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, 2005
Date of reporting period: October 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Global
Strategic Income Trust
Annual Report
October 31, 2005
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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, 2005
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, 2005.
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
non-investment grade 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 (U.S. dollar hedged) for the six-
and 12-month periods ended October 31, 2005. 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.
The Fund's Class A shares outperformed both the benchmark, the LB Global
Aggregate Index, and the Lipper Average, for the six- and 12-month periods
ended October 31, 2005. Contributing positively to performance during both
timeframes was the Fund's allocation to emerging-market debt. The
emerging-market debt class significantly outperformed the Fund's broader index.
In addition, the Fund's country allocation within its emerging debt holdings,
particularly its position in Russia, contributed to its outperformance. The
Fund's allocation to high yield also contributed positively to performance
during both periods under review as high yield debt outperformed
investment-grade debt. Also adding to the Fund's performance versus its
benchmark for the six- and 12-month periods ended October 31, 2005 was its
developed government country selection. The Fund's underweight position in U.S.
Treasuries benefited performance as U.S. government holdings significantly
underperformed non-U.S. government holdings. Conversely, the Fund's European
government bond allocation contributed positively to performance.
Market Review and Investment Strategy
U.S. fixed-income returns were modest relative to the non-U.S. bond markets
during the annual reporting period. These returns reflected higher U.S.
interest rates, a significant flattening of the yield curve and modest spread
movement in the non-Treasury sectors. Beginning in June 2004, the Federal
Reserve hiked the Fed Funds benchmark rate 12 times for a total of 300 basis
points, bringing the Fed Funds target from its all-time low of 1% to 4%. For
the year, the U.S. yield curve flattened by 186 basis points with shorter-term
maturity yields rising the most.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 1
U.S. Treasuries posted a very modest return of 0.88%, according to Lehman
Brothers. As a result, U.S. Treasuries substantially underperformed developed
non-U.S. dollar government bond markets (hedged) at 5.63%. Non-U.S. government
bond markets outperformed the U.S. as global bond yields remained relatively
stable on weaker economic growth in those economies. The economies of Europe,
Canada and Japan lagged the U.S. significantly early in the reporting period,
with most global central banks remaining neutral. Economic prospects for each,
however, brightened as the year progressed.
Global high yield debt outperformed investment-grade sectors which are more
sensitive to rising interest rates. Global high yield securities returned 6.31%
on a hedged basis, according to Lehman Brothers. A combination of factors
supported the high yield market throughout the year, including a strong
investor demand for yield, limited supply and strong corporate earnings.
Liquidity in the high yield market also remained ample with default rates near
all-time lows. European high yield, which returned 9.85%, outperformed U.S.
high yield, which returned 4.08%.
The emerging-market debt class posted the strongest returns within the
fixed-income sectors of the market for the annual period, returning 10.54%,
according to the JP Morgan Emerging Markets Bond Index Global. Thirty of
thirty-one countries represented within JP Morgan's index posted positive
returns, with the Latin region at 11.18%, outpacing non-Latin countries at
9.63%. Emerging-market spreads continued to tighten throughout the year an
additional 157 basis points to end the period at 242 basis points over
Treasuries. During the reporting period, the emerging markets enjoyed strong
investor demand, a favorable low global interest-rate environment, strong
global liquidity and improving individual country fundamentals. Additionally,
many emerging debt countries markedly improved their external debt dynamics and
pre-funded their debt obligations through 2006.
During the year, the Fund continued to generally maintain its allocations to
global government debt, high yield corporate securities and emerging-market
debt. The Fund's global government debt positions included government
securities from the U.S., Canada, Finland, Ireland, France, Spain and Germany.
Within the high yield market, dispersion among high yield industries remained
quite narrow which led to limited opportunities for outperformance through
industry over- and underweights. As such, the Fund's Global and High Yield
Investment Team (the "Team") continued to emphasize security selection as the
primary means of achieving value, drawing on the Team's extensive fundamental
and quantitative research to help identify the winners and losers.
Within the Fund's emerging-market debt allocation, the Fund's exposure to
Russia was maintained. Russia was one of the best performing emerging debt
countries outside of Latin America during the reporting period. Russia
continued to benefit from high-
2 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
er oil revenues, strong fiscal performance and debt prepayments. Argentina was
also favored within the Fund based on very strong growth (10.1% gross domestic
product growth in the second quarter of 2005), solid growth in reserves and
improvement in the political system with Argentina's president recently
consolidating gains. The Fund's exposure to Peru was increased as economic
growth continued to outpace most Latin countries on strong demand for its
exports. Exports doubled in Peru during 1999-2004, led by mining, and growth
has averaged 5% per annum. Lastly, the Fund's exposure to Ecuador was
eliminated. Although credit fundamentals in this country are sound, political
volatility warranted caution.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 3
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, Class R, Class K and
Class I shares will vary due to different expenses associated with these
classes. Performance assumes reinvestment of distributions and does not account
for taxes.
Benchmark Disclosure
Neither the unmanaged Lehman Brothers (LB) Global Aggregate Index (U.S. dollar
hedged) nor the LB U.S. Aggregate Index reflects 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 LB 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, 2005, the Lipper Multi-Sector Income Funds Average
consisted of 116 and 107 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 non-investment grade 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. High yield bonds involve a greater risk of default and price
volatility than other bonds. Investing in non-investment grade securities
presents special risks, including credit risk. Please note, as interest rates
rise, existing bond prices fall and can cause the value of an investment in the
Fund to decline. 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)
4 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED OCTOBER 31, 2005 6 Months 12 Months
-------- ---------
AllianceBernstein Global Strategic Income Trust
Class A 2.58% 5.67%
Class B 2.21% 4.92%
Class C 2.33% 4.93%
Advisor Class 2.74% 6.01%
Class R** 2.42% 1.17%*
Class K** 2.58% 1.36%*
Class I** 2.76% 1.58%*
Lehman Brothers Global Aggregate
Index (USD Hedged) 1.16% 3.86%
Lipper Multi-Sector Income Funds Average 1.57% 3.49%
* Since Inception. The Class R, Class K and Class I share inception date is
3/1/05.
** Please note that this is a new share class offering for investors
purchasing shares through institutional pension plans. The inception date for
Class R, Class K and Class I shares is listed above.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 5
HISTORICAL PERFORMANCE
(continued from previous page)
GROWTH OF A $10,000 INVESTMENT IN THE FUND
1/9/96* TO 10/31/05
AllianceBernstein Global Strategic Income Trust Class A: $19,762
Lehman Brothers Global Aggregate Index (USD Hedged): $18,643
Lipper Multi-Sector Income Funds Average: $18,092
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
AllianceBernstein Lipper
Global Strategic Lehman Brothers Multi-Sector
Income Trust Global Aggregate Income Funds
Class A Index (USD Hedged) Average
- -------------------------------------------------------------------------------
1/9/96* $ 9,575 $10,000 $10,000
10/31/96 $11,228 $10,563 $10,844
10/31/97 $13,118 $11,602 $11,906
10/31/98 $13,251 $12,866 $11,941
10/31/99 $14,201 $13,019 $12,413
10/31/00 $15,070 $13,961 $12,586
10/31/01 $14,844 $15,679 $13,180
10/31/02 $14,770 $16,450 $13,607
10/31/03 $17,662 $17,082 $16,030
10/31/04 $18,702 $17,950 $17,482
10/31/05 $19,762 $18,643 $18,092
* Since inception of the Fund's Class A shares on 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 (U.S. dollar 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
10/31/05) as compared to the performance of its benchmark, the Lehman Brothers
Global Aggregate Index (U.S. dollar hedged) 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 page 4.
