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, 2018


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


LOGO


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, 2018 consisted of 19% net investment income and 81% return of capital.

In January 2019, a Form 1099-DIV will be sent to shareholders, which will state the final amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2018 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, 2018. 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, 2018, the total return to shareholders of the Fund based on the net asset value (“NAV”) and market price of the Fund are as follows:

 

        1 Year  

NAV*

       -3.8

Market Price*

       1.3

 

*   assuming the reinvestment of dividends and distributions

The Fund’s NAV total return is based on the reported NAV on each financial reporting period end which could differ from the NAV disclosed within the financial statements. For more information on Fund performance, please see page 3 of Report of the Investment Manager and Total Investment Returns (page 5).

NAV and Market Price

The below table represents comparison from current year to prior year of Market Price to NAV and associated Premium / Discount.

 

        NAV      Closing
Market Price
     Premium/
(Discount)
 

10/31/2017

     $ 9.17      $ 8.96        (2.3%

10/31/2018

     $ 7.99      $ 8.22        2.9%  

Throughout the fiscal year ended October 31, 2018, the Fund’s NAV was within a range of $7.99 to $9.36 and the Fund’s market price traded within a range $7.83 to $9.48. Throughout the fiscal year ended October 31, 2018, the Fund’s shares traded within a range of a discount of 7.5% to a premium of 6.1%.

Portfolio Management

The Fund is managed by Aberdeen’s Asia-Pacific fixed income team. The Asia-Pacific fixed income team works in a 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.

Managed Distribution Policy

Distributions to common shareholders for the twelve months ended October 31, 2018 totaled $0.84 per share. Based on the market price of $8.22 on October 31, 2018, the distribution rate over the twelve-month period ended October 31, 2018 was 10.2%. 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, 2018 and December 11, 2018, the Fund announced that it will pay on November 28, 2018 and January 10, 2019, respectively, a distribution of U.S. $0.07 per share to all shareholders of record as of November 19, 2018 and December 31, 2018, 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 terminated the Australian Qualified Business Unit structure of the Fund, which generated foreign currency losses in 2017 which reduced the taxable income available to support the monthly distributions. Also, a portion of the currency losses realized were deferred and are 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, 2018 and fiscal year ended October 31, 2017, the Fund repurchased 0 and 19,539 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. The Fund’s outstanding balance as of October 31, 2017 was $31 million on the Revolving Credit Facility. On June 1, 2018, July 17, 2018 and August 8, 2018, the Fund paid down $.5 million, $1 million and $1.4 million, respectively. The Fund’s outstanding balance as of October 31, 2018 was $28.6 million. 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

 

 

Aberdeen Global Income Fund, Inc.

 

1


Letter to Shareholders (unaudited) (continued)

 

 

 

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.

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.

Brexit

The ongoing negotiations surrounding the UK’s exit from the EU (“Brexit”) have yet to provide clarity on what the outcome will be for the UK or Europe. The UK remains a member of the EU until the legally established departure date of March 29, 2019 and, until such date, all existing EU-derived laws and regulations continue to apply in the UK. Those laws may continue to apply for a transitional period, depending on whether a deal is struck and, if so, what that deal is. In any event, the UK’s on-shoring of EU legislation currently envisages no policy changes to EU law. However, the EU has not yet provided any material cushion from the effects of Brexit for financial services as a matter of EU law. Whether or not a Fund invests in securities of issuers located in Europe (whether the EU, Eurozone or UK) or with significant exposure to European, EU, Eurozone or UK issuers or countries, the unavoidable uncertainties and events related to Brexit could negatively affect the value and liquidity of the Fund’s investments, increase taxes and costs of business and cause volatility in currency exchange rates and interest rates. Brexit could adversely affect the performance of contracts in existence at the date of Brexit and European, UK or worldwide political, regulatory, economic or market conditions and could contribute to instability in political institutions, regulatory agencies and financial markets. Brexit could also lead to legal uncertainty and politically divergent national laws and regulations as a new relationship between the UK and EU is defined and the UK determines which EU laws to replace or replicate. Any of these effects of Brexit, and others that cannot be anticipated, could adversely affect the Fund’s business, results of operations and financial condition. In addition, the risk that Standard Life Aberdeen plc, the parent of the companies that provide investment advisory and administration services to the Fund and which is headquartered in the UK, fails to adequately prepare for Brexit could have significant customer, reputation and capital impacts for Standard Life Aberdeen plc and its subsidiaries, including those providing services to the Fund; however, we have detailed contingency planning in place to seek to manage the consequences of Brexit on the Fund and to avoid any disruption on the Fund and to the services we provide. Given the fluidity and complexity of the situation, however, we cannot assure that the Fund will not be adversely impacted despite our preparations.

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.

 

 

Aberdeen Global Income Fund, Inc.

 

2


Letter to Shareholders (unaudited) (concluded)

 

 

 

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.

Contact Us:

 

 

Visit: cef.aberdeen-asset.us;

 

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

 

Email: InvestorRelations@aberdeenstandard.com;

 

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

 

Yours sincerely,

/s/ Christian Pittard

Christian Pittard

President

 

 

All amounts are U.S. Dollars unless otherwise stated.

 

Aberdeen Global Income Fund, Inc.

 

3


Report of the Investment Manager (unaudited)

 

 

 

Market/economic Review

Global bonds experienced significant bouts of volatility during the 12-month period ended October 31, 2018, as capital outflows from emerging markets quickened due to the U.S. Federal Reserve’s ongoing rate-hike cycle and rising U.S. Treasury yields. As monetary policy normalization accelerated in the West, the easing cycle also came to an end in most parts of Asia. Indonesia’s central bank led the charge, raising its benchmark interest rate five times over the reporting period in a bid to stem the falling rupiah as most emerging-market currencies succumbed to broad U.S.-dollar strength. Central banks in the Philippines and India also hiked interest rates, but more in response to rising inflation, given the threat posed by higher global oil prices after U.S. President Donald Trump reimposed economic sanctions on Iran. Weakness in the Indonesian rupiah, Philippine peso and Indian rupee weighed on total returns in their respective local-currency government bond markets, although Indian bonds recouped losses after oil prices stabilized, inflationary pressures moderated, and the central bank announced more bond-buying through open-market operations. In Sri Lanka, bond markets were hampered by volatile foreign-exchange movements, concerns over the country’s large borrowing needs, and a constitutional crisis after Prime Minister Ranil Wickremesinghe was ousted. Conversely, the ringgit bucked the regional currency sell-off and this aided Malaysian bond market returns, despite concerns over the country’s fiscal deficit. Korean bonds strengthened as domestic growth forecasts were downgraded.

In emerging markets excluding Asia, government bond yields ended mixed over the reporting period. Several central banks were forced to raise interest rates in a bid to halt the run in their currencies on the back of contagion fears stemming from Argentina and Turkey, where bond yields rose sharply. In Turkey, investors were equally unnerved by President Recep Tayyip Erdogan’s increasing interference in monetary policy. Mexico’s central bank also increased rates in an effort to stem the peso’s decline, while investor sentiment was further dented by fears the government would default on the bonds it had issued to finance the Mexico City airport construction, after a referendum voted to cancel the project. Conversely, Brazilian bond yields generally fell during the period as investors welcomed Jair Bolsonaro’s sweeping presidential victory and his market-friendly pledges, which offset initial anxiety over rising inflationary pressures.

Australian bond yields were mixed over the reporting period, with the long end of the yield curve falling and the front end rising. The

Australian market remained relatively defensive, outperforming comparable-duration1 U.S. Treasuries as benign domestic inflation diminished the prospect of policy rate hikes. New Zealand bond yields trended lower over the reporting period. The country ushered in a new government over the 12-month period and revised the central bank’s mandate to include jobs growth in addition to inflation targeting. With economic growth weaker than expected, monetary policymakers maintained their dovish stance. Nonetheless, the Australian and New Zealand dollars’ depreciation weighed on the markets’ performance for the period.

U.S. and European high-yield markets saw marginal gains over the reporting period. Corporate earnings continued to be supported by generally positive economic growth, while default rates remained low. Supply was also lower than that in 2017 as companies, faced with rising borrowing costs, responded by reducing new issuance. However, investor sentiment in the U.S. deteriorated towards the end of the reporting period as trade tensions with China worsened and businesses began to forecast more conservative revenues and profitability in the quarters ahead. Across the Atlantic, tenuous Brexit talks, political tensions in Germany, and jitters over Italy’s proposed budget shook confidence.

Performance review

The Fund returned -3.8% on a net asset value basis performed for the 12-month period ended October 31, 2018, underperforming the -2.4% return of its blended benchmark.2 The Fund’s holdings in Asian local-currency bonds and emerging-market debt weighed on relative performance for the period. Conversely, strategies in global high-yield bonds, as well as Australia and New Zealand bonds, had a positive impact on relative performance.

The Fund’s overweight allocation to global high-yield bonds, bolstered relative performance as the sector strengthened marginally over the reporting period. Security selection in financial, industrial and oil-and-gas bonds was the most positive contributor to the Fund’s relative performance.

The underweight position in the Australian dollar enhanced the Fund’s relative performance for the reporting period, as the currency weakened against the U.S. dollar. The New Zealand dollar also fell declined versus the U.S. dollar; therefore, the Fund’s overweight position in the currency detracted from the relative performance.

 

 

1   

Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements.

2   

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.

