nq-tei113014.htm - Generated by SEC Publisher for SEC Filing


Washington, DC 20549








Investment Company Act file number 811-07866


Templeton Emerging Markets Income Fund

(Exact name of registrant as specified in charter)


300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923

 (Address of principal executive offices) (Zip code)


Craig S. Tyle, One Franklin Parkway, San Mateo, CA  94403-1906

(Name and address of agent for service)


Registrant's telephone number, including area code:  (954) 527-7500


Date of fiscal year end:   8/31    


Date of reporting period:  11/30/14_



Item 1. Schedule of Investments.




Templeton Emerging Markets Income Fund

Statement of Investments, November 30, 2014 (unaudited)

  Principal Amount*       Value
Foreign Government and Agency Securities 57.6%          
Bosnia & Herzegovina 0.5%          
aGovernment of Bosnia & Herzegovina, FRN, 1.095%, 12/11/17 6,214,790   DEM $ 3,603,922
Brazil 9.1%          
Letra Tesouro Nacional, Strip, 1/01/15 2,333 b BRL   900,598
cNota Do Tesouro Nacional, Index Linked, 6.00%,          
5/15/17 134b BRL   132,768
5/15/19 15,000b BRL   14,778,895
8/15/22 11,920b BRL   11,832,946
5/15/23 11,855b BRL   11,754,002
8/15/24 3,220b BRL   3,200,490
8/15/50 18,020b BRL   18,133,879
Croatia 1.3%          
dGovernment of Croatia, 144A, 6.75%, 11/05/19 7,920,000       8,858,995
Ecuador 4.8%          
dGovernment of Ecuador, senior note, 144A, 7.95%, 6/20/24 31,380,000       32,301,003
El Salvador 0.4%          
dGovernment of El Salvador, 144A, 7.65%, 6/15/35 2,650,000       2,913,675
Georgia 0.5%          
dGovernment of Georgia, 144A, 6.875%, 4/12/21 3,050,000       3,424,098
Ghana 5.8%          
Government of Ghana,          
24.00%, 5/25/15 7,690,000   GHS   2,397,493
21.00%, 10/26/15 3,257,000   GHS   990,809
16.90%, 3/07/16 180,000   GHS   52,222
19.24%, 5/30/16 11,875,000   GHS   3,514,870
23.00%, 2/13/17 9,040,000   GHS   2,877,442
24.44%, 5/29/17 3,150,000   GHS   1,032,944
26.00%, 6/05/17 130,000   GHS   43,570
25.40%, 7/31/17 2,370,000   GHS   787,273
23.00%, 8/21/17 12,230,000   GHS   3,885,820
19.04%, 9/24/18 14,300,000   GHS   4,114,384
d144A, 8.50%, 10/04/17 2,029,000       2,153,499
d144A, 7.875%, 8/07/23 15,169,086       15,050,085
eReg S, 8.50%, 10/04/17 1,559,000       1,654,660
Hungary 3.5%          
Government of Hungary,          
4.125%, 2/19/18 2,040,000       2,126,935
5.375%, 2/21/23 3,750,000       4,104,375
senior note, 6.375%, 3/29/21 15,000,000       17,315,025
India 1.0%          
Government of India,          
senior bond, 7.80%, 5/03/20 68,300,000   INR   1,078,538
senior bond, 8.28%, 9/21/27 20,600,000   INR   333,135
senior bond, 8.60%, 6/02/28 71,000,000   INR   1,184,043
senior note, 7.28%, 6/03/19 2,700,000   INR   42,025
senior note, 8.12%, 12/10/20 51,300,000   INR   820,767
senior note, 8.35%, 5/14/22 20,200,000   INR   326,952
senior note, 7.16%, 5/20/23 12,700,000   INR   191,100


Quarterly Statement of Investments | See Notes to Statement of Investments.


