N-CSRS 1 tm2419829d3_ncsrs.htm N-CSRS

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number: 811-07694

Morgan Stanley Emerging Markets Debt Fund, Inc.

(Exact Name of Registrant as Specified in Charter)

1585 Broadway, New York, New York 10036

(Address of Principal Executive Offices)

John H. Gernon

1585 Broadway, New York, New York 10036

(Name and Address of Agent for Services)

(212) 762-1886

(Registrant’s Telephone Number)

December 31

Date of Fiscal Year End

June 30, 2024

Date of Reporting Period

Item 1. Reports to Stockholders

(a)

Morgan Stanley Investment Management Inc.
Adviser

Morgan Stanley Emerging Markets

Debt Fund, Inc.
NYSE: MSD

Semi-Annual Report

June 30, 2024

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Table of Contents

Performance Summary		3
Portfolio of Investments		4
Statement of Assets and Liabilities		16
Statement of Operations		17
Statements of Changes in Net Assets		18
Financial Highlights		19
Notes to Financial Statements		20
Investment Advisory Agreement Approval		33
Portfolio Management		36
Investment Policy		37
Dividend Reinvestment and Cash Purchase Plan		45
Important Notices		46
U.S. Customer Privacy Notice		47
Directors and Officers Information	Back Cover

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Performance Summary

Average Annual Total Returns as of June 30, 2024

	6 Month*			One Year			Five Years			Ten Years
NAV		5.31	%		13.66	%		0.87	%		2.64	%
Market price		11.95	%		28.53	%		2.68	%		3.64	%
J.P. Morgan EMBI Global Diversified Index⁽¹⁾		2.34	%		9.23	%		-0.03	%		2.60	%
Emerging Markets Debt Blended Index⁽²⁾		2.34	%		9.23	%		-0.01	%		2.21	%

* Cumulative return

Performance data quoted in the table represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Performance assumes that all dividends and distributions, if any, were reinvested at prices obtained under the Fund's dividend reinvestment plan. For the most recent month-end performance figures, please visit www.morganstanley.com/im/closedendfundsshareholderreports. Investment returns and principal value will fluctuate so that Fund shares, when sold, may be worth more or less than their original cost. The table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the sale of fund shares. Total return, market price, NAV, market price distribution rate, and NAV distribution rate will fluctuate with changes in market conditions. The Fund's total returns are based upon the market value and net asset value on the last business day of the period.

Distributions
Total Distributions per share for the period	$	0.43
Distribution Rate at NAV⁽³⁾		11.58	%
Distribution Rate at Market Price⁽³⁾		11.99	%
% Premium/(Discount) to NAV⁽⁴⁾		(3.42	)%

(1) The J.P. Morgan Emerging Markets Bond Global Diversified (EMBI Global Diversified) Index tracks total returns for U.S. dollar-denominated debt instruments issued by emerging markets sovereign and quasi-sovereign entities: Brady Bonds, loans, Eurobonds and local market instruments for emerging market countries but limits the weights of countries with larger debt stocks by only including a specified portion of these countries' eligible current face amounts of debt outstanding. The performance of the Index is calculated in U.S. dollars and assumes reinvestment of net dividends. It is not possible to invest directly in an index.

(2) The Emerging Markets Debt Blended Index is a performance linked benchmark of the old and new benchmark of the Fund. The old benchmark represented by J.P. Morgan Emerging Markets Bond Global Index (benchmark that tracks total returns for U.S. dollar denominated debt instruments issued by emerging markets sovereign and quasi-sovereign entities) from the Fund's inception to December 31, 2019 and the new benchmark represented by J.P. Morgan Emerging Markets Bond Global Diversified Index for periods thereafter. The performance of the Index is calculated in U.S. dollars and assumes reinvestment of net dividends. It is not possible to invest directly in an index.

(3) The Distribution Rate is based on the Fund's last regular distribution per share in the period (annualized) divided by the Fund's NAV or market price at the end of the period. The Fund's distributions may be comprised of amounts characterized for federal income tax purposes as qualified and non-qualified ordinary dividends, capital gains and non-dividend distributions, also known as return of capital. The Fund will determine the federal income tax character of distributions paid to a shareholder after the end of the calendar year. The Fund's distributions are determined by the investment adviser based on its current assessment of the Fund's long-term return potential. Fund distributions may be affected by numerous factors including changes in Fund performance, the cost of financing for leverage, portfolio holdings, realized and projected returns, and other factors. As portfolio and market conditions change, the rate of distributions paid by the Fund could change.

