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: 811-05189
THE SPAIN FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: November 30, 2006
Date of reporting period: May 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
The Spain Fund
Semi-Annual Report
May 31, 2006
SEMI-ANNUAL REPORT
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
Investment Products Offered
-----------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
-----------------------------
The Fund's Board of Directors approved amended and restated by-laws for the
Fund effective July 1, 2006. The by-laws are an exhibit to the Fund's most
recently filed report on Form N-SAR, which is on file with the SEC and may be
accessed via the SEC's website which is at www.sec.gov. A copy is also
available upon written request to the Secretary of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein(R) at
(800) 227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P.,
the manager of the funds, and is a member of the NASD.
AllianceBernstein(R) and the AB Logo are registered trademarks and service
marks used by permission of the owner, AllianceBernstein L.P.
July 18, 2006
Semi-Annual Report
This report provides management's discussion of fund performance for The Spain
Fund (the "Fund") for the semi-annual reporting period ended May 31, 2006. The
Fund is a closed-end fund that trades under the New York Stock Exchange Symbol
"SNF".
Investment Objective and Policies
The Fund is a closed-end fund that seeks long-term capital appreciation through
investment primarily in the equity securities of Spanish companies. The Fund
will, under normal circumstances, invest at least 80% of its total net assets
in Spanish equity securities. The Fund may invest up to 35% of its total assets
in fixed-income instruments issued by the Spanish government and its agencies
or instrumentalities or by supranational organizations and multinational
companies rated AA or better by Standard & Poor's Corporation or Aa or better
by Moody's Investors Service. The Fund may invest up to 25% of its total assets
in unlisted securities of Spanish companies which are not readily marketable.
For more information regarding the Fund's risks, please see "A Word About Risk"
on page 3 and "Note E--Risks Involved in Investing in the Fund" of the Notes to
Financial Statements on page 15.
Investment Results
The table on page 4 shows the Fund's performance compared to its new benchmark,
the Morgan Stanley Capital International (MSCI) Spain Index, and its old
benchmarks, the Madrid General Index and the IBEX 35 Index, for the six- and
12-month periods ended May 31, 2006. The Fund's benchmark was changed because
the country-specific MSCI Spain Index is a better measure of the Spanish equity
market.
The Fund slightly underperformed its new benchmark, the MSCI Spain Index, for
the six-month period ended May 31, 2006. The Fund's underperformance was due to
its holdings in the energy sector, as well as its exposure to media. Spain's
oil company was affected negatively by the change in Bolivia's government which
impacted energy returns. Nonetheless, the Fund's double-digit performance
during this period is attributed to its overweight position in insurance and
construction, and an underweight position in telecommunications. A holding in
the telephone directory sector also contributed positively to Fund performance.
During the 12-month period ended May 31, 2006, the Fund also underperformed its
new benchmark, the MSCI Spain Index. The Fund's underperformance during this
timeframe was a result of an overweight position in media, air transportation
and energy, and an underweight position in financials and basic materials, in
particular small-cap stocks. The Fund's overweight position in construction and
an underweight position in telecommunications added to the Fund's total return
during this period.
Market Review and Investment Strategy
During the six-month period ended May 31, 2006, the Spanish stock market
continued to perform positively.
THE SPAIN FUND o 1
The market was backed by external factors, such as global liquidity, and
internal factors, such as strong economic growth, which is ahead of Euro area
growth. Spanish economic growth continued to be fostered by private consumption
and construction activity, which benefited from low interest rates.
The Fund maintained an overweight position in construction but exposure to
consumer stocks was reduced in anticipation of a slowdown in consumption. This
slowdown has proven to be much more moderate than initially expected. An
overweight position in the construction sector was maintained given attractive
valuation and earnings momentum. An overweight position in energy was
maintained to benefit from higher oil prices on a global basis. However, the
Fund was penalized by the new Bolivian government's decision to nationalize oil
assets, as Spanish energy companies have exposure to Bolivia. The Fund
continued to maintain an overweight position in energy transmission stocks
which delivered strong positive performance over the six-month period. The Fund
has also maintained an underweight position in financials and telecommunication
stocks; a position that only performed well in the case of the latter.
Positions were initiated again in basic materials, mainly due to a better
pricing environment for metals, and in a food company with significant exposure
to renewable energy. These positions were chosen as alternatives to the energy
sector because positive performance is expected from these companies in a
scenario of higher oil prices.