Templeton Emerging Markets Income Fund        
Statement of Investments, November 30, 2014 (unaudited) (continued)        
senior note, 8.83%, 11/25/23 171,200,000   INR 2,861,580
Indonesia 3.4%        
Government of Indonesia,        
FR31, 11.00%, 11/15/20 134,139,000,000   IDR 12,711,709
FR36, 11.50%, 9/15/19 40,000,000,000   IDR 3,776,400
FR40, 11.00%, 9/15/25 58,140,000,000   IDR 5,811,570
senior bond, FR53, 8.25%, 7/15/21 5,281,000,000   IDR 445,055
Iraq 3.6%        
dGovernment of Iraq, 144A, 5.80%, 1/15/28 27,190,000     23,904,632
Kenya 1.0%        
dGovernment of Kenya, senior note, 144A, 6.875%, 6/24/24 6,290,000     6,759,391
Lithuania 0.3%        
dGovernment of Lithuania, 144A, 7.375%, 2/11/20 1,700,000     2,071,518
Mexico 1.3%        
Government of Mexico,        
6.00%, 6/18/15 126,580 f MXN 923,815
8.00%, 12/17/15 581,300 f MXN 4,384,433
6.25%, 6/16/16 159,350 f MXN 1,193,558
7.25%, 12/15/16 259,750 f MXN 2,000,614
Mongolia 0.9%        
dGovernment of Mongolia, senior note, 144A, 5.125%, 12/05/22 7,100,000     6,411,655
Nigeria 0.6%        
Government of Nigeria, 13.05%, 8/16/16 740,980,000   NGN 4,137,910
Senegal 1.0%        
dGovernment of Senegal, 144A, 6.25%, 7/30/24 6,900,000     6,913,179
Serbia 3.8%        
dGovernment of Serbia, senior note, 144A, 7.25%, 9/28/21 11,080,000     12,727,208
Serbia Treasury Bond, 10.00%,        
6/27/16 65,340,000   RSD 690,101
8/15/16 26,900,000   RSD 284,306
11/21/18 13,450,000   RSD 136,242
Serbia Treasury Note, 10.00%,        
4/27/15 780,000,000   RSD 8,139,498
9/14/15 205,300,000   RSD 2,154,018
1/30/16 3,510,000   RSD 36,974
5/22/16 17,420,000   RSD 183,871
10/17/16 15,050,000   RSD 159,055
12/19/16 15,400,000   RSD 162,113
5/08/17 10,040,000   RSD 104,291
11/08/17 36,330,000   RSD 373,748
3/20/21 23,990,000   RSD 228,861
Slovenia 0.6%        
dGovernment of Slovenia, senior note, 144A, 5.85%, 5/10/23 3,370,000     3,867,564
Sri Lanka 4.9%        
Government of Sri Lanka,        
8.25%, 3/01/17 18,920,000   LKR 148,356
10.60%, 7/01/19 187,510,000   LKR 1,607,568
10.60%, 9/15/19 264,500,000   LKR 2,270,777
11.20%, 7/01/22 31,680,000   LKR 282,460
d144A, 7.40%, 1/22/15 3,500,000     3,529,610
d144A, 5.875%, 7/25/22 7,750,000     8,078,019
A, 11.75%, 3/15/15 3,840,000   LKR 29,751
A, 6.50%, 7/15/15 108,070,000   LKR 826,651



