United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-08188
AllianceBernstein Emerging Market Debt Fund, Inc.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: October 31, 2003
Date of reporting period: October 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
Emerging Market Fixed Income
AllianceBernstein Emerging Market Debt Fund
Annual Report--October 31, 2003
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, without charge, upon request by visiting Alliance Capital's web
site at www.investor.alliancecapital.com or on the Securities and Exchange
Commission's web site at http://www.sec.gov, or by calling Alliance Capital at
(800) 227-4618.
AllianceBernstein Investment Research and Management, Inc., the principal
underwriter of the AllianceBernstein mutual funds and an affiliate of Alliance
Capital Management L.P., the manager of the funds, is a member of the NASD.
December 30, 2003
Annual Report
This report provides performance, investment strategy and outlook for
AllianceBernstein Emerging Market Debt Fund (the "Fund") for the annual
reporting period ended October 31, 2003.
Investment Objectives and Policies
This open-end fund is designed to provide investors with a high level of
current income and, secondarily, capital appreciation. To achieve its
objectives, the Fund invests primarily in a non-diversified portfolio of
sovereign debt obligations and in U.S. and non-U.S. corporate fixed-income
securities. The Fund invests substantially all of its assets in lower-rated
securities.
Investment Results
The following table shows how the Fund performed over the past six- and
12-month periods ended October 31, 2003. For comparison, we have included the
returns for the unmanaged J.P. Morgan Emerging Markets Bond Index Plus (JPM
EMBI+), which provides a broad measure of the performance of a basket of
emerging market debt securities.
INVESTMENT RESULTS*
Periods Ended October 31, 2003
Returns
6 Months 12 Months
- -------------------------------------------------------------------------------
AllianceBernstein
Emerging Market
Debt Fund
Class A 11.23% 42.13%
Class B 10.69% 40.88%
Class C 10.81% 40.98%
J.P. Morgan
Emerging
Markets Bond
Index Plus 7.90% 31.20%
* The Fund's investment results are for the periods shown and are based on
the net asset value (NAV) of each class of shares as of October 31, 2003.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares. All fees and expenses
related to the operation of the Fund have been deducted, but no adjustment has
been made for sales charges that may apply when shares are purchased or
redeemed. Returns for the Fund include the reinvestment of any distributions
paid during each period. Past performance is no guarantee of future results.
The unmanaged J.P. Morgan Emerging Markets Bond Index Plus does not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The Index is a total return index that tracks the traded market for
U.S. dollar-denominated restructured sovereign bonds; a large percentage of the
index is made up of Brady bonds. An investor cannot invest directly in an
index, and its results are not indicative of any specific investment, including
AllianceBernstein Emerging Market Debt Fund.
Additional investment results appear on page 5.
The Fund outperformed its benchmark, the JPM EMBI+, for both the six- and
12-month periods ended October 31, 2003. The Fund benefited from added value
versus its benchmark from both country and security selection.
The Fund's allocation to Brazil was the primary contributor to performance for
the 12-month period under review.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 1
Brazilian debt was the second best performer within the JPM EMBI+, returning
76.47% for the period. The Fund's positioning of Uruguayan and Venezuelan debt
also helped the Fund to outperform versus the index. Both countries conducted
debt exchanges during this period that significantly improved the maturity
structure of their external debt. Uruguay is not part of the JPM EMBI+. In
addition, security selection in Russia contributed positively to the Fund's
performance, as prospects for rating agency upgrades reflected the success of
structural reforms that have led to economic growth and debt reduction.
Market Review and Investment Strategy
The emerging debt market benefited from investors' desire for higher yielding
asset classes, as high levels of global liquidity encouraged more risk taking.
The emerging market debt class, as represented by the JPM EMBI+, returned a
strong 31.20% for the annual period. Latin countries outperformed non-Latin
countries, posting returns of 38.64% versus 21.67%, respectively. All countries
represented within the Index posted positive returns. Top performing countries,
as measured by the JPM EMBI+, included Ecuador at 84.36%, Brazil at 76.47%,
Nigeria at 51.44%, Peru at 39.52% and Turkey at 35.63%, while Colombia at
27.65%, Venezuela at 26.97%, Russia at 23.79%, Panama at 17.26% and Argentina
at 19.19% lagged the Index.
Early in the reporting period, we increased the Fund's exposure to Brazil on
expectations of a victory for President Lula and confidence that his
administration would implement market-friendly policies. We have maintained the
Fund's exposure to this country, as Brazil continues to be a focus for
investors and President Lula exceeded expectations in his ability to push
forward crucial tax and social security reforms. Russia and Mexico continued to
be a large percentage of the Fund's exposure. In October, Moody's Investors
Service upgraded Russia to investment grade, raising the country's rating two
notches to Baa3. We have maintained the Fund's position in Russian sovereign
debt as credit statistics continued to improve. Although still a large position
in the Fund, we reduced our Mexican holdings. Given the current valuations,
these bonds will be very sensitive to changes in U.S. interest rates.
Additionally, we are concerned about the lack of progress on key reforms and
the loss of economic competitiveness in Mexico. With the support of the
International Monetary Fund (IMF), Uruguay announced in April an aggressive
plan to swap its outstanding debt for longer maturity securities. We increased
the Fund's Uruguayan holdings after this announcement--a tactic that proved
beneficial to the Fund. We increased the Fund's holdings in Peru, as this
country's economy continues to expand at a strong rate and inflation remains
low and trending downward, resulting in above budget real revenue increases.
Late in the reporting period, Standard & Poor's raised Turkey's rating from B
to B+, crediting the government's efforts to comply with targets set forth by
the IMF and its resolve to implement reforms. As a result, we added to the
Fund's position in Turkey.
- -------------------------------------------------------------------------------
2 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
PERFORMANCE UPDATE
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND CLASS A
GROWTH OF A $10,000 INVESTMENT
2/25/94* TO 10/31/03
J.P. Morgan Emerging Markets Bond Index Plus: $30,839
AllianceBernstein Emerging Market Debt Fund Class A: $29,488
[THE FOLLOWING DATA WAS DEPICTED AS A MOUNTAIN CHART IN THE PRINTED REPORT]
AllianceBernstein
J.P. Morgan Emerging Market
Emerging Markets Debt Fund
Bond Index Plus Class A
--------------- -----------------
2/25/94* $ 9,579 $10,000
10/31/94 $ 8,960 $ 9,481
10/31/95 $ 9,358 $10,189
10/31/96 $13,662 $14,722
10/31/97 $14,065 $16,314
10/31/98 $11,630 $14,666
10/31/99 $13,862 $17,597
10/31/00 $17,226 $21,202
10/31/01 $17,354 $21,946
10/31/02 $20,772 $23,505
10/31/03 $29,488 $30,839
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Emerging Market Debt Fund Class A shares (from 2/25/94* to
10/31/03) as compared to the performance of an appropriate broad-based index.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares. The chart reflects the
deduction of the maximum 4.25% sales charge from the initial $10,000 investment
in the Fund and assumes the reinvestment of dividends and capital gains.
Performance for Class B and Class C shares will vary from the results shown
above due to differences in expenses charged to these classes. Past performance
is not indicative of future results, and is not representative of future gain
or loss in capital value or dividend income.
The unmanaged J.P. Morgan Emerging Markets Bond Index Plus does not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The Index is composed of dollar-denominated restructured sovereign
bonds; a large percentage of the index is made up of Brady bonds. An investor
cannot invest directly in an index, and its results are not indicative of any
specific investment, including AllianceBernstein Emerging Market Debt Fund.
