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, 2004
Date of reporting period: October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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Multi-Sector Fixed Income
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AllianceBernstein [LOGO](SM)
Investment Research and Management
AllianceBernstein Global Strategic Income Trust
Annual Report -- October 31, 2004
Investment Products Offered
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o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. Please read the prospectus carefully
before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com.
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, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
December 22, 2004
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, 2004.
Investment Objective 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 table on page 5 shows the Fund's performance compared to its benchmark, the
Lehman Brothers (LB) Global Aggregate Index for the six- and 12-month periods
ended October 31, 2004. Also included in the table are returns for Fund's peer
group, as represented by the Lipper Multi-Sector Income Funds Average (the
"Lipper Average"). Funds in the Lipper Average have generally similar
investment objectives to the Fund, although some may have different investment
policies and sales and management fees.
For both the six- and 12-month periods ended October 31, 2004, the Fund
outperformed the LB Global Aggregate Index, however, it underperformed the
Lipper Average of similarly managed funds. The Fund's outperformance relative
to the LB Global Aggregate Index during the 12-month reporting period was
primarily the result of its overweighted allocation to both the high yield and
emerging market sectors, which dramatically outperformed the investment-grade
only sectors within the LB Global Aggregate Index. The Fund's underweighted
holdings in Japanese government bonds (JGB's) also contributed positively to
the Fund's relative performance as JGB's underperformed.
Detracting from performance for the six- and 12-month periods was the Fund's
more conservative interest rate risk profile. Although the Fund had a longer
duration in credit (emerging market and high yield), the Fund had a
substantially shorter position in interest rate risk, with expectations that
interest rates would rise. However, lower consumer confidence and sluggish
employment growth during the summer delayed rate hikes by the Federal Reserve
and kept interest rates relatively low. In addition, the management team
reduced the Fund's high yield allocation in favor of lower yielding, less
interest-rate sensitive bank loans. Both the Fund's shorter position in
interest rate duration and the Fund's shift from high yield to bank loans were
designed to protect the Fund from the dampening effects of higher interest
rates, which did not materialize. Also dampening performance was the Fund's
exposure to the airline industry within its high yield allocation.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 1
Market Review and Investment Strategy
Bond markets during the annual reporting period were marked by intra-period
volatility as changing perceptions of the direction of the U.S. and global
economy effected global bond performance. Global bond markets rebounded
strongly in the first quarter of 2004, as escalating geopolitical tensions and
concerns regarding the sustainability of the U.S. economic recovery began to
surface primarily due to a tepid job market. Early in April, however, bond
markets sold off on a surprisingly strong 308,000 gain in March payroll
employment, as well as less dovish comments from the Federal Reserve. Global
yields moved up across the maturity spectrum as markets began to price in an
eventual interest rate hike. By late June, weak economic data and the prospects
of slower, more measured Federal Reserve tightenings bolstered the bond markets
back into positive territory as the U.S. economy hit a mid-year slowdown.
For the annual reporting period, credit and higher yielding markets
outperformed government securities. According to the LB Global Aggregate Index,
Treasuries and agencies posted returns of 4.69% and 4.64%, respectively.
Mortgage securities returned 5.51% for the year, supported by strong investor
demand coupled with relatively low volatility. Investment-grade corporates
posted a 6.00% return, benefiting from a stronger economy and improving credit
fundamentals. Record free cash flow and improving profitability, plus declining
leverage driven by a stronger economy, supported the corporate market.
Within the high-yield sector, improved balance sheets and access to capital led
to strong returns. Yield-seeking investors in the low-rate environment helped
to drive high-yield prices up, despite heavy issuance. For the annual period,
the high-yield market posted a return of 12.32%, according to the LB High Yield
Index. Credit quality continued to improve, resulting in declining default
rates and more favorable upgrade/downgrade ratios. The Credit Suisse First
Boston Bank Loan Index returned 5.96%.
The emerging market debt class, as represented by the J.P. Morgan Emerging
Markets Bond Index Plus (JPM EMBI+), substantially outperformed the components
within the Fund's holdings and returned a strong 12.94% for the reporting
period. All emerging market countries represented within the JPM EMBI+ posted
positive returns. The emerging debt markets benefited throughout the 12-month
reporting period from lower global interest rates, higher commodity prices and
improving emerging country fundamentals.
The Latin region at 15.04% outpaced non-Latin markets at 9.87%, as several
Latin countries benefited from export demand and strong commodity prices,
particularly oil, according to the JPM EMBI+. Sustained growth in the Latin
region and a resulting decline in fiscal deficits improved their macroeconomic
fundamentals.
Emerging market countries within the JPM EMBI+ that outperformed for the annual
period included the oil-produc-
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
ing countries Ecuador, Venezuela and Brazil. During the 12-month period ended
October 31, 2004, Ecuador returned 33.40%, Venezuela returned 30.30% and
Brazil, which was upgraded by both Moody's Investors Service and Standard &
Poor's rating agencies, returned 17.97%. Countries within the JPM EMBI+ that
underperformed during the 12-month period ended October 31, 2004, were Morocco,
which returned 4.23%, Malaysia at 6.19% and Peru at 6.61%.
Part of the management team's (the "team's") strategy during the annual
reporting period ended October 31, 2004, was to significantly underweight the
Fund's position in interest rate duration by selling forward U.S. Treasury
futures. This strategy was based on the team's forecast for higher interest
rates. The Fund was generally underweighted in non-U.S. governments as well.
Additionally, the Fund's allocations to corporate and emerging market debt were
significantly over-weighted.
Within the Fund's emerging market allocation, the team maintained its core
holdings (Brazil, Mexico, Russia and Colombia). The Fund's exposure in Brazil
was reduced as concerns surfaced that political scandal and the Central Bank's
inability to lower interest rates would hurt economic growth. Those concerns
proved to be misplaced, however, so Brazilian holdings have subsequently begun
to be added back to the Fund's investment portfolio. Furthermore, gross
domestic product in Brazil has remained high, easing worries about debt
sustainability.
The Fund generally maintained an overweighted position in Russian debt early in
the period as credit statistics continued to improve and Russia benefited from
higher oil prices. In July, however, the Fund's Russian holdings were reduced
as positive economic fundamentals were offset by administrative paralysis and
the Yukos affair. Russia's Justice Ministry had seized the assets of Yukos, the
country's largest oil producer, and was preparing to sell its main
oil-producing unit in Siberia to recover payment of back taxes. Furthermore,
there was a significant negative change in Russia's sovereign supply and demand
technicals.
During the year, as spread dispersion among high yield industries narrowed, the
Fund's high yield strategy turned more toward specific issuer selection and
diversifying the Fund's holdings across industry sectors. The team focused on
identifying sectors with positive fundamental/valuation outlooks and avoided
those sectors with deteriorating credit trends or limited upside potential. The
Fund maintained an underweighted position in industries with lower spread
levels that would be more negatively impacted by a rising interest rate
environment.
In Memory
It is with sadness that we announce the passing of Clifford L. Michel, a member
of the Board of Directors of AllianceBernstein Global Strategic Income Trust.
Mr. Michel served the interests of the Fund's shareholders for the last nine
years. His hard work, dedication and contributions to the Fund will be greatly
missed.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 3
Historical Performance
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HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for Advisor Class shares will vary due to
different expenses associated with this class. Performance assumes reinvestment
of distributions and does not account for taxes.
Benchmark Disclosure
The unmanaged Lehman Brothers (LB) Global Aggregate Index (USD Hedged) does not
reflect fees and expenses associated with the active management of a mutual
fund portfolio. The LB Global Aggregate 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. For the six- and 12-month periods ended October 31, 2004, the
Lipper Multi-Sector Income Funds Average consisted of 114 and 111 funds,
respectively. These funds have generally similar investment objectives to
AllianceBernstein Global Strategic Income Trust, although some may have
different investment policies and sales and management fees. An investor cannot
invest directly in an index or average, and their results are not indicative of
the performance for any specific investment, including the Fund.
