Aberdeen Global Income Fund, Inc.

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:    811-06342
Exact name of registrant as specified in charter:    Aberdeen Global Income Fund, Inc.
Address of principal executive offices:    1735 Market Street, 32nd Floor
   Philadelphia, PA 19103
Name and address of agent for service:    Ms. Andrea Melia
   Aberdeen Asset Management Inc.
   1735 Market Street 32nd Floor
   Philadelphia, PA 19103
Registrant’s telephone number, including area code:    800-522-5465
Date of fiscal year end:    October 31
Date of reporting period:    October 31, 2017


Item 1 – Reports to Stockholders – The Report to Shareholders is attached herewith.


LOGO

 

Aberdeen Global Income Fund, Inc. (FCO)
Annual Report
October 31, 2017
Auckland, New Zealand
Aberdeen Simply asset management.


Managed Distribution Policy (unaudited)

 

 

 

The Board of Directors of the Aberdeen Global Income Fund, Inc. (the “Fund”) has authorized a managed distribution policy (“MDP”) of paying monthly distributions at an annual rate set once a year. The Fund’s current monthly distribution is set at a rate of $0.07 per share. With each distribution, the Fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and estimated composition of the distribution and other information required by the Fund’s MDP exemptive order. The Fund’s Board of Directors may amend or terminate the MDP at any time without prior notice to shareholders; however, at this time, there are no reasonably foreseeable circumstances that might cause the termination of the MDP. You should not draw any conclusions about the Fund’s investment performance from the amount of distributions or from the terms of the Fund’s MDP.

Distribution Disclosure Classification (unaudited)

 

 

The Fund’s policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital.

The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax rules, the amount applicable to the Fund and character of distributable income for each fiscal period depends on the actual exchange rates during the entire year between the U.S. Dollar and the currencies in which Fund assets are denominated and on the aggregate gains and losses realized by the Fund during the entire year.

Therefore, the exact amount of distributable income for each fiscal year can only be determined as of the end of the Fund’s fiscal year, October 31. Under Section 19 of the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund is required to indicate the sources of certain distributions to shareholders. The estimated distribution composition may vary from month to month because it may be materially impacted by future income, expenses and realized gains and losses on securities and fluctuations in the value of the currencies in which the Fund’s assets are denominated.

The distributions for the fiscal year ended October 31, 2017 consisted of 17% net investment income and 83% return of capital.

In January 2018, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2017 calendar year.

Dividend Reinvestment and Direct Stock Purchase Plan (unaudited)

 

 

Computershare Trust Company, N.A. (“Computershare”), the Fund’s transfer agent, sponsors and administers a Dividend Reinvestment and Direct Stock Purchase Plan (the “Plan”), which is available to shareholders.

The Plan allows registered shareholders and first-time investors to buy and sell shares and automatically reinvest dividends and capital gains through the transfer agent. This is a cost-effective way to invest in the Fund.

Please note that for both purchase and reinvestment purposes, shares will be purchased in the open market at the current share price and cannot be issued directly by the Fund.

For more information about the Plan and a brochure that includes the terms and conditions of the Plan, please call Computershare at 1-800-647-0584 or visit www.computershare.com/buyaberdeen.


Letter to Shareholders (unaudited)

 

 

 

Dear Shareholder,

We present this Annual Report, which covers the activities of Aberdeen Global Income Fund, Inc. (the “Fund”), for the fiscal year ended October 31, 2017. The Fund’s principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective.

Total Investment Return

For the fiscal year ended October 31, 2017, the total return to shareholders of the Fund based on the net asset value (“NAV”) and market price of the Fund are as follows:

 

NAV*

     9.6

Market Price*

     16.7

 

*   assuming the reinvestment of dividends and distributions

The Fund’s total return is based on the reported NAV on each financial reporting period end. For more information about Fund performance please see page 4 Report from Investment Manager.

NAV, Share Price and Discount

 

      NAV      Price      Discount  

10/31/2016

   $ 9.22      $ 8.46        8.2

10/31/2017

   $ 9.17      $ 8.96        2.3

% Change

     -0.5%        5.9%           

Portfolio Management

The Fund is managed by Aberdeen’s Asia-Pacific fixed income team. The Asia-Pacific fixed income team works in a truly collaborative fashion; all team members have both portfolio management and research responsibilities. The team is responsible for the day-to-day management of the Fund.

Effective March 15, 2017, Lin-Jing Leong replaced Victor Rodriguez as part of the team having the most significant responsibility for the day-to-day management of the Fund’s portfolio. The team also includes Nick Bishop, Kenneth Akintewe, Steven Logan and Adam McCabe. Ms. Leong is an investment manager on the Asian local rates and currency team. She joined Aberdeen Asset Management Asia Limited in 2013 from the Reserve Management Section of the Central Bank of Malaysia where she specialized in investing in the Asian local current bond market.

Credit Quality

As of October 31, 2017, 17.4% of the Fund’s portfolio was invested in securities where either the issue or the issuer was rated A or better by multiple rating agencies.

Managed Distribution Policy

Distributions to common shareholders for the twelve months ended October 31, 2017 totaled $0.84 per share. Based on the share price of $8.96 on October 31, 2017, the distribution rate over the twelve-month period ended October 31, 2017 was 9.4%. Since all distributions are paid after deducting applicable withholding taxes, the effective distribution rate may be higher for those U.S. investors who are able to claim a tax credit.

On November 9, 2017 and December 11, 2017, the Fund announced that it will pay on November 29, 2017 and January 8, 2018, respectively, a distribution of $0.07 per share to all shareholders of record as of November 21, 2017 and December 29, 2017, respectively.

The Fund’s policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital, which is a non-taxable return of capital. This policy is subject to an annual review as well as regular review at the Board’s quarterly meetings, unless market conditions require an earlier evaluation.

During the fiscal year ended October 31, 2017, the Fund sold all the AUD denominated securities held in the Australian QBU which resulted in the liquidation of the Australian QBU and the termination of the QBU structure of the Fund. Due to the liquidation of the final QBU of the Fund, the Fund generated foreign currency losses which reduced the taxable income available to support the monthly distributions. Ultimately, the Fund designated the monthly distributions as 83% return of capital. Shareholders will receive a Form 1099 in early 2018 with the final characterization of the distributions over the calendar year 2017 for tax return purposes. Additionally, a portion of the currency losses realized were deferred and will be incorporated into the distribution characterization for the fiscal year ended October 31, 2018.

Open Market Repurchase Program

The Fund’s policy is generally to buy back Fund shares on the open market when the Fund trades at certain discounts to NAV and management believes such repurchases may enhance shareholder value. During the fiscal year ended October 31, 2017 and fiscal year ended October 31, 2016, the Fund repurchased 19,539 and 100,430 shares, respectively.

Revolving Credit Facility

The Fund’s $40,000,000 revolving credit facility with The Bank of Nova Scotia was renewed for a 3-year term on February 28, 2017.

 

 

Aberdeen Global Income Fund, Inc.

 

1


Letter to Shareholders (unaudited) (concluded)

 

 

 

The outstanding balance on the loan as of October 31, 2017 was $31,500,000. Under the terms of the loan facility and applicable regulations, the Fund is required to maintain certain asset coverage ratios for the amount of its outstanding borrowings. The Board regularly reviews the use of leverage by the Fund. The Fund is also authorized to use reverse repurchase agreements as another form of leverage.

Merger of Aberdeen Asset Management PLC with Standard Life plc

The Fund’s investment manager, investment adviser, investment sub-adviser and administrator are each a subsidiary of Aberdeen Asset Management PLC (“Aberdeen PLC”). The merger of Standard Life plc and Aberdeen PLC, announced on March 6, 2017 (the “Merger”), closed on August 14, 2017. Aberdeen PLC became a direct subsidiary of Standard Life plc as a result of the Merger and the combined company changed its name to Standard Life Aberdeen plc. Shareholders of the Fund are not required to take any action as a result of the Merger. Following the Merger, the Fund’s investment manager and administrator each became an indirect subsidiary of Standard Life Aberdeen plc, but otherwise did not change. The investment management, investment advisory, investment sub-advisory and administration agreements for the Fund, the services provided under the agreements, and the fees charged for services did not change as a result of the Merger. The portfolio management team for the Fund also has remained the same following the Merger.

Portfolio Holdings Disclosure

The Fund’s complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year are included in the Fund’s semi-annual and annual reports to shareholders. The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund makes the information on Form N-Q available to shareholders on the Fund’s website or upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465.

Proxy Voting

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve months ended June 30 is available by August 31 of the relevant year: (i) upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465; and (ii) on the SEC’s website at http://www.sec.gov.

Unclaimed Share Accounts

Please be advised that abandoned or unclaimed property laws for certain states require financial organizations to transfer (escheat) unclaimed

property (including Fund shares) to the state. Each state has its own definition of unclaimed property, and Fund shares could be considered “unclaimed property” due to account inactivity (e.g., no owner-generated activity for a certain period), returned mail (e.g., when mail sent to a shareholder is returned to the Fund’s transfer agent as undeliverable), or a combination of both. If your Fund shares are categorized as unclaimed, your financial advisor or the Fund’s transfer agent will follow the applicable state’s statutory requirements to contact you, but if unsuccessful, laws may require that the shares be escheated to the appropriate state. If this happens, you will have to contact the state to recover your property, which may involve time and expense. For more information on unclaimed property and how to maintain an active account, please contact your financial adviser or the Fund’s transfer agent.

Investor Relations Information

As part of Aberdeen’s commitment to shareholders, we invite you to visit the Fund on the web at www.aberdeenfco.com. Here, you can view monthly fact sheets, quarterly commentary, distribution and performance information, updated daily fact sheets courtesy of Morningstar®, portfolio charting and other Fund literature.

Enroll in our email services today and be among the first to receive the latest closed-end fund news, announcements, videos and information. In addition, you can receive electronic versions of important Fund documents including annual reports, semi-annual reports, prospectuses, and proxy statements. Sign up today at cef.aberdeen-asset.us/en/cefinvestorcenter/contact-us/email.

For your convenience, included within this report is a reply card with postage paid envelope. Please complete and mail the card if you would like to be added to our enhanced email service and receive future communications from Aberdeen.

Contact Us:

 

 

Visit: cef.aberdeen-asset.us;

 

Watch:  http://cef.aberdeen-asset.us/en/cefinvestorcenter/aberdeen-closed-end-fund-tv;

 

Email: InvestorRelations@aberdeenstandard.com; or

 

Call: 1-800-522-5465 (toll-free in the U.S.).

Yours sincerely,

/s/ Christian Pittard

Christian Pittard

President

 

 

Aberdeen Global Income Fund, Inc.

 

2


Report of the Investment Manager (unaudited)

 

 

 

Market/economic Review

Global fixed-income markets saw mixed performance over the 12-month period ended October 31, 2017. Donald Trump’s win in the November 2016 U.S. presidential election fueled expectations of increased fiscal spending and rising inflation, which halted the global bond market rally. Towards the end of the reporting period, bond yields rose again as major global central banks edged closer towards ending the era of accommodative monetary policy. Notably, both the U.S. Federal Reserve (Fed) and European Central Bank decided to start unwinding their quantitative-easing programs. Meanwhile, North Korea enflamed geopolitical tensions and market anxiety with its missile tests. Against this backdrop, high-yielding emerging-market bonds outperformed versus their developed-market counterparts. G101 currencies were mostly firmer against the U.S. dollar, while those in emerging markets ended with mixed performance.

Australian government bond yields rose over the reporting period as benign inflation scuttled talks of policy rate hikes. The domestic economy appeared robust, while improving Chinese economic growth data also bolstered the prospects of Australian commodities exporters, which were positioned to benefit from increased demand. New Zealand yields also trended higher despite the central bank’s rate cut early in the reporting period. The New Zealand dollar declined sharply against the U.S. dollar, pressured by the new government’s plans to reform the mandate of the central bank to possibly include employment alongside inflation targeting, cut immigration and ban foreigners from buying existing property, a sector that had been a key growth driver over the past several years.

In Asian local-currency bonds, Indonesia was among the strongest regional performers, buoyed by policy rate cuts and ongoing reforms that prompted Standard & Poor’s to restore the country’s investment-grade rating.2 Government reform momentum also lifted Sri Lankan bonds. In India, the government’s demonetization3 led to vast amounts of bank deposits being channeled into domestic bonds, while the nationwide Goods and Services Tax was finally implemented. However, market gains were later pared by concerns

that the government’s bank rescue plan could increase the fiscal deficit. Malaysian bond yields were boosted by easier trading rules for government securities, although rising inflationary pressures capped total returns. Conversely, Singapore bonds tracked U.S. Treasury yields higher. Philippine bonds weakened as expectations of a rate hike persisted amid rising inflation.

