n-qteipe053116.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: _11/30/16_



Item 1. Schedule of Investments.



Templeton Emerging Markets Income Fund          
Statement of Investments, November 30, 2016 (unaudited)          
  Shares/Warrants   Value
Common Stocks and Other Equity Interests 0.0%          
Mexico 0.0%          
a Corporacion GEO SAB de CV, B 221,287     $ 69,871
a,b Corporacion GEO SAB de CV, wts., 12/30/27 346,196      
South Africa 0.0%          
a,c Edcon Holdings Ltd., F wts., 2/20/49 4,375      
a,c Edcon Holdings Ltd., F1 wts., 2/20/49 78,291,411      
a,c Edcon Holdings Ltd., F2 wts., 2/20/49 6,340,039      
Total Common Stocks and Other Equity Interests (Cost $9,316,759)         69,871
  Principal Amount*    
Foreign Government and Agency Securities 64.0%          
Argentina 6.9%          
Argentine Bonos del Tesoro,          
18.20%, 10/03/21 206,097,000   ARS   13,032,703
16.00%, 10/17/23 87,252,000   ARS   5,356,204
senior note, 15.50%, 10/17/26 349,007,000   ARS   21,345,927
Brazil 7.7%          
Nota Do Tesouro Nacional,          
10.00%, 1/01/21 1,725 d BRL   483,358
10.00%, 1/01/25 13,416 d BRL   3,615,163
10.00%, 1/01/27 15,337 d BRL   4,085,413
e Index Linked, 6.00%, 5/15/17 134 d BRL   116,336
e Index Linked, 6.00%, 5/15/19 1,490 d BRL   1,293,081
e Index Linked, 6.00%, 8/15/22 9,322 d BRL   8,029,731
e Index Linked, 6.00%, 5/15/23 10,763 d BRL   9,315,085
e Index Linked, 6.00%, 8/15/24 2,360 d BRL   2,041,891
e Index Linked, 6.00%, 8/15/50 18,020 d BRL   15,659,571
Colombia 3.1%          
Government of Colombia, senior bond,          
7.75%, 4/14/21 2,433,000,000   COP   828,605
4.375%, 3/21/23 164,000,000   COP   46,273
9.85%, 6/28/27 262,000,000   COP   99,701
Titulos de Tesoreria,          
B, 5.00%, 11/21/18 565,000,000   COP   179,088
B, 7.75%, 9/18/30 16,777,000,000   COP   5,557,633
senior bond, B, 11.25%, 10/24/18 2,335,000,000   COP   821,100
senior bond, B, 7.00%, 5/04/22 2,211,000,000   COP   724,000
senior bond, B, 10.00%, 7/24/24 4,722,000,000   COP   1,790,490
senior bond, B, 7.50%, 8/26/26 16,738,000,000   COP   5,531,025
senior bond, B, 6.00%, 4/28/28 3,465,000,000   COP   995,357
senior note, B, 7.00%, 9/11/19 1,585,000,000   COP   520,068
senior bond, B, 11.00%, 7/24/20 1,655,000,000   COP   610,159
Croatia 1.5%          
f Government of Croatia, 144A, 6.75%, 11/05/19 7,920,000       8,606,387
Dominican Republic 2.3%          
g Government of the Dominican Republic, senior bond, Reg S, 6.85%, 1/27/45 14,000,000       13,321,630
El Salvador 0.4%          
f Government of El Salvador, 144A, 7.65%, 6/15/35 2,650,000       2,298,504
Ethiopia 1.5%          
f Ethiopia International Bond, 144A, 6.625%, 12/11/24 10,000,000       8,939,550


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


Templeton Emerging Markets Income Fund

Statement of Investments, November 30, 2016 (unaudited) (continued)