(Historical Performance continued on next page)
6 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 2005
NAV Returns SEC Returns
Class A Shares
1 Year 5.67% 1.21%
5 Years 5.57% 4.66%
Since Inception* 7.66% 7.19%
SEC Yield** 2.65%
Class B Shares
1 Year 4.92% 0.92%
5 Years 4.83% 4.83%
Since Inception* 7.17% 7.17%
SEC Yield** 2.04%
Class C Shares
1 Year 4.93% 3.93%
5 Years 4.86% 4.86%
Since Inception* 6.90% 6.90%
SEC Yield** 2.05%
Advisor Class Shares
1 Year 6.01%
5 Years 5.90%
Since Inception* 5.47%
SEC Yield** 3.08%
Class R Shares+
Since Inception* 1.17%
SEC Yield** 2.54%
Class K Shares+
Since Inception* 1.36%
SEC Yield** 2.78%
Class I Shares+
Since Inception* 1.58%
SEC Yield** 3.15%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
Class A Shares
1 Year 3.62%
5 Years 4.65%
Since Inception* 7.37%
Class B Shares
1 Year 3.45%
5 Years 4.83%
Since Inception* 7.36%
Class C Shares
1 Year 6.58%
5 Years 4.83%
Since Inception* 7.09%
* Inception dates: 1/9/96 for Class A shares; 3/21/96 for Class B and Class C
shares; 12/18/97 for Advisor Class shares; 3/1/05 for Class R, Class K and
Class I shares.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended October 31, 2005.
+ Please note that this is a new share class offering for investors
purchasing shares through institutional pension plans. The inception date for
Class R, Class K and Class I shares is listed above.
See Historical Performance disclosures on page 4.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 7
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 table below provides information about actual account values and actual
expenses. You may use the information, 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 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 table below also 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 hypothetical example 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, 2005 October 31, 2005 During Period*
------------------------ -------------------------- ------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
Class A $1,000 $1,000 $1,025.82 $1,016.94 $8.37 $8.34
Class B $1,000 $1,000 $1,022.05 $1,013.31 $12.03 $11.98
Class C $1,000 $1,000 $1,023.30 $1,013.36 $11.98 $11.93
Advisor
Class $1,000 $1,000 $1,027.42 $1,018.45 $6.85 $6.82
Class R $1,000 $1,000 $1,024.22 $1,018.45 $6.84 $6.82
Class K $1,000 $1,000 $1,025.79 $1,019.51 $5.77 $5.75
Class I $1,000 $1,000 $1,027.62 $1,020.67 $4.60 $4.58
* Expenses are equal to the classes' annualized expense ratios of 1.64%,
2.36%, 2.33%, 2.74%,2.42%, 2.58% and 2.76%, respectively, multiplied by the
average account value over the period, multiply by the number of days in the
period/365 (reflect the one-half year period).
** Assumes 5% return before expenses.
8 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
PORTFOLIO SUMMARY
October 31, 2005
Portfolio Summary
PORTFOLIO STATISTICS
Net Assets ($mil): $96.9
[PIE CHART OMITTED]
SECURITY TYPE BREAKDOWN*
45.8% Sovereign Debt Obligations
22.5% Corporate Debt Obligations
15.5% U.S. Government &
Government Sponsored
Agency Obligations
10.7% Bank Loans
4.7% Supranationals
0.7% Preferred Stocks
0.1% Municipal Debt Obligations
* All data are as of October 31, 2005. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 9
PORTFOLIO OF INVESTMENTS
October 31, 2005
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Argentina-1.4%
Government Obligations-1.4%
Republic of Argentina
4.01%, 8/03/12(a)(b) US$ 904 $ 809,872
7.82%, 12/31/33 EUR 481 539,064
8.28%, 12/31/33(b) US$ 33 31,944
Total Argentinian Securities
(cost $1,245,957) 1,380,880
Australia-0.3%
Corporate Debt Obligations-0.3%
Commonwealth Bank of Australia
4.65%, 6/15/18(c) 150 139,816
SPI Electricity & Gas Australia Holdings
Pty, Ltd.
6.15%, 11/15/13(c) 160 169,777
Total Australian Securities
(cost $321,082) 309,593
Brazil-3.3%
Corporate Debt Obligation-0.4%
PF Export Receivables Master Trust
6.44%, 6/01/15(c) 393 391,304
Government Obligations-2.9%
Federal Republic of Brazil
10.50%, 7/14/14(b) 105 123,375
12.00%, 4/15/10(b) 1,800 2,151,000
12.50%, 1/05/16 BRL 1,041 435,715
12.75%, 1/15/20(b) US$ 65 87,197
2,797,287
Total Brazilian Securities
(cost $2,347,024) 3,188,591
Canada-2.7%
Corporate Debt Obligation-1.1%
Abitibi-Consolidated, Inc.
6.00%, 6/20/13(b) 1,275 1,055,063
Government Obligations-1.6%
Government of Canada
4.25%, 9/01/09 CAD 661 568,725
5.75%, 6/01/33 1,000 1,037,592
1,606,317
Total Canadian Securities
(cost $2,925,131) 2,661,380
10 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Cayman Islands-0.1%
Corporate Debt Obligation-0.1%
Resona Preferred Global Securities
Cayman, Ltd.
7.19%, 7/30/15(a)(c)
(cost $109,353) US$ 109 $111,050
Colombia-1.0%
Government Obligation-1.0%
Republic of Colombia
11.75%, 2/25/20(b)
(cost $691,627) 714 960,330
Denmark-0.3%
Corporate Debt Obligation-0.3%
Danske Bank A/S
5.88%, 3/26/15(a)(b)
(cost $240,493) EUR 240 325,770
El Salvador-0.3%
Government Obligation-0.3%
Republic of El Salvador
7.75%, 1/24/23(c)
(cost $249,142) US$ 250 271,250
Finland-4.6%
Government Obligation-4.6%
Republic of Finland
5.38%, 7/04/13(b)
(cost $4,793,140) EUR 3,270 4,481,831
France-8.2%
Corporate Debt Obligation-0.4%
Legrand Holding SA
10.50%, 2/15/13(b) US$ 305 345,412
Government Obligations-7.8%
Government of France
4.00%, 10/25/13(b) EUR 3,400 4,280,985
6.50%, 4/25/11 O.A.T.(b) 2,349 3,302,325
7,583,310
Total French Securities
(cost $7,765,705) 7,928,722
Germany-4.6%
Corporate Debt Obligations-0.5%
Kloeckner Investment SCA
10.50%, 5/15/15(c) 110 143,694
Kronos International, Inc.
8.88%, 6/30/09(b) 250 313,095
456,789
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 11
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Government Obligations-4.1%
Deutsche Bundesrepublik
4.00%, 7/04/09(b) EUR 2,311 $2,877,600
5.00%, 7/04/12 874 1,161,640
4,039,240
Total German Securities
(cost $4,678,642) 4,496,029
Greece-0.1%
Corporate Debt Obligation-0.1%
Antenna TV, SA
7.25%, 2/15/15(c)
(cost $61,750) 48 55,225
Ireland-4.7%
Government Obligation-4.7%
Republic of Ireland
5.00%, 4/18/13(b)
(cost $4,895,651) 3,390 4,533,841
Italy-0.5%
Corporate Debt Obligation-0.5%
Banca Popolare di Bergamo Capital Trust
8.36%, 2/15/11(a)(b)
(cost $307,405) 325 468,214
Jamaica-0.1%
Corporate Debt Obligation-0.1%
Digicel, Ltd.
