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: 811-07391
AllianceBernstein Global Strategic Income Trust, 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
AllianceBernstein Global Strategic Income Trust
Multi-Sector
Fixed Income
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 8, 2003
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Global Strategic Income Trust (the "Fund") for the annual
reporting period ended October 31, 2003.
Investment Objectives and Policies
This open-end fund seeks primarily a high level of current income and
secondarily capital appreciation. The Fund invests primarily in a portfolio of
fixed-income securities of U.S. and non-U.S. companies and U.S. government and
foreign government securities and supranational entities, including lower-rated
securities. The Fund will maintain at least 65% of its total assets in
investment grade securities and may maintain not more than 35% of its total
assets in lower-rated securities.
Investment Results
The following table provides the Fund's performance over the six- and 12-month
periods ended October 31, 2003. For comparison, we have included the Lehman
Brothers (LB) Global Aggregate Bond Index (hedged), a standard measure of the
international investment-grade bond market, and the Lipper Multi-Sector Income
Funds Average, which reflects the average performance of a group of funds with
similar investment objectives to the Fund.
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INVESTMENT RESULTS*
Periods Ended October 31, 2003
-------------------------
Returns
-------------------------
6 Months 12 Months
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AllianceBernstein Global Strategic Income Trust
Class A 3.63% 19.57%
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Class B 3.27% 18.89%
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Class C 3.27% 18.74%
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Lehman Brothers Global Aggregate Bond Index (hedged) 0.06% 3.84%
- --------------------------------------------------------------------------------
Lipper Multi-Sector Income Funds Average 4.83% 17.40%
- --------------------------------------------------------------------------------
* 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 Advisor Class shares will vary due to different expenses associated
with this class. Returns for the Fund include the reinvestment of any
distributions paid during each period. Past performance is no guarantee of
future results.
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AllianceBernstein Global Strategic Income Trust o 1
The unmanaged Lehman Brothers (LB) Global Aggregate Bond Index (hedged) does
not reflect fees and expenses associated with the active management of a mutual
fund portfolio. The Index provides a broad-based measure of the international
investment-grade bond market. The Index combines the U.S. Aggregate Index with
dollar-denominated versions of the Pan-European Index and the Japanese,
Canadian, Australian and New Zealand components of the Global Treasury Index.
The Lipper Multi-Sector Income Funds Average (the "Lipper Average") reflects
the performance of 113 and 112 funds for the six- and 12-month periods ended
October 31, 2003, respectively. The Lipper Average is comprised of funds that
have generally similar investment objectives to the Fund, although the
investment policies and sales and management fees for its various funds may
vary. An investor cannot invest directly in an index or an average, and its
results are not indicative of any specific investment, including
AllianceBernstein Global Strategic Income Trust.
Additional investment results appear on page 6.
For the 12-month period ended October 31, 2003, the Fund outperformed its
benchmark, the LB Global Aggregate Bond Index, as well as the Lipper
Multi-Sector Income Funds Average. Contributing to the Fund's outperformance
were its high yield and emerging market sector allocations and security
selection. In addition, security selection within the government sector added
to the Fund's relative performance.
In the emerging market sector, Brazilian debt performed well during the
annual reporting period in response to tight fiscal policy and positive
initiatives, including tax and social security reforms. The Fund's exposure in
South Africa, which took advantage of improving economic conditions,
contributed positively to performance. Also contributing positively to the
Fund's performance were its holdings of Mexican long dated fixed-rate
government debt. In the high yield sector, the Fund benefited from its
overweight position in cable and wireless communications, where levels greatly
appreciated in value from previously oversold levels. In addition, the Fund's
underweight position in energy, which languished due to relative overvalued
levels versus the overall market, added to relative performance. The Fund's
government security selection also had a positive impact, with both U.S. and
European government securities enhancing performance. Our avoidance of Japan
provided a significant advantage against the benchmark.
Market Review and Investment Strategy
Among U.S. investment-grade bonds, Treasuries were the weakest sector, while
corporates posted the strongest absolute returns. The Fund currently maintains
a diversified overweight position in emerging markets and high yield
corporates, at the expense of U.S. government debt. Investors' desire for
higher yielding asset classes benefited both the emerging debt and high yield
markets, as high levels of global liquidity encouraged more risk taking during
the period. We maintained the Fund's exposure to Brazil, and the country
continues to be a focus for investors. Brazil's President Lula exceeded
expectations in his ability to push forward
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2 o AllianceBernstein Global Strategic Income Trust
crucial tax and social security reforms. We reduced the Fund's Mexican
holdings, as we believe that 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. 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.
In the high yield sector, the Fund benefited from exposure to certain higher
risk/volatility issuers in the cable and wireless telecommunications sectors.
We maintained a sector overweighting based on our belief that these sectors
were oversold and certain better quality issuers were punished along with the
entire sector. This proved to be correct as investors recognized the
historically high spreads in a number of these sectors. In our view, events had
led to an asymmetric profile of expected returns, in which volatility in the
credit markets would remain high, creating opportunities in quality companies
in oversold sectors. Given our constructive view of the economy, we maintained
the Fund's positions in certain cyclical sectors, such as paper/packaging and
services, but continued to reduce allocation to specific names to enhance
sector diversification. We continued to underweight credit challenged sectors,
such as airlines, technology, utilities, wireline telecommunications and
retail, but added some issuers in these sectors as we identified value in
certain names. We maintain the Fund's underweighted positions in utilities and
technology due to ongoing credit concerns. We also underweighted the
food/beverage and energy sectors due to unattractive valuation levels.
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AllianceBernstein Global Strategic Income Trust o 3
PERFORMANCE UPDATE
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST CLASS A
GROWTH OF A $10,000 INVESTMENT
1/9/96* TO 10/31/03
AllianceBernstein Global Strategic Income Trust Class A: $17,720
LB Global Aggregate Bond Index (hedged): $16,926
Lipper Multi-Sector Income Funds Average: $15,577
[THE FOLLOWING TABLE WAS DEPICTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
AllianceBernstein
Global Strategic Income LB Global Aggregate Lipper Multi-Sector
Trust Class A Bond Index (hedged) Income Funds Average
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1/9/96* 9579 10000 10000
10/31/96 11232 10467 10599
10/31/97 13122 11496 11637
10/31/98 13253 12749 11724
10/31/99 14202 12900 12127
10/31/00 15070 13834 12267
10/31/01 14844 15536 12859
10/31/02 14769 16301 13268
10/31/03 17720 16926 15577
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Global Strategic Income Trust Class A shares (from 1/9/96* to
10/31/03) as compared to the performance of an appropriate broad-based index
and the Lipper Multi-Sector Income Funds Average. 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 $10,000 investment in the Fund and assumes
the reinvestment of dividends and capital gains. Performance for Class B and
Class C shares will vary from the results shown above due to differences in
expenses charged to these classes. Past performance is not indicative of future
results, and is not representative of future gain or loss in capital value or
dividend income.
The unmanaged Lehman Brothers (LB) Global Aggregate Bond Index (hedged) does
not reflect fees and expenses associated with the active management of a mutual
fund portfolio. The Index provides a broad-based measure of the international
investment-grade bond market. The Index combines the U.S. Aggregate Index with
dollar-denominated versions of the Pan-European Index and the Japanese,
Canadian, Australian and New Zealand components of the Global Treasury Index.