A Word About Risk
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.
While the Fund invests principally in bonds and other fixed income securities,
in order to achieve its investment objectives, the Fund may at times use
certain types of investment derivatives, such as options, futures, forwards and
swaps. These instruments involve risks different from, and in certain cases,
greater than, the risks presented by more traditional investments. These risks
are fully discussed in the Fund's prospectus.
(Historical Performance continued on next page)
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4 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED OCTOBER 31, 2004 -------------------------
6 Months 12 Months
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AllianceBernstein Global Strategic Income Trust
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Class A 3.91% 5.89%
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Class B 3.53% 5.13%
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Class C 3.65% 5.25%
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Advisor Class 4.07% 6.21%
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Lehman Brothers Global Aggregate Index (USD Hedged) 3.39% 5.09%
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Lipper Multi-Sector Income Funds Average 5.92% 9.06%
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GROWTH OF A $10,000 INVESTMENT IN THE FUND
1/9/96* TO 10/31/04
AllianceBernstein Global Strategic Income Trust Class A: $18,611
Lehman Brothers Global Aggregate Index: $17,950
Lipper Multi-Sector Income Funds Average: $17,482
[THE FOLLOWING TABLE WAS DEPICTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
AllianceBernstein Lehman Brothers Lipper
Global Strategic Global Aggregate Multi-Sector
Income Trust Index Income Funds
Class A (USD Hedged) Average
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1/9/96* $ 9,575 $ 10,000 $ 10,000
10/31/96 $ 11,228 $ 10,563 $ 10,844
10/31/97 $ 13,117 $ 11,602 $ 11,906
10/31/98 $ 13,209 $ 12,866 $ 11,941
10/31/99 $ 14,155 $ 13,019 $ 12,413
10/31/00 $ 14,990 $ 13,961 $ 12,586
10/31/01 $ 14,780 $ 15,679 $ 13,180
10/31/02 $ 14,702 $ 16,450 $ 13,607
10/31/03 $ 17,638 $ 17,082 $ 16,030
10/31/04 $ 18,611 $ 17,950 $ 17,482
* The Fund's Class A shares inception date is 1/9/96. The growth of $10,000
for the Fund is calculated from the Fund's actual inception date. Daily data
for the LB Global Aggregate Index (USD Hedged) was not available prior to
12/31/98. Daily data for the Lipper Average is not available. Therefore, the
growth of $10,000 for the benchmark and Lipper Average is calculated from the
closest month-end to the Fund's inception date, which is 12/31/95.
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
10/31/04) as compared to the performance of its benchmark, the Lehman Brothers
Global Aggregate Index, and the Lipper Average. 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.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 5
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 2004
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NAV Returns SEC Returns
Class A Shares
1 Year 5.89% 1.43%
5 Years 5.66% 4.74%
Since Inception* 7.89% 7.36%
SEC Yield** 4.27%
Class B Shares
1 Year 5.13% 1.14%
5 Years 4.92% 4.92%
Since Inception* 7.35% 7.35%
SEC Yield** 3.75%
Class C Shares
1 Year 5.25% 4.25%
5 Years 4.95% 4.95%
Since Inception* 7.13% 7.13%
SEC Yield** 3.75%
Advisor Class Shares
1 Year 6.21%
5 Years 5.96%
Since Inception* 5.39%
SEC Yield** 4.77%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2004)
- --------------------------------------------------------------
Class A Shares
1 Year -0.02%
5 Years 4.60%
Since Inception* 7.28%
Class B Shares
1 Year -0.22%
5 Years 4.78%
Since Inception* 7.26%
Class C Shares
1 Year 2.73%
5 Years 4.78%
Since Inception* 7.04%
* Inception dates: 1/9/96 for Class A shares; 3/21/96 for Class B and C
shares; 12/18/97 for Advisor Class shares.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended October 31, 2004.
See Historical Performance disclosures on page 4.
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Fund Expenses
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FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2004 October 31, 2004 During Period*
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Class A
Actual $1,000 $1,039.08 $ 7.07
Hypothetical (5% return before expenses) $1,000 $1,018.20 $ 7.00
Class B
Actual $1,000 $1,035.26 $10.69
Hypothetical (5% return before expenses) $1,000 $1,014.63 $10.58
Class C
Actual $1,000 $1,036.45 $10.70
Hypothetical (5% return before expenses) $1,000 $1,014.63 $10.58
Advisor Class
Actual $1,000 $1,040.70 $ 5.54
Hypothetical (5% return before expenses) $1,000 $1,019.71 $ 5.48
* Expenses are equal to the classes' annualized expense ratios of 1.38%,
2.09%, 2.09% and 1.08%, respectively, multiplied by the average account value
over the period, multiplied by the number of days in the most recent fiscal
half-year/366 (to reflect the one-half year period).
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 7
Portfolio Summary
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PORTFOLIO SUMMARY
October 31, 2004
PORTFOLIO STATISTICS
Net Assets ($mil): $128.8
SECURITY TYPE BREAKDOWN*
44.8% Sovereign
10.4% Federal Agency
9.0% Bank Loans
5.5% Banking
5.5% Treasury
3.5% Supranationals
2.6% Paper/Packaging [PIE CHART OMITTED]
1.9% Communications-Mobile
1.7% Automotive
1.4% Cable
1.2% Broadcasting/Media
10.7% Other
1.8% Short-Term
* All data are as of October 31, 2004. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time. "Other"
represents less than 1.0% of the following securities: Financial, Insurance,
Industrial, Supermarket/Drug, Petroleum Products, Publishing, Consumer
Manufacturing, Entertainment/Leisure, Building/Real Estate, Public
Utilities-Electric & Gas, Food/Beverage, Gaming, Metals/Mining,
Conglomerate/Miscellaneous, Containers, Public Utilities-Telephone, Retail,
Service and Health Care.
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
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PORTFOLIO OF INVESTMENTS
October 31, 2004
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Argentina-0.7%
Government Obligations-0.7%
Republic of Argentina
1.98%, 8/03/12(a)(b) US$ 890 $ 678,625
11.38%, 1/30/17(a)(c) 50 16,000
11.75%, 6/15/15(a)(c) 125 38,750
12.00%, 6/19/31(a)(c) 27 7,910
12.25%, 6/19/18(c) 239 71,038
15.50%, 12/19/08(a)(c) 175 53,375
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Total Argentinian Securities
(cost $728,451) 865,698
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Australia-0.1%
Corporate Debt Obligation-0.1%
Commonwealth Bank of Australia
4.65%, 6/15/18(d)
(cost $149,210) 150 142,802
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Brazil-5.1%
Government Obligations-5.1%
Brazil Real Structured Product
Zero Coupon, 4/05/10(a) 22,734 2,867,062
Federal Republic of Brazil
9.25%, 10/22/10 300 321,150
10.50%, 7/14/14(a) 1,050 1,175,475
11.00%, 8/17/40(a) 75 84,487
12.00%, 4/15/10(a) 1,800 2,141,100
12.75%, 1/15/20 25 31,250
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Total Brazilian Securities
(cost $5,429,206) 6,620,524
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Canada-6.6%
Corporate Debt Obligations-1.0%
Abitibi-Consolidated, Inc.
6.00%, 6/20/13(a) 1,275 1,220,813
West Fraser Timber Co., Ltd.
