Form N-14 under
                            the 1940 Act that will register the Acquiring Fund Shares to be issued in
                            the Acquisition and will include the proxy materials necessary for the
                            stockholders of the Acquired Fund to approve the Acquisition.

Valuation Time              The close of regular session trading on the NYSE on the Closing Date,
                            when for purposes of the Plan, the Acquiring Fund determines its net as-
                            set value per Acquiring Fund Share and the Acquired Fund determines
                            the net value of the Assets.

NAV                         A Fund's net asset value is calculated by valuing and totaling assets and
                            then subtracting liabilities and then dividing the balance by the number of
                            shares that are outstanding.


2. Regulatory Filings

   The Acquiring Fund shall promptly prepare and file the N-14 Registration
Statement with the SEC, and the Acquiring Fund and the Acquired Fund also shall
make any other required or appropriate filings with respect to the actions
contemplated hereby.

3. Stockholder Action

   As soon as practicable after the effective date of the N-14 Registration
Statement, the Acquired Fund shall hold a stockholders meeting to consider and
approve the Acquisition and this Plan and such other matters as the Board of
Directors may determine. Such approval by the stockholders of the Acquired Fund
shall, to the extent necessary to permit the consummation of the transactions
contemplated herein without violating any investment objective, policy or
restriction of the Acquired Fund, be deemed to constitute approval by the
stockholders of a temporary amendment of any investment objective, policy or
restriction that would otherwise be inconsistent with or violated upon the
consummation of such transactions solely for the purpose of consummating such
transactions.

4. Transfer of the Acquired Fund's Assets.

   The Acquiring Fund and the Acquired Fund shall take the following steps with
respect to the Acquisition, as applicable:

    (a)On or prior to the Closing Date, the Acquired Fund shall pay or provide
       for the payment of all of the Liabilities, expenses, costs and charges
       of or attributable to the Acquired Fund that are known to the Acquired
       Fund and that are due and payable prior to or as of the Closing Date.

    (b)Prior to the Effective Time, except to the extent prohibited by Rule
       19b-1 under the 1940 Act, the Acquired Fund will declare to Acquired
       Fund shareholders of record a dividend or dividends which, together with
       all previous such dividends, shall have the effect of distributing
       (a) all the excess of (i) Acquired Fund's investment income excludable
       from gross income under section 103(a) of the Code over (ii) Acquired
       Fund's deductions disallowed under section 265 and 171(a)(2) of the
       Code, (b) all of Acquired Fund's investment company taxable income (as
       defined in Code section 852), (computed in each case without regard to
       any deduction for dividends paid), and (c) all of Acquired Fund's net
       realized capital gain (as defined in Code section 1222), if any (after
       reduction for any capital loss

                                      40



       carryover), in each case for both the taxable year ending on [      ],
       and the short taxable year beginning on [      ], and ending on the
       Closing Date. Such dividends will be made to ensure continued
       qualification of the Acquired Fund as a "regulated investment company"
       for tax purposes and to eliminate fund-level tax.

    (c)At the Effective Time, pursuant to Articles of Transfer accepted for
       record by the State Department of Assessments and Taxation of Maryland
       (the "SDAT"), the Acquired Fund shall assign, transfer, deliver and
       convey the Assets to the Acquiring Fund, subject to the Liabilities. The
       Acquiring Fund shall then accept the Assets and assume the Liabilities
       such that at and after the Effective Time (i) the Assets at or after the
       Effective Time shall become and be assets of the Acquiring Fund, and
       (ii) the Liabilities at the Effective Time shall attach to the Acquiring
       Fund, and shall be enforceable against the Acquiring Fund to the same
       extent as if initially incurred by the Acquiring Fund.

    (d)Within a reasonable time prior to the Closing Date, the Acquired Fund
       shall provide, if requested, a list of the Assets to the Acquiring Fund.
       The Acquired Fund may sell any asset on such list prior to the Effective
       Time. After the Acquired Fund provides such list, the Acquired Fund will
       not acquire any additional securities or permit to exist any
       encumbrances, rights, restrictions or claims not reflected on such list,
       without the approval of the Acquiring Fund. Within a reasonable time
       after receipt of the list and prior to the Closing Date, the Acquiring
       Fund will advise the Acquired Fund in writing of any investments shown
       on the list that the Acquiring Fund has determined to be inconsistent
       with its investment objective, policies and restrictions. The Acquired
       Fund will dispose of any such securities prior to the Closing Date to
       the extent practicable and consistent with applicable legal
       requirements, including the Acquired Fund's investment objectives,
       policies and restrictions. In addition, if the Acquiring Fund determines
       that, as a result of the Acquisition, the Acquiring Fund would own an
       aggregate amount of an investment that would exceed a percentage
       limitation applicable to the Acquiring Fund, the Acquiring Fund will
       advise the Acquired Fund in writing of any such limitation and the
       Acquired Fund shall dispose of a sufficient amount of such investment as
       may be necessary to avoid the limitation as of the Effective Time, to
       the extent practicable and consistent with applicable legal
       requirements, including the Acquired Fund's investment objectives,
       policies and restrictions.

    (e)The Acquired Fund shall assign, transfer, deliver and convey the Assets
       to the Acquiring Fund at the Effective Time on the following basis:

       (1)The value of the Assets less the Liabilities, both determined as of
          the Valuation Time, shall be divided by the then NAV of one Acquiring
          Fund Share, and, in exchange for the transfer of the Assets, the
          Acquiring Fund shall simultaneously issue and deliver to the Acquired
          Fund the number of full Acquiring Fund Shares so determined that are
          allocable to all shares held by or for those stockholders of the
          Acquired Fund on a stockholder by stockholder basis plus fractional
          Acquiring Fund Shares, rounded to the second decimal place or such
          other decimal place as the parties may agree to in writing, allocable
          to those stockholders of the Acquired Fund that at the Effective Time
          participate in the Acquired Fund's Dividend Reinvestment Plan ("DRIP
          Stockholders"), regardless of whether the shares of the Acquired Fund
          with respect to which such fractional Acquiring Fund Shares are to be
          issued and delivered are held by or for the DRIP Stockholders
          directly or in the Acquired Fund's Dividend Reinvestment Plan. The
          Acquiring Fund shall at the same time deliver to the Acquired Fund
          cash in lieu of any fractional Acquiring Fund Shares allocable to
          those stockholders of the Acquired Fund that are not DRIP
          Stockholders;

       (2)The NAV of the Acquiring Fund Shares to be delivered to the Acquired
          Fund shall be determined as of the Valuation Time in accordance with
          the Acquiring Fund's then applicable valuation procedures, and the
          net value of the Assets to be conveyed to the Acquiring Fund shall be
          determined as of the Valuation Time in accordance with the then
          applicable valuation procedures of the Acquired Fund; and

       (3)The portfolio securities of the Acquired Fund shall be made available
          by the Acquired Fund to           , as custodian for the Acquiring
          Fund (the "Custodian"), for examination no later than

                                      41



          five business days preceding the Valuation Time. On the Closing Date,
          such portfolio securities and all the Acquired Fund's cash shall be
          delivered by the Acquired Fund to the Custodian for the account of
          the Acquiring Fund, such portfolio securities to be duly endorsed in
          proper form for transfer in such manner and condition as to
          constitute good delivery thereof in accordance with the custom of
          brokers or, in the case of portfolio securities held in the U.S.
          Treasury Department's book-entry system or by The Depository Trust
          Company, Participants Trust Company or other third party
          depositories, by transfer to the account of the Custodian in
          accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7, as the case may
          be, under the 1940 Act and accompanied by all necessary federal and
          state stock transfer stamps or a check for the appropriate purchase
          price thereof. The cash delivered shall be in the form of currency or
          certified or official bank checks, payable to the order of
                    , the Custodian, or shall be wired to an account pursuant
          to instructions provided by the Acquiring Fund.

    (f)Promptly after the Closing Date, the Acquired Fund will deliver to the
       Acquiring Fund a Statement of Assets and Liabilities of the Acquired
       Fund as of the Closing Date.

5. Liquidation and Dissolution of the Acquired Fund, Registration of Acquiring
   Fund Shares and Access to Records.

   The Acquired Fund and the Acquiring Fund also shall take the following
steps, as applicable:

    (a)At or as soon as reasonably practical after the Effective Time, the
       Acquired Fund shall liquidate and dissolve by transferring pro rata to
       its stockholders of record, the Acquiring Fund Shares and cash it
       receives pursuant to Section 4(e)(1) of this Plan. The Acquiring Fund
       shall record on its books the ownership by the Acquired Fund's
       stockholders of the Acquiring Fund Shares so transferred to such
       stockholders, and the Acquired Fund shall simultaneously cancel on its
       books all of the issued and outstanding shares of the Acquired Fund. The
       Acquiring Fund shall not issue certificates representing Acquiring Fund
       Shares to replace certificates representing Acquired Fund shares unless
       the Acquired Fund share certificates are first surrendered to the
       Acquiring Fund.

       Following distribution by the Acquired Fund to its stockholders of all
       the Acquiring Fund Shares delivered to the Acquired Fund, the Acquired
       Fund shall wind up its affairs and shall take all steps as are necessary
       and proper to liquidate and dissolve as soon as is reasonably possible
       after the Effective Time, including filing of Articles of Dissolution
       with SDAT.

    (b)At and after the Closing Date, the Acquired Fund shall provide the
       Acquiring Fund and its transfer agent with immediate access to: (i) all
       records containing the names, addresses and taxpayer identification
       numbers of all of the Acquired Fund's stockholders and the number and
       percentage ownership of the outstanding shares of the Acquired Fund
       owned by stockholders as of the Effective Time, and (ii) all original
       documentation (including all applicable Internal Revenue Service forms,
       certificates, certifications and correspondence) relating to the
       Acquired Fund stockholders' taxpayer identification numbers and their
       liability for or exemption from back-up withholding. The Acquired Fund
       shall preserve and maintain, or shall direct its service providers to
       preserve and maintain, records with respect to the Acquired Fund as
       required by Section 31 of, and Rules 31a-1 and 31a-2 under, the 1940 Act.

6. Certain Representations and Warranties of the Acquired Fund.

   The Acquired Fund represents and warrants to the Acquiring Fund as follows:

    (a)The Acquired Fund is a corporation duly incorporated, validly existing
       and in good standing under the laws of the State of Maryland. The
       Acquired Fund is registered with the SEC as a closed-end management
       investment company under the 1940 Act and is duly registered with the
       SEC under the 1934 Act, and such registrations will be in full force and
       effect as of the Effective Time.

    (b)The Acquired Fund has the power and all necessary federal, state and
       local qualifications and authorizations to own all of the Assets, to
       carry on its business, to enter into this Plan and to consummate the
       transactions contemplated herein.

                                      42



    (c)The Board of Directors of the Acquired Fund has duly authorized the
       execution and delivery of this Plan and the transactions contemplated
       herein. Duly authorized officers of the Acquired Fund have executed and
       delivered the Plan. The Plan represents a valid and binding contract,
       enforceable in accordance with its terms, subject as to enforcement to
       bankruptcy, insolvency, reorganization, arrangement, moratorium, and
       other similar laws of general applicability relating to or affecting
       creditors' rights and to general equity principles. The execution and
       delivery of this Plan does not, and, subject to the approval of
       stockholders referred to in Section 3 hereof, the consummation of the
       transactions contemplated by this Plan will not, violate the Acquired
       Fund's Charter, its Bylaws or any material agreement to which the
       Acquired Fund is subject. Except for the approval of its stockholders,
       the Acquired Fund does not need to take any other action to authorize
       its officers to effectuate this Plan and the transactions contemplated
       herein.

    (d)The Acquired Fund has qualified as a regulated investment company under
       Part I of Subchapter M of Subtitle A, Chapter 1, of the Code, in respect
       of each taxable year since the commencement of its operations and
       intends to continue to qualify as a regulated investment company for its
       taxable year ending upon its liquidation.

    (e)The information pertaining to the Acquired Fund included within the N-14
       Registration Statement when filed with the SEC, when Part A of the N-14
       Registration Statement is distributed to stockholders, at the time of
       the stockholders meeting of the Acquired Fund for approval of the
       Acquisition and at the Effective Time shall (i) comply in all material
       respects with the applicable provisions of the 1933 Act, the 1934 Act
       and the 1940 Act, and the rules and regulations thereunder and
       applicable state securities laws, and (ii) not contain any untrue
       statement of a material fact or omit to state a material fact required
       to be stated therein or necessary to make the statements made therein
       not misleading.

    (f)The Acquired Fund has duly authorized and validly issued all of its
       issued and outstanding shares of common stock, and all such shares are
       fully paid and non-assessable and were offered for sale and sold in
       conformity with the registration requirements of all applicable federal
       and state securities laws. There are no outstanding options, warrants or
       other rights to subscribe for or purchase any of the shares of the
       Acquired Fund, nor are there any securities convertible into shares of
       the Acquired Fund.

    (g)The Acquired Fund shall operate its business in the ordinary course
       between the date hereof and the Effective Time. Such ordinary course of
       business will include the declaration and payment of customary dividends
       and distributions and any other dividends and distributions referred to
       in Section 4(b) hereof.

    (h)At the Effective Time, the Acquired Fund will have good and marketable
       title to the Assets and full right, power and authority to assign,
       transfer, deliver and convey the Assets.

    (i)The Financial Statements of the Acquired Fund, a copy of which has been
       previously delivered to the Acquiring Fund, fairly present the financial
       position of the Acquired Fund as of the Acquired Fund's most recent
       fiscal year-end and the results of the Acquired Fund's operations and
       changes in the Acquired Fund's net assets for the periods indicated.

    (j)To the knowledge of the Acquired Fund, the Acquired Fund has no
       liabilities, whether or not determined or determinable, other than the
       Liabilities disclosed or provided for in its Financial Statements or
       Liabilities incurred in the ordinary course of business subsequent to
       the date of the most recent Financial Statement referencing Liabilities.

    (k)To the knowledge of the Acquired Fund, except as has been disclosed in
       writing to the Acquiring Fund, no claims, actions, suits, investigations
       or proceedings of any type are pending or threatened against the
       Acquired Fund or any of its properties or assets or any person whom the
       Acquired Fund may be obligated to indemnify in connection with such
       litigation, proceeding or investigation. Subject to the foregoing, there
       are no facts that the Acquired Fund has reason to believe are likely to
       form the basis for the institution of any such claim, action, suit,
       investigation or proceeding against the Acquired Fund. The Acquired Fund
       is not a party to nor subject to the provisions of any order, decree or
       judgment of

                                      43



       any court or governmental body that adversely affects, or is reasonably
       likely to adversely affect, its financial condition, results of
       operations, or the Assets or its ability to consummate the transactions
       contemplated by the Plan.

    (l)Except for agreements entered into or granted in the ordinary course of
       its business, in each case under which no material default exists, and
       this Plan, the Acquired Fund is not a party to or subject to any
       material contract or other commitments, which if terminated, may result
       in material liability to the Acquired Fund or under which (whether or
       not terminated) any material payment for periods subsequent to the
       Closing Date will be due from the Acquired Fund.

    (m)The Acquired Fund has filed its federal income tax returns, copies of
       which have been previously made available to the Acquiring Fund, for all
       taxable years for which such returns are due and has paid all taxes
       payable pursuant to such returns. All of the Acquired Fund's tax
       liabilities will have been adequately provided for on its books. No such
       return is currently under audit and no unpaid assessment has been
       asserted with respect to such returns. To the best of the Acquired
       Fund's knowledge, it will not have any tax deficiency or liability
       asserted against it or question with respect thereto raised, and it will
       not be under audit by the Internal Revenue Service or by any state or
       local tax authority for taxes in excess of those already paid. The
       Acquired Fund will timely file its federal income tax return for each
       subsequent taxable year including its current taxable year.

    (n)For federal income tax purposes, the Acquired Fund qualifies as a
       "regulated investment company," and the provisions of section 851
       through 855 of the Code apply to the Acquired Fund for the remainder of
       its current taxable year beginning [      ], and will continue to apply
       through the Closing Date.

    (o)Since the date of the Financial Statements of the Acquired Fund, there
       has been no material adverse change in its financial condition, results
       of operations, business, or Assets. For this purpose, negative
       investment performance shall not be considered a material adverse change.

    (p)The Acquired Fund's investment operations from inception to the date
       hereof have been in compliance in all material respects with the
       investment policies and investment restrictions set forth in its
       prospectus or prospectuses and statement or statements of additional
       information as in effect from time to time, except as previously
       disclosed in writing to the Acquiring Fund.

    (q)The Acquiring Fund Shares to be issued to the Acquired Fund pursuant to
       paragraph 4(e)(1) will not be acquired for the purpose of making any
       distribution thereof other than to the Acquired Fund Stockholders as
       provided in paragraph 4(e)(1).

    (r)The Acquired Fund, or its agents, (i) holds a valid Form W-8Ben,
       Certificate of Foreign Status of Beneficial Owner for United States
       Withholding (or other appropriate series of Form W-8, as the case may
       be) or Form W-9, Request for Taxpayer Identification Number and
       Certification, for each Acquired Fund stockholder of record, which Form
       W-8 or Form W-9 can be associated with reportable payments made by the
       Acquired Fund to such stockholder, and/or (ii) has otherwise timely
       instituted the appropriate backup withholding procedures with respect to
       such stockholder as provided by Section 3406 of the Code and the
       regulations thereunder.

7. Certain Representations and Warranties of Acquiring Fund.

   The Acquiring Fund represents and warrants to the Acquired Fund as follows:

    (a)The Acquiring Fund is a corporation duly incorporated, validly existing
       and in good standing under the laws of the State of Maryland. The
       Acquiring Fund is registered with the SEC as a closed-end management
       investment company under the 1940 Act and is duly registered with the
       SEC under the 1934 Act, and such registrations will be in full force and
       effect as of the Effective Time.

    (b)The Acquiring Fund shall operate its business in the ordinary course
       between the date hereof and the Effective Time. Such ordinary course of
       business will include the declaration and payment of customary dividends
       and distributions and any other dividends and distributions referred to
       in Section 4(b) hereof.

                                      44



    (c)The Acquiring Fund has the power and all necessary federal, state and
       local qualifications and authorizations to own all of its assets, to
       carry on its business, to enter into this Plan and to consummate the
       transactions contemplated herein.

    (d)The Board of Directors of the Acquiring Fund has duly authorized
       execution and delivery of this Plan and the transactions contemplated
       herein. Duly authorized officers of the Acquiring Fund have executed and
       delivered the Plan. The Plan represents a valid and binding contract,
       enforceable in accordance with its terms, subject as to enforcement to
       bankruptcy, insolvency, reorganization, arrangement, moratorium and
       other similar laws of general applicability relating to or affecting
       creditors' rights and to general equity principles. The execution and
       delivery of this Plan does not, and the consummation of the transactions
       contemplated by this Plan will not violate the Charter of the Acquiring
       Fund, its Bylaws or any material agreement to which the Acquiring Fund
       is subject. Except for the approval of its Board, the Acquiring Fund
       does not need to take any other action to authorize its officers to
       effectuate the Plan and the transactions contemplated herein.

    (e)The Acquiring Fund has qualified as a regulated investment company under
       Part I of Subchapter M of Subtitle A, Chapter 1, of the Code, in respect
       of each taxable year since the commencement of its operations and
       qualifies and intends to continue to qualify as a regulated investment
       company for its current taxable year.

    (f)The N-14 Registration Statement, when filed with the SEC, when Part A of
       the N-14 Registration Statement is distributed to stockholders, at the
       time of the stockholder meeting of the Acquired Fund for approval of the
       Acquisition and at the Effective Time, insofar as it relates to the
       Acquiring Fund shall (i) comply in all material respects with the
       applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act,
       and the rules and regulations thereunder and applicable state securities
       laws and (ii) not contain any untrue statement of a material fact or
       omit to state a material fact required to be stated therein or necessary
       to make the statements made therein, in light of the circumstances under
       which they were made, not misleading.

    (g)The Acquiring Fund has duly authorized and validly issued all issued and
       outstanding Acquiring Fund Shares, and all such shares are fully paid
       and non-assessable and were offered for sale and sold in conformity with
       the registration requirements of all applicable federal and state
       securities laws. The Acquiring Fund has duly authorized the Acquiring
       Fund Shares referred to in Section 4(e) hereof to be issued and
       delivered to the Acquired Fund as of the Effective Time. When issued and
       delivered, such Acquiring Fund Shares shall be validly issued, fully
       paid and non-assessable, and no stockholder of the Acquiring Fund shall
       have any preemptive right of subscription or purchase in respect of any
       such share. There are no outstanding options, warrants or other rights
       to subscribe for or purchase any Acquiring Fund Shares, nor are there
       any securities convertible into Acquiring Fund Shares.

    (h)To the knowledge of the Acquiring Fund, except as has been disclosed in
       writing to the Acquiring Fund, no claims, actions, suits, investigations
       or proceedings of any type are pending or threatened against the
       Acquiring Fund or any of its properties or assets or any person whom the
       Acquiring Fund may be obligated to indemnify in connection with such
       litigation, proceeding or investigation. Subject to the foregoing, there
       are no facts that the Acquiring Fund currently has reason to believe are
       likely to form the basis for the institution of any such claim, action,
       suit, investigation or proceeding against the Acquiring Fund. The
       Acquiring Fund is not a party to or subject to the provisions of any
       order, decree or judgment of any court or governmental body that
       adversely affects, or is reasonably likely to adversely affect its
       financial condition, results of operations, its assets or its ability to
       consummate the transactions contemplated by this Plan.

    (i)Except for agreements entered into or granted in the ordinary course of
       its business, in each case under which no material default exists, the
       Acquiring Fund is not a party to or subject to any material contract,
       debt instrument, employee benefit plan, lease, franchise, license or
       permit of any kind or nature whatsoever.

                                      45



    (j)The Acquiring Fund has filed its federal income tax returns, copies of
       which have been previously made available to the Acquired Fund, for all
       taxable years for which such returns are due and has paid all taxes
       payable pursuant to such returns. All of the Acquiring Fund's tax
       liabilities will have been adequately provided for on its books. No such
       return is currently under audit and no unpaid assessment has been
       asserted with respect to such returns. To the best of the Acquiring
       Fund's knowledge, it will not have any tax deficiency or liability
       asserted against it or question with respect thereto raised, and it will
       not be under audit by the Internal Revenue Service or by any state or
       local tax authority for taxes in excess of those already paid. The
       Acquiring Fund will timely file its federal income tax return for each
       subsequent taxable year including its current taxable year.

    (k)For federal income tax purposes, the Acquiring Fund qualifies as a
       "regulated investment company," and the provisions of section 851
       through 855 of the Code apply to the Acquiring Fund for the remainder of
       its current taxable year beginning [      ], and will continue to apply
       through the Closing Date.

    (l)The Financial Statements of the Acquiring Fund, a copy of which has been
       previously delivered to the Acquired Fund, fairly present the financial
       position of the Acquiring Fund's most recent fiscal year-end and the
       results of the Acquiring Fund's operations and changes in the Acquiring
       Fund's net assets for the period indicated.

    (m)Since the date of the Financial Statements of the Acquiring Fund, there
       has been no material adverse change in its financial condition, results
       of operations, business or assets. Negative investment performance shall
       not be considered a material adverse change.

    (n)The Acquiring Fund's investment operations from inception to the date
       hereof have been in compliance in all material respects with the
       investment policies and investment restrictions set forth in its
       prospectus or prospectuses and statement or statements of additional
       information as in effect from time to time, except as previously
       disclosed in writing to the Acquired Fund.

    (o)The Acquiring Fund will use all reasonable efforts to obtain the
       approvals and authorizations required by the 1933 Act, the 1940 Act and
       such other state securities laws as it may deem appropriate in order to
       continue its operations after the Closing Date.

8. Conditions to the Obligations of the Acquiring Fund and the Acquired Fund.

   The obligations of the Acquiring Fund and the Acquired Fund with respect to
the Acquisition shall be subject to the following conditions precedent:

    (a)The stockholders of the Acquired Fund shall have approved the
       Acquisition in the manner required by the Charter of the Acquired Fund,
       its Bylaws and applicable law. If stockholders of the Acquired Fund fail
       to approve the Acquisition as required, that failure shall release the
       Funds of their obligations under this Plan.

    (b)The Acquiring Fund and the Acquired Fund shall have delivered to the
       other party a certificate dated as of the Closing Date and executed in
       its name by its Secretary or an Assistant Secretary, in a form
       reasonably satisfactory to the receiving party, stating that the
       representations and warranties of the Acquiring Fund or the Acquired
       Fund, as applicable, in this Plan that apply to the Acquisition are true
       and correct in all material respects at and as of the Valuation Time.

    (c)The Acquiring Fund and the Acquired Fund shall have performed and
       complied in all material respects with each of its representations and
       warranties required by this Plan to be performed or complied with by it
       prior to or at the Valuation Time and the Effective Time.

    (d)There has been no material adverse change in the financial condition,
       results of operations, business, properties or assets of the Acquiring
       Fund or the Acquired Fund since the date of the most recent Financial
       Statements. Negative investment performance shall not be considered a
       material adverse change.

                                      46



    (e)The Acquiring Fund and the Acquired Fund shall have received an opinion
       of Seward & Kissel LLP reasonably satisfactory to each of them,
       substantially to the effect that for federal income tax purposes:

       (1)the Acquisition will constitute a "reorganization" within the meaning
          of section 368(a) of the Code and that the Acquiring Fund and the
          Acquired Fund will each be "a party to a reorganization" within the
          meaning of section 368(b) of the Code;

       (2)a stockholder of the Acquired Fund will recognize no gain or loss on
          the exchange of the stockholder's shares of the Acquired Fund solely
          for Acquiring Fund Shares, except with respect to cash received in
          lieu of a fractional share of the Acquiring Fund in connection with
          the Acquisition;

       (3)neither the Acquired Fund nor the Acquiring Fund will recognize any
          gain or loss upon the transfer of all of the Assets to the Acquiring
          Fund in exchange for Acquiring Fund Shares (plus cash in lieu of
          fractional shares) and the assumption by Acquiring Fund of the
          Liabilities pursuant to this Plan or upon the distribution of
          Acquiring Fund Shares and cash to stockholders of the Acquired Fund
          in exchange for their respective shares of the Acquired Fund;

       (4)the holding period and tax basis of the Assets acquired by the
          Acquiring Fund will be the same as the holding period and tax basis
          that the Acquired Fund had in such Assets immediately prior to the
          Acquisition;

       (5)the aggregate tax basis of the Acquiring Fund Shares received in
          connection with the Acquisition by each stockholder of the Acquired
          Fund (including any fractional share to which the stockholder may be
          entitled) will be the same as the aggregate tax basis of the shares
          of the Acquired Fund surrendered in exchange therefor, decreased by
          any cash received and increased by any gain recognized on the
          exchange;

       (6)the holding period of the Acquiring Fund Shares received in
          connection with the Acquisition by each stockholder of the Acquired
          Fund (including any fractional share to which the stockholder may be
          entitled) will include the holding period of the shares of the
          Acquired Fund surrendered in exchange therefor, provided that such
          Acquired Fund shares constitute capital assets in the hands of the
          stockholder as of the Closing Date;

       (7)The Acquiring Fund will succeed to the capital loss carryovers of the
          Acquired Fund, if any, under section 381 of the Code, but the use by
          the Acquiring Fund of any such capital loss carryovers (and of
          capital loss carryovers of the Acquiring Fund) may be subject to
          limitation under section 383 of the Code; and

       (8)any gain or loss realized by a stockholder of the Acquired Fund upon
          the sale of a fractional share of the Acquiring Fund to which the
          stockholder is entitled will be recognized to the stockholder and
          measured by the difference between the amount of cash received and
          the basis of the fractional share and, provided that the Acquired
          Fund shares surrendered constitute capital assets in the hands of the
          stockholder, will be a capital gain or loss.

       The opinion will be based on certain factual certifications made by
       officers of the Funds and will also be based on customary assumptions
       and subject to certain qualifications. The opinion is not a guarantee
       that the tax consequences of the Acquisition will be as described above.

       Notwithstanding this subparagraph (e), Seward & Kissel LLP will express
       no view with respect to the effect of the Acquisition on any transferred
       asset as to which any unrealized gain or loss is required to be
       recognized at the end of a taxable year (or on the termination or
       transfer thereof) under federal income tax principles. Each Fund shall
       agree to make and provide additional representations to Seward & Kissel
       LLP with respect to the Funds that are reasonably necessary to enable
       Seward & Kissel LLP to deliver the tax opinion. Notwithstanding anything
       in this Plan to the contrary, neither Fund may waive in any material
       respect the conditions set forth under this subparagraph (e).

                                      47



    (f)The N-14 Registration Statement shall have become effective under the
       1933 Act as to the Acquiring Fund Shares, and the SEC shall not have
       instituted and to the knowledge of the Acquiring Fund is not
       contemplating instituting, any stop order suspending the effectiveness
       of the N-14 Registration Statement.

    (g)No action, suit or other proceeding shall be threatened or pending
       before any court or governmental agency in which it is sought to
       restrain or prohibit, or obtain damages or other relief in connection
       with, the Acquisition.

    (h)The SEC shall not have issued any unfavorable advisory report under
       Section 25(b) of the 1940 Act nor instituted any proceeding seeking to
       enjoin consummation of the Acquisition under Section 25(c) of the 1940
       Act.

    (i)Neither party shall have terminated this Plan with respect to the
       Acquisition pursuant to Section 13 of this Plan.

    (j)The NYSE shall have approved, upon official notice of issuance, the
       listing of the Acquiring Fund Shares to be issued and delivered to the
       Acquired Fund pursuant hereto.

9. Conditions to the Obligations of the Acquired Fund.

   The obligations of the Acquired Fund with respect to the Acquisition shall
be subject to the following conditions precedent:

    (a)The Acquired Fund shall have received an opinion of Seward & Kissel LLP,
       counsel to the Acquiring Fund, in form and substance reasonably
       satisfactory to the Acquired Fund and dated as of the Closing Date,
       substantially to the effect that:

       (1)The Acquiring Fund is a corporation duly incorporated, validly
          existing and in good standing under the laws of the State of Maryland
          and is a closed-end, management investment company registered under
          the 1940 Act and duly registered under the 1934 Act;

       (2)This Plan has been duly authorized, executed and delivered by the
          Acquiring Fund and, assuming the N-14 Registration Statement referred
          to in Section 2 of this Plan does not contain any material
          misstatements or omissions, and assuming due authorization, execution
          and delivery of this Plan by the Acquired Fund, represents a legal,
          valid and binding contract, enforceable in accordance with its terms,
          subject to the effect of bankruptcy, insolvency, moratorium,
          fraudulent conveyance and transfer and similar laws relating to or
          affecting creditors' rights generally and court decisions with
          respect thereto, and further subject to the application of equitable
          principles in any proceeding, whether at law or in equity or with
          respect to the enforcement of provisions of the Plan and the effect
          of judicial decisions which have held that certain provisions are
          unenforceable when their enforcement would violate an implied
          covenant of good faith and fair dealing or would be commercially
          unreasonable or when default under the Plan is not material;

       (3)The Acquiring Fund Shares to be delivered as provided for by this
          Plan are duly authorized and upon delivery will be validly issued,
          fully paid and non-assessable by the Acquiring Fund;

       (4)The execution and delivery of this Plan did not, and the consummation
          of the Acquisition will not, violate the Charter of the Acquiring
          Fund, its Bylaws or any agreement of the Acquiring Fund known to such
          counsel, after reasonable inquiry; and

       (5)To the knowledge of such counsel, no consent, approval, authorization
          or order of any federal or state court or administrative or
          regulatory agency, other than the acceptance of record of Articles of
          Transfer by the SDAT, is required for the Acquiring Fund to enter
          into this Plan or carry out its terms, except those that have been
          obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules
          and regulations under those Acts or that may be required under state
          securities laws or subsequent to the Effective Time or when the
          failure to obtain the consent, approval, authorization or order would
          not have a material adverse effect on the operation of the Acquiring
          Fund.

                                      48



       In rendering such opinion, Seward & Kissel LLP may (i) rely on the
       opinion of Venable LLP as to matters of Maryland law to the extent set
       forth in such opinion, (ii) make assumptions regarding the authenticity,
       genuineness and/or conformity of documents and copies thereof without
       independent verification thereof, (iii) limit such opinion to applicable
       federal and state law, (iv) define the word "knowledge" and related
       terms to mean the knowledge of attorneys then with such firm who have
       devoted substantive attention to matters directly related to this Plan
       and (v) rely on certificates of officers or directors of the Acquiring
       Fund as to factual matters.