The Lipper Multi-Sector Income Funds Average reflects performance of 58 funds
(based on the number of funds in the average from 1/9/96* to 10/31/03). These
funds have generally similar investment objectives to AllianceBernstein Global
Strategic Income Trust, although the investment policies of some funds included
in the average may vary.
Lipper results include fees and expenses. An investor cannot invest directly in
an index or an average, and its results are not indicative of any specific
investment, including AllianceBernstein Global Strategic Income Trust.
* Fund data is from the Fund's Class A share inception date of 1/9/96. Data
for the benchmark and the Lipper Average is from 1/31/96, the closest month-end
to the Fund's inception date for which data is available.
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4 o AllianceBernstein Global Strategic Income Trust
PORTFOLIO SUMMARY
October 31, 2003
INCEPTION DATES PORTFOLIO STATISTICS
Class A Shares Net Assets ($mil): $175.1
1/9/96
Class B Shares
3/21/96
Class C Shares
3/21/96
SECURITY TYPE BREAKDOWN
42.3% Sovereign
7.8% Federal Agency
6.5% Supranationals
5.3% Banking
4.5% Treasury
2.8% Energy
2.5% Communications-Fixed
2.4% Paper & Packaging [PIE CHART OMITTED]
2.2% Utilities--Electric & Gas
2.0% Financial Services
1.8% Consumer Manufacturing
1.7% Automotive
1.7% Communications--Mobile
1.6% Broadcasting & Cable
13.0% Other
1.9% Short-Term
All data as of October 31, 2003. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time. "Other"
represents less than 1.5% weightings in the following securities:
Communications, Service, Chemicals, Technology, Publishing, Broadcasting/Media,
Entertainment/Leisure, Supermarket/Drug, Health Care, Hotel/Lodging,
Building/Real Estate, Brady Bonds, Petroleum Products, Retail, Containers,
Food/Beverage, Insurance, Industrial, Gaming, Electronics, Metals/Mining,
Public Utilities-Telephone, Conglomerate/Miscellaneous and Communications
Equipment.
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AllianceBernstein Global Strategic Income Trust o 5
INVESTMENT RESULTS
AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 2003
Class A Shares
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Without Sales Charge With Sales Charge
1 Year 19.57% 14.55%
5 Year 5.91% 5.00%
Since Inception* 8.15% 7.55%
SEC Yield** 4.57%
Class B Shares
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Without Sales Charge With Sales Charge
1 Year 18.89% 14.89%
5 Year 5.18% 5.18%
Since Inception* 7.55% 7.55%
SEC Yield** 4.07%
Class C Shares
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Without Sales Charge With Sales Charge
1 Year 18.74% 17.74%
5 Year 5.18% 5.18%
Since Inception* 7.38% 7.38%
SEC Yield** 4.09%
AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (SEPTEMBER 30, 2003)
Class A Class B Class C
- -------------------------------------------------------------------------------
1 Year 15.68% 15.92% 18.91%
5 Year 5.17% 5.34% 5.34%
Since Inception* 7.65% 7.64% 7.49%
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 (4% year
1, 3% year 2, 2% year 3, 1% 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. Returns for
Advisor Class shares will vary due to different expenses associated with this
class.
The Fund invests a significant amount of its assets in foreign securities and
emerging markets which could result in substantial volatility due to political
and economic uncertainty. The Fund can invest a portion of its assets in the
securities of a single issuer, a single region, a single foreign country and
35% of its assets in lower-rated securities which may present greater risk. In
an effort to increase yield, the Fund can use leverage which may increase
fluctuation caused by changes in interest rates or bond credit quality ratings.
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: 1/9/96, Class A shares; 3/21/96, Class B and Class C shares.
** SEC yields are based on SEC guidelines and are calculated on 30 days ended
October 31, 2003.
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6 o AllianceBernstein Global Strategic Income Trust
PORTFOLIO OF INVESTMENTS
October 31, 2003
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
Argentina-0.7%
Government Obligation-0.7%
Republic of Argentina
1.16%, 8/03/12(a)
(cost $1,224,918) US$ 2,200 $ 1,303,500
------------
Australia-0.1%
Corporate Debt Obligation-0.1%
Commonwealth Bank of Australia
4.65%, 6/15/18(b)
(cost $149,166) 150 142,137
------------
Brazil-4.8%
Government Obligations-4.8%
Banco Nacional de Desenvolvimento
Economico e Social
6.50%, 6/15/06(b) 75 76,500
Brazil Real Structured Product
Zero Coupon, 4/05/10(a) 22,734 2,212,653
Federal Republic of Brazil
8.00%, 4/15/14(a) 770 720,606
11.25%, 7/26/07(a) 1,150 1,273,625
12.00%, 4/15/10(a) 2,100 2,367,750
14.50%, 10/15/09(a) 1,475 1,820,150
------------
Total Brazilian Securities
(cost $6,160,338) 8,471,284
------------
Canada-4.2%
Corporate Debt Obligations-1.1%
Abitibi-Consolidated, Inc.
6.00%, 6/20/13(a) 1,275 1,193,353
Bombardier, Inc.
6.75%, 5/01/12(b) 85 90,737
Doman Industries, Ltd.
12.00%, 7/01/04(a) 400 422,000
Intrawest Corp.
10.50%, 2/01/10(a) 250 275,937
------------
1,982,027
------------
Government Obligation-3.1%
Canada Housing Trust
4.40%, 3/15/08(a) CAD 6,918 5,315,700
------------
Total Canadian Securities
(cost $7,362,918) 7,297,727
------------
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AllianceBernstein Global Strategic Income Trust o 7
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Cayman Islands-0.2%
Preferred Stock-0.2%
ACE Ltd. Series C
7.80%, 12/31/49(a)
(cost $325,000) 13,000 $ 346,450
------------
Chile-1.2%
Government Obligation-1.2%
Banco Central Chile Peso
8.00%, 9/01/07(a)
(cost $1,749,659) CLP 1,200,000 2,090,112
------------
Colombia-0.7%
Government Obligations-0.7%
Republic of Colombia
9.75%, 4/23/09(a) US$ 150 161,475
11.75%, 2/25/20(a) 1,000 1,145,000
------------
Total Colombian Securities
(cost $1,107,551) 1,306,475
------------
Denmark-0.3%
Corporate Debt Obligations-0.3%
Danske Bank A/S
5.88%, 3/26/15(a)
(cost $458,670) EUR 440 551,420
------------
El Salvador-0.2%
Government Obligation-0.2%
Republic of El Salvador
7.75%, 1/24/23(b)
(cost $249,194) US$ 250 257,875
------------
France-10.2%
Corporate Debt Obligations-0.5%
Crown European Holdings SA
10.88%, 3/01/13(b) 525 601,125
FIMEP SA
10.50%, 2/15/13(a)(b) 305 356,850
------------
957,975
------------
Government Obligation-9.7%
Government of France
4.00%, 10/25/13(a) EUR 15,000 16,923,347
------------
Total French Securities
(cost $18,180,512) 17,881,322
------------
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8 o AllianceBernstein Global Strategic Income Trust
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Germany-4.3%
Corporate Debt Obligations-0.4%
Kronos International, Inc.