 

4


Report of the Investment Manager (unaudited) (continued)

 

 

 

In Asian local-currency bonds, the underweight to Korean bonds hampered the Fund’s relative performance for the reporting period as the Korean market strengthened. The overweight to the Indian and Sri Lankan rupees also weighed on relative performance as both currencies depreciated against the U.S. dollar. However, the losses were mitigated by the Fund’s positioning in high-yielding Indian and Sri Lankan bonds. The underweight to Philippine bonds also had a positive impact.

The Fund’s overweight allocation to emerging-market debt, which experienced periods of volatility over the reporting period, weighed on the relative performance. The overweight to Argentina was a key detractor from the Fund’s relative performance as the Argentine peso tumbled against the U.S. dollar. However, positive security selection in Argentina contributed to the Fund’s relative performance

The Fund’s use of derivatives had an overall positive impact on performance for the period, adding about 325 basis points to its return, primarily from the use of interest rates swaps that hedge out the increasing cost of leverage as interest rates increases.

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. Over the 12-month period, the Fund issued total distributions of $0.84 per share.

Outlook

Global events continue to unfold. We now see the possibility of the U.S. Federal Reserve taking a breather in its policy normalization cycle in the second half of 2019. In China, we are mindful of the slowdown in the domestic economy but are encouraged that the authorities appear committed to providing support for the private sector, which may not halt the slowdown but should diminish its magnitude. Furthermore, we would not rule out the possibility of the U.S. and China finding ways to temper the ongoing trade dispute. This could occur in 2019 when the Democratic Party, which secured the takes control of the U.S. House of Representatives, in which it secured a majority in the midterm elections held in early November.

In Australia, we believe that the central bank likely will keep interest rates steady well into 2019 as good gross domestic product (GDP) growth, supported by consumer spending, is being offset by housing-sector weakness and tightening credit conditions. We think that employment growth will add a positive countervailing force to housing weakness, but we do not expect labor conditions to tighten before the end of 2018. We also expect monetary policy in New Zealand to remain accommodative in the near term.

While we think that we may see further pressure on emerging-market currencies and capital flows, we believe that investors have priced in the risks to a large degree, with trade friction and higher oil prices dominating discussions. The overall market’s positioning has also shifted from a short-U.S. dollar stance to one that is long U.S. dollar. At this stage, what investors are not positioned for is a de-escalation of risks, in our view. Some investors already have been forced to unwind their long speculative positions in oil as the demand outlook softens, inventories increase and countries negotiate waivers to the U.S. sanctions on Iran. The resultant sharp correction in the oil price has reduced one of the key risks for many Asian economies, while providing support for oil-importing nations such as India and Indonesia. This backdrop, along with the prospect of a high-level meeting between U.S. President Trump and his Chinese counterpart Xi Jinping, have allowed regional currencies to stabilize somewhat.

Asia-Pacific economies generally have healthy external trade balances and solid foreign-currency reserves, while institutional frameworks are noticeably more robust than a decade ago. Elsewhere, we think that increasing International Monetary Fund (IMF) support for Argentina, monetary policy tightening in Turkey, and the agreement to a new trade deal among the U.S., Mexico and Canada also bode well for sentiment. We expect volatility to persist, but we intend to take advantage of opportunities to add exposure to the Fund where we believe that valuations look compelling, particularly issuers which we feel will cope well in a lower-growth environment.

Regarding U.S. and UK high-yield credit, markets have repriced to levels which appear relatively attractive and demand from insurers and pension funds is emerging. However, we remain concerned about high levels of borrowing in a rising-rate environment, and economic data in Europe seem to be softening. Additionally, we think that the UK’s exit from the European Union without a formal agreement would still have a negative impact on the market.

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.

 

 

Aberdeen Global Income Fund, Inc.

 

5


Report of the Investment Manager (unaudited) (concluded)

 

 

 

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 1940 Act. The covenants or guidelines could impede management of the Fund 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 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 May 23, 2018, the Fund terminated a swap agreement with a notional value of $0.5

million maturing on November 4, 2027. On July 16, 2018, the Fund terminated a swap agreement with a notional of $1 million maturing on November 4, 2027 and on August 7, 2018, the Fund terminated a swap agreement with a notional of $1.4 million maturing on November 4, 2027. As of October 31, 2018, the Fund held interest rate swap agreements with an aggregate notional amount of $28,600,000 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, 2018
  Receive/(Pay)
Floating
Rate
    Amount
(in $ millions)
    Fixed Rate
Payable (%)
 

72 months

    Receive       12.1       2.44  

108 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.

Aberdeen Standard Investments (Asia) Limited (formerly known as Aberdeen Asset Management Asia Limited)

Risk Considerations

Past performance is not an indication of future results.

International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods; these risks are generally heightened for emerging market investments. Concentrating investments in the Asia-Pacific region subjects the Fund to more volatility and greater risk of loss than geographically diverse funds.

Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), and extension (principal repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase).

 

 

Aberdeen Global Income Fund, Inc.

 

6


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, 2018. 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)

       -3.8%          4.7%          1.0%          7.5%  

Market Price

       1.3%          10.9%          3.5%          9.5%  

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 agreement 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, 2018 was 3.06%. The net operating expense ratio, net of fee waivers, based on the fiscal year ended October 31, 2018 was 3.03%. The net operating expense ratio, excluding interest expense and net of fee waivers, based on the fiscal year ended October 31, 2018 was 1.89%.

 

Aberdeen Global Income Fund, Inc.

 

7


Portfolio Composition (unaudited)

 

 

 

Quality of Investments(1)

As of October 31, 2018, 18.9% 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, 2018 compared to April 30, 2018 and October 31, 2017:

 

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

October 31, 2018

     4.5        10.4        4.0        14.7        20.7        30.1        5.9        9.7  

April 30, 2018

     5.0        9.9        3.4        14.5        16.9        32.6        7.3        10.4  

October 31, 2017

     5.3        9.3        2.8        13.3        19.8        33.5        8.5        7.5  

 

**   Below investment grade
***   Not Rated
(1)   For financial reporting purposes, credit quality ratings shown above reflect the lowest rating assigned by either S&P 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, 2018, compared to April 30, 2018 and October 31, 2017:

 

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

October 31, 2018

       54.2          17.0          28.8  

April 30, 2018

       53.7          19.3          27.0  

October 31, 2017

       50.3          21.4          28.3  

Currency Exposure

The table below shows the currency exposure, including hedges, of the Fund’s total investments as of October 31, 2018, compared to April 30, 2018 and October 31, 2017:

 

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

October 31, 2018

       84.3          8.4          7.3  

April 30, 2018

       80.0          12.2          7.8  

October 31, 2017

       77.8          14.1          8.1  

 

Aberdeen Global Income Fund, Inc.

 

8


Portfolio Composition (unaudited) (concluded)

 

 

 

Maturity Composition

As of October 31, 2018, the average maturity of the Fund’s total investments was 8.4 years, compared with 8.8 years at April 30, 2018 and 8.4 years at October 31, 2017. The table below shows the maturity composition of the Fund’s investments as of October 31, 2018, compared

to April 30, 2018 and October 31, 2017:

 

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

October 31, 2018

       17.8          25.7          41.4          15.1  

April 30, 2018

       15.3          17.3          46.3          21.1  

October 31, 2017

       14.6          16.7          48.8          19.9  

Modified Duration

As of October 31, 2018, the modified duration* of the Fund was 4.58 years. This calculation excludes the interest rate swaps that are used to manage the leverage of the fund. Excluding swaps will increase portfolio duration.

 

 

 

 

*   Modified duration is a measure of the sensitivity of the price of a bond to the fluctuations in interest rates.

 

Aberdeen Global Income Fund, Inc.

 

9


Summary of Key Rates (unaudited)

 

 

 

The following table summarizes the movements of key interest rates and currencies from October 31, 2018 compared to April 30, 2018 and October 31, 2017:

 

        Oct-18        Apr-18        Oct-17  

Australia

              

90 day Bank Bills

       1.91%          2.03%          1.69%  

10 yr bond

       2.17%          2.43%          2.28%  

currency USD per 1 AUD

       $0.71          $0.75          $0.77  

New Zealand

              

90 day Bank Bills

       1.93%          2.02%          1.95%  

10 yr bond

       2.54%          2.84%          2.92%  

currency USD per 1 NZD

       $0.65          $0.70          $0.69  

Malaysia

              

3-month T-Bills

       3.28%          3.24%          3.00%  

10 yr bond

       4.08%          4.13%          3.90%  

currency local per 1USD

       RM4.18          RM3.92          RM4.23  

India

              

3-month T-Bills

       6.11%          6.11%          6.10%  

10 yr bond

       7.85%          7.75%          6.86%  

currency local per 1USD

       73.95          66.74          64.77  

Indonesia

              

3 months deposit rate

       6.25%          5.76%          5.93%  

10 yr bond

       8.50%          6.88%          6.77%  

currency local per 1USD

       Rp15202.50          RP13912.50          RP13562.50  

Russia

              

Zero Cpn 3m

       7.40%          6.22%          7.63%  

10 yr bond

       8.60%          7.27%          7.60%  

currency local per 1USD

       p65.74          p62.98          p58.35  

Yankee Bonds

              

Mexico

       4.83%          4.50%          3.64%  

Indonesia

       4.88%          4.18%          3.22%  

Argentina

       9.77%          6.93%          5.59%  

Romania

       4.41%          4.07%          3.08%  

 

Aberdeen Global Income Fund, Inc.

