-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
ThqHsqhcxhaZ2ifAVsUMX1wHwPln2v5mXEW4VqqLro/0Cg6hm5kNbm5mcFtt1nsq
9r5P3Z/QHhNgnPL+enTcQg==
<SEC-DOCUMENT>0000889812-97-000010.txt : 19970106
<SEC-HEADER>0000889812-97-000010.hdr.sgml : 19970106
ACCESSION NUMBER: 0000889812-97-000010
CONFORMED SUBMISSION TYPE: N-30D
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 19961031
FILED AS OF DATE: 19970103
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: GLOBAL HIGH INCOME DOLLAR FUND INC
CENTRAL INDEX KEY: 0000897996
STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000]
STATE OF INCORPORATION: MD
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: N-30D
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-07540
FILM NUMBER: 97500883
BUSINESS ADDRESS:
STREET 1: 1285 AVENUE OF THE AMERICAS
STREET 2: 16TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10019
BUSINESS PHONE: 2127132000
MAIL ADDRESS:
STREET 1: 1285 AVENUE OF THE AMERICAS
STREET 2: 16TH FL
CITY: NEW YORK
STATE: NY
ZIP: 10019
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<DESCRIPTION>ANNUAL REPORT
<TEXT>
<PAGE>
Global High Income Dollar Fund Inc. Annual Report
December 15, 1996
Dear Shareholder,
We are pleased to present you with the annual report for Global High Income
Dollar Fund Inc. (the "Fund") for the year ended October 31, 1996.
GENERAL MARKET OVERVIEW
================================================================================
Following a correction in U.S. Treasuries early in the year, bond markets
worldwide performed strongly. In a global environment characterized by ample
liquidity, low short-term interest rates, moderate growth and low inflation,
most markets rose to, or close to, historically high valuations, while yields
compressed everywhere. Higher yielding markets, and emerging market debt in
particular, did especially well.
Fixed income markets worldwide were also helped by moves taken by
governments to achieve fiscal austerity. At the margin, tighter fiscal policies
allow governments to pursue easier monetary, lower interest rate policies. In
our opinion, this combination strongly contributed to bond performance this
year.
PORTFOLIO REVIEW
================================================================================
For the 12-month period ended October 31, 1996, the Fund's total return was
25.34% based on the Fund's net asset value change assuming (for illustrative
purposes only) dividends reinvested at the net asset value on the payable dates,
and 20.26% based on the Fund's share price on the New York Stock Exchange and
dividends reinvested under the Fund's Dividend Reinvestment Plan. Over the same
period, the JP Morgan Emerging Bond Index (EMBI) returned 39.9%. As of October
31, 1996, the Fund's net asset value per share was $14.99, while its share price
on the New York Stock Exchange was $12.63. During the fiscal year, the Fund made
distributions totalling $1.27 per share.
Over the 12 month period, our strategy to add to positions of countries
where macro-economic developments supported stability helped the Fund achieve
strong returns. These purchases included Moroccan loans, Mexican global bonds
and Venezuelan Brady bonds. Venezuelan debt performed particularly well this
year, due to a convergence of positive factors affecting the country's credit.
The rise in the price of oil increased the government's tax take, and the
country's fiscal situation improved substantially as a result. The government
also took concrete steps toward economic liberalization, and the appointment of
several new ministers fostered forthright discussion about policy
1
<PAGE>
directions, which served to enhance the country's credibility and increased
investor confidence.
- -------------------------------------------------------------------------------
ASSET
ALLOCATION
Global High Income
Dollar Fund Inc.
As of October 31, 1996
[PIE CHART]
U.S. Dollar Denominated
Sovereign Debt 61.35%
Cash & Cash Equivalents 19.78%
U.S. Dollar Denominated
Corporate Debt 14.40%
Foreign Currency Debt 4.47%
- ------------------------------------------------------------------------------
Mexico continued to stabilize after last year's liquidity crisis, as the
economy benefited greatly from strong trade performance. The government also
successfully managed the peso moderately lower to protect it from becoming
overvalued again, and it did so without provoking a capital flight crisis.
Although we anticipate some turbulence in the Mexican market due to next year's
municipal elections, we believe Mexican debt will continue to offer attractive
returns. In fact, the Fund's largest position remains in Mexican sovereign debt.
We also initiated positions in Russian Vnesheconombank loans and Bulgarian
Brady bonds. The Russian loans appreciated substantially from the Fund's
purchase price. However, because the debt is non-performing until a
restructuring deal is completed, we kept the Fund's exposure under 5%. In
October, Russia received sovereign credit ratings on its external debt of BB-
from Standard & Poor's and BA2 from Moody's. Over the coming year, we anticipate
substantial debt issuance by Russian municipalities and companies and are
directing more of our research efforts to this country.