  Templeton Emerging Markets Income Fund      
  Statement of Investments, November 30, 2014 (unaudited) (continued)      
  A, 11.00%, 8/01/15 607,700,000 LKR 4,780,419
  A, 8.50%, 11/01/15 65,580,000 LKR 510,009
  A, 6.40%, 8/01/16 49,800,000 LKR 378,902
  A, 5.80%, 1/15/17 51,000,000 LKR 381,858
  A, 7.50%, 8/15/18 11,760,000 LKR 90,335
  A, 8.00%, 11/15/18 230,150,000 LKR 1,801,628
  A, 9.00%, 5/01/21 387,750,000 LKR 3,114,432
  B, 6.40%, 10/01/16 53,200,000 LKR 404,277
  B, 8.50%, 7/15/18 65,800,000 LKR 521,644
  C, 8.50%, 4/01/18 200,870,000 LKR 1,590,893
  D, 8.50%, 6/01/18 284,830,000 LKR 2,262,297
  gSupranational 0.8%      
  eEastern & Southern African Trade and Development Bank, Reg S, 6.875%, 1/09/16 5,000,000   5,132,525
  Ukraine 5.1%      
  dGovernment of Ukraine,      
  144A, 9.25%, 7/24/17 2,300,000   1,828,995
  144A, 7.75%, 9/23/20 19,840,000   15,331,162
  senior bond, 144A, 7.80%, 11/28/22 3,780,000   2,823,849
  senior note, 144A, 7.95%, 2/23/21 260,000   201,240
  senior note, 144A, 7.50%, 4/17/23 6,080,000   4,457,582
  dKyiv Finance PLC, (City of Kiev), loan participation, senior note, 144A, 9.375%, 7/11/16 12,940,000   9,390,946
  Vietnam 0.1%      
  dGovernment of Vietnam, 144A, 6.75%, 1/29/20 565,000   641,275
  Zambia 3.3%      
  dGovernment of Zambia International Bond, 144A,      
  5.375%, 9/20/22 20,000,000   19,107,400
  8.50%, 4/14/24 2,470,000   2,795,521
  Total Foreign Government and Agency Securities (Cost $393,853,212)     385,788,487
      Quasi-Sovereign and Corporate Bonds 30.5%      
  Canada 1.4%      
  dFirst Quantum Minerals Ltd., senior note, 144A, 7.25%, 5/15/22 10,000,000   9,675,000
  Chile 1.9%      
  dVTR Finance BV, senior secured note, 144A, 6.875%, 1/15/24 12,000,000   12,660,000
  Costa Rica 2.3%      
  hReventazon Finance Trust, secured bond, first lien, 144A, 8.00%, 11/15/33 14,400,000   15,293,068
  Hungary 1.6%      
  dMagyar Export-Import Bank RT, senior note, 144A, 5.50%, 2/12/18 10,000,000   10,653,300
  India 0.6%      
  dICICI Bank Ltd., sub. bond, 144A, 6.375% to 4/30/17, FRN thereafter, 4/30/22 4,100,000   4,279,375
  Kazakhstan 3.6%      
        dHSBK (Europe) BV, senior note, 144A, 7.25%, 5/03/17 23,030,000   24,173,324
  Mexico 0.1%      
  d,iCorporacion GEO SAB de CV, senior note, 144A, 8.875%, 3/27/22 8,420,000   799,900
  Nigeria 3.5%      
  dAccess Bank PLC, sub. note, 144A, 9.25% to 6/23/19, FRN thereafter, 6/24/21 10,100,000   9,898,000
  dZenith Bank PLC, senior note, 144A, 6.25%, 4/22/19 13,670,000   13,430,775