During the 12-month period ended May 31, 2006, the Spanish stock market
performed positively and outperformed the main European indices, benefiting
from the strength of the Spanish economy and given their presence in Latin
America. The Fund's portfolio managers had anticipated the strengthening of the
global economy, and as a result, had maintained the Fund's overweight positions
in energy, construction, and insurance, and underweight positions in defensive
sectors, such as motorways and tobacco. The Fund had no exposure to the real
estate sector during this timeframe. The managers believe that the property
sector is peaking in the cycle given rising interest rates. However, this
sector has recently been the best performing sector, driven exclusively by
merger and acquisition (M&A) activity.
The most significant change in the Fund during 12-month period was a larger
exposure to the electricity sector as a result of an improvement in the
regulatory framework and increased M&A activity. Again, during this period,
small-capitalization companies remained stronger. In particular, the industrial
and real estate sectors performed well, driven by a strong global supply of
liquidity and increased M&A activity. In order to benefit from this trend, the
managers increased the Fund's exposure to stocks with good fundamentals and
high liquidity that could be subject to M&A activity.
2 o THE SPAIN FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following page represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. All fees and expenses related to the
operation of the Fund have been deducted. Performance assumes reinvestment of
distributions and does not account for taxes.
The Spain Fund Shareholder Information
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of The Wall Street Journal under the
abbreviation "SpainFd". The Fund's NYSE trading symbol is "SNF". Weekly
comparative net asset value (NAV) and market price information about the Fund
is published each Monday in The Wall Street Journal, each Sunday in The New
York Times and each Saturday in Barron's and in other newspapers in a table
called "Closed End Funds". For additional shareholder information regarding
this Fund, please see page 24.
Benchmark Disclosure
Neither the unmanaged Morgan Stanley Capital International (MSCI) Spain Index,
the unmanaged Madrid General Index, or the unmanaged IBEX 35 Index reflects
fees and expenses associated with the active management of a mutual fund
portfolio. The MSCI Spain Index seeks to measure the performance of the Spanish
equity market. It is a capitalization-weighted index that aims to capture 85%
of the publicly available free float adjusted market capitalization. The Madrid
General Index measures the performance of a selected number of continuous
market stocks. The IBEX 35 Index is the official index of the Spanish
Continuous Market and is composed of the 35 most liquid stocks traded on the
Continuous Market. The indices' returns are expressed in U.S. dollars. An
investor cannot invest directly in an index, and its results are not indicative
of the performance for any specific investment, including the Fund.
A Word About Risk
Investment in The Spain Fund includes risks not associated with funds that
invest primarily in U.S. issues. Substantially all of the Fund's assets may be
invested in Spanish securities and are subject to greater risk than would a
fund with a more diversified portfolio. Foreign markets can be more volatile
than the U.S. market due to increased risks of adverse issuer, political,
regulatory, market or economic developments. In addition, because the Fund will
invest in foreign currency denominated securities, fluctuations in the value of
the Fund's investments may be magnified by changes in foreign exchange rates.
Although the Fund expects to invest primarily in listed securities of
established companies, it may invest up to 25% of its total assets in unlisted
securities of Spanish companies which are not readily marketable, and which may
involve a high degree of business and financial risk that can result in
substantial losses. Because of the absence of a trading market for these types
of investments, the Fund may not be able to realize their value upon sale. In
general, Spanish securities markets are less liquid and more volatile than the
major securities markets in the U.S. Issuers of securities in Spain are not
subject to the same degree of regulation as are U.S. issuers with respect to
such matters as insider trading rules, tender offer regulation, shareholder
proxy requirements and the timely disclosure of information. Spanish
accounting, auditing and financial reporting standards are not equivalent to
U.S. standards and less information is available to investors in Spanish
securities than to investors in U.S. securities. The Spanish securities
industry is subject to less governmental regulation than the securities
industry in the U.S.
Shares of closed-end investment companies that invest primarily in equity
securities, in particular foreign countries or geographical areas, frequently
trade at a discount from net asset value. This characteristic of shares of
closed-end funds is a risk separate and distinct from the risk that the Fund's
net asset value will decrease. It should be noted, however, that in some cases,
shares of closed-end funds may trade at a premium. The Fund cannot predict
whether its shares will trade at, above or below net asset value.
(Historical Performance continued on next page)
THE SPAIN FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED MAY 31, 2006 6 Months 12 Months
The Spain Fund (NAV) 14.28% 22.27%
MSCI Spain Index 16.85% 26.50%
Madrid General Index 19.57% 29.13%
IBEX 35 Index 18.85% 28.74%
The Fund's Market Price per share on May 31, 2006 was $12.33. The Fund's Net
Asset Value Price per share on May 31, 2006 was $11.07. For additional
Financial Highlights, please see page 20.