    (b)The Acquiring Fund shall have received a letter from the Adviser with
       respect to insurance matters in form and substance satisfactory to the
       Acquired Fund.

10.Conditions to the Obligations of the Acquiring Fund.

   The obligations of the Acquiring Fund with respect to the Acquisition shall
be subject to the following conditions precedent:

    (a)The Acquiring Fund shall have received an opinion of Seward & Kissel
       LLP, counsel to the Acquired Fund, in form and substance reasonably
       satisfactory to the Acquiring Fund and dated as of the Closing Date,
       substantially to the effect that:

       (1)The Acquired Fund is a corporation duly incorporated, validly
          existing and in good standing under the laws of the State of Maryland
          and is a closed-end management investment company registered under
          the 1940 act and duly registered under the 1934 Act;

       (2)This Plan has been duly authorized, executed and delivered by the
          Acquired Fund and, assuming the N-14 Registration Statement referred
          to in Section 2 of this Plan does not contain any material
          misstatements or omissions, and assuming due authorization, execution
          and delivery of this Plan by the Acquiring Fund, represents a legal,
          valid and binding contract, enforceable in accordance with its terms,
          subject to the effect of bankruptcy, insolvency, moratorium,
          fraudulent conveyance and transfer and similar laws relating to or
          affecting creditors' rights generally and court decisions with
          respect thereto, and further subject to the application of equitable
          principles in any proceeding, whether at law or in equity or with
          respect to the enforcement of provisions of the Plan and the effect
          of judicial decisions which have held that certain provisions are
          unenforceable when their enforcement would violate an implied
          covenant of good faith and fair dealing or would be commercially
          unreasonable or when default under the Plan is not material;

       (3)The execution and delivery of this Plan did not, and the consummation
          of the Acquisition will not, violate the Charter of the Acquired
          Fund, its Bylaws or any agreement of the Acquired Fund known to such
          counsel, after reasonable inquiry, and no approval of the Plan by
          stockholders of the Acquiring Fund is required under its Charter,
          Bylaws or applicable law; and

       (4)To the knowledge of such counsel, no consent, approval, authorization
          or order of any federal or state court or administrative or
          regulatory agency, other than the acceptance of record of Articles of
          Transfer by the SDAT, is required for the Acquired Fund to enter into
          the Plan or carry out its terms, except those that have been obtained
          under the 1933 Act, the 1934 Act, the 1940 Act and the rules and
          regulations under those Acts or that may be required under state
          securities laws or subsequent to the Effective Time or when the
          failure to obtain the consent, approval, authorization or order would
          not have a material adverse effect on the operation of the Acquired
          Fund.

       In rendering such opinion, Seward & Kissel LLP may (i) rely on the
       opinion of Venable LLP as to matters of Maryland law , (ii) make
       assumptions regarding the authenticity, genuineness and/or conformity of
       documents and copies thereof without independent verification thereof,
       (iii) limit such opinion to applicable federal and state law,
       (iv) define the word "knowledge" and related terms to mean the knowledge
       of attorneys then with such firm who have devoted substantive attention
       to matters directly related to this Plan and (v) rely on certificates of
       officers or directors of the Acquired Fund as to factual matters.

                                      49



    (b)The Acquiring Fund shall have received a letter from the Adviser
       agreeing to indemnify the Acquiring Fund in respect of certain
       liabilities of the Acquired Fund in form and substance satisfactory to
       the Acquiring Fund.

11.Closing

    (a)The Closing shall be held at the offices of the Funds, 1345 Avenue of
       the Americas, New York, New York 10105, or at such other time place as
       the parties may agree.

    (b)In the event that at the Valuation Time (a) the New York Stock Exchange
       shall be closed to trading or trading thereon shall be restricted, or
       (b) trading or the reporting of trading on said Exchange or elsewhere
       shall be disrupted so that accurate appraisal of the value of the net
       assets of the Acquired Fund or the Acquiring Fund is impracticable, the
       Closing Date shall be postponed until the first business day after the
       day when trading shall have been fully resumed and reporting shall have
       been restored; provided that if trading shall not be fully resumed and
       reporting restored within three business days of the Valuation Time,
       this Plan may be terminated by either the Acquired Fund or the Acquiring
       Fund upon the giving of written notice to the other party.

    (c)The Acquiring Fund will provide to the Acquired Fund evidence
       satisfactory to the Acquired Fund that the Acquiring Fund Shares
       issuable pursuant to the Acquisition have been credited to the Acquired
       Fund's account on the books of the Acquiring Fund. After the Closing
       Date, the Acquiring Fund will provide to the Acquired Fund evidence
       satisfactory to the Acquired Fund that such Shares have been credited
       pro rata to open accounts in the names of the Acquired Fund Stockholders.

    (d)At the Closing each party shall deliver to the other such bills of sale,
       instruments of assumption of liabilities, checks, assignments, stock
       certificates, receipts or other documents as such other party or its
       counsel may reasonably request in connection with the transfer of
       assets, assumption of liabilities and liquidation contemplated by the
       Plan.

12.Survival of Representations and Warranties.

   No representations, warranties or covenants in or pursuant to this Plan
(including certificates of officers) hereto shall survive the completion of the
transactions contemplated herein.

13.Termination of Plan.

   A majority of either Fund's Board of Directors may terminate this Plan with
respect to that Fund at any time before the applicable Effective Time if:
(i) the Fund's conditions precedent set forth in Sections 8, 9 or 10 as
appropriate, are not satisfied; or (ii) the Board of Directors determines that
the consummation of the Acquisition is not in the best interests of the Fund or
its stockholders and gives notice of such termination to the other party.

14.Governing Law.

   This Plan and the transactions contemplated hereby shall be governed,
construed and enforced in accordance with the laws of the State of New York,
except to the extent preempted by federal law, without regard to conflicts of
law principles.

15.Brokerage Fees.

   Each party represents and warrants that there are no brokers or finders
entitled to receive any payments in connection with the transactions provided
for in the Plan.

16.Amendments.

   The parties may, by agreement in writing authorized by their respective
Board of Directors, amend this Plan at any time before or after the
stockholders of the Acquired Fund approve the Acquisition. However, after
stockholders of the Acquired Fund approve the Acquisition, the parties may not
amend this Plan in a manner that

                                      50



materially alters the obligations of the other party. This Section shall not
preclude the parties from changing the Closing Date or the Effective Time by
mutual agreement.

17.Waivers.

   At any time prior to the Closing Date, either party may by written
instrument signed by it (i) waive the effect of any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the agreements, covenants or conditions made for its
benefit contained herein. Any waiver shall apply only to the particular
inaccuracy or requirement for compliance waived, and not any other or future
inaccuracy or lack of compliance.

18.Indemnification of Directors.

   The Acquiring Fund agrees that all rights to indemnification and all
limitations of liability existing in favor of the Acquired Fund's current and
former Directors and officers, acting in their capacities as such, under the
Acquired Fund's Articles of Incorporation and Bylaws as in effect as of the
date of this Plan shall survive the Acquisition as obligations of the Acquiring
Fund and shall continue in full force and effect, without any amendment
thereto, and shall constitute rights which may be asserted against the
Acquiring Fund, its successors or assigns.

19.Other Matters.

   Pursuant to Rule 145 under the 1933 Act, and in connection with the issuance
of any shares to any person who at the time of the Acquisition is, to the
Acquiring Fund's knowledge, an affiliate of a party to the Acquisition pursuant
to Rule 145(c), the Acquiring Fund will cause to be affixed upon the
certificate(s) issued to such person (if any) a legend as follows:

       THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE
       SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
       EXCEPT TO ACQUIRING FUND (OR ITS STATUTORY SUCCESSOR) UNLESS (I) A
       REGISTRATION STATEMENT WITH RESPECT TO SUCH SHARES IS EFFECTIVE UNDER
       THE SECURITIES ACT OF 1933 OR (II) IN THE OPINION OF COUNSEL REASONABLY
       SATISFACTORY TO THE FUND, SUCH REGISTRATION IS NOT REQUIRED.

20.Cooperation and Further Assurances.

   Each party will cooperate with the other in fulfilling its obligations under
this Plan and will provide such information and documentation as is reasonably
requested by the other in carrying out the Plan's terms. Each party will
provide such further assurances concerning the performance of its obligations
hereunder and execute all documents for or in connection with the consummation
of the Acquisition as, with respect to such assurances or documents, the other
shall deem necessary or appropriate.

21.Updating of N-14 Registration Statement.

   If at any time prior to the Effective Time, a party becomes aware of any
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements made not
misleading in the N-14 Registration Statement, the party discovering the item
shall notify the other party and the parties shall cooperate in promptly
preparing, filing and clearing with the SEC and, if appropriate, distributing
to stockholders appropriate disclosure with respect to the item.

22.Limitation on Liabilities.

   The obligations of the Acquired Fund and the Acquiring Fund shall not bind
any of the directors, stockholders, nominees, officers, agents, employees or
agents of the Acquired Fund or the Acquiring Fund personally, but shall bind
only the Acquired Fund or Acquiring Fund, as appropriate. The execution and
delivery of this Plan by an officer of either party shall not be deemed to have
been made by the officer individually or to impose any liability on the officer
personally, but shall bind only the Acquired Fund or the Acquiring Fund, as
appropriate.

                                      51



23.Termination of the Acquired Fund.

   If the parties complete the Acquisition, the Acquired Fund shall terminate
its registration under the 1940 Act, the 1933 Act, and the 1934 Act and will
liquidate and dissolve.

24.Notices.

   Any notice, report, statement, certificate or demand required or permitted
by any provision of the Plan shall be in writing and shall be given in person
or by telecopy, certified mail or overnight express courier to:

   For the Acquired Fund:

             [Acquired Fund]

             1345 Avenue of the Americas
             New York, New York 10105

             Attention: Secretary

   For the Acquiring Fund:

             [Acquiring Fund]

             1345 Avenue of the Americas
             New York, New York 10105

             Attention: Secretary

25.Expenses.

   The Acquisition expenses shall be paid by the Acquired Fund.

26.General.

   This Plan supersedes all prior agreements between the parties with respect
to the subject matter hereof and may be amended only in writing signed by both
parties. The headings contained in this Plan are for reference only and shall
not affect in any way the meaning or interpretation of this Plan. Whenever the
context so requires, the use in the Plan of the singular will be deemed to
include the plural and vice versa. Nothing in this Plan, expressed or implied,
confers upon any other person any rights or remedies under or by reason of this
Plan. Neither party may assign or transfer any right or obligation under this
Plan without the written consent of the other party.

                                      52



   In Witness Whereof, the parties hereto have executed this Plan as of the day
and year first above written.


                                         
[Acquired Fund]

Attest:


-------------------------------------      By: -------------------------------------

Name:
       --------------------------------        Name:  --------------------------------

Title:
       --------------------------------        Title: --------------------------------


                                         

[Acquiring Fund]

Attest:


-------------------------------------      By: -------------------------------------

Name:
       --------------------------------        Name:  --------------------------------

Title:
       --------------------------------        Title: --------------------------------


Accepted and agreed with respect to
  Section [25] only:

AllianceBernstein L.P.

By: AllianceBernstein Corporation, its General Partner


By: ---------------------------------


    Name:           -------------------------


    Title:          -------------------------

                                      53



                                  APPENDIX F

                                CAPITALIZATION

   The following table sets forth (i) the capitalization of the Funds and
(ii) the pro forma capitalization of the combined Fund as adjusted giving
effect to the proposed acquisition of assets at net asset value as of March 31,
2006:



                                                                AWDGF II
                          AWDGF       AWDGF II   Adjustments*  (pro forma)
                       ------------ ------------ ------------ --------------
                                                  
    Total Net Assets   $129,364,129 $983,787,664   $(75,000)  $1,113,076,793
    Shares Outstanding    8,897,497   67,648,715                  76,546,212
    NAV Per Share      $      14.54 $      14.54         --   $        14.54

--------
*  Portfolio repositioning costs.

                                      54



                                  APPENDIX G

                     TRADING HISTORY AND SHARE PRICE DATA

   Shares of each of the Funds are traded on the NYSE under the following
symbols: AWDGF - "AWG" and AWDGF II - "AWF." Shares of closed-end management
companies frequently trade at discounts from their NAVs, and the Funds' shares
have also traded at a discount in recent times. The following tables set forth
for each Fund's fiscal quarter within the two most recent fiscal years and each
Fund's fiscal quarter since the beginning of the current fiscal year: (a) the
per share high and low sales prices as reported by the NYSE; (b) the NAV per
share, based on the Fund's computation as of 4:00 p.m. on the last NYSE
business day for the week corresponding to the dates on which the respective
high and low prices were recorded; and (c) the discount or premium to NAV
represented by the high and low sales prices shown. The range of NAVs and of
premiums and discounts for the shares during the periods shown may be broader
than is shown in this table. On September 15, 2006, the closing price per share
was $12.63 and $12.88, the NAV per share was $14.64 and $14.63 and the discount
to NAV was (13.73)% and (11.96)%, for AWDGF and AWDGF II, respectively.



                                                         (Discount) or
              AWDGF                    Corresponding      Premium to
         FYE: October 31  Sales Price  Net Asset Value  Net Asset Value
         --------------- ------------- --------------- ---------------
          Quarter Ended   High   Low    High    Low      High     Low
          -------------  ------ ------ ------  ------  ------   ------
                                              
            1/31/04      $13.99 $12.55 $14.00  $13.14    1.25%   (4.49)%
            4/30/04      $13.20 $11.05 $13.80  $12.73   (2.74)% (14.35)%
            7/31/04      $11.59 $ 9.90 $12.97  $11.96   (9.91)% (17.22)%
            10/31/04     $12.26 $11.44 $13.50  $12.97   (9.19)% (12.61)%
            1/31/05      $12.70 $11.85 $13.97  $13.60   (9.09)% (12.87)%
            4/30/05      $13.03 $11.44 $14.08  $13.49   (7.46)% (15.20)%
            7/31/05      $12.58 $11.74 $14.13  $13.68  (10.97)% (14.48)%
            10/31/05     $12.64 $11.99 $14.42  $13.95  (10.49)% (14.71)%
            1/31/06      $12.76 $12.09 $14.71  $14.30  (12.95)% (15.45)%
            4/30/06      $13.05 $12.15 $14.86  $14.31  (12.18)% (15.09)%
            7/31/06      $12.42 $11.85 $14.45  $13.82  (13.50)% (15.44)%




                                                        (Discount) or
            AWDGF II                  Corresponding      Premium to
          FYE: March 31  Sales Price  Net Asset Value  Net Asset Value
          ------------- ------------- --------------- ---------------
          Quarter Ended  High   Low    High    Low      High     Low
          ------------- ------ ------ ------  ------  ------   ------
                                             
            6/30/04     $13.04 $ 9.80 $13.61  $11.91   (4.19)% (17.72)%
            9/30/04     $12.23 $11.03 $13.52  $12.52   (9.14)% (12.47)%
            12/31/04    $12.41 $11.90 $13.66  $13.55   (9.04)% (13.11)%
            3/31/05     $12.79 $11.40 $14.08  $13.39   (9.16)% (15.30)%
            6/30/05     $12.42 $11.58 $14.16  $13.47  (11.99)% (14.24)%
            9/30/05     $12.61 $12.28 $14.10  $14.06  (10.57)% (13.68)%
            12/31/05    $12.74 $11.89 $14.42  $14.00  (11.65)% (15.15)%
            3/31/06     $13.16 $12.42 $14.92  $14.45  (11.62)% (14.22)%
            6/30/06     $12.70 $12.01 $14.54  $14.02  (12.28)% (14.79)%


                                      55



                                  APPENDIX H

                               LEGAL PROCEEDINGS

   The staff of the U.S. Securities and Exchange Commission ("SEC") and the
Office of the New York Attorney General ("NYAG") have been investigating
practices in the mutual fund industry identified as "market timing" and "late
trading" of mutual fund shares. Certain other regulatory authorities have also
been conducting investigations into these practices within the industry and
have requested that the Adviser provide information to them. The Adviser has
been cooperating and will continue to cooperate with all of these authorities.

   Excluding the occurrences of tender offers or stock repurchases, the shares
of a Fund are not redeemable by a Fund, but are traded on an exchange at prices
established by the market. Accordingly, the Fund and its stockholders are not
subject to the market timing and late trading practices that are the subject of
the investigations mentioned above or the lawsuits described below. Please see
below for a description of the agreements reached by the Adviser and the SEC
and NYAG in connection with the investigations mentioned above.

   Numerous lawsuits have been filed against the Adviser and certain other
defendants in which plaintiffs make claims purportedly based on or related to
the same practices that are the subject of the SEC and NYAG investigations
referred to above. Some of these lawsuits name one or more of the Funds as a
party. The lawsuits are now pending in the United States District Court for the
District of Maryland pursuant to a ruling by the Judicial Panel on
Multidistrict Litigation transferring and centralizing all of the mutual funds
involving market and late trading in the District of Maryland (the "Mutual Fund
MDL"). Management of the Adviser believes that these private lawsuits are not
likely to have a material adverse effect on the results of operations or
financial condition of a Fund.

   On December 18, 2003, the Adviser confirmed that it had reached terms with
the SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuation dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:

    (i)The Adviser agreed to establish a $250 million fund (the "Reimbursement
       Fund") to compensate mutual fund stockholders for the adverse effects of
       market timing attributable to market timing relationships described in
       the SEC Order. According to the SEC Order, the Reimbursement Fund is to
       be paid, in order of priority, to fund investors based on (i) their
       aliquot share of losses suffered by the fund due to market timing, and
       (ii) a proportionate share of advisory fees paid by such fund during the
       period of such market timing;

   (ii)The Adviser agreed to reduce the advisory fees it receives from some of
       the AllianceBernstein long-term, open-end retail funds, commencing
       January 1, 2004, for a period of at least five years; and

  (iii)The Adviser agreed to implement changes to its governance and compliance
       procedures. Additionally, the SEC Order contemplates that the Adviser's
       registered investment company clients, including the Fund, will
       introduce governance and compliance changes.

   The shares of the Fund are not redeemable by the Fund, but are traded on an
exchange at prices established by the market. Accordingly, the Fund and its
stockholders are not subject to the market timing practices described in the
SEC Order and are not expected to participate in the Reimbursement Fund. Since
the Fund is a closed-end fund, it will not have its advisory fee reduced
pursuant to the terms of the agreements mentioned above.

   On February 10, 2004, the Adviser received (i) a subpoena duces tecum from
the Office of the Attorney General of the State of West Virginia and (ii) a
request for information from West Virginia's Office of the State Auditor,
Securities Commission (the "West Virginia Securities Commission") (together,
the "Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.

                                      56



   On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), and various other defendants not affiliated with the Adviser. The
WVAG Complaint was filed in the Circuit Court of Marshall County, West Virginia
by the Attorney General of the State of West Virginia. The WVAG Complaint makes
factual allegations generally similar to those in certain of the complaints
related to the lawsuits discussed above. On May 31, 2005, defendants removed
the WVAG Complaint to the United States District Court for the Northern
District of West Virginia. On July 12, 2005, plaintiff moved to remand. On
October 19, 2005, the WVAG Complaint was transferred to the Mutual Fund MDL.

   On August 30, 2005, the deputy commissioner of securities of the West
Virginia Securities Commission signed a "Summary Order to Cease and Desist, and
Notice of Right to Hearing" addressed to the Adviser and Alliance Holding. The
Summary Order claims that the Adviser and Alliance Holding violated the West
Virginia Uniform Securities Act, and makes factual allegations generally
similar to those in the SEC Order and the NYAG Order. On January 26, 2006, the
Adviser, Alliance Holding, and various unaffiliated defendants filed a Petition
for Writ of Prohibition and Order Suspending Proceedings in West Virginia state
court seeking to vacate the Summary Order and for other relief. The Adviser
intends to vigorously defend against the allegations in the WVAG Complaint.

   On June 22, 2004, a purported class action complaint entitled Aucoin, et al.
v. Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Fund was not named as a defendant in the Aucoin Complaint. The
Aucoin Complaint was filed in the United States District Court for the Southern
District of New York by an alleged stockholder of an AllianceBernstein mutual
fund. The Aucoin Complaint alleges, among other things, (i) that certain of the
defendants improperly authorized the payment of excessive commissions and other
fees from fund assets to broker-dealers in exchange for preferential marketing
services, (ii) that certain of the defendants misrepresented and omitted from
registration statements and other reports material facts concerning such
payments, and (iii) that certain defendants caused such conduct as control
persons of other defendants. The Aucoin Complaint asserts claims for violation
of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206
and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding
and abetting breaches of common law fiduciary duties. Plaintiffs seek an
unspecified amount of compensatory damages and punitive damages, rescission of
their contracts with the Adviser, including recovery of all fees paid to the
Adviser pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.

   Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of stockholders of the Funds.

   On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiff's claim under Section 36(b) of the Investment Company Act. On
January 11, 2006, the District Court granted defendants' motion for
reconsideration and dismissed the remaining Section 36(b) claim. Plaintiffs
have moved for leave to amend their consolidated complaint.

   On October 19, 2005, the District Court granted in part, and denied in part,
defendants' motion to dismiss the Aucoin Complaint and as a result the only
claim remaining is plaintiffs' Section 36(b).

   On August 7, 2006, the Mutual Fund MDL signed an Order staying the actions
(including discovery) against the Alliance defendants pending settlement.

   The Adviser believes that these matters are not likely to have a material
adverse effect on the Fund or the Adviser's ability to perform advisory
services relating to the Fund.

                                      57



                                  APPENDIX I

                          SHARE OWNERSHIP INFORMATION

Shares Outstanding

   As of August 15, 2006 each Fund had the following number of shares of common
stock outstanding.



                                  Number of Outstanding
                                        Shares of
                         Fund         Common Stock
                         ----     ---------------------
                               
                         AWDGF          8,897,497
                         AWDGF II      67,648,715


Ownership of Shares

   As of August 15, 2006, the directors and officers of each Fund as a group
beneficially owned less than 1% of the outstanding shares of common stock of
that Fund and, to the knowledge of each Fund, no person owned either of record
or beneficially, 5% or more of the outstanding shares of the Fund.

                                      58



                                  APPENDIX J

                          FINANCIAL HIGHLIGHTS TABLE

   The financial highlights table is intended to help you understand each
Fund's financial performance for the past 5 years. Certain information reflects
financial results for a single share of each Fund. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst & Young LLP, the
independent registered public accounting firm for the Funds, whose reports,
along with each Fund's financial statements, are included in each Fund's annual
report, which is available upon request.

                                      59



                                   AWDGF II



                                                                 Year Ended March 31,
                                                ----------------------------------------------------
                                                   2006       2005     2004(a)      2003       2002
                                                --------   --------   --------   --------   --------
                                                                             
Net asset value, beginning of period            $  13.55   $  13.59   $  11.42   $  10.58   $  10.37
                                                --------   --------   --------   --------   --------
Income From Investment Operations
Net investment income(b)                             .90        .87        .99       1.07       1.32
Net realized and unrealized gain (loss) on
  investment transactions                            .99       (.08)      2.36        .83        .19
                                                --------   --------   --------   --------   --------
Net increase in net asset value from operations     1.89        .79       3.35       1.90       1.51
                                                --------   --------   --------   --------   --------
Less: Dividends
Dividends from net investment income                (.90)      (.83)     (1.18)     (1.06)     (1.30)
                                                --------   --------   --------   --------   --------
Net asset value, end of period                  $  14.54   $  13.55   $  13.59   $  11.42   $  10.58
                                                --------   --------   --------   --------   --------
Market value, end of period                     $  12.59   $  11.80   $  12.91   $  10.91   $  10.32
                                                ========   ========   ========   ========   ========
Discount                                          (13.41)%   (12.92)%    (5.00)%    (4.47)%    (2.46)%
Total Return
Total investment return based on:(c)
   Market value                                    14.62%     (1.96)%    29.27%     17.72%     27.02%
   Net asset value                                 15.28%      6.94%     30.01%     20.20%     16.22%

Ratios/Supplemental Data
Net assets, end of period (000's omitted)       $983,788   $916,838   $919,453   $889,435   $823,753

Ratio to average net assets of:
   Expenses                                         1.23%      1.30%      1.29%      1.49%      1.88%
   Expenses, excluding interest expense             1.15%      1.28%      1.25%      1.35%      1.29%
   Net investment income                            6.33%      6.50%      7.65%     10.53%     12.69%
Portfolio turnover rate                               79%       147%       158%       121%       178%

--------
(a)As of April 1, 2003, the Fund has adopted the method of accounting for
   interim payments on swap contracts in accordance with Financial Accounting
   Standards Board Statement No. 133. These interim payments are reflected
   within net realized and unrealized gain (loss) on swap contracts, however,
   prior to April 1, 2003, these interim payments were reflected within
   interest income/expense on the statement of operations. The effect of this
   change for the year ended March 31, 2004, was to decrease net investment
   income per share by $0.06 and increase net realized and unrealized gain
   (loss) on investment transactions per share by $0.06, and decrease the
   ratios of net investment income and expenses to average net assets by 0.50%
   and 0.20%, respectively.
(b)Based on average shares outstanding.
(c)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
   purposes of this calculation, to be reinvested at prices obtained under the
   Fund's Dividend Reinvestment Plan. Generally, total investment return based
   on net asset value will be higher than total investment return based on
   market value in periods where there is an increase in the discount or a
   decrease in the premium of the market value to the net asset value from the
   beginning to the end of such periods. Conversely, total investment return
   based on net asset value will be lower than total investment return based on
   market value in periods where there is a decrease in the discount or an
   increase in the premium of the market value to the net asset value from the
   beginning to the end of such periods. Total investment return calculated for
   a period of less than one year is not annualized.

                                      60



                                     AWDGF



                                        Six Months
                                           Ended
                                         April 30,                  Year Ended October 31,
                                           2006       --------------------------------------------------
                                        (unaudited)      2005     2004(a)      2003     2002(b)    2001
                                        -----------   --------   --------   --------   -------   -------
                                                                               
Net asset value, beginning of period     $  14.17     $  13.63   $  13.05   $   9.98   $  9.43   $ 10.45
                                         --------     --------   --------   --------   -------   -------
Income From Investment Operations
Net investment income(c)                      .40          .78        .77       1.04      1.06      1.36
Net realized and unrealized gain (loss)
  on investment transactions                  .31          .59        .76       2.98       .59      (.95)
                                         --------     --------   --------   --------   -------   -------
Net increase in net asset value from
  operations                                  .71         1.37       1.53       4.02      1.65       .41
                                         --------     --------   --------   --------   -------   -------
Less: Dividends and Distributions
Dividends from net investment income         (.41)        (.83)      (.95)      (.95)    (1.07)    (1.36)
Distributions in excess of net
  investment income                           -0-          -0-        -0-        -0-      (.02)     (.07)
Tax return of capital                         -0-          -0-        -0-        -0-      (.01)      -0-
                                         --------     --------   --------   --------   -------   -------
Total dividends and distributions            (.41)        (.83)      (.95)      (.95)    (1.10)    (1.43)
                                         --------     --------   --------   --------   -------   -------
Net asset value, end of period           $  14.47     $  14.17   $  13.63   $  13.05   $  9.98   $  9.43
                                         ========     ========   ========   ========   =======   =======
Market value, end of period              $  12.39     $  12.09   $  12.20   $  12.70   $  9.55   $ 10.10
Premium/(Discount)                         (14.37)%     (14.68)%   (10.49)%    (2.68)%   (4.31)%    7.10%
Total Return
Total investment return based on:(d)
   Market value                              5.89%        5.95%      3.67%     44.12%     5.16%    11.51%
   Net asset value                           5.52%       11.15%     12.71%     41.71%    17.66%     3.45%

Ratios/Supplemental Data
Net assets, end of period (000's
  omitted)                               $128,761     $126,113   $121,267   $115,986   $88,735   $82,478

Ratio to average net assets of:
   Expenses                                  1.46%(e)     1.54%      1.59%      2.05%     1.87%     3.21%
   Expenses, excluding interest
     expense                                 1.37%(e)     1.54%      1.58%      1.63%     1.64%     1.65%
   Net investment income                     5.53%(e)     5.60%      5.82%      8.80%    10.55%    13.05%
Portfolio turnover rate                        43%          86%       198%       131%      197%      202%

--------
(a)As of November 1, 2003, the Fund has adopted the method of accounting for
   interim payments on swap contracts in accordance with Financial Accounting
   Standards Board Statement No. 133. These interim payments are reflected
   within net realized and unrealized gain (loss) on swap contracts, however,
   prior to November 1, 2003, these interim payments were reflected within
   interest income/expense on the statement of operations. The effect of this
   change for the year ended October 31, 2004, was to decrease net investment
   income per share by $.09 and increase net realized and unrealized gain
   (loss) on investment transactions per share by $.09, and decrease the ratio
   of net investment income to average net assets by .67%.
(b)As required, effective November 1, 2001, the Fund has adopted the provisions
   of the AICPA Audit and Accounting Guide, Audits of Investment Companies, and
   began amortizing premium on debt securities for financial statement
   reporting purposes only. The effect of this change for the year ended
   October 31, 2002 was to decrease net investment income per share by $0.02,
   increase net realized and unrealized gain on investment per share by $0.02,
   and decrease the ratio of net investment income to average net assets from
   10.67% to 10.55%. Per share, ratios and supplemental data for periods prior
   to November 1, 2001 have not been restated to reflect this change in
   presentation.
(c)Based on average shares outstanding.
(d)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
   the period reported. Dividends and distributions, if any, are assumed, for
   purposes of this calculation, to be reinvested at prices obtained under the
   Fund's Dividend Reinvestment Plan. Generally, total investment return based
   on net asset value will be higher than total investment return based on
   market value in periods where there is an increase in the discount or a
   decrease in the premium of the market value to the net asset value from the
   beginning to the end of such periods. Conversely, total investment return
   based on net asset value will be lower than total investment return based on
   market value in periods where there is a decrease in the discount or an
   increase in the premium of the market value to the net asset value from the
   beginning to the end of such periods. Total investment return calculated for
   a period of less than one year is not annualized.
(e)Annualized.

                                      61



                 ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.

                           1345 Avenue of the Americas
                               New York, New York
                            Toll Free (800) 221-5672

                       STATEMENT OF ADDITIONAL INFORMATION
                                October 27, 2006

This Statement of Additional  Information  ("SAI")  relates  specifically to the
proposed  Acquisition  (as defined in the  Prospectus/Proxy  Statement)  wherein
Alliance World Dollar Government Fund II, Inc. ("AWDGF II") would acquire all of
the assets and assume all of the liabilities of Alliance World Dollar Government
Fund, Inc. ("AWDGF") in exchange solely for shares of AWDGF II, and cash in lieu
of fractional  shares for those  stockholders  who do not participate in AWDGF's
Dividend  Reinvestment and Cash Purchase Plan ("DRIP").  (AWDGF II and AWDGF are
each a "Fund" and collectively, the "Funds").

AllianceBernstein,  L.P. (the  "Adviser")  serves as  investment  adviser to the
Funds. This SAI is not a prospectus,  and should be read in conjunction with the
Prospectus/Proxy  Statement for the Funds dated October 27, 2006.  This SAI does
not include all information  that a prospective  investor should consider before
purchasing  shares  of the  Fund,  and  investors  should  obtain  and  read the
Prospectus/Proxy   Statement  prior  to  purchasing   shares.   A  copy  of  the
Prospectus/Proxy   Statement  may  be  obtained   without  charge,   by  calling
1-800-227-4618.  This SAI incorporates by reference the entire  Prospectus/Proxy
Statement.

                                TABLE OF CONTENTS

                                                                            Page

INVESTMENT OBJECTIVES AND POLICIES............................................2
INVESTMENT PRACTICES..........................................................6
INVESTMENT RESTRICTIONS......................................................11
RISK FACTORS AND SPECIAL CONSIDERATIONS......................................12
MANAGEMENT OF THE FUNDS......................................................17
VALUATION OF PORTFOLIO SECURITIES............................................31
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN.................................33
DESCRIPTION OF COMMON STOCK..................................................35
PORTFOLIO TRANSACTIONS.......................................................36
DISTRIBUTIONS................................................................37
TAXATION.....................................................................37
PROXY VOTING.................................................................41
LEGAL MATTERS................................................................42
EXPERTS......................................................................42
FINANCIAL STATEMENTS.........................................................43
APPENDIX A..................................................................A-1

The following  supplements  the  information  contained in the  Prospectus/Proxy
Statement  concerning the Funds.  AWDGF II and AWDGF are each a  non-diversified
closed-end  investment  company  registered under the Investment  Company Act of
1940, as amended (the "1940 Act").