(4) The shares of the Fund often trade at a discount or premium to their net asset value. The discount or premium may vary over time and may be higher or lower than what is quoted in this report.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Portfolio of Investments

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
FIXED INCOME SECURITIES (98.1%)
Albania (1.7%)
Sovereign (1.7%)
Albania Government International Bond, 3.50%, 11/23/31	EUR	539	$	521
5.90%, 6/9/28		1,861		2,056
				2,577
Angola (3.1%)
Sovereign (3.1%)
Angolan Government International Bond, 8.75%, 4/14/32	$	2,011		1,785
9.13%, 11/26/49		2,045		1,682
9.38%, 5/8/48		1,494		1,253
				4,720
Argentina (1.3%)
Corporate Bonds (0.8%)
Generacion Mediterranea SA/Central Termica Roca SA, 12.50%, 5/28/27 (a)		552		543
Pan American Energy LLC, 8.50%, 4/30/32 (a)		619		649
				1,192
Sovereign (0.5%)
Argentine Republic Government International Bond, 3.50%, 7/9/41 (b)		500		196
3.63%, 7/9/35 (b)		600		253
4.25%, 1/9/38 (b)		700		321
				770
				1,962
Bahamas (0.5%)
Sovereign (0.5%)
Bahamas Government International Bond, 6.00%, 11/21/28		436		383
8.95%, 10/15/32		400		376
				759

	Face Amount (000)		Value (000)
Bahrain (1.8%)
Sovereign (1.8%)
Bahrain Government International Bond, 5.45%, 9/16/32	$	600	$	553
5.63%, 5/18/34		1,400		1,261
7.00%, 10/12/28		900		929
				2,743
Barbados (0.5%)
Sovereign (0.5%)
Barbados Government International Bond, 6.50%, 10/1/29		838		800
Benin (2.6%)
Sovereign (2.6%)
Benin Government International Bond, 4.88%, 1/19/32	EUR	400		360
4.95%, 1/22/35		1,120		952
6.88%, 1/19/52		2,930		2,482
7.96%, 2/13/38	$	200		186
				3,980
Brazil (4.8%)
Corporate Bonds (4.2%)
Braskem Netherlands Finance BV, 8.50%, 1/23/81		906		908
Coruripe Netherlands BV, 10.00%, 2/10/27		830		729
FORESEA Holding SA, 7.50%, 6/15/30		980		914
Gol Finance SA 1 Month Term SOFR + 10.50%, 15.84%, 1/29/25 (a)(c)		234		254
MC Brazil Downstream Trading SARL, 7.25%, 6/30/31		751		666
MV24 Capital BV, 6.75%, 6/1/34		473		452
Samarco Mineracao SA, 9.00%, 6/30/31 (d)(e)(f)		1,684		1,567
Yinson Boronia Production BV, 8.95%, 7/31/42 (a)		898		907
				6,397

The accompanying notes are an integral part of the financial statements.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Portfolio of Investments (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Sovereign (0.6%)
Brazilian Government International Bond, 6.13%, 1/22/32	$	1,016	$	1,004
				7,401
Cameroon (0.7%)
Sovereign (0.7%)
Republic of Cameroon International Bond, 5.95%, 7/7/32	EUR	1,212		1,011
Cayman Islands (0.5%)
Corporate Bond (0.5%)
Ittihad International Ltd., 9.75%, 11/9/28 (g)		790		806
Chile (1.3%)
Corporate Bond (0.3%)
Liberty Latin America Ltd., 2.00%, 7/15/24	$	388		387
Sovereign (1.0%)
Chile Government International Bond, 2.55%, 7/27/33		1,400		1,138
3.50%, 1/25/50		600		433
				1,571
				1,958
China (1.6%)
Corporate Bonds (1.6%)
China Oil & Gas Group Ltd., 4.70%, 6/30/26		880		811
KWG Group Holdings Ltd., 7.88%, 8/30/24 (e)(f)		654		38
Longfor Group Holdings Ltd., 3.85%, 1/13/32		338		223
Shimao Group Holdings Ltd., 5.60%, 7/15/26 (e)(f)		1,783		92
Sunac China Holdings Ltd., PIK 1.00%, 9/30/32 (d)(e)(f)		123		8
6.00%, 9/30/26 (d)(e)(f)		102		14
6.25%, 9/30/27 (d)(e)(f)		102		12
6.50%, 9/30/27 (d)(e)(f)		205		23
6.75%, 9/30/28 (d)(e)(f)		308		32
7.00%, 9/30/29 (d)(e)(f)		308		29
7.25%, 9/30/30 (d)(e)(f)		145		13