In other emerging markets, Brazilian bond yields fell as the central bank cut its benchmark interest rate. The inflation outlook remains benign, but it is unclear if the easing cycle will continue as second-quarter 2017 gross domestic product (GDP) growth rebounded. Bond yields in Russia declined as investor sentiment benefited from higher oil prices and the central bank’s rate cut amid falling inflationary pressures. However, Mexican bond yields rose in line with higher policy rates, while investor sentiment was further depressed by fractious North American Free Trade Agreement (NAFTA) negotiations with the U.S. Turkish bond yields also moved higher as the central bank maintained a tight policy stance and constitutional changes granting more power to the president eroded market confidence.

Global high-income bonds outside of emerging markets performed well over the reporting period, supported by economic recovery both in the U.S. and Europe. Defaults also appeared to be falling, particularly in the volatile commodity sector. While political headwinds persisted, particularly with the ongoing Brexit negotiations and political logjam in the U.S., market sentiment remained supported by a positive technical backdrop and accommodating credit conditions.

Fund Performance Review

The Fund outperformed its blended benchmark4 on a net asset value basis over the for the 12-month period ended October 31, 2017. Fund performance benefited from all strategies, led by those in emerging-market debt, Asian local-currency bonds, as well as Australia and New Zealand bonds; the strategy in global high-income debt was largely neutral.

 

 

1   

The G10 nations, which consult and cooperate on economic, monetary and financial matters, include Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the UK and the U.S.

2   

Standard & Poor’s credit ratings express the agency’s opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Typically, ratings are expressed as letter grades that range, for example, from “AAA” to “D” to communicate the agency’s opinion of relative level of credit risk. Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

3   

Demonetization comprises the act of stripping specific denominations of a currency unit of their status as legal tender. The currency denominations are pulled from circulation and are replaced with new currency units.

4   

The Fund’s blended benchmark comprises 10% Bank of America Merrill Lynch (BofA ML) All Maturity Australia Government Index; 25% Bank of America Merrill Lynch Global High Yield Constrained Index (hedged into U.S. dollars); 35% J.P. Morgan EMBI Global Diversified Index; 5% BofA ML New Zealand Government Index; and 25% Markit iBoxx Asia Government Index.

 

Aberdeen Global Income Fund, Inc.

 

3


Report of the Investment Manager (unaudited) (continued)

 

 

 

In emerging-market debt, positive security selection in Brazil, Russia, Mexico and Indonesia was the key contributor to relative performance.

In Asian local-currency bonds, the main contributors to Fund performance were the overweight positions in Indian, Indonesian and Sri Lankan bonds. However, gains were pared by the underweight allocation to Malaysian bonds.

The Fund’s underweight to Australian bonds contributed to relative performance, but the position in the New Zealand dollar was a detractor.

Regarding the global high-income strategy, positive security selection in the high-yield oil and gas sector was the primary contributor to Fund performance for the reporting period, followed by security selection in high-yield financial credits. This was counterbalanced by the negative impact of security selection in high-yield industrial credits. The Fund’s use of derivatives, primarily for currency management, detracted slightly from relative performance due mainly to the short position in the Australian dollar, which ended slightly firmer against the U.S. dollar and euro as it rallied strongly over the reporting period.

Outlook

In early November 2017, the Bank of England raised interest rates for the first time in a decade and indicated the start of a gradual increase in borrowing costs, as monetary policymakers seek to prevent a sustained rise in inflation without choking economic recovery. Meanwhile, the Fed grew more vocal about unwinding its balance sheet. Bond markets currently appear to be taking the news in stride, but we will not be surprised if the sell-off gathers pace. We do not think that such moves to drain liquidity from the global financial system will go unnoticed as risks to the nascent global economic recovery persist. Specifically, we believe that global financial markets remain vulnerable to precarious political developments in the Korean Peninsula and the Middle East, the possibility of renewed volatility in commodity prices and potentially protectionist trade policies from the Trump administration in the U.S. While higher oil prices are generally positive for emerging markets, for parts of Asia, a continued rise could exert inflationary and balance-of-payments pressure, in our view.

Against this backdrop, we intend to maintain the Fund’s overweight versus its blended benchmark to high-yielding government bonds that are relatively insulated from external risks. We also retain our preference for countries with more robust balances of payments over their structurally weaker counterparts. In credit markets, valuations look expensive, so we intend to narrow our search to investment-

grade companies that we believe have strong balance sheets, healthy cash flows and good management.

Regarding the global high-income sector (excluding emerging markets), we believe the short-term outlook is positive as there remains a shortage of income-producing assets globally. President Trump could yet deliver tax cuts, which could boost risk appetite. While we think that valuations already discount this rosy outlook and offer little room for disappointment or increased volatility, we feel that current credit spreads overcompensate for the expected low level of defaults.

Loan Facility and the Use of Leverage

The Fund utilizes leverage to seek to increase the yield for its shareholders. The amounts borrowed from the Fund’s loan facility may be invested to seek to return higher rates than the rates in the Fund’s portfolio. However, the cost of leverage could exceed the income earned by the Fund on the proceeds of such leverage. To the extent that the Fund is unable to invest the proceeds from the use of leverage in assets which pay interest at a rate which exceeds the rate paid on the leverage, the yield on the Fund’s common stock will decrease. In addition, in the event of a general market decline in the value of assets in which the Fund invests, the effect of that decline will be magnified in the Fund because of the additional assets purchased with the proceeds of the leverage. Non-recurring expenses in connection with the implementation of the loan facility will reduce the Fund’s performance.

The Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having similar investment objectives and policies. The funds borrowed pursuant to the loan facility may constitute a substantial lien and burden by reason of their prior claim against the income of the Fund and against the net assets of the Fund in liquidation. The Fund is not permitted to declare dividends or other distributions in the event of default under the loan facility. In the event of default under the loan facility, the lender has the right to cause a liquidation of the collateral (i.e., sell portfolio securities and other assets of the Fund) and, if any such default is not cured, the lender may be able to control the liquidation as well. The loan facility has a term of 3 years and is not a perpetual form of leverage; there can be no assurance that the loan facility will be available for renewal on acceptable terms, if at all.

The credit agreement governing the loan facility includes usual and customary covenants for this type of transaction. These covenants impose on the Fund asset coverage requirements, Fund composition requirements and limits on certain investments, such as illiquid investments, which are more stringent than those imposed on the Fund by the Investment Company Act of 1940. The covenants or

 

 

Aberdeen Global Income Fund, Inc.

 

4


Report of the Investment Manager (unaudited) (concluded)

 

 

 

guidelines could impede the Investment Manager, Investment Adviser or Sub-Adviser from fully managing the Fund’s portfolio in accordance with the Fund’s investment objective and policies. Furthermore, non-compliance with such covenants or the occurrence of other events could lead to the cancellation of the loan facility. The covenants also include a requirement that the Fund maintain net assets of no less than $60,000,000.

Prices and availability of leverage are extremely volatile in the current market environment. The Board regularly reviews the use of leverage by the Fund and may explore other forms of leverage. The Fund is also authorized to use reverse repurchase agreements as another form of leverage. A reverse repurchase agreement involves the sale of a security, with an agreement to repurchase the same or substantially similar securities at an agreed upon price and date. Whether such a transaction produces a gain for the Fund depends upon the costs of the agreements and the income and gains of the securities purchased with the proceeds received from the sale of the security. If the income and gains on the securities purchased fail to exceed the costs, the Fund’s NAV will decline faster than otherwise would be the case. Reverse repurchase agreements, as with any leveraging techniques, may increase the Fund’s return; however, such transactions also increase the Fund’s risks in down markets.

Interest Rate Swaps

The Fund may enter into interest rate swaps to efficiently gain interest rate exposure and hedge interest rate risk. On October 25, 2017 the Fund entered $16,500,000 in notional value of a swap

maturing October 25, 2027 to replace a $16,500,000 in notional value swap maturing November 1, 2017. As of October 31, 2017, the Fund held interest rate swap agreements with an aggregate notional amount of $31,500,000 which represented 100% of the Fund’s total borrowings. Under the terms of the agreements currently in effect, the Fund either receives a floating rate of interest (three month USD-LIBOR BBA rate) and pays fixed rates of interest for the terms or pays a floating rate of interest and receives a fixed rate of interest for the terms, and based upon the notional amounts set forth below:

 

Remaining
Term as of
October 31, 2017
  Receive/(Pay)
Floating
Rate
    Amount
(in $ millions)
    Fixed Rate
Payable (%)
 

84 months

    Receive     $ 15.0       2.44

120 months

    Receive     $ 16.5       2.36

A significant risk associated with interest rate swaps is the risk that the counterparty may default or file for bankruptcy, in which case the Fund would bear the risk of loss of the amount expected to be received under the swap agreements. There can be no assurance that the Fund will have an interest rate swap in place at any given time nor can there be any assurance that, if an interest rate swap is in place, it will be successful in hedging the Fund’s interest rate risk with respect to the loan facility. The implementation of this strategy is at the discretion of the Leverage Committee of the Board.

Aberdeen Asset Management Asia Limited

 

 

Aberdeen Global Income Fund, Inc.

 

5


Total Investment Returns (unaudited)

 

 

 

The following table summarizes the average annual Fund performance for the 1-year, 3-year, 5-year and 10-year periods as of October 31, 2017. The Fund’s principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective.

 

        1 Year        3 Years        5 Years        10 Years  

Net Asset Value (NAV)

       9.6%          2.3%          0.7%          4.7%  

Market Price

       16.7%          4.4%          -0.1%          5.4%  

Aberdeen Asset Management Inc. has entered into an agreement with the Fund to limit investor relations services fees, without which performance would be lower. This contract aligns with the term of the advisory agreement and may not be terminated prior to the end of the current term of the advisory agreement. See Note 3 in the Notes to Financial Statements. Returns represent past performance. Total investment return at NAV is based on changes in the NAV of Fund shares and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Fund’s dividend reinvestment program. All return data at NAV includes fees charged to the Fund, which are listed in the Fund’s Statement of Operations under “Expenses”. The Fund’s total investment return at NAV is based on the reported NAV on each financial reporting period end. Total investment return at market value is based on changes in the market price at which the Fund’s shares traded on the NYSE American (formerly, NYSE MKT) during the period and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Fund’s dividend reinvestment program. Because the Fund’s shares trade in the stock market based on investor demand, the Fund may trade at a price higher or lower than its NAV. Therefore, returns are calculated based on both market price and NAV. Past performance is no guarantee of future results. The performance information provided does not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund. The current performance of the Fund may be lower or higher than the figures shown. The Fund’s yield, return, market price and NAV will fluctuate. Performance information current to the most recent month-end is available at www.aberdeenfco.com or by calling 800-522-5465.

The net operating expense ratio, excluding fee waivers, based on the fiscal year ended October 31, 2017 was 2.78%. The net operating expense ratio, net of fee waivers, based on the fiscal year ended October 31, 2017 was 2.77%. The net operating expense ratio, excluding interest expense and net of fee waivers, based on the fiscal year ended October 31, 2017 was 1.98%.

 

Aberdeen Global Income Fund, Inc.

 

6


Portfolio Composition (unaudited)

 

 

 

Quality of Investments(1)

As of October 31, 2017, 17.4% of the Fund’s total investments were invested in securities where either the issue or the issuer was rated “A” or better by Standard & Poor’s or Moody’s or Fitch Ratings, Inc. The table below shows the asset quality of the Fund’s portfolio as of October 31, 2017 compared to April 30, 2017 and October 31, 2016:

 

Date    AAA/Aaa
%
     AA/Aa
%
     A
%
     BBB/Baa
%
     BB/Ba**
%
     B**
%
     C/CCC**
%
     D**
%
     NR***
%
 

October 31, 2017

     5.3        9.3        2.8        13.3        19.8        33.5        8.5        0.0        7.5  

April 30, 2017

     5.6        10.0        2.1        11.9        21.1        31.0        7.9        0.0        10.4  

October 31, 2016

     18.2        17.2        0.4        8.5        18.7        20.2        6.0        0.1        10.7  

 

**   Below investment grade
***   Not Rated
(1)   For financial reporting purposes, credit quality ratings shown above reflect the lowest rating assigned by either Standard & Poor’s or Moody’s or Fitch Ratings, Inc. if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated NR are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. The Investment Manager evaluates the credit quality of unrated investments based upon, but not limited to, credit ratings for similar investments.

Geographic Composition

The Fund’s investments are divided into three categories: Developed Markets, Investment Grade Developing Markets and Sub-Investment Grade Developing Markets. The table below shows the geographical composition (with U.S. Dollar-denominated bonds issued by foreign issuers allocated into country of issuance) of the Fund’s total investments as of October 31, 2017, compared to April 30, 2017 and October 31, 2016:

 

Date      Developed Markets
%
       Investment Grade
Developing Markets
%
       Sub-Investment Grade
Developing  Markets
%
 

October 31, 2017

       50.3          21.4          28.3  

April 30, 2017

       55.4          19.8          24.8  

October 31, 2016

       71.0          12.5          16.5  

Currency Composition

The table below shows the currency composition, including hedges, of the Fund’s total investments as of October 31, 2017, compared to April 30, 2017 and October 31, 2016:

 

Date      Developed Markets
%
       Investment Grade
Developing Markets
%
       Sub-Investment Grade
Developing  Markets
%
 

October 31, 2017

       77.8          14.1          8.1  

April 30, 2017

       80.3          11.7          8.0  

October 31, 2016

       95.1          3.4          1.5  

 

Aberdeen Global Income Fund, Inc.