 

10


Portfolio of Investments

As of October 31, 2018

 

 

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

CORPORATE BONDS—66.8%

 

ARGENTINA—0.2%

 

USD

    150     

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

  $ 139,502  

AUSTRALIA—0.4%

 

USD

    200     

Australia and New Zealand Banking Group Ltd., 6.75%, 12/29/2049 (b)(c)(d)

    205,250  

USD

    52     

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

    49,920  
      255,170  

BANGLADESH—0.3%

 

USD

    200     

Banglalink Digital Communications Ltd., 8.63%, 12/02/2018 (a)(b)

    201,000  

BARBADOS—0.3%

 

USD

    210     

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

    218,820  

BELGIUM—0.1%

 

EUR

    140     

Nyrstar Netherlands Holdings BV, 6.88%, 03/15/2020 (a)(b)

    95,293  

BRAZIL—3.1%

 

USD

    222     

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

    200,080  

USD

    220     

Caixa Economica Federal, (fixed rate to 07/23/2019, variable thereafter), 7.25% (a)(b)

    221,650  

USD

    220     

CSN Resources SA, 7.63%, 02/13/2021 (a)(b)

    203,227  

USD

    440     

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

    457,605  

USD

    420     

OAS Finance Ltd., 8.88%, 12/03/2018 (a)(b)(d)(e)(f)

    11,025  

USD

    195     

Odebrecht Drilling Norbe VIII/IX Ltd., 6.35%, 12/01/2020 (a)(b)(g)

    192,326  

USD

    760     

Petrobras Global Finance BV, 8.75%, 05/23/2026

    848,806  
      2,134,719  

CANADA—1.2%

 

USD

    80     

Bombardier, Inc., 7.50%, 03/15/2020 (a)(b)

    79,976  

GBP

    300     

Entertainment One Ltd., 6.88%, 12/15/2018 (a)(b)

    397,840  

USD

    144     

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

    141,840  

USD

    85     

Teine Energy Ltd., 6.88%, 12/03/2018 (a)(b)

    84,575  

USD

    146     

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

    155,490  
      859,721  

CHINA—3.4%

 

USD

    200     

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

    195,597  

USD

    200     

China Evergrande Group, 8.25%, 03/23/2020 (a)(b)

    176,006  

USD

    200     

Industrial & Commercial Bank of China Ltd., (fixed rate to 12/10/2019, variable thereafter), 6.00% (a)(b)(d)

    201,750  

USD

    200     

New Metro Global Ltd., 4.75%, 02/11/2019 (a)

    198,514  

USD

    200     

New Metro Global Ltd., 5.00%, 08/08/2020 (a)(b)

    170,492  

USD

    200     

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

    181,092  

USD

    210     

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

    212,917  

USD

    330     

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

    324,642  

USD

    330     

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

    320,096  

USD

    200     

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

    192,570  

USD

    200     

Yingde Gases Investment Ltd., 6.25%, 01/19/2021 (a)(b)

    186,880  
      2,360,556  

COLOMBIA—0.6%

 

USD

    121     

Banco GNB Sudameris SA, (fixed rate to 04/03/2022, variable thereafter), 6.50% (a)(b)

    119,640  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

11


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

CORPORATE BONDS (continued)

 

COLOMBIA (continued)

 

USD

    275     

Bancolombia SA, (fixed rate to 10/18/2022, variable thereafter), 4.88% (b)

  $ 264,632  
      384,272  

CONGO—0.3%

 

USD

    210     

HTA Group Ltd., 9.13%, 03/08/2019 (a)(b)

    213,938  

DENMARK—0.3%

 

USD

    200     

DKT Finance ApS, 9.38%, 06/17/2020 (a)(b)

    210,000  

EL SALVADOR—0.3%

 

USD

    232     

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

    241,862  

FRANCE—0.8%

 

EUR

    100     

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

    100,840  

EUR

    100     

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

    100,840  

USD

    350     

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

    323,750  
      525,430  

GEORGIA—0.6%

 

USD

    200     

Bank of Georgia JSC, 6.00%, 07/26/2023 (a)

    196,092  

USD

    250     

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

    254,359  
      450,451  

GERMANY—1.7%

 

EUR

    200     

Platin 1426 GmbH, 5.38%, 12/15/2019 (a)(b)

    219,451  

EUR

    250     

PrestigeBidCo GmbH, 6.25%, 12/15/2019 (a)(b)

    300,552  

EUR

    117     

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

    113,291  

EUR

    115     

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

    111,355  

EUR

    335     

Summit Germany Ltd., 2.00%, 01/31/2021 (a)(b)

    360,521  

EUR

    100     

Tele Columbus AG, 3.88%, 05/02/2021 (a)(b)

    104,664  
      1,209,834  

GUATEMALA—0.3%

 

USD

    200     

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

    204,575  

HONDURAS—0.3%

 

USD

    220     

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

    225,502  

HONG KONG—0.3%

 

USD

    200     

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

    181,535  

INDIA—3.4%

 

INR

    50,000     

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

    694,701  

INR

    50,000     

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

    646,639  

INR

    50,000     

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

    668,656  

USD

    200     

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

    187,795  

USD

    216     

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

    190,586  
      2,388,377  

INDONESIA—1.1%

 

USD

    200     

Medco Platinum Road Pte Ltd., 6.75%, 01/30/2022 (a)(b)

    182,464  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

12


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

CORPORATE BONDS (continued)

 

INDONESIA (continued)

 

USD

    370     

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

  $ 361,246  

USD

    200     

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

    194,876  
      738,586  

ITALY—0.6%

 

USD

    235     

Telecom Italia Capital SA, 6.00%, 09/30/2034

    212,087  

USD

    200     

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

    170,240  
      382,327  

KAZAKHSTAN—0.3%

 

USD

    216     

Tengizchevroil Finance Co. International Ltd., 4.00%, 08/15/2026 (a)(g)

    201,094  

KUWAIT—0.3%

 

USD

    200     

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

    191,360  

LUXEMBOURG—2.6%

 

USD

    425     

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

    399,500  

EUR

    275     

Altice Luxembourg SA, 7.25%, 11/30/2018 (a)(b)

    304,533  

EUR

    340     

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

    382,405  

EUR

    275     

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

    330,199  

EUR

    120     

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

    139,121  

EUR

    100     

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

    72,713  

EUR

    152     

Matterhorn Telecom Holding SA, 4.88%, 11/13/2018 (a)(b)

    175,176  
      1,803,647  

MALAYSIA—1.4%

 

MYR

    300     

Cagamas Bhd, 4.05%, 12/20/2018

    71,721  

MYR

    500     

Cagamas Bhd, 4.45%, 11/25/2020

    120,600  

USD

    200     

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

    187,016  

MYR

    200     

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

    48,055  

USD

    200     

Press Metal Labuan Ltd., 4.80%, 10/30/2020 (a)(b)

    187,875  

USD

    200     

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

    192,091  

USD

    200     

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

    181,794  
      989,152  

MEXICO—1.8%

 

USD

    390     

Petroleos Mexicanos, 6.50%, 06/02/2041

    333,957  

USD

    280     

Petroleos Mexicanos, 6.63%, 06/15/2035

    256,200  

USD

    130     

Petroleos Mexicanos, 6.63%, 06/15/2038

    116,025  

USD

    159     

Petroleos Mexicanos, 6.88%, 08/04/2026

    158,364  

USD

    210     

Sixsigma Networks Mexico SA de CV, 7.50%, 05/02/2021 (a)(b)

    198,188  

USD

    224     

Unifin Financiera SAB de CV SOFOM ENR, (fixed rate to 01/29/2025, variable thereafter), 8.88% (a)(b)(d)

    205,410  
      1,268,144  

NETHERLANDS—1.2%

 

USD

    160     

Cimpress NV, 7.00%, 06/15/2021 (a)(b)

    159,800  

USD

    200     

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

    207,000  

EUR

    100     

InterXion Holding, 4.75%, 06/15/2021 (a)(b)

    118,079  

USD

    410     

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

    376,175  
      861,054  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

13


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

CORPORATE BONDS (continued)

 

NIGERIA—1.5%

 

USD

    210     

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

  $ 223,524  

USD

    200     

IHS Netherlands Holdco BV, 9.50%, 12/03/2018 (a)(b)

    201,258  

USD

    220     

SEPLAT Petroleum Development Co. PLC, 9.25%, 04/01/2020 (a)(b)

    222,794  

USD

    420     

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

    421,117  
      1,068,693  

OMAN—0.3%

 

USD

    230     

Oztel Holdings SPC Ltd., 6.63%, 04/24/2028 (a)

    225,354  

PARAGUAY—0.4%

 

USD

    250     

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

    249,737  

RUSSIA—2.0%

 

USD

    240     

Credit Bank of Moscow Via CBOM Finance PLC, (fixed rate to 10/05/2022, variable thereafter), 7.50%, (a)(b)

    181,404  

USD

    301     

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

    295,732  

USD

    230     

Gazprom OAO Via Gaz Capital SA, 4.95%, 03/23/2027 (a)

    219,414  

USD

    300     

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

    307,314  

USD

    380     

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

    374,273  
      1,378,137  

SINGAPORE—0.8%

 

USD

    200     

DBS Group Holdings Ltd., (fixed rate to 12/11/2023, variable thereafter), 4.52% (a)(b)