Conversely, we reduced the Fund's exposure in Brazilian debt given our
concern over a number of issues, including the government's lack of fiscal
policy reform. Moreover, we dramatically reduced the Fund's position in South
African Rand-denominated bonds because of the high level of domestic credit
growth in this country. Together with high wage demands by unionized workers,
this credit growth engenders rand instability and raises the prospects of
inflation pressures.
Finally, we have also continued the Fund's underweight position in
Argentine debt. Because of its large up-coming financing needs, the next several
years are critical for economic reform in Argentina. Successful completion of
these financings would likely result in a significant upgrade to Argentina's
credit rating. However, while the Menem government has made tremendous progress
with economic reform in the past, several developments beyond the government's
control could have a negative impact on the outcome of this situation.
In general, there are several reasons why, despite strong returns, the Fund
underperformed the EMBI index in the last year. The index consists almost
entirely of Brady bonds which, over the last several years, have proved to be
volatile both on the upside and the downside. In an effort to reduce volatility,
we have tried to vary the Fund's holdings to include not only Brady bonds, but
also Eurobonds and local currency fixed income of emerging market issuers. In
the last year, these securities generally have risen as much as most Brady
bonds. Over the long term, we believe a more varied approach will allow the Fund
to better capture attractive income available from emerging market debt and
capital appreciation resulting from improvements in the creditworthiness of
emerging market debt issuers, while reducing volatility associated with a
portfolio consisting of Brady bonds alone.
2
<PAGE>
Global High Income Dollar Fund Inc. Annual Report
Additionally, we maintained short-term investments in the Fund that exerted
a drag on performance. We reinvested these proceeds selectively on temporary
market declines and in new issues as they came to market. However, with the
markets' strong liquidity-driven moves, this strategy underper- formed one which
would have immediately reinvested all proceeds.
OUTLOOK
================================================================================
With general bond yields at low levels and emerging market debt yield
spreads at historically narrow levels, risks are greater. Based on what we know
now, we see no obvious, strong threats to present valuations, but neither do
valuations offer much downside protection in the event of a negative surprise.
For this reason, one of our most important goals in the coming year will be to
identify and assess prospective risks to current valuations. As always, we will
manage the Fund through careful investment selection so as to reduce risk, and
we will seek to position the Fund to enhance its income distributions where we
can do so prudently.
Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued support,
and welcome any comments or questions you may have.
Sincerely,
/s/ Margo N. Alexander /s/ Stuart Waugh
MARGO N. ALEXANDER STUART WAUGH
President, Vice President and Portfolio Manager,
Mitchell Hutchins Asset Management Inc. Global High Income Dollar Fund Inc.
FUND PROFILE
Goal:
High level of current
income, secondarily
capital appreciation
Portfolio Manager:
Stuart Waugh,
Mitchell Hutchins
Asset Management
Inc.
Total Net Assets:
$340.9 million (as of
October 31, 1996)
Dividend Payment:
Monthly
3
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- --------- ------------------------ ------------------------ ------------
<S> <C> <C> <C>
LONG-TERM DEBT SECURITIES - 80.22%
ARGENTINA - 4.26%
US$17,640 Republic of Argentina................... 03/31/05 6.625%+ $ 14,530,950
------------
BRAZIL - 12.06%
US$6,000 Celulose Nipo-Brasileira, S.A........... 12/21/03 9.375 5,925,000
US$3,000 Companhia Brasileira de Petroleos
Ipiranga.............................. 02/25/02 8.625 3,022,500
US$7,000 Federal Republic of Brazil, DISC........ 04/15/24 6.500+ 5,136,250
US$7,000 Federal Republic of Brazil, EI (1)...... 04/15/06 6.500+ 5,941,250
US$22,000 Federal Republic of Brazil, EXIT........ 09/15/13 6.000 15,070,000
US$6,000 Metalurgica Gerbau, S.A................. 11/23/01 to 05/24/04 10.250 to 11.125 6,030,000
------------
41,125,000