* Fund and benchmark data are from the Fund's Class A share inception date of
2/25/94.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 3
PORTFOLIO SUMMARY
October 31, 2003
INCEPTION DATES
Class A Shares
2/25/94
Class B Shares
2/25/94
Class C Shares
2/25/94
PORTFOLIO STATISTICS
Net Assets ($mil): $305.8
SECURITY TYPE
80.5% Sovereign Debt Obligations [PIE CHART OMITTED]
12.8% Corporate Fixed Income Securities
6.7% Short-Term
COUNTRY BREAKDOWN
21.3% Brazil
19.3% Russia
15.2% Mexico
8.0% United States
4.7% Turkey
4.1% Venezuela [PIE CHART OMITTED]
3.7% Colombia
3.7% Peru
3.6% Philippines
2.7% Ukraine
2.0% Luxembourg
1.8% Panama
1.6% Bulgaria
8.3% Other
All data as of October 31, 2003. The Fund's security type and country
breakdowns are expressed as a percentage of total investments and may vary over
time. "Other" represents less than 1.5% weightings in the following countries:
Uruguay, Argentina, Netherlands, South Africa, Cayman Islands, El Salvador,
Ecuador, Belize, Morocco, Romania and South Korea.
- -------------------------------------------------------------------------------
4 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
INVESTMENT RESULTS
AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 2003
Class A Shares
- -------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 42.13% 35.99%
5 Years 20.49% 19.46%
Since Inception* 12.34% 11.84%
SEC Yield** 6.17%
Class B Shares
- -------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 40.88% 37.88%
5 Years 19.50% 19.50%
Since Inception*(a) 11.78% 11.78%
SEC Yield** 5.65%
Class C Shares
- -------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 40.98% 39.98%
5 Years 19.54% 19.54%
Since Inception* 11.46% 11.46%
SEC Yield** 5.64%
AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (SEPTEMBER 30, 2003)
Class A Class B Class C
- -------------------------------------------------------------------------------
1 Year 46.74% 48.84% 50.75%
5 Years 21.12% 21.16% 21.17%
Since Inception* 11.78% 11.74%(a) 11.40%
The Fund's investment results represent average annual returns. Returns do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The returns reflect
reinvestment of dividends and/or capital gains distributions in additional
shares without and with the effect of the 4.25% maximum front-end sales charge
for Class A or applicable contingent deferred sales charge for Class B (3% year
1, 2% year 2, 1% year 3, 0% year 4); and for Class C shares (1% year 1).
Returns for Class A shares do not reflect the imposition of the 1 year, 1%
contingent deferred sales charge for accounts over $1,000,000.
The Fund invests a significant amount of its assets in foreign securities,
which may magnify fluctuations and can invest a significant portion of its
assets in the securities of a single issuer, which may present greater risk
than a more diversified portfolio. Price fluctuation may be caused by changes
in interest rates or bond credit quality ratings. Changes in interest rates
have a greater effect on bonds with longer maturities than on those with
shorter maturities.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception date: 2/25/94 for all share classes.
** SEC yields are based on SEC guidelines and are calculated on 30 days ended
October 31, 2003.
(a)Assumes conversion of Class B shares into Class A shares after six years.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 5
PORTFOLIO OF INVESTMENTS
October 31, 2003
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-79.0%
Argentina-1.1%
Republic of Argentina FRN
1.162%, 8/03/12 $ 5,579 $ 3,305,558
------------
Belize-0.5%
Government of Belize
9.50%, 8/15/12 1,500 1,509,596
------------
Brazil-20.2%
Banco Nac Desenv Bondes
6.50%, 6/15/06(a) 1,850 1,887,000
Federal Republic of Brazil
8.875%, 4/15/24 3,300 2,801,700
9.375%, 4/07/08 2,925 3,031,763
10.00%, 1/16/07 1,600 1,730,800
10.00%, 8/07/11 2,950 3,023,750
10.125%, 5/15/27 4,250 3,990,750
11.00%, 1/11/12 1,100 1,178,650
11.00%, 8/17/40(b) 11,022 10,779,515
11.25%, 7/26/07 2,200 2,436,500
12.25%, 3/06/30 1,700 1,851,300
12.75%, 1/15/20 3,325 3,737,300
14.50%, 10/15/09 1,750 2,159,500
C-Bonds
8.00%, 4/15/14 16,901 15,824,501
DCB FRN
Series L
2.063%, 4/15/12 8,800 7,425,440
------------
61,858,469
------------
Bulgaria-1.5%
Republic of Bulgaria
8.25%, 1/15/15(a) 4,247 4,820,345
------------
Colombia-3.7%
Republic of Colombia
9.75%, 4/23/09 375 406,875
10.00%, 1/23/12 2,350 2,475,725
10.50%, 7/09/10 250 272,500
10.75%, 1/15/13 3,700 4,070,000
11.75%, 2/25/20 3,490 3,996,050
------------
11,221,150
------------
Ecuador-0.6%
Republic of Ecuador
7.00%, 8/15/30(a)(c) 2,825 1,885,688
------------
- -------------------------------------------------------------------------------
6 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
El Salvador-0.7%
Republic of El Salvador
7.75%, 1/24/23(a) $ 1,000 $ 1,036,250
8.50%, 7/25/11(a) 1,000 1,075,500
------------
2,111,750
------------
Mexico-12.2%
United Mexican States
6.625%, 3/03/15(d) 7,025 7,232,238
11.375%, 9/15/16 21,250 30,015,624
------------
37,247,862
------------
Morocco-0.4%
Kingdom of Morocco Loan Participation FRN
Series A
2.031%, 1/01/09 1,373 1,328,155
------------
Panama-1.8%
Republic of Panama
9.375%, 4/01/29 2,900 3,291,500
9.625%, 2/08/11 850 983,875
10.75%, 5/15/20 1,025 1,235,125
------------
5,510,500
------------
Peru-3.6%
Republic of Peru
9.125%, 2/21/12 6,625 7,403,438
9.875%, 2/06/15 3,075 3,605,438
------------
11,008,876
------------
Philippines-3.5%
Republic of Philippines
8.25%, 1/15/14 3,300 3,242,250
9.00%, 2/15/13 3,625 3,775,438
9.875%, 1/15/19 1,100 1,140,150
10.625%, 3/16/25 2,300 2,489,750
------------
10,647,588
------------
Russia-15.7%
Russian Federation
5.00%, 3/31/30(a)(c) 36,980 34,587,948
11.00%, 7/24/18(a) 3,500 4,663,750
Russian Ministry of Finance
Series V
3.00%, 5/14/08 2,400 2,106,000
Series VI
3.00%, 5/14/06(a) 1,250 1,203,125
3.00%, 5/14/06 3,950 3,801,875
Series VII
3.00%, 5/14/11 2,250 1,715,625
------------
48,078,323
------------
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 7
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
South Africa-1.0%
Republic of South Africa
7.375%, 4/25/12 $ 2,725 $ 3,065,625
------------
Turkey-4.6%
Republic of Turkey
9.50%, 1/15/14 750 804,375
9.875%, 3/19/08 1,025 1,145,438
11.00%, 1/14/13 1,900 2,216,350
11.75%, 6/15/10 3,370 4,119,825
11.875%, 1/15/30 2,600 3,276,000
12.375%, 6/15/09 2,125 2,635,000
------------
14,196,988
------------
Ukraine-2.7%
Government of Ukraine
7.65%, 6/11/13(a) 500 501,250
11.00%, 3/15/07(a) 6,952 7,664,070
------------
8,165,320
------------
Uruguay-1.2%
Republic of Uruguay
7.25%, 2/15/11 1,050 862,575
7.50%, 3/15/15 361 281,775
7.875%, 1/15/33 3,625 2,465,000
------------
3,609,350
------------
Venezuela-4.0%
Republic of Venezuela
5.375%, 8/07/10 1,200 885,000
9.25%, 9/15/27 5,950 4,789,750
10.75%, 9/19/13(a) 3,530 3,353,500
DCBFRN
Series DL
1.875%, 12/18/07 3,214 2,973,135
FLIRB
Series A
2.063%, 3/31/07 167 153,744
------------
12,155,129
------------
Total Sovereign Debt Obligations
(cost $199,776,108) 241,726,272
------------
CORPORATE DEBT OBLIGATIONS-12.6%
Brazil-0.7%
Petrobras International Finance
9.875%, 5/09/08 1,100 1,240,250
Unibanco
9.375%, 4/30/12(a)(c) 900 958,500
------------
2,198,750
------------
Cayman Islands-0.9%
PF Export Receivables Master Trust
6.436%, 6/01/15(a) 2,729 2,692,531
------------
- -------------------------------------------------------------------------------
8 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Luxembourg-1.9%
PTC International Finance II, SA
11.25%, 12/01/09 $ 2,000 $ 2,195,000
Mobile Telesystems Finance
9.75%, 1/30/08(a) 2,100 2,241,750
10.95%, 12/21/04(a) 1,405 1,489,300
------------
5,926,050
------------
Mexico-2.7%
Innova S de. R.L., SA
9.375%, 9/19/13(a) 3,180 3,219,750
12.875%, 4/01/07 1,115 1,142,533
Monterrey Power SA de C.V.