                       INVESTMENT OBJECTIVES AND POLICIES

GENERAL.  The  Funds  are  non-diversied,   closed-end   management   investment
companies.  The primary investment objective of AWDGF II is to seek high current
income,  with a secondary  investment  objective  of capital  appreciation.  The
investment  objective  of AWDGF is to seek  high  current  income  by  investing
exclusively in fixed income securities  denominated in U.S. Dollars.  In seeking
to achieve its investment objectives, each Fund invests principally in Sovereign
Debt  Obligations  (as defined  below) and  utilizes  certain  other  investment
techniques,  including options, futures, forwards and swaps, intended to enhance
income and reduce market risk. AWDGF II may also invest in U.S.  corporate fixed
income securities. The Funds are designed primarily for long term investment and
investors should not consider any Fund to be a short-term  trading  vehicle.  As
with all investment companies, there can be no assurance that a Fund's objective
will be achieved.

AWDGF II normally  invests at least 80% of its total  assets in  Sovereign  Debt
Obligations (as defined below). The balance of the Fund's investment  portfolio,
up to 20% of its total assets,  may be invested in U.S.  corporate  fixed income
securities which include debt securities,  convertible  securities and preferred
stocks of corporate issuers. AWDGF II has also adopted a fundamental policy that
it will invest at least 65% of its total  assets in Sovereign  Debt  Obligations
(as defined below). AWDGF invests,  under normal circumstances,  at least 80% of
its net assets in Sovereign Debt  Obligations (as defined below) and zero coupon
obligations  issued  or  guaranteed  by the U.S.  Government,  its  agencies  or
instrumentalities  ("Zero Coupon Bonds"). AWDGF has adopted a fundamental policy
that, under normal circumstances, the Fund will invest at least 75% of its total
assets in (i) Sovereign Debt Obligations (as defined below) and (ii) Zero Coupon
Obligations.  Each Fund's investment objective and fundamental policies (and its
investment restrictions set forth below under "Investment  Restrictions") may be
changed  only with the  approval  of the  holders of a  "majority  of the Fund's
outstanding voting  securities," which means the lesser of (i) 67% of the shares
of the Fund  represented at a meeting at which more than 50% of the  outstanding
shares are present in person or represented  by proxy,  or (ii) more than 50% of
the outstanding  shares.  A Fund's other  investment  policies  described below,
except as set forth under "Investment Restrictions," are not fundamental and may
be  changed  by the Fund  without  stockholder  approval.

SOVEREIGN   DEBT    OBLIGATIONS.    Sovereign   Debt    Obligations   are   U.S.
Dollar-denominated  debt securities issued or guaranteed by foreign governments,
including  participations  in loans between  foreign  governments  and financial
institutions and interests in entities organized and operated for the purpose of
restructuring the investment characteristics of instruments issued or guaranteed
by foreign governments.

Sovereign Debt Obligations held by the Funds will take the form of bonds, notes,
bills,  debentures,  warrants,  short-term  paper,  loan  participations,   loan
assignments  and  interests  issued by entities  organized  and operated for the
purpose of restructuring the investment  characteristics of other Sovereign Debt
Obligations.

AWDGF II emphasizes  investments in the Sovereign Debt  Obligations of countries
that  are  considered  emerging  market  countries  at the time of  purchase.  A
substantial  part  of the  Fund's  investment  focus  is in the  Sovereign  Debt
Obligations  of  Argentina,   Brazil,  Mexico,   Morocco,  the  Philippines  and
Venezuela.  AWDGF invests  substantially all of its assets in (i) Sovereign Debt
Obligations and (ii) Zero Coupon Obligations.

HIGH YIELD DEBT  SECURITIES.  Substantially  all of AWDGF  II's  investments  in
Sovereign  Debt  Obligations  and U.S.  corporate  fixed income  securities  and
AWDGF's  assets  will be in high  yield,  high  risk  debt  securities  that are
low-rated (i.e.,  below investment  grade) or unrated and in both cases that are
considered to be predominantly  speculative as regards the issuer's  capacity to
pay interest and repay principal.

STRUCTURED  SECURITIES.  The Funds may invest in securities issued in structured
financing  transactions,  which generally involve  aggregating  various types of
debt in a pool or special purpose entity and then issuing new  securities.  Each
Fund may invest up to 25% of its total assets in interests in entities organized
and  operated   solely  for  the  purpose  of   restructuring   the   investment
characteristics  of  Sovereign  Debt  Obligations.  This  type of  restructuring
involves the deposit  with or purchase by an entity,  such as a  corporation  or
trust, of specified instruments (such as commercial bank loans) and the issuance
by that entity of one or more classes of  securities  ("Structured  Securities")
backed by, or representing  interests in, the underlying  instruments.  The cash
flow on the underlying  instruments  may be  apportioned  among the newly issued
Structured   Securities  to  create   securities   with   different   investment
characteristics such as varying maturities, payment priorities and interest rate
provisions,  and the extent of the  payments  made with  respect  to  Structured
Securities  is  dependent  on the  extent  of the  cash  flow on the  underlying
instruments.  Because  Structured  Securities  of  the  type  in  which  a  Fund
anticipates it will invest typically involve no credit enhancement, their credit
risk generally will be equivalent to that of the underlying instruments.

The Funds are  permitted to invest in a class of Structured  Securities  that is
either  subordinated or unsubordinated to the right of payment of another class.
Subordinated  Structured  Securities  typically  have higher  yields and present
greater risks than unsubordinated Structured Securities.

LOAN PARTICIPATIONS AND ASSIGNMENTS.  The Funds may invest in fixed and floating
rate loans ("Loans") arranged through private  negotiations between an issuer of
Sovereign Debt Obligations and one or more financial  institutions  ("Lenders").
The Funds' investments in Loans are expected in most instances to be in the form
of  participations  in  Loans  ("Participations")  and  assignments  of all or a
portion of Loans  ("Assignments") from third parties. Each Fund may invest up to
25% of its total assets in Participations  and Assignments.  The government that
is the borrower on the Loan will be  considered  by a Fund to be the issuer of a
Participation  or Assignment for purposes of the Fund's  fundamental  investment
policy that it will not invest 25% or more of its total assets in  securities of
issuers conducting their principal business activities in the same industry (for
this purpose, each foreign government is treated as a separate industry).

A Fund's investment in Participations typically will result in the Fund having a
contractual  relationship  only with the Lender and not with the borrower.  Each
Fund will have the right to receive payments of principal, interest and any fees
to which it is entitled only from the Lender selling the  Participation and only
upon receipt by the Lender of the payments from the borrower. In connection with
purchasing  Participations,  a Fund  generally  will  have no right  to  enforce
compliance by the borrower with the terms of the loan agreement  relating to the
Loan,  nor any  rights of set-off  against  the  borrower,  and the Fund may not
directly  benefit  from  any  collateral  supporting  the  Loan in  which it has
purchased the Participation.  As a result, the Fund may be subject to the credit
risk of both the borrower and the Lender that is selling the  Participation.  In
the event of the insolvency of the Lender selling a Participation,  the Fund may
be treated as a general  creditor  of the  Lender and may not  benefit  from any
set-off  between  the Lender and the  borrower.  Certain  Participations  may be
structured  in a manner  designed to avoid  purchasers of  Participations  being
subject to the credit risk of the Lender with respect to the Participation;  but
even  under  such a  structure,  in the event of the  Lender's  insolvency,  the
Lender's  servicing of the Participation may be delayed and the assignability of
the Participation  impaired.  The Fund will acquire  Participations  only if the
Lender  interpositioned  between the Fund and the  borrower  is a Lender  having
total assets of more than $25 billion and whose senior  unsecured  debt is rated
investment  grade (i.e.,  Baa3 or higher by Moody's or BBB- or higher by S&P) or
higher.

When a Fund  purchases  Assignments  from Lenders it will acquire  direct rights
against the  borrower on the Loan.  Because  Assignments  are  arranged  through
private  negotiations  between  potential  assignees  and  potential  assignors,
however,  the rights and obligations acquired by the Fund as the purchaser of an
assignment  may  differ  from,  and be  more  limited  than,  those  held by the
assigning Lender. The assignability of certain  obligations is restricted by the
governing  documentation as to the nature of the assignee such that the only way
in which the Fund may acquire an  interest in a Loan is through a  Participation
and not an Assignment. The Fund may have difficulty disposing of Assignments and
Participations  because  to do so it will have to assign  such  securities  to a
third party.  Because  there is no liquid market for such  securities,  the Fund
anticipates  that such  securities  could be sold  only to a  limited  number of
institutional  investors.  The lack of a  liquid  secondary  market  may have an
adverse impact on the value of such securities and the Fund's ability to dispose
of particular  Assignments or  Participations  when necessary to meet the Fund's
liquidity needs in response to a specific economic event such as a deterioration
in the  creditworthiness of the borrower.  The lack of a liquid secondary market
for Assignments and Participations  also may make it more difficult for the Fund
to  assign a value to these  securities  for  purposes  of  valuing  the  Fund's
portfolio and calculating its asset value.

ZERO COUPON OBLIGATIONS. AWDGF may invest in Zero Coupon Obligations,  including
Treasury  bills  and the  principal  components  of U.S.  Treasury  bonds,  U.S.
Treasury notes and obligations of U.S. government agencies or instrumentalities.
A zero  coupon  security  pays no  interest  to its holder  during its life.  An
investor  acquires a zero coupon  security at a  discounted  price from the face
value of the  security,  which is generally  based upon its present  value,  and
which,  depending upon the time remaining until maturity,  may be  significantly
less than its face value  (sometimes  referred to as a "deep  discount"  price).
Upon maturity of the zero coupon security,  the investor receives the face value
of the security.

Currently,  the only  U.S.  Treasury  security  issued  without  coupons  is the
Treasury  bill.  The zero coupon  securities  purchased by a Fund may consist of
principal  components  held in STRIPS  form issued  through the U.S.  Treasury's
STRIPS  program,  which permits the beneficial  ownership of the component to be
recorded directly in the Treasury  book-entry  system. In addition,  in the last
few years a number of banks and brokerage firms have separated  ("stripped") the
principal  portions  ("corpus")  from the coupon  portions of the U.S.  Treasury
bonds and notes and sold them separately in the form of receipts or certificates
representing  undivided  interests in these instruments  (which  instruments are
generally  held by a bank in a  custodial  or trust  account).  The staff of the
Securities and Exchange Commission (the "Commission") has indicated that, in its
view, these receipts or certificates  should be considered as securities  issued
by the bank or brokerage firm involved and, therefore,  unlike those obligations
issued under the U.S.  Treasury's STRIPS program,  should not be included in the
Fund's categorization of U.S. Government Securities. The Fund disagrees with the
staff's  interpretation  but has  undertaken  that it will  not  invest  in such
securities until final resolution of the issue. If such securities are deemed to
be U.S. Government  Securities,  the Fund will not be subject to any limitations
on their purchase.

Because zero coupon  securities trade at a discount from their face or par value
but pay no periodic interest, they are subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of comparable
maturities which make periodic distributions of interest.

Current  federal tax law  requires  that a holder  (such as the Funds) of a zero
coupon  security  accrue a portion of the  discount  at which the  security  was
purchased  as income  each year even  though the  holder  receives  no  interest
payment  in cash on the  security  during  the year  (generally  referred  to as
"original  issue  discount"  or  "OID").  As a  result,  in  order  to make  the
distributions necessary for a Fund not to be subject to federal income or excise
taxes, the Fund may be required to pay out as an income  distribution  each year
an amount,  obtained by  liquidation  of portfolio  securities  or borrowings if
necessary,  greater  than the total  amount  of cash that the Fund has  actually
received as interest  during the year.  The Funds believe,  however,  that it is
highly unlikely that it would be necessary to liquidate portfolio  securities or
borrow  money in order to make  such  required  distributions  or to meet  their
investment objective.

REPURCHASE  AGREEMENTS.  A repurchase  agreement is an agreement by which a Fund
purchases a security and obtains a  simultaneous  commitment  from the seller to
repurchase the security at an agreed upon price and date,  normally one day or a
few days later. The resale price is greater than the purchase price,  reflecting
an  agreed-upon  "interest  rate" that is  effective  for the period of time the
buyer's money is invested in the  security,  and which is related to the current
market rate of the purchased  security  rather than its coupon rate.  During the
term of the  repurchase  agreement,  a Fund monitors on a daily basis the market
value of the securities subject to the agreement and, if the market value of the
securities   falls  below  the  resale  amount  provided  under  the  repurchase
agreement,  the seller  under the  repurchase  agreement  is required to provide
additional  securities  equal to the  amount  by which the  market  value of the
securities falls below the resale amount. Because a repurchase agreement permits
the Fund to invest temporarily available cash on a  fully-collateralized  basis,
repurchase  agreements permit the Fund to earn a return on temporarily available
cash while  retaining  "overnight"  flexibility  in pursuit of  investments of a
longer-term  nature.  Repurchase  agreements may exhibit the  characteristics of
loans by the Fund.

The obligation of the seller under the repurchase  agreement is not  guaranteed,
and  there is a risk  that the  seller  may fail to  repurchase  the  underlying
security,  whether  because of the seller's  bankruptcy  or  otherwise.  In such
event,  a Fund  would  attempt  to  exercise  its  rights  with  respect  to the
underlying  security,  including  possible sale of the securities.  The Fund may
incur various expenses in the connection with the exercise of its rights and may
be subject to various delays and risks of loss,  including (a) possible declines
in the value of the underlying  securities,  (b) possible reduction in levels of
income  and (c) lack of access  to the  securities  (if they are held  through a
third-party custodian) and possible inability to enforce the Fund's rights. Each
Fund's Board of Directors has  established  procedures,  which are  periodically
reviewed   by  the  Board,   pursuant  to  which  the   Adviser   monitors   the
creditworthiness  of the  dealers  with which the Fund  enters  into  repurchase
agreement transactions.

Each  Fund may  enter  into  repurchase  agreements  pertaining  to the types of
securities in which it invests with member banks of the Federal  Reserve  System
or "primary  dealers" (as designated by the Federal Reserve Bank of New York) in
securities  in which the Fund may  invest.  Each Fund may enter into  repurchase
agreements  with respect to up to 35% of its total assets.  Each Fund  currently
enters into  repurchase  agreements  only with its  custodian  and such  primary
dealers.

U.S.  CORPORATE  FIXED-INCOME  SECURITIES.  AWDGF II may invest up to 20% of its
total  assets in U.S.  corporate  fixed  income  securities  which  include debt
securities,  convertible  securities and preferred stocks of corporate  issuers.
Differing yields on fixed-income  securities of the same maturity are a function
of several factors,  including the relative  financial  strength of the issuers.
Higher  yields are  generally  available  from  securities  in the lower  rating
categories.  When the spread between the yields of lower rated  obligations  and
those of more highly rated issues is relatively  narrow,  the Fund may invest in
the latter since they may provide  attractive  returns with  somewhat less risk.
The Fund  expects  to invest in high  yield,  high risk lower  rated  securities
(i.e.,  securities  rated  lower  than  Baa3 by  Moody's  or BBB- by S&P) and in
unrated  securities of comparable  credit  quality.  Unrated  securities will be
considered  for  investment  by the Fund  when  the  Adviser  believes  that the
financial  condition  of the  issuers  of such  obligations  and the  protection
afforded by the terms of the obligations  themselves  limit the risk to the Fund
to a degree comparable to that of rated securities which are consistent with the
Fund's investment objectives and policies.

OTHER  SECURITIES.  While  the  principal  investment  strategies  of the  Funds
emphasize investment in Sovereign Debt Obligations, a Fund may, where consistent
with its investment  objective,  invest in securities  other than Sovereign Debt
Obligations,  including options,  warrants,  reverse  repurchase  agreements and
swaps, as discussed below under the caption "Investment Practices."

The Funds may also at any time temporarily invest funds awaiting reinvestment or
held for reserves for dividends and other  distributions to stockholders in such
U.S. Dollar-denominated money market instruments.

Illiquid  Securities.  Each Fund may  invest  up to 50% of its  total  assets in
illiquid  securities.   These  securities  include,  among  others,  (i)  direct
placements  or other  securities  which  are  subject  to  legal or  contractual
restrictions on resale or for which there is no readily  available market (e.g.,
trading in the  security is  suspended  or, in the case of unlisted  securities,
market  makers  do not exist or will not  entertain  bids of  offers),  and (ii)
repurchase  agreements not terminable within seven days. Securities eligible for
resale under Rule 144A under the  Securities  Act of 1933, as amended (the "1933
Act"), that have legal or contractual  restrictions on resale but have a readily
available  market are not deemed to be illiquid for purposes of this limitation.
The Adviser will monitor such  securities and in reaching  decisions  concerning
their  marketability  will consider,  among other things, the following factors:
(i) the  frequency  of trades and quotes  for the  security;  (ii) the number of
dealers  wishing  to  purchase  or sell the  security  and the  number  of other
potential  purchasers;  (iii)  dealer  undertakings  to  make  a  market  in the
security;  (iv) the nature of the  security  and the  nature of the  marketplace
trades  (e.g.,  the time  needed  to  dispose  of the  security,  the  method of
soliciting offers and the mechanics of the transfer); and (v) any applicable SEC
interpretation or position with respect to such type of securities.

                              INVESTMENT PRACTICES

Options. An option, which may be standardized and exchange-traded, or customized
and privately  negotiated,  is an agreement  that, for a premium payment or fee,
gives the option  holder (the buyer) the right but not the  obligation to buy or
sell the  underlying  asset (or settle for cash an amount based on an underlying
asset,  rate or index) at a specified price (the exercise price) during a period
of time or on specified date. A call option entitles the holder to purchase, and
a put option  entitles the holder to sell, the  underlying  asset (or settle for
cash an amount based on an underlying asset, rate or index).  Likewise,  when an
option is  exercised  the writer of the option is obligated to sell (in the case
of a call  option) or to purchase  (in the case of a put option) the  underlying
asset  (or  settle  for cash an amount  based on an  underlying  asset,  rate or
index).  Investments in options are considered speculative.  A Fund may lose the
premium  paid for them if the price of the  underlying  security  or other asset
decreased  or remained  the same (in the case of a call  option) or increased or
remained  the  same  (in the  case  of a put  option).  If a put or call  option
purchased by a Fund were  permitted to expire  without  being sold or exercised,
its premium would represent a loss to the Fund.

Options on U.S. and Foreign  Government  Securities.  For hedging and investment
purposes,  the Funds may  purchase and write (sell) put and call options on U.S.
and foreign government securities that are traded on U.S. and foreign securities
exchanges and over-the-counter markets.

A put option gives the purchaser of such option, upon payment of a premium,  the
right to deliver a specified amount of a security to the writer of the option on
or  before a fixed  date at a  predetermined  price.  A call  option  gives  the
purchaser of the option,  upon payment of a premium,  the right to call upon the
writer to deliver a specified  amount of a security on or before a fixed date at
a predetermined price.

The premium paid by the purchaser of an option reflects, among other things, the
relationship  of the exercise  price to the market price and  volatility  of the
underlying  security,  the remaining  term of the option,  supply and demand and
interest rates.

The risk  associated  with  purchasing  an  option is that a Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss or premium and change in market value should the  counterparty  not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio  securities.  The cost of  securities  acquired  through the
exercise of call  options is  increased  by premiums  paid.  The  proceeds  from
securities  sold  through  the  exercise of put  options  are  decreased  by the
premiums paid.

When a Fund writes an option,  the premium received by the Fund is recorded as a
liability and is subsequently adjusted to the current market value of the option
written.  Premiums  received from written  options which expire  unexercised are
recorded  by the Fund on the  expiration  date as  realized  gains from  options
written.  The  difference  between the premium  received  and the amount paid on
effecting a closing purchase transaction,  including brokerage  commissions,  is
also  treated as a realized  gain,  or if the premium  received is less than the
amount paid for the closing purchase transaction,  as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the sale
of the  underlying  security  or currency  in  determining  whether the Fund has
realized a gain or loss.  If a put option is  exercised,  the  premium  received
reduces the cost basis of the  security or currency  purchased  by the Fund.  In
writing an option,  the Fund bears the market risk of an  unfavorable  change in
the price of the security or currency underlying the written option. Exercise of
an option  written  by the Fund could  result in the Fund's  selling or buying a
security or currency at a price different from the current market value.

If a put option  written by a Fund were exercised the Fund would be obligated to
purchase the underlying security at the exercise price. If a call option written
by a Fund were  exercised  the Fund would be  obligated  to sell the  underlying
security at the  exercise  price.  The risk  involved in writing a put option is
that there could be a decrease in the market value of the  underlying  security.
If this  occurred,  the option could be exercised  and the  underlying  security
would then be sold by the option  holder to the Fund at a higher  price than its
current  market  value.  These  risks  involved in writing a call option is that
there could be an increase in the market value or the  underlying  security.  If
this occurred,  the option could be exercised and the underlying  security would
then be sold by the Fund at a lower price than its current  market value.  These
risks could be reduced by entering  into a closing  transaction.  A Fund retains
the premium received from writing a put or call option whether or not the option
is exercised.

A Fund may purchase or write  options on  securities of the types in which it is
permitted to invest in  privately  negotiated  transactions.  A Fund will effect
such transactions only with investment dealers and other financial  institutions
(such as commercial banks or savings and loan institutions)  deemed creditworthy
by the  Adviser,  and the Adviser  has adopted  procedures  for  monitoring  the
creditworthiness  of such  entities.  Options  purchased or written by a Fund in
negotiated  transactions are illiquid and it may not be possible for the Fund to
effect a closing  transaction  at a time when the  Adviser  believes it would be
advantageous to do so.

Futures.  A futures contract is an agreement that obligates the buyer to buy and
the seller to sell a specified  quantity of an  underlying  asset (or settle for
cash the value of a contract based on an underlying  asset,  rate or index) at a
specific   price  on  the  contract   maturity  date.   Futures   contracts  are
standardized,  exchange-traded instruments and are fungible (i.e., considered to
be  perfect  substitutes  for  each  other).  This  fungibility  allows  futures
contracts to be readily offset or cancelled through the acquisition of equal but
opposite  positions,  which is the primary method in which futures contracts are
liquidated.  A cash-settled  futures contract does not require physical delivery
of the underlying  asset but instead is settled for cash equal to the difference
between  the  values  of the  contract  on the date it is  entered  into and its
maturity date.

Warrants. The Funds may invest in warrants, which are securities permitting, but
not obligating,  their holder to subscribe for other  securities.  The Funds may
invest in warrants for debt  securities or warrants for equity  securities  that
are acquired as units with debt instruments.

Lending of Portfolio  Securities.  In order to increase  income, a Fund may from
time to time  lend  securities  from  its  portfolio  to  brokers,  dealers  and
financial  institutions  and  receive  collateral  in the  form  of cash of U.S.
Government Securities.  Under each Fund's procedures,  collateral for such loans
must be  maintained  at all  times in an  amount  equal to at least  100% of the
current market value of the loaned securities (including interest accrued on the
loaned securities).  The interest accruing on the loaned securities will be paid
to a Fund and the Fund will have the right,  on demand,  to call back the loaned
securities.  The risks in lending portfolio securities, as with other extensions
of  credit,  consist of  possible  loss of rights in the  collateral  should the
borrower  fail  financially.  In  determining  whether to lend  securities  to a
particular  borrower,  a Fund's  Adviser  (subject  to review by the Board) will
consider all relevant facts and circumstances, including the creditworthiness of
the borrower.  While  securities  are on loan,  the borrower will pay a Fund any
income earned  thereon and the Fund may invest any cash  collateral in portfolio
securities,  thereby earning additional income, or receive an agreed upon amount
of income from a borrower who has delivered  equivalent  collateral.  A Fund may
pay fees to arrange  the loans.  A Fund will not lend  portfolio  securities  in
excess of 30% of the value of its total assets nor lend its portfolio securities
to any officer, Director, employee or affiliate of the Fund or the Adviser.

Forward Commitments.  A Fund may enter into forward commitments for the purchase
or  sale  of  securities.   Such   transactions  may  include   purchases  on  a
"when-issued" basis or purchases or sales on a "delayed delivery" basis. In some
cases,  a  forward  commitment  may be  conditioned  upon  the  occurrence  of a
subsequent  event  such as  approval  of a  proposed  financing  by  appropriate
municipal authorities (i.e., a "when, as and if issued" trade).

When  forward  commitment  transactions  are  negotiated,  the  price,  which is
generally expressed in yield terms, is fixed at the time the commitment is made,
but  delivery  and  payment  for the  securities  take  place  at a later  date.
Normally,  the settlement  date occurs within two months after the  transaction,
but  delayed  settlements  beyond  two  months  may  be  negotiated.  Securities
purchased or sold under a forward commitment are subject to market  fluctuation,
and no interest  accrues to the purchaser  prior to the settlement  date. At the
time a Fund enters into a forward commitment, it will record the transaction and
thereafter reflect the value of the security purchased or, if sold, the proceeds
to be received,  in determining  the net asset value ("NAV") of its shares.  Any
unrealized  appreciation or depreciation reflected in such valuation of a "when,
as and if issued"  security  would be  cancelled  in the event that the required
condition did not occur and the trade was cancelled.

The use of forward  commitments  enables a Fund to protect  against  anticipated
changes  in  interest  rates and  prices.  For  instance,  in  periods of rising
interest  rate and falling  bond  prices,  a Fund might sell  securities  in its
portfolio on a forward commitment basis to limit its exposure to falling prices.
In periods of falling interest rates and rising bond prices, a Fund might sell a
security  in its  portfolio  and  purchase  the same or a similar  security on a
when-issued  or forward  commitment  basis,  thereby  obtaining  the  benefit of
currently  higher cash  yields.  However,  if a Fund's  Adviser were to forecast
incorrectly the direction of interest rate movements, the Fund might be required
to complete such when-issued of forward  transactions at prices inferior to then
current market values.  No forward  commitments  will be made by a Fund if, as a
result,  the Fund's aggregate  commitments under such transactions would be more
than 30% of the then current value of the Fund's total assets.

A Fund's right to receive or deliver a security  under a forward  commitment may
be  sold  prior  to the  settlement  date,  but the  Fund  enters  into  forward
commitments  only with the  intention of actually  receiving or  delivering  the
securities,  as the case  may be.  To  facilitate  such  transactions,  a Fund's
Custodian will  maintain,  in a segregated  account of the Fund,  cash or liquid
high-grade  debt  securities  having  value  equal  to,  or  greater  than,  any
commitments  to purchase  securities  on a forward  commitment  basis and,  with
respect to forward  commitments  to sell  portfolio  securities of the Fund, the
portfolio securities,  themselves. If a Fund, however, chooses to dispose of the
right to receive or deliver a security subject to a forward  commitment prior to
the  settlement  date of the  transaction,  it can incur a gain or loss.  In the
event the other party to a forward  commitment  transaction  were to default,  a
Fund might lose the opportunity to invest money at favorable rates or to dispose
of securities at favorable prices.

Standby  Commitment  Agreements.  The  Funds may from  time to time  enter  into
standby commitment  agreements.  A Fund enters into such agreements only for the
purpose of investing in the security  underlying  the  commitment at a yield and
price that are considered advantageous to the Fund and that are unavailable on a
firm commitment basis. Each Fund will not enter into a standby commitment with a
remaining  term in  excess  of 45 days and will  limit  its  investment  in such
commitments so that the aggregate  purchase  price of the securities  subject to
the  commitments,  together with the value of portfolio  securities that are not
readily  marketable,  will not  exceed  50% of its  assets  taken at the time of
acquisition of such commitment of security.

Short  Sales.  A Fund may make short  sales of  securities  or  maintain a short
position, provided that at all times when a short position is open the Fund owns
an equal amount of such securities of the same issue as, and equal in amount to,
the securities sold short. In addition, a Fund may not make a short sale if more
than 10% of the  Fund's  net  assets  (taken at market  value)  would be held as
collateral  for short sales at any one time.  If the price of the security  sold
short increases  between the time of the short sale and the time a Fund replaces
the  borrowed  security,  the Fund will incur a loss;  conversely,  if the price
declines,  the Fund will  realize  a capital  gain.  Although  a Fund's  gain is
limited to the price at which it sold the security short,  its potential loss is
unlimited.  It is the Funds'  present  intention to make such sales only for the
purpose  of  deferring  realization  of gain  or loss  for  federal  income  tax
purposes.  Certain special federal income tax  considerations may apply to short
sales, which are entered into by a Fund.

Reverse Repurchase  Agreements.  Each Fund may use reverse repurchase agreements
and  dollar  rolls  as  part  of its  investment  strategy.  Reverse  repurchase
agreements  involve  sales by a Fund of portfolio  assets  concurrently  with an
agreement by the Fund to  repurchase  the same assets at a later date at a fixed
price.  During the reverse  repurchase  agreement period,  the Fund continues to
receive  principal and interest  payments on these  securities.  Generally,  the
effect of such a transaction  is that a Fund can recover all or most of the cash
invested in the  portfolio  securities  involved  during the term of the reverse
repurchase  agreement,  while  it  will be able  to  keep  the  interest  income
associated with those portfolio  securities.  Such transactions are advantageous
only if the interest  cost to a Fund of the reverse  repurchase  transaction  is
less than the cost of otherwise obtaining the cash.

Reverse  repurchase  agreements  involve  the risk that the market  value of the
securities a Fund is obligated to  repurchase  under the  agreement  may decline
below the repurchase price. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent,  a Fund's use of
the proceeds of the agreement may be restricted  pending a determination  by the
other  party,  or its  trustee  or  receiver,  whether  to  enforce  the  Fund's
obligation to repurchase the securities.

A Fund may enter  into  dollar  rolls in which  the Fund  sells  securities  for
delivery  in the  current  month  and  simultaneously  contracts  to  repurchase
substantially  similar (same type and coupon)  securities on a specified  future
date.  During the roll period,  the Fund forgoes  principal and interest paid on
the  securities.  The Fund is compensated by the difference  between the current
sales price and the lower forward price for the future  purchase (often referred
to as the "drop") as well as by the interest  earned on the cash proceeds of the
initial sale.

Swap. Each Fund may enter into swaps to hedge its exposure to interest rates and
credit risk or for  investment  purposes.  A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based upon
or  calculated  by  reference  to  changes  in  specified  prices or rates for a
specified  amount of an underlying  asset.  The payment flows are usually netted
against each other,  with the  difference  being paid by one party to the other.
Risks may  arise as a result  of the  failure  of the  counterparty  to the swap
contract to comply with the terms of the swap contract. The loss incurred by the
failure of a counterparty is generally limited to the net interest payment to be
received by a Fund,  and/or the  termination  value at the end of the  contract.
Therefore,  a Fund considers the creditworthiness of each counterparty to a swap
contract in evaluating potential credit risk. Additionally, risks may arise from
unanticipated  movements  in  interest  rates or in the value of the  underlying
securities.

A Fund accrues for the interim payments on swap contracts on a daily basis, with
the net amount  recorded  within  unrealized  appreciation/depreciation  of swap
contracts on the statement of assets and liabilities.  Once the interim payments
are settled in cash, the net amount is recorded as realized  gain/loss on swaps,
in  addition  to  realized  gain/loss  recorded  upon  the  termination  of swap
contracts on the  statement  of  operations.  Fluctuations  in the value of swap
contracts   are   recorded   as  a  component   of  net  change  in   unrealized
appreciation/depreciation of investments.

Interest Rate Swap Agreements.  The Funds may enter into interest rate swaps and
may purchase or sell (i.e., write) interest rate caps and floors. A Fund expects
to enter into these  transactions  primarily to preserve a return or spread on a
particular  investment or portion of its  portfolio.  A Fund may also enter into
these  transactions  to protect  against any increase in the price of securities
the Fund anticipates  purchasing at a later date. The Funds do not intend to use
these transactions in a speculative manner.

Interest rate swaps involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest (e.g., an exchange of floating
rate payments for fixed rate payments)  computed based on a  contractually-based
principal (or "notional") amount.  Interest rate swaps are entered into on a net
basis (i.e.,  the two payment streams are netted out, with the Fund receiving or
paying,  as the case may be, only the net amount of the two payments).  Interest
rate caps and floors are similar to options in that the  purchase of an interest
rate cap or floor entitles the purchaser,  to the extent that a specified  index
exceeds  (in the  case of a cap) or  falls  below  (in the  case of a  floor)  a
predetermined  interest  rate,  to receive  payments  of  interest on a notional
amount from the party selling the interest rate cap or floor. The Fund may enter
into  interest  rate  swaps,  caps  and  floors  on  either  an  asset-based  or
liability-based basis.