5.20%, 10/15/14(d) 56 56,305
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1,277,118
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Government Obligation-5.6%
Government of Canada
5.50%, 6/01/10(a) CAD 8,309 7,292,748
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Total Canadian Securities
(cost $8,184,276) 8,569,866
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_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 9
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Cayman Islands-0.3%
Preferred Stock-0.3%
ACE, Ltd. Series C
7.80%, 5/30/08(a)
(cost $325,000) US$ 13,000 $ 344,760
-------------
Colombia-0.9%
Government Obligation-0.9%
Republic of Colombia
11.75%, 2/25/20(a)
(cost $923,352) 950 1,161,375
-------------
Czech Republic-0.0%
Corporate Debt Obligation-0.0%
Oskar Mobil AS
7.50%, 10/15/11(d)
(cost $61,513) EUR 50 65,822
-------------
Denmark-0.5%
Corporate Debt Obligation-0.5%
Danske Bank A/S
5.88%, 3/26/15(a)(b)
(cost $449,401) 440 624,980
-------------
Ecuador-0.0%
Government Obligation-0.0%
Republic of Ecuador
8.00%, 8/15/30(a)(d)(e)
(cost $851) US$ 1 845
-------------
El Salvador-0.2%
Government Obligation-0.2%
Republic of El Salvador
7.75%, 1/24/23(d)
(cost $249,074) 250 267,500
-------------
France-11.4%
Corporate Debt Obligations-0.4%
Crown European Holdings SA
6.25%, 9/01/11(d) EUR 107 138,812
Legrand Holding SA
10.50%, 2/15/13(a) US$ 305 356,850
-------------
495,662
-------------
Government Obligation-11.0%
Government of France
4.00%, 10/25/13(a) EUR 11,000 14,217,984
-------------
Total French Securities
(cost $13,184,078) 14,713,646
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_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Germany-8.2%
Corporate Debt Obligations-0.4%
Grohe Holding Gmbh
8.63%, 10/01/14(d) EUR 127 $ 167,592
Kronos International, Inc.
8.88%, 6/30/09(a) 250 342,656
-------------
510,248
-------------
Government Obligations-7.8%
Bundesobligation
4.25%, 2/15/08(a) 1,162 1,550,401
4.50%, 8/17/07(a) 2,097 2,807,423
Deutsche Bundesrepublik
5.00%, 1/04/12(a) 4,095 5,670,580
-------------
10,028,404
-------------
Total German Securities
(cost $9,273,201) 10,538,652
-------------
Greece-0.5%
Corporate Debt Obligation-0.5%
Antenna TV SA
9.75%, 7/01/08(a)
(cost $482,346) 540 700,549
-------------
Hong Kong-0.1%
Corporate Debt Obligation-0.1%
Hutchison Whampoa International, Ltd.
5.45%, 11/24/10(d)
(cost $99,768) US$ 100 102,955
-------------
Ireland-0.3%
Corporate Debt Obligation-0.3%
JSG Funding Plc.
10.13%, 10/01/12(a)(d)
(cost $294,720) EUR 300 434,138
-------------
Italy-3.8%
Corporate Debt Obligation-0.7%
Banca Popolare di Bergamo Capital Trust
8.36%, 2/15/11(a)(d) 625 961,748
-------------
Government Obligation-3.1%
Government of Italy
5.00%, 5/01/08(a) 2,900 3,956,166
-------------
Total Italian Securities
(cost $4,397,568) 4,917,914
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 11
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Japan-1.0%
Corporate Debt Obligations-1.0%
Mizuho Financial Group Cayman, Ltd.
5.79%, 4/15/14(d) US$ 200 $ 208,110
8.38%, 4/27/09(a) 990 1,079,001
-------------
Total Japanese Securities
(cost $1,248,966) 1,287,111
-------------
Kazakhstan-1.1%
Corporate Debt Obligation-1.1%
Kazkommerts International BV
8.50%, 4/16/13(d)
(cost $1,271,282) 1,300 1,355,250
-------------
Luxembourg-1.0%
Corporate Debt Obligations-1.0%
Arcelor Finance SCA
5.13%, 9/24/10(a) EUR 345 464,347
NOMA Luxembourg SA
9.75%, 7/15/11(d) 218 289,068
PTC International Finance II SA
11.25%, 12/01/09(a) US$ 250 265,000
Sanitec International SA
9.00%, 5/15/12(a) EUR 175 241,533
-------------
Total Luxembourg Securities
(cost $1,150,760) 1,259,948
-------------
Mexico-5.4%
Corporate Debt Obligations-0.5%
Innova S. de R.L.
9.38%, 9/19/13(a) US$ 405 449,550
12.88%, 4/01/07(a) 282 284,416
-------------
733,966
-------------
Government Obligations-4.9%
Mexican Bonos
9.00%, 12/20/12(a) MXN 7,491 614,609
United Mexican States
8.00%, 9/24/22(a) US$ 3,206 3,683,694
8.13%, 12/30/19(a) 925 1,082,713
11.38%, 9/15/16(a) 606 901,425
-------------
6,282,441
-------------
Total Mexican Securities
(cost $6,860,654) 7,016,407
-------------
Netherlands-0.3%
Common Stock-0.1%
Versatel Telecom International NV(a)(f) EUR 32,931 68,859
-------------
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Corporate Debt Obligation-0.2%
Deutsche Telekom International Finance BV
8.25%, 6/15/30(a)(e) US$ 224 $ 295,582
-------------
Total Dutch Securities
(cost $330,728) 364,441
-------------
Peru-0.1%
Government Obligation-0.1%
Republic of Peru
8.38%, 5/03/16(a)
(cost $113,465) 113 118,650
-------------
Romania-0.5%
Corporate Debt Obligation-0.5%
MobiFon Holdings BV
12.50%, 7/31/10(a)
(cost $490,975) 500 592,500
-------------
Russia-5.8%
Government Obligations-5.8%
Russian Federation
5.00%, 3/31/30(d)(e) 4,960 4,967,440
Russian Ministry of Finance
3.00%, 5/14/08(a) 2,670 2,469,750
-------------
Total Russian Securities
(cost $4,547,928) 7,437,190
-------------
South Africa-4.7%
Corporate Debt Obligations-4.7%
Development Bank of Southern Africa
Zero Coupon, 12/31/27(a) ZAR 50,000 1,092,308
European Bank For Reconstruction
& Development
Zero Coupon, 12/31/29(a) 50,000 1,173,824
International Bank For Reconstruction
& Development
Zero Coupon, 2/17/26(a) 50,000 1,488,555
Zero Coupon, 12/29/28(d) 250,000 2,241,677
-------------
Total South African Securities
(cost $5,044,967) 5,996,364
-------------
Spain-2.0%
Government Obligation-2.0%
Government of Spain
4.25%, 10/31/07(a)
(cost $2,352,900) EUR 1,940 2,580,049
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 13
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Turkey-0.0%
Government Obligation-0.0%
Republic of Turkey
11.50%, 1/23/12(a)
(cost $63,608) US$ 50 $ 62,875
-------------
Ukraine-1.7%
Government Obligations-1.7%
Government of Ukraine
6.88%, 3/04/11(d) 100 101,000
7.65%, 6/11/13(d) 2,000 2,058,000
11.00%, 3/15/07(d) 23 25,411
-------------
Total Ukrainian Securities
(cost $2,124,855) 2,184,411
-------------
United Kingdom-4.4%
Corporate Debt Obligations-4.3%
Big Food Group Plc.
9.75%, 6/30/12(d) GBP 92 178,110
British Telecommunications Plc.
8.63%, 12/15/30(a) US$ 50 66,825
HSBC Capital Funding LP
4.61%, 6/27/13(a)(c) 370 358,429
mmo2 Plc.
6.38%, 1/25/07(a) EUR 820 1,123,007
Rexam Plc.