------------
BULGARIA - 1.86%
US$20,000 Republic of Bulgaria, FLIRB............. 07/28/12 2.250++ 6,350,000
------------
CHILE - 0.94%
US$3,000 Banco del Estado Chile, S.A............. 08/01/01 8.390 3,190,050
------------
COLOMBIA - 0.61%
US$2,000 Banco Ganadero, S.A..................... 08/26/99 9.750 2,092,500
------------
INDIA - 0.88%
US$3,000 Reliance Industries, Ltd................ 09/27/05 8.125 2,992,500
------------
INDONESIA - 3.03%
10,000,000 Bank Tambungan Negara................... 07/31/98 15.800+ 4,153,609
2,000,000 Bank Tambungan Negara................... 01/23/98 17.000 847,894
US$3,000 Indah Kiat International Finance........ 06/15/06 12.500 3,243,750
5,000,000 Polysindo Eka Perkasa................... 05/05/98 15.920+ 2,092,903
------------
10,338,156
------------
JAMAICA - 1.33%
US$4,765 Government of Jamaica Loan
Participation, Tranche A (JP
Morgan)(2)............................ 10/16/00 6.344+ 4,526,467
------------
MEXICO - 21.71%
US$4,720 Grupo Industrial Durango, S.A. de C.V... 07/15/01 to 08/01/03 12.000 to 12.625 4,871,050
US$10,000 Mexican Multi Year Refinance
Loan Participation
(Salomon Brothers)(2)................. 03/20/05 6.563+ 8,487,500
US$14,500 Petroleos Mexicanos..................... 12/01/23 8.625 11,382,500
US$42,750 United Mexican States DISC(3)........... 12/31/19 6.352 to 6.453+ 35,161,875
US$14,068 United Mexican States................... 02/06/01 to 05/15/26 9.750 to 11.500 14,111,580
------------
74,014,505
------------
MOROCCO - 4.06%
US$12,500 Kingdom of Morocco Loan Participation,
Tranche A (JP Morgan)(2).............. 01/01/09 6.438%+ 9,890,625
</TABLE>
4
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- --------- ------------------------ ------------------------ ------------
<S> <C> <C> <C>
MOROCCO - (CONCLUDED)
US$5,000 Kingdom of Morocco Loan Participation,
Tranche A (Chase Manhattan
Bank)(2) ............................. 01/01/09 6.438%+ $ 3,956,250
------------
13,846,875
------------
PANAMA - 2.18%
US$10,000 Republic of Panama PDI.................. 07/17/16 6.750+ 7,437,500
------------
PHILIPPINES - 4.00%
US$3,000 CE Casecnan Water & Energy.............. 11/15/10 11.950 3,330,000
US$5,639 Republic of Philippines................. 10/07/16 8.750 5,540,318
US$5,000 Republic of Philippines DCB............. 12/01/09 6.438+ 4,775,000
------------
13,645,318
------------
POLAND - 7.47%
11,300 Republic of Poland...................... 10/12/01 12.000 3,243,269
US$27,000 Republic of Poland, PDI................. 10/27/14 4.000++ 22,207,500
------------
25,450,769
------------
PERU - 0.97%
US$6,000 Government of Peru, FLIRB#.............. -- -- 3,285,000
------------
ROMANIA - 0.89%
US$3,000 National Bank of Romania................ 06/25/99 9.750 3,001,875
------------
RUSSIA - 4.00%
US$5,000 Russian Principle Loan#................. -- -- 2,681,250
US$8,000 Vnesheconombank Loan Participation,
(Chase Manhattan Bank)(2)##........... -- -- 5,850,000
US$7,000 Vnesheconombank Loan Participation, (JP
Morgan)(2)##.......................... -- -- 5,118,750
------------
13,650,000
------------
SOUTH AFRICA - 1.44%
28,000 Republic of South Africa................ 08/31/10 13.000 4,915,545
------------
TRINIDAD & TOBAGO - 2.88%
US$9,000 Republic of Trinidad and Tobago......... 11/03/00 to 10/03/04 9.750 to 11.750 9,832,500
------------
VENEZUELA - 5.65%
US$16,175 Republic of Venezuela PAR............... 03/31/20 6.750 11,464,031
US$9,500 Republic of Venezuela DCB............... 12/18/07 6.625+ 7,790,000
------------
19,254,031
------------
Total Long-Term Debt Securities (cost -
$238,788,686)...................................... 273,479,541
------------
SHORT-TERM DEBT SECURITIES - 12.04%
INDONESIA - 0.68%
5,500,000 Bank Pembangunan Indonesia.............. 07/17/97 15.860+ 2,325,806
------------
POLAND - 3.17%
33,780 Republic of Poland Treasury Bills....... 11/13/96 to 09/03/97 18.400 to 20.906 10,792,872
------------
UNITED STATES - 8.19%
28,000 U.S. Treasury Bills(1).................. 11/14/96 5.025@ 27,949,320
------------
Total Short-Term Debt Securities (cost -
$41,843,141)....................................... 41,067,998
------------
</TABLE>
5
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- --------- ------------------------ ------------------------ ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 8.44%
$14,384 Repurchase agreement dated 10/31/96 with
Dresdner Securities (USA), Inc.,
collateralized by $13,949,000 U.S.