Ghana 3.7%      
Ghana Treasury Note,      
24.25%, 10/09/17 1,130,000 GHS 261,727
23.95%, 11/06/17 610,000 GHS 141,159
23.30%, 12/11/17 2,560,000 GHS 589,760
24.25%, 6/11/18 10,040,000 GHS 2,344,536
Government of Ghana,      
23.00%, 2/13/17 9,670,000 GHS 2,217,923
25.48%, 4/24/17 230,000 GHS 53,227
24.44%, 5/29/17 3,670,000 GHS 848,006
26.00%, 6/05/17 130,000 GHS 30,269
25.40%, 7/31/17 3,410,000 GHS 793,118
23.00%, 8/21/17 13,160,000 GHS 3,018,515
23.23%, 2/19/18 3,340,000 GHS 768,617
22.49%, 4/23/18 1,730,000 GHS 395,228
23.47%, 5/21/18 8,220,000 GHS 1,901,035
19.04%, 9/24/18 14,300,000 GHS 3,107,511
24.50%, 10/22/18 5,917,000 GHS 1,417,894
24.50%, 4/22/19 5,300,000 GHS 1,302,827
24.50%, 5/27/19 2,040,000 GHS 500,750
21.00%, 3/23/20 110,000 GHS 25,598
24.50%, 6/21/21 5,530,000 GHS 1,443,590
24.75%, 7/19/21 670,000 GHS 175,448
India 1.1%      
Government of India,      
senior bond, 7.80%, 5/03/20 68,300,000 INR 1,046,116
senior bond, 8.35%, 5/14/22 20,200,000 INR 321,457
senior note, 7.28%, 6/03/19 2,700,000 INR 40,499
senior note, 8.12%, 12/10/20 51,300,000 INR 799,903
senior note, 7.80%, 4/11/21 91,600,000 INR 1,416,360
senior note, 7.16%, 5/20/23 12,700,000 INR 193,613
senior note, 8.83%, 11/25/23 171,200,000 INR 2,830,946
Indonesia 7.0%      
Government of Indonesia,      
FR36, 11.50%, 9/15/19 40,000,000,000 IDR 3,219,452
FR48, 9.00%, 9/15/18 2,961,000,000 IDR 223,019
senior bond, FR31, 11.00%, 11/15/20 134,139,000,000 IDR 10,897,399
senior bond, FR39, 11.75%, 8/15/23 1,780,000,000 IDR 155,967
senior bond, FR40, 11.00%, 9/15/25 58,140,000,000 IDR 5,040,732
senior bond, FR42, 10.25%, 7/15/27 2,368,000,000 IDR 199,546
senior bond, FR44, 10.00%, 9/15/24 1,066,000,000 IDR 86,916
senior bond, FR46, 9.50%, 7/15/23 80,000,000,000 IDR 6,330,936
senior bond, FR53, 8.25%, 7/15/21 6,465,000,000 IDR 483,474
senior bond, FR56, 8.375%, 9/15/26 70,379,000,000 IDR 5,296,928
senior bond, FR61, 7.00%, 5/15/22 1,720,000,000 IDR 122,154
senior bond, FR63, 5.625%, 5/15/23 3,071,000,000 IDR 199,975
senior bond, FR70, 8.375%, 3/15/24 85,338,000,000 IDR 6,391,296
senior note, FR66, 5.25%, 5/15/18 3,553,000,000 IDR 254,301
senior note, FR69, 7.875%, 4/15/19 21,627,000,000 IDR 1,597,390
Iraq 3.8%      
f Government of Iraq, 144A, 5.80%, 1/15/28 27,190,000   21,763,012
Kenya 3.5%      
Government of Kenya, senior note,      
f 144A, 6.875%, 6/24/24 6,033,000   5,744,019
g Reg S, 5.875%, 6/24/19 7,200,000   7,350,444