    202,182  

USD

    200     

Parkway Pantai Ltd., (fixed rate to 07/27/2022, variable thereafter), 4.25% (a)(b)(d)

    188,800  

USD

    200     

United Overseas Bank Ltd., (fixed rate to 09/16/2021, variable thereafter), 3.50% (a)(b)(i)

    196,822  
      587,804  

SOUTH AFRICA—0.3%

 

USD

    210     

Liquid Telecommunications Financing PLC, 8.50%, 07/13/2020 (a)(b)

    214,174  

SPAIN—0.3%

 

EUR

    100     

Codere Finance 2 Luxembourg SA, 6.75%, 11/30/2018 (a)(b)

    106,755  

EUR

    100     

Codere Finance 2 Luxembourg SA,, 6.75%, 11/30/2018 (a)(b)

    106,756  
      213,511  

THAILAND—0.6%

 

USD

    200     

GC Treasury Center Co. Ltd., 4.25%, 09/19/2022 (a)

    199,829  

USD

    200     

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

    208,288  
      408,117  

TURKEY—1.3%

 

USD

    600     

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

    556,644  

USD

    240     

Turkiye Garanti Bankasi AS, 5 year USD Swap + 4.220%, 6.13%, 05/24/2022 (a)(b)(c)

    198,592  

USD

    209     

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

    170,335  
      925,571  

UKRAINE—1.2%

 

USD

    220     

Metinvest BV, 8.50%, 01/23/2026 (a)(b)

    209,550  

USD

    243     

MHP Lux SA, 6.95%, 04/03/2026 (a)

    224,571  

USD

    210     

Ukreximbank Via Biz Finance PLC, 9.63%, 04/27/2022 (a)(g)

    211,902  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

14


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

CORPORATE BONDS (continued)

 

UKRAINE (continued)

 

UAH

    6,000     

Ukreximbank Via Biz Finance PLC, 16.50%, 03/02/2021 (a)

  $ 185,831  
      831,854  

UNITED ARAB EMIRATES—0.3%

 

USD

    200     

MAF Global Securities Ltd., (fixed rate to 09/07/2022, variable thereafter), 5.50% (a)(b)(d)(i)

    189,812  

UNITED KINGDOM—5.3%

 

EUR

    200     

Barclays PLC, (fixed rate to 09/15/2019, variable thereafter), 6.50% (b)(d)

    233,009  

GBP

    110     

Cabot Financial Luxembourg SA, 6.50%, 11/12/2018 (a)(b)

    140,799  

EUR

    130     

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

    156,880  

GBP

    110     

CYBG PLC, (fixed rate to 02/08/2021, variable thereafter), 5.00% (a)(b)(i)

    143,400  

GBP

    200     

CYBG PLC, (fixed rate to 12/08/2022, variable thereafter), 8.00% (a)(b)(d)(i)

    257,877  

USD

    310     

Fiat Chrysler Automobiles, 5.25%, 04/15/2023

    308,450  

USD

    200     

HSBC Holdings PLC, (fixed rate to 09/17/2024, variable thereafter), 6.38% (b)(d)

    193,800  

GBP

    100     

Lloyds Bank PLC, (fixed rate to 01/22/2029, variable thereafter), 13.00% (b)(d)(i)

    215,539  

GBP

    300     

Moto Finance PLC, 4.50%, 03/15/2019 (a)(b)

    376,270  

GBP

    185     

Paragon Banking Group PLC (The), (fixed rate to 09/09/2021, variable thereafter), 7.25% (a)(b)(i)

    249,532  

GBP

    150     

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

    200,981  

GBP

    235     

Pinewood Finance Co. Ltd., 3.75%, 12/01/2019 (a)(b)

    300,076  

GBP

    135     

Pinnacle Bidco PLC, 6.38%, 02/15/2021 (a)(b)

    176,043  

GBP

    100     

Pizzaexpress Financing 2 PLC, 6.63%, 11/12/2018 (a)(b)

    113,908  

GBP

    200     

RAC Bond Co. PLC, 5.00%, 07/14/2019 (a)(b)

    240,430  

GBP

    100     

TalkTalk Telecom Group PLC, 5.38%, 01/15/2019 (a)(b)

    127,176  

GBP

    207     

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

    269,681  
      3,703,851  

UNITED STATES—25.3%

 

USD

    134     

ACI Worldwide, Inc., 5.75%, 08/15/2021 (a)(b)

    134,000  

EUR

    200     

Adient Global Holdings Ltd., 3.50%, 05/15/2024 (a)(b)

    198,361  

EUR

    120     

Alliance Data Systems Corp., 5.25%, 11/30/2018 (a)(b)

    139,818  

USD

    123     

Alliance Data Systems Corp., 5.88%, 12/03/2018 (a)(b)

    125,128  

GBP

    200     

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

    255,630  

USD

    100     

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

    94,500  

USD

    148     

Apergy Corp., 6.38%, 05/01/2021 (a)(b)

    149,850  

USD

    66     

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

    65,670  

USD

    353     

Avis Budget Car Rental LLC / Avis Budget Finance, Inc., 5.50%, 12/03/2018 (b)

    343,292  

USD

    120     

Banff Merger Sub, Inc., 9.75%, 09/01/2021 (a)(b)

    115,200  

USD

    298     

Bank of America Corp., (fixed rate to 09/05/2024, variable thereafter), 6.25% (b)(d)(i)

    306,940  

EUR

    120     

Bausch Health Cos. Inc., 4.50%, 11/30/2018 (a)(b)

    131,506  

USD

    155     

Blue Racer Midstream LLC / Blue Racer Finance Corp., 6.13%, 12/03/2018 (a)(b)

    158,100  

USD

    240     

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

    237,900  

USD

    122     

Bruin E&P Partners LLC, 8.88%, 08/01/2020 (a)(b)

    120,170  

EUR

    100     

BWAY Holding Co., 4.75%, 04/15/2020 (a)(b)

    114,047  

USD

    95     

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

    92,625  

USD

    160     

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

    142,968  

USD

    217     

Carrizo Oil & Gas, Inc., 6.25%, 12/03/2018 (b)

    213,202  

USD

    525     

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

    519,750  

USD

    100     

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

    101,250  

USD

    292     

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

    285,430  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

15


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

CORPORATE BONDS (continued)

 

UNITED STATES (continued)

 

USD

    374     

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

  $ 385,220  

USD

    39     

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

    38,269  

USD

    240     

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

    241,500  

USD

    143     

Commercial Metals Co., 5.75%, 04/15/2021 (a)(b)

    137,280  

USD

    279     

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

    259,470  

EUR

    265     

Crown European Holdings SA, 3.38%, 11/15/2024 (a)(b)

    307,380  

USD

    200     

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

    230,750  

USD

    76     

Dell International LLC / EMC Corp., 5.88%, 11/16/2018 (a)(b)

    77,047  

EUR

    100     

Energizer Gamma Acquisition BV, 4.63%, 07/15/2021 (a)(b)

    115,983  

USD

    10     

Energizer Gamma Acquisition, Inc., 6.38%, 07/15/2021 (a)(b)

    10,000  

USD

    300     

Equinix, Inc., 5.38%, 12/03/2018 (b)

    304,500  

USD

    210     

Exela Intermediate LLC / Exela Finance, Inc., 10.00%, 07/15/2020 (a)(b)

    218,337  

USD

    155     

Frontier Communications Corp., 10.50%, 06/15/2022 (b)

    129,038  

USD

    243     

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

    242,392  

USD

    345     

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

    354,487  

USD

    322     

Goldman Sachs Group, Inc. (The), (fixed rate to 05/10/2020, variable thereafter), 5.38% (b)(d)(i)

    324,415  

USD

    111     

Goodyear Tire & Rubber Co. (The), 5.13%, 12/03/2018 (b)

    108,891  

USD

    113     

Graham Holdings Co., 5.75%, 06/01/2021 (a)(b)

    113,848  

USD

    20     

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

    20,550  

USD

    125     

Harland Clarke Holdings Corp., 6.88%, 12/03/2018 (a)(b)

    122,813  

USD

    125     

Harland Clarke Holdings Corp., 8.38%, 02/15/2019 (a)(b)

    112,813  

USD

    109     

HCA, Inc., 5.25%, 12/15/2025 (b)

    110,908  

USD

    299     

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

    305,727  

USD

    115     

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

    124,775  

USD

    118     

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

    124,490  

USD

    189     

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

    183,802  

USD

    145     

Iron Mountain, Inc., 5.25%, 12/27/2022 (a)(b)

    130,138  

USD

    180     

JPMorgan Chase & Co., (fixed rate to 11/01/2022, variable thereafter), 4.63% (b)(d)

    166,608  

USD

    291     

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

    301,912  

USD

    29     

Lennar Corp., 4.50%, 01/31/2024 (b)

    27,486  

USD

    185     

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

    180,606  

USD

    312     

Level 3 Financing, Inc., 5.13%, 12/03/2018 (b)

    309,660  

USD

    185     

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

    180,606  

USD

    163     

Meredith Corp., 6.88%, 02/01/2021 (a)(b)

    163,000  

USD

    161     

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

    145,303  

USD

    190     

Morgan Stanley, (fixed rate to 07/15/2020, variable thereafter), 5.55% (b)(d)(i)

    191,900  

USD

    142     

Moss Creek Resources Holdings, Inc., 7.50%, 01/15/2021 (a)(b)

