UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
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Investment Company Act file number: | | 811-06342 |
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Exact name of registrant as specified in charter: | | Aberdeen Global Income Fund, Inc. |
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Address of principal executive offices: | | 1735 Market Street, 32nd Floor |
| | Philadelphia, PA 19103 |
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Name and address of agent for service: | | Andrea Melia |
| | Aberdeen Asset Management Inc. |
| | 1735 Market Street 32nd Floor |
| | Philadelphia, PA 19103 |
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Registrant’s telephone number, including area code: | | 1-800-522-5465 |
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Date of fiscal year end: | | October 31 |
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Date of reporting period: | | April 30, 2017 |
Item 1. Reports to Stockholders.
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-17-222470/g280658covapg01.jpg)
Aberdeen Global Income Fund, Inc. (FCO)
Semi-Annual Report
April 30, 2017
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Aberdeen
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Managed Distribution Policy (unaudited)
The Board of Directors of the Aberdeen Global Income Fund, Inc. (the “Fund”) has authorized a managed distribution policy (“MDP”) of paying monthly distributions at an annual rate set once a year. The Fund’s current monthly distribution is set at a rate of $0.07 per share. With each distribution, the Fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and estimated composition of the distribution and other information required by the Fund’s MDP exemptive order. The Fund’s Board of Directors may amend or terminate the MDP at any time without prior notice to shareholders; however, at this time, there are no reasonably foreseeable circumstances that might cause the termination of the MDP. You should not draw any conclusions about the Fund’s investment performance from the amount of distributions or from the terms of the Fund’s MDP.
Distribution Disclosure Classification (unaudited)
The Fund’s policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax rules, the amount applicable to the Fund and character of distributable income for each fiscal period depends on the actual exchange rates during the entire year between the U.S. Dollar and the currencies in which Fund assets are denominated and on the aggregate gains and losses realized by the Fund during the entire year.
Therefore, the exact amount of distributable income for each fiscal year can only be determined as of the end of the Fund’s fiscal year, October 31. Under Section 19 of the Investment Company Act of 1940, as amended, the Fund is required to indicate the sources of certain distributions to shareholders. The estimated distribution composition may vary from month to month because it may be materially impacted by future income, expenses and realized gains and losses on securities and fluctuations in the value of the currencies in which the Fund’s assets are denominated.
Based on U.S. generally accepted accounting principles, the Fund estimates that distributions for the fiscal year commenced November 1, 2016, through the distributions declared on May 9, 2017 and June 9, 2017, consisted of 10% net investment income and 90% return of capital. The amounts and sources of distributions reported in this report are only estimates and are not being provided for tax reporting purposes.
In January 2018, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2017 calendar year.
Dividend Reinvestment and Direct Stock Purchase Plan (unaudited)
Computershare Trust Company, N.A. (“Computershare”), the Fund’s transfer agent, sponsors and administers a Dividend Reinvestment and Direct Stock Purchase Plan (the “Plan”), which is available to shareholders.
The Plan allows registered shareholders and first-time investors to buy and sell shares and automatically reinvest dividends and capital gains through the transfer agent. This is a cost-effective way to invest in the Fund.
Please note that for both purchases and reinvestment purposes, shares will be purchased in the open market at the current share price and cannot be issued directly by the Fund.
For more information about the Plan and a brochure that includes the terms and conditions of the Plan, please call Computershare at 1-800-647-0584 or visit www.computershare.com/buyaberdeen.
Letter to Shareholders (unaudited)
Dear Shareholder,
We present this Semi-Annual Report, which covers the activities of Aberdeen Global Income Fund, Inc. (the “Fund”), for the six-month period ended April 30, 2017. The Fund’s principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective.
NAV Total Return Performance
The Fund’s total return, based on net asset value (“NAV”) net of fees, was 4.8% for the six-month period ended April 30, 2017 and 7.0% per annum since inception, assuming the reinvestment of dividends and distributions. The Fund’s total return for the six-month period ended April 30, 2017 and per annum since inception is based on the reported NAV on each financial reporting period end.
Share Price Total Return Performance & Discount
For the six-month period ended April 30, 2017, based on market price, the Fund’s total return was 7.1% assuming reinvestment of dividends and distributions. The Fund’s share price increased by 1.9% over the six-month period, from $8.46 on October 31, 2016 to $8.62 on April 30, 2017. The Fund’s share price on April 30, 2017 represented a discount of 6.2% to the NAV per share of $9.19 on that date, compared with a discount of 8.2% to the NAV per share of $9.22 on October 31, 2016.
Portfolio Management
The Fund is managed by Aberdeen’s Asia-Pacific fixed income team. The Asia-Pacific fixed income team works in a truly collaborative fashion; all team members have both portfolio management and research responsibilities. The team is responsible for the day-to-day management of the Fund.
Effective March 15, 2017, Lin-Jing Leong replaced Victor Rodriguez as part of the team having the most significant responsibility for the day-to-day management of the Fund’s portfolio. The team also includes Nick Bishop, Kenneth Akintewe, Steven Logan and Adam McCabe.
Ms. Leong is an investment manager on the Asian local rates and currency team. She joined Aberdeen Asset Management Asia Limited in 2013 from the Reserve Management Section of the Central Bank of Malaysia where she specialized in investing in the Asian local current bond market.
Credit Quality
As of April 30, 2017, 17.7% of the Fund’s portfolio was invested in securities where either the issue or the issuer was rated A or better by multiple rating agencies.
Managed Distribution Policy
Distributions to common shareholders for the twelve-month period ended April 30, 2017 totaled $0.84 per share. Based on the share price of $8.62 on April 30, 2017, the distribution rate over the twelve-month period ended April 30, 2017 was 9.7%. Since all distributions are paid after deducting applicable withholding taxes, the effective distribution rate may be higher for those U.S. investors who are able to claim a tax credit.
On May 9, 2017 and June 9, 2017, the Fund announced that it will pay on May 26, 2017 and June 27, 2017 respectively, a distribution of US $0.07 per share to all shareholders of record as of May 19, 2017 and June 20, 2017, respectively.
The Fund’s policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital, which is a non-taxable return of capital. This policy is subject to an annual review as well as regular review at the Board’s quarterly meetings, unless market conditions require an earlier evaluation.
Open Market Repurchase Program
The Fund’s policy is generally to buy back Fund shares on the open market when the Fund trades at certain discounts to NAV and management believes such repurchases may enhance shareholder value. During the six-month period ended April 30, 2017 and fiscal year ended October 31, 2016, the Fund repurchased 19,539 and 100,430 shares, respectively.
Revolving Credit Facility
The Fund’s revolving credit facility with The Bank of Nova Scotia was renewed for a 3-year term on February 28, 2017. The outstanding balance on the loan as of April 30, 2017 was $31,500,000. Under the terms of the loan facility and applicable regulations, the Fund is required to maintain certain asset coverage ratios for the amount of its outstanding borrowings. The Board regularly reviews the use of leverage by the Fund. The Fund is also authorized to use reverse repurchase agreements as another form of leverage.
Merger of Aberdeen Asset Management PLC with Standard Life plc
The Fund’s investment manager, investment adviser, investment sub-adviser and administrator are each a subsidiary of Aberdeen Asset Management PLC (“Aberdeen PLC”). On March 6, 2017, the Boards of Standard Life plc and Aberdeen PLC announced that they had reached an agreement on the terms of a merger (“Merger”). The Boards of each of Standard Life plc and Aberdeen PLC believe that the Merger has a compelling strategic and financial rationale through combining complementary strengths to create a world-class
Aberdeen Global Income Fund, Inc.
1
Letter to Shareholders (unaudited) (concluded)
investment group. The Merger is expected to occur in the third quarter of 2017, subject to various conditions and terms, including regulatory approvals. The portfolio management team for the Fund is not expected to change as a result of the Merger. In addition, the agreements that the Fund has with Aberdeen PLC’s subsidiary companies, the services provided by such companies, and the fees charged for those services are not expected to change as a result of the Merger.
Portfolio Holdings Disclosure
The Fund’s complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the Fund’s semi-annual and annual reports to shareholders. The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund makes the information on Form N-Q available to shareholders on the Fund’s website or upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465.
Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve months ended June 30 is available by August 31 of the relevant year: (i) upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465; and (ii) on the SEC’s website at http://www.sec.gov.
Unclaimed Share Accounts
Please be advised that abandoned or unclaimed property laws for certain states require financial organizations to transfer (escheat) unclaimed property (including Fund shares) to the state. Each state has its own definition of unclaimed property, and Fund shares could be considered “unclaimed property” due to account inactivity (e.g., no owner-generated activity for a certain period), returned mail (e.g., when mail sent to a shareholder is returned to the Fund’s transfer agent as undeliverable), or a combination of both. If your Fund
shares are categorized as unclaimed, your financial advisor or the Fund’s transfer agent will follow the applicable state’s statutory requirements to contact you, but if unsuccessful, laws may require that the shares be escheated to the appropriate state. If this happens, you will have to contact the state to recover your property, which may involve time and expense. For more information on unclaimed property and how to maintain an active account, please contact your financial adviser or the Fund’s transfer agent.
Investor Relations Information
As part of Aberdeen’s commitment to shareholders, we invite you to visit the Fund on the web at www.aberdeenfco.com. Here, you can view monthly fact sheets, quarterly commentary, distribution and performance information, updated daily data courtesy of Morningstar®, portfolio charting and other Fund literature.
Enroll in our email services today and be among the first to receive the latest closed-end fund news, announcements, videos and information. In addition, you can receive electronic versions of important Fund documents including annual reports, semi-annual reports, prospectuses, and proxy statements. Sign-up today at
www.aberdeen-asset.us/aam.nsf/usclosed/email.
Contact Us:
• | | Visit: cef.aberdeen-asset.us; |
• | | Watch: www.aberdeen-asset.us/aam.nsf/usclosed/aberdeentv; |
• | | Email: InvestorRelations@aberdeen-asset.com; |
• | | Call: 1-800-522-5465 (toll free in the U.S.). |
Yours sincerely,
/s/ Christian Pittard
Christian Pittard
President
Aberdeen Global Income Fund, Inc.
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Report of the Investment Manager (unaudited)
Market/economic review
Global fixed income markets were volatile over the six-month period ended April 30, 2017. Events in the U.S. held sway, notably Donald Trump’s win in the presidential election in November 2016. This halted the global bond market rally as investors considered the possibility that Trump would increase fiscal spending and lift the inflation outlook. Investors subsequently rotated back into bonds amid growing uncertainty over U.S. trade policies and their potential impact on global recovery. Towards the end of the reporting period, Asian government bonds rallied further as political tensions escalated following U.S. military strikes in Syria and several botched missile tests by North Korea. Meanwhile, the U.S. Federal Reserve (Fed) raised its benchmark interest rate in two 25-basis point increments in December 2016 and March 2017. The European Central Bank and Bank of Japan maintained their loose monetary policy stance. Currencies in the G10 markets were mostly weaker against the U.S. dollar, including the Australian and New Zealand dollars. Emerging-market currencies were mixed: the Russian rouble and Indian rupee led the gains and the Mexican peso and Brazilian real also strengthened, but the Turkish lira and Malaysian ringgit weakened.
Australian and New Zealand government bond yields rose over the reporting period, with the short end of their curves outperforming the long end. In Australia, the central bank kept interest rates on hold as inflation remained entrenched below its 2% target. With the frothy housing market presenting risks to the financial system, macroprudential1 measures were strengthened, including stricter rules for mortgages. New Zealand yields rose despite the central bank’s interest-rate cut due to rising external risks. However, policymakers’ desire to see a weaker New Zealand dollar subsequently saw them hold rates unchanged.
In Asian local-currency bonds, the Philippines was one of the main laggards as bonds yields trended higher on expectations of rising inflation. Singapore bond yields tracked U.S. Treasury yields higher. On a positive note, Indonesian and Indian bonds outperformed their Asia-Pacific region peers. Investor sentiment in Indonesia was buoyed by hopes that government reform momentum and infrastructure spending was gathering pace. Additionally, President Joko Widodo’s signature tax amnesty program netted 135 trillion rupiah (roughly US$10.1 billion) in revenues. In India, the government’s unexpected decision to replace large rupee denominations resulted in a flood of bank deposits that were channelled into government bonds. The ruling Bharatiya Janata Party’s victory in several state elections also reignited hopes that
economic reforms would accelerate. This helped mask early disappointment over the central bank’s move from an easing bias to a neutral policy stance. In Malaysia, fund outflows accelerated, but the market pared losses after the central bank eased rules on the short-selling of government bonds in an effort to bolster trading volumes and attract more investors.
In other emerging markets, Turkish and Mexican bonds underperformed over the reporting period, despite a late rebound in both markets. In Turkey, confidence over the political situation deteriorated as a controversial referendum win conferred sweeping powers to the president and eliminated the role of the prime minister. In Mexico, the central bank raised interest rates and Donald Trump’s threat to renege on the North American Free Trade Agreement (NAFTA) and other anti-Mexican rhetoric from his campaign trail hurt investor sentiment. Conversely, Brazilian bonds and the Brazilian real performed well as the central bank cut interest rates and maintained a dovish monetary policy stance. Russian yields fell initially on the oil-price rebound and hopes that the economy would benefit from Donald Trump’s presidency. Later in the reporting period, policy rate cuts further bolstered investor sentiment. South African bond yields also fell during the reporting period, despite a credit rating downgrade to non-investment-grade status.
High-yield bonds outside of emerging markets continued to perform well over the reporting period, with spreads tightening as expectations of increased fiscal spending and stronger growth under the Trump administration bolstered investor risk appetite. Concurrently, defaults in the high-yield commodity sector, particularly in the U.S., appeared to be abating. These positive developments helped to soothe investors’ concerns over rising interest rates and volatile oil prices.
Fund performance review
Fund performance over the reporting period benefited from strategies in Australia and New Zealand, as well as emerging-market debt. However, the strategies in Asian local-currency bonds and global high-income debt detracted from Fund performance.
The Fund’s underweight allocations to both Australian bonds and the Australian dollar relative to its blended benchmark2 were key contributors to the Fund’s relative performance for the reporting period. In emerging-market debt, security selection in Russia bolstered Fund performance.
The Fund’s strategies in Asian local-currency bonds weighed on performance due mainly to the positions in Malaysian bonds and the
1 | | Macroprudential policy addresses the connection between individual financial institutions and markets, as well as their common exposure to economic risk factors. |
2 | | The Fund’s blended benchmark comprises 10% BofA ML All Maturity Australia Government Index; 25% Bank of America Merrill Lynch Global High Yield Constrained Index (hedged into U.S. dollars); 35% J.P. Morgan EMBI Global Diversified Index; 5% BofA ML New Zealand Government Index; and 25% Markit iBoxx Asia Government Index. |
Aberdeen Global Income Fund, Inc.
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Report of the Investment Manager (unaudited) (continued)
Malaysian ringgit. Nonetheless, the overweight allocation to the Indian rupee mitigated losses as the currency strengthened
significantly against the U.S. dollar over the reporting period. The Fund’s overweight to Indonesian bonds also had a positive impact.
Regarding the global high-income strategies, the main detractor from Fund performance for the reporting period was security selection in investment-grade financial bonds. However, security selection in high-yield oil-and-gas and high-yield financial bonds mitigated the losses.
The Fund’s use of derivatives, primarily for currency management, had an overall positive impact on performance for the reporting period due to short positions in the Australian dollar and New Zealand dollar. This was slightly offset by short positioning in the euro and British pound, both of which ended the period stronger against the U.S. dollar.
Outlook
The global economy seems to be on a cyclical recovery. In the U.S., this is underscored by increases in both hiring and wages. However, we believe that underlying strength over the longer term remains elusive. This is attributable in part to persistent doubts over the effectiveness of the Trump presidency. In Europe, investors are wary of political developments, even though the market-friendly outcome of the French presidential election assuaged fears somewhat. In Asia, North Korea’s belligerence remains a concern, while the potential for systemic risk lingers in China, with the accompanying worries over deleveraging and credit-tightening. Nonetheless, we believe that Beijing will be keen to ensure stability ahead of its Party Congress meeting in late 2017.
We believe that the Fed will not rush to normalize interest rates and the European Central Bank should maintain its easy monetary policy in the near term. In Australia, we believe that the central bank will favor targeted regulatory tweaks over rate hikes in a bid to rein in the frothy housing market, since overall inflation remains below its target. In most parts of the emerging world, inflation remains benign as the price of oil is expected to stay under pressure for some time. Therefore, we think that bond markets should find some support, although we may see a continued reduction in duration3 risk. In our view, government bonds, in particular, could benefit from their relative value. With respect to high-yield credit, we think that the environment remains favorable, although valuations appear elevated. We believe that the recent default cycle in the U.S. energy and commodity sectors may result in a cathartic cleansing of the weakest corporate balance sheets and the rate of defaults could decline. While pockets of weakness persist, among U.S. retailers for example, we feel that the bulk of the market remains in good shape, and we believe
that it still provides investors with the ability to generate decent returns, especially in the context of a low-yielding environment.
Loan Facility and the Use of Leverage
The Fund utilizes leverage to seek to increase the yield for its shareholders. The amounts borrowed from the Fund’s loan facility may be invested to seek to return higher rates than the rates in the Fund’s portfolio. However, the cost of leverage could exceed the income earned by the Fund on the proceeds of such leverage. To the extent that the Fund is unable to invest the proceeds from the use of leverage in assets which pay interest at a rate which exceeds the rate paid on the leverage, the yield on the Fund’s common stock will decrease. In addition, in the event of a general market decline in the value of assets in which the Fund invests, the effect of that decline will be magnified in the Fund because of the additional assets purchased with the proceeds of the leverage. Non-recurring expenses in connection with the implementation of the loan facility will reduce the Fund’s performance.
The Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having similar investment objectives and policies. The funds borrowed pursuant to the loan facility may constitute a substantial lien and burden by reason of their prior claim against the income of the Fund and against the net assets of the Fund in liquidation. The Fund is not permitted to declare dividends or other distributions in the event of default under the loan facility. In the event of default under the loan facility, the lender has the right to cause a liquidation of the collateral (i.e., sell portfolio securities and other assets of the Fund) and, if any such default is not cured, the lender may be able to control the liquidation as well. The loan facility has a term of 3 years and is not a perpetual form of leverage; there can be no assurance that the loan facility will be available for renewal on acceptable terms, if at all.
The credit agreement governing the loan facility includes usual and customary covenants for this type of transaction. These covenants impose on the Fund asset coverage requirements, Fund composition requirements and limits on certain investments, such as illiquid investments, which are more stringent than those imposed on the Fund by the 1940 Act. The covenants or guidelines could impede the Investment Manager, Investment Adviser or the Sub-Adviser from fully managing the Fund’s portfolio in accordance with the Fund’sinvestment objective and policies. Furthermore, non-compliance with such covenants or the occurrence of other events could lead to the cancellation of the loan facility. The covenants also include a requirement that the Fund maintain a NAV of no less than $60,000,000.
3 | | Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements. |
Aberdeen Global Income Fund, Inc.
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Report of the Investment Manager (unaudited) (concluded)
Prices and availability of leverage are extremely volatile in the current market environment. The Board regularly reviews the use of leverage by the Fund and may explore other forms of leverage. The Fund is also authorized to use reverse repurchase agreements as another form of leverage. A reverse repurchase agreement involves the sale of a security, with an agreement to repurchase the same or substantially similar securities at an agreed upon price and date. Whether such a transaction produces a gain for the Fund depends upon the costs of the agreements and the income and gains of the securities purchased with the proceeds received from the sale of the security. If the income and gains on the securities purchased fail to exceed the costs, the Fund’s NAV will decline faster than otherwise would be the case. Reverse repurchase agreements, as with any leveraging techniques, may increase the Fund’s return; however, such transactions also increase the Fund’s risks in down markets.