9.625%, 11/15/09(a) 857 998,642
Pemex Project Funding Master Trust
8.625%, 2/01/22(a) 500 547,500
9.125%, 10/13/10 2,000 2,362,500
------------
8,270,925
------------
Netherlands-1.1%
Hurricane Finance
9.625%, 2/12/10(a) 900 994,500
Kazkommerts International BV
8.50%, 4/16/13(a) 1,350 1,343,250
Turanalem Finance BV
10.00%, 5/29/07(a) 1,000 1,059,000
------------
3,396,750
------------
Romania-0.4%
MobiFon Holdings BV
12.50%, 7/31/10(a) 1,100 1,218,250
------------
Russia-3.3%
Gazprom Oao
9.625%, 3/01/13(a) 5,550 6,049,499
Tyumen Oil
11.00%, 11/06/07(a) 3,375 3,865,788
------------
9,915,287
------------
South Korea-0.3%
Hanvit Bank, SA
12.75%, 3/01/10(a) 725 815,625
------------
United States-1.3%
Citgo Petroleum Corp.
11.375%, 2/01/11(a) 1,900 2,156,500
Freeport-McMoran Copper & Gold
10.125%, 2/01/10 1,500 1,774,750
------------
3,931,250
------------
Total Corporate Debt Obligations
(cost $35,690,112) 38,365,418
------------
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 9
Contracts(e),
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
CALL OPTION PURCHASED(f)-0.0%
Brazil-0.0%
Republic of Brazil
8%, 4/15/14
C-Bonds
Expiring Nov '03 @ 92.625
(cost $22,412) 2,154,968 $ 32,325
------------
WARRANTS(f)-0.0%
Central Bank of Nigeria
Warrants, expiring 11/15/20 3,250 -0-
Republic of Venezuela
Warrants, expiring 4/15/20 48,195 -0-
------------
Total Warrants
(cost $0) -0-
------------
SHORT-TERM INVESTMENT-6.6%
Time Deposit-6.6%
Societe Generale
1.03%, 11/03/03
(cost $20,300,000) $20,300 20,300,000
------------
Total Investments-98.2%
(cost $255,788,632) 300,424,015
Other assets less liabilities-1.8% 5,385,340
------------
Net Assets-100% $305,809,355
============
CALL OPTION WRITTEN (see Note D)
Exercise Expiration
Description Contracts(e) Price Month U.S. $ Value
------------- ------------- ------------- -------------
Federal Republic of Brazil
11.00%, 8/17/40
(premiums received
$32,400) 1,800,000 $98.65 Nov. '03 $(9,000)
CREDIT DEFAULT SWAP CONTRACTS (see Note D)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation /
Referenced Obligation (000's) Rate Date (Depreciation)
- --------------------- ------------- ------------- ------------- -------------
Buy Contracts:
Citigroup Global Markets, Inc.
Republic of Colombia
9.75%, 4/23/09 10,000 3.15% 1/30/04 $(53,000)
Morgan Stanley
Federal Republic of Brazil
10.125%, 5/15/27 2,000 15.25 7/30/04 (215,000)
JP Morgan Chase
Republic of Venezuela
1.875%, 12/18/07 2,650 5.00 9/20/04 (66,515)
Deutsche Bank
Republic of Peru
9.875%, 2/06/15 1,800 3.90 9/20/08 (44,460)
- -------------------------------------------------------------------------------
10 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
CREDIT DEFAULT SWAP CONTRACTS (continued)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation /
Referenced Obligation (000's) Rate Date (Depreciation)
- --------------------- ------------- ------------- ------------- -------------
Sale Contracts:
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 3,300 6.35% 8/20/05 $192,060
Citigroup Global Markets, Inc.
Republic of Colombia
9.75%, 4/23/09 10,000 5.70 1/30/05 499,000
Citigroup Global Markets, Inc.
Republic of Turkey
11.875%, 1/15/30 3,650 7.30 8/13/08 458,440
Citigroup Global Markets, Inc.
Republic of Turkey
11.875%, 1/15/30 1,825 6.45 9/05/08 162,242
Deutsche Bank
Federal Republic of Brazil
8.00%, 4/15/14 3,500 14.50 3/08/08 1,061,200
Deutsche Bank
Federal Republic of Brazil
12.25%, 3/06/30 1,300 17.85 2/06/08 547,170
Deutsche Bank
Republic of Romania
8.50%, 5/08/12 3,500 3.55 4/03/10 290,500
JP Morgan Chase
Federal Republic of Brazil
8.00%, 4/15/14 1,650 9.05 9/20/13 251,625
JP Morgan Chase
Federal Republic of Brazil
8.00%, 4/15/14 1,650 8.60 9/20/08 156,585
JP Morgan Chase
Russian Federation
5.00%, 3/31/30 3,300 3.20 6/25/13 81,510
JP Morgan Chase
Russian Federation
5.00%, 3/31/30 3,300 3.20 6/26/13 81,510
JP Morgan Chase
Republic of Venezuela
1.875%, 12/18/07 2,650 7.70 9/20/06 78,970
Morgan Stanley
Federal Republic of Brazil
10.125%, 5/15/27 2,000 17.75 2/13/08 833,000
UBS Warburg
Federal Republic of Brazil
11.00%, 8/17/40 2,250 8.80 9/20/13 284,063
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 11
REVERSE REPURCHASE AGREEMENT (see Note D)
Interest
Broker Rate Maturity Amount
- --------------- -------- -------- ----------
Lehman Brothers 0.50% 12/31/03 $4,953,365
(a)Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31, 2003,
the aggregate market value of these securities amounted to $92,328,811 or 30.2%
of net assets.
(b)Position, or portion thereof, with an aggregate market value of $1,760,400
has been segregated to collateralize the call option written.
(c)Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at October 31, 2003.
(d)Position, or portion thereof, with an aggregate market value of $5,201,789
has been segregated to collateralize reverse repurchase agreements.
(e)One contract relates to principal amount of $1.00.
(f)Non-income producing security.
Glossary of Terms:
DCB - Debt Conversion Bonds
FLIRB - Front Loaded Interest Reduction Bond
FRN - Floating Rate Note
See notes to financial statements.