9.25%, 9/01/12(c)
(cost $100,000) US$ 100 104,750
Japan-1.2%
Corporate Debt Obligations-1.2%
Mizuho Financial Group Cayman, Ltd.
5.79%, 4/15/14(c) 100 102,546
8.38%, 4/27/09(b) 920 984,400
Sumitomo Mitsui Banking Corp.
5.63%, 10/15/15(a)(c) 100 97,810
Total Japanese Securities
(cost $1,175,452) 1,184,756
Kazakhstan-1.4%
Corporate Debt Obligation-1.4%
Kazkommerts International BV
8.50%, 4/16/13(c)
(cost $1,273,780) 1,300 1,355,250
12 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Luxembourg-0.7%
Corporate Debt Obligations-0.7%
Arcelor Finance SCA
4.63%, 11/07/14(b) EUR 368 $ 461,148
Nell AF SARL
8.38%, 8/15/15(c) 120 144,533
Telecom Italia Capital SA
5.25%, 10/01/15 US$ 100 96,264
Total Luxembourg Securities
(cost $735,295) 701,945
Mexico-9.0%
Corporate Debt Obligation-0.5%
Innova S de RL
9.38%, 9/19/13(b) 405 451,575
Government Obligations-8.5%
Mexican Bonos
9.00%, 12/20/12(b) MXN 6,643 618,645
10.00%, 12/05/24 18,632 1,854,210
United Mexican States
7.50%, 1/14/12(b) US$ 250 277,250
8.00%, 9/24/22(b) 3,206 3,811,934
8.13%, 12/30/19(b) 925 1,106,762
11.38%, 9/15/16(b) 406 586,670
8,255,471
Total Mexican Securities
(cost $8,288,975) 8,707,046
Netherlands-1.9%
Government Obligation-1.9%
Kingdom of the Netherlands
3.75%, 7/15/14(b)
(cost $1,897,447) EUR 1,453 1,795,270
Peru-0.4%
Government Obligations-0.4%
Republic of Peru
8.38%, 5/03/16(b) US$ 113 127,407
8.60%, 8/12/17 PEN 711 224,019
Total Peruvian Securities
(cost $332,407) 351,426
Poland-2.3%
Government Obligation-2.3%
Government of Poland
5.75%, 3/24/10
(cost $2,324,920) PLN 7,300 2,251,588
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 13
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Qatar-0.2%
Corporate Debt Obligation-0.2%
Ras Laffan LNG III
5.84%, 9/30/27(c)
(cost $250,000) US$ 250 $ 244,678
Romania-0.6%
Corporate Debt Obligation-0.6%
MobiFon Holdings BV
12.50%, 7/31/10(b)
(cost $492,336) 500 585,000
Russia-5.9%
Corporate Debt Obligation-0.5%
Aries Vermoegensverwaltungs GmbH
9.60%, 10/25/14(c) 250 320,325
Russian Standard Finance SA
7.50%, 10/07/10 100 98,375
418,700
Government Obligations-5.4%
Russian Federation
5.00%, 3/31/30(c)(d) 2,750 3,052,500
Russian Ministry of Finance
3.00%, 5/14/08(b) 2,195 2,035,863
3.00%, 5/14/11 200 174,000
5,262,363
Total Russian Securities
(cost $3,945,423) 5,681,063
South Africa-6.6%
Corporate Debt Obligations-6.6%
Development Bank of Southern Africa
Zero Coupon, 12/31/27(b) ZAR 50,000 1,181,337
European Bank for Reconstruction &
Development
Zero Coupon, 12/31/29(b) 50,000 1,248,416
Foodcorp, Ltd.
8.88%, 6/15/12(c) EUR 123 159,276
International Bank for Reconstruction &
Development
Zero Coupon, 2/17/26(b) ZAR 50,000 1,606,917
Zero Coupon, 12/29/28(c) 250,000 2,206,156
Total South African Securities
(cost $5,750,908) 6,402,102
Spain-2.9%
Government Obligation-2.9%
Kingdom of Spain
5.40%, 7/30/11(b)
(cost $2,982,025) EUR 2,065 2,774,673
14 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Turkey-0.1%
Government Obligations-0.1%
Republic of Turkey
11.50%, 1/23/12(b) US$ 28 $ 35,322
11.88%, 1/15/30(b) 21 30,429
Total Turkish Securities
(cost $64,650) 65,751
Ukraine-0.1%
Government Obligations-0.1%
Government of Ukraine
6.88%, 3/04/11(c) 100 103,250
11.00%, 3/15/07(c) 14 14,687
Total Ukrainian Securities
(cost $114,470) 117,937
United Kingdom-5.6%
Corporate Debt Obligations-5.1%
BSKYB Finance UK Plc.
5.63%, 10/15/15(c) 129 127,030
5.75%, 10/20/17(c) GBP 383 677,069
HSBC Capital Funding LP
4.61%, 6/27/13(c) US$ 370 345,031
mmO2 Plc.
6.38%, 1/25/07(b) EUR 410 512,701
Rexam Plc.
6.63%, 3/27/07(b) 410 515,635
Royal & Sun Alliance Insurance
Group Plc.
8.95%, 10/15/29(b) US$ 205 253,614
Royal Bank of Scotland Group Plc.
7.65%, 9/30/31(a)(b) 1,875 2,202,319
Yorkshire Power Finance, Ltd.
7.25%, 8/04/28(b) GBP 145 310,162
4,943,561
Government Obligation-0.4%
United Kingdom Treasury Note
4.25%, 3/07/36 185 328,548
Preferred Stock-0.1%
Royal Bank of Scotland Group Plc.
6.40%, 9/30/09(b) 4,700 118,064
Total United Kingdom Securities
(cost $4,794,626) 5,390,173
United States-39.1%
Corporate Debt Obligations-9.5%
AK Steel Corp.
7.88%, 2/15/09(b) US$ 250 238,125
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 15
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Amerada Hess Corp.
7.13%, 3/15/33 US$ 11 $ 12,160
AT&T Corp.
8.00%, 11/15/31(a) 91 110,792
Bank of America Corp.
4.50%, 8/01/10 186 181,966
Broder Brothers Co.
11.25%, 10/15/10(b) 570 527,250
Calpine Corp.
8.50%, 7/15/10(c) 235 164,500
Charter Communication Holdings LLC
11.75%, 5/15/11(b)(e) 585 365,625
Comcast Corp.
4.95%, 6/15/16 426 395,681
Cox Communications, Inc.
7.13%, 10/01/12 115 123,178
Crum & Forster Holdings Corp.
10.38%, 6/15/13(b) 240 256,800
Dex Media East LLC
12.13%, 11/15/12(b) 134 156,445
Dex Media West LLC Series B
9.88%, 8/15/13(b) 244 269,010
Ford Motor Co.
7.45%, 7/16/31(b) 95 69,825
Ford Motor Credit Co.
4.95%, 1/15/08(b) 100 93,783
6.63%, 6/16/08 115 110,280
General Motors Corp.
7.75%, 3/15/36(b)(e) 377 94,250
Genworth Financial, Inc.