Interest Rate Swaps
The Fund may enter into interest rate swaps to efficiently gain interest rate exposure and hedge interest rate risk. As of April 30, 2017, the Fund held interest rate swap agreements with an aggregate notional amount of $31,500,000 which represented 100% of the Fund’s total borrowings. Under the terms of the agreements
currently in effect, the Fund either receives a floating rate of interest (three month USD-LIBOR BBA rate) and pays fixed rates of interest for the terms or pays a floating rate of interest and receives a fixed rate of interest for the terms, and based upon the notional amounts set forth below:
| | | | | | | | | | | | |
Remaining Term as of April 30, 2017 | | Receive/(Pay) Floating Rate | | | Amount (in $ millions) | | | Fixed Rate Payable (%) | |
6 months | | | Receive | | | | 16.5 | | | | 0.84 | |
90 months | | | Receive | | | | 15.0 | | | | 2.44 | |
A significant risk associated with interest rate swaps is the risk that the counterparty may default or file for bankruptcy, in which case the Fund would bear the risk of loss of the amount expected to be received under the swap agreements. There can be no assurance that the Fund will have an interest rate swap in place at any given time nor can there be any assurance that, if an interest rate swap is in place, it will be successful in hedging the Fund’s interest rate risk with respect to the loan facility. The implementation of this strategy is at the discretion of the Leverage Committee of the Board.
Aberdeen Asset Management Asia Limited
Aberdeen Global Income Fund, Inc.
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Total Investment Returns (unaudited)
The following table summarizes the six-month and average annual Fund performance for the 6-month, 1-year, 3-year, 5-year and 10-year periods as of April 30, 2017. The Fund’s principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective.
| | | | | | | | | | | | | | | | | | | | |
| | 6 Months | | | 1 Year | | | 3 Years | | | 5 Years | | | 10 Years | |
Net Asset Value (NAV) | | | 4.8% | | | | 7.0% | | | | 0.3% | | | | 0.7% | | | | 4.9% | |
Market Value | | | 7.1% | | | | 9.1% | | | | 0.3% | | | | -1.4% | | | | 4.6% | |
Aberdeen Asset Management Inc. has entered into an agreement with the Fund to limit investor relations services fees, without which performance would be lower. This contract aligns with the term of the advisory agreement and may not be terminated prior to the end of the current term of the advisory agreement. See Note 3 in the Notes to Financial Statements. Returns represent past performance. Total investment return at NAV is based on changes in the NAV of Fund shares and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Fund’s dividend reinvestment program. All return data at NAV includes fees charged to the Fund, which are listed in the Fund’s Statement of Operations under “Expenses”. The Fund’s total investment return at NAV is based on the reported NAV on each financial reporting period end. Total investment return at market value is based on changes in the market price at which the Fund’s shares traded on the NYSE MKT during the period and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Fund’s dividend reinvestment program. Because the Fund’s shares trade in the stock market based on investor demand, the Fund may trade at a price higher or lower than its NAV. Therefore, returns are calculated based on both market price and NAV. Past performance is no guarantee of future results. The performance information provided does not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund. The current performance of the Fund may be lower or higher than the figures shown. The Fund’s yield, return, market price and NAV will fluctuate. Performance information current to the most recent month-end is available at www.aberdeenfco.com or by calling 800-522-5465.
The net annualized operating expense ratio, excluding fee waivers, based on the six-month period ended April 30, 2017 was 2.72%. The net annualized operating expense ratio, net of fee waivers, based on the six-month period ended April 30, 2017 was 2.70%. The annualized net operating expense ratio, excluding interest expense, net of fee waivers, based on the six-month period ended April 30, 2017 was 1.98%.
Aberdeen Global Income Fund, Inc.
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Portfolio Composition (unaudited)
Quality of Investments(1)
As of April 30, 2017, 17.7% of the Fund’s total investments were invested in securities where either the issue or the issuer was rated “A” or better by Standard & Poor’s, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. The table below shows the asset quality of the Fund’s portfolio as of April 30, 2017 compared with the previous six and twelve months:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Date | | AAA/Aaa % | | | AA/Aa % | | | A % | | | BBB/Baa % | | | BB/Ba** % | | | B** % | | | C/CCC** % | | | D** % | | | NR*** % | |
April 30, 2017* | | | 5.6 | | | | 10.0 | | | | 2.1 | | | | 11.9 | | | | 21.1 | | | | 31.0 | | | | 7.9 | | | | 0.0 | | | | 10.4 | |
October 31, 2016 | | | 18.2 | | | | 17.2 | | | | 0.4 | | | | 8.5 | | | | 18.7 | | | | 20.2 | | | | 6.0 | | | | 0.1 | | | | 10.7 | |
April 30, 2016* | | | 27.6 | | | | 33.2 | | | | 4.6 | | | | 7.6 | | | | 12.3 | | | | 10.1 | | | | 3.1 | | | | 0.0 | | | | 1.5 | |
** | | Below investment grade |
(1) | | For financial reporting purposes, credit quality ratings shown above reflect the lowest rating assigned by either S&P, Moody’s or Fitch if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated NR are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. The Investment Manager evaluates the credit quality of unrated investments based upon, but not limited to, credit ratings for similar investments. |
Geographic Composition
The Fund’s investments are divided into three categories: Developed Markets, Investment Grade Developing Markets and Sub-Investment Grade Developing Markets. The table below shows the geographical composition (with U.S. Dollar-denominated bonds issued by foreign issuers allocated into country of issuance) of the Fund’s total investments as of April 30, 2017, compared with the previous six and twelve months:
| | | | | | | | | | | | |
Date | | Developed Markets % | | | Investment Grade Developing Markets % | | | Sub-Investment Grade Developing Markets % | |
April 30, 2017* | | | 55.4 | | | | 19.8 | | | | 24.8 | |
October 31, 2016 | | | 71.0 | | | | 12.5 | | | | 16.5 | |
April 30, 2016* | | | 70.4 | | | | 13.4 | | | | 16.2 | |
Currency Composition
The table below shows the currency composition of the Fund’s total investments as of April 30, 2017, compared with the previous six and twelve months:
| | | | | | | | | | | | |
Date | | Developed Markets % | | | Investment Grade Developing Markets % | | | Sub-Investment Grade Developing Markets % | |
April 30, 2017* | | | 80.3 | | | | 11.7 | | | | 8.0 | |
October 31, 2016 | | | 95.1 | | | | 3.4 | | | | 1.5 | |
April 30, 2016* | | | 94.2 | | | | 4.8 | | | | 1.0 | |
Aberdeen Global Income Fund, Inc.
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Portfolio Composition (unaudited) (concluded)
Maturity Composition
As of April 30, 2017, the average maturity of the Fund’s total investments was 8.6 years, compared with 7.8 years at October 31, 2016 and 10.2 years at April 30, 2016. The table below shows the maturity composition of the Fund’s investments as of April 30 2017, compared with the previous six and twelve months:
| | | | | | | | | | | | | | | | |
Date | | Under 3 Years % | | | 3 to 5 Years % | | | 5 to 10 Years % | | | 10 Years & Over % | |
April 30, 2017* | | | 15.1 | | | | 12.9 | | | | 47.8 | | | | 24.2 | |
October 31, 2016 | | | 21.9 | | | | 17.6 | | | | 37.7 | | | | 22.8 | |
April 30, 2016* | | | 12.4 | | | | 11.5 | | | | 45.0 | | | | 31.1 | |
Aberdeen Global Income Fund, Inc.
8
Summary of Key Rates (unaudited)
The following table summarizes the movements of key interest rates and currencies from April 30, 2017 and the previous six and twelve month periods.
Global Income
| | | | | | | | | | | | |
| | Apr-17 | | | Oct-16 | | | Apr-16 | |
Australia | | | | | | | | | | | | |
90 day Bank Bills | | | 1.75% | | | | 1.75% | | | | 2.16% | |
10 yr bond | | | 2.22% | | | | 2.06% | | | | 2.30% | |
Australian Dollar | | | $0.75 | | | | $0.76 | | | | $0.76 | |
New Zealand | | | | | | | | | | | | |
90 day Bank Bills | | | 1.99% | | | | 2.14% | | | | 2.42% | |
10 yr bond | | | 3.04% | | | | 2.71% | | | | 2.85% | |
New Zealan Dollar | | | $0.69 | | | | $0.72 | | | | $0.70 | |
Malaysia | | | | | | | | | | | | |
3-month T-Bills | | | 3.09% | | | | 2.62% | | | | 2.48% | |
10 yr bond | | | 4.05% | | | | 3.60% | | | | 3.88% | |
Malaysian Ringgit* | | | R4.34 | | | | R4.20 | | | | R3.91 | |
India | | | | | | | | | | | | |
3-month T-Bills | | | 6.18% | | | | 6.37% | | | | 6.81% | |
10 yr bond | | | 6.96% | | | | 6.79% | | | | 7.44% | |
Indian Rupee | | | ₹64.33 | | | | ₹66.79 | | | | ₹66.33 | |
Indonesia | | | | | | | | | | | | |
3 months deposit rate | | | 6.19% | | | | 6.32% | | | | 6.88% | |
10 yr bond | | | 7.01% | | | | 7.21% | | | | 7.68% | |
Indonesian Rupiah | | | Rp13329.00 | | | | Rp13048.00 | | | | Rp13188.00 | |
Russia | | | | | | | | | | | | |
Zero Cpn 3m | | | 8.58% | | | | 9.62% | | | | 10.20% | |
10 yr bond | | | 7.61% | | | | 8.58% | | | | 8.88% | |
New Russian Ruble | | | 56.99 | | | | 63.29 | | | | 64.68 | |
U.S. $ Bonds** | | | | | | | | | | | | |
Mexico | | | 3.67% | | | | 3.40% | | | | 3.51% | |
Indonesia | | | 3.78% | | | | 3.59% | | | | 3.96% | |
Argentina | | | 6.08% | | | | n/a | | | | n/a | |
Romania | | | 3.38% | | | | 2.99% | | | | 3.45% | |
* | | The currencies are quoted Asian currency per U.S. Dollar. The Australian and New Zealand Dollars are quoted U.S. Dollars per currency. |
Aberdeen Global Income Fund, Inc.
9
Portfolio of Investments (unaudited)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
CORPORATE BONDS—68.5% | |
ARGENTINA—0.2% | |
USD | | | 150 | | | Genneia SA, 8.75%, 01/20/2020 (a)(b) | | | | | | $ | 160,875 | |
BANGLADESH—0.3% | |
USD | | | 200 | | | Banglalink Digital Communications Ltd., 8.63%, 05/29/2017 (a)(b) | | | | | | | 208,820 | |
BARBADOS—0.3% | |
USD | | | 210 | | | Sagicor Finance 2015 Ltd., 8.88%, 08/11/2019 (a)(b) | | | | | | | 235,200 | |
BELGIUM—0.2% | |
EUR | | | 120 | | | KBC Group NV, 5.63%, 03/19/2019 (a)(b)(c)(d)(e) | | | | | | | 134,438 | |
BRAZIL—2.7% | |
USD | | | 130 | | | JBS USA LUX SA / JBS USA Finance, Inc., 5.75%, 06/15/2020 (a)(b) | | | | | | | 134,225 | |
USD | | | 420 | | | OAS Finance Ltd., 8.88%, 04/25/2018 (a)(b)(c)(f)(g) | | | | | | | 23,100 | |
USD | | | 490 | | | Petrobras Global Finance BV, 5.38%, 01/27/2021 | | | | | | | 503,401 | |
USD | | | 640 | | | Petrobras Global Finance BV, 8.38%, 05/23/2021 | | | | | | | 724,800 | |
USD | | | 109 | | | QGOG Atlantic, 5.25%, 05/30/2017 (a)(b)(h) | | | | | | | 107,393 | |
USD | | | 280 | | | QGOG Constellation SA, 6.25%, 05/30/2017 (a)(b) | | | | | | | 203,000 | |
USD | | | 400 | | | Vale Overseas Ltd., 6.88%, 11/21/2036 | | | | | | | 433,500 | |
| | | | | | | | | | | | | 2,129,419 | |
CANADA—1.4% | |
USD | | | 200 | | | First Quantum Minerals Ltd., 7.25%, 10/01/2019 (a)(b) | | | | | | | 203,625 | |
USD | | | 411 | | | Gateway Casinos & Entertainment Ltd., 8.25%, 03/01/2020 (a)(b) | | | | | | | 420,247 | |
USD | | | 209 | | | MEG Energy Corp., 6.38%, 07/30/2017 (a)(b) | | | | | | | 183,920 | |
USD | | | 54 | | | MEG Energy Corp., 6.50%, 01/15/2020 (a)(b) | | | | | | | 53,325 | |
USD | | | 145 | | | MEG Energy Corp., 7.00%, 09/30/2018 (a)(b) | | | | | | | 129,413 | |
USD | | | 146 | | | Telesat Canada / Telesat LLC, 8.88%, 11/15/2019 (a)(b) | | | | | | | 160,600 | |
| | | | | | | | | | | | | 1,151,130 | |
CHINA—3.4% | |
USD | | | 200 | | | 361 Degrees International Ltd., 7.25%, 06/03/2019 (a)(b) | | | | | | | 216,220 | |
USD | | | 200 | | | China Aoyuan Property Group Ltd., 6.35%, 01/11/2020 (a) | | | | | | | 206,505 | |
CNH | | | 3,000 | | | China Development Bank, 3.35%, 09/19/2017 | | | | | | | 433,508 | |
USD | | | 200 | | | China Hongqiao Group Ltd., 7.63%, 06/26/2017 (a) | | | | | | | 198,001 | |
USD | | | 200 | | | Future Land Development Holdings Ltd., 5.00%, 02/16/2020 (a) | | | | | | | 201,246 | |
USD | | | 200 | | | FUXIANG Investment Management Ltd., 3.63%, 11/30/2019 (a) | | | | | | | 200,876 | |
USD | | | 200 | | | Proven Honour Capital Ltd., 4.13%, 05/06/2026 (a) | | | | | | | 201,900 | |
USD | | | 330 | | | Sinopec Group Overseas Development 2017 Ltd., 2.38%, 04/12/2020 (a) | | | | | | | 329,112 | |
USD | | | 330 | | | Sinopec Group Overseas Development 2017 Ltd., 3.00%, 04/12/2022 (a) | | | | | | | 331,048 | |
USD | | | 200 | | | Tencent Holdings Ltd., 3.80%, 02/11/2025 (a) | | | | | | | 206,299 | |
USD | | | 200 | | | Yestar Healthcare Holdings Co, Ltd., 6.90%, 09/15/2019 (a)(b) | | | | | | | 209,373 | |
| | | | | | | | | | | | | 2,734,088 | |
COLOMBIA—0.2% | |
USD | | | 155 | | | Banco GNB Sudameris SA, 6.50%, 04/03/2022 (a)(b)(e) | | | | | | | 159,914 | |
DOMINICAN REPUBLIC—0.5% | |
USD | | | 400 | | | AES Andres BV / Dominican Power Partners / Empresa Generadora de Electricidad It, 7.95%, 05/11/2021 (a)(b) | | | | | | | 430,672 | |
EGYPT—1.1% | |
EGP | | | 16,600 | | | Egypt T-Bill, HSBC Credit Linked Note, Zero Coupon, 09/21/2017 (a) | | | | | | | 854,555 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
10
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
CORPORATE BONDS (continued) | |
EL SALVADOR—0.3% | |
USD | | | 232 | | | Grupo Unicomer Co. Ltd., 7.88%, 04/01/2021 (a)(b) | | | | | | $ | 249,980 | |
FRANCE—1.2% | |
EUR | | | 100 | | | La Financiere Atalian SAS, 4.00%, 05/15/2020 (a)(b) | | | | | | | 108,930 | |
EUR | | | 270 | | | Novafives SAS, 4.50%, 06/30/2017 (a)(b) | | | | | | | 296,317 | |
USD | | | 515 | | | SFR Group SA, 6.00%, 05/29/2017 (a)(b) | | | | | | | 536,887 | |
| | | | | | | | | | | | | 942,134 | |
GEORGIA—1.1% | |
USD | | | 200 | | | BGEO Group JSC, 6.00%, 07/26/2023 (a) | | | | | | | 201,250 | |
USD | | | 250 | | | Georgian Oil and Gas Corp., 6.75%, 04/26/2021 (a) | | | | | | | 262,550 | |
USD | | | 400 | | | Georgian Railway JSC, 7.75%, 07/11/2022 (a) | | | | | | | 439,668 | |
| | | | | | | | | | | | | 903,468 | |
GERMANY—0.5% | |
EUR | | | 245 | | | ALBA Group PLC & Co. KG, 8.00%, 05/15/2017 (a)(b) | | | | | | | 266,406 | |
EUR | | | 117 | | | Senvion Holding GmbH, 3.88%, 05/01/2019 (a)(b) | | | | | | | 127,658 | |
| | | | | | | | | | | | | 394,064 | |
GREECE—0.2% | |
EUR | | | 150 | | | Intralot Capital Luxembourg SA, 6.00%, 05/30/2017 (a)(b) | | | | | | | 167,379 | |
GUATEMALA—0.3% | |
USD | | | 200 | | | Comcel Trust via Comunicaciones Celulares SA, 6.88%, 02/06/2019 (a)(b) | | | | | | | 211,956 | |
HONG KONG—0.8% | |
USD | | | 200 | | | China Water Affairs Group Ltd., 5.25%, 02/07/2020 (a)(b) | | | | | | | 204,210 | |
USD | | | 200 | | | Hongkong Electric Finance Ltd., 2.88%, 05/03/2026 (a) | | | | | | | 191,548 | |
USD | | | 210 | | | Shimao Property Holdings Ltd., 8.38%, 02/10/2019 (a)(b) | | | | | | | 233,883 | |
| | | | | | | | | | | | | 629,641 | |
INDIA—4.6% | |
INR | | | 50,000 | | | Axis Bank Ltd., 7.60%, 10/20/2023 | | | | | | | 768,423 | |
USD | | | 200 | | | GCX Ltd., 7.00%, 05/30/2017 (a)(b) | | | | | | | 204,991 | |
INR | | | 50,000 | | | Housing Development Finance Corp. Ltd., 7.90%, 08/24/2026 | | | | | | | 756,384 | |
INR | | | 50,000 | | | Indiabulls Housing Finance Ltd., 9.00%, 09/26/2026 | | | | | | | 781,091 | |
USD | | | 200 | | | Neerg Energy Ltd., 6.00%, 02/13/2020 (a)(b) | | | | | | | 201,975 | |