    136,632  

USD

    53     

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

    49,804  

USD

    170     

Nationstar Mortgage LLC / Nationstar Capital Corp., 6.50%, 12/03/2018 (b)

    168,300  

USD

    110     

Neiman Marcus Group Ltd., LLC, 8.00%, 12/03/2018 (a)(b)

    66,000  

USD

    329     

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

    343,805  

USD

    27     

Nine Energy Service, Inc., 8.75%, 11/01/2020 (a)(b)

    27,439  

USD

    186     

Northwest Hardwoods, Inc., 7.50%, 12/03/2018 (a)(b)

    159,960  

USD

    150     

Novelis Corp., 5.88%, 09/30/2021 (a)(b)

    141,375  

USD

    45     

NRG Energy, Inc., 6.25%, 05/01/2019 (b)

    45,940  

USD

    80     

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

    85,000  

USD

    150     

Oasis Petroleum, Inc., 6.88%, 12/03/2018 (b)

    151,313  

USD

    112     

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

    111,160  

USD

    170     

Pitney Bowes, Inc., 3.88%, 09/01/2021 (b)

    161,500  

USD

    167     

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

    154,057  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

16


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

CORPORATE BONDS (continued)

 

UNITED STATES (continued)

 

USD

    155     

Radiate Holdco LLC / Radiate Finance, Inc., 6.63%, 02/15/2020 (a)(b)

  $ 144,925  

USD

    49     

Radiate Holdco LLC / Radiate Finance, Inc., 6.88%, 02/15/2020 (a)(b)

    47,040  

USD

    199     

Rite Aid Corp., 6.13%, 12/03/2018 (a)(b)

    169,026  

USD

    377     

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

    393,574  

USD

    195     

Sanchez Energy Corp., 6.13%, 12/03/2018 (b)

    72,150  

USD

    255     

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

    244,162  

USD

    62     

Sirius XM Radio, Inc., 6.00%, 07/15/2019 (a)(b)

    63,383  

USD

    72     

Sprint Corp., 7.63%, 11/01/2025 (b)

    74,880  

USD

    289     

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

    308,507  

USD

    120     

State Street Corp., 3M USD LIBOR + 1.000%, 3.33%, 12/03/2018 (b)(c)

    105,379  

USD

    304     

Summit Materials LLC / Summit Materials Finance Corp, 6.13%, 11/16/2018 (b)

    294,120  

USD

    2     

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

    1,790  

USD

    140     

T-Mobile USA, Inc., 6.50%, 01/15/2021 (b)

    147,350  

USD

    200     

Tempo Acquisition LLC / Tempo Acquisition Finance Corp., 6.75%, 06/01/2020 (a)(b)

    190,440  

USD

    309     

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

    297,830  

USD

    109     

TopBuild Corp., 5.63%, 05/01/2021 (a)(b)

    103,823  

USD

    55     

TransDigm, Inc., 6.00%, 12/03/2018 (b)

    55,275  

USD

    85     

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

    85,921  

USD

    150     

Transocean Guardian Ltd., 5.88%, 07/15/2021 (a)(b)(g)

    148,500  

USD

    182     

TTM Technologies, Inc., 5.63%, 10/01/2020 (a)(b)

    177,450  

USD

    303     

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

    295,236  

USD

    187     

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

    185,831  

USD

    278     

Vistra Energy Corp., 7.63%, 11/01/2019 (b)

    293,985  

USD

    213     

WMG Acquisition Corp., 5.63%, 11/30/2018 (a)(b)

    215,396  

USD

    18     

WPX Energy, Inc., 5.75%, 06/01/2021 (b)

    17,910  

USD

    115     

WPX Energy, Inc., 8.25%, 06/01/2023 (b)

    129,231  

USD

    120     

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

    120,900  

USD

    115     

Wyndham Destinations, Inc., 4.15%, 02/01/2024 (b)

    110,688  

USD

    110     

Wyndham Destinations, Inc., 6.35%, 07/01/2025 (b)

    109,450  

USD

    305     

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

    312,381  

USD

    340     

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

    347,650  
      17,613,709  
      

Total Corporate Bonds—66.8% (cost $49,228,820)

    46,546,245  

GOVERNMENT BONDS—61.7%

 

ANGOLA—0.6%

 

USD

    430     

Angolan Government International Bond, 9.38%, 05/08/2048 (a)

    432,184  

ARGENTINA—3.3%

 

ARS

    23,444     

Argentina POM Politica Monetaria, Argentina Central Bank 7-day Repo Reference Rate, 67.49%, 06/21/2020 (c)

    735,724  

USD

    280     

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

    251,300  

USD

    1,090     

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

    907,425  

USD

    323     

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

    245,645  

USD

    203     

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

    171,785  
      2,311,879  

AUSTRALIA—9.7%

 

AUD

    3,500     

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

    2,506,733  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

17


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

GOVERNMENT BONDS (continued)

 

AUSTRALIA (continued)

 

AUD

    5,300     

Treasury Corp. of Victoria, 6.00%, 10/17/2022

  $ 4,272,075  
      6,778,808  

BAHRAIN—0.3%

 

USD

    220     

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

    220,111  

BRAZIL—2.1%

 

BRL

    1,200     

Brazil Notas do Tesouro Nacional, 10.00%, 01/01/2029

    319,579  

BRL

    2,430     

Brazil Notas do Tesouro Nacional Serie F, 10.00%, 01/01/2021

    675,623  

USD

    400     

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

    440,000  
      1,435,202  

COLOMBIA—0.5%

 

USD

    200     

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

    200,000  

USD

    120     

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

    144,900  
      344,900  

COSTA RICA—0.9%

 

USD

    480     

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

    418,800  

USD

    230     

Costa Rica Government International Bond, 7.16%, 03/12/2045 (a)

    191,820  
      610,620  

DOMINICAN REPUBLIC—1.3%

 

USD

    210     

Dominican Republic International Bond, 5.88%, 04/18/2024 (a)(g)

    212,877  

USD

    100     

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

    105,000  

USD

    530     

Dominican Republic International Bond, 8.63%, 04/20/2027 (a)(g)

    594,262  
      912,139  

ECUADOR—0.9%

 

USD

    630     

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

    601,650  

EGYPT—0.8%

 

USD

    640     

Egypt Government International Bond, 7.90%, 02/21/2048 (a)

    572,372  

EL SALVADOR—0.6%

 

USD

    440     

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

    403,150  

GHANA—1.7%

 

GHS

    1,700     

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

    363,847  

USD

    420     

Ghana Government International Bond, 7.63%, 05/16/2029 (a)(g)

    400,809  

USD

    430     

Ghana Government International Bond, 8.13%, 01/18/2026 (a)(g)

    432,001  
      1,196,657  

INDIA—0.4%

 

INR

    20,000     

India Government Bond, 7.73%, 12/19/2034

    259,652  

INDONESIA—4.4%

 

USD

    940     

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

    902,602  

USD

    800     

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

    751,478  

IDR

    8,400,000     

Indonesia Treasury Bond, 5.63%, 05/15/2023

    495,629  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

18


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

GOVERNMENT BONDS (continued)

 

INDONESIA (continued)

 

IDR

    4,800,000     

Indonesia Treasury Bond, 6.13%, 05/15/2028

  $ 265,220  

IDR

    5,826,000     

Indonesia Treasury Bond, 6.63%, 05/15/2033

    315,779  

IDR

    5,800,000     

Indonesia Treasury Bond, 7.50%, 05/15/2038

    328,104  
      3,058,812  

IRAQ—0.7%

 

USD

    330     

Iraq International Bond, 5.80%, 12/16/2018 (a)(b)(g)

    302,276  

USD

    200     

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

    194,692  
      496,968  

KAZAKHSTAN—1.9%

 

USD

    520     

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

    521,300  

USD

    681     

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

    810,833  
      1,332,133  

KENYA—1.1%

 

USD

    420     

Kenya Government International Bond, 6.88%, 06/24/2024 (a)

    408,621  

USD

    410     

Kenya Government International Bond, 8.25%, 02/28/2048 (a)

    373,773  
      782,394  

MALAYSIA—2.1%

 

MYR

    400     

Malaysia Government Bond, 3.44%, 02/15/2021

    95,280  

MYR

    900     

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

    215,033  

MYR

    600     

Malaysia Government Bond, 3.62%, 11/30/2021

    143,135  

MYR

    1,000     

Malaysia Government Bond, 4.05%, 09/30/2021

    241,491  

MYR

    800     

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

    184,279  

MYR

    2,600     

Malaysia Government Bond, 4.76%, 04/07/2037

    614,835  
      1,494,053  

MEXICO—1.4%

 

MXN

    4,600     

Mexican Bonos, 5.75%, 03/05/2026

    189,394  

MXN

    7,850     

Mexican Bonos, 8.00%, 06/11/2020

    382,819  

USD

    400     

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

    398,968  
      971,181  

MONGOLIA—0.5%

 

USD

    400     

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

    380,804  

NEW ZEALAND—9.8%

 

NZD

    3,800     

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

    2,878,902  

NZD

    6,000     

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

    3,962,388  
      6,841,290  

NIGERIA—1.9%

 

NGN

    326,000     

Nigeria Government Bond, 12.50%, 01/22/2026

    784,196  

USD

    200     

Nigeria Government International Bond, 7.14%, 02/23/2030 (a)

    183,711  

USD

    200     

Nigeria Government International Bond, 7.63%, 11/28/2047 (a)