- -------------------------------------------------------------------------------
12 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
STATEMENT OF ASSETS & LIABILITIES
October 31, 2003
Assets
Investments in securities, at value (cost $255,788,632) $300,424,015
Cash 3,149,198
Unrealized appreciation of swap contracts 4,977,875
Interest receivable 5,299,397
Receivable for capital stock sold 2,248,643
Receivable for investment securities sold 1,526,268
------------
Total assets 317,625,396
------------
Liabilities
Outstanding call option written, at value
(premiums received $32,400) 9,000
Unrealized depreciation of swap contracts 378,975
Reverse repurchase agreement 4,953,365
Payable for investment securities purchased 3,154,620
Payable for capital stock redeemed 1,821,275
Dividend payable 733,629
Advisory fee payable 192,358
Interest payable 188,460
Distribution fee payable 177,155
Administrative fee payable 12,943
Accrued expenses 194,261
------------
Total liabilities 11,816,041
------------
Net Assets $305,809,355
============
Composition of Net Assets
Capital stock, at par $ 38,025
Additional paid-in capital 301,092,724
Distributions in excess of net investment income (1,144,869)
Accumulated net realized loss on investment transactions (43,434,208)
Net unrealized appreciation on investments 49,257,683
------------
$305,809,355
============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($137,709,396 / 17,221,969 shares of
capital stock issued and outstanding) $8.00
Sales charge--4.25% of public offering price .36
-----
Maximum offering price $8.36
=====
Class B Shares
Net asset value and offering price per share
($90,443,120 / 11,201,557 shares of
capital stock issued and outstanding) $8.07
=====
Class C Shares
Net asset value and offering price per share
($77,656,839 / 9,601,495 shares of
capital stock issued and outstanding) $8.09
=====
See notes to financial statements.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 13
STATEMENT OF OPERATIONS
September 1,
2003 to Year Ended
October 31, August 31,
2003* 2003
------------- -------------
Investment Income
Interest $ 4,747,191 $29,348,692
----------- -----------
Expenses
Advisory fee 371,259 1,888,435
Distribution fee--Class A 64,591 307,679
Distribution fee--Class B 152,522 896,195
Distribution fee--Class C 127,182 596,120
Transfer agency 64,687 331,722
Audit and legal 48,655 131,475
Custodian 34,124 231,633
Administrative 25,000 140,200
Printing 16,293 103,163
Registration 11,593 65,663
Directors' fees 3,300 20,088
Miscellaneous 1,845 23,108
----------- -----------
Total expenses before interest 921,051 4,735,481
Interest expense 137,879 1,194,486
----------- -----------
Total expenses 1,058,930 5,929,967
Less: expense offset arrangement
(see Note B) (8) (234)
----------- -----------
Net expenses 1,058,922 5,929,733
----------- -----------
Net investment income 3,688,269 23,418,959
----------- -----------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions 5,160,746 29,681,299
Written options 20,212 420,087
Swap contract -0- (90,560)
Net change in unrealized
appreciation/depreciation of:
Investments 3,424,646 28,882,188
Written option 23,400 -0-
Swap contracts 1,750,701 2,918,199
----------- -----------
Net gain on investment transactions 10,379,705 61,811,213
----------- -----------
Net Increase in Net Assets
from Operations $14,067,974 $85,230,172
=========== ===========
* The Fund changed its fiscal year end from August 31 to October 31.
See notes to financial statements.
- -------------------------------------------------------------------------------
14 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
STATEMENT OF CHANGES IN NET ASSETS
September 1,
2003 to Year Ended Year Ended
October 31, August 31, August 31,
2003* 2003 2002
-------------- -------------- --------------
Increase (Decrease)
in Net Assets from
Operations
Net investment
income $ 3,688,269 $ 23,418,959 $ 20,824,274
Net realized gain (loss)
on investment
transactions 5,180,958 30,010,826 (24,305,694)
Net change in
unrealized
appreciation/
depreciation of
investments 5,198,747 31,800,387 15,480,097
------------ ------------ ------------
Net increase in
net assets from
operations 14,067,974 85,230,172 11,998,677
Dividends to
Shareholders from:
Net investment income
Class A (1,851,590) (10,200,153) (8,504,921)
Class B (1,219,376) (8,446,512) (9,034,739)
Class C (1,034,345) (5,499,918) (4,787,207)
Tax return of capital
Class A -0- -0- (735,143)
Class B -0- -0- (780,940)
Class C -0- -0- (413,794)
Capital Stock
Transactions
Net increase 14,129,599 18,645,018 23,122,724
------------ ------------ ------------
Total increase 24,092,262 79,728,607 10,864,657
Net Assets
Beginning of period 281,717,093 201,988,486 191,123,829
------------ ------------ ------------
End of period $305,809,355 $281,717,093 $201,988,486
============ ============ ============
* The Fund changed its fiscal year end from August 31 to October 31.
See notes to financial statements.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 15
STATEMENT OF CASH FLOWS
September 1, 2003 to October 31, 2003*
Increase (Decrease) in Cash from
Operating Activities:
Interest received $ 6,321,820
Interest expense paid (304,115)
Operating expenses paid (914,702)
------------
Net increase in cash from operating
activities $ 5,103,003
Investing Activities:
Proceeds from disposition of long-term
portfolio investments 59,237,399
Purchase of long-term portfolio
investments (61,675,262)
Purchase of short-term portfolio
investments, net (9,905,176)
------------
Net decrease in cash from investing
activities (12,343,039)
Financing Activities:**
Subscription of capital stock, net 11,650,433
Cash dividends paid (1,848,633)
------------
Net increase in cash from financing
activities 9,801,800
------------
Net increase in cash 2,561,764
Cash at beginning of period 587,434
------------
Cash at end of period $ 3,149,198
============
- -------------------------------------------------------------------------------
Reconciliation of Net Increase in
Net Assets from Operations to
Net Increase in Cash from Operating
Activities:
Net increase in net assets resulting
from operations $ 14,067,974
Adjustments:
Decrease in interest receivable $ 1,976,229
Net realized gain on investment
transactions (5,180,958)
Net change in unrealized appreciation/
depreciation of investments (5,198,747)
Accretion of bond discount and
amortization of bond premium (401,600)
Decrease in interest payable (166,236)
Increase in accrued expenses 6,341
------------
Total adjustments (8,964,971)
------------
Net Increase in Cash from Operating
Activities $ 5,103,003
============
* The Fund changed its fiscal year end from August 31 to October 31.
** Non-cash financing activities not included herein consist of reinvestment
of dividends.
See notes to financial statements.
- -------------------------------------------------------------------------------
16 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
STATEMENT OF CASH FLOWS
Year ended August 31, 2003
Increase (Decrease) in Cash from
Operating Activities:
Interest received $ 25,635,479
Interest expense paid (873,167)
Operating expenses paid (4,663,539)
------------
Net increase in cash from operating
activities $20,098,773
Investing Activities:
Proceeds from disposition of long-term
portfolio investments 362,963,211
Purchase of long-term portfolio
investments (331,156,020)
Purchase of short-term portfolio
investments, net (9,541,820)
------------
Net increase in cash from investing
activities 22,265,371
Financing Activities:**
Decrease in reverse repurchase
agreements (36,528,715)
Subscription of capital stock, net 7,334,330
Cash dividends paid (12,582,482)
------------
Net decrease in cash from financing
activities (41,776,867)
------------
Net increase in cash 587,277
Cash at beginning of period 157
------------
Cash at end of period $587,434
============
- -------------------------------------------------------------------------------
Reconciliation of Net Increase in
Net Assets from Operations to
Net Increase in Cash from Operating
Activities:
Net increase in net assets resulting
from operations $85,230,172
Adjustments:
Increase in interest receivable $(710,483)
Net realized gain on investment
transactions (30,010,826)
Net change in unrealized
appreciation/depreciation
of investments (31,800,387)
Accretion of bond discount and
amortization of bond premium (3,002,730)
Increase in interest payable 321,319
Increase in accrued expenses 71,708
------------
Total adjustments (65,131,399)
------------
Net Increase in Cash from Operating
Activities $20,098,773
============
** Non-cash financing activities not included herein consist of reinvestment
of dividends.