INR | | | 50,000 | | | Power Finance Corp. Ltd., 7.63%, 08/14/2026 | | | | | | | 761,677 | |
USD | | | 200 | | | UPL Corp. Ltd., 3.25%, 10/13/2021 (a) | | | | | | | 199,520 | |
| | | | | | | | | | | | | 3,674,061 | |
INDONESIA—1.7% | |
USD | | | 200 | | | Indika Energy Capital II Pte Ltd., 6.88%, 04/10/2020 (a)(b) | | | | | | | 198,637 | |
USD | | | 370 | | | Pertamina Persero PT, 4.30%, 05/20/2023 (a) | | | | | | | 380,671 | |
USD | | | 560 | | | Pertamina Persero PT, 5.63%, 05/20/2043 (a) | | | | | | | 576,508 | |
USD | | | 200 | | | TBG Global Pte Ltd., 5.25%, 02/10/2019 (a)(b) | | | | | | | 205,478 | |
| | | | | | | | | | | | | 1,361,294 | |
ITALY—0.6% | |
USD | | | 440 | | | Wind Acquisition Finance SA, 7.38%, 06/13/2017 (a)(b) | | | | | | | 457,600 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
11
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
CORPORATE BONDS (continued) | |
KAZAKHSTAN—1.2% | |
USD | | | 200 | | | KazMunayGas National Co. JSC, 7.00%, 05/05/2020 (a) | | | | | | $ | 219,555 | |
USD | | | 216 | | | Tengizchevroil Finance Co. International Ltd., 4.00%, 08/15/2026 (a)(h) | | | | | | | 208,764 | |
USD | | | 510 | | | Zhaikmunai LLP, 7.13%, 05/30/2017 (a)(b) | | | | | | | 499,408 | |
| | | | | | | | | | | | | 927,727 | |
KUWAIT—0.3% | |
USD | | | 200 | | | Equate Petrochemical BV, 3.00%, 03/03/2022 (a) | | | | | | | 198,820 | |
LUXEMBOURG—2.3% | |
USD | | | 400 | | | Altice Financing SA, 7.50%, 05/15/2021 (a)(b) | | | | | | | 432,000 | |
EUR | | | 275 | | | Altice Luxembourg SA, 7.25%, 05/30/2017 (a)(b) | | | | | | | 316,482 | |
EUR | | | 340 | | | ARD Finance SA, 6.63%, 09/15/2019 (a)(b)(i) | | | | | | | 384,713 | |
EUR | | | 100 | | | DEA Finance SA, 7.50%, 04/15/2019 (a)(b) | | | | | | | 116,537 | |
EUR | | | 175 | | | DEA Finance SA, 7.50%, 04/15/2019 (a)(b) | | | | | | | 203,939 | |
EUR | | | 120 | | | INEOS Group Holdings SA, 5.38%, 08/01/2019 (a)(b) | | | | | | | 138,861 | |
USD | | | 225 | | | Trinseo Materials Operating SCA / Trinseo Materials Finance, Inc., 6.75%, 05/01/2018 (a)(b) | | | | | | | 237,375 | |
| | | | | | | | | | | | | 1,829,907 | |
MALAYSIA—0.9% | |
CNH | | | 1,000 | | | Cagamas Global PLC., 3.70%, 09/22/2017 | | | | | | | 143,109 | |
USD | | | 200 | | | Gohl Capital Ltd., 4.25%, 01/24/2027 (a) | | | | | | | 203,275 | |
USD | | | 200 | | | RHB Bank Bhd, 2.50%, 10/06/2021 (a) | | | | | | | 195,655 | |
USD | | | 200 | | | TNB Global Ventures Capital Bhd, 3.24%, 10/19/2026 (a) | | | | | | | 193,191 | |
| | | | | | | | | | | | | 735,230 | |
MEXICO—1.3% | |
USD | | | 250 | | | Alfa SAB de CV, 6.88%, 09/25/2043 (a)(b) | | | | | | | 261,875 | |
USD | | | 200 | | | Cemex SAB de CV, 7.75%, 04/16/2021 (a)(b) | | | | | | | 228,000 | |
USD | | | 280 | | | Petroleos Mexicanos, 6.63%, 06/15/2035 | | | | | | | 291,200 | |
USD | | | 250 | | | Unifin Financiera SAB de CV SOFOM ENR, 7.25%, 09/27/2020 (a)(b) | | | | | | | 256,250 | |
| | | | | | | | | | | | | 1,037,325 | |
NETHERLANDS—1.3% | |
USD | | | 415 | | | Constellium NV, 8.00%, 01/15/2018 (a)(b) | | | | | | | 428,903 | |
USD | | | 200 | | | GTH Finance BV, 7.25%, 01/26/2023 (a)(b) | | | | | | | 219,020 | |
USD | | | 410 | | | Ziggo Secured Finance BV, 5.50%, 01/15/2022 (a)(b) | | | | | | | 420,262 | |
| | | | | | | | | | | | | 1,068,185 | |
NIGERIA—0.5% | |
USD | | | 210 | | | Access Bank PLC, 10.50%, 10/19/2021 (a) | | | | | | | 222,991 | |
USD | | | 200 | | | Ihs Netherlands Holdco BV, 9.50%, 10/27/2018 (a)(b) | | | | | | | 208,656 | |
| | | | | | | | | | | | | 431,647 | |
PARAGUAY—0.3% | |
USD | | | 250 | | | Banco Regional SAECA, 8.13%, 01/24/2019 (a) | | | | | | | 265,000 | |
PERU—0.2% | |
USD | | | 190 | | | InRetail Consumer, 5.25%, 10/10/2018 (a)(b) | | | | | | | 192,938 | |
RUSSIA—1.4% | |
USD | | | 210 | | | Credit Bank of Moscow Via CBOM Finance PLC, 7.50%, 10/05/2022 (a)(b)(e) | | | | | | | 212,215 | |
USD | | | 301 | | | Evraz Group SA, 5.38%, 03/20/2023 (a) | | | | | | | 302,866 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
12
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
CORPORATE BONDS (continued) | |
RUSSIA (continued) | |
USD | | | 310 | | | Gazprom Neft OAO Via GPN Capital SA, 4.38%, 09/19/2022 (a) | | | | | | $ | 313,875 | |
USD | | | 270 | | | Vimpel Communications Via VIP Finance Ireland Ltd. OJSC, 7.75%, 02/02/2021 (a) | | | | | | | 305,492 | |
| | | | | | | | | | | | | 1,134,448 | |
SINGAPORE—0.5% | |
USD | | | 200 | | | DBS Group Holdings Ltd., 3.60%, 09/07/2021 (a)(b)(c)(e) | | | | | | | 196,700 | |
USD | | | 200 | | | United Overseas Bank Ltd., 3.50%, 09/16/2021 (a)(b)(e) | | | | | | | 201,708 | |
| | | | | | | | | | | | | 398,408 | |
SOUTH AFRICA—0.5% | |
USD | | | 200 | | | MTN Mauritius Investment Ltd., 6.50%, 10/13/2026 (a) | | | | | | | 205,600 | |
| | | | | | | | | | | | | | |
USD | | | 200 | | | Petra Diamonds US Treasury PLC, 7.25%, 05/01/2019 (a)(b) | | | | | | | 209,000 | |
| | | | | | | | | | | | | 414,600 | |
SPAIN—1.1% | |
EUR | | | 100 | | | Codere Finance 2 Luxembourg SA, 6.75%, 10/31/2018 (a)(b) | | | | | | | 110,564 | |
EUR | | | 100 | | | Codere Finance 2 Luxembourg SA, 6.75%, 10/31/2018 (a)(b) | | | | | | | 110,564 | |
EUR | | | 390 | | | Obrascon Huarte Lain SA, 4.75%, 03/15/2018 (a)(b) | | | | | | | 356,039 | |
EUR | | | 300 | | | OHL Investments SA, 4.00%, 04/25/2018 (a) | | | | | | | 316,578 | |
| | | | | | | | | | | | | 893,745 | |
SUPRANATIONAL—0.5% | |
INR | | | 23,400 | | | International Bank for Reconstruction & Development, 6.38%, 08/07/2018 | | | | | | | 364,695 | |
SWITZERLAND—0.1% | |
EUR | | | 100 | | | Selecta Group BV, 6.50%, 05/29/2017 (a)(b) | | | | | | | 108,843 | |
THAILAND—0.5% | |
USD | | | 200 | | | PTT Global Chemical PCL, 4.25%, 09/19/2022 (a) | | | | | | | 210,691 | |
USD | | | 200 | | | PTTEP Canada International Finance Ltd., 5.69%, 04/05/2021 (a) | | | | | | | 221,189 | |
| | | | | | | | | | | | | 431,880 | |
TURKEY—0.8% | |
USD | | | 220 | | | Akbank T.A.S., 5.13%, 03/31/2025 (a) | | | | | | | 215,601 | |
USD | | | 209 | | | Turkiye Vakiflar Bankasi TAO, 6.00%, 11/01/2022 (a) | | | | | | | 207,817 | |
USD | | | 250 | | | Yasar Holdings AS, 8.88%, 11/06/2017 (a)(b) | | | | | | | 255,618 | |
| | | | | | | | | | | | | 679,036 | |
UKRAINE—0.3% | |
USD | | | 210 | | | Ukreximbank Via Biz Finance PLC, 9.63%, 04/27/2022 (a)(h) | | | | | | | 213,465 | |
UNITED KINGDOM—4.1% | |
GBP | | | 98 | | | Annington Finance No 5 PLC, 13.00%, 01/15/2018 (a)(b)(i) | | | | | | | 142,060 | |
GBP | | | 100 | | | Boparan Finance PLC, 5.50%, 07/15/2017 (a)(b) | | | | | | | 129,520 | |
GBP | | | 110 | | | Cabot Financial Luxembourg SA, 6.50%, 05/30/2017 (a)(b) | | | | | | | 147,028 | |
EUR | | | 130 | | | Corral Petroleum Holdings, 11.75%, 05/15/2019 (a)(b)(i) | | | | | | | 149,380 | |
GBP | | | 110 | | | CYBG PLC, 5.00%, 02/08/2021 (a)(b)(d)(e) | | | | | | | 141,575 | |
GBP | | | 200 | | | CYBG PLC, 8.00%, 12/08/2022 (a)(b)(c)(d)(e) | | | | | | | 255,968 | |
USD | | | 200 | | | HSBC Holdings PLC, 6.38%, 09/17/2024 (b)(c)(e) | | | | | | | 207,000 | |
USD | | | 365 | | | Inmarsat Finance PLC, 4.88%, 05/30/2017 (a)(b) | | | | | | | 368,650 | |
GBP | | | 100 | | | Lloyds Bank PLC, 13.00%, 01/21/2029 (b)(c)(d)(e) | | | | | | | 238,317 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
13
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
CORPORATE BONDS (continued) | |
UNITED KINGDOM (continued) | |
GBP | | | 125 | | | Matalan Finance PLC, 6.88%, 05/08/2017 (a)(b) | | | | | | $ | 140,839 | |
GBP | | | 115 | | | New Look Secured Issuer PLC, 6.50%, 06/24/2018 (a)(b) | | | | | | | 130,329 | |
GBP | | | 185 | | | Paragon Group of Cos. PLC, 7.25%, 09/09/2021 (a)(b)(d)(e) | | | | | | | 253,357 | |
GBP | | | 150 | | | Phoenix Group Holdings, 6.63%, 12/18/2025 | | | | | | | 214,365 | |
GBP | | | 210 | | | Pizzaexpress Financing 2 PLC, 6.63%, 08/01/2017 (a)(b) | | | | | | | 281,512 | |
USD | | | 200 | | | Polyus Gold International Ltd., 5.25%, 02/07/2023 (a) | | | | | | | 204,000 | |
GBP | | | 207 | | | Virgin Media Secured Finance PLC, 5.50%, 01/15/2019 (a)(b) | | | | | | | 282,852 | |
| | | | | | | | | | | | | 3,286,752 | |
UNITED STATES—28.7% | |
USD | | | 216 | | | Airxcel, Inc., 8.50%, 02/15/2019 (a)(b) | | | | | | | 222,480 | |
USD | | | 367 | | | Albertsons Cos. LLC / Safeway, Inc. / New Albertson’s, Inc. / Albertson’s LLC, 6.63%, 06/15/2019 (a)(b) | | | | | | | 375,257 | |
EUR | | | 120 | | | Alliance Data Systems Corp., 5.25%, 11/15/2018 (a)(b) | | | | | | | 137,938 | |
USD | | | 123 | | | Alliance Data Systems Corp., 5.88%, 11/01/2018 (a)(b) | | | | | | | 127,305 | |
USD | | | 200 | | | Altice US Finance I Corp., 5.38%, 07/15/2018 (a)(b) | | | | | | | 208,750 | |
GBP | | | 100 | | | AMC Entertainment Holdings, 6.38%, 11/15/2019 (a)(b) | | | | | | | 137,973 | |
GBP | | | 100 | | | AMC Entertainment Holdings, Inc., 6.38%, 11/15/2019 (a)(b) | | | | | | | 137,973 | |
USD | | | 298 | | | American Airlines 2013-2, Class B Pass Through Trust, 5.60%, 01/15/2020 (a)(h) | | | | | | | 309,725 | |
USD | | | 380 | | | American Axle & Manufacturing, Inc., 6.25%, 04/01/2020 (a)(b) | | | | | | | 378,100 | |
USD | | | 242 | | | American Builders & Contractors Supply Co., Inc., 5.75%, 12/15/2018 (a)(b) | | | | | | | 257,730 | |
USD | | | 100 | | | AmeriGas Partners LP / AmeriGas Finance Corp., 5.88%, 05/20/2026 (b) | | | | | | | 101,500 | |
USD | | | 353 | | | Avis Budget Car Rental LLC / Avis Budget Finance, Inc., 5.50%, 04/01/2018 (b) | | | | | | | 347,705 | |
USD | | | 298 | | | Bank of America Corp., 6.25%, 09/05/2024 (b)(c)(d)(e) | | | | | | | 319,638 | |
USD | | | 400 | | | Blue Racer Midstream LLC / Blue Racer Finance Corp., 6.13%, 11/15/2017 (a)(b) | | | | | | | 410,000 | |
USD | | | 240 | | | Boyd Gaming Corp., 6.38%, 04/01/2021 (b) | | | | | | | 258,600 | |
USD | | | 260 | | | CalAtlantic Group, Inc., 5.25%, 12/01/2025 (b) | | | | | | | 267,150 | |
USD | | | 95 | | | Callon Petroleum Co., 6.13%, 10/01/2019 (a)(b) | | | | | | | 99,513 | |
USD | | | 260 | | | Calpine Corp., 5.75%, 10/15/2019 (b) | | | | | | | 251,550 | |
USD | | | 217 | | | Carrizo Oil & Gas, Inc., 6.25%, 04/15/2018 (b) | | | | | | | 218,628 | |
USD | | | 525 | | | CCO Holdings LLC / CCO Holdings Capital Corp., 5.75%, 02/15/2021 (a)(b) | | | | | | | 557,644 | |
USD | | | 495 | | | Cengage Learning, Inc., 9.50%, 06/15/2019 (a)(b) | | | | | | | 446,737 | |
USD | | | 100 | | | CenturyLink, Inc., 5.63%, 04/01/2020 | | | | | | | 106,125 | |
USD | | | 150 | | | Cenveo Corp., 6.00%, 02/01/2019 (a)(b) | | | | | | | 122,250 | |
USD | | | 92 | | | Change Healthcare Holdings LLC / Change Healthcare Finance, Inc., 5.75%, 03/01/2020 (a)(b) | | | | | | | 94,415 | |
USD | | | 374 | | | Cheniere Corpus Christi Holdings LLC, 5.88%, 03/31/2025 (a) | | | | | | | 398,310 | |
USD | | | 430 | | | Citgo Holding, Inc., 10.75%, 02/15/2020 (a) | | | | | | | 461,175 | |
USD | | | 110 | | | Cogent Communications Group, Inc., 5.38%, 12/01/2021 (a)(b) | | | | | | | 113,575 | |
USD | | | 279 | | | Compass Minerals International, Inc., 4.88%, 05/15/2024 (a)(b) | | | | | | | 272,723 | |
USD | | | 341 | | | Continental Resources, Inc., 3.80%, 03/01/2024 (b) | | | | | | | 320,540 | |
USD | | | 225 | | | CSC Holdings LLC, 10.88%, 10/15/2020 (a)(b) | | | | | | | 270,281 | |
USD | | | 302 | | | DISH DBS Corp., 5.88%, 11/15/2024 | | | | | | | 317,100 | |
USD | | | 210 | | | Dynegy, Inc., 7.63%, 11/01/2019 (b) | | | | | | | 192,150 | |
USD | | | 320 | | | EMI Music Publishing Group North America Holdings, Inc., 7.63%, 06/15/2019 (a)(b) | | | | | | | 353,600 | |
USD | | | 290 | | | Endo Dac / Endo Finance LLC / Endo Finco, Inc., 6.00%, 07/15/2018 (a)(b) | | | | | | | 254,113 | |
USD | | | 300 | | | Equinix, Inc., 5.38%, 04/01/2018 (b) | | | | | | | 312,375 | |
USD | | | 367 | | | First Data Corp., 5.38%, 08/15/2018 (a)(b) | | | | | | | 381,680 | |
USD | | | 373 | | | Fresh Market, Inc. (The), 9.75%, 05/01/2019 (a)(b) | | | | | | | 309,944 | |
USD | | | 494 | | | Frontier Communications Corp., 6.88%, 10/15/2024 (b) | | | | | | | 411,378 | |
USD | | | 380 | | | Gardner Denver, Inc., 6.88%, 05/30/2017 (a)(b) | | | | | | | 394,250 | |
USD | | | 307 | | | Goldman Sachs Group, Inc. (The), 5.38%, 05/10/2020 (b)(c)(d)(e) | | | | | | | 318,282 | |
USD | | | 20 | | | Grinding Media, Inc. / MC Grinding Media Canada, Inc., 7.38%, 12/15/2019 (a)(b) | | | | | | | 21,336 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
14
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
CORPORATE BONDS (continued) | |
UNITED STATES (continued) | |
USD | | | 115 | | | Hardwoods Acquisition, Inc., 7.50%, 08/01/2017 (a)(b) | | | | | | $ | 104,650 | |
USD | | | 299 | | | HCA, Inc., 5.88%, 08/15/2025 (b) | | | | | | | 317,687 | |
USD | | | 115 | | | HCA, Inc., 7.50%, 02/15/2022 | | | | | | | 132,296 | |
USD | | | 301 | | | HD Supply, Inc., 5.75%, 04/15/2019 (a)(b) | | | | | | | 319,812 | |
USD | | | 189 | | | Hilcorp Energy I LP / Hilcorp Finance Co., 5.75%, 04/01/2020 (a)(b) | | | | | | | 183,330 | |
USD | | | 157 | | | JC Penney Corp., Inc., 5.88%, 07/01/2019 (a)(b) | | | | | | | 158,570 | |
USD | | | 291 | | | KB Home, 7.00%, 09/15/2021 (b) | | | | | | | 325,192 | |
USD | | | 130 | | | Kindred Healthcare, Inc., 8.75%, 01/15/2018 (b) | | | | | | | 133,413 | |
USD | | | 131 | | | Kratos Defense & Security Solutions, Inc., 7.00%, 05/30/2017 (b) | | | | | | | 131,328 | |
USD | | | 336 | | | Landry’s, Inc., 6.75%, 10/15/2019 (a)(b) | | | | | | | 351,960 | |
USD | | | 185 | | | Lennar Corp., 4.88%, 09/15/2023 (b) | | | | | | | 191,475 | |
USD | | | 312 | | | Level 3 Financing, Inc., 5.13%, 05/01/2018 (b) | | | | | | | 320,190 | |
USD | | | 185 | | | Level 3 Financing, Inc., 5.38%, 05/01/2020 (b) | | | | | | | 192,863 | |
USD | | | 325 | | | MGM Resorts International, 4.63%, 06/01/2026 (b) | | | | | | | 324,187 | |
USD | | | 190 | | | Morgan Stanley, 5.55%, 07/15/2020 (b)(c)(d)(e) | | | | | | | 198,906 | |
USD | | | 305 | | | NCR Corp., 6.38%, 12/15/2018 (b) | | | | | | | 326,960 | |
USD | | | 110 | | | Neiman Marcus Group Ltd., LLC, 8.00%, 05/30/2017 (a)(b) | | | | | | | 64,350 | |
USD | | | 329 | | | New Enterprise Stone & Lime Co., Inc., 10.13%, 04/01/2019 (a)(b) | | | | | | | 348,740 | |
USD | | | 320 | | | NewStar Financial, Inc., 7.25%, 05/30/2017 (b) | | | | | | | 330,000 | |
USD | | | 250 | | | NRG Energy, Inc., 7.25%, 05/15/2021 (b) | | | | | | | 255,625 | |
USD | | | 130 | | | Oasis Petroleum, Inc., 6.50%, 05/30/2017 (b) | | | | | | | 131,300 | |
USD | | | 310 | | | Oasis Petroleum, Inc., 6.88%, 07/15/2017 (b) | | | | | | | 313,100 | |
USD | | | 45 | | | Park-Ohio Industries, Inc., 6.63%, 04/15/2022 (a)(b) | | | | | | | 46,125 | |
USD | | | 322 | | | Post Holdings, Inc., 5.00%, 08/15/2021 (a)(b) | | | | | | | 320,390 | |
USD | | | 594 | | | Rite Aid Corp., 6.13%, 04/01/2018 (a)(b) | | | | | | | 588,060 | |
USD | | | 442 | | | Sabine Pass Liquefaction LLC, 5.63%, 12/01/2024 (b) | | | | | | | 483,204 | |
USD | | | 240 | | | Scientific Games International, Inc., 7.00%, 01/01/2018 (a)(b) | | | | | | | 256,949 | |
USD | | | 255 | | | Sinclair Television Group, Inc., 5.63%, 08/01/2019 (a)(b) | | | | | | | 265,162 | |
USD | | | 245 | | | Springs Industries, Inc., 6.25%, 05/30/2017 (b) | | | | | | | 252,656 | |
USD | | | 289 | | | Sprint Corp., 7.88%, 09/15/2023 | | | | | | | 324,402 | |
USD | | | 120 | | | Standard Industries, Inc., 5.38%, 11/15/2019 (a)(b) | | | | | | | 125,100 | |
USD | | | 120 | | | State Street Corp., 2.13%, 05/30/2017 (b)(e) | | | | | | | 105,450 | |
USD | | | 304 | | | Summit Materials LLC / Summit Materials Finance Corp, 6.13%, 07/15/2018 (b) | | | | | | | 318,440 | |
USD | | | 312 | | | Sunoco LP / Sunoco Finance Corp., 6.25%, 04/15/2018 (b) | | | | | | | 329,547 | |