Treasury Notes, 7.375% due 11/15/97;
proceeds: $14,386,206................. 11/01/96 5.520% $ 14,384,000
14,383 Repurchase agreement dated 10/31/96 with
Salomon Brothers, Inc, collateralized
by $14,478,000 U.S. Treasury Notes,
5.250%
due 12/31/97; proceeds: $14,385,177... 11/01/96 5.450 14,383,000
------------
Total Repurchase Agreements (cost - $28,767,000)... 28,767,000
------------
<CAPTION>
NUMBER OF
SHARES
(000)
- ---------
<S> <C> <C> <C>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES
LOANED - 8.39%
MONEY MARKET FUNDS - 8.39%
13,315 Short Term Investment Company Liquid
Assets Portfolio...................... 13,314,819
15,281 Temporary Investment Fund, Inc.......... 15,281,431
------------
Total investments of cash collateral for securities
loaned
(cost - $28,596,250)............................. 28,596,250
------------
Total Investments (cost - $337,995,077) -
109.09%............................................ 371,910,789
Liabilities in excess of other assets - (9.09%).... (31,000,810)
------------
Net Assets - 100.00%............................... $340,909,979
------------
</TABLE>
- ------------
Note: The Portfolio of Investments is listed by the issuer's country of origin
* In local currency unless otherwise indicated
@ Yield to Maturity
+ Reflects rate at October 31, 1996 on variable rate instruments
++ Reflects rate at October 31, 1996 on step coupon rate instruments
# Purchased on a when issued basis, coupon rate and maturity date will
be determined upon settlement
## Non-performing loans currently under restructuring
(1) A portion of security was on loan at October 31, 1996
(2) Participation interest was acquired through the financial institution
indicated parenthetically
(3) With an additional 65,767,000 recoverable rights attached expiring on
06/30/03 with no market value
(4) With an additional 80,875 warrants attached expiring on 04/15/20 with no
market value
DCB Debt Conversion Bond
DISC Discount Bond
EI Eligible Interest
EXIT Investment Bond
FLIRB Front-loaded Interest Reduction Bond
PAR Par Bond
PDI Past Due Interest Bond
6
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
FORWARD FOREIGN CURRENCY CONTRACT
<TABLE>
<CAPTION>
CONTRACT TO IN EXCHANGE MATURITY UNREALIZED
DELIVER FOR DATE APPRECIATION
----------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
South African Rand................. 14,594,541 US$ 3,177,562 11/21/96 $ 86,389
</TABLE>
INVESTMENTS BY TYPE OF ISSUER
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
--------------------------
LONG-TERM SHORT-TERM
--------- ----------
<S> <C> <C>
Government and other public issuers..... 63.73% 11.36%
Repurchase agreements................... -- 8.44
Money market funds...................... -- 8.39
Oil/Gas................................. 4.23 --
Banks................................... 3.90 0.68
Paper................................... 3.17 --
Steel................................... 1.77 --
Utilities - Electric & Water............ 0.98 --
Financial institutions.................. 0.95 --
Other................................... 1.49 --
--------- ----------
80.22% 28.87%
--------- ----------
--------- ----------
</TABLE>
See accompanying notes to financial statements
7
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1996
<TABLE>
<S> <C>
Assets
Investments in securities, at value (cost - $337,995,077)...................................... $371,910,789
Receivable for investments sold................................................................ 8,942,500
Interest receivable............................................................................ 6,021,371
Unrealized appreciation on forward foreign currency contracts.................................. 86,389
Deferred organizational expenses............................................................... 52,745
Other assets................................................................................... 7,481
------------
Total assets................................................................................... 387,021,275
------------
Liabilities
Collateral for securities loaned............................................................... 28,596,250
Payable for investments purchased.............................................................. 16,982,163
Payable to investment adviser and administrator................................................ 363,459
Accrued expenses and other liabilities......................................................... 169,424
------------
Total liabilities.............................................................................. 46,111,296
------------
Net Assets
Capital stock - $0.001 par value; total authorized shares - 100,000,000; 22,736,667 shares
issued and outstanding....................................................................... 335,561,113
Distributions in excess of net investment income............................................... (922)
Accumulated net realized losses from investments............................................... (28,626,633)
Net unrealized appreciation of investments, other assets, liabilities and forward contracts
denominated in foreign currencies............................................................ 33,976,421
------------
Net assets..................................................................................... $340,909,979
------------
------------
Net asset value per share...................................................................... $14.99
------------
------------
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Investment income:
Interest (net of foreign withholding taxes)..................................................... $34,256,599
----------
Expenses:
Investment advisory and administration.......................................................... 4,035,563
Custody and accounting.......................................................................... 270,737
Reports and notices to shareholders............................................................. 136,011