See notes to financial statements.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 17
NOTES TO FINANCIAL STATEMENTS
October 31, 2003
NOTE A
Significant Accounting Policies
AllianceBernstein Emerging Market Debt Fund, Inc. (the "Fund") was incorporated
in the state of Maryland on December 2, 1993, as a non-diversified, open-end
management investment company. The Fund offers Class A, Class B and Class C
shares. Class A shares are sold with a front-end sales charge of up to 4.25%
for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000
or more, Class A shares redeemed within one year of purchase may be subject to
a contingent deferred sales charge of 1%. Class B shares are currently sold
with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares are subject to a contingent deferred sales
charge of 1% on redemptions made within the first year after purchase. All
three classes of shares have identical voting, dividend, liquidation and other
rights, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. The financial
statements have been prepared in conformity with accounting principles
generally accepted in the United States, which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to Alliance Capital Management L.P. (the "Adviser"), subject to the
Board's continuing oversight, certain responsibilities with respect to the
implementation of the Pricing Policies. Pursuant to the Pricing Policies,
securities for which market quotations are readily available are valued at
their current market value. In general, the market value of these securities is
determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or asked prices are quoted on such day, then the security is
valued in good faith at fair value in accordance with the Pricing Policies.
Securities listed on more than one exchange are valued by reference to the
principal exchange on which the securities are traded; securities not listed on
an exchange but traded on The
- -------------------------------------------------------------------------------
18 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuations, the last available closing settlement price is used;
securities traded in the over-the-counter market,(but excluding securities
traded on NASDAQ) are valued at the mean of the current bid and asked prices as
reported by the National Quotation Bureau or other comparable sources; U.S.
Government securities and other debt instruments having 60 days or less
remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less, or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, the Pricing Policies provide that the
Adviser may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security. Securities for
which market quotations are not readily available are valued at fair value in
accordance with the Pricing Policies.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discount as
adjustments to interest income. Additionally, the Fund amortizes premium on
debt securities for financial statement reporting purposes only.
4. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such class, except that the Fund's Class
B and Class C shares bear higher distribution and transfer agent fees than
Class A shares.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 19
5. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with accounting principles generally accepted in the United States.
To the extent these differences are permanent, such amounts are reclassified
within the capital accounts based on their federal tax basis treatment;
temporary differences do not require such reclassification.
6. Change of Fiscal Year End
The Fund changed its fiscal year end from August 31 to October 31. Accordingly,
the statements of operations and cash flows, the statement of changes in net
assets and financial highlights reflect the period from September 1, 2003 to
October 31, 2003.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .75 of 1% of the average daily net assets
of the Fund. Such fee is accrued daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid $25,000 and $140,200,
respectively, to the Adviser representing the cost of certain legal and
accounting services provided to the Fund by the Adviser for the period ended
October 31, 2003 and the year ended August 31, 2003.
The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. Such compensation amounted to $37,742 and $197,731 for the period ended
October 31, 2003 and the year ended August 31, 2003.
For the period ended October 31, 2003 and the year ended August 31, 2003, the
Fund's expenses were reduced by $8 and $234 under an expense offset arrangement
with AGIS.
AllianceBernstein Investment Research and Management, Inc. (the "Distributor"),
a wholly-owned subsidiary of the Adviser, serves as the distributor of the
Fund's shares. The Distributor has advised the Fund that it has retained
front-end sales charges of $7,669 and $24,446 from the sale of Class A shares
and received $2,125 and $5,960; $44,085 and $174,223; and $6,844 and $21,471 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class A, Class B and Class C shares, respectively, for the period ended October
31, 2003 and year ended August 31, 2003.
- -------------------------------------------------------------------------------
20 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays a distribution fee to the Distributor at an annual rate
of up to .30 of 1% of the average daily net assets attributable to Class A
shares and 1% of the average daily net assets attributable to Class B and Class
C shares. The fees are accrued daily and paid monthly. The Agreement provides
that the Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has advised the Fund
that it has incurred expenses in excess of the distribution costs reimbursed by
the Fund in the amount of $4,739,571 and $2,353,056 for Class B and Class C
shares, respectively; such costs may be recovered from the Fund in future
periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the period ended October 31, 2003, were as follows:
Purchases Sales
------------- -------------
Investment securities (excluding U.S.
government securities) $62,708,976 $55,200,864
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation (excluding the written option and swap
contracts) are as follows:
Cost $257,541,390
------------
Gross unrealized appreciation $ 45,539,586
Gross unrealized depreciation (2,656,961)
------------
Net unrealized appreciation $ 42,882,625
============
1. Swap Agreements
The Fund may enter into swaps on sovereign debt obligations to protect itself
from interest rate fluctuations on the underlying debt instruments and for
investment purposes. A swap is an agreement that obligates two parties to
exchange a series of cash flows at specified intervals based upon or calculated
by reference to changes in specified prices or rates for a specified amount of
an underlying asset. The payment flows are usually netted against each other,
with the difference being paid by one party to the other.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 21
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the underlying value of the securities.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as
interest income (or as an offset to interest income). Fluctuations in the value
of swap contracts are recorded for financial statement purposes as a component
of net change in unrealized appreciation/depreciation of investments. Realized
gains and/or losses from terminated swap contracts are included in net realized
gain or loss on investment transactions.
The Fund may enter into credit default swaps. A sell/(buy) in a credit default
swap provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Fund to buy/(sell) from/(to) the Counterparty at par and
take/(deliver) the principal amount (the "Notional Amount") of the referenced
obligation. During the term of the swap agreement, the Fund receives/(pays)
semi-annual fixed interest payments from/(to) the respective Counterparty,
calculated at the agreed upon interest rate applied to the Notional Amount.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no credit event occurs, it will lose its investment. In addition,
the value of the referenced obligation received by the Fund as a seller if a
credit event occurs, coupled with the periodic payments previously received,
may be less than the full notional value it pays to the buyer, resulting in a
loss of value to the Fund.
2. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds
- -------------------------------------------------------------------------------
22 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
from securities sold through the exercise of put options are decreased by the
premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a
written call option is exercised, the premium received is added to the proceeds
from the sale of the underlying security or currency in determining whether the
Fund has realized a gain or loss. If a written put option is exercised, the
premium received reduces the cost basis of the security or currency purchased
by the Fund. In writing an option, the Fund bears the market risk of an
unfavorable change in the price of the security or currency underlying the
written option. Exercise of an option written by the Fund could result in the
Fund selling or buying a security or currency at a price different from the
current market value.
Transactions in written options for the period ended October 31, 2003 were as
follows:
Number of Premiums
Contracts Received
----------- -------------
Options outstanding at
August 31, 2003 -0- $ -0-
Options written 3,725,000 52,613
Options expired (1,925,000) (20,213)
------------ ------------
Options outstanding at
October 31, 2003 1,800,000 $ 32,400
============ ============
3. Reverse Repurchase Agreements
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
account with the custodian containing liquid assets having a value at least
equal to the repurchase price.