6.63%, 3/27/07(a) 810 1,113,267
Royal & Sun Alliance Insurance Group Plc.
8.95%, 10/15/29(a) US$ 305 384,540
Royal Bank of Scotland Group Plc.
7.65%, 9/30/31(a) 1,875 2,266,172
-------------
5,490,350
-------------
Preferred Stock-0.1%
Royal Bank of Scotland Group Plc.
5.75%, 6/23/08(a) 4,700 120,555
-------------
Total United Kingdom Securities
(cost $4,527,197) 5,610,905
-------------
United States-41.0%
Corporate Debt Obligations-12.9%
AK Steel Corp.
7.88%, 2/15/09(a) 250 253,750
Amerada Hess Corp.
7.13%, 3/15/33(a) 450 498,096
Amkor Technology, Inc.
7.75%, 5/15/13(a) 250 215,625
BellSouth Corp.
5.20%, 9/15/14(a) 81 82,630
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Broder Brothers Co.
11.25%, 10/15/10(a) US$ 595 $ 600,950
Calpine Corp.
8.50%, 7/15/10(d) 335 246,225
Charter Communication Holdings LLC
11.75%, 5/15/11(a)(g) 585 377,325
Comcast Cable Communications
Holdings, Inc.
8.38%, 3/15/13(a) 115 141,094
Continental Airlines, Inc.
6.70%, 6/15/21(a) 94 88,004
7.03%, 6/15/11(a) 450 347,937
7.88%, 7/02/18(a) 200 188,271
Crum & Forster Holdings Corp.
10.38%, 6/15/13(a) 240 256,800
Delhaize America, Inc.
8.05%, 4/15/27(a) 860 939,203
Dex Media East LLC
12.13%, 11/15/12(a) 134 166,495
Dex Media West LLC Series B
9.88%, 8/15/13(a) 244 288,530
First American Capital Trust I
8.50%, 4/15/12(a) 100 113,750
Foot Locker, Inc.
8.50%, 1/15/22(a) 100 107,000
Ford Motor Co.
6.38%, 2/01/29(a) 38 33,251
7.45%, 7/16/31(a) 489 476,230
Foster's Financial Corp.
4.88%, 10/01/14(d) 75 75,202
General Motors Acceptance Corp.
7.00%, 2/01/12(a) 207 216,873
General Motors Corp.
7.13%, 7/15/13(a) 50 51,877
8.38%, 7/15/33(a) 500 520,293
Genworth Financial, Inc.
1.60%, 6/20/11(a) JPY 22,000 204,108
Goldman Sachs Group, Inc.
5.15%, 1/15/14(a) US$ 400 405,850
HCA, Inc.
7.58%, 9/15/25(a) 65 64,789
HLI Operating Co., Inc.
10.50%, 6/15/10(a) 130 138,450
Huntsman International LLC
10.13%, 7/01/09(a) 250 262,500
IBM Corp.
4.75%, 11/29/12(a) 700 715,041
Insight Communications Co., Inc.
12.25%, 2/15/11(a)(g) 350 342,125
Insight Midwest LP/Insight Capital, Inc.
9.75%, 10/01/09(a) 500 525,625
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 15
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
IPALCO Enterprises, Inc.
8.38%, 11/14/08(a)(b) US$ 150 $ 167,625
Iridium LLC/Capital Corp. Series B
14.00%, 7/15/05(a)(c) 2,000 252,500
JP Morgan Chase & Co.
5.75%, 1/02/13(a) 900 962,725
Liberty Mutual Group
5.75%, 3/15/14(d) 138 135,254
Markel Corp.
7.35%, 8/15/34 100 105,707
MeadWestvaco Corp.
6.85%, 4/01/12(a) 300 337,482
Morgan Stanley
4.75%, 4/01/14(a) 78 76,411
National Waterworks, Inc. Series B
10.50%, 12/01/12(a) 200 224,500
Nextel Partners, Inc.
12.50%, 11/15/09(a) 341 390,019
Paxson Communications Corp.
12.25%, 1/15/09(a)(g) 265 230,550
PF Export Receivables Master Trust
6.44%, 6/01/15(d) 436 439,510
Pliant Corp.
13.00%, 6/01/10(a) 395 368,338
Qwest Services Corp.
13.50%, 12/15/10(d) 150 178,125
Rainbow National Services LLC
10.38%, 9/01/14(a)(d) 250 272,500
Rite Aid Corp.
11.25%, 7/01/08(a) 200 218,000
Riviera Holdings Corp.
11.00%, 6/15/10(a) 240 266,400
RJ Tower Corp.
9.25%, 8/01/10(a) EUR 500 436,688
RR Donnelley & Sons Co.
4.95%, 4/01/14(a) US$ 489 491,537
SBC Communications, Inc.
5.88%, 8/15/12(a) 19 20,518
6.15%, 9/15/34 150 151,528
Six Flags, Inc.
9.75%, 4/15/13(a) 250 240,938
Sprint Capital Corp.
8.38%, 3/15/12(a) 119 146,047
Time Warner Entertainment Co. LP
8.38%, 3/15/23(a) 175 214,278
Time Warner Telecom, Inc.
10.13%, 2/01/11(a) 350 339,500
Universal City Development Partners
11.75%, 4/01/10(a) 255 297,075
William Lyon Homes, Inc.
10.75%, 4/01/13(a) 250 284,375
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Williams Scotsman, Inc.
9.88%, 6/01/07(a) US$ 500 $ 480,000
-------------
16,672,029
-------------
Bank Loans-10.0%
Alderwoods Group, Inc.
4.81%, 9/17/09 559 567,908
Allegheny Energy Supply Co.
4.39-4.58%, 2/28/11 500 507,708
American Achievement Corp.
4.29-4.46%, 3/31/11 498 504,341
Brenntag Group
4.73%, 2/28/12 1,000 1,015,000
Dex Media West LLC
3.62-4.32%, 3/09/10 897 909,788
Graham Packaging
2.50%, 9/15/11 500 506,795
Keystone Automotive Operations, Inc.
4.67%, 10/30/09 467 472,065
Landsource
4.38%, 7/31/10 500 507,500
MGM Studios
4.48%, 4/30/11 1,000 1,002,750
Multiplan
4.34%, 3/31/09 498 501,853
Owens Illinois
4.86%, 4/01/08 149 151,197
Panamsat Corp.
4.35%, 7/01/11 500 499,896
PGT Industries
4.96-5.13%, 2/28/10 486 492,176
Prestige Brands
4.08%, 4/15/11 498 501,024
Rainbow National Services LLC
2.75%, 3/31/12 500 507,604
Regal Cinemas
4.23%, 10/19/10 482 487,813
Simmons Co.
4.13-4.75%, 12/19/11 979 988,440
TRW Automotive
4.13%, 2/28/11 697 706,512
Venetian Resort
2.50%, 7/25/11 68 69,119
4.50%, 7/25/11 432 438,835
VWR International
4.58%, 4/05/11 458 464,723
Warner Music Group
4.32-4.66%, 3/22/11 498 503,985
Western Wireless
4.84-5.08%, 5/30/11 499 506,053
-------------
12,813,085
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 17
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
U.S. Government and Government
Sponsored Agency Obligations-17.4%
Federal National Mortgage Association
15 YR TBA
5.50%, 11/25/19 US$ 3,300 $ 3,416,530
Federal National Mortgage Association
30 YR TBA
6.00%, 11/25/34 7,500 7,774,215
6.50%, 11/25/34 3,300 3,469,125
U.S. Treasury Bonds
5.38%, 2/15/31(a) 2,101 2,281,965
U.S. Treasury Notes
2.00%, 7/15/14 (TIPS) 3,317 3,431,773
2.25%, 2/15/07(a)(h) 1,910 1,892,989
4.75%, 5/15/14(a) 100 105,734
4.88%, 2/15/12(a) 58 62,157
-------------
22,434,488
-------------
Preferred Stocks-0.7%
Ford Motor Co. Capital Trust II
6.50%, 1/15/32(a) 10,285 514,147
Genworth Financial, Inc.