USD | | | 360 | | | T-Mobile USA, Inc., 6.00%, 04/15/2019 (b) | | | | | | | 390,060 | |
USD | | | 330 | | | Tenet Healthcare Corp., 8.13%, 04/01/2022 | | | | | | | 334,950 | |
USD | | | 255 | | | TerraForm Power Operating LLC, 6.38%, 02/01/2018 (a)(b)(j) | | | | | | | 263,606 | |
USD | | | 183 | | | Ultra Resources, Inc., 6.88%, 04/15/2019 (a)(b) | | | | | | | 185,059 | |
USD | | | 303 | | | United Rentals North America, Inc., 5.50%, 07/15/2020 (b) | | | | | | | 316,917 | |
USD | | | 60 | | | United Rentals North America, Inc., 6.13%, 12/15/2017 (b) | | | | | | | 62,700 | |
USD | | | 400 | | | Valeant Pharmaceuticals International, Inc., 6.38%, 05/30/2017 (a)(b) | | | | | | | 343,500 | |
USD | | | 154 | | | Vector Group Ltd., 6.13%, 02/01/2020 (a)(b) | | | | | | | 159,390 | |
USD | | | 375 | | | Whiting Petroleum Corp., 5.00%, 12/15/2018 (b) | | | | | | | 378,750 | |
USD | | | 213 | | | WMG Acquisition Corp., 5.63%, 05/30/2017 (a)(b) | | | | | | | 222,053 | |
USD | | | 120 | | | WR Grace & Co-Conn, 5.13%, 10/01/2021 (a) | | | | | | | 128,850 | |
USD | | | 305 | | | XPO Logistics, Inc., 6.13%, 09/01/2019 (a)(b) | | | | | | | 320,250 | |
USD | | | 340 | | | Zayo Group LLC / Zayo Capital Inc, 6.38%, 05/15/2020 (b) | | | | | | | 367,625 | |
| | | | | | | | | | | | | 23,042,627 | |
VENEZUELA—0.1% | |
USD | | | 300 | | | Petroleos de Venezuela SA, 6.00%, 05/16/2024 (a)(h) | | | | | | | 118,599 | |
| | | | | | Total Corporate Bonds—68.5% (cost $54,099,717) | | | | | | | 54,964,565 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
15
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
GOVERNMENT BONDS—63.5% | |
ARGENTINA—4.1% | |
ARS | | | 18,330 | | | Argentine Bonos del Tesoro, 16.00%, 10/17/2023 | | | | | | $ | 1,277,431 | |
USD | | | 324 | | | Argentine Republic Government International Bond, 5.63%, 01/26/2022 | | | | | | | 337,446 | |
USD | | | 323 | | | Argentine Republic Government International Bond, 7.13%, 07/06/2036 | | | | | | | 326,876 | |
USD | | | 1,060 | | | Argentine Republic Government International Bond, 7.50%, 04/22/2026 | | | | | | | 1,161,230 | |
USD | | | 203 | | | Argentine Republic Government International Bond, 8.28%, 12/31/2033 (h) | | | | | | | 223,015 | |
| | | | | | | | | | | | | 3,325,998 | |
ARMENIA—0.5% | |
USD | | | 400 | | | Republic of Armenia, 6.00%, 09/30/2020 (a) | | | | | | | 420,480 | |
AUSTRALIA—9.5% | |
AUD | | | 5,200 | | | New South Wales Treasury Corp., 6.00%, 05/01/2030 | | | | | | | 5,062,971 | |
AUD | | | 3,500 | | | Queensland Treasury Corp., 2.75%, 08/20/2027 (a) | | | | | | | 2,527,080 | |
| | | | | | | | | | | | | 7,590,051 | |
AZERBAIJAN—0.5% | |
USD | | | 371 | | | Southern Gas Corridor CJSC, 6.88%, 03/24/2026 (a)(k) | | | | | | | 409,454 | |
BAHRAIN—0.5% | |
USD | | | 400 | | | Bahrain Government International Bond, 7.00%, 10/12/2028 (a) | | | | | | | 415,564 | |
BRAZIL—1.5% | |
BRL | | | 2,300 | | | Brazil Notas do Tesouro Nacional Series F, 10.00%, 01/01/2023 | | | | | | | 719,122 | |
USD | | | 400 | | | Brazilian Government International Bond, 7.13%, 01/20/2037 | | | | | | | 464,000 | |
| | | | | | | | | | | | | 1,183,122 | |
COLOMBIA—0.4% | |
USD | | | 200 | | | Colombia Government International Bond, 4.50%, 10/28/2025 (b) | | | | | | | 213,000 | |
USD | | | 120 | | | Colombia Government International Bond, 7.38%, 09/18/2037 | | | | | | | 154,320 | |
| | | | | | | | | | | | | 367,320 | |
COSTA RICA—0.3% | |
USD | | | 250 | | | Costa Rica Government International Bond, 4.25%, 01/26/2023 (a) | | | | | | | 242,813 | |
DOMINICAN REPUBLIC—2.3% | |
DOP | | | 41,000 | | | Dominican Republic Bond, 10.50%, 04/07/2023 (a) | | | | | | | 873,611 | |
USD | | | 210 | | | Dominican Republic International Bond, 5.88%, 04/18/2024 (a)(h) | | | | | | | 223,679 | |
USD | | | 100 | | | Dominican Republic International Bond, 6.88%, 01/29/2026 (a) | | | | | | | 111,542 | |
USD | | | 530 | | | Dominican Republic International Bond, 8.63%, 04/20/2027 (a)(h) | | | | | | | 632,147 | |
| | | | | | | | | | | | | 1,840,979 | |
ECUADOR—1.1% | |
USD | | | 850 | | | Ecuador Government International Bond, 9.65%, 12/13/2026 (a) | | | | | | | 864,875 | |
EGYPT—0.3% | |
USD | | | 200 | | | Egypt Government International Bond, 6.13%, 01/31/2022 (a) | | | | | | | 207,950 | |
EL SALVADOR—0.5% | |
USD | | | 440 | | | El Salvador Government International Bond, 7.65%, 06/15/2035 (a) | | | | | | | 400,400 | |
ETHIOPIA—0.6% | |
USD | | | 500 | | | Ethiopia International Bond, 6.63%, 12/11/2024 (a) | | | | | | | 494,250 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
16
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
GOVERNMENT BONDS (continued) | |
GHANA—0.3% | |
USD | | | 250 | | | Ghana Government International Bond, 8.13%, 01/18/2026 (a)(h) | | | | | | $ | 246,825 | |
HONDURAS—0.4% | |
USD | | | 330 | | | Honduras Government International Bond, 7.50%, 03/15/2024 (a)(h) | | | | | | | 365,683 | |
INDONESIA—5.0% | |
USD | | | 850 | | | Indonesia Government International Bond, 5.88%, 01/15/2024 (a) | | | | | | | 968,726 | |
USD | | | 200 | | | Indonesia Government International Bond, 6.75%, 01/15/2044 (a) | | | | | | | 256,647 | |
IDR | | | 10,000,000 | | | Indonesia Treasury Bond, 8.38%, 09/15/2026 | | | | | | | 815,515 | |
IDR | | | 10,200,000 | | | Indonesia Treasury Bond, 8.38%, 03/15/2034 | | | | | | | 811,929 | |
IDR | | | 14,000,000 | | | Indonesia Treasury Bond, 8.75%, 05/15/2031 | | | | | | | 1,160,627 | |
| | | | | | | | | | | | | 4,013,444 | |
IRAQ—0.9% | |
USD | | | 800 | | | Iraq International Bond, 5.80%, 06/12/2017 (a)(b)(h) | | | | | | | 715,000 | |
IVORY COAST—0.6% | |
USD | | | 490 | | | Ivory Coast Government International Bond, 5.75%, 06/30/2017 (a)(b)(j) | | | | | | | 469,910 | |
KAZAKHSTAN—1.7% | |
USD | | | 520 | | | Kazakhstan Government International Bond, 3.88%, 10/14/2024 (a) | | | | | | | 526,524 | |
USD | | | 820 | | | Kazakhstan Government International Bond, 4.88%, 10/14/2044 (a) | | | | | | | 812,515 | |
| | | | | | | | | | | | | 1,339,039 | |
MALAYSIA—1.6% | |
MYR | | | 2,625 | | | Malaysia Government Bond, 4.25%, 05/31/2035 | | | | | | | 584,014 | |
MYR | | | 3,175 | | | Malaysia Government Bond, 4.74%, 03/15/2046 | | | | | | | 722,395 | |
| | | | | | | | | | | | | 1,306,409 | |
MEXICO—1.9% | |
MXN | | | 4,550 | | | Mexican Bonos, 6.50%, 06/09/2022 | | | | | | | 235,647 | |
USD | | | 350 | | | Mexico Government International Bond, 6.05%, 01/11/2040 | | | | | | | 405,475 | |
USD | | | 390 | | | Petroleos Mexicanos, 6.50%, 06/02/2041 | | | | | | | 390,585 | |
USD | | | 130 | | | Petroleos Mexicanos, 6.63%, 06/15/2038 | | | | | | | 132,925 | |
USD | | | 159 | | | Petroleos Mexicanos, 6.88%, 08/04/2026 | | | | | | | 177,682 | |
MXN | | | 4,000 | | | Petroleos Mexicanos, 7.19%, 09/12/2024 (a) | | | | | | | 187,302 | |
| | | | | | | | | | | | | 1,529,616 | |
MONGOLIA—0.2% | |
USD | | | 200 | | | Mongolia Government International Bond, 5.13%, 12/05/2022 (a) | | | | | | | 191,009 | |
NEW ZEALAND—9.1% | |
NZD | | | 4,400 | | | New Zealand Government Bond, 2.75%, 04/15/2025 (a) | | | | | | | 2,970,042 | |
NZD | | | 6,000 | | | New Zealand Government Bond, 5.00%, 03/15/2019 (a) | | | | | | | 4,337,090 | |
| | | | | | | | | | | | | 7,307,132 | |
NIGERIA—0.3% | |
USD | | | 200 | | | Nigeria Government International Bond, 7.88%, 02/16/2032 (a) | | | | | | | 217,200 | |
OMAN—0.3% | |
USD | | | 200 | | | Oman Government International Bond, 6.50%, 03/08/2047 (a) | | | | | | | 215,439 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
17
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
GOVERNMENT BONDS (continued) | |
PARAGUAY—0.3% | |
USD | | | 200 | | | Paraguay Government International Bond, 5.00%, 04/15/2026 (a) | | | | | | $ | 210,000 | |
PERU—0.6% | |
PEN | | | 1,450 | | | Peruvian Government International Bond, 6.90%, 08/12/2037 (a) | | | | | | | 482,597 | |
PHILIPPINES—0.6% | |
PHP | | | 20,000 | | | Philippine Government International Bond, 6.25%, 01/14/2036 | | | | | | | 444,311 | |
USD | | | 40 | | | Philippine Government International Bond, 8.38%, 06/17/2019 | | | | | | | 45,560 | |
| | | | | | | | | | | | | 489,871 | |
ROMANIA—1.7% | |
USD | | | 1,090 | | | Romanian Government International Bond, 6.13%, 01/22/2044 (a) | | | | | | | 1,352,396 | |
RUSSIA—4.3% | |
RUB | | | 166,560 | | | Russian Federal Bond—OFZ, 7.05%, 01/19/2028 | | | | | | | 2,814,932 | |
USD | | | 200 | | | Russian Foreign Bond—Eurobond, 4.88%, 09/16/2023 (a) | | | | | | | 216,796 | |
USD | | | 380 | | | Vnesheconombank Via VEB Finance PLC, 6.80%, 11/22/2025 (a) | | | | | | | 424,209 | |
| | | | | | | | | | | | | 3,455,937 | |
RWANDA—0.7% | |
USD | | | 550 | | | Rwanda International Government Bond, 6.63%, 05/02/2023 (a) | | | | | | | 559,429 | |
SENEGAL—0.5% | |
USD | | | 330 | | | Senegal Government International Bond, 8.75%, 05/13/2021 (a) | | | | | | | 377,504 | |
SINGAPORE—0.9% | |
SGD | | | 1,000 | | | Singapore Government Bond, 2.13%, 06/01/2026 | | | | | | | 720,968 | |
SOUTH AFRICA—1.9% | |
USD | | | 1,030 | | | Republic of South Africa Government Bond, 4.88%, 04/14/2026 | | | | | | | 1,038,351 | |
USD | | | 100 | | | Republic of South Africa Government Bond, 6.25%, 03/08/2041 | | | | | | | 110,414 | |
ZAR | | | 4,730 | | | Republic of South Africa Government International Bond, 10.50%, 12/21/2026 | | | | | | | 395,054 | |
| | | | | | | | | | | | | 1,543,819 | |
SRI LANKA—1.3% | |
LKR | | | 160,000 | | | Sri Lanka Government Bonds, 10.60%, 09/15/2019 | | | | | | | 1,025,556 | |
SURINAME—0.2% | |
USD | | | 200 | | | Republic of Suriname, 9.25%, 10/26/2026 (a) | | | | | | | 202,000 | |
TANZANIA—0.2% | |
USD | | | 134 | | | Tanzania Government International Bond, 7.42%, 03/09/2020 (a)(d)(e)(h) | | | | | | | 140,643 | |
THAILAND—0.8% | |
THB | | | 20,000 | | | Thailand Government Bond, 3.65%, 06/20/2031 | | | | | | | 608,724 | |
TURKEY—2.4% | |
USD | | | 259 | | | Hazine Mustesarligi Varlik Kiralama, 5.00%, 04/06/2023 (a) | | | | | | | 263,921 | |
TRY | | | 3,150 | | | Turkey Government Bond, 10.40%, 03/20/2024 | | | | | | | 891,271 | |
USD | | | 200 | | | Turkey Government International Bond, 5.75%, 03/22/2024 | | | | | | | 212,123 | |
USD | | | 210 | | | Turkey Government International Bond, 6.00%, 03/25/2027 | | | | | | | 224,700 | |
USD | | | 320 | | | Turkey Government International Bond, 6.25%, 09/26/2022 | | | | | | | 347,716 | |
| | | | | | | | | | | | | 1,939,731 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
18
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
| | | | | | | | | | | | | | |
Principal Amount (000) | | | Description | | | | | Value (US$) | |
GOVERNMENT BONDS (continued) | |
UKRAINE—1.5% | |
USD | | | 810 | | | Ukraine Government International Bond, 7.75%, 09/01/2023 (a) | | | | | | $ | 782,217 | |
USD | | | 430 | | | Ukraine Government International Bond, 7.75%, 09/01/2024 (a) | | | | | | | 409,214 | |
| | | | | | | | | | | | | 1,191,431 | |
URUGUAY—0.6% | |
USD | | | 50 | | | Uruguay Government International Bond, 4.38%, 10/27/2027 (h) | | | | | | | 52,500 | |
USD | | | 146 | | | Uruguay Government International Bond, 7.63%, 03/21/2036 (h) | | | | | | | 192,173 | |
USD | | | 165 | | | Uruguay Government International Bond, 7.88%, 01/15/2033 | | | | | | | 218,773 | |
| | | | | | | | | | | | | 463,446 | |
VENEZUELA—0.3% | |
USD | | | 380 | | | Venezuela Government International Bond, 7.75%, 10/13/2019 (a) | | | | | | | 228,646 | |
ZAMBIA—0.3% | |
USD | | | 200 | | | Zambia Government International Bond, 8.97%, 07/30/2027 (a)(h) | | | | | | | 213,540 | |
| | | | | | Total Government Bonds—63.5% (cost $49,007,894) | | | | | | | 50,886,200 | |
| | | | | | | Shares or Principal Amount | | | Value | |
SHORT-TERM INVESTMENT (5.8%) | |
UNITED STATES (5.8%) | |
State Street Institutional U.S. Government Money Market Fund (l) | | | 4,603,746 | | | | 4,603,746 | |
| | | | | | Total Short-Term Investment—5.8% (cost $4,603,746) | | | | | | | 4,603,746 | |
| | | | | | Total Investments—137.8% (cost $107,711,357) | | | | | | | 110,454,511 | |
| | | | |
| | | | | | Liabilities in Excess of Other Assets—(37.8)% | | | | | | | (30,270,539 | ) |
| | | | | | Net Assets—100.0% | | | | | | $ | 80,183,972 | |
(a) | | Denotes a restricted security. |
(b) | | The maturity date presented for these instruments represents the next call/put date. |
(c) | | Perpetual bond. This is a bond that has no maturity date, is redeemable and pays a steady stream of interest indefinitely. The maturity date presented for these instruments represents the next call/put date. |
(d) | | The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. |
(e) | | Variable or Floating Rate Security. Rate disclosed is as of April 30, 2017. |
(f) | | Security is in default. |
(i) | | Payment-in-kind. This is a type of bond that pays interest in additional bonds rather than in cash. |
(j) | | Indicates a stepped coupon bond. This bond was issued with a low coupon that gradually increases over the life of the bond. |
(k) | | This security is government guaranteed. |
(l) | | Registered investment company advised by State Street Global Advisors. |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
19
Portfolio of Investments (unaudited) (continued)
As of April 30, 2017
|
ARS—Argentine Peso |
AUD—Australian Dollar |
BRL—Brazilian Real |
CAD—Canadian Dollar |
CNH—Chinese Yuan Renminbi Offshore |
DOP—Dominican peso |
EGP—Egyptian pound |
EUR—Euro Currency |
|
GBP—British Pound Sterling |
IDR—Indonesian Rupiah |
INR—Indian Rupee |
KRW—South Korean Won |
LKR—Sri Lanka Rupee |
MXN—Mexican Peso |
MYR—Malaysian Ringgit |
NZD—New Zealand Dollar |
|
PEN—Peruvian Sol |
PHP—Philippine Peso |
RUB—New Russian Ruble |
SGD—Singapore Dollar |
THB—Thai Baht |
TRY—Turkish Lira |
USD—U.S. Dollar |
ZAR—South African Rand |
At April 30, 2017, the Fund’s open forward foreign currency exchange contracts were as follows:
| | | | | | | | | | | | | | | | | | |
Purchase Contracts Settlement Date* | | Counterparty | | Amount Purchased | | | Amount Sold | | | Fair Value | | | Unrealized Appreciation/ (Depreciation) | |
British Pound/United States Dollar | |
06/01/2017 | | Barclays | | | GBP 24,000 | | | | USD 29,823 | | | $ | 31,109 | | | $ | 1,286 | |
Canadian Dollar/United States Dollar | |
05/10/2017 | | UBS | | | CAD 377,000 | | | | USD 282,244 | | | | 276,218 | | | | (6,026 | ) |
Chinese Yuan/United States Dollar | |
05/19/2017 | | Standard Chartered Bank | | | CNH 7,604,343 | | | | USD 1,100,000 | | | | 1,100,888 | | | | 888 | |
Euro/United States Dollar | |
05/10/2017 | | Citibank | | | EUR 491,500 | | | | USD 526,590 | | | | 535,568 | | | | 8,978 | |
05/10/2017 | | Royal Bank of Canada | | | EUR 247,000 | | | | USD 261,981 | | | | 269,146 | | | | 7,165 | |
Philippine Peso/United States Dollar | |
05/19/2017 | | Standard Chartered Bank | | | PHP 39,783,610 | | | | USD 790,000 | | | | 795,660 | | | | 5,660 | |
Singapore Dollar/United States Dollar | |
06/16/2017 | | Royal Bank of Canada | | | SGD 2,732,595 | | | | USD 1,950,000 | | | | 1,956,789 | | | | 6,789 | |
South Korean Won/United States Dollar | |
06/26/2017 | | Royal Bank of Canada | | | KRW 2,197,632,000 | | | | USD 1,940,000 | | | | 1,934,084 | | | | (5,916 | ) |
Thai Baht/United States Dollar | |
05/17/2017 | | Standard Chartered Bank | | | THB 45,009,770 | | | | USD 1,300,000 | | | | 1,301,127 | | | | 1,127 | |
| | | | | | | | | | | | $ | 8,200,589 | | | $ | 19,951 | |
Sale Contracts Settlement Date* | | Counterparty | | Amount Purchased | | | Amount Sold | | | Fair Value | | | Unrealized Appreciation/ (Depreciation) | |
United States Dollar/Australian Dollar | |
05/26/2017 | | Citibank | | | USD 750,000 | | | | AUD 983,355 | | | | 736,008 | | | | 13,992 | |