 

7


Portfolio Composition (unaudited) (concluded)

 

 

 

Maturity Composition

As of October 31, 2017, the average maturity of the Fund’s total investments was 8.4 years, compared with 8.6 years at April 30, 2017 and 7.8 years at October 31, 2016. The table below shows the maturity composition of the Fund’s investments as of October 31 2017, compared to April 30, 2017 and October 31, 2016:

 

Date      Under 3 Years
%
       3 to 5 Years
%
       5 to 10 Years
%
       10 Years & Over
%
 

October 31, 2017

       14.6          16.7          48.8          19.9  

April 30, 2017

       15.1          12.9          47.8          24.2  

October 31, 2016

       21.9          17.6          37.7          22.8  

 

Aberdeen Global Income Fund, Inc.

 

8


Summary of Key Rates (unaudited)

 

 

 

The following table summarizes the movements of key interest rates and currencies from October 31, 2017 compared to April 30, 2017 and October 31, 2016:

 

        October 31, 2017        April 30, 2017        October 31, 2016  

Australia

              

90 day Bank Bills

       1.69%          1.75%          1.75%  

10 yr bond

       2.28%          2.22%          2.06%  

currency USD per 1 AUD

       $0.77          $0.75          $0.76  

New Zealand

              

90 day Bank Bills

       1.95%          1.99%          2.14%  

10 yr bond

       2.92%          3.04%          2.71%  

currency USD per 1 NZD

       $0.69          $0.69          $0.72  

Malaysia

              

3-month T-Bills

       3.00%          3.09%          2.62%  

10 yr bond

       3.90%          4.05%          3.60%  

currency local per 1USD

       R4.23          R4.34          R4.20  

India

              

3-month T-Bills

       6.10%          6.18%          6.37%  

10 yr bond

       6.86%          6.96%          6.79%  

currency local per 1USD

       64.77          64.33          66.79  

Indonesia

              

3 months deposit rate

       5.93%          6.19%          6.32%  

10 yr bond

       6.77%          7.01%          7.21%  

currency local per 1USD

       Rp13562.50          Rp13329.00          Rp13048.00  

Russia

              

Zero Cpn 3m

       7.63%          8.58%          9.62%  

10 yr bond

       7.60%          7.61%          8.58%  

currency local per 1USD

       P58.35          P56.99          P63.29  

Yankee Bonds

              

Mexico

       3.64%          3.67%          3.40%  

Indonesia

       3.22%          3.53%          3.36%  

Argentina

       5.59%          6.08%          n/a  

Romania

       3.08%          3.36%          2.96%  

 

Aberdeen Global Income Fund, Inc.

 

9


Portfolio of Investments

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—69.3%

 

ARGENTINA—0.2%

 

USD

    150     

Genneia SA, 8.75%, 01/20/2020 (a)(b)

  $ 166,414  

AUSTRALIA—0.1%

 

USD

    52     

FMG Resources August 2006 Pty Ltd., 4.75%, 02/15/2022 (a)(b)

    53,040  

AZERBAIJAN—0.5%

 

USD

    371     

Southern Gas Corridor CJSC, 6.88%, 03/24/2026 (b)(c)

    419,245  

BANGLADESH—0.3%

 

USD

    200     

Banglalink Digital Communications Ltd., 8.63%, 12/03/2017 (a)(b)

    208,380  

BARBADOS—0.3%

 

USD

    210     

Sagicor Finance 2015 Ltd., 8.88%, 08/11/2019 (a)(b)

    239,925  

BELGIUM—0.2%

 

EUR

    120     

KBC Group NV, 5.63%, 03/19/2019 (a)(b)(d)(e)

    147,295  

BRAZIL—2.5%

 

USD

    440     

GTL Trade Finance, Inc., 7.25%, 10/16/2043 (a)(b)

    482,768  

USD

    130     

JBS USA LUX SA / JBS USA Finance, Inc., 5.75%, 06/15/2020 (a)(b)

    126,100  

USD

    420     

OAS Finance Ltd., 8.88%, 04/25/2018 (a)(b)(d)(f)(g)

    31,500  

USD

    1,270     

Petrobras Global Finance BV, 6.00%, 01/27/2028 (b)

    1,285,875  

USD

    88     

QGOG Atlantic / Alaskan Rigs Ltd., 5.25%, 11/30/2017 (a)(b)(h)

    86,756  
                   2,012,999  

CANADA—1.7%

 

USD

    411     

Gateway Casinos & Entertainment Ltd., 8.25%, 03/01/2020 (a)(b)

    436,687  

USD

    164     

GFL Environmental, Inc., 5.63%, 05/01/2019 (a)(b)

    170,150  

USD

    209     

MEG Energy Corp., 6.38%, 12/01/2017 (a)(b)

    191,235  

USD

    54     

MEG Energy Corp., 6.50%, 01/15/2020 (a)(b)

    53,730  

USD

    145     

MEG Energy Corp., 7.00%, 09/30/2018 (a)(b)

    131,587  

USD

    144     

Taseko Mines Ltd., 8.75%, 06/15/2019 (a)(b)

    146,160  

USD

    85     

Teine Energy Ltd., 6.88%, 12/01/2017 (a)(b)

    86,913  

USD

    146     

Telesat Canada / Telesat LLC, 8.88%, 11/15/2019 (a)(b)

    163,520  
                   1,379,982  

CHINA—2.9%

 

USD

    200     

361 Degrees International Ltd., 7.25%, 06/03/2019 (a)(b)

    213,953  

USD

    200     

China Aoyuan Property Group Ltd., 6.35%, 01/11/2020 (b)

    205,496  

USD

    200     

Future Land Development Holdings Ltd., 5.00%, 02/16/2020 (b)

    202,240  

USD

    200     

FUXIANG Investment Management Ltd., 3.63%, 11/30/2019 (b)

    201,213  

USD

    200     

Proven Honour Capital Ltd., 4.13%, 05/06/2026 (b)

    207,444  

USD

    330     

Sinopec Group Overseas Development 2017 Ltd., 2.38%, 04/12/2020 (b)

    329,721  

USD

    330     

Sinopec Group Overseas Development 2017 Ltd., 3.00%, 04/12/2022 (b)

    333,376  

USD

    200     

Tencent Holdings Ltd., 3.80%, 02/11/2025 (b)

    209,804  

USD

    200     

Wanda Properties Overseas Ltd., 4.88%, 11/21/2018 (b)

    197,992  

USD

    200     

Yestar Healthcare Holdings Co, Ltd., 6.90%, 09/15/2019 (a)(b)

    209,244  
                   2,310,483  

COLOMBIA—0.5%

 

USD

    155     

Banco GNB Sudameris SA, 6.50%, 04/03/2022 (a)(b)

    160,998  

USD

    275     

Bancolombia SA, 4.88%, 10/18/2022 (a)

    275,344  
                   436,342  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

10


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—(continued)

 

EL SALVADOR—0.3%

 

USD

    232     

Grupo Unicomer Co. Ltd., 7.88%, 04/01/2021 (a)(b)

  $ 252,880  

FRANCE—1.7%

 

EUR

    100     

La Financiere Atalian SAS, 4.00%, 05/15/2020 (a)(b)

    122,309  

EUR

    270     

Novafives SAS, 4.50%, 11/10/2017 (a)(b)

    320,025  

USD

    515     

SFR Group SA, 6.00%, 12/01/2017 (a)(b)

    536,887  

USD

    350     

SPCM SA, 4.88%, 09/15/2020 (a)(b)

    359,625  
                   1,338,846  

GEORGIA—1.1%

 

USD

    200     

BGEO Group JSC, 6.00%, 07/26/2023 (b)

    205,532  

USD

    250     

Georgian Oil and Gas Corp. JSC, 6.75%, 04/26/2021 (b)

    267,500  

USD

    400     

Georgian Railway JSC, 7.75%, 07/11/2022 (b)

    446,508  
                   919,540  

GERMANY—0.2%

 

EUR

    117     

Senvion Holding GmbH, 3.88%, 05/01/2019 (a)

    139,696  

GUATEMALA—0.3%

 

USD

    200     

Comcel Trust via Comunicaciones Celulares SA, 6.88%, 02/06/2019 (a)

    211,000  

HONDURAS—0.3%

 

USD

    220     

Inversiones Atlantida SA, 8.25%, 07/28/2020 (a)(b)

    228,800  

HONG KONG—0.5%

 

USD

    200     

Hongkong Electric Finance Ltd., 2.88%, 05/03/2026 (b)

    194,175  

USD

    210     

Shimao Property Holdings Ltd., 8.38%, 02/10/2019 (a)(b)

    231,260  
                   425,435  

INDIA—5.0%

 

INR

    50,000     

Adani Transmission Ltd., 10.25%, 04/15/2021

    821,821  

INR

    50,000     

Axis Bank Ltd., 7.60%, 10/20/2023

    770,994  

USD

    200     

GCX Ltd., 7.00%, 11/30/2017 (a)(b)

    168,988  

INR

    50,000     

Indiabulls Housing Finance Ltd., 8.90%, 09/26/2021

    792,307  

INR

    50,000     

Indiabulls Housing Finance Ltd., 9.00%, 09/26/2026

    794,142  

USD

    200     

Neerg Energy Ltd., 6.00%, 02/13/2020 (a)(b)

    206,657  

USD

    200     

UPL Corp. Ltd., 3.25%, 10/13/2021 (b)

    200,165  

USD

    216     

Vedanta Resources PLC, 6.13%, 08/09/2021 (a)(b)

    220,374  
                   3,975,448  

INDONESIA—1.0%

 

USD

    200     

Indika Energy Capital II Pte Ltd., 6.88%, 04/10/2020 (a)(b)

    208,485  

USD

    370     

Pertamina Persero PT, 4.30%, 05/20/2023 (b)

    390,811  

USD

    200     

TBG Global Pte Ltd., 5.25%, 02/10/2019 (a)(b)

    205,605  
                   804,901  

ITALY—0.8%

 

USD

    440     

Wind Acquisition Finance SA, 7.38%, 12/01/2017 (a)(b)

    457,072  

USD

    200     

Wind Tre SpA, 5.00%, 11/03/2020 (a)(b)

    201,298  
                   658,370  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

11


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—(continued)

 

KAZAKHSTAN—1.0%

 

USD

    200     

KazMunayGas National Co. JSC, 7.00%, 05/05/2020 (b)

  $ 218,134  

USD

    320     

Nostrum Oil & Gas Finance BV, 8.00%, 07/25/2019 (a)(b)

    332,960  

USD

    216     

Tengizchevroil Finance Co. International Ltd., 4.00%, 08/15/2026 (b)(h)

    212,395  
                   763,489  

KUWAIT—0.2%

 

USD

    200     

Equate Petrochemical BV, 3.00%, 03/03/2022 (b)

    197,800  

LUXEMBOURG—2.3%

 

USD

    425     

Altice Financing SA, 7.50%, 05/15/2021 (a)

    465,906  

EUR

    275     

Altice Luxembourg SA, 7.25%, 11/30/2017 (a)(b)

    341,156  

EUR

    340     

ARD Finance SA, 6.63%, 09/15/2019 (a)

    425,598  

EUR

    275     

DEA Finance SA, 7.50%, 04/15/2019 (a)(b)

    355,170  

EUR

    120     

INEOS Group Holdings SA, 5.38%, 08/01/2019 (a)(b)

    151,489  

EUR

    100     

Kleopatra Holdings 1 SCA, 8.50%, 07/15/2019 (a)(b)

    117,305  
                   1,856,624  

MALAYSIA—1.0%

 

MYR

    500     

Cagamas Bhd, 4.45%, 11/25/2020

    119,668  

USD

    200     

Gohl Capital Ltd., 4.25%, 01/24/2027 (b)

    207,686  

MYR

    200     

Malaysia Airports Capital Bhd, 4.55%, 08/28/2020

    47,670  

USD

    200     

RHB Bank Bhd, 2.50%, 10/06/2021 (b)

    197,918  

USD

    200     

TNB Global Ventures Capital Bhd, 3.24%, 10/19/2026 (b)

    195,765  
                   768,707  

MEXICO—2.2%

 

USD

    250     

Alfa SAB de CV, 6.88%, 09/25/2043 (a)(b)

    273,437  

USD

    200     

Cemex SAB de CV, 7.75%, 04/16/2021 (a)(b)

    226,520  

USD

    390     

Petroleos Mexicanos, 6.50%, 06/02/2041

    394,875  

USD

    280     

Petroleos Mexicanos, 6.63%, 06/15/2035

    295,680  

USD

    130     

Petroleos Mexicanos, 6.63%, 06/15/2038

    133,445  

USD

    159     

Petroleos Mexicanos, 6.88%, 08/04/2026

    178,637  

USD

    250     

Unifin Financiera SAB de CV SOFOM ENR, 7.25%, 09/27/2020 (a)(b)