1.60%, 6/20/11(b) JPY 22,000 188,299
HCA, Inc.
7.58%, 9/15/25(b) US$ 65 63,526
HLI Operating Co., Inc.
10.50%, 6/15/10(b) 130 106,600
HSBC Finance Corp.
5.00%, 6/30/15 92 88,628
Huntsman International LLC
10.13%, 7/01/09(b) 153 157,399
IBM Corp.
4.75%, 11/29/12(b) 700 691,165
Insight Communications Co., Inc.
12.25%, 2/15/11(b)(e) 350 359,625
Insight Midwest LP/Insight Capital, Inc.
9.75%, 10/01/09(b) 500 515,000
IPALCO Enterprises, Inc.
8.38%, 11/14/08(b) 150 156,000
JP Morgan Chase & Co.
5.75%, 1/02/13(b) 900 924,513
Liberty Mutual Group
5.75%, 3/15/14(c) 138 132,850
16 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
MBNA Corp.
5.00%, 5/04/10 US$ 48 $ 47,828
Nextel Partners, Inc.
12.50%, 11/15/09(b) 341 364,017
Paxson Communications Corp.
12.25%, 1/15/09(b)(e) 265 259,038
Pliant Corp.
13.00%, 6/01/10(b) 395 57,275
Qwest Services Corp.
13.50%, 12/15/10 150 171,375
Riviera Holdings Corp.
11.00%, 6/15/10(b) 240 261,000
SBC Communications, Inc.
6.15%, 9/15/34 109 106,474
Six Flags, Inc.
9.75%, 4/15/13(b) 250 248,750
Sprint Capital Corp.
8.38%, 3/15/12(b) 119 137,301
Teck Cominco, Ltd.
6.13%, 10/01/35 22 20,650
Time Warner Entertainment Co. LP
8.38%, 3/15/23(b) 175 205,696
Universal City Development Partners
11.75%, 4/01/10(b) 255 285,919
Valero Energy Corp.
6.88%, 4/15/12 120 130,107
William Lyon Homes, Inc.
10.75%, 4/01/13(b) 250 261,875
Willis North America, Inc.
5.13%, 7/15/10 37 36,594
9,147,174
Bank Loans-11.8%
Allegheny Energy Supply Co. LLC
5.64-5.92%, 2/28/11-3/08/11 331 334,357
Brenntag Group
6.81%, 2/28/12 1,000 1,002,250
DaVita, Inc.
6.25-6.54%, 4/30/12 961 973,995
Dex Media West LLC
5.49-5.96%, 3/09/10 781 783,668
Graham Packaging Co. LP
6.38-6.63%, 9/15/11 496 501,988
Kerr-McGee Corp.
6.51%, 5/15/11 998 999,495
Keystone Automotive Operations, Inc.
5.63-6.03%, 10/30/09 415 417,293
LandSource Communities
Development LLC
6.50%, 7/31/10 500 503,125
MGM Holdings II, Inc.
6.27%, 3/15/12 1,000 1,007,875
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 17
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
MultiPlan, Inc.
6.53%, 3/31/09 US$ 333 $ 337,500
Owens-Illinois Group, Inc.
5.78%, 4/01/08 131 132,445
PanAmSat Corp.
6.05-6.11%, 7/01/11 496 500,634
PGT Industries, Inc.
7.14-7.23%, 1/29/10 536 543,129
Prestige Brands, Inc.
6.31-8.00%, 4/15/11 493 498,041
Rainbow National Services LLC
6.44%, 3/31/12 498 501,231
Regal Cinemas Corp.
6.02%, 10/19/10 478 482,090
Stewart Enterprises
5.39-5.77%, 11/01/11 947 957,647
VWR International, Inc.
6.69%, 4/05/11 458 463,245
WMG Acquisitions Corp.
5.52-6.37%, 3/22/11 492 496,606
11,436,614
Municipal Obligation-0.1%
Alameda Corridor Transportation Authority
6.60%, 10/01/29 100 112,985
U.S. Government And
Government Sponsored
Agency Obligations-17.1%
Federal National Mortgage Association
30 YR TBA
5.50%, 2/01/35 4,694 4,634,806
6.00%, 12/01/35 3,300 3,323,720
6.50%, 11/01/34 4,755 4,879,819
U.S. Treasury Bonds
4.25%, 8/15/15 16 15,613
5.38%, 2/15/31(f) 2,685 2,928,328
U.S. Treasury Notes
2.25%, 2/15/07(g) 810 788,452
16,570,738
Preferred Stocks-0.6%
AmerUs Group Co.
7.25%, 9/15/10 2,000 48,938
Ford Motor Co. Capital Trust II
6.50%, 1/15/32(b) 7,885 251,453
Paxson Communications Corp.
14.25%, 11/15/06(b) 39 266,175
XL Capital, Ltd. Class A
6.50%, 5/15/07(b) 2,325 49,964
616,530
Total United States Securities
(cost $38,232,269) 37,884,041
18 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
U.S. $ Value
- -------------------------------------------------------------------------------
Total Investments-110.2%
(cost $103,387,085) $106,770,155
Other assets less liabilities-(10.2%) (9,891,411)
NET ASSETS-100% $ 96,878,744
REVERSE REPURCHASE AGREEMENT (see Note D)
Interest
Broker Rate Maturity Amount
- -------------------------------------------------------------------------------
Merrill Lynch 2.90% 11/02/05 $(2,940,075)
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S.$ U.S. $
Contract Value on Value at Unrealized
Amount Origination October 31, Appreciation/
(000) Date 2005 (Depreciation)
- -------------------------------------------------------------------------------
Buy Contracts:
British Pound,
settling 12/23/05 604 $1,078,442 $1,068,570 $(9,872)
Euro Dollar,
settling 12/16/05 656 791,038 788,192 (2,846)
Japanese Yen,
settling 12/19/05 89,512 784,025 773,251 (10,774)
South Korean Won,
settling 12/01/05 1,972,770 1,900,000 1,890,327 (9,673)
Sale Contracts:
British Pound,
settling 12/23/05 808 1,427,807 1,428,797 (990)
Canadian Dollar,
settling 12/14/05 807 690,436 683,954 6,482
Euro Dollar,
settling 12/16/05-1/18/06 25,082 30,407,180 30,161,005 246,175
Mexican Peso,
settling 12/21/05-2/21/06 27,528 2,502,141 2,524,608 (22,467)
Peruvian New Sol,
settling 11/15/05 214 62,986 63,290 (304)
Polish Zloty,
settling 11/04/05 7,796 2,409,205 2,357,307 51,898
South African Rand,
settling 11/22/05 39,609 6,175,554 5,894,786 280,768
Swedish Krona,
settling 12/22/05 3,680 468,556 463,798 4,758
FINANCIAL FUTURES CONTRACTS SOLD (see Note D)
Number Expiration Original Value at Unrealized
Type Contracts Month Value October 31, 2005 Appreciation
- ---------------------------------------------------------------------------------------
U.S. Treasury
Note 10 yr December
Futures 291 2005 $32,313,828 $31,559,859 $753,969
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 19
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% $76,979
Deutsche Banc MXN 46,500 1/12/07 9.90% 8.03%* (54,448)
* Variable rates are based on the Interbank equilibrium interest rate for
Mexican Pesos.
(a) Coupon rate adjusts on a predetermined schedule to a rate based on a
specific Index. Stated interest rate was in effect at October 31, 2005.