8.88%, 6/30/09(a) EUR 250 $ 303,024
Messer Griesheim GmbH
10.38%, 6/01/11(a) 300 404,515
------------
707,539
------------
Government Obligations-3.9%
Bundesobligation
4.50%, 8/17/07(a) 1,297 1,563,978
Deutsche Bundesrepublik
5.00%, 1/04/12(a) 4,095 5,022,419
5.38%, 1/04/10(a) 200 250,857
------------
6,837,254
------------
Total German Securities
(cost $7,205,775) 7,544,793
------------
Greece-0.4%
Corporate Debt Obligation-0.4%
Antenna TV SA
9.75%, 7/01/08(a)
(cost $463,766) 540 620,083
------------
Ireland-0.2%
Corporate Debt Obligation-0.2%
JSG Funding Plc.
10.13%, 10/01/12(a)(b)
(cost $294,720) 300 384,507
------------
Italy-1.3%
Corporate Debt Obligation-1.3%
Banca Popolare di Bergamo Capital Trust
8.36%, 2/15/11(a)
(cost $1,645,595) 1,735 2,304,430
------------
Japan-0.1%
Corporate Debt Obligation-0.1%
UFJ Finance Aruba AEC
6.75%, 7/15/13(a)
(cost $99,545) US$ 100 104,881
------------
Kazakhstan-0.7%
Corporate Debt Obligation-0.7%
Kazkommerts International BV
8.50%, 4/16/13(b)
(cost $1,269,236) 1,300 1,293,500
------------
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AllianceBernstein Global Strategic Income Trust o 9
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Luxembourg-0.6%
Corporate Debt Obligations-0.6%
Antargaz Finance
10.00%, 7/15/11(b) EUR 200 $ 259,818
PTC International Finance II SA
11.25%, 12/01/09(a) US$ 250 274,375
Sanitec International SA
9.00%, 5/15/12(a) EUR 175 190,803
Tyco International Group SA
6.50%, 11/21/11(a) GBP 170 281,843
------------
Total Luxembourg Securities
(cost $925,687) 1,006,839
------------
Mexico-5.4%
Corporate Debt Obligations-0.6%
Innova S. de R.L.
9.38%, 9/19/13(a)(c) US$ 805 815,063
12.88%, 4/01/07(a) 282 287,232
------------
1,102,295
------------
Government Obligations-4.8%
Mexican Bonos
9.00%, 12/20/12(a) MXN 7,4917 17,470
10.50%, 7/14/11(a) 22,636 2,354,831
United Mexican States
11.38%, 9/15/16(a) US$ 3,800 5,358,000
------------
8,430,301
------------
Total Mexican Securities
(cost $8,338,904) 9,532,596
------------
Netherlands-0.6%
Common Stock-0.0%
Versatel Telecom International NV(a)(c) 32,931 75,630
------------
Corporate Debt Obligation-0.6%
Koniklijke (Royal) KPN NV
3.50%, 11/24/05(a) EUR 860 998,761
------------
Preferred Stock-0.0%
United Pan-Europe Communications NV
convertible preferred(c)(d) 30,000 22,200
------------
Warrants-0.0%
Versatel Telecom International NV
expiring 10/08/04(a)(c) 32,931 7,257
------------
Total Dutch Securities
(cost $3,805,508) 1,103,848
------------
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10 o AllianceBernstein Global Strategic Income Trust
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
New Zealand-2.6%
Government Obligation-2.6%
Government of New Zealand
6.50%, 2/15/06(a)
(cost $4,600,473) NZD 7,390 $ 4,597,489
------------
Poland-1.5%
Government Obligation-1.5%
Government of Poland
8.50%, 2/12/05(a)
(cost $2,641,738) PLN 10,000 2,539,072
------------
Romania-0.6%
Corporate Debt Obligation-0.6%
MobiFon Holdings BV
12.50%, 7/31/10(b)
(cost $963,312) US$ 980 1,085,350
------------
Russia-6.2%
Corporate Debt Obligation-0.1%
Tyumen Oil
11.00%, 11/06/07(b) 150 172,425
------------
Government Obligations-6.1%
Russian Federation
5.00%, 3/31/30(b)(e) 7,750 7,219,125
5.00%, 3/31/30(b)(e) 1,050 978,075
Russian Ministry of Finance
3.00%, 5/14/06(a) 2,500 2,406,250
------------
10,603,450
------------
Total Russian Securities
(cost $6,074,413) 10,775,875
------------
Slovakia-0.2%
Corporate Debt Obligation-0.2%
Slovak Wireless Finance Co. NV
11.25%, 3/30/07(a)
(cost $309,305) EUR 300 379,461
------------
South Africa-7.4%
Corporate Debt Obligations-7.4%
Development Bank of Southern Africa
Zero Coupon, 12/31/27(a) ZAR 50,000 831,216
European Bank for Reconstruction &
Development
Zero Coupon, 12/31/29(a) 50,000 965,517
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AllianceBernstein Global Strategic Income Trust o 11
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
International Bank for Reconstruction &
Development
Zero Coupon, 12/31/25(a) ZAR 350,000 $ 8,176,915
Zero Coupon, 2/17/26(a) 50,000 1,163,122
Zero Coupon, 12/29/28(b) 250,000 1,822,141
------------
Total South African Securities
(cost $12,045,657) 12,958,911
------------
Spain-3.3%
Government Obligation-3.3%
Government of Spain
4.25%, 10/31/07(a)
(cost $5,869,677) EUR 4,800 5,741,149
------------
Turkey-0.1%
Government Obligation-0.1%
Republic of Turkey
11.88%, 1/15/30(a)
(cost $173,624) US$ 150 187,875
------------
Ukraine-1.1%
Government Obligation-1.1%
Government of Ukraine
7.65%, 6/11/13(b)
(cost $2,000,000) 2,000 1,992,500
------------
United Kingdom-4.1%
Corporate Debt Obligations-3.9%
Avecia Group Plc.
11.00%, 7/01/09(a) 500 467,500
British Telecommunications Plc.
8.63%, 12/15/30(a) 1,000 1,292,216
Filtronic Plc.
10.00%, 12/01/05(a) 500 515,000
mmO2 Plc.
6.38%, 1/25/07(a) EUR 820 1,020,768
Rexam Plc.
6.63%, 3/27/07(a) 810 1,006,354
Royal & Sun Alliance Insurance
Group Plc.
8.95%, 10/15/29(a) US$ 305 281,658
Royal Bank of Scotland Group Plc.
7.65%, 9/30/31(a) 1,875 2,228,724
------------
6,812,220
------------
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12 o AllianceBernstein Global Strategic Income Trust
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Preferred Stock-0.2%
HSBC Capital Funding LP
4.61%, 6/27/13(a)(b) 370,000 $ 344,447
Royal Bank of Scotland Group Plc.
5.75%, 6/23/08(a) 3,700 89,910
------------
434,357
------------
Total United Kingdom Securities
(cost $6,402,147) 7,246,577
------------
United States-38.8%
Corporate Debt Obligations-24.3%
AK Steel Corp.
7.88%, 2/15/09(a) US$ 605 426,525
Allied Waste North America Series B
10.00%, 8/01/09(a) 500 546,250
Anchor Glass Container Corp.
11.00%, 2/15/13(b) 455 520,975
AT&T Corp.
7.80%, 11/15/11(a) 100 113,533
Berry Plastics Corp.
10.75%, 7/15/12(a) 485 548,050
Broder Brothers Co.
11.25%, 10/15/10(a)(b) 1,095 1,127,850
Calpine Corp.