    261,875  
                   1,764,469  

NETHERLANDS—0.8%

 

USD

    214     

Metinvest BV, 9.37%, 12/31/2021 (b)(h)

    222,074  

USD

    410     

Ziggo Secured Finance BV, 5.50%, 01/15/2022 (a)(b)

    418,200  
                   640,274  

NIGERIA—1.1%

 

USD

    210     

Access Bank PLC, 10.50%, 10/19/2021 (b)

    237,346  

USD

    200     

IHS Netherlands Holdco BV, 9.50%, 10/27/2018 (a)(b)

    212,459  

USD

    210     

United Bank for Africa PLC, 7.75%, 06/08/2022 (b)

    213,377  

USD

    200     

Zenith Bank PLC, 7.38%, 05/30/2022 (b)

    207,476  
                   870,658  

PARAGUAY—0.3%

 

USD

    250     

Banco Regional SAECA, 8.13%, 01/24/2019 (b)

    263,125  

RUSSIA—1.9%

 

USD

    240     

Credit Bank of Moscow Via CBOM Finance PLC, 7.50%, 10/05/2022 (a)(b)

    222,332  

USD

    301     

Evraz Group SA, 5.38%, 03/20/2023 (b)

    310,873  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

12


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—(continued)

 

RUSSIA—(continued)

 

USD

    300     

Gazprom OAO Via Gaz Capital SA, 6.00%, 01/23/2021 (b)

  $ 322,556  

USD

    200     

GTH Finance BV, 7.25%, 01/26/2023 (a)(b)

    226,468  

USD

    380     

Vnesheconombank Via VEB Finance PLC, 6.80%, 11/22/2025 (b)

    432,086  
                   1,514,315  

SINGAPORE—0.8%

 

USD

    200     

DBS Group Holdings Ltd., 3.60%, 09/07/2021 (a)(b)(d)

    200,691  

USD

    200     

Parkway Pantai Ltd., 4.25%, 07/27/2022 (a)(b)(d)

    203,640  

USD

    200     

United Overseas Bank Ltd., 3.50%, 09/16/2021 (a)

    203,589  
                   607,920  

SLOVENIA—0.1%

 

EUR

    100     

United Group BV, 4.38%, 07/01/2019 (a)(b)

    122,310  

SPAIN—0.7%

 

EUR

    100     

Codere Finance 2 Luxembourg SA,, 6.75%, 10/31/2018 (a)(b)

    121,731  

EUR

    100     

Codere Finance 2 Luxembourg SA, REGS, 6.75%, 10/31/2018 (a)(b)

    121,731  

EUR

    290     

Obrascon Huarte Lain SA, 4.75%, 03/15/2018 (a)(b)

    335,020  
                   578,482  

SUPRANATIONAL—0.4%

 

INR

    23,400     

International Bank for Reconstruction & Development, 6.38%, 08/07/2018

    362,695  

SWITZERLAND—0.1%

 

EUR

    100     

Selecta Group BV, 6.50%, 11/30/2017 (a)(b)

    118,675  

THAILAND—0.5%

 

USD

    200     

PTT Global Chemical PCL, 4.25%, 09/19/2022 (b)

    211,328  

USD

    200     

PTTEP Canada International Finance Ltd., 5.69%, 04/05/2021 (b)

    218,709  
                   430,037  

TURKEY—1.6%

 

USD

    600     

Hazine Mustesarligi Varlik Kiralama AS, 5.00%, 04/06/2023 (b)

    610,935  

USD

    220     

Odea Bank AS, 7.63%, 08/01/2022 (a)(b)

    209,110  

USD

    209     

Turkiye Vakiflar Bankasi TAO, 6.00%, 11/01/2022 (b)

    205,806  

USD

    250     

Yasar Holding AS, 8.88%, 12/01/2017 (a)

    259,530  
                   1,285,381  

UKRAINE—0.3%

 

USD

    210     

Ukreximbank Via Biz Finance PLC, 9.63%, 04/27/2022 (b)(h)

    226,817  

UNITED ARAB EMIRATES—0.3%

 

USD

    200     

MAF Global Securities Ltd., 5.50%, 09/07/2022 (a)(b)(d)

    206,364  

UNITED KINGDOM—3.9%

 

EUR

    200     

Barclays PLC, 6.50%, 09/15/2019 (a)(d)

    250,459  

GBP

    110     

Cabot Financial Luxembourg SA, 6.50%, 11/30/2017 (a)(b)

    150,845  

EUR

    130     

Corral Petroleum Holdings AB, 11.75%, 05/15/2019 (a)

    171,398  

GBP

    110     

CYBG PLC, 5.00%, 02/08/2021 (a)(b)(e)

    153,514  

GBP

    200     

CYBG PLC, 8.00%, 12/08/2022 (a)(b)(d)(e)

    280,771  

USD

    200     

HSBC Holdings PLC, 6.38%, 09/17/2024 (a)(d)

    217,250  

USD

    465     

Inmarsat Finance PLC, 4.88%, 12/01/2017 (a)(b)

    474,393  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

13


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—(continued)

 

UNITED KINGDOM—(continued)

 

GBP

    100     

Lloyds Bank PLC, 13.00%, 01/21/2029 (a)(d)(e)

  $ 248,893  

GBP

    125     

Matalan Finance PLC, 6.88%, 11/10/2017 (a)(b)

    167,781  

GBP

    115     

New Look Secured Issuer PLC, 6.50%, 06/24/2018 (a)(b)

    92,024  

GBP

    185     

Paragon Banking Group PLC (The), 7.25%, 09/09/2021 (a)(b)(e)

    265,166  

GBP

    150     

Phoenix Group Holdings, 6.63%, 12/18/2025 (b)

    235,534  

GBP

    100     

Pizzaexpress Financing 2 PLC, 6.63%, 11/10/2017 (a)(b)

    129,163  

GBP

    207     

Virgin Media Secured Finance PLC, 5.50%, 01/15/2019 (a)(b)(h)

    289,515  
                   3,126,706  

UNITED STATES—28.7%

 

USD

    256     

Airxcel, Inc., 8.50%, 02/15/2019 (a)(b)

    271,360  

USD

    262     

Albertsons Cos. LLC / Safeway, Inc. / New Albertson’s, Inc. / Albertson’s LLC, 6.63%, 06/15/2019 (a)

    246,280  

EUR

    120     

Alliance Data Systems Corp., 5.25%, 11/15/2018 (a)(b)

    149,532  

USD

    123     

Alliance Data Systems Corp., 5.88%, 11/01/2018 (a)(b)

    127,305  

USD

    200     

Altice US Finance I Corp., 5.38%, 07/15/2018 (a)(b)

    208,500  

GBP

    200     

AMC Entertainment Holdings, Inc., 6.38%, 11/15/2019 (a)

    272,802  

USD

    283     

American Airlines 2013-2, Class B Pass Through Trust, 5.60%, 01/15/2022 (b)(h)

    296,243  

USD

    380     

American Axle & Manufacturing, Inc., 6.25%, 04/01/2020 (a)(b)

    389,500  

USD

    100     

AmeriGas Partners LP / AmeriGas Finance Corp., 5.88%, 05/20/2026 (a)

    104,000  

USD

    66     

Ascend Learning LLC, 6.88%, 08/01/2020 (a)(b)

    69,135  

USD

    353     

Avis Budget Car Rental LLC / Avis Budget Finance, Inc., 5.50%, 04/01/2018 (a)

    357,412  

USD

    222     

Azul Investments LLP, 5.88%, 10/26/2021 (a)(b)

    221,223  

USD

    298     

Bank of America Corp., 6.25%, 09/05/2024 (a)(d)(e)

    331,897  

USD

    400     

Blue Racer Midstream LLC / Blue Racer Finance Corp., 6.13%, 12/01/2017 (a)(b)

    417,000  

USD

    240     

Boyd Gaming Corp., 6.38%, 04/01/2021 (a)

    263,400  

USD

    95     

Callon Petroleum Co., 6.13%, 10/01/2019 (a)

    98,800  

USD

    260     

Calpine Corp., 5.75%, 10/15/2019 (a)

    247,000  

USD

    217     

Carrizo Oil & Gas, Inc., 6.25%, 04/15/2018 (a)

    220,798  

USD

    525     

CCO Holdings LLC / CCO Holdings Capital Corp., 5.75%, 02/15/2021 (a)(b)

    548,887  

USD

    390     

Cengage Learning, Inc., 9.50%, 06/15/2019 (a)(b)

    351,487  

USD

    100     

CenturyLink, Inc., 5.63%, 04/01/2020

    104,250  

USD

    150     

Cenveo Corp., 6.00%, 02/01/2019 (a)(b)

    103,500  

USD

    92     

Change Healthcare Holdings LLC / Change Healthcare Finance, Inc., 5.75%, 03/01/2020 (a)(b)

    94,070  

USD

    374     

Cheniere Corpus Christi Holdings LLC, 5.88%, 10/02/2024 (a)

    404,855  

USD

    39     

Cheniere Energy Partners LP, 5.25%, 10/01/2020 (a)(b)

    40,170  

USD

    262     

Citgo Holding, Inc., 10.75%, 02/15/2020 (b)

    282,960  

USD

    240     

Cogent Communications Group, Inc., 5.38%, 12/01/2021 (a)(b)

    253,500  

USD

    279     

Compass Minerals International, Inc., 4.88%, 05/15/2024 (a)(b)

    275,164  

USD

    341     

Continental Resources, Inc., 3.80%, 03/01/2024 (a)

    331,196  

USD

    200     

CSC Holdings LLC, 10.88%, 10/15/2020 (a)(b)

    245,000  

USD

    313     

CSVC Acquisition Corp., 7.75%, 06/15/2020 (a)(b)

    305,175  

USD

    285     

Dynegy, Inc., 7.63%, 11/01/2019 (a)

    311,362  

USD

    71     

Dynegy, Inc., 8.13%, 07/30/2020 (a)(b)

    78,810  

USD

    320     

EMI Music Publishing Group North America Holdings, Inc., 7.63%, 06/15/2019 (a)(b)

    358,000  

USD

    290     

Endo Dac / Endo Finance LLC / Endo Finco, Inc., 6.00%, 07/15/2018 (a)(b)

    234,900  

USD

    300     

Equinix, Inc., 5.38%, 04/01/2018 (a)

    309,750  

USD

    224     

Frontier Communications Corp., 6.88%, 10/15/2024 (a)

    166,531  

USD

    90     

GCP Applied Technologies, Inc., 9.50%, 02/01/2019 (a)(b)

    100,800  

USD

    401     

Golden Nugget, Inc., 6.75%, 10/15/2019 (a)(b)

    408,017  

USD

    345     

Golden Nugget, Inc., 8.75%, 10/01/2020 (a)(b)

    354,487  

USD

    322     

Goldman Sachs Group, Inc. (The), 5.38%, 05/10/2020 (a)(d)(e)

    334,075  

USD

    20     

Grinding Media, Inc. / Moly-Cop AltaSteel Ltd., 7.38%, 12/15/2019 (a)(b)

    21,750  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

14


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—(continued)

 

UNITED STATES—(continued)

 

USD

    270     

Hardwoods Acquisition, Inc., 7.50%, 12/01/2017 (a)(b)

  $ 252,113  

USD

    299     

HCA, Inc., 5.88%, 08/15/2025 (a)

    314,324  

USD

    115     

HCA, Inc., 7.50%, 02/15/2022

    130,525  

USD

    301     

HD Supply, Inc., 5.75%, 04/15/2019 (a)(b)

    324,704  

USD

    137     

Herc Rentals, Inc., 7.75%, 06/01/2019 (a)(b)

    150,358  

USD

    170     

Hertz Corp., 6.75%, 12/01/2017 (a)

    170,531  

USD

    189     

Hilcorp Energy I LP / Hilcorp Finance Co., 5.75%, 04/01/2020 (a)(b)

    193,489  

USD

    157     

JC Penney Corp., Inc., 5.88%, 07/01/2019 (a)(b)

    150,571  

USD

    180     

JPMorgan Chase & Co., 4.63%, 11/01/2022 (a)(d)

    178,385  

USD

    291     

KB Home, 7.00%, 09/15/2021 (a)

    328,102  

USD

    130     

Kindred Healthcare, Inc., 8.75%, 01/15/2018 (a)

    126,750  

USD

    185     

Lennar Corp., 4.88%, 09/15/2023 (a)

    195,638  

USD

    312     

Level 3 Financing, Inc., 5.13%, 05/01/2018 (a)

    319,410  

USD

    185     

Level 3 Financing, Inc., 5.38%, 05/01/2020 (a)

    193,325  

USD

    161     

MGM Resorts International, 4.63%, 06/01/2026 (a)

    161,000  

USD

    190     

Morgan Stanley, 5.55%, 07/15/2020 (a)(d)(e)

    199,500  

USD

    53     

MPT Operating Partnership LP / MPT Finance Corp., 5.00%, 10/15/2022 (a)