06/23/2017 | | Goldman Sachs | | | USD 3,100,000 | | | | AUD 4,082,869 | | | | 3,054,363 | | | | 45,637 | |
07/25/2017 | | Citibank | | | USD 750,000 | | | | AUD 984,413 | | | | 736,078 | | | | 13,922 | |
07/27/2017 | | UBS | | | USD 500,000 | | | | AUD 662,339 | | | | 495,239 | | | | 4,761 | |
United States Dollar/British Pound | |
06/01/2017 | | Citibank | | | USD 2,605,867 | | | | GBP 2,086,000 | | | | 2,703,896 | | | | (98,029 | ) |
United States Dollar/Canadian Dollar | |
05/10/2017 | | Royal Bank of Canada | | | USD 286,998 | | | | CAD 377,000 | | | | 276,218 | | | | 10,780 | |
United States Dollar/Egyptian Pound | |
05/24/2017 | | Citibank | | | USD 794,599 | | | | EGP 14,565,000 | | | | 805,236 | | | | (10,637 | ) |
United States Dollar/Euro | |
05/10/2017 | | Citibank | | | USD 3,324,470 | | | | EUR 3,096,500 | | | | 3,374,131 | | | | (49,661 | ) |
05/10/2017 | | Royal Bank of Canada | | | USD 103,654 | | | | EUR 97,500 | | | | 106,242 | | | | (2,588 | ) |
05/10/2017 | | UBS | | | USD 586,938 | | | | EUR 552,000 | | | | 601,492 | | | | (14,554 | ) |
* | | Certain contracts with different trade dates and like characteristics have been shown net. |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
20
Portfolio of Investments (unaudited) (concluded)
As of April 30, 2017
| | | | | | | | | | | | | | | | | | |
Sale Contracts Settlement Date* | | Counterparty | | Amount Purchased | | | Amount Sold | | | Fair Value | | | Unrealized Appreciation/ (Depreciation) | |
United States Dollar/New Zealand Dollar | |
05/19/2017 | | Credit Suisse | | | USD 4,000,000 | | | | NZD 5,444,103 | | | $ | 3,736,269 | | | $ | 263,731 | |
United States Dollar/South African Rand | |
07/14/2017 | | Citibank | | | USD 335,722 | | | | ZAR 4,705,000 | | | | 347,825 | | | | (12,103 | ) |
| | | | | | | | | | $16,972,997 | | | $165,251 | |
* | | Certain contracts with different trade dates and like characteristics have been shown net. |
At April 30, 2017, the Fund’s interest rate swaps were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
Currency | | Notional Amount | | | Expiration Date | | | Counterparty | | Receive (Pay) Floating Rate | | | Floating Rate Index | | Fixed Rate | | | Unrealized Appreciation/ (Depreciation) | |
Over-the-counter swap agreements: | | | | | | | | | | | | | | | | | |
USD | | | 16,500,000 | | | | 11/01/2017 | | | Barclays | | | Receive | | | 3-month LIBOR Index | | | 0.84% | | | $ | 11,248 | |
Centrally cleared swap agreements: | | | | | | | | | | | | | | | | | |
USD | | | 15,000,000 | | | | 11/04/2024 | | | Citibank | | | Receive | | | 3-month LIBOR Index | | | 2.44% | | | | (479,305 | ) |
| | | $ | (468,057 | ) |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
21
Statement of Assets and Liabilities (unaudited)
As of April 30, 2017
| | | | |
Assets | | | | |
Investments, at value (cost $103,107,611) | | $ | 105,850,765 | |
Short-term investments, at value (cost $4,603,746) | | | 4,603,746 | |
Foreign currency, at value (cost $1,239,458) | | | 1,237,356 | |
Cash at broker for interest rate swaps | | | 623,107 | |
Interest and dividends receivable | | | 1,663,622 | |
Receivable for investments sold | | | 640,707 | |
Unrealized appreciation on forward foreign currency exchange contracts | | | 384,716 | |
Due from broker | | | 16,906 | |
Unrealized appreciation on interest rate swaps | | | 11,248 | |
Prepaid expenses | | | 645 | |
Total assets | | | 115,032,818 | |
| |
Liabilities | | | | |
Bank loan payable (Note 7) | | | 31,500,000 | |
Payable for investments purchased | | | 2,013,985 | |
Due to custodian | | | 575,186 | |
Spot contract payable | | | 409,725 | |
Unrealized depreciation on forward foreign currency exchange contracts | | | 199,514 | |
Investment management fees payable (Note 3) | | | 59,566 | |
Variation margin payable for centrally cleared interest rate swap contracts | | | 14,241 | |
Administration fees payable (Note 3) | | | 11,455 | |
Investor relations fees payable (Note 3) | | | 7,277 | |
Deferred foreign capital gains tax | | | 6,968 | |
Interest payable on bank loan | | | 5,183 | |
Other accrued expenses | | | 45,746 | |
Total liabilities | | | 34,848,846 | |
| | | | |
Net Assets | | $ | 80,183,972 | |
| |
Composition of Net Assets: | | | | |
Common stock (par value $.001 per share) (Note 5) | | $ | 8,725 | |
Paid-in capital in excess of par | | | 93,158,310 | |
Distributions in excess of net investment income | | | (5,025,876 | ) |
Accumulated net realized loss from investments, interest rate swaps and futures contracts | | | (2,542,179 | ) |
Net unrealized appreciation on investments and interest rate swaps | | | 1,644,860 | |
Accumulated net realized foreign exchange losses | | | (7,874,273 | ) |
Net unrealized foreign exchange and forward foreign currency contract gains | | | 814,405 | |
Net Assets | | $ | 80,183,972 | |
Net asset value per share based on 8,724,789 shares issued and outstanding | | $ | 9.19 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
22
Statement of Operations (unaudited)
For the Six-Month Period Ended April 30, 2017
| | | | |
Net Investment Income | | | | |
| |
Income | | | | |
Interest and amortization of discount and premium and other income (net of foreign withholding taxes of $33,987) | | $ | 3,029,132 | |
| | | 3,029,132 | |
| |
Expenses | | | | |
Investment management fee (Note 3) | | | 355,799 | |
Directors’ fees and expenses | | | 111,906 | |
Administration fee (Note 3) | | | 68,423 | |
Investor relations fees and expenses (Note 3) | | | 52,904 | |
Independent auditors’ fees and expenses | | | 39,101 | |
Reports to shareholders and proxy solicitation | | | 37,926 | |
Insurance expense | | | 29,923 | |
Bank loan fees and expenses | | | 21,109 | |
Custodian’s fees and expenses | | | 20,592 | |
Legal fees and expenses | | | 17,086 | |
Transfer agent fees | | | 15,090 | |
Miscellaneous | | | 13,288 | |
Total operating expenses, excluding interest expense | | | 783,147 | |
Interest expense (Note 7) | | | 281,497 | |
Total operating expenses before reimbursed/waived expenses | | | 1,064,644 | |
Less: Investor relations fee waiver (Note 3) | | | (9,220 | ) |
Net operating expenses | | | 1,055,424 | |
| | | | |
Net Investment Income | | | 1,973,708 | |
| |
Realized and Unrealized Gains/(Losses) on Investments, Interest Rate Swaps and Foreign Currencies | | | | |
| |
Net realized gain/(loss) from: | | | | |
Investment transactions (including $3,096 capital gains tax) | | | 2,025,001 | |
Interest rate swaps | | | (118,258 | ) |
Forward and spot foreign currency exchange contracts | | | 1,249 | |
Foreign currency transactions | | | (3,353,986 | ) |
| | | (1,445,994 | ) |
| |
Net change in unrealized appreciation/(depreciation) on: | | | | |
Investments (including change in deferred capital gains tax of $3,489) | | | (1,397,595 | ) |
Interest rate swaps | | | 692,166 | |
Forward foreign currency exchange rate contracts | | | 15,483 | |
Foreign currency translation | | | 3,562,529 | |
| | | 2,872,583 | |
Net gain from investments, interest rate swaps and foreign currencies | | | 1,426,589 | |
Net Increase in Net Assets Resulting from Operations | | $ | 3,400,297 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
23
Statements of Changes in Net Assets
| | | | | | | | |
| | For the Six-Month Period Ended April 30, 2017 (unaudited) | | | For the Year Ended October 31, 2016 | |
| | |
Increase/(Decrease) in Net Assets | | | | | | | | |
| | |
Operations: | | | | | | | | |
Net investment income | | $ | 1,973,708 | | | $ | 2,931,892 | |
Net realized gain from investments and interest rate swaps | | | 1,906,743 | | | | 5,807,595 | |
Net realized (loss) from foreign currency transactions | | | (3,352,737 | ) | | | (8,137,303 | ) |
Net change in unrealized (depreciation) on investments and interest rate swaps | | | (705,429 | ) | | | (1,276,822 | ) |
Net change in unrealized appreciation on foreign currency translation | | | 3,578,012 | | | | 6,461,658 | |
Net increase in net assets resulting from operations | | | 3,400,297 | | | | 5,787,020 | |
| | |
Distributions to Shareholders from: | | | | | | | | |
Net investment income | | | (3,664,939 | ) | | | — | |
Tax return of capital | | | — | | | | (7,360,663 | ) |
Net decrease in net assets from distributions | | | (3,664,939 | ) | | | (7,360,663 | ) |
| | |
Common Stock Transactions: | | | | | | | | |
Repurchase of common stock resulting in the reduction of 19,539 and 100,430 shares of common stock, respectively (Note 6) | | | (157,834 | ) | | | (766,510 | ) |
Change in net assets from capital transactions | | | (157,834 | ) | | | (766,510 | ) |
Change in net assets resulting from operations | | | (422,476 | ) | | | (2,340,153 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of period | | | 80,606,448 | | | | 82,946,601 | |
End of period (including distributions in excess of net investment income of ($5,025,876) and ($3,334,645), respectively) | | $ | 80,183,972 | | | $ | 80,606,448 | |
Amounts listed as “—” are $0 or round to $0.
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
24
Statement of Cash Flows (unaudited)
For the Six-Month Period Ended April 30, 2017
| | | | |
Increase/(Decrease) in Cash (Including Foreign Currency) | | | | |
Cash flows provided from (used for) operating activities: | | | | |
Interest received (excluding discount and premium amortization of $94,316) | | $ | 3,041,029 | |
Operating expenses paid | | | (1,098,318 | ) |
Payments received from broker for collateral on interest rate swaps | | | 4,418,413 | |
Purchases and sales of short-term portfolio investments, net | | | 4,817,435 | |
Purchases of long-term portfolio investments | | | (79,285,457 | ) |
Proceeds from sales of long-term portfolio investments | | | 73,244,826 | |
Realized gains on forward foreign currency exchange contracts closed | | | 5,014 | |
Realized losses on interest rate swap transactions | | | (118,258 | ) |
Decrease in prepaid expenses and other assets | | | 33,172 | |
Net cash provided from operating activities | | | 5,057,856 | |
Cash flows provided from (used for) financing activities | | | | |
Repurchase of common stock | | | (157,834 | ) |
Dividends paid to common shareholders | | | (3,664,939 | ) |
Negative cash due to custodian | | | (2,975,526 | ) |
Net cash used for financing activities | | | (6,798,299 | ) |
Effect of exchange rate on cash | | | (3,526,841 | ) |
Net decrease in cash | | | (5,267,284 | ) |
Cash at beginning of period | | | 6,504,640 | |
Cash at end of period | | $ | 1,237,356 | |
| |
Reconciliation of Net Increase in Net Assets from Operations to Net Cash (Including Foreign Currency) Provided from (Used for) Operating Activities | | | | |
Net increase in total net assets resulting from operations | | $ | 3,400,297 | |
Decrease in investments | | | 3,207,612 | |
Net realized gain on investment transactions | | | (2,025,001 | ) |
Net realized foreign exchange losses | | | 3,357,751 | |
Net change in unrealized appreciation/depreciation on investments | | | 1,397,595 | |
Net change in unrealized foreign exchange gains/losses | | | (3,578,012 | ) |
Increase in interest receivable | | | (82,419 | ) |
Increase in receivable for investments sold | | | (640,707 | ) |
Increase in interest payable on bank loan, senior secured notes and term loans | | | 3,805 | |
Net decrease in other assets | | | 33,172 | |
Decrease in payable for investments purchased | | | (3,695,785 | ) |
Change in interest receivable/payable for closed interest rate swaps | | | 3,682,871 | |
Payments received from broker for interest rate swaps | | | 43,376 | |
Increase in accrued expenses and other liabilities | | | (46,699 | ) |
Total adjustments | | | 1,657,559 | |
Net cash provided from operating activities | | $ | 5,057,856 | |
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
25
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Financial Highlights
| | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Six- Month Period Ended April 30, 2017 (unaudited) | | | For the Fiscal Years Ended October 31, | |
| | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | |
Per Share Operating Performance(a): | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value per common share, beginning of period | | | $9.22 | | | | $9.38 | | | | $11.49 | | | | $12.25 | | | | $13.88 | | | | $13.45 | |
Net investment income | | | 0.23 | | | | 0.33 | (b) | | | 0.39 | | | | 0.47 | | | | 0.54 | | | | 0.61 | |
Net realized and unrealized gains/(losses) on investments, interest rate swaps, futures contracts and foreign currency transactions | | | 0.16 | | | | 0.33 | | | | (1.71 | ) | | | (0.32 | ) | | | (1.33 | ) | | | 0.73 | |
Total from investment operations applicable to common shareholders | | | 0.39 | | | | 0.66 | | | | (1.32 | ) | | | 0.15 | | | | (0.79 | ) | | | 1.34 | |
Distributions to common shareholders from: | |
Net investment income | | | (0.42 | ) | | | – | | | | (0.76 | ) | | | (0.93 | ) | | | (0.84 | ) | | | (0.92 | ) |
Tax return of capital | | | – | | | | (0.84 | ) | | | (0.08 | ) | | | – | | | | – | | | | – | |
Total distributions | | | (0.42 | ) | | | (0.84 | ) | | | (0.84 | ) | | | (0.93 | ) | | | (0.84 | ) | | | (0.92 | ) |
Capital Share Transactions: | |
Impact of at-the-market stock offering (Note 5) | | | – | | | | – | | | | – | | | | – | | | | – | | | | 0.01 | |
Impact of open market repurchase program (Note 6) | | | – | | | | 0.02 | | | | 0.05 | | | | 0.02 | | | | – | | | | – | |
Total from capital transactions | | | – | | | | 0.02 | | | | 0.05 | | | | 0.02 | | | | – | | | | – | |
Net asset value per common share, end of period | | | $9.19 | | | | $9.22 | | | | $9.38 | | | | $11.49 | | | | $12.25 | | | | $13.88 | |
Market value, end of period | | | $8.62 | | | | $8.46 | | | | $8.11 | | | | $10.55 | | | | $11.15 | | | | $14.06 | |
| | | | | | |
Total Investment Return Based on(c): | | | | | | | | | | | | | | | | | | | | | | | | |
Market value | | | 7.13% | | | | 15.48% | | | | (15.54% | ) | | | 2.99% | | | | (15.00% | ) | | | 14.54% | |
Net asset value | | | 4.80% | | | | 8.81% | (b) | | | (10.30% | ) | | | 2.09% | | | | (5.49% | )(d) | | | 10.21% | (d) |
| | | | | | |
Ratio to Average Net Assets Applicable to Common Shareholders/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets applicable to common shareholders, end of period (000 omitted) | | | $80,184 | | | | $80,606 | | | | $82,947 | | | | $105,653 | | | | $115,209 | | | | $128,112 | |
Average net assets applicable to common shareholders (000 omitted) | | | $78,884 | | | | $81,601 | | | | $93,299 | | | | $110,812 | | | | $122,387 | | | | $123,780 | |
Net operating expenses, net of fee waivers | | | 2.70% | (f) | | | 2.47% | | | | 2.55% | (e) | | | 2.18% | | | | 2.04% | | | | 2.07% | |
Net operating expenses, excluding fee waivers | | | 2.72% | (f) | | | 2.49% | | | | 2.56% | (e) | | | – | | | | – | | | | – | |
Net operating expenses, excluding interest expense, net of fee waivers | | | 1.98% | (f) | | | 1.90% | | | | 2.09% | (e) | | | 1.76% | | | | 1.68% | | | | 1.68% | |
Net investment income | | | 5.05% | (f) | | | 3.59% | (b) | | | 3.77% | | | | 3.94% | | | | 4.10% | | | | 4.50% | |
Portfolio turnover | | | 63% | | | | 80% | | | | 41% | | | | 59% | | | | 43% | | | | 34% | |
Senior securities (loan facility) outstanding (000 omitted) | | | $31,500 | | | | $31,500 | | | | $31,500 | | | | $40,000 | | | | $40,000 | | | | $40,000 | |
Asset coverage ratio on revolving credit facility at period end | | | 355% | | | | 356% | | | | 363% | | | | 364% | | | | 388% | | | | 420% | |
Asset coverage per $1,000 on revolving credit facility at period end(g) | | | $3,546 | | | | $3,559 | | | | $3,633 | | | | $3,641 | | | | $3,880 | | | | $4,196 | |
Aberdeen Global Income Fund, Inc.