    176,328  

USD

    200     

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

    192,236  
      1,336,471  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

19


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

GOVERNMENT BONDS (continued)

 

OMAN—0.3%

 

USD

    230     

Oman Government International Bond, 6.75%, 01/17/2048 (a)

  $ 209,875  

PARAGUAY—0.3%

 

USD

    200     

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

    199,750  

PERU—1.0%

 

PEN

    805     

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

    237,383  

PEN

    1,450     

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

    459,106  
      696,489  

PHILIPPINES—0.5%

 

PHP

    17,000     

Philippine Government Bond, 6.25%, 03/22/2028

    282,476  

USD

    40     

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

    41,348  
      323,824  

POLAND—0.6%

 

PLN

    1,400     

Republic of Poland Government Bond, 4.00%, 10/25/2023

    390,576  

QATAR—0.3%

 

USD

    217     

Qatar Government International Bond, 5.10%, 04/23/2048 (a)

    220,255  

ROMANIA—1.8%

 

USD

    1,260     

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

    1,283,688  

RUSSIA—1.4%

 

RUB

    26,000     

Russian Federal Bond – OFZ, 7.70%, 03/23/2033

    369,635  

RUB

    25,200     

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

    375,882  

USD

    200     

Russian Foreign Bond – Eurobond, 4.75%, 05/27/2026 (a)

    197,300  
      942,817  

RWANDA—0.8%

 

USD

    350     

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

    352,048  

USD

    200     

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

    201,170  
      553,218  

SENEGAL—0.5%

 

USD

    330     

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

    351,622  

SOUTH AFRICA—2.1%

 

ZAR

    5,650     

Republic of South Africa Government Bond, 10.50%, 12/21/2026

    406,118  

USD

    1,030     

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

    952,750  

USD

    100     

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

    92,956  
      1,451,824  

SRI LANKA—0.8%

 

LKR

    5,000     

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

    27,870  

LKR

    10,000     

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

    56,779  

LKR

    15,000     

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

    86,358  

USD

    430     

Sri Lanka Government International Bond, 6.75%, 04/18/2028 (a)

    378,405  
      549,412  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

20


Portfolio of Investments (continued)

As of October 31, 2018

 

 

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

GOVERNMENT BONDS (continued)

 

SURINAME—0.3%

 

USD

    200     

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

  $ 196,500  

TANZANIA—0.1%

 

USD

    67     

Tanzania Government International Bond, 6M USD LIBOR + 6.000%, 8.54%, 03/09/2020 (a)(c)(g)

    68,016  

TUNISIA—0.5%

 

USD

    450     

Banque Centrale de Tunisie International Bond, 5.75%, 01/30/2025 (a)

    381,495  

TURKEY—1.1%

 

TRY

    4,900     

Turkey Government Bond, 8.80%, 09/27/2023

    603,997  

USD

    210     

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

    189,165  
      793,162  

UKRAINE—1.7%

 

USD

    1,260     

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

    1,157,698  

URUGUAY—0.7%

 

USD

    50     

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

    49,375  

USD

    146     

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

    187,902  

USD

    165     

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

    214,500  
      451,777  
      

Total Government Bonds—61.7% (cost $46,400,574)

    42,995,428  

COMMON STOCKS—0.0%

 

UNITED STATES—0.0%

 

USD

    657     

Cenveo Enterprises, Inc. (f)(j)(k)(l)

    18,422  
      

Total Common Stocks— —% (cost $68,595)

    18,422  
Shares or
Principal
Amount
          Value
 

SHORT-TERM INVESTMENT—6.0%

 

UNITED STATES—6.0%

 

USD

    4,175,747     

State Street Institutional U.S. Government Money Market Fund, Premier Class,
2.09% (m)

    4,175,747  
            

Total Short-Term Investment—6.0% (cost $4,175,747)

    4,175,747  
            

Total Investments—134.5% (cost $99,873,736) (n)

    93,735,842  
            

Liabilities in Excess of Other Assets—(34.5)%

    (24,042,354
            

Net Assets—100.0%

  $ 69,693,488  

 

(a)   Denotes a restricted security.
(b)   The maturity date presented for these instruments represents the next call/put date.
(c)   Variable rate instrument. The rate shown is based on the latest available information as of October 31, 2018. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.
(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)   Security is in default.

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

21


Portfolio of Investments (continued)

As of October 31, 2018

 

 

(f)   Illiquid security.
(g)   Sinkable security.
(h)   Payment-in-kind. This is a type of bond that pays interest in additional bonds rather than in cash.
(i)   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.
(j)   Level 3 security. See Note 2(a) of the accompanying Notes to Financial Statements.
(k)   Fair Values are determined pursuant to procedures approved by the Fund’s Board of Directors. Unless otherwise noted, securities are valued by applying valuation factors to the exchange traded price. See Note 2(a) of the accompanying Notes to Financial Statements.
(l)   Security is Delisted.
(m)   Registered investment company advised by State Street Global Advisors. The rate shown is the 7-day yield as of October 31, 2018.
(n)   See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities.

 

ARS—Argentine Peso   INR—Indian Rupee   PLN—Polish Zloty
AUD—Australian Dollar   KRW—South Korean Won   RUB—New Russian Ruble
BRL—Brazilian Real   LKR—Sri Lanka Rupee   SGD—Singapore Dollar
CNH—Chinese Yuan Renminbi Offshore   MXN—Mexican Peso   THB—Thai Baht
CNY—Chinese Yuan Renminbi   MYR—Malaysian Ringgit   TRY—Turkish Lira
EUR—Euro Currency   NGN—Nigerian Naira   TWD—New Taiwan Dollar
GBP—British Pound Sterling   NZD—New Zealand Dollar   UAH—Ukraine hryvna
GHS—Ghanaian Cedi   PEN—Peruvian Sol   USD—U.S. Dollar
IDR—Indonesian Rupiah   PHP—Philippine Peso   ZAR—South African Rand

At October 31, 2018, 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

 
11/14/2018   

Royal Bank of Canada

     GBP7,500        USD9,541      $ 9,591      $ 50  
11/30/2018   

Royal Bank of Canada

     GBP6,500        USD8,446        8,318        (128

Chinese Yuan Renminbi/United States Dollar

 
01/11/2019   

HSBC Bank USA

     CNY1,394,980        USD199,999        199,409        (590

Chinese Yuan Renminbi Offshore/United States Dollar

 
01/11/2019   

UBS AG

     CNH12,635,983        USD1,812,719        1,805,755        (6,964

Euro/United States Dollar

 
11/14/2018   

Citibank N.A.

     EUR209,500        USD244,133        237,508        (6,625
11/14/2018   

Goldman Sachs & Co.

     EUR127,000        USD143,860        143,978        118  
11/14/2018   

HSBC Bank USA

     EUR21,000        USD23,917        23,807        (110
11/14/2018   

JPMorgan Chase Bank N.A.

     EUR19,000        USD22,299        21,540        (759
11/14/2018   

Royal Bank of Canada

     EUR10,000        USD11,583        11,337        (246

Indonesian Rupiah/United States Dollar

 
01/24/2019   

HSBC Bank USA

     IDR7,714,500,000        USD499,999        499,978        (21

New Russian Ruble/United States Dollar

 
11/27/2018   

Deutsche Bank AG

     RUB48,900,000        USD734,676        739,963        5,287  

Philippine Peso/United States Dollar

 
01/31/2019   

HSBC Bank USA

     PHP33,702,500        USD625,000        628,103        3,103  

Singapore Dollar/United States Dollar

 
11/02/2018   

UBS AG

     SGD2,050,000        USD1,504,636        1,479,984        (24,652
12/03/2018   

UBS AG

     SGD2,200,000        USD1,588,648        1,589,308        660  

South Korean Won/United States Dollar

 
12/07/2018   

HSBC Bank USA

     KRW2,807,774,000        USD2,500,000        2,463,320        (36,680

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

22


Portfolio of Investments (concluded)

As of October 31, 2018

 

 

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

Thai Baht/United States Dollar

 
12/21/2018   

UBS AG

     THB60,400,000        USD1,868,344      $ 1,826,048      $ (42,296
       $ 11,687,947      $ (109,853
Sale Contracts
Settlement Date*
   Counterparty    Amount
Purchased
     Amount Sold      Fair Value      Unrealized
Appreciation/
(Depreciation)
 

United States Dollar/Australian Dollar

 
11/29/2018   

Royal Bank of Canada

     USD4,259,929        AUD5,798,543      $ 4,107,351      $ 152,578  

United States Dollar/Brazilian Real

 
11/27/2018   

Citibank N.A.

     USD923,843        BRL3,615,000        969,301        (45,458

United States Dollar/British Pound

 
11/30/2018   

Citibank N.A.

     USD3,650,261        GBP2,800,000        3,583,202        67,059  

United States Dollar/Euro

 
11/14/2018   

HSBC Bank USA

     USD5,390,630        EUR4,626,000        5,244,436        146,194  

United States Dollar/Indian Rupee

 
11/30/2018   

Goldman Sachs & Co.

     USD1,700,000        INR126,097,500        1,697,597        2,403  

United States Dollar/Malaysian Ringgit

 
12/14/2018   

BNP Paribas S.A.