6.00%, 5/16/07(a) 350 10,248
Paxson Communications Corp.
14.25%, 11/15/06(a) 35 266,000
XL Capital, Ltd. Class A
6.50%, 5/15/07(a) 2,325 55,405
-------------
845,800
-------------
Total United States Securities
(cost $52,517,360) 52,765,402
-------------
Venezuela-0.2%
Government Obligation-0.2%
Republic of Venezuela
9.25%, 9/15/27(a)
(cost $175,993) US$ 235 240,405
-------------
SHORT-TERM INVESTMENT-1.9%
Repurchase Agreement-1.9%
State Street Bank
1.75%, dated 10/29/04,
due 11/01/04 in the amount
of $2,500,365 (cost $2,500,000;
collateralized by $2,545,000
FHLB, 1.88%, due 2/15/05,
value $2,543,371) 2,500 2,500,000
-------------
Total Investments-109.8%
(cost $129,553,653) 141,443,934
Other assets less liabilities-(9.8%) (12,599,961)
-------------
Net Assets-100% $ 128,843,973
=============
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $ U.S. $
Contract Value on Value at Unrealized
Amount Origination October 31, Appreciation/
(000) Date 2004 (Depreciation)
- -------------------------------------------------------------------------------------------------------
Buy Contracts
Japanese Yen,
settling 11/05/04 303,482 $ 2,728,073 $ 2,862,665 $ 134,592
Mexican Peso,
settling 11/16/04 29,814 2,580,319 2,577,576 (2,743)
Sale Contracts
British Pound,
settling 11/19/04 99 176,757 180,783 (4,026)
Canadian Dollar,
settling 11/09/04 8,983 7,127,496 7,359,289 (231,793)
Euro,
settling 11/05/04-12/22/04 28,643 36,153,016 36,516,657 (363,641)
Japanese Yen,
settling 11/05/04 328,599 2,997,069 3,099,587 (102,518)
Mexican Peso,
settling 11/16/04 5,983 528,688 517,293 11,395
South African Rand,
settling 11/22/04 31,678 5,001,798 5,148,654 (146,856)
Swedish Krona,
settling 12/17/04 3,697 508,782 520,755 (11,973)
FINANCIAL FUTURES CONTRACTS SOLD (see Note D)
Number Expiration Original U.S. $ Value at Unrealized
Type Contracts Month Value October 31, 2004 Depreciation
- -------------------------------------------------------------------------------------------------------------
U.S. Treasury 146 December $16,005,250 $16,260,750 $ (255,500)
Note 5 Yr 2004
Futures
U.S. Treasury 222 December 24,983,671 25,210,875 (227,204)
Note 10 Yr 2004
Futures
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 1/12/07 8.03%* 10.35% $ 93,887
Deutsche Banc MXN 46,500 1/12/07 9.90% 8.03%* (26,618)
* Variable rates are based on the Interbank equilibrium interest rate for
Mexican Pesos
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 19
Portfolio of Investments
- -------------------------------------------------------------------------------
(a) Positions, or a portion thereof, with an aggregate market value of
$90,688,278 have been segregated to collateralize forward exchange currency
contracts.
(b) Coupon rate adjusts on a predetermined schedule to a rate based on a
specific Index. Stated interest rate was in effect at October 31, 2004.
(c) Security is in default and is non-income producing.
(d) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At October 31, 2004 these securities amounted to $14,506,082 or 11.3%
of net assets.
(e) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate was in effect at October 31, 2004.
(f) Non-income producing security.
(g) 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.
(h) A portion of this position, with a market value of $802,786 has been
segregated to collateralize margin requirements for the open futures contracts.
Glossary:
TBA - (To Be Assigned) Securities are purchased on a forward commitment with an
appropriate principal amount (generally +/-1.0%) and no definite maturity date.
The actual principal amount and maturity date will be determined upon
settlement when the specific mortgage pools are assigned.
FHLB - Federal Home Loan Bank
TIPS - Treasury Inflation Protected Security
Currency Abbreviations:
CAD - Canadian Dollar
EUR - Euros
GBP - Great British Pound
JPY - Japanese Yen
MXN - Mexican Peso
US$ - United States Dollar
ZAR - South African Rand
See notes to financial statements.
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
October 31, 2004
ASSETS
Investments in securities, at value (cost $129,553,653) $ 141,443,934
Cash 323,045
Foreign cash, at value (cost $196,235) 4,912
Unrealized appreciation on interest rate swap contracts 93,887
Receivable for investment securities sold 9,035,337
Interest receivable 1,718,089
Receivable for capital stock sold 133,813
Unrealized appreciation of forward exchange currency contracts 145,987
-------------
Total assets 152,899,004
-------------
LIABILITIES
Payable for investment securities purchased 22,216,651
Unrealized depreciation of forward exchange currency contracts 863,550
Payable for capital stock redeemed 333,793
Dividends payable 169,659
Payable for variation margin on futures contracts 115,189
Distribution fee payable 91,119
Advisory fee payable 58,603
Unrealized depreciation on interest rate swap contracts 26,618
Administrative fee payable 7,836
Transfer Agent fee payable 7,532
Accrued expenses and other liabilities 164,481
-------------
Total liabilities 24,055,031
-------------
Net Assets $ 128,843,973
=============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 14,922
Additional paid-in capital 164,033,728
Distributions in excess of net investment income (3,064,307)
Accumulated net realized loss on investment
and foreign currency transactions (43,088,604)
Net unrealized appreciation of investments
and foreign currency denominated assets and liabilities 10,948,234
-------------
$ 128,843,973
=============
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share
($29,464,781/3,409,780 shares of capital stock
issued and outstanding) $ 8.63
Sales charge--4.25% of public offering price .38
------
Maximum offering price $ 9.01
======
Class B Shares
Net asset value and offering price per share
($84,385,461/9,776,014 shares of capital stock
issued and outstanding) $ 8.63
======
Class C Shares
Net asset value and offering price per share
($14,093,988/1,631,723 shares of capital stock
issued and outstanding) $ 8.64
======
Advisor Class Shares
Net asset value, redemption and offering price per share
($899,743/104,263 shares of capital stock
issued and outstanding) $ 8.63
======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 21
Statement of Operations
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended October 31, 2004
INVESTMENT INCOME
Interest (net of foreign taxes withheld
of $46,946) $ 10,208,355
Income from dollar rolls 619,136
Dividends 105,357 $ 10,932,848
EXPENSES
Advisory fee 1,079,330
Distribution fee--Class A 100,023
Distribution fee--Class B 986,222
Distribution fee--Class C 173,132
Custodian 301,403
Transfer agency 209,214
Audit and legal 122,909
Administrative 99,350
Printing 75,118
Registration 55,149
Directors' fees 20,577
Miscellaneous 9,278
------------
Total expenses 3,231,705
Less: expense waived and reimbursed by
the Adviser (see Note B) (255,586)
Less: expense offset arrangement
(see Note B) (16)
------------
Net expenses 2,976,103
------------
Net investment income 7,956,745
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 7,444,800
Futures contracts (2,410,340)
Swap contracts 76,476
Foreign currency transactions (3,578,194)
Net change in unrealized
appreciation/depreciation of:
Investments (1,211,280)
Futures contracts (84,820)
Swap contracts 4,364
Foreign currency denominated assets
and liabilities (506,210)
------------
Net loss on investments and foreign
currency transactions (265,204)
------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 7,691,541
============
See notes to financial statements.