For the period ended October 31, 2003, the average amount of reverse repurchase
agreements outstanding was $6,423,315 and the daily weighted average interest
rate was .57%.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 23
NOTE E
Capital Stock
There are 9,000,000,000 shares of $.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
stock were as follows:
Shares
------------------------------------------------------
September 1,
2003 to Year Ended Year Ended
October 31, August 31, August 31,
2003* 2003 2002
- -------------------------------------------------------------------------------
Class A
Shares sold 2,625,192 15,805,963 7,408,459
Shares issued in
reinvestment of
dividends and
distributions 130,057 767,001 774,307
Shares converted
from Class B 108,120 1,081,814 752,632
Shares redeemed (1,005,137) (14,979,291) (6,726,005)
- -------------------------------------------------------------------------------
Net increase 1,858,232 2,675,487 2,209,393
===============================================================================
Class B
Shares sold 461,773 4,004,147 3,961,357
Shares issued in
reinvestment of
dividends and
distributions 78,242 517,733 656,486
Shares converted
to Class A (109,203) (1,070,593) (743,923)
Shares redeemed (709,323) (5,118,893) (3,700,767)
- -------------------------------------------------------------------------------
Net increase
(decrease) (278,511) (1,667,606) 173,153
===============================================================================
Class C
Shares sold 617,045 4,327,340 2,485,082
Shares issued in
reinvestment of
dividends and
distributions 62,481 355,635 411,963
Shares redeemed (477,362) (2,747,810) (1,727,056)
- -------------------------------------------------------------------------------
Net increase 202,164 1,935,165 1,169,989
===============================================================================
* The Fund changed its fiscal year end from August 31 to October 31.
Amount
------------------------------------------------------
September 1,
2003 to Year Ended Year Ended
October 31, August 31, August 31,
2003* 2003 2002
- -------------------------------------------------------------------------------
Class A
Shares sold $ 20,797,068 $ 109,920,861 $ 45,752,765
Shares issued in
reinvestment of
dividends and
distributions 1,041,833 5,359,919 4,809,570
Shares converted
from Class B 872,532 7,661,897 4,666,315
Shares redeemed (7,987,376) (106,021,261) (41,296,519)
- -------------------------------------------------------------------------------
Net increase $ 14,724,057 $ 16,921,416 $ 13,932,131
===============================================================================
* The Fund changed its fiscal year end from August 31 to October 31.
- -------------------------------------------------------------------------------
24 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
Amount
------------------------------------------------------
September 1,
2003 to Year Ended Year Ended
October 31, August 31, August 31,
2003* 2003 2002
- -------------------------------------------------------------------------------
Class B
Shares sold $ 3,715,085 $ 28,604,474 $ 25,161,520
Shares issued in
reinvestment of
dividends and
distributions 632,968 3,639,603 4,128,656
Shares converted
to Class A (872,532) (7,661,897) (4,666,315)
Shares redeemed (5,701,215) (36,999,728) (23,076,497)
- -------------------------------------------------------------------------------
Net increase (decrease) $ (2,225,694) $ (12,417,548) $ 1,547,364
===============================================================================
Class C
Shares sold $ 4,968,163 $ 31,650,442 $ 15,814,450
Shares issued in
reinvestment of
dividends and
distributions 506,101 2,514,505 2,595,917
Shares redeemed (3,843,028) (20,023,797) (10,767,138)
- -------------------------------------------------------------------------------
Net increase $ 1,631,236 $ 14,141,150 $ 7,643,229
===============================================================================
* The Fund changed its fiscal year end from August 31 to October 31.
NOTE F
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the period ended October 31, 2003.
NOTE G
Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include the possibility of future political and economic
developments which could adversely affect the value of such securities.
Moreover, securities of many foreign companies and foreign governments and
their markets may be less liquid and their prices more volatile than those of
comparable U.S. companies and the United States government. The Fund invests in
the Sovereign Debt Obligations of countries that are considered emerging market
countries at the time of purchase. Therefore, the Fund is susceptible to
governmental factors and economic and debt restructuring developments adversely
affecting the economies of these emerging market countries. In addition, these
debt obligations may be less liquid and subject to greater volatility than debt
obligations of more developed countries.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 25
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the period ended October 31,
2003, and fiscal years ended August 31, 2003 and August 31, 2002 were as
follows:
September 1,
2003 to Year Ended Year Ended
October 31, August 31, August 31,
2003 2003 2002
------------- ------------- -------------
Distributions paid from:
Ordinary income $ 4,105,311 $24,146,583 $22,411,441(a)
----------- ----------- -----------
Total taxable
distributions 4,105,311 24,146,583 22,411,441
Tax return of capital -0- -0- 1,929,877
----------- ----------- -----------
Total distributions
paid $ 4,105,311 $24,146,583 $24,341,318
=========== =========== ===========
As of October 31, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $(42,092,690)(b)
Unrealized appreciation/(depreciation) 47,504,925(c)
------------
Total accumulated earnings/(deficit) $ 5,412,235
============
(a) Total distributions paid differ from the statement of changes in net
assets because for tax purposes dividends are recognized when actually paid.
(b) On October 31, 2003, the Fund had a net capital loss carryforward for
federal income tax purposes of $42,092,690 of which $24,980,617 expires in the
year 2007, $5,826,966 expires in the year 2008 and $11,285,107 expires in the
year 2009. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year, the
Fund utilized capital loss carryforwards of $5,016,595.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between book and tax amortization
methods for premium.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income and the tax treatment of bond
premium, resulted in a net decrease in distributions in excess of net
investment income, a net increase in accumulated net realized loss on
investment transactions and a decrease in additional paid-in capital. This
reclassification had no effect on net assets.
NOTE I
Legal Proceedings
As has been previously reported in the press, the Staff of the U.S. Securities
and Exchange Commission ("SEC") and the Office of the New York Attorney General
("NYAG") have been investigating practices in the mutual fund industry
- -------------------------------------------------------------------------------
26 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
identified as "market timing" and "late trading" of mutual fund shares. Certain
other regulatory authorities have also been conducting investigations into
these practices within the industry and have requested that Alliance Capital
Management L.P. ("Alliance Capital"), the Fund's Adviser, provide information
to them. Alliance Capital has been cooperating and will continue to cooperate
with all of these authorities. Please see "Subsequent Events" below for a
description of the agreements reached by Alliance Capital and the SEC and NYAG
in connection with the investigations mentioned above.
A special committee of Alliance Capital's Board of Directors, comprised of the
members of Alliance Capital's Audit Committee and the other independent member
of the Board, is continuing to direct and oversee an internal investigation and
a comprehensive review of the facts and circumstances relevant to the SEC's and
the NYAG's investigations.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against Alliance Capital; Alliance Capital Management Holding L.P.; Alliance
Capital Management Corporation; AXA Financial, Inc.; certain of the
AllianceBernstein Mutual Funds, including the Fund; Gerald Malone; Charles
Schaffran (collectively, the "Alliance Capital defendants"); and certain other
defendants not affiliated with Alliance Capital. The Hindo Complaint was filed
in the United States District Court for the Southern District of New York by
alleged shareholders of two of the AllianceBernstein Mutual Funds. The Hindo
Complaint alleges that certain of the Alliance Capital defendants failed to
disclose that they improperly allowed certain hedge funds and other
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with Alliance Capital,
including recovery of all fees paid to Alliance Capital pursuant to such
contracts.
Since October 2, 2003, more than thirty additional lawsuits making factual
allegations similar to those in the Hindo Complaint were filed against Alliance
Capital and certain other defendants. All of these lawsuits seek an unspecified
amount of damages.