See Historical Performance and Benchmark disclosures on previous page.
4 o THE SPAIN FUND
PORTFOLIO SUMMARY
May 31, 2006 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $96.8
SECTOR BREAKDOWN*
[ ] 33.1% Financial Services
[ ] 32.7% Utilities
[ ] 10.2% Consumer Services
[ ] 9.0% Capital Goods
[ ] 8.2% Energy [PIE CHART OMITTED]
[ ] 2.7% Consumer Staples
[ ] 2.2% Basic Industry
[ ] 1.9% Technology
TEN LARGEST HOLDINGS
May 31, 2006 (unaudited)
Percent of
Company U.S. $ Value Net Assets
-------------------------------------------------------------------------------
Telefonica, SA $13,518,547 14.0%
Banco Bilbao Vizcaya Argentaria, SA 12,069,768 12.5
Banco Santander Central Hispano, SA 11,389,175 11.8
Repsol-YPF, SA 7,879,454 8.1
Endesa, SA 4,678,694 4.8
Enagas 4,581,719 4.7
Red Electrica de Espana 4,469,613 4.6
Industria de Diseno Textil (Inditex), SA 4,436,701 4.6
Grupo Ferrovial, SA 4,394,277 4.5
ACS, Actividades de Construccion y
Servicios, SA 4,228,134 4.4
$71,646,082 74.0%
* All data are as of May 31, 2006. The Fund's sector breakdown is expressed as
a percentage of total investments and may vary over time.
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser. These sector classifications
are broadly defined. The "Portfolio of Investments" section of the report
reflects more specific industry information and is consistent with the
investment restrictions discussed in the Fund's prospectus.
THE SPAIN FUND o 5
PORTFOLIO OF INVESTMENTS
May 31, 2006 (unaudited)
Company Shares U.S. $ Value
-------------------------------------------------------------------------------
COMMON STOCKS-99.1%
Financial Services-32.8%
Banking-Money Center-24.2%
Banco Bilbao Vizcaya Argentaria, SA(a) 582,000 $12,069,768
Banco Santander Central Hispano, SA 789,195 11,389,175
------------
23,458,943
Banking-Regional-3.4%
Banco Pastor, SA 65,000 3,338,312
Insurance-5.2%
Corporacion Mapfre, SA 100,508 1,948,762
Grupo Catalana Occidente, SA 24,000 3,053,091
------------
5,001,853
------------
31,799,108
Utilities-32.5%
Electric & Gas-18.5%
Enagas 215,000 4,581,719
Endesa, SA 139,593 4,678,694
Iberdrola, SA 130,000 4,171,713
Red Electrica de Espana 129,106 4,469,613
------------
17,901,739
Telephone Utility-14.0%
Telefonica, SA 825,831 13,518,547
------------
31,420,286
Consumer Services-10.1%
Apparel-4.6%
Industria de Diseno Textil (Inditex), SA 111,875 4,436,701
Broadcasting & Cable-3.2%
Promotora de Informaciones (Prisa), SA 182,000 3,057,120
Printing & Publishing-2.3%
Telefonica Publicidad e Informacion, SA 210,000 2,265,933
------------
9,759,754
Capital Goods-8.9%
Engineering & Construction-8.9%
ACS, Actividades de Construccion y Servicios,
SA 106,000 4,228,134
Grupo Ferrovial, SA 55,500 4,394,277
------------
8,622,411
Energy-8.1%
International-8.1%
Repsol-YPF, SA 282,070 7,879,454
6 o THE SPAIN FUND
Company Shares U.S. $ Value
-------------------------------------------------------------------------------
Consumer Staples-2.6%
Food-2.6%
Ebro Puleva, SA 130,000 $2,543,441
Basic Industry-2.2%
Mining & Metals-2.2%
Acerinox, SA 125,000 2,098,485
Technology-1.9%
Computer Services-1.9%
Indra Sistemas, SA 93,035 1,817,946
Total Investments-99.1%
(cost $52,919,230) 95,940,885
Other assets less liabilities-0.9% 882,708
Net Assets-100% $96,823,593
(a) Security represents investment in an affiliate.
See notes to financial statements.