	Face Amount (000)		Value (000)
Times China Holdings Ltd., 5.55%, 6/4/24 (e)(f)	$	2,015	$	50
6.75%, 7/16/23 (e)(f)		410		10
Yuexiu Co. Ltd. REIT MTN, 2.65%, 2/2/26		1,241		1,098
				2,453
Colombia (3.0%)
Corporate Bonds (3.0%)
ABRA Global Finance 6.00% Cash, 5.50% PIK, 11.50%, 3/2/28 (a)(d)		357		350
Avianca Midco 2 PLC, 9.00%, 12/1/28		1,181		1,142
Banco Davivienda SA, 6.65%, 4/22/31 (h)		208		154
Banco de Occidente SA, 10.88%, 8/13/34		1,160		1,240
Bancolombia SA, 8.63%, 12/24/34		1,022		1,044
Canacol Energy Ltd., 5.75%, 11/24/28		1,337		708
				4,638
Costa Rica (0.8%)
Sovereign (0.8%)
Costa Rica Government International Bond, 6.55%, 4/3/34		1,200		1,238
Dominican Republic (1.8%)
Sovereign (1.8%)
Dominican Republic International Bond, 4.88%, 9/23/32		1,200		1,077
5.95%, 1/25/27		400		397
6.00%, 7/19/28		600		596
6.85%, 1/27/45 (a)		500		494
7.45%, 4/30/44 (a)		200		210
				2,774
Ecuador (2.0%)
Sovereign (2.0%)
Ecuador Government International Bond, 0.00%, 7/31/30		3,408		1,636
3.50%, 7/31/35 (b)		1,895		948

The accompanying notes are an integral part of the financial statements.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Portfolio of Investments (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Ecuador (cont'd)
Sovereign (cont'd)
6.00%, 7/31/30 (b)	$	654	$	415
				2,999
Egypt (6.9%)
Sovereign (6.9%)
Egypt Government International Bond, 4.75%, 4/16/26	EUR	480		486
5.25%, 10/6/25 (a)	$	440		426
5.63%, 4/16/30	EUR	2,012		1,733
6.38%, 4/11/31		636		543
6.38%, 4/11/31 (a)		800		683
6.88%, 4/30/40	$	121		84
7.05%, 1/15/32		466		373
7.50%, 2/16/61		500		336
7.60%, 3/1/29		200		182
7.63%, 5/29/32		200		164
7.90%, 2/21/48 (a)		490		345
7.90%, 2/21/48		627		442
8.15%, 11/20/59		200		143
8.50%, 1/31/47		2,816		2,092
8.70%, 3/1/49		1,063		801
8.75%, 9/30/51		648		489
8.88%, 5/29/50		1,739		1,328
				10,650
El Salvador (0.4%)
Sovereign (0.4%)
El Salvador Government International Bond, 8.25%, 4/10/32		750		593
Ethiopia (1.9%)
Sovereign (1.9%)
Ethiopia International Bond, 6.63%, 12/11/24 (e)(f)		4,077		2,956
Gabon (0.2%)
Sovereign (0.2%)
Gabon Government International Bond, 6.95%, 6/16/25 (a)		400		368

	Face Amount (000)		Value (000)
Georgia (2.1%)
Corporate Bonds (2.1%)
Bank of Georgia JSC, 9.50%, 7/16/29 (h)	$	1,030	$	1,005
TBC Bank JSC, 10.25%, 7/30/29 (h)		1,550		1,521
10.78%, 10/3/24 (h)		740		741
				3,267
Ghana (3.0%)
Corporate Bonds (0.8%)
Kosmos Energy Ltd., 7.50%, 3/1/28		208		198
Puma International Financing SA, 7.75%, 4/25/29 (a)		503		508
Tullow Oil PLC, 10.25%, 5/15/26		609		579
				1,285
Sovereign (2.2%)
Ghana Government International Bond, 6.38%, 2/11/27 (e)(f)		788		400
7.63%, 5/16/29 (e)(f)		400		204
7.75%, 4/7/29 (e)(f)		717		367
7.88%, 3/26/27 - 2/11/35 (e)(f)		738		378
8.13%, 1/18/26 - 3/26/32 (e)(f)		629		325
8.63%, 4/7/34 - 6/16/49 (e)(f)		1,859		945
8.75%, 3/11/61 (e)(f)		610		314
8.88%, 5/7/42 (e)(f)		710		364
				3,297
				4,582
Greece (1.4%)
Corporate Bonds (1.4%)
Alpha Services & Holdings SA, 5.50%, 6/11/31	EUR	350		373
Piraeus Financial Holdings SA, 5.50%, 2/19/30		220		234
7.25%, 4/17/34		420		467
8.75%, 6/16/26 (h)		1,000		1,075
				2,149