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, October 31,
2004 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 7,956,745 $ 11,045,609
Net realized gain (loss) on investments and
foreign currency transactions 1,532,742 (3,088,422)
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities (1,797,946) 23,769,677
Contribution from Adviser -0- 38,824
------------- -------------
Net increase in net assets from
operations 7,691,541 31,765,688
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (1,989,480) (1,584,457)
Class B (5,169,553) (4,213,150)
Class C (906,665) (742,218)
Advisor Class (72,007) (59,467)
Tax return of capital
Class A -0- (1,254,965)
Class B -0- (3,337,017)
Class C -0- (587,872)
Advisor Class -0- (47,101)
CAPITAL STOCK TRANSACTIONS
Net decrease (45,824,945) (22,455,677)
------------- -------------
Total decrease (46,271,109) (2,516,236)
NET ASSETS
Beginning of period 175,115,082 177,631,318
------------- -------------
End of period (including distributions
in excess of net investment income
of $(3,064,307) and $(1,620,028),
respectively) $ 128,843,973 $ 175,115,082
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 23
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
October 31, 2004
NOTE A
Significant Accounting Policies
AllianceBernstein Global Strategic Income Trust, Inc. (the "Fund"), 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 U.S. generally
accepted accounting principles, 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
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are 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. 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
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 valuation, the last available closing
settlement price is used; securities traded in the over-the-counter market,
("OTC") (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, Alliance
Capital Management, L.P. (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 (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
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 div-
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 25
Notes to Financial Statements
- -------------------------------------------------------------------------------
idends, 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
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation and 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
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
U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Fund paid the Adviser an advisory fee at an annual rate of .75% of the
Fund's average daily net assets. Effective September 7, 2004, the terms of the
investment advisory agreement were amended so that the advisory fee was reduced
to an
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
annual rate of .50% of the first $2.5 billion, .45% of the next $2.5 billion
and .40% in excess of $5 billion, of the Fund's average daily net assets. The
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 1.90%, 2.60%, 2.60% and 1.60% of the daily average
net assets for the Class A, Class B, Class C and Advisor Class shares,
respectively. For the year ended October 31, 2004, there were no fees waived by
the Adviser.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the Fund at
the reduced annual rate discussed above. Through September 6, 2004, such waiver
amounted to $255,586. For a more complete discussion of the Adviser's
settlement with the NYAG, please see "Legal Proceedings" below.
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.
Pursuant to the Advisory Agreement, the Fund paid $99,350 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, 2004.
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 $116,544, for the year ended October 31,
2004.
For the year ended October 31, 2004, the Fund's expenses were reduced by $16
under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), a wholly-owned subsidiary of the Adviser, serves as the
distributor of the Fund's shares. The Distributor has advised the Fund that it
has retained front-end sales charges of $1,647 from the sale of Class A shares
and received $798, $194,575 and $1,540 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, 2004.
Brokerage commissions paid on investment transactions for the year ended
October 31, 2004 amounted to $594, none of which was paid to Sanford C.
Bernstein &Co. LLC, an affiliate of the Adviser.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 27
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 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 reimbursed by the Fund in the amount of $9,100,125 and
$1,379,338 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, 2004, were as follows:
Purchases Sales
============= =============
Investment securities (excluding
U.S. government securities) $ 133,875,118 $ 185,895,375
U.S. government securities 20,583,815 21,503,244
At October 31, 2004, 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 $ 129,795,378
-------------
Gross unrealized appreciation $ 13,501,857
Gross unrealized depreciation (1,853,301)
-------------
Net unrealized appreciation $ 11,648,556
=============
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
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
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 and to hedge certain firm purchase and sales commitments
denominated in foreign currencies. 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
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 29
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 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. Swap Agreements
The Fund may enter into swaps to hedge its exposure to foreign currency
interest rates and credit risk or for investment purposes. A swap is an
agreement that obligates two parties to exchange a series of cash flows at
specified intervals based upon or calculated by reference to changes in
specified prices or rates for a specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.
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 interim 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 underlying securities or currencies.
As of November 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Fund accrues for the interim payments on
swap contracts on a daily basis, with the net amount recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities. Once the interim payments are settled in cash, the net amount is
recorded as realized gain/loss on swaps, in addition to realized gain/loss
recorded upon the termination of swaps contracts on the statements of
operations. Prior to November 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Fund to buy/(sell) from/(to) the counterparty at the
notional amount (the "Notional Amount") and receive/(deliver) the principal
amount of the referenced obligation. If a credit event occurs, the maximum
payout amount for a Sale Contract is limited to the Notional Amount of the swap
contract ("Maximum Payout Amount"). During the term of the swap agreement, the
Fund receives/(pays) semi-annual fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no credit event occurs, it will lose its investment. In addition,
if the Fund is a seller and a credit event occurs, the value of the referenced
obligation received by the Fund coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Fund.
At October 31, 2004, the Fund had no Sale Contracts outstanding.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. The Fund had no Buy Contracts outstanding as of
October 31, 2004.
5. Dollar Rolls
The Fund may enter into dollar rolls. Dollar rolls involve sales by the Fund of
securities for delivery in the current month and the Fund's simultaneously
contracting to repurchase substantially similar (same type and coupon)
securities on a specified future date. During the roll period, the Fund forgoes
principal and interest paid on the securities. The Fund is compensated by the
difference between the current sales price and the lower forward price for the
future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. Dollar rolls involve the risk
that the market value of the securities the Fund is obligated to repurchase
under the agreement may decline below the repurchase price. Dollar rolls are
speculative techniques and may be considered to be borrowings by the Fund.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 31
Notes to Financial Statements
- -------------------------------------------------------------------------------
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,
2004 2003 2004 2003
------------ ------------ -------------- --------------
Class A
Shares sold 393,391 2,976,832 $ 3,409,621 $ 25,341,854
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 165,212 209,541 1,427,219 1,769,520
- -------------------------------------------------------------------------------
Shares converted
from Class B 302,546 178,205 2,599,487 1,514,848
- -------------------------------------------------------------------------------
Shares redeemed (1,733,499) (4,070,066) (14,953,806) (34,486,726)
- -------------------------------------------------------------------------------
Net decrease (872,350) (705,488) $ (7,517,479) $ (5,860,504)
===============================================================================
Class B
Shares sold 660,862 1,970,943 $ 5,754,392 $ 16,670,477
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 382,569 345,826 3,307,819 3,082,283
- -------------------------------------------------------------------------------
Shares converted
to Class A (302,466) (178,206) (2,599,487) (1,514,848)
- -------------------------------------------------------------------------------
Shares redeemed (4,305,485) (3,975,274) (37,142,352) (33,641,565)
- -------------------------------------------------------------------------------
Net decrease (3,564,520) (1,836,711) $(30,679,628) $(15,403,653)
===============================================================================
Class C
Shares sold 204,616 651,156 $ 1,783,908 $ 5,618,834
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 58,582 59,400 507,491 501,400
- -------------------------------------------------------------------------------
Shares redeemed (1,078,222) (860,429) (9,339,977) (7,273,879)
- -------------------------------------------------------------------------------
Net decrease (815,024) (149,873) $ (7,048,578) $ (1,153,645)
===============================================================================
Advisor Class
Shares sold 1,846 7,054 $ 16,225 $ 58,809
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 6,760 10,173 58,346 87,822
- -------------------------------------------------------------------------------
Shares redeemed (75,772) (21,153) (653,831) (184,506)
- -------------------------------------------------------------------------------
Net decrease (67,166) (3,926) $ (579,260) $ (37,875)
===============================================================================
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTE F
Risks Involved in Investing in the Fund
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guarantor of a debt security, or the counterparty
to a derivative contract, will be unable or unwilling to make timely principal
and/or interest payments, or to otherwise honor its obligations. The degree of
risk for a particular security may be reflected in its credit risk rating.