THE SPAIN FUND o 7
STATEMENT OF ASSETS & LIABILITIES
May 31, 2006 (unaudited)
Assets
Investments in securities, at value (cost $52,919,230) $95,940,885
Foreign cash, at value (cost $1,092,829) 1,135,541
Dividends receivable 11,115
Total assets 97,087,541
Liabilities
Due to custodian 182
Management fee payable 71,891
Printing fee payable 65,407
Legal fee payable 44,958
Custody fee payable 43,807
Audit fee payable 22,607
Accrued expenses 15,096
Total liabilities 263,948
Net Assets $96,823,593
Composition of Net Assets
Capital stock, at par $87,485
Additional paid-in capital 53,266,572
Accumulated net realized gain on investment and foreign
currency transactions 405,181
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 43,064,355
$96,823,593
Net Asset Value Per Share -- 100 million shares of
capital stock authorized, $.01 par value
(based on 8,748,519 shares outstanding) $11.07
See notes to financial statements.
8 o THE SPAIN FUND
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2006 (unaudited)
Investment Income
Dividends--unaffiliated issuers (net of
foreign taxes withheld of $159,844) $905,785
Dividends--affiliated issuers (net of
foreign taxes withheld of $32,262) 182,818
Interest 11,416 $1,100,019
Expenses
Management fee 379,317
Legal 122,173
Custodian 87,939
Directors' fees and expenses 63,539
Printing 48,556
Audit 28,983
Transfer agency 17,893
Registration 11,830
Miscellaneous 6,715
Total expenses 766,945
Net investment income 333,074
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain on:
Investment transactions- unaffiliated
issuers 4,668,599
Investment transactions- affiliated
issuers 423,986
Foreign currency transactions 65,178
Net change in unrealized
appreciation/depreciation of:
Investments 7,177,063
Foreign currency denominated assets
and liabilities 43,576
Net gain on investment and foreign
currency transactions 12,378,402
Net Increase in Net Assets from
Operations $12,711,476
See notes to financial statements.
THE SPAIN FUND o 9
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
May 31, 2006 November 30,
(unaudited) 2005
Increase (Decrease) in Net Assets
from Operations
Net investment income $333,074 $1,222,117
Net realized gain on investment and
foreign currency transactions 5,157,763 11,689,067
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities 7,220,639 (4,143,155)
Net increase in net assets from
operations 12,711,476 8,768,029
Dividends and Distributions to
Shareholders from:
Net investment income (333,074) (1,222,117)
Net realized gain on investment and
foreign currency transactions (4,156,992) (7,331,661)
Capital Stock Transactions
Net increase 202,889 386,183
Total increase 8,424,299 600,434
Net Assets
Beginning of period 88,399,294 87,798,860
End of period (including accumulated
net investment income of
$0 and $0, respectively) $96,823,593 $88,399,294
See notes to financial statements.
10 o THE SPAIN FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 2006 (unaudited)
NOTE A
Significant Accounting Policies
The Spain Fund, Inc. (the "Fund") was incorporated in the state of Maryland on
June 30, 1987 as a non-diversified, closed-end management investment company.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, AllianceBernstein L.P. (prior to February
24, 2006 known as Alliance Capital Management L.P.) (the "Investment Manager")
may establish procedures whereby changes in market yields or spreads are used
to
THE SPAIN FUND o 11
adjust, on a daily basis, a recently obtained quoted price on a security; and
OTC and other derivatives are valued on the basis of a quoted bid price or
spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation and depreciation of investments
and foreign currency denominated assets and liabilities.
The exchange rate for the Euro at May 31, 2006 was .78 EUR to U.S. $1.00.
3. Taxes
It is the Fund's policy to meet the requirements of the U.S. Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
12 o THE SPAIN FUND
The Fund may be subject to taxes imposed by countries in which it invests. Such
taxes are generally based on income and/or capital gains earned or repatriated.
Taxes are accrued and applied to net investment income, net realized gains and
net unrealized appreciation/depreciation as such income and/or gains are
earned. Withholding taxes on foreign interest and dividends have been provided
for in accordance with the Spanish tax rates.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Realized gains and losses from security and currency transactions are
calculated on the identified cost basis. The Fund amortizes premiums and
accretes discounts as adjustments to interest income.
5. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
determined in accordance with federal tax regulations and may differ from those
determined in accordance with U.S. generally accepted accounting principles. To
the extent these differences are permanent, such amounts are reclassified
within the capital accounts based on their federal tax treatment; temporary
differences, do not require such reclassification.
The Fund distributes to its shareholders an amount equal to 2.5% of the Fund's
total net assets at the beginning of each of the first three quarters of the
calendar year. With respect to the fourth quarter, an amount equal to at least
2.5% of the total net assets is distributed to shareholders. If these
distributions exceed the Fund's aggregate net investment income and net
realized capital gains with respect to a given year, the difference will
generally constitute a return of capital to shareholders.