Templeton Emerging Markets Income Fund        
Statement of Investments, November 30, 2016 (unaudited) (continued)        
g Reg S, 6.875%, 6/24/24 7,700,000     7,331,170
Mexico 2.8%        
Government of Mexico,        
7.75%, 12/14/17 1,503,920 h MXN 7,444,974
M, 4.75%, 6/14/18 43,400 h MXN 206,114
senior note, 8.50%, 12/13/18 904,500 h MXN 4,564,586
senior note, M, 5.00%, 6/15/17 607,200 h MXN 2,933,104
senior note, M, 5.00%, 12/11/19 225,300 h MXN 1,046,738
Senegal 1.2%        
f Government of Senegal, 144A, 6.25%, 7/30/24 6,900,000     6,885,648
Serbia 2.0%        
f Government of Serbia, senior note, 144A, 7.25%, 9/28/21 10,250,000     11,461,191
South Africa 1.4%        
Government of South Africa,        
8.00%, 1/31/30 2,690,000   ZAR 170,710
8.875%, 2/28/35 8,080,000   ZAR 534,057
9.00%, 1/31/40 6,730,000   ZAR 443,896
8.75%, 1/31/44 11,850,000   ZAR 759,203
8.75%, 2/28/48 6,530,000   ZAR 418,257
R186, 10.50%, 12/21/26 76,150,000   ZAR 5,924,697
Sri Lanka 1.2%        
Government of Sri Lanka,        
10.60%, 9/15/19 321,640,000   LKR 2,110,214
8.00%, 11/01/19 18,120,000   LKR 110,870
9.25%, 5/01/20 68,990,000   LKR 429,659
11.20%, 7/01/22 31,680,000   LKR 203,561
A, 9.00%, 5/01/21 387,750,000   LKR 2,339,968
A, 11.00%, 8/01/21 259,200,000   LKR 1,668,214
Ukraine 6.7%        
f Government of Ukraine, 144A,        
7.75%, 9/01/19 5,855,000     5,683,156
7.75%, 9/01/20 8,667,000     8,266,151
7.75%, 9/01/21 3,506,000     3,297,919
7.75%, 9/01/22 3,406,000     3,167,665
7.75%, 9/01/23 3,406,000     3,129,263
7.75%, 9/01/24 3,406,000     3,095,203
7.75%, 9/01/25 3,406,000     3,065,638
7.75%, 9/01/26 3,406,000     3,056,885
7.75%, 9/01/27 3,406,000     3,031,340
a,i VRI, GDP Linked Securities, 5/31/40 10,087,000     2,989,736
Zambia 6.2%        
f Government of Zambia International Bond, 144A,        
5.375%, 9/20/22 26,070,000     22,386,961
8.50%, 4/14/24 2,470,000     2,330,210
f Government of Zambia, senior bond, 144A, 8.97%, 7/30/27 11,460,000     10,852,964
Total Foreign Government and Agency Securities (Cost $400,896,055)       369,926,547
Quasi-Sovereign and Corporate Bonds 11.3%        
Bermuda 0.4%        
f Digicel Group Ltd., senior note, 144A, 7.125%, 4/01/22 3,300,000     2,474,522
Canada 1.7%        
f First Quantum Minerals Ltd., senior note, 144A, 7.25%, 5/15/22 10,000,000     9,750,000



Templeton Emerging Markets Income Fund        
Statement of Investments, November 30, 2016 (unaudited) (continued)        
Chile 2.1%        
f VTR Finance BV, senior secured note, 144A, 6.875%, 1/15/24 12,000,000     12,210,000
Costa Rica 2.5%        
c Reventazon Finance Trust, secured bond, first lien, 144A, 8.00%, 11/15/33 14,400,000     14,239,814
Nigeria 1.3%        
f Access Bank PLC, sub. note, 144A, 9.25% to 6/23/19, FRN thereafter, 6/24/21 8,170,000     7,504,513
Peru 0.1%        
f Peru Enhanced Pass-Through Finance Ltd., senior secured bond, A-1, 144A, zero cpn., 768,800     745,889
South Africa 0.6%        
f Edcon Ltd.,        
j senior secured note, 144A, 9.50%, 3/01/18 7,250,000     1,450,000
j senior secured note, 144A, 9.50%, 3/01/18 2,828,000   EUR 599,423
k senior secured note, 144A, PIK, 12.75%, 6/30/19 1,886,005   EUR 446,020
k super senior secured note, 144A, PIK, 8.00%, 6/30/19 1,802,728   EUR 1,303,475
Turkey 1.2%        
f Yasar Holdings SA, senior note, 144A, 8.875%, 5/06/20 6,680,000     6,901,242
Ukraine 0.5%        
f Ukreximbank, (BIZ Finance PLC), loan participation, senior note, 144A, 9.75%, 1/22/25 3,005,000     2,742,062
United States 0.9%        
General Electric Co., senior note, A, 8.50%, 4/06/18 101,000,000   MXN 5,036,630
Total Quasi-Sovereign and Corporate Bonds (Cost $81,086,350)       65,403,590
Total Investments before Short Term Investments (Cost $491,299,164)       435,400,008
Short Term Investments 19.5%        
l Senior Floating Rate Interests (Cost $13,468,751) 2.3%        
South Africa 2.3%        
Edcon Ltd., Tranche 2 Bridge Facility, 4.661% - 8.00%, 12/30/16 13,551,880     13,549,847
Foreign Government and Agency Securities 0.8%        
Colombia 0.1%        
Colombian Tes Corto Plazo, Strip, 3/14/17 - 9/12/17 1,417,000,000   COP 444,364
Mexico 0.7%        
m Mexico Treasury Bill, 1/19/17 - 11/09/17 8,635,540 n MXN 4,073,903
Total Foreign Government and Agency Securities (Cost $4,908,490)       4,518,267
U.S. Government and Agency Securities (Cost $29,999,799) 5.2%        
United States 5.2%        
m U.S. Treasury Bill, 12/01/16 30,000,000     30,000,000
Total Investments before Money Market Funds (Cost $539,676,204)       483,468,122
Money Market Funds (Cost $64,287,717) 11.2%        
United States 11.2%        
a,o Institutional Fiduciary Trust Money Market Portfolio 64,287,717     64,287,717