    54,458  

USD

    170     

Nationstar Mortgage LLC / Nationstar Capital Corp., 6.50%, 12/01/2017 (a)

    174,250  

USD

    305     

NCR Corp., 6.38%, 12/15/2018 (a)

    324,843  

USD

    110     

Neiman Marcus Group Ltd., LLC, 8.00%, 12/01/2017 (a)(b)

    64,900  

USD

    329     

New Enterprise Stone & Lime Co., Inc., 10.13%, 04/01/2019 (a)(b)

    356,142  

USD

    80     

NRG Energy, Inc., 7.25%, 05/15/2021 (a)

    86,700  

USD

    130     

Oasis Petroleum, Inc., 6.50%, 12/01/2017 (a)

    132,275  

USD

    310     

Oasis Petroleum, Inc., 6.88%, 12/01/2017 (a)

    315,425  

USD

    112     

Park-Ohio Industries, Inc., 6.63%, 04/15/2022 (a)

    121,520  

USD

    120     

PBF Holding Co. LLC / PBF Finance Corp., 7.25%, 06/15/2020 (a)(b)

    124,050  

USD

    46     

Plastipak Holdings, Inc., 6.25%, 10/15/2020 (a)(b)

    46,911  

USD

    322     

Post Holdings, Inc., 5.00%, 08/15/2021 (a)(b)

    323,610  

USD

    349     

Rite Aid Corp., 6.13%, 04/01/2018 (a)(b)

    324,570  

USD

    377     

Sabine Pass Liquefaction LLC, 5.63%, 12/01/2024 (a)

    418,907  

USD

    200     

Sable International Finance Ltd., 6.88%, 08/01/2018 (a)(b)

    214,500  

USD

    195     

Sanchez Energy Corp., 6.13%, 07/15/2018 (a)

    162,825  

USD

    385     

Scientific Games International, Inc., 7.00%, 01/01/2018 (a)(b)

    407,137  

USD

    255     

Sinclair Television Group, Inc., 5.63%, 08/01/2019 (a)(b)

    258,825  

USD

    245     

Springs Industries, Inc., 6.25%, 12/01/2017 (a)

    252,350  

USD

    289     

Sprint Corp., 7.88%, 09/15/2023

    322,957  

USD

    120     

Standard Industries, Inc., 5.38%, 11/15/2019 (a)(b)

    126,588  

USD

    120     

State Street Corp., 3-month LIBOR + 1.000%, 2.32%, 12/01/2017 (a)(i)

    109,524  

USD

    304     

Summit Materials LLC / Summit Materials Finance Corp, 6.13%, 07/15/2018 (a)

    315,400  

USD

    2     

Summit Materials LLC / Summit Materials Finance Corp., 5.13%, 06/01/2020 (a)(b)

    2,025  

USD

    312     

Sunoco LP / Sunoco Finance Corp., 6.25%, 04/15/2018 (a)

    326,820  

USD

    360     

T-Mobile USA, Inc., 6.00%, 04/15/2019 (a)

    385,200  

USD

    119     

Tenet Healthcare Corp., 4.63%, 07/15/2020 (a)(b)

    117,066  

USD

    330     

Tenet Healthcare Corp., 8.13%, 04/01/2022

    331,650  

USD

    255     

TerraForm Power Operating LLC, 6.38%, 02/01/2018 (a)(b)(j)

    267,113  

USD

    85     

TransDigm, Inc., 6.50%, 07/15/2019 (a)

    87,763  

USD

    183     

Ultra Resources, Inc., 6.88%, 04/15/2019 (a)(b)

    184,830  

USD

    170     

United Continental Holdings, Inc., 5.00%, 02/01/2024

    172,550  

USD

    303     

United Rentals North America, Inc., 5.50%, 07/15/2020 (a)

    325,157  

USD

    245     

Valeant Pharmaceuticals International, 6.38%, 12/01/2017 (a)(b)

    243,469  

USD

    187     

Valvoline, Inc., 5.50%, 07/15/2019 (a)(b)

    198,220  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

15


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

CORPORATE BONDS—(continued)

 

UNITED STATES—(continued)

 

USD

    68     

Warrior Met Coal, Inc., 8.00%, 11/01/2020 (a)(b)

  $ 69,669  

USD

    445     

Whiting Petroleum Corp., 5.00%, 12/15/2018 (a)

    448,894  

USD

    213     

WMG Acquisition Corp., 5.63%, 11/30/2017 (a)(b)

    220,988  

USD

    120     

WR Grace & Co-Conn, 5.13%, 10/01/2021 (b)

    129,000  

USD

    305     

XPO Logistics, Inc., 6.13%, 09/01/2019 (a)(b)

    321,012  

USD

    340     

Zayo Group LLC / Zayo Capital Inc, 6.38%, 05/15/2020 (a)

    365,962  
                   22,935,663  

VENEZUELA—0.4%

 

USD

    1,050     

Petroleos de Venezuela SA, 6.00%, 05/16/2024 (b)(h)

    296,625  

ZAMBIA—0.3%

 

USD

    200     

First Quantum Minerals Ltd., 7.25%, 10/01/2019 (a)(b)

    211,500  
            

Total Corporate Bonds—69.3% (cost $54,545,633)

    55,477,657  

GOVERNMENT BONDS—63.6%

 

ARGENTINA—4.1%

 

ARS

    8,580     

Argentina POM Politica Monetaria, Argentina Central Bank 7-day Repo Reference Rate, 27.15%, 06/21/2020 (i)

    528,580  

ARS

    3,300     

Argentine Bonos del Tesoro, 16.00%, 10/17/2023

    187,969  

USD

    324     

Argentine Republic Government International Bond, 5.63%, 01/26/2022

    340,200  

USD

    1,530     

Argentine Republic Government International Bond, 6.88%, 01/26/2027

    1,667,700  

USD

    323     

Argentine Republic Government International Bond, 7.13%, 07/06/2036

    347,387  

USD

    203     

Argentine Republic Government International Bond, 8.28%, 12/31/2033 (h)

    233,180  
                   3,305,016  

ARMENIA—0.5%

 

USD

    400     

Republic of Armenia International Bond, 6.00%, 09/30/2020 (b)

    421,080  

AUSTRALIA—9.1%

 

AUD

    3,500     

Queensland Treasury Corp., 3.25%, 07/21/2028 (b)

    2,679,241  

AUD

    5,200     

Treasury Corp. of Victoria, 4.75%, 11/20/2030

    4,597,547  
                   7,276,788  

BAHRAIN—0.6%

 

USD

    220     

Bahrain Government International Bond, 7.00%, 01/26/2026 (b)

    232,800  

USD

    200     

Bahrain Government International Bond, 7.00%, 10/12/2028 (b)

    205,512  
                   438,312  

BRAZIL—2.0%

 

BRL

    3,500     

Brazil Notas do Tesouro Nacional, 10.00%, 01/01/2025

    1,081,286  

USD

    400     

Brazilian Government International Bond, 7.13%, 01/20/2037

    477,800  
                   1,559,086  

COLOMBIA—0.5%

 

USD

    200     

Colombia Government International Bond, 4.50%, 10/28/2025 (a)

    213,100  

USD

    120     

Colombia Government International Bond, 7.38%, 09/18/2037

    158,400  
                   371,500  

COSTA RICA—0.3%

 

USD

    250     

Costa Rica Government International Bond, 4.25%, 01/26/2023 (b)

    247,188  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

16


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

GOVERNMENT BONDS—(continued)

 

DOMINICAN REPUBLIC—2.4%

 

DOP

    41,000     

Dominican Republic Bond, 10.50%, 04/07/2023 (b)

  $ 926,801  

USD

    210     

Dominican Republic International Bond, 5.88%, 04/18/2024 (b)(h)

    228,637  

USD

    100     

Dominican Republic International Bond, 6.88%, 01/29/2026 (b)

    114,283  

USD

    530     

Dominican Republic International Bond, 8.63%, 04/20/2027 (b)(h)

    646,600  
                   1,916,321  

ECUADOR—2.0%

 

USD

    200     

Ecuador Government International Bond, 8.75%, 06/02/2023 (b)

    209,800  

USD

    1,380     

Ecuador Government International Bond, 8.88%, 10/23/2027 (b)

    1,411,893  
                   1,621,693  

EGYPT—1.4%

 

USD

    200     

Egypt Government International Bond, 6.13%, 01/31/2022 (b)

    208,545  

EGP

    18,000     

Egypt Treasury Bills, Zero Coupon, 05/29/2018

    924,221  
                   1,132,766  

EL SALVADOR—0.6%

 

USD

    440     

El Salvador Government International Bond, 7.65%, 06/15/2035 (b)

    458,700  

ETHIOPIA—0.6%

 

USD

    500     

Ethiopia International Bond, 6.63%, 12/11/2024 (b)

    515,000  

GHANA—0.9%

 

GHS

    1,700     

Ghana Government Bond, 21.50%, 03/09/2020

    411,882  

USD

    250     

Ghana Government International Bond, 8.13%, 01/18/2026 (b)(h)

    271,250  
                   683,132  

HONDURAS—0.5%

 

USD

    330     

Honduras Government International Bond, 7.50%, 03/15/2024 (b)(h)

    374,550  

INDONESIA—6.0%

 

USD

    940     

Indonesia Government International Bond, 4.13%, 01/15/2025 (b)

    984,607  

USD

    800     

Indonesia Government International Bond, 5.13%, 01/15/2045 (b)

    887,737  

IDR

    8,000,000     

Indonesia Treasury Bill, Zero Coupon, 11/09/2017

    589,331  

IDR

    10,000,000     

Indonesia Treasury Bond, 8.38%, 09/15/2026

    809,216  

IDR

    10,200,000     

Indonesia Treasury Bond, 8.38%, 03/15/2034

    814,872  

IDR

    8,300,000     

Indonesia Treasury Bond, 8.75%, 05/15/2031

    686,949  
                   4,772,712  

IRAQ—0.6%

 

USD

    330     

Iraq International Bond, 5.80%, 12/17/2017 (a)(b)(h)

    310,595  

USD

    200     

Iraq International Bond, 6.75%, 03/09/2023 (b)

    200,385  
                   510,980  

KAZAKHSTAN—1.7%

 

USD

    520     

Kazakhstan Government International Bond, 3.88%, 10/14/2024 (b)

    537,031  

USD

    681     

Kazakhstan Government International Bond, 6.50%, 07/21/2045 (b)

    851,996  
                   1,389,027  

LEBANON—0.8%

 

USD

    660     

Lebanon Government International Bond, 6.85%, 03/23/2027 (b)

    642,650  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

17


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

GOVERNMENT BONDS—(continued)

 

MALAYSIA—1.5%

 

MYR

    900     

Malaysia Government Bond, 3.49%, 03/31/2020

  $ 212,922  

MYR

    3,900     

Malaysia Government Bond, 4.06%, 09/30/2024

    926,944  

MYR

    375     

Malaysia Government Bond, 4.74%, 03/15/2046

    85,244  
                   1,225,110  

MEXICO—0.5%

 

USD

    400     

Mexico Government International Bond, 3.50%, 01/21/2021

    417,200  

MONGOLIA—1.3%

 

USD

    400     

Mongolia Government International Bond, 4.13%, 01/05/2018 (b)

    400,400  

USD

    200     

Mongolia Government International Bond, 5.13%, 12/05/2022 (b)

    198,760  

USD

    400     

Mongolia Government International Bond, 5.63%, 05/01/2023 (b)

    401,043  
                   1,000,203  

NETHERLANDS—0.3%

 

USD

    250     

Mongolia (Government Of) Credit Linked Note, Zero Coupon, 07/23/2018 (g)(k)(l)

    230,157  

NEW ZEALAND—9.0%

 

NZD

    3,800     

New Zealand Government Bond, 4.50%, 04/15/2027 (b)

    2,934,045  

NZD

    6,000     

New Zealand Government Bond, 5.00%, 03/15/2019 (b)

    4,277,497  
                   7,211,542  

NIGERIA—0.3%

 

USD

    200     

Nigeria Government International Bond, 7.88%, 02/16/2032 (b)

    219,696  

PARAGUAY—0.3%

 

USD

    200     

Paraguay Government International Bond, 5.00%, 04/15/2026 (b)

    215,500  

PERU—1.0%

 

PEN

    805     

Peru Government Bond, 6.15%, 08/12/2032 (b)

    258,912  

PEN

    1,450     

Peruvian Government International Bond, 6.95%, 08/12/2031 (b)

    500,402  
                   759,314  

PHILIPPINES—0.1%

 

USD

    40     

Philippine Government International Bond, 8.38%, 06/17/2019

    44,230  

ROMANIA—1.7%

 

USD

    1,260     

Romanian Government International Bond, 4.88%, 01/22/2024 (b)

    1,384,445  

RUSSIA—2.8%

 

RUB

    113,800     

Russian Federal Bond—OFZ, 8.15%, 02/03/2027

    2,033,494  

USD

    200     

Russian Foreign Bond—Eurobond, 4.75%, 05/27/2026 (b)