     USD500,000        MYR 2,072,350        494,905        5,095  

United States Dollar/New Russian Ruble

 
11/27/2018   

Deutsche Bank AG

     USD728,221        RUB48,900,000        739,963        (11,742

United States Dollar/New Taiwan Dollar

 
01/04/2019   

UBS AG

     USD300,000        TWD9,130,500        296,408        3,592  

United States Dollar/New Zealand Dollar

 
12/21/2018   

UBS AG

     USD1,835,375        NZD2,800,000        1,828,050        7,325  

United States Dollar/Singapore Dollar

 
11/02/2018   

UBS AG

     USD1,479,397        SGD2,050,000        1,479,984        (587

United States Dollar/South African Rand

 
01/10/2019   

UBS AG

     USD388,817        ZAR5,810,000        390,462        (1,645

United States Dollar/South Korean Won

 
12/07/2018   

Royal Bank of Canada

     USD100,000        KRW111,538,750        97,855        2,145  
       $ 20,929,514      $ 326,959  

Total unrealized appreciation on open forward foreign currency exchange contracts

     $ 395,609  

Total unrealized depreciation on open forward foreign currency exchange contracts

       (178,503

 

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

At October 31, 2018, the Fund held the following centrally cleared interest rate swaps:

 

Currency   Notional
Amount
    Expiration
Date
    Counterparty   Receive (Pay)
Floating Rate
  Floating Rate Index   Fixed
Rate
    Premiums
Paid
(Received)
    Unrealized
Appreciation
 

USD

    16,500,000       10/25/2027    

Citibank

  Receive  

3-month LIBOR Index

    2.36%     $     $ 1,102,414  

USD

    12,100,000       11/04/2024    

Citibank

  Receive  

3-month LIBOR Index

    2.44%             396,502  
                                        $     $ 1,498,916  

 

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

23


Statement of Assets and Liabilities

As of October 31, 2018

 

 

Assets

        

Investments, at value (cost $95,697,989)

   $ 89,560,095  

Short-term investments, at value (cost $4,175,747)

     4,175,747  

Foreign currency, at value (cost $2,330,010)

     2,291,648  

Cash at broker for interest rate swaps

     431,774  

Cash at broker for forward foreign currency contracts

     70,000  

Interest and dividends receivable

     1,376,172  

Receivable for investments sold

     610,007  

Unrealized appreciation on forward foreign currency exchange contracts

     395,609  

Due from broker

     461,796  

Variation margin receivable for centrally cleared interest rate swap contracts

     89,258  

Prepaid expenses

     32,640  

Total assets

     99,494,746  

Liabilities

  

Bank loan payable (Note 7)

     28,600,000  

Payable for investments purchased

     474,730  

Due to custodian

     321,735  

Unrealized depreciation on forward foreign currency exchange contracts

     178,503  

Investment management fees payable (Note 3)

     58,395  

Administration fees payable (Note 3)

     11,230  

Interest payable on bank loan

     4,815  

Investor relations fees payable (Note 3)

     2,883  

Other accrued expenses

     148,967  

Total liabilities

     29,801,258  
          

Net Assets

   $ 69,693,488  

Composition of Net Assets:

  

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

   $ 8,725  

Paid-in capital in excess of par

     76,602,010  

Distributable accumulated loss

     (6,917,247

Net Assets

   $ 69,693,488  

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

   $ 7.99  

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

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

24


Statement of Operations

For the Year Ended October 31, 2018

 

 

Net Investment Income

        

Income

  

Interest and amortization of discount and premium (net of foreign withholding taxes of $56,498)

   $ 6,132,435  

Other income

     34,066  

Total Investment Income

     6,166,501  

Expenses

  

Investment management fee (Note 3)

     695,934  

Director fees and expenses

     207,022  

Administration fee (Note 3)

     133,833  

Independent auditors fees and expenses

     77,765  

Reports to shareholders and proxy solicitation

     66,805  

Insurance expense

     60,256  

Investor relations fees and expenses (Note 3)

     54,500  

Custodian fees and expenses

     49,428  

Legal fees and expenses

     34,849  

Transfer agent’s fees and expenses

     31,825  

Bank loan fees and expenses

     13,941  

Miscellaneous

     37,224  

Total operating expenses, excluding interest expense

     1,463,382  

Interest expense (Note 7)

     869,886  

Total operating expenses before reimbursed/waived expenses

     2,333,268  

Less: Investor relations fee waiver (Note 3)

     (16,302

Net operating expenses

     2,316,966  
          

Net Investment Income

     3,849,535  

Net Realized/Unrealized Gain/(Loss) from Investments and Foreign Currency Related Transactions:

  

Net realized gain/(loss) from:

  

Investment transactions (including $19,566 capital gains tax)

     (918,587

Interest rate swaps

     (90,909

Forward foreign currency exchange contracts

     992,826  

Foreign currency transactions

     (1,314,973
       (1,331,643

Net change in unrealized appreciation/(depreciation) on:

  

Investments (including change in deferred capital gains tax of $7,156)

     (5,248,994

Interest rate swaps

     1,885,833  

Forward foreign currency exchange rate contracts

     (136,373

Foreign currency translation

     (1,990,875
       (5,490,409

Net (loss) from investments, interest rate swaps and foreign currencies

     (6,822,052

Net Decrease in Net Assets Resulting from Operations

   $ (2,972,517

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

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

25


Statements of Changes in Net Assets

 

 

 

      For the
Year Ended
October 31, 2018
     For the
Year Ended
October 31, 2017
 

Increase/(Decrease) in Net Assets

     

Operations:

     

Net investment income

   $ 3,849,535      $ 4,124,812  

Net realized gain/(loss) from investments and interest rate swaps

     (1,009,496      4,088,073  

Net realized loss from foreign currency transactions

     (322,147      (2,772,506

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

     (3,363,161      (1,431,380

Net change in unrealized appreciation/(depreciation) on foreign currency translation

     (2,127,248      2,866,563  

Net increase/(decrease) in net assets resulting from operations

     (2,972,517      6,875,562  

Distributions to Shareholders from:

     

Distributable earnings(a)

     (1,414,651      (1,221,998

Tax return of capital

     (5,914,171      (6,107,352

Net decrease in net assets from distributions

     (7,328,822      (7,329,350

Repurchase of common stock resulting in the reduction of 0 and 19,539 shares of common stock, respectively (Note 6)

            (157,833

Change in net assets from capital transactions

            (157,833

Change in net assets resulting from operations

     (10,301,339      (611,621

Net Assets:

     

Beginning of year

     79,994,827        80,606,448  

End of year

   $ 69,693,488      $ 79,994,827  

 

(a)   Per the Securities and Exchange Commission release #33-10532 “Disclosure Update and Simplification”; the Fund is no longer required to differentiate distributions from earnings as either from net investment income or net realized capital gains. For the year ended October 31, 2017, all distributions from distributable earnings were from net investment income.

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

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

26


Statement of Cash Flows

For the year ended October 31, 2018

 

 

Cash Flows from Operating Activities

        

Net increase in net assets resulting from operations

   $ (2,972,517

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

  

Investments purchased

     (48,968,083

Investments sold and principal repayments

     55,602,766  

Increase in short-term investments, excluding foreign government securities

     (2,024,998

Net amortization/accretion of premium (discount)

     203,435  

Decrease in cash at broker

     1,133,949  

Decrease in interest receivable

     116,486  

Net unrealized (appreciation) depreciation on forward foreign exchange contracts

     136,373  

Decrease in bank loan payable

     (2,900,000

Decrease in prepaid expenses

     500  

Decrease in interest payable on bank loan

     (53,423

Decrease in accrued investment management fee

     (5,360

Increase in accrued expenses

     55,213  

Decrease in deferred foreign capital gains tax

     (423

Net change in unrealized appreciation from investments

     5,248,994  

Net change in unrealized appreciation from foreign currency translations

     1,990,875  

Net realized loss on investments in securities

     918,587  

Net cash provided by operating activities

     8,482,374  

Cash Flows from Financing Activities

  

Decrease in payable due to custodian

     (2,219,950

Distributions paid to shareholders

     (7,328,822

Net cash paid (received) for swap contracts

     (95,032

Net cash used in financing activities

   $ (9,643,804

Effect of exchange rate on cash

     (17,121

Net change in cash

     (1,178,551

Cash at beginning of year

     3,470,199  

Cash at end of year

   $ 2,291,648  

Supplemental disclosure of cash flow information:

  

Cash paid for interest and fees on borrowings:

   $ 923,309  

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

27


Financial Highlights

 

 

 

     For the Fiscal Years Ended October 31,  
      2018      2017      2016      2015      2014  

Per Share Operating Performance(a):

                                            
Net asset value per common share, beginning of year      $9.17        $9.22        $9.38        $11.49        $12.25  
Net investment income      0.44        0.47        0.33 (b)        0.39        0.47  
Net realized and unrealized gains/(losses) on investments, interest rate swaps, futures contracts and foreign currency transactions      (0.78      0.32        0.33        (1.71      (0.32
Total from investment operations applicable to common shareholders      (0.34      0.79        0.66        (1.32      0.15  
Distributions to common shareholders from:

 

Net investment income      (0.16      (0.14             (0.76      (0.93
Tax return of capital      (0.68      (0.70      (0.84      (0.08       
Total distributions      (0.84      (0.84      (0.84      (0.84      (0.93
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      $7.99        $9.17        $9.22        $9.38        $11.49  
Market value, end of year      $8.22        $8.96        $8.46        $8.11        $10.55  
Total Investment Return Based on(c):               
Market value      1.27%        16.74%        15.48%        (15.54%      2.99%  
Net asset value      (3.81%      9.63%        8.81% (b)        (10.30%      2.09%  
Ratio to Average Net Assets Applicable to Common Shareholders/Supplementary Data:               
Net assets applicable to common shareholders, end of year (000 omitted)      $69,693        $79,995        $80,606        $82,947        $105,653  
Average net assets applicable to common shareholders (000 omitted)      $76,372        $79,658        $81,601        $93,299        $110,812  
Net operating expenses, net of fee waivers      3.03%        2.77%        2.47%        2.55% (d)        2.18%  
Net operating expenses, excluding fee waivers      3.06%        2.78%        2.49%        2.56% (d)         
Net operating expenses, excluding interest expense, net of fee waivers      1.89%        1.98%        1.90%        2.09% (d)        1.76%  
Net investment income      5.04%        5.18%        3.59% (b)        3.77%        3.94%  
Portfolio turnover      45%        95%        80%        41%        59%  
Senior securities (loan facility) outstanding (000 omitted)      $28,600        $31,500        $31,500        $31,500        $40,000  
Asset coverage ratio on revolving credit facility at year end      344%        354%        356%        363%        364%  
Asset coverage per $1,000 on revolving credit facility at year end(e)      $3,437        $3,540        $3,559        $3,633        $3,641  

 

Aberdeen Global Income Fund, Inc.