Templeton Emerging Markets Income Fund

Statement of Investments, November 30, 2016 (unaudited) (continued)

Total Investments (Cost $603,963,921) 94.8%   547,755,839
Other Assets, less Liabilities 5.2%   30,339,437
Net Assets 100.0% $ 578,095,276


* The principal amount is stated in U.S. dollars unless otherwise indicated.
Rounds to less than 0.1% of net assets.
a Non-income producing.
b Security has been deemed illiquid because it may not be able to be sold within seven days. At November 30, 2016, the value of this security was $-.
c See Note 6 regarding restricted securities.
d Principal amount is stated in 1,000 Brazilian Real Units.
e Redemption price at maturity is adjusted for inflation.
f 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, 2016, the aggregate value of these securities was $186,178,548, representing 32.2% of net assets.
g 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, 2016, the aggregate value of
these securities was $28,003,244, representing 4.8% of net assets.
h Principal amount is stated in 100 Mexican Peso Units.
i The principal represents the notional amount. See Note 3 regarding value recovery instruments.
j Defaulted security or security for which income has been deemed uncollectible.
k Income may be received in additional securities and/or cash.
l The coupon rate shown represents the rate at period end.
m The security was issued on a discount basis with no stated coupon rate.
n Principal amount is stated in 10 Mexican Peso Units.
o See Note 7 regarding investments in affiliated management investment companies.


Templeton Emerging Markets Income Fund            
Statement of Investments, November 30, 2016 (unaudited) (continued)          
At November 30, 2016, 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  
OTC Forward Exchange Contracts                    
Australian Dollar JPHQ Sell 4,946,000 $ 3,519,964 12/12/16 $ - $ (130,247 )
Ghana Cedi BZWS Buy 2,895,477   703,042 12/12/16   -   (44,321 )
Australian Dollar JPHQ Sell 7,297,000   5,384,566 12/13/16   -   (570 )
Australian Dollar CITI Sell 4,919,000   3,630,812 12/14/16   721   -  
Australian Dollar JPHQ Sell 2,458,000   1,759,633 12/14/16   -   (54,306 )
Euro MSCO Sell 907,070   1,022,322 12/15/16   60,126   -  
Euro HSBK Sell 826,000   919,057 1/13/17   41,466   -  
Euro SCNY Sell 628,500   691,476 1/13/17   23,721   -  
Euro BZWS Sell 10,415,000   11,253,512 1/17/17   185,896   -  
Japanese Yen CITI Sell 624,500,000   5,363,001 1/17/17   -   (113,288 )
Japanese Yen SCNY Sell 1,873,240,000   16,038,151 1/17/17   -   (388,436 )
Euro GSCO Sell 2,753,000   3,047,791 1/18/17   122,146   -  
Japanese Yen HSBK Sell 1,620,890,000   15,457,658 1/19/17   1,242,653   -  
Japanese Yen SCNY Sell 1,770,880,000   16,904,565 1/19/17   1,374,168   -  
Euro DBAB Sell 1,506,000   1,658,889 1/23/17   58,064   -  
Japanese Yen DBAB Sell 626,420,000   5,427,074 1/23/17   -   (67,552 )
Malaysian Ringgit DBAB Buy 3,942,000   984,712 1/23/17   -   (109,451 )
Malaysian Ringgit DBAB Sell 3,942,000   946,800 1/23/17   71,539   -  
Malaysian Ringgit JPHQ Buy 5,039,000   1,245,735 1/23/17   -   (126,902 )
Malaysian Ringgit JPHQ Sell 5,039,000   1,211,298 1/23/17   92,465   -  
Euro BZWS Sell 2,547,416   2,792,566 1/27/17   84,235   -  
Malaysian Ringgit DBAB Buy 4,793,000   1,197,262 1/27/17   -   (133,632 )
Malaysian Ringgit DBAB Sell 4,793,000   1,151,057 1/27/17   87,427   -  
Euro DBAB Sell 4,531,031   4,970,496 1/30/17   152,579   -  
Euro CITI Sell 358,630   400,016 2/08/17   18,529   -  
Euro DBAB Sell 3,298,550   3,609,461 2/14/17   99,762   -  
Euro GSCO Sell 910,000   1,003,321 2/14/17   35,069   -  
Euro SCNY Sell 413,000   452,194 2/14/17   12,757   -  
Euro DBAB Sell 359,450   387,523 2/17/17   5,014   -  
Euro MSCO Sell 907,070   977,200 2/17/17   11,940   -  
Euro DBAB Sell 1,347,000   1,433,558 2/22/17   -   (168 )
Euro JPHQ Sell 2,260,000   2,538,943 2/22/17   133,434   -  
Euro BOFA Sell 1,604,997   1,710,943 2/27/17   2,236   -  
Euro SCNY Sell 362,390   386,439 2/27/17   632   -  
South African Rand HSBK Sell 28,567,455   2,006,592 3/01/17   14,207   -  
Australian Dollar CITI Sell 4,886,000   3,733,735 3/13/17   135,489   -  
Australian Dollar BOFA Sell 1,753,000   1,338,328 3/29/17   47,812   -  
Malaysian Ringgit DBAB Buy 2,499,000   626,190 7/20/17   -   (77,672 )
Malaysian Ringgit DBAB Sell 2,499,000   596,990 7/20/17   48,471   -  
Total Forward Exchange Contracts           $ 4,162,558 $ (1,246,545 )
Net unrealized appreciation (depreciation)           $ 2,916,013      
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.              