(b) Positions, or a portion thereof, with an aggregate market value of
$57,661,069 have been segregated to collateralize forward exchange currency
contracts.
(c) Security is 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, 2005, the aggregate market value of these securities
amounted to $10,634,357 or 11.0% of net assets.
(d) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate was in effect at October 31, 2005.
(e) 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.
(f) Position, or portion thereof, with an aggregate market value of $2,928,328
has been segregated to collateralize reverse repurchase agreements.
(g) A portion of this position, with a market value of $788,452 has been
segregated to collateralize margin requirements for the open futures contracts.
Glossary:
TBA - (To Be Assigned) Securities are purchased on a forward commitment with an
appropriate principal amount (generally +/- 1.0%) and no definite maturity
date. The actual principal amount and maturity date will be determined upon
settlement when the specific mortgage pools are assigned.
Currency Abbreviations:
BRL - Brazilian Real
CAD - Canadian Dollar
EUR - Euro Dollar
GBP - Great British Pound
JPY - Japanese Yen
MXN - Mexican Peso
PEN - Peruvian New Sol
PLN - Polish Zloty
US$ - United States Dollar
ZAR - South African Rand
See notes to financial statements.
20 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
STATEMENT OF ASSETS & LIABILITIES
October 31, 2005
Assets
Investments in securities, at value (cost $103,387,085) $106,770,155
Cash 104,810
Foreign cash, at value (cost $52,529) 52,569
Receivable for investment securities sold 3,492,693
Interest receivable 1,306,363
Unrealized appreciation of forward exchange currency
contracts 590,081
Receivable for capital stock sold 255,333
Unrealized appreciation of swap contracts 76,979
Total assets 112,648,983
Liabilities
Payable for investment securities purchased 11,684,222
Reverse repurchase agreement 2,940,075
Payable for capital stock redeemed 570,235
Dividends payable 123,197
Distribution fee payable 67,771
Unrealized depreciation of forward exchange currency
contracts 56,926
Unrealized depreciation on swap contracts 54,448
Advisory fee payable 41,901
Payable for variation margin on futures contracts 9,077
Administrative fee payable 7,908
Transfer Agent fee payable 7,132
Accrued expenses and other liabilities 207,347
Total liabilities 15,770,239
Net Assets $ 96,878,744
Composition of Net Assets
Capital stock, at par $ 11,130
Additional paid-in capital 130,744,333
Undistributed net investment income 1,601,401
Accumulated net realized loss on investment and
foreign currency transactions (40,133,003)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 4,654,883
$ 96,878,744
Calculation of Maximum Offering Price Per Share
Net Asset Value and:
-------------------- Maximum
Shares Offering Redemption Offering
Class Net Assets Outstanding Price Price Price *
- -------------------------------------------------------------------------------
A $24,249,933 2,786,311 -- $8.70 $9.09
B $59,513,219 6,837,132 $8.70 -- --
C $11,492,418 1,319,904 $8.71 -- --
Advisor $ 1,593,541 183,183 $8.70 $8.70 --
R $ 9,917 1,141 $8.69 $8.69 --
K $ 9,893 1,138 $8.69 $8.69 --
I $ 9,823 1,130 $8.69 $8.69 --
* The maximum offering price per share for Class A shares includes a sales
charge of 4.25%.
See notes to financial statements.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 21
STATEMENT OF OPERATIONS
Year Ended October 31, 2005
Investment Income
Interest (net of foreign taxes withheld
of $42,209) $6,959,138
Dividends 57,074 $7,016,212
Expenses
Advisory fee 566,544
Distribution fee--Class A 78,671
Distribution fee--Class B 725,137
Distribution fee--Class C 129,649
Distribution fee--Class R 33
Distribution fee--Class K 17
Transfer agency 187,679
Custodian 170,418
Registration 112,589
Administration 93,000
Audit 77,600
Legal 72,162
Printing 70,210
Proxy solicitation 30,084
Directors' fees 25,024
Miscellaneous 12,510
Total expenses 2,351,327
Less: expense offset arrangement
(see Note B) (736)
Net expenses 2,350,591
Net investment income 4,665,621
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions 3,513,372
Futures contracts (358,456)
Swap contracts 14,974
Written Options 857
Foreign currency transactions 4,543,415
Net change in unrealized
appreciation/depreciation of:
Investments (8,507,211)
Futures contracts 1,236,673
Swap contracts (44,738)
Foreign currency denominated assets
and liabilities 1,021,925
Net gain on investments and foreign
currency transactions 1,420,811
Net Increase in Net Assets
from Operations $6,086,432
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,
2005 2004
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
from Operations
Net investment income $4,665,621 $7,956,745
Net realized gain on investment and
foreign currency transactions 7,714,162 1,532,742
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities (6,293,351) (1,797,946)
Net increase in net assets from
operations 6,086,432 7,691,541
Dividends to Shareholders from
Net investment income
Class A (1,238,825) (1,989,480)
Class B (2,918,184) (5,169,553)
Class C (521,507) (906,665)
Advisor Class (79,008) (72,007)
Class R (299) -0-
Class K (316) -0-
Class I (335) -0-
Capital Stock Transactions
Net decrease (33,293,187) (45,824,945)
Total decrease (31,965,229) (46,271,109)
Net Assets
Beginning of period 128,843,973 175,115,082
End of period (including
undistributed/(distribution in excess)
of net investment income of
$1,601,401 and ($3,064,307),
respectively) $96,878,744 $128,843,973
See notes to financial statements.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 23
NOTES TO FINANCIAL STATEMENTS
October 31, 2005
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 diversified,
open-end management investment company. The Fund offers Class A, Class B, Class
C, Advisor Class, Class R, Class K and Class I 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. Class R and Class K shares are sold
without an initial or contingent deferred sales charge. Advisor Class and Class
I shares are sold without an initial or contingent deferred sales charge and
are not subject to ongoing distribution expenses. All seven 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
24 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
call options are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid prices on that day;
open futures contracts and options thereon are valued using the closing
settlement price or, in the absence of such a price, the most recent quoted bid
price. If there are no quotations available for the day of 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
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 25
foreign investment transactions, and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains and losses from valuing foreign currency denominated
assets and 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, Advisor Class, Class R, Class K and Class I shares. Advisor Class
and Class I 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 amortizes premiums and
accretes discounts as adjustments to interest income.
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
Under the terms of the investment advisory agreement, the Fund pays the Advisor
an advisory fee at an 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
26 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
net assets. Prior to September 7, 2004, the Fund paid the Adviser an advisory
fee at an annual rate of .75% 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%, 1.60%, 2.10%, 1.85% and 1.60% of the
daily average net assets for the Class A, Class B, Class C, Advisor Class,
Class R, Class K and Class I shares, respectively. For the year ended October
31, 2005, there were no fees waived by the Adviser.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with Office of the 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 as discussed above. For a more complete discussion of
the Adviser's settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Fund may reimburse the Advisor for
certain legal and accounting services provided to the Fund by the Adviser. For
the year ended October 31, 2005, such fees amounted to $93,000.
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. AGIS may make payments to intermediaries that provide omnibus account
services, sub-accounting services and/or networking services. The compensation
retained by AGIS amounted to $74,566 for the year ended October 31, 2005.
For the year ended October 31, 2005, the Fund's expenses were reduced by $736
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 $3,061 from the sale of Class A shares
and received $325, $80,761 and $974 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, 2005.