The swap market has grown  substantially in recent years, with a large number of
banks and  investment  banking  firms  acting both as  principals  and as agents
utilizing  standardized  swap  documentation.  As a result,  the swap market has
become well established and relatively  liquid.  Caps and floors are less liquid
than swaps.  These  transactions  do not involve the delivery of  securities  or
other  underlying   assets  or  principal.   Accordingly,   unless  there  is  a
counterparty  default,  the  risk  of  loss  to  the  Fund  from  interest  rate
transactions is limited to the net amount of interest  payments that the Fund is
contractually  obligated to make.  The Fund will enter into  interest rate swap,
cap or floor transactions only with counterparties who have credit ratings of at
least  A- (or  the  equivalent)  from  any  one  NRSRO  or  counterparties  with
guarantors with debt securities having such a rating.

Credit Default Swap  Agreements.  The Funds may enter into credit default swaps.
The Fund may purchase  credit  protection  on the  referenced  obligation of the
credit  default  swap ("Buy  Contract")  or  provide  credit  protection  on the
referenced obligation of the credit default swap ("Sale Contract"). A sale/(buy)
in a credit  default swap  provides upon the  occurrence  of a credit event,  as
defined  in the  swap  agreement,  for the  Fund  to  buy/(sell)  from/(to)  the
counterparty   at   the   notional   amount   (the   "Notional    Amount")   and
receive/(deliver) the principal amount of the referenced obligation. If a credit
event  occurs,  the maximum  payout amount for a Sale Contract is limited to the
Notional Amount of the swap contract ("Maximum Payout Amount").  During the term
of the swap agreement, the Fund receives/(pays) interim fixed payments from/(to)
the respective counterparty, calculated at the agreed upon interest rate applied
to the Notional Amount.  These interim  payments are recorded within  unrealized
appreciation/depreciation  of swap  contracts  on the  statement  of assets  and
liabilities.  Credit default swaps may involve  greater risks than if a Fund had
invested in the referenced obligation directly. Credit default swaps are subject
to general market risk,  liquidity risk,  counterparty  risk and credit risk. If
the Fund is a buyer and no credit event occurs, it will lose its investment.  In
addition,  if the Fund is a seller and a credit event  occurs,  the value of the
referenced  obligation  received by the Fund coupled with the periodic  payments
previously  received,  may be less than the Maximum Payout Amount it pays to the
buyer, resulting in a loss to the Fund.

Future  Developments.  A Fund may, following written notice to its stockholders,
take  advantage  of  other  investment   practices  which  are  not  at  present
contemplated  for use by the Fund or which currently are not available but which
may be developed,  to the extent such  investment  practices are both consistent
with the Fund's investment  objective and legally permissible for the Fund. Such
investment  practices,  if they  arise,  may  involve  risks that  exceed  those
involved in the activities described above.

                             INVESTMENT RESTRICTIONS

Each Fund has adopted the following  investment  restrictions,  which may not be
changed  without  the  approval  of the  holders  of a majority  of that  Fund's
outstanding  voting securities as defined above. The percentage  limitations set
forth below,  as well as those described in the  Prospectus/Proxy  Statement and
elsewhere  in this SAI,  apply only at the time an  investment  is made or other
relevant action is taken by a Fund.

     1.   Each Fund will not make loans except  through (a) the purchase of debt
          obligations in accordance with its investment  objective and policies;
          (b) the lending of portfolio securities;  or (c) the use of repurchase
          agreements;

     2.   Each  Fund  will  not  invest  25% or  more  of its  total  assets  in
          securities of issuers conducting their principal  business  activities
          in the same industry,  except that this  restriction does not apply to
          U.S. Government Securities;

     3.   Each Fund will not borrow  money,  except a Fund may borrow (a) from a
          bank or other  entity in a privately  arranged  transaction  and issue
          commercial paper, bonds,  debentures or notes, in series or otherwise,
          with such  interest  rates,  conversion  rights  and  other  terms and
          provisions  as are  determined  by the  Fund's  Board,  if after  such
          borrowing  or  issuance  there is asset  coverage  of at least 300% as
          defined in the 1940 Act, and (b) for  temporary  purposes in an amount
          not exceeding 5% of the value of the total assets of the Fund;

     4.   Each Fund will not pledge, hypothecate, mortgage or otherwise encumber
          its assets, except to secure permitted borrowings;

     5.   Each Fund will not invest in companies  for the purpose of  exercising
          control;

     6.   Each Fund will not make short sales of  securities or maintain a short
          position, unless at all times when a short position is open it owns an
          equal amount of such  securities  or  securities  convertible  into or
          exchangeable  for,  without  payment  of  any  further  consideration,
          securities  of the  same  issue  as,  and  equal  in  amount  to,  the
          securities sold short ("short sales against the box"),  and unless not
          more than 10% of the Fund's net assets (taken at market value) is held
          as collateral for such sales at any one time (it is the Fund's present
          intention  to make  such  sales  only  for the  purpose  of  deferring
          realization of gain or loss for federal income tax purposes);

     7.   Each Fund will not (a)  purchase or sell real  estate,  except that it
          may  purchase  and sell  securities  of  companies  which deal in real
          estate or interests  therein and  securities  that are secured by real
          estate,  provided such securities are Sovereign Debt Obligations;  (b)
          purchase or sell  commodities  or commodity  contracts;  (c) invest in
          interests in oil, gas, or other  mineral  exploration  or  development
          programs;  and (d)  purchase  securities  on  margin,  except for such
          short-term   credits  as  may  be  necessary   for  the  clearance  of
          transactions;

     8.   Each Fund would own more than 3% of the total outstanding voting stock
          of any  investment  company  and not more  than 5% of the value of the
          Fund's  total  assets  may  be  invested  in  the  securities  of  any
          investment company; and

     9.   Each fund will not act as an underwriter  of  securities,  except that
          the Fund may acquire  restricted  securities  under  circumstances  in
          which, if such securities were sold, the Fund might be deemed to be an
          underwriter for purposes of the Securities Act of 1933.

                     RISK FACTORS AND SPECIAL CONSIDERATIONS

General. The NAV of shares of a Fund varies as the aggregate value of the Fund's
portfolio securities increases or decreases. A Fund's NAV changes as the general
levels of interest rates fluctuate.  When interest rates decline, the value of a
portfolio  invested  in  fixed-income   securities  can  be  expected  to  rise.
Conversely,  when  interest  rates rise,  the value of a  portfolio  invested in
fixed-income securities can be expected to decline. If the Adviser's expectation
of changes in interest rates or its evaluation of the normal yield relationships
in the  fixed-income  markets proves to be incorrect,  a Fund's income,  NAV and
potential  capital gain may be decreased  or its  potential  capital loss may be
increased.

Although  changes in the value of a Fund's  portfolio  securities  subsequent to
their  acquisition are reflected in the Fund's NAV, such changes will not affect
the income  received by the Fund from such  securities.  The dividends paid by a
Fund  increase or  decrease in relation to the income  received by the Fund from
its  investments,   which  is  reduced  by  the  Fund's  expenses  before  being
distributed to the Fund's stockholders.

For these  reasons,  an investment in shares of the Fund should not constitute a
complete  investment program and may not be appropriate for investors who cannot
assume the  greater  risk of capital  depreciation  inherent  in seeking  higher
income.

Borrowing. A Fund may, if and when market conditions dictate,  borrow, including
on  a  secured  basis,  from  bank  or  other  entities  in  privately  arranged
transactions to increase the money available to the Fund to invest in securities
when the Fund  believes  that the income from the  securities  financed  will be
greater than the interest expense paid on the borrowing. Such borrowings involve
additional  risk to a Fund,  since the interest  expense may be greater than the
income from or  appreciation  of the  securities  carried by the  borrowings and
since the value of the securities carried may decline below the amount borrowed.
A Fund may also borrow to finance repurchases of or tender offers for its shares
when the Fund deems it desirable in order to avoid the untimely  disposition  of
portfolio  securities.  A Fund  reserves  the  right to issue  preferred  stock,
commercial paper, bonds, debentures or notes, in series or otherwise,  with such
interest  rates,  conversion  rights  and  other  terms  and  provisions  as are
determined by the Fund's Board of Directors.

A Fund may borrow to the maximum extent  permitted  under the 1940 Act. The 1940
Act  requires a Fund to maintain  "asset  coverage" of not less than 300% of its
"senior  securities  representing  indebtedness," as those terms are defined and
used in the 1940 Act. In addition, a Fund may not make any cash distributions to
its stockholders if, after the distribution, there would be less than 300% asset
coverage  of  a  senior  security   representing   indebtedness  for  borrowings
(excluding for this purpose certain  evidences of indebtedness made by a bank or
other  entity  and  privately   arranged,   and  not  intended  to  be  publicly
distributed).  This limitation on a Fund's ability to make  distributions  could
under  certain   circumstances   impair  the  Fund's  ability  to  maintain  its
qualification for taxation as a registered investment company.

A Fund may also borrow for  temporary  purposes in an amount not exceeding 5% of
the value of the total assets of the Fund.  Such  borrowings  are not subject to
the asset coverage restrictions set forth in the preceding paragraph.

Any investment  gains made with the proceeds  obtained from borrowings in excess
or interest  paid on the  borrowings  will cause the net income per share or the
NAV per share of a Fund's common stock to be greater than would otherwise be the
case.  On the  other  hand,  if the  investment  performance  of the  additional
securities  purchased  fails to cover their cost (including any interest paid on
the money borrowed) to a Fund, then the net income per share or NAV per share of
the Fund's common stock will be less than would  otherwise be the case.  This is
the speculative factor known as "leverage."

Effects of  Leverage.  Utilization  of  leverage,  which is  usually  considered
speculative,  involves  certain  risks to  stockholders.  These include a higher
volatility  of the NAV of the  common  stock,  caused by  favorable  or  adverse
changes in currency  exchange rates.  In addition,  fluctuations in the interest
rates on a Fund's  indebtedness  will  affect the return to  stockholders,  with
increases in such rates decreasing such return.

To the extent that the current interest rate on a Fund's indebtedness approaches
the net return on the leveraged portion of the Fund's investment portfolio,  the
benefit of leverage to stockholders will be reduced, and if the current interest
rate on the  indebtedness  were to exceed the net return on such  portion of the
Funds' portfolio,  the Fund's leverage would result in a lower rate of return to
stockholders and in a lower NAV than if a Fund were not leveraged. In an extreme
case, if a Fund's current investment income were not sufficient to meet interest
requirements  on the  indebtedness  or if a Fund  failed to  maintain  the asset
coverage  required  by the  1940  Act,  it could  be  necessary  for the Fund to
liquidated  certain of its investments at a time when it may be  disadvantageous
to do so, thereby reducing its NAV.

Investments in Lower-Rated Securities.  Securities rated below investment grade,
i.e., Ba and lower by Moody's or BB and lower by S&P ("lower-rated securities"),
or, if not rated,  determined  by the Adviser to be of equivalent  quality,  are
subject to greater risk of loss of  principal  and  interest  than  higher-rated
securities and are considered to be  predominantly  speculative  with respect to
the issuer's capacity to pay interest and repay principal, which may in any case
decline during sustained periods of deteriorating  economic conditions or rising
interest  rates.  They are also  generally  considered  to be subject to greater
market risk than  higher-rated  securities  in times of  deteriorating  economic
conditions. In addition,  lower-rated securities may be more susceptible to real
or perceived  adverse  economic  conditions  than investment  grade  securities,
although  the market  values of  securities  rated  below  investment  grade and
comparable  unrated  securities  tend to react less to  fluctuations in interest
rate levels than do those of  higher-rated  securities.  Securities  rated Ba by
Moody's or BB by S&P are  judged to have  speculative  characteristics  or to be
predominantly  speculative  with respect to the issuer's ability to pay interest
and repay  principal.  Securities  rated B by Moody's and S&P are judged to have
highly  speculative  characteristics  or to be predominantly  speculative.  Such
securities may have small assurance of interest and principal payments.

The market for  lower-rated  securities may be thinner and less active than that
for  higher-rated  securities,  which can  adversely  affect the prices at which
these  securities  can be sold.  To the  extent  that  there  is no  established
secondary market for lower-rated securities, the Funds may experience difficulty
in valuing such securities and, in turn, the Funds' assets.

The  Adviser  will try to reduce  risk  inherent in  investment  in  lower-rated
securities  through credit  analysis,  diversification  and attention to current
developments and trends in interest rates and economic and political conditions.
However, there can be no assurance that losses will not occur. Since the risk of
default is higher for lower-rated securities,  the Adviser's research and credit
analysis are a correspondingly more important aspect of its program for managing
the  Fund's  securities  than  would be the case if the Fund did not  invest  in
lower-rated securities.

In seeking to achieve the Fund's investment objective, there will be times, such
as during periods of rising interest rates, when depreciation and realization of
capital  losses on  securities  in the  Fund's  portfolio  will be  unavoidable.
Moreover,  medium-  and  lower-rated  securities  and  non-rated  securities  of
comparable  quality  may be  subject to wider  fluctuations  in yield and market
values than  higher-rated  securities  under  certain  market  conditions.  Such
fluctuations after a security is acquired do not affect the cash income received
from that security but are reflected in the NAV of the Fund.

Ratings of securities by Moody's and S&P are a generally  accepted  barometer of
credit  risk.  They  are,  however,  subject  to  certain  limitations  from  an
investor's  standpoint.  The rating of a security  is heavily  weighted  by past
developments and does not necessarily reflect probable future conditions.  There
is  frequently  a lag between  the time a rating is assigned  and the time it is
updated.  In addition,  there may be varying degrees of difference in the credit
risk of securities within each rating category. See Appendix A for a description
of Moody's and S&P's bond ratings.

Certain lower-rated securities in which the Funds may invest may contain call or
buy-back  features that permit the issuers  thereof to call or  repurchase  such
securities.  Such securities may present risks based on prepayment expectations.
If an issuer  exercises  such a  provision,  the Funds may have to  replace  the
called security with a lower yielding security, resulting in a decreased rate of
return to the Funds.

U.S.  Corporate  Fixed-Income   Securities.   The  U.S.  corporate  fixed-income
securities  in which  AWDGF II will  invest  may  include  securities  issued in
connection with corporate restructurings such as takeovers or leveraged buyouts,
which  may  pose  particular  risks.  Securities  issued  to  finance  corporate
restructurings  may  have  special  credit  risks  due to the  highly  leveraged
conditions  of the  issuer.  In  addition,  such  issuers  may lose  experienced
management as a result of the restructuring.  Finally,  the market price of such
securities  may be more volatile to the extent that  expected  benefits from the
restructuring  do not  materialize.  The Fund may also invest in U.S.  corporate
fixed-income  securities  that are not  current in the  payment of  interest  or
principal or are in default,  so long as the Adviser believes such investment is
consistent with the Fund's investment objectives. The Fund's rights with respect
to defaults on such securities  will be subject to applicable  U.S.  bankruptcy,
moratorium and other similar laws.

Sovereign Debt Obligations.  No established secondary markets may exist for many
of the  Sovereign  Debt  Obligations  in which the Funds  will  invest.  Reduced
secondary  market liquidity may have an adverse effect on the market price and a
Fund's ability to dispose of particular  instruments  when necessary to meet its
liquidity  requirements  or in response to  specific  economic  events such as a
deterioration in the  creditworthiness  of the issuer.  Reduced secondary market
liquidity for certain Sovereign Debt Obligations may also make it more difficult
for a Fund to obtain accurate  market  quotations for the purpose of valuing its
portfolio.  Market  quotations  are generally  available on many  Sovereign Debt
Obligations  only  from a  limited  number of  dealers  and may not  necessarily
represent firm bids of those dealers or prices for actual sales.

By  investing in Sovereign  Debt  Obligations,  the Funds will be exposed to the
direct or indirect  consequences  of political,  social and economic  changes in
various countries.  Political changes in a country may affect the willingness of
a foreign  government to make or provide for timely payments of its obligations.
The  country's  economic  status,  as  reflected,  among  other  things,  in its
inflation rate, the amount of its external debt and its gross domestic  product,
will also affect the government's ability to honor its obligations.

Many countries providing investment opportunities for the Funds have experienced
substantial,  and in some periods  extremely  high,  rates of inflation for many
years.  Inflation  and rapid  fluctuations  in inflation  rates have had and may
continue to have adverse  effects on the  economies  and  securities  markets of
certain of these countries.  In an attempt to control inflation,  wage and price
controls have been imposed in certain countries.

Investing in Sovereign Debt Obligations  involves  economic and political risks.
The  Sovereign  Debt  Obligations  in which the Funds will  invest in most cases
pertain to countries  that are among the world's  largest  debtors to commercial
banks,  foreign  governments,  international  financial  organizations and other
financial  institutions.  In  recent  years,  the  governments  of some of these
countries  have  encountered  difficulties  in  servicing  their  external  debt
obligations,  which led to defaults on certain obligations and the restructuring
of certain indebtedness.  Restructuring  arrangements have included, among other
things,  obtaining new credit to finance interest payments.  Certain governments
may not be able to make  payments of interest on or principal of Sovereign  Debt
Obligations  as those  payments  have come due.  Obligations  arising  from past
restructuring  agreements may affect the economic  performance and political and
social stability of those issuers.

Central banks and other governmental  authorities which control the servicing of
Sovereign Debt  Obligations  may not be willing or able to permit the payment of
the  principal  or  interest  when  due in  accordance  with  the  terms  of the
obligations.  As a result, the issuers of Sovereign Debt Obligations may default
on their  obligations.  Defaults  on certain  Sovereign  Debt  Obligations  have
occurred  in the past.  Holders of certain  Sovereign  Debt  Obligations  may be
requested  to  participate  in  the  restructuring  and  rescheduling  of  these
obligations and to extend further loans to the issuers. The interests of holders
of  Sovereign  Debt  Obligations  could be  adversely  affected in the course of
restructuring  arrangements  or by  certain  other  factors  referred  to below.
Furthermore, some of the participants in the secondary market for Sovereign Debt
Obligations  may also be  directly  involved in  negotiating  the terms of these
arrangements and may therefore have access to information not available to other
market participants.

The ability of  governments  to make timely  payments  on their  obligations  is
likely to be influenced strongly by the issuer's balance of payments,  including
export performance,  and its access to international credits and investments.  A
country whose exports are concentrated in a few commodities  could be vulnerable
to a decline in the  international  prices of one or more of those  commodities.
Increased  protectionism on the part of a country's  trading partners could also
adversely  affect the country's  exports and diminish its trade account surplus,
if any.

To the extent that a country  receives  payment  for its  exports in  currencies
other than  dollars,  its ability to make debt payments  denominated  in dollars
could be  adversely  affected.  To the  extent  that a country  develops a trade
deficit,  it will need to depend on continuing  loans from foreign  governments,
multilateral  organizations  or private  commercial  banks,  aid  payments  from
foreign  governments  and on  inflows  of  foreign  investment.  The access of a
country to these forms of external funding may not be certain,  and a withdrawal
of external  funding could adversely affect the capacity of a government to make
payments on its obligations. In addition, the cost of servicing debt obligations
can be affected by a change in  international  interest rates since the majority
of these obligations carry interest rates that are adjusted  periodically  based
upon international rates.

Another  factor  bearing on the  ability of a country  to repay  Sovereign  Debt
Obligations is the level of the country's international  reserves.  Fluctuations
in the level of these reserves can affect the amount of foreign exchange readily
available  for external debt  payments  and,  thus,  could have a bearing on the
capacity of the country to make payments in its Sovereign Debt Obligations.

The Funds are  permitted to invest in Sovereign  Debt  Obligations  that are not
current in the payment of interest or  principal  or are in default,  so long as
the Adviser believes it to be consistent with the Funds' investment  objectives.
The Funds may have limited legal recourse in the event of a default with respect
to certain  Sovereign  Debt  Obligations  it holds.  For example,  remedies from
defaults on certain  Sovereign Debt  Obligations,  unlike those on private debt,
must, in some cases,  be pursued in the courts of the  defaulting  party itself.
Legal recourse therefore may be significantly diminished. Bankruptcy, moratorium
and other similar laws  applicable to issuers of Sovereign Debt  Obligations may
be  substantially  different  from those  applicable  to issuers of private debt
obligations. The political context, expressed as the willingness of an issuer of
Sovereign  Debt  Obligations  to meet  the  terms of the  debt  obligation,  for
example, is of considerable  importance.  In addition, no assurance can be given
that the  holders  of  commercial  bank debt will not  contest  payments  to the
holders  of  securities  issued by foreign  governments  in the event of default
under commercial bank loan agreements.

Non-Diversified  Status.  Each Fund is a  "non-diversified"  investment company,
which means the Fund is not limited in the  proportion of its assets that may be
invested in the  securities  of a single  issuer.  However,  the Fund intends to
conduct its operations so as to qualify as a "regulated  investment company" for
purposes of the Code,  which will relieve the Fund of any  liability for federal
income tax to the extent its earnings are  distributed  to  stockholders.  To so
qualify, among other requirements,  the Fund will limit its investments so that,
at the close of each quarter of the taxable  year,  (i) not more than 25% of the
market value of the Fund's total assets will be invested in the  securities of a
single  issuer,  and (ii) with  respect to 50% of the market  value of its total
assets,  not more  than 5% of the  market  value  of its  total  assets  will be
invested  in the  securities  of a single  issuer and the Fund will not own more
than 10% of the  outstanding  voting  securities  of a single  issuer.  A Fund's
investments in U.S. Government  Securities are not subject to these limitations.
Because  the Fund,  as a  non-diversified  investment  company  may  invest in a
smaller number of individual issuers than a diversified  investment  company, an
investment in the Fund may, under certain circumstances, present greater risk to
an investor than an investment in a diversified company.

Securities issued or guaranteed by foreign governments are not treated like U.S.
Government Securities for purposes of the diversification tests described in the
preceding  paragraph,  but instead are subject to these tests in the same manner
as the securities of non-governmental  issuers.  In this regard,  Sovereign Debt
Obligations  issued by different  issuers  located in the same country are often
treated  as issued by a single  issuer  for  purposes  of these  diversification
tests.  Certain  issuers of  Structured  Securities  and  Participations  may be
treated as separate issuers for purposes of these tests.

Because the Funds are non-diversified investment companies, they may invest in a
smaller number of individual issuers than a diversified  investment company, and
an investment in such Fund may,  under certain  circumstances,  present  greater
risk to an investor than an investment in a diversified investment company.

Repurchase of Shares.  In  recognition of the  possibility  that a Fund's shares
might trade at a discount to NAV, each Fund's Board has determined that it would
be in the  interest  of  stockholders  for the  Fund to  attempt  to  reduce  or
eliminate such a market value discount should it exist. To that end, each Fund's
Board  presently  contemplates  that a Fund may from  time to time  take  action
either to  repurchase  in the open market or to make a tender  offer for its own
shares at NAV. Each Fund's Board presently  intends each quarter to consider the
making of a tender  offer.  The Boards may at any time,  however,  decide that a
Fund should not make a tender offer.

Subject to a Fund's fundamental policy with respect to borrowings,  the Fund may
incur debt to finance  repurchases  and/or tender  offers.  Interest on any such
borrowing will reduce the Fund's net income.

There can be no assurance that repurchases and/or tender offers will result in a
Fund's shares trading at a price equal to their NAV. Each Fund  anticipates that
the market  price of its shares will from time to time vary from NAV. The market
price of a Fund's shares will,  among other things,  be affected by the relative
demand  for and  supply of such  shares in the  market,  the  Fund's  investment
performance,  the Fund's  dividends  and yield and  investor  perception  of the
Fund's overall attractiveness as an investment as compared with other investment
alternatives.  Nevertheless, the fact that a Fund's shares may be the subject of
tender  offers  at NAV from  time to time  may  reduce  the  spread  that  might
otherwise  exist  between  market  price and NAV. In the opinion of the Adviser,
sellers  may be less  inclined to accept a  significant  discount if they have a
reasonable  expectation  of being  able to  recover  NAV in  conjunction  with a
possible tender offer.

Although  each Fund's Board  believes that share  repurchases  and tender offers
might, in certain circumstances have a favorable effect an the market price of a
Fund's  shares,  it should be recognized  that the  acquisition of shares by the
Fund would  decrease the total assets of the Fund and therefore  have the effect
of increasing the Fund's expense ratio. Even if a tender offer has been made, it
is a Board's policy, which may be changed by the Board, not to accept tenders or
effect repurchases if (1) such transactions if consummated,  would (a) result in
the  delisting of the Fund's  shares from the New York Stock  Exchange  ("NYSE")
(the NYSE  having  advised  the Fund  that it would  consider  delisting  if the
aggregate market value of the Fund's outstanding shares is less than $5,000,000,
the  number of  publicly  held  shares  falls  below  600,000  or the  number of
round-lot  holders  fall below  1,200),  or (b)  impair  the Fund's  status as a
regulated investment company under the Code (which would make the Fund a taxable
entity, causing the Fund's income to be taxed at the corporate level in addition
to the taxation of stockholders  who receive  dividends from the Fund);  (2) the
Fund would not be able to liquidate  portfolio  securities in an orderly  manner
and  consistent  with the Fund's  investment  policies and objective in order to
repurchase  shares; or (3) there is, in the Board's  judgment,  any material (a)
legal  action  or  proceeding   instituted  or   threatened   challenging   such
transactions  or  otherwise   materially   adversely  affecting  the  Fund,  (b)
suspension of or limitation  on prices for trading  securities  generally on the
NYSE of any  foreign  exchange  on which  portfolio  securities  of the Fund are
traded,  (c)  declaration of a banking  moratorium by federal,  state or foreign
authorities or any suspension of payment by banks in the United States, New York
State or foreign countries in which the Fund invests,  (d) limitation  affecting
the Fund or the issuers of its portfolio securities imposed by federal, state or
foreign authorities on the extension of credit by lending institutions or on the
exchange of foreign  currency,  (e)  commencement  of war, armed  hostilities or
other  international or national calamity  directly or indirectly  involving the
United States or other countries in which the Fund invests or (f) other event or
condition  which  would  have a  material  adverse  effect  on the  Fund  or its
stockholders if shares were repurchased.  A Board may modify these conditions in
light of experience.

Any  tender  offer  made by AWDGF II will be at a price  equal to the NAV of the
shares on a date  subsequent  to the Fund's  receipt of all tenders.  Any tender
offer made by AWDGF will be at a price equal to the NAV per share  determined at
the close of business on the day the offer  terminates.  Each offer will be made
and stockholders  notified in accordance with the requirements of the Securities
Exchange  Act of 1934,  as amended and the 1940 Act,  either by  publication  or
mailing or both.  Each  offering  document will contain such  information  as is
prescribed by such laws and the rules and  regulations  promulgated  thereunder.
When a tender offer is authorized  to be made by a Fund's  Board,  a stockholder
wishing to accept the offer  will be  required  to tender all (but not less thin
all) of the shares owned by such  stockholder  (or attributed to the stockholder
for federal  income tax  purposes  under  Section 318 of the Code).  A Fund will
purchase all shares tendered in accordance with the terms of the offer unless it
determines  to accept none of them (based upon one of the  conditions  set forth
above).  Each person  tendering shares will be required to submit a check in the
amount of  $25.00,  payable to the Fund,  which will be used to help  defray the
costs  associated  with  effecting  the tender  offer.  This  $25.00 fee will be
imposed  upon  each  tendering  stockholder  any of whose  tendered  shares  are
purchased in the offer,  and will be imposed  regardless of the number of shares
purchased.  A Fund expects the cost to the Fund of effecting a tender offer will
exceed the aggregate of all such fees received from those who tender offer their
shares.  Costs associated with the tender offer will be charged against capital.
During the period of the tender  offer,  a Fund's  stockholders  will be able to
obtain the Fund's current NAV by use of a toll-free telephone number.

If a Fund must liquidate  portfolio  securities in order to purchase Fund shares
tendered,  the Fund may realize gains and losses.  If the  portfolio  securities
sold are "Section 998" items, a Fund's distributable net investment income could
be positively or adversely  affected.  The portfolio turnover rate of a Fund may
or may not be affected by the Fund's  repurchase of shares  pursuant to a tender
offer.

                             MANAGEMENT OF THE FUNDS

Directors and Officers
----------------------

The  Directors  and  principal   officers  of  the  Funds  and  their  principal
occupations  during the past five years are set forth  below.  Unless  otherwise
specified,  the address of each such person is 1345 Avenue of the Americas,  New
York, NY 10105. Each Director and officer is affiliated as such with one or more
of the other registered investment companies sponsored by the Adviser.

Directors


Name, Address and               Fund                                  Principal Occupation During the
Date of Birth                   First Year Elected    Office          Past Five Years and Other Affiliations
-------------                   ------------------    ------          --------------------------------------
                                                             

Marc O. Mayer*                  AWDGF II - 2003       President       Executive Vice President of AllianceBernstein L.P.
10/2/57                         AWDGF - 2003                          (the "Adviser")** since 2001 and Executive Managing
                                                                      Director of AllianceBernstein Investments, Inc.
                                                                      ("ABI")** since 2003; prior thereto, he was head of
                                                                      AllianceBernstein Institutional Investments, a unit
                                                                      of AllianceBernstein, from 2001-2003.  Prior
                                                                      thereto, Chief Executive Officer of Sanford C.
                                                                      Bernstein & Co., LLC (institutional research and
                                                                      brokerage arm of Bernstein & Co. LLC) and its
                                                                      predecessor since prior to 2001. He is a Director of
                                                                      SCB Partners, Inc. and SCB, Inc.

William H. Foulk, Jr., +**      AWDGF II - 1992       Chairman        Investment Adviser and an independent consultant.
2 Sound View Drive              AWDGF - 1993          Director        He was formerly Senior Manager of Barrett
Suite 100                                                             Associates, Inc., a registered investment adviser,
Greenwich, CT 06830                                                   with which he had been associated since prior to
9/7/32                                                                2001.  He was formerly Deputy Comptroller and Chief
                                                                      Investment Officer of the State of New York and,
                                                                      prior thereto, Chief Investment Officer of the New
                                                                      York Bank for Savings.

David H. Dievler, +             AWDGF II - 1992       Director        Independent Consultant. Until December 1994, he was
P.O. Box 167                    AWDGF - 1993                          Senior Vice President of AllianceBernstein
Spring Lake, NJ 07762                                                 Corporation ("AB Corp.") (formerly Alliance Capital
10/23/29                                                              Management Corporation) responsible for mutual fund
                                                                      administration. Prior to joining AB Corp. in
                                                                      1984, he was Chief Financial Officer of Eberstadt
                                                                      Asset Management since 1968.  Prior to that, he was
                                                                      a Senior Manager at Price Waterhouse & Co. Member
                                                                      of the American Institute of Certified Public
                                                                      Accountants since 1953.

John H. Dobkin, +               AWDGF II - 1992       Director        Consultant. Formerly President of Save Venice, Inc.
P.O. Box 12                     AWDGF - 1993                          (preservation organization) from 2001 - 2002, a
Annandale, NY 12504                                                   Senior Advisor from June 1999 - June 2000 and
2/19/42                                                               President of Historic Hudson Valley (historic
                                                                      preservation) from December 1989 - May 1999.
                                                                      Previously, Director of the National Academy of
                                                                      Design and during 1988 - 1992, Director and
                                                                      Chairman of the Audit Committee of AB Corp. (formerly
                                                                      Alliance Capital Management Corporation).

Michael J. Downey, +            AWDGF II - 2005       Director        Consultant since January 2004.  Formerly managing
c/o AllianceBernstein L.P.      AWDGF - 2005                          partner of Lexington Capital, LLC (investment
Attention: Philip L. Kirstein                                         advisory firm) from December 1997 until December
1345 Avenue of the Americas                                           2003. Prior thereto, Chairman and CEO of Prudential
New York, NY 10105                                                    Mutual Fund Management from 1987 to 1993.  Director
1/26/44                                                               of Asia Pacific Fund, Inc. and The Merger Fund.

D. James Guzy, +                AWDGF II - 2005       Director        Chairman of the Board of PLX Technology
P.O. Box 128                    AWDGF - 2005                          (semi-conductors) and of SRC Computers Inc., with
Glenbrook, NV 89413                                                   which he has been associated since prior to 2001.
3/7/36                                                                He is also President of the Arbor Company (private
                                                                      family investments).  He is a director of Intel
                                                                      Corporation (semi-conductors), Cirrus Logic
                                                                      Corporation (semi-conductors), Novellus Corporation
                                                                      (semi-conductor equipment) and the Davis
                                                                      Selected Advisors Group of Mutual Funds.