NOTE B
Management Fee and Other Transactions with Affiliates
Under the terms of the Investment Management and Administration Agreement, the
Fund pays the Investment Manager an annual rate of 0.85% on the first $50
million, 0.75% on the next $50 million, and 0.65% in excess of $100 million, of
the Fund's average weekly net assets. Such fee is accrued daily and paid
monthly.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 2006 amounted to $69,566, of which none was paid to Banco Bilbao
Vizcaya Argentaria.
Banco Bilbao Vizcaya Argentaria, serves as subcustodian of the Fund. Fees paid
to the subcustodian are payable by the custodian from its fee. For the six
months
THE SPAIN FUND o 13
ended May 31, 2006, the Fund earned $11,261 of interest income on cash balances
maintained at the subcustodian. According to information filed with the
Securities and Exchange Commission, Banco Bilbao-Vizcaya, S.A. owns
approximately 17.5% of the outstanding shares of common stock of the Fund and
is therefore an "affiliated person" as defined under the Investment Company Act
of 1940. A director of the Fund is a director of Banco Bilbao Vizcaya
Argentaria, an affiliate of the Sub-Adviser.
Under the terms of a Shareholder Inquiry Agency Agreement with
AllianceBernstein Investor Services, Inc. (prior to February 24, 2006 known as
Alliance Global Investor Services, Inc.) ("ABIS") a wholly-owned subsidiary of
the Investment Manager, the Fund reimburses ABIS for costs relating to
servicing phone inquiries for the Fund. The Fund reimbursed ABIS $199 during
the six months ended May 31, 2006.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended May 31, 2006, were as follows:
Purchases Sales
Investment securities (excluding
U.S. government securities) $23,464,545 $21,678,988
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation and unrealized depreciation (excluding foreign currency
transactions) are as follows:
Gross unrealized appreciation $43,104,674
Gross unrealized depreciation (83,019)
Net unrealized appreciation $43,021,655
Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings, to hedge certain firm purchase and sales commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
14 o THE SPAIN FUND
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
NOTE D
Capital Stock
During the six months ended May 31, 2006, the Fund issued 17,210 shares, in
connection with the Fund's dividend reinvestment plan.
NOTE E
Risks Involved in Investing in the Fund
Concentration of Risk--Investing in securities of foreign companies involves
special risks which include the possibility of future political and economic
developments which could adversely affect the value of such securities.
Moreover, securities of many foreign companies and their markets may be less
liquid and their prices more volatile than those of U.S. companies.
Investment in the Fund's shares requires consideration of certain factors that
are not typically associated with investments in U.S. equity securities such as
currency fluctuations, potential price volatility, lower liquidity and
concentration of the Spanish equities market and limitations on the
concentration of investment in the equity of securities of companies in certain
industry sectors. The possibility of political and economic instability of
government supervision and regulation of the market may further affect the
Fund's investments.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
THE SPAIN FUND o 15
NOTE F
Distributions to Shareholders
The tax character for distributions to be paid for the fiscal year ending
November 30, 2006 will be determined at the end of the current fiscal year.
The tax character of distributions paid during the fiscal years ended November
30, 2005 and November 30, 2004 were as follows:
2005 2004
Distributions paid from:
Ordinary income $4,795,273 $7,505,567
Long-term capital gains 3,758,505 -0-
Total taxable distributions 8,553,778 7,505,567
Total distributions paid $8,553,778 $7,505,567
As of November 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $-0-(a)
Unrealized appreciation/(depreciation) 35,248,126(b)
Total accumulated earnings/(deficit) $35,248,126
(a) The Fund utilized capital loss carryforwards of $8,044,505 during the
fiscal year ended November 30, 2005. Future realized gains offset by the loss
carryforwards are not required to be distributed to shareholders. However,
under the Fund's distribution policy, such gains may be distributed to
shareholders in the year the gains are realized. Any such gains distributed may
be taxable to shareholders.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE G
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the Office of the New York Attorney General ("NYAG")
have been investigating practices in the mutual fund industry identified as
"market timing" and "late trading" of mutual fund shares. Certain other
regulatory authorities have also been conducting investigations into these
practices within the industry and have requested that the Investment Manager
provide information to them. The Investment Manager has been cooperating and
will continue to cooperate with all of these authorities. The shares of the
Fund are not redeemable by the Fund, but are traded on an exchange at prices
established by the market. Accordingly, the Fund and its shareholders are not
subject to the market timing and late trading practices that are the subject of
the investigations mentioned above or the lawsuits described below. Please see
below for a description of the agreements reached by the Investment Manager and
the SEC and NYAG in connection with the investigations mentioned above.