8.50%, 7/15/10(b) 500 460,000
Charter Communications Holdings LLC
11.75%, 5/15/11(a)(f) 585 346,612
CITGO Petroleum Corp.
11.38%, 2/01/11(b) 500 567,500
Clear Channel Communications, Inc.
5.75%, 1/15/13(a) 200 207,483
Comcast Cable Communications
Holdings, Inc.
8.38%, 3/15/13(a) 440 532,950
Concentra Operating Corp.
13.00%, 8/15/09(a) 405 451,575
Cooperative Computing, Inc.
10.50%, 6/15/11(a)(b) 490 531,650
Crum & Forster Holdings Corp
10.38%, 6/15/13(b) 240 259,200
Dana Corp.
10.13%, 3/15/10(a) 210 238,350
Delhaize America, Inc.
8.05%, 4/15/27(a) 860 870,750
Devon Financing Corp. ULC
7.88%, 9/30/31(a) 3,000 3,560,799
Dex Media East LLC
9.88%, 11/15/09(a) 200 227,500
12.13%, 11/15/12(a) 205 248,306
Dex Media West LLC
8.50%, 8/15/10(a)(b) 120 131,400
9.88%, 8/15/13(a)(b) 460 525,550
- ------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 13
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Dobson Communications Corp.
8.88%, 10/01/13(a)(b) US$ 270 $ 275,400
Dura Operating Corp. Series D
9.00%, 5/01/09(a) 400 368,000
EOP Operating LP
5.88%, 1/15/13(a) 250 260,543
Euronet Worldwide, Inc.
12.38%, 7/01/06(a) EUR 3,573 1,610,397
Extended Stay America, Inc.
9.88%, 6/15/11(a) US$ 170 187,850
FairPoint Communications, Inc.
11.88%, 3/01/10(b) 145 170,375
FastenTech, Inc.
11.50%, 5/01/11(b) 255 271,575
Ford Motor Co.
7.45%, 7/16/31(a) 292 263,020
Ford Motor Credit Co.
7.00%, 10/01/13(a) 100 98,477
General Electric Capital Corp.
6.88%, 11/15/10(a) 520 594,704
General Motors Corp.
7.13%, 7/15/13(a) 230 239,762
8.38%, 7/15/33(a) 200 211,610
General Motors Acceptance Corp.
8.00%, 11/01/31(a) 98 101,069
Georgia Gulf Corp.
10.38%, 11/01/07(a) 285 301,387
HCA, Inc.
6.25%, 2/15/13(a) 70 69,338
6.75%, 7/15/13(a) 100 102,599
7.50%, 11/06/33 300 299,574
7.58%, 9/15/25(a) 65 65,025
7.69%, 6/15/25(a) 15 15,260
Hilcorp Energy I LP
10.50%, 9/01/10(a)(b) 750 810,000
Hines Nurseries, Inc.
10.25%, 10/01/11(a)(b) 330 354,750
HLI Operating Co., Inc.
10.50%, 6/15/10(b) 200 219,000
Houghton Mifflin Co.
9.88%, 2/01/13(b) 175 190,094
Household Finance Corp.
7.00%, 5/15/12(a) 492 559,665
Huntsman International LLC
10.13%, 7/01/09(a) 500 478,750
IBM Corp.
4.75%, 11/29/12(a) 700 701,256
Insight Communications Co., Inc.
12.25%, 2/15/11(a)(f) 580 408,900
Insight Midwest LP/Insight Capital
9.75%, 10/01/09(a) 500 512,500
- ------------------------------------------------------------------------------
14 o AllianceBernstein Global Strategic Income Trust
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Interline Brands, Inc.
11.50%, 5/15/11(b) US$ 250 $ 271,250
Iridium LLC/Capital Corp. Series B
14.00%, 7/15/05(a)((g) 2,000 190,000
Jabil Circuit, Inc.
5.88%, 7/15/10(a) 100 103,451
Jostens, Inc.
12.75%, 5/01/10(a) 500 582,500
JP Morgan Chase & Co.
5.75%, 1/02/13(a) 900 946,330
Liberty Mutual
8.50%, 5/15/25(b) 100 101,300
Markel Corp.
7.00%, 5/15/08(a) 179 192,937
MeadWestvaco Corp.
6.85%, 4/01/12(a) 300 330,782
MeriStar Hospitality Corp.
9.13%, 1/15/11(a) 250 265,625
Mizuho JGB Investment LLC
9.87%, 6/30/08(b) 348 386,776
National Waterworks, Inc. Series B
10.50%, 12/01/12(a) 200 225,000
Nextel Partners, Inc.
12.50%, 11/15/09(a) 500 582,500
ON Semiconductor Corp.
12.00%, 5/15/08(a)(f) 600 699,000
Paxson Communications Corp.
12.25%, 1/15/09(a)(f) 265 223,925
PF Export Receivables Master Trust
6.44%, 6/01/15(b) 487 480,809
Pliant Corp.
13.00%, 6/01/10(a) 395 379,200
Progress Energy, Inc.
7.75%, 3/01/31(a) 2,600 3,048,100
Qwest Corp.
8.88%, 3/15/12(b) 100 113,500
Qwest Services Corp.
13.50%, 12/15/10(b) 150 175,875
Resolution Performance Products LLC
13.50%, 11/15/10(a) 300 285,000
RH Donnelley Finance Corp. I
10.88%, 12/15/12(b) 305 365,238
Rite Aid Corp.
11.25%, 7/01/08(a) 200 226,000
Riviera Holdings Corp.
11.00%, 6/15/10(a) 240 246,000
RJ Tower Corp.
9.25%, 8/01/10(a) EUR 500 503,107
Royal Caribbean Cruises, Ltd.
8.75%, 2/02/11(a) US$ 250 280,000
- ------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 15
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Salton, Inc.
12.25%, 4/15/08(a) US$ 250 $ 247,500
SCG Holding Corp.
12.00%, 8/01/09(a) 190 203,300
Sealy Mattress Co. Series B
9.88%, 12/15/07(a) 500 518,750
Sears Roebuck Acceptance Corp.
6.88%, 10/15/17(a) 64 74,294
Service Corp. International
6.00%, 12/15/05(a) 150 151,875
Six Flags, Inc.
9.75%, 4/15/13(b) 250 246,250
Sola International, Inc.
11.00%, 3/15/08(a) EUR 300 389,726
Sovereign Bank
5.13%, 3/15/13(a) US$ 60 58,835
Sprint Capital Corp.
8.38%, 3/15/12(a) 200 228,714
Swift & Co.
10.13%, 10/01/09(b) 500 565,000
The Limited Brands, Inc.
6.95%, 3/01/33(a) 500 541,387
Time Warner, Inc.
7.70%, 5/01/32(a) 200 226,819
Time Warner Telecom, Inc.
10.13%, 2/01/11(a) 730 761,025
Trump Casino Holdings LLC
11.63%, 3/15/10 260 230,425
TRW Automotive, Inc.
9.38%, 2/15/13(b) 250 285,000
11.00%, 2/15/13(b) 250 296,250
Union Carbide Corp.
6.79%, 6/01/25(a) 100 97,000
Universal City Development Partners
11.75%, 4/01/10(b) 505 586,431
Vail Resorts, Inc.
8.75%, 5/15/09(a) 100 105,625
Verizon Global Funding Corp.