Nancy P. Jacklin, #+            AWDGF II - 2006       Director        Formerly U.S. Executive Director of the
4046 Chancery Court, NW         AWDGF - 2006                          International Monetary Fund (December 2002-May
Washington, DC  20007                                                 2006); partner, Clifford Chance (1992-2002); Senior
5/22/48                                                               Counsel, International Banking and Finance, and
                                                                      Associate General Counsel, Citicorp (1985-1992);
                                                                      Assistant General Counsel (International), Federal
                                                                      Reserve Board of Governors (1982-1985); and
                                                                      Attorney Advisor, U.S. Department of the Treasury
                                                                      (1973-1982).  Member of the Bar of the District of
                                                                      Columbia and of New York; member of the Council on
                                                                      Foreign Relations.

Marshall C. Turner, Jr., +      AWDGF II - 2005       Director        Principal of Turner Venture Associates since before
220 Montgomery Street           AWDGF - 2005                          2001.  From 2003 until May 31, 2006, he was CEO of
Penthouse 10                                                          Toppan Photomasks, Inc., Austin, Texas.
San Francisco, CA                                                     (Semi-conductor manufacturing services).  He is
94104-3402                                                            also a director of the George Lucas Educational
10/10/41                                                              Foundation, and National Datacast, Inc.


----------
*    "Interested  person" as defined in the  Investment  Company Act of 1940, as
     amended, of each Fund because of an affiliation with each Fund's investment
     adviser, AllianceBernstein L.P.

+    Member of the Audit Committee,  the Governance and Nominating Committee and
     the Independent Directors Committee.

**   Member of the Fair Value Pricing Committee.

During the Fund's fiscal year ended in 2006,  the Board of AWDGF II met 9 times.
During the Fund's  fiscal  year ended in 2005,  the Board of AWDGF met 11 times.
The  Funds do not have a policy  that  requires  a  Director  to  attend  annual
meetings of stockholders.


Each Fund's Board has four standing committees: an Audit Committee, a Governance
and Nominating Committee,  an Independent Directors Committee,  and a Fair Value
Pricing  Committee.  The members of the Committees  are identified  above in the
table listing the Directors. The function of the Audit Committee of each Fund is
to assist the Board in its oversight of a Fund's  financial  reporting  process.
The members of the Audit Committee are  "independent"  as required by applicable
listing standards of the New York Stock Exchange.  During the Fund's fiscal year
ended in 2006,  the Audit  Committee of AWDGF II met 3 times.  During the Fund's
fiscal year ended in 2005, the Audit Committee of AWDGF met 3 times.  During the
Fund's fiscal year ended in 2006, the  Governance  and  Nominating  Committee of
AWDGF II met 8  times.  During  the  Fund's  fiscal  year  ended  in  2005,  the
Governance and Nominating Committee of AWDGF met 8 times.

Each Fund's  Board of  Directors  has adopted a charter for its  Governance  and
Nominating  Committee,  a copy of which may be found on the  Adviser's  website,
http://www.alliancebernstein.com    (click    on    Investor    Solutions/Mutual
Funds/Closed-End).  Pursuant to the  charter of the  Governance  and  Nominating
Committee,  the  Governance  and  Nominating  Committee  assists  each  Board in
carrying  out its  responsibilities  with  respect to  governance  of a Fund and
identifies,  evaluates and selects and nominates  candidates for that Board. The
Committee also may set standards or qualifications for Directors.  The Committee
may  consider  candidates  as  Directors  submitted  by a Fund's  current  Board
members,  officers,  investment  adviser,  stockholders  and  other  appropriate
sources.

The Governance and Nominating  Committee will consider candidates submitted by a
stockholder  or group  of  stockholders  who have  owned at least 5% of a Fund's
outstanding  common stock for at least two years at the time of  submission  and
who timely provide specified information about the candidates and the nominating
stockholder  or group.  To be timely for  consideration  by the  Committee,  the
submission,  including all required information, must be submitted in writing to
the attention of the Secretary at the principal  executive offices of a Fund not
less than 120 days  before  the date of the  proxy  statement  for the  previous
year's annual  meeting of  stockholders.  The  Committee  will consider only one
candidate  submitted by such a stockholder  or group for nomination for election
at  an  annual  meeting  of  stockholders.   The  Committee  will  not  consider
self-nominated candidates.

The Governance and  Nominating  Committee will consider and evaluate  candidates
submitted  by  stockholders  on the basis of the same  criteria as those used to
consider and evaluate  candidates  submitted from other sources.  These criteria
include the  candidate's  relevant  knowledge,  experience,  and expertise,  the
candidate's  ability to carry out his or her duties in the best  interests  of a
Fund and the candidate's ability to qualify as a disinterested Director.

The function of each Fund's Fair Value  Pricing  Committee  is to  consider,  in
advance if possible,  any fair  valuation  decision of the  Adviser's  Valuation
Committee  relating  to a security  held by a Fund made  under  unique or highly
unusual  circumstances not previously  addressed by the Valuation Committee that
would  result in a change in the Fund's  NAV by more than  $0.01 per share.  The
Fair Value  Pricing  Committee  did not meet during  each  Fund's most  recently
completed fiscal year.

The function of each Fund's Independent  Directors  Committee is to consider and
take action on matters that the Board or Committee  believes should be addressed
in executive session of the disinterested Directors, such as review and approval
of the Advisory  Agreements.  During the Fund's  fiscal year ended in 2006,  the
Independent  Directors  Committee  of AWDGF II met 12 times.  During  the Fund's
fiscal year ended in 2005, the  Independent  Directors  Committee of AWDGF met 8
times.

Officers

Name, Address*           Position(s)(Month and      Principal Occupation
and Date of Birth        Year First Elected)        During the Past 5 Years
-----------------        -------------------        -----------------------

Marc O. Mayer            President and Chief       See biography above.
10/2/57                  Executive Officer
                         (11/03)

Philip L. Kirstein       Senior Vice President     Senior Vice President and
5/29/45                  and Independent           Independent Compliance
                         Compliance Officer        Officer of the
                         (10/04)                   AllianceBernstein Funds, with
                                                   which he has been associated
                                                   since October 2004. Prior
                                                   thereto, he was Of Counsel to
                                                   Kirkpatrick & Lockhart, LLP
                                                   from October 2003 to October
                                                   2004, and General Counsel of
                                                   Merrill Lynch Investment
                                                   Managers, L.P. since prior to
                                                   2001 until March 2003.

Paul J. DeNoon           Vice President            Senior Vice President of the
4/18/62                  (04/94)                   Adviser,** with which he has
                                                   been associated since prior
                                                   to 2001.

Joseph J. Mantineo       Treasurer and             Senior Vice President of
3/28/59                  Chief Financial Officer   AllianceBernstein Investor
                         (08/06)                   Services, Inc. ("ABIS"),**
                                                   with which he has been
                                                   associated since prior to
                                                   2001.

Vincent S. Noto          Controller                Vice President of ABIS,**
12/14/64                 (04/96)                   with which he has been
                                                   associated since prior to
                                                   2001.

Emilie D. Wrapp          Secretary                 Senior Vice President,
11/13/55                 (10/05)                   Assistant General Counsel and
                                                   Assistant Secretary of ABI,**
                                                   with which she has been
                                                   associated since prior to
                                                   2001.

----------
*    The address for the Funds'  officers  is 1345 Avenue of the  Americas,  New
     York, New York 10105.
**   An affiliate of the Fund.

A Fund does not pay any fees to, or reimburse expenses of, any Director during a
time when such  Director is considered  an  "interested  person" of the Fund, as
defined by the 1940 Act. The aggregate compensation paid by each of AWDGF II and
AWDGF to each of its  Directors  during its fiscal  year ended in 2006 and 2005,
respectively,  the aggregate  compensation  paid to each of the Directors during
calendar year 2005 by all of the investment  companies in the  AllianceBernstein
Fund  Complex,  and the  total  number of  investment  companies  (and  separate
investment  portfolios  within those  companies) in the  AllianceBernstein  Fund
Complex  with  respect to which each of the  Directors  serves as a director  or
trustee, are set forth below. Neither the Funds nor any other investment company
in the  AllianceBernstein  Fund  Complex  provides  compensation  in the form of
pension or retirement benefits to any of its directors or trustees.



                                                  Total                  Total Number of            Total Number of
                                                  Compensation           Investment                 Investment
                           Aggregate              from the               Companies in the           Portfolios within the
                           Compensation from      AllianceBernstein      AllianceBernstein          AllianceBernstein
                           AWDGF II and AWDGF     Fund Complex,          Fund Complex,              Fund Complex,
                           During the Fiscal      Including              Including the Funds,       Including the Funds,
                           Year Ended in 2006     the Funds,             as to which the            as to which the
                           and 2005,              During Calendar        Director is a              Director is a
Name of Director           respectively           Year 2005              Director or a Trustee      Director or a Trustee
----------------           ------------           ---------              ---------------------      ---------------------
                                                                                        
Marc O. Mayer              $        0             $      0                41                         111
                           AWDGF II
                           $        0
                           AWDGF

William H. Foulk, Jr.      $    8,780             $487,625                43                         113
                           AWDGF II
                           $    8,301
                           AWDGF

David H. Dievler           $    4,796             $269,125                42                         112
                           AWDGF II
                           $    4,863
                           AWDGF

John H. Dobkin             $    5,929             $263,125                41                         111
                           AWDGF II
                           $    5,126
                           AWDGF

Michael J. Downey          $    4,850             $240,625                41                         111
                           AWDGF II
                           $    3,329
                           AWDGF

D. James Guzy*             $      977             $ 32,000                41                         111
                           AWDGF II
                           $        0
                           AWDGF

Nancy P. Jacklin*          $        0             $      0                41                         111
                           AWDGF II
                           $        0
                           AWDGF

Marshall C. Turner, Jr.*   $      977             $ 28,500                41                         111
                           AWDGF II
                           $        0
                           AWDGF


----------
*    Messrs.  Guzy and  Turner  did not  become  Directors  for the Funds  until
     December   15,  2005  and  were   directors   for  only  one  fund  in  the
     AllianceBernstein  Fund Complex prior to November 15, 2005. Ms. Jacklin did
     not become a Director for the Funds until June 14, 2006.

As of January 27, 2006, each of the Directors of each Fund owned less than 1% of
the shares of such Fund and the  Directors  and officers of each Fund as a group
owned less than 1% of the  shares of each such Fund.  During  each  Fund's  most
recently  completed  fiscal  year,  none of the  Funds'  Directors  engaged in a
purchase  or sale of the  securities  of the  Adviser  or any of its  parents or
subsidiaries  in an amount  exceeding  1% of the relevant  class of  securities.

The  dollar  range of each  Fund's  securities  owned by each  Director  and the
aggregate dollar range of securities owned in the AllianceBernstein Fund Complex
are set forth below.

                                                         Aggregate Dollar Range
                                                         of Equity Securities
                                                         in the Funds in the
                          Dollar Range of                AllianceBernstein Fund
                          Equity Securities in Fund      a Complex as of
Name of Director          as of January 27, 2006         January 27, 2006
----------------          ------------------------       ------------------

Marc O. Mayer             None                           over $100,000

William H. Foulk, Jr.     $1-$10,000          AWDGF II   over $100,000
                          $1-$10,000          AWDGF

David H. Dievler          $10,001-$50,000     AWDGF II   over $100,000
                          None                AWDGF

John H. Dobkin            $1-$10,000          AWDGF II   over $100,000
                          None                AWDGF

Michael J. Downey         None                AWDGF II   over $100,000

D. James Guzy*            None                AWDGF II   $50,001-$100,000

Nancy P. Jacklin*         None                AWDGF II   $0

Marshall C. Turner, Jr.*  None                AWDGF II   over $100,000

----------
*    Messrs.  Guzy and  Turner  did not  become  Directors  for the Funds  until
     December   15,  2005  and  were   directors   for  only  one  fund  in  the
     AllianceBernstein  Fund Complex prior to November 15, 2005. Ms. Jacklin did
     not become a Director for the Funds until June 14, 2006.

Each Fund, the Adviser and each Fund's principal underwriter have adopted a Code
of Ethics  under Rule  17j-1 of the 1940 Act.  These  Codes do permit  personnel
subject to the Codes to invest in securities,  including  securities that may be
purchased  or held by the Fund.  These Codes may be  reviewed  and copied at the
SEC's Public Reference Room in Washington,  DC. For information on the operation
of the Public Reference Room call the SEC at 1-202-551-8090.  In addition, these
Codes are  available on the SEC's  Internet site at  http://www.sec.gov  or upon
request   (for  a   duplicating   fee)   at  the   following   E-mail   address:
publicinfo@sec.gov or by writing the SEC's Public Reference Section, Washington,
DC 20549-0102

Adviser

The Funds'  investment  adviser,  AllianceBernstein  L.P. (the "Adviser"),  1345
Avenue  of  the  Americas,  New  York,  NY  10105,  is a  leading  international
investment  adviser  managing  client  accounts  with assets as of June 30, 2006
totaling more than $625 billion (of which more than $88 billion  represented the
assets of  investment  companies).  As of June 30,  2006,  the  Adviser  managed
retirement  assets for many of the largest public and private  employee  benefit
plans (including 41 of the nations' FORTUNE 100 companies),  for public employee
retirement funds in 37 states,  for investment  companies,  and for foundations,
endowments,   banks  and  insurance  companies  worldwide.   The  45  registered
investment companies managed by the Adviser,  comprising 126 separate investment
portfolios, currently have approximately 4.0 million stockholder accounts.

The Adviser is a registered investment adviser under the Investment Advisers Act
of 1940,  as  amended.  As of June 30,  2006,  AllianceBernstein  Holding,  L.P.
("Holding"),  a Delaware limited  partnership,  owned approximately 32.7% of the
issued and  outstanding  units of limited  partnership  interest  in the Adviser
("AllianceBernstein   Units").  Units  representing  assignments  of  beneficial
ownership of limited  partnership  interests in Holding  ("Holding Units") trade
publicly on the Exchange under the ticker symbol "AB".  AllianceBernstein  Units
do not trade publicly and are subject to significant  restrictions  on transfer.
AllianceBernstein  Corporation  ("AB Corp.") is the general  partner of both the
Adviser and Holding.  AB Corp. owns 100,000 general partnership units in Holding
and a 1% general  partnership  interest in the Adviser.  AB Corp. is an indirect
wholly-owned  subsidiary of AXA Financial,  Inc. ("AXA  Financial"),  a Delaware
corporation.

As of June 30, 2006,  AXA, AXA Financial,  AXA Equitable Life Insurance  Company
("AXA Equitable") and certain  subsidiaries of AXA Equitable  beneficially owned
approximately  59.6% of the issued and outstanding  AllianceBernstein  Units and
approximately 1.7% of the issued and outstanding  Holding Units that,  including
the general  partnership  interests  in the Adviser and  Holding,  represent  an
economic  interest of approximately  60.6% in the Adviser.  As of June 30, 2006,
SCB Partners,  Inc., a wholly-owned  subsidiary of SCB, Inc., beneficially owned
approximately 6.3% of the issued and outstanding AllianceBernstein Units.

AXA, a French  company,  is the holding  company for an  international  group of
companies and a worldwide leader in financial  protection and wealth management.
AXA operates  primarily in Western  Europe,  North America and the  Asia/Pacific
region and, to a lesser  extent,  in other  regions  including  the Middle East,
Africa and South America.  AXA has five operating  business  segments:  life and
savings,  property and casualty insurance,  international  insurance  (including
reinsurance),  asset management and other financial services. AXA Financial is a
wholly-owned  subsidiary  of AXA.  AXA  Equitable  is an  indirect  wholly-owned
subsidiary of AXA Financial.

Under the Advisory Agreement, the Adviser furnishes advice and recommendations
with respect to the Fund's portfolio of securities and investments and provides
persons satisfactory to the Board of Directors to act as officers and employees
of the Fund. Such officers and employees may be employees of the Adviser or its
affiliates.

Each Fund has entered into an Advisory  Agreement with the Adviser.  Each Fund's
Advisory  Agreement  was  approved  by the vote,  cast in person,  of the Fund's
Directors  including the Directors who are not parties to the Advisory Agreement
or  interested  persons  as  defined in the 1940 Act,  of any such  party,  at a
meeting called and held for that purpose.

The Adviser provides investment advisory services and order placement facilities
for each of the Fund's and pays all  compensation  of Directors  and officers of
the  Fund  who  are  affiliated  persons  of the  Adviser.  The  Adviser  or its
affiliates  also furnish a Fund,  without  charge,  management  supervision  and
assistance and office  facilities and provide  persons  satisfactory to a Fund's
Board to serve as the  Fund's  officers.  Each  Fund  has,  under  the  Advisory
Agreement, assumed obligation to pay for all other expenses. As to the obtaining
of services other than those specifically provided to a Fund by the Adviser, the
Fund may employ its own personnel.  For such services, the Fund may also utilize
personnel  employed by the  Adviser or its  affiliates  and, in such event,  the
services will be provided to the Fund at cost and the payments  therefor,  which
must be specifically approved by the Fund's Board.

Under its Advisory  Agreement,  each Fund pays the Adviser an advisory fee at an
annual rate of .90% of the Fund's average weekly net assets. Prior to October 1,
2005,  AWDGF II paid the Adviser an  advisory  fee at an annual rate of 1.00% of
the  Fund's  average  weekly  net  assets.  Such fee is  accrued  daily and paid
monthly.

For  purposes  of the  calculation  of the fee payable to the  Adviser,  average
weekly net assets are  determined  on the basis of the  average  net assets of a
Fund for each weekly period (ending on Fridays) ending during the month. The net
assets for each weekly  period are  determined  by  averaging  the net assets on
Friday of such weekly  period  with the net assets on Friday of the  immediately
preceding  weekly  period.  When a Friday is not a Fund  business  day, then the
calculation  will be based on the net assets of a Fund on the Fund  business day
immediately  preceding  such Friday.  This advisory fee may be greater than that
paid by most funds.  In addition to payments to the Adviser  under the  Advisory
Agreement, the Fund pays certain other costs.

For the fiscal years ended March 31, 2006, 2005 and 2004, AWDGF II paid advisory
fees to the Adviser that, in the aggregate,  amounted to $9,123,453,  $9,008,460
and $9,536,160,  respectively.  For the fiscal year ended October 31, 2005, 2004
and 2003,  AWDGF paid  advisory  fees to the  Adviser  that,  in the  aggregate,
amounted to $1,230,992, $1,715,403 and $1,054,431, respectively.

Each Fund's  Advisory  Agreement is terminable with respect to that Fund without
penalty on 60 days  written  notice by a vote of a majority  of the  outstanding
voting  securities  of  such  Fund  or by a vote  of a  majority  of the  Fund's
Directors,  or by the Adviser on 60 days written notice,  and will automatically
terminate  in the  event  of its  assignment.  Each  Fund's  Advisory  Agreement
provides  that,  in the  absence  of  willful  misfeasance,  bad  faith or gross
negligence  on  the  part  of  the  Adviser,  or of  reckless  disregard  of its
obligations  thereunder,  the  Adviser  shall  not be liable  for any  action or
failure to act in accordance with its duties thereunder.

The Advisory  Agreements  for the Funds  continue in effect,  provided that such
continuance is  specifically  approved at least annually by a vote of a majority
of the Fund's outstanding voting securities or by the Fund's Board, including in
either case  approval by a majority of the  Directors who are not parties to the
Advisory  Agreement or interested persons of such parties as defined by the 1940
Act.  Most  recently,  continuance  of the  Advisory  Agreements  of each Fund's
Advisory  Agreements was approved by the respective Board,  including a majority
of the  Directors  who are not parties to the Advisory  Agreements or interested
persons of any such party, at a Meeting held on September 14 and 16, 2005.

Portfolio Managers

The dollar ranges of AWDGF II's equity securities owned directly or beneficially
by the Fund's portfolio managers as of March 31, 2006 are set forth below.

                  DOLLAR RANGE OF EQUITY SECURITIES IN AWDGF II

                Paul J. DeNoon                                  None
                Fernando Grisales                               None
                Michael Mon                                     None
                Douglas Peebles                                 None
                Matthew Sheridan                                None

AWDGF II
--------

The  following  tables  provide  information   regarding  registered  investment
companies  other  than the Fund,  other  pooled  investment  vehicles  and other
accounts  over  which  the  Fund's  portfolio   managers  also  have  day-to-day
management  responsibilities.  The tables  provide the numbers of such accounts,
the total  assets in such  accounts  and the number of accounts and total assets
whose fees are based on  performance.  The  information  is  provided  as of the
Fund's fiscal year ended March 31, 2006.

REGISTERED INVESTMENT COMPANIES
(excluding AWDGF II)

                                                    Number of      Total Assets
                      Total          Total          Registered     of Registered
                      Number of      Assets of      Investment     Investment
                      Registered     Registered     Companies      Companies
                      Investment     Investment     Managed with   Managed with
                      Companies      Companies      Performance-   Performance-
Portfolio Manager     Managed        Managed        based Fees     based Fees
-----------------     -------        -------        ----------     ----------

Paul J. DeNoon           16        2,893,298,272       None            None
Fernando Grisales       None            None           None            None
Michael Mon               8        1,615,130,891       None            None
Douglas Peebles         None            None           None            None
Matthew Sheridan          4          635,546,781       None            None

POOLED INVESTMENT VEHICLES

                                                    Number of      Total Assets
                      Total          Total          Registered     of Registered
                      Number         Assets         Investment     Investment
                      of Pooled      of Pooled      Vehicles       Vehicles
                      Investment     Investment     Managed with   Managed with
                      Vehicles       Vehicles       Performance-   Performance-
Portfolio Manager     Managed        Managed        based Fees     based Fees
-----------------     -------        -------        ----------     ----------

Paul J. DeNoon            6        7,841,698,582      None             None
Fernando Grisales       None            None          None             None
Michael Mon               1            1,875,079      1            1,875,079
Douglas Peebles         None            None          None             None
Matthew Sheridan          6          767,897,420      None             None

OTHER ACCOUNTS

                                                    Number
                      Total          Total          of Other       Total Assets
                      Number         Assets         Accounts       of Other
                      of Other       of Other       Managed with   Accounts with
                      Account        Accounts       Performance-   Performance-
Portfolio Manager     Managed        Managed        based Fees     based Fees
-----------------     -------        -------        ----------     ----------

Paul J. DeNoon          None           None           None            None
Fernando Grisales       None           None           None            None
Michael Mon              10        618,085,446          1          115,112,449
Douglas Peebles         None           None           None            None
Matthew Sheridan          2        127,813,696        None            None

Investment Professional Conflict of Interest Disclosure

As an  investment  adviser  and  fiduciary,  the  Adviser  owes its  clients and
stockholders  an  undivided  duty of loyalty.  We  recognize  that  conflicts of
interest are inherent in our business and  accordingly  have developed  policies
and procedures (including oversight  monitoring)  reasonably designed to detect,
manage and mitigate the effects of actual or potential  conflicts of interest in
the area of employee personal  trading,  managing multiple accounts for multiple
clients,  including  AllianceBernstein  Mutual Funds, and allocating  investment
opportunities.   Investment  professionals,  including  portfolio  managers  and
research  analysts,  are subject to the  above-mentioned  policies and oversight
monitoring  to ensure  that all  clients  are  treated  equitably.  We place the
interests  of our clients  first and expect all of our  employees  to meet their
fiduciary duties.

     Employee  Personal  Trading.  The  Adviser  has  adopted a Code of Business
Conduct and Ethics that is designed to detect and prevent  conflicts of interest
when  investment  professionals  and other  personnel of the Adviser own, buy or
sell securities which may be owned by, or bought or sold for, clients.  Personal
securities  transactions  by an  employee  may  raise a  potential  conflict  of
interest  when an  employee  owns or  trades  in a  security  that is  owned  or
considered for purchase or sale by a client, or recommended for purchase or sale
by an  employee to a client.  Subject to the  reporting  requirements  and other
limitations of its Code of Business Conduct and Ethics,  the Adviser permits its
employees to engage in personal securities transactions, and also allows them to
acquire  investments  in  the  AllianceBernstein  Mutual  Funds  through  direct
purchase,  401K/profit  sharing plan investment  and/or notionally in connection
with deferred  incentive  compensation  awards. The Adviser's Code of Ethics and
Business Conduct requires disclosure of all personal accounts and maintenance of
brokerage accounts with designated  broker-dealers  approved by the Adviser. The
Code also requires  preclearance  of all securities  transactions  and imposes a
one-year  holding  period for  securities  purchased by employees to  discourage
short-term trading.

     Managing Multiple Accounts for Multiple Clients. The Adviser has compliance
policies  and  oversight  monitoring  in place to address  conflicts of interest
relating to the management of multiple accounts for multiple clients.  Conflicts
of interest may arise when an investment  professional has  responsibilities for
the investments of more than one account because the investment professional may
be unable to devote equal time and  attention to each  account.  The  investment
professional  or  investment   professional  teams  for  each  client  may  have
responsibilities  for managing all or a portion of the  investments  of multiple
accounts  with  a  common  investment   strategy,   including  other  registered
investment  companies,  unregistered  investment vehicles,  such as hedge funds,
pension plans, separate accounts,  collective trusts and charitable foundations.
Among other things, the Adviser's policies and procedures provide for the prompt
dissemination  to  investment  professionals  of initial  or changed  investment
recommendations by analysts so that investment  professionals are better able to
develop  investment  strategies  for all  accounts  they  manage.  In  addition,
investment decisions by investment professionals are reviewed for the purpose of
maintaining  uniformity  among  similar  accounts and ensuring that accounts are
treated  equitably.  No investment  professional  that manages  client  accounts
carrying  performance  fees is  compensated  directly  or  specifically  for the
performance of those accounts.  Investment professional  compensation reflects a
broad  contribution in multiple  dimensions to long-term  investment success for
our clients and is not tied  specifically  to the  performance of any particular
client's  account,  nor is it  directly  tied to the level or change in level of
assets under management.

     Allocating   Investment   Opportunities.   The  Adviser  has  policies  and
procedures  intended to address conflicts of interest relating to the allocation
of  investment  opportunities.  These  policies and  procedures  are designed to
ensure  that  information  relevant  to  investment  decisions  is  disseminated
promptly within its portfolio management teams and investment  opportunities are
allocated equitably among different clients. The investment professionals at the
Adviser routinely are required to select and allocate  investment  opportunities
among accounts.  Portfolio  holdings,  position  sizes,  and industry and sector
exposures  tend to be similar  across  similar  accounts,  which  minimizes  the
potential  for  conflicts of interest  relating to the  allocation of investment
opportunities.   Nevertheless,   investment   opportunities   may  be  allocated
differently among accounts due to the particular  characteristics of an account,
such as size of the account,  cash  position,  tax status,  risk  tolerance  and
investment restrictions or for other reasons.

The Adviser's  procedures  are also designed to prevent  potential  conflicts of
interest that may arise when the Adviser has a particular  financial  incentive,
such  as  a  performance-based  management  fee,  relating  to  an  account.  An
investment  professional  may perceive that he or she has an incentive to devote
more time to developing and analyzing investment strategies and opportunities or
allocating  securities  preferentially  to accounts for which the Adviser  could
share in investment gains.

To address these  conflicts of interest,  the Adviser's  policies and procedures
require,   among  other   things,   the  prompt   dissemination   to  investment
professionals of any initial or changed investment  recommendations by analysts;
the aggregation of orders to facilitate  best execution for all accounts;  price
averaging for all aggregated orders; objective allocation for limited investment
opportunities  (e.g.,  on a  rotational  basis)  to  ensure  fair and  equitable
allocation among accounts;  and limitations on short sales of securities.  These
procedures  also  require  documentation  and review of  justifications  for any
decisions  to  make  investments  only  for  select  accounts  or  in  a  manner
disproportionate to the size of the account.

Portfolio Manager Compensation

The Adviser's  compensation program for investment  professionals is designed to
be competitive  and effective in order to attract and retain the highest caliber
employees.  The compensation program for investment professionals is designed to
reflect their ability to generate long-term  investment success for our clients,
including  stockholders  of  the  AllianceBernstein   Mutual  Funds.  Investment
professionals do not receive any direct  compensation  based upon the investment
returns of any individual  client account,  nor is compensation tied directly to
the  level  or  change  in  level  of  assets   under   management.   Investment
professionals' annual compensation is comprised of the following:

     (i)  Fixed  base  salary:   This  is  generally  the  smallest  portion  of
compensation. The base salary is a relatively low, fixed salary within a similar
range for all  investment  professionals.  The base salary is  determined at the
outset of employment based on level of experience, does not change significantly
from year-to-year and hence, is not particularly sensitive to performance.

     (ii)  Discretionary  incentive  compensation  in the form of an annual cash
bonus:  The  Adviser's  overall  profitability  determines  the total  amount of
incentive  compensation available to investment  professionals.  This portion of
compensation is determined  subjectively  based on qualitative and  quantitative
factors.   In  evaluating   this  component  of  an  investment   professional's
compensation,  the  Adviser  considers  the  contribution  to  his/her  team  or
discipline as it relates to that team's  overall  contribution  to the long-term
investment success,  business results and strategy of the Adviser.  Quantitative
factors considered include, among other things,  relative investment performance
(e.g.,  by comparison  to  competitor  or peer group funds or similar  styles of
investments,  and  appropriate,  broad-based or specific  market  indices),  and
consistency  of  performance.  There are no specific  formulas used to determine
this part of an investment  professional's  compensation and the compensation is
not tied to any  pre-determined  or specified level of performance.  The Adviser
also considers qualitative factors such as the complexity and risk of investment
strategies  involved  in the style or type of assets  managed by the  investment
professional;  success  of  marketing/business  development  efforts  and client
servicing; seniority/length of service with the firm; management and supervisory
responsibilities; and fulfillment of the Adviser's leadership criteria.

     (iii) Discretionary  incentive compensation in the form of awards under the
Adviser's Partners Compensation Plan ("deferred awards"):  the Adviser's overall
profitability  determines  the total  amount of  deferred  awards  available  to
investment  professionals.  The deferred awards are allocated  among  investment
professionals  based on criteria  similar to those used to determine  the annual
cash bonus.  There is no fixed formula for determining  these amounts.  Deferred
awards,  for which there are various investment  options,  vest over a four-year
period and are  generally  forfeited  if the  employee  resigns  or the  Adviser
terminates his/her employment. Investment options under the deferred awards plan
include many of the same  AllianceBernstein  Mutual Funds offered to mutual fund
investors, thereby creating a close alignment between the financial interests of
the investment  professionals and those of the Adviser's clients and mutual fund
stockholders  with respect to the performance of those mutual funds. The Adviser
also permits  deferred award  recipients to allocate up to 50% of their award to
investments in the Adviser's publicly traded equity securities.(1)

----------
(1)  Prior  to  2002,   investment   professional   compensation  also  included
     discretionary  long-term  incentive in the form of restricted grants of the
     Adviser's Master Limited Partnership Units.

     (iv)  Contributions  under the Adviser's  Profit  Sharing/401(k)  Plan: The
contributions are based on the Adviser's overall  profitability.  The amount and
allocation of the  contributions  are  determined at the sole  discretion of the
Adviser.