Templeton Emerging Markets Income Fund            
Statement of Investments, November 30, 2016 (unaudited) (continued)          
At November 30, 2016, the Fund had the following interest rate swap contracts outstanding. See Note 3.            
Interest Rate Swap Contracts                  
      Notional Expiration   Unrealized   Unrealized  
Description Exchange   Amount Date   Appreciation   Depreciation  
Centrally Cleared Swap Contracts                  
Receive Floating rate 3-month USD BBA LIBOR                  
     Pay Fixed rate 0.926%                  
  LCH $ 17,160,000 10/17/17 $ 26,928 $ -  
Receive Floating rate 3-month USD BBA LIBOR                  
     Pay Fixed rate 2.310% LCH   75,850,000 7/29/25   -   (1,557,087 )
Receive Floating rate 3-month USD BBA LIBOR                  
    Pay Fixed rate 2.752%                  
  LCH   39,530,000 7/29/45   -   (2,543,153 )
Total Interest Rate Swap Contracts         $ 26,928 $ (4,100,240 )
Net unrealized appreciation (depreciation)             $ (4,073,312 )



Counterparty / Exchange

BOFA - Bank of America Corp.
BZWS - Barclays Bank PLC
CITI - Citigroup Inc.
DBAB - Deutsche Bank AG
GSCO - The Goldman Sachs Group, Inc.
JPHQ - JPMorgan Chase Bank & Co.
LCH - LCH Clearnet LLC
MSCO - Morgan Stanley
SCNY - Standard Chartered Bank
ARS - Argentine Peso
BRL - Brazilian Real
COP - Colombian Peso
EUR - Euro
GHS - Ghanaian Cedi
IDR - Indonesian Rupiah
INR - Indian Rupee
LKR - Sri Lankan Rupee
USD - United States Dollar
MXN - Mexican Peso
ZAR - South African Rand


Selected Portfolio

BBA - British Bankers Association
FRN - Floating Rate Note
GDP - Gross Domestic Product
LIBOR - London Interbank Offered Rate
PIK - Payment-In-Kind
VRI - Value Recovery Instrument



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 a closed-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles.

As approved by the Fund’s Board of Trustees (the Board), at a meeting held on July 13, 2016, the Fund’s fiscal year-end will be changed to December 31st. This will result in the Fund having a fiscal year that is shorter than a full calendar year for the period ended December 31, 2016.


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 (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees, the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The VC 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.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the (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 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV.

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 VC 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 VC 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 VC 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 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time 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 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC 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.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund's NAV is not calculated, 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. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

At November 30, 2016, the Fund received $938,719 in United Kingdom Treasury Bonds and Notes as collateral for derivatives.

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.

The Fund invests in value recovery instruments (VRI) primarily to gain exposure to growth risk. Periodic payments from VRI are dependent on established benchmarks for underlying variables. VRI has a notional amount, which is used to calculate amounts of payments to holders. Payments are recorded upon receipt as realized gains. The risks of investing in VRI include growth risk, liquidity, and the potential loss of investment.