Templeton Emerging Markets Income Fund        
Statement of Investments, November 30, 2014 (unaudited) (continued)        
Peru 0.3%        
dPeru Enhanced Pass-Through Finance Ltd., senior secured bond, A-1, 144A, zero cpn.,        
5/31/18 1,793,868     1,699,464
Poland 1.0%        
d,jPlay Topco SA, senior note, 144A, PIK, 7.75%, 2/28/20 5,250,000   EUR 6,680,631
Russia 3.4%        
dAlfa Bond Issuance PLC (Alfa Bank OJSC), loan participation,        
secured note, 144A, 7.875%, 9/25/17 6,550,000     6,721,937
senior note, 144A, 7.75%, 4/28/21 7,900,000     7,682,750
LUKOIL International Finance BV,        
d144A, 6.656%, 6/07/22 4,540,000     4,426,500
eReg S, 6.656%, 6/07/22 3,970,000     3,885,499
South Africa 2.3%        
dEdcon Holdings Pty. Ltd., senior note, 144A, 13.375%, 6/30/19 10,415,000   EUR 6,253,908
dEdcon Pty. Ltd., senior secured note, 144A, 9.50%,        
3/01/18 7,250,000     6,017,500
3/01/18 2,828,000   EUR 2,951,935
Trinidad and Tobago 0.9%        
Petro Co. of Trinidad and Tobago Ltd., senior note,        
d144A, 9.75%, 8/14/19 4,500,000     5,595,750
eReg S, 9.75%, 8/14/19 210,000     261,135
Turkey 3.2%        
dTurkiye Is Bankasi, sub. note, 144A, 6.00%, 10/24/22 3,000,000     3,068,460
eWillow No.2, (Yasar Holding SA), loan participation, secured note, Reg S, 9.625%,        
10/07/15 10,900,000     11,186,125
dYasar Holdings SA, senior note, 144A, 8.875%, 5/06/20 6,680,000     7,214,400
Ukraine 0.9%        
dFinancing of Infrastructure Projects State Enterprise, 144A, 8.375%, 11/03/17 2,000,000     1,491,500
eState Export-Import Bank of Ukraine (BIZ FIN), loan participation, Reg S, 8.75%,        
1/22/18 6,405,000     4,587,165
United Arab Emirates 2.3%        
dDP World Ltd., 144A, 6.85%, 7/02/37 13,500,000     15,618,083
United States 1.2%        
General Electric Capital Corp., senior note, A, 8.50%, 4/06/18 101,000,000   MXN 8,154,836
Total Quasi-Sovereign and Corporate Bonds (Cost $216,042,929)       204,360,320
Credit-Linked Notes (Cost $505,720) 0.1%        
Ukraine 0.1%        
dING Americas Issuance BV (Government of Ukraine), 144A, 5.50%, 8/25/15 4,941,400   UAH 308,209
Total Investments before Short Term Investments (Cost $610,401,861)       590,457,016
Short Term Investments 6.3%        
Foreign Government and Agency Securities 3.6%        
Mexico 2.8%        
kMexico Treasury Bills,        
12/11/14 9,820,640 l MXN 7,049,839
4/01/15 - 10/01/15 16,523,050 l MXN 11,620,408



Templeton Emerging Markets Income Fund      
Statement of Investments, November 30, 2014 (unaudited) (continued)      
Nigeria 0.8%      
kNigeria Treasury Bills, 2/05/15 - 6/04/15 933,550,000 NGN 4,961,920
Total Foreign Government and Agency Securities (Cost $25,089,716)     23,632,167
Total Investments before Money Market Funds (Cost $635,491,577)     614,089,183
Money Market Funds (Cost $18,218,741) 2.7%      
United States 2.7%      
m,nInstitutional Fiduciary Trust Money Market Portfolio 18,218,741   18,218,741
Total Investments (Cost $653,710,318) 94.5%     632,307,924
Other Assets, less Liabilities 5.5%     37,121,919
Net Assets 100.0%   $ 669,429,843


* The principal amount is stated in U.S. dollars unless otherwise indicated.
a The coupon rate shown represents the rate at period end.
b Principal amount is stated in 1,000 Brazilian Real Units.
c Redemption price at maturity is adjusted for inflation.
d Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers
or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. At
November 30, 2014, the aggregate value of these securities was $356,842,802, representing 53.31% of net assets.
e Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption
from registration. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. At November 30, 2014, the aggregate value of
these securities was $26,707,109, representing 3.99% of net assets.
f Principal amount is stated in 100 Mexican Peso Units.
g A supranational organization is an entity formed by two or more central governments through international treaties.
h See Note 6 regarding restricted securities.
i Defaulted security or security for which income has been deemed uncollectible.
j Income may be received in additional securities and/or cash.
k The security is traded on a discount basis with no stated coupon rate.
l Principal amount is stated in 10 Mexican Peso Units.
m Non-income producing.
n Institutional Fiduciary Trust Money Market Portfolio is an affiliated open-end management investment company.