The  Adviser  may act as an  investment  adviser  to  other  persons,  firms  or
corporations,  including  investment  companies,  and is  investment  adviser to
AllianceBernstein Balanced Shares, Inc., AllianceBernstein Blended Style Series,
Inc.,  AllianceBernstein  Bond Fund,  Inc.,  AllianceBernstein  Cap Fund,  Inc.,
AllianceBernstein  Emerging Market Debt Fund, Inc.,  AllianceBernstein  Exchange
Reserves, AllianceBernstein Fixed-Income Shares, Inc., AllianceBernstein Focused
Growth & Income Fund, Inc.,  AllianceBernstein  Global  Government Income Trust,
Inc.,  AllianceBernstein Global Health Care Fund, Inc., AllianceBernstein Global
Research Growth Fund,  Inc.,  AllianceBernstein  Global  Strategic Income Trust,
Inc.,  AllianceBernstein Global Technology Fund, Inc., AllianceBernstein Greater
China  '97  Fund,  Inc.,   AllianceBernstein   Growth  and  Income  Fund,  Inc.,
AllianceBernstein High Yield Fund, Inc., AllianceBernstein  Institutional Funds,
Inc.,  AllianceBernstein  International  Growth  Fund,  Inc.,  AllianceBernstein
International  Research Growth Fund,  Inc.,  AllianceBernstein  Large Cap Growth
Fund,  Inc.,  AllianceBernstein  Mid-Cap  Growth Fund,  Inc.,  AllianceBernstein
Municipal  Income  Fund,  Inc.,  AllianceBernstein  Municipal  Income  Fund  II,
AllianceBernstein  Real Estate  Investment Fund, Inc.,  AllianceBernstein  Short
Duration  Portfolio,   AllianceBernstein  Tax-Managed  International  Portfolio,
AllianceBernstein   Trust,   AllianceBernstein   Utility   Income  Fund,   Inc.,
AllianceBernstein Variable Products Series Fund, Inc., Sanford C. Bernstein Fund
II, Inc., The  AllianceBernstein  Pooling  Portfolios and The  AllianceBernstein
Portfolios,  all registered  open-end investment  companies;  and to AWDGF Fund,
Inc.,  AWDGF II Fund,  Inc., ACM Managed  Dollar Income Fund,  Inc., ACM Managed
Income  Fund,  Inc.,  ACM  Municipal  Securities  Income  Fund,  Inc.,  Alliance
All-Market  Advantage Fund,  Inc.,  Alliance  California  Municipal Income Fund,
Inc., Alliance National Municipal Income Fund, Inc., Alliance New York Municipal
Income Fund, Inc. and The Spain Fund, Inc., all registered closed-end investment
companies.

Administrator

The  Adviser  serves  as  administrator  for  each  of  the  Funds.   Under  the
administrative agreements, the Adviser performs standard administrative services
for the Funds.

Pursuant to the Administration  Agreement in effect until October 1, 2005, AWDGF
II paid the Adviser an  administrative  fee of .15% of the Fund's average weekly
net  assets.   Effective  that  date,  pursuant  to  an  Amended  Administration
Agreement,  the Fund  reimburses the Adviser for its costs,  including legal and
accounting  costs, in serving as Administrator of the Fund;  provided,  however,
that the  reimbursement  may not exceed the prior fee of .15% of average  weekly
net assets.

Pursuant to an Administration  Agreement,  effective October 1, 2005, AWDGF pays
the Adviser an  administrative  fee in the amount of  $106,000  per year for its
costs incurred for providing  administrative services. Prior to October 1, 2005,
the Fund paid the Adviser an administrative fee at an annual rate of .15% of the
Fund's average weekly net assets.

For the  fiscal  years  ended  March  31,  2006,  2005 and  2004,  AWDGF II paid
administrative fees to the Adviser that, in the aggregate, amounted to $763,168,
$1,351,269 and $1,430,424,  respectively. For the fiscal years ended October 31,
2005, 2004 and 2003, AWDGF paid  administrative fees to the Adviser that, in the
aggregate, amounted to $179,078, $176,311 and $158,165, respectively.

Shareholder Servicing

AllianceBernstein Investor Services, Inc. ("ABIS"), an affiliate of the Adviser,
provides  stockholder services for the Funds. The Funds reimburse ABIS for these
services. For these services and for the fiscal years ended March 31, 2006, 2005
and 2004,  AWDGF II paid  ABIS  $880,  $2,100  and $0,  respectively.  For these
services and for its fiscal years ended October 31, 2005,  2004 and 2003,  AWDGF
paid ABIS $490, $530 and $1,250, respectively.

Custodian, Dividend Paying Agent, Transfer Agent and Registrar

Bank of New York,  One Wall Street,  New York,  NY 10286 serves as custodian for
each of the Funds. Computershare Trust Company, N.A. ("Computershare"), P.O. Box
43010, Providence,  RI 02940 serves as the dividend paying agent, transfer agent
and registrar for each of the Funds.

For these services and for the fiscal years ended March 31, 2006, 2005 and 2004.
AWDGF II paid Bank of New York  $620,055,  $659,504 and $443,567,  respectively;
and paid Computershare $73,119, $108,617 and $142,951,  respectively.  For these
services and for the fiscal years ended October 31, 2005,  2004 and 2003,  AWDGF
paid Bank of New York $175,062,  $212,163 and $214,179,  respectively;  and paid
and PFPC,  Inc.,  the Fund's  previous  transfer  agent,  $57,214,  $59,911  and
$47,772, respectively.

Stock Ownership

As of September 29, 2006, to the knowledge of the Funds,  no person owned either
of record or beneficially,  5% or more of the oustanding shares of either of the
Funds.

                        VALUATION OF PORTFOLIO SECURITIES

Each Fund calculates and makes  available for weekly  publication the NAV of its
shares of common stock. The NAV per share of a Fund's common stock is determined
as of the close of trading on the NYSE each Friday or, when Friday is not a Fund
business  day, on the  immediately  preceding  Fund  business day, by adding the
market  value of all  securities  in the  Fund's  portfolio  and  other  assets,
subtracting  liabilities incurred or accrued and dividing by the total number of
the Fund's shares of common stock then outstanding.

In accordance with applicable rules under the 1940 Act, portfolio securities are
valued at current  market value or at fair value as  determined in good faith by
the Board of  Directors.  The Board of  Directors  has  delegated to the Adviser
certain of the Board's duties with respect to the following procedures.  Readily
marketable  securities  listed on the NYSE or on a foreign  securities  exchange
(other than foreign  securities  exchanges whose operations are similar to those
of the United States  over-the-counter  market) are valued,  except as indicated
below, at the last sale price reflected on the consolidated tape at the close of
the NYSE or, in the case of a foreign  securities  exchange,  at the last quoted
sale  price,  in each case on the  business  day as of which such value is being
determined.  If there has been no sale on such day, the securities are valued at
the quoted bid prices on such day. If no bid prices are quoted on such day, then
the  security is valued at the mean of the bid and asked  prices at the close of
the NYSE on such day as obtained  from one or more  dealers  regularly  making a
market in such  security.  Where a bid and asked price can be obtained from only
one such dealer,  such security is valued at the mean of the bid and asked price
obtained  from such  dealer  unless it is  determined  that such  price does not
represent  current  market value,  in which case the security shall be valued in
good faith at fair value by, or pursuant to procedures established by, the Board
of Directors. Securities for which no bid and asked price quotations are readily
available  are valued in good  faith at faire  value by, or in  accordance  with
procedures established by, the Board of Directors. Readily marketable securities
not listed on the NYSE or on a foreign  securities  exchange  are valued in like
manner. Portfolio securities traded on the NYSE and on one or more other foreign
or other national securities  exchanges,  and portfolio securities not traded on
the  NYSE  but  traded  on one or more  foreign  or  other  national  securities
exchanges  are valued in  accordance  with these  procedures by reference to the
principal exchange on which the securities are traded.

Readily  marketable  securities  traded  only  in the  over-the-counter  market,
securities listed on a foreign securities  exchange whose operations are similar
to those of the  United  Stated  over-the-counter  market,  and debt  securities
listed on a U.S. national  securities  exchange whose primary market is believed
to be  over-the-counter,  are valued at the mean of the bid and asked  prices at
the close of the NYSE on such day as obtained from two or more dealers regularly
making a market in such  security.  Where a bid and asked  price can be obtained
from only one such  dealer,  such  security is valued at the mean of the bid and
asked price  obtained from such dealer  unless it is determined  that such price
does not represent  current  market value,  in which case the security  shall be
valued  in good  faith  at fair  value  by,  or in  accordance  with  procedures
established by, the Board of Directors.

Listed  put and call  options  purchased  by a Fund are  valued at the last sale
price.  If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day.

Open  futures  contracts  and options  thereon  will be valued using the closing
settlement  price or, in the absence of such a price, the most recent quoted bid
price. If there are no quotations available for the day of valuations,  the last
available closing settlement price will be used.

U.S.  Government  Securities and other debt  instruments  having 60 days or less
remaining until maturity are valued at amortized cost if their original maturity
was 60 days or less, or by amortizing  their fair value as of the 61st day prior
to  maturity if their  original  term to  maturity  exceeded 60 days  (unless in
either  case  the  Board of  Directors  determines  that  this  method  does not
represent fair value.)

Fixed-income  securities  may be valued on the  basis of  prices  provided  by a
pricing  service  when such prices are believed to reflect the fair market value
of such  securities.  The prices provided by a pricing service take into account
may  factors,   including  institutional  size  trading  in  similar  groups  of
securities and any developments related to specific securities.  Mortgage backed
and asset backed securities may be valued at prices obtained from a bond pricing
service or at a price obtained from one or more of the major  broker/dealers  in
such securities.  In cases where broker/dealers quotes are obtained, the Adviser
may establish procedures whereby changes in market yields or spreads are used to
adjust, on a daily basis, a recently obtained quoted bid price on a security.

All other  assets of a Fund are  valued  in good  faith at fair  value by, or in
accordance with procedures established by, the Board of Directors.

Trading in  securities  on Far Eastern and  European  securities  exchanges  and
over-the-counter  markets is normally competed well before the close of business
of each Fund business day. In addition,  trading in foreign markets may not take
place on all Fund business days. Furthermore,  trading may take place in various
foreign markets on days that are not Fund business days. A Fund's calculation of
the  net  asset  value  per  share,  therefore,   does  not  always  take  place
contemporaneously  with the most recent determination of the prices of portfolio
securities in these  markets.  Events  affecting  the values of these  portfolio
securities that occur between the time their prices are determined in accordance
with the above procedures and the close of the NYSE will not be reflected in the
Fund's calculation of net asset value unless these prices do not reflect current
market value,  in which case the securities will be valued in good faith by fair
value  by,  or in  accordance  with  procedures  established  by,  the  Board of
Directors.

The Board of  Directors  may  suspend  the  determination  of a Fund's net asset
value,  subject  to the  rules  of the  SEC and  other  governmental  rules  and
regulations,  at a time  when:  (1) the NYSE is  closed,  other  than  customary
weekend and holiday  closings or (2) an emergency exists as a result of which it
is not reasonably  practicable for the Fund to dispose of securities owned by it
or to determine fairly the value of its net assets.

For purposes of  determining a Fund's net asset value per share,  all assets and
liabilities  initially  expressed in a foreign  currency will be converted  into
U.S.  Dollars at the mean of the current bid and asked  prices of such  currency
against  the  U.S.  Dollar  last  quoted  by a  major  bank  that  is a  regular
participant in the relevant foreign exchange market or on the basis of a pricing
service  that takes into  account the quotes  provided by a number of such major
banks.  If such  quotations  are not available as of the close of the NYSE,  the
rate of exchange will be determined in good faith by, or under the direction of,
the Board of Directors.

                  DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

Stockholders  of each Fund whose  shares are  registered  in their own names may
elect to be participants in each Fund's DRIP,  under which dividends and capital
gain  distributions  to  stockholders  will be paid or  reinvested in additional
shares of a Fund (the "Dividend Shares"). Computershare Trust Company, N.A. (the
"Agent") serves as the agent for participants under the DRIP for the Funds.


Stockholders  who do not  elect to  participate  in the DRIP  will  receive  all
distributions in cash paid by check mailed directly to the stockholder of record
(or,  if the  shares  are held in  street  or other  nominee  name,  then to the
nominee) by the Agent, as dividend disbursing agent.

The  automatic  reinvestment  of dividends  and  distributions  will not relieve
participants  of any  income  taxes  that  may be  payable  (or  required  to be
withheld) on dividends and  distributions.  The federal  income tax treatment of
reinvestment is described under "Taxation."

A stockholder  who has elected to  participate in the DRIP may withdraw from the
DRIP at any time.  There will be no  penalty  for  withdrawal  from the DRIP and
stockholders  who have  previously  withdrawn from the DRIP may rejoin it at any
time.   Changes  in  elections  must  be  in  writing  and  should  include  the
stockholders  name and  address  as they  appear  on the share  certificate.  An
election  to withdraw  from the DRIP will,  until such  election is changed,  be
deemed to be an election by a stockholder to take all  subsequent  distributions
in cash.  An election  will be effective  only for a  distribution  declared and
having a record date of at least 10 days after the date on which the election is
received. A stockholder whose shares are held in the name of a broker or nominee
should contact such broker or nominee  concerning  changes in that stockholder's
election.

Under a DRIP and commencing not more than five business days before the dividend
payment date,  purchases of a Fund's shares may be made by the Agent,  on behalf
of the  participants  in the  DRIP,  from  time  to  time  to  satisfy  dividend
reinvestments  under  the DRIP.  Such  purchases  by the Agent on or before  the
dividend  payment date may be made on the NYSE or elsewhere at any time when the
price plus  estimated  commissions of a Fund's common stock on the NYSE is lower
than the Fund's most recently calculated NAV per share.

If the Agent  determines on the dividend  payment date that the shares purchased
as  of  such  date  are  insufficient  to  satisfy  the  dividend   reinvestment
requirements,  the Agent, on behalf of the participants in the DRIP, will obtain
the  necessary  additional  shares as follows.  To the extent  that  outstanding
shares are not  available  at a cost of less than per share NAV,  the Agent,  on
behalf of the participants in the DRIP, will accept payment of the dividend,  or
the remaining  portion  thereof,  in authorized but unissued shares of a Fund on
the dividend payment date. Such shares will be issued at a per share price equal
to the higher of (1) the NAV per share on the  payment  date,  or (2) 95% of the
closing market price per share on the payment date. If the closing sale or offer
price,  plus  estimated  commissions,  of the  common  stock  on the NYSE on the
payment  date is less than a Fund's  NAV per  share on such day,  then the Agent
will purchase additional outstanding shares on the NYSE or elsewhere.  If before
the Agent has  completed  such  purchases,  the market  price  plus  commissions
exceeds the NAV of a Fund share,  the average per share  purchase  price paid by
the Agent may exceed the NAV of the Fund's shares,  resulting in the acquisition
of fewer shares than if shares had been issued by the Fund.

Participants in a DRIP have the option of making additional cash payments to the
Agent,  semi-annually,  in any amount of $100 or more for investment in a Fund's
shares.  The Agent uses all funds  received from  participants  to purchase Fund
shares in the open market on or about each January 15 and July 15. Participants'
cash  payments are also used to acquire Fund shares under the same  procedure as
that used for reinvestment of dividends and  distributions.  To allow ample time
for receipt and processing by the Agent,  participants  should send in voluntary
cash  payments  to be received  by the Agent not later than five  business  days
before each  January 15 and July 15. To avoid  unnecessary  cash  accumulations,
cash payments  received after that time and cash payments  received more than 30
days prior to these dates will be returned by the Agent and interest will not be
paid on any  uninvested  cash payments.  A participant  may withdraw a voluntary
cash payment by written notice,  if the notice is received by the Agent not less
than 48 hours before such payment is to be invested.

The Agent will maintain all stockholders' accounts in a DRIP and furnish written
confirmation of all transactions in the account, including information needed by
stockholders  for tax  records.  Shares in the account of each DRIP  participant
will  be  held  by  the  Agent  in  non-certificated  form  in the  name  of the
participant, and each stockholder's proxy will include those shares purchased or
received pursuant to the DRIP.

In the case of  stockholders  such as banks,  brokers  or  nominees,  which hold
shares for others who are the beneficial  owners,  the Agent will administer the
DRIP on the basis of the number of shares  certificated from time to time by the
record  stockholders as representing  the total amount  registered in the record
stockholders'  name and held for the  account  of  beneficial  owners who are to
participate in the DRIP.

There will be no brokerage charges with respect to shares issued directly by the
Fund  to  satisfy  the  dividend   reinvestment   requirements.   However,  each
participant  will pay a pro rata share of brokerage  commissions  incurred  with
respect to the Agent's open market  purchases of shares.  In each case, the cost
per share of shares purchased for each stockholder's account will be the average
cost,  including  brokerage  commissions,  of any shares  purchased  in the open
market plus the cost of any shares issued by the Fund. A  participant  also will
pay brokerage  commissions  incurred in purchases  from  voluntary cash payments
made by the participant.

Stockholders  participating  in a DRIP may receive  benefits  not  available  to
stockholders  not  participating in a DRIP. If the market price plus commissions
of a Fund's shares is above the NAV,  participants in a DRIP will receive shares
of a Fund at a discount of up to 5% from the current market value.  However,  if
the market price plus  commissions is below the NAV,  participants  will receive
distributions  in  shares  with  a NAV  greater  than  the  value  of  any  cash
distribution they would have received on their shares. There may be insufficient
shares  available in the market to make  distributions in shares at prices below
NAV.  Also,  since a Fund does not redeem it shares,  the price on resale may be
more or less than the NAV.

In the case of foreign  participants  whose dividends are subject to U.S. income
tax  withholding  and in the case of any  participants  subject  to 31%  federal
backup  withholding,  the Agent will reinvest  dividends  after deduction of the
amount required to be withheld.

Experience under a DRIP may indicate that changes are desirable.  Accordingly, a
Fund reserves the right to amend or terminate a DRIP as applied to any voluntary
cash payments made and any dividend or  distribution  paid subsequent to written
notice of the change  sent to  participants  in the DRIP at least 90 days before
the record date for such dividend or distribution. A DRIP may also be amended or
terminated by the Agent on at least 90 days' written notice to  participants  in
the DRIP. There is no service charge to participants in a DRIP;  however, a Fund
reserves the right to amend the DRIP to include a service  charge payable to the
Agent by the participants. All correspondence concerning the DRIPs for the Funds
should be  directed  to  Computershare  Trust  Company,  N.A.,  P.O.  Box 43010,
Providence, RI 02940.

                           DESCRIPTION OF COMMON STOCK

Common Stock of the Funds

Each Fund is authorized to issue up to 100,000,000  shares of common stock,  par
value  $.01  per  share.  As of  [March  29],  2006,  AWDGF  II  and  AWDGF  had
[67,648,715] and [8,897,498] shares outstanding, respectively. The Funds' shares
have no preemptive,  conversion,  exchange or redemption rights.  Each share has
equal voting, dividend,  distribution and liquidation rights. The shares of each
Fund  outstanding  are,  and the  shares  of  AWDGF  II,  when  issued  upon the
Acquisitions will be, fully paid and nonassessable. Stockholders are entitled to
one vote per  share.  All  voting  rights  for the  election  of  Directors  are
noncumulative,  which  means that the  holders of more than 50% of the shares of
common  stock of a Fund can  elect  100% of the  Directors  then  nominated  for
election  if  they  choose  to do so and,  in such  event,  the  holders  of the
remaining shares of common stock will not be able to elect any Directors.  Under
the rules of the NYSE applicable to listed  companies,  each Fund is required to
hold an annual meeting of stockholders each year.

Certain   Anti-Takeover   Provisions   of  the  Fund's   Charters   Articles  of
Incorporation and Bylaws

The Funds presently have provisions in their Charters, and Bylaws (together, the
"Charter  Documents")  that are  intended  to  limit  (i) the  ability  of other
entities  or persons to  acquired  control of a Fund,  (ii) a Fund's  freedom to
engage in certain  transactions,  or (iii) the ability of a Fund's  Directors or
stockholders  to amend the  Charter  Documents  or effect  changes in the Fund's
management.  These  provisions  of the  Charter  Documents  may be  regarded  as
"anti-takeover"  provisions. The Board of Directors of each Fund is divided into
three classes, each having a term of three years. Each class of Directors serves
for a three year term.  Accordingly,  only those - Directors may have the effect
of maintaining  the continuity of management  and, thus,  make it more difficult
for the Fund's stockholders to change the majority of Directors.  Under Maryland
law and a Fund's Charter,  the affirmative  vote of the holders of a majority of
the votes entitles to be cast is required for the consolidation of the Fund with
another  corporation,  a merger  of the Fund  with or into  another  corporation
(except for  certain  mergers in which the Fund is the  successor),  a statutory
share exchange in which the Fund is not the successor, a sale or transfer of all
or  substantially  all of the Fund's  assets,  the  dissolution  of the Fund and
certain amendments to the Fund's Charter.  In addition,  the affirmative vote of
75% (which is higher than that required  under  Maryland law or the 1940 Act) of
the  outstanding  shares  of common  stock of a Fund is  required  generally  to
authorize any of the following  transactions  or to amend the  provisions of the
Articles of Incorporation relating to such transactions:

     (i)  merger,  consolidation or statutory share exchange of the Fund with or
          into any corporation, person or other entity;

     (ii) issuance of any securities of the Fund to any  corporation,  person or
          other entity for cash;

    (iii) sale, lease ore exchange of all or any substantial part of the assets
          of the Fund to any corporation,  person or other entity (except assets
          having an aggregate fair market value of less than $1,000,000); or

     (iv) sale, lease or exchange to the Fund, in exchange for securities of the
          Fund, of any assets of any corporation, person or other entity (except
          assets having an aggregate fair market value of less than $1,000,000);

If such  corporation,  person or  entity  is  directly,  or  indirectly  through
affiliates  or  associates,  the  beneficial  owner  of  more  than  5%  of  the
outstanding shares of the Fund (a "principal  stockholder").  However, such vote
would not be required  where,  under certain  condition,  the Board of Directors
approves  the   transaction,   although  in  certain  cases  involving   merger,
consolidation or statutory share exchange or sale of all or substantially all of
the Fund's assets the affirmative  vote of a majority of the outstanding  shares
of a Fund would nevertheless be required.

The provisions of the Charter  Documents  described  above and a Fund's right to
repurchase  or make a tender offer for its common stock could have the effect of
depriving  the  owners of  shares of  opportunities  to sell  their  shares at a
premium  over  prevailing  market  prices,  by  discouraging  a third party from
seeking to obtain  control of a Fund in a tender  offer or similar  transaction.
The  overall  effect  of  these  provisions  is to  render  more  difficult  the
accomplishment  of a  merger  or  the  assumption  of  control  by  a  principal
stockholder.  However,  they  provide the  advantage  of  potentially  requiring
persons seeking control of a Fund to negotiate with its management regarding the
price to be paid and  facilitating  the continuity of the Fund's  management and
investment  objective  and  policies.  The Board of  Directors  of each Fund has
considered the foregoing anti-takeover provisions and concluded that they are in
the best interests of the Fund and its stockholders.

                             PORTFOLIO TRANSACTIONS

Subject to the general supervision of a Fund's Board, the Adviser is responsible
for  the   investment   decisions  and  the  placing  of  orders  for  portfolio
transactions for the Fund. A Fund's portfolio  transactions occur primarily with
issuers,  underwriters or major dealers acting as principals.  Such transactions
are  normally  on a net basis,  which  does not  involve  payment  of  brokerage
commissions.  The  cost of  securities  purchased  from an  underwriter  usually
includes a commission paid by the issuer to the underwriters;  transactions with
dealers normally  reflect the spread between bid and asked prices.  Premiums are
paid with respect to options  purchased by a Fund and brokerage  commissions are
payable with respect to transactions in exchange-traded futures contracts.

A Fund has no obligation to enter into transactions in portfolio securities with
any dealer,  issuer,  underwriter or other entity.  In placing orders, it is the
policy of each Fund to obtain the best price and execution for its transactions.
Where best price and execution  may be obtained  from more than one dealer,  the
Adviser may, in its discretion, purchase and sell securities through dealers who
provide  research,  statistical  and  other  information  to the  Adviser.  Such
services may be used by the Adviser for all of its investment  advisory accounts
and, accordingly, not all such services may be used by the Adviser in connection
with a Fund. The supplemental  information received from a dealer is in addition
to the  services  required to be  performed  by the Adviser  under the  Advisory
Agreement,  and the expenses of the Adviser will not necessarily be reduced as a
result of the  receipt of such  information.  Consistent  with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., and subject to
seeking best price and  execution,  a Fund may  consider  sales of shares of the
Fund  as  a  factor  in  the  selection  of  dealers  to  enter  into  portfolio
transactions with the Fund.

Brokerage Allocation and Other Practices

Neither a Fund nor the Adviser has entered  into  agreements  or  understandings
with any brokers or dealers  regarding the placement of securities  transactions
because of research or  statistical  services they  provide.  To the extent that
such persons or firms supply  investment  information  to the Adviser for use in
rendering  investment  advice to a Fund, such  information may be supplied at no
cost to the Adviser and, therefore, may have the effect of reducing the expenses
of the Adviser in rendering  advice to the Fund. While it is impossible to place
an actual  dollar  value on such  investment  information,  its  receipt  by the
Adviser  probably  does not reduce the  overall  expenses  of the Adviser to any
material extent.

The investment  information provided to the Adviser is of the types described in
Section  28(e)(3)  of the  Securities  Exchange  Act of 1934 and is  designed to
augment  the   Adviser's   own  internal   research  and   investment   strategy
capabilities.  Research and  statistical  services  furnished by brokers through
whom a Fund effects securities  transactions are used by the Adviser in carrying
out its investment  management  responsibilities  with respect to all its client
accounts but not all such  services may be utilized by the Adviser in connection
with the Fund. A Fund will deal in some  instances in equity  securities,  which
are  not  listed  on  a  national   stock   exchange   but  are  traded  in  the
over-the-counter market. Where transactions are executed in the over-the-counter
market,  a Fund will  seek to deal  with the  primary  market  makers,  but when
necessary in order to obtain the best price and  execution,  it will utilize the
services  of  others.  In all  cases,  a Fund will  attempt  to  negotiate  best
execution. A Fund may from time to time place orders for the purchase or sale of
securities  (including  listed call options) with SCB & Co., an affiliate of the
Adviser.  In such  instances,  the placement of orders with such broker would be
consistent  with the Fund's  objective of obtaining best execution and would not
be dependent  upon the fact that SCB & Co. is an affiliate of the Adviser.  With
respect to orders placed with SCB & Co. for  execution on a national  securities
exchange,  commissions  received must conform to Section 17(e)(2)(A) of the 1940
Act and Rule 17e-1 thereunder, which permit an affiliated person of a registered
investment company (such as a Fund), or any affiliated person of such person, to
receive a brokerage commission from such registered  investment company provided
that such commission is reasonable and fair compared to the commissions received
by other brokers in connection with comparable  transactions  involving  similar
securities during a comparable period of time.

The following table shows the brokerage commission paid on investment
transactions for the last three fiscal years:

           Fund                                   Brokerage Commission Paid ($)
           ----                                   -----------------------------

  AWDGF II (Fiscal Year End - March 31)
      2006                                                    $0
      2005                                                    $0
      2004                                                    $0

  AWDGF (Fiscal Year End - October 31)
      2005                                                    $0
      2004                                                    $0
      2003                                                    $0

                                  DISTRIBUTIONS

Each  Fund  intends  to  distribute  monthly  its  net  investment  income.  Net
short-term capital gains, if any, will normally be distributed quarterly and net
long-term capital gains, if any, will normally be distributed annually.

                                    TAXATION
General

Each Fund intends for each  taxable  year to qualify as a "regulated  investment
company"  under the Code. To so qualify,  a Fund must,  among other things,  (i)
derive at least 90% of its gross  income in each  taxable  year from  dividends,
interest,  payments  with respect to  securities  loans,  gains from the sale or
other disposition of stock or securities or foreign  currency,  or certain other
income  (including  but not limited to, gains from options,  futures and forward
contracts)  derived  with  respect  to  its  business  of  investing  in  stock,
securities or currency;  and (ii)  diversify its holdings so that, at the end of
each quarter of its taxable year,  the following two  conditions are met: (a) at
least  50% of the  value of the  Fund's  assets  is  represented  by cash,  U.S.
Government  Securities,  securities of other regulated  investment companies and
other  securities  with respect to which the Fund's  investment  if limited,  in
respect of any one issuer,  to an amount not greater than 5% of the Fund's total
assets and 10% of the outstanding  voting  securities of such issuer and (b) not
more than 25% of the value of the Fund's assets is invested in securities of any
one  issuer  (other  than U.S.  Government  Securities  or  securities  of other
regulated investment companies).

The Treasury  Department  is  authorized  to issue  regulations  to provide that
foreign  currency  gains that are "not directly  related" to a Fund's  principal
business of investing  in stock or  securities  may be excluded  from the income
which qualifies for purposes of the 90% gross income requirement described above
with respect to the Fund's qualification as a "regulated investment company." No
such regulations have yet been issued.

If a Fund qualifies as a regulated  investment  company for any taxable year and
makes  timely  distributions  to its  stockholders  of 90% or  more  of its  net
investment  income for that year  (calculated  without regard to its net capital
gain, i.e., the excess of its net long-term capital gain over its net short-term
capital  loss),  it will not be subject to federal  income tax on the portion of
its  taxable  income  for the year  (including  any net  capital  gain)  that it
distributes to  stockholders.  Investors  should consult their own counsel for a
complete  understanding  of the requirements the Fund must meet to qualify to be
taxed as a "regulated investment company."

The  information  set forth in the following  discussion  relates  solely to the
significant  United  States  federal  income tax  consequences  of dividends and
distributions by a Fund and of sales or redemptions of Fund shares,  and assumes
that a Fund qualifies to be taxed as a regulated  investment company.  Investors
should  consult  their  own  tax  counsel  with  respect  to  the  specific  tax
consequences  of their being  stockholders  of a Fund,  including the effect and
applicability  of  federal,  state and  local  tax laws to their own  particular
situation and the possible effects of changes therein.

Dividends and Distributions

Each Fund intends to make timely  distributions of its taxable income (including
any net  capital  gain) so that the Fund will not be subject  to federal  income
taxes. Each Fund also intends to declare and distribute dividends in the amounts
and at the times necessary to avoid the application of the 4% federal excise tax
imposed on certain  undistributed  income of regulated investment  companies.  A
Fund  will be  required  to pay the 4%  excise  tax to the  extent  it does  not
distribute to its  stockholders  during any calendar year an amount equal to the
sum of (i) 98% of its ordinary taxable income for the calendar year, (ii) 98% of
its capital  gain net income and foreign  currency  gains for the twelve  months
ended  October 31 of such year (or December 31 if elected by the Fund) and (iii)
any ordinary income or capital gain net income from the preceding  calendar year
that was not  distributed  during such year.  For this  purpose,  income or gain
retained by a Fund that is subject to corporate income tax will be considered to
have been distributed by the Fund by year-end. For federal income and excise tax
purposes,  dividends declared and payable to stockholders of record as of a date
in October,  November or December but actually paid during the following January
will be taxable to these  stockholders  for the year  declared,  and not for the
subsequent  calendar  year in  which  the  stockholders  actually  received  the
dividend.

Dividends of a Fund's net ordinary income and  distributions of any net realized
short-term  capital gain are taxable to stockholders as ordinary  income.  Since
each Fund expects to derive  substantially  all of its gross income from sources
other  than  dividends,  it is  expected  that none of the Fund's  dividends  or
distributions   will   qualify   for  the   dividends-received   deduction   for
corporations.

Distributions of net capital gain by a Fund to its stockholders  will be taxable
to the  stockholders as long-term  capital gains,  irrespective of the length of
time a stockholder  may have held his Fund shares.  Any dividend or distribution
received by a  stockholder  on shares of a Fund will have the effect of reducing
the  NAV of  such  shares  by the  amount  of  such  dividend  or  distribution.
Furthermore,  a dividend or distribution made shortly after the purchase of such
shares  by a  stockholder,  although  in  effect a  return  of  capital  to that
particular  stockholder,  would be taxable to him as described above.  Dividends
are taxable in the manner  discussed  regardless of whether they are paid to the
stockholder in cash or are reinvested in additional shares of a Fund.

After the end of the  taxable  year,  a Fund  will  notify  stockholders  of the
federal income tax status of any distributions  made by the Fund to stockholders
during such year.

Sales

Any gain or loss  arising from a sale of Fund shares  generally  will be capital
gain or loss except in the case of a dealer or a financial institution, and will
be long-term  capital gain or loss if such  stockholder has held such shares for
more  than one year at the time of the  sale;  otherwise  it will be  short-term
capital gain or loss.  However,  if a stockholder  has held shares in a Fund for
six months or less and during that  period has  received a  distribution  of net
capital gain, any loss recognized by the stockholder on the sale of those shares
during the six-month  period will be treated as a long-term  capital loss to the
extent of such  distribution.  In determining  the holding period of such shares
for this purpose, any period during which a stockholder's risk of loss is offset
by means of options, short sales or similar transactions is not counted.

Any loss  realized  by a  stockholder  on a sale or exchange of shares of a Fund
will be  disallowed to the extent the shares  disposed of are replaced  within a
period of 61 days  beginning  30 days before and ending 30 days after the shares
are sold or exchanged. For this purpose,  acquisitions pursuant to a Fund's DRIP
would  constitute a replacement if made within the period.  If  disallowed,  the
loss will be  reflected  in an  upward  adjustment  to the  basis of the  shares
acquired.