7.38%, 9/01/12(a) 220 252,802
7.75%, 12/01/30(a) 1,000 1,161,756
7.75%, 6/15/32(a) 300 349,062
Washington Mutual Bank FA
5.50%, 1/15/13(a) 500 512,755
William Lyon Homes, Inc.
10.75%, 4/01/13(a) 250 278,750
William Scotsman, Inc.
9.88%, 6/01/07(a) 500 510,000
Williams Cos., Inc. Series A
7.50%, 1/15/31(a) 250 236,250
------------
42,503,474
------------
- ------------------------------------------------------------------------------
16 o AllianceBernstein Global Strategic Income Trust
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
U.S. Government and Government
Sponsored Agency Obligations-13.0%
Federal National Mortgage Association
30 YR TBA
5.50%, 11/25/33 US$ 6,700 $ 6,762,813
6.00%, 11/25/33 7,500 7,701,563
U.S. Treasury Bonds
5.38%, 2/15/31(a) 693 716,362
U.S. Treasury Notes
1.88%, 7/15/13 (TIPS)(a) 5,070 5,057,801
3.88%, 2/15/13(a) 2,606 2,534,233
4.25%, 8/15/13(a) 89 88,666
------------
22,861,438
------------
Preferred Stocks-1.5%
CBA Capital Trust I
5.81%, 6/30/15(b) 300,000 306,676
Cablevision Systems New York Group
Series M
11.13%, 4/01/08(a) 5,000 525,000
Enterprise Capital Trust II Series B
2.36%, 6/30/28 500,000 407,782
Ford Motor Co. Capital Trust II
6.50%, 1/15/32(a) 11,005 511,182
Paxson Communications
13.25%, 11/15/06(a) 31 291,400
Sovereign Real Estate Investment Corp.
12.00%, 5/16/20(b) 400,000 597,000
------------
2,639,040
------------
Total United States Securities
(cost $64,186,837) 68,003,952
------------
Uruguay-0.4%
Government Obligation-0.4%
Republic of Uruguay
10.50%, 10/20/06 (TIPS)(a)
(cost $604,113) UYU 16,884 608,363
------------
Venezuela-1.1%
Government Obligation-1.1%
Republic of Venezuela
9.25%, 9/15/27(a)
(cost $1,562,584) US$ 2,350 1,891,750
------------
SHORT-TERM INVESTMENT-2.1%
Repurchase Agreement-2.1%
Deutsche Bank
1.02%, dated 10/31/03, due 11/03/03
in the amount of $3,600,000
(cost $3,600,000; collateralized by
$3,660,000 FNMA, 1.0%, due 9/10/04,
value $3,600,306) 3,600 3,600,000
------------
- ------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 17
U.S. $ Value
- -------------------------------------------------------------------------------
Total Investments-105.7%
(cost $172,050,542) $185,152,103
Other assets less liabilities-(5.7%) (10,037,021)
------------
Net Assets-100% $175,115,082
============
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $
Contract Value on U.S. $ Unrealized
Amount Origination Current Appreciation/
(000) Date Value (Depreciation)
- ------------------------------------------------------------------------------------------------
Buy Contracts
Australian Dollar,
settling 12/17/03 2,638 $ 1,806,903 $ 1,858,536 $51,633
Mexican Peso,
settling 11/19/03 8,818 790,809 796,198 5,389
New Zealand Dollar,
settling 11/04/03 7,559 4,633,870 4,629,334 (4,536)
Sale Contracts
British Pound,
settling 11/10/03 700 1,160,015 1,187,723 (27,708)
Canadian Dollar,
settling 11/21/03 7,175 5,403,165 5,432,173 (29,008)
Euro,
settling 11/25/03 33,924 39,628,150 39,323,946 304,204
Mexican Peso,
settling 11/19/03 30,991 2,817,448 2,798,208 19,240
New Zealand Dollar,
settling 11/04/03-12/04/03 15,888 9,420,325 9,714,307 (293,982)
Polish Zloty,
settling 12/02/03 9,164 2,294,877 2,265,551 29,326
Swedish Krona,
settling 12/29/03 3,697 477,505 471,687 5,818
South African Rand,
settling 11/06/03 82,782 11,939,425 12,013,235 (73,810)
FINANCIAL FUTURES CONTRACTS SOLD (see Note D)
Value at
Number of Expiration Original October 31, Unrealized
Type Contracts Month Value 2003 Depreciation
- ------------------------------------------------------------------------------------------------
U.S. Treasury
Note 10 Yr December
Futures 50 2003 $ 5,451,726 $ 5,614,844 $(163,118)
U.S. Treasury
Note 10 Yr December
Futures 150 2003 16,620,703 16,844,531 (223,828)
U.S. Treasury
Note 10 Yr December
Futures 20 2003 2,235,000 2,245,938 (10,938)
---------
$(397,884)
=========
- -------------------------------------------------------------------------------
18 o AllianceBernstein Global Strategic Income Trust
INTEREST RATE SWAP TRANSACTIONS (see Note D)
Rate Type
Notional Payments Payments Unrealized
Swap Amount Termination made by received by Appreciation/
Counterparty (000) Date the Fund the Fund (Depreciation)
- ------------------------------------------------------------------------------
Deutsche Banc MXN 46,500 12/01/03 5.65%* 12.30% $23,295
Deutsche Banc MXN 46,500 12/01/03 9.56% 5.65%* (14,381)
Deutsche Banc MXN 46,500 1/12/07 5.10%* 10.35% 370,747
Deutsche Banc MXN 46,500 1/12/07 9.90% 5.10%* (316,756)
* Variable rates are based on the Interbank equilibrium interest rate for
Mexican Pesos
(a) Positions, or a portion thereof, with an aggregate market value of
$138,041,289 have been segregated to collateralize forward exchange currency
contracts.
(b) Security is 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 $29,084,849 or 16.6%
of net assets.
(c) Non-income producing security.
(d) Restricted and illiquid security, valued at fair value. (See Notes A & G)
(e) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate was in effect at October 31, 2003.
(f) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective until
final maturity.
(g) Security is in default and is non-income producing.
Glossary of Terms:
FNMA - Federal National Mortgage Association
TBA - (To Be Assigned) Securities are purchased on a forward commitment
with an appropriate principal amount (generally +/-1.0%) and no definite
maturity date. The actual principal amount and maturity date will be determined
upon settlement when the specific mortgage pools are assigned.