Credit risk is greater for medium quality and lower-rated securities.
Lower-rated debt securities and similar unrated securities (commonly known as
"junk bonds") have speculative elements or are predominantly speculative risks.
Concentration of Risk--Investing in securities of foreign companies or foreign
governments involves special risks which include changes in foreign exchange
rates and the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies or foreign governments and their markets may be less
liquid and their prices more volatile than those of comparable United States
companies or of the United States Government.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE G
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, 2004.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 33
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the fiscal years ended October
31, 2004 and October 31, 2003 were as follows:
2004 2003
============= =============
Distributions paid from:
Ordinary income $ 8,137,705 $ 6,599,292
------------- -------------
Total taxable distributions 8,137,705 6,599,292
Tax return of capital -0- 5,226,955
------------- -------------
Total distributions paid $ 8,137,705 $ 11,826,247
============= =============
As of October 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (46,940,781)(a)
Unrealized appreciation/(depreciation) 11,905,763(b)
-------------
Total accumulated earnings/(deficit) $ (35,035,018)(c)
=============
(a) On October 31, 2004 the Fund had a net capital loss carryforward of
$43,545,562 of which $19,724,391 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 $4,529,180. For
the year ended October 31, 2004, the cumulative deferred loss on straddles was
$3,395,219.
(b) 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.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/ (deficit) is attributable primarily to dividends payable.
During the current fiscal year, permanent differences, primarily due to the
distribution in excess of net investment income, the tax treatment of bond
premiums, the tax treatment of swap income and the tax treatment of foreign
currency gains and losses, resulted in a net increase in distribution in excess
of net investment income, a decrease in accumulated net realized loss on
investments and foreign currency transactions, and a corresponding decrease in
additional paid in capital. This reclassification had no effect on net assets.
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the 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
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
On December 18, 2003, the 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 memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
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) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's 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.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 35
Notes to Financial Statements
- -------------------------------------------------------------------------------
filed against the Adviser; 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 the Adviser. 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 the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, 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.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC has indicated publicly that, among other things, it
is considering enforcement action in connection with mutual funds' disclosure
of such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser in connection with
this matter and the Adviser has provided documents and other information to the
SEC and is cooperating fully with its investigation.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
_______________________________________________________________________________
36 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 37
Financial Highlights
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.65 $7.75 $8.43 $9.53 $9.91
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .48(d) .55 .63 .78 .83
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .02 .93 (.67) (.90) (.22)
Net increase (decrease) in
net asset value from
operations .50 1.48 (.04) (.12) .61
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.52) (.29) (.52) (.71) (.83)
Distributions in excess of
net investment income -0- -0- -0- -0- (.16)
Tax return of capital -0- (.29) (.12) (.27) -0-
Total dividends and distributions (.52) (.58) (.64) (.98) (.99)
Net asset value, end of
period $8.63 $8.65 $7.75 $8.43 $9.53
TOTAL RETURN
Total investment return based
on net asset value(e) 5.89% 19.57% (.50)% (1.50)% 6.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $29,465 $37,043 $38,631 $57,667 $52,561
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.43% 1.60% 1.53% 1.45% 1.54%
Expenses, before
waivers/reimbursements 1.60% 1.60% 1.53% 1.45% 1.54%
Net investment income 5.83%(d) 6.50% 7.71% 8.60% 8.32%
Portfolio turnover rate 106% 155% 268% 304% 321%
See footnote summary on page 42.
_______________________________________________________________________________
38 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.65 $7.74 $8.42 $9.52 $9.90
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .41(d) .48 .57 .71 .76
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .02 .95 (.67) (.90) (.23)
Net increase (decrease) in
net asset value from
operations .43 1.43 (.10) (.19) .53
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.45) (.27) (.47) (.65) (.76)
Distributions in excess of
net investment income -0- -0- -0- -0- (.15)
Tax return of capital -0- (.25) (.11) (.26) -0-
Total dividends and
distributions (.45) (.52) (.58) (.91) (.91)
Net asset value, end of period $8.63 $8.65 $7.74 $8.42 $9.52
TOTAL RETURN
Total investment return based
on net asset value(e) 5.13% 18.89% (1.23)% (2.24)% 5.38%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $84,385 $115,414 $117,529 $156,948 $118,356
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.15% 2.31% 2.24% 2.16% 2.27%
Expenses, before
waivers/reimbursements 2.32% 2.31% 2.24% 2.16% 2.27%
Net investment income 5.12%(d) 5.83% 7.02% 7.85% 7.66%
Portfolio turnover rate 106% 155% 268% 304% 321%
See footnote summary on page 42.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 39
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.65 $7.75 $8.43 $9.52 $9.90
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .40(d) .50 .57 .72 .77
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .04 .92 (.67) (.90) (.24)
Net increase (decrease) in
net asset value from
operations .44 1.42 (.10) (.18) .53
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.45) (.28) (.47) (.65) (.76)
Distributions in excess of
net investment income -0- -0- -0- -0- (.15)
Tax return of capital -0- (.24) (.11) (.26) -0-
Total dividends and
distributions (.45) (.52) (.58) (.91) (.91)
Net asset value, end of
period $8.64 $8.65 $7.75 $8.43 $9.52
TOTAL RETURN
Total investment return based
on net asset value(e) 5.25% 18.74% (1.22)% (2.13)% 5.38%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $14,094 $21,175 $20,113 $33,035 $32,345
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.14% 2.30% 2.23% 2.15% 2.25%
Expenses, before
waivers/reimbursements 2.31% 2.30% 2.23% 2.15% 2.25%
Net investment income 5.14%(d) 5.81% 7.00% 7.90% 7.68%
Portfolio turnover rate 106% 155% 268% 304% 321%
See footnote summary on page 42.
_______________________________________________________________________________
40 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value, beginning
of period $8.65 $7.74 $8.43 $9.53 $9.92
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .47(d) .57 .65 .80 .88
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .05 .95 (.67) (.89) (.25)
Net increase (decrease) in
net asset value from
operations .52 1.52 (.02) (.09) .63
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.54) (.34) (.54) (.73) (.86)
Distributions in excess of
net investment income -0- -0- -0- -0- (.16)
Tax return capital -0- (.27) (.13) (.28) -0-
Total dividends and
distributions (.54) (.61) (.67) (1.01) (1.02)
Net asset value, end of
period $8.63 $8.65 $7.74 $8.43 $9.53
TOTAL RETURN
Total investment return based
on net asset value(e) 6.21% 20.10% (.31)% (1.19)% 6.33%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $900 $1,483 $1,358 $1,350 $2,658
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.13% 1.30% 1.24% 1.13% 1.23%
Expenses, before
waivers/reimbursements 1.30% 1.30% 1.24% 1.13% 1.23%
Net investment income 6.15%(d) 6.84% 8.08% 8.81% 8.71%
Portfolio turnover rate 106% 155% 268% 304% 321%
See footnote summary on page 42.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 41
Financial Highlights
- -------------------------------------------------------------------------------
(a) As of November 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. These interim payments are reflected within
net realized and unrealized gain (loss) on swap contracts, however, prior to
November 1, 2003, these interim payments were reflected within interest
income/expense on the statement of operations. The effect of this change for
the year ended October 31, 2004, was to decrease net investment income per
share by $0.001 for Class A, B, C, and Advisor Class and increase net realized
and unrealized gain (loss) on investment transactions per share by $0.001 for
Class A, B, C, and Advisor Class. Consequently, the ratios of net investment
income to average net assets were decreased by 0.20% for Class A, B, C and
Advisor Class, respectively.