16 o THE SPAIN FUND
Numerous lawsuits have been filed against the Investment Manager and certain
other defendants in which plaintiffs make claims purportedly based on or
related to the same practices that are the subject of the SEC and NYAG
investigations referred to above. Some of these lawsuits name the Fund as a
party. The lawsuits are now pending in the United States District Court for the
District of Maryland pursuant to a ruling by the Judicial Panel on
Multidistrict Litigation transferring and centralizing all of the mutual funds
involving market and late trading in the District of Maryland (the "Mutual Fund
MDL"). Management of the Investment Manager believes that these private
lawsuits are not likely to have a material adverse effect on the results of
operations or financial condition of the Fund.
On December 18, 2003, the Investment Manager confirmed that it had reached
terms with the SEC and the NYAG for the resolution of regulatory claims
relating to the practice of "market timing" mutual fund shares in some of the
AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in an
Order of the Commission ("SEC Order"). The agreement with the NYAG is
memorialized in an Assurance of Discontinuation dated September 1, 2004
("NYAGOrder"). Among the key provisions of these agreements are the following:
(i) The Investment Manager agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Investment Manager agreed to reduce the advisory fees it receives
from some of the AllianceBernstein long-term, open-end retail funds, commencing
January 1, 2004, for a period of at least five years; and
(iii) The Investment Manager agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order contemplates that the
Investment Manager's registered investment company clients, including the Fund,
will introduce governance and compliance changes.
The shares of the Fund are not redeemable by the Fund, but are traded on an
exchange at prices established by the market. Accordingly, the Fund and its
shareholders are not subject to the market timing practices described in the
SEC Order and are not expected to participate in the Reimbursement Fund. Since
the Fund is a closed-end fund, it will not have its advisory fee reduced
pursuant to the terms of the agreements mentioned above.
THE SPAIN FUND o 17
On February 10, 2004, the Investment Manager received (i) a subpoena duces
tecum from the Office of the Attorney General of the State of West Virginia and
(ii) a request for information from West Virginia's Office of the State
Auditor, Securities Commission (the "West Virginia Securities Commissioner")
(together, the "Information Requests"). Both Information Requests require the
Investment Manager to produce documents concerning, among other things, any
market timing or late trading in the Investment Manager's sponsored mutual
funds. The Investment Manager responded to the Information Requests and has
been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), and various other defendants not affiliated with the Investment
Manager. The WVAG Complaint was filed in the Circuit Court of Marshall County,
West Virginia by the Attorney General of the State of West Virginia. The WVAG
Complaint makes factual allegations generally similar to those in certain of
the complaints related to the lawsuits discussed above. On October 19, 2005,
the WVAG Complaint was transferred to the Mutual fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commissioner signed a Summary Order to Cease and Desist, and Notice
of Right to Hearing addressed to the Investment Manager and Alliance Holding.
The Summary Order claims that the Investment Manager and Alliance Holding
violated the West Virginia Uniform Securities Act, and makes factual
allegations generally similar to those in the SEC Order and the NYAG Order. On
January 26, 2006, the Investment Manager, Alliance Holding, and various
unaffiliated defendants filed a Petition for Writ of Prohibition and Order
Suspending Proceedings in West Virginia state court seeking to vacate the
Summary Order and for other relief. On April 12, 2006, respondents' petition
was denied. On May 4, 2006, respondents appealed the court's determination.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Investment Manager, Alliance Capital Management Holding L.P., Alliance
Capital Management Corporation, AXA Financial, Inc., AllianceBernstein
Investment Research & Management, Inc., certain current and former directors of
the AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Fund was not named as a defendant in the Aucion Compliant. The
Aucoin Complaint was filed in the United States District Court for the Southern
District of New York by alleged shareholders of an AllianceBernstein mutual
fund. The Aucoin Complaint alleges, among other things, (i) that certain of the
defendants improperly authorized the payment of excessive commissions and other
fees from fund assets to broker-dealers in
18 o THE SPAIN FUND
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Investment Manager, including recovery of all fees paid to the Investment
Manager pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Investment Manager and certain other defendants. All nine of the lawsuits (i)
were brought as class actions filed in the United States District Court for the
Southern District of New York, (ii) assert claims substantially identical to
the Aucoin Complaint, and (iii) are brought on behalf of shareholders of the
Funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiffs' claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. On May 31, 2006 the District Court
denied plaintiffs' motion for leave to file an amended complaint.