Legal and audit................................................................................. 89,694
Transfer agency fees............................................................................ 40,248
Amortization of organizational expenses......................................................... 27,812
Directors' fees................................................................................. 12,250
Other expenses.................................................................................. 12,326
----------
4,624,641
----------
Net investment income........................................................................... 29,631,958
----------
Realized and unrealized gains (losses) from investment activities:
Net realized gains (losses) from:
Investment transactions................................................................... 6,972,906
Foreign currency transactions............................................................. (590,711)
Net change in unrealized appreciation/depreciation of:
Investments............................................................................... 36,371,633
Other assets, liabilities and forward contracts denominated in foreign currencies......... 357,946
----------
Net realized and unrealized gains from investment activities.................................... 43,111,774
----------
Net increase in net assets resulting from operations............................................ $72,743,732
----------
----------
</TABLE>
See accompanying notes to financial statements
9
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
OCTOBER 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
From operations:
Net investment income................................................... $29,631,958 $30,471,283
Net realized gains (losses) from investment transactions................ 6,972,906 (15,994,840)
Net realized losses from foreign currency transactions.................. (590,711) (4,621,486)
Net change in unrealized appreciation/depreciation of investments....... 36,371,633 25,637,170
Net change in unrealized appreciation/depreciation of other assets,
liabilities and forward contracts denominated in foreign currencies... 357,946 (417,075)
------------ ------------
Net increase in net assets resulting from operations.................... 72,743,732 35,075,052
------------ ------------
Dividends and distributions to shareholders from:
Net investment income................................................... (28,921,040) (26,227,183)
Paid-in-capital......................................................... -- (3,512,377)
------------ ------------
(28,921,040) (29,739,560)
------------ ------------
Net increase in net assets.............................................. 43,822,692 5,335,492
Net Assets:
Beginning of year....................................................... 297,087,287 291,751,795
------------ ------------
End of year............................................................. $340,909,979 $297,087,287
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
10
<PAGE>
PAINEWEBBER NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Global High Income Dollar Fund Inc. (the 'Fund') was
incorporated in the state of Maryland on February 23, 1993 and
is registered with the Securities and Exchange Commission as a
closed-end, non-diversified management investment company.
Organizational costs have been deferred and are being amortized
using the straight line method over a period not to exceed 60
months from the date the Fund commenced operations.
The preparation of financial statements in accordance with
generally accepted accounting principles requires Fund
management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. The following
is a summary of significant accounting policies:
Valuation of Investments--Securities which are listed on stock
exchanges are valued at the last sale price on the day the
securities are being valued or, lacking any sales on such day,
at the last available bid price. In cases where securities are
traded on more than one exchange, the securities are generally
valued on the exchange designated as the primary market by
Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'),
a wholly owned subsidiary of PaineWebber Incorporated
('PaineWebber') and investment adviser and administrator of the
Fund. Securities traded in the over-the-counter ('OTC') market
and listed on The Nasdaq Stock Market, Inc. ('Nasdaq') are
valued at the last available sale price on Nasdaq prior to the
time of valuation; other OTC securities are valued at the last
bid price available in the OTC market prior to the time of
valuation (other than short-term investments that mature in 60
days or less). The amortized cost method of valuation is used
to value short-term debt instruments with sixty days or less
remaining to maturity. Securities and assets for which market
quotations are not readily available (including restricted
securities subject to limitations as to their sale) are valued
at fair value as determined in good faith by a management
committee under the direction of the Fund's board of directors.
All investments quoted in foreign currencies will be valued
weekly in U.S. dollars on the basis of foreign currency
exchange rates prevailing at the time such valuation is
determined by the Fund's custodian.
Foreign currency exchange rates are generally determined prior
to the close of regular trading on the New York Stock Exchange
('NYSE'). Occasionally events affecting the value of foreign
investments and such exchange rates occur between the time at
which they are determined and the close of the NYSE, which will
not be reflected in the computation of the Fund's net asset
value on that day. If events materially affecting the value of
such securities or currency exchange rates occurred during such
time period, the securities will be valued at their fair value
as determined in good faith by or under the direction of the
Fund's Board of Directors.