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, 1% of the average daily net assets attributable to both
Class B and Class C shares, .50% of the Fund's average daily net assets
attributable to Class R shares and .25% of the Fund's average daily net assets
attributable to Class K shares.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 27
There are no distribution and servicing fees on the Class I and 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 incurred expenses
in excess of the distribution costs reimbursed by the Fund in the amounts of
$8,836,760, $1,445,813, $2, and $18 for Class B, Class C, Class R and Class K
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, 2005, were as follows:
Purchases Sales
- -------------------------------------------------------------------------------
Investment securities (excluding
U.S. government securities) $109,984,231 $135,499,883
U.S. government securities 9,425,160 13,537,847
At October 31, 2005, the cost of investments for federal income tax purposes,
gross unrealized appreciation and unrealized depreciation (excluding foreign
currency contracts and swap contracts) are as follows:
Cost $103,432,373
Gross unrealized appreciation $ 6,566,479
Gross unrealized depreciation $ (3,228,697)
Net unrealized appreciation $ 3,337,782
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments and the imperfect correlation between movements in the
price of the future contracts and movements in the price of the securities
hedged or used for cover.
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
Risks may arise from the
28 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
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
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 29
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
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.
30 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
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
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, 2005, 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, 2005.
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
6. Reverse Repurchase Agreements
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
account with the custodian containing liquid assets having at least equal to
the repurchase price.
For the year ended October 31, 2005, the average amount of reverse repurchase
agreements outstanding was $2,911,642 and the daily weighted average annual
interest rate was 2.67%
NOTE E
Capital Stock
There are 21,000,000,000 shares of $0.001 par value capital stock authorized,
divided into seven classes, designated Class A, Class B, Class C, Advisor
Class, Class R, Class K and Class I 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,
2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 435,207 393,391 $ 3,796,086 $ 3,409,621
Shares issued in
reinvestment of
dividends 87,205 165,212 765,090 1,427,219
Shares converted
from Class B 281,430 302,546 2,465,647 2,599,487
Shares redeemed (1,427,311) (1,733,499) (12,511,947) (14,953,806)
Net decrease (623,469) (872,350) $ (5,485,124) $ (7,517,479)
Class B
Shares sold 398,235 660,862 $ 3,455,761 $ 5,754,392
Shares issued in
reinvestment of
dividends 163,313 382,569 1,433,026 3,307,819
Shares converted
to Class A (281,352) (302,466) (2,465,647) (2,599,487)
Shares redeemed (3,219,078) (4,305,485) (28,212,036) (37,142,352)
Net decrease (2,938,882) (3,564,520) $(25,789,896) $(30,679,628)
Class C
Shares sold 123,189 204,616 $ 1,080,910 $ 1,783,908
Shares issued in
reinvestment of
dividends 30,828 58,582 270,561 507,491
Shares redeemed (465,836) (1,078,222) (4,094,941) (9,339,977)
Net decrease (311,819) (815,024) $ (2,743,470) $ (7,048,578)
32 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2005 2004 2005 2004
------------ ------------ -------------- --------------
Advisor Class
Shares sold 132,088 1,846 $1,159,932 $ 16,225
Shares issued in
reinvestment of
dividends 7,916 6,760 69,649 58,346
Shares redeemed (61,084) (75,772) (534,450) (653,831)
Net increase
(decrease) 78,920 (67,166) $ 695,131 $(579,260)
March 1, 2005(a) March 1, 2005(a)
to to
October 31, 2005 October 31, 2005
- -------------------------------------------------------------------------------
Class R
Shares sold 1,141 $10,100
Shares redeemed -0- -0-
Net increase 1,141 $10,100
Class K
Shares sold 1,138 $10,072
Shares redeemed -0- -0-
Net increase 1,138 $10,072
Class I
Shares sold 1,130 $10,000
Shares redeemed -0- -0-
Net increase 1,130 $10,000
(a) Commencement of distributions
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
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 33
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 $250 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, 2005.
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 were as follows:
2005 2004
- -------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $4,758,474 $8,137,705
Total taxable distributions 4,758,474 8,137,705
Tax return of capital -0- -0-
Total distributions paid $4,758,474 $8,137,705
34 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
As of October 31, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed net investment income $2,340,744
Accumulated capital and other losses (39,457,477)(a)
Unrealized appreciation/(depreciation) 3,363,211(b)
Total accumulated earnings/(deficit) $(33,753,522)(c)
(a) On October 31, 2005 the Fund had a net capital loss carryforward of
$39,354,512 of which $15,553,341 expires in the year 2,009 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 $4,191,050. For
the year ended October 31, 2005, the cumulative deferred loss on straddles was
$102,965.
(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 foreign
currency, the tax treatment of bond premium, and the tax treatment of swap
income resulted in a net increase in accumulated net realized loss on
investment and foreign currency transactions, and an increase in undistributed
net investment income. 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.
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
Assurance 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
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 35
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 purported class action complaint entitled Hindo, et al.
v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. 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 Funds. The Hindo Complaint alleges
that certain of the Alliance defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in "late
trading" and "market
36 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
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
generally similar to those in the Hindo Complaint were filed in various federal
and state courts against the Adviser and certain other defendants, and others
may be filed. The plaintiffs in such lawsuits have asserted a variety of
theories for recovery including, but not limited to, violations of the
Securities Act, the Exchange Act, the Advisers Act, the Investment Company Act,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
certain state securities laws and common law. On February 20, 2004, the
Judicial Panel on Multidistrict Litigation transferred all federal actions, and
removed all state court actions, to the United States District Court for the
District of Maryland (the "Mutual Fund MDL"). The plaintiffs in the removed
actions have since moved for remand, and that motion is pending.
On September 29, 2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Alliance Holding; and
claims brought under ERISA by participants in the Profit Sharing Plan for
Employees of the Adviser. All four complaints include substantially identical
factual allegations, which appear to be based in large part on the SEC Order
and the NYAG Order. The claims in the mutual fund derivative consolidated
amended complaint are generally based on the theory that all fund advisory
agreements, distribution agreements and 12b-1 plans between the Adviser and the
AllianceBernstein Funds should be invalidated, regardless of whether market
timing occurred in each individual fund, because each was approved by fund
trustees on the basis of materially misleading information with respect to the
level of market timing permitted in funds managed by the Adviser. The claims
asserted in the other three consolidated amended complaints are similar to
those that the respective plaintiffs asserted in their previous federal
lawsuits. All of these lawsuits seek an unspecified amount of damages. The
Alliance defendants have moved to dismiss the complaints, and those motions are
pending.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commission") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 37
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Holding, and various other defendants not
affiliated with the Adviser. The WVAG Complaint was filed in the Circuit Court
of Marshall County, West Virginia by the Attorney General of the State of West
Virginia. The WVAG Complaint makes factual allegations generally similar to
those in the Hindo Complaint. On May 31, 2005, defendants removed the WVAG
Complaint to the United States District Court for the Northern District of West
Virginia. On July 12, 2005, plaintiff moved to remand. On October 19, 2005, the
WVAG Complaint was transferred to the Mutual Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a "Summary Order to Cease and Desist, and Notice
of Right to Hearing" addressed to the Adviser and Alliance Holding. The Summary
Order claims that the Adviser and Alliance Holding violated the West Virginia
Uniform Securities Act, and makes factual allegations generally similar to
those in the Commission Order and the NYAGOrder. The Adviser intends to
vigorously defend against the allegations in the WVAG Complaint.
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.