The Investment Manager believes that these matters are not likely to have a
material adverse effect on the Fund or the Investment Manager's ability to
perform advisory services relating to the Fund.
THE SPAIN FUND o 19
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Six Months
Ended
May 31, 2006 Year Ended November 30,
(unaudited) 2005 2004 2003 2002 2001
Net asset value,
beginning of period $10.12 $10.09 $8.41 $6.81 $8.39 $10.30
Income From Investment
Operations
Net investment income (loss)(a) .04 .14 .04(b) .01 (.03) (.03)
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions 1.42 .87 2.51 2.22 (.79) (.75)
Net increase (decrease) in net
asset value from operations 1.46 1.01 2.55 2.23 (.82) (.78)
Less: Dividends and
Distributions
Dividends from net investment
income (.04) (.14) (.04) (.05) -0- (.02)
Distributions from net realized
gain on investment and foreign
currency transactions (.47) (.84) (.83) -0- -0- (.48)
Tax return of capital -0- -0- -0- (.58) (.76) (.63)
Total dividends and distributions (.51) (.98) (.87) (.63) (.76) (1.13)
Net asset value, end of period $11.07 $10.12 $10.09 $8.41 $6.81 $8.39
Market value, end of period $12.33 $12.43 $12.50 $9.57 $6.97 $8.55
Premium/(Discount) 11.38% 22.83% 23.89% 13.79% 2.35% 1.91%
Total Return
Total investment return based on(c):
Market value 3.64% 7.95% 42.04% 49.25% (9.74)% 0.49%
Net asset value 14.28% 8.88% 30.47% 34.24% (10.13)% (7.85)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $96,824 $88,399 $87,799 $72,817 $58,800 $72,001
Ratio to average net assets of:
Expenses, net of waivers 1.62%(d) 1.65% 1.95% 2.19% 2.13% 1.91%
Expenses, before waivers 1.62%(d) 1.65% 2.01% 2.19% 2.13% 1.91%
Net investment income (loss) .70%(d) 1.37% .41%(b) .11% (.48)% (.35)%
Portfolio turnover rate 24% 22% 27% 26% 39% 34%
See footnote summary on page 21.
20 o THE SPAIN FUND
Financial Highlights
(a) Based on average shares outstanding.
(b) Net of waivers by the Investment Manager.
(c) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last business
day of each period reported. Dividends and distributions, if any, are assumed
for purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment and Cash Purchase Plan. Generally, total
investment return based on net asset value will be higher than total investment
return based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net asset
value from the beginning to the end of such years. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount or
an increase in the premium of the market value to the net asset value from the
beginning to the end of such years. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
THE SPAIN FUND o 21
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Luis Abril Perez(1)
Daniel de Fernando Garcia
Inmaculada de Habsburgo-Lorena(1)
Antonio Eraso(1)
Ignacio Gomez-Acebo
Francisco Gomez Roldan(1)
Jose Ignacio Comenge(1)
OFFICERS
Marc O. Mayer, President
Edward D. Baker III(2), Senior Vice President
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Cristina Fernandez-Alepuz(2), Vice President
Siobhan McManus, Vice President
Emilie D. Wrapp, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Dividend Paying Agent, Transfer Agent and Registrar
Computershare Trust Company N.A.
P.O. Box 43010
Providence, RI 02940-3010
(1) Member of the Audit Committee, the Independent Directors Committee and the
Governance and Nominating Committee
(2) Mr. Baker and Ms. Fernandez-Alepuz are the persons primarily responsible
for the day-to-day management of the Fund's investment portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock on the open market.
This report, including the financial statements therein is transmitted to
the shareholders of The Spain Fund for their information. This is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in this report.
Annual Certifications - As required, on July 28, 2006, the Fund submitted
to the New York Stock Exchange ("NYSE") the annual certification of the Fund's
Chief Executive Officer certifying that he is not aware of any violation of the
NYSE's Corporate Governance listing standards. The Fund also has included the
certifications of the Fund's Chief Executive Officer and Chief Financial
Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as exhibits
to the Fund's Form N-CSR filed with the Securities and Exchange Commission for
the annual period.