27
Financial Highlights (concluded)
(a) | | Based on average shares outstanding. |
(b) | | Included within Net Investment Income per share, Total Return, and Ratio of Net Investment Income to Average Net Assets are the effects of a one-time reimbursement for overbilling of prior years’ custodian out-of-pocket fees. If such amounts were excluded, the Net Investment Income per share, Total Investment Return on Net Asset Value, and Ratio of Net Investment Income to Average Net Assets would have been $0.31, 8.58%, and 3.36%. |
(c) | | Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the period, dividends, capital gains, and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value. |
(d) | | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
(e) | | The expense ratio includes a one-time expense associated with the January 2011 shelf offering costs attributable to the registered but unsold shares that expired in January 2015. |
(g) | | Asset coverage ratio is calculated by dividing net assets plus the amount of any borrowings, for investment purposes by the amount of the Revolving Credit Facility. |
Amounts listed as “—” are $0 or round to $0.
See Notes to Financial Statements.
Aberdeen Global Income Fund, Inc.
28
Notes to Financial Statements (unaudited)
April 30, 2017
1. Organization
Aberdeen Global Income Fund, Inc. (the “Fund”) was incorporated in Maryland on June 28, 1991, as a closed-end, non-diversified management investment company. The Fund’s principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective. As a non-fundamental policy, under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in debt securities. This 80% investment policy is a non-fundamental policy of the Fund and may be changed by the Fund’s Board of Directors (the “Board”) upon 60 days’ prior written notice to shareholders. The Fund’s investments are divided into three categories: Developed Markets, Investment Grade Developing Markets and Sub-Investment Grade Developing Markets. “Developed Markets” are those countries contained in the Citigroup World Government Bond Index, New Zealand, Luxembourg and the Hong Kong Special Administrative Region. As of April 30, 2017, securities of the following countries comprised the Citigroup World Government Bond Index: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Malaysia, Mexico, Netherlands, Norway, Poland, Singapore, South Africa, Spain, Sweden, Switzerland, the United Kingdom and the United States. “Investment Grade Developing Markets” are those countries whose sovereign debt is rated not less than Baa3 by Moody’s Investors Services Inc. (“Moody’s”) or BBB- by Standard & Poor’s (“S&P”) or comparably rated by another appropriate nationally or internationally recognized ratings agency. “Sub-Investment Grade Developing Markets” are those countries that are not Developed Markets or Investment Grade Developing Markets. Under normal circumstances, at least 60% of the Fund’s total assets are invested in fixed income securities of issuers in Developed Markets or Investment Grade Developing Markets, whether or not denominated in the currency of such country; provided, however, that the Fund invests at least 40% of its total assets in fixed income securities of issuers in Developed Markets. The Fund may invest up to 40% of its total assets in fixed income securities of issuers in Sub-Investment Grade Developing Markets, whether or not denominated in the currency of such country. There can be no assurance that the Fund will achieve its investment objectives. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic developments in a specific industry, country or region.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to generally accepted accounting principles in
the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The accounting records of the Fund are maintained in U.S. Dollars and the U.S. Dollar is used as both the functional and reporting currency. However, the Australian Dollar, Canadian Dollar and British Pound are the functional currencies for U.S. federal tax purposes.
a. Security Valuation:
The Fund values its securities at current market value or fair value, consistent with regulatory requirements. “Fair value” is defined in the Fund’s Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to contract at the measurement date.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1 measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3 measurements to valuations based upon unobservable inputs that are significant to the valuation. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.
Long-term debt and other fixed-income securities are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service provider approved by the Board. Pricing services generally price debt securities assuming orderly transactions of an institutional “round lot” size and the strategies employed by the Fund’s investment adviser generally trade in round lot sizes. In certain circumstances, some trades may occur in smaller “odd lot” sizes at lower prices than institutional round lot trades. If
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Notes to Financial Statements (unaudited) (continued)
April 30, 2017
there are no current day bids, the security is valued at the previously applied bid. Short-term debt securities (such as commercial paper and U.S. treasury bills) having a remaining maturity of 60 days or less are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service, or on the basis of amortized cost, if it represents the best approximation of fair value. Debt and other fixed-income securities are generally determined to be Level 2 investments.
Short-term investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. The Fund sweeps available cash into the State Street Institutional U.S. Government Money Market Fund; a “government money market fund” pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”), which has an objective, which is not guaranteed, to maintain a $1.00 per share net asset value (“NAV”). Registered investment companies are valued at their net asset value as reported by such company. Generally, these investment types are categorized as Level 1 investments.
Derivatives are valued at fair value. Exchange traded derivatives are generally Level 1 investments and over-the-counter derivatives are generally Level 2 investments. Forward foreign currency contracts
are generally valued based on the bid price of the forward rates and the current spot rate. Forward exchange rate quotations are available for scheduled settlement dates, such as 1-, 3-, 6-, 9-, and 12-month periods. An interpolated valuation is derived based on the actual settlement dates of the forward contracts held. Interest rate swaps are generally valued by an approved pricing agent based on the terms of the swap agreement (including future cash flows).
In the event that a security’s market quotations are not readily available or are deemed unreliable, the security is valued at fair value as determined by the Fund’s Pricing Committee, taking into account the relevant factors and surrounding circumstances using valuation policies and procedures approved by the Board. A security that has been fair valued by the Fund’s Pricing Committee may be classified as Level 2 or Level 3 depending on the nature of the inputs. The three-level hierarchy of inputs is summarized below:
Level 1 — quoted prices in active markets for identical investments;
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or
Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
A summary of standard inputs is listed below:
| | |
Security Type | | Standard Inputs |
| |
Debt and other fixed-income securities | | Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, credit quality, yield, and maturity. |
| |
Forward foreign currency contracts | | Forward exchange rate quotations. |
| |
Swap agreements | | Market information pertaining to the underlying reference assets, i.e., credit spreads, credit event probabilities, fair values, forward rates, and volatility measures. |
The following is a summary of the inputs used as of April 30, 2017 in valuing the Fund’s investments and other financial instruments at fair value. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Please refer to the Portfolio of Investments for a detailed breakout of the security types:
| | | | | | | | | | | | | | | | |
Investments, at Value | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Fixed Income Investments | | | | | | | | | | | | | | | | |
Corporate Bonds | | $ | — | | | $ | 54,964,565 | | | $ | — | | | $ | 54,964,565 | |
Government Bonds | | | — | | | | 50,886,200 | | | | — | | | | 50,886,200 | |
Total Fixed Income Investments | | | — | | | | 105,850,765 | | | | — | | | | 105,850,765 | |
Short-Term Investment | | | 4,603,746 | | | | — | | | | — | | | | 4,603,746 | |
Total Investments | | $ | 4,603,746 | | | $ | 105,850,765 | | | $ | — | | | $ | 110,454,511 | |
Other Financial Instruments | |
Forward Foreign Currency Exchange Contracts | | $ | — | | | $ | 384,716 | | | $ | — | | | $ | 384,716 | |
Interest Rate Swap Agreements | | | — | | | | 11,248 | | | | — | | | | 11,248 | |
Total Other Financial Instruments | | $ | — | | | $ | 395,964 | | | $ | — | | | $ | 395,964 | |
Total Assets | | $ | 4,603,746 | | | $ | 106,246,729 | | | $ | — | | | $ | 110,850,475 | |
Liabilities | |
Other Financial Instruments | |
Forward Foreign Currency Exchange Contracts | | $ | — | | | $ | (199,514 | ) | | $ | — | | | $ | (199,514 | ) |
Interest Rate Swap Agreements | | | — | | | | (479,305 | ) | | | — | | | | (479,305 | ) |
Total Liabilities | | $ | — | | | $ | (678,819 | ) | | $ | — | | | $ | (678,819 | ) |
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Notes to Financial Statements (unaudited) (continued)
April 30, 2017
For movements between the Levels within the fair value hierarchy, the Fund has adopted a policy of recognizing transfers at the end of each period. During the six-month period ended April 30, 2017, there have been no transfers between levels and no significant changes to the fair valuation methodologies.
b. Restricted Securities:
Restricted securities are privately-placed securities whose resale is restricted under U.S. securities laws. The Fund may invest in restricted securities, including unregistered securities eligible for resale without registration pursuant to Rule 144A and privately-placed securities of U.S. and non-U.S. issuers offered outside the U.S. without registration pursuant to Regulation S under the Securities Act of 1933, as amended (the “1933 Act”). Rule 144A securities may be freely traded among certain qualified institutional investors, such as the Fund, but resale of such securities in the U.S. is permitted only in limited circumstances.
c. Foreign Currency Translation:
Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate of said currencies against the U.S. Dollar, as of the valuation time, as provided by an independent pricing service approved by the Board. The Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time).
Foreign currency amounts are translated into U.S. Dollars on the following basis:
(i) | | market value of investment securities, other assets and liabilities – at the current daily rates of exchange at the valuation time, and |
(ii) | | purchases and sales of investment securities, income and expenses – at the relevant rates of exchange prevailing on the respective dates of such transactions. |
The Fund isolates that portion of the results of operations arising from changes in the foreign exchange rates due to the fluctuations in the market prices of the securities held at the end of the reporting period. Similarly, the Fund isolates the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the reporting period.
Net exchange gain/(loss) is realized from sales and maturities of portfolio securities, sales of foreign currencies, settlement of securities transactions, dividends, interest and foreign withholding taxes recorded on the Fund’s books. Net unrealized foreign exchange appreciation/(depreciation) includes changes in the value of portfolio securities and other assets and liabilities arising as a result of
changes in the exchange rate. The net realized and unrealized foreign exchange gain/(loss) shown in the composition of net assets represents foreign exchange gain/(loss) for book purposes that may not have been recognized for tax purposes.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar. Generally, when the U.S. Dollar rises in value against foreign currency, the Fund’s investments denominated in that currency will lose value because its currency is worth fewer U.S. Dollars; the opposite effect occurs if the U.S. Dollar falls in relative value.
d. Derivative Financial Instruments:
The Fund is authorized to use derivatives to manage currency risk, credit risk and interest rate risk and to replicate or as a substitute for physical securities. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities.
Forward Foreign Currency Exchange Contracts:
A forward foreign currency exchange contract (“forward contract”) involves an obligation to purchase and sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Forward contracts are used to manage the Fund’s currency exposure in an efficient manner. They are used to sell unwanted currency exposure that comes with holding securities in a market, or to buy currency exposure where the exposure from holding securities is insufficient to give the desired currency exposure either in absolute terms or relative to the benchmark. The use of forward contracts allows the separation of decision-making between markets and their currencies. The forward contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation. Forward contracts’ prices are received daily from an independent pricing provider. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These realized and unrealized gains and losses are reported on the Statement of Operations. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or from unanticipated movements in exchange rates. During the six-month period ended April 30, 2017, the Fund used forward contracts to hedge certain emerging market currencies.
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Notes to Financial Statements (unaudited) (continued)
April 30, 2017
While the Fund may enter into forward contracts to seek to reduce currency exchange rate risks, transactions in such contracts involve certain risks. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in exchange rates. Thus, while the Fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for the Fund than if it had not engaged in any such transactions. Moreover, there may be imperfect correlation between the Fund’s portfolio holdings or securities quoted or denominated in a particular currency and forward contracts entered into by the Fund. Such imperfect correlation may prevent the Fund from achieving a complete hedge, which will expose the Fund to the risk of foreign exchange loss.
Forward contracts are subject to the risk that a counterparty to such contract will default on its obligations. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearing house, a default on the contract would deprive the Fund of unrealized profits, transaction costs or the benefits of a currency hedge or force the Fund to cover its purchase or sale commitments, if any, at the current market price.
Swaps:
A swap is an agreement that obligates two parties to exchange a series of cash flows and/or meet certain obligations at specified intervals based upon or calculated by reference to changes in specified prices or rates (interest rates in the case of interest rate swaps, currency exchange rates in the case of currency swaps) or the occurrence of a credit event with respect to an underlying reference obligation (in the case of a credit default swap) for a specified amount of an underlying asset or notional principal amount. The Fund will enter into swaps only on a net basis, which means that the two payment streams are netted out, with the Fund receiving or paying, as the case may be, only the amount of the difference between the two payments. Except for currency swaps and credit default swaps, the notional principal amount is used solely to calculate the payment streams but is not exchanged. With respect to currency swaps, actual principal amounts of currencies may be exchanged by the counterparties at the initiation, and again upon the termination of the transaction.
Traditionally, swaps were customized, privately negotiated agreements executed between two parties (“OTC Swaps”) but since 2013, certain swaps are required to be cleared pursuant to rules and regulations related to the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”) and/or Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories (“EMIR”) (“Cleared Swaps”). Like OTC Swaps, Cleared
Swaps are negotiated bilaterally. Unlike OTC Swaps, the act of clearing results in two swaps executed between each of the parties and a central counterparty (“CCP”), and thus the counterparty credit exposure of the parties is to the CCP rather than to one another. Upon entering into a Cleared Swap, the Fund is required to pledge an amount of cash and/or other assets equal to a certain percentage of the contract amount. This payment is known as “initial margin”. Subsequent payments, known as “variation margin,” are calculated each day, depending on the daily fluctuations in the fair value/ market value of the underlying assets. An unrealized gain or loss equal to the variation margin is recognized on a daily basis. When the contract matures or is terminated, the gain or loss is realized and is presented in the Statements of Operations as a net realized gain or loss on swap contracts. As of March 2017, the Fund may be required to provide variation and/or initial margin for OTC Swaps pursuant to further rules and regulations related to Dodd Frank and EMIR. The margin requirements associated with OTC Swaps and Cleared Swaps may not be the same.
The rights and obligations of the parties to a swap are memorialized in either an International Swap Dealers Association, Inc. Master Agreement (“ISDA”) for OTC Swaps or a futures agreement with an OTC addendum for Cleared Swaps (“Clearing Agreement”). These agreements are with certain counterparties whose creditworthiness is monitored on an ongoing basis by risk professionals. Both the ISDA and Clearing Agreement maintain provisions for general obligations, representations, agreements, collateral, and events of default or termination. The occurrence of a specified event of default or termination by one party may give the other party the right to terminate and settle all of its contracts.
Entering into swap agreements involves, to varying degrees, elements of credit, market and interest risk in excess of the amounts reported on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform and that there may be unfavorable changes in the value of the index or securities underlying the agreement. The Funds’ maximum risk of loss from counterparty risk related to swaps is the fair value of the contract. This risk is mitigated by the posting of collateral by the counterparties to the Funds to cover the Funds’ exposure to the counterparty.
Interest Rate Swaps:
The Fund uses interest rate swap contracts to manage its exposure to interest rates. Interest rate swap contracts typically represent the exchange between the Fund and a counterparty of respective commitments to make variable rate and fixed rate payments with
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Notes to Financial Statements (unaudited) (continued)
April 30, 2017
respect to a notional amount of principal. Interest rate swap contracts may have a term that is greater than one year, but typically require periodic interim settlement in cash, at which time the specified value of the variable interest rate is reset for the next settlement period. Net payments of interest are recorded as realized gains or losses. During the period that the swap contract is open, the
contract is marked-to-market as the net amount due to or from the Fund and changes in the value of swap contracts are recorded as unrealized gains or losses. During the six-month period ended April 30, 2017, the Fund used interest rate swaps to hedge the interest rate risk on the Fund’s Revolving Credit Facility (as defined below).
Summary of Derivative Instruments:
The Fund may use derivatives for various purposes as noted above. The following is a summary of the fair value of Derivative Instruments, not accounted for as hedging instruments, as of April 30, 2017:
| | | | | | | | | | | | |
| | Asset Derivatives | | | Liability Derivatives | |
| | Period Ended April 30, 2017 | | | Period Ended April 30, 2017 | |
Derivatives not accounted for as hedging instruments and risk exposure | | Statement of Assets and Liabilities Location | | Fair Value | | | Statement of Assets and Liabilities Location | | Fair Value | |
Interest rate swaps (interest rate risk) | | Variation margin receivable for centrally cleared interest rate swaps | | $ | – | | | Variation margin payable for centrally cleared interest rate swaps | | $ | 14,241 | |
| | | | |
Interest rate swaps (interest rate risk) | | Unrealized appreciation on over-the-counter interest rate swaps | | | 11,248 | | | Unrealized depreciation on over-the-counter interest rate swaps | | | – | |
| | | | |
Forward foreign exchange contracts (foreign exchange risk) | | Unrealized appreciation on forward currency exchange contracts | | | 384,716 | | | Unrealized depreciation on forward currency exchange contracts | | | 199,514 | |
Total | | | | $ | 395,964 | | | | | $ | 213,755 | |
Amounts | | listed as “–” are $0 or round to $0. |
The Fund has transactions that may be subject to enforceable master netting agreements. A reconciliation of the gross amounts on the Statement of Assets and Liabilities as of April 30, 2017 to the net amounts by broker and derivative type, including any collateral received or pledged, is included in the following tables:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Gross Amounts Not Offset in Statement of Assets & Liabilities | | | | | | | | | Gross Amounts Not Offset in Statement of Assets and Liabilities | |
Description | | Gross Amounts of Assets Presented in Statement of Financial Position | | Financial Instruments | | | Collateral Received(1) | | | Net Amount(3) | | | | | | Gross Amounts of Liabilities Presented in Statement of Financial Position | | | Financial Instruments | | | Collateral Pledged(1) | | | Net Amount(3) | |
| | Assets | | | | | | Liabilities | |
Forward foreign currency(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Barclays | | $1,286 | | $ | – | | | $ | – | | | $ | 1,286 | | | | | | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
Citibank | | 36,892 | | | (36,892 | ) | | | – | | | | – | | | | | | | | 170,430 | | | | (36,892 | ) | | | – | | | | 133,538 | |
Credit Suisse | | 263,731 | | | – | | | | – | | | | 263,731 | | | | | | | | – | | | | – | | | | – | | | | – | |
Goldman Sachs | | 45,637 | | | – | | | | – | | | | 45,637 | | | | | | | | – | | | | – | | | | – | | | | – | |
Royal Bank of Canada | | 24,734 | | | (8,504 | ) | | | – | | | | 16,230 | | | | | | | | 8,504 | | | | (8,504 | ) | | | – | | | | – | |
Standard Chartered Bank | | 7,675 | | | – | | | | – | | | | 7,675 | | | | | | | | – | | | | – | | | | – | | | | – | |
UBS | | 4,761 | | | (4,761 | ) | | | – | | | | – | | | | | | | | 20,580 | | | | (4,761 | ) | | | – | | | | 15,819 | |
| | | | | | | | | |
Interest rate swaps(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Barclays | | $11,248 | | $ | – | | | $ | – | | | $ | 11,248 | | | | | | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
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Notes to Financial Statements (unaudited) (continued)
April 30, 2017
1. | | In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. |
2. | | Includes financial instruments (swaps and forwards) which are not subject to a master netting arrangement across funds, or another similar arrangement. |
3. | | Net amounts represent the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting arrangements with the same legal entity. |
The Effect of Derivative Instruments on the Statement of Operations for the six-month period ended April 30, 2017:
| | | | | | | | | | |
Derivatives Not Accounted for as Hedging Instruments Under Statement 133(a) | | Location of Gain or (Loss) on Derivatives | | Realized Gain or (Loss) on Derivatives | | | Change in Unrealized Appreciation/ (Depreciation) on Derivatives | |
| | Realized/Unrealized Gain/(Loss) from Investments, Interest Rate Swaps, Futures Contracts and Foreign Currencies | | | | | | | | |
| | | |
Interest rate swaps (interest rate risk) | | | | $ | (118,258 | ) | | $ | 692,166 | |
| | | |
Forward foreign exchange contracts (foreign exchange risk) | | | | | 23,962 | | | | 15,483 | |
Total | | | | $ | (94,296 | ) | | $ | 707,649 | |
Information about derivatives reflected as of the date of this report is generally indicative of the type of activity for the six-month period ended April 30, 2017. The table below summarizes the weighted average values of derivatives holdings for the Fund during the six-month period ended April 30, 2017.
| | | | |
Derivative | | Average Notional Value | |
Purchase Forward Foreign Currency Contracts | | $ | 7,241,648 | |
Sale Forward Foreign Currency Contracts | | | 21,018,631 | |
Interest Rate Swap Contracts | | | 31,500,000 | |
The Fund values derivatives at fair value, as described in the results of operations. Accordingly, the Fund does not follow hedge accounting even for derivatives employed as economic hedges.
e. Bank Loans:
The Fund may invest in bank loans. Bank loans include floating and fixed-rate debt obligations. Floating rate loans are debt obligations issued by companies or other entities with floating interest rates that reset periodically. Bank loans may include, but are not limited to, term loans, delayed funding loans, bridge loans and revolving credit facilities. Loan interest will primarily take the form of assignments purchased in the primary or secondary market but may include participants. Floating rate loans are secured by specific collateral of
the borrower and are senior to most other securities of the borrower (e.g., common stock or debt instruments) in the event of bankruptcy. Floating rate loans are often issued in connection with recapitalizations, acquisitions, leveraged buyouts, and refinancings. Floating rate loans are typically structured and administered by a financial institution that acts as the agent of the lenders participating in the floating rate loan. Floating rate loans may be acquired directly through the agent, as an assignment from another lender who holds a direct interest in the floating rate loan, or as a participation interest in another lender’s portion of the floating rate loan.