    211,112  
                   2,244,606  

RWANDA—0.7%

 

USD

    350     

Rwanda International Government Bond, 6.63%, 05/02/2023 (b)

    363,150  

USD

    200     

Rwanda International Government Bond,, 6.63%, 05/02/2023 (b)

    207,515  
                   570,665  

SENEGAL—0.7%

 

USD

    200     

Senegal Government International Bond, 6.25%, 05/23/2033 (b)(h)

    206,730  

USD

    330     

Senegal Government International Bond, 8.75%, 05/13/2021 (b)

    381,856  
                   588,586  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

18


Portfolio of Investments (continued)

As of October 31, 2017

 

 

Principal
Amount
(000)
or Shares
     Description   Value
(US$)
 

GOVERNMENT BONDS—(continued)

 

SINGAPORE—0.9%

 

SGD

    900     

Singapore Government Bond, 3.38%, 09/01/2033

  $ 739,068  

SOUTH AFRICA—1.9%

 

USD

    1,030     

Republic of South Africa Government International Bond, 4.88%, 04/14/2026

    1,023,803  

USD

    100     

Republic of South Africa Government International Bond, 6.25%, 03/08/2041

    104,908  

ZAR

    5,800     

South Africa Government Bond, 8.00%, 01/31/2030

    362,907  
                   1,491,618  

SRI LANKA—2.3%

 

LKR

    165,000     

Sri Lanka Government Bond, 10.60%, 09/15/2019

    1,088,560  

LKR

    15,000     

Sri Lanka Government Bond, 10.75%, 01/15/2019

    98,961  

LKR

    5,000     

Sri Lanka Government Bonds, 9.25%, 05/01/2020

    32,065  

LKR

    10,000     

Sri Lanka Government Bonds, 11.00%, 08/01/2021

    66,807  

LKR

    15,000     

Sri Lanka Government Bonds, 11.50%, 12/15/2021

    102,554  

USD

    440     

Sri Lanka Government International Bond, 6.20%, 05/11/2027 (b)

    467,609  
                   1,856,556  

SURINAME—0.3%

 

USD

    200     

Republic of Suriname, 9.25%, 10/26/2026 (b)

    216,750  

TANZANIA—0.1%

 

USD

    111     

Tanzania Government International Bond, 6-month LIBOR + 6.000%, 7.45%, 03/09/2020 (b)(e)(h)(i)

    116,387  

TURKEY—0.7%

 

TRY

    1,500     

Turkey Government Bond, 10.40%, 03/20/2024

    374,254  

USD

    210     

Turkey Government International Bond, 6.00%, 03/25/2027

    221,172  
                   595,426  

UKRAINE—1.6%

 

USD

    1,260     

Ukraine Government International Bond, 7.75%, 09/01/2025 (b)

    1,310,450  

URUGUAY—0.8%

 

USD

    50     

Uruguay Government International Bond, 4.38%, 10/27/2027 (h)

    54,050  

USD

    146     

Uruguay Government International Bond, 7.63%, 03/21/2036 (h)

    206,225  

USD

    165     

Uruguay Government International Bond, 7.88%, 01/15/2033

    233,887  

UYU

    4,021     

Uruguay Government International Bond, 9.88%, 06/20/2022 (b)

    146,711  
                   640,873  

VENEZUELA—0.2%

 

USD

    470     

Venezuela Government International Bond, 9.25%, 05/07/2028 (b)

    155,100  
            

Total Government Bonds—63.6% (cost $50,717,781)

    50,869,983  

SHORT-TERM INVESTMENT—2.7%

 

UNITED STATES—2.7%

 

USD

    2,150,749     

State Street Institutional U.S. Government Money Market Fund, Institutional Class, 0.96% (l)

  $ 2,150,749  
            

Total Short-Term Investment—2.7% (cost $2,150,749)

    2,150,749  
            

Total Investments—135.6% (cost $107,414,163)

    108,498,389  
            

Liabilities in Excess of Other Assets—(35.6)%

    (28,503,562
            

Net Assets—100.0%

  $ 79,994,827  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

19


Portfolio of Investments (continued)

As of October 31, 2017

 

 

 

(a)   The maturity date presented for these instruments represents the next call/put date.
(b)   Denotes a restricted security.
(c)   This security is government guaranteed.
(d)   Perpetual bond. This is a bond that has no maturity date, is redeemable and pays a steady stream of interest indefinitely. The maturity date presented for these instruments represents the next call/put date.
(e)   The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted.
(f)   Security is in default.
(g)   Illiquid security.
(h)   Sinkable security.
(i)   Variable or Floating Rate Security. Rate disclosed is as of October 31, 2017.
(j)   Indicates a stepped coupon bond. This bond was issued with a low coupon that gradually increases over the life of the bond.
(k)   Level 3 security. This security was fair valued by the Fund’s pricing committee as approved by the Fund’s Board of Trustees. See Note 2(a) of the accompanying Notes to Financial Statements.
(l)   Registered investment company advised by State Street Global Advisors. The rate shown is the current yield as of October 31, 2017.

 

ARS—Argentine Peso
AUD—Australian Dollar
BRL—Brazilian Real
CNH—Chinese Yuan Renminbi Offshore
CNY—Chinese Yuan Renminbi
DOP—Dominican Peso
EGP—Egyptian Pound
EUR—Euro Currency
GBP—British Pound Sterling
GHS—Ghanaian Cedi
IDR—Indonesian Rupiah
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
LKR—Sri Lanka Rupee
MYR—Malaysian Ringgit
NZD—New Zealand Dollar
PEN—Peruvian Sol
PHP—Philippine Peso
RUB—New Russian Ruble
SGD—Singapore Dollar
THB—Thai Baht
TRY—Turkish Lira
USD—U.S. Dollar
UYU—Uruguayan Peso
ZAR—South African Rand
 

 

At October 31, 2017, the Fund’s open forward foreign currency exchange contracts were as follows:

 

 

 

Purchase Contracts
Settlement Date*
   Counterparty    Amount
Purchased
     Amount Sold      Fair Value      Unrealized
Appreciation/
(Depreciation)
 

British Pound/United States Dollar

          
12/01/2017   

Citibank

     GBP14,000        USD18,523      $ 18,609      $ 86  
12/01/2017   

Royal Bank of Canada

     GBP109,500        USD144,283        145,547        1,264  

Chinese Yuan Renminbi/United States Dollar

          
11/03/2017   

Goldman Sachs & Co.

     CNY2,008,740        USD300,000        303,078        3,078  
11/03/2017   

UBS

     CNY1,351,500        USD200,000        203,914        3,914  

Chinese Yuan Renminbi Offshore/United States Dollar

          
11/03/2017   

Goldman Sachs & Co.

     CNH3,303,005        USD500,000        497,953        (2,047
11/03/2017   

UBS

     CNH5,410,480        USD800,000        815,670        15,670  

Euro/United States Dollar

          
11/10/2017   

Barclays Bank plc

     EUR10,000        USD11,756        11,653        (103
11/10/2017   

Citibank

     EUR8,500        USD9,878        9,905        27  
11/10/2017   

UBS

     EUR191,000        USD225,972        222,576        (3,396

Indian Rupee/United States Dollar

          
11/03/2017   

Standard Chartered Bank

     INR22,498,000        USD350,000        347,307        (2,693

Japanese Yen/United States Dollar

          
01/19/2018   

HSBC Bank plc

     JPY37,500,000        USD335,758        331,151        (4,607

Philippine Peso/United States Dollar

          
12/22/2017   

HSBC Bank plc

     PHP65,192,500        USD1,250,000        1,259,150        9,150  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

20


Portfolio of Investments (concluded)

As of October 31, 2017

 

 

Purchase Contracts
Settlement Date*
   Counterparty    Amount
Purchased
     Amount Sold      Fair Value      Unrealized
Appreciation/
(Depreciation)
 

Singapore Dollar/United States Dollar

          
12/08/2017   

Goldman Sachs & Co.

     SGD2,433,960        USD1,800,000      $ 1,786,431      $ (13,569

South African Rand/United States Dollar

          
01/10/2018   

Citibank

     ZAR5,531,000        USD401,617        386,667        (14,950

South Korean Won/United States Dollar

          
01/05/2018   

Goldman Sachs & Co.

     KRW2,950,014,589        USD2,590,000        2,635,540        45,540  

Thai Baht/United States Dollar

          
11/10/2017   

UBS

     THB60,570,000        USD1,800,000        1,823,546        23,546  
       $ 10,798,697      $ 60,910  

 

Sale Contracts
Settlement Date*
   Counterparty    Amount
Purchased
     Amount
Sold
     Fair Value      Unrealized
Appreciation/
(Depreciation)
 

United States Dollar/Australian Dollar

          
11/24/2017   

HSBC Bank plc

     USD938,193        AUD1,200,158      $ 918,329      $ 19,864  
11/24/2017   

UBS

     USD749,361        AUD950,000        726,915        22,446  
12/20/2017   

HSBC Bank plc

     USD2,858,067        AUD3,569,068        2,730,284        127,783  

United States Dollar/British Pound

          
12/01/2017   

Royal Bank of Canada

     USD2,442,126        GBP1,886,000        2,506,858        (64,732

United States Dollar/Chinese Yuan Renminbi Offshore

          
11/03/2017   

UBS

     USD900,000        CNH5,986,000        902,434        (2,434

United States Dollar/Euro

          
11/10/2017   

Royal Bank of Canada

     USD3,475,523        EUR2,951,000        3,438,859        36,664  
11/10/2017   

UBS

     USD251,627        EUR210,000        244,717        6,910  

United States Dollar/Indian Rupee

          
11/03/2017   

Standard Chartered Bank

     USD350,000        INR22,866,375        352,994        (2,994

United States Dollar/New Zealand Dollar

          
11/17/2017   

UBS

     USD2,700,000        NZD3,739,923        2,558,485        141,515  

United States Dollar/South African Rand

          
01/10/2018   

JPMorgan Chase Bank

     USD394,862        ZAR5,531,000        386,667        8,195  

United States Dollar/South Korean Won

          
01/05/2018   

HSBC Bank plc

     USD100,000        KRW112,657,000        100,648        (648
                            $ 14,867,190      $ 292,569  

 

*   Certain contracts with different trade dates and like characteristics have been shown net.

At October 31, 2017, the Fund held the following centrally cleared interest rate swaps:

 

Currency   

Notional

Amount

   

Expiration

Date

    Counter-
party
    Receive (Pay)
Floating Rate
    Floating Rate Index    

Fixed

Rate

    Premiums
Paid
(Received)
   

Unrealized

Depreciation

 

USD

     16,500,000       10/24/2027       Citibank       Receive       3-month LIBOR index       2.36%     $     $ (23,423

USD

     15,000,000       11/04/2024       Citibank       Receive       3-month LIBOR Index       2.44%             (363,494
                                                               (386,917

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

21


Statement of Assets and Liabilities

As of October 31, 2017

 

 

Assets

        

Investments, at value (cost $105,263,414)

   $ 106,347,640  

Short-term investments, at value (cost $2,150,749)

     2,150,749  

Foreign currency, at value (cost $3,491,440)

     3,470,199  

Cash at broker for interest rate swaps

     1,389,264  

Interest and dividends receivable

     1,484,416  

Due from broker

     708,255  

Unrealized appreciation on forward foreign currency exchange contracts

     465,651  

Prepaid expenses

     33,140  

Total assets

     116,049,314  

Liabilities

  

Bank loan payable (Note 7)

     31,500,000  

Due to custodian

     2,541,685  

Payable for investments purchased

     1,657,417  

Unrealized depreciation on forward foreign currency exchange contracts

     112,172  

Investment management fees payable (Note 3)

     63,755  

Interest payable on bank loan

     58,238  

Administration fees payable (Note 3)

     12,261  

Deferred foreign capital gains tax

     7,579  

Variation margin payable for centrally cleared interest rate swap contracts

     5,774  

Investor relations fees payable (Note 3)

     680  

Other accrued expenses

     94,926  

Total liabilities

     36,054,487  
          

Net Assets

   $ 79,994,827  

Composition of Net Assets:

  

Common stock (par value $.001 per share) (Note 5)

   $ 8,725  

Paid-in capital in excess of par

     82,537,012  

Distributions in excess of net investment income

     (3,241,747

Net unrealized appreciation on investments and interest rate swaps

     918,909  

Accumulated net realized foreign exchange losses

     (331,028

Net unrealized foreign exchange and forward foreign currency contract gains

     102,956  

Net Assets

   $ 79,994,827  

Net asset value per share based on 8,724,789 shares issued and outstanding

   $ 9.17  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

22


Statement of Operations

For the Year Ended October 31, 2017

 

 

Net Investment Income

        

Income

  

Interest and amortization of discount and premium (net of foreign withholding taxes of $56,539)

   $ 6,330,464  

Other income

     143  

Total Investment Income

     6,330,607  

Expenses

  

Investment management fee (Note 3)