Backup Withholding

A Fund  generally  will  be  required  to  withhold  tax at the  rate  of 28% of
reportable  payments  (which may  include  dividends  and  distributions  of net
capital  gain)  payable to a  noncorporate  stockholder  unless the  stockholder
certified on his  subscription  application that the social security or taxpayer
identification  number provided is correct and that the stockholder has not been
notified  by  the  Internal  Revenue  Service  that  he  is  subject  to  backup
withholding.

United States Federal Income Taxation of a Fund

The following  discussion  relates to certain  significant United States federal
income  tax  consequences  to a Fund with  respect to the  determination  of its
"investment  company taxable  income" each year. This discussion  assumes that a
Fund will be taxed as a  regulated  investment  company  for each of its taxable
years.

Options and Futures Contracts

Certain listed options and regulated futures  contracts are considered  "section
1256 contracts" for federal income tax purposes.  Section 1256 contracts held by
a Fund at the end of each  taxable  year will be "marked to market"  and treated
for federal income tax purposes as though sold for fair market value on the last
business day of such taxable  year.  Gain or loss  realized by a Fund on section
1256  contracts  (other  than  forward  foreign  currency   contracts)  will  be
considered  60%  long-term and 40%  short-term  capital gain or loss. A Fund can
elect to exempt its section 1256 contracts which are part of a "mixed  straddle"
(as described below) from the application of section 1256.

With  respect to  over-the-counter  put and call  options  or options  traded on
certain  foreign  exchanges,  gain or loss  realized by a Fund upon the lapse or
sale of such  options held by the Fund will be either  long-term  or  short-term
capital gain or loss  depending  upon the Fund's  holding period with respect to
such option.  However,  gain or loss  realized  upon the lapse or closing out of
such  options that are written by a Fund will be treated as  short-term  capital
gain or loss. In general,  if a Fund  exercises an option,  or if an option that
the  Fund has  written  is  exercised,  gain or loss on the  option  will not be
separately  recognized but the premium  received or paid will be included in the
calculation  of gain or loss upon  disposition  of the property  underlying  the
option.

Gain or loss  realized by a Fund on the lapse or sale of put and call options on
foreign  currencies  which are traded  over-the-counter  or on  certain  foreign
exchanges  will be  treated as section  988 gain or loss and will  therefore  be
characterized  as ordinary  income or loss and will  increase  or  decrease  the
amount of the  Fund's net  investment  income  available  to be  distributed  to
stockholders as ordinary income,  as described above. The amount of such gain or
loss shall be  determined  by  subtracting  the amount paid, if any, for or with
respect to the option  (including any amount paid by a Fund upon  termination of
an option  written by the Fund) from the amount  received,  if any,  for or with
respect  to  the  option  (including  any  amount  received  by  the  Fund  upon
termination of an option held by the Fund). In general, if a Fund exercises such
an option on a foreign currency,  or such an option that the Fund has written is
exercised,  gain or loss on the option will be  recognized in the same manner as
if the Fund had sold the  option  (or paid  another  person to assume the Fund's
obligation to make delivery under the option) on the date on which the option is
exercised,  for the fair market value of the option.  The  foregoing  rules will
also apply to other put and call options which have as their underlying property
foreign  currency and which are traded  over-the-counter  or on certain  foreign
exchanges  to  the  extent  gain  or  loss  with  respect  to  such  options  is
attributable to fluctuations in foreign currency exchange rates.

Tax Straddles

Any option, futures contract,  forward foreign currency contract,  other forward
contract,  or other position  entered into or held by a Fund in conjunction with
any other  position  held by the Fund may  constitute a  "straddle"  for federal
income  tax  purposes.  A  straddle  of  which at least  one,  but not all,  the
positions  are section 1256  contracts  may  constitute a "mixed  straddle."  In
general,  straddles  are subject to certain  rules that may affect the character
and timing of a Fund's  gains and losses with  respect to straddle  positions by
requiring,  among other  things,  that (i) loss realized on  disposition  of one
position  of a  straddle  not be  recognized  to the  extent  that  the Fund has
unrealized  gains with respect to the other position in such straddle;  (ii) the
Fund's  holding  period in straddle  positions be  suspended  while the straddle
exists  (possibly  resulting in gain being  treated as  short-term  capital gain
rather than long-term  capital gain);  (iii) losses  recognized  with respect to
certain  straddle  positions  which are part of a mixed  straddle  and which are
non-section  1256  positions  be treated  as 60%  long-term  and 40%  short-term
capital loss; (iv) losses recognized with respect to certain straddle  positions
which  would  otherwise  constitute  short-term  capital  losses be  treated  as
long-term capital losses; and (v) the deduction of interest and carrying charges
attributable  to  certain  straddle  positions  may be  deferred.  The  Treasury
Department is authorized to issue regulations providing for the proper treatment
of a mixed straddle where at least one position is capital.  No such regulations
have yet been  issued.  Various  elections  are  available  to a Fund  which may
mitigate the effects of the straddle rules,  particularly  with respect to mixed
straddles.  In general,  the straddle rules  described above do not apply to any
straddles  held by a Fund all of the  offsetting  positions of which  consist of
section 1256 contracts.

Zero Coupon Treasury Securities

Under current federal tax law, a Fund will receive net investment  income in the
form of interest by virtue of holding Treasury bills,  notes and bonds, and will
recognize interest attributable to it under the original issue discount rules of
the Code from holding zero coupon Treasury  securities.  Current federal tax law
requires  that a  holder  (such as a Fund) of a zero  coupon  security  accrue a
portion of the discount at which the security was  purchased as income each year
even though the Fund receives no interest payment in cash on the security during
the  year.  Accordingly,  a  Fund  may be  required  to  pay  out  as an  income
distribution  each year an amount which is greater than the total amount of cash
interest the Fund actually  received.  Such  distributions will be made from the
cash assets of a Fund or by liquidation of portfolio securities, if necessary. A
Fund may realize a gain or loss from such sales. In the event a Fund realize net
capital  gains from such  transactions,  its  stockholders  may receive a larger
capital gain distribution,  if any, than they would have received in the absence
of such transactions.

Foreign Taxes

Investment income received by a Fund from foreign  government  securities may be
subject to foreign income taxes,  including  taxes  withheld at the source.  The
United  States has entered into tax treaties with many foreign  countries  which
entitles a Fund to a reduced rate of such taxes or exemption  from taxes on such
income.  It is  impossible  to determine  the  effective  rate of foreign tax in
advance  since the  amount  of a Fund's  assets to be  invested  within  various
countries  is not  known.  To the  extent  that  investment  income of a Fund is
subject to foreign income taxes,  the Fund will be entitled to claim a deduction
or credit  for the amount of such taxes for  United  States  federal  income tax
purposes.  However,  any  such  taxes  will  reduce  the  income  available  for
distribution to a Fund's stockholders.

Other Taxation

The foregoing is a brief summary of the federal tax laws applicable to investors
in the Funds.  Investors may also be subject to state and local taxes,  although
distributions of a Fund that are derived from interest on certain obligations to
the U.S.  Government  and  agencies  thereof  may be exempt from state and local
taxes in certain states.

                                  PROXY VOTING

You may obtain a description of a Fund's proxy voting  policies and  procedures,
and  information  regarding  how the Fund voted  proxies  relating to  portfolio
securities during the most recent 12-month period ended June 30, without charge.
Simply visit the Adviser's web site at  www.alliancebernstein.com,  or go to the
Commission's web site at www.sec.gov, or call the Adviser at (800) 227-4618.

Each Fund files its complete schedule of portfolio  holdings with the Commission
for the first and third  quarters of each  fiscal year on Form N-Q.  Each Fund's
Forms N-Q is available on the  Commission's  web site at  www.sec.gov.  A Fund's
Forms N-Q may also be reviewed and copied at the  Commission's  Public Reference
Room in Washington,  DC;  information  on the operation of the Public  Reference
Room may be obtained by calling 1-202-551-8090.

                                  LEGAL MATTERS

Certain  legal  matters  concerning  the Funds and  their  participation  in the
Acquisition,  the issuance of AWDGF II shares in connection with the Acquisition
and the tax  consequences  of the  Acquisition  will be passed  upon by Seward &
Kissel LLP, One Battery Park Plaza, New York, NY 10004, counsel to the Funds.

                                     EXPERTS

The audited financial information in the Prospectus/Proxy  Statement and the SAI
has  been  included  in  reliance  on the  report  of  Ernst  & Young  LLP,  the
independent registered public accounting firm for the Funds, 5 Times Square, New
York, NY 10036, given on its authority as experts in auditing and accounting.



--------------------------------------------------------------------------------

                              FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

(a) The  Financial  Statements  required  under  Item  14(a)  of Form  N-14  are
incorporated by reference herein from the:

1. AWDGF II:  Annual  Report for the period  ended March 31, 2006 filed with the
SEC on June 9, 2006 (File No. 811-07732).

2. AWDGF II:  Semi-Annual  Report for the period ended  September 30, 2005 filed
with the SEC on December 8, 2005 (File No. 811-07732).

3. AWDGF: Annual Report for the period ended October 31, 2005 filed with the SEC
on January 6, 2006 (File No. 811-07108).

4. AWDGF:  Semi-Annual Report for the period ended April 30, 2006 filed with the
SEC on July 10, 2006 (File No. 811-07108).

(b) Pro Forma Financial Information:

The pro  forma  AWDGF  II  financial  statements  give  effect  to the  proposed
Acquisition  of the assets and  liabilities of AWDGF by AWDGF II pursuant to the
Agreement and Plan of Acquisition  and  Liquidation.  The  Acquisition  would be
accomplished  by a tax-free  exchange of the assets and liabilities of AWDGF for
shares of AWDGF II.

AWDGF II was  incorporated  under the laws of the State of  Maryland  on May 20,
1993.  AWDGF II's  unaudited Pro Forma  Portfolio of  Investments,  Statement of
Assets and  Liabilities  and Statement of Operations  are prepared as though the
Acquisition  was  effective  for the period April 1, 2005 - March 31, 2006.  You
should read them in conjunction with AWDGF II's historical financial statements,
which  are  incorporated  by  reference.  AWDGF  II's  Pro  Forma  Statement  of
Operations  reflects the assumption that certain expenses would be lower for the
combined  Fund as a result of the  Acquisition.  AWDGF will bear the expenses of
the  Acquisition,  including  the  cost of  proxy  solicitation  and  the  costs
associated  with  the  disposition  of  any  assets  or  liabilities  not  being
transferred  to  AWDGF II in  connection  with the  Acquisition.  The  following
represents the pro forma financial information:




                                    PRO FORMA

                  ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC
                              FINANCIAL STATEMENTS

                 ALLIANCE WORLD DOLLAR GOVERNMENT FUND II, INC.
                   ALLIANCE WORLD DOLLAR GOVERNMENT FUND, INC.

                                 March 31, 2006
                                   (unaudited)





PORTFOLIO OF INVESTMENTS
PRO FORMA ALLIANCE WORLD DOLLAR GOVERNMENT FUND II                                         Alliance World Dollar Government Fund II
March 31, 2006 (unaudited)                                                                    Alliance World Dollar Government Fund


                                     Alliance                                                  Pro Forma                 Pro Forma
                                     World         Alliance       Alliance                     Alliance                   Alliance
                                     Dollar         World         World Dollar   Alliance      World Dollar                World
                                    Government      Dollar        Government      World        Government                  Dollar
                                    Fund II       Government        Fund          Dollar       Fund II                 Government
                                    Principal      Fund II         Principal     Government    Principal                  Fund II
                                    Amount          (U.S.           Amount        Fund (a)      Amount                    (U.S. $
                                     (000)        $ Value)          (000)     (U.S. $ Value)     (000)   Adjustments       Value)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  

SOVEREIGN DEBT OBLIGATIONS--82.5%
Argentina 4.6%
Republic of Argentina
   Zero Coupon, 12/15/35(b)         $  23,602    $    2,124,182   $   3,134   $     282,071   $  26,736                 $ 2,406,253
   4.889%, 8/03/12(c)                  40,298        37,390,106       5,657       5,248,533      45,955                  42,638,639
   8.28%, 12/31/33(d)                   5,771         5,670,356         751         738,003       6,522                   6,408,359
                                                 --------------               -------------                           -------------
                                                     45,184,644                   6,268,607                              51,453,251
                                                 --------------               -------------                           -------------

Brazil--16.1%
Federal Republic of Brazil
   7.125%, 1/20/37(d)                  29,261        28,675,779       3,768       3,692,640      33,029                  32,368,419
   8.00%, 1/15/18                       9,038         9,770,078         873         943,713       9,911                  10,713,791
   8.25%, 1/20/34                      27,633        30,451,565       3,621       3,990,342      31,254                  34,441,907
   8.875%, 10/14/19                     7,260         8,385,300       1,109       1,280,895       8,369                   9,666,195
   10.50%, 7/14/14                     10,110        12,586,950       1,364       1,698,180      11,474                  14,285,130
   12.00%, 4/15/10                      8,650        10,553,000       1,025       1,250,500       9,675                  11,803,500
   12.75%, 1/15/20                     31,478        46,823,524       4,897       7,284,287      36,375                  54,107,811
   DCB FRN
   Series L
   5.25%, 4/15/12                      10,806        10,806,228       1,167       1,166,959      11,973                  11,973,187
                                                 --------------               -------------                           -------------
                                                    158,052,424                  21,307,516                             179,359,940
                                                 --------------               -------------                           -------------

Bulgaria--0.4%
Republic of Bulgaria
   8.25%, 1/15/15(e)                    3,204         3,745,476         425         496,825       3,629                   4,242,301
                                                 --------------               -------------                           -------------

Colombia--2.6%
Republic of Colombia
   10.75%, 1/15/13                      8,057         9,982,623         376         465,864       8,433                  10,448,487
   11.75%, 2/25/20                     10,919        15,532,278       1,948       2,771,030      12,867                  18,303,308
                                                 --------------               -------------                           -------------
                                                     25,514,901                   3,236,894                              28,751,795
                                                 --------------               -------------                           -------------

Costa Rica--0.4%
Republic of Costa Rica
   8.05%, 1/31/13(e)                    1,669         1,798,348         228         245,670       1,897                   2,044,018
   8.11%, 2/01/12(e)                    1,964         2,111,300         269         289,175       2,233                   2,400,475
                                                 --------------               -------------                           -------------
                                                      3,909,648                     534,845                               4,444,493
                                                 --------------               -------------                           -------------

Dominican Republic--0.2%
Dominican Republic
   9.50%, 9/27/11(e)                    2,101         2,258,352         261         280,132       2,362                   2,538,484

Ecuador--1.4%
Republic of Ecuador
   9.00%, 8/15/30(e)(f)                 9,300         9,369,751       1,311       1,320,833      10,611                  10,690,584
   9.375%, 12/15/15(e)                  3,834         4,044,870         393         414,615       4,227                   4,459,485
                                                 --------------               -------------                           -------------
                                                     13,414,621                   1,735,448                              15,150,069
                                                 --------------               -------------                           -------------

El Salvador--0.9%
Republic of El Salvador
   7.625%, 9/21/34(e)                   2,290         2,490,375         352         382,800       2,642                   2,873,175
   7.65%, 6/15/35(e)                    1,691         1,771,323         413         432,618       2,104                   2,203,941
   8.50%, 7/25/11(e)                    3,700         4,108,850         425         471,962       4,125                   4,580,812
                                                 --------------               -------------                           -------------
                                                      8,370,548                   1,287,380                               9,657,928
                                                 --------------               -------------                           -------------

Indonesia--1.7%
Republic of Indonesia
   6.75%, 3/10/14(e)                    8,585         8,542,075       1,150       1,144,250       9,735                   9,686,325
   6.875%, 3/09/17(e)                   3,954         3,894,690         539         530,915       4,493                   4,425,605
   7.25%, 4/20/15(e)                    2,480         2,539,520         307         314,368       2,787                   2,853,888
   8.50%, 10/12/35(e)                   2,048         2,283,520         270         301,050       2,318                   2,584,570
                                                 --------------               -------------                           -------------
                                                     17,259,805                   2,290,583                              19,550,388
                                                 --------------               -------------                           -------------

Lebanon--1.2%
Lebanese Republic
   7.875%, 5/20/11(e)                   2,475         2,574,000         330         343,200       2,805                   2,917,200
   10.125%, 8/06/08(e)                  7,501         8,082,328         979       1,054,873       8,480                   9,137,201
   11.625%, 5/11/16(e)                  1,114         1,420,350         148         188,700       1,262                   1,609,050
                                                 --------------               -------------                           -------------
                                                     12,076,678                   1,586,773                              13,663,451
                                                 --------------               -------------                           -------------

Malaysia--1.0%
Malaysia
   7.50%, 7/15/11                          -0-               -0-        550         598,002         550                     598,002
   8.75%, 6/01/09                       9,420        10,301,552          -0-             -0-      9,420                  10,301,552
                                                 --------------               -------------                           -------------
                                                     10,301,552                      598,002                             10,899,554
                                                 --------------               -------------                           -------------

Mexico--13.4%
United Mexican States
   7.50%, 1/14/12                       7,400         7,992,000       1,075       1,161,000       8,475                   9,153,000
   8.125%, 12/30/19                    42,200        49,627,199       4,720       5,550,720      46,920                  55,177,919
   11.375%, 9/15/16                    11,110        15,653,990       1,607       2,264,263      12,717                  17,918,253

   Series A
   6.375%, 1/16/13                      2,782         2,851,550         555         568,875       3,337                   3,420,425
   8.00%, 9/24/22                      34,632        40,484,807       5,214       6,095,166      39,846                  46,579,973
   9.875%, 2/01/10                     11,800        13,452,000       2,687       3,063,180      14,487                  16,515,180
                                                 --------------               -------------                           -------------
                                                    130,061,546                  18,703,204                             148,764,750
                                                 --------------               -------------                           -------------

Morocco--0.0%
Kingdom of Morocco Loan
 Participation FRN
   Series A
   5.69%, 1/01/09                          -0-               -0-        370         369,304         370                     369,304
                                                 --------------               -------------                           -------------

Nigeria--1.7%
Central Bank of Nigeria
   6.25%, 11/15/20(f)                  17,250        17,272,425       2,250       2,252,925      19,500                  19,525,350
                                                 --------------               -------------                           -------------

Panama--3.1%
Republic of Panama
   6.70%, 1/26/36                       4,263         4,252,343         782         780,045       5,045                   5,032,388
   7.125%, 1/29/26                      4,794         4,913,850         488         500,200       5,282                   5,414,050
   7.25%, 3/15/15                         600           636,000          75          79,500         675                     715,500
   8.875%, 9/30/27                      6,113         7,427,295         948       1,151,820       7,061                   8,579,115
   9.375%, 7/23/12- 4/01/29             6,285         7,517,445         554         672,673       6,839                   8,190,118
   9.625%, 2/08/11                      5,206         5,986,900         375         431,250       5,581                   6,418,150
                                                 --------------               -------------                           -------------
                                                     30,733,833                   3,615,488                              34,349,321
                                                 --------------               -------------                           -------------

Peru--3.0%
Republic of Peru
   7.35%, 7/21/25                       2,097         2,059,254       1,176       1,154,832       3,273                   3,214,086
   8.375%, 5/03/16                      3,191         3,462,235         508         551,180       3,699                   4,013,415
   8.75%, 11/21/33                     20,733        23,117,295       2,102       2,343,730      22,835                  25,461,025
   9.875%, 2/06/15                        157           185,260         431         508,580         588                     693,840
                                                 --------------               -------------                           -------------
                                                     28,824,044                   4,558,322                              33,382,366
                                                 --------------               -------------                           -------------

Philippines--5.0%
Republic of Philippines
   7.75%, 1/14/31                       5,528         5,562,550         619         622,869       6,147                   6,185,419
   8.375%, 2/15/11                        684           740,430          93         100,673         777                     841,103
   8.875%, 3/17/15                     17,505        19,675,620       2,535       2,849,339      20,040                  22,524,959
   9.00%, 2/15/13                       4,775         5,168,938         725         784,813       5,500                   5,953,751
   9.50%, 2/02/30                          -0-               -0-        283         336,063         283                     336,063
   9.875%, 1/15/19                     12,750        15,331,875       1,025       1,232,562      13,775                  16,564,437
   10.625%, 3/16/25                     2,055         2,666,363         756         980,910       2,811                   3,647,273
                                                 --------------               -------------                           -------------
                                                     49,145,776                   6,907,229                              56,053,005
                                                 --------------               -------------                           -------------

Russia--13.0%
Russian Federation
   5.00%, 3/31/30(e)(f)                37,641        41,174,609       7,743       8,470,842      45,384                  49,645,451
   11.00%, 7/24/18(e)                   4,340         6,223,560       3,170       4,545,780       7,510                  10,769,340

Russian Ministry of Finance
   Series V
   3.00%, 5/14/08                      70,752        66,952,617      11,505      10,887,181      82,257                  77,839,798
   Series VII
   3.00%, 5/14/11                       5,870         5,173,231       1,080         951,804       6,950                   6,125,035
                                                 --------------               -------------                           -------------
                                                    119,524,017                  24,855,607                             144,379,624
                                                 --------------               -------------                           -------------

Turkey--4.7%
Republic of Turkey
   6.875%, 3/17/36                     18,028        17,442,090       1,502       1,453,185      19,530                  18,895,275
   7.375%, 2/05/25                      2,142         2,219,648         597         618,641       2,739                   2,838,289
   11.00%, 1/14/13                      5,500         6,897,000       1,040       1,304,160       6,540                   8,201,160
   11.50%, 1/23/12                      5,183         6,478,750       1,112       1,390,000       6,295                   7,868,750
   11.75%, 6/15/10                      5,823         7,002,158         680         817,700       6,503                   7,819,858
   11.875%, 1/15/30                     3,935         6,079,575         328         506,760       4,263                   6,586,335
                                                 --------------               -------------                           -------------
                                                     46,119,221                   6,090,446                              52,209,667
                                                 --------------               -------------                           -------------

Ukraine--0.6%
Government of Ukraine
   6.875%, 3/04/11(e)                      -0-               -0-        482         485,615         482                     485,615
   7.65%, 6/11/13(e)                    1,170         1,225,575         125         130,938       1,295                   1,356,513
   11.00%, 3/15/07(e)                   3,743         3,876,016         518         536,456       4,261                   4,412,472
                                                 --------------               -------------                           -------------
                                                      5,101,591                   1,153,009                               6,254,600
                                                 --------------               -------------                           -------------

Uruguay--1.5%
Republic of Uruguay
   5.875%, 1/15/33(g)                   4,246         4,394,725         606         626,965       4,852                   5,021,690
   7.50%, 3/15/15                       3,691         3,847,868         124         129,270       3,815                   3,977,138
   8.00%, 11/18/22                      2,296         2,399,320         378         395,010       2,674                   2,794,330
   9.25%, 5/17/17                       3,488         4,054,800         690         802,125       4,178                   4,856,925
                                                 --------------               -------------                           -------------
                                                     14,696,713                   1,953,370                              16,650,083
                                                 --------------               -------------                           -------------

Venezuela--6.0%
Republic of Venezuela
   5.614%, 4/20/11(c)(e)                3,050         3,066,775         440         442,420       3,490                   3,509,195
   8.50%, 10/08/14                      1,731         1,938,720         268         300,160       1,999                   2,238,880
   9.25%, 9/15/27(d)                   17,171        21,807,170       2,189       2,780,030      19,360                  24,587,200
   10.75%, 9/19/13                     19,646        24,498,562       3,530       4,401,910      23,176                  28,900,472
   13.625%, 8/15/18                     4,499         6,905,965         583         894,905       5,082                   7,800,870
                                                 --------------               -------------                           -------------
                                                     58,217,192                   8,819,425                              67,036,617
                                                 --------------               -------------                           -------------

Total Sovereign Debt
Obligations
   (cost $834,765,990)                              799,785,007                 118,901,334                             918,686,341
                                                 --------------               -------------                           -------------

CORPORATE DEBT OBLIGATIONS--10.6%
Brazil--0.3%
Banco BMG, SA
   9.15%, 1/15/16(e)                    3,300         3,378,375          -0-             -0-      3,300                   3,378,375
                                                 --------------               -------------                           -------------

Cayman Islands--0.1%
C&M Finance Ltd.
   8.10%, 2/01/16(e)                    1,405         1,405,493          -0-             -0-      1,405                   1,405,493
                                                 --------------               -------------                           -------------

Hong Kong--0.4%
Noble Group Ltd.
   6.625%, 3/17/15(e)                   4,731         4,181,986          -0-             -0-      4,731                   4,181,986
                                                 --------------               -------------                           -------------

Indonesia--0.5%
Freeport-McMoran Copper & Gold
   10.125%, 2/01/10                     4,800         5,172,000          -0-             -0-      4,800                   5,172,000
                                                 --------------               -------------                           -------------

Jamaica--0.3%
Digicel Ltd.
   9.25%, 9/01/12(e)                    2,884         3,049,830          -0-             -0-      2,884                   3,049,830
                                                 --------------               -------------                           -------------

Kazakhstan--0.5%
Kazkommerts International BV
   8.50%, 4/16/13(e)                    3,000         3,202,500          -0-             -0-      3,000                   3,202,500

TengizChevroil Finance Co.
   6.124%, 11/15/14(e)                  2,569         2,556,155          -0-             -0-      2,569                   2,556,155
                                                 --------------               -------------                           -------------
                                                      5,758,655                          -0-                              5,758,655
                                                 --------------               -------------                           -------------

Mexico--1.1%
America Movil SA de CV
   6.375%, 3/01/35                        923           869,928          -0-             -0-        923                     869,928
Innova S De. R.L., SA
   9.375%, 9/19/13                      7,955         8,909,600          -0-             -0-      7,955                   8,909,600
Monterrey Power SA de CV
   9.625%, 11/15/09(e)                  2,526         2,795,060          -0-             -0-      2,526                   2,795,060
                                                 --------------               -------------                           -------------
                                                     12,574,588                          -0-                             12,574,588
                                                 --------------               -------------                           -------------

Panama--0.3%
AES El Savador Trust
   6.75%, 2/01/16(e)                    3,100         3,012,713          -0-             -0-      3,100                   3,012,713
                                                 --------------               -------------                           -------------

People's Republic of China--0.3%
Choada Modern Agricultural
 Holdings Ltd.
   7.75%, 2/08/10(e)                    3,808         3,808,000          -0-             -0-      3,808                   3,808,000
                                                 --------------               -------------                           -------------

Peru--0.4%
Southern Copper Corp.
   6.375%, 7/27/15                      4,524         4,406,955          -0-             -0-      4,524                   4,406,955
                                                 --------------               -------------                           -------------

Romania--0.3%
MobiFon Holdings BV
   12.50%, 7/31/10                      3,075         3,513,188          -0-             -0-      3,075                   3,513,188
                                                 --------------               -------------                           -------------

Russia--5.8%
Aries Vermogensverwaltng
   9.60%, 10/25/14(e)                  21,750        27,174,451          -0-             -0-     21,750                  27,174,451

Citigroup (JSC Severstal)
   9.25%, 4/19/14(e)                    2,256         2,431,291          -0-             -0-      2,256                   2,431,291

Evraz Group, SA
   8.25%, 11/10/15(e)                   3,933         3,972,330          -0-             -0-      3,933                   3,972,330

Gazprom Oao
   9.625%, 3/01/13(e)                  16,100        19,059,180          -0-             -0-     16,100                  19,059,180

Gazstream, SA
   5.625%, 7/22/13(e)                   1,898         1,867,059          -0-             -0-      1,898                   1,867,059

Mobile Telesystems Finance
   9.75%, 1/30/08(e)                    5,390         5,666,370          -0-             -0-      5,390                   5,666,370

Russian Standard Finance
   7.50%, 10/07/10(e)                   3,412         3,339,495          -0-             -0-      3,412                   3,339,495

Tyumen Oil
   11.00%, 11/06/07(e)                  1,075         1,150,250          -0-             -0-      1,075                   1,150,250
                                                 --------------               -------------                           -------------
                                                     64,660,426                          -0-                             64,660,426
                                                 --------------               -------------                           -------------

Ukraine--0.3%
Kyivstar
   7.75%, 4/27/12(e)                      900           903,375          -0-             -0-        900                     903,375
   10.375%, 8/17/09(e)                  1,800         1,953,000          -0-             -0-      1,800                   1,953,000
                                                 --------------               -------------                           -------------
                                                      2,856,375                          -0-                              2,856,375
                                                 --------------               -------------                           -------------

Total Corporate Debt
Obligations
   (cost $115,143,743)                              117,778,584                          -0-                            117,778,584
                                                 --------------               -------------                           -------------

WARRANTS(h)--0.0%
Central Bank of Nigeria
   Warrants, expiring 11/15/20          9,500           209,000       1,250          27,500      10,750                     236,500
Republic of Venezuela
   Warrants, expiring 4/15/20          25,000                -0-     20,599              -0-     45,599                          -0-
                                                 --------------               -------------                           -------------
Total Warrants
   (cost $0)                                            209,000                      27,500                                 236,500
                                                 --------------               -------------                           -------------

SHORT-TERM INVESTMENTS 9.8%
Time Deposits  9.8 %
Societe Generale

   4.82%, 4/03/06                      95,400        95,400,000      12,800      12,800,000     108,200                 108,200,000
The Bank of New York
   3.75%, 4/03/06                          -0-               -0-        515         515,000         515                     515,000
                                                 --------------               -------------                           -------------

Total Short-Term Investments
   (cost $108,715,000)                               95,400,000                  13,315,000                             108,715,000
                                                 --------------               -------------                           -------------

Total Investments 102.9%
   (cost $1,058,624,733)                          1,013,172,591                 132,243,834                           1,145,416,425
Other assets less
liabilities (2.9%)                                  (29,384,927)                 (2,879,705)               (75,000)     (32,339,632)
                                                 --------------               -------------                           -------------
Net Assets 100%                                  $  983,787,664               $ 129,364,129              $ (75,000)   $1,113,076,793
                                                 --------------               -------------                           -------------



Alliance World Dollar Government Fund II
CREDIT DEFAULT SWAP CONTRACTS

                                         Notional                                                               Unrealized
Swap Counterparty &                        Amount         Interest                   Termination               Appreciation/
Referenced Obligation                     (000's)           Rate                         Date                  (Depreciation)
---------------------                     -------           ----                         ----                  --------------
                                                                                                    
Buy Contracts:
Citigroup Global Markets, Inc.
  Republic of Colombia
  8.375%, 2/15/27                          $4,250           3.02%                       1/20/10                  $(301,641)
Citigroup Global Markets, Inc.
  Republic of Hungary
  4.50%, 2/06/13                            3,075           0.50                       11/26/13                        940
Citigroup Global Markets, Inc.
  Republic of Philippines
  10.625%, 3/16/25                          4,070           5.60                        3/20/14                   (725,430)
JP Morgan Chase & Co.
  Republic of Hungary
  4.75%, 2/03/15                           11,300           0.30                       10/20/15                    240,043

Sale Contracts:
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                          19,047           1.98                        4/20/07                    500,688
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                          18,840           3.09                        8/20/10                  1,312,449
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                           6,750           4.40                        5/20/06                    147,895
Citigroup Global Markets, Inc.
  Republic of Colombia
  8.375%, 2/15/27                           8,600           1.13                        1/20/07                     79,074
Citigroup Global Markets, Inc.
  Republic of Philippines
  10.625%, 3/16/25                          4,070           4.95                        3/20/09                    419,409
Credit Suisse First Boston
  Federal Republic of Brazil
  12.25%, 3/06/30                           5,800           6.90                        6/20/07                    563,019
Credit Suisse First Boston
  Republic of Venezuela
  9.25%, 9/15/27                           13,570           3.17                       10/20/15                  1,230,448
Deutche Bank AG London
  Federal Republic of Brazil
  12.25%, 3/06/30                          19,047           1.90                        4/20/07                    478,076
JPMorgan Chase & Co.
  Gazprom Oao
   5.875% - 10.50%,
   4/25/07 - 6/01/15                       12,210           1.04                       10/20/10                     83,730
Morgan Stanley
  Federal Republic of Brazil
  10.125%, 5/15/27                          7,200          17.75                        2/13/08                  2,378,369
Morgan Stanley
  Federal Republic of Brazil
  12.25%, 3/06/30                           5,120           3.80                        8/20/06                     91,749