TIPS - Treasury Inflation Protected Security
Currency Abbreviations:
CAD - Canadian Dollar
CLP - Chilean Peso
EUR - Euros
GBP - Great British Pound
MXN - Mexican Peso
NZD - New Zealand Dollar
PLN - Polish Zloty
US$ - United States Dollar
UYU - Uruguayan Peso
ZAR - South African Rand
See notes to financial statements.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 19
STATEMENT OF ASSETS & LIABILITIES
October 31, 2003
Assets
Investments in securities, at value (cost $172,050,542) $ 185,152,103
Cash 721,706
Foreign cash, at value (cost $713,031) 735,306
Interest receivable 2,595,411
Receivable for investment securities sold 1,131,959
Receivable for capital stock sold 505,892
Unrealized appreciation of forward exchange
currency contracts 415,610
Unrealized appreciation of interest rate swap contracts 394,042
Receivable for variation margin on futures contracts 254,375
Receivable from Adviser 38,824
-------------
Total assets 191,945,228
-------------
Liabilities
Payable for investment securities purchased 14,859,056
Payable for capital stock redeemed 443,886
Unrealized depreciation of forward exchange
currency contracts 429,044
Unrealized depreciation of interest rate swap contracts 331,137
Dividends payable 279,701
Distribution fee payable 126,390
Advisory fee payable 116,460
Accrued expenses and other liabilities 244,472
-------------
Total liabilities 16,830,146
-------------
Net Assets $ 175,115,082
=============
Composition of Net Assets
Capital stock, at par $20,241
Additional paid-in capital 211,835,705
Distributions in excess of net investment income (1,620,028)
Accumulated net realized loss on investment and
foreign currency transactions (47,867,016)
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 12,746,180
-------------
$ 175,115,082
=============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($37,042,897/4,282,130 shares of capital stock
issued and outstanding) $8.65
Sales charge--4.25% of public offering price .38
-----
Maximum offering price $9.03
=====
Class B Shares
Net asset value and offering price per share
($115,414,139/13,340,534 shares of capital stock
issued and outstanding) $8.65
=====
Class C Shares
Net asset value and offering price per share
($21,175,414/2,446,747 shares of capital stock
issued and outstanding) $8.65
=====
Advisor Class Shares
Net asset value, redemption and offering price per share
($1,482,632/171,429 shares of capital stock
issued and outstanding) $8.65
=====
See notes to financial statements.
- -------------------------------------------------------------------------------
20 o AllianceBernstein Global Strategic Income Trust
STATEMENT OF OPERATIONS
Year Ended October 31, 2003
Investment Income
Interest (net of foreign taxes withheld
of $6,455) $14,819,253
Dividends 185,999 $15,005,252
-----------
Expenses
Advisory fee 1,385,012
Distribution fee--Class A 122,519
Distribution fee--Class B 1,209,869
Distribution fee--Class C 213,701
Custodian 307,911
Transfer agency 271,029
Administrative 141,000
Audit and legal 134,677
Printing 78,546
Registration 56,478
Directors' fees 19,400
Miscellaneous 19,909
-----------
Total expenses 3,960,051
Less: expense offset arrangement
(see Note B) (408)
-----------
Net expenses 3,959,643
-----------
Net investment income 11,045,609
-----------
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions 2,248,606
Futures contracts (319,950)
Swap contracts 23,030
Foreign currency transactions (5,040,108)
Net change in unrealized
appreciation/depreciation of:
Investments 22,853,183
Futures contracts (397,885)
Swap contracts (33,063)
Foreign currency denominated assets
and liabilities 1,347,442
-----------
Net gain on investment and foreign
currency transactions 20,681,255
Contribution from Adviser 38,824
-----------
Net Increase in Net Assets from
Operations $31,765,688
===========
See notes to financial statements.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 21
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, October 31,
2003 2002
============= =============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 11,045,609 $ 15,448,951
Net realized loss on investment and
foreign currency transactions (3,088,422) (28,192,388)
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities 23,769,677 10,737,692
Contribution from Adviser 38,824 -0-
------------- -------------
Net increase (decrease) in net assets
from operations 31,765,688 (2,005,745)
Dividends and Distributions to
Shareholders from
Net investment income
Class A (1,584,457) (3,093,358)
Class B (4,213,150) (8,031,811)
Class C (742,218) (1,568,284)
Advisor Class (59,467) (91,992)
Tax return of capital
Class A (1,254,965) (745,844)
Class B (3,337,017) (1,936,563)
Class C (587,872) (378,132)
Advisor Class (47,101) (22,180)
Capital Stock Transactions
Net decrease (22,455,677) (53,494,261)
------------- -------------
Total decrease (2,516,236) (71,368,170)
Net Assets
Beginning of period 177,631,318 248,999,488
------------- -------------
End of period $ 175,115,082 $ 177,631,318
============= =============
See notes to financial statements.
- -------------------------------------------------------------------------------
22 o AllianceBernstein Global Strategic Income Trust
NOTES TO FINANCIAL STATEMENTS
October 31, 2003
NOTE A
Significant Accounting Policies
AllianceBernstein Global Strategic Income Trust, Inc. (the "Fund"), formerly
Alliance Global Strategic Income Trust, Inc., was incorporated in the State of
Maryland on October 25, 1995 as a non-diversified, open-end management
investment company. The Fund offers Class A, Class B, Class C and Advisor Class
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 4% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares eight 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.
Advisor Class shares are sold without an initial or contingent deferred sales
charge and are not subject to ongoing distribution expenses. Advisor Class
shares are offered to investors participating in fee-based programs and to
certain retirement plan accounts. All four classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, 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
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 23
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 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. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments and foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign currency
denominated assets and
- -------------------------------------------------------------------------------
24 o AllianceBernstein Global Strategic Income Trust
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation or depreciation of investments and foreign currency
denominated assets and liabilities.
3. 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 provision for federal income or excise taxes is
required.
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 net assets 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 and Advisor Class shares. Advisor Class shares have no
distribution fees.
5. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date the securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income. Additionally, the Fund amortizes premium on
debt securities as adjustments to interest income for financial reporting
purposes only.
6. Dividends and Distributions
Dividends and distributions to shareholders 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.
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.
The Adviser has agreed to waive its fees and bear certain expenses to the
extent necessary to limit total operating expenses on an annual basis to 1.90%,
2.60%, 2.60% and 1.60% of the average daily net assets for the Class A, Class
B, Class C and Advisor Class shares, respectively. For the year ended October
31, 2003, there were no fees waived by the Adviser.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 25
During the year ended October 31, 2003, the Fund engaged in various interest
rate swap transactions. The Adviser became aware of an interest rate swap that
was priced incorrectly during the fiscal year that caused the Fund's net assets
to be overstated by $633,512 at fiscal year end. The Fund's Adviser has agreed
to reimburse the Fund for $38,824, which represents the net loss incurred as a
result of this overstatement. The financial statements reflect the corrected
valuation of the interest rate swap as well as the receivable from the Adviser.
Pursuant to the Advisory Agreement, the Fund paid $141,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended October 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 $148,532, for the year ended October 31,
2003.
For the year ended October 31, 2003, the Fund's expenses were reduced by $408
under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), formerly Alliance Fund Distributors, Inc., 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 $5,739 from the sale of Class A shares and received $14,963, $272,075 and
$8,108 in contingent deferred sales charges imposed upon redemption by
shareholders of Class A, Class B and Class C shares, respectively, for the year
ended October 31, 2003.
Brokerage commissions paid on investment transactions for the year ended
October 31, 2003 amounted to $817, none of which was paid to Sanford
C.Bernstein &Co. LLC, an affiliate of the Adviser.
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 distribution and servicing fees to the Distributor at
an annual rate of up to .30 of 1% of the average daily net assets attributable
to the Class A shares and up to 1% of the average daily net assets attributable
to both Class B and Class C shares. There are no distribution and servicing
fees on the Advisor Class 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 reim
- -------------------------------------------------------------------------------
26 o AllianceBernstein Global Strategic Income Trust
bursed by the Fund in the amount of $9,528,039 and $1,310,157 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 period 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 year ended October 31, 2003, were as follows:
Purchases Sales
============= =============
Investment securities (excluding
U.S. government securities) $211,370,055 $232,450,598
U.S. government securities 65,221,384 83,224,943
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation (excluding foreign currency contracts,
futures contracts and swap contracts) are as follows:
Cost $172,437,034
============
Gross unrealized appreciation $ 18,777,477
Gross unrealized depreciation (6,062,408)
------------
Net unrealized appreciation $ 12,715,069
============
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments and the imperfect correlation between movements in the
price of the future contracts and movements in the price of the securities
hedged or used for cover.