Repurchase Agreements--The Fund's custodian takes possession of
the collateral pledged for investments in repurchase
agreements. The underlying collateral is valued daily on a
mark-to-market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In
the event of default of the obligation to repurchase, the Fund
has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain
circumstances, in the
11
<PAGE>
PAINEWEBBER
event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may
be subject to legal proceedings. The Fund occasionally
participates in joint repurchase agreement transactions with
other funds managed by Mitchell Hutchins.
Investment Transactions and Investment Income--Investment
transactions are recorded on trade date. Realized gains and
losses from investments and foreign exchange transactions are
calculated on the identified cost method. Interest income is
recorded on an accrual basis. Discounts are accreted as
adjustments to interest income and the identified cost of
investments.
Foreign Currency Translation--The books and records of the Fund
are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars on the following basis:
(1) Market value of investment securities, other assets and
liabilities--at the exchange rates prevailing at the
end of the period.
(2) Purchases and sales of investment securities, income
and expenses--at the rates of exchange prevailing on
the respective dates of such transactions.
Although the net assets and the market value of the Fund are
presented at the foreign exchange rates at the close of the
period, the Fund does not generally isolate the effect of
fluctuations in foreign exchange rates from the effect of the
changes in market prices of securities. However, the Fund does
isolate the effect of fluctuations in foreign exchange rates
when determining the gain or loss upon the sale or maturity of
foreign currency-denominated debt obligations pursuant to
federal income tax regulations. Certain foreign exchange gains
and losses included in realized and unrealized gains and losses
are included in or are a reduction of ordinary income in
accordance with federal income tax regulations.
Forward Foreign Currency Contracts--The Fund may enter into
forward foreign currency exchange contracts ('forward
contracts') in connection with planned purchases or sales of
securities or to hedge the U.S. dollar value of portfolio
securities denominated in a particular currency. The Fund may
also use forward currency contracts to attempt to enhance
income.
The Fund has no specific limitation on the percentage of assets
which may be committed to such contracts. The Fund may enter
into forward contracts or maintain a net exposure to forward
contracts only if (1) the consummation of the contracts would
not obligate the Fund to deliver an amount of foreign currency
in excess of the value of the position being hedged by such
contracts or (2) the Fund maintains cash or liquid securities
in a segregated account in an amount not less than the value of
its total assets committed to the consummation of the forward
contracts and not covered as provided in (1) above, as
marked-to-market daily.
Risks may arise with respect to entering into forward contracts
from the potential inability of counterparties to meet the
terms of their forward contracts and from unanticipated
movements in the value of foreign currencies relative to the
U.S. dollar.
Fluctuations in the value of forward contracts are recorded for
book purposes as unrealized gains or losses by the Fund.
Realized gains and losses include net gains and losses
recognized by the Fund on contracts which have matured.
12
<PAGE>
PAINEWEBBER
Dividends and Distributions--Dividends and distributions to
shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions are determined in accordance
with federal income tax regulations, which may differ from
generally accepted accounting principles. These 'book/tax'
differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital
accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency
transactions may involve certain considerations and risks not
typically associated with investments in the United States.
These risks include revaluation of currencies, adverse
fluctuations in foreign currency values and possible adverse
political, social and economic developments, including those
particular to a specific industry, country or region, which
could cause the securities and their markets to be less liquid
and prices more volatile than those of comparable U.S.
companies and U.S. government securities. These risks are
greater with respect to securities of issuers located in
emerging market countries in which the Fund is authorized to
invest. The ability of the issuers of debt securities held by
the Fund to meet their obligations may be affected by economic
and political developments particular to specific industry,
country or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund has an Investment Advisory and Administration Contract
('Advisory Contract') with Mitchell Hutchins. In accordance
with the Advisory Contract, the Fund pays Mitchell Hutchins an
investment advisory and administration fee, which is accrued
weekly and paid monthly, at the annual rate of 1.25% of the
Fund's average weekly net assets.
SECURITY LENDING
The Fund may lend up to 33 1/3% of its total assets to
qualified institutions. The loans are secured at all times by
cash or U.S. government securities in an amount at least equal
to the market value of the securities loaned, plus accrued
interest, determined on a daily basis and adjusted accordingly.