At November 30, 2016, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments $ 617,707,558  
Unrealized appreciation $ 19,441,506  
Unrealized depreciation   (89,393,225 )
Net unrealized appreciation (depreciation) $ (69,951,719 )




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, 2016, 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:

Amount/   Acquisition        
Warrants Issuer Date   Cost   Value
4,375 a Edcon Holdings Ltd., F w ts., 2/20/49 11/27/15 $ 46 $ -
78,291,411 a Edcon Holdings Ltd., F1 w ts., 2/20/49 11/27/15   829,537   -
6,340,039 a Edcon Holdings Ltd., F2 w ts., 2/20/49 11/27/15   67,176   -
14,400,000 Reventazon Finance Trust, secured bond, first lien, 144A, 8.00%, 11/15/33 12/18/13   14,400,000   14,239,814
  Total Restricted Securities (Value is 2.5% of Net Assets) $   15,296,759 $ 14,239,814
a The Fund also invests in unrestricted securities of the issuer, valued at $17,348,765 as of November 30, 2016.        



The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. During the period ended November 30, 2016, the Fund held investments in affiliated management investment companies as follows:

                  % of Affiliated Fund  
  Number of Shares       Number of Shares   Value at   Shares Outstanding  
  Held at Beginning Gross Gross   Held at End of   End of Investment Realized Held at End of  
  of Period Additions Reductions   Period   Period Income Gain (Loss) Period  
Non-Controlled Affiliates                      
Institutional Fiduciary Trust Money Market Portfolio 91,119,633 85,867,971 (112,699,887 ) 64,287,717 $ 64,287,717 $ - $ - 0.4 %



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, 2016, 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:                
Equity Investmentsa $ 69,871 $ - $ - b $ 69,871
Foreign Government and Agency Securitiesc   -   374,444,814   -   374,444,814
Quasi-Sovereign and Corporate Bondsc   -   51,163,776   14,239,814   65,403,590
Senior Floating Rate Interests   -   13,549,847   -   13,549,847
Short Term Investments   94,287,717   -   -   94,287,717
Total Investments in Securities $ 94,357,588 $ 439,158,437 $ 14,239,814 $ 547,755,839
Other Financial Instruments:                
Forw ard Exchange Contracts $ - $ 4,162,558 $ - $ 4,162,558
Sw ap Contracts   -   26,928   -   26,928
Total Other Financial Instruments $ - $ 4,189,486 $ - $ 4,189,486
Other Financial Instruments:                
Forw ard Exchange Contracts $ - $ 1,246,545 $ - $ 1,246,545
Sw ap Contracts   -   4,100,240   -   4,100,240
Total Other Financial Instruments $ - $ 5,346,785 $ - $ 5,346,785


aIncludes common stocks and other equity investments.
bIncludes securities determined to have no value at November 30, 2016.
cFor 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, 2016, is as follows:

                              Net Change in  
                    Net         Appreciation  
    Balance at         Transfers     Realized Net Unrealized         (Depreciation)  
    Beginning of         Into (Out of) Cost Basis   Gain Appreciation     Balance at End of   on Assets Held  
    Period Purchases   Sales   Level 3 Adjustments   (Loss) (Depreciation)     Period   at Period End  
Investments in Securities:                                
Quasi-Sovereign and Corporate Bonds $ 15,288,746 $ - $ - $ - $ - $ - $ (1,048,932 ) $ 14,239,814 $ (1,048,932 )


Significant unobservable valuation inputs developed by the VC for material Level 3 financial instruments and impact to fair value as a result of changes in unobservable valuation inputs as of November 30, 2016, are as follows:

              Impact to Fair
    Fair Value at End         Value if Input
Description   of Period Valuation Technique Unobservable Input Amount   Increasesa
Investments in Securities:              
Quasi-Sovereign and Corporate Bonds $ 14,239,814 Discounted cash flow model Discount rate b 8.2 % Decreasec


a Represents the directional change in the fair value of the Level 3 financial instruments that w ould result from a significant and reasonable increase in the corresponding input.
A significant and reasonable decrease in the input w ould have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.
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.
c Represents a significant impact to fair value and net assets.


The Fund has evaluated subsequent events through the issuance of the Statement of Investments and determined that no events have occurred that require disclosure other than those already disclosed in the Notes to Statement of Investments.

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 February 27, 2017



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 February 27, 2017




      Mark H. Otani

Chief Financial Officer and

 Chief Accounting Officer

Date February 27, 2017