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
Risks may arise from the potential inability of a counterparty to meet the
terms of the contract. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the time it was closed.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 27
2. Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings, to hedge certain firm purchase and sales commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract is included in net realized gain or loss on foreign currency
transactions. Fluctuations in the value of open forward exchange currency
contracts are recorded for financial reporting purposes as unrealized
appreciation and depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges. Risks
may arise from the potential inability of the counterparty to meet the terms of
a contract and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. The face or contract amount, in U.S. dollars
reflects the total exposure the Fund has in that particular currency contract.
3. 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 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 call
- -------------------------------------------------------------------------------
28 o AllianceBernstein Global Strategic Income Trust
option is exercised, the premium received is added to the proceeds from the
sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security or currency underlying the written option. Exercise
of an option written by the Fund could result in the Fund selling or buying a
security or currency at a price different from the current market value.
4. Interest Rate Swap Agreements
The Fund may enter into currency and interest rate swap agreements to protect
itself from foreign currency and interest rate fluctuations on the underlying
debt instruments. A swap is an agreement that obligates two parties to exchange
a series of cash flows at specified intervals based upon or calculated by
reference to changes in specified prices or rates for a specified amount of an
underlying asset. The payment flows are usually netted against each other, with
the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by 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 value of the foreign securities or currencies.
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 or depreciation of investments.
Realized gains and losses from terminated swap contracts are included in net
realized gain or loss on investment transactions.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 29
NOTE E
Capital Stock
There are 12,000,000,000 shares of $0.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2003 2002 2003 2002
------------ ------------ -------------- --------------
Class A
Shares sold 2,976,832 1,483,284 $25,341,854 $11,960,454
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 209,541 289,896 1,769,520 2,358,008
- -------------------------------------------------------------------------------
Shares converted
from Class B 178,205 122,558 1,514,848 997,518
- -------------------------------------------------------------------------------
Shares redeemed (4,070,066) (3,751,022) (34,486,726) (30,421,849)
- -------------------------------------------------------------------------------
Net decrease (705,488) (1,855,284) $(5,860,504) $(15,105,869)
- -------------------------------------------------------------------------------
Class B
Shares sold 1,970,943 2,121,171 $16,670,477 $17,457,066
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 345,826 553,298 3,082,283 4,503,158
- -------------------------------------------------------------------------------
Shares converted
to Class A (178,206) (122,611) (1,514,848) (997,518)
- -------------------------------------------------------------------------------
Shares redeemed (3,975,274) (6,005,035) (33,641,565) (48,803,169)
- -------------------------------------------------------------------------------
Net decrease (1,836,711) (3,453,177) $(15,403,653) $(27,840,463)
- -------------------------------------------------------------------------------
Class C
Shares sold 651,156 497,879 $5,618,834 $4,114,271
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 59,400 116,034 501,400 948,153
- -------------------------------------------------------------------------------
Shares redeemed (860,429) (1,937,486) (7,273,879) (15,738,076)
- -------------------------------------------------------------------------------
Net decrease (149,873) (1,323,573) $(1,153,645) $(10,675,652)
- -------------------------------------------------------------------------------
Advisor Class
Shares sold 7,054 19,343 $58,809 $159,174
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 10,173 12,739 87,822 104,101
- -------------------------------------------------------------------------------
Shares redeemed (21,153) (16,894) (184,506) (135,552)
- -------------------------------------------------------------------------------
Net increase
(decrease) (3,926) 15,188 $(37,875) $127,723
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
30 o AllianceBernstein Global Strategic Income Trust
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 for 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 year ended October 31, 2003.
NOTE G
Restricted Security
Date Acquired U.S. $ Cost
============= =============
United Pan Europe Communications
convertible preferred 11/29/00 $ 3,000,000
The security shown above is restricted as to resale and has been valued at fair
value in accordance with the procedures described in Note A. The Fund will not
bear any costs, including those involved in registration under the Securities
Act of 1933, in connection with the disposition of this security.
The value of this security at October 31, 2003 was $22,200 representing 0.01%
of net assets.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 31
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the fiscal years ended October
31, 2003 and October 31, 2002 were as follows:
2003 2002
============= =============
Distributions paid from:
Ordinary income $6,599,292 $13,005,233
------------- -------------
Total taxable distributions 6,599,292 13,005,233
Tax return of capital 5,226,955 3,082,719
------------- -------------
Total distributions paid $11,826,247 $16,087,952(a)
============= =============
As of October 31, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $(49,261,495)(b)
Unrealized appreciation/(depreciation) 12,800,332 (c)
-------------
Total accumulated earnings/(deficit) $(36,461,163)
=============
(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 of
$48,074,742 of which $1,683,961 expires in the year 2007, $2,393,347 expires in
the year 2008, $20,176,263 expires in the year 2009 and $23,821,171 expires in
the year 2010. 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 $441,584. For the year ended
October 31, 2003, the cumulative deferred loss on straddles was $1,186,753.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of gains/losses on
certain derivative instruments, 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, tax return of capital, the
tax treatment of bond premium and the tax treatment of foreign currency gains
and losses, resulted in a net decrease in distributions in excess of net
investment income, a decrease in accumulated net realized loss on investments
and foreign currency 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
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
Man-
- -------------------------------------------------------------------------------
32 o AllianceBernstein Global Strategic Income Trust
agement 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 Global Strategic Income Trust o 33
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.
- -------------------------------------------------------------------------------
34 o AllianceBernstein Global Strategic Income Trust
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2003 2002(a) 2001 2000 1999
---------------------------------------------------------------
Net asset value,
beginning of period $7.75 $8.43 $9.53 $9.91 $10.18
---------------------------------------------------------------
Income From Investment
Operations
Net investment income(b) .55 .63 .78 .83 .94
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .93 (.67) (.90) (.22) (.22)
---------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations 1.48 (.04) (.12) .61 .72
---------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income (.29) (.52) (.71) (.83) (.94)
Distributions in excess of
net investment income -0- -0- -0- (.16) (.05)
Tax return of capital (.29) (.12) (.27) -0- -0-
---------------------------------------------------------------
Total dividends and
distributions (.58) (.64) (.98) (.99) (.99)
---------------------------------------------------------------
Net asset value,
end of period $8.65 $7.75 $8.43 $9.53 $9.91
===============================================================
Total Return
Total investment return based
on net asset value(c) 19.57% (.50)% (1.50)% 6.12% 7.17%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $37,043 $38,631 $57,667 $52,561 $33,813
Ratio to average net assets of:
Expenses 1.60% 1.53% 1.45% 1.54% 1.77%
Net investment income 6.50% 7.71% 8.60% 8.32% 9.34%
Portfolio turnover rate 155% 268% 304% 321% 254%
See footnote summary on page 39.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 35
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2003 2002(a) 2001 2000 1999
---------------------------------------------------------------
Net asset value,
beginning of period $7.74 $8.42 $9.52 $9.90 $10.17
---------------------------------------------------------------
Income From Investment
Operations
Net investment income(b) .48 .57 .71 .76 .87
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .95 (.67) (.90) (.23) (.22)
---------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations 1.43 (.10) (.19) .53 .65
---------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income (.27) (.47) (.65) (.76) (.87)
Distributions in excess of
net investment income -0- -0- -0- (.15) (.05)
Tax return of capital (.25) (.11) (.26) -0- -0-
---------------------------------------------------------------
Total dividends and
distributions (.52) (.58) (.91) (.91) (.92)
---------------------------------------------------------------
Net asset value,
end of period $8.65 $7.74 $8.42 $9.52 $9.90
===============================================================
Total Return
Total investment return based
on net asset value(c) 18.89% (1.23)% (2.24)% 5.38% 6.44%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $115,414 $117,529 $156,948 $118,356 $79,085
Ratio to average net assets of:
Expenses 2.31% 2.24% 2.16% 2.27% 2.47%
Net investment income 5.83% 7.02% 7.85% 7.66% 8.54%
Portfolio turnover rate 155% 268% 304% 321% 254%
See footnote summary on page 39.