The Fund may also enter into, or acquire participation in, delayed funding loans and revolving credit facilities. Delayed funding loans and revolving credit facilities are borrowings in which the Fund agrees to make loans up to a maximum amount upon demand by the borrowing issuer for a specified term. A revolving credit facility differs from a delayed funding loan in that as the borrowing issuer repays the loan, an amount equal to the repayment is again made available to the borrowing issuer under the facility. The borrowing issuer may at any time borrow and repay amounts so long as, in the aggregate, at any given time the amount borrowed does not exceed the maximum amount established by the loan agreement. Delayed funding loans and revolving credit facilities usually provide for floating or variable rates of interest.
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34
Notes to Financial Statements (unaudited) (continued)
April 30, 2017
There are a number of risks associated with an investment in bank loans including credit risk, interest rate risk, illiquid securities risk, and prepayment risk. There is also the possibility that the collateral securing a loan, if any, may be difficult to liquidate or be insufficient to cover the amount owed under the loan. These risks could cause the Fund to lose income or principal on a particular investment, which in turn could affect the Fund’s returns. In addition, bank loans may settle on a delayed basis, resulting in the proceeds from the sale of such loans not being readily available to make additional investments or to meet the Fund’s redemption obligations. To the extent the extended settlement process gives rise to short-term liquidity needs, the Fund may hold additional cash, sell investments or temporarily borrow from banks or other lenders.
As of April 30, 2017, the Fund held no unfunded commitments or bridge loans.
f. Security Transactions, Investment Income and Expenses:
Security transactions are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the identified cost basis. Interest income and expenses are recorded on an accrual basis. Discounts and premiums on securities purchased are accreted or amortized on an effective yield basis over the estimated lives of the respective securities.
g. Distributions:
The Fund has a managed distribution policy to pay distributions from net investment income supplemented by net realized foreign exchange gains, net realized short-term capital gains and return of capital distributions, if necessary, on a monthly basis. The managed distribution policy is subject to regular review by the Board. The Fund will also declare and pay distributions at least annually from net realized gains on investment transactions and net realized foreign exchange gains, if any. Dividends and distributions to shareholders are recorded on the ex-dividend date.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments for foreign currencies, loss deferrals and recognition of market discount and premium.
h. Federal Income Taxes:
For U.S. federal income purposes, the Fund is comprised of separately identifiable units called Qualified Business Units (“QBU”) (see Internal Revenue Code of 1986, as amended (“IRC”) section 987). The Fund has operated with QBUs for U.S. federal income purposes since 1991. The home office of the Fund is designated as the United States and the QBU was Australia with
functional currency of Australian dollar. During the six-month period ended April 30, 2017, the Fund sold the AUD denominated securities held in the Australian QBU which resulted in the termination of the Australian QBU.
When sold, Australian dollar denominated securities within the Australian QBU generated capital gain/loss (which were translated for U.S. federal income tax purposes into U.S. dollars based on the weighted average exchange rate for the period) but not currency gain/loss. When a New Zealand security was sold within the Australian QBU, the sale generated capital gain/loss as well as currency gain/loss from the currency exchange between the New Zealand dollar and the Australian dollar.
Currency gain/loss related to currency exchange between the U.S. dollar and the QBU functional currency is generated when money is transferred from a QBU to the home office. The currency gain/loss would result from the difference between the current exchange rate and the pooled U.S. dollar basis in the QBU (which is generally computed based on the currency exchange rates from when money was transferred into such QBU and from gain/losses generated within such QBU based on the cumulative weighted average exchange rates for the periods such gain/loss was recognized.) Based on the QBU structure, there may be sizable differences in the currency gain/loss recognized for U.S. federal income tax purposes and what is reported within the financial statements under GAAP. As of the Fund’s fiscal year-end, the calculation of the composition of distributions to shareholders is finalized and reported in the Fund’s annual report to shareholders.
The Fund intends to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in Subchapter M of the IRC, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all federal income taxes. Therefore, no federal income tax provision is required. Dividend and interest income from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes. In addition, the Fund may be subject to capital gains tax in certain countries in which it invests. The above taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties with some of these countries. The Fund accrues such taxes when the related income is earned.
i. Foreign Withholding Tax:
Dividend and interest income from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes. In addition, the Fund may be subject to capital gains tax in certain countries in which it invests. The above taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties with some of
Aberdeen Global Income Fund, Inc.
35
Notes to Financial Statements (unaudited) (continued)
April 30, 2017
these countries. The Fund accrues such taxes when the related income is earned.
In addition, when the Fund sells securities within certain countries in which it invests, the capital gains realized may be subject to tax. Based on these market requirements and as required under GAAP, the Fund accrues deferred capital gains tax on securities currently held that have unrealized appreciation within these countries. The amount of deferred capital gains tax accrued is reported on the Statement of Operations as part of the Net Change in Unrealized Appreciation/Depreciation on Investments.
j. Cash Flow Information:
The Fund invests in securities and distributes dividends from net investment income and net realized gains on investment and currency transactions which are paid in cash or are reinvested at the discretion of shareholders. These activities are reported in the Statements of Changes in Net Assets and additional information on cash receipts and cash payments is presented in the Statement of Cash Flows. Cash includes domestic and foreign currency but does not include cash at brokers in segregated accounts for financial futures contracts because it is designated as collateral.
k. Repurchase Agreements:
The Fund may enter into repurchase agreements under the terms of a Master Repurchase Agreement. It is the Fund’s policy that its custodian/counterparty segregate the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates. To the extent that any repurchase transaction exceeds one business day, the collateral is valued on a daily basis to determine its adequacy. Under the Master Repurchase Agreement, if the counterparty defaults and the value of the collateral declines, or if bankruptcy proceedings are commenced with respect to the counterparty of the security, realization of the collateral by the Fund may be delayed or limited. Repurchase agreements are subject to contractual netting arrangements with the counterparty, Fixed Income Clearing Corp. To the extent the Fund enters into repurchase agreements, additional information on individual repurchase agreements is included in the Statements of Investments.
3. Agreements and Transactions with Affiliates
a. Investment Manager, Investment Adviser, and Investment Sub-Adviser:
Aberdeen Asset Management Asia Limited (“AAMAL” or the “Investment Manager”) serves as investment manager to the Fund, pursuant to a management agreement (the “Management
Agreement”). Aberdeen Asset Management Limited (the “Investment Adviser”) serves as the investment adviser and Aberdeen Asset Managers Limited (“AAML” or the “Sub-Adviser”) serves as the sub-adviser, pursuant to an advisory agreement and a sub-advisory agreement, respectively. The Investment Manager, the Investment Adviser and the Sub-Adviser (collectively, the “Advisers”) are wholly-owned subsidiaries of Aberdeen Asset Management PLC.
The Investment Manager makes investment decisions on behalf of the Fund on the basis of recommendations and information furnished to it by the Investment Adviser, including the selection of and the placement of orders with, brokers and dealers to execute portfolio transactions on behalf of the Fund. The Sub-Adviser manages the portion of the Fund’s assets that the Investment Manager allocates to it.
The Management Agreement provides the Investment Manager with a fee, payable monthly by the Fund, at the following annual rates: 0.65% of the Fund’s average weekly Managed Assets up to $200 million, 0.60% of Managed Assets between $200 million and $500 million, and 0.55% of Managed Assets in excess of $500 million. Managed Assets is defined in the Management Agreement as net assets plus the amount of any borrowings for investment purposes.
For the six-month period ended April 30, 2017, AAML earned $355,799 from the Fund for investment management fees.
b. Fund Administration:
Aberdeen Asset Management Inc. (“AAMI”), an affiliate of the Investment Manager, Investment Adviser and Sub-Adviser, is the Fund’s Administrator, pursuant to an agreement under which AAMI receives a fee, payable monthly by the Fund, at an annual fee rate of 0.125% of the Fund’s average weekly Managed Assets up to $1 billion, 0.10% of the Fund’s average weekly Managed Assets between $1 billion and $2 billion, and 0.075% of the Fund’s average weekly Managed Assets in excess of $2 billion. For the six-month period ended April 30, 2017, AAMI earned $68,423 from the Fund for administration fees.
c. Investor Relations:
Under the terms of the Investor Relations Services Agreement, AAMI provides and pays third parties to provide investor relations services to the Fund and certain other funds advised by AAMAL or its affiliates as part of an Investor Relations Program. Under the Investor Relations Services Agreement, the Fund owes a portion of the fees related to the Investor Relations Program (the “Fund’s Portion”). However, investor relations services fees are capped by AAMI so that the Fund will only pay up to an annual rate of 0.05% of the Fund’s
Aberdeen Global Income Fund, Inc.
36
Notes to Financial Statements (unaudited) (continued)
April 30, 2017
average weekly net assets. Any difference between the capped rate of 0.05% of the Fund’s average weekly net assets and the Fund’s Portion is paid for by AAMI.
Pursuant to the terms of the Investor Relations Services Agreement, AAMI, among other things, provides objective and timely information to shareholders based on publicly-available information; provides information efficiently through the use of technology while offering shareholders immediate access to knowledgeable investor relations representatives; develops and maintains effective communications with investment professionals from a wide variety of firms; creates and maintains investor relations communication materials such as fund manager interviews, films and webcasts, published white papers, magazine articles and other relevant materials discussing the Fund’s investment results, portfolio positioning and outlook; develops and maintains effective communications with large institutional shareholders; responds to specific shareholder questions; and reports activities and results to the Board and management detailing insight into general shareholder sentiment.
During the six-month period ended April 30, 2017, the Fund incurred investor relations fees of approximately $47,716 of which AAMI waived $9,220, for investor relations services.
4. Investment Transactions
Purchases and sales of investment securities (excluding short-term securities) for the six-month period ended April 30, 2017, were $69,358,090 and $62,122,579, respectively.
5. Capital
The authorized capital of the Fund is 300 million shares of $0.001 par value common stock. During the six-month period ended April 30, 2017, the Fund repurchased 19,539 shares pursuant to its Open Market Repurchase Program, see Note 6 for further information. As of April 30, 2017, there were 8,724,789 shares of common stock issued and outstanding.
6. Open Market Repurchase Program
On March 1, 2001, the Board approved a stock repurchase program. The Board amended the program on December 12, 2007. The stock repurchase program allows the Fund to repurchase up to 10% of its outstanding common stock in the open market during any 12-month period. The Fund reports repurchase activity on the Fund’s website on a monthly basis.
For the six-month period ended April 30, 2017 and fiscal year ended October 31, 2016, the Fund repurchased 19,539 shares and 100,430 shares, respectively, through this program.
7. Credit Facility
The Fund’s revolving credit loan facility with The Bank of Nova Scotia was renewed for a 3-year term on February 28, 2017. For the six-month period ended April 30, 2017, the balance of the loan outstanding was $31,500,000, and the average interest rate on the loan facility was 1.7775%. The average balance for the six-month period was $31,500,000. The interest expense is accrued on a daily basis and is payable to The Bank of Nova Scotia on a monthly basis.
The amounts borrowed from the loan facility may be invested to return higher rates than the rates in the Fund’s portfolio. However, the cost of leverage could exceed the income earned by the Fund on the proceeds of such leverage. To the extent that the Fund is unable to invest the proceeds from the use of leverage in assets which pay interest at a rate which exceeds the rate paid on the leverage, the yield on the Fund’s common stock will decrease. In addition, in the event of a general market decline in the value of assets in which the Fund invests, the effect of that decline will be magnified in the Fund because of the additional assets purchased with the proceeds of the leverage. Non-recurring expenses in connection with the implementation of the loan facility will reduce the Fund’s performance.
The Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having similar investment objectives and policies. The funds borrowed pursuant to the loan facility may constitute a substantial lien and burden by reason of their prior claim against the income of the Fund and against the net assets of the Fund in liquidation. The Fund is not permitted to declare dividends or other distributions in the event of default under the loan facility. In the event of a default under the loan facility, the lenders have the right to cause a liquidation of the collateral (i.e., sell portfolio securities and other assets of the Fund) and, if any such default is not cured, the lenders may be able to control the liquidation as well. The loan facility has a term of three years and is not a perpetual form of leverage; there can be no assurance that the loan facility will be available for renewal on acceptable terms, if at all. Bank loan fees and expenses included in the Statement of Operations include fees for the renewal of the loan facility as well as commitment fees for any portion of the loan facility not drawn upon at any time during the period. During the six-month period ended April 30, 2017, the Fund incurred fees of approximately $21,109.
The credit agreement governing the loan facility includes usual and customary covenants for this type of transaction. These covenants impose on the Fund asset coverage requirements, Fund composition requirements and limits on certain investments, such as illiquid investments, which are more stringent than those imposed on the Fund by the 1940 Act. The covenants or guidelines could impede the
Aberdeen Global Income Fund, Inc.
37
Notes to Financial Statements (unaudited) (continued)
April 30, 2017
Investment Manager, Investment Adviser or Sub-Adviser from fully managing the Fund’s portfolio in accordance with the Fund’s investment objective and policies. The covenants also include a requirement that the Fund maintain a net asset value of no less than $60,000,000. Furthermore, non-compliance with such covenants or the occurrence of other events could lead to the cancellation of the loan facility.
The estimated fair value of the loan facility was calculated, for disclosure purposes, by discounting future cash flows by a rate equal to the current U.S. Treasury rate with an equivalent maturity date, the spread between the U.S. insurance and financial debt rate and the U.S. Treasury rate. The following table shows the maturity date, interest rate, notional/carrying amount and estimated fair value outstanding as of April 30, 2017.
| | | | | | | | | | | | | | |
Maturity Date | | | Interest Rate | | | Notional/ Carrying Amount | | | Estimated Fair Value | |
| February 28, 2020 | | | | 1.98% | | | $ | 31,500,000 | | | $ | 30,884,519 | |
8. Portfolio Investment Risks
a. Bank Loan Risk
There are a number of risks associated with an investment in bank loans including credit risk, interest rate risk, illiquid securities risk, and prepayment risk. There is also the possibility that the collateral securing a loan, if any, may be difficult to liquidate or be insufficient to cover the amount owed under the loan. These risks could cause the Fund to lose income or principal on a particular investment, which in turn could affect the Fund’s returns.
b. Credit and Market Risk:
A debt instrument’s price depends, in part, on the credit quality of the issuer, borrower, counterparty, or underlying collateral and can decline in response to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral, or changes in specific or general market, economic, industry, political, regulatory, geopolitical, or other conditions. Funds that invest in high yield and emerging market instruments are subject to certain additional credit and market risks. The yields of high yield and emerging market debt obligations reflect, among other things, perceived credit risk. The Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading.
c. Emerging Markets Risk
The Fund is subject to emerging markets risk. This is a magnification of the risks that apply to foreign investments. These risks are greater for securities of companies in emerging markets countries because the countries may have less stable governments, more volatile currencies and less established markets (see “Risks Associated with Foreign Securities and Currencies” below).
d. High-Yield Bonds and Other Lower-Rated Securities Risk
The Fund’s investments in high-yield bonds (commonly referred to as “junk bonds”) and other lower-rated securities will subject the Fund to substantial risk of loss. Investments in high-yield bonds are speculative and issuers of these securities are generally considered to be less financially secure and less able to repay interest and principal than issuers of investment-grade securities. Prices of high-yield bonds tend to be very volatile. These securities are less liquid than investment-grade debt securities and may be difficult to price or sell, particularly in times of negative sentiment toward high-yield securities.
e. Interest Rate Risk:
The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers, including governments. Generally, the Fund’s fixed income securities will decrease in value if interest rates rise and vice versa, and the volatility of lower-rated securities is even greater than that of higher-rated securities. Also, longer-term securities are generally more volatile, so the average maturity or duration of these securities affects risk.
The Fund may be subject to a greater risk of rising interest rates due to current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives.
f. Risks Associated with Foreign Securities and Currencies:
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, and political or social instability or diplomatic developments, which could adversely affect investments in those countries.
Aberdeen Global Income Fund, Inc.
38
Notes to Financial Statements (unaudited) (concluded)
April 30, 2017
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries. Foreign securities may also be harder to price than U.S. securities.
The value of foreign currencies relative to the U.S. Dollar fluctuates in response to market, economic, political, regulatory, geopolitical or other conditions. A decline in the value of a foreign currency versus the U.S. Dollar reduces the value in U.S. Dollars of investments denominated in that foreign currency. This risk may impact the Fund more greatly to the extent the Fund does not hedge its currency risk, or hedging techniques used by the Advisers are unsuccessful.
g. Focus Risk:
The Fund may have elements of risk not typically associated with investments in the United States due to focused investments in a limited number of countries or regions subject to foreign securities or currencies risks. Concentrating investments in the Asia-Pacific region subjects the Fund to more volatility and greater risk of loss than geographically diverse funds. Such focused investments may subject the Fund to additional risks resulting from political or economic conditions in such countries or regions and the possible imposition of adverse governmental laws or currency exchange restrictions could cause the securities and their markets to be less liquid and their prices to be more volatile than those of comparable U.S. securities.
9. Contingencies
In the normal course of business, the Fund may provide general indemnifications pursuant to certain contracts and organizational documents. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund, and therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote.
10. Tax Information
The U.S. federal income tax basis of the Fund’s investments and the net unrealized appreciation as of April 30, 2017 were as follows:
| | | | | | | | | | | | | | |
Tax Basis of Investments | | | Appreciation | | | Depreciation | | | Net Unrealized Appreciation | |
| $108,530,459 | | | $ | 2,987,986 | | | $ | (1,063,934 | ) | | $ | 1,924,052 | |
11. Recent Accounting Pronouncement
In December 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-19 (“ASU 2016-19”), “Technical Corrections and Improvements”. The guidance includes an amendment to Topic 820, Fair Value Measurement, which clarifies the difference between a valuation approach and a valuation technique when applying the guidance in that Topic. The amendment also requires an entity to disclose when there has been a change in either or both a valuation approach and/or a valuation technique. The transition guidance for the amendment must be applied prospectively because it could potentially involve the use of hindsight that includes fair value measurements. The guidance is effective for interim periods beginning after December 15, 2016. Management is currently evaluating the implication, if any, of the additional disclosure requirements and its impact on the Fund’s financial statements.