     722,529  

Director fees and expenses

     244,500  

Administration fee (Note 3)

     138,948  

Independent auditors fees and expenses

     95,550  

Reports to shareholders and proxy solicitation

     72,138  

Investor relations fees and expenses (Note 3)

     67,993  

Insurance expense

     58,085  

Legal fees and expenses

     49,775  

Custodian fees and expenses

     44,384  

Transfer agents fees and expenses

     34,847  

Bank loan fees and expenses

     34,802  

Miscellaneous

     22,346  

Total operating expenses, excluding interest expense

     1,585,897  

Interest expense (Note 7)

     628,059  

Total operating expenses before reimbursed/waived expenses

     2,213,956  

Less: Investor relations fee waiver (Note 3)

     (8,161

Net operating expenses

     2,205,795  
          

Net Investment Income

     4,124,812  
          

Realized and Unrealized Gains/(Losses) on Investments, Interest Rate Swaps, Futures Contracts and Foreign Currencies

  

Net realized gain/(loss) from:

  

Investment transactions (including $16,469 capital gains tax)

     4,296,558  

Interest rate swaps

     (208,485

Forward foreign currency exchange contracts

     (373,788

Foreign currency transactions

     (2,398,718
       1,315,567  

Net change in unrealized appreciation/(depreciation) on:

  

Investments (including $3,677 change in unrealized deferred capital gains tax)

     (2,204,686

Interest rate swaps

     773,306  

Forward foreign currency exchange rate contracts

     183,760  

Foreign currency translation

     2,682,803  
       1,435,183  

Net gain from investments and interest rate swaps

     2,750,750  

Net Increase in Net Assets Resulting from Operations

   $ 6,875,562  

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

23


Statements of Changes in Net Assets

 

 

 

      For the
Year Ended
October 31, 2017
     For the
Year Ended
October 31, 2016
 

Increase/(Decrease) in Net Assets

     

Operations:

     

Net investment income

   $ 4,124,812      $ 2,931,892  

Net realized gain from investments and interest rate swaps

     4,088,073        5,807,595  

Net realized loss from foreign currency transactions and forward foreign currency exchange contracts

     (2,772,506      (8,137,303

Net change in unrealized appreciation/(depreciation) on investments and interest rate swaps

     (1,431,380      (1,276,822

Net change in unrealized appreciation on foreign currency translation and forward foreign currency exchange contracts

     2,866,563        6,461,658  

Net increase in net assets resulting from operations

     6,875,562        5,787,020  

Distributions to Shareholders from:

     

Net investment income

     (1,221,998       

Tax return of capital

     (6,107,352      (7,360,663

Net decrease in net assets from distributions

     (7,329,350      (7,360,663

Common Stock Transactions:

     

Repurchase of common stock resulting in the reduction of 19,539 and 100,430 shares of common stock, respectively (Note 6)

     (157,833      (766,510

Change in net assets from capital transactions

     (157,833      (766,510

Change in net assets resulting from operations

     (611,621      (2,340,153

Net Assets:

     

Beginning of year

     80,606,448        82,946,601  

End of year (including distributions in excess of net investment income of (3,241,747) and ($3,334,645), respectively)

   $ 79,994,827      $ 80,606,448  

Amounts listed as “—” are $0 or round to $0.

See Notes to Financial Statements.

 

 

Aberdeen Global Income Fund, Inc.

 

24


Statement of Cash Flows

For the Year Ended October 31, 2017

 

 

Increase/(Decrease) in Cash (Including Foreign Currency)

  

Cash flows provided from (used for) operating activities:

  

Interest received (excluding discount and premium amortization of $92,219)

   $ 6,509,777  

Operating expenses paid

     (2,148,056

Payments received from broker for collateral on interest rate swaps

     3,753,083  

Purchases and sales of short-term portfolio investments, net

     7,270,432  

Purchases of long-term portfolio investments

     (133,035,217

Proceeds from sales of long-term portfolio investments

     126,988,548  

Realized losses on forward foreign currency exchange contracts closed

     (373,788

Realized losses on interest rate swap transactions

     (208,485

Increase in Payments due from broker

     (708,255

Decrease in prepaid expenses and other assets

     677  

Realized losses on foreign currency transactions

     (2,398,718

Net cash provided from operating activities

     5,649,998  

Cash flows provided from (used for) financing activities

  

Repurchase of common stock

     (157,833

Dividends paid to common shareholders

     (7,329,350

Decrease in payable due to custodian

     (1,009,027

Net cash used for financing activities

     (8,496,210

Effect of exchange rate on cash

     (188,229

Net decrease in cash

     (3,034,441

Cash at beginning of year

     6,504,640  

Cash at end of year

   $ 3,470,199  

Reconciliation of Net Increase in Net Assets from Operations to Net Cash (Including Foreign Currency) Provided from (Used for) Operating Activities

  

Net increase in total net assets resulting from operations

   $ 6,875,562  

Decrease in investments

     5,777,069  

Net realized gain on investment transactions

     (4,296,558

Net change in unrealized appreciation/depreciation on investments

     2,204,686  

Net change in unrealized foreign exchange gains/losses

     (2,866,563

Decrease in interest receivable

     86,951  

Increase in interest payable on bank loan, senior secured notes and term loans

     56,860  

Net decrease in other assets

     677  

Decrease in payable for investments purchased

     (4,461,087

Change in interest receivable/payable for closed interest rate swaps

     3,691,310  

Payments made to broker for interest rate swaps

     (711,533

Decrease in payments due from broker

     (708,255

Increase in accrued expenses and other liabilities

     879  

Total adjustments

     (1,225,564

Net cash provided from operating activities

   $ 5,649,998  

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

25


Financial Highlights

 

 

 

     For the Fiscal Years Ended October 31,  
     2017     2016     2015     2014     2013  

PER SHARE OPERATING PERFORMANCE(a):

                                        
Net asset value per common share, beginning of year      $9.22       $9.38       $11.49       $12.25       $13.88  
Net investment income      0.47       0.33 (b)      0.39       0.47       0.54  
Net realized and unrealized gains/(losses) on investments, interest rate swaps, futures contracts and foreign currency transactions      0.32       0.33       (1.71     (0.32     (1.33
Total from investment operations applicable to common shareholders      0.79       0.66       (1.32     0.15       (0.79
Distributions to common shareholders from:           
Net investment income      (0.14           (0.76     (0.93     (0.84
Tax return of capital      (0.70     (0.84     (0.08            
Total distributions      (0.84     (0.84     (0.84     (0.93     (0.84
Capital Share Transactions:           
Impact of open market repurchase program (Note 6)            0.02       0.05       0.02        
Total from capital transactions            0.02       0.05       0.02        
Net asset value per common share, end of year      $9.17       $9.22       $9.38       $11.49       $12.25  
Market value, end of year      $8.96       $8.46       $8.11       $10.55       $11.15  
Total Investment Return Based on(c):           
Market value      16.74%       15.48%       (15.54%     2.99%       (15.00%
Net asset value      9.63%       8.81% (b)      (10.30%     2.09%       (5.49% )(d) 
Ratio to Average Net Assets Applicable to Common Shareholders/Supplementary Data:           
Net assets applicable to common shareholders, end of year (000 omitted)      $79,995       $80,606       $82,947       $105,653       $115,209  
Average net assets applicable to common shareholders (000 omitted)      $79,658       $81,601       $93,299       $110,812       $122,387  
Net operating expenses, net of fee waivers      2.77%       2.47%       2.55% (e)      2.18%       2.04%  
Net operating expenses, excluding fee waivers      2.78%       2.49%       2.56% (e)             
Net operating expenses, excluding interest expense, net of fee waivers      1.98%       1.90%       2.09% (e)      1.76%       1.68%  
Net investment income      5.18%       3.59% (b)      3.77%       3.94%       4.10%  
Portfolio turnover      95%       80%       41%       59%       43%  
Senior securities (loan facility) outstanding (000 omitted)      $31,500       $31,500       $31,500       $40,000       $40,000  
Asset coverage ratio on revolving credit facility at year end      354%       356%       363%       364%       388%  
Asset coverage per $1,000 on revolving credit facility at year end(f)      $3,540       $3,559       $3,633       $3,641       $3,880  

 

Aberdeen Global Income Fund, Inc.

 

26


Financial Highlights (concluded)

 

 

 

 

(a)   Based on average shares outstanding.
(b)   Included within Net Investment Income per share, Total Return, and Ratio of Net Investment Income to Average Net Assets are the effects of a one-time reimbursement for overbilling of prior years’ custodian out-of-pocket fees. If such amounts were excluded, the Net Investment Income per share, Total Investment Return on Net Asset Value, and Ratio of Net Investment Income to Average Net Assets would have been $0.31, 8.58%, and 3.36%.
(c)   Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the period, dividends, capital gains, and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value.
(d)   The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments.
(e)   The expense ratio includes a one-time expense associated with the January 2011 shelf offering costs attributable to the registered but unsold shares that expired in January 2015.
(f)   Asset coverage ratio is calculated by dividing net assets plus the amount of any borrowings for investment purposes by the amount of the Revolving Credit Facility.

Amounts listed as “—” are $0 or round to $0.

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

27


Notes to Financial Statements

October 31, 2017

 

 

1. Organization

Aberdeen Global Income Fund, Inc. (the “Fund”) was incorporated in Maryland on June 28, 1991, as a closed-end, non-diversified management investment company. The Fund’s principal investment objective is to provide high current income by investing primarily in fixed income securities. As a secondary investment objective, the Fund seeks capital appreciation, but only when consistent with its principal investment objective. As a non-fundamental policy, under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in debt securities. This 80% investment policy is a non-fundamental policy of the Fund and may be changed by the Fund’s Board of Directors (the “Board”) upon 60 days’ prior written notice to shareholders. The Fund’s investments are divided into three categories: Developed Markets, Investment Grade Developing Markets and Sub-Investment Grade Developing Markets. “Developed Markets” are those countries contained in the Citigroup World Government Bond Index, New Zealand, Luxembourg and the Hong Kong Special Administrative Region. As of October 31, 2017, securities of the following countries comprised the Citigroup World Government Bond Index: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Malaysia, Mexico, Netherlands, Norway, Poland, Singapore, South Africa, Spain, Sweden, Switzerland, the United Kingdom and the United States. “Investment Grade Developing Markets” are those countries whose sovereign debt is rated not less than Baa3 by Moody’s Investors Services Inc. (“Moody’s”) or BBB- by Standard & Poor’s (“S&P”) or comparably rated by another appropriate nationally or internationally recognized ratings agency. “Sub-Investment Grade Developing Markets” are those countries that are not Developed Markets or Investment Grade Developing Markets. Under normal circumstances, at least 60% of the Fund’s total assets are invested in fixed income securities of issuers in Developed Markets or Investment Grade Developing Markets, whether or not denominated in the currency of such country; provided, however, that the Fund invests at least 40% of its total assets in fixed income securities of issuers in Developed Markets. The Fund may invest up to 40% of its total assets in fixed income securities of issuers in Sub-Investment Grade Developing Markets, whether or not denominated in the currency of such country. There can be no assurance that the Fund will achieve its investment objectives. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic developments in a specific industry, country or region.

2. Summary of Significant Accounting Policies

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard

Codification Topic 946 Financial Services-Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The accounting records of the Fund are maintained in U.S. Dollars and the U.S. Dollar is used as both the functional and reporting currency. However, the Australian Dollar, Canadian Dollar and British Pound are the functional currencies for U.S. federal tax purposes.

a. Security Valuation:

The Fund values its securities at current market value or fair value, consistent with regulatory requirements. “Fair value” is defined in the Fund’s Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to transact at the measurement date.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1, the highest level, measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3, the lowest level, measurements to valuations based upon unobservable inputs that are significant to the valuation. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.

Long-term debt and other fixed-income securities are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service provider approved by the Board. If there are no current day bids, the security is valued at the previously

 

 

Aberdeen Global Income Fund, Inc.

 

28


Notes to Financial Statements (continued)

October 31, 2017

 

 

applied bid. Pricing services generally price debt securities assuming orderly transactions of an institutional “round lot” size and the strategies employed by the Fund’s investment adviser generally trade in round lot sizes. In certain circumstances, some trades may occur in smaller “odd lot” sizes at lower prices than institutional round lot trades. Short-term debt securities (such as commercial paper and U.S. treasury bills) having a remaining maturity of 60 days or less are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service, or on the basis of amortized cost, if it represents the best approximation of fair value. Debt and other fixed-income securities are generally determined to be Level 2 investments.

Short-term investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. The Fund sweeps available cash into the State Street Institutional U.S. Government Money Market Fund, which has elected to qualify as a “government money market fund” pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”) and has an objective, which is not guaranteed, to maintain a $1.00 per share net asset value (“NAV”). Generally, these investment types are categorized as Level 1 investments.