The Fund will retain record ownership of loaned securities to
exercise certain beneficial rights, however, the Fund may bear
the risk of delay in recovery of, or even loss of rights in,
the securities loaned should the borrower fail financially. The
Fund receives compensation, which is included in interest
income, for lending its securities from interest earned on the
cash or U.S. government securities held as collateral, net of
fee rebates paid to the borrower plus reasonable administrative
and custody fees. The Fund's lending agent is PaineWebber, who
received no compensation from the Fund for the year ended
October 31, 1996.
As of October 31, 1996, the Fund's custodian held cash and cash
equivalents having an aggregate value of $28,596,250 as
collateral for portfolio securities loaned having a market
value of $28,063,208.
13
<PAGE>
PAINEWEBBER
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned
at October 31, 1996, was substantially the same as the cost of
securities for financial statement purposes.
At October 31, 1996, the components of net unrealized
appreciation of investments were as follows:
Gross appreciation (investments having
an excess of value over cost)...... $ 38,148,552
Gross depreciation (investments having
an excess of cost over value)...... (4,232,840)
------------
Net unrealized appreciation of
investments........................ $ 33,915,712
------------
------------
For the year ended October 31, 1996, aggregate purchases and
sales of portfolio securities, excluding short-term securities,
were $288,544,856 and $219,341,286 respectively.
CAPITAL STOCK
There are 100,000,000 shares of $0.001 par value capital stock
authorized. Of the 22,736,667 shares outstanding at October 31,
1996 Mitchell Hutchins owned 7,449 shares.
FEDERAL INCOME TAX STATUS
The Fund intends to distribute substantially all of its taxable
income and to comply with the other requirements of the
Internal Revenue Code applicable to regulated investment
companies. Accordingly, no provision for federal income taxes
is required. In addition, by distributing during each calendar
year substantially all of its net investment income, capital
gains and certain other amounts, if any, the Fund intends not
to be subject to a federal excise tax.
To reflect reclassifications arising from permanent 'book/tax'
differences for the year ended October 31, 1996, accumulated
net realized losses from investments were decreased by
$590,711; distributions in excess of net investment income were
increased by $332,772; and capital stock was decreased by
$257,939.
During the current year ended October 31, 1996, the Fund
utilized $6,115,787 of its capital loss carryforward to offset
net realized capital gains for federal income tax purposes. At
October 31, 1996, the Fund had remaining capital loss
carryforwards of $28,626,547 available as a reduction, to the
extent provided in the regulations, of any future net realized
capital gains which expires as follows: $13,488,912 in 2002 and
$15,137,635 in 2003. To the extent that such losses are used to
offset future capital gains, it is probable that the gains to
offset will not be distributed.
14
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each period is
presented below:
<TABLE>
<CAPTION>
For the Years Ended
October 31, For the Period
-------------------------------- October 8, 1993+
1996 1995 1994 to October 31, 1993
-------- -------- -------- -------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 13.07 $ 12.83 $ 15.21 $ 15.00
-------- -------- -------- -------------------
Net investment income................................. 1.30 1.34 1.43 0.04
Net realized and unrealized gains (losses) from
investments and foreign currency transactions....... 1.89 0.21 (2.40) 0.17
-------- -------- -------- -------------------
Total increase (decrease) from investment
operations.......................................... 3.19 1.55 (0.97) 0.21
-------- -------- -------- -------------------
Dividends from net investment income.................. (1.27) (1.16) (1.34) --
Distributions from paid-in-capital.................... -- (0.15) (0.07) --
-------- -------- -------- -------------------
Total dividends and distributions..................... (1.27) (1.31) (1.41) --
-------- -------- -------- -------------------
Net asset value, end of period........................ $ 14.99 $ 13.07 $ 12.83 $ 15.21
-------- -------- -------- -------------------
-------- -------- -------- -------------------
Per share market value, end of period................. $ 12.63 $ 11.63 $ 11.50 $ 15.00
-------- -------- -------- -------------------
-------- -------- -------- -------------------
Total investment return (1)........................... 20.26% 13.65% (14.80)% 0.00%
-------- -------- -------- -------------------
-------- -------- -------- -------------------
Ratios and supplemental data:
Net assets, end of period (000's)..................... $340,910 $297,087 $291,752 $ 345,755
Expenses to average net assets........................ 1.43% 1.46% 1.50% 1.41%*
Net investment income to average net assets........... 9.18% 10.76% 10.40% 4.60%*
Portfolio turnover rate............................... 80% 71% 51% 1%
</TABLE>
------------------
* Annualized
+ Commencement of operations
(1) Total investment return on market value is calculated assuming a purchase
of one share at market value on the first day of each period reported,
reinvestment of all dividends and distributions in accordance with the
Dividend Reinvestment Plan, and a sale at market value on the last day of
each period reported. Total investment returns for periods less than one
year has not been annualized. Total investment return does not reflect
brokerage commissions.