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
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 puni-
38 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
tive 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. On October 19,
2005, the District Court granted in part, and denied in part, defendants'
motion to dismiss the Aucoin Complaint and as a result the only claim remaining
is plaintiffs' Section 36(b) claim.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the AllianceBernstein
Mutual Funds' shares or other adverse consequences to the AllianceBernstein
Mutual Funds. 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 AllianceBernstein Mutual Funds.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 39
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
2005 2004(a) 2003 2002(b) 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $8.63 $8.65 $7.75 $8.43 $9.53
Income From Investment
Operations
Net investment income(c) .39 .48(d) .55 .63 .78
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .09 .02 .93 (.67) (.90)
Net increase (decrease) in
net asset value from
operations .48 .50 1.48 (.04) (.12)
Less: Dividends and
Distributions
Dividends from net investment
income (.41) (.52) (.29) (.52) (.71)
Tax return of capital -0- -0- (.29) (.12) (.27)
Total dividends and distributions (.41) (.52) (.58) (.64) (.98)
Net asset value, end of period $8.70 $8.63 $8.65 $7.75 $8.43
Total Return
Total investment return based
on net asset value(e) 5.67% 5.89% 19.57% (.50)% (1.50)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $24,250 $29,465 $37,043 $38,631 $57,667
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.54% 1.43% 1.60% 1.53% 1.45%
Expenses, before
waivers/reimbursements 1.54% 1.60% 1.60% 1.53% 1.45%
Net investment income 4.65% 5.83%(d) 6.50% 7.71% 8.60%
Portfolio turnover rate 98% 106% 155% 268% 304%
See footnote summary on page 45.
40 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2005 2004(a) 2003 2002(b) 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $8.63 $8.65 $7.74 $8.42 $9.52
Income From Investment
Operations
Net investment income(c) .32 .41(d) .48 .57 .71
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .10 .02 .95 (.67) (.90)
Net increase (decrease) in
net asset value from
operations .42 .43 1.43 (.10) (.19)
Less: Dividends and
Distributions
Dividends from net investment
income (.35) (.45) (.27) (.47) (.65)
Tax return of capital -0- -0- (.25) (.11) (.26)
Total dividends and
distributions (.35) (.45) (.52) (.58) (.91)
Net asset value, end of period $8.70 $8.63 $8.65 $7.74 $8.42
Total Return
Total investment return based
on net asset value(e) 4.92% 5.13% 18.89% (1.23)% (2.24)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $59,513 $84,385 $115,414 $117,529 $156,948
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.25% 2.15% 2.31% 2.24% 2.16%
Expenses, before
waivers/reimbursements 2.25% 2.32% 2.31% 2.24% 2.16%
Net investment income 3.94% 5.12%(d) 5.83% 7.02% 7.85%
Portfolio turnover rate 98% 106% 155% 268% 304%
See footnote summary on page 45.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 41
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2005 2004(a) 2003 2002(b) 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $8.64 $8.65 $7.75 $8.43 $9.52
Income From Investment
Operations
Net investment income(c) .33 .40(d) .50 .57 .72
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .09 .04 .92 (.67) (.90)
Net increase (decrease) in
net asset value from
operations .42 .44 1.42 (.10) (.18)
Less: Dividends and
Distributions
Dividends from net investment
income (.35) (.45) (.28) (.47) (.65)
Tax return of capital -0- -0- (.24) (.11) (.26)
Total dividends and
distributions (.35) (.45) (.52) (.58) (.91)
Net asset value, end of period $8.71 $8.64 $8.65 $7.75 $8.43
Total Return
Total investment return based
on net asset value(e) 4.93% 5.25% 18.74% (1.22)% (2.13)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $11,492 $14,094 $21,175 $20,113 $33,035
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.25% 2.14% 2.30% 2.23% 2.15%
Expenses, before
waivers/reimbursements 2.25% 2.31% 2.30% 2.23% 2.15%
Net investment income 3.94% 5.14%(d) 5.81% 7.00% 7.90%
Portfolio turnover rate 98% 106% 155% 268% 304%
See footnote summary on page 45.
42 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2005 2004(a) 2003 2002(b) 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $8.63 $8.65 $7.74 $8.43 $9.53
Income From Investment
Operations
Net investment income(c) .47 .47(d) .57 .65 .80
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .04 .05 .95 (.67) (.89)
Net increase (decrease) in
net asset value from
operations .51 .52 1.52 (.02) (.09)
Less: Dividends and
Distributions
Dividends from net investment
income (.44) (.54) (.34) (.54) (.73)
Tax return capital -0- -0- (.27) (.13) (.28)
Total dividends and
distributions (.44) (.54) (.61) (.67) (1.01)
Net asset value, end of period $8.70 $8.63 $8.65 $7.74 $8.43
Total Return
Total investment return based
on net asset value(e) 6.01% 6.21% 20.10% (.31)% (1.19)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $1,594 $900 $1,483 $1,358 $1,350
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.26% 1.13% 1.30% 1.24% 1.13%
Expenses, before
waivers/reimbursements 1.26% 1.30% 1.30% 1.24% 1.13%
Net investment income 4.93% 6.15%(d) 6.84% 8.08% 8.81%
Portfolio turnover rate 98% 106% 155% 268% 304%
See footnote summary on page 45.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 43
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R Class K Class I
------------------------------------------------------
March 1, 2005(f) March 1, 2005(f) March 1, 2005(f)
to October 31, to October 31, to October 31,
2005 2005 2005
--------------- ------------------ ----------------
Net asset value, beginning of period $8.85 $8.85 $8.85
Income From Investment
Operations
Net investment income(c) .25 .27 .29
Net realized and unrealized loss on
investment and foreign currency
investment transactions. (.15) (.15) (.15)
Net decrease in net asset value
from operations .10 .12 .14
Less: Dividends
Dividends from net investment
income (.26) (.28) (.30)
Net asset value, end of period $8.69 $8.69 $8.69
Total Return
Total investment return based on
net asset value(e) 1.17% 1.36% 1.58%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $10 $10 $10
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements(g) 1.94% 1.63% 1.30%
Expenses, before
waivers/reimbursements(g) 1.94% 1.63% 1.30%
Net investment income(g) 4.25% 4.55% 4.88%
Portfolio turnover rate 98% 98% 98%
See footnote summary on page 45.
44 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
(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.
(f) Commencement of distributions.
(g) Annualized.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 45
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, 2005, 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 standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Funds's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of October 31, 2005 by correspondence with
the custodian and others or by other appropriate auditing procedures where
replies from others were not received. 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, 2005, 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 16, 2005
46 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
D. James Guzy(1)
Marshall C. Turner(1)
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon, Vice President
Michael L. Mon, Vice President
Douglas J. Peebles, Vice President
Michael A. Snyder, Vice President
Emilie D. Wrapp, 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, Governance and Nominating Committee and
Independent Directors Committee.
(2) The management of and investment decisions for the Fund's portfolio are
made by the Global Fixed Income Invetment Team and the US High Yield
Investment Team. Mr. Douglas J. Peebles, Mr. Paul DeNoon, Mr. Michael L. Mon
and Mr. Michael Snyder are the investment professionals with the most
significant responsibility for the day-to-day management of the Fund's
portfolio.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 47
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, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS, 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 Alliance 106 SCB Partners
1345 Avenue of the Capital Management Corporation Inc.; SCB, Inc.
Americas ("ACMC") since 2001 and Chairman
New York, NY 10105 of the Board of AllianceBernstein
10/2/57 Investment Research and Manage-
(2003) ment, Inc. ("ABIRM") since 2000;
prior thereto, Chief Executive Officer
of Sanford C. Bernstein & Co., LLC
(institutional research and brokerage
arm of Bernstein & Co., LLC ("SCB &
Co.")) and its predecessor since prior
to 2000.