At November 30, 2014, the Fund had the following forward exchange contracts outstanding. See Note 3.

Forward Exchange Contracts                  
        Contract Settlement   Unrealized   Unrealized  
Currency Counterpartya Type Quantity Amount* Date   Appreciation   Depreciation  
Euro SCNY Sell 628,500 854,138 1/13/15 $ 71,733 $ -  
Japanese Yen CITI Sell 624,500,000 5,970,934 1/13/15   705,485   -  
Japanese Yen SCNY Sell 1,873,240,000 17,929,173 1/14/15   2,134,895   -  
Japanese Yen HSBK Sell 1,620,890,000 15,585,481 1/15/15   1,918,794   -  
Japanese Yen DBAB Sell 626,420,000 6,060,155 1/16/15   778,394   -  
Japanese Yen SCNY Sell 1,770,880,000 17,139,345 1/16/15   2,207,888   -  
Euro BZWS Sell 2,547,416 3,480,623 1/27/15   309,019   -  
Euro SCNY Sell 362,390 497,671 2/26/15   46,380   -  
Ghanaian Cedi BZWS Buy 1,780,000 574,194 3/10/15   -   (55,780 )
Euro DBAB Sell 3,345,000 4,604,393 3/31/15   437,623   -  
Ghanaian Cedi BZWS Buy 1,395,324 423,467 4/07/15   -   (24,704 )



Templeton Emerging Markets Income Fund            
Statement of Investments, November 30, 2014 (unaudited) (continued)        
Euro HSBK Sell 826,000 1,138,786   4/10/15   109,773 -  
Euro DBAB Sell 688,000 949,626   4/13/15   92,508 -  
Euro SCNY Sell 413,000 570,861   4/13/15   56,341 -  
Euro GSCO Sell 910,000 1,253,980   5/13/15   119,999 -  
Euro GSCO Sell 2,753,000 3,792,092   5/14/15   361,460 -  
Euro DBAB Sell 1,506,000 2,053,777   6/08/15   176,595 -  
South Korean Won JPHQ Buy 7,297,662,505 7,010,916   6/09/15   - (495,507 )
Polish Zloty DBAB Buy 16,600,000 3,922,681 EUR 7/07/15   2,631 -  
Malaysian Ringgit DBAB Buy 2,499,000 765,508   7/20/15   - (38,777 )
Malaysian Ringgit DBAB Buy 3,942,000 1,211,991   7/22/15   - (65,766 )
Malaysian Ringgit DBAB Buy 4,793,000 1,482,020   7/27/15   - (88,778 )
Malaysian Ringgit JPHQ Buy 5,039,000 1,558,132   7/30/15   - (93,655 )
Euro CITI Sell 358,630 479,848   8/10/15   32,475 -  
Euro DBAB Sell 2,344,550 3,145,448   8/13/15   220,639 -  
Euro MSCO Sell 907,070 1,132,894   8/14/15   1,317 -  
Euro DBAB Sell 359,450 481,638   8/17/15   33,204 -  
Euro MSCO Sell 907,070 1,217,764   8/17/15   86,145 -  
Euro DBAB Sell 1,347,000 1,806,765   8/20/15   126,246 -  
Euro JPHQ Sell 2,260,000 3,017,439   8/21/15   197,825 -  
Euro BZWS Sell 1,604,997 2,135,649   8/26/15   133,095 -  
Euro DBAB Sell 9,366,031 12,387,701   8/31/15   700,732 -  
Euro DBAB Sell 266,000 331,503   11/12/15   - (818 )
Euro BZWS Sell 10,415,000 13,034,685   11/16/15   22,111 -  
Unrealized appreciation (depreciation)             11,083,307 (863,785 )
Net unrealized appreciation (depreciation)         $ 10,219,522    
* a In May U.S. be dollars comprised unless of otherwise multiple contracts indicated. with the same counterparty, currency and settlement date.          