As a result of the matters more fully discussed in the note entitled
"Subsequent Events" below, investors in the AllianceBernstein Mutual Funds may
choose to redeem their investments. This may require the AllianceBernstein
Mutual Funds to sell investments held by those funds to provide for sufficient
liquidity and could also have an adverse effect on the investment performance
of the AllianceBernstein Mutual Funds.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 27
NOTE J
Subsequent Events
On December 18, 2003, Alliance Capital, the Fund's Adviser, confirmed that it
had reached terms with the SEC and the NYAG for the resolution of regulatory
claims relating to the practice of "market timing" mutual fund shares in some
of the AllianceBernstein Mutual Funds. The agreement with the SEC is reflected
in an Order of the Commission ("SEC Order"). The agreement with the NYAG is
subject to final, definitive documentation. Among the key provisions of these
agreements are the following:
(i) Alliance Capital agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to the market timing relationships
described in the SEC Order (i.e., relationships Alliance Capital maintained
with some investors who were permitted to engage in market timing trades in
some of the AllianceBernstein Mutual Funds in return for or in connection with
making investments (which were not actively traded) in other Alliance Capital
products, including hedge funds and mutual funds, for which Alliance Capital
receives advisory fees). According to the SEC Order, the Reimbursement Fund is
to be paid, in order of priority, to fund investors based on (i) their aliquot
share of losses suffered by the fund due to market timing, and (ii) a
proportionate share of advisory fees paid by such fund during the period of
such market timing;
(ii) Alliance Capital agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds, commencing
January 1, 2004, for a period of at least five years. The determination of
which funds will have their fees reduced and to what degree is subject to the
terms of the definitive agreement with the NYAG; and
(iii) Alliance Capital agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order contemplates that Alliance
Capital's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
- -------------------------------------------------------------------------------
28 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
----------------------------------------------------------------------------
September
1, 2003 to Year Ended August 31,
October ---------------------------------------------------------------
31, 2003(a) 2003 2002(b) 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $ 7.72 $ 6.02 $ 6.37 $ 7.06 $ 5.69 $ 5.05
----------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(c) .11 .69 .69 .85 .75 .71
Net realized and unrealized
gain (loss) on investment
transactions .28 1.71 (.24) (.76) 1.40 .74
----------------------------------------------------------------------------
Net increase in net asset value
from operations .39 2.40 .45 .09 2.15 1.45
----------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net investment
income (.11) (.70) (.74) (.78) (.75) (.74)
Tax return of capital -0- -0- (.06) -0- (.03) (.03)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.04)
----------------------------------------------------------------------------
Total dividends and
distributions (.11) (.70) (.80) (.78) (.78) (.81)
----------------------------------------------------------------------------
Net asset value, end of period $ 8.00 $ 7.72 $ 6.02 $ 6.37 $ 7.06 $ 5.69
============================================================================
Total Return
Total investment return based
on net asset value(d) 5.11% 41.80% 7.38% 1.55% 39.76% 29.40%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $137,709 $118,669 $76,397 $66,750 $66,075 $50,540
Ratio to average net assets of:
Expenses 1.75%(e) 1.94% 1.88% 2.20% 1.76% 1.59%
Expenses, excluding interest
expense 1.47%(e) 1.46% 1.50% 1.47% 1.51% 1.59%
Net investment income 7.90%(e) 9.73% 11.02% 12.78% 11.59% 12.34%
Portfolio turnover rate 20% 125% 170% 150% 173% 179%
See footnote summary on page 32.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 29
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
----------------------------------------------------------------------------
September
1, 2003 to Year Ended August 31,
October ---------------------------------------------------------------
31, 2003(a) 2003 2002(b) 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $ 7.80 $ 6.09 $ 6.45 $ 7.14 $ 5.74 $ 5.05
----------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(c) .10 .64 .64 .79 .71 .67
Net realized and unrealized
gain (loss) on investment
transactions .28 1.73 (.24) (.76) 1.40 .76
----------------------------------------------------------------------------
Net increase in net asset value
from operations .38 2.37 .40 .03 2.11 1.43
----------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net investment
income (.11) (.66) (.70) (.72) (.68) (.68)
Tax return of capital -0- -0- (.06) -0- (.03) (.03)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.03)
----------------------------------------------------------------------------
Total dividends and
distributions (.11) (.66) (.76) (.72) (.71) (.74)
----------------------------------------------------------------------------
Net asset value, end of period $ 8.07 $ 7.80 $ 6.09 $ 6.45 $ 7.14 $ 5.74
============================================================================
Total Return
Total investment return based
on net asset value(d) 4.84% 40.69% 6.50% .63% 38.41% 28.85%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $90,443 $89,571 $80,064 $83,706 $108,075 $110,003
Ratio to average net assets of:
Expenses 2.45%(e) 2.64% 2.58% 2.88% 2.45% 2.31%
Expenses, excluding interest
expense 2.17%(e) 2.17% 2.20% 2.17% 2.21% 2.31%
Net investment income 7.11%(e) 9.07% 10.25% 11.80% 10.85% 11.59%
Portfolio turnover rate 20% 125% 170% 150% 173% 179%
See footnote summary on page 32.
- -------------------------------------------------------------------------------
30 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
----------------------------------------------------------------------------
September
1, 2003 to Year Ended August 31,
October ---------------------------------------------------------------
31, 2003(a) 2003 2002(b) 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $ 7.82 $ 6.10 $ 6.46 $ 7.15 $ 5.74 $ 5.05
----------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(c) .10 .63 .64 .79 .71 .67
Net realized and unrealized
gain (loss) on investment
transactions .28 1.75 (.24) (.76) 1.41 .76
----------------------------------------------------------------------------
Net increase in net asset value
from operations .38 2.38 .40 .03 2.12 1.43
----------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net investment
income (.11) (.66) (.70) (.72) (.68) (.68)
Tax return of capital -0- -0- (.06) -0- (.03) (.03)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.03)
----------------------------------------------------------------------------
Total dividends and
distributions (.11) (.66) (.76) (.72) (.71) (.74)
----------------------------------------------------------------------------
Net asset value, end of period $ 8.09 $ 7.82 $ 6.10 $ 6.46 $ 7.15 $ 5.74
============================================================================
Total Return
Total investment return based
on net asset value(d) 4.83% 40.80% 6.50% .63% 38.58% 28.85%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $77,657 $73,477 $45,527 $40,667 $48,960 $39,024
Ratio to average net assets of:
Expenses 2.43%(e) 2.63% 2.56% 2.87% 2.45% 2.30%
Expenses, excluding interest
expense 2.16%(e) 2.16% 2.19% 2.16% 2.20% 2.30%
Net investment income 7.09%(e) 8.91% 10.16% 11.81% 10.78% 11.56%
Portfolio turnover rate 20% 125% 170% 150% 173% 179%
See footnote summary on page 32.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 31
(a) The Fund changed its fiscal year end from August 31 to October 31.
(b) As required, effective September 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. For the year ended August 31, 2002, the
effect of this change to Class A, B and C was to decrease net investment income
per share by $.01 and decrease net realized and unrealized loss on investment
transactions per share by $.01. Consequently, the ratio of net investment
income to average net assets was decreased from 11.10% to 11.02% for Class A,
from 10.34% to 10.25% for Class B and from 10.24% to 10.16% for Class C. Per
share, ratios and supplemental data for periods prior to September 1, 2001 have
not been restated to reflect this change in presentation.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the year, reinvestment of all
dividends and distributions at net asset value during the year, and redemption
on the last day of the year. Initial sales charge or contingent deferred sales
charge is not reflected in the calculation of total investment return. Total
return does not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares. Total investment return
calculated for a period of less than one year is not annualized.
(e) Annualized.