15
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Global High Income Dollar Fund Inc.
In our opinion, the accompanying statement of assets and
liabilities, including the portfolio of investments, and the
related statements of operations and of changes in net assets
and the financial highlights present fairly, in all material
respects, the financial position of Global High Income Dollar
Fund Inc. (the 'Fund') at October 31, 1996, the results of its
operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended and
the financial highlights for each of the three years in the
period then ended and for the period October 8, 1993
(commencement of operations) through October 31, 1993, in
conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter
referred to as 'financial statements') are the responsibility of
the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31,
1996 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 23, 1996
16
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
TAX INFORMATION (UNAUDITED)
We are required by Subchapter M of the Internal Revenue Code of
1986, as amended, to advise you within 60 days of the Fund's
fiscal year end (October 31, 1996) as to the federal tax status
of distributions received by shareholders during such fiscal
year. Accordingly, we are advising you that all of the
distributions paid during the fiscal year by the Fund were
derived from net investment income and are taxable as ordinary
income.
Dividends received by tax-exempt recipients (e.g., IRAs and
Keoghs) need not be reported as taxable income. Some retirement
trusts (e.g., corporate, Keogh and 403(b)(7) plans) may need
this information for their annual information reporting.
Since the Fund's fiscal year is not the calendar year, another
notification will be sent in respect of calendar 1996. The
second notification, which will reflect the amount to be used by
calendar year taxpayers on their federal income tax returns,
will be made in conjunction with Form 1099 DIV and will be
mailed in January 1997. Shareholders are advised to consult
their own tax advisers with respect to the tax consequences of
their investment in the Fund.
17
<PAGE>
PAINEWEBBER GLOBAL HIGH INCOME DOLLAR FUND INC.
GENERAL INFORMATION
THE FUND
Global High Income Dollar Fund Inc. (the 'Fund') is a
non-diversified, closed-end management investment company whose
shares trade on the New York Stock Exchange ('NYSE'). The Fund's
primary investment objective is to achieve a high level of
current income. As a secondary objective the Fund seeks capital
appreciation, to the extent consistent with its primary
objective. The Fund's investment adviser and administrator is
Mitchell Hutchins Asset Management Inc., a wholly owned
subsidiary of PaineWebber Incorporated, which has over $43.4
billion in assets under management as of October 31, 1996.
SHAREHOLDER INFORMATION
The Fund's NYSE trading symbol is 'GHI.' Comparative net asset
value and market price information about the Fund is published
each Monday in The Wall Street Journal and New York Times and
Barron's, as well as in numerous other newspapers.
DISTRIBUTION POLICY
The Fund has established a Dividend Reinvestment Plan under
which all shareholders whose shares are registered in their own
names, or in the name of PaineWebber or its nominee, will have
all dividends and other distributions on their shares
automatically reinvested in additional shares, unless such
shareholders elect to receive cash. Shareholders who elect to
hold their shares in the name of another broker or nominee
should contact such broker or nominee to determine whether, or
how, they may participate in the Dividend Reinvestment Plan.
Additional shares acquired under the Dividend Reinvestment Plan
will be purchased in the open market, on the NYSE or otherwise,
at prices that may be higher or lower than the net asset value
per share at the time of the purchase. The Fund will not issue
any new shares in connection with its Dividend Reinvestment
Plan.
The Transfer Agent will serve as agent for the shareholders in
administering the Plan. After the Fund declares a dividend or
determines to make a capital gain distribution, the Transfer
Agent will, as agent for the participants, receive the cash
payment and use it to buy Fund shares in the open market, on the
NYSE or elsewhere, for the participants' accounts.
18
<PAGE>
================================================================================
BOARD OF DIRECTORS
Margo N. Alexander
Richard Q. Armstrong
E. Garrett Bewkes, Jr.
Richard R. Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
John R. Torell III
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
Stuart Waugh
Vice President
INVESTMENT ADVISER AND ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that from time to time the Fund may purchase at market
prices shares of its common stock in the open market.
This report is sent to the shareholders of the Fund for their information. It is
not a prospectus, circular or representation intended for use in the purchase or
sale of shares of the Fund or of any securities mentioned in the report.
<PAGE>
OCTOBER 31, 1996
ANNUAL REPORT
================================================================================
GLOBAL HIGH
INCOME DOLLAR
FUND INC.
PaineWebber
(Copyright) 1996 PaineWebber Incorporated
Member SIPC
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----