At November 30, 2014, the Fund had the following interest rate swap contracts outstanding. See Note 3.              
Interest Rate Swap Contracts                  
  Counterparty / Expiration   Notional   Unrealized   Unrealized  
Description Exchange Date   Amount   Appreciation Depreciation  
Centrally Cleared Swaps                  
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 0.926% LCH 10/17/17 $ 34,560,000 $ 92,772 $ -  
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 2.532% CME 8/28/24   75,850,000   -   (1,983,875 )
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 3.129% CME 8/30/44   39,530,000   -   (2,169,893 )
Net unrealized appreciation (depreciation)           92,772   (4,153,768 )
              $ (4,060,996 )




BZWS Barclays Bank PLC
CITI Citibank N.A.
CME Chicago Mercantile Exchange
DBAB Deutsche Bank AG
GSCO The Goldman Sachs Group, Inc.


Templeton Emerging Markets Income Fund
Statement of Investments, November 30, 2014 (unaudited) (continued)
JPHQ JPMorgan Chase Bank N.A.
LCH London Clearing House 
MSCO Morgan Stanley and Co. Inc.
SCNY Standard Chartered Bank


BRL Brazilian Real
DEM Deutsche Mark
EUR Euro
GHS Ghanaian Cedi
IDR Indonesian Rupiah
INR Indian Rupee
LKR Sri Lankan Rupee
MXN Mexican Peso
NGN Nigerian Naira
RSD Serbian Dinar
UAH Ukraine Hryvnia

Selected Portfolio

FRN Floating Rate Note
PIK Payment-In-Kind


Templeton Emerging Markets Income Fund

Notes to Statement of Investments (unaudited)


Templeton Emerging Markets Income Fund (Fund) is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles.


The Fund's investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value per share at the close of the New York Stock Exchange (NYSE), generally at 4 p.m. Eastern time (NYSE close) on each day the NYSE is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund's valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Fund's pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at the NYSE close on the date that the values of the foreign debt securities are determined. Investments in open-end mutual funds are valued at the closing net asset value.

Derivative financial instruments (derivatives) listed on an exchange are valued at the official closing price of the day. Certain derivatives trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are


discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before the daily NYSE close. In addition, trading in certain foreign markets may not take place on every NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

Also, when the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.


The Fund invested in derivatives in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary


depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of fund business each day and any additional collateral required due to changes in derivative values may be delivered by the fund or the counterparty within a few business days. Collateral pledged and/or received by the fund for OTC derivatives, if any, is held in segregated accounts with the fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives.

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency for a specific exchange rate on a future date

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (“OTC interest rate swaps”) or may be executed on a registered exchange (“centrally cleared interest rate swaps”). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.


At November 30, 2014, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments $ 657,125,156  
Unrealized appreciation $ 29,255,868  
Unrealized depreciation   (54,073,100 )
Net unrealized appreciation (depreciation) $ (24,817,232 )



Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.

At November 30, 2014, the Fund held investments in restricted securities, excluding certain securities
exempt from registration under the Securities Act of 1933 deemed to be liquid, as follows:    
Principal Amount Issuer Acquisition Date   Cost   Value
14,400,000 Reventazon Finance Trust, secured bond, first lien, 144A, 8.00%, 11/15/33          
  Total Restricted Securities (Value is 2.28% of Net Assets) 12/18/13 $ 14,400,000 $ 15,293,068




The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of November 30, 2014, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