The accompanying notes are an integral part of the financial statements.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Portfolio of Investments (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Guatemala (0.5%)
Sovereign (0.5%)
Guatemala Government Bond, 3.70%, 10/7/33	$	600	$	492
4.65%, 10/7/41 (a)		400		317
				809
Honduras (0.1%)
Sovereign (0.1%)
Honduras Government International Bond, 6.25%, 1/19/27		150		143
Hungary (1.7%)
Corporate Bonds (0.6%)
MBH Bank Nyrt, 8.63%, 10/19/27	EUR	493		557
OTP Bank Nyrt, 8.75%, 5/15/33	$	376		395
				952
Sovereign (1.1%)
Hungary Government International Bond, 5.50%, 3/26/36		800		770
6.25%, 9/22/32 (a)		800		826
				1,596
				2,548
India (1.8%)
Corporate Bonds (1.8%)
Indiabulls Housing Finance Ltd., 4.50%, 9/28/26		567		558
Vedanta Resources Finance II PLC, 13.88%, 1/21/27 - 12/9/28		2,257		2,189
				2,747
Indonesia (2.1%)
Corporate Bonds (1.1%)
Indika Energy Tbk. PT, 8.75%, 5/7/29 (a)		980		979
LLPL Capital Pte. Ltd., 6.88%, 2/4/39		766		773
				1,752

	Face Amount (000)		Value (000)
Sovereign (1.0%)
Indonesia Government International Bond, 4.70%, 2/10/34	$	1,060	$	1,024
5.10%, 2/10/54		500		472
				1,496
				3,248
Iraq (0.1%)
Sovereign (0.1%)
Iraq International Bond, 5.80%, 1/15/28		205		192
Ivory Coast (2.6%)
Sovereign (2.6%)
Ivory Coast Government International Bond, 4.88%, 1/30/32	EUR	300		270
5.25%, 3/22/30		750		733
6.63%, 3/22/48		1,562		1,306
6.88%, 10/17/40		1,000		898
8.25%, 1/30/37	$	867		841
				4,048
Jamaica (1.1%)
Corporate Bond (0.8%)
Digicel Intermediate Holdings Ltd./Digicel International Finance Ltd./Difl U.S., 12.00%, 5/25/27 (d)		1,274		1,262
Senior Loan Interests (0.3%)
Digicel International Finance Ltd. 3 Month USD SOFR + 6.75%, 12.07%, 5/25/27 (c)		431		419
				1,681
Jordan (0.6%)
Sovereign (0.6%)
Jordan Government International Bond, 5.85%, 7/7/30		539		484
7.38%, 10/10/47		173		148
7.50%, 1/13/29		302		296
				928

The accompanying notes are an integral part of the financial statements.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2024 (unaudited)

Portfolio of Investments (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Kazakhstan (0.4%)
Sovereign (0.4%)
Kazakhstan Government International Bond, 6.50%, 7/21/45	$	500	$	578
Kenya (2.5%)
Sovereign (2.5%)
Republic of Kenya Government International Bond, 8.00%, 5/22/32		1,196		1,043
9.75%, 2/16/31		2,950		2,832
				3,875
Kuwait (0.3%)
Sovereign (0.3%)
Kuwait International Government Bond, 3.50%, 3/20/27		450		433
Latvia (0.3%)
Corporate Bond (0.3%)
Air Baltic Corp. AS, 14.50%, 8/14/29 (a)	EUR	370		432
Lebanon (0.1%)
Sovereign (0.1%)
Lebanon Government International Bond, 6.85%, 3/23/27 (e)(f)	$	1,960		137
Macedonia (1.8%)
Sovereign (1.8%)
North Macedonia Government International Bond, 1.63%, 3/10/28	EUR	2,252		2,104
6.96%, 3/13/27		623		693
				2,797
Mexico (3.2%)
Corporate Bonds (1.2%)
BBVA Bancomer SA, 5.13%, 1/18/33	$	550		502
8.45%, 6/29/38 (a)		220		227
Total Play Telecomunicaciones SA de CV, 10.50%, 12/31/28 (a)		1,285		1,055
				1,784

	Face Amount (000)		Value (000)
Sovereign (2.0%)
Mexico Government International Bond, 3.50%, 2/12/34	$	850	$	693
Petroleos Mexicanos, 6.75%, 9/21/47		685		451
6.84%, 1/23/30		1,025		903
6.88%, 8/4/26		1,120		1,097
				3,144

SEC Form N-CSRS filed by Morgan Stanley Emerging Markets Debt Fund Inc.