Alliance World Dollar Government Fund
CREDIT DEFAULT SWAP CONTRACTS

                                          Notional                                                                Unrealized
Swap Counterparty &                       Amount         Interest                   Termination                 Appreciation/
Referenced Obligation                     (000's)           Rate                         Date                   (Depreciation)
---------------------                     -------           ----                         ----                   --------------
                                                                                                    

Buy Contracts:
Citigroup Global Markets, Inc.
  Republic of Colombia
  8.375%, 2/15/27                            $550           3.02%                     1/20/10                     $(39,128)
Citigroup Global Markets, Inc.
  Republic of Hungary
  4.50%, 2/06/13                              350           0.50                     11/26/13                           97
Citigroup Global Markets, Inc.
  Republic of Philippines
  10.625%, 3/16/25                            520           5.60                      3/20/14                      (92,846)
JP Morgan Chase & Co.
  Republic of Hungary
  4.75%, 2/03/15                            1,490           0.30                     10/20/15                       31,627

Sale Contracts:
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                           2,583           1.98                      4/20/07                       68,183
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                           2,540           3.09                      8/20/10                      177,380
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                             900           4.40                      5/20/06                       19,939
Citigroup Global Markets, Inc.
  Republic of Colombia
  8.375%, 2/15/27                           1,150           1.13                      1/20/07                       10,646
Citigroup Global Markets, Inc.
  Republic of Philippines
  10.625%, 3/16/25                            520           4.95                      3/20/09                       53,728
Credit Suisse First Boston
  Federal Republic of Brazil
  12.25%, 3/06/30                             775           6.90                      6/20/07                       75,528
Credit Suisse First Boston
  Republic of Venezuela
  9.25%, 9/15/27                              950           3.17                      10/20/15                      86,308
Deutche Bank AG London
  Federal Republic of Brazil
  12.25%, 3/06/30                           2,583           1.90                      4/20/07                       65,106
Morgan Stanley
  Federal Republic of Brazil
  10.125%, 5/15/27                            800           17.75                     2/13/08                      265,052
Morgan Stanley
  Federal Republic of Brazil
  12.25%, 3/06/30                             680           3.80                      8/20/06                       12,329







Pro Forma Alliance World Dollar Government Fund II
CREDIT DEFAULT SWAP CONTRACTS


                                      Pro Forma                                                                  Pro Forma
                                      Notional                                                                  Unrealized
Swap Counterparty &                    Amount             Interest                   Termination                Appreciation/
Referenced Obligation                  (000's)              Rate                         Date                   (Depreciation)
---------------------                  -------              ----                         ----                   --------------
                                                                                                    

Buy Contracts:
Citigroup Global Markets, Inc.
  Republic of Colombia
  8.375%, 2/15/27                          $4,800           3.02%                    1/20/10                      $(340,769)
Citigroup Global Markets, Inc.
  Republic of Hungary
  4.50%, 2/06/13                            3,425           0.50                     11/26/13                         1,037
Citigroup Global Markets, Inc.
  Republic of Philippines
  10.625%, 3/16/25                          4,590           5.60                     3/20/14                       (818,276)
JP Morgan Chase & Co.
  Republic of Hungary
  4.75%, 2/03/15                           12,790           0.30                     10/20/15                       271,670

Sale Contracts:
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                          21,630           1.98                     4/20/07                        568,871
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                          21,380           3.09                     8/20/10                      1,489,829
Citigroup Global Markets, Inc.
  Federal Republic of Brazil
  12.25%, 3/06/30                           7,650           4.40                     5/20/06                        167,834
Citigroup Global Markets, Inc.
  Republic of Colombia
  8.375%, 2/15/27                           9,750           1.13                     1/20/07                         89,720
Citigroup Global Markets, Inc.
  Republic of Philippines
  10.625%, 3/16/25                          4,590           4.95                     3/20/09                        473,137
Credit Suisse First Boston
  Federal Republic of Brazil
  12.25%, 3/06/30                           6,575           6.90                     6/20/07                        638,547
Credit Suisse First Boston
  Republic of Venezuela
  9.25%, 9/15/27                           14,520            3.17                    10/20/15                     1,316,756
Deutche Bank AG London
  Federal Republic of Brazil
  12.25%, 3/06/30                          21,630            1.90                    4/20/07                        543,182
JPMorgan Chase & Co.
  Gazprom Oao
  5.875% - 10.50%, 4/25/07 -
  6/01/15                                  12,210            1.04                    10/20/10                        83,730
Morgan Stanley
  Federal Republic of Brazil
  10.125%, 5/15/27                          8,000           17.75                    2/13/08                      2,643,421
Morgan Stanley
  Federal Republic of Brazil
  12.25%, 3/06/30                           5,800            3.80                    8/20/06                        104,078




Alliance World Dollar Government Fund
INTEREST RATE SWAP CONTRACT


                                                                                   Rate Type
                                                                             -----------------------

                                                                            Payments       Payments
                                     Notional             Termination       made by      received by              Unrealized
Swap Counterparty                    Amount                  Date           the Fund       the Fund               Depreciation
-----------------                    ------                  ----           --------       --------               ------------
                                                                                                   

Morgan Guaranty                        $3,320,644            1/01/09         LIBOR+          6.8526%               $(1,146,461)

+LIBOR
(London Interbank Offered Rate)





Pro Forma Alliance World Dollar Government Fund II
INTEREST RATE SWAP CONTRACT


                                                                                   Rate Type
                                                                             -----------------------

                                                                            Payments       Payments
                                     Notional             Termination       made by      received by              Unrealized
Swap Counterparty                    Amount                  Date           the Fund       the Fund               Depreciation
-----------------                    ------                  ----           --------       --------               ------------
                                                                                                   

Morgan Guaranty                        $3,320,644           1/01/09          LIBOR+        6.8526%               $(1,146,461)

+LIBOR
(London Interbank Offered Rate)





Alliance World Dollar Government Fund II
REVERSE REPURCHASE AGREEMENTS


                                          Interest
Broker                                        Rate                Maturity                             Amount
------                                        ----                --------                             ------
                                                                                             

UBS AG London                                1.60%                12/29/06                            $5,527,701
UBS AG London                                 4.10                12/29/06                            20,964,958
UBS AG London                                 4.40                 4/06/06                             2,527,941
UBS AG London                                 4.60                12/29/06                            22,575,723
                                                                                                     -----------
                                                                                                     $51,596,323




Alliance World Dollar Government Fund
REVERSE REPURCHASE AGREEMENT


                                           Interest
Broker                                         Rate              Maturity                              Amount
------                                         ----              --------                              ------
                                                                                            

UBS AG London                                 4.60%              12/29/06                            $2,933,777





Pro Forma Alliance World Dollar Government Fund II
REVERSE REPURCHASE AGREEMENTS


                                           Interest                                                      Pro Forma
Broker                                         Rate              Maturity                                Amount
------                                         ----              --------                                ------
                                                                                               

UBS AG London                                 1.60%              12/29/06                               $5,527,701
UBS AG London                                  4.10              12/29/06                               20,964,958
UBS AG London                                  4.40               4/06/06                                2,527,941
UBS AG London                                  4.60              12/29/06                               25,509,500
                                                                                                       ------------
                                                                                                       $54,530,100

(a)  The schedule of portfolio  investments includes securities that may be sold
     as a result of portfolio repositioning.

(b)  Variable rate coupon, rate shown as of March 31, 2006.

(c)  Floating rate security, stated interest rate in effect at March 31, 2006.

(d)  Position,   or  portion   thereof,   with  an  aggregate  market  value  of
     $52,762,985,  has  been  segregated  to  collateralize  reverse  repurchase
     agreements.

(e)  Securities are exempt from  registration  under Rule 144A of the Securities
     Act of 1933.  These  securities are considered  liquid and may be resold in
     transactions exempt from registration,  normally to qualified institutional
     buyers.  At March 31, 2006, the aggregate  market value of these securities
     amounted to $234,332,613 or 21.1% of net assets.

(f)  Coupon increases periodically based upon a predetermined  schedule.  Stated
     interest rate in effect at March 31, 2006.

(g)  Pay-In-Kind Payments (PIK).

(h) Non-income producing security.

Glossary of Terms:
DOB - Debt Conversion Bonds
FRN - Floating Rate Note

See notes to Pro Forma Alliance World Dollar Government Fund II financial
statements.









STATEMENT OF ASSETS AND LIABILITIES
PRO FORMA ALLIANCE WORLD DOLLAR GOVERNMENT FUND II                                         Alliance World Dollar Government Fund II
March 31, 2006 (unaudited)                                                                   Alliance World Dollar  Government Fund


                                                           Alliance
                                                            World             Alliance
                                                             Dollar           World                           Pro Forma Alliance
                                                          Government          Dollar                             World Dollar
                                                            Fund II          Government       Adjustments*    Government  Fund II
                                                      ------------------------------------------------------------------------------
                                                                                                   

Assets
Investments in securities, at value
   (cost $1,058,624,733)..........................    $ 1,013,172,591        $  132,243,834     $      -0-        $  1,145,416,425
Cash..............................................                 -0-               20,485       (20,485)                      -0-
Unrealized appreciation of credit default swap
   contracts......................................          7,525,889               865,923            -0-               8,391,812
Interest Receivable...............................         14,293,519             1,935,775            -0-              16,229,294
Receivable for investment securities sold.........          5,373,369            13,296,022            -0-              18,669,391
                                                       --------------         -------------        -------         ---------------
Total assets......................................      1,040,365,368           148,362,039       (20,485)           1,188,706,922
                                                       --------------         -------------        -------         ---------------

Liabilities
Due to custodian..................................            987,642                    -0-       54,515                1,042,157
Unrealized depreciation of credit default swap
   contracts......................................          1,027,071               131,974            -0-               1,159,045
Unrealized depreciation of interest rate swap
   contract.......................................                 -0-            1,146,461            -0-               1,146,461
Reverse repurchase agreements.....................         51,596,323             2,933,777            -0-              54,530,100
Payable for investment securities purchased                 1,728,955            13,597,156            -0-              15,326,111
Advisory fee payable..............................            860,162               119,591            -0-                 979,753
Administrative fee payable........................              5,521                   419            -0-                   5,940
Accrued expenses..................................            372,030             1,068,532            -0-               1,440,562
                                                       --------------         -------------        -------         ---------------
Total liabilities.................................         56,577,704            18,997,910        54,515               75,630,129
                                                       --------------         -------------        -------         ---------------

Net Assets........................................    $   983,787,664        $  129,364,129       (75,000)        $  1,113,076,793
                                                       --------------         -------------        -------         ---------------
Net Asset Value Per Share
Net Assets........................................    $   983,787,664        $  129,364,129      $(75,000)        $  1,113,076,793
                                                       --------------         -------------                        ---------------
Shares Outstanding................................         67,648,715             8,897,497                             76,546,212
                                                       --------------         -------------                        ---------------
Net Asset Value Per Share.........................    $         14.54        $        14.54                       $          14.54
                                                       --------------         -------------                        ---------------

See  notes to Pro Forma  Alliance  World  Dollar  Government  Fund II  financial statements.

*    Cost associated with the realignment of the investment holdings of Alliance
     World Dollar Government Fund prior to the Acquisition.








STATEMENT OF OPERATIONS
PRO FORMA ALLIANCE WORLD DOLLAR GOVERNMENT FUND II                                          Alliance World Dollar Government Fund II
Year Ended March 31, 2006 (unaudited)                                                          Alliance World Dollar Government Fund


                                                                                                          Pro Forma
                                         Alliance World                                                 Alliance World
                                        Dollar Government      Alliance World                         Dollar Government
                                             Fund II         Dollar Government       Adjustments           Fund II
                                        -----------------------------------------------------------------------------------------
                                                                                           
Investment Income
Interest............................    $    72,577,286        $   9,023,877         $       -0-        $ 81,601,163
Expenses
Advisory fee........................          9,123,453            1,208,138           (518,617)           9,812,974   (a)
Administrative......................            763,168              146,528           (802,696)             107,000   (b)
Custodian...........................            620,055              159,464           (139,188)             640,331   (c)
Audit & Legal.......................            197,105              153,812           (148,917)             202,000   (c)
Printing............................            124,998               39,301            (24,299)             140,000   (c)
Transfer agency.....................             73,119               56,206              1,844              131,169   (c)
Registration........................             60,000               23,910            (16,910)              67,000   (c)
Directors' fees.....................             36,200               39,061            (39,061)              36,200   (c)
Miscellaneous.......................             41,032               17,915            (14,947)              44,000   (c)
                                         --------------         -------------         ----------         -----------
Total expenses before interest......         11,039,130            1,844,335         (1,702,791)          11,180,674
Interest expense....................            739,942               52,090             80,232              872,264
                                         --------------         -------------         ----------         -----------
Total liabilities...................         11,779,072            1,896,425         (1,622,559)          12,052,938
                                         --------------         -------------         ----------         -----------
Net investment income...............         60,798,214            7,127,452          1,622,559           69,548,225
                                         --------------         -------------         ----------         -----------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
  Investment transactions...........         63,515,335            7,405,769                 -0-          70,921,104
  Swap contracts....................          (856,502)             (35,893)                 -0-           (892,395)
  Written options...................          1,188,246              154,420                 -0-           1,342,666
Net change in unrealized
  appreciation/depreciation of:
  Investments.......................            916,301            1,257,826                 -0-           2,174,127
  Swap contracts....................          2,035,511              124,481                 -0-           2,159,992
                                         --------------         -------------         ----------         -----------
Net gain on investment transactions.         66,798,691            8,906,603                 -0-          75,705,494
                                         --------------         -------------         ----------         -----------
Net Increase in Net Assets from
  Operations........................    $   127,597,105        $  16,034,055         $ 1,622,559        $145,253,719
                                         --------------         -------------         ----------         -----------

--------------
(a)  Advisory  fee based on annual  rate of .90% of the total  combined  average
     weekly net assets.

(b)  Administrative fee based on annual fixed fee for one Fund.

(c)  Expenses are based on one Fund.

See notes to Pro Forma Alliance World Dollar Government Fund II financial statements.




NOTES TO FINANCIAL STATEMENTS PRO FORMA ALLIANCE
WORLD DOLLAR GOVERNMENT FUND II March 31, 2006 (unaudited)



NOTE A: Significant Accounting Policies

The Fund's Pro Forma Financial  Statements have been prepared in conformity with
U.S. generally accepted accounting principles,  which require management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities  in the  financial  statements  and  amounts of income and  expenses
during the reporting period. Actual results could differ from those estimates.

1.   Security Valuation

Portfolio  securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available or
are  deemed  unreliable,  at "fair  value"  as  determined  in  accordance  with
procedures  established by and under the general supervision of the Fund's Board
of Directors.

In general,  the market  value of  securities  which are readily  available  and
deemed  reliable  are  determined  as follows.  Securities  listed on a national
securities  exchange or on a foreign securities  exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If there
has been no sale on such  day,  the  securities  are  valued  at the mean of the
closing  bid and asked  prices on such day.  Securities  listed on more than one
exchange  are  valued  by  reference  to the  principal  exchange  on which  the
securities  are traded;  securities  not listed on an exchange but traded on The
NASDAQ Stock Market,  Inc.  ("NASDAQ") are valued in accordance  with the NASDAQ
Official  Closing Price;  listed put or call options are valued at the last sale
price.  If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures  contracts and options  thereon
are  valued  using the  closing  settlement  price or, in the  absence of such a
price,  the most recent quoted bid price.  If there are no quotations  available
for the day of valuation,  the last available closing  settlement price is used;
securities  traded  in  the  over-the-counter  market,  ("OTC")  (but  excluding
securities traded on NASDAQ) are valued at the mean of the current bid and asked
prices as reported by the National Quotation Bureau or other comparable sources;
U.S.  Government  securities and other debt  instruments  having 60 days or less
remaining until maturity are valued at amortized cost if their original maturity
was 60 days or less; or by amortizing  their fair value as of the 61st day prior
to maturity if their  original term to maturity  exceeded 60 days;  fixed-income
securities, including mortgage backed and asset backed securities, may be valued
on the basis of prices provided by a pricing service or at a price obtained from
one or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained,  the Adviser may establish procedures whereby changes in market yields
or spreads are used to adjust,  on a daily  basis,  a recently  obtained  quoted
price on a security;  and OTC and other derivatives are valued on the basis of a
quoted bid price or spread from a major broker/dealer in such security.


Securities  for which market  quotations  are not readily  available  (including
restricted  securities)  or are  deemed  unreliable  are  valued at fair  value.
Factors considered in making this determination may include, but are not limited
to,  information  obtained by contacting the issuer,  analysts,  analysis of the
issuer's financial statements or other available documents.  In addition,  AWDGF
II may use fair  value  pricing  for  securities  primarily  traded in  non-U.S.
markets  because  most  foreign  markets  close well  before the Fund values its
securities  at 4:00 p.m.,  Eastern  Time.  The  earlier  close of these  foreign
markets gives rise to the possibility that significant  events,  including broad
market  moves,  may have occurred in the interim and may  materially  affect the
value of those securities.

2.   Taxes

It is the Fund's policy to meet the  requirements  of the Internal  Revenue Code
applicable  to  regulated  investment  companies  and to  distribute  all of its
investment   company   taxable  income  and  net  realized  gains,  if  any,  to
stockholders.  Therefore,  no provisions  for federal income or excise taxes are
required.  The Fund may be subject to taxes  imposed  by  countries  in which it
invests. Such taxes are generally based on income and/or capital gains earned or
repatriated.  Taxes are  accrued  and  applied  to net  investment  income,  net
realized  gains  and net  unrealized  appreciation/depreciation  as such  income
and/or gains are earned.

3.   Investment Income and Investment Transactions

Interest income is accrued daily.  Investment  transactions are accounted for on
the date  securities  are  purchased  or sold.  Investment  gains and losses are
determined  on the  identified  cost  basis.  The Fund  amortizes  premiums  and
accretes discounts as adjustments to interest income.

4.   Dividends and Distributions

Dividends and  distributions  to  stockholders  are recorded on the  ex-dividend
date.  Income and capital gains  distributions are determined in accordance with
federal tax regulations and may differ from those  determined in accordance with
U.S. generally accepted accounting  principles.  To the extent these differences
are permanent,  such amounts are reclassified  within the capital accounts based
on their federal tax basis treatment;  temporary differences do not require such
reclassification.


NOTE B: Advisory Fee and Other Transactions with Affiliates

Under the terms of the Investment Advisory Agreement,  AWDGF II pays the Adviser
an  advisory  fee at an annual  rate of .90% of the  Fund's  average  weekly net
assets.  Prior to October 1, 2005,  AWDGF II paid the Adviser an advisory fee at
an annual rate of 1.00% of the Fund's  average  weekly net  assets.  Such fee is
accrued daily and paid monthly.


Pursuant to an  Administration  Agreement,  effective  October 1, 2005, AWDGF II
pays the Adviser an  administrative  fee in the amount of $107,000  per year for
its costs incurred for providing  administrative  services.  Prior to October 1,
2005, AWDGF II paid the Adviser an administrative  fee at an annual rate of .15%
of the Fund's  average  weekly net  assets.  Such fee is accrued  daily and paid
monthly.


Under the terms of a Shareholder Inquiry Agency Agreement with AllianceBernstein
Investor  Services,  Inc.  (prior to February 24, 2006 known as Alliance  Global
Investor  Services,  Inc.) ("ABIS"),  a wholly-owned  subsidiary of the Adviser,
AWDGF II  reimburses  ABIS for costs  relating to servicing  phone  inquiries on
behalf  of the  Fund.  During  the year  ended  March  31,  2006,  there  was no
reimbursement paid to ABIS.


NOTE C: Capital Stock

The pro-forma  combining net asset value per share assumes the issuance of AWDGF
II shares to AWDGF stockholders in connection with the proposed Acquisition. The
number of shares  assumed to be issued is equal to the net asset value per share
of the Acquired  Fund divided by the net asset value per share of the  Acquiring
Fund as of March 31, 2006. The pro-forma  number of shares  outstanding  for the
combined entity consists of the following at March 31, 2006.


         Shares of               Additional Shares            Total Shares
         AWDGF II                 Assumed Issued              Outstanding
      Pre-Acquisition            with Acquisition          Post-Acquisition
      ---------------            ----------------          ----------------

         67,648,715                  8,897,497                 76,546,212



                                   APPENDIX A

--------------------------------------------------------------------------------

                                  BOND RATINGS

--------------------------------------------------------------------------------

Moody's Investors Service, Inc.
-------------------------------

Aaa            Bonds  which are rated Aaa are judged to be of the best  quality.
               They  carry  the  smallest  degree  of  investment  risk  and are
               generally  referred  to as "gilt  edge."  Interest  payments  are
               protected  by a large or by an  exceptionally  stable  margin and
               principal is secure.  While the various  protective  elements are
               likely to  change,  such  changes as can be  visualized  are most
               unlikely  to impair the  fundamentally  strong  position  of such
               issues.

Aa             Bonds which are rated Aa are judged to be of high  quality by all
               standards.  Together  with the Aaa group they  comprise  what are
               generally  known as high grade  bonds.  They are rated lower than
               the best bonds because  margins of protection may not be as large
               as in Aaa securities or fluctuation of protective elements may be
               of greater amplitude or there may be other elements present which
               make the  long-term  risks  appear  somewhat  larger than the Aaa
               securities.

A              Bonds  which  are  rated  A  possess  many  favorable  investment
               attributes  and  are  to  be  considered  as   upper-medium-grade
               obligations.  Factors  giving  security to principal and interest
               are considered adequate but elements may be present which suggest
               a susceptibility to impairment some time in the future.

Baa            Bonds  which  are  rated  Baa  are  considered  as   medium-grade
               obligations,  i.e., they are neither highly  protected nor poorly
               secured. Interest payments and principal security appear adequate
               for the present but certain protective elements may be lacking or
               may be  characteristically  unreliable  over any great  length of
               time. Such bonds lack outstanding investment  characteristics and
               in fact have speculative characteristics as well.

Ba             Bonds which are rated Ba are judged to have speculative elements;
               their future  cannot be  considered  as  well-assured.  Often the
               protection  of  interest  and  principal  payments  may  be  very
               moderate  and thereby not well  safeguarded  during both good and
               bad times over the future.  Uncertainty of position characterizes
               bonds in this class.

B              Bonds which are rated B  generally  lack  characteristics  of the
               desirable   investment.   Assurance  of  interest  and  principal
               payments or of  maintenance  of other terms of the contract  over
               any long period of time may be small.

Caa            Bonds which are rated Caa are of poor  standing.  Such issues may
               be in  default or there may be present  elements  of danger  with
               respect to principal or interest.

Ca             Bonds  which  are  rated  Ca  represent   obligations  which  are
               speculative in a high degree. Such issues are often in default or
               have other marked shortcomings.

C              Bonds  which are rated C are the lowest  rated class of bonds and
               issues  so  rated  can  be  regarded  as  having  extremely  poor
               prospects of ever attaining any real investment standing.

Absence        When no  rating  has been  assigned  or  where a rating  has been
of Rating      suspended or  withdrawn,  it may be for reasons  unrelated to the
               quality of the issue.

     Should no rating be assigned, the reason may be one of the following:
     ---------------------------------------------------------------------

     An application for rating was not received or accepted.

     The issue or issuer  belongs to a group of securities or companies that are
     unrated as a matter of policy.

     There is a lack of essential data pertaining to the issue or issuer.

     The issue was privately  placed,  in which case the rating is not published
     in Moody's publications.

Suspension or withdrawal may occur if new and material  circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable  up-to-date  data to permit a  judgment  to be  formed;  if a bond is
called for redemption; or for other reasons.

Note           Moody's applies numerical  modifiers,  1, 2 and 3 in each generic
               rating  classification  from Aa through B in its  corporate  bond
               rating  system.  The modifier 1 indicates that the security ranks
               in the higher end of its generic rating category;  the modifier 2
               indicates a mid-range ranking;  and the modifier 3 indicates that
               the issue ranks in the lower end of its generic rating category.

Standards & Poor's Ratings Services
-----------------------------------

AAA            Debt rated AAA has the highest rating  assigned by S&P.  Capacity
               to pay interest and repay principal is extremely strong.

AA             Debt rated AA has a very  strong  capacity  to pay  interest  and
               repay principal and differs from the highest rated issues only in
               small degree.

A              Debt  rated A has a strong  capacity  to pay  interest  and repay
               principal although it is somewhat more susceptible to the adverse
               effects of changes in circumstances and economic  conditions than
               debt in higher rated categories.

BBB            Debt rated BBB normally exhibits adequate protection  parameters.
               However,  adverse economic  conditions or changing  circumstances
               are more likely to lead to a weakened  capacity  to pay  interest
               and  repay  principal  for debt in this  category  than in higher
               rated categories.

BB,B, CCC,     Debt rated BB, B, CCC, CC or C is regarded as having  significant
CC, C          speculative  characteristics.  BB indicates  the lowest degree of
               speculation  and C the highest.  While such debt will likely have
               some quality and protective characteristics, these are outweighed
               by large uncertainties or major exposures to adverse conditions.

BB             Debt  rated  BB is  less  vulnerable  to  nonpayment  than  other
               speculative debt. However,  it faces major ongoing  uncertainties
               or exposure to adverse business, financial or economic conditions
               which could lead to an  inadequate  capacity to pay  interest and
               repay principal.

B              Debt rated B is more vulnerable to nonpayment than debt rated BB,
               but  there is  capacity  to pay  interest  and  repay  principal.
               Adverse  business,  financial or economic  conditions will likely
               impair the  capacity or  willingness  to pay  principal  or repay
               interest.

CCC            Debt rated CCC is  currently  vulnerable  to  nonpayment,  and is
               dependent  upon  favorable   business,   financial  and  economic
               conditions to pay interest and repay  principal.  In the event of
               adverse business,  financial or economic conditions, there is not
               likely to be capacity to pay interest or repay principal.

CC             Debt rated CC is currently highly vulnerable to nonpayment.

C              The C rating may be used to cover a situation  where a bankruptcy
               petition  has been filed or similar  action has been  taken,  but
               payments are being continued.

D              The D rating,  unlike other ratings, is not prospective;  rather,
               it is used only where a default has actually occurred.

Plus(+) or     The ratings  from AA to CCC may be modified by the  addition of a
Minus (-)      plus or minus  sign to show  relative  standing  within the major
               rating categories.

NR             Not rated.

Fitch Ratings
-------------

AAA            Bonds considered to be investment grade and of the highest credit
               quality.  The obligor has an exceptionally  strong ability to pay
               interest and repay principal, which is unlikely to be affected by
               reasonably foreseeable events.

AA             Bonds  considered to be investment  grade and of very high credit
               quality.   The  obligor's  ability  to  pay  interest  and  repay
               principal is very  strong,  although not quite as strong as bonds
               rated AAA.  Because bonds rated in the AAA and AA categories  are
               not significantly  vulnerable to foreseeable future developments,
               short-term debt of these issuers is generally rated F- 1+.

A              Bonds  considered  to be  investment  grade  and of  high  credit
               quality.   The  obligor's  ability  to  pay  interest  and  repay
               principal is considered to be strong,  but may be more vulnerable
               to adverse changes in economic  conditions and circumstances than
               bonds with higher ratings.

BBB            Bonds  considered  to be  investment  grade  and of  satisfactory
               credit quality.  The obligor's  ability to pay interest and repay
               principal  is  considered  to be  adequate.  Adverse  changes  in
               economic conditions and circumstances,  however,  are more likely
               to have  adverse  impact on these  bonds,  and  therefore  impair
               timely  payment.  The likelihood  that the ratings of these bonds
               will fall below  investment  grade is higher  than for bonds with
               higher ratings.

BB             Bonds are considered  speculative.  The obligor's  ability to pay
               interest and repay principal may be affected over time by adverse
               economic changes.  However,  business and financial  alternatives
               can be  identified  which could assist the obligor in  satisfying
               its debt service requirements.

B              Bonds are  considered  highly  speculative.  While  bonds in this
               class  are  currently  meeting  debt  service  requirements,  the
               probability of continued timely payment of principal and interest
               reflects the obligor's  limited margin of safety and the need for
               reasonable  business and economic activity throughout the life of
               the issue.

CCC            Bonds have certain  identifiable  characteristics  which,  if not
               remedied,  may lead to default.  The ability to meet  obligations
               requires an advantageous business and economic environment.

CC             Bonds are  minimally  protected.  Default in payment of  interest
               and/or principal seems probable over time.

C              Bonds  are  in  imminent   default  in  payment  of  interest  or
               principal.

DDD, DD, D     Bonds are in default on interest and/or principal payments.  Such
               bonds are extremely speculative and should be valued on the basis
               of their ultimate recovery value in liquidation or reorganization
               of the obligor. DDD represents the highest potential for recovery
               on  these  bonds,  and D  represents  the  lowest  potential  for
               recovery.

Plus (+)       Plus and minus  signs are used with a rating  symbol to  indicate
Minus (-)      the  relative  position of a credit  within the rating  category.
               Plus and minus signs,  however,  are not used in the AAA, DDD, DD
               or D categories.

NR             Indicates that Fitch does not rate the specific issue.

Dominion Bond Rating Service Limited
------------------------------------

Each  rating  category  is denoted by the  subcategories  "high" and "low".  The
absence of either a "high" or "low"  designation  indicates the rating is in the
"middle"  of the  category.  The AAA and D  categories  do not  utilize  "high",
"middle", and "low" as differential grades.

AAA--Long-term   debt  rated  AAA  is  of  the  highest  credit  quality,   with
exceptionally  strong  protection  for the timely  repayment  of  principal  and
interest. Earnings are considered stable, the structure of the industry in which
the entity  operates  is strong,  and the outlook  for future  profitability  is
favorable.  There are few qualifying factors present that would detract from the
performance  of the entity.  The  strength of liquidity  and coverage  ratios is
unquestioned  and the entity has established a credible track record of superior
performance.  Given the  extremely  high standard that Dominion has set for this
category, few entities are able to achieve a AAA rating.

AA--Long-term  debt rated AA is of superior  credit  quality,  and protection of
interest  and  principal  is  considered  high.  In many cases they  differ from
long-term debt rated AAA only to a small degree. Given the extremely restrictive
definition  Dominion  has for the  AAA  category,  entities  rated  AA are  also
considered to be strong credits,  typically exemplifying  above-average strength
in key areas of  consideration  and  unlikely  to be  significantly  affected by
reasonably foreseeable events.

A--Long-term  debt rated "A" is of satisfactory  credit  quality.  Protection of
interest and principal is still substantial,  but the degree of strength is less
than that of AA rated entities.  While "A" is a respectable rating,  entities in
this  category  are  considered  to be  more  susceptible  to  adverse  economic
conditions and have greater cyclical tendencies than higher-rated securities.

BBB--Long-term  debt rated BBB is of  adequate  credit  quality.  Protection  of
interest  and  principal  is  considered  acceptable,  but the  entity is fairly
susceptible to adverse  changes in financial and economic  conditions,  or there
may be other adverse  conditions present which reduce the strength of the entity
and its rated securities.

BB--Long-term  debt  rated BB is defined to be  speculative  and  non-investment
grade,  where the  degree of  protection  afforded  interest  and  principal  is
uncertain, particularly during periods of economic recession. Entities in the BB
range typically have limited access to capital markets and additional  liquidity
support.  In many cases,  deficiencies  in critical mass,  diversification,  and
competitive strength are additional negative considerations.

B--Long-term  debt  rated B is  considered  highly  speculative  and  there is a
reasonably  high  level of  uncertainty  as to the  ability of the entity to pay
interest  and  principal  on a  continuing  basis in the future,  especially  in
periods of economic recession or industry adversity.

CCC, CC and  C--Long-term  debt rated in any of these  categories is very highly
speculative and is in danger of default of interest and principal. The degree of
adverse  elements  present is more severe than long-term debt rated B. Long-term
debt rated  below B often have  features  which,  if not  remedied,  may lead to
default. In practice, there is little difference between these three categories,
with CC and C normally  used for lower  ranking debt of companies  for which the
senior debt is rated in the CCC to B range.

D--A security rated D implies the issuer has either not met a scheduled  payment
of interest or  principal or that the issuer has made it clear that it will miss
such a payment in the near  future.  In some cases,  Dominion may not assign a D
rating under a bankruptcy announcement scenario, as allowances for grace periods
may exist in the underlying  legal  documentation.  Once assigned,  the D rating
will  continue as long as the missed  payment  continues  to be in arrears,  and
until such time as the  rating is  suspended,  discontinued,  or  reinstated  by
Dominion.

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