12. Subsequent Events
Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no disclosures or adjustments were required to the financial statements as of April 30, 2017, other than those listed below.
On May 9, 2016 and June 9, 2016, the Fund announced that it will pay on May 26, 2017 and June 27, 2017, a distribution of $0.07 per share to all shareholders of record as of May 19, 2017 and June 20, 2017 respectively.
Aberdeen Global Income Fund, Inc.
39
Supplemental Information (unaudited)
Results of Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on Thursday, March 30, 2017 at 1735 Market St., 32nd Floor, Philadelphia, PA. The description of the proposals and number of shares voted at the meeting are as follows:
1. To elect two Class I directors to the Board of Directors to serve until the 2020 Annual Meeting of Shareholders:
| | | | | | | | | | | | |
| | Votes For | | | Votes Against | | | Votes Withheld | |
P. Gerald Malone | | | 6,009,733 | | | | 96,135 | | | | 62,698 | |
John T. Sheehy | | | 5,997,370 | | | | 105,630 | | | | 65,566 | |
Directors whose term of office continued beyond the meeting are as follows: Neville J. Miles, William J. Potter, Peter D. Sacks and Martin J. Gilbert.
Aberdeen Global Income Fund, Inc.
40
Corporate Information
Directors
P. Gerald Malone, Chairman
Martin J. Gilbert
Neville J. Miles
William J. Potter
Peter D. Sacks
John T. Sheehy
Officers
Christian Pittard, President
Jeffrey Cotton, Chief Compliance Officer and Vice President, Compliance
Megan Kennedy, Vice President and Secretary
Andrea Melia, Treasurer and Principal Accounting Officer
Kenneth Akintewe, Vice President
Joseph Andolina, Vice President - Compliance
Nicholas Bishop, Vice President
Siddharth Dahiya, Vice President
Martin J. Gilbert, Vice President
Alan Goodson, Vice President
Bev Hendry, Vice President
Lin-Jing Leong, Vice President
Steven Logan, Vice President
Adam McCabe, Vice President
Jennifer Nichols, Vice President
Lucia Sitar, Vice President
Sharon Ferrari, Assistant Treasurer
Matthew Keener, Assistant Secretary
Investment Manager
Aberdeen Asset Management Asia Limited
21 Church Street
#01-01 Capital Square Two
Singapore 049480
Investment Adviser
Aberdeen Asset Management Limited
Level 10, 255 George Street
Sydney, NSW 2000, Australia
Investment Sub-Adviser
Aberdeen Asset Managers Limited
Bow Bells House, 1 Bread Street
London United Kingdom
EC4M 9HH
Administrator
Aberdeen Asset Management Inc.
1735 Market Street, 32nd Floor
Philadelphia, PA 19103
Custodian
State Street Bank and Trust Company
1 Heritage Drive, 3rd Floor
North Quincy, MA 02171
Transfer Agent
Computershare Trust Company, N.A.
P.O. Box 30170
College Station, TX 77842
Independent Registered Public Accounting Firm
KPMG LLP
1601 Market Street
Philadelphia, PA 19103
Legal Counsel
Willkie Farr & Gallagher LLP
787 Seventh Ave
New York, NY 10019
Investor Relations
Aberdeen Asset Management Inc.
1735 Market Street, 32nd Floor
Philadelphia, PA 19103
1-800-522-5465
InvestorRelations@aberdeen-asset.com
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Aberdeen Asset Management Asia Limited
The Financial Statements as of April 30, 2017 included in this report were not audited and accordingly, no opinion is expressed thereon.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may purchase, from time to time, shares of its common stock in the open market.
Shares of Aberdeen Global Income Fund, Inc. are traded on the NYSE MKT Equities Exchange under the symbol “FCO”. Information about the Fund’s net asset value and market price is available at www.aberdeenfco.com.
This report, including the financial information herein, is transmitted to the shareholders of Aberdeen Global Income Fund, Inc. for their general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. Past performance is no guarantee of future returns.
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International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods; these risks are generally heightened for emerging market investments. Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund’s investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the Fund. The NAV is the value of an entity’s assets less the value of its liabilities. The market price is the current price at which an asset can be bought or sold. There is no assurance that the Fund will achieve its investment objective. Past performance does not guarantee future results.
In the United States, Aberdeen Asset Management is the marketing name for the following affiliated, registered investment advisers: Aberdeen Asset Management Inc., Aberdeen Asset Managers Ltd, Aberdeen Asset Management Ltd, Aberdeen Asset Management Asia Ltd and Aberdeen Capital Management, LLC. Excluding Aberdeen Capital Management LLC, each of these advisers are wholly owned by Aberdeen Asset Management PLC. Aberdeen Capital Management LLC is a wholly-owned subsidiary of Aberdeen Asset Management Inc. “Aberdeen” is a U.S. registered service mark of Aberdeen Asset Management PLC.
FCO-SEMI-ANNUAL
Item 2. Code of Ethics.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 3. Audit Committee Financial Expert.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 6. Schedule of Investments.
(a) Schedule of Investments in securities of unaffiliated issuers as of close of the reporting period is included as part of the Report to Shareholders filed under Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a) | Not applicable to semi-annual report on Form N-CSR. |
(b) | The Registrant is managed by Aberdeen’s Asia-Pacific fixed income team. The Asia-Pacific fixed income team works in a truly collaborative fashion; all team members have both portfolio management and research responsibilities. The team is responsible for the day-to-day management of the Registrant. |
Effective March 15, 2017, Lin-Jing Leong, Steven Logan and Kenneth Akintewe replaced Victor Rodriguez, Patrick O’Donnell and Kevin Daly as part of the team having the most significant responsibility for the day-to-day management of the Registrant’s portfolio team. As of the date of this filing, the team includes Kenneth Akintewe, Nick Bishop, Lin-Jing Leong, Steven Logan and Adam McCabe.
(1) The information in the table below is as of July 5, 2017.
| | | | |
Individual & Position | | Services Rendered | | Past Business Experience |
Kenneth Akintewe Senior Investment Manager | | Responsible for Asian fixed income (interest rates and currencies) research and portfolio management | | Currently, Senior Investment Manager for Aberdeen Asset Management Asia Limited. Mr. Akintewe joined Aberdeen in 2002. |
Lin-Jing Leong Investment Manager | | Responsible for Asian fixed income | | Currently, Investment Manager on the Asian local rates and currency team. She joined Aberdeen in 2013 from the Reserve Management Section of the Central Bank of Malaysia where she specialized in the Asian local currency bond market. |
| | | | |
Steven Logan Global Head of High Yield | | Responsible for Global high yield | | Currently, Head of Global High Yield. Mr. Logan joined Aberdeen Asset Management in April 2014. From 2001-2014 Mr. Logan was an Investment Director (2001-2006) and Head of European High Yield (2006-2014) with Scottish Widows Investment Partnership |
(a)(2) The information in the table below is as of March 31, 2017.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name of Portfolio Manager | | | | Type of Accounts | | | | Total Number of Accounts Managed | | | | | | | Total Assets ($M) | | | | Number of Accounts Managed for Which Advisory Fee is Based on Performance | | | | | | | Total Assets for Which Advisory Fee is Based on Performance ($M) | | |
Kenneth Akintewe | | | | Registered Investment Companies | | | | 1 | | | | $ | | | | 20.10 | | | | 0 | | | | $ | | | | 0 | | |
| | | | | | | | | | | | | |
| | | | Pooled Investment Vehicles | | | | 18 | | | | $ | | | | 897.46 | | | | 0 | | | | $ | | | | 0 | | |
| | | | | | | | | | | | | |
| | | | Other Accounts | | | | 3 | | | | $ | | | | 60.90 | | | | 0 | | | | $ | | | | 0 | | |
Lin-Jing Leong | | | | Registered Investment Companies | | | | 1 | | | | $ | | | | 20.10 | | | | 0 | | | | $ | | | | 0 | | |
| | | | | | | | | | | | | |
| | | | Pooled Investment Vehicles | | | | 18 | | | | $ | | | | 897.46 | | | | 0 | | | | $ | | | | 0 | | |
| | | | | | | | | | | | | |
| | | | Other Accounts | | | | 3 | | | | $ | | | | 60.90 | | | | 0 | | | | $ | | | | 0 | | |
Steven Logan | | | | Registered Investment Companies | | | | 1 | | | | $ | | | | 416.75 | | | | 0 | | | | $ | | | | 0 | | |
| | | | | | | | | | | | | |
| | | | Pooled Investment Vehicles | | | | 8 | | | | $ | | | | 2,144.10 | | | | 0 | | | | $ | | | | 0 | | |
| | | | | | | | | | | | | |
| | | | Other Accounts | | | | 4 | | | | $ | | | | 415.45 | | | | 0 | | | | $ | | | | 0 | | |
Total assets are as of March 31, 2017 and have been translated to U.S. dollars at a rate of £1.00 = $1.25.
In accordance with legal requirements in the various jurisdictions in which they operate, and their own Conflicts of Interest policies, all subsidiaries of Aberdeen Asset Management PLC (together “Aberdeen”), have in place arrangements to identify and manage Conflicts of Interest that may arise between them and their clients or between their different clients. Where Aberdeen does not consider that these arrangements are sufficient to manage a particular conflict, it will inform the relevant client(s) of the nature of the conflict so that the client(s) may decide how to proceed.
The portfolio managers’ management of “other accounts”, including (1) mutual funds; (2) other pooled investment vehicles; and (3) other accounts that may pay advisory fees that are based on account performance (“performance-based fees”), may give rise to potential conflicts of interest in connection with their management of a Registrant’s investments, on the one hand, and the investments of the other accounts, on the other. The other accounts may have the same investment objective as a Registrant. Therefore, a potential conflict of interest may arise as a result of the identical investment objectives, whereby the portfolio manager could favor one account over another. However, Aberdeen believes that these risks are mitigated by the fact that: (i) accounts with like investment strategies managed by a particular portfolio manager are generally managed in a similar fashion, subject to exceptions to account for particular investment restrictions or policies applicable only to certain accounts, differences in cash flows and account sizes, and similar factors; and (ii) portfolio manager personal trading is monitored to avoid potential conflicts. In addition, Aberdeen has adopted trade allocation procedures that require equitable allocation of trade orders for a particular security among participating accounts.
In some cases, another account managed by the same portfolio manager may compensate Aberdeen based on the performance of the portfolio held by that account. The existence of such performance-based fees may create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities.
Another potential conflict could include instances in which securities considered as investments for a Registrant also may be appropriate for other investment accounts managed by Aberdeen or its affiliates. Whenever decisions are made to buy or sell securities by the Registrant and one or more of the other accounts simultaneously, Aberdeen may aggregate the purchases and sales of the securities and will allocate the securities transactions in a manner that it believes to be equitable under the circumstances. As a result of the allocations, there may be instances where the Registrant will not participate in a transaction that is allocated among other accounts. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available to a Registrant from time to time, it is the opinion of Aberdeen that the benefits from the Aberdeen organization outweigh any disadvantage that may arise from exposure to simultaneous transactions. Aberdeen has adopted policies that are designed to eliminate or minimize conflicts of interest, although there is no guarantee that procedures adopted under such policies will detect each and every situation in which a conflict arises.
With respect to non-discretionary model delivery accounts, Aberdeen will deliver model changes subsequent to commencing trading on behalf of our discretionary accounts. Model changes are typically delivered on a security by security basis. The timing of such delivery is determined by Aberdeen and will depend on the anticipated market impact of trading. Market impact includes, but is not limited to, factors such as liquidity and price impact. When minimal market impact is anticipated, we typically deliver security level model changes after such time when approximately two-thirds of our full discretionary order has been executed. Although we anticipate delivering model changes of such securities after approximately two-thirds of the discretionary order has been executed, we may deliver model changes prior to or substantially after two-thirds have been executed depending on prevailing market conditions and trader discretion. With respect to securities for which we anticipate a more significant market impact, we intend to withhold model deliver changes until such time when the entire discretionary order has been fully executed. Anticipated market impact on any given security is determined at the sole discretion of Aberdeen based on prior market experience and current market conditions. Actual market impact may vary significantly from anticipated market impact. Notwithstanding the aforementioned, we may provide order instructions simultaneously or prior to completion of trading for other accounts if the trade represents a relatively small proportion of the average daily trading volume of the particular security or other instrument.
Aberdeen does not trade for non-discretionary model delivery clients. Because model changes may be delivered to non-discretionary model clients prior to the completion of Aberdeen’s discretionary account trading, Aberdeen may compete against these clients in the market when attempting to execute its orders for its discretionary accounts. As a result, our discretionary clients may experience negative price and liquidity impact due to multiple market participants attempting to trade in a similar direction on the same security.
Timing delays or other operational factors associated with the implementation of trades may result in non-discretionary and model delivery clients receiving materially different prices relative to other client accounts. This may create performance dispersions within accounts with the same or similar investment mandate.
Aberdeen does not currently have any model delivery clients in the Registrant’s strategy but may in the future. Investment decisions for other strategies that have model delivery clients, however, may cause the Registrant to compete against such model delivery clients that hold and trade in a same security as the Registrant.
Aberdeen’s remuneration policies are designed to support its business strategy as a leading international asset manager. The objective is to attract, retain and reward talented individuals for the delivery of sustained, superior returns for Aberdeen’s clients and shareholders. Aberdeen operates in a highly competitive international employment market, and aims to maintain its strong track record of success in developing and retaining talent.
Aberdeen’s policy is to recognize corporate and individual achievements each year through an appropriate annual bonus scheme. The aggregate value of awards in any year is dependent on the group’s overall performance and profitability. Consideration is also given to the levels of bonuses paid in the market. Individual awards, which are payable to all members of staff, are determined by a rigorous assessment of achievement against defined objectives.
A long-term incentive plan for key staff and senior employees comprises a mixture of cash and deferred shares in Aberdeen PLC or select Aberdeen funds (where applicable). Overall compensation packages are designed to be competitive relative to the investment management industry.
Base Salary
Aberdeen’s policy is to pay a fair salary commensurate with the individual’s role, responsibilities and experience, and considering market rates being offered for similar roles in the asset management sector and other comparable companies. Any increase is generally to reflect inflation and is applied in a manner consistent with other Aberdeen employees; any other increases must be justified by reference to promotion or changes in responsibilities.
Annual Bonus
The Remuneration Committee of Aberdeen determines the key performance indicators that will be applied in considering the overall size of the bonus pool. In line with practices amongst other asset management companies, individual bonuses are not subject to an absolute cap. However, the aggregate size of the bonus pool is dependent on the group’s overall performance and profitability. Consideration is also given to the levels of bonuses paid in the market. Individual awards are determined by a rigorous assessment of achievement against defined objectives, and are reviewed and approved by the Remuneration Committee.
Aberdeen has a deferral policy which is intended to assist in the retention of talent and to create additional alignment of executives’ interests with Aberdeen’s sustained performance and, in respect of the deferral into funds, managed by Aberdeen, to align the interest of asset managers with our clients.
Staff performance is reviewed formally at least once a year. The review process evaluates the various aspects that the individual has contributed to Aberdeen, and specifically, in the case of portfolio managers, to the relevant investment team. Discretionary bonuses are based on client service, asset growth and the performance of the respective portfolio manager. Overall participation in team meetings, generation of original research ideas and contribution to presenting the team externally are also evaluated.
In the calculation of a portfolio management team’s bonus, Aberdeen takes into consideration investment matters (which include the performance of funds, adherence to the company investment process, and quality of company meetings) as well as more subjective issues such as team participation and effectiveness at client presentations. To the extent performance is factored in, such performance is not judged against any specific benchmark and is evaluated over the period of a year - January to December. The pre- or after-tax performance of an individual account is not considered in the determination of a portfolio manager’s discretionary bonus; rather the review process evaluates the overall performance of the team for all of the accounts the team manages.
Portfolio manager performance on investment matters is judged over all of the accounts the portfolio manager contributes to and is documented in the appraisal process. A combination of the team’s and individual’s performance is considered and evaluated.
Although performance is not a substantial portion of a portfolio manager’s compensation, Aberdeen also recognizes that fund performance can often be driven by factors outside one’s control, such as (irrational) markets, and as such pays attention to the effort by portfolio managers to ensure integrity of our core process by sticking to disciplines and processes set, regardless of momentum and ‘hot’ themes. Short-terming is thus discouraged and trading-oriented managers will thus find it difficult to thrive in the Aberdeen environment. Additionally, if any of the aforementioned undue risks were to be taken by a portfolio manager, such trend would be identified via Aberdeen’s dynamic compliance monitoring system.
(4)
| | |
Individual | | Dollar Range of Equity Securities in the Registrant Beneficially Owned by the Portfolio Manager as of April 30, 2017 |
Kenneth Akintewe | | None |
Lin-Jing Leong | | None |
Steven Logan | | None |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
REGISTRANT PURCHASES OF EQUITY SECURITIES
| | | | | | | | |
Period | | (a) Total Number of Shares Purchased | | (b) Average Price Paid per Share | | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 1 | | (d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs 1 |
November 1, 2016 through November 30, 2016 | | 12,000 | | $8.14 | | 12,000 | | 873,232 |
December 1, 2016 through December 31, 2016 | | 7,539 | | $7.92 | | 7,539 | | 865,693 |
January 1, 2017 through January 31, 2017 | | 0 | | $0.00 | | 0 | | 865,693 |
February 1, 2017 through February 28, 2017 | | 0 | | $0.00 | | 0 | | 865,693 |
March 1, 2017 through March 31, 2017 | | 0 | | $0.00 | | 0 | | 865,693 |
April 1, 2017 through April 30, 2017 | | 0 | | $0.00 | | 0 | | 865,693 |
Total | | 19,539 | | $8.03 | | 19,539 | | - |
1 The Registrant’s stock repurchase program was announced on March 19, 2001 and further amended by the Registrant’s Board of Directors on December 12, 2007. Under the terms of the current program, the Registrant is permitted to repurchase up to 10% of its outstanding shares of common stock, par value $.01 per share, on the open market during any 12 month period.
Item 10. Submission of Matters to a Vote of Security Holders.
During the period ended April 30, 2017, there were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
Item 11. Controls and Procedures.
| (a) | The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15(b)). |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Exhibits.
| (a)(2) | Certifications pursuant to Rule 30a-2(a) under the Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
| (b) | Certifications pursuant to Rule 30a-2(b) under the Act and section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
| (c) | A copy of the Registrant’s notices to stockholders, which accompanied distributions paid, pursuant to the Registrant’s Managed Distribution Policy since the Registrant’s last filed N-CSR, are filed herewith as Exhibits 12(c)(1), 12(c)(2), 12(c)(3), 12(c)(4), 12(c)(5), 12(c)(6) and 12(c)(7), as required by the terms of the Registrant’s SEC exemptive order. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Aberdeen Global Income Fund, Inc.
| | |
By: | | /s/ Christian Pittard |
| | Christian Pittard, |
| | Principal Executive Officer of |
| | Aberdeen Global Income Fund, Inc. |
Date: July 5, 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.
| | |
By: | | /s/ Christian Pittard |
| | Christian Pittard, |
| | Principal Executive Officer of |
| | Aberdeen Global Income Fund, Inc. |
Date: July 5, 2017
| | |
By: | | /s/ Andrea Melia |
| | Andrea Melia, |
| | Principal Financial Officer of |
| | Aberdeen Global Income Fund, Inc. |
Date: July 5, 2017
EXHIBIT LIST
12(a)(2) – Rule 30a-2(a) Certifications
12(b) – Rule 30a-2(b) Certifications
12(c)(1), 12(c)(2), 12(c)(3), 12(c)(4), 12(c)(5), 12(c)(6) and 12(c)(7) – Distribution notice to stockholders