    Level 1   Level 2   Level 3   Total
Investments in Securities:                
Foreign Government and Agency Securitiesa $ - $ 385,788,487 $ - $ 385,788,487
Quasi-Sovereign and Corporate Bondsa   -   189,067,252   15,293,068   204,360,320
Credit-Linked Notes   -   308,209   -   308,209
Short Term Investments   18,218,741   23,632,167   -   41,850,908
Total Investments in Securities $ 18,218,741 $ 598,796,115 $ 15,293,068 $ 632,307,924
Other Financial Instruments                
Forw ard Exchange Contracts $ - $ 11,083,307 $ - $ 11,083,307
Sw ap Contracts   -   92,772   -   92,772
Total Other Financial Instruments $ - $ 11,176,079 $ - $ 11,176,079
Other Financial Instruments                
Forw ard Exchange Contracts $ - $ 863,785 $ - $ 863,785
Sw ap Contracts   -   4,153,768   -   4,153,768
Total Other Financial Instruments $ - $ 5,017,553 $ - $ 5,017,553
aFor detailed categories, see the accompanying Statement of Investments.            


A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 financial instruments at the end of the period. The reconciliation of assets for the three months ended November 30, 2014, is as follows:

                            Net Change in Unrealized  
    Balance at             Net Unrealized         Appreciation  
    Beginning of Purchases Transfers Into Cost Basis Net Realized   Appreciation     Balance at End   (Depreciation) on Assets  
    Period (Sales) (Out of) Level 3 Adjustments Gain (Loss)   (Depreciation)     of Period   Held at Period End  
Investments in Securities:                              
Quasi-Sovereign and Corporate                              
Bonds $ 15,418,646 $ - $ - $ - $ - $ (125,578 ) $ 15,293,068 $ (125,578 )


Significant unobservable valuation inputs developed by the VLOC for material Level 3 financial instruments and impact to fair value as a result of changes in unobservable valuation inputs as of November 30, 2014, are as follows:


          Impact to
          Fair Value
          if Input
Description   Fair Value at End of Period Valuation Technique Unobservable Inputs Amount Increasesa
Investments in Securities:          
Quasi-Sovereign and Corporate Bonds     Discounted cash flow    
  $ 15,293,068 model Discount rateb 7.2% Decrease


a Represents the expected directional change in the fair value of the Level 3 investments that w ould result from an increase in the corresponding input. A decrease to the
unobservable input w ould have the opposite effect. Significant changes in these inputs could result in significantly higher or low er fair value measurement.
b The discount rate is comprised of the risk-free rate, the 10-year Costa Rican CDS curve, and an incremental credit spread that combines w ith the first tw o components to
arrive at an 8% yield on issue date for an 8% coupon bond issued at par.


In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-11, Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The ASU changes the accounting for certain repurchase agreements and expands disclosure requirements related to repurchase agreements, securities lending, repurchase-to-maturity and similar transactions. The ASU is effective for interim and annual reporting periods beginning after December 15, 2014. Management is currently evaluating the impact, if any, of applying this provision.


The Fund has evaluated subsequent events through the issuance of the Statement of Investments and determined that no events have occurred that require disclosure.

For additional information on the Fund's significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report.



Item 2. Controls and Procedures.


(a) Evaluation of Disclosure Controls and Procedures.  The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission.  Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.


Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures.  Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.


(b) Changes in Internal Controls.  There have been no changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q.



Item 3. Exhibits.


(a) Certification pursuant to Section 30a-2 under the Investment Company Act of 1940 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Mark H. Otani, Chief Financial Officer and Chief Accounting Officer.
























Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Templeton Emerging Markets Income Fund





    Laura F. Fergerson

    Chief Executive Officer –

    Finance and Administration

Date January 27, 2015



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





    Laura F. Fergerson

    Chief Executive Officer –

    Finance and Administration

Date January 27, 2015





   Mark H. Otani

   Chief Financial Officer and

   Chief Accounting Officer

Date January 27, 2015