- -------------------------------------------------------------------------------
36 o AllianceBernstein Global Strategic Income Trust
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2003 2002(a) 2001 2000 1999
---------------------------------------------------------------
Net asset value,
beginning of period $7.75 $8.43 $9.52 $9.90 $10.17
---------------------------------------------------------------
Income From Investment
Operations
Net investment income(b) .50 .57 .72 .77 .88
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .92 (.67) (.90) (.24) (.23)
---------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations 1.42 (.10) (.18) .53 .65
---------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income (.28) (.47) (.65) (.76) (.88)
Distributions in excess of
net investment income -0- -0- -0- (.15) (.04)
Tax return of capital (.24) (.11) (.26) -0- -0-
---------------------------------------------------------------
Total dividends and
distributions (.52) (.58) (.91) (.91) (.92)
---------------------------------------------------------------
Net asset value,
end of period $8.65 $7.75 $8.43 $9.52 $9.90
===============================================================
Total Return
Total investment return based
on net asset value(c) 18.74% (1.22)% (2.13)% 5.38% 6.44%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $21,175 $20,113 $33,035 $32,345 $22,598
Ratio to average net assets of:
Expenses 2.30% 2.23% 2.15% 2.25% 2.46%
Net investment income 5.81% 7.00% 7.90% 7.68% 8.52%
Portfolio turnover rate 155% 268% 304% 321% 254%
See footnote summary on page 39.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 37
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2003 2002(a) 2001 2000 1999
---------------------------------------------------------------
Net asset value, beginning
of period $7.74 $8.43 $9.53 $9.92 $10.18
---------------------------------------------------------------
Income From Investment
Operations
Net investment income(b) .57 .65 .80 .88 .98
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions .95 (.67) (.89) (.25) (.22)
---------------------------------------------------------------
Net increase (decrease)
in net asset value
from operations 1.52 (.02) (.09) .63 .76
---------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income (.34) (.54) (.73) (.86) (.98)
Distributions in excess of net
investment income -0- -0- -0- (.16) (.04)
Tax return capital (.27) (.13) (.28) -0- -0-
---------------------------------------------------------------
Total dividends and
distributions (.61) (.67) (1.01) (1.02) (1.02)
---------------------------------------------------------------
Net asset value,
end of period $8.65 $7.74 $8.43 $9.53 $9.92
===============================================================
Total Return
Total investment return based
on net asset value(c) 20.10% (.31)% (1.19)% 6.33% 7.58%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $1,483 $1,358 $1,350 $2,658 $1,359
Ratio to average net assets of:
Expenses 1.30% 1.24% 1.13% 1.23% 1.45%
Net investment income 6.84% 8.08% 8.81% 8.71% 9.52%
Portfolio turnover rate 155% 268% 304% 321% 254%
See footnote summary on page 39.
- -------------------------------------------------------------------------------
38 o AllianceBernstein Global Strategic Income Trust
(a) As required, effective November 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year ended
October 31, 2002 was to decrease net investment income per share by $.03,
decrease net realized and unrealized loss on investments per share by $.03 for
Class A, B, C and Advisor Class, respectively, and decrease the ratio of net
investment income to average net assets from 8.03% to 7.71% for Class A, from
7.34% to 7.02% for Class B, from 7.32% to 7.00% for Class C and from 8.40% to
8.08% for Advisor Class. Per share, ratios and supplemental data for periods
prior to November 1, 2001 have not been restated to reflect this change in
presentation.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of the total
investment return. Total investment 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.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 39
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of AllianceBernstein Global
Strategic Income Trust, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Global Strategic Income Trust, Inc., formerly Alliance Global
Strategic Income Trust, Inc. (the "Fund"), including the portfolio of
investments, as of October 31, 2003, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the five years in the period then ended. 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 and financial highlights. 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 Global Strategic Income Trust, Inc. at October 31, 2003, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended, 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
TAX INFORMATION (unaudited)
For the fiscal year ended October 31, 2003 certain dividends paid by the Fund
may be subject to a maximum tax rate of 15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. The Fund designates a maximum
amount of $185,999 as qualifed dividend income, which is taxed at a maximum
rate of 15%. The information and distributions reported herein may differ from
the information and distributions taxable to the shareholders for the calendar
year ending December 31, 2003. Complete information will be computed and
reported in conjunction with your 2003 Form 1099-DIV.
- -------------------------------------------------------------------------------
40 o AllianceBernstein Global Strategic Income Trust
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
Douglas J. Peebles(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & 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
Brown Brothers Hartman & Co.
40 Water Street
Boston, MA 02109
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. Peebles is the person primarily responsible for the day-to-day
management of the Fund's investment portfolio.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 41
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 was
Suite 100 formerly Senior Manager of Barrett
Greenwich, CT 06830 Associates, Inc., a registered
(8) investment adviser, with which he
Chairman of the Board had been associated since prior to
1998. He was formerly Deputy
Comptroller and Chief Investment
Officer of the State of New York
and, prior thereto, Chief Invest-
ment 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 The
Boca Raton, FL 33432 Equitable Life Assurance Society of
(8) 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
(8) 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.
- -------------------------------------------------------------------------------
42 o AllianceBernstein Global Strategic Income Trust
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 of 98 None
P.O. Box 12 Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002, a
(8) 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 of 97 Placer
15 St. Bernard's Road Cahill Gordon & Reindel since Dome, Inc.
Gladstone, NJ 07934 February 2001 and a partner of
(8) 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 Secur-
ities 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.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 43
Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, POSITION(S) PRINCIPAL OCCUPATION
ADDRESS* 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.
Douglas J. Peebles, 38 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.
- -------------------------------------------------------------------------------
44 o AllianceBernstein Global Strategic Income Trust
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
ACMGovernment Opportunity Fund
ACMManaged 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.
- -------------------------------------------------------------------------------
AllianceBernstein Global Strategic Income Trust o 45
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN(SM)
Investment Research and Management
SM This service mark used under license from
the owner, Alliance Capital Management L.P.
GSIFAR1003
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 Global Strategic Income Trust, Inc.
By: /s/Marc O. Mayer
---------------------------------
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
---------------------------------
Marc O. Mayer
President
Date: December 30, 2003
By: /s/Mark D. Gersten
---------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: December 30, 2003