- -------------------------------------------------------------------------------
32 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of
AllianceBernstein Emerging Market Debt Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Emerging Market Debt Fund, Inc. (the "Fund"), including the
portfolio of investments, as of October 31, 2003, and the related statement of
operations and cash flows for the period from September 1, 2003 to October 31,
2003 and for the year ended August 31, 2003, the statement of changes in net
assets for the period from September 1, 2003 to October 31, 2003 and for each
of the two years in the period ended August 31, 2003, and the financial
highlights for the period from September 1, 2003 to October 31, 2003 and for
each of the five years in the period ended August 31, 2003. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of October 31, 2003, by correspondence with the custodian and others.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
AllianceBernstein Emerging Market Debt Fund, Inc. at October 31, 2003, the
results of its operations and cash flows for the period from September 1, 2003
to October 31, 2003 and for the year ended August 31, 2003, the changes in its
net assets for the period from September 1, 2003 to October 31, 2003 and for
each of the two years in the period ended August 31, 2003, and the financial
highlights for the period from September 1, 2003 to October 31, 2003 and for
each of the five years in the period ended August 31, 2003, in conformity with
accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
New York, New York
December 12, 2003,
except for Note J, as to which the date is December 23, 2003
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 33
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Kathleen A. Corbet, Senior Vice President
Paul J. DeNoon,(2) Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee.
(2) Mr. DeNoon is the person primarily responsible for the day-to-day
management of the Fund's investment portfolio.
- -------------------------------------------------------------------------------
34 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- -------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
William H. Foulk, Jr.,#, 71 Investment adviser and an 113 None
2 Sound View Drive independent consultant. He
Suite 100 was formerly Senior Manager
Greenwich, CT 06830 of Barrett Associates, Inc., a
(9) registered investment adviser,
Chairman of the Board with which he had been associ-
ated since prior to 1998. He was
formerly Deputy Comptroller and
Chief Investment Officer of the
State of New York and, prior
thereto, Chief Investment Officer
of the New York Bank for Savings.
Ruth Block,#, 73 Formerly Executive Vice President 96 None
500 SE Mizner Blvd. and Chief Insurance Officer of
Boca Raton, FL 33432 The Equitable Life Assurance
(9) Society of the United States;
Chairman and Chief Executive
Officer of Evlico; Director of
Avon, BP (oil and gas), Ecolab
Incorporated (specialty chemicals),
Tandem Financial Group and Donaldson,
Lufkin & Jenrette Securities
Corporation; former Governor at
Large National Association of
Securities Dealers, Inc.
David H. Dievler,#, 74 Independent consultant. Until 100 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
(9) Management Corporation
("ACMC") responsible for mutual
fund administration. Prior to
joining ACMC in 1984, he was Chief
Financial Officer of Eberstadt Asset
Management since 1968. Prior to that,
he was a Senior Manager at Price
Waterhouse & Co. Member of American
Institute of Certified Public
Accountants since 1953.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 35
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- -------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
John H. Dobkin,#, 61 Consultant. Formerly President 98 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002,
(9) a Senior Advisor from June 1999
-June 2000 and President of Historic
Hudson Valley (historic preservation)
from December 1989-May 1999.
Previously, Director of the National
Academy of Design and during 1988-1992,
he was Director and Chairman of the
Audit Committee of ACMC.
Clifford L. Michel,#, 64 Senior Counsel of the law firm 97 Placer Dome,
15 St. Bernard's Road of Cahill Gordon & Reindel since Inc.
Gladstone, NJ 07934 February 2001 and a partner of
(9) that firm for more than twenty-five
years prior thereto. He is President
and Chief Executive Officer of Wenonah
Development Company (investments) and
a Director of Placer Dome, Inc. (mining).
Donald J. Robinson,#, 69 Senior Counsel to the law firm of 96 None
98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP
Weston, VT 05161 since prior to 1998. Formerly a
(7) senior partner and a member of
the Executive Committee of that firm.
He was also a member and Chairman of
the Municipal Securities Rulemaking
Board and a Trustee of the Museum of
the City of New York.
INTERESTED DIRECTOR
Marc O. Mayer, +, 46 Executive Vice President of ACMC 68 None
1345 Avenue of the since 2001; prior thereto, Chief
Americas Executive Officer of Sanford C.
New York, NY 10105 Bernstein & Co., LLC and its
(3 months) predecessor since prior to 1998.
* There is no stated term of office for the Fund's Directors.
# Member of the Audit Committee and the Nominating Committee.
+ Mr. Mayer is an "interested director", as defined in the 1940 Act, due to
his position as Executive Vice President of ACMC.
- -------------------------------------------------------------------------------
36 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
Officers of the Fund
Certain information concerning the Fund's Officers is listed below.
POSITION(S) PRINCIPAL OCCUPATION
NAME AND AGE HELD WITH FUND DURING PAST 5 YEARS**
- -------------------------------------------------------------------------------------------------------
Marc O. Mayer, 46 President See biography above.
Kathleen A. Corbet, 43 Senior Vice President Executive Vice President of Alliance Capital
Management Corporation ("ACMC")**, with which
she has been associated since prior to 1998.
Paul J. DeNoon, 41 Vice President Senior Vice President of ACMC**, with which he
has been associated since prior to 1998.
Mark R. Manley, 41 Secretary Senior Vice President and Acting General Counsel
of ACMC**, with which he has been associated since
prior to 1998.
Mark D. Gersten, 53 Treasurer and Chief Senior Vice President of Alliance Global
Financial Officer Investor Services, Inc. ("AGIS")**, and Vice
President of AllianceBernstein Investment Research
and Management, Inc. ("ABIRM")**, with which he
has been associated since prior to 1998.
Vincent S. Noto, 39 Controller Vice President of AGIS**, with which he has been
associated since prior to 1998.
* The address for each of the Fund's Officers is 1345 Avenue of the
Americas, New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at (800) 227-4618 for a free prospectus or SAI.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 37
ALLIANCEBERNSTEIN FAMILY OF FUNDS
Wealth Strategies Funds
- -------------------------------------------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy*
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy**
Blended Style Series
- -------------------------------------------------------------------------------
U.S. Large Cap Portfolio
Growth Funds
- -------------------------------------------------------------------------------
Domestic
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Small Cap Growth Fund+
Technology Fund
Global & International
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
Value Funds
- -------------------------------------------------------------------------------
Domestic
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
Taxable Bond Funds
- -------------------------------------------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
Municipal Bond Funds
- -------------------------------------------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Intermediate Municipal Bond Funds
- -------------------------------------------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
Closed-End Funds
- -------------------------------------------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,++ which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. Please read the prospectus carefully before you invest or send
money.
* Formerly Growth Investors Fund.
** Formerly Conservative Investors Fund.
+ Quasar Fund changed its name to Small Cap Growth Fund on 11/3/03.
++ An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
- -------------------------------------------------------------------------------
38 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
NOTES
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND o 39
NOTES
- -------------------------------------------------------------------------------
40 o ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
ALLIANCEBERNSTEIN EMERGING MARKET DEBT FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLLIANCEBERNSTEIN (SM)
Investment Research and Management
(SM) This service mark used under license from
the owner, Alliance Capital Management L.P.
GDGAR1003
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting officer.
A copy of the registrant's code of ethics is filed herewith as Exhibit 10(a)(1).
(b) During the period covered by this report, no amendments were made to the
provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers to
the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended)
are effective at the reasonable assurance level based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
Exhibit No. DESCRIPTION OF EXHIBIT
10 (a) (1) Code of ethics that is subject to the disclosure of Item 2
hereof
10 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
10 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
10 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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.
(Registrant): AllianceBernstein Emerging Market Debt Fund, Inc.
By: /s/ Marc O. Mayer
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Marc O. Mayer
President
Date: December 30, 2003
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/ Marc O. Mayer
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Marc O. Mayer
President
Date: December 30, 2003
By: /s/ Mark D. Gersten
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Mark D. Gersten
Treasurer and Chief Financial Officer
Date: December 30, 2003