 

28


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 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.
(e)   Asset coverage ratio is calculated by dividing net assets plus the amount of any borrowings, including Series A Mandatory Redeemable Preferred Shares, for investment purposes by the amount of any borrowings.

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

See Notes to Financial Statements.

 

Aberdeen Global Income Fund, Inc.

 

29


Notes to Financial Statements

October 31, 2018

 

 

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. 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, 2018, 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 and tax records of the Fund are maintained in U.S. Dollars and the U.S. Dollar is used as both the functional and reporting currency.

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. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. 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.

 

 

Aberdeen Global Income Fund, Inc.

 

30


Notes to Financial Statements (continued)

October 31, 2018

 

 

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 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 1940 Act and has an objective, which is not guaranteed, to maintain a $1.00 per share 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 and centrally cleared 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 (for reasons other than because the foreign exchange on which they trade closed before the (“Valuation Time”), 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. Under normal circumstances, the Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time). 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.

 

31


Notes to Financial Statements (continued)

October 31, 2018

 

 

The following is a summary of the inputs used as of October 31, 2018 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-Quoted
Prices ($)
       Level 2-Other
Significant
Observable
Inputs ($)
       Level 3-Significant
Unobservable
Inputs ($)
       Total ($)  

Investments in Securities

 

Fixed Income Investments

                   

Corporate Bonds

     $        $ 46,546,245        $        $ 46,546,245  

Government Bonds

                42,995,428                   42,995,428  

Common Stocks

                         18,422          18,422  

Total Investments

                89,541,673          18,422          89,560,095  

Short-Term Investment

       4,175,747                            4,175,747  

Total Investments

     $ 4,175,747        $ 89,541,673        $ 18,422        $ 93,735,842  

Other Financial Instruments

                   

Centrally Cleared Interest Rate Swap Agreements

     $        $ 1,498,916        $        $ 1,498,916  

Forward Foreign Currency Exchange Contracts

                395,609                   395,609  

Total Other Financial Instruments

     $        $ 1,894,525        $        $ 1,894,525  

Total Assets

     $ 4,175,747        $ 91,436,198        $ 18,422        $ 95,630,367  

Liabilities

                   

Other Financial Instruments

                   

Forward Foreign Currency Exchange Contracts

     $        $ (178,503      $        $ (178,503

Total Liabilities

     $        $ (178,503      $        $ (178,503

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

 

During the fiscal year ended October 31, 2018, there have been no transfers between levels and no significant changes to the fair valuation methodologies. Level 3 investments held during and at the end of the fiscal year in relation to net assets were not significant (less than 0.03% of total net assets) and accordingly, a reconciliation of Level 3 assets for the period ended October 31, 2018 is not presented. The valuation technique used at October 31, 2018 was an independent evaluated price on the debt security prior to restructure.

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.
 

 

Aberdeen Global Income Fund, Inc.

 

32


Notes to Financial Statements (continued)

October 31, 2018

 

 

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.

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, 2018, the Fund used forward contracts to hedge a portion of its currency exposure.

While the Fund may enter into forward contracts to seek to reduce currency exchange rate risks or enhance return, 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, when used for hedging, 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 market price at the time of default.

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

 

 

Aberdeen Global Income Fund, Inc.

 

33


Notes to Financial Statements (continued)

October 31, 2018

 

 

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.

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 is required to provide variation and/or initial margin for OTC Swaps pursuant to further rules and regulations related to Dodd Frank and EMIR under normal circumstances. 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 Funds’ 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 Funds to cover the Funds’ 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, 2018, 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.

 

34


Notes to Financial Statements (continued)

October 31, 2018

 

 

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, 2018:

 

     Asset Derivatives      Liability Derivatives  
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)

   Unrealized appreciation on receivable for centrally cleared interest rate swaps    $ 1,498,916      Unrealized depreciation on payable for centrally cleared interest rate swaps    $  

Forward foreign exchange contracts (foreign exchange risk)

   Unrealized appreciation on forward currency exchange contracts    $ 395,609      Unrealized depreciation on forward currency exchange contracts    $ 178,503  

Total

        $ 1,894,525           $ 178,503  

 

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

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

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, 2018 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)

                 

BNP Paribas S.A.

  $ 5,095     $     $     $ 5,095       $     $     $     $  

Citibank N.A.

    67,059       (52,083           14,976         52,083       (52,083            

Deutsche Bank AG

    5,287       (5,287                   11,742       (5,287           6,455  

Goldman Sachs & Co.

    2,521                   2,521                            

HSBC Bank USA

    149,297       (37,401           111,896         37,401       (37,401            

JPMorgan Chase Bank N.A.

                              759                   759  

Royal Bank of Canada

    154,773       (374           154,399         374       (374            

UBS AG

    11,577       (11,577                   76,144       (11,577           64,567  

 

1.   In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization.
2.   Includes financial instrument which are not subject to a master netting arrangement across funds, or another similar arrangement.

 

Aberdeen Global Income Fund, Inc.

 

35


Notes to Financial Statements (continued)

October 31, 2018

 

 

3.   Net amounts represent the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting agreement with the same legal entity.

 

The   effect of derivative instruments on the Statement of Operations for the fiscal year ended October 31, 2018:

 

Derivatives not accounted for as
hedging instruments
     Location of Gain or (Loss)
on Derivatives
     Realized
Gain or
(Loss) on
Derivatives
       Change in
Unrealized
Appreciation/
(Depreciation)
on Derivatives
 

Interest rate swaps (interest rate risk)

     Realized/Unrealized Gain/(Loss) from Investments, Interest Rate Swaps and Foreign Currencies      $ (90,909      $ 1,885,833  

Forward foreign exchange contracts (foreign exchange risk)

     $ 992,826        $ (136,373

Total

            $ 901,917        $ 1,749,460  

 

Information about derivatives reflected as of the date of this report is generally indicative of the type of activity for the fiscal year ended October 31, 2018. The table below summarizes the weighted average values of derivatives holdings for the Fund during the fiscal year ended October 31, 2018.

 

Derivative     

Average

Notional Value

 

Purchase Forward Foreign Currency Contracts

     $ 12,707,004  

Sale Forward Foreign Currency Contracts

       17,101,137  

Interest Rate Swap Contracts

       30,836,364  

The Fund values derivatives at fair value, as described in the results of operations. Accordingly, the Fund does not follow hedge accounting even for derivatives employed as economic hedges.

e. Bank Loans:

The Fund may invest in bank loans. Bank loans include floating and fixed-rate debt obligations. Floating rate loans are debt obligations issued by companies or other entities with floating interest rates that reset periodically. Bank loans may include, but are not limited to, term loans, delayed funding loans, bridge loans and revolving credit facilities. Loan interest will primarily take the form of assignments purchased in the primary or secondary market but may include participations. Floating rate loans are secured by specific collateral of the borrower and are senior to most other securities of the borrower (e.g., common stock or debt instruments) in the event of bankruptcy. Floating rate loans are often issued in connection with recapitalizations, acquisitions, leveraged buyouts, and refinancings. Floating rate loans are typically structured and administered by a financial institution that acts as the agent of the lenders

participating in the floating rate loan. Floating rate loans may be acquired directly through the agent, as an assignment from another lender who holds a direct interest in the floating rate loan, or as a participation interest in another lender’s portion of the floating rate loan.

The Fund may also enter into, or acquire participations in, delayed funding loans and revolving credit facilities. Delayed funding loans and revolving credit facilities are borrowings in which the Fund agrees to make loans up to a maximum amount upon demand by the borrowing issuer for a specified term. A revolving credit facility differs from a delayed funding loan in that as the borrowing issuer repays the loan, an amount equal to the repayment is again made available to the borrowing issuer under the facility. The borrowing issuer may at any time borrow and repay amounts so long as, in the aggregate, at any given time the amount borrowed does not exceed the maximum amount established by the loan agreement. Delayed funding loans and revolving credit facilities usually provide for floating or variable rates of interest.

See “Bank Loan Risk” under “Portfolio Investment Risks” for information regarding the risks associated with an investment in bank loans.