DISINTERESTED DIRECTORS
William H. Foulk, Jr., #,## Investment adviser and an 108 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) 2000. 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 106 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
(insurance); Director of Avon, BP
(oil and gas), Ecolab Incorporated
(specialty chemicals), Tandem
Financial Group and Donaldson, Lufkin
& Jenrette Securities Corporation;
Governor at Large, National Association
of Securities Dealers, Inc.
48 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
PORTFOLIOS
IN FUND OTHER
NAME, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS, DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
David H. Dievler, # Independent consultant. Until 107 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of ACMC responsible
10/23/29 for mutual fund administration. Prior
(1995) 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.
John H. Dobkin, # Consultant. Formerly President of 106 None
P.O. Box 12 Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002,
2/19/42 (1995) a Senior Advisor from June 1999
-June 2000 and President of Historic
Hudson Valley (historic preservation)
from December 1989-May 1999. Previously,
Director of the National Academy of
Design and during 1988-1992, Director
and Chairman of the Audit Committee
of ACMC.
Michael J. Downey, # Consultant since January 2004. 106 Asia Pacific
c/o Alliance Capital Formerly managing partner of Fund, Inc.,
Management L.P. Lexington Capital, LLC (investment and The
Attn: Philip L. Kirstein advisory firm) from December 1997 Merger Fund.
1345 Avenue of the until December 2003. Prior thereto,
Americas Chairman and CEOof Prudential
New York, NY 10105 Mutual Fund Management from
1/26/44 1987 to 1993.
(2005)
D. James Guzy, # Chairman of the Board of PLX 106 Intel Corporation
P.O. Box 128 Technology (semi-conductors) (semi-conductors)
Glenbrook, NV 89413 and of SRC Computers, Inc. Cirrus Logic
3/7/36 with which he has been associated Corporation,
(2005) since prior to 2000. He is also (semi-conductors),
President of the Arbor Company Novellus
(private family investments). Corporation
(semi-conductor
equipment),
Micro Component
Technology
(semi-conductor
equipment), the
Davis Selected
Advisers Group
of Mutual Funds
and LogicVision.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 49
PORTFOLIOS
IN FUND OTHER
NAME, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS, DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
Marshall C. Turner, Jr., # Principal of Turner Venture 106 Toppan
220 Montgomery Street Associates (venture capital Photomasks, Inc.,
Penthouse 10 and consulting) since prior to the George
San Francisco, CA 2000. Chairman and CEO, Lucas
94104 DuPont Photomasks, Inc., Educational
10/10/41 Austin, Texas, 2003-2005, Foundation,
(2005) and President and CEO Chairman of the
since company acquired, and Board of the
name changed to Toppan Smithsonian's
Photomasks, Inc. in 2005 National
(semiconductor manufacturing Museum of
services). Natural History.
* There is no stated term of office for the Fund's Directors.
## Member of the Fair Value Pricing Committee.
** Ms. Block was an "interested person", as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of equity securities of a
controlling person of the Adviser. Such securities were sold for approximately
$2,400 on October 21, 2004. Ms. Block received shares of The Equitable
Companies Incorporated as part of the demutualization of The Equitable Life
Assurance Society of the United States. Her Equitable shares were subsequently
converted through a corporate action into 116 American Despositary Shares of
AXA.
# Member of the Audit Committee, the Governance and Nominating Committee and
Independent Directors Committee.
+ Mr. Mayer is an "interested person", as defined in the 1940 Act, due to his
position as an Executive Vice President of ACMC.
50 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, ADDRESS* POSITION(S) PRINCIPAL OCCUPATION
AND DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
Marc O. Mayer President and See biography above.
10/2/57 Chief Executive Officer
Philip L. Kirstein Senior Vice President Senior Vice President, Independent
5/29/45 and Independent Compliance Officer of the Alliance-
Compliance Officer Bernstein Funds with which he has been
associated since October 2004. Prior
thereto, he was Of Counsel to Kirkpatrick
& Lockhart, LLP from October 2003 to
October 2004, and General Counsel of
Merrill Lynch Investment Managers, L.P.
since prior to 2000 until March 2003.
Paul J. DeNoon Vice President Senior Vice President of ACMC**, with
4/18/62 which he has been associated since prior to
2000.
Michael L. Mon Vice President Vice President of ACMC**, with which
3/2/69 he has been associated since prior to 2000.
Michael A. Snyder Vice President Senior Vice President of ACMC** since
4/18/62 May, 2001. Prior thereto, he was a Managing
Director in the high yield asset group at
Donaldson, Lufkin & Jenrette Corporation
since prior to 2000.
Douglas J. Peebles Vice President Executive Vice President of ACMC**,
8/10/65 with which he has been associated since
prior to 2000.
Emilie D. Wrapp Secretary Senior Vice President, Assistant
11/13/55 General Counsel and Assistant Secretary
of ABIRM**, with which she has been
associated since prior to 2000.
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 ABIRM**, with which he
as been associated since prior to 2000.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 51
NAME, ADDRESS* POSITION(S) PRINCIPAL OCCUPATION
AND DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
Vincent S. Noto Controller Vice President of AGIS,** with which
12/14/64 he has been associated since prior to 2000.
* The address for each of the Fund's officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM, AGIS and SCB & Co. 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.
52 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style 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 Portfolio
Global & International
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Growth Fund*
International Research Growth Fund*
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-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. Prior to February 1, 2005, Small/Mid-Cap Value Fund
was named Small Cap Value Fund. Prior to May 16, 2005, International Growth
Fund was named Worldwide Privatization Fund and International Research Growth
Fund was named International Premier Growth Fund. On June 24, 2005, All-Asia
Investment Fund merged into International Research GrowthFund. On July 8, 2005,
New Europe Fund merged into International Research Growth 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.
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 53
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
GSIFAR1005
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 12(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 registered public accounting firm 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 advice
and education related to accounting and auditing issues and quarterly
press release review (for those Funds which issue press releases), and
preferred stock maintenance testing (for those Funds that issue
preferred stock); and (iii) tax compliance, tax advice and tax return
preparation.
Audit-Related
Audit Fees Fees Tax Fees
- -------------------------------------------------------------------------------
2004 $55,000 $3,325 $23,038
2005 $56,000 $4,257 $17,204
(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 registered public accounting firm. The Fund's Audit
Committee policies and procedures also require preapproval 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 preparing an annual internal control report pursuant to
Statement on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column
Pre-approved by the
All Fees for Audit Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
- -------------------------------------------------------------------------------
2004 $1,128,095 [$176,363]
($153,325)
($ 23,038)
2005 $ 900,457 [$189,164]
($171,960)
($ 17,204)
(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 registered public accounting firm to the Adviser and
Service Affiliates is compatible with maintaining the independent registered
public accounting firm'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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. 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 11. 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 changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
12 (a) (1) Code of Ethics that is subject to the disclosure of Item 2 hereof
12 (b) (1) Certification of Principal Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
12 (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 29, 2005
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 29, 2005
By: /s/ Mark D. Gersten
-----------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: December 29, 2005