Derivatives are valued at fair value. Exchange traded derivatives are generally Level 1 investments and over-the-counter derivatives are

generally Level 2 investments. Forward foreign currency contracts are generally valued based on the bid price of the forward rates and the current spot rate. Forward exchange rate quotations are available for scheduled settlement dates, such as 1-, 3-, 6-, 9-, and 12-month periods. An interpolated valuation is derived based on the actual settlement dates of the forward contracts held. Interest rate swaps are generally valued by an approved pricing agent based on the terms of the swap agreement (including future cash flows).

In the event that a security’s market quotations are not readily available or are deemed unreliable, the security is valued at fair value as determined by the Fund’s Pricing Committee, taking into account the relevant factors and surrounding circumstances using valuation policies and procedures approved by the Board. A security that has been fair valued by the Fund’s Pricing Committee may be classified as Level 2 or Level 3 depending on the nature of the inputs. The three-level hierarchy of inputs is summarized below:

Level 1 – quoted prices in active markets for identical investments;

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

 

 

A summary of standard inputs is listed below:

 

Security Type    Standard Inputs
   

Debt and other fixed-income securities

   Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, credit quality, yield, and maturity.
   

Forward foreign currency contracts

   Forward exchange rate quotations.
   

Swap agreements

   Market information pertaining to the underlying reference assets, i.e., credit spreads, credit event probabilities, fair values, forward rates, and volatility measures.

 

Aberdeen Global Income Fund, Inc.

 

29


Notes to Financial Statements (continued)

October 31, 2017

 

 

The following is a summary of the inputs used as of October 31, 2017 in valuing the Fund’s investments and other financial instruments at fair value. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Please refer to the Portfolio of Investments for a detailed breakout of the security types:

 

Investments, at Value      Level 1        Level 2        Level 3        Total  

Fixed Income Investments

                     

Corporate Bonds

     $        $ 55,477,657        $        $ 55,477,657  

Government Bonds

                50,639,826          230,157          50,869,983  

Short-Term Investment

       2,150,749                            2,150,749  

Total Investments

     $ 2,150,749        $ 106,117,483        $ 230,157        $ 108,498,389  

Other Financial Instruments

 

Forward Foreign Currency Exchange Contracts

                465,651                   465,651  

Total Other Financial Instruments

     $        $ 465,651        $          465,651  

Total Assets

     $ 2,150,749        $ 106,583,134        $ 230,157          108,964,040  

Liabilities

 

Other Financial Instruments

 

Forward Foreign Currency Exchange Contracts

                (112,172                 (112,172

Centrally Cleared Interest Rate Swap Agreements

                (386,917                 (386,917

Total Liabilities

     $        $ (499,089      $        $ (499,089

 

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing transfers at the end of each fiscal period. During the fiscal year ended October 31, 2017, there have been no transfers between levels and no significant changes to the fair valuation methodologies. There were no Level 3 investments held at the beginning of the year. Level 3 investments held during and at the end of the year in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the year ended October 31, 2017 is not presented. The valuation technique used at October 31, 2017 was a single unadjusted broker quote. The inputs utilized by the broker to value the investment were not available.

b. Restricted Securities:

Restricted securities are privately-placed securities whose resale is restricted under U.S. securities laws. The Fund may invest in restricted securities, including unregistered securities eligible for resale without registration pursuant to Rule 144A and privately-placed securities of U.S. and non-U.S. issuers offered outside the U.S. without registration pursuant to Regulation S under the Securities Act of 1933, as amended. Rule 144A securities may be freely traded among certain qualified institutional investors, such as the Fund, but resale of such securities in the U.S. is permitted only in limited circumstances.

c. Foreign Currency Translation:

Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate of said currencies against the U.S. Dollar, as of the Valuation Time, as provided by an independent pricing service approved by the Board. The Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time).

Foreign currency amounts are translated into U.S. Dollars on the following basis:

 

(i)   market value of investment securities, other assets and liabilities – at the current daily rates of exchange at the valuation time; and

 

(ii)   purchases and sales of investment securities, income and expenses – at the relevant rates of exchange prevailing on the respective dates of such transactions.

The Fund isolates that portion of the results of operations arising from changes in the foreign exchange rates due to the fluctuations in the market prices of the securities held at the end of the reporting period. Similarly, the Fund isolates the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the reporting period.

 

 

Aberdeen Global Income Fund, Inc.

 

30


Notes to Financial Statements (continued)

October 31, 2017

 

 

Net exchange gain/(loss) is realized from sales and maturities of portfolio securities, sales of foreign currencies, settlement of securities transactions, dividends, interest and foreign withholding taxes recorded on the Fund’s books. Net unrealized foreign exchange appreciation/(depreciation) includes changes in the value of portfolio securities and other assets and liabilities arising as a result of changes in the exchange rate. The net realized and unrealized foreign exchange gain/(loss) shown in the composition of net assets represents foreign exchange gain/(loss) for book purposes that may not have been recognized for tax purposes.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar. Generally, when the U.S. Dollar rises in value against foreign currency, the Fund’s investments denominated in that foreign currency will lose value because the foreign currency is worth fewer U.S. Dollars; the opposite effect occurs if the U.S. Dollar falls in relative value.

d. Derivative Financial Instruments:

The Fund is authorized to use derivatives to manage currency risk, credit risk and interest rate risk and to replicate or as a substitute for physical securities. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities.

Forward Foreign Currency Exchange Contracts:

A forward foreign currency exchange contract (“forward contract”) involves an obligation to purchase and sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Forward contracts are used to manage the Fund’s currency exposure in an efficient manner. They are used to sell unwanted currency exposure that comes with holding securities in a market, or to buy currency exposure where the exposure from holding securities is insufficient to give the desired currency exposure either in absolute terms or relative to the benchmark. The use of forward contracts allows the separation of decision-making between markets and their currencies. The forward contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation. Forward contracts’ prices are received daily from an independent pricing provider. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These

realized and unrealized gains and losses are reported on the Statement of Operations. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or from unanticipated movements in exchange rates. During the fiscal year ended October 31, 2017, the Fund used forward contracts to hedge certain emerging market currencies.

While the Fund may enter into forward contracts to seek to reduce currency exchange rate risks, transactions in such contracts involve certain risks. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in exchange rates. Thus, while the Fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for the Fund than if it had not engaged in any such transactions. Moreover, there may be imperfect correlation between the Fund’s portfolio holdings or securities quoted or denominated in a particular currency and forward contracts entered into by the Fund. Such imperfect correlation may prevent the Fund from achieving a complete hedge, which will expose the Fund to the risk of foreign exchange loss.

Forward contracts are subject to the risk that a counterparty to such contract may default on its obligations. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearing house, a default on the contract would deprive the Fund of unrealized profits, transaction costs or the benefits of a currency hedge or force the Fund to cover its purchase or sale commitments, if any, at the current market price.

Swaps:

A swap is an agreement that obligates two parties to exchange a series of cash flows and/or meet certain obligations at specified intervals based upon or calculated by reference to changes in specified prices or rates (interest rates in the case of interest rate swaps, currency exchange rates in the case of currency swaps) or the occurrence of a credit event with respect to an underlying reference obligation (in the case of a credit default swap) for a specified amount of an underlying asset or notional principal amount. The Fund will enter into swaps only on a net basis, which means that the two payment streams are netted out, with the Fund receiving or paying, as the case may be, only the amount of the difference between the two payments. Except for currency swaps and credit default swaps, the notional principal amount is used solely to calculate the payment streams but is not exchanged. With respect to currency swaps, actual principal amounts of currencies may be exchanged by the counterparties at the initiation, and again upon the termination of the transaction.

 

 

Aberdeen Global Income Fund, Inc.

 

31


Notes to Financial Statements (continued)

October 31, 2017

 

 

Traditionally, swaps were customized, privately negotiated agreements executed between two parties (“OTC Swaps”) but since 2013, certain swaps are required to be cleared pursuant to rules and regulations related to the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”) and/or Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories (“EMIR”) (“Cleared Swaps”). Like OTC Swaps, Cleared Swaps are negotiated bilaterally. Unlike OTC Swaps, the act of clearing results in two swaps executed between each of the parties and a central counterparty (“CCP”), and thus the counterparty credit exposure of the parties is to the CCP rather than to one another. Upon entering into a Cleared Swap, the Fund is required to pledge an amount of cash and/or other assets equal to a certain percentage of the contract amount. This payment is known as “initial margin”. Subsequent payments, known as “variation margin,” are calculated each day, depending on the daily fluctuations in the fair value/ market value of the underlying assets. An unrealized gain or loss equal to the variation margin is recognized on a daily basis. When the contract matures or is terminated, the gain or loss is realized and is presented in the Statements of Operations as a net realized gain or loss on swap contracts. As of March 2017, the Fund may be required to provide variation and/or initial margin for OTC Swaps pursuant to further rules and regulations related to Dodd Frank and EMIR. The margin requirements associated with OTC Swaps and Cleared Swaps may not be the same.

The rights and obligations of the parties to a swap are memorialized in either an International Swap Dealers Association, Inc. Master Agreement (“ISDA”) for OTC Swaps or a futures agreement with an OTC addendum for Cleared Swaps (“Clearing Agreement”). These agreements are with certain counterparties whose creditworthiness is monitored on an ongoing basis by risk professionals. Both the ISDA and Clearing Agreement maintain provisions for general obligations,

representations, agreements, collateral, and events of default or termination. The occurrence of a specified event of default or termination by one party may give the other party the right to terminate and settle all of its contracts.

Entering into swap agreements involves, to varying degrees, elements of credit, market and interest risk in excess of the amounts reported on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform and that there may be unfavorable changes in the value of the index or securities underlying the agreement. The Fund’s maximum risk of loss from counterparty risk related to swaps is the fair value of the contract. This risk is mitigated by the posting of collateral by the counterparties to the Fund to cover the Fund’s exposure to the counterparty.

Interest Rate Swaps:

The Fund uses interest rate swap contracts to manage its exposure to interest rates. Interest rate swap contracts typically represent the exchange between the Fund and a counterparty of respective commitments to make variable rate and fixed rate payments with respect to a notional amount of principal. Interest rate swap contracts may have a term that is greater than one year, but typically require periodic interim settlement in cash, at which time the specified value of the variable interest rate is reset for the next settlement period. Net payments of interest are recorded as realized gains or losses. During the period that the swap contract is open, the contract is marked-to-market as the net amount due to or from the Fund and changes in the value of swap contracts are recorded as unrealized gains or losses. During the fiscal year ended October 31, 2017, the Fund used interest rate swaps to hedge the interest rate risk on the Fund’s Revolving Credit Facility (as defined below).

 

 

Aberdeen Global Income Fund, Inc.

 

32


Notes to Financial Statements (continued)

October 31, 2017

 

 

Summary of Derivative Instruments:

The Fund may use derivatives for various purposes as noted above. The following is a summary of the fair value of Derivative Instruments, not accounted for as hedging instruments, as of October 31, 2017:

 

     Asset Derivatives      Liability Derivatives  
     Year Ended October 31, 2017      Year Ended October 31, 2017  
Derivatives not accounted for as
hedging instruments
and risk exposure
   Statement of Assets and
Liabilities Location
   Fair Value      Statement of Assets and
Liabilities Location
   Fair
Value
 

Interest rate swaps* (interest rate risk)

   Variation margin
receivable for centrally
cleared interest rate
swaps
   $      Variation margin
payable for centrally
cleared interest rate
swaps
   $ 386,917  

Forward foreign exchange contracts (foreign exchange risk)

   Unrealized appreciation
on forward currency
exchange contracts
     465,651      Unrealized depreciation
on forward currency
exchange contracts
     112,172  

Total

        $ 465,651           $ 499,089  

Amounts listed as “–” are $0 or round to $0.

 

*   The values shown reflect unrealized appreciation/(depreciation) and the values shown in the Statement of Assets and Liabilities reflects variation margin.

The Fund has transactions that may be subject to enforceable master netting agreements. A reconciliation of the gross amounts on the Statement of Assets and Liabilities as of October 31, 2017 to the net amounts by broker and derivative type, including any collateral received or pledged, is included in the following tables:

 

          Gross Amounts Not Offset
in Statement of
Assets & Liabilities
          Gross Amounts Not Offset
in Statement of
Assets and Liabilities
 
Description   Gross Amounts
of Assets
Presented in
Statement of
Financial Position
    Financial
Instruments
    Collateral
Received (1)
    Net
Amount (3)
    Gross Amounts
of Liabilities
Presented in
Statement of
Financial Position
    Financial
Instruments
    Collateral
Pledged (1)
    Net
Amount (3)
 
    Assets     Liabilities  

Forward foreign currency (2)

               

Barclays Bank plc

  $     $     $     $     $ 103     $     $     $ 103  

Citibank

    113       (113                 14,950       (113           14,837  

Goldman Sachs & Co.

    48,618       (15,616           33,002       15,616       (15,616            

HSBC Bank plc

    156,797       (5,255           151,542       5,255       (5,255            

JPMorgan Chase Bank

    8,195                   8,195                          

Royal Bank of Canada

    37,928       (37,928                 64,732       (37,928           26,804  

Standard Chartered Bank

                            5,687                   5,687  

UBS

    214,001