22 o THE SPAIN FUND
ALLIANCEBERNSTEIN FAMILY OF FUNDS
-----------------------------------------
Wealth Strategies Funds
-----------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
-----------------------------------------
Blended Style Funds
-----------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
-----------------------------------------
Growth Funds
-----------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund
Small Cap Growth Portfolio
Global & International
Global Health Care Fund
Global Research Growth Fund
Global Technology Fund
Greater China '97 Fund
International Growth Fund
International Research Growth Fund*
-----------------------------------------
Value Funds
-----------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
-----------------------------------------
Taxable Bond Funds
-----------------------------------------
Global Government Income Trust*
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Intermediate Bond Portfolio*
Short Duration Portfolio
U.S. Government Portfolio
-----------------------------------------
Municipal Bond Funds
-----------------------------------------
National Michigan
Insured National Minnesota
Arizona New Jersey
California New York
Insured California Ohio
Florida Pennsylvania
Massachusetts Virginia
-----------------------------------------
Intermediate Municipal Bond Funds
-----------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
-----------------------------------------
Closed-End Funds
-----------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
-----------------------------------------
Retirement Strategies Funds
-----------------------------------------
2000 Retirement Strategy
2005 Retirement Strategy
2010 Retirement Strategy
2015 Retirement Strategy
2020 Retirement Strategy
2025 Retirement Strategy
2030 Retirement Strategy
2035 Retirement Strategy
2040 Retirement Strategy
2045 Retirement Strategy
We also offer Exchange Reserves,** which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our website at
www.alliancebernstein.com or call us at 800.227.4618 for a current prospectus.
You should read the prospectus carefully before you invest.
* On July 8, 2005, New Europe Fund merged into International Research Growth
Fund. Prior to February 1, 2006, Global Government Income Trust was named
Americas Government Income Trust and Intermediate Bond Portfolio was named
Quality Bond Portfolio.
** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
THE SPAIN FUND o 23
SUMMARY OF GENERAL INFORMATION
Shareholder Information
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of The Wall Street Journal under the
designation SpainFd. The daily net asset value of the Fund's shares are
available from the Fund's Transfer Agent by calling (800) 219-4218. The Fund
also distributes its daily net asset value to various financial publications or
independent organizations such as Lipper Inc. and Morningstar, Inc. The Fund's
NYSE trading symbol is "SNF". Weekly comparative net asset value (NAV) and
market price information about the Fund is published each Monday in The Wall
Street Journal, each Sunday in The New York Times and each Saturday in Barron's
and other newspapers in a table called "Closed End Funds".
Dividend Reinvestment and Cash Purchase Plan
A Dividend Reinvestment Plan is available to shareholders in the Fund, which
provides automatic reinvestment of dividends and capital gain distributions or
other distributions in additional Fund shares. The Plan also allows you to make
optional cash investments in Fund shares through the Plan Agent. If you wish to
participate in the Plan and your shares are held in your name, simply complete
and mail the enrollment form in the brochure. If your shares are held in the
name of your brokerage firm, bank or other nominee, you should ask them whether
or how you can participate in the Plan.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call Computershare
Trust Company, N.A. at (800) 219-4218.
24 o THE SPAIN FUND
Privacy Notice
AllianceBernstein, the AllianceBernstein Family of Funds and AllianceBernstein
Investments, Inc. (collectively, "AllianceBernstein" or "we") understand the
importance of maintaining the confidentiality of our customers' nonpublic
personal information. In order to provide financial products and services to
our customers efficiently and accurately, we may collect nonpublic personal
information about our customers from the following sources: (1) information we
receive from account documentation, including applications or other forms
(which may include information such as a customer's name, address, social
security number, assets and income) and (2) information about our customers'
transactions with us, our affiliates and others (including information such as
a customer's account balances and account activity).
It is our policy not to disclose nonpublic personal information about our
customers (or former customers) except to our affiliates, or to others as
permitted or required by law. From time to time, AllianceBernstein may disclose
nonpublic personal information that we collect about our customers (or former
customers), as described above, to non-affiliated third party providers,
including those that perform processing or servicing functions and those that
provide marketing services for us or on our behalf pursuant to a joint
marketing agreement that requires the third party provider to adhere to
AllianceBernstein's privacy policy. We have policies and procedures to
safeguard nonpublic personal information about our customers (or former
customers) which include: (1) restricting access to such nonpublic personal
information and (2) maintaining physical, electronic and procedural safeguards
that comply with federal standards to safeguard such nonpublic personal
information.
THE SPAIN FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
SPAIN-0152-0506
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
There have been no purchases of equity securities by the Fund or by affiliated
parties for the reporting period.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders
may recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
---------- ------------------------
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and
Principal Financial Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): The Spain Fund, Inc.
By: /s/ Marc O. Mayer
-----------------------
Marc O. Mayer
President
Date: July 28, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
-----------------------
Marc O. Mayer
President
Date: July 28, 2006
By: /s/ Mark D. Gersten
-----------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: July 28, 2006