(b) 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.
(c) Based on average shares outstanding.
(d) Net of waivers/reimbursement by the Adviser.
(e) 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.
_______________________________________________________________________________
42 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Report of Independent Registered Public Accounting Firm
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
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. (the "Fund"), including
the portfolio of investments, as of October 31, 2004, and the related statement
of operations for the year then ended, and the statement of changes in net
assets and the financial highlights for each of the periods indicated therein.
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 standards of the Public Company
Accounting Oversight Board (United States). Those standard require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of October 31, 2004, 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, 2004, the
results of its operations for the year then ended, and the changes in its net
assets and the financial highlights for each of the periods indicated therein,
in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
December 15, 2004
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 43
Board of Directors
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Donald J. Robinson(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Douglas J. Peebles(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
Brown Brothers Harriman & Company
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 Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee and Governance and Nominating Committee.
(2) Mr. Peebles is the person primarily responsible for the day-to-day
management of the Fund's investment portfolio.
_______________________________________________________________________________
44 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Management of the Fund
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH, OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- -----------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR
Marc O. Mayer + 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
10/2/57 predecessor since prior to 1999.
(2003)
DISINTERESTED DIRECTORS
William H. Foulk, Jr. # Investment adviser and an 116 None
2 Sound View Drive independent consultant. He was
Suite 100 formerly Senior Manager of Barrett
Greenwich, CT 06830 Associates, Inc., a registered
Chairman of the Board investment adviser, with which he
9/7/32 had been associated since prior to
(1995) 1999. 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** 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
11/7/30 the United States; Chairman and
(1995) Chief Executive Officer of Evlico;
Director of Avon, BP (oil and gas),
Ecolab Incorporated (specialty chem-
icals), Tandem Financial Group and
Donaldson, Lufkin & Jenrette
Securities Corporation; former
Governor at Large National
Association of Securities Dealers, Inc.
David H. Dievler # Independent consultant. Until 100 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
10/23/29 Management Corporation ("ACMC")
(1995) responsible for mutual fund
administration. Prior to joining
ACMC in 1984, he was Chief
Financial Officer of Eberstadt Asset
Management since 1968. Prior to
that, he was a Senior Manager at
Price Waterhouse & Co. Member
of American Institute of Certified
Public Accountants since 1953.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 45
Management of the Fund
- -------------------------------------------------------------------------------
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH, OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- -----------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
John H. Dobkin # Consultant. Formerly President of 98 None
P.O. Box 12 Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002, a
2/19/42 (1995) 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.
Donald J. Robinson # Senior Counsel to the law firm of 96 None
98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP
Weston, VT 05161 since prior to 1999. Formerly a
8/24/34 (1996) senior partner and a member of
the Executive Committee of that
firm. Formerly a member and
Chairman of the Municipal Secur-
ities Rulemaking Board and a
Trustee of the Museum of the City
of New York.
* There is no stated term of office for the Fund's Directors.
** Ms. Block was an "interested person", as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of 116 American Depository Shares
of AXA having a value of approximately $2,396. AXA is a controlling person of
ACMC. Ms. Block received shares of The Equitable Companies Incorporated as part
of the demutualization of The Equitable Life Assurance Society of the United
States, which were subsequently converted through a corporate action into 116
American Despositary Shares of AXA.
# Member of the Audit Committee and the Governance and Nominating Committee.
+ Mr. Mayer is an "interested person", as defined in the 1940 Act, due to his
position as Executive Vice President of ACMC.
_______________________________________________________________________________
46 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Management of the Fund
- -------------------------------------------------------------------------------
Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, ADDRESS* AND POSITION(S) PRINCIPAL OCCUPATION
DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
Marc O. Mayer President See biography above.
10/2/57
Philip L. Kirstein Senior Vice President Senior Vice President, Independent
5/29/45 and Independent Compliance Officer-Mutual Funds of
Compliance Officer ACMC with which he has been
associated since October 2004. Prior
thereto, he was Of Counsel to
Kirkpatrick & Lockhart, LLP from 2003
to October 2004, and General Counsel
and First Vice President of Merrill Lynch
Investment Managers, LLP since prior
to 1999.
Douglas J. Peebles Vice President Executive Vice President of ACMC**,
8/10/65 with which he has been associated
since prior to 1999.
Mark R. Manley Secretary Senior Vice President and Deputy
10/23/62 General Counsel and Chief Compliance
Officer of ACMC**, with which he has
been associated since prior to 1999.
Mark D. Gersten Treasurer and Chief Senior Vice President of Alliance Global
10/4/50 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 1999.
Vincent S. Noto Controller Vice President of AGIS,** with which
12/14/64 he has been associated since prior to
1999.
* The address for each of the Fund's officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at (800) 227-4618 for a free prospectus or SAI.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 47
AllianceBernstein Family of Funds
- -------------------------------------------------------------------------------
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 Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Fund
Global & International
All-Asia Investment Fund
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund**
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
- --------------------------------------------
Intermediate Municipal Bond Funds
- --------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
- --------------------------------------------
Closed-End Funds
- --------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,*** which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. You should read the prospectus carefully before you invest.
* Prior to December 15, 2004, these Funds were named as follows: Global Health
Care Fund was Health Care Fund; Large Cap Growth Fund was Premier Growth Fund;
Global Technology Fund was Technology Fund; and Focused Growth & Income Fund
was Disciplined Value Fund.
** Effective February 1, 2005, Small Cap Value Fund will be renamed
Small/Mid-Cap Value Fund.
*** 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.
_______________________________________________________________________________
48 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
AllianceBernstein [LOGO](SM)
Investment Research and Management
(SM) This service mark used under license from the owner, Alliance Capital
Management L.P.
GSIFAR1004
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 11(a)(1).
(b) During the period covered by this report, no material 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.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent auditor Ernst & Young LLP, for the Fund's last two fiscal years for
professional services rendered for: (i) the audit of the Fund's annual
financial statements included in the Fund's annual report to stockholders; (ii)
assurance and related services that are reasonably related to the performance
of the audit of the Fund's financial statements and are not reported under (i),
which include multi-class distribution testing, advice and education on
accounting and auditing issues, and consent letters; and (iii) tax compliance,
tax advice and tax return preparation.
Audit-Related
Audit Fees Fees Tax Fees
- ----------------------------------------------------------------------------------------------------
AllianceBernstein Global Strategic 2003 52,000 9,047 14,814
Income Trust, Inc.
2004 55,000 3,325 23,038
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on
or after May 6, 2003, the Fund's Audit Committee policies and procedures
require the pre-approval of all audit and non-audit services provided to the
Fund by the Fund's independent auditors. The Fund's Audit Committee policies
and procedures also require pre-approval of all audit and non-audit services
provided to the Adviser and Service Affiliates to the extent that these
services are directly related to the operations or financial reporting of the
Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in
the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided
to the Fund, the Fund's Adviser and entities that control, are controlled by or
under common control with the Adviser that provide ongoing services to the
Fund, which include conducting an annual internal control report pursuant to
Statement on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column Pre-
approved by the Audit
All Fees for Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
- --------------------------------------------------------------------------------------------------------------
AllianceBernstein Global Strategic 2003 772,826 410,861
Income Trust, Inc. 396,047
14,814
2004 1,128,095 176,363
153,325
23,038
(h) The Audit Committee of the Fund has considered whether the provision of
any non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditor to the Adviser and Service Affiliates is compatible
with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 10. 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 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
11 (a) (1) Code of ethics that is subject to the disclosure of
Item 2 hereof
11 (b) (1) Certification of Principal Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
11 (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 31, 2004
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 31, 2004
By: /s/ Mark D. Gersten
-----------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: December 31, 2004